    [House Report 117-130]
    [From the U.S. Government Publishing Office]

    117th Congress   }                                      {       Report
                            HOUSE OF REPRESENTATIVES
     1st Session     }                                      {      117-130
    _______________________________________________________________________

                             BUILD BACK BETTER ACT

                                   ----------

                                  R E P O R T

                                     of the

                            COMMITTEE ON THE BUDGET
                            HOUSE OF REPRESENTATIVES

                                  to accompany

                                   H.R. 5376

                                 together with

                                 MINORITY VIEWS

                                  BOOK 3 OF 3

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

     September 27, 2021.--Committed to the Committee of the Whole House on
                the State of the Union and ordered to be printed

    117th Congress   }                                      {       Report
                            HOUSE OF REPRESENTATIVES
     1st Session     }                                      {      117-130
    _______________________________________________________________________

                             BUILD BACK BETTER ACT

                                   __________

                                  R E P O R T

                                     of the

                            COMMITTEE ON THE BUDGET

                            HOUSE OF REPRESENTATIVES

                                  to accompany

                                   H.R. 5376

                                 together with

                                 MINORITY VIEWS

                                  BOOK 3 OF 3

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

     September 27, 2021.--Committed to the Committee of the Whole House on
                the State of the Union and ordered to be printed
                                 _________

                     U.S. GOVERNMENT PUBLISHING OFFICE

    45-624                   WASHINGTON : 2021

                    TITLE XII--COMMITTEE ON VETERANS AFFAIRS

    SEC. 12001. DEPARTMENT OF VETERANS AFFAIRS INFRASTRUCTURE IMPROVEMENTS.

      In addition to amounts otherwise available, there is
    appropriated for fiscal year 2022, out of any money in the
    Treasury not otherwise appropriated, $15,200,000,000, to remain
    available until September 30, 2031, for facilities under the
    jurisdiction of, or for the use of, the Department of Veterans
    Affairs to carry out sections 2400, 2403, 2404, 2406, 2407,
    2412, 8101 through 8110, 8122, and 8161 through 8169 of title
    38, United States Code, taking into consideration the
    integration of climate resiliency into infrastructure as well
    as the needs of underserved areas and underserved veteran
    populations.

    SEC. 12002. MODIFICATIONS TO ENHANCED-USE LEASE AUTHORITY OF DEPARTMENT
                        OF VETERANS AFFAIRS.

      (a) Modifications to Authority.--Paragraph (2) of section
    8162(a) of title 38, United States Code, is amended to read as
    follows:
      ``(2)(A) The Secretary may enter into an enhanced-use lease
    on or after the date of the enactment of this paragraph only if
    the Secretary determines--
              ``(i) that the lease will not be inconsistent with,
            and will not adversely affect--
                      ``(I) the mission of the Department; or
                      ``(II) the operation of facilities, programs,
                    and services of the Department in the local
                    area; and
              ``(ii) that--
                      ``(I) the lease will enhance the use of the
                    leased property by directly or indirectly
                    benefitting veterans; or
                      ``(II) the leased property will provide
                    supportive housing.
      ``(B) The Secretary shall give priority to enhanced-use
    leases that, on the leased property--
              ``(i) provide supportive housing for veterans;
              ``(ii) provide direct services or benefits targeted
            to veterans; or
              ``(iii) provide services or benefits that indirectly
            support veterans.''.
      (b) Appropriation.--In addition to amounts otherwise
    available, there is appropriated for fiscal year 2022, out of
    any money in the Treasury not otherwise appropriated,
    $455,000,000 for the Department of Veterans Affairs, to remain
    available until expended, to enter into enhanced-use leases
    pursuant to section 8162 of title 38, United States Code, as
    amended by this section.
      (c) Modification of Sunset.--Section 8169 of such title is
    amended by striking ``December 31, 2023'' and inserting
    ``September 30, 2026''.

    SEC. 12003. MAJOR MEDICAL FACILITY LEASES OF THE DEPARTMENT OF VETERANS
                        AFFAIRS.

      (a) Authority to Enter Into Major Medical Facility Leases.--
    Paragraph (2) of subsection (a) of section 8104 of title 38,
    United States Code, is amended--
              (1) by striking ``No funds'' and inserting ``(A) No
            funds'';
              (2) by striking ``or any major medical facility
            lease'';
              (3) by striking ``or lease''; and
              (4) by adding at the end the following new
            subparagraph:
      ``(B) Funds may be appropriated for a fiscal year, and the
    Secretary may obligate and expend funds, including for advance
    planning and design, for any major medical facility lease.''.
      (b) Modification of Definition of Major Medical Facility
    Lease.--Subparagraph (B) of paragraph (3) of such subsection is
    amended to read as follows:
              ``(B) The term `major medical facility lease'--
                      ``(i) means a lease for space for use as a
                    new medical facility approved through the
                    General Services Administration under section
                    3307(a)(2) of title 40 at an average annual
                    rent equal to or greater than the dollar
                    threshold described in such section, which
                    shall be subject to annual adjustment in
                    accordance with section 3307(h) of such title;
                    and
                      ``(ii) does not include a lease for space for
                    use as a shared Federal medical facility for
                    which the Department's estimated share of the
                    lease costs does not exceed such dollar
                    threshold.''.
      (c) Interim Leasing Actions.--Such section is further amended
    by adding at the end the following new subsection:
      ``(i)(1) The Secretary may carry out interim leasing actions
    as the Secretary considers necessary for major medical facility
    leases (as defined in subsection (a)(3)(B)).
      ``(2) In this subsection, the term `interim leasing actions'
    has the meaning given that term by the Administrator of the
    General Services Administration.''.
      (d) Applicability.--The amendments made by this section shall
    apply with respect to a lease that has not been specifically
    authorized by law on or before the date of the enactment of
    this Act and is included as part of the annual budget
    submission of the President for fiscal year 2022, 2023, or
    2024.
      (e) Purchase Options.--The Secretary of Veterans Affairs may
    obligate and expend funds to exercise a purchase option
    included in any major medical facility lease described in
    subsection (d).
      (f) Appropriation.--In addition to amounts otherwise
    available, there is appropriated for fiscal year 2022, out of
    any money in the Treasury not otherwise appropriated,
    $1,805,000,000, to remain available until expended, for major
    medical facility leases pursuant to subchapter I of chapter 81
    of title 38, United States Code, as amended by this section, as
    requested in the annual budget submission of the President for
    fiscal year 2022, 2023, or 2024.
      (g) Termination and Restoration.--
              (1) In general.--Effective upon the date of execution
            of the final lease award for leases described in
            subsection (d), subsections (a) through (e) of this
            section and the amendments made by those subsections
            are repealed and any provision of law amended by those
            subsections is restored as if those subsections had not
            been enacted into law.
              (2) Notification.--The Secretary of Veterans Affairs
            shall submit to Congress and the Law Revision Counsel
            of the House of Representatives written notification of
            the date specified in paragraph (1) not later than 30
            days before such date.

    SEC. 12004. INCREASE IN NUMBER OF HEALTH PROFESSIONS RESIDENCY
                        POSITIONS AT DEPARTMENT OF VETERANS AFFAIRS MEDICAL
                        FACILITIES.

      (a) Increase.--In carrying out section 7302(a)(1) of title
    38, United States Code, during the seven-year period beginning
    on the day that is one year after the date of the enactment of
    this Act, the Secretary of Veterans Affairs shall increase the
    number of health professions residency positions at medical
    facilities of the Department of Veterans Affairs by not more
    than 700 positions (which shall be allocated among occupations
    included in the most current determination published in the
    Federal Register pursuant to section 7412(a) of such title, or
    allocated pursuant to a prioritization by the Secretary of
    occupations in primary care, mental health care, and any other
    health professions occupation the Secretary determines
    appropriate) through the establishment of such new positions
    at--
              (1) medical facilities where the Secretary
            established such positions pursuant to section
            301(b)(2) of the Veterans Access, Choice, and
            Accountability Act of 2014 (Public Law 113-146; 38
            U.S.C. 7302 note); or
              (2) any medical facility--
                      (A) the director of which expresses an
                    interest in establishing or expanding a health
                    professions residency program at the medical
                    facility; or
                      (B) that is located in a community that has a
                    high concentration of veterans or is
                    experiencing a shortage of health care
                    professionals.
      (b) Appropriations.--In addition to amounts otherwise
    available, there is appropriated to the Department of Veterans
    Affairs for fiscal year 2022, out of any money in the Treasury
    not otherwise appropriated, $375,000,000, to remain available
    until September 30, 2029, for the purpose of carrying out this
    section.

    SEC. 12005. VETERAN RECORDS SCANNING.

      In addition to amounts otherwise available, there is
    appropriated to the Veterans Benefits Administration for fiscal
    year 2022, out of any money in the Treasury not otherwise
    appropriated, $150,000,000, to remain available until September
    30, 2023, for costs of record scanning and claims processing,
    to carry out sections 7701 and 7703 of title 38, United States
    Code.

    SEC. 12006. FUNDING FOR DEPARTMENT OF VETERANS AFFAIRS OFFICE OF
                        INSPECTOR GENERAL.

      In addition to amounts otherwise available, there is
    appropriated to the Office of Inspector General of the
    Department of Veterans Affairs for fiscal year 2022, out of any
    money in the Treasury not otherwise appropriated, $15,000,000,
    to remain available until September 30, 2031, for audits,
    investigations, and other oversight of projects and activities
    carried out with funds made available to the Department of
    Veterans Affairs.

                    TITLE XIII--COMMITTEE ON WAYS AND MEANS

              Subtitle A--Universal Paid Family and Medical Leave

    SEC. 130001. PAID FAMILY AND MEDICAL LEAVE.

      The Social Security Act (42 U.S.C. 301 et seq.) is amended by
    adding at the end the following:

              ``TITLE XXII--PAID FAMILY AND MEDICAL LEAVE BENEFITS

    ``SEC. 2201. TABLE OF CONTENTS.

      ``The table of contents for this title is as follows:

    ``Sec. 2201. Table of contents.
    ``Sec. 2202. Paid family and medical leave benefit eligibility.
    ``Sec. 2203. Benefit amount.
    ``Sec. 2204. Benefit determination and payment.
    ``Sec. 2205. Appeals.
    ``Sec. 2206. Stewardship.
    ``Sec. 2207. Funding for benefit payments, grants, and program
              administration.
    ``Sec. 2208. Funding for outreach, public education, and research.
    ``Sec. 2209. Funding for State administration option for legacy States.
    ``Sec. 2210. Reimbursement option for employer-sponsored paid leave
              benefits.
    ``Sec. 2211. Funding for small business assistance.
    ``Sec. 2212. Definitions.

    ``SEC. 2202. PAID FAMILY AND MEDICAL LEAVE BENEFIT ELIGIBILITY.

      ``(a) Entitlement.--Every individual who--
              ``(1) has filed an application for a paid family and
            medical leave benefit in accordance with section
            2204(a);
              ``(2) has, or anticipates having, at least 4
            caregiving hours in a week ending at any time during
            the period that begins 90 days before the date on which
            such application is filed or not later than 180 days
            after such date; and
              ``(3) has wages or self-employment income at any time
            during the period--
                      ``(A) beginning with the most recent calendar
                    quarter that ends at least 4 months prior to
                    the beginning of the individual's benefit
                    period specified in subsection (b); and
                      ``(B) ending with the month before the month
                    in which such benefit period begins,
    shall be entitled to such a benefit for each month during such
    benefit period, except as otherwise provided in this section.
      ``(b) Benefit Period.--
              ``(1) In general.--Except as provided in paragraph
            (2), the benefit period specified in this subsection is
            the period beginning with the month in which ends the
            1st week in which the individual has at least 4
            caregiving hours and otherwise meets the criteria
            specified in paragraphs (1), (2), and (3) of subsection
            (a) and ending with the month in which ends the 52nd
            week ending during such period.
              ``(2) Retroactive benefits.--In the case of an
            application for benefits under this section with
            respect to an individual who has at least 4 caregiving
            hours in a week at any time during the period that
            begins 90 days before the date on which such
            application is filed, the benefit period specified in
            this subsection is the period beginning with the later
            of--
                      ``(A) the month in which ends the 1st week in
                    which the individual has at least 4 caregiving
                    hours; or
                      ``(B) the 1st month that begins during such
                    90-day period,
            and ending with the month in which ends the 52nd week
            ending during such period.
              ``(3) Limitation.--Notwithstanding paragraphs (1) and
            (2), no benefit period under this title may begin with
            any month beginning prior to July 2023.
      ``(c) Caregiving Hours.--
              ``(1) Caregiving hour defined.--For purposes of this
            title, the term `caregiving hour' means a 1-hour period
            during which the individual engaged in qualified
            caregiving (determined on the basis of information
            filed with the Secretary pursuant to subsection (c) of
            section 2204).
              ``(2) Qualified caregiving.--
                      ``(A) In general.--For purposes of this
                    subsection, the term `qualified caregiving'
                    means any activity engaged in by an individual
                    in lieu of work, other than for monetary
                    compensation, for any reason described in
                    paragraph (1) or (3) of section 102(a) of the
                    Family and Medical Leave Act of 1993 (29 U.S.C.
                    2612(a)), except that for purposes of this
                    paragraph such section shall be applied--
                              ``(i) by treating such individual as
                            the employee referred to in such
                            paragraph;
                              ``(ii) as if paragraph (1)(C) were
                            amended to read as follows:
                      ```(C)(i) In order to care for a qualified
                    family member of the employee, if such
                    qualified family member has a serious health
                    condition.
                      ```(ii) For purposes of clause (i), the term
                    ``qualified family member'' means, with respect
                    to an employee--
                              ```(I) a spouse (including a domestic
                            partner in a civil union or other
                            registered domestic partnership
                            recognized by a State) and a spouse's
                            parent;
                              ```(II) a child and a child's spouse;
                              ```(III) a parent and a parent's
                            spouse;
                              ```(IV) a sibling and a sibling's
                            spouse;
                              ```(V) a grandparent, a grandchild,
                            or a spouse of a grandparent or
                            grandchild; and
                              ```(VI) any other individual who is
                            related by blood or affinity and whose
                            association with the employee is
                            equivalent of a family relationship (as
                            determined under regulations issued by
                            the Secretary of the Treasury).'; and
                              ``(iii) by treating the criterion in
                            paragraph (1)(D) that an individual is
                            `unable to perform the functions of the
                            position of such employee' because of a
                            serious health condition as a criterion
                            that the individual is unable to
                            satisfy the requirements needed to
                            continue receiving the wages or self-
                            employment income described in
                            subsection (a)(3) with respect to the
                            individual because of such serious
                            health condition;
                              ``(iv) as if paragraph (1)(E) were
                            amended to read as follows:
                      ```(E) Because of any qualifying exigency (as
                    the Secretary shall, by regulation, determine)
                    arising out of the fact that a qualified family
                    member of the employee (as defined in
                    subparagraph (C)(ii)) is on covered active duty
                    (or has been notified of an impending call or
                    order to covered active duty) in the Armed
                    Forces.'; and
                              ``(v) as if paragraph (1) were
                            amended by adding at the end the
                            following:
                      ```(G) Because of the death of a spouse,
                    parent, or child of the employee.'.
                              ``(vi) as if paragraph (3) were
                            amended by striking `the spouse, son,
                            daughter, parent, or next of kin' and
                            inserting `a qualified family member of
                            the employee (as defined in
                            subparagraph (C)(ii))'.
                      ``(B) No monetary compensation permitted.--
                    For purposes of subparagraph (A), an activity
                    shall be considered to be engaged in by an
                    individual for monetary compensation if the
                    individual received any form of wage
                    compensation from an employer, including paid
                    vacation, paid sick leave, and any other form
                    of accrued paid time off (but not including any
                    such form of accrued paid time off or any non-
                    accrued paid family and medical leave benefits
                    sponsored by an employer to the extent that the
                    sum of such accrued or non-accrued paid leave
                    and any paid family and medical leave benefits
                    under section 2202 does not exceed 100 percent
                    of the individual's regular rate of pay (as
                    determined under section 7(e) of the Fair Labor
                    Standards Act of 1938)), for the time during
                    which the individual was so engaged.
                      ``(C) Treatment of individuals eligible for
                    employer sponsored paid family and medical
                    leave benefits.--For purposes of subparagraph
                    (A), an activity engaged in by an individual
                    shall not be considered to be engaged in in
                    lieu of work if, for the time during which the
                    individual was so engaged, the individual would
                    be eligible for paid family and medical leave
                    benefits under a program sponsored by an
                    employer who receives a grant with respect to
                    such program under section 2210.
                      ``(D) Treatment of individuals employed in
                    legacy states.--For purposes of subparagraph
                    (A), an activity engaged in by an individual
                    shall not be considered to be engaged in in
                    lieu of work if the time during which the
                    individual was so engaged constitutes leave
                    from employment for which the individual would
                    be eligible to receive paid family or medical
                    leave benefits under the law of a legacy State
                    (as defined in section 2209(b)).
      ``(d) Treatment of Bereavement Leave.--In the case of an
    activity engaged in by an individual in lieu of work for a
    reason described in paragraph (1)(G) of section 102(a) of the
    Family and Medical Leave Act of 1993 (as such section is
    applied for purposes of paragraph (2) of subsection (c)), the
    total number of caregiving hours attributable to such activity,
    for each death described in such paragraph (1)(G), that may be
    credited under section 2203(c) to weeks during the individual's
    benefit period may not exceed \3/5\ of the number of hours in
    the individual's regular workweek (within the meaning of
    section 2203(d)).
      ``(e) No Caregiving Hours in Individual's Week of Death.--No
    caregiving hours of an individual may be credited under section
    2203(c) to the week during which the individual dies.
      ``(f) Disqualification Following Certain Convictions.--An
    individual who has been found to have used false statements or
    representation to secure benefits under this title shall be
    ineligible for benefits under this title for a 5-year period
    following the date of such finding.

    ``SEC. 2203. BENEFIT AMOUNT.

      ``(a) In General.--The amount of the benefit to which an
    individual is entitled under section 2202 for a month shall be
    an amount equal to the sum of the weekly benefit amounts for
    each week ending during such month. The weekly benefit amount
    of an individual for a week shall be equal to the product of
    the individual's weekly benefit rate (as determined under
    subsection (b)) multiplied by a fraction--
              ``(1) the numerator of which is the number of
            caregiving hours of the individual credited to such
            week (as determined in subsection (c)); and
              ``(2) the denominator of which is the number of hours
            in a regular workweek of the individual (as determined
            in subsection (d)).
      ``(b) Weekly Benefit Rate.--
              ``(1) In general.--For purposes of this section, an
            individual's weekly benefit rate shall be an amount
            equal to the sum of--
                      ``(A) 85 percent of the individual's average
                    weekly earnings to the extent that such
                    earnings do not exceed the amount established
                    for purposes of this subparagraph by paragraph
                    (2);
                      ``(B) 75 percent of the individual's average
                    weekly earnings to the extent that such
                    earnings exceed the amount established for
                    purposes of subparagraph (A) but do not exceed
                    the amount established for purposes of this
                    subparagraph by paragraph (2);
                      ``(C) 55 percent of the individual's average
                    weekly earnings to the extent that such
                    earnings exceed the amount established for
                    purposes of subparagraph (B) but do not exceed
                    the amount established for purposes of this
                    subparagraph by paragraph (2);
                      ``(D) 25 percent of the individual's average
                    weekly earnings to the extent that such
                    earnings exceed the amount established for
                    purposes of subparagraph (C) but do not exceed
                    the amount established for purposes of this
                    subparagraph by paragraph (2); and
                      ``(E) 5 percent of the individual's average
                    weekly earnings to the extent that such
                    earnings exceed the amount established for
                    purposes of subparagraph (D) but do not exceed
                    the amount established for purposes of this
                    subparagraph by paragraph (2).
              ``(2) Amounts established.--
                      ``(A) Initial amounts.--For individuals whose
                    benefit period under this title begins in or
                    before calendar year 2024, the amount
                    established for purposes of subparagraphs (A),
                    (B), (C), (D), and (E) of paragraph (1) shall
                    be \1/52\ of $15,080, $34,248, $72,000,
                    $100,000, and $250,000, respectively.
                      ``(B) Wage indexing.--For individuals whose
                    benefit period under this title begins in any
                    calendar year after 2024, each of the amounts
                    so established shall equal the corresponding
                    amount established for the calendar year
                    preceding such calendar year, or, if larger,
                    the product of the corresponding amount
                    established with respect to the calendar year
                    2024 and the quotient obtained by dividing--
                              ``(i) the national average wage index
                            (as defined in section 2212) for the
                            second calendar year preceding such
                            calendar year, by
                              ``(ii) the national average wage
                            index (as so defined) for 2022.
                      ``(C) Rounding.--Each amount established
                    under subparagraph (B) for any calendar year
                    shall be rounded to the nearest $1, except that
                    any amount so established which is a multiple
                    of $0.50 but not of $1 shall be rounded to the
                    next higher $1.
              ``(3) Average weekly earnings.--For purposes of this
            subsection, an individual's average weekly earnings, as
            calculated by the Secretary, shall be equal to the
            quotient obtained by dividing--
                      ``(A) the total of the wages and self-
                    employment income received by the individual
                    during the most recent 8-calendar quarter
                    period that ends at least 4 months prior to the
                    beginning of the individual's benefit period;
                    by
                      ``(B) 104.
              ``(4) Evidence of earnings.--For purposes of
            determining the wages and self-employment income of an
            individual with respect to an application for benefits
            under section 2202, the Secretary shall make such
            determination on the basis of wage data provided to the
            Secretary from the National Directory of New Hires
            pursuant to section 453(j)(5) and self-employment
            income data provided by the Secretary, except that the
            Secretary shall also consider any more recent or
            additional evidence of wages or self-employment income
            the individual chooses to additionally submit.
      ``(c) Crediting of Caregiving Hours to a Week.--The number of
    caregiving hours of an individual credited to a week as
    determined under this subsection shall equal the number of
    caregiving hours of the individual occurring during such week,
    except that--
              ``(1) such number may not exceed the number of hours
            in a regular workweek of the individual (as determined
            in subsection (d));
              ``(2) no caregiving hours may be credited to a week
            in which fewer than 4 caregiving hours of the
            individual occur;
              ``(3) no caregiving hours of the individual may be
            credited to the individual's waiting period, consisting
            of the first week during an individual's benefit period
            in which at least 4 caregiving hours occur (regardless
            of whether the individual received paid vacation, paid
            sick leave, or any other form of accrued paid time off
            from the individual's employer during such week in
            accordance with section 2202(c)(2)(B)); and
              ``(4) the total number of caregiving hours credited
            to weeks during the individual's benefit period may not
            exceed the product of 12 multiplied by the number of
            hours in a regular workweek of the individual (as so
            determined).
      ``(d) Number of Hours in a Regular Workweek.--For purposes of
    this section, the number of hours in a regular workweek of an
    individual shall be the number of hours that the individual
    regularly works in a week for all employers (or regularly
    worked in the case of an individual no longer employed), as
    determined under guidance to be issued by the Secretary.

    ``SEC. 2204. BENEFIT DETERMINATION AND PAYMENT.

      ``(a) In General.--An individual seeking benefits under
    section 2202 shall file an application with the Secretary
    containing the information described in subsection (b) and such
    other information as the Secretary may require. Any information
    contained in an application for benefits under section 2202, or
    in a periodic benefit claim report filed with respect to such
    benefits, shall be presumed to be true and accurate, unless the
    Secretary demonstrates by a preponderance of the evidence that
    information contained in the application or periodic benefit
    claim report is false, except that the Secretary shall
    establish procedures to validate the identity of the individual
    filing the application.
      ``(b) Required Contents of Initial Application.--An
    application for a paid family and medical leave benefit filed
    by an individual shall include--
              ``(1) an attestation that the individual has, or
            anticipates having, at least 4 caregiving hours in a
            week ending at any time during the period that begins
            90 days before the date on which such application is
            filed or not later than 180 days after such date;
              ``(2) except as otherwise provided in this
            subsection, a certification, issued by a relevant
            authority determined under regulations issued by the
            Secretary, that contains such information as the
            Secretary shall specify in such regulations as
            necessary to affirm the circumstances giving rise to
            the need for such caregiving hours, which shall be no
            more than the information that is required to be stated
            under section 103(b) of the Family and Medical Leave
            Act of 1993 (29 U.S.C. 2613(b));
              ``(3) an attestation from the individual that notice
            of the individual's need to be absent from work during
            such caregiving hours has been provided, not later than
            7 days after such need arises, to the individual's
            employer (except in cases of hardship or other
            extenuating circumstances or if the individual does not
            have (or no longer has) an employer);
              ``(4) pay stubs or such other evidence as the
            individual may provide demonstrating the individual's
            wages or self-employment income during the period
            described in section 2202(a)(3), except that the
            Secretary may waive this requirement in any case in
            which such evidence is otherwise available to the
            Secretary;
              ``(5) an attestation from the individual stating the
            number of hours in a regular workweek of the individual
            (within the meaning of section 2203(d)); and
              ``(6) an attestation from the individual stating that
            the leave from employment with respect to which the
            individual is filing such application is not employment
            for which the individual has received--
                      ``(A) a notice from a State pursuant to
                    subsection (b)(2)(B) of section 2209 stating
                    that such employment would be eligible for paid
                    family and medical leave benefits under a State
                    legacy program described in such section; or
                      ``(B) a notice from the individual's employer
                    pursuant to subsection (b)(1)(F)(iv) of section
                    2210 stating that such employment would be
                    eligible for paid family and medical leave
                    benefits under an employer-sponsored program
                    described in such section.
    In the case of an individual who applies for a paid family and
    medical leave benefit in the anticipation of caregiving hours
    occurring after the date of application, the certification
    described in paragraph (2), the attestation described in
    paragraph (3), and the evidence described in paragraph (4) may
    be provided after the 1st week in which at least 4 such
    caregiving hours occur.
      ``(c) Periodic Benefit Claim Report.--
              ``(1) In general.--Except as provided in paragraph
            (2), not later than 60 days (or such longer period as
            may be provided in any case in which the Secretary
            determines that good cause exists for an extension)
            after the end of each month during the benefit period
            of an individual entitled to benefits under section
            2202, the individual shall file a periodic benefit
            claim report with the Secretary. Such periodic benefit
            claim report shall specify the caregiving hours of the
            individual that occurred during each week that ended in
            such month and shall include such other information as
            the Secretary may require. No periodic benefit claim
            report shall be required with respect to any week in
            which fewer than 4 caregiving hours occurred.
              ``(2) Retroactive applications.--In the case of an
            application filed by an individual for a paid family
            and medical leave benefit with a benefit period that
            begins, in accordance with section 2202(b)(2), with a
            month that ends before the date on which such
            application is filed, the individual may include with
            such application the information described in the
            second sentence of paragraph (1) with respect to each
            week in the benefit period that ends before such date.
      ``(d) Determinations and Notice Requirements.--
              ``(1) Initial application.--
                      ``(A) In general.--The Secretary shall
                    determine the initial eligibility of an
                    individual applying for benefits under this
                    title in accordance with section 2202.
                      ``(B) Notices.--To ensure payment of benefits
                    in the correct amount and that beneficiaries
                    are aware of the right to appeal a benefit
                    determination of the Secretary--
                              ``(i) not later than 15 days after
                            each application for benefits from an
                            individual under this title is filed,
                            the Secretary shall provide notice to
                            the individual of--
                                      ``(I) the initial
                                    determination of eligibility
                                    for such benefits;
                                      ``(II)(aa) the calendar
                                    quarter that begins the period
                                    described in section 2202(a)(3)
                                    with respect to the individual,
                                    the 8 calendar quarters used to
                                    compute the individual's
                                    average weekly earnings under
                                    section 2203(b)(3), and the
                                    wages and self-employment
                                    income received by the
                                    individual during each of those
                                    8 quarters as recorded by the
                                    Secretary; and
                                      ``(bb) the individual's right
                                    under section 2203(b)(4) to
                                    submit more recent or
                                    additional evidence of such
                                    wages or self-employment
                                    income, including a statement
                                    that eligibility could change
                                    or benefits could increase if
                                    such additional evidence
                                    results in more recent or
                                    higher average weekly earnings;
                                      ``(III) the estimated weekly
                                    benefit amount for a week to
                                    which 4 caregiving hours of the
                                    individual are credited;
                                      ``(IV) the estimated weekly
                                    benefit amount for a week to
                                    which a number of caregiving
                                    hours are credited equal to the
                                    number of hours in a regular
                                    workweek of the individual (as
                                    determined in subsection
                                    2203(d));
                                      ``(V) the number of
                                    caregiving hours credited to
                                    weeks ending prior to the date
                                    of such application;
                                      ``(VI) the beginning and
                                    ending dates of the
                                    individual's benefit period;
                                    and
                                      ``(VII) the individual's
                                    right to appeal such initial
                                    determination in accordance
                                    with the provisions of section
                                    2205; and
                              ``(ii) in any case in which an
                            individual submits additional
                            information with respect to such an
                            application, the Secretary shall
                            provide an updated notice to the
                            individual containing the same
                            information provided in the notice
                            described in clause (i), including a
                            specific indication of any such
                            information that has been updated as a
                            result of the additional information
                            submitted by the individual.
              ``(2) Monthly benefit determinations.--
                      ``(A) In general.--On the basis of the
                    information filed with the Secretary pursuant
                    to subsection (c), the Secretary shall
                    determine, with respect to an individual for
                    each week ending in a month, the number of
                    caregiving hours to be credited to such week in
                    accordance with section 2203(c).
                      ``(B) Notices.--To ensure payment of benefits
                    in the correct amount and that beneficiaries
                    are aware of the right to appeal a benefit
                    determination of the Secretary, not later than
                    15 days after each periodic benefit claim
                    report from an individual is filed (or after
                    filing of initial application for retroactive
                    benefits), the Secretary shall provide notice
                    to the individual specifying--
                              ``(i) whether payment will be made to
                            the individual for each week to which
                            such periodic benefit claim report
                            pertains and the amount of such
                            payment;
                              ``(ii) if the Secretary determines
                            that payment will not be made for a
                            week or that payment will be made based
                            on a number of caregiving hours
                            credited to the week inconsistent with
                            the number of caregiving hours
                            specified for such week in such
                            periodic benefit claim report (or
                            initial application), the reasons for
                            such determination; and
                              ``(iii) the individual's right to
                            appeal such determination in accordance
                            with the provisions of section 2205.
              ``(3) Changing circumstances.--The Secretary shall
            issue regulations to establish a process under which an
            individual may notify the Secretary if more than one
            type of circumstance gives rise to the need for
            caregiving hours during the individual's benefit
            period. Such caregiving hours shall be credited to
            weeks within the benefit period in accordance with
            section 2203(c) regardless of circumstance.
              ``(4) Accessibility of notices.--The Secretary shall
            take such actions as are necessary to ensure that any
            notice to one or more individuals issued pursuant to
            this title by the Secretary is written in simple and
            clear language.
      ``(e) Certification of Payment.--Not later than 15 days after
    the making of a determination under subsection (d)(2)(A) with
    respect to the number of caregiving hours of an individual to
    be credited to weeks ending in a month, the Secretary shall
    certify payment to such individual of the amount of the paid
    family and medical leave benefit for such month.
      ``(f) Expedited Benefit Payment in Cases of Missing
    Payment.--The Secretary shall establish and put into effect
    procedures under which expedited payment of benefits under this
    title will be made to an individual to whom a benefit payment
    was due for a month but was not received by the individual.
      ``(g) Submission of Required Information.--
              ``(1) By phone, mail, or electronic means.--To ensure
            full access to benefits by all eligible individuals,
            applicable paid leave information with respect to an
            individual may be submitted to the Secretary by phone,
            mail, or electronic means.
              ``(2) By any person.--Any person may submit
            applicable paid leave information with respect to an
            individual, including, as applicable, the individual's
            representative, the individual's employer, or any
            relevant authority identified under subsection (b)(2).
            The Secretary shall promptly notify an individual
            whenever any other person submits such information on
            the individual's behalf.
              ``(3) Notice of receipt.--The Secretary shall provide
            prompt notice of receipt of all applicable paid leave
            information submitted with respect to an individual.
              ``(4) Definition of applicable paid leave
            information.--For purposes of this subsection, the term
            `applicable paid leave information' means, with respect
            to an individual, any information submitted to the
            Secretary with respect to the paid family and medical
            leave benefits of the individual, including any initial
            application, periodic benefit claim report, appeal, and
            any other information submitted in support of such
            application, report, or appeal.

    ``SEC. 2205. APPEALS.

      ``(a) In General.--An individual shall have the right--
              ``(1) to appeal to the Secretary any determination
            made with respect to--
                      ``(A) paid family and medical leave benefits
                    under section 2202; and
                      ``(B) paid family and medical leave benefits
                    under an employer-sponsored program described
                    in section 2210 whose initial appeal pursuant
                    to subsection (b)(1)(F)(iii)(I) of such section
                    results in a determination unfavorable to the
                    individual; and
              ``(2) to appeal any final decision of the Secretary
            by a civil action brought in the district court of the
            United States for the judicial district in which the
            plaintiff resides, or in which the principal place of
            business of the plaintiff sits, or, if the plaintiff
            does not reside or such principal place of business
            does not sit within any such judicial district, in the
            United States District Court for the District of
            Columbia.
      ``(b) Procedures.--The Secretary shall establish procedures
    for appeals of such determinations that ensure that appeals
    will be heard in a timely manner by a decisionmaker who is
    different from the initial decisionmaker using procedures that
    are similar to the procedures used for appeals of
    determinations under the Medicare Low-Income Subsidy program
    described under section 1860D-14(a)(3)(B)(iv)(II).
      ``(c) Authority to Issue and Enforce Subpoenas.--
              ``(1) In general.--For the purpose of any hearing,
            investigation, or other proceeding authorized or
            directed under this title, the Secretary shall have
            power to issue subpoenas requiring the attendance and
            testimony of witnesses and the production of any
            evidence that relates to any matter under investigation
            or in question before the Secretary. Such attendance of
            witnesses and production of evidence at the designated
            place of such hearing, investigation, or other
            proceeding may be required from any place in the United
            States or in any Territory or possession thereof.
              ``(2) Service; witnesses.--Subpoenas of the Secretary
            shall be served by anyone authorized by the Secretary--
                      ``(A) by delivering a copy thereof to the
                    individual named therein; or
                      ``(B) by registered mail or by certified mail
                    addressed to such individual at his last
                    dwelling place or principal place of business.
            A verified return by the individual serving the
            subpoena setting forth the manner of service, or, in
            the case of service by registered mail or by certified
            mail, the return post-office receipt therefor signed by
            the individual so served, shall be proof of service.
            Witnesses so subpoenaed shall be paid the same fees and
            mileage as are paid witnesses in the district courts of
            the United States.
              ``(3) Contumacy or refusal to obey a subpoena.--
                      ``(A) In general.--In case of contumacy by,
                    or refusal to obey a subpoena duly served upon,
                    any person, any district court of the United
                    States for the judicial district in which the
                    person charged with contumacy or refusal to
                    obey is found or resides or transacts business,
                    upon application by the Secretary, shall have
                    jurisdiction to issue an order requiring such
                    person to appear and give testimony, or to
                    appear and produce evidence, or both. Any
                    failure to obey such order of the court may be
                    punished by the court as contempt thereof.
                      ``(B) Treatment of employers.--In the case of
                    contumacy by, or refusal to obey a subpoena
                    duly served upon, any employer, the Secretary
                    shall impose such penalties against the
                    employer as the Secretary determines may apply
                    pursuant to section 2210(f).

    ``SEC. 2206. STEWARDSHIP.

      ``(a) Promoting Equity.--The Secretary shall conduct a robust
    program to analyze and prevent disparities on the basis of
    race, color, ethnicity, religion, sex, sexual orientation,
    gender identity, disability, age, national origin, family
    composition, or living arrangements with respect to the
    benefits provided under this title and individuals' access to
    such benefits.
      ``(b) Underpayments and Overpayments.--
              ``(1) In general.--Whenever the Secretary determines
            that more or less than the correct amount of payment
            has been made to any individual under this title, the
            Secretary shall promptly notify the individual of such
            determination and inform the individual of the right to
            appeal such determination in accordance with the
            provisions of section 2205. Proper adjustment or
            recovery shall be made, under regulations prescribed by
            the Secretary, as follows:
                      ``(A) Underpayments.--With respect to payment
                    to an individual of less than the correct
                    amount, the Secretary shall promptly pay the
                    balance of the amount due to such underpaid
                    individual.
                      ``(B) Overpayments.--
                              ``(i) In general.--With respect to
                            payment to an individual of more than
                            the correct amount, the Secretary shall
                            decrease any payment for a month under
                            this title to which such overpaid
                            individual is entitled (except that the
                            weekly benefit amounts for each week
                            ending during such month as determined
                            under section 2203(a) may not be
                            decreased below the amount specified in
                            clause (ii) with respect to such weekly
                            benefit amounts of the individual), or
                            shall require such overpaid individual
                            to refund the amount in excess of the
                            correct amount, or shall apply any
                            combination of the foregoing.
                              ``(ii) Limitation on recovery.--
                                      ``(I) Amount specified.--The
                                    amount specified in this clause
                                    with respect to a weekly
                                    benefit amount of an individual
                                    for a week is an amount equal
                                    to the weekly benefit amount
                                    that would be determined for
                                    the individual for such week
                                    under section 2203(a) if the
                                    individual's weekly benefit
                                    rate (as determined under
                                    section 2203(b)) were equal to
                                    the applicable dollar amount as
                                    determined under subclause
                                    (II).
                                      ``(II) Applicable dollar
                                    amount.--For purposes of
                                    subclause (I), the applicable
                                    dollar amount is--
                                              ``(aa) with respect
                                            to a weekly benefit
                                            amount determined for a
                                            week ending in a month
                                            in or before calendar
                                            year 2024, $315; and
                                              ``(bb) with respect
                                            to a weekly benefit
                                            amount determined for a
                                            week ending in a month
                                            in any calendar year
                                            after 2024, the
                                            corresponding amount
                                            established with
                                            respect to a weekly
                                            benefit amount
                                            determined for a week
                                            ending in a month in
                                            the calendar year
                                            preceding such calendar
                                            year or, if larger, the
                                            product of the
                                            corresponding amount
                                            specified in item (aa)
                                            with respect to a
                                            weekly benefit amount
                                            determined for a week
                                            ending in a month in
                                            calendar year 2024
                                            multiplied by the
                                            quotient obtained by
                                            dividing--
                                                      ``(AA) the
                                                    national
                                                    average wage
                                                    index (as
                                                    defined in
                                                    section 2212)
                                                    for the second
                                                    calendar year
                                                    preceding such
                                                    calendar year,
                                                    by
                                                      ``(BB) the
                                                    national
                                                    average wage
                                                    index (as so
                                                    defined) for
                                                    2022.
              ``(2) Waiver of certain overpayments.--In any case in
            which more than the correct amount of payment has been
            made, there shall be no adjustment of payments to, or
            recovery by the United States from, any individual who
            was without fault in connection with the overpayment if
            such adjustment or recovery would defeat the purpose of
            this title or would be against equity and good
            conscience, or would impede efficient or effective
            administration of this title, as determined by the
            Secretary under procedures to be established by the
            Secretary.
              ``(3) Liability of certifying or disbursing
            officer.--No certifying or disbursing officer shall be
            held liable for any amount certified or paid by him to
            any individual where the adjustment or recovery of such
            amount is waived under paragraph (2), or where
            adjustment under paragraph (1) is not completed prior
            to the death of the individual against whose benefits
            deductions are authorized.
      ``(c) Penalties and Other Procedures.--
              ``(1) In general.--Whoever--
                      ``(A) knowingly and willfully makes or causes
                    to be made any false statement or
                    representation of a material fact in any
                    application for any benefit under this title,
                      ``(B) at any time knowingly and willfully
                    makes or causes to be made any false statement
                    or representation of a material fact for use in
                    determining rights to any such benefit,
                      ``(C) having knowledge of the occurrence of
                    any event affecting (A) his initial or
                    continued right to any such benefit, or (B) the
                    initial or continued right to any such benefit
                    of any other individual in whose behalf he has
                    applied for or is receiving such benefit,
                    conceals or fails to disclose such event with
                    an intent fraudulently to secure such benefit
                    either in a greater amount or quantity than is
                    due or when no such benefit is authorized,
                      ``(D) having made application to receive any
                    such benefit for the use and benefit of another
                    and having received it, knowingly and willfully
                    converts such benefit or any part thereof to a
                    use other than for the use and benefit of such
                    other person, or
                      ``(E) conspires to commit any offense
                    described in any of subparagraphs (A) through
                    (C),
            shall be fined under title 18, United States Code,
            imprisoned not more than 5 years, or both.
              ``(2) Exclusion from participation.--
                      ``(A) In general.--No person or entity who is
                    convicted of a violation of paragraph (1) may
                    represent, or submit evidence on behalf of, an
                    individual applying for, or receiving, benefits
                    under this title.
                      ``(B) Notice, effective date, and period of
                    exclusion.--
                              ``(i) In general.--An exclusion under
                            this paragraph shall be effective at
                            such time, for such period, and upon
                            such reasonable notice to the public
                            and to the individual excluded as may
                            be specified in regulations consistent
                            with clause (ii).
                              ``(ii) Effective date.--Such an
                            exclusion shall be effective with
                            respect to services furnished to any
                            individual on or after the effective
                            date of the exclusion. Nothing in this
                            paragraph may be construed to preclude
                            consideration of any medical evidence
                            derived from services provided by a
                            health care provider before the
                            effective date of the exclusion of the
                            health care provider under this
                            paragraph.
                              ``(iii) Period of exclusion.--
                                      ``(I) In general.--The
                                    Secretary shall specify, in the
                                    notice of exclusion under
                                    clause (i), the period of the
                                    exclusion.
                                      ``(II) Previous offense.--In
                                    the case of the exclusion of a
                                    person or entity under
                                    subparagraph (A) who has
                                    previously been subject to an
                                    exclusion under such
                                    subparagraph--
                                              ``(aa) if the person
                                            or entity has
                                            previously been subject
                                            to such an exclusion
                                            only once, the period
                                            of exclusion shall be
                                            not less than 10 years;
                                            and
                                              ``(bb) if the person
                                            or entity has
                                            previously been subject
                                            to such an exclusion
                                            more than once, the
                                            exclusion shall be
                                            permanent.
                      ``(C) Notice to state licensing agencies.--
                    The Secretary shall--
                              ``(i) promptly notify the appropriate
                            State or local agency or authority
                            having responsibility for the licensing
                            or certification of a person or entity
                            excluded from participation under this
                            section of the fact and circumstances
                            of the exclusion;
                              ``(ii) request that appropriate
                            investigations be made and sanctions
                            invoked in accordance with applicable
                            State law and policy; and
                              ``(iii) request that the State or
                            local agency or authority keep the
                            Secretary fully and currently informed
                            with respect to any actions taken in
                            response to the request.
                      ``(D) Notice, hearing, and judicial review.--
                    Any person or entity who is excluded (or
                    directed to be excluded) from participation
                    under this section is entitled to reasonable
                    notice and opportunity for a hearing by the
                    Secretary and to judicial review of such final
                    agency decision to the same extent as is
                    provided in section 2205.
                      ``(E) Application for termination of
                    exclusion.--
                              ``(i) In general.--An individual
                            excluded from participation under this
                            paragraph may apply to the Secretary,
                            in the manner specified by the
                            Secretary in regulations and at the end
                            of the period of exclusion provided
                            under subparagraph (B)(iii) and at such
                            other times as the Secretary may
                            provide, for termination of the
                            exclusion effected under this
                            paragraph.
                              ``(ii) Criteria for termination.--The
                            Secretary may terminate the exclusion
                            if the Secretary determines, on the
                            basis of the conduct of the applicant
                            which occurred after the date of the
                            notice of exclusion or which was
                            unknown to the Secretary at the time of
                            the exclusion, that--
                                      ``(I) there is no basis under
                                    subparagraph (A) for a
                                    continuation of the exclusion;
                                    and
                                      ``(II) there are reasonable
                                    assurances that the types of
                                    actions which formed the basis
                                    for the original exclusion have
                                    not recurred and will not
                                    recur.
                      ``(F) Availability of records of excluded
                    persons and entities.--Nothing in this section
                    shall be construed to have the effect of
                    limiting access by any applicant or beneficiary
                    under this title or the Secretary to records
                    maintained by any person or entity in
                    connection with services provided to the
                    applicant or beneficiary prior to the exclusion
                    of such person or entity under this paragraph.
                      ``(G) Reporting requirement.--Any person or
                    entity participating in, or seeking to
                    participate in, the program under this title
                    shall inform the Secretary, in such form and
                    manner as the Secretary shall prescribe by
                    regulation, whether such person or entity has
                    been convicted of a violation under paragraph
                    (1).
      ``(d) Redetermination of Entitlement.--
              ``(1) In general.--
                      ``(A) Procedures.--The Secretary shall
                    immediately redetermine the entitlement of
                    individuals to paid family and medical leave
                    benefit benefits under this title if there is
                    reason to believe that fraud or similar fault
                    was involved in the application of the
                    individual for such benefits, unless a United
                    States attorney, or equivalent State
                    prosecutor, with jurisdiction over potential or
                    actual related criminal cases, certifies, in
                    writing, that there is a substantial risk that
                    such action by the Secretary with regard to
                    beneficiaries in a particular investigation
                    would jeopardize the criminal prosecution of a
                    person involved in a suspected fraud.
                      ``(B) Disregard of certain evidence.--When
                    redetermining the entitlement, or making an
                    initial determination of entitlement, of an
                    individual under this title, the Secretary
                    shall disregard any evidence if there is reason
                    to believe that fraud or similar fault was
                    involved in the providing of such evidence.
              ``(2) Similar fault described.--For purposes of
            paragraph (1), similar fault is involved with respect
            to a determination if--
                      ``(A) an incorrect or incomplete statement
                    that is material to the determination is
                    knowingly made; or
                      ``(B) information that is material to the
                    determination is knowingly concealed.
              ``(3) Termination of benefits.--If, after
            redetermining pursuant to this subsection the
            entitlement of an individual to monthly insurance
            benefits, the Secretary determines that there is
            insufficient evidence to support such entitlement, the
            Secretary may terminate such entitlement and may treat
            benefits paid on the basis of such insufficient
            evidence as overpayments.

    ``SEC. 2207. FUNDING FOR BENEFIT PAYMENTS, GRANTS, AND PROGRAM
                        ADMINISTRATION.

      ``(a) Funding for Benefit Payments and Grants.--
              ``(1) In general.--There are appropriated, out of any
            funds in the Treasury not otherwise appropriated, such
            sums as may be necessary to pay benefits under section
            2202 and for grants under sections 2209 and 2210,
            subject to paragraph (2).
              ``(2) Limitation.--In no case shall a grant under
            section 2209 exceed a total amount (for all applicable
            individuals) equivalent to the sum of benefits paid
            (including, in the case of a grant under section 2209,
            the full cost of administering such benefits) for each
            applicable individual (as described under paragraph
            (3)) calculated on the basis of a total number of hours
            of leave during the individual's benefit period equal
            to--
                      ``(A) the product of 12 multiplied by the
                    number of hours in a regular workweek of the
                    individual (within the meaning of section
                    2203(d)), minus
                      ``(B) the number of caregiving hours (as
                    defined in section 2202(c)) of such individual
                    credited in total to months during such benefit
                    period under this title.
              ``(3) Applicable individual.--For purposes of
            paragraph (2), an `applicable individual' is an
            individual, with respect to whom a grant under section
            2209 is awarded, receiving paid family or medical leave
            benefits for days of leave under a paid family and
            medical leave benefit program of a legacy State (as
            defined in section 2209(b)).
      ``(b) Funding for Program Administration.--There are
    appropriated, out of any funds in the Treasury not otherwise
    appropriated, such sums as may be necessary for the following
    purposes (including through the use of grants or contracts
    except where otherwise specified):
              ``(1) Costs related to taking applications,
            responding to public inquiries, assisting with problem
            resolution, taking requests for appeals, and the
            provision of other necessary assistance to individuals
            applying for or receiving benefits under this title,
            including the following:
                      ``(A) Costs related to staffing a national
                    toll-free telephone number (which shall not be
                    carried out through the use of grants or
                    contracts).
                      ``(B) Costs related to technology to support
                    a national toll-free telephone number and to
                    technology related to the design, construction
                    and maintenance of an online application and
                    customer service portal.
                      ``(C) Costs related to mailed notices.
              ``(2) Costs related to determining eligibility (which
            shall not be carried out through the use of grants or
            contracts).
              ``(3) Costs related to ensuring program integrity and
            combating fraud, including by issuing regulations to do
            the following:
                      ``(A) Ensure identity validation of
                    applicants and beneficiaries.
                      ``(B) Verify the professional credentials of
                    relevant authorities who provide certifications
                    pursuant to section 2204(b)(2).
                      ``(C) Ensure the accuracy of any wage and
                    self-employment income data used in the
                    administration of this title.
                      ``(D) Ensure that the attestation requirement
                    in section 2204(b)(3) has been satisfied for
                    each applicant and beneficiary.
                      ``(E) Ensure the accuracy of periodic benefit
                    claim reports.
                      ``(F) Provide for post-effectuation quality
                    review of approved claims and quality review of
                    denied claims (which shall not be carried out
                    through the use of grants or contracts).
              ``(4) Costs related to certification of payment of
            benefits (which shall not be carried out through the
            use of grants or contracts).
              ``(5) Costs related to appeals (which shall not be
            carried out through the use of grants or contracts).
              ``(6) Costs related to the administration by the
            Secretary of the legacy State grant program under
            section 2209 and the employer-sponsored plan grant
            program under section 2210.
              ``(7) Costs related to developing systems of records
            for purposes of administering the program under this
            title (which shall not be carried out through the use
            of grants or contracts, except that costs related to
            technology to support such systems of records may be
            carried out through the use of grants or contracts).
              ``(8) Costs related to data exchange and sharing, for
            which the Secretary shall enter into an agreement with
            relevant data sources including the National Directory
            of New Hires and shall seek to enter into agreements
            with States to obtain such information as the Secretary
            may require to determine eligibility and benefits
            payable under section 2202, administer the grants in
            sections 2209 and 2210, and verify such other
            information as the Secretary determines may be
            necessary in carrying out the provisions of this title.
              ``(9) Costs related to the training of employees,
            grantees, and contractors, including training relating
            to the prevention of discrimination in the
            administration of this title on the basis of race,
            color, ethnicity, religion, sex, sexual orientation,
            gender identity, disability, age, national origin,
            family composition, or living arrangements.
              ``(10) Costs related to providing technical
            assistance to legacy States under section 2209 and to
            employers or third party administrators designated by
            an employer of paid leave programs under section 2210.
              ``(11) Costs related to providing technical
            assistance to small business employers with respect to
            the requirements of the small business assistance
            grants in section 2211 and the process by which their
            employees may apply for benefits under section 2202;
            and
              ``(12) Any other costs necessary for the effective
            administration of this title.

    ``SEC. 2208. FUNDING FOR OUTREACH, PUBLIC EDUCATION, AND RESEARCH.

      ``(a) Funding for Outreach and Public Education.--There are
    appropriated, out of any funds in the Treasury not otherwise
    appropriated, $150,000,000 for each of fiscal years 2022
    through 2026 for the Secretary to, with respect to benefits
    provided by the program under this title--
              ``(1) engage in a robust program of culturally and
            linguistically competent education and outreach toward
            ensuring awareness of and access to such benefits;
              ``(2) provide information to potential beneficiaries
            regarding eligibility requirements, the claims process,
            benefit amounts, maximum benefits payable, notice
            requirements, the appeals process, and
            nondiscrimination rights, including specific benefit
            estimates based on the average weekly earnings of a
            potential beneficiary; and
              ``(3) provide employers with a model notice to be
            used to inform employees of the availability of such
            benefits.
      ``(b) Funding for Research.--There are appropriated, out of
    any funds in the Treasury not otherwise appropriated,
    $150,000,000 for each of fiscal years 2023 through 2027 for the
    Secretary to--
              ``(1) develop and carry out grants for research for
            the purpose of ensuring full access to the benefits
            provided by the program under this title, including
            through the detection and prevention of disparities on
            the basis of race, color, ethnicity, religion, sex,
            sexual orientation, gender identity, disability, age,
            national origin, income, language, job classification,
            family composition, or living arrangements; and
              ``(2) annually make available to the public beginning
            in fiscal year 2024 a report that includes--
                      ``(A) the number of individuals who received
                    such benefits;
                      ``(B) the purposes and durations for which
                    such benefits were received;
                      ``(C) an analysis of benefit use by
                    occupation, industry, wage levels, employer
                    size, and geography;
                      ``(D) an analysis of disparities identified
                    by the grants for research authorized under
                    this subsection on the basis of race, color,
                    ethnicity, religion, sex, sexual orientation,
                    gender identity, disability, age, national
                    origin, family composition, or living
                    arrangements;
                      ``(E) a description of the actions by the
                    Secretary to prevent disparities and ensure
                    full access to the benefits provided by the
                    program under this title;
                      ``(F) a comparative analysis of paid family
                    and medical leave benefits received by
                    individuals through the program under section
                    2202, through a legacy State paid family and
                    medical leave program described in section
                    2209, or through an employer-sponsored program
                    described in section 2210 that takes into
                    account the number of individuals receiving
                    benefits, the characteristics of the benefits
                    received, and the patterns of leave-taking
                    under each program;
                      ``(G) the number of employers who received a
                    reimbursement grant under section 2210 and the
                    number of employees of such employers who
                    received paid family and medical leave benefits
                    under an employer-sponsored program described
                    in such section; and
                      ``(H) the number of employers who received
                    one or more small business assistance grants
                    under section 2211 and the total number of such
                    grants provided.

    ``SEC. 2209. FUNDING FOR STATE ADMINISTRATION OPTION FOR LEGACY STATES.

      ``(a) In General.--In each calendar year beginning with 2024,
    the Secretary shall make a grant to each State that, for the
    calendar year preceding such calendar year (or, in the case of
    a grant under this section in 2024, for the portion of such
    preceding calendar year occurring after June 30), was a legacy
    State and that met the data sharing requirements of subsection
    (c), in an amount equal to the lesser of--
              ``(1) an amount, as estimated by the Secretary, in
            consultation with the Secretary of Labor, equal to the
            total amount of paid family and medical leave benefits
            that would have been paid under section 2202 (including
            the full Federal cost of administering such benefits)
            to individuals who received benefits under a State
            program described in subsection (b) during the calendar
            year preceding such calendar year (or, in the case of a
            grant under this section in 2024, for the portion of
            such preceding calendar year occurring after June 30)
            if the State had not been a legacy State for such
            preceding calendar year (or, in the case of a grant
            under this section in 2024, for the portion of such
            preceding calendar year occurring after June 30); or
              ``(2) an amount equal to the total cost of the State
            paid family and medical leave program described in
            subsection (b) for the calendar year preceding such
            calendar year (or, in the case of a grant under this
            section in 2024, for the portion of such preceding
            calendar year occurring after June 30), including--
                      ``(A) the total amount of paid family and
                    medical leave benefits that would have been
                    paid to individuals under such program for
                    leave that is exempt under such program on
                    account of being otherwise paid under a program
                    provided by such individual's employer; and
                      ``(B) the full cost to the State of
                    administering such program.
    In any case in which, during any calendar year, the Secretary
    has reason to believe that a State will be a legacy State and
    meet the data sharing requirements of subsection (c) for such
    calendar year, the Secretary may make estimated payments during
    such calendar year of the grant which would be paid to such
    State in the succeeding calendar year, to be adjusted as
    appropriate in the succeeding calendar year.
      ``(b) Legacy State.--For purposes of this section, the term
    `legacy State' for a calendar year means a State that the
    Secretary, in consultation with the Secretary of Labor,
    determines--
              ``(1) has enacted, not later than the date of
            enactment of this title, a State law that provides paid
            family and medical leave benefits; and
              ``(2) for any calendar year that begins on or after
            the date that is 3 years after the date of enactment of
            this title, has in effect, throughout such calendar
            year, a State program enacted into law--
                      ``(A) that provides paid family and medical
                    leave benefits--
                              ``(i) for at least 12 full workweeks
                            of leave during each 12-month period to
                            at least all of those individuals in
                            the State who would be eligible for
                            paid family and medical leave benefits
                            under section 2202 (without regard to
                            section 2202(c)(2)(D)) during any part
                            of such calendar year, provided that
                            such State program--
                                      ``(I) shall provide paid
                                    family and medical leave
                                    benefits for leave from
                                    employment by the State or any
                                    political subdivision thereof,
                                    except that any State or local
                                    employees subject to a
                                    collective bargaining agreement
                                    may be excluded from such
                                    coverage with the agreement of
                                    90 percent of the employees
                                    covered by the collective
                                    bargaining agreement; and
                                      ``(II) may provide such
                                    benefits for leave from Federal
                                    employment; and
                              ``(ii) at a wage replacement rate
                            that is at least equivalent to the wage
                            replacement rate under the program
                            under this title (without regard to
                            section 2202(c)(2)(D)); and
                      ``(B) that provides an annual notice to each
                    individual whose employment would be eligible
                    for such benefits under the State program.
      ``(c) Data Sharing.--As a condition of receiving a grant
    under subsection (a) in a calendar year, a State shall enter
    into an agreement with the Secretary under which the State
    shall provide the Secretary--
              ``(1) with information, to be provided periodically
            as determined by the Secretary, concerning individuals
            who received a paid leave benefit under a State program
            described in subsection (b), including each
            individual's name, information to establish the
            individual's identity, dates for which such paid leave
            benefits were paid, the amount of such paid leave
            benefit, and, to the extent available, such other
            information concerning such individuals as the
            Secretary may require for the purpose of carrying out
            this section and section 2202(c)(2)(D);
              ``(2) not later than July 1 of such calendar year,
            the amount described in subsection (a)(2) for the
            calendar year preceding such calendar year; and
              ``(3) such other information as the Secretary
            determines may be necessary in carrying out the
            provisions of this title, including for the purposes of
            promoting equity as described under section 2206(a) and
            for research described under section 2208(b).
      ``(d) Funding for Transitional Costs for Legacy States.--
              ``(1) In general.--There are appropriated to the
            Secretary, out of any funds in the Treasury not
            otherwise appropriated, such sums as necessary for
            grants in accordance with this subsection.
              ``(2) Transition grants.--The Secretary shall make a
            grant under this subsection to each State that--
                      ``(A) is a legacy State for the calendar year
                    in which occurs the date of enactment of this
                    title;
                      ``(B) certifies to the Secretary that the
                    State intends to remain a legacy State and meet
                    the data sharing requirements of subsection (c)
                    at least through the first calendar year that
                    begins on or after the date that is 3 years
                    after the date of enactment of this title; and
                      ``(C) agrees to repay the full amount of such
                    grant if the State fails to remain a legacy
                    State and meet the data sharing requirements of
                    subsection (c) as certified in subparagraph
                    (B).
              ``(3) Amount of grant.--The amount of a grant
            provided to a State under this subsection shall be
            equal to \1/2\ of the sum of the State's expenditures
            from the date of enactment of this title through the
            calendar year described in paragraph (2)(B) on--
                      ``(A) the costs of creating new information
                    technology systems as needed to implement the
                    data sharing requirements of subsection (c)
                    (including staffing costs related to such
                    systems); and
                      ``(B) other necessary costs incurred by the
                    State to meet the requirements of subsection
                    (b)(2)(A)(ii).
              ``(4) Estimated advance payments.--The Secretary may
            make estimated payments of a grant provided to a State
            under this subsection for any calendar year, to be
            adjusted as appropriate in the succeeding calendar
            year.

    ``SEC. 2210. REIMBURSEMENT OPTION FOR EMPLOYER-SPONSORED PAID LEAVE
                        BENEFITS.

      ``(a) In General.--For each calendar year beginning with
    2023, the Secretary shall make a grant to each employer that is
    an eligible employer for such calendar year in an amount equal
    to--
              ``(1) in the case of an eligible employer sponsoring
            a paid family and medical leave benefit program with
            respect to which benefits are awarded and paid under a
            contract with an insurer, an amount equal to 90 percent
            of the product of--
                      ``(A) the projected national average cost per
                    employee of providing paid family and medical
                    leave benefits as determined by the Secretary
                    for such calendar year under subsection (c)(3)
                    (or, in the case of calendar year 2023, \1/2\
                    of such projected national average cost);
                    multiplied by
                      ``(B) the number of employees (pro-rated for
                    part-time employees) covered under the program
                    for such calendar year (or, in the case of
                    calendar year 2023, for the portion of such
                    calendar year occurring after June 30); and
              ``(2) in the case of an eligible employer sponsoring
            a self-insured paid family and medical leave benefit
            program with respect to which benefits are awarded and
            paid directly by the employer (or by a third party
            administrator on behalf of the employer), an amount
            equal to 90 percent of--
                      ``(A) the amount of benefits paid under the
                    program for such calendar year to individuals
                    for up to 12 weeks of leave per individual (or,
                    in the case of calendar year 2023, for the
                    portion of such calendar year occurring after
                    June 30); or
                      ``(B) if lesser, the product of the national
                    average weekly benefit amount paid under
                    section 2203(a) during such calendar year (or,
                    in the case of calendar year 2023, during the
                    portion of such calendar year occurring after
                    June 30) multiplied by the number of weeks of
                    leave (up to 12 per individual) paid by the
                    employer for all individuals under the program
                    for the calendar year (or such portion in the
                    case of calendar year 2023).
      ``(b) Eligibility; Application Requirements.--
              ``(1) In general.--For purposes of subsection (a), an
            eligible employer for a calendar year is an employer
            (other than the Federal Government or the government of
            any State (or political subdivision thereof) that is a
            legacy State for such calendar year under section 2209)
            that satisfies all of the following requirements:
                      ``(A) Non-legacy state employees.--The
                    employer has one or more employees during such
                    calendar year whose employment with such
                    employer would not be eligible for paid family
                    or medical leave benefits under the law of any
                    legacy State (as defined in section 2209(b))
                    for such calendar year.
                      ``(B) Application; submission of required
                    information.--Not later than the certification
                    deadline specified in paragraph (2)(A) for such
                    calendar year, the employer--
                              ``(i) notifies the Secretary that the
                            employer intends to seek a grant under
                            this section for such calendar year;
                              ``(ii) certifies to the Secretary
                            that the employer will have in effect
                            during such calendar year a paid family
                            and medical leave benefit program that
                            meets the requirements of subsection
                            (c) and, not later than the submission
                            deadline specified in paragraph (2)(B)
                            for such calendar year, provides all
                            documentation relating to such program
                            as the Secretary may request; and
                              ``(iii) pays an application fee of
                            $1,000 (or $200 in the case of a
                            renewed application).
                      ``(C) Approval by the secretary.--The paid
                    family and medical leave benefit program
                    referred to in subparagraph (B) is subsequently
                    approved by the Secretary as meeting all
                    applicable requirements.
                      ``(D) Information submission requirement.--At
                    the time of application for such grant for each
                    calendar year, the employer--
                              ``(i) submits to the Secretary--
                                      ``(I) an attestation that the
                                    paid family and medical leave
                                    benefit program referred to in
                                    subparagraph (B) will remain in
                                    effect during the whole of such
                                    calendar year (or, in the case
                                    of a program not in effect at
                                    the beginning of such calendar
                                    year, an attestation that such
                                    program will remain in effect
                                    until the end of such calendar
                                    year); and
                                      ``(II) with respect to each
                                    employee of the employer
                                    covered by the program for such
                                    calendar year, the employee's
                                    name, information to establish
                                    the employee's identity, and in
                                    the case of a part-time
                                    employee (for purposes of
                                    determining the number of
                                    employees (pro-rated for part-
                                    time employees) covered under
                                    the program for such calendar
                                    year under subsection
                                    (a)(1)(B)), the number of hours
                                    the employee regularly works in
                                    a week; and
                              ``(ii) agrees to submit information
                            to the Secretary as described in
                            subsection (e).
                      ``(E) Maintenance of records.--The employer
                    agrees to retain all records relating to the
                    employer's paid family and medical leave
                    benefit program for not less than 3 years.
                      ``(F) Job protections and other employee
                    rights.--As a condition of the grant, the
                    employer agrees--
                              ``(i) that, on return from leave
                            under the program described in
                            subparagraph (B), the individual taking
                            such leave will--
                                      ``(I) be restored by the
                                    employer to the position of
                                    employment held by the
                                    individual when the leave
                                    commenced; or
                                      ``(II) be restored to an
                                    equivalent position with
                                    equivalent employment benefits,
                                    pay, and other terms and
                                    conditions of employment;
                              ``(ii) to maintain coverage for the
                            individual under any `group health
                            plan' (as defined in section 2212) for
                            the duration of such leave at the level
                            and under the conditions coverage would
                            have been provided if the individual
                            had continued in employment
                            continuously for the duration of such
                            leave;
                              ``(iii) in any case in which an
                            employee receives an adverse
                            determination from the employer (or
                            administering entity) with respect to
                            paid family and medical leave benefits
                            under the program described in
                            subparagraph (B)--
                                      ``(I) to provide opportunity
                                    for the employee to appeal such
                                    adverse determination to the
                                    employer (or administering
                                    entity); and
                                      ``(II) in any case in which
                                    the employee elects to appeal
                                    the results of such initial
                                    appeal to the Secretary
                                    pursuant to section
                                    2205(a)(1)(B) and the final
                                    decision of the Secretary is in
                                    the employee's favor, to
                                    provide for the payment of such
                                    paid family and medical leave
                                    benefits in addition to the
                                    costs to the Secretary of such
                                    secondary appeal;
                              ``(iv) to provide annual notice to
                            all employees of the availability of
                            paid family and medical leave benefits
                            under the program described in
                            subparagraph (B) and of the right to
                            appeal any adverse determination with
                            respect to such benefits; and
                              ``(v) not to impose any fee on any
                            employee related to the receipt of paid
                            family and medical leave benefits under
                            the program described in subparagraph
                            (B).
                      ``(G) Additional assurances.--The employer
                    provides assurances that the employer (or
                    administering entity)--
                              ``(i) will not interfere with,
                            restrain, or deny the exercise of, or
                            the attempt to exercise, any right
                            provided under such policy;
                              ``(ii) will notify an employee in any
                            case in which the employee is provided
                            reimbursable benefits; and
                              ``(iii) will not discharge, or in any
                            other manner discriminate against, any
                            individual for opposing any practice
                            prohibited by such policy.
                      ``(H) Special conditions in the case of
                    certain employers.--
                              ``(i) Self-insured private
                            employers.--In the case of a paid
                            family and medical leave benefit
                            program of an employer (other than a
                            State or political subdivision thereof)
                            with respect to which benefits are
                            awarded and paid directly by the
                            employer (or by a third party
                            administrator on behalf of the
                            employer)--
                                      ``(I) such employer employs
                                    at least 50 employees described
                                    in subparagraph (A);
                                      ``(II) such benefits are
                                    guaranteed by a surety bond
                                    held by the employer; and
                                      ``(III) such employer (or
                                    administering entity) holds
                                    funds in a dedicated account
                                    for such benefits not used for
                                    any other business purpose.
                              ``(ii) Self-insured state and local
                            employers.--In the case of a paid
                            family and medical leave benefit
                            program of an employer that is a State
                            (or political subdivision thereof) with
                            respect to which benefits are awarded
                            and paid directly by the employer (or
                            by a third party administrator on
                            behalf of the employer), such benefits
                            are negotiated pursuant to a collective
                            bargaining agreement.
              ``(2) Timing of application.--
                      ``(A) Certification.--The certification
                    deadline specified in this subparagraph for a
                    calendar year is--
                              ``(i) for calendar year 2023, March
                            31, 2023; and
                              ``(ii) for any calendar year after
                            2023, 90 days before the beginning of
                            such calendar year,
                    or, if later, the date that is 90 days before a
                    plan described in paragraph (1)(B) first goes
                    into effect.
                      ``(B) Submission of documentation.--The
                    submission deadline specified in this
                    subparagraph for a calendar year is--
                              ``(i) for calendar year 2023, May 15,
                            2023; and
                              ``(ii) for any calendar year after
                            2023, 45 days before the beginning of
                            such calendar year,
                    or, if later, the date that is 45 days before a
                    plan described in paragraph (1)(B) first goes
                    into effect.
      ``(c) Employer Program Requirements.--
              ``(1) In general.--A paid family and medical leave
            benefit program shall not be considered to meet the
            requirements of this subsection unless such program
            consists of a written employer policy that provides for
            the payment, through one or more employee benefit
            plans, of family and medical leave benefits, which may
            be guaranteed through an insurer and which may be
            administered by an insurer or by another third-party
            entity, that includes each element in the model
            template described in paragraph (2), and that provides
            for each of the following:
                      ``(A) The provision of such benefits to all
                    employees described in subsection (b)(1)(A),
                    regardless of length of service, job type,
                    membership in a labor organization, seniority
                    status, or any other employee classification.
                      ``(B) Each of the job protections and other
                    employee rights described in subsection
                    (b)(1)(F).
                      ``(C) Each of the assurances described in
                    subsection (b)(1)(G).
                      ``(D) Submission of information to the
                    Secretary as described in subsection (e).
              ``(2) Model template.--Not later than July 1, 2022,
            the Secretary shall make available to eligible
            employers a model template of a written policy
            providing paid family and medical leave benefits--
                      ``(A) at a wage replacement rate that is at
                    least as great as the wage replacement rate
                    that an employee would receive under the
                    program under this title (without regard to
                    section 2202(c)(2)(C));
                      ``(B) for a total number of weeks of paid
                    leave that is at least as great as the total
                    number of weeks of paid leave that an employee
                    would receive under the program under this
                    title (without regard to such section);
                      ``(C) for all of the reasons for which an
                    individual would be considered to be engaged in
                    qualified caregiving under section
                    2202(c)(2)(A), regardless of any pre-existing
                    medical conditions;
                      ``(D) for leave which may be taken
                    intermittently or on a reduced leave schedule;
                      ``(E) that does not impose any fee on any
                    employee related to the receipt of such
                    benefits.
                      ``(F) which must be paid not less frequently
                    than monthly;
                      ``(G) for which applications must be
                    processed and notifications provided at least
                    as quickly as is provided under section 2204
                    for benefits provided under section 2202(a);
                    and
                      ``(H) for which any information contained in
                    an application for such benefits shall be
                    presumed to be true and accurate, unless the
                    employer (or administering entity) demonstrates
                    by a preponderance of the evidence that
                    information contained in the application is
                    false;
              ``(3) National average cost.--Not later than October
            1 of the calendar year before each calendar year
            beginning with 2023, the Secretary shall determine the
            projected national average cost per employee for such
            calendar year of a paid family and medical leave
            benefit program that meets the requirements of
            paragraph (2) (assuming administrative costs no greater
            than the average or projected average administrative
            costs of providing benefits under section 2202), taking
            into account projected benefit levels, duration of
            benefits, and frequency of use of the program in such
            calendar year.
      ``(d) Timing of Payment; Penalty for Late Filing.--
              ``(1) Insured employers.--A grant paid under this
            section for a calendar year to an eligible employer
            described in subsection (a)(1) shall be paid by the
            Secretary not later than 30 days after the beginning of
            such calendar year, except that in the case of a grant
            under this section for calendar year 2023, such grant
            shall be paid by the Secretary not later than August 1,
            2023.
              ``(2) Self-insured employers.--A grant paid under
            this section for a calendar year to an eligible
            employer described in subsection (a)(2) shall be paid
            by the Secretary not later than March 31 of the
            calendar year succeeding such calendar year.
              ``(3) Penalty for late filing.--In any case in which
            an eligible employer seeking a grant under this
            subsection for a calendar year fails to submit all
            required documentation by the submission deadline for
            such calendar year as required under subsection
            (b)(1)(B)(ii)--
                      ``(A) the grant for such calendar year for
                    such employer shall not be paid until 45 days
                    after the date of payment otherwise specified
                    in paragraph (1) or (2), as applicable; and
                      ``(B) the amount of such grant shall be
                    reduced by 2 percent for each 7 days by which
                    such submission deadline is exceeded.
      ``(e) Information Submission.--As a condition of receiving a
    grant under subsection (a) for a calendar year, an employer
    shall provide the Secretary with information, at such times and
    in such manner as determined by the Secretary, concerning
    individuals who received a paid leave benefit under the paid
    family and medical leave benefit program of the employer,
    including each individual's name, information to establish the
    individual's identity, dates for which such paid leave benefits
    were paid, the amount of such paid leave benefit, and, to the
    extent available, such other information concerning such
    individuals as the Secretary may require for the purpose of
    carrying out this section and section 2202(c)(2)(C), and for
    otherwise carrying out the provisions of this title, including
    for the purposes of promoting equity as described under section
    2206(a) and for research described under section 2208(b).
      ``(f) Enforcement.--
              ``(1) In general.--The Secretary shall conduct
            periodic reviews of employers receiving grants under
            this section (and of entities administering such
            grants). The Secretary may withdraw approval of the
            paid family and medical leave benefit program of an
            employer in any case in which the Secretary finds that
            the employer (or administering entity) has violated any
            requirement of this section, and may disqualify an
            employer (or administering entity) from receiving (or
            administering) subsequent grants under this section in
            the case of repeated violations.
              ``(2) Penalties relating to appeals.--In any case in
            which the Secretary determines that a pattern exists
            with respect to an employer (or administering entity)
            in which the employer (or administering entity) has
            incorrectly denied claims for paid leave benefits under
            the employer-sponsored program and such claims have
            subsequently been approved by the Secretary pursuant to
            an appeal described in section 2205(a)(1)(B), the
            Secretary may impose such penalties on the employer (or
            administering entity) as the Secretary deems
            appropriate, which may include a reduction in, or
            disqualification from receiving (or administering),
            subsequent grants under this section.
              ``(3) Penalties on administering entities.--In the
            case of a third-party entity administering a paid
            family and medical leave benefit program of an
            employer, such entity shall notify such employer in any
            case in which a penalty is imposed under this
            subsection on the administering entity not later than
            30 days after the date on which such penalty has been
            imposed. In any case in which the Secretary determines
            that a pattern of misconduct exists with respect to an
            entity administering benefits under this section for
            multiple employers, the Secretary may disqualify such
            entity from administering employer-sponsored programs
            receiving subsequent grants under this section.
              ``(4) Employer and administrator appeals.--An
            employer (or administering entity) with respect to
            which a penalty is imposed under this subsection may
            appeal such decision to the Secretary only if such
            appeal is filed with the Secretary not later than 60
            days after the date of such decision.
      ``(g) Greater Benefits Permitted.--Nothing in this section
    shall be construed to prohibit an eligible employer from
    providing paid family and medical leave benefits that exceed
    the requirements described in this section.

    ``SEC. 2211. FUNDING FOR SMALL BUSINESS ASSISTANCE.

      ``(a) In General.--There are appropriated, out of any funds
    in the Treasury not otherwise appropriated, such sums as may be
    necessary for grants in accordance with this section.
      ``(b) Small Business Assistance Grants.--The Secretary shall
    make a grant to each eligible employer (as defined in
    subsection (g)) who employs a covered individual (as so
    defined) if such eligible employer satisfies the requirements
    of subsection (c).
      ``(c) Grant Requirements.--An eligible employer seeking a
    grant under this section with respect to a covered individual
    described in subsection (b) shall--
              ``(1) not later than 90 days after such individual
            returns from qualified leave (as defined in subsection
            (g)) from the employer, submit an application to the
            Secretary in such manner as the Secretary shall
            provide;
              ``(2) attest to the Secretary that the employer
            reasonably expects to, during the period in which such
            individual is taking such qualified leave, incur costs
            attributable to replacing the labor of such individual
            during such period in excess of the wages that would be
            paid to the individual during such period if such leave
            were not taken;
              ``(3) agree that, on return from such qualified
            leave, the individual will--
                      ``(A) be restored by the employer to the
                    position of employment held by the individual
                    when the leave commenced; or
                      ``(B) be restored to an equivalent position
                    with equivalent employment benefits, pay, and
                    other terms and conditions of employment;
              ``(4) agree to maintain coverage for the individual
            under any `group health plan' (as defined in section
            2212) for the duration of such qualified leave at the
            level and under the conditions coverage would have been
            provided if the individual had continued in employment
            continuously for the duration of such leave;
              ``(5) upon the award of such grant, notify the
            individual of their rights under paragraphs (3) and
            (4).
      ``(d) Amount of Grant.--The amount of a grant to an eligible
    employer with respect to a covered individual shall be an
    amount equal to the product of 2.5 multiplied by the average
    weekly wage of the State in which the individual's worksite is
    located for the most recent calendar year. For purposes of this
    subsection, the average weekly wage of a State for a calendar
    year shall be determined and annually published by the
    Secretary on the basis of data prepared by the Bureau of Labor
    Statistics that is based on a quarterly census of employers in
    the State of wages paid for unemployment insurance-covered
    employment.
      ``(e) Limitations.--In no case may an eligible employer--
              ``(1) receive more than 1 grant under this section
            with respect to the same covered individual in a single
            calendar year; or
              ``(2) receive more than 10 total grants under this
            section in a single calendar year.
      ``(f) Enforcement.--In any case in which--
              ``(1) an employer's attestation with respect to costs
            incurred made pursuant to subsection (c)(2) is not made
            in good faith; or
              ``(2) an employer who receives a grant under this
            section with respect to a covered individual fails to
            satisfy the requirements of paragraph (3) or (4) of
            subsection (c) with respect to such individual,
    the Secretary may require the employer to repay the full amount
    of such grant (including any applicable interest) and may
    permanently prohibit the employer from applying for any
    subsequent grants under this section.
      ``(g) Definitions.--For purposes of this section--
              ``(1) Covered individual.--For purposes of this
            section, the term `covered individual' means an
            individual employed by an eligible employer who takes 4
            or more weeks of leave from such employer, or
            anticipates taking 4 or more weeks, during the
            individual's benefit period for which the individual
            receives paid family and medical leave benefits--
                      ``(A) under section 2202(a);
                      ``(B) under the law of a legacy State (as
                    defined in section 2209(b)); or
                      ``(C) under an eligible employer-sponsored
                    plan under section 2210,
            but only if the eligible employer has received no other
            State or Federal grant intended to cover the costs
            described in subsection (c)(2) with respect to such
            individual.
              ``(2) Eligible employer.--The term `eligible
            employer' means any person (other than a governmental
            agency) who regularly employs at least 1 and not more
            than 50 employees.
              ``(3) Qualified leave.--The term `qualified leave'
            means leave taken by an individual with respect to
            which the individual is eligible for paid family and
            medical leave benefits under section 2202, under the
            law of a legacy State (as defined in section 2209(b)),
            or under an eligible employer-sponsored plan under
            section 2210.

    ``SEC. 2212. DEFINITIONS.

      ``For purposes of this title the following definitions apply:
              ``(1) Group health plan.--The term `group health
            plan' has the meaning given such term in section
            5000(b)(1) of the Internal Revenue Code of 1986.
              ``(2) National average wage index.--The term
            `national average wage index' has the meaning given
            such term in section 209(k)(1).
              ``(3) Secretary.--The term `Secretary' means the
            Secretary of the Treasury.
              ``(4) Self-employment income.--The term `self-
            employment income' has the meaning given the term in
            section 1402(b) of the Internal Revenue Code of 1986
            for purposes of the taxes imposed by section 1401(b) of
            such Code. For purposes of section 2202(a) and
            2203(b)(3), the Secretary shall determine rules for the
            crediting of self-employment income to calendar
            quarters, under which--
                      ``(A) in the case of a taxable year which is
                    a calendar year, self-employment income shall
                    be credited equally to each quarter of such
                    calendar year; and
                      ``(B) in the case of any other taxable year,
                    such income shall be credited equally to the
                    calendar quarter in which such taxable year
                    ends and to each of the next three or fewer
                    preceding quarters any part of which is in such
                    taxable year.
              ``(5) State.--The term `State' means any State of the
            United States or the District of Columbia or any
            territory or possession of the United States.
              ``(6) Wages.--The term `wages' has the meaning given
            such term in section 3121(a) of the Internal Revenue
            Code of 1986 for purposes of the taxes imposed by
            sections 3101(b) and 3111(b) of such Code, except that
            such term also includes--
                      ``(A) compensation, as defined in section
                    3231(e) of such Code for purposes of the
                    Railroad Retirement Tax Act; and
                      ``(B) unemployment compensation, as defined
                    in section 85(b) of such Code.
              ``(7) Week.--The term `week' means a 7-day period
            beginning on a Sunday.''.

    SEC. 130002. ACCESS TO WAGE INFORMATION FROM THE NATIONAL DIRECTORY OF
                        NEW HIRES FOR THE PURPOSE OF ADMINISTERING PAID
                        LEAVE.

      (a) In General.--Section 453(j) of the Social Security Act
    (42 U.S.C. 653(j)) is amended--
              (1) by redesignating paragraphs (5) through (11) as
            paragraphs (6) through (12), respectively; and
              (2) by adding after paragraph (4) the following:
              ``(5) Provision of new hire information for purposes
            of family and medical leave program.--
                      ``(A) In general.--The National Directory of
                    New Hires shall provide the Secretary of the
                    Treasury with all information in the National
                    Directory relating to wages paid to
                    individuals.
                      ``(B) Use and maintenance of information by
                    the secretary of the treasury.--The Secretary
                    of the Treasury may use information provided
                    under this paragraph only for purposes of
                    administering the paid family and medical leave
                    benefit program under title XXII, and shall
                    maintain such information in the records of the
                    Secretary of the Treasury for such time as the
                    Secretary of the Treasury deems necessary for
                    the administration of such program.''.
      (b) Conforming Amendment.--Section 453(i)(2)(C) of such Act
    (42 U.S.C. 653(i)(2)(C)) is amended by striking ``(j)(5)'' and
    inserting ``(j)(6)''.

                             Subtitle B--Retirement

    SEC. 131001. AMENDMENT OF 1986 CODE.

      Except as otherwise expressly provided, whenever in this
    subtitle 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.

             PART 1--AUTOMATIC CONTRIBUTION PLANS AND ARRANGEMENTS

    SEC. 131101. TAX IMPOSED ON EMPLOYERS FAILING TO MAINTAIN OR FACILITATE
                        AUTOMATIC CONTRIBUTION PLAN OR ARRANGEMENT.

      (a) Automatic Contribution Plan or Arrangement.--
              (1) In general.--Section 414 is amended by adding at
            the end the following:
      ``(aa) Automatic Contribution Plan or Arrangement.--For
    purposes of this title--
              ``(1) In general.--The term `automatic contribution
            plan or arrangement' means--
                      ``(A) a defined contribution plan that--
                              ``(i) is described in clause (i),
                            (ii), or (iv) of section 219(g)(5)(A),
                              ``(ii) includes a qualified cash or
                            deferred arrangement or a salary
                            reduction arrangement, and
                              ``(iii) meets the notice,
                            eligibility, contribution, investment,
                            fee, and lifetime income requirements
                            of paragraphs (2), (3), (4), (5), (6),
                            and (7), respectively,
                      ``(B) an automatic IRA arrangement described
                    in paragraph (8),
                      ``(C) an arrangement described in section
                    408(p) that meets the notice, contribution,
                    investment, and fee requirements described in
                    paragraphs (2), (4), (5), and (6), and
                      ``(D) a plan described in clause (i), (ii),
                    (iv), (v), or (vi) of section 219(g)(5)(A) that
                    is established and maintained by an employer as
                    of the date of enactment of the Act to provide
                    for reconciliation pursuant to title II of S.
                    Con. Res. 14, or a plan described in section
                    219(g)(5)(A)(iv) that is not subject to title I
                    of the Employee Retirement Income Security Act
                    of 1974 and offers annuity contracts, or makes
                    custodial accounts available to employees, as
                    of such date.
              ``(2) Notice requirements.--A plan or arrangement
            shall be treated as meeting the notice requirements of
            this paragraph with respect to an employee if the plan
            or arrangement meets the notice requirements of, or
            similar to, the notice requirements of section
            401(k)(13)(E), excluding any such notice requirements
            that are not applicable or relevant to the such plan or
            arrangement.
              ``(3) Eligibility requirements.--
                      ``(A) In general.--The requirements of this
                    paragraph shall be treated as met if all
                    employees of the employer are eligible to
                    participate in an automatic contribution plan
                    or arrangement maintained or facilitated by the
                    employer.
                      ``(B) Certain exclusions.--The following
                    employees may be excluded from consideration in
                    determining whether the requirements of this
                    paragraph are met:
                              ``(i) Individuals less than 21 years
                            old.--Any employee who has not attained
                            age 21.
                              ``(ii) Certain other employees.--Any
                            employee described in section
                            410(b)(3).
                              ``(iii) Service requirements.--Any
                            employee who has not completed at least
                            one of the following periods of service
                            with the employer maintaining or
                            facilitating the plan or arrangement:
                                      ``(I) The period permitted
                                    under section 410(a)(1)
                                    (determined without regard to
                                    subparagraph (B)(i) thereof).
                                      ``(II) A period of 2
                                    consecutive 12-month periods
                                    during each of which the
                                    employee has at least 500 hours
                                    of service.
                      ``(C) Special rules for controlled groups.--
                    Eligible employees within an employer need not
                    be eligible to participate in the same
                    automatic contribution plan or arrangement. For
                    purposes of this subsection, the term
                    `employer' shall include all employers treated
                    as a single employer under subsection (b), (c),
                    (m), or (o) of section 414.
                      ``(D) Entry dates.--Rules similar to the
                    rules of section 410(a)(4) shall apply with
                    respect to employees who have satisfied the age
                    and service requirements referenced in
                    subparagraph (B) and who are otherwise entitled
                    to participate in a plan or arrangement.
              ``(4) Contribution requirements.--
                      ``(A) In general.--The requirements of this
                    paragraph shall be treated as met if, under the
                    plan or arrangement, each employee eligible to
                    participate in the plan or arrangement is
                    treated as having elected to have the employer
                    make elective contributions in an amount equal
                    to the qualified percentage of compensation.
                      ``(B) Election out.--The election treated as
                    having been made under subparagraph (A) shall
                    cease to apply with respect to any employee if
                    such employee makes an affirmative election--
                              ``(i) not to have such contributions
                            made, or
                              ``(ii) to make elective contributions
                            at a level specified in such
                            affirmative election.
                      ``(C) Qualified percentage.--For purposes of
                    this paragraph, and except as provided in
                    subparagraph (D)(i), the term `qualified
                    percentage' means, with respect to any
                    employee, any percentage determined under the
                    plan or arrangement if such percentage is
                    applied uniformly, does not exceed 15 percent
                    (10 percent during the period described in
                    clause (i)), and is at least--
                              ``(i) 6 percent during the period
                            ending on the last day of the first
                            plan year which begins after the date
                            on which the first elective
                            contribution described in subparagraph
                            (A) is made with respect to such
                            employee,
                              ``(ii) 7 percent during the first
                            plan year following the plan year
                            described in clause (i),
                              ``(iii) 8 percent during the first
                            plan year following the plan year
                            described in clause (ii),
                              ``(iv) 9 percent during the first
                            plan year following the plan year
                            described in clause (iii), and
                              ``(v) 10 percent during any
                            subsequent plan year.
                      ``(D) Rules relating to automatic IRA
                    arrangements.--For purposes of this paragraph--
                              ``(i) Qualified percentage.--In the
                            case of an automatic IRA arrangement,
                            the term `qualified percentage' means,
                            with respect to an employee for any
                            plan year, a percentage equal to the
                            minimum percentage described for such
                            plan year under subparagraph (C).
                              ``(ii) Payroll deduction
                            contributions.--In the case of an
                            automatic IRA arrangement, any
                            reference in this paragraph to elective
                            contributions shall be treated as
                            including a reference to payroll
                            deduction contributions.
              ``(5) Investment requirements.--
                      ``(A) In general.--
                              ``(i) Default investments.--A plan or
                            arrangement shall be treated as meeting
                            the requirements of this paragraph if
                            in the absence of an investment
                            election by a participant or
                            beneficiary, amounts are invested only
                            in the class of assets or funds
                            described in subparagraph (B).
                              ``(ii) Required investment options in
                            automatic ira arrangement.--In addition
                            to the default investment requirement
                            of clause (i), an automatic IRA
                            arrangement shall be treated as meeting
                            the requirements of this paragraph if
                            the arrangement also allows the
                            participant to invest in any of the
                            class of assets or funds described in
                            subparagraph (B), (C), (D), or (E), and
                            provides for no other investment
                            options.
                      ``(B) Target date/lifecycle option.--The
                    class of assets or funds described in this
                    clause is the class of assets or funds that
                    constitutes a qualified default investment
                    alternative under Department of Labor
                    regulation section 2550.404c-5(e)(4)(i).
                      ``(C) Principal preservation.--The class of
                    assets or funds described in this clause is the
                    class of assets or funds that is designed to
                    protect the principal of the individual on an
                    ongoing basis.
                      ``(D) Balanced option.--The class of assets
                    or funds described in this clause is the class
                    of assets or funds that constitutes a qualified
                    default investment alternative under Department
                    of Labor regulation section 2550.404c-
                    5(e)(4)(ii).
                      ``(E) Other.--Any other class of assets or
                    funds determined by the Secretary to be a
                    qualified investment for purposes of this
                    section.
              ``(6) Fee requirements.--In the case of any plan or
            arrangement not otherwise subject to title I of the
            Employee Retirement Income Security Act of 1974, under
            the fee requirements of this paragraph, no participant
            may be charged unreasonable fees or expenses.
              ``(7) Lifetime income requirements.--
                      ``(A) In general.--A plan or arrangement
                    shall be treated as meeting the lifetime income
                    requirement described in this paragraph if the
                    plan or arrangement permits participants to
                    elect to receive at least 50 percent of their
                    vested account balance in a form of
                    distribution described in section
                    401(a)(38)(B)(iii).
                      ``(B) Exception.--
                              ``(i) In general.--This paragraph
                            shall not apply with respect to any
                            participant whose vested account
                            balance is $200,000 or less at the time
                            of distribution.
                              ``(ii) Not treated as discriminatory
                            in favor of highly compensated
                            employees.--A plan shall not be treated
                            as failing to meet the requirements of
                            section 401(a)(4) solely by reason of
                            applying the exception of clause (i) to
                            the requirements of subparagraph (A).
              ``(8) Automatic ira arrangement.--
                      ``(A) In general.--For purposes of this
                    paragraph, the term `automatic IRA arrangement'
                    means, with respect to an employer (and trustee
                    or issuer designated by the employer), an
                    arrangement facilitated by the employer which
                    meets the requirements of this paragraph and
                    the eligibility, contribution, investment, and
                    fee requirements of paragraphs (3), (4), (5),
                    and (6), and under which an employee--
                              ``(i) may elect--
                                      ``(I) to have the employer
                                    make payroll deduction deposits
                                    on behalf of the individual as
                                    payroll deduction contributions
                                    to an individual retirement
                                    account, or
                                      ``(II) to have such payments
                                    paid to the employee directly
                                    in cash,
                              ``(ii) is treated as having made the
                            election under clause (i)(I) at the
                            level determined under paragraph (4)(D)
                            until the individual makes an
                            affirmative election not to have such
                            contributions made (or to have such
                            contributions made at a level specified
                            in the affirmative election), and
                              ``(iii) may elect to modify the
                            manner in which such amounts are
                            invested for such plan year.
                      ``(B) Administrative requirements.--
                              ``(i) Payments.--The requirements of
                            this subparagraph are met with respect
                            to any automatic IRA arrangement if the
                            employer makes the payments elected or
                            treated as elected under subparagraph
                            (A)(i) on or before the last day of the
                            month following the month in which the
                            compensation otherwise would have been
                            payable to the employee in cash.
                              ``(ii) Notice of election period.--
                            The requirements of this paragraph
                            shall be treated as met with respect to
                            any year if the employer notifies each
                            employee eligible to participate,
                            within a reasonable period of time
                            before the beginning of such year (and,
                            for the first year the employee is so
                            eligible, a reasonable period of time
                            before the first day such employee is
                            so eligible), of--
                                      ``(I) the opportunity to
                                    elect to have contributions
                                    made, or to be treated as so
                                    electing, under clause (i)(I),
                                    or (ii), of subparagraph (A),
                                      ``(II) the opportunity to
                                    elect not to have payroll
                                    deduction contributions made or
                                    to have such contributions made
                                    at a different percentage or in
                                    a different amount, and
                                      ``(III) the opportunity under
                                    subparagraph (A)(iii) to modify
                                    the manner in which such
                                    amounts are invested for such
                                    year.
                            The employer shall provide such notice
                            in paper form or, if the employee so
                            elects, in electronic form.
                      ``(C) Limits on contributions.--An employer
                    shall not be treated as failing to satisfy the
                    requirements of this section or any other
                    provision of this title merely because--
                              ``(i) aggregate payroll deduction
                            contributions by or on behalf of an
                            individual to individual retirement
                            accounts of the individual exceed the
                            deductible amount in effect under
                            section 219(b)(5) (determined without
                            regard to subparagraph (B) thereof) for
                            any taxable year in which any payroll
                            deduction contributions by the employer
                            under an automatic IRA arrangement are
                            made, or
                              ``(ii) the employer chooses to limit
                            the payroll deduction contributions
                            under this subsection on behalf of an
                            employee for any calendar year in a
                            manner reasonably designed to avoid
                            exceeding such deductible amount.
                      ``(D) Default treatment as roth ira.--An
                    employee on whose behalf payroll deduction
                    contributions are made to an individual
                    retirement account under subparagraph (A) may
                    elect, at such time and in such manner and form
                    as the Secretary may prescribe, whether to
                    treat the individual retirement account as
                    designated as a Roth IRA. If no such election
                    is made, the account shall be treated as so
                    designated.
                      ``(E) Deposits to individual retirement
                    accounts of a designated trustee or issuer.--
                              ``(i) In general.--An employer shall
                            not be treated as failing to satisfy
                            the requirements of this section, or
                            any other provision of this title,
                            merely because the employer makes all
                            payroll deduction contributions on
                            behalf of all employees (or all
                            employees who do not specify an
                            individual retirement account, trustee,
                            or issuer to receive the contributions)
                            to individual retirement accounts
                            specified in clause (ii).
                              ``(ii) Individual retirement accounts
                            other than those selected by
                            employee.--An employer may elect to
                            have payroll deduction contributions
                            for all employees participating in an
                            automatic IRA arrangement made to
                            individual retirement accounts of a
                            trustee or issuer under the arrangement
                            that has been designated by the
                            employer, but only if the provider of
                            such accounts, and the investments
                            therein, are identified on the website
                            established under subparagraph
                            (F)(iii). The preceding sentence shall
                            not apply unless each participant is
                            notified in writing that the
                            participant's balance may be
                            transferred without cost or penalty to
                            another individual retirement account
                            established by or on behalf of the
                            participant. Such notice shall be in
                            paper form or, if the employee so
                            elects, electronic form.
                              ``(iii) Employers may permit employee
                            to choose ira.--If the employer so
                            elects, the arrangement may provide for
                            an employee election to have payroll
                            deduction contributions made to any
                            individual retirement account specified
                            by the employee.
                              ``(iv) Regulations.--The Secretary
                            may issue such regulations as are
                            necessary to carry out the purposes of
                            this subparagraph, including
                            establishment of procedures to assist
                            employers in connecting with certified
                            and available providers of individual
                            retirement accounts and to communicate
                            to individuals the importance of
                            investment diversification.
                      ``(F) Model notice, etc.--The Secretary
                    shall--
                              ``(i) provide a model notice, written
                            in a manner calculated to be
                            understandable to the average worker,
                            that is simple for employers to use--
                                      ``(I) to notify employees of
                                    the requirement under this
                                    section for the employer to
                                    provide certain employees with
                                    the opportunity to participate
                                    in an automatic IRA
                                    arrangement, and
                                      ``(II) to satisfy the
                                    requirements of subparagraph
                                    (B)(ii),
                              ``(ii) provide model forms for
                            enrollment, including automatic
                            enrollment, in an automatic IRA
                            arrangement,
                              ``(iii) establish a website or other
                            electronic means that small employers
                            and individuals can access and use to
                            obtain information on automatic IRA
                            arrangements (including clear,
                            standardized, easy-to-compare
                            information on fees and expenses and
                            investment returns in a format
                            prescribed by the Secretary) and to
                            obtain notices and forms, and
                              ``(iv) establish a process--
                                      ``(I) for the provider of an
                                    automatic IRA arrangement to
                                    demonstrate to the Secretary
                                    that the arrangement is
                                    described in this paragraph and
                                    meets the requirements
                                    specified in paragraph (1)(B),
                                    and
                                      ``(II) to certify any
                                    arrangement that the Secretary
                                    determines so demonstrates, to
                                    regularly monitor compliance
                                    and update such determinations
                                    and certifications, and to list
                                    all arrangements so certified
                                    on the website described in
                                    clause (iii) as appropriate for
                                    use by employers and
                                    participants.
                    The information referred to in clause (iii)
                    shall be provided in a manner designed to
                    assist employers and providers by facilitating
                    the identification by employers of private-
                    sector providers of individual retirement
                    accounts, including the provider's investment
                    options, that are appropriate for use in
                    automatic IRA arrangements.
                      ``(G) Safe harbor for certain state-provided
                    arrangements.--An arrangement facilitated by an
                    employer shall not fail to be treated as an
                    automatic IRA arrangement merely because such
                    arrangement is provided or otherwise offered,
                    in whole or in part, by a State.
                      ``(H) Individual retirement account.--For
                    purposes of this paragraph, the term
                    `individual retirement account' shall have the
                    meaning given such term by section 408(a),
                    except that such term shall include individual
                    retirement annuities (as defined in section
                    408(b)).''.
              (2) Other rules applicable to automatic IRA
            arrangements.--
                      (A) Penalty for failure to timely remit
                    contributions to automatic ira arrangements.--
                    Section 4975(c) is amended by adding at the end
                    the following new paragraph:
              ``(7) Special rule for automatic IRA arrangements.--
            For purposes of paragraph (1), if an employer is
            required under an automatic IRA arrangement (as defined
            in section 414(aa)(1)(B)) to deposit amounts withheld
            from an employee's compensation into an individual
            retirement account (within the meaning of section
            414(aa)(8)(H)) but fails to do so within the time
            prescribed under section 414(aa)(8)(B)(i), such amounts
            shall be treated as assets of the individual retirement
            account.''.
                      (B) Waiver of early withdrawal penalty for
                    certain distributions following initial
                    election to participate in automatic ira
                    arrangement.--Section 72(t) is amended by
                    adding at the end the following new paragraph:
              ``(11) Distribution following initial election to
            participate in automatic ira arrangement.--Paragraph
            (1) shall not apply in the case of a distribution--
                      ``(A) to an individual from an individual
                    retirement account (within the meaning of
                    section 414(aa)(8)(H)) that is part of an
                    automatic IRA arrangement (as defined in
                    section 414(aa)(8)(A)), and
                      ``(B) made not later than 90 days after the
                    initial election under section
                    414(aa)(8)(A)(ii).''.
                      (C) Automatic IRA advisory group.--
                              (i) In general.--Not later than 90
                            days after the date of the enactment of
                            this Act, the Secretary of the Treasury
                            shall establish an Automatic IRA
                            Advisory Group (hereinafter in this
                            subparagraph referred to as the
                            ``Advisory Group''). The purpose of the
                            Advisory Group shall be to make
                            recommendations, advise, and assist in
                            the Secretary's implementation and
                            administration of paragraphs (5), (6),
                            and (8) of section 414(aa) of the
                            Internal Revenue Code of 1986 with
                            respect to automatic IRA arrangements
                            in the best financial interest of
                            savers, including--
                                      (I) the procedures and
                                    criteria for the periodic
                                    certification, website listing,
                                    and monitoring of investment
                                    options that meet the
                                    requirements of those
                                    paragraphs,
                                      (II) user-friendly disclosure
                                    regarding investment returns,
                                    terms, fees, and expenses to
                                    facilitate comparison,
                                      (III) the use of low-cost
                                    investment options,
                                      (IV) the appropriate use of
                                    electronic and paper methods to
                                    provide notice and disclosure,
                                      (V) any possible learnings or
                                    efficiencies based on the
                                    Secretary's procedures and
                                    experience in approving nonbank
                                    individual retirement account
                                    trustees, and
                                      (VI) such other related
                                    matters as may be determined by
                                    the Secretary.
                              (ii) Membership.--The Advisory Group
                            shall consist of not more than 15
                            members and shall be composed of--
                                      (I) such individuals as the
                                    Secretary may consider
                                    appropriate to provide
                                    expertise regarding the
                                    financial needs and challenges
                                    of lower- and middle-income
                                    households,
                                      (II) at least one individual
                                    who is an expert in retirement-
                                    related consumer protections or
                                    who represents the general
                                    public, and
                                      (III) at least one
                                    representative of the
                                    Department of the Treasury.
                              (iii) Compensation.--The members of
                            the Advisory Group shall serve without
                            compensation.
                              (iv) Administrative support.--The
                            Department of the Treasury shall
                            provide appropriate administrative
                            support to the Advisory Group,
                            including technical assistance. The
                            Advisory Group may use the services and
                            facilities of such Department, with or
                            without reimbursement, as determined by
                            such Department.
                              (v) Report by advisory group.--Not
                            later than 1 year after the date of the
                            enactment of this Act, the Advisory
                            Group shall submit to the Secretary of
                            the Treasury a report containing its
                            recommendations. The Secretary may
                            request that the Advisory Group submit
                            subsequent reports.
      (b) Excise Tax for Failure to Maintain or Facilitate
    Automatic Contribution Plans or Arrangements.--
              (1) In general.--Chapter 43 is amended by adding at
            the end the following new section:

    ``SEC. 4980J. FAILURE TO MAINTAIN OR FACILITATE AUTOMATIC CONTRIBUTION
                        PLANS OR ARRANGEMENTS.

      ``(a) General Rule.--
              ``(1) In general.--There is hereby imposed a tax on
            the failure of an employer to maintain or facilitate an
            automatic contribution plan or arrangement.
              ``(2) Exceptions.--
                      ``(A) Paragraph (1) shall not apply to an
                    employer to the extent such employer
                    participates in an arrangement under a
                    qualified State law.
                      ``(B) Paragraph (1) shall not apply to an
                    employer with respect to any employee who is
                    eligible to participate in a different
                    automatic contribution plan or arrangement than
                    one or more other employees of the employer.
      ``(b) Amount of Tax.--
              ``(1) In general.--The amount of the tax imposed by
            subsection (a) on any failure with respect to an
            employee shall be $10 for each day in the noncompliance
            period with respect to such failure.
              ``(2) Noncompliance period.--For purposes of this
            section, the term `noncompliance period' means, with
            respect to any failure, the period--
                      ``(A) beginning on the date such failure
                    first occurs, and
                      ``(B) ending on the earlier of--
                              ``(i) the date such failure is
                            corrected, or
                              ``(ii) with respect to any employer,
                            the date that is 3 months after the
                            last date on which the employee is
                            required to be eligible to participate
                            in an automatic contribution plan or
                            arrangement maintained or facilitated
                            by such employer.
              ``(3) Adjustment for inflation.--
                      ``(A) In general.--In the case of any failure
                    relating to maintaining or facilitating a plan
                    or arrangement in a calendar year beginning
                    after 2023, the $10 amount under paragraph (1)
                    shall be increased by an amount equal to such
                    dollar amount multiplied by the cost-of-living
                    adjustment determined under section 1(f)(3) for
                    the calendar year determined by substituting
                    `calendar year 2022' for `calendar year 2016'
                    in subparagraph (A)(ii) thereof.
                      ``(B) Rounding.--If any amount adjusted under
                    subparagraph (A) is not a whole dollar amount,
                    such amount shall be rounded to the nearest
                    whole dollar amount.
      ``(c) Limitations on Amount of Tax.--
              ``(1) Tax not to apply where failure not discovered
            exercising reasonable diligence.--No tax shall be
            imposed by subsection (a) on any failure during any
            period for which it is established to the satisfaction
            of the Secretary that none of the persons referred to
            in subsection (e) knew, nor exercising reasonable
            diligence would have known, that such failure existed.
              ``(2) Tax not to apply to failures corrected within
            9\1/2\ months.--No tax shall be imposed by subsection
            (a) on any failure if--
                      ``(A) such failure was due to reasonable
                    cause and not to willful neglect, and
                      ``(B) such failure is corrected during the
                    9\1/2\-month period beginning on the first date
                    any of the persons referred to in subsection
                    (e) knew that such failure existed, or
                    exercising reasonable diligence would have
                    known.
              ``(3) Overall limitation for unintentional
            failures.--In the case of failures which are due to
            reasonable cause and not to willful neglect--
                      ``(A) General rule.--The tax imposed by
                    subsection (a) for failures during the taxable
                    year of the employer shall not exceed $500,000.
                      ``(B) Taxable years in the case of certain
                    controlled groups.--For purposes of this
                    subparagraph, if not all persons who are
                    treated as a single employer for purposes of
                    this section have the same taxable year, the
                    taxable years taken into account shall be
                    determined under principles similar to the
                    principles of section 1561.
              ``(4) 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 relative to the
            failure involved.
      ``(d) Tax Not to Apply in Certain Cases.--This section shall
    not apply in the case of--
              ``(1) any employer with respect to a plan or
            arrangement that, during the prior calendar year, was
            maintained or facilitated only by employers each of
            which had no more than 5 employees receiving at least
            $5,000 of compensation from the employer for such year,
              ``(2) any employer with respect to a governmental
            plan (within the meaning of section 414(d)),
              ``(3) any employer with respect to a church plan
            (within the meaning of section 414(e)), or
              ``(4) any employer that has been in existence for
            fewer than 2 years, taking into account all predecessor
            employers.
      ``(e) Liability for Tax.--The employer shall be liable for
    the tax imposed by subsection (a) on a failure. All employers,
    determined without regard to subsection (f)(2), shall be
    jointly and severally liable for the liability of any other
    employer with which they are aggregated under subsection
    (f)(2).
      ``(f) Definitions.--For purposes of this section--
              ``(1) Automatic contribution plan or arrangement.--
            The term `automatic contribution plan or arrangement'
            has the meaning given such term under section 414(aa),
            and
              ``(2) Employer.--The term `employer' includes all
            employers treated as a single employer under subsection
            (b), (c), (m), or (o) of section 414.
              ``(3) Qualified state law.--The term `qualified State
            law' means a State law (as it may be amended from time
            to time) that--
                      ``(A) was enacted before the date of the
                    enactment of the Act to provide for
                    reconciliation pursuant to title II of S. Con.
                    Res. 14, and
                      ``(B)(i) requires certain employers to
                    facilitate an automatic IRA arrangement
                    pursuant to a payroll deduction savings program
                    of the State, or
                      ``(ii) allows certain employers to contribute
                    to, or participate in, a plan described in
                    section 413(c) of such Code established and
                    maintained by the State.''.
              (2) Clerical amendment.--The table of sections for
            chapter 43 is amended by adding at the end the
            following new item:

    ``Sec. 4980J. Failure to maintain or facilitate automatic contribution
              plans or arrangements.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to plan years beginning after December 31, 2022.

    SEC. 131102. DEFERRAL-ONLY ARRANGEMENTS.

      (a) In General.--Section 401(k) is amended by adding at the
    end the following new paragraph:
              ``(16) Deferral-only arrangement.--
                      ``(A) In general.--A deferral-only
                    arrangement shall be treated as meeting the
                    requirements of paragraph (3)(A)(ii).
                      ``(B) Deferral-only arrangement.--For
                    purposes of this paragraph, the term `deferral-
                    only arrangement' means any cash or deferred
                    arrangement which meets--
                              ``(i) the automatic deferral
                            requirements of subparagraph (C),
                              ``(ii) the elective contribution
                            requirement of subparagraph (D), and
                              ``(iii) the requirements of
                            subparagraph (E) of paragraph (13).
                      ``(C) Automatic deferral.--
                              ``(i) In general.--The requirements
                            of this subparagraph shall be treated
                            as met if, under the arrangement, each
                            employee eligible to participate in the
                            arrangement is treated as having
                            elected to have the employer make
                            elective contributions in an amount
                            equal to the qualified percentage of
                            compensation.
                              ``(ii) Election out.--The election
                            treated as having been made under
                            clause (i) shall cease to apply with
                            respect to any employee if such
                            employee makes an affirmative
                            election--
                                      ``(I) to not have such
                                    contributions made, or
                                      ``(II) to make elective
                                    contributions at a level
                                    specified in such affirmative
                                    election.
                              ``(iii) Qualified percentage.--For
                            purposes of this subparagraph, with
                            respect to any employee, the term
                            `qualified percentage' means, in lieu
                            of the meaning given such term in
                            paragraph (13)(C)(iii), any percentage
                            determined under the arrangement if
                            such percentage is applied uniformly,
                            does not exceed 15 percent (10 percent
                            during the period described in
                            subclause (I)) and is at least--
                                      ``(I) 6 percent during the
                                    period ending on the last day
                                    of the first plan year which
                                    begins after the date on which
                                    the first elective contribution
                                    described in clause (i) is made
                                    with respect to such employee,
                                      ``(II) 7 percent during the
                                    first plan year following the
                                    plan year described in
                                    subclause (I),
                                      ``(III) 8 percent during the
                                    first plan year following the
                                    plan year described in
                                    subclause (II),
                                      ``(IV) 9 percent during the
                                    first plan year following the
                                    plan year described in
                                    subclause (III), and
                                      ``(V) 10 percent during any
                                    subsequent plan year.
                      ``(D) Elective contributions.--
                              ``(i) In general.--The requirements
                            of this subparagraph are met if under
                            the plan containing the arrangement--
                                      ``(I) the only contributions
                                    which may be made are elective
                                    contributions of employees who
                                    are eligible to participate in
                                    the arrangement, and
                                      ``(II) the aggregate amount
                                    of such elective contributions
                                    which may be made with respect
                                    to any employee for any
                                    calendar year shall not exceed
                                    the amount in effect for the
                                    taxable year under section
                                    219(b)(5) (determined without
                                    regard to subparagraph (B)
                                    thereof).
                              ``(ii) Cross reference.--For catch-up
                            contributions for individuals age 50 or
                            over, see section 414(v).''.
      (b) Catch-up Contributions for Individuals Age 50 and Over.--
              (1) Section 414(v)(2)(B)(i) is amended by inserting
            ``, 401(k)(16),'' after ``401(k)(11)''.
              (2) Section 414(v)(2)(B) is amended by adding at the
            end thereof the following clause:
                              ``(iii) In the case of an applicable
                            employer plan described in section
                            401(k)(16), the applicable dollar
                            amount is $1,000.''.
              (3) Section 414(v)(2)(C) is amended--
                      (A) by striking ``(B)(i) and'' and inserting
                    ``(B)(i),'' and by inserting after
                    ``subparagraph (B)(ii)'' the following: ``, and
                    the $1,000 amount described in subparagraph
                    (B)(iii)'',
                      (B) inserting after ``2005'' the following:
                    ``(the calendar quarter beginning July 1, 2020,
                    in the case of the $1,000 amount described in
                    subparagraph (B)(iii))'', and
                      (C) by inserting before the period at the end
                    the following ``($100 in the case of an
                    increase in the amount described in
                    subparagraph (B)(iii) which is not a multiple
                    of $100)''.
      (c) Plans Not Treated as Top-heavy Plans.--Section
    416(g)(4)(H)(i) is amended by striking ``or 401(k)(13)'' and
    inserting ``401(k)(13), or 401(k)(16)''.
      (d) Effective Date.--The amendments made by this section
    shall apply to plan years beginning after December 31, 2022.

    SEC. 131103. INCREASE IN CREDIT LIMITATION FOR SMALL EMPLOYER PENSION
                        PLAN STARTUP COSTS INCLUDING FOR AUTOMATIC
                        CONTRIBUTION PLAN OR ARRANGEMENT.

      (a) Years for Which Credit Is Allowed.--Section 45E(b)(1) is
    amended by striking ``2 taxable years'' and inserting ``4
    taxable years''.
      (b) Special Rule for Employers With 25 or Fewer Employees.--
    Section 45E(a) is amended by inserting before the period at the
    end the following: ``(100 percent of such costs in the case of
    an eligible employer with 25 or fewer employees, as determined
    by substituting `25' for `100' in section 408(p)(2)(C)(i))''.
      (c) Credit Not to Apply to Certain Plans or Arrangements.--
              (1) No credit with respect to deferral-only
            arrangements.--Section 45E(d)(2) is amended by
            inserting ``(other than a deferral-only arrangement (as
            defined in section 401(k)(16)(B))'' before the period
            at the end.
              (2) Termination with respect to plans other than
            automatic contribution plans or arrangements.--Section
            45E is amended by adding at the end the following new
            subsection:
        ``(f) Credit Terminated for Non-automatic Contribution
    Plans or Arrangements After 2022.--In the case of taxable years
    beginning after December 31, 2022, no credit shall be allowed
    under this section for amounts paid or incurred with respect to
    an eligible employer plan that is not an automatic contribution
    plan or arrangment (as defined in section 414(aa)).''.
      (d) Effective Date.--The amendment made by this section shall
    apply to taxable years beginning after December 31, 2021.

    SEC. 131104. CREDIT FOR CERTAIN SMALL EMPLOYER AUTOMATIC RETIREMENT
                        ARRANGEMENTS.

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

    ``SEC. 45U. CREDIT FOR CERTAIN SMALL EMPLOYER AUTOMATIC RETIREMENT
                        ARRANGEMENTS.

      ``(a) General Rule.--For purposes of section 38, in the case
    of an eligible employer, the small employer automatic
    retirement arrangement credit determined under this section for
    any taxable year in the credit period is $500.
      ``(b) Definitions.--For purposes of this section--
              ``(1) Eligible employer.--The term `eligible
            employer' means, with respect to the calendar year in
            which the taxable year begins, an employer which--
                      ``(A)(i) participates in an automatic IRA
                    arrangement (as defined in section 414(aa)(8)),
                    or an arrangement described in 4980J(a)(2)(A),
                    or
                      ``(ii) maintains a deferral-only arrangement
                    (as defined in section 401(k)(16)),
                      ``(B) is described in 408(p)(2)(C)(i), and
                      ``(C) did not maintain an eligible employer
                    plan during the portion of the calendar year
                    preceding the commencement of such arrangement,
                    or adoption of such deferral-only arrangement,
                    and the 2 preceding calendar years.
              ``(2) Credit period.--The term `credit period' means
            the first 4 calendar years beginning after the date of
            the enactment of this section in which the eligible
            employer participates in the arrangement or maintains
            the deferral-only arrangement.
              ``(3) Eligible employer plan.--The term `eligible
            employer plan' means a qualified employer plan within
            the meaning of section 4972(d).
      ``(c) Other Rules.--For purposes of this section, the rules
    of section 45E(e) shall apply.''.
      (b) Credit Allowed as Part of General Business Credit.--
    Section 38(b) of is amended by striking ``plus'' at the end of
    paragraph (32), by striking the period at the end of paragraph
    (33) and inserting ``, plus'', and by adding at the end the
    following new paragraph:
              ``(34) the small employer automatic retirement
            arrangement credit determined under section 45U(a).''.
      (c) Clerical Amendment.--The table of sections for subpart D
    of part IV of subchapter A of chapter 1 is amended by adding at
    the end the following new item:

    ``Sec. 45U. Credit for certain small employer automatic retirement
              arrangements.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

                             PART 2--SAVER'S MATCH

    SEC. 131201. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL AND IRA
                        CONTRIBUTIONS BY CERTAIN INDIVIDUALS.

      (a) In General.--Subchapter B of chapter 65 is amended by
    adding at the end the following new section:

    ``SEC. 6433. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL AND IRA
                        CONTRIBUTIONS BY CERTAIN INDIVIDUALS.

      ``(a) In General.--
              ``(1) Allowance of credit.--Any eligible individual
            who makes qualified retirement savings contributions
            for the taxable year shall be allowed a credit for such
            taxable year in an amount equal to the applicable
            percentage of so much of the qualified retirement
            savings contributions made by such eligible individual
            for the taxable year as does not exceed $1,000.
              ``(2) Payment of credit.--The credit under this
            section shall be--
                      ``(A) treated as allowed by subpart C of part
                    IV of subchapter A of chapter 1, and
                      ``(B) paid by the Secretary as a contribution
                    (as soon as practicable after the eligible
                    individual has filed a tax return making a
                    claim for such credit for the taxable year) to
                    the applicable retirement savings vehicle of an
                    eligible individual.
      ``(b) Applicable Percentage.--For purposes of this section--
              ``(1) In general.--Except as provided in paragraph
            (2), the applicable percentage is 50 percent.
              ``(2) Phaseout.--The percentage under paragraph (1)
            shall be reduced (but not below zero) by the number of
            percentage points which bears the same ratio to 50
            percentage points as--
                      ``(A) the excess of--
                              ``(i) the taxpayer's modified
                            adjusted gross income for such taxable
                            year, over
                              ``(ii) the applicable dollar amount,
                            bears to
                      ``(B) the phaseout range.
            If any reduction determined under this paragraph is not
            a whole percentage point, such reduction shall be
            rounded to the next lowest whole percentage point.
              ``(3) Applicable dollar amount; phaseout range.--
                      ``(A) Joint returns.--Except as provided in
                    subparagraph (B)--
                              ``(i) the applicable dollar amount is
                            $50,000, and
                              ``(ii) the phaseout range is $20,000.
                      ``(B) Other returns.--In the case of--
                              ``(i) a head of a household (as
                            defined in section 2(b)), the
                            applicable dollar amount and the
                            phaseout range shall be \3/4\ of the
                            amounts applicable under subparagraph
                            (A) (as adjusted under subsection (h)),
                            and
                              ``(ii) any taxpayer who is not filing
                            a joint return and who is not a head of
                            a household (as so defined), the
                            applicable dollar amount and the
                            phaseout range shall be \1/2\ of the
                            amounts applicable under subparagraph
                            (A) (as so adjusted).
              ``(4) Exception; minimum credit.--In the case of an
            eligible individual with respect to whom (without
            regard to this paragraph) the credit determined under
            subsection (a)(1) is greater than zero but less than
            $100, the credit allowed under this section shall be
            $100.
      ``(c) Eligible Individual.--For purposes of this section--
              ``(1) In general.--The term `eligible individual'
            means any individual if such individual has attained
            the age of 18 as of the close of the taxable year.
              ``(2) Dependents and full-time students not
            eligible.--The term `eligible individual' shall not
            include--
                      ``(A) any individual with respect to whom a
                    deduction under section 151 is allowed to
                    another taxpayer for a taxable year beginning
                    in the calendar year in which such individual's
                    taxable year begins, and
                      ``(B) any individual who is a student (as
                    defined in section 152(f)(2)).
      ``(d) Qualified Retirement Savings Contributions.--For
    purposes of this section--
              ``(1) In general.--The term `qualified retirement
            savings contributions' means, with respect to any
            taxable year, the sum of--
                      ``(A) the amount of the qualified retirement
                    contributions (as defined in section 219(e))
                    made by the eligible individual,
                      ``(B) the amount of--
                              ``(i) any elective deferrals (as
                            defined in section 402(g)(3)) of such
                            individual, and
                              ``(ii) any elective deferral of
                            compensation by such individual under
                            an eligible deferred compensation plan
                            (as defined in section 457(b)) of an
                            eligible employer described in section
                            457(e)(1)(A),
                      ``(C) the amount of voluntary employee
                    contributions by such individual to any
                    qualified retirement plan (as defined in
                    section 4974(c)), and
                      ``(D) the amount of contributions made by
                    such individual to the ABLE account (within the
                    meaning of section 529A) of which such
                    individual is the designated beneficiary.
            Such term shall not include any amount attributable to
            a payment under subsection (a)(2).
              ``(2) Reduction for certain distributions.--
                      ``(A) In general.--The qualified retirement
                    savings contributions determined under
                    paragraph (1) for a taxable year shall be
                    reduced (but not below zero) by the aggregate
                    distributions received by the individual during
                    the testing period from any entity of a type to
                    which contributions under paragraph (1) may be
                    made.
                      ``(B) Testing period.--For purposes of
                    subparagraph (A), the testing period, with
                    respect to a taxable year, is the period which
                    includes--
                              ``(i) such taxable year,
                              ``(ii) the 2 preceding taxable years,
                            and
                              ``(iii) the period after such taxable
                            year and before the due date (including
                            extensions) for filing the return of
                            tax for such taxable year.
                      ``(C) Excepted distributions.--There shall
                    not be taken into account under subparagraph
                    (A)--
                              ``(i) any distribution referred to in
                            section 72(p), 401(k)(8), 401(m)(6),
                            402(g)(2), 404(k), or 408(d)(4),
                              ``(ii) any distribution to which
                            section 408(d)(3) or 408A(d)(3)
                            applies,
                              ``(iii) any portion of a distribution
                            if such portion is transferred or paid
                            in a rollover contribution (as defined
                            in section 402(c), 403(a)(4),
                            403(b)(8), 408A(e), or 457(e)(16)) to
                            an account or plan to which qualified
                            retirement contributions can be made,
                            and
                              ``(iv) the amount of distributions
                            under a qualified ABLE program (within
                            the meaning of section 529A) that is
                            equal to amounts not included in gross
                            income with respect to such
                            distributions under section
                            529A(c)(1)(B) (relating to
                            distributions for qualified disability
                            expenses).
                      ``(D) Treatment of distributions received by
                    spouse of individual.--For purposes of
                    determining distributions received by an
                    individual under subparagraph (A) for any
                    taxable year, any distribution received by the
                    spouse of such individual shall be treated as
                    received by such individual if such individual
                    and spouse file a joint return for such taxable
                    year and for the taxable year during which the
                    spouse receives the distribution.
      ``(e) Applicable Retirement Savings Vehicle.--
              ``(1) In general.--The term `applicable retirement
            savings vehicle' means an account or plan elected by
            the eligible individual under paragraph (2).
              ``(2) Election.--Any such election to have
            contributed the amount determined under subsection (a)
            shall be to an account or plan which--
                      ``(A) is a Roth IRA or a designated Roth
                    account (within the meaning of section 402A) of
                    an applicable retirement plan (as defined in
                    section 402A(e)(1)),
                      ``(B) is for the benefit of the eligible
                    individual,
                      ``(C) accepts contributions made under this
                    section, and
                      ``(D) is designated by such individual (in
                    such form and manner as the Secretary may
                    provide).
      ``(f) Other Definitions and Special Rules.--
              ``(1) Modified adjusted gross income.--For purposes
            of this section, the term `modified adjusted gross
            income' means adjusted gross income--
                      ``(A) determined without regard to sections
                    911, 931, and 933, and
                      ``(B) determined without regard to any
                    exclusion or deduction allowed for any
                    qualified retirement savings contribution made
                    during the taxable year.
              ``(2) Treatment of contributions.--In the case of any
            contribution under subsection (a)(2)--
                      ``(A) except as otherwise provided in this
                    section or by the Secretary under regulations,
                    such contribution shall be treated as--
                              ``(i) an elective deferral made by
                            the individual which is a designated
                            Roth contribution, if contributed to an
                            applicable retirement plan, or
                              ``(ii) as a Roth IRA contribution
                            made by such individual, if contributed
                            to a Roth IRA, and
                      ``(B) such contribution shall not be taken
                    into account with respect to any applicable
                    limitation under sections 402(g)(1), 403(b),
                    408(a)(1), 408(b)(2)(B), 408A(c)(2), 414(v)(2),
                    415(c), or 457(b)(2), and shall be disregarded
                    for purposes of sections 401(a)(4), 401(k)(3),
                    401(k)(11)(B)(i)(III), and 416.
              ``(3) Treatment of qualified plans, etc.--A plan or
            arrangement to which a contribution is made under this
            section shall not be treated as violating any
            requirement under section 401, 403, 408A, or 457 solely
            by reason of accepting such contribution.
              ``(4) Erroneous credits.--
                      ``(A) In general.--If any contribution is
                    erroneously paid under subsection (a)(2),
                    including a payment that is not made to an
                    applicable retirement savings vehicle, the
                    amount of such erroneous payment shall be
                    treated as an underpayment of tax (other than
                    for purposes of part II of subchapter A of
                    chapter 68) for the taxable year in which the
                    Secretary determines the payment is erroneous.
                      ``(B) Distribution of erroneous credits.--In
                    the case of a contribution to which
                    subparagraph (A) applies--
                              ``(i) section 72 shall not apply to
                            the distribution of such contribution
                            (and any income attributable thereto)
                            if such distribution is received not
                            later than the day prescribed by law
                            (including extensions of time) for
                            filing the individual's return for such
                            taxable year, and
                              ``(ii) any plan or arrangement from
                            which such a distribution is made under
                            this subparagraph shall not be treated
                            as violating any requirement under
                            section 401, 403, 408A, or 457 solely
                            by reason of making such distribution.
      ``(g) Provision by Secretary of Information Relating to
    Contributions.--In the case of an amount elected by an eligible
    individual to be contributed to an account or plan under
    subsection (e)(2), the Secretary shall provide guidance to the
    custodian of the account or the plan sponsor, as the case may
    be, detailing the treatment of such contribution under
    subsection (f)(2) and the reporting requirements with respect
    to such contribution under section 131201(c)(2) of the Act to
    provide for reconciliation pursuant to title II of S. Con. Res.
    14.
      ``(h) Inflation Adjustments.--
              ``(1) In general.--In the case of any taxable year
            beginning in a calendar year after 2020, each of the
            dollar amounts in subsections (a)(1) and (b)(3)(A)(i)
            shall be increased by an amount equal to--
                      ``(A) such dollar amount, multiplied by
                      ``(B) the cost-of-living adjustment
                    determined under section 1(f)(3) for the
                    calendar year in which the taxable year begins,
                    determined by substituting `calendar year 2019'
                    for `calendar year 2016' in subparagraph
                    (A)(ii) thereof.
              ``(2) Rounding.--Any increase determined under
            paragraph (1) shall be rounded to the nearest multiple
            of--
                      ``(A) $100 in the case of an adjustment of
                    the amount in subsection (a)(1), and
                      ``(B) $1,000 in the case of an adjustment of
                    the amount in subsection (b)(3)(A)(i).''.
      (b) Treatment of Certain Possessions.--
              (1) Payments to possessions with mirror code tax
            systems.--The Secretary of the Treasury shall pay to
            each possession of the United States which has a mirror
            code tax system amounts equal to the loss (if any) to
            that possession by reason of the amendments made by
            this section. Such amounts shall be determined by the
            Secretary of the Treasury based on information provided
            by the government of the respective possession.
              (2) Payments to other possessions.--The Secretary of
            the Treasury shall pay to each possession of the United
            States which does not have a mirror code tax system
            amounts estimated by the Secretary of the Treasury as
            being equal to the aggregate benefits (if any) that
            would have been provided to residents of such
            possession by reason of the amendments made by this
            section if a mirror code tax system had been in effect
            in such possession. The preceding sentence shall not
            apply unless the respective possession has a plan,
            which has been approved by the Secretary of the
            Treasury, under which such possession will promptly
            distribute such payments to its residents.
              (3) Coordination with credit allowed against united
            states income taxes.--No credit shall be allowed
            against United States income taxes under section 6433
            of the Internal Revenue Code of 1986 (as added by this
            section) to any person--
                      (A) to whom a credit is allowed against taxes
                    imposed by the possession by reason of the
                    amendments made by this section, or
                      (B) who is eligible for a payment under a
                    plan described in paragraph (2).
              (4) Mirror code tax system.--For purposes of this
            subsection, the term ``mirror code tax system'' means,
            with respect to any possession of the United States,
            the income tax system of such possession if the income
            tax liability of the residents of such possession under
            such system is determined by reference to the income
            tax laws of the United States as if such possession
            were the United States.
              (5) Treatment of payments.--For purposes of section
            1324 of title 31, United States Code, the payments
            under this subsection shall be treated in the same
            manner as a refund due from a credit provision referred
            to in subsection (b)(2) of such section.
      (c) Administrative Provisions.--
              (1) Deficiencies.--Section 6211(b)(4) is amended by
            striking ``and 7527A'' and inserting ``7527A, and
            6433''.
              (2) Reporting.--The Secretary of the Treasury shall--
                      (A) amend Form 5500 to require separate
                    reporting of the aggregate amount of
                    contributions received by the plan during the
                    year under section 6433 of the Internal Revenue
                    Code of 1986 (as added by this section), and
                      (B) amend Form 5498 to require similar
                    reporting with respect to individual retirement
                    accounts (as defined in section 408 of such
                    Code) and individual retirement annuities (as
                    defined in section 408(b) of such Code).
      (d) Payment Authority.--Section 1324(b)(2) of title 31,
    United States Code, is amended by striking ``or 7527A'' and
    inserting ``7527A, or 6433''.
      (e) Conforming Amendments.--
              (1) Section 25B is amended by striking subsections
            (a) through (f) and inserting the following:
    ``For payment of credit related to qualified retirement savings
    contributions, see section 6433.''.
              (2) The table of sections for subchapter B of chapter
            65 is amended by adding at the end the following new
            item:

    ``Sec. 6433. Matching payments for elective deferral and IRA
              contributions by certain individuals.''.
      (f) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2024.

    SEC. 131202. DEADLINE TO FUND IRA WITH TAX REFUND.

      (a) In General.--Section 219(f)(3) is amended--
              (1) by striking ``is made not later than'' and
            inserting ``is made--
                              ``(i) not later than'',
              (2) by striking the period at the end and inserting
            ``, or'', and
              (3) by adding at the end the following new clause:
                              ``(ii) by direct deposit by the
                            Secretary pursuant to an election on
                            the return for such taxable year to
                            contribute all or a portion of any
                            amount owed to the taxpayer to an
                            individual retirement account of the
                            taxpayer, but only if the return is
                            filed not later than the date described
                            in clause (i).''.
      (b) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2022.

                    Subtitle C--Child Care Access and Equity

    SEC. 132001. CHILD CARE ACCESS.

      Part A of title IV of the Social Security Act (42 U.S.C. 601-
    619) is amended by inserting after section 418 the following:

    ``SEC. 418A. CHILD CARE ACCESS.

      ``(a) Establishing State Child Care Information Networks.--
              ``(1) Development.--The Secretary shall conduct a
            stakeholder engagement process to make recommendations
            about the development and implementation of the State
            Child Care Information Networks to be operated by the
            States, Indian tribes, and territories. The stakeholder
            engagement process may include parents, center-based
            child care providers, home-based child care providers,
            child care policy experts, trade associations, labor
            unions, and other organizations representing child care
            providers.
              ``(2) Models.--The Secretary may use funds made
            available to the Secretary for administrative purposes
            to establish national technology models for State Child
            Care Information Networks, and guidance on development
            and establishment of interoperable data governance
            systems that address privacy and allow for sharing and
            storing data across information systems, including
            guidance on alignment with State child care consumer
            education websites.
              ``(3) Data exchange standards and interoperability.--
                      ``(A) Designation and use of data exchange
                    standards.--
                              ``(i) Designation.--The Secretary
                            shall, in consultation with an
                            interagency work group established by
                            the Office of Management and Budget and
                            considering State government
                            perspectives, designate data exchange
                            standards for necessary categories of
                            information that the Child Care
                            Information Network is required to
                            electronically exchange with another
                            agency under applicable Federal law.
                              ``(ii) Data exchange standards must
                            be nonproprietary and interoperable.--
                            The data exchange standards designated
                            under clause (i) shall, to the extent
                            practicable, be nonproprietary and
                            interoperable.
                              ``(iii) Other requirements.--In
                            designating data exchange standards
                            under this subparagraph, the Secretary
                            shall, to the extent practicable,
                            incorporate--
                                      ``(I) interoperable standards
                                    developed and maintained by an
                                    international voluntary
                                    consensus standards body, as
                                    defined by the Office of
                                    Management and Budget;
                                      ``(II) interoperable
                                    standards developed and
                                    maintained by intergovernmental
                                    partnerships, such as the
                                    National Information Exchange
                                    Model; and
                                      ``(III) interoperable
                                    standards developed and
                                    maintained by Federal entities
                                    with authority over contracting
                                    and financial assistance.
                      ``(B) Data exchange standards for federal
                    reporting.--
                              ``(i) Designation.--The Secretary
                            shall, in consultation with an
                            interagency work group established by
                            the Office of Management and Budget,
                            and considering State government
                            perspectives, designate data exchange
                            standards to govern Federal reporting
                            and exchange requirements under
                            applicable Federal law.
                              ``(ii) Requirements.--The data
                            exchange reporting standards required
                            by clause (i) shall, to the extent
                            practicable--
                                      ``(I) incorporate a widely
                                    accepted, nonproprietary,
                                    searchable, computer-readable
                                    format;
                                      ``(II) be consistent with and
                                    implement applicable accounting
                                    principles;
                                      ``(III) be implemented in a
                                    manner that is cost-effective
                                    and improves program efficiency
                                    and effectiveness; and
                                      ``(IV) be capable of being
                                    continually upgraded as
                                    necessary.
                              ``(iii) Incorporation of
                            nonproprietary standards.--In
                            designating data exchange standards
                            under this subparagraph, the Secretary
                            shall, to the extent practicable,
                            incorporate existing nonproprietary
                            standards.
                              ``(iv) Rule of interpretation.--
                            Nothing in this subparagraph shall be
                            construed to require a change to
                            existing data exchange standards for
                            Federal reporting under this section if
                            the Secretary finds the standards to be
                            effective and efficient.
              ``(4) State requirements.--A State meets the
            requirements of this paragraph with respect to a
            quarter if--
                      ``(A) during the quarter, the State has
                    maintained an up-to-date, publicly available
                    compilation of child care providers who are
                    registered, licensed, or regulated by the State
                    (in this section referred to as the `State
                    Child Care Information Network'), that
                    includes, with respect to each such provider--
                              ``(i) where the provider is located,
                            and a description of any fees imposed
                            by the provider and the services
                            offered by the provider;
                              ``(ii) whether the provider is
                            providing child care services that may
                            be funded under section 418;
                              ``(iii) the hours of operation of the
                            provider;
                              ``(iv) whether the provider offers
                            child care to the general public, and
                            if so, where an application for child
                            care services from the provider may be
                            obtained, or a direct link to such an
                            application;
                              ``(v) the total number of children,
                            by age group, for whom the provider is
                            providing child care services, and how
                            many openings are available with the
                            provider by age group;
                              ``(vi) whether the provider has a
                            waiting list for child care services,
                            and if so, the average length of time
                            parents are on the waiting list before
                            being offered child care services and
                            how to join the list;
                              ``(vii) the type of child care (such
                            as family child care or center-based
                            care) provided, differentiating between
                            licensed and license-exempt child care
                            providers; and
                              ``(viii) information about the
                            languages spoken by staff of the child
                            care provider, and such other
                            information as the Secretary may
                            require to help parents determine
                            whether the provider can meet their
                            child care needs and the parents can
                            enroll a child in care, such as quality
                            indicators or accreditation status;
                      ``(B) the State Child Care Information
                    Network--
                              ``(i) by grant or contract, has been
                            maintained or jointly maintained by--
                                      ``(I) a child care resource
                                    and referral agency that has
                                    operated in the last fiscal
                                    year;
                                      ``(II) a local child care
                                    resource and referral agency
                                    that has operated in the most
                                    recently completed fiscal year
                                    and has applied to become a
                                    State Child Information
                                    Network; or
                                      ``(III) the lead agency, the
                                    State licensing entity, or
                                    other appropriate entities;
                              ``(ii) may have been maintained in
                            coordination with, or jointly with,
                            other federally funded systems, so long
                            as there is no supplantation of
                            funding; and
                              ``(iii) has been made--
                                      ``(I) publicly available,
                                    including through the Internet
                                    and by telephone, to families
                                    seeking information about
                                    obtaining child care services;
                                    and
                                      ``(II) accessible to State,
                                    county, and other government
                                    staff involved in the provision
                                    of child care;
                      ``(C) the State requires each provider listed
                    in the State Child Care Information Network
                    (or, at the option of the provider, another
                    entity designated by the provider) to update
                    the information described in clauses (v) and
                    (vi) of subparagraph (A) on a weekly basis, and
                    to update all other information described in
                    subparagraph (A) not less frequently than
                    quarterly, and ensures that publicly available
                    information in the State Child Care Information
                    Network indicates when the slot availability
                    information about the provider was most
                    recently updated; and
                      ``(D) the State has submitted to the
                    Secretary a plan that includes an estimate of
                    the total capacity of licensed, regulated, and
                    registered provider slots, and a description of
                    the eligible expenditures the State will make
                    in the quarter, which may be submitted with
                    other plans required by the Secretary.
      ``(b) Funding State Child Care Information Networks.--
              ``(1) Start-up funds.--
                      ``(A) Grants.--For each fiscal year specified
                    in subparagraph (C), the Secretary shall make
                    grants to lead agencies to conduct activities
                    related to the planning and implementation of
                    State Child Care Information Networks, which
                    may include scaling systems such as non-profit
                    community-based referral registries, staffed
                    Family Child Care Networks, and child care
                    resource and referral systems.
                      ``(B) Distribution.--The Secretary shall
                    distribute the grant funds to the States that
                    are not territories in accordance with the
                    formula referred to in section 418(a)(2)(B),
                    and to the territories according to relative
                    need.
                      ``(C) Appropriation.--Out of any money in the
                    Treasury not otherwise appropriated, there are
                    appropriated to the Secretary $200,000,000 for
                    each of fiscal years 2022 and 2023 for grants
                    under this paragraph.
              ``(2) Matching grants.--
                      ``(A) In general.--The Secretary shall pay to
                    each State that meets the requirements of
                    subsection (a)(4) with respect to a calendar
                    quarter in any of fiscal years 2022 through
                    2026 an amount equal to 75 percent of the
                    eligible expenditures of the State in the
                    quarter, subject to subsection (d)(3).
                      ``(B) Eligible expenditures.--In this
                    section, the term `eligible expenditures' means
                    all of the following, but only to the extent
                    supplementing, and not supplanting, funds made
                    available under other law:
                              ``(i) State child care information
                            network.--Expenditures to carry out
                            subsection (a)(4).
                              ``(ii) Ease of application for
                            subsidized child care certificate.--
                            Expenditures to establish an option, as
                            indicated by the State in a plan
                            describing planned eligible
                            expenditures (which may be submitted
                            with other plans required by the
                            Secretary)--
                                      ``(I) for a family to file an
                                    application for a subsidized
                                    child care certificate with a
                                    child care provider, for the
                                    provider to submit the
                                    application to the State for
                                    processing, or for the lead
                                    agency, a local child care
                                    resource and referral agency,
                                    or other entity under grant or
                                    contract to respond to the
                                    family;
                                      ``(II) to establish a
                                    statewide common application
                                    for child care, which--
                                              ``(aa) allows an
                                            application with
                                            respect to a child to
                                            be submitted
                                            simultaneously to
                                            multiple child care
                                            providers;
                                              ``(bb) allows the
                                            application to be for a
                                            particular site and
                                            schedule;
                                              ``(cc) is considered
                                            an application directly
                                            to each such provider
                                            involved for purposes
                                            of any decision of the
                                            provider regarding a
                                            wait list or an open
                                            slot based on the
                                            application date;
                                              ``(dd) safeguards
                                            confidential
                                            information; and
                                              ``(ee) allows for
                                            such a provider to seek
                                            and collect information
                                            not on the common
                                            application so that the
                                            provider may determine
                                            the priority to be
                                            given to the applicant
                                            on any waiting list or
                                            for other specialized
                                            admission criteria such
                                            as disability services;
                                            or
                                      ``(III) to enable child care
                                    providers to respond to
                                    families through other
                                    application methods.
                              ``(iii) Expenditures for technology
                            needed to participate in the state
                            child care information network.--
                            Expenditures for child care providers,
                            lead agencies, and contractors to
                            support system-building and system-
                            implementation activities associated
                            with the State Child Care Information
                            Network, including data
                            interoperability and the installation
                            and maintenance of equipment and
                            software needed to develop, implement,
                            maintain, and provide electronic access
                            to the State Child Care Information
                            Network.
                              ``(iv) Participation incentives.--
                            Expenditures to provide financial
                            incentives and support to child care
                            providers for whom participating in the
                            State Child Care Information Network
                            would be costly or time consuming. In
                            providing the incentives, a lead
                            agency--
                                      ``(I) shall take into account
                                    the differential burden on
                                    varying types of providers to
                                    ensure that the incentives are
                                    sufficient to encourage all
                                    types of providers, including
                                    family-based providers, to
                                    participate in the State Child
                                    Care Information Network;
                                      ``(II) may coordinate with
                                    staffed Family Child Care
                                    Networks, child care resource
                                    and referral organizations,
                                    labor unions, labor-management
                                    partnerships, or other
                                    community-based organizations,
                                    to ensure that home-based
                                    providers are able to
                                    participate in the State Child
                                    Care Information Network; and
                                      ``(III) may reimburse
                                    coordinating partners and other
                                    entities for expenses
                                    associated with helping
                                    providers participate in the
                                    Child Care Information Network
                                    and provide information
                                    required under subsection
                                    (a)(4)(A).
                      ``(C) Appropriation.--Out of any money in the
                    Treasury not otherwise appropriated, there are
                    appropriated to the Secretary for each of
                    fiscal years 2022 through 2026 such sums as are
                    necessary for grants under this paragraph.
      ``(c) HHS Participating Child Care Provider Certification.--
              ``(1) In general.--The Secretary shall--
                      ``(A) maintain current information on child
                    care providers who are qualified to receive the
                    HHS Participating Child Care Provider
                    Certification for a calendar quarter, and
                    historical information on child care providers
                    who were so qualified for a prior calendar
                    quarter, including a quarter in a prior year,
                    (in this section referred to as the `HHS
                    Participating Child Care Provider
                    Certification') based on the information
                    submitted by lead agencies;
                      ``(B) update the list of providers who are so
                    qualified, 1 month before the end of each
                    quarter, and electronically share with the
                    Internal Revenue Service current and historical
                    information on the providers who are so
                    qualified; and
                      ``(C) at the end of each calendar year and on
                    request of any provider listed in the HHS
                    Participating Child Care Provider Certification
                    who has qualified for the certification for an
                    entire calendar quarter, provide the provider
                    and the lead agency of the jurisdiction in
                    which the provider is located written
                    documentation of the quarters with respect to
                    which the provider was so qualified.
              ``(2) Qualifications.--A child care provider is
            qualified to receive the HHS Participating Child Care
            Provider Certification for a calendar quarter if the
            provider--
                      ``(A)(i) is licensed with a State as a
                    provider of child care services, or is in a
                    license-exempt category of providers that meets
                    all health and safety standards and has zero
                    unresolved violations;
                      ``(ii) is providing child care services that
                    may be funded under section 418;
                      ``(iii) has submitted to the State Child Care
                    Information Network, on a weekly basis, the
                    information on all available child care slots
                    with the provider required under subsection
                    (a)(4)(A)(v), and the waiting list information
                    required under subsection (a)(4)(A)(vi);
                      ``(iv) makes child care slots available to
                    the general public, when available, subject to
                    any clearly explained priority system; and
                      ``(v) is in compliance with other
                    requirements set by the State regarding
                    applications for or inquiries about available
                    child care slots; or
                      ``(B) was so qualified for the entire 3-month
                    period preceding the most recent update made
                    under paragraph (1)(B).
      ``(d) Administrative Provisions.--
              ``(1) Accuracy checks.--The Secretary shall
            periodically conduct accuracy checks of randomly
            sampled child care providers participating in any State
            Child Care Information Network to determine whether the
            providers are updating their slot availability on a
            weekly basis, and if not, estimate the statewide rate
            at which the providers are doing so.
              ``(2) Privacy; security.--The Secretary shall issue
            guidance regarding data interoperability (in accordance
            with the data exchange standards for interoperability)
            and the privacy and security of personally identifiable
            information in any State Child Care Information
            Network.
              ``(3) Penalty for excessive errors in state child
            care information network.--The percentage specified in
            subsection (b)(2)(A) with respect to a State shall be
            70 percent if--
                      ``(A) a check conducted under paragraph (1)
                    of this subsection reveals that the number of
                    child care providers erroneously included or
                    erroneously not included in the State Child
                    Care Information Network is at least 10 percent
                    of the number of providers included in the
                    network; and
                      ``(B) the State has not submitted to the
                    Secretary a report demonstrating that action
                    has been taken to reduce that error rate to
                    less than 10 percent.
              ``(4) Eligible expenditures.--The Secretary shall
            issue guidance to States which specifies the
            expenditures that will be considered eligible
            expenditures for purposes of this section.
              ``(5) Publication of amount of eligible expenditures
            of each state.--Before issuing grant awards for fiscal
            year 2023 or a succeeding fiscal year, the Secretary,
            in consultation with the States, shall annually publish
            the amount of eligible expenditures of each State in
            the preceding fiscal year.
      ``(e) Appropriation.--Out of any funds in the Treasury not
    otherwise appropriated, there is appropriated $50,000,000 for
    each of fiscal years 2022 through 2026 for administrative
    expenses in carrying out subsections (c) and (d).''.

    SEC. 132002. INFRASTRUCTURE GRANTS TO IMPROVE CHILD CARE SAFETY.

      Part A of title IV of the Social Security Act (42 U.S.C. 601-
    619) is further amended by inserting after section 418A the
    following:

    ``SEC. 418B. INFRASTRUCTURE GRANTS TO IMPROVE CHILD CARE SAFETY.

      ``(a) Child Care Facilities Grants.--
              ``(1) Grants to states.--
                      ``(A) In general.--The Secretary shall award
                    grants to States for the purpose of helping
                    child care providers acquire, construct,
                    renovate, or improve child care facilities,
                    including adapting, reconfiguring, or expanding
                    facilities.
                      ``(B) Duration of grants.--The Secretary
                    shall award grants under this paragraph within
                    12 months after the date of the enactment of
                    this section, for a period of not more than 5
                    years.
                      ``(C) Plan approval required before using
                    grant.--A State to which a grant is made under
                    this paragraph shall not obligate or expend the
                    grant funds unless the State has submitted to
                    the Secretary, and the Secretary has approved,
                    a plan that--
                              ``(i) includes an analysis or
                            assessment, in such form and manner as
                            the Secretary may require, of the need
                            of the State for child care
                            infrastructure;
                              ``(ii) is submitted at such time, in
                            such manner, and containing such other
                            information as the Secretary may
                            require, which information shall--
                                      ``(I) be disaggregated as the
                                    Secretary may require; and
                                      ``(II) include a plan to use
                                    a portion of the grant funds to
                                    report to the Secretary on the
                                    effects of using the grant
                                    funds to improve child care
                                    facilities, including center-
                                    based and home-based child care
                                    facilities; and
                              ``(iii) complies with paragraph (3),
                            if applicable.
                      ``(D) Requirement.--In allocating grants
                    awards under this paragraph, the Secretary
                    shall require approved plans to include
                    elements that--
                              ``(i) provide for improving center-
                            based and home-based child care
                            programs to meet or surpass State
                            health and safety standards, or include
                            a project designed so that a facility
                            is expected to meet or surpass State
                            health and safety standards on
                            completion of the project;
                              ``(ii) aim to meet specific needs
                            across urban, suburban, or rural areas
                            as determined by the State;
                              ``(iii) show evidence of
                            collaboration with--
                                      ``(I) local government
                                    officials;
                                      ``(II) other State agencies;
                                      ``(III) nongovernmental
                                    organizations, such as--
                                              ``(aa) certified
                                            community development
                                            financial institutions
                                            as defined in section
                                            103 of the Community
                                            Development Banking and
                                            Financial Institutions
                                            Act of 1994 (12 U.S.C.
                                            4702) that have been
                                            certified by the
                                            Community Development
                                            Financial Institutions
                                            Fund (12 U.S.C. 4703);
                                            and
                                              ``(bb) organizations
                                            that have demonstrated
                                            experience in--
                                                      ``(AA)
                                                    providing
                                                    technical or
                                                    financial
                                                    assistance for
                                                    the
                                                    acquisition,
                                                    construction,
                                                    renovation, or
                                                    improvement of
                                                    child care
                                                    facilities;
                                                      ``(BB)
                                                    providing
                                                    technical,
                                                    financial, or
                                                    managerial
                                                    assistance to
                                                    child care
                                                    providers; and
                                                      ``(CC)
                                                    securing
                                                    private sources
                                                    of capital
                                                    financing for
                                                    child care
                                                    facilities or
                                                    other community
                                                    development
                                                    projects
                                                    eligible for
                                                    assistance from
                                                    a child care
                                                    assistance
                                                    program; and
                                      ``(IV) local community
                                    organizations, such as--
                                              ``(aa) child care
                                            providers;
                                              ``(bb) community care
                                            agencies;
                                              ``(cc) resource and
                                            referral agencies; and
                                              ``(dd) labor unions
                                            and other employers of
                                            infrastructure trades
                                            that pay the prevailing
                                            wage; and
                              ``(iv) provide for improving the
                            facilities of child care providers who
                            qualify for the HHS Participating Child
                            Care Provider Certification for at
                            least 1 fiscal quarter before the date
                            of application for the grant.
                      ``(E) Matching requirement.--
                              ``(i) In general.--As a condition of
                            the receipt of a grant under this
                            paragraph, a State shall agree to make
                            available, directly or through
                            donations from public or private
                            entities, contributions with respect to
                            the costs to be covered by the grant,
                            which may be provided in cash or in
                            kind, in an amount equal to 10 percent
                            of the funds provided through the
                            grant.
                              ``(ii) Determination of amount
                            contributed.--Such a matching
                            contribution may include philanthropic
                            or private-sector funds.
                      ``(F) Amount limit.--The annual amount of a
                    grant under this paragraph may not exceed
                    $250,000,000.
                      ``(G) Prohibition.--The Secretary may not, as
                    a condition of making a grant under this
                    paragraph or section 418D, retain an interest
                    in any property, including any project
                    involving a privately-owned family child care
                    home or tribal land.
                      ``(H) Report.--Not later than 6 months after
                    the last day of the grant period, a State to
                    which a grant is made under this paragraph
                    shall submit to the Secretary the report
                    referred to in subparagraph (C)(ii)(II)--
                              ``(i) to determine the effects of the
                            grant in constructing, renovating, or
                            improving child care facilities,
                            including any changes in response to
                            public health guidelines or efforts
                            associated with natural disaster
                            emergency preparedness and response and
                            any effects on access to child care;
                            and
                              ``(ii) to provide such other
                            information as the Secretary may
                            require.
                      ``(I) Return of grant if plan not approved
                    within 2 years.--A State to which a grant is
                    made under this paragraph shall remit the grant
                    to the Secretary if the Secretary has not
                    provided the approval required by subparagraph
                    (C) within 2 years after the date the grant is
                    made.
              ``(2) Grants to intermediary organizations.--
                      ``(A) In general.--The Secretary may award
                    grants to intermediary organizations, such as
                    certified community development financial
                    institutions or other organizations with
                    demonstrated experience in child care
                    facilities financing, for the purpose of
                    providing technical assistance, capacity-
                    building, and financial products to develop or
                    finance child care facilities.
                      ``(B) Application.--A grant under this
                    paragraph may be made only to an intermediary
                    organization that submits to the Secretary an
                    application at such time, in such manner, and
                    containing such information as the Secretary
                    may require, that complies with paragraph (3)
                    if applicable.
                      ``(C) Consultation.--In selecting
                    intermediary organizations for grants under
                    this paragraph, the Secretary shall conduct
                    consultations with organizations that--
                              ``(i) demonstrate experience in child
                            care facility financing or related
                            community facility financing;
                              ``(ii) demonstrate the capacity to
                            assist States and local governments in
                            developing child care facilities and
                            programs;
                              ``(iii) demonstrate the ability to
                            leverage grant funding to support
                            financing tools to build the capacity
                            of child care providers, such as
                            through credit enhancements;
                              ``(iv) propose to focus on child care
                            facilities that operate under
                            nontraditional hours;
                              ``(v) propose to meet a diversity of
                            needs across urban, suburban, and rural
                            areas at varying types of center-based,
                            home-based, and other child care
                            settings, including early care programs
                            located in buildings in which the care
                            center is the sole occupant or in
                            mixed-use properties; and
                              ``(vi) propose to focus on child care
                            facilities primarily serving low-income
                            populations and children who have not
                            attained 13 years of age.
                      ``(D) Amount limit.--The amount of a grant
                    under this paragraph may not exceed
                    $15,000,000.
                      ``(E) Annual report required.--As a condition
                    of receiving funds under this paragraph, the
                    recipient shall submit annual reports to the
                    lead agency of the jurisdiction in which the
                    recipient is located documenting how the
                    recipient has expended the funds and updating
                    the planned future expenditures described in
                    the application submitted by the recipient for
                    the funds.
              ``(3) Labor standards.--In the case of an application
            for a grant under this subsection for a project to
            construct, renovate, or improve a child care facility,
            including a project to adapt, reconfigure, or expand
            such a facility, the application shall include a
            written assurance that all laborers and mechanics
            employed by contractors or subcontractors in the
            performance of construction, alteration, or repair, as
            part of the project, shall be paid wages at rates not
            less than those prevailing on similar work in the
            locality as determined by the Secretary of Labor in
            accordance with subchapter IV of chapter of part A of
            subtitle II of title 40, United States Code (commonly
            referred to as the `Davis-Bacon Act'), and with respect
            to the labor standards specified in such subchapter,
            the Secretary of Labor shall have the authority and
            functions set forth in Reorganization Plan Numbered 14
            of 1950 (15 Fed. Reg. 3176; 5 U.S.C. App.).
              ``(4) Use of funds.--
                      ``(A) Infrastructure improvement.--
                              ``(i) In general.--A recipient of
                            funds under this subsection may use the
                            funds only to acquire, construct,
                            renovate, or otherwise physically
                            improve the infrastructure of a
                            building primarily used for the
                            provision of child care services by a
                            child care provider, subject to clause
                            (ii).
                              ``(ii) Prohibition.--A recipient of
                            funds under this subsection may not use
                            the funds for modernization,
                            renovation, or repair of facilities--
                                      ``(I) that are primarily used
                                    for sectarian instruction or
                                    religious worship; or
                                      ``(II) in which a substantial
                                    portion of the functions of the
                                    facilities are subsumed in a
                                    religious mission.
                      ``(B) Rules applicable to lead agencies.--A
                    lead agency that is a recipient of funds under
                    this subsection may use not more than 5 percent
                    of the funds for administrative purposes which
                    may be in addition to evaluation and reporting
                    activities, and shall use the balance of the
                    funds to enter into grants or contracts, on a
                    competitive basis, with entities to carry out
                    projects to acquire, construct, renovate, or
                    complete other physical improvements to
                    buildings in which child care services are
                    provided or will be provided on completion of
                    the project.
      ``(b) Appropriation.--Out of any funds in the Treasury not
    otherwise appropriated, there is appropriated $15,000,000,000
    for fiscal year 2022 to carry out this section, which shall
    remain available through fiscal year 2026.
      ``(c) Reservations of Funds.--
              ``(1) Territories.--The Secretary shall reserve
            $100,000,000 of the amount made available to carry out
            this section, for grants to territories.
              ``(2) Administration.--The Secretary may reserve not
            more than $200,000,000 of the amount made available to
            carry out this section, for administrative costs.
              ``(3) Assessments and development plans.--The
            Secretary shall reserve for each lead agency not more
            than $100,000 to conduct assessments and develop plans
            for obligating and expending funds provided under this
            section, which may be expended by a lead agency
            immediately on receipt.
              ``(4) Data exchange standards for interoperability.--
            The Secretary may reserve not more than $200,000 of the
            amount made available to carry out this section to
            implement data exchange standards for interoperability.
      ``(d) Limitation on Availability of Funds for Grants for
    Intermediary Organizations.--Not more than $2,250,000,000 of
    the total amount made available to carry out this section may
    be used to carry out subsection (a)(2).''.

    SEC. 132003. TECHNICAL ASSISTANCE.

      Part A of title IV of the Social Security Act (42 U.S.C. 601-
    619) is further amended by inserting after section 418B the
    following:

    ``SEC. 418C. TECHNICAL ASSISTANCE.

      ``(a) In General.--
              ``(1) Child care information network.--The Secretary
            shall provide technical assistance to lead agencies to
            support the development and implementation of, and
            ongoing full participation in, State Child Care
            Information Networks provided for in section
            418A(a)(4).
              ``(2) Child care infrastructure.--The Secretary shall
            provide technical assistance--
                      ``(A) to child care small business owners,
                    entrepreneurs, nonprofit organizations, and
                    child care infrastructure grant recipients, for
                    the purpose of starting new licensed child care
                    businesses, or re-opening a closed child care
                    facility, in areas in which there is a child
                    care shortage or that are at risk of having
                    such a shortage;
                      ``(B) to State and local governments to
                    incentivize public-private partnerships to
                    identify excess buildings and land and conduct
                    feasibility studies, for new or expanded child
                    care options that could be available to child
                    care entrepreneurs and infrastructure grantees,
                    or used for publicly-run child care facilities;
                    and
                      ``(C) to support child care business
                    technical assistance, which may include
                    strategies to support management training and
                    shared services initiatives including provider
                    networks such as child care center alliances
                    and family child care home provider networks,
                    as well as fundamental business support needs
                    such as budgeting and fiscal management skills,
                    business planning, understanding the cost of
                    quality, and core best business practices such
                    as recordkeeping and payment reconciliation.
              ``(3) Supplementing national technical assistance
            efforts.--The Secretary may provide technical
            assistance to States (and submit to the Congress
            reports on technical assistance activities) to increase
            child care availability and affordability, including
            by--
                      ``(A) providing technical assistance on best
                    practices for conducting market rate surveys
                    and establishing State reimbursement rates and
                    price-per-child rates for child care for
                    children who have not attained 13 years of age;
                      ``(B) increasing child care availability in
                    tribal communities for families with children
                    who have not attained 13 years of age;
                      ``(C) improving the effectiveness and
                    affordability of child care assistance programs
                    in meeting the needs of low-income parents; or
                      ``(D) collecting, managing, analyzing, and
                    reporting child care administrative data, and
                    use the data to support documentation of
                    changes in child care availability and
                    affordability.
      ``(b) Administrative Provision.--The Secretary may carry out
    this section through means including the use of grants or
    cooperative agreements.
      ``(c) Appropriation.--Out of any funds in the Treasury not
    otherwise appropriated, there is appropriated $17,500,000 for
    each of fiscal years 2022 through 2026 to carry out this
    section.''.

    SEC. 132004. TRIBAL CHILD CARE ACCESS AND GROWTH.

      Part A of title IV of the Social Security Act (42 U.S.C. 601-
    619) is further amended by inserting after section 418C the
    following:

    ``SEC. 418D. TRIBAL CHILD CARE ACCESS AND GROWTH.

      ``(a) HHS Consultations With Indian Tribes.--Of the amount
    appropriated under subsection (e) for each fiscal year, the
    Secretary shall use not more than $1,000,000 to--
              ``(1) conduct such consultations with Indian tribes
            and tribal organizations as are necessary to determine
            how to better conduct consumer outreach and education
            and provide timely availability for child care slots,
            improve child care infrastructure, and otherwise inform
            best practices and guidelines for carrying out the
            activities described in subsection (b); and
              ``(2) provide technical assistance to the lead
            agencies of Indian tribes and tribal organizations with
            respect to carrying out the activities.
      ``(b) Activities Described.--The activities described in this
    subsection are the following:
              ``(1) Planning, start-up, implementation, and
            maintenance costs associated with establishing and
            funding a Child Care Information Network designed to
            help parents determine which child care providers can
            meet their child care needs and to give parents ease of
            access in enrolling their children in child care.
              ``(2) Coordinating with the Secretary regarding the
            HHS Participating Child Care Provider Certification
            provided for in section 418A(c).
              ``(3) Conducting infrastructure projects to improve
            the safety of child care facilities.
      ``(c) Grants.--
              ``(1) In general.--Of the amount appropriated under
            subsection (e) for each fiscal year, the Secretary
            shall use not less than $199,000,000 to make grants to
            the lead agencies of Indian tribes and tribal
            organizations for activities described in subsection
            (b), which are to be carried out in accordance with
            such rules as the Secretary may prescribe, taking into
            account the results of the consultations conducted
            under subsection (a)(1).
              ``(2) Allocation.--The Secretary may make grants
            under this subsection according to relative need.
      ``(d) Nonsupplantation.--An entity to which an amount is
    provided under this section shall use the amount to supplement,
    but not supplant, other funds provided for any purpose or
    activity for which the amount is used.
      ``(e) Appropriation.--Out of any funds in the Treasury not
    otherwise appropriated, there is appropriated to the Secretary
    $200,000,000 for each of fiscal years 2022 through 2026 to
    carry out this section.''.

    SEC. 132005. RAISING THE FLOOR FOR CHILD CARE PROVIDER WAGES.

      (a) Planning for Child Care Wage Grants for Small
    Businesses.--
              (1) In general.--For the purpose of maintaining an
            effective and diverse child care workforce, effective
            upon enactment, through the end of fiscal year 2022,
            the Secretary of Health and Human Services shall,
            regarding the development and implementation of the
            Child Care Wage Grant program provided for in section
            418E of the Social Security Act (as added by subsection
            (b) of this section)--
                      (A) issue guidance or technical assistance to
                    lead agencies (as defined in such section) with
                    respect to--
                              (i) consultation with field
                            engagement organizations (as defined in
                            such section);
                              (ii) wage supplement calculations,
                            with the option of providing a bonus
                            that may not be more than the
                            equivalent of an annual wage;
                              (iii) application requirements;
                              (iv) reporting requirements;
                              (v) anti-discrimination protection
                            measures; and
                              (vi) other related activities;
                      (B) engage in hiring, training, developing
                    work plans, developing outreach materials, and
                    other administrative overhead activities; and
                      (C) consult with relevant entities such as
                    tribal leaders, governors, county and local
                    government, and community stakeholders.
              (2) Funding.--Out of any money in the Treasury not
            otherwise appropriated, there is appropriated to the
            Secretary of Health and Human Services $10,000,000, to
            remain available through September 30, 2022, to carry
            out this paragraph.
      (b) Implementation.--Part A of title IV of the Social
    Security Act (42 U.S.C. 601-619) is further amended by
    inserting after section 418D the following:

    ``SEC. 418E. CHILD CARE WAGE GRANTS FOR SMALL BUSINESSES.

      ``(a) Grants to Lead Agencies.--
              ``(1) Grants.--
                      ``(A) In general.--The Secretary shall make
                    grants to reimburse State, tribal, and
                    territorial lead agencies for the amount of
                    child care wage grants made to qualifying child
                    care providers under lead agency child care
                    wage grant programs, and for documented costs
                    of administering the programs that are directly
                    related to determining provider eligibility,
                    making payments, data collection, and verifying
                    provider compliance with program rules.
                      ``(B) Limitation on reimbursement for
                    documented administrative costs.--The amount of
                    the reimbursement for the documented
                    administrative costs shall not exceed 5 percent
                    of the total amount of the child care wage
                    grants.
              ``(2) Consultation required as a condition of
            eligibility.--A lead agency shall not be eligible for a
            grant under this section with respect to a child care
            wage grant program unless the lead agency has consulted
            with field engagement organizations in developing and
            implementing the program, including application
            process, eligibility determinations, community
            outreach, and such other aspects of the program as the
            Secretary deems appropriate, and if, after the
            consultation, the lead agency intends to operate a
            child care wage grant program for small businesses, the
            lead agency shall submit to the Secretary a
            certification that the lead agency has conducted such a
            consultation and intends to submit a claim for
            reimbursement with respect to program expenditures at
            the end of the fiscal year.
      ``(b) State Child Care Wage Grant Program.--
              ``(1) In general.--A lead agency child care wage
            grant program is a program operated by a lead agency
            under which a child care wage grant is made to
            qualified child care providers for the 1-year period
            covered by the grant, in an amount equal to the
            aggregate of the eligible child care wage supplements
            provided by the qualified child care provider during
            the year, which year shall not begin before October 1,
            2022.
              ``(2) Reporting requirement.--
                      ``(A) In general.--A recipient of a child
                    care wage grant from a lead agency shall submit
                    to the lead agency every fiscal quarter a
                    report that includes documentation of how the
                    grant has been expended including the number of
                    full or part-time workers providing child care
                    and whether each such worker worked for the
                    full year, a description of the wage levels and
                    demographics of the child care employees of the
                    qualified child care provider, and such other
                    information as the Secretary may require, and
                    may allow field engagement organizations to
                    support grant recipients in meeting quarterly
                    reporting requirements.
                      ``(B) Authority to extend deadline.--A lead
                    agency may approve a request from such a
                    recipient to extend the reporting deadline for
                    90 days, but shall accompany such an approval
                    with a notice that failure to submit all
                    information required in the report will result
                    in future ineligibility for such a grant.
      ``(c) Reimbursement; Advance Estimated Payment.--A lead
    agency may submit to the Secretary a request for reimbursement
    or estimated advance payment of the costs of operating the lead
    agency child care wage grant program for the 1-year period
    covered by the request, which shall include documentation of
    the grant awards made to qualified child care providers under
    the program, an assurance that not more than 5 percent of the
    costs in the reimbursement request are for administrative
    costs, an assurance that the State will repay any advances
    based on payments to child care providers that were in excess
    of costs allowable under this section (including payments for
    workers who did not work for the full year) or based on State
    administrative costs in excess of 5 percent, and the following:
              ``(1) Qualified child care provider application data,
            including the number of qualified child care providers
            and the proportion of applications that were approved
            under the program, documentation of rejected
            applications, including the reason for
            disqualification, and demographic data of applicants.
              ``(2) Qualified child care provider wage subsidy
            data, including wage levels, the size and type of the
            qualified child care provider, the number of children
            served by the qualified child care provider,
            verification that the child care wage grant provided to
            the qualified child care provider was not used to
            supplant Federal funds, verification that the qualified
            child care provider performs child care services as the
            primary function of the qualified child care provider,
            verification that qualifying child care provider
            applications are approved for 1 year, and documentation
            of the number of full-time and part-time child care
            employees (which may include sole proprietors)
            including the portion of the year for which each
            employee was employed with that provider to provide
            child care.
              ``(3) Certification that each qualified child care
            provider is not eligible to receive a child care
            payroll tax credit under section 3135 of the Internal
            Revenue Code of 1986 with respect to wages paid to any
            child care employee of the qualified child care
            provider.
              ``(4) Qualified child care provider demographic data,
            including racial, ethnic, and gender data of the
            qualified child care provider and child care employees.
              ``(5) Documentation of qualified child care provider
            wages, and documentation of child care wages that, in
            the absence of a grant made under this section, would
            have been paid at not less than the applicable minimum
            rate.
              ``(6) Documentation that each qualified child care
            provider is licensed by, registered with, or regulated
            by the State.
              ``(7) Documentation that each qualified child care
            provider was so qualified throughout the year with
            respect to which reimbursement is sought.
              ``(8) Documentation that each employee for which a
            grant is sought was employed for the full year, or if
            not, for what portion of the year they were employed.
              ``(9) Such other relevant items as the Secretary may
            require.
      ``(d) Penalties.--
              ``(1) Misuse of child care wage grant.--If the
            Secretary finds that a qualified child care provider
            has used funds provided under this section with respect
            to a year other than to supplement the applicable
            minimum rate of child care wages for an employee
            engaged in child care work for the reported period, the
            qualified child care provider shall--
                      ``(A) repay to the lead agency all funds so
                    provided to the child care provider for the
                    year; and
                      ``(B) be ineligible for the succeeding 2
                    years to receive funds made available under
                    this section.
              ``(2) Decrease in number of child care employees.--If
            a recipient of a child care wage grant for a year
            reports under subsection (b)(2)(A) that the number of
            child care employees of the recipient has decreased
            during the year, then--
                      ``(A) the lead agency shall proportionately
                    decrease the amount of the child care wage
                    grant (if any) payable to the recipient for the
                    next year; or
                      ``(B) if the recipient is not awarded a child
                    care wage grant for the next year, the
                    recipient shall remit to the lead agency a
                    portion of the grant equal to the proportionate
                    decrease in the number of child care employees
                    of the provider.
      ``(e) Appropriation.--Out of any money in the Treasury not
    otherwise appropriated, there is appropriated to the Secretary
    for each of fiscal years 2023 through 2026 such sums as may be
    necessary for reimbursements or estimated payments referred to
    in subsection (a).
      ``(f) Definitions.--In this section:
              ``(1) Applicable minimum rate.--The term `applicable
            minimum rate' means the rate at which basic pay is
            payable for a position at level 3, step 1, of the
            General Schedule under subchapter III of chapter 53 of
            title 5, United States Code, including any applicable
            locality-based comparability payment under section 5304
            of such title or similar authority, at the time such
            wages are paid and determined with respect to the
            locality in which services are provided.
              ``(2) Child care wages.--The term `child care wages'
            means--
                      ``(A) wages paid to an employee for services
                    in providing child care; and
                      ``(B) an owner's draw in lieu of wages, in
                    the case of a sole proprietor who provides
                    child care services or an owner who directly
                    provides child care services alongside
                    employees.
              ``(3) Child care employee.--The term `child care
            employee' means an employee--
                      ``(A) who is employed by a qualified child
                    care provider;
                      ``(B) who provides child care services as a
                    primary function of employment; and
                      ``(C) whose wages do not qualify under
                    section 3135(a) of the Internal Revenue Code of
                    1986.
              ``(4) Eligible child care wage supplement.--
                      ``(A) In general.--The term `eligible child
                    care wage supplement' means, with respect to a
                    year, a supplement to child care wages of an
                    employee (or owner), but only to the extent
                    that the total amount of the child care wage
                    supplements provided to the employee (or owner)
                    during the year--
                              ``(i) in the case of a full-time
                            employee (or an owner who works on a
                            full-time basis), is not more than
                            $16,000; or
                              ``(ii) in the case of a part-time
                            employee (or an owner who works on a
                            part-time basis), is not more than
                            $10,000.
                    In the case of any employee who is not employed
                    as a child care employee for the full year, the
                    maximum dollar amounts set forth in the
                    preceding sentence shall be proportionately
                    reduced.
                      ``(B) Inflation adjustment.--Each dollar
                    amount in effect under subparagraph (A) with
                    respect to a year shall be increased by a
                    percentage equal to the percentage (if any) by
                    which the Consumer Price Index for all urban
                    consumers (U.S. city average) increased during
                    the 12-month period ending with the last month
                    for which Consumer Price Index data is
                    available.
              ``(5) Field engagement organization.--The term `field
            engagement organization' means any nonprofit,
            community-based organization, labor union, trade
            association, staffed family child care network, child
            care resource and referral organization, or local
            government entity with experience providing
            representation, technical assistance, or community
            supports to child care providers or individuals seeking
            to enter or re-enter the child care market.
              ``(6) Qualified child care provider.--The term
            `qualified child care provider' means an entity who--
                      ``(A) provides child care services as the
                    primary function of the entity;
                      ``(B) is registered with, or regulated or
                    licensed by, the State as a child care
                    provider;
                      ``(C) at the time of application for a child
                    care wage grant under this section, does not
                    have an unresolved violation of a State law or
                    regulation pertaining to health or safety in
                    the provision of child care services;
                      ``(D) has at least 1 employee whose wages may
                    not be taken into account under section 3135(a)
                    of the Internal Revenue Code of 1986 because
                    the employee is a sole proprietor or reports
                    self-employment income;
                      ``(E) as of the time of the application, pays
                    child care wages at a rate that is at least the
                    applicable minimum rate, and certifies that the
                    entity will not reduce the hourly wage rate of
                    any employee during the 1-year period for which
                    the entity has applied for a child care wage
                    grant under this section; and
                      ``(F) has submitted to the lead agency all
                    data requested by the Secretary under this
                    section;
                      ``(G) has submitted the application to the
                    lead agency, which has approved the
                    application; and
                      ``(H) has not failed to include all
                    information required to be included in any
                    quarterly report required by subsection (b)(2)
                    to be submitted by the entity with respect to
                    the year preceding the year for which the
                    application is submitted.''.

    SEC. 132006. COMMON PROVISIONS.

      (a) Definitions.--Section 419 of the Social Security Act (42
    U.S.C. 619) is amended by adding at the end the following:
              ``(6) Lead agency.--The term `lead agency' means,
            with respect to a jurisdiction, the lead agency
            responsible for administering the child care assistance
            program of the jurisdiction.
              ``(7) Territory.--The term `territory' means the
            Commonwealth of Puerto Rico, the United States Virgin
            Islands, Guam, American Samoa, and the Commonwealth of
            the Northern Mariana Islands.''.
      (b) Reports to the Congress.--Section 411 of such Act (42
    U.S.C. 611) is amended by adding at the end the following:
      ``(e) Reports on Certain State Child Care Expenditures.--The
    Secretary shall submit to the Committee on Ways and Means of
    the House of Representatives and the Committee on Finance of
    the Senate biennial reports on--
              ``(1) eligible expenditures (as defined in section
            418A(b)(2)(B)) by the States, and on expenditures by
            the Secretary under section 418A during the period
            covered by the report;
              ``(2) the extent to which payments under section 418A
            have been made with respect to the expenditures;
              ``(3) to the extent that any funds made available to
            carry out such section have not been expended, the
            reasons therefor; and
              ``(4) expenditures under section 418C.''.
      (c) Inapplicability of Payment Limitation.--Section 1108(a)
    of such Act (42 U.S.C. 1308(a)) is amended by inserting ``418A,
    418B, 418C, 418D, 418E,'' before ``or''.

                    Subtitle D--Trade Adjustment Assistance

    SEC. 133001. SHORT TITLE.

      This subtitle may be cited as the ``Trade Adjustment
    Assistance Modernization Act of 2021''.

    SEC. 133002. APPLICATION OF PROVISIONS RELATING TO TRADE ADJUSTMENT
                        ASSISTANCE.

      (a) Effective Date; Applicability.--Except as otherwise
    provided in this subtitle, the provisions of chapters 2 through
    6 of title II of the Trade Act of 1974, as in effect on June
    30, 2021, and as amended by this subtitle, shall--
              (1) take effect on the date of the enactment of this
            Act; and
              (2) apply with respect to petitions for certification
            filed under chapter 2, 3, 4, or 6 of title II of the
            Trade Act of 1974 on or after such date of enactment.
      (b) Reference.--Except as otherwise provided in this
    subtitle, whenever in this subtitle an amendment or repeal is
    expressed in terms of an amendment to, or repeal of, a
    provision of chapters 2 through 6 of title II of the Trade Act
    of 1974, the reference shall be considered to be made to a
    provision of any such chapter, as in effect on June 30, 2021.
      (c) Repeal of Snapback.--Section 406 of the Trade Adjustment
    Assistance Reauthorization Act of 2015 (Public Law 114-27; 129
    Stat. 379) is repealed.

                PART 1--TRADE ADJUSTMENT ASSISTANCE FOR WORKERS

    SEC. 133101. FILING PETITIONS.

      Section 221(a)(1) of the Trade Act of 1974 (19 U.S.C.
    2271(a)(1)) is amended--
              (1) by amending subparagraph (A) to read as follows:
              ``(A) One or more workers in the group of workers.'';
            and
              (2) in subparagraph (C), by striking ``or a State
            dislocated worker unit'' and inserting ``a State
            dislocated worker unit, or workforce intermediaries,
            including labor-management organizations that carry out
            re-employment and training services''.

    SEC. 133102. GROUP ELIGIBILITY REQUIREMENTS.

      (a) In General.--Section 222(a)(2) of the Trade Act of 1974
    (19 U.S.C. 2272(a)(2)) is amended--
              (1) in subparagraph (A)--
                      (A) in clause (i), by inserting ``, failed to
                    increase, or will decrease absolutely due to a
                    scheduled or imminently anticipated, long-term
                    decrease in or reallocation of the production
                    capacity of the firm'' after ``absolutely'';
                    and
                      (B) in clause (iii)--
                              (i) by striking ``to the decline''
                            and inserting ``to any decline or
                            absence of increase''; and
                              (ii) by striking ``or'' at the end;
              (2) in subparagraph (B)(ii), by striking the period
            at the end and inserting ``; or''; and
              (3) by adding at the end the following:
              ``(C)(i) the sales or production, or both, of such
            firm have decreased;
              ``(ii)(I) exports of articles produced or services
            supplied by such workers' firm have decreased; or
              ``(II) imports of articles or services necessary for
            the production of articles or services supplied by such
            firm have decreased; and
              ``(iii) the decrease in exports or imports described
            in clause (ii) contributed to such workers' separation
            or threat of separation and to the decline in the sales
            or production of such firm.''.
      (b) Repeal.--Section 222 of the Trade Act of 1974 (19 U.S.C.
    2272) is amended--
              (1) in subsections (a) and (b), by striking
            ``importantly'' each place it appears; and
              (2) in subsection (c)--
                      (A) by striking paragraph (1); and
                      (B) by redesignating paragraphs (2) through
                    (4) as paragraphs (1) through (3),
                    respectively.
      (c) Eligibility of Staffed Workers and Teleworkers.--Section
    222 of the Trade Act of 1974 (19 U.S.C. 2272), as amended by
    subsection (b), is further amended by adding at the end the
    following:
      ``(f) Treatment of Staffed Workers and Teleworkers.--
              ``(1) In general.--For purposes of subsection (a),
            workers in a firm include staffed workers and
            teleworkers.
              ``(2) Definitions.--In this subsection:
                      ``(A) Staffed worker.--The term `staffed
                    worker' means a worker who performs work under
                    the operational control of a firm that is the
                    subject of a petition filed under section 221,
                    even if the worker is directly employed by
                    another firm.
                      ``(B) Teleworker.--The term `teleworker'
                    means a worker who works remotely but who
                    reports to the location listed for a firm in a
                    petition filed under section 221.''.

    SEC. 133103. APPLICATION OF DETERMINATIONS OF ELIGIBILITY TO WORKERS
                        EMPLOYED BY SUCCESSORS-IN-INTEREST.

      Section 223 of the Trade Act of 1974 (19 U.S.C. 2273) is
    amended by adding at the end the following:
      ``(f) Treatment of Workers of Successors-in-Interest.--If the
    Secretary certifies a group of workers of a firm as eligible to
    apply for adjustment assistance under this chapter, a worker of
    a successor-in-interest to that firm shall be covered by the
    certification to the same extent as a worker of that firm.''.

    SEC. 133104. PROVISION OF BENEFIT INFORMATION TO WORKERS.

      Section 225 of the Trade Act of 1974 (19 U.S.C. 2275) is
    amended--
              (1) in subsection (a), by inserting after the second
            sentence the following new sentence: ``The Secretary
            shall make every effort to provide such information and
            assistance to workers in their native language.''; and
              (2) in subsection (b)--
                      (A) by redesignating paragraph (2) as
                    paragraph (3);
                      (B) by inserting after paragraph (1) the
                    following:
      ``(2) The Secretary shall provide a second notice to a worker
    described in paragraph (1) before the worker has exhausted all
    rights to any unemployment insurance to which the worker is
    entitled (other than additional compensation described in
    section 231(a)(3)(B) funded by a State and not reimbursed from
    Federal funds).'';
                      (C) in paragraph (3), as redesignated by
                    paragraph (1), by striking ``newspapers of
                    general circulation'' and inserting
                    ``appropriate print or digital outlets''; and
                      (D) by adding at the end the following:
      ``(4) For purposes of providing sustained outreach regarding
    the benefits available under this chapter to workers covered by
    a certification made under this subchapter, the Secretary may
    take any necessary actions, including the following:
              ``(A) Collecting the email addresses and telephone
            numbers of such workers from the employers of such
            workers to provide sustained outreach to such workers.
              ``(B) Partnering with the certified or recognized
            union, a community-based worker organization, or other
            duly authorized representatives of such workers.
              ``(C) Hiring peer support workers to perform
            sustained outreach to other workers covered by that
            certification.
              ``(D) Using advertising methods and public
            information campaigns, including social media, in
            addition to notice published in print or digital
            outlets under paragraph (3).''.

    SEC. 133105. QUALIFYING REQUIREMENTS FOR WORKERS.

      (a) Modification of Conditions.--
              (1) In general.--Section 231(a) of the Trade Act of
            1974 (19 U.S.C. 2291(a)) is amended--
                      (A) by striking paragraph (2);
                      (B) by redesignating paragraphs (3), (4), and
                    (5) as paragraphs (2), (3), and (4),
                    respectively; and
                      (C) in paragraph (4) (as redesignated), by
                    striking ``paragraphs (1) and (2)'' each place
                    it appears and inserting ``paragraph (1)''.
              (2) Conforming amendments.--(A) Section 232 of the
            Trade Act of 1974 (19 U.S.C. 2292) is amended by
            striking ``section 231(a)(3)(B)'' each place it appears
            and inserting ``section 231(a)(2)(B)''.
              (B) Section 233(a) of the Trade Act of 1974 (19
            U.S.C. 2293(a)) is amended--
                      (i) in paragraph (1), by striking ``section
                    231(a)(3)(A)'' and inserting ``section
                    231(a)(2)(A)''; and
                      (ii) in paragraph (2)--
                              (I) by striking ``adversely affected
                            employment'' and all that follows
                            through ``(A) within'' and inserting
                            ``adversely affected employment
                            within'';
                              (II) by striking ``, and'' and
                            inserting a period; and
                              (III) by striking subparagraph (B).
      (b) Waivers of Training Requirements.--Section 231(c)(1) of
    the Trade Act of 1974 (19 U.S.C. 2291(c)(1)) is amended--
              (1) by redesignating subparagraphs (A), (B), and (C)
            as subparagraphs (C), (D), and (E), respectively; and
              (2) by inserting before subparagraph (C) (as
            redesignated) the following:
                      ``(A) Recall.--The worker has been notified
                    that the worker will be recalled by the firm
                    from which the separation occurred.
                      ``(B) Retirement.--The worker is within 2
                    years of meeting all requirements for
                    entitlement to either--
                              ``(i) old-age insurance benefits
                            under title II of the Social Security
                            Act (42 U.S.C. 401 et seq.) (except for
                            application therefor); or
                              ``(ii) a private pension sponsored by
                            an employer or labor organization.''.

    SEC. 133106. MODIFICATION TO TRADE READJUSTMENT ALLOWANCES.

      Section 233 of the Trade Act of 1974 (19 U.S.C. 2293) is
    amended--
              (1) in subsection (a)--
                      (A) in paragraph (2), by inserting after
                    ``104-week period'' the following: ``(or, in
                    the case of an adversely affected worker who
                    requires a program of prerequisite education or
                    remedial education (as described in section
                    236(a)(5)(D)) in order to complete training
                    approved for the worker under section 236, the
                    130-week period)'';
                      (B) in paragraph (3), by striking ``65
                    additional weeks in the 78-week period'' and
                    inserting ``78 additional weeks in the 91-week
                    period''; and
                      (C) in the flush text, by striking ``78-week
                    period'' and inserting ``91-week period'';
              (2) by striking subsection (d); and
              (3) by amending subsection (f) to read as follows:
      ``(f) Payment of Trade Readjustment Allowances to Complete
    Training.--Notwithstanding any other provision of this section,
    in order to assist an adversely affected worker to complete
    training approved for the worker under section 236 that
    includes a program of prerequisite education or remedial
    education (as described in section 236(a)(5)(D)), and in
    accordance with regulations prescribed by the Secretary,
    payments may be made as trade readjustment allowances for up to
    26 additional weeks in the 26-week period that follows the last
    week of entitlement to trade readjustment allowances otherwise
    payable under this chapter.''.

    SEC. 133107. AUTOMATIC EXTENSION OF TRADE READJUSTMENT ALLOWANCES.

      (a) In General.--Part I of subchapter B of chapter 2 of title
    II of the Trade Act of 1974 (19 U.S.C. 2291 et seq.) is amended
    by inserting after section 233 the following new section:

    ``SEC. 233A. AUTOMATIC EXTENSION OF TRADE READJUSTMENT ALLOWANCES.

      ``(a) In General.--Notwithstanding the limitations under
    section 233(a), the Secretary shall extend the period during
    which trade readjustment allowances are payable to an adversely
    affected worker who completes training approved under section
    236 by the Secretary during a period of heightened unemployment
    with respect to the State in which such worker seeks benefits,
    for the shorter of--
              ``(1) the 26-week period beginning on the date of
            completion of such training; or
              ``(2) the period ending on the date on which the
            adversely affected worker secures employment.
      ``(b) Job Search Required.--A worker shall only be eligible
    for an extension under subsection (a) if the worker is
    complying with the job search requirements associated with
    unemployment insurance in the applicable State.
      ``(c) Period of Heightened Unemployment Defined.--In this
    section, the term `period of heightened unemployment' with
    respect to a State means a 90-day period during which, in the
    determination of the Secretary, either of the following average
    rates equals or exceeds 5.5 percent:
              ``(1) The average rate of total unemployment in such
            State (seasonally adjusted) for the period consisting
            of the most recent 3-month period for which data for
            all States are published before the close of such
            period.
              ``(2) The average rate of total unemployment in all
            States (seasonally adjusted) for the period consisting
            of the most recent 3-month period for which data for
            all States are published before the close of such
            period.''.
      (b) Clerical Amendment.--The table of contents for the Trade
    Act of 1974 is amended by inserting after the item relating to
    section 233 the following:

    ``Sec. 233A. Automatic extension of trade readjustment allowances.''.

    SEC. 133108. EMPLOYMENT AND CASE MANAGEMENT SERVICES.

       Section 235 of the Trade Act of 1974 (19 U.S.C. 2295) is
    amended--
              (1) in paragraph (3)--
                      (A) by inserting after ``regional areas'' the
                    following: ``(including information about
                    registered apprenticeship programs, on-the-job
                    training opportunities, and other work-based
                    learning opportunities)''; and
                      (B) by inserting after ``suitable training''
                    the following: ``, information regarding the
                    track record of a training provider's ability
                    to successfully place participants into
                    suitable employment'';
              (2) by redesignating paragraph (8) as paragraph (10);
            and
              (3) by inserting after paragraph (7) the following:
              ``(8) Information related to direct job placement,
            including facilitating the extent to which employers
            within the community commit to employing workers who
            would benefit from the employment and case management
            services under this section.
              ``(9) Sustained outreach to groups of workers likely
            to be certified as eligible for adjustment assistance
            under this chapter and members of certified worker
            groups who have not yet applied for or been enrolled in
            benefits or services under this chapter, especially
            such groups and members from underserved
            communities.''.

    SEC. 133109. TRAINING.

      Section 236 of the Trade Act of 1974 (19 U.S.C. 2296(a)) is
    amended--
              (1) in subsection (a)--
                      (A) in paragraph (1)(D), by inserting ``,
                    with a demonstrated ability to place
                    participants into employment'' before the comma
                    at the end;
                      (B) in paragraph (3), by adding at the end
                    before the period the following: ``, except
                    that every effort shall be made to ensure that
                    employment opportunities are available upon the
                    completion of training''; and
                      (C) in paragraph (5)--
                              (i) in subparagraph (G), by striking
                            ``, and'' and inserting a comma;
                              (ii) in subparagraph (H)(ii), by
                            striking the period at the end and
                            inserting ``, and''; and
                              (iii) by adding at the end before the
                            flush text the following:
              ``(I) pre-apprenticeship training.''; and
              (2) by adding at the end the following:
      ``(h) Reimbursement for Out-of-pocket Training Expenses.--If
    the Secretary approves training for a worker under paragraph
    (1) of subsection (a), the Secretary may reimburse the worker
    for out-of-pocket expenses relating to training program
    described in paragraph (5) of that subsection that were
    incurred by the worker on and after the date of the worker's
    total or partial separation and before the date on which the
    certification of eligibility under section 222 that covers the
    worker is issued.''.

    SEC. 133110. JOB SEARCH, RELOCATION, AND CHILD CARE ALLOWANCES.

      (a) Job Search Allowances.--Section 237 of the Trade Act of
    1974 (19 U.S.C. 2297) is amended--
              (1) in subsection (a)(1), by striking ``may use funds
            made available to the State to carry out sections 235
            through 238'' and inserting ``shall use, from funds
            made available to the State to carry out sections 235
            through 238A, such amounts as may be necessary'';
              (2) in subsection (a)(2), in the matter preceding
            subparagraph (A), by striking ``may grant'' and
            inserting ``shall grant''; and
              (3) in subsection (b)--
                      (A) in paragraph (1), by striking ``not more
                    than 90 percent'' and inserting ``100
                    percent'';
                      (B) in paragraph (2), by striking ``$1,250''
                    and inserting ``$2,000 (subject to adjustment
                    under paragraph (4))''; and
                      (C) by adding at the end the following;
              ``(4) Adjustment of maximum allowance limitation for
            inflation.--
                      ``(A) In general.--The Secretary of Labor
                    shall adjust the maximum allowance limitation
                    under paragraph (2) on the date that is 30 days
                    after the date of the enactment of this
                    paragraph, and at the beginning of each fiscal
                    year thereafter, to reflect the percentage (if
                    any) of the increase in the average of the
                    Consumer Price Index for the preceding 12-month
                    period compared to the Consumer Price Index for
                    fiscal year 2020.
                      ``(B) Special rules for calculation of
                    adjustment.--In making an adjustment under
                    subparagraph (A), the Secretary--
                              ``(i) shall round the amount of any
                            increase in the Consumer Price Index to
                            the nearest dollar; and
                              ``(ii) may ignore any such increase
                            of less than 1 percent.
                      ``(C) Consumer price index defined.--For
                    purposes of this paragraph, the term `Consumer
                    Price Index' means the Consumer Price Index for
                    All Urban Consumers published by the Bureau of
                    Labor Statistics of the Department of Labor.''.
      (b) Relocation Allowances.--Section 238 of the Trade Act of
    1974 (19 U.S.C. 2298) is amended--
              (1) in subsection (a)(1), by striking ``may use funds
            made available to the State to carry out sections 235
            through 238'' and inserting ``shall use, from funds
            made available to the State to carry out sections 235
            through 238A, such amounts as may be necessary'';
              (2) in subsection (a)(2), in the matter preceding
            subparagraph (A), by striking ``may be granted'' and
            inserting ``shall be granted'';
              (3) in subsection (b)--
                      (A) in paragraph (1), by striking ``not more
                    than 90 percent'' and inserting ``100
                    percent''; and
                      (B) in paragraph (2), by striking ``$1,250''
                    and inserting ``$2,000 (subject to adjustment
                    under subsection (d))''; and
              (4) by adding at the end the following:
      ``(d) Adjustment of Maximum Payment Limitation for
    Inflation.--
              ``(1) In general.--The Secretary of Labor shall
            adjust the maximum payment limitation under subsection
            (b)(2) on the date that is 30 days after the date of
            the enactment of this subsection, and at the beginning
            of each fiscal year thereafter, to reflect the
            percentage (if any) of the increase in the average of
            the Consumer Price Index for the preceding 12-month
            period compared to the Consumer Price Index for fiscal
            year 2020.
              ``(2) Special rules for calculation of adjustment.--
            In making an adjustment under paragraph (1), the
            Secretary--
                      ``(A) shall round the amount of any increase
                    in the Consumer Price Index to the nearest
                    dollar; and
                      ``(B) may ignore any such increase of less
                    than 1 percent.
              ``(3) Consumer price index defined.--For purposes of
            this subsection, the term `Consumer Price Index' means
            the Consumer Price Index for All Urban Consumers
            published by the Bureau of Labor Statistics of the
            Department of Labor.''.
      (c) Child Care Allowances.--
              (1) In general.--Part II of subchapter B of chapter 2
            of title II of the Trade Act of 1974 (19 U.S.C. 2295 et
            seq.) is amended by adding at the end the following:

    ``SEC. 238A. CHILD CARE ALLOWANCES.

      ``(a) Child Care Allowances Authorized.--
              ``(1) In general.--Each State shall use, from funds
            made available to the State to carry out sections 235
            through 238A, such amounts as may be necessary to allow
            an adversely affected worker covered by a certification
            issued under subchapter A of this chapter to file an
            application for a child care allowance with the
            Secretary, and the Secretary may grant the child care
            allowance, subject to the terms and conditions of this
            section.
              ``(2) Conditions for granting allowance.--A child
            care allowance shall be granted if the allowance will
            assist an adversely affected worker to attend training
            or seek suitable employment, by providing for the care
            of one or more of the minor dependents of the worker.
      ``(b) Amount of Allowance.--Any child care allowance granted
    to a worker under subsection (a) shall not exceed $2,000 per
    minor dependent per year.
      ``(c) Adjustment of Maximum Allowance Limitation for
    Inflation.--
              ``(1) In general.--The Secretary of Labor shall
            adjust the maximum allowance limitation under
            subsection (b) on the date that is 30 days after the
            date of the enactment of this subsection, and at the
            beginning of each fiscal year thereafter, to reflect
            the percentage (if any) of the increase in the average
            of the Consumer Price Index for the preceding 12-month
            period compared to the Consumer Price Index for fiscal
            year 2020.
              ``(2) Special rules for calculation of adjustment.--
            In making an adjustment under paragraph (1), the
            Secretary--
                      ``(A) shall round the amount of any increase
                    in the Consumer Price Index to the nearest
                    dollar; and
                      ``(B) may ignore any such increase of less
                    than 1 percent.
              ``(3) Consumer price index defined.--For purposes of
            this subsection, the term `Consumer Price Index' means
            the Consumer Price Index for All Urban Consumers
            published by the Bureau of Labor Statistics of the
            Department of Labor.''.
              (2) Conforming amendments.--
                      (A) Limitations on administrative expenses
                    and employment and case management services.--
                    Section 235A of the Trade Act of 1974 (19
                    U.S.C. 2295a) is amended in the matter
                    preceding paragraph (1) by striking ``through
                    238'' and inserting ``through 238A''.
                      (B) Training.--Section 236(a)(2) of the Trade
                    Act of 1974 (19 U.S.C. 2296(a)(2)) is amended--
                              (i) in subparagraph (A), by striking
                            ``and 238'' and inserting ``238, and
                            238A'';
                              (ii) in subparagraph (B), by striking
                            ``and 238'' each place it appears and
                            inserting ``238, and 238A'';
                              (iii) in subparagraph (C)(i), by
                            striking ``and 238'' and inserting
                            ``238, and 238A'';
                              (iv) in subparagraph (C)(v), by
                            striking ``and 238'' and inserting
                            ``238, and 238A''; and
                              (v) in subparagraph (E), by striking
                            ``and 238'' each place it appears and
                            inserting ``238, and 238A''.
              (3) Clerical amendment.--The table of contents for
            the Trade Act of 1974 is amended by adding after the
            item relating to section 238 the following new item:

    ``Sec. 238A. Child care allowances.''.

    SEC. 133111. AGREEMENTS WITH STATES.

      (a) Coordination.--Section 239(f) of the Trade Act of 1974
    (19 U.S.C. 2311(f)) is amended--
              (1) by striking ``(f) Any agreement'' and inserting
            the following:
      ``(f)(1) Any agreement''; and
              (2) by adding at the end the following:
              ``(2) In arranging for training programs to be
            carried out under this chapter, each cooperating State
            agency shall, among other factors, take into account
            and measure the progress of the extent to which such
            programs--
                      ``(A) achieve a satisfactory rate of
                    completion and placement in jobs that provide a
                    living wage and that increase economic
                    security;
                      ``(B) assist workers in developing the
                    skills, networks, and experiences necessary to
                    advance along a career path;
                      ``(C) assist workers from underserved
                    communities to establish a work history,
                    demonstrate success in the workplace, and
                    develop the skills that lead to entry into and
                    retention in unsubsidized employment; and
                      ``(D) adequately serve individuals who face
                    the greatest barriers to employment, including
                    people with low incomes, people of color,
                    immigrants, persons with disabilities, and
                    formerly incarcerated individuals.
              ``(3) Each cooperating State agency shall facilitate
            joint cooperation between training programs,
            representatives of workers, employers, and communities,
            especially in underserved rural and urban regions, to
            ensure a fair and engaging workplace that balances the
            priorities and well-being of workers with the needs of
            businesses.
              ``(4) Each cooperating State agency shall seek,
            including through agreements and training programs
            described in this subsection, to ensure the
            reemployment of adversely affected workers upon
            completion of training as described in section 236.''.
      (b) Administration.--Section 239(g) of the Trade Act of 1974
    (19 U.S.C. 2311(g)) is amended--
              (1) by redesignating--
                      (A) paragraphs (1) through (4) as paragraphs
                    (3) through (6), respectively; and
                      (B) paragraph (5) as paragraph (8);
              (2) by inserting before paragraph (3) (as
            redesignated) the following:
              ``(1) review each layoff of more than 5 workers in a
            firm to determine whether trade played a role in the
            layoff and whether workers in such firm are potentially
            eligible to receive benefits under this chapter,
              ``(2) perform sustained outreach to firms to
            facilitate and assist with filing petitions under
            section 221 and collecting necessary supporting
            information,'';
              (3) in paragraph (3) (as redesignated), by striking
            ``who applies for unemployment insurance of'' and
            inserting ``identified under paragraph (1) of
            unemployment insurance benefits and'';
              (4) in paragraph (4) (as redesignated), by inserting
            ``and assist with'' after ``facilitate'';
              (5) in paragraph (6) (as redesignated), by striking
            ``and'' at the end;
              (6) by inserting after paragraph (6) (as
            redesignated) the following:
              ``(7) perform sustained outreach to workers from
            underserved communities and to firms that employ a
            majority or a substantial percentage of workers from
            underserved communities and develop a plan, in
            consultation with the Secretary, for addressing common
            barriers to receiving services that such workers have
            faced,'';
              (7) in paragraph (8) (as redesignated), by striking
            ``funds provided to carry out this chapter are
            insufficient to make such services available, make
            arrangements to make such services available through
            other Federal programs'' and inserting ``support
            services are needed beyond what this chapter can
            provide, make arrangements to coordinate such services
            available through other Federal programs'' ; and
              (8) by adding at the end the following:
              ``(9) develop a strategy to engage with local
            workforce development institutions, including local
            community colleges and other educational institutions,
            and
              ``(10) develop a comprehensive strategy to provide
            agency staffing to support the requirements of
            paragraphs (1) through (9).''.
      (c) Staffing.--Section 239 of the Trade Act of 1974 (19
    U.S.C. 2311) is amended by striking subsection (k) and
    inserting the following:
      ``(k) Staffing.--An agreement entered into under this section
    shall provide that the cooperating State or cooperating State
    agency shall require that any individual engaged in functions
    (other than functions that are not inherently governmental) to
    carry out the trade adjustment assistance program under this
    chapter shall be a State employee covered by a merit system of
    personnel administration.''.

    SEC. 133112. REEMPLOYMENT TRADE ADJUSTMENT ASSISTANCE PROGRAM.

      Section 246(a) of the Trade Act of 1974 (19 U.S.C. 2318(a))
    is amended--
              (1) in paragraph (3)(B)(ii), by striking ``$50,000''
            and inserting ``$70,000 (subject to adjustment under
            paragraph (8))'';
              (2) in paragraph (5)(B)(i), by striking ``$10,000''
            and inserting ``$20,000 (subject to adjustment under
            paragraph (8))''; and
              (3) by adding at the end the following:
              ``(8) Adjustment of salary limitation and total
            amount of payments for inflation.--
                      ``(A) In general.--The Secretary of Labor
                    shall adjust the salary limitation under
                    paragraph (3)(B)(ii) and the amount under
                    paragraph (5)(B)(i) on the date that is 30 days
                    after the date of the enactment of this
                    paragraph, and at the beginning of each fiscal
                    year thereafter, to reflect the percentage (if
                    any) of the increase in the average of the
                    Consumer Price Index for the preceding 12-month
                    period compared to the Consumer Price Index for
                    fiscal year 2020.
                      ``(B) Special rules for calculation of
                    adjustment.--In making an adjustment under
                    subparagraph (A), the Secretary--
                              ``(i) shall round the amount of any
                            increase in the Consumer Price Index to
                            the nearest dollar; and
                              ``(ii) may ignore any such increase
                            of less than 1 percent.
                      ``(C) Consumer price index defined.--For
                    purposes of this paragraph, the term `Consumer
                    Price Index' means the Consumer Price Index for
                    All Urban Consumers published by the Bureau of
                    Labor Statistics of the Department of Labor.''.

    SEC. 133113. EXTENSION OF TRADE ADJUSTMENT ASSISTANCE TO PUBLIC AGENCY
                        WORKERS.

      (a) Definitions.--Section 247 of the Trade Act of 1974 (19
    U.S.C. 2319) is amended--
              (1) in paragraph (3)--
                      (A) in the matter preceding subparagraph (A),
                    by striking ``The'' and inserting ``Subject to
                    section 222(d)(5), the''; and
                      (B) in subparagraph (A), by striking ``or
                    service sector firm'' and inserting ``, service
                    sector firm, or public agency''; and
              (2) by adding at the end the following:
              ``(20) The term `public agency' means a department or
            agency of a State or local government or of the Federal
            Government.''.
      (b) Group Eligibility Requirements.--Section 222 of the Trade
    Act of 1974 (19 U.S.C. 2272), as amended by subsections (b) and
    (c) of section 133102, is further amended--
              (1) by redesignating subsections (c), (d), (e), and
            (f) as subsections (d), (e), (f), and (g),
            respectively;
              (2) by inserting after subsection (b) the following:
      ``(c) Adversely Affected Workers in Public Agencies.--A group
    of workers in a public agency shall be certified by the
    Secretary as eligible to apply for adjustment assistance under
    this chapter pursuant to a petition filed under section 221 if
    the Secretary determines that--
              ``(1) a significant number or proportion of the
            workers in the public agency have become totally or
            partially separated, or are threatened to become
            totally or partially separated;
              ``(2) the public agency has acquired from a foreign
            country services like or directly competitive with
            services which are supplied by such agency; and
              ``(3) the acquisition of services described in
            paragraph (2) contributed to such workers' separation
            or threat of separation.'';
              (3) in subsection (d) (as redesignated), by adding at
            the end the following:
              ``(5) Reference to firm.--For purposes of subsections
            (a) and (b), the term `firm' does not include a public
            agency.''; and
              (4) in paragraph (2) of subsection (e) (as
            redesignated), by striking ``subsection (a) or (b)''
            and inserting ``subsection (a), (b), or (c)''.

    SEC. 133114. DEFINITIONS.

      (a) Extension of Adjustment Assistance for Workers to
    Territories.--Section 247(7) of the Trade Act of 1974 (19
    U.S.C. 2319(7)) is amended--
              (1) by inserting ``, Guam, the Virgin Islands of the
            United States, American Samoa, the Commonwealth of the
            Northern Mariana Islands,'' after ``District of
            Columbia''; and
              (2) by striking ``such Commonwealth.'' and inserting
            ``such territories.''.
      (b) Underserved Community.--Section 247 of the Trade Act of
    1974 (19 U.S.C. 2319), as amended by section 133113(a), is
    further amended by adding at the end the following:
              ``(21) The term `underserved community' means a
            community with populations sharing a particular
            characteristic that have been systematically denied a
            full opportunity to participate in aspects of economic,
            social, or civic life, such as Black, Latino, and
            Indigenous and Native American persons, Asian Americans
            and Pacific Islanders, other persons of color, members
            of other minority communities, persons with
            disabilities, persons who live in rural areas, and
            other populations otherwise adversely affected by
            persistent poverty or inequality.''.

    SEC. 133115. SUBPOENA POWER.

      Section 249 of the Trade Act of 1974 (19 U.S.C. 2321) is
    amended--
              (1) in subsection (a), by adding at the end the
            following: ``The authority under the preceding sentence
            includes the authority of States to require, by
            subpoena, a firm to provide information on workers
            employed by, or totally or partially separated from,
            the firm that is necessary to make a determination
            under this chapter or to provide outreach to workers,
            including the names and address of workers.''; and
              (2) by adding at the end the following:
      ``(c) Enforcement of Subpoenas by States.--A State may
    enforce compliance with a subpoena issued under subsection
    (a)--
              ``(1) as provided for under State law; and
              ``(2) by petitioning an appropriate United States
            district court for an order requiring compliance with
            the subpoena.''.

                 PART 2--TRADE ADJUSTMENT ASSISTANCE FOR FIRMS

    SEC. 133201. PETITIONS AND DETERMINATIONS.

      Section 251 of the Trade Act of 1974 (19 U.S.C. 2341) is
    amended--
              (1) in the second sentence of subsection (a), by
            striking ``Upon'' and inserting ``Not later than 15
            days after'';
              (2) by amending subsection (c) to read as follows:
      ``(c)(1) The Secretary shall certify a firm (including any
    agricultural firm or service sector firm) as eligible to apply
    for adjustment assistance under this chapter if the Secretary
    determines--
              ``(A)(i) that a significant number or proportion of
            the workers in such firm have become totally or
            partially separated, or are threatened to become
            totally or partially separated, or
              ``(ii) that--
                      ``(I) sales or production, or both, of the
                    firm have decreased absolutely or failed to
                    increase,
                      ``(II) sales or production, or both, of an
                    article or service that accounted for not less
                    than 25 percent of the total sales or
                    production of the firm during the 12-month
                    period preceding the most recent 12-month
                    period for which data are available have
                    decreased absolutely or failed to increase,
                      ``(III) sales or production, or both, of the
                    firm during the most recent 12-month period for
                    which data are available have decreased or
                    failed to increase compared to--
                              ``(aa) the average annual sales or
                            production for the firm during the 24-
                            month period preceding that 12-month
                            period, or
                              ``(bb) the average annual sales or
                            production for the firm during the 36-
                            month period preceding that 12-month
                            period, and
                      ``(IV) sales or production, or both, of an
                    article or service that accounted for not less
                    than 25 percent of the total sales or
                    production of the firm during the most recent
                    12-month period for which data are available
                    have decreased or failed to increase compared
                    to--
                              ``(aa) the average annual sales or
                            production for the article or service
                            during the 24-month period preceding
                            that 12-month period, or
                              ``(bb) the average annual sales or
                            production for the article or service
                            during the 36-month period preceding
                            that 12-month period, and
              ``(B)(i) increases of imports of articles or services
            like or directly competitive with articles which are
            produced or services which are supplied by such firm
            contributed to such total or partial separation, or
            threat thereof, or to such decline or failure to
            increase in sales or production, or
              ``(ii) decreases in exports of articles produced or
            services supplied by such firm, or imports of articles
            or services necessary for the production of articles or
            services supplied by such firm, contributed to such
            total or partial separation, or threat thereof, or to
            such decline in sales or production.
      ``(2) For purposes of paragraph (1)(B):
              ``(A) Any firm which engages in exploration or
            drilling for oil or natural gas shall be considered to
            be a firm producing oil or natural gas.
              ``(B) Any firm that engages in exploration or
            drilling for oil or natural gas, or otherwise produces
            oil or natural gas, shall be considered to be producing
            articles directly competitive with imports of oil and
            with imports of natural gas.''; and
              (3) in subsection (d)--
                      (A) by striking ``this section,'' and
                    inserting ``this section.''; and
                      (B) by striking ``but in any event'' and all
                    that follows and inserting the following: ``If
                    the Secretary does not make a determination
                    with respect to a petition within 55 days after
                    the date on which an investigation is initiated
                    under subsection (a) with respect to the
                    petition, the Secretary shall be deemed to have
                    certified the firm as eligible to apply for
                    adjustment assistance under this chapter.''.

    SEC. 133202. APPROVAL OF ADJUSTMENT PROPOSALS.

      Section 252 of the Trade Act of 1974 (19 U.S.C. 2342) is
    amended--
              (1) in the second sentence of subsection (a), by
            adding at the end before the period the following:
            ``and an assessment of the potential employment
            outcomes of such proposal'';
              (2) in subsection (b)(1)(B), by striking ``gives
            adequate consideration to'' and inserting ``is in'';
              (3) by redesignating subsection (c) as subsection
            (d); and
              (4) by inserting after subsection (b) the following:
      ``(c) Amount of Assistance.--
              ``(1) In general.--A firm may receive adjustment
            assistance under this chapter with respect to the
            firm's economic adjustment proposal in an amount not to
            exceed $300,000, subject to adjustment under paragraph
            (2) and the matching requirement under paragraph (3).
              ``(2) Adjustment of assistance limitation for
            inflation.--
                      ``(A) In general.--The Secretary of Commerce
                    shall adjust the technical assistance
                    limitation under paragraph (1) on the date that
                    is 30 days after the date of the enactment of
                    this paragraph, and at the beginning of each
                    fiscal year thereafter, to reflect the
                    percentage (if any) of the increase in the
                    average of the Consumer Price Index for the
                    preceding 12-month period compared to the
                    Consumer Price Index for fiscal year 2020.
                      ``(B) Special rules for calculation of
                    adjustment.--In making an adjustment under
                    subparagraph (A), the Secretary--
                              ``(i) shall round the amount of any
                            increase in the Consumer Price Index to
                            the nearest dollar; and
                              ``(ii) may ignore any such increase
                            of less than 1 percent.
                      ``(C) Consumer price index defined.--For
                    purposes of this paragraph, the term `Consumer
                    Price Index' means the Consumer Price Index for
                    All Urban Consumers published by the Bureau of
                    Labor Statistics of the Department of Labor.
              ``(3) Matching requirement.--A firm may receive
            adjustment assistance under this chapter only if the
            firm provides matching funds in an amount equal to the
            amount of adjustment assistance received under
            paragraph (1).''.

    SEC. 133203. TECHNICAL ASSISTANCE.

      Section 253(a)(3) of the Trade Act of 1974 (19 U.S.C.
    2343(a)(3)) is amended by adding at the end before the period
    the following: ``, including assistance to provide skills
    training programs to employees of the firm''.

    SEC. 133204. DEFINITIONS.

      Section 259 of the Trade Act of 1974 (19 U.S.C. 2351) is
    amended by adding at the end the following:
              ``(3) Underserved community.--The term `underserved
            community' has the meaning given that term in section
            247.''.

    SEC. 133205. PLAN FOR SUSTAINED OUTREACH TO POTENTIALLY-ELIGIBLE FIRMS.

      (a) In General.--Chapter 3 of title II of the Trade Act of
    1974 (19 U.S.C. 2341 et seq.) is amended by adding at the end
    the following:

    ``SEC. 263. PLAN FOR SUSTAINED OUTREACH TO POTENTIALLY-ELIGIBLE FIRMS.

      ``(a) In General.--The Secretary shall develop a plan to
    provide sustained outreach to firms that may be eligible for
    adjustment assistance under this chapter.
      ``(b) Matters to Be Included.--The plan required by paragraph
    (1) shall include the following:
              ``(1) Outreach to the United States International
            Trade Commission and to such firms in industries with
            increased imports identified in the Commission's annual
            report regarding the operation of the trade agreements
            program under section 163(c).
              ``(2) Outreach to such firms in the service sector.
              ``(3) Outreach to such firms that are small
            businesses.
              ``(4) Outreach to such firms that are minority- or
            women-owned firms.
              ``(5) Outreach to such firms that employ a majority
            or a substantial percentage of workers from underserved
            communities.
      ``(c) Updates.--The Secretary shall update the plan required
    under this section on an annual basis.
      ``(d) Submission to Congress.--The Secretary shall submit the
    plan and each update to the plan required under this section to
    Congress.''.
      (b) Clerical Amendment.--The table of contents for the Trade
    Act of 1974 is amended by inserting after the item relating to
    section 262 the following new item:

    ``Sec. 263. Plan for sustained outreach to potentially-eligible
              firms.''.

       PART 3--TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES AND COMMUNITY
                                    COLLEGES

    SEC. 133301. TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES.

      (a) In General.--Chapter 4 of title II of the Trade Act of
    1974 (19 U.S.C. 2371 et seq.) is amended--
              (1) by inserting after the chapter heading the
            following:

    ``Subchapter B--Trade Adjustment Assistance for Community Colleges and
                             Career Training''; and

              (2) by redesignating sections 271 and 272 as sections
            279 and 279A, respectively; and
              (3) by inserting before subchapter B (as designated
            by paragraph (1)) the following:

          ``Subchapter A--Trade Adjustment Assistance for Communities

    ``SEC. 271. DEFINITIONS.

      ``In this subchapter:
              ``(1) Agricultural commodity producer.--The term
            `agricultural commodity producer' has the meaning given
            that term in section 291.
              ``(2) Community.--The term `community' means--
                      ``(A) a city or other political subdivision
                    of a State, including a special purpose unit of
                    a State or local government engaged in economic
                    or infrastructure development activities, or a
                    consortium of political subdivisions;
                      ``(B) an Economic Development District
                    designated by the Economic Development
                    Administration of the Department of Commerce;
                    or
                      ``(C) an Indian Tribe.
              ``(3) Eligible community.--The term `eligible
            community' means a community that is impacted by trade
            under section 273(a)(2) and is determined to be
            eligible for assistance under this subchapter.
              ``(4) Eligible entity.--The term `eligible entity'
            means--
                      ``(A) an eligible community;
                      ``(B) an institution of higher education or a
                    consortium of institutions of higher education;
                    or
                      ``(C) a public or private nonprofit
                    organization or association acting in
                    cooperation with officials of a political
                    subdivision of a State.
              ``(4) Secretary.--The term `Secretary' means the
            Secretary of Commerce.
              ``(5) Underserved community.--The term `underserved
            community' has the meaning given that term in section
            247.

    ``SEC. 272. ESTABLISHMENT OF TRADE ADJUSTMENT ASSISTANCE FOR
                        COMMUNITIES PROGRAM.

      ``The Secretary, acting through the Assistant Secretary for
    Economic Development, shall, not later than 180 days after the
    date of enactment of this subchapter, establish a program to
    provide communities impacted by trade with assistance in
    accordance with the requirements of this subchapter.

    ``SEC. 273. ELIGIBILITY; NOTIFICATION OF ELIGIBILITY.

      ``(a) Eligibility.--
              ``(1) In general.--A community shall be eligible for
            assistance under this subchapter if the community is a
            community impacted by trade under paragraph (2).
              ``(2) Community impacted by trade.--A community is
            impacted by trade if it meets each of the following
            requirements:
                      ``(A) One or more of the following
                    certifications are made with respect to the
                    community:
                              ``(i) By the Secretary of Labor, that
                            a group of workers located in the
                            community is eligible to apply for
                            assistance under section 223.
                              ``(ii) By the Secretary of Commerce,
                            that a firm located in the community is
                            eligible to apply for adjustment
                            assistance under section 251.
                              ``(iii) By the Secretary of
                            Agriculture, that a group of
                            agricultural commodity producers
                            located in the community is eligible to
                            apply for adjustment assistance under
                            section 293.
                      ``(B) The community--
                              ``(i) applies for assistance not
                            later than 180 days after the date on
                            which the most recent certification
                            described in subparagraph (A) is made;
                            or
                              ``(ii) in the case of a community
                            with respect to which one or more such
                            certifications were made on or after
                            January 1, 1994, and before the date of
                            the enactment of this subchapter,
                            applies for assistance not later than
                            September 30, 2024.
                      ``(C) The community--
                              ``(i) has a per capita income of 80
                            percent or less of the national
                            average;
                              ``(ii) has an unemployment rate that
                            is, for the most recent 24-month period
                            for which data are available, at least
                            1 percent greater than the national
                            average unemployment rate; or
                              ``(iii) is significantly affected by
                            a loss of, or threat to, the jobs
                            associated with any certification
                            described in subparagraph (A), or the
                            community is undergoing transition of
                            its economic base as a result of
                            changing trade patterns, as determined
                            by the Secretary.
      ``(b) Notification of Eligibility.--If one or more
    certifications described in subsection (a)(2)(A) are made with
    respect to a community, the applicable Secretary with respect
    to such certification shall concurrently, notify the Governor
    of the State in which the community is located of the ability
    of the community to apply for assistance under this section.

    ``SEC. 274. GRANTS TO ELIGIBLE COMMUNITIES.

      ``(a) In General.--The Secretary may--
              ``(1) upon the application of an eligible community,
            award a grant under this section to the community to
            assist in developing or updating a strategic plan that
            meets the requirements of section 275; or
              ``(2) upon the application of an eligible entity,
            award an implementation grant under this section to the
            entity to assist in implementing projects included in a
            strategic plan that meets the requirements of section
            275.
      ``(b) Special Provisions.--
              ``(1) Revolving loan fund grants.--
                      ``(A) In general.--The Secretary shall
                    maintain the proper operation and financial
                    integrity of revolving loan funds established
                    by eligible entities with assistance under this
                    section.
                      ``(B) Efficient administration.--The
                    Secretary may--
                              ``(i) at the request of an eligible
                            entity, amend and consolidate grant
                            agreements governing revolving loan
                            funds to provide flexibility with
                            respect to lending areas and borrower
                            criteria; and
                              ``(ii) assign or transfer assets of a
                            revolving loan fund to third party for
                            the purpose of liquidation, and the
                            third party may retain assets of the
                            fund to defray costs related to
                            liquidation.
                      ``(C) Treatment of actions.--An action taken
                    by the Secretary under this subsection with
                    respect to a revolving loan fund shall not
                    constitute a new obligation if all grant funds
                    associated with the original grant award have
                    been disbursed to the recipient.
              ``(2) Use of funds in projects constructed under
            project cost.--
                      ``(A) In general.--In the case of a grant for
                    a construction project under this section, if
                    the Secretary determines, before closeout of
                    the project, that the cost of the project,
                    based on the designs and specifications that
                    were the basis of the grant, has decreased
                    because of decreases in costs, the Secretary
                    may approve the use of the excess funds (or a
                    portion of the excess funds) to improve the
                    project.
                      ``(B) Other uses of excess funds.--Any amount
                    of excess funds remaining after application of
                    subparagraph (A) may be used by the Secretary
                    for providing assistance under this section.
      ``(c) Coordination.--If an eligible institution (as such term
    is defined in section 279) located in an eligible community is
    seeking a grant under section 279 at the same time the
    community is seeking an implementation grant under subsection
    (a)--
              ``(1) the Secretary, upon receipt of such information
            from the Secretary of Labor as required under section
            279(e), shall notify the community that the institution
            is seeking a grant under section 279; and
              ``(2) the community shall provide to the Secretary,
            in coordination with the institution, a description of
            how the community will integrate projects included in
            the strategic plan with the specific project for which
            the institution submits the grant proposal under
            section 279.
      ``(d) Limitation.--The total amount of grants awarded with
    respect to an eligible community under this section for fiscal
    years 2022 through 2026 may not exceed $25,000,000.
      ``(e) Priority.--The Secretary shall, in awarding grants
    under this section, provide higher levels of funding with
    respect to eligible communities that have a history of economic
    distress and long-term unemployment, as determined by the
    Secretary.
      ``(f) Geographic Diversity.--
              ``(1) In general.--The Secretary shall, in awarding
            grants under this section, ensure that grants are
            awarded with respect to eligible communities from
            geographically diverse areas.
              ``(2) Geographic region requirement.--The Secretary
            shall, in meeting the requirement under paragraph (1),
            award a grant under this section for each of the fiscal
            years 2022 through 2026 to at least one eligible
            community located in each geographic region for which
            regional offices of the Economic Development
            Administration of the Department of Commerce are
            responsible, to the extent that the Secretary receives
            an application from at least one eligible community in
            each such geographic region.

    ``SEC. 275. STRATEGIC PLANS.

      ``(a) In General.--A strategic plan meets the requirements of
    this section if--
              ``(1) the consultation requirements of subsection (b)
            are met with respect to the development of the plan;
              ``(2) the plan meets the requirements of subsection
            (c); and
              ``(3) the plan is approved in accordance with the
            requirements of subsection (d).
      ``(b) Consultation.--
              ``(1) In general.--To the extent practicable, an
            eligible community shall consult with the entities
            described in paragraph (2) in developing the strategic
            plan.
              ``(2) Entities described.--The entities described in
            this paragraph are public and private entities located
            in or serving the eligible community, including--
                      ``(A) local, county, or State government
                    agencies;
                      ``(B) firms, including small- and medium-
                    sized firms;
                      ``(C) local workforce investment boards;
                      ``(D) labor organizations, including State
                    labor federations and labor-management
                    initiatives, representing workers in the
                    community;
                      ``(E) educational institutions, local
                    educational agencies, and other training
                    providers; and
                      ``(F) local civil rights organizations and
                    community-based organizations, including
                    organizations representing underserved
                    communities.
      ``(c) Contents.--The strategic plan may contain, as
    applicable to the community, the following:
              ``(1) A description and analysis of the capacity of
            the eligible community to achieve economic adjustment
            to the impact of trade.
              ``(2) An analysis of the economic development
            challenges and opportunities facing the community,
            including the strengths and weaknesses of the economy
            of the community.
              ``(3) An assessment of--
                      ``(A) the commitment of the community to
                    carry out the strategic plan on a long-term
                    basis;
                      ``(B) the participation and input of members
                    of the community who are dislocated from
                    employment due to the impact of trade; and
                      ``(C) the extent to which underserved
                    communities have been impacted by trade.
              ``(4) A description of how underserved communities
            will benefit from the strategic plan.
              ``(5) A description of the role of the entities
            described in subsection (b)(2) in developing the
            strategic plan.
              ``(6) A description of projects under the strategic
            plan to facilitate the community's economic adjustment
            to the impact of trade, including projects to--
                      ``(A) develop public facilities, public
                    services, jobs, and businesses (including
                    establishing a revolving loan fund);
                      ``(B) provide for planning and technical
                    assistance;
                      ``(C) provide for training;
                      ``(D) provide for the demolition of vacant or
                    abandoned commercial, industrial, or
                    residential property;
                      ``(E) redevelop brownfields;
                      ``(F) establish or support land banks;
                      ``(G) support energy conservation; and
                      ``(H) support historic preservation.
              ``(7) A strategy for continuing the community's
            economic adjustment to the impact of trade after the
            completion of such projects.
              ``(8) A description of the educational and training
            programs and the potential employment opportunities
            available to workers in the community, including for
            workers under the age of 25, and the future employment
            needs of the community.
              ``(9) An assessment of--
                      ``(A) the cost of implementing the strategic
                    plan; and
                      ``(B) the timing of funding required by the
                    community to implement the strategic plan.
              ``(10) A description of the methods of financing to
            be used to implement the strategic plan, including--
                      ``(A) an implementation grant received under
                    section 274 or under other authorities;
                      ``(B) a loan, including the establishment of
                    a revolving loan fund; or
                      ``(C) other types of financing.
              ``(11) An assessment of how the community will
            address unemployment among agricultural commodity
            producers, if applicable.
      ``(d) Approval; CEDS Equivalent.--
              ``(1) Approval.--The Secretary shall approve the
            strategic plan developed by an eligible community under
            this section if the Secretary determines that the
            strategic plan meets the requirements of this section.
              ``(2) CEDS or equivalent.--The Secretary may deem an
            eligible community's Comprehensive Economic Development
            Strategy that substantially meets the requirements of
            this section to be an approved strategic plan for
            purposes of this subchapter.
      ``(e) Allocation.--Of the funds appropriated to carry out
    this chapter for each of the fiscal years 2022 through 2026,
    the Secretary may make available not more than $50,000,000 to
    award grants under section 274(a)(1).

    ``SEC. 276. COORDINATION OF FEDERAL RESPONSE AND OTHER ADDITIONAL
                        TECHNICAL ASSISTANCE.

      ``(a) In General.--The Secretary shall coordinate the Federal
    response with respect to an eligible community that is awarded
    an implementation grant under section 274(a)(2) to implement
    the community's strategic plan that meets the requirements of
    section 275 by--
              ``(1) identifying and consulting, as appropriate,
            with any other Federal, State, regional, or local
            government agency;
              ``(2) assisting the community to access assistance
            from other available Federal sources as necessary to
            fulfill the community's strategic plan developed under
            section 275; and
              ``(3) ensuring that such assistance is provided in a
            targeted, integrated manner.
      ``(b) Transfer of Funds.--
              ``(1) Transfer of funds to other federal agencies.--
            Funds appropriated to carry out this chapter may be
            transferred between Federal agencies, if the funds are
            used for the purposes for which the funds are
            specifically appropriated.
              ``(2) Transfer of funds from other federal
            agencies.--
                      ``(A) In general.--Subject to subparagraph
                    (B), for the purposes of this chapter, the
                    Secretary may accept transfers of funds from
                    other Federal agencies if the funds are used
                    for the purposes for which (and in accordance
                    with the terms under which) the funds are
                    specifically appropriated.
                      ``(B) Use of funds.--The transferred funds--
                              ``(i) shall remain available until
                            expended; and
                              ``(ii) may, to the extent necessary
                            to carry out this chapter, be
                            transferred to and merged by the
                            Secretary with the appropriations for
                            salaries and expenses.
      ``(c) Additional Technical Assistance.--In addition to the
    coordination and assistance described in subsection (a), the
    Secretary shall provide technical assistance for communities--
              ``(1) to identify significant impediments to economic
            development that result from the impact of trade on the
            community, including in the course of developing a
            strategic plan under section 275; and
              ``(2) to access assistance under other available
            sources, including State, local, or private sources, to
            implement projects that diversify and strengthen the
            economy in the community.

    ``SEC. 277. GENERAL PROVISIONS.

      ``(a) Regulations.--
              ``(1) In general.--The Secretary shall, subject to
            paragraph (3), promulgate such regulations as may be
            necessary to carry out this subchapter, including with
            respect to--
                      ``(A) administering the awarding of grants
                    under section 274, including establishing
                    guidelines for the submission and evaluation of
                    grant applications under such section; and
                      ``(B) establishing guidelines for the
                    evaluation of strategic plans developed to meet
                    the requirements of section 275.
              ``(2) Consultations.--The Secretary shall consult
            with the Committee on Ways and Means of the House of
            Representatives and the Committee on Finance of the
            Senate not later than 90 days prior to promulgating any
            final rule or regulation under this subsection.
              ``(3) Relationship to existing regulations.--The
            Secretary, to the maximum extent practicable, shall--
                      ``(A) rely on and apply regulations
                    promulgated to carry out other economic
                    development programs of the Department of
                    Commerce in carrying out this subchapter; and
                      ``(B) provide guidance regarding the manner
                    and extent to which such other economic
                    development programs relate to this subchapter.
      ``(b) Resources.--The Secretary shall allocate such resources
    as may be necessary to provide sufficiently individualized
    assistance to each eligible community that receives a grant
    under section 274(a) or seeks technical assistance under
    section 276(c) to develop and implement a strategic plan that
    meets the requirements of section 275.''.
      (b) Clerical Amendment.--The table of contents for the Trade
    Act of 1974 is amended by striking the items relating to
    chapter 4 of title II and inserting the following:

            ``Chapter 4--Trade Adjustment Assistance for Communities

           ``subchapter a--trade adjustment assistance for communities

    ``Sec. 271. Definitions.
    ``Sec. 272. Establishment of trade adjustment assistance for communities
              program.
    ``Sec. 273. Eligibility; notification of eligibility.
    ``Sec. 274. Grants to eligible communities.
    ``Sec. 275. Strategic plans.
    ``Sec. 276. Coordination of Federal response and other additional
              technical assistance.
    ``Sec. 277. General provisions.

       ``subchapter b--community college and career training grant program

    ``Sec. 279. Community College and Career Training Grant Program.
    ``Sec. 279A. Authorization of appropriations.''.

    SEC. 133302. TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITY COLLEGES AND
                        CAREER TRAINING.

      Section 279 of the Trade Act of 1974, as redesignated by
    section 133301(a)(2), is amended as follows:
              (1) In subsection (a)--
                      (A) in paragraph (1), by striking ``eligible
                    institutions'' and inserting ``eligible
                    entities''; and
                      (B) in paragraph (2)--
                              (i) in the matter preceding
                            subparagraph (A), by striking
                            ``eligible institution'' and inserting
                            ``eligible entity''; and
                              (ii) in subparagraph (B)--
                                      (I) by striking
                                    ``$1,000,000'' and inserting
                                    ``$2,500,000'';
                                      (II) by striking ``(B)'' and
                                    inserting ``(B)(i) in the case
                                    of an eligible institution,'';
                                      (III) by striking the period
                                    at the end and inserting ``;
                                    or''; and
                                      (IV) by adding at the end the
                                    following:
                      ``(ii) in the case of a consortium of
                    eligible institutions, a grant under this
                    section in excess of $15,000,000.''.
              (2) In subsection (b), by adding at the end the
            following:
              ``(3) Eligible entity.--The term `eligible entity'
            means an eligible institution or a consortium of
            eligible institutions.
              ``(4) Underserved community.--The term `underserved
            community' has the meaning given that term in section
            247.''.
              (3) In subsection (c)--
                      (A) by striking ``eligible institution'' each
                    place it appears and inserting ``eligible
                    entity''; and
                      (B) in paragraph (5)(A)(i)--
                              (i) in subclause (I), by striking
                            ``and'' at the end; and
                              (ii) by adding at the end the
                            following:
                                      ``(III) any opportunities to
                                    support industry or sector
                                    partnerships to develop or
                                    expand quality academic
                                    programs and curricula; and''.
              (4) In subsection (d), by striking ``eligible
            institution'' each place it appears and inserting
            ``eligible entity''.
              (5) By redesignating subsection (e) as subsection (h)
            and inserting after subsection (d) the following:
      ``(e) Use of Funds.--
              ``(1) In general.--An eligible entity shall use a
            grant awarded under this section to establish and scale
            career training programs, including career and
            technical education programs, and career pathways and
            supports for students participating in such programs.
              ``(2) Student support and emergency services.--Not
            less than 15 percent of the amount of a grant awarded
            to an eligible entity under this section shall be used
            to carry out student support services, which may
            include the following:
                      ``(A) Supportive services, including
                    childcare, transportation, mental health
                    services, or substance use disorder prevention
                    and treatment, assistance in obtaining health
                    insurance coverage, housing, and other
                    benefits, as appropriate.
                      ``(B) Connecting students to State or Federal
                    means-tested benefits programs.
                      ``(C) The provision of direct financial
                    assistance to help students facing financial
                    hardships that may impact enrollment in or
                    completion of a program supported by such
                    funds.
                      ``(D) Navigation, coaching, mentorship, and
                    case management services, including providing
                    information and outreach to the population
                    described in subparagraph (C) to take part in
                    such a program.
                      ``(E) Providing access to necessary supplies,
                    materials, technological devices, or required
                    equipment, and other supports necessary to
                    participate in such a program.
      ``(f) Plan for Outreach to Underserved Communities.--
              ``(1) In general.--In awarding grants under this
            section, the Secretary shall--
                      ``(A) ensure that eligible institutions
                    effectively serve individuals from underserved
                    communities; and
                      ``(B) develop a plan to ensure that grants
                    provided under this subchapter effectively
                    serve individuals from underserved communities.
              ``(2) Updates.--The Secretary shall update the plan
            required by paragraph (1)(B) on an annual basis.
              ``(3) Submission to congress.--The Secretary shall
            submit the plan required by paragraph (1)(B) and each
            update to the plan required by paragraph (2) to
            Congress.
      ``(g) Geographic Diversity.--The Secretary shall, in awarding
    grants under this section, ensure that grants are awarded with
    respect to eligible entities from geographically diverse
    areas.''.

                PART 4--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS

    SEC. 133401. DEFINITIONS.

      Section 291 of the Trade Act of 1974 (19 U.S.C. 2401) is
    amended--
              (1) by striking paragraph (3);
              (2) by redesignating paragraphs (4) through (7) as
            paragraphs (3) through (6), respectively; and
              (3) by adding at the end the following:
              ``(7) Underserved community.--The term `underserved
            community' has the meaning given that term in section
            247.''.

    SEC. 133402. GROUP ELIGIBILITY REQUIREMENTS.

      Section 292 of the Trade Act of 1974 (19 U.S.C. 2401a) is
    amended--
              (1) in subsection (c)--
                      (A) in paragraph (1)--
                              (i) by striking ``85 percent of''
                            each place it appears; and
                              (ii) in subparagraph (D), by adding
                            ``and'' at the end;
                      (B) in paragraph (2), by striking ``(2)'' and
                    inserting ``(2)(A)(i)'';
                      (C) by redesignating paragraph (3) as clause
                    (ii) of paragraph (2)(A) (as designated by
                    subparagraph (B));
                      (D) in clause (ii) of paragraph (2)(A) (as
                    redesignated by subparagraph (C))--
                              (i) by striking ``importantly''; and
                              (ii) by striking the period at the
                            end and inserting ``; or'' ; and
                      (E) in paragraph (2), by adding at the end
                    the following:
              ``(B)(i) the volume of exports of the agricultural
            commodity produced by the group in the marketing year
            with respect to which the group files the petition
            decreased compared to the average volume of such
            exports during the 3 marketing years preceding such
            marketing year; and
              ``(ii) the decrease in such exports contributed to
            the decrease in the national average price, quantity of
            production, or value of production of, or cash receipts
            for, the agricultural commodity, as described in
            paragraph (1).''; and
              (2) in subsection (e)(3), by adding at the end before
            the period the following: ``or exports''.

    SEC. 133403. BENEFIT INFORMATION TO AGRICULTURAL COMMODITY PRODUCERS.

      Section 295(a) of the Trade Act of 1974 (19 U.S.C. 2401d(a))
    is amended by adding at the end the following: ``The Secretary
    shall develop a plan to conduct targeted sustained outreach and
    offer assistance to agricultural commodity producers from
    underserved communities''.

    SEC. 133404. QUALIFYING REQUIREMENTS AND BENEFITS FOR AGRICULTURAL
                        COMMODITY PRODUCERS.

      Section 296 of the Trade Act of 1974 (19 U.S.C. 2401e) is
    amended--
              (1) in subsection (a)(1)(A), by striking ``90 days''
            and inserting ``120 days'';
              (2) in subsection (b)--
                      (A) in paragraph (3)(B), by striking
                    ``$4,000'' and inserting ``$12,000''; and
                      (B) in paragraph (4)(C), by striking
                    ``$8,000'' and inserting ``$24,000'';
              (3) in subsection (c), by striking ``$12,000'' and
            inserting ``$36,000''; and
              (4) by adding at the end the following new
            subsection:
      ``(e) Adjustments for Inflation.--
              ``(1) In general.--The Secretary of Agriculture shall
            adjust each dollar amount limitation described in this
            section on the date that is 30 days after the date of
            the enactment of this subsection, and at the beginning
            of each fiscal year thereafter, to reflect the
            percentage (if any) of the increase in the average of
            the Consumer Price Index for the preceding 12-month
            period compared to the Consumer Price Index for fiscal
            year 2020.
              ``(2) Special rules for calculation of adjustment.--
            In making an adjustment under paragraph (1), the
            Secretary--
                      ``(A) shall round the amount of any increase
                    in the Consumer Price Index to the nearest
                    dollar; and
                      ``(B) may ignore any such increase of less
                    than 1 percent.
              ``(3) Consumer price index defined.--For purposes of
            this subsection, the term `Consumer Price Index' means
            the Consumer Price Index for All Urban Consumers
            published by the Bureau of Labor Statistics of the
            Department of Labor.''.

                    PART 5--APPROPRIATIONS AND OTHER MATTERS

    SEC. 133501. EXTENSION OF AND APPROPRIATIONS FOR TRADE ADJUSTMENT
                        ASSISTANCE PROGRAM.

      (a) Extension of Termination Provisions.--Section 285 of the
    Trade Act of 1974 (19 U.S.C. 2271 note) is amended by striking
    ``2021'' each place it appears and inserting ``2028''.
      (b) Training Funds.--Section 236(a)(2)(A) of the Trade Act of
    1974 (19 U.S.C. 2296(a)(2)(A)) , as amended by section
    133110(c)(2)(B), is further amended--
              (1) by striking ``shall not exceed $450,000,000'' and
            inserting the following: ``shall not exceed--
                              ``(i) $450,000,000'';
              (2) by striking the period at the end and inserting
            ``; and''; and
              (3) by adding at the end the following:
      ``(ii) $1,000,000,000 for each of the fiscal years 2022
    through 2028.''.
      (c) Reemployment Trade Adjustment Assistance.--Section
    246(b)(1) of the Trade Act of 1974 (19 U.S.C. 2318(b)(1)) is
    amended by striking ``2021'' and inserting ``2028''.
      (d) Authorizations of Appropriations.--
              (1) Trade adjustment assistance for workers.--Section
            245 of the Trade Act of 1974 (19 U.S.C. 2317) is
            amended--
                      (A) in subsection (a), by striking ``2021''
                    and inserting ``2028''; and
                      (B) by adding at the end the following:
      ``(d) Reservation by the Secretary.--Of the funds
    appropriated to carry out this chapter for any fiscal year, the
    Secretary of Labor may reserve not more than 0.5 percent for
    technical assistance, pilots and demonstrations, and the
    evaluation of activities carried out under this chapter.''.
              (2) Trade adjustment assistance for firms.--Section
            255(a) of the Trade Act of 1974 (19 U.S.C. 2345(a)) is
            amended in the first sentence by adding at the end
            before the period the following: ``and $50,000,000 for
            each of the fiscal years 2022 through 2028''.
              (3) Trade adjustment assistance for farmers.--Section
            298 of the Trade Act of 1974 (19 U.S.C. 2401g(a)) is
            amended--
                      (A) in subsection (a)--
                              (i) by striking ``$90,000,000'' and
                            inserting ``$50,000,000''; and
                              (ii) by striking ``2021'' and
                            inserting ``2028''; and
                      (B) by adding at the end the following:
      ``(c) Reservation by the Secretary.--Of the funds
    appropriated to carry out this chapter for any fiscal year, the
    Secretary of Agriculture may not reserve more than 5 percent
    for technical assistance, pilots and demonstrations, and the
    evaluation of activities carried out under this chapter.''.
      (e) Appropriations.--
              (1) Trade adjustment assistance for workers.--In
            addition to amounts otherwise available, there is
            appropriated for each of fiscal years 2022 through
            2028, out of any money in the Treasury not otherwise
            appropriated, $1,000,000,000, to remain available until
            expended, to carry out the purposes of chapter 2 of
            title II of the Trade Act of 1974, as authorized by
            section 245 of the Trade Act of 1974 (19 U.S.C. 2317)
            (as amended by subsection (d)).
              (2) Trade adjustment assistance for firms.--In
            addition to amounts otherwise available, there is
            appropriated for each of fiscal years 2022 through
            2028, out of any money in the Treasury not otherwise
            appropriated, $50,000,000, to remain available until
            expended, to carry out the provisions of chapter 3 of
            title II of the Trade Act of 1974, as authorized by
            section 255 of the Trade Act of 1974 (19 U.S.C. 2345)
            (as amended by subsection (d)).
              (3) Trade adjustment assistance for communities.--
                      (A) In general.--In addition to amounts
                    otherwise available, there is appropriated for
                    each of fiscal years 2022 through 2026, out of
                    any money in the Treasury not otherwise
                    appropriated, $1,000,000,000, to remain
                    available until expended, to carry out
                    subchapter A of chapter 4 of title II of the
                    Trade Act of 1974, as added by section 133301
                    of this Act, as added by subsection (d).
                      (B) Salaries and expenses.--Of the amounts
                    appropriated pursuant subparagraph (A) for each
                    of fiscal years 2022 through 2026, not more
                    than $40,000,000 shall be made available for
                    the salaries and expenses of personnel
                    administering subchapter A of chapter 4 of
                    title II of the Trade Act of 1974.
                      (C) Supplement and not supplant.--Amounts
                    appropriated pursuant to subparagraph (A) for
                    each of the fiscal years 2022 through 2026
                    shall be used to supplement, and not supplant,
                    other Federal, State, regional, and local
                    government funds made available to provide
                    economic development assistance for
                    communities.
              (4) Trade adjustment assistance for community
            colleges and career training.--
                      (A) In general.--In addition to amounts
                    otherwise available, there is appropriated for
                    each of fiscal years 2022 through 2028, out of
                    any money in the Treasury not otherwise
                    appropriated, $1,300,000,000, to remain
                    available until expended, to carry out
                    subchapter B of chapter 4 of title II of the
                    Trade Act of 1974, as designated by section
                    13301 of this Act, as authorized by section
                    279A of such subchapter B (as redesignated).
                      (B) Reservation by the secretary.--Of the
                    funds appropriated to carry out subchapter B of
                    chapter 4 of title II of the Trade Act of 1974
                    for each of fiscal years 2002 through 2028, the
                    Secretary of Labor may reserve not more than 5
                    percent for administration of the program,
                    including providing technical assistance,
                    sustained outreach to eligible institutions
                    effectively serving underserved communities,
                    pilots and demonstrations, and a rigorous
                    third-party evaluation of the program carried
                    out under such subchapter.
              (5) Trade adjustment assistance for farmers.--In
            addition to amounts otherwise available, there is
            appropriated for each of fiscal years 2022 through
            2028, out of any money in the Treasury not otherwise
            appropriated, $50,000,000, to remain available until
            expended, to carry out the purposes of chapter 6 of
            title II of the Trade Act of 1974, as authorized by
            section 298 of the Trade Act of 1974 (19 U.S.C. 2401)
            (as amended by subsection (d)).

    SEC. 133502. APPLICABILITY OF TRADE ADJUSTMENT ASSISTANCE PROVISIONS.

      (a) Workers Certified Before Date of Enactment.--
              (1) In general.--Except as provided in paragraphs (2)
            and (3), a worker certified as eligible for adjustment
            assistance under section 222 of the Trade Act of 1974
            before the date of the enactment of this Act shall be
            eligible, on and after such date of enactment, to
            receive benefits only under the provisions of chapter 2
            of title II of the Trade Act of 1974, as in effect on
            such date of enactment, or as such provisions may be
            amended after such date of enactment.
              (2) Computation of maximum benefits.--Benefits
            received by a worker described in paragraph (1) under
            chapter 2 of title II of the Trade Act of 1974 before
            the date of the enactment of this Act shall be included
            in any determination of the maximum benefits for which
            the worker is eligible under the provisions of chapter
            2 of title II of the Trade Act of 1974, as in effect on
            the date of the enactment of this Act, or as such
            provisions may be amended after such date of enactment.
              (3) Authority to make adjustments to benefits.--For
            the 90-day period beginning on the date of the
            enactment of this Act, the Secretary is authorized to
            make any adjustments to benefits to workers described
            in paragraph (1) that the Secretary determines to be
            necessary and appropriate in applying and administering
            the provisions of chapter 2 of title II of the Trade
            Act of 1974, as in effect on the date of the enactment
            of this Act, or as such provisions may be amended after
            such date of enactment, in a manner that ensures parity
            of treatment between the benefits of such workers and
            the benefits of workers certified after such date of
            enactment.
      (b) Workers Not Certified Pursuant to Certain Petitions Filed
    Before Date of Enactment.--
              (1) Certifications of workers not certified before
            date of enactment.--
                      (A) Criteria if a determination has not been
                    made.--If, as of the date of the enactment of
                    this Act, the Secretary of Labor has not made a
                    determination with respect to whether to
                    certify a group of workers as eligible to apply
                    for adjustment assistance under section 222 of
                    the Trade Act of 1974 pursuant to a petition
                    described in subparagraph (C), the Secretary
                    shall make that determination based on the
                    requirements of section 222 of the Trade Act of
                    1974, as in effect on such date of enactment.
                      (B) Reconsideration of denials of
                    certifications.--If, before the date of the
                    enactment of this Act, the Secretary made a
                    determination not to certify a group of workers
                    as eligible to apply for adjustment assistance
                    under section 222 of the Trade Act of 1974
                    pursuant to a petition described in
                    subparagraph (C), the Secretary shall--
                              (i) reconsider that determination;
                            and
                              (ii) if the group of workers meets
                            the requirements of section 222 of the
                            Trade Act of 1974, as in effect on such
                            date of enactment, certify the group of
                            workers as eligible to apply for
                            adjustment assistance.
                      (C) Petition described.--A petition described
                    in this subparagraph is a petition for a
                    certification of eligibility for a group of
                    workers filed under section 221 of the Trade
                    Act of 1974 on or after January 1, 2021, and
                    before the date of the enactment of this Act.
              (2) Eligibility for benefits.--
                      (A) In general.--Except as provided in
                    subparagraph (B), a worker certified as
                    eligible to apply for adjustment assistance
                    under section 222 of the Trade Act of 1974
                    pursuant to a petition described in paragraph
                    (1)(C) shall be eligible, on and after the date
                    of the enactment of this Act, to receive
                    benefits only under the provisions of chapter 2
                    of title II of the Trade Act of 1974, as in
                    effect on such date of enactment, or as such
                    provisions may be amended after such date of
                    enactment.
                      (B) Computation of maximum benefits.--
                    Benefits received by a worker described in
                    paragraph (1) under chapter 2 of title II of
                    the Trade Act of 1974 before the date of the
                    enactment of this Act shall be included in any
                    determination of the maximum benefits for which
                    the worker is eligible under the provisions of
                    chapter 2 of title II of the Trade Act of 1974,
                    as in effect on the date of the enactment of
                    this Act, or as such provisions may be amended
                    after such date of enactment.
      (c)  Conforming Amendments.--
              (1) Trade act of 2002.--Section 151 of the Trade Act
            of 2002 (19 U.S.C. note prec. 2271) is amended by
            striking subsections (a), (b), and (c).
              (2) Trade and globalization adjustment assistance act
            of 2009.--Section 1891 of the Trade and Globalization
            Adjustment Assistance Act of 2009 (19 U.S.C. 2271 note)
            is repealed.
              (3) Trade adjustment assistance extension act of
            2011.--The Trade Adjustment Assistance Extension Act of
            2011 is amended--
                      (A) in section 201 (19 U.S.C. note prec.
                    2271), by striking subsections (b) and (c); and
                      (B) in section 231(a) (19 U.S.C. 2271 note),
                    by striking paragraphs (1)(B) and (2).
              (4) Trade adjustment assistance reauthorization act
            of 2015.--The Trade Adjustment Assistance
            Reauthorization Act of 2015 is amended--
                      (A) in section 402 (19 U.S.C. note prec.
                    2271), by striking subsections (b) and (c); and
                      (B) in section 405(a)(1) (19 U.S.C.
                    2319(a)(1)), by striking subparagraph (B).
      (d) Trade Adjustment Assistance for Firms.--
              (1) Certification of firms not certified before date
            of enactment.--
                      (A) Criteria if a determination has not been
                    made.--If, as of the date of the enactment of
                    this Act, the Secretary of Commerce has not
                    made a determination with respect to whether to
                    certify a firm as eligible to apply for
                    adjustment assistance under section 251 of the
                    Trade Act of 1974 pursuant to a petition
                    described in subparagraph (C), the Secretary
                    shall make that determination based on the
                    requirements of section 251 of the Trade Act of
                    1974, as in effect on such date of enactment.
                      (B) Reconsideration of denial of certain
                    petitions.--If, before the date of the
                    enactment of this Act, the Secretary made a
                    determination not to certify a firm as eligible
                    to apply for adjustment assistance under
                    section 251 of the Trade Act of 1974 pursuant
                    to a petition described in subparagraph (C),
                    the Secretary shall--
                              (i) reconsider that determination;
                            and
                              (ii) if the firm meets the
                            requirements of section 251 of the
                            Trade Act of 1974, as in effect on such
                            date of enactment, certify the firm as
                            eligible to apply for adjustment
                            assistance.
                      (C) Petition described.--A petition described
                    in this subparagraph is a petition for a
                    certification of eligibility filed by a firm or
                    its representative under section 251 of the
                    Trade Act of 1974 on or after January 1, 2021,
                    and before the date of the enactment of this
                    Act.
              (2) Certification of firms that did not submit
            petitions between january 1, 2021, and date of
            enactment.--
                      (A) In general.--The Secretary of Commerce
                    shall certify a firm described in subparagraph
                    (B) as eligible to apply for adjustment
                    assistance under section 251 of the Trade Act
                    of 1974, as in effect on the date of the
                    enactment of this Act, if the firm or its
                    representative files a petition for a
                    certification of eligibility under section 251
                    of the Trade Act of 1974 not later than 90 days
                    after such date of enactment.
                      (B) Firm described.--A firm described in this
                    subparagraph is a firm that the Secretary
                    determines would have been certified as
                    eligible to apply for adjustment assistance
                    if--
                              (i) the firm or its representative
                            had filed a petition for a
                            certification of eligibility under
                            section 251 of the Trade Act of 1974 on
                            a date during the period beginning on
                            January 1, 2021, and ending on the day
                            before the date of the enactment of
                            this Act; and
                              (ii) the provisions of chapter 3 of
                            title II of the Trade Act of 1974, as
                            in effect on such date of enactment,
                            had been in effect on that date during
                            the period described in clause (i).

                                   Subtitle E

           PART 1--PROVISIONS RELATING TO PATHWAYS TO HEALTH CAREERS

    SEC. 134101. PATHWAYS TO HEALTH CAREERS ACT.

      (a) Transition Funding.--There is appropriated, out of any
    funds in the Treasury not otherwise appropriated, $15,000,000
    to the Secretary of Health and Human Services to provide
    technical assistance and cover administrative costs associated
    with implementing section 2071 of the Social Security Act (as
    added by subsection (b)).
      (b) Career Pathways Through Health Profession Opportunity
    Grants.--Effective October 1, 2021, title XX of the Social
    Security Act (42 U.S.C. 1397-1397n-13) is amended by adding at
    the end the following:

      ``Subtitle D--Career Pathways Through Health Profession Opportunity
                                     Grants

    ``SEC. 2071. CAREER PATHWAYS THROUGH HEALTH PROFESSION OPPORTUNITY
                        GRANTS.

      ``(a) Application Requirements.--An eligible entity desiring
    a grant under this section for a project shall submit to the
    Secretary an application for the grant, that includes the
    following:
              ``(1) A description of how the applicant will use a
            career pathways approach to train eligible individuals
            for health professions that pay well or will put
            eligible individuals on a career path to an occupation
            that pays well, under the project.
              ``(2) A description of the adult basic education and
            literacy activities, work readiness activities,
            training activities, and case management and career
            coaching services that the applicant will use to assist
            eligible individuals to gain work experience,
            connection to employers, and job placement, and a
            description of the plan for recruiting, hiring, and
            training staff to provide the case management,
            mentoring, and career coaching services, under the
            project directly or through local governmental,
            apprenticeship, educational, or charitable
            institutions.
              ``(3) In the case of an application for a grant under
            this section for a demonstration project described in
            subsection (c)(2)(B)(i)(I)--
                      ``(A) a demonstration that the State in which
                    the demonstration project is to be conducted
                    has in effect policies or laws that permit
                    certain allied health and behavioral health
                    care credentials to be awarded to people with
                    certain arrest or conviction records (which
                    policies or laws shall include appeals
                    processes, waivers, certificates, and other
                    opportunities to demonstrate rehabilitation to
                    obtain credentials, licensure, and approval to
                    work in the proposed health careers), and a
                    plan described in the application that will use
                    a career pathway to assist participants with
                    such a record in acquiring credentials,
                    licensing, and employment in the specified
                    careers;
                      ``(B) a discussion of how the project or
                    future strategic hiring decisions will
                    demonstrate the experience and expertise of the
                    project in working with job seekers who have
                    arrest or conviction records or employers with
                    experience working with people with arrest or
                    conviction records;
                      ``(C) an identification of promising
                    innovations or best practices that can be used
                    to provide the training;
                      ``(D) a proof of concept or demonstration
                    that the applicant has done sufficient research
                    on workforce shortage or in-demand jobs for
                    which people with certain types of arrest or
                    conviction records can be hired;
                      ``(E) a plan for recruiting students who are
                    eligible individuals into the project; and
                      ``(F) a plan for providing post-employment
                    support and ongoing training as part of a
                    career pathway under the project.
              ``(4) In the case of an application for a grant under
            this section for a demonstration project described in
            subsection (c)(2)(B)(i)(II)--
                      ``(A) a description of the partnerships,
                    strategic staff hiring decisions, tailored
                    program activities, or other programmatic
                    elements of the project, such as training plans
                    for doulas and other community health workers
                    and training plans for midwives and other
                    allied health professions, that are designed to
                    support a career pathway in pregnancy, birth,
                    or post-partum services; and
                      ``(B) a demonstration that the State in which
                    the demonstration project is to be conducted
                    recognizes doulas or midwives, as the case may
                    be.
              ``(5) A demonstration that the applicant has
            experience working with low-income populations, or a
            description of the plan of the applicant to work with a
            partner organization that has the experience.
              ``(6) A plan for providing post-employment support
            and ongoing training as part of a career pathway under
            the project.
              ``(7) A description of the support services that the
            applicant will provide under the project, including a
            plan for how child care and transportation support
            services will be guaranteed and, if the applicant will
            provide a cash stipend or wage supplement, how the
            stipend or supplement would be calculated and
            distributed.
              ``(8) A certification by the applicant that the
            project development included--
                      ``(A) consultation with a local workforce
                    development board established under section 107
                    of the Workforce Innovation and Opportunity
                    Act;
                      ``(B) consideration of apprenticeship and
                    pre-apprenticeship models registered under the
                    Act of August 16, 1937 (also known as the
                    `National Apprenticeship Act');
                      ``(C) consideration of career pathway
                    programs in the State in which the project is
                    to be conducted; and
                      ``(D) a review of the State plan under
                    section 102 or 103 of the Workforce Innovation
                    and Opportunity Act.
              ``(9) A description of the availability and relevance
            of recent labor market information and other pertinent
            evidence of in-demand jobs or worker shortages.
              ``(10) A certification that the applicant will
            directly provide or contract for the training services
            described in the application.
              ``(11) A commitment by the applicant that, if the
            grant is made to the applicant, the applicant will--
                      ``(A) during the planning period for the
                    project, provide the Secretary with any
                    information needed by the Secretary to
                    establish adequate data reporting and
                    administrative structure for the project;
                      ``(B) hire a person to direct the project not
                    later than the end of the planning period
                    applicable to the project;
                      ``(C) accept all technical assistance offered
                    by the Secretary with respect to the grant;
                      ``(D) participate in peer technical
                    assistance conferences as are regularly
                    scheduled by the Secretary; and
                      ``(E) provide all data required by the
                    Secretary under subsection (g).
      ``(b) Preferences in Considering Applications.--In
    considering applications for a grant under this section, the
    Secretary shall give preference to--
              ``(1) applications submitted by applicants to whom a
            grant was made under this section or any predecessor to
            this section;
              ``(2) applications submitted by applicants who have
            business and community partners in each of the
            following categories:
                      ``(A) State and local government agencies and
                    social service providers, including a State or
                    local entity that administers a State program
                    funded under part A of this title;
                      ``(B) institutions of higher education,
                    apprenticeship programs, and local workforce
                    development boards established under section
                    107 of the Workforce Innovation and Opportunity
                    Act; and
                      ``(C) health care employers, health care
                    industry or sector partnerships, labor unions,
                    and labor-management partnerships;
              ``(3) applications that include opportunities for
            mentoring or peer support, and make career coaching
            available, as part of the case management plan;
              ``(4) applications which describe a project that will
            serve a rural area in which--
                      ``(A) the community in which the individuals
                    to be enrolled in the project reside is
                    located;
                      ``(B) the project will be conducted; or
                      ``(C) an employer partnership that has
                    committed to hiring individuals who
                    successfully complete all activities under the
                    project is located;
              ``(5) applications that include a commitment to
            providing project participants with a cash stipend or
            wage supplement; and
              ``(6) applications which have an emergency cash fund
            to assist project participants financially in emergency
            situations.
      ``(c) Grants.--
              ``(1) Competitive grants.--
                      ``(A) Grant authority.--
                              ``(i) In general.--The Secretary may
                            make a grant in accordance with this
                            paragraph to an eligible entity whose
                            application for the grant is approved
                            by the Secretary, to conduct a project
                            designed to train low-income
                            individuals for allied health
                            professions, health information
                            technology, physicians assistants,
                            nursing assistants, registered nurse,
                            advanced practice nurse, and other
                            professions considered part of a health
                            care career pathway model.
                              ``(ii) Guarantee of grantees in each
                            state and the district of columbia.--
                            For each grant cycle, the Secretary
                            shall award a grant under this
                            paragraph to at least 2 eligible
                            entities in each State that is not a
                            territory, to the extent there are a
                            sufficient number of applications
                            submitted by the entities that meet the
                            requirements applicable with respect to
                            such a grant. If, for a grant cycle,
                            there are fewer than 2 such eligible
                            entities in a State, the Secretary
                            shall include that information in the
                            report required by subsection (g)(2)
                            that covers the fiscal year.
                      ``(B) Guarantee of grants for indian
                    populations.--From the amount reserved under
                    subsection (i)(2)(B) for each fiscal year, the
                    Secretary shall award a grant under this
                    paragraph to at least 10 eligible entities that
                    are an Indian tribe, a tribal organization, or
                    a tribal college or university, to the extent
                    there are a sufficient number of applications
                    submitted by the entities that meet the
                    requirements applicable with respect to such a
                    grant.
                      ``(C) Guarantee of grantees in the
                    territories.--From the amount reserved under
                    subsection (i)(2)(C) for each fiscal year, the
                    Secretary shall award a grant under this
                    paragraph to at least 2 eligible entities that
                    are located in a territory, to the extent there
                    are a sufficient number of applications
                    submitted by the entities that meet the
                    requirements applicable with respect to such a
                    grant.
              ``(2) Grants for demonstration projects.--
                      ``(A) Grant authority.--The Secretary shall
                    make a grant in accordance with this subsection
                    to an eligible entity whose application for the
                    grant is approved by the Secretary, to conduct
                    a demonstration project that meets the
                    requirements of subparagraph (B).
                      ``(B) Requirements.--The requirements of this
                    subparagraph are the following:
                              ``(i) Type of project.--The
                            demonstration project shall be of 1 of
                            the following types:
                                      ``(I) Individuals with arrest
                                    or conviction records
                                    demonstration.--The
                                    demonstration project shall be
                                    of a type designed to provide
                                    education and training for
                                    eligible individuals with
                                    arrest or conviction records to
                                    enter and follow a career
                                    pathway in the health
                                    professions through occupations
                                    that pay well and are expected
                                    to experience a labor shortage
                                    or be in high demand.
                                      ``(II) Pregnancy and
                                    childbirth career pathway
                                    demonstration.--The
                                    demonstration project shall be
                                    of a type designed to provide
                                    education and training for
                                    eligible individuals to enter
                                    and follow a career pathway in
                                    the field of pregnancy,
                                    childbirth, post-partum, or
                                    childbirth and post-partum, in
                                    a State that recognizes doulas
                                    or midwives and that provides
                                    payment for services provided
                                    by doulas or midwives, as the
                                    case may be, under private or
                                    public health insurance plans.
                              ``(ii) Duration.--The demonstration
                            project shall be conducted for not less
                            than 5 years.
                      ``(C) Minimum allocation of funds for each
                    type of demonstration project.--
                              ``(i) Individuals with arrest or
                            conviction records demonstrations.--Not
                            less than $6,375,000 of the amounts
                            made available for grants under this
                            paragraph shall be used to make grants
                            for demonstration projects of the type
                            described in subparagraph (B)(i)(I).
                              ``(ii) Pregnancy and childbirth
                            career pathway demonstrations.--Not
                            less than $6,375,000 of the amounts
                            made available for grants under this
                            paragraph shall be used to make grants
                            for demonstration projects of the type
                            described in subparagraph (B)(i)(II).
              ``(3) Grant cycle.--The grant cycle under this
            section shall be not less than 5 years, with a planning
            period of not more than the first 12 months of the
            grant cycle. During the planning period, the amount of
            the grant shall be in such lesser amount as the
            Secretary determines appropriate.
      ``(d) Use of Grant.--
              ``(1) In general.--An entity to which a grant is made
            under this section shall use the grant in accordance
            with the approved application for the grant.
              ``(2) Support to be provided.--
                      ``(A) Required support.--A project for which
                    a grant is made under this section shall
                    include the following:
                              ``(i) An assessment for adult basic
                            skill competency, and provision of
                            adult basic skills education if
                            necessary for lower-skilled eligible
                            individuals to enroll in the project
                            and go on to enter and complete post-
                            secondary training, through means
                            including the following:
                                      ``(I) Establishing a network
                                    of partners that offer pre-
                                    training activities for project
                                    participants who need to
                                    improve basic academic skills
                                    or English language proficiency
                                    before entering a health
                                    occupational training career
                                    pathway program.
                                      ``(II) Offering resources to
                                    enable project participants to
                                    continue advancing adult basic
                                    skill proficiency while
                                    enrolled in a career pathway
                                    program.
                                      ``(III) Embedding adult basic
                                    skill maintenance as part of
                                    ongoing post-graduation career
                                    coaching and mentoring.
                              ``(ii) A guarantee that child care is
                            an available and affordable support
                            service for project participants
                            through means such as the following:
                                      ``(I) Referral to, and
                                    assistance with, enrollment in
                                    a subsidized child care
                                    program.
                                      ``(II) Direct payment to a
                                    child care provider if a slot
                                    in a subsidized child care
                                    program is not available or
                                    reasonably accessible.
                                      ``(III) Payment of co-
                                    payments or associated fees for
                                    child care.
                              ``(iii) Case management plans that
                            include career coaching (with the
                            option to offer appropriate peer
                            support and mentoring opportunities to
                            help develop soft skills and social
                            capital), which may be offered on an
                            ongoing basis before, during, and after
                            initial training as part of a career
                            pathway model.
                              ``(iv) A plan to provide project
                            participants with transportation
                            through means such as the following:
                                      ``(I) Referral to, and
                                    assistance with enrollment in,
                                    a subsidized transportation
                                    program.
                                      ``(II) If a subsidized
                                    transportation program is not
                                    reasonably available, direct
                                    payments to subsidize
                                    transportation costs.
                            For purposes of this clause, the term
                            `transportation' includes public
                            transit, or gasoline for a personal
                            vehicle if public transit is not
                            reasonably accessible or available.
                              ``(v) In the case of a demonstration
                            project of the type described in
                            subsection (c)(2)(B)(i)(I), access to
                            legal assistance for project
                            participants for the purpose of
                            addressing arrest or conviction records
                            and associated workforce barriers.
                      ``(B) Allowed support.--The goods and
                    services provided under a project for which a
                    grant is made under this section may include
                    the following:
                              ``(i) A cash stipend.
                              ``(ii) A reserve fund for financial
                            assistance to project participants in
                            emergency situations.
                              ``(iii) Tuition, and training
                            materials such as books, software,
                            uniforms, shoes, and hair nets, and
                            personal protective equipment.
                              ``(iv) In-kind resource donations
                            such as interview clothing and
                            conference attendance fees.
                              ``(v) Assistance with accessing and
                            completing high school equivalency or
                            adult basic education courses as
                            necessary to achieve success in the
                            project and make progress toward career
                            goals.
                              ``(vi) Assistance with programs and
                            activities, including legal assistance,
                            deemed necessary to address arrest or
                            conviction records as an employment
                            barrier.
                              ``(vii) Other support services as
                            deemed necessary for family well-being,
                            success in the project, and progress
                            toward career goals.
              ``(3) Training.--The number of hours of training
            provided to an eligible individual under a project for
            which a grant is made under this section, for a
            recognized postsecondary credential (including an
            industry-recognized credential, and a certificate
            awarded by a local workforce development board
            established under section 107 of the Workforce
            Innovation and Opportunity Act), which is awarded in
            recognition of attainment of measurable technical or
            occupational skills necessary to gain employment or
            advance within an occupation, shall be--
                      ``(A) not less than the number of hours of
                    training required for certification in that
                    level of skill by the State in which the
                    project is conducted; or
                      ``(B) if there is no such requirement, such
                    number of hours of training as the Secretary
                    finds is necessary to achieve that skill level.
              ``(4) Inclusion of tanf recipients.--In the case of a
            project for which a grant is made under this section
            that is conducted in a State that has a program funded
            under part A of title IV, at least 10 percent of the
            eligible individuals to whom support is provided under
            the project shall meet the income eligibility
            requirements under that State program, without regard
            to whether the individuals receive benefits or services
            directly under that State program.
              ``(5) Income limitation.--An entity to which a grant
            is made under this section shall not use the grant to
            provide support to a person who is not an eligible
            individual.
              ``(6) Prohibition.--An entity to which a grant is
            made under this section shall not use the grant for
            purposes of entertainment, except that case management
            and career coaching services may include celebrations
            of specific career-based milestones such as completing
            a semester, graduation, or job placement.
      ``(e) Technical Assistance.--
              ``(1) In general.--The Secretary shall provide
            technical assistance--
                      ``(A) to assist eligible entities in applying
                    for grants under this section;
                      ``(B) that is tailored to meet the needs of
                    grantees at each stage of the administration of
                    projects for which grants are made under this
                    section;
                      ``(C) that is tailored to meet the specific
                    needs of Indian tribes, tribal organizations,
                    and tribal colleges and universities;
                      ``(D) that is tailored to meet the specific
                    needs of the territories;
                      ``(E) that is tailored to meet the specific
                    needs of eligible entities in carrying out
                    demonstration projects for which a grant is
                    made under this section; and
                      ``(F) to facilitate the exchange of
                    information among eligible entities regarding
                    best practices and promising practices used in
                    the projects.
              ``(2) Continuation of peer technical assistance
            conferences.--The Secretary shall continue to hold peer
            technical assistance conferences for entities to which
            a grant is made under this section or was made under
            the immediate predecessor of this section. The
            preceding sentence shall not be interpreted to require
            any such conference to be held in person.
      ``(f) Evaluation of Demonstration Projects.--
              ``(1) In general.--The Secretary shall, by grant,
            contract, or interagency agreement, conduct rigorous
            and well-designed evaluations of the demonstration
            projects for which a grant is made under this section.
              ``(2) Requirement applicable to individuals with
            arrest or conviction records demonstration.--In the
            case of a project of the type described in subsection
            (c)(2)(B)(i)(I), the evaluation shall include
            identification of successful activities for creating
            opportunities for developing and sustaining,
            particularly with respect to low-income individuals
            with arrest or conviction records, a health professions
            workforce that has accessible entry points, that meets
            high standards for education, training, certification,
            and professional development, and that provides
            increased wages and affordable benefits, including
            health care coverage, that are responsive to the needs
            of the workforce.
              ``(3) Requirement applicable to pregnancy and
            childbirth career pathway demonstration.--In the case
            of a project of the type described in subsection
            (c)(2)(B)(i)(II), the evaluation shall include
            identification of successful activities for creating
            opportunities for developing and sustaining,
            particularly with respect to low-income individuals and
            other entry-level workers, a career pathway that has
            accessible entry points, that meets high standards for
            education, training, certification, and professional
            development, and that provides increased wages and
            affordable benefits, including health care coverage,
            that are responsive to the needs of the birth,
            pregnancy, and post-partum workforce.
              ``(4) Rule of interpretation.--Evaluations conducted
            pursuant to this subsection may include a randomized
            controlled trial, but this subsection shall not be
            interpreted to require an evaluation to include such a
            trial.
      ``(g) Reports.--
              ``(1) To the secretary.--An eligible entity awarded a
            grant to conduct a project under this section shall
            submit interim reports to the Secretary on the
            activities carried out under the project, and, on the
            conclusion of the project, a final report on the
            activities. Each such report shall include data on
            participant outcomes related to earnings, employment in
            health professions, graduation rate, graduation
            timeliness, credential attainment, participant
            demographics, and other data specified by the
            Secretary.
              ``(2) To the congress.--During each Congress, the
            Secretary shall submit to the Committee on Ways and
            Means of the House of Representatives and the Committee
            on Finance of the Senate a report--
                      ``(A) on the demographics of the participants
                    in the projects for which a grant is made under
                    this section;
                      ``(B) on the rate of which project
                    participants completed all activities under the
                    projects;
                      ``(C) on the employment credentials acquired
                    by project participants;
                      ``(D) on the employment of project
                    participants on completion of activities under
                    the projects, and the earnings of project
                    participants at entry into employment;
                      ``(E) on best practices and promising
                    practices used in the projects;
                      ``(F) on the nature of any technical
                    assistance provided to grantees under this
                    section;
                      ``(G) on, with respect to the period since
                    the period covered in the most recent prior
                    report submitted under this paragraph--
                              ``(i) the number of applications
                            submitted under this section, with a
                            separate statement of the number of
                            applications referred to in subsection
                            (b)(5);
                              ``(ii) the number of applications
                            that were approved, with a separate
                            statement of the number of such
                            applications referred to in subsection
                            (b)(5); and
                              ``(iii) a description of how grants
                            were made in any case described in the
                            last sentence of subsection
                            (c)(1)(A)(ii); and
                      ``(H) that includes an assessment of the
                    effectiveness of the projects with respect to
                    addressing health professions workforce
                    shortages or in-demand jobs.
      ``(h) Definitions.--In this section:
              ``(1) Allied health profession.--The term `allied
            health profession' has the meaning given in section
            799B(5) of the Public Health Service Act.
              ``(2) Career pathway.--The term `career pathway' has
            the meaning given that term in section 3(7) of the
            Workforce Innovation and Opportunity Act.
              ``(3) Doula.--The term `doula' means an individual
            who--
                      ``(A) is certified by an organization that
                    has been established for not less than 5 years
                    and that requires the completion of continuing
                    education to maintain the certification, to
                    provide non-medical advice, information,
                    emotional support, and physical comfort to an
                    individual during the individual's pregnancy,
                    childbirth, and post-partum period; and
                      ``(B) maintains the certification by
                    completing the required continuing education.
              ``(4) Eligible entity.--The term `eligible entity'
            means any of the following entities that demonstrates
            in an application submitted under this section that the
            entity has the capacity to fully develop and administer
            the project described in the application:
                      ``(A) A local workforce development board
                    established under section 107 of the Workforce
                    Innovation and Opportunity Act.
                      ``(B) A State or territory, a political
                    subdivision of a State or territory, or an
                    agency of a State, territory, or such a
                    political subdivision, including a State or
                    local entity that administers a State program
                    funded under part A of this title.
                      ``(C) An Indian tribe, a tribal organization,
                    or a tribal college or university.
                      ``(D) An institution of higher education (as
                    defined in the Higher Education Act of 1965).
                      ``(E) A hospital (as defined in section
                    1861(e)).
                      ``(F) A high-quality skilled nursing
                    facility.
                      ``(G) A Federally qualified health center (as
                    defined in section 1861(aa)(4)).
                      ``(H) A nonprofit organization described in
                    section 501(c)(3) of the Internal Revenue Code
                    of 1986, a labor organization, or an entity
                    with shared labor-management oversight, that
                    has a demonstrated history of providing health
                    profession training to eligible individuals.
                      ``(I) In the case of a demonstration project
                    of the type provided for in subsection
                    (c)(2)(B)(i)(II) of this section, an entity
                    recognized by a State, Indian tribe, or tribal
                    organization as qualified to train doulas or
                    midwives, if midwives or doulas, as the case
                    may be, are permitted to practice in the State
                    involved.
                      ``(J) An opioid treatment program (as defined
                    in section 1861(jjj)(2)), and other high
                    quality comprehensive addiction care providers.
              ``(5) Eligible individual.--The term `eligible
            individual' means an individual whose family income
            does not exceed 200 percent of the Federal poverty
            level.
              ``(6) Federal poverty level.--The term `Federal
            poverty level' means the poverty line (as defined in
            section 673(2) of the Omnibus Budget Reconciliation Act
            of 1981, including any revision required by such
            section applicable to a family of the size involved).
              ``(7) Indian tribe; tribal organization.--The terms
            `Indian tribe' and `tribal organization' have the
            meaning given the terms in section 4 of the Indian
            Self-Determination and Education Assistance Act (25
            U.S.C. 450b).
              ``(8) Institution of higher education.--The term
            `institution of higher education' has the meaning given
            the term in section 101 or 102(a)(1)(B) of the Higher
            Education Act of 1965.
              ``(9) Territory.--The term `territory' means the
            Commonwealth of Puerto Rico, the United States Virgin
            Islands, Guam, the Northern Mariana Islands, and
            American Samoa.
              ``(10) Tribal college or university.--The term
            `tribal college or university' has the meaning given
            the term in section 316(b) of the Higher Education Act
            of 1965.
      ``(i) Funding.--
              ``(1) In general.--Out of any funds in the Treasury
            of the United States not otherwise appropriated, there
            are appropriated to the Secretary to carry out this
            section $425,000,000 for each of fiscal years 2022
            through 2026.
              ``(2) Allocation of funds.--Of the amount
            appropriated for a fiscal year under paragraph (1) of
            this subsection--
                      ``(A) $318,750,000 shall be available for
                    grants under subsection (c)(1)(A);
                      ``(B) $17,000,000 shall be reserved for
                    grants under subsection (c)(1)(B);
                      ``(C) $21,250,000 shall be reserved for
                    grants under subsection (c)(1)(C);
                      ``(D) $25,5000,000 shall be available for
                    demonstration project grants under subsection
                    (c)(2);
                      ``(E) $25,500,000, plus all amounts referred
                    to in subparagraphs (A) through (D) of this
                    paragraph that remain unused after all grant
                    awards are made for the fiscal year, shall be
                    available for the provision of technical
                    assistance and associated staffing; and
                      ``(F) $17,000,000 shall be available for
                    studying the effects of the demonstration and
                    non-demonstration projects for which a grant is
                    made under this section, and for associated
                    staffing, for the purpose of supporting the
                    rigorous evaluation of the demonstration
                    projects, and supporting the continued study of
                    the short-, medium-, and long-term effects of
                    all such projects, including the effectiveness
                    of new or added elements of the non-
                    demonstration projects.''.

                  PART 2--PROVISIONS RELATING TO ELDER JUSTICE

    SEC. 134201. REAUTHORIZATION OF FUNDING FOR PROGRAMS TO PREVENT AND
                        INVESTIGATE ELDER ABUSE, NEGLECT, AND EXPLOITATION.

      (a) Long-term Care Staff Training Grants.--Section 2041 of
    the Social Security Act (42 U.S.C. 1397m) is amended to read as
    follows:

    ``SEC. 2041. NURSING HOME WORKER TRAINING GRANTS.

      ``(a) Appropriation.--Out of any funds in the Treasury not
    otherwise appropriated, there is appropriated to the Secretary
    for each of fiscal years 2022 through 2025--
              ``(1) $392,000,000for grants under subsection (b)(1);
            and
              ``(2) $8,000,000 for grants under subsection (b)(2).
      ``(b) Grants.--
              ``(1) State entitlement.--
                      ``(A) In general.--Each State shall be
                    entitled to receive from the Secretary for each
                    fiscal year specified in subsection (a) a grant
                    in an amount equal to the amount allotted to
                    the State under subparagraph (B) of this
                    paragraph.
                      ``(B) State allotments.--The amount allotted
                    to a State under this subparagraph for a fiscal
                    year shall be--
                              ``(i) the amount made available by
                            subsection (a) for the fiscal year that
                            is not required to be reserved by
                            subsection (a); multiplied by
                              ``(ii)(I) the number of State
                            residents who have attained 65 years of
                            age or are individuals with a
                            disability, as determined by the
                            Secretary using the most recent version
                            of the American Community Survey
                            published by the Bureau of the Census
                            or a successor data set; divided by
                              ``(II) the total number of such
                            residents of all States.
              ``(2) Grants to indian tribes and tribal
            organizations.--
                      ``(A) In general.--The Secretary, in
                    consultation with the Indian tribes and tribal
                    organizations, shall make grants in accordance
                    with this section to Indian tribes and tribal
                    organizations who operate at least 1 eligible
                    setting.
                      ``(B) Grant formula.--The Secretary, in
                    consultation with the Indian tribes and tribal
                    organizations, shall devise a formula for
                    distributing among Indian tribes and tribal
                    organizations the amount required to be
                    reserved by subsection (a) for each fiscal
                    year.
              ``(3) Sub-grants.--A State, Indian tribe, or tribal
            organization to which an amount is paid under this
            paragraph may use the amount to make sub-grants to
            local organizations, including community organizations,
            local non-profits, elder rights and justice groups, and
            workforce development boards for any purpose described
            in paragraph (1) or (2) of subsection (c).
      ``(c) Use of Funds.--
              ``(1) Required uses.--A State to which an amount is
            paid under subsection (b) shall use the amount to--
                      ``(A) provide wage subsidies to eligible
                    individuals;
                      ``(B) provide student loan repayment or
                    tuition assistance to eligible individuals for
                    a degree or certification in a field relevant
                    to their position referred to in subsection
                    (f)(1)(A);
                      ``(C) guarantee affordable and accessible
                    child care for eligible individuals, including
                    help with referrals, co-pays, or other direct
                    assistance; and
                      ``(D) provide assistance where necessary with
                    obtaining appropriate transportation, including
                    public transportation if available, or gas
                    money or transit vouchers for ride share,
                    taxis, and similar types of transportation if
                    public transportation is unavailable or
                    impractical based on work hours or location.
              ``(2) Authorized uses.--A State to which an amount is
            paid under subsection (b) may use the amount to--
                      ``(A) establish a reserve fund for financial
                    assistance to eligible individuals in emergency
                    situations;
                      ``(B) provide in-kind resource donations,
                    such as interview clothing and conference
                    attendance fees;
                      ``(C) provide assistance with programs and
                    activities, including legal assistance, deemed
                    necessary to address arrest or conviction
                    records that are an employment barrier;
                      ``(D) support employers operating an eligible
                    setting in the State in providing employees
                    with not less than 2 weeks of paid leave per
                    year; or
                      ``(E) provide other support services the
                    Secretary deems necessary to allow for
                    successful recruitment and retention of
                    workers.
              ``(3) Provision of funds only for the benefit of
            eligible individuals in eligible settings.--A State to
            which an amount is paid under subsection (b) may
            provide the amount to only an eligible individual or a
            partner organization serving an eligible individual.
              ``(4) Nonsupplantation.--A State to which an amount
            is paid under subsection (b) shall not use the amount
            to supplant the expenditure of any State funds for
            recruiting or retaining employees in an eligible
            setting.
      ``(d) Administration.--A State to which a grant is made under
    subsection (b) shall reserve not more than 10 percent of the
    grant to--
              ``(1) administer subgrants in accordance with this
            section;
              ``(2) provide technical assistance and support for
            applying for and accessing such a subgrant opportunity;
              ``(3) publicize the availability of the subgrants;
              ``(4) carry out activities to increase the supply of
            eligible individuals; and
              ``(5) provide technical assistance to help
            subgrantees find and train individuals to provide the
            services for which they are contracted.
      ``(e) Definitions.--In this section:
              ``(1) Eligible individual.--The term `eligible
            individual' means an individual who--
                      ``(A)(i) is a qualified home health aide, as
                    defined in section 484.80(a) of title 42, Code
                    of Federal Regulations;
                      ``(ii) is a nurse aide approved by the State
                    as meeting the requirements of sections 483.150
                    through 483.154 of such title, and is listed in
                    good standing on the State nurse aide registry;
                      ``(iii) is a personal care aide approved by
                    the State, and furnishes personal care
                    services, as defined in section 440.167 of such
                    title;
                      ``(iv) is a qualified hospice aide, as
                    defined in section 418.76 of such title; or
                      ``(v) is a licensed practical nurse or a
                    licensed or certified social worker; or
                      ``(vi) is receiving training to be certified
                    or licensed as such an aide, nurse, or social
                    worker; and
                      ``(B) provides (or, in the case of a trainee,
                    intends to provide) services as such an aide,
                    nurse, or social worker in an eligible setting.
              ``(2) Eligible setting.--The term `eligible setting'
            means--
                      ``(A) a skilled nursing facility, as defined
                    in section 1819;
                      ``(B) a nursing facility, as defined in
                    section 1919;
                      ``(C) a home health agency, as defined in
                    section 1891;
                      ``(D) a facility provider approved to deliver
                    home or community-based services authorized
                    under State options described in subsection (c)
                    or (i) of section 1915 or, as relevant,
                    demonstration projects authorized under section
                    1115;
                      ``(E) a hospice, as defined in section 1814;
                    or
                      ``(F) a tribal assisted living facility.
              ``(3) Tribal organization.--The term `tribal
            organization' has the meaning given the term in section
            4 of the Indian Self-Determination and Education
            Assistance Act.''.
      (b) Adult Protective Services Functions and Grant Programs.--
              (1) Direct funding; state entitlement.--Section 2042
            of the Social Security Act (42 U.S.C. 1397m-1) is
            amended--
                      (A) in subsection (a)--
                              (i) in paragraph (1)(A)--
                                      (I) by striking ``offices''
                                    and inserting ``programs''; and
                                      (II) by inserting ``and
                                    adults who are under a
                                    disability (as defined in
                                    section 216(i)(1))'' before the
                                    semicolon; and
                              (ii) by striking paragraph (2) and
                            inserting the following:
              ``(2) Appropriation.--Out of any money in the
            Treasury not otherwise appropriated, there are
            appropriated to the Secretary $8,000,000 for each of
            fiscal years 2023 through 2025 to carry out this
            subsection.'';
                      (B) in subsection (b)--
                              (i) in paragraph (2)--
                                      (I) in subparagraph (A), by
                                    striking ``the availability of
                                    appropriations and''; and
                                      (II) in subparagraph (B)--
                                              (aa) in the heading
                                            for clause (i), by
                                            inserting ``and the
                                            district of columbia''
                                            after ``States''; and
                                              (bb) in clause (ii),
                                            by inserting ``or the
                                            District of Columbia''
                                            after ``States''; and
                              (ii) by striking paragraph (5) and
                            inserting the following:
              ``(5) Appropriation.--Out of any money in the
            Treasury not otherwise appropriated, there are
            appropriated to the Secretary for each of fiscal years
            2023 through 2025--
                      ``(A) $392,000,000 for grants to States under
                    this subsection; and
                      ``(B) $8,000,000 for grants to Indian tribes
                    and tribal organizations under this
                    subsection.''; and
                      (C) in subsection (c), by striking paragraph
                    (6) and inserting the following:
              ``(6) Appropriation.--Out of any money in the
            Treasury not otherwise appropriated, there are
            appropriated to the Secretary $75,000,000 for each of
            fiscal years 2023 through 2025 to carry out this
            subsection.''.
              (2) State entitlement; grants to indian tribes and
            tribal organizations.--Section 2042 of such Act (42
            U.S.C. 1397m-1) is amended--
                      (A) in subsection (a)(1)(A), by striking
                    ``State and local'' and inserting ``State,
                    local, and tribal'';
                      (B) in subsection (b)(1), by striking ``the
                    Secretary shall annually award grants to States
                    in the amounts calculated under paragraph (2)''
                    and inserting ``each State shall be entitled to
                    annually receive from the Secretary in the
                    amounts calculated under paragraph (2), and the
                    Secretary may annually award to each Indian
                    tribe and tribal organization in accordance
                    with paragraph (3), grants'';
                      (C) in subsection (b)(2)--
                              (i) in the paragraph heading, by
                            inserting ``for a state'' after
                            ``payment'';
                              (ii) in subparagraph (A), by striking
                            ``to carry out'' and inserting ``for
                            grants to States under''; and
                              (iii) in subparagraph (B)(i), by
                            striking ``such year'' and inserting
                            ``for grants to States under this
                            subsection for the fiscal year''; and
                      (D) in subsection (b), by redesignating
                    paragraphs (3) through (5) as paragraphs (4)
                    through (6), respectively, and inserting after
                    paragraph (2) the following:
              ``(3) Amount of payment to indian tribe or tribal
            organization.--The Secretary, in consultation with
            Indian tribes and tribal organizations, shall determine
            the amount of any grant to be made to each Indian tribe
            and tribal organization under this subsection.
            Paragraphs (4) and (5) shall apply to grantees under
            this paragraph in the same manner in which the
            paragraphs apply to States.'';
                      (E) in subsection (c)--
                              (i) in paragraph (1), by striking
                            ``to States'' and inserting ``to
                            States, Indian tribes, and tribal
                            organizations'';
                              (ii) in paragraph (2)--
                                      (I) in the matter preceding
                                    subparagraph (A), by inserting
                                    ``and Indian tribes and tribal
                                    organizations'' after
                                    ``government''; and
                                      (II) in subparagraph (D), by
                                    inserting ``or Indian tribe or
                                    tribal organization, as the
                                    case may be'' after
                                    ``government'';
                              (iii) in paragraph (4), by inserting
                            ``or Indian tribe or tribal
                            organization'' after ``a State'' the
                            1st place it appears; and
                              (iv) in paragraph (5)--
                                      (I) by inserting ``or Indian
                                    tribe or tribal organization''
                                    after ``Each State''; and
                                      (II) by inserting ``or Indian
                                    tribe or tribal organization,
                                    as the case may be'' after
                                    ``the State''; and
                      (F) by adding at the end the following:
      ``(d) Definitions of Indian Tribe and Tribal Organization.--
    In this section, the terms `Indian tribe' and `tribal
    organization' have the meanings given the terms in section
    419.''.
              (3) Conforming amendment.--Section 2011(2) of such
            Act (42 U.S.C. 1397j(2)) is amended by striking ``such
            services provided to adults as the Secretary may
            specify'' and inserting ``services provided by an
            entity authorized by or under State law address
            neglect, abuse, and exploitation of older adults and
            people with disabilities''.
      (c) Long-term Care Ombudsman Program Grants and Training.--
    Section 2043 of the Social Security Act (42 U.S.C. 1397m-2) is
    amended--
              (1) in subsection (a), by striking paragraph (2) and
            inserting the following:
              ``(2) Appropriation.--Out of any money in the
            Treasury not otherwise appropriated, there are
            appropriated to the Secretary to carry out this
            subsection--
                      ``(A) $22,500,000 for fiscal year 2023; and
                      ``(B) $30,000,000 for each of fiscal years
                    2024 and 2025.''; and
              (2) in subsection (b), by striking paragraph (2) and
            inserting the following:
              ``(2) Appropriation.--Out of any money in the
            Treasury not otherwise appropriated, there are
            appropriated to the Secretary $30,000,000 for each of
            fiscal years 2023 through 2025 to carry out this
            subsection.''.
      (d) Incentives for Developing and Sustaining Structural
    Competency in Providing Health and Human Services.--Part II of
    subtitle B of title XX of the Social Security Act (42 U.S.C.
    1397m-1397m-5) is amended by adding at the end the following:

    ``SEC. 2047. INCENTIVES FOR DEVELOPING AND SUSTAINING STRUCTURAL
                        COMPETENCY IN PROVIDING HEALTH AND HUMAN SERVICES.

      ``(a) Grants to States to Support Linkages to Legal Services
    and Medical Legal Partnerships.--
              ``(1) Appropriation.--Out of any money in the
            Treasury not otherwise appropriated, there are
            appropriated to the Secretary $500,000,000 for fiscal
            year 2022, to remain available for the purposes of this
            subsection through fiscal year 2028.
              ``(2) Grants.--Within 2 years after the date of the
            enactment of this section, the Secretary shall
            establish and administer a program of grants to States
            to support the adoption of evidence-based approaches to
            establishing or improving and maintaining real-time
            linkages between health and social services and
            supports for vulnerable elders or in conjunction with
            authorized representatives of vulnerable elders,
            including through the following:
                      ``(A) Medical-legal partnerships.--The
                    establishment and support of medical-legal
                    partnerships, the incorporation of the
                    partnerships in the elder justice framework and
                    health and human services safety net, and the
                    implementation and operation of such a
                    partnership by an eligible grantee--
                              ``(i) at the option of a State, in
                            conjunction with an area agency on
                            aging;
                              ``(ii) in a solo provider practice in
                            a health professional shortage area (as
                            defined in section 332(a) of the Public
                            Health Service Act), a medically
                            underserved community (as defined in
                            section 399V of such Act), or a rural
                            area (as defined in section 330J of
                            such Act);
                              ``(iii) in a minority-serving
                            institution of higher learning with
                            health, law, and social services
                            professional programs;
                              ``(iv) in a federally qualified
                            health center, as described in section
                            330 of the Public Health Service Act,
                            or look-alike, as described in section
                            1905(l)(2)(B) of this Act; or
                              ``(v) in certain hospitals that are
                            critical access hospitals, Medicare-
                            dependent hospitals, sole community
                            hospitals, rural emergency hospitals,
                            or that serve a high proportion of
                            Medicare or Medicaid patients.
                      ``(B) Legal hotlines development or
                    expansion.--The provision of incentives to
                    develop, enhance, and integrate platforms, such
                    as legal assistance hotlines, that help to
                    facilitate the identification of older adults
                    who could benefit from linkages to available
                    legal services such as those described in
                    subparagraph (A).
              ``(3) State reports.--Each State to which a grant is
            made under this subsection shall submit to the
            Secretary biannual reports on the activities carried
            out by the State pursuant to this subsection, which
            shall include assessments of the effectiveness of the
            activities with respect to--
                      ``(A) the number of unique individuals
                    identified through the mechanism outlined in
                    paragraph (2)(B) who are referred to services
                    described in paragraph (2)(A), and the average
                    time period associated with resolving issues;
                      ``(B) the success rate for referrals to
                    community-based resources; and
                      ``(C) other factors determined relevant by
                    the Secretary.
              ``(4) Evaluation.--The Secretary shall, by grant,
            contract, or interagency agreement, evaluate the
            activities conducted pursuant to this subsection, which
            shall include a comparison among the States.
              ``(5) Supplement not supplant.--Support provided to
            area agencies on aging, State units on aging, eligible
            entities, or other community-based organizations
            pursuant to this subsection shall be used to supplement
            and not supplant any other Federal, State, or local
            funds expended to provide the same or comparable
            services described in this subsection.
      ``(b) Grants and Training to Support Area Agencies on Aging
    or Other Community-based Organizations to Address Social
    Isolation Among Vulnerable Older Adults and People With
    Disabilities.--
              ``(1) Appropriation.--Out of any money in the
            Treasury not otherwise appropriated, there are
            appropriated to the Secretary $250,000,000, to remain
            available for the purposes of this subsection through
            fiscal year 2028.
              ``(2) Grants.--The Secretary shall make grants to
            eligible area agencies on aging or other community-
            based organizations for the purpose of--
                      ``(A) conducting outreach to individuals at
                    risk for, or already experiencing, social
                    isolation or loneliness, through established
                    screening tools or other methods identified by
                    the Secretary;
                      ``(B) developing community-based
                    interventions for the purposes of mitigating
                    loneliness or social isolation (including
                    evidence-based programs, as defined by the
                    Secretary, developed with multi-stakeholder
                    input for the purposes of promoting social
                    connection, mitigating social isolation or
                    loneliness, or preventing social isolation or
                    loneliness) among at-risk individuals;
                      ``(C) connecting at-risk individuals with
                    community social and clinical supports; and
                      ``(D) evaluating the effect of programs
                    developed and implemented under subparagraphs
                    (B) and (C).
              ``(3) Training.--The Secretary shall establish
            programs to provide and improve training for area
            agencies on aging or community-based organizations with
            respect to addressing and preventing social isolation
            and loneliness among older adults and people with
            disabilities.
              ``(4) Evaluation.--Not later than 3 years after the
            date of the enactment of this section and at least once
            after fiscal year 2025, the Secretary shall submit to
            the Congress a written report which assesses the extent
            to which the programs established under this subsection
            address social isolation and loneliness among older
            adults and people with disabilities.
              ``(5) Coordination.--The Secretary shall coordinate
            with resource centers, grant programs, or other funding
            mechanisms established under section 411(a)(18) of the
            Older Americans Act (42 U.S.C. 3032(a)(18)), section
            417(a)(1) of such Act (42 U.S.C. 3032F(a)(1)), or other
            programs as determined by the Secretary.
      ``(c) Definitions.--In this section:
              ``(1) Area agency on aging.--The term `area agency on
            aging' means an area agency on aging designated under
            section 305 of the Older Americans Act of 1965.
              ``(2) Social isolation.--The term `social isolation'
            means objectively being alone, or having few
            relationships or infrequent social contact.
              ``(3) Loneliness.--The term `loneliness' means
            subjectively feeling alone, or the discrepancy between
            one's desired level of social connection and one's
            actual level of social connection.
              ``(4) Social connection.--The term `social
            connection' means the variety of ways one can connect
            to others socially, through physical, behavioral,
            social-cognitive, and emotional channels.
              ``(5) Community-based organization.--The term
            `community-based organization' includes, except as
            otherwise provided by the Secretary, a nonprofit
            community-based organization, a consortium of nonprofit
            community-based organizations, a national nonprofit
            organization acting as an intermediary for a community-
            based organization, or a community-based organization
            that has a fiscal sponsor that allows the organization
            to function as an organization described in section
            501(c)(3) of the Internal Revenue Code of 1986 and
            exempt from taxation under section 501(a) of such
            Code.''.
      (e) Technical Amendment.--Section 2011(12)(A) of the Social
    Security Act (42 U.S.C. 1397j(12)(A)) is amended by striking
    ``450b'' and inserting ``5304''.

    SEC. 134202. APPROPRIATION FOR ASSESSMENTS.

      Out of any money in the Treasury not otherwise appropriated,
    there are appropriated to the Secretary of Health and Human
    Services $5,000,000 for each of fiscal years 2022 through 2025
    to prepare and submit to the Committee on Ways and Means of the
    House of Representatives and the Committee on Finance of the
    Senate, not later than 3 years after the date of enactment of
    this Act, and at least once after fiscal year 2025, reports on
    the programs, coordinating bodies, registries, and activities
    established or authorized under subtitle B of title XX of the
    Social Security Act (42 U.S.C. 1397l et seq.) or section
    6703(b) of the Patient Protection and Affordable Care Act (42
    U.S.C. 1395i-3a), which shall assess the extent to which such
    programs, coordinating bodies, registries, and activities have
    improved access to, and the quality of, resources available to
    aging Americans and their caregivers to ultimately prevent,
    detect, and treat abuse, neglect, and exploitation, and shall
    include, as appropriate, recommendations to Congress on funding
    levels and policy changes to help these programs, coordinating
    bodies, registries, and activities better prevent, detect, and
    treat abuse, neglect, and exploitation of aging Americans.

                       PART 3--SKILLED NURSING FACILITIES

    SEC. 134301. FUNDING TO IMPROVE THE ACCURACY AND RELIABILITY OF CERTAIN
                        SKILLED NURSING FACILITY DATA.

      Section 1888 of the Social Security Act (42 U.S.C. 1395yy) is
    amended--
              (1) in subsection (h)(12)--
                      (A) in subparagraph (A), by striking ``and
                    the data submitted under subsection (e)(6)''
                    and inserting ``, the data submitted under
                    subsection (e)(6), and, during the period
                    beginning with fiscal year 2024 and ending with
                    fiscal year 2031, the resident assessment data
                    described in section 1819(b)(3) and the direct
                    care staffing information described in section
                    1128I(g)''; and
                      (B) in subparagraph (B)--
                              (i) by striking ``Funding.--For
                            purposes'' and inserting ``Funding.--
                              ``(i) Fiscal years 2023 through
                            2025.--For purposes''; and
                              (ii) by adding at the end the
                            following new clause:
                              ``(ii) Fiscal years 2026 through
                            2031.--There is appropriated to the
                            Secretary, out of any monies in the
                            Treasury not otherwise appropriated,
                            $50,000,000 for the period of fiscal
                            years 2026 through 2031 for purposes of
                            carrying out this paragraph.''; and
              (2) in subsection (e)(6)(A)--
                      (A) in the header, by striking ``for failure
                    to report''; and
                      (B) in clause (i)--
                              (i) by striking ``For fiscal years''
                            and inserting the following:
                                      ``(I) Failure to report.--For
                                    fiscal years''; and
                              (ii) by adding at the end the
                            following new subclause:
                                      ``(II) Reporting of
                                    inaccurate information.--For
                                    fiscal years during the period
                                    beginning with fiscal year 2025
                                    and ending with fiscal year
                                    2031, in the case of a skilled
                                    nursing facility that submits
                                    data under this paragraph,
                                    measures under subsection (h),
                                    resident assessment data
                                    described in section
                                    1819(b)(3), or direct care
                                    staffing information described
                                    in section 1128I(g) with
                                    respect to such fiscal year
                                    that is inaccurate (as
                                    determined by the Secretary
                                    through the validation process
                                    described in section
                                    1888(h)(12) or otherwise),
                                    after determining the
                                    percentage described in
                                    paragraph (5)(B)(i), and after
                                    application of clauses (ii) and
                                    (iii) of paragraph (5)(B) and
                                    of subclause (I) of this clause
                                    (if applicable), the Secretary
                                    shall reduce such percentage
                                    for payment rates during such
                                    fiscal year by 2 percentage
                                    points.''.

    SEC. 134302. ENSURING ACCURATE INFORMATION ON COST REPORTS.

      Section 1888(f) of the Social Security Act (42 U.S.C.
    1395yy(f)) is amended by adding at the end the following new
    paragraph:
              ``(5) Audit of cost reports.--There is appropriated
            to the Secretary, out of any monies in the Treasury not
            otherwise appropriated, $250,000,000 for fiscal year
            2023 to remain available until expended, for purposes
            of conducting an annual audit (beginning with 2022 and
            ending with 2031) of cost reports submitted under this
            title for a representative sample of skilled nursing
            facilities.''.

    SEC. 134303. SURVEY IMPROVEMENTS.

      Section 1819 of the Social Security Act (42 U.S.C. 1395i-3)
    is amended by adding at the end the following new subsection:
      ``(l) Survey Improvements.--
              ``(1) In general.--There is appropriated to the
            Secretary, out of any monies in the Treasury not
            otherwise appropriated, $325,000,000, for the period of
            fiscal years 2022 through 2031, for purposes of--
                      ``(A) conducting reviews and identifying
                    plans under paragraph (2); and
                      ``(B) providing training, tools, technical
                    assistance, and financial support in accordance
                    with paragraph (3).
              ``(2) Review.--The Secretary shall conduct reviews,
            during the period specified in paragraph (1), of (and,
            as appropriate, identify plans to improve) the
            following:
                      ``(A) The extent to which surveys conducted
                    under subsection (g) and the enforcement
                    process under subsection (h) result in
                    increased compliance with requirements under
                    this section and subpart B of part 483 of title
                    42, Code of Federal Regulations, with respect
                    to skilled nursing facilities (in this
                    subsection referred to as `facilities').
                      ``(B) The timeliness and thoroughness of
                    State agency verification of deficiency
                    corrections at facilities.
                      ``(C) The appropriateness of the scoping and
                    substantiation of cited deficiencies at
                    facilities.
                      ``(D) The accuracy of the identification and
                    appropriateness of the scoping of life safety,
                    infection control, and emergency preparedness
                    deficiencies at facilities.
                      ``(E) The timeliness of State agency
                    investigations of--
                              ``(i) complaints at facilities; and
                              ``(ii) reported allegations of abuse,
                            neglect, and exploitation at
                            facilities.
                      ``(F) The consistency of facility reporting
                    of substantiated complaints to law enforcement.
                      ``(G) The ability of the State agency to
                    sufficiently hire, train, and retain
                    individuals who conduct surveys.
                      ``(H) Any other area related to surveys of
                    facilities, or the individuals conducting such
                    surveys, determined appropriate by the
                    Secretary.
              ``(3) Support.--Based on the review under paragraph
            (2), the Secretary shall, during the period specified
            in paragraph (1), provide training, tools, technical
            assistance, and financial support to State agencies
            that perform surveys of facilities for the purpose of
            improving the surveys conducted under subsection (g)
            and the enforcement process under subsection (h) with
            respect to the areas reviewed under paragraph (2).''.

    SEC. 134304. NURSE STAFFING REQUIREMENTS.

      Section 1819(d) of the Social Security Act (42 U.S.C. 1395i-
    3(d)) is amended--
              (1) in paragraph (4)(A), by inserting ``and any
            regulations promulgated under paragraph (5)(C)'' after
            ``section 1124''; and
              (2) by adding at the end the following new paragraph:
              ``(5) Nurse staffing requirements.--
                      ``(A) Funding.--There is appropriated to the
                    Secretary, out of any monies in the Treasury
                    not otherwise appropriated, $50,000,000 for the
                    period of fiscal years 2022 through 2031 for
                    purposes of carrying out this paragraph.
                      ``(B) Study.--Not later than 3 years after
                    the date of the enactment of this paragraph,
                    and not less frequently than once every 5 years
                    thereafter, the Secretary shall, out of funds
                    appropriated under subparagraph (A), conduct a
                    study and submit to Congress a report on the
                    appropriateness of establishing minimum staff
                    to resident ratios for nursing staff for
                    skilled nursing facilities. Each such report
                    shall include--
                              ``(i) with respect to the first such
                            report, recommendations regarding
                            appropriate minimum ratios of
                            registered nurses (and, if practicable,
                            licensed practical nurses (or licensed
                            vocational nurses) and certified
                            nursing assistants) to residents at
                            such skilled nursing facilities; and
                              ``(ii) with respect to each
                            subsequent such report, recommendations
                            regarding appropriate minimum ratios of
                            registered nurses, licensed practical
                            nurses (or licensed vocational nurses),
                            and certified nursing assistants to
                            residents at such skilled nursing
                            facilities.
                      ``(C) Promulgation of regulations.--
                              ``(i) In general.--Not later than 2
                            years after the Secretary first submits
                            a report under subparagraph (B), the
                            Secretary shall, out of funds
                            appropriated under subparagraph (A)--
                                      ``(I) specify through
                                    regulations, consistent with
                                    such report, appropriate
                                    minimum ratios (if any) of
                                    registered nurses (and, if
                                    practicable, licensed practical
                                    nurses (or licensed vocational
                                    nurses) and certified nursing
                                    assistants) to residents at
                                    skilled nursing facilities; and
                                      ``(II) except as provided in
                                    clause (ii), require such
                                    skilled nursing facilities to
                                    comply with such ratios.
                              ``(ii) Exception.--
                                      ``(I) In general.--In
                                    addition to the authority to
                                    waive the application of clause
                                    (i)(II) under section 1135, the
                                    Secretary may waive the
                                    application of such clause with
                                    respect to a skilled nursing
                                    facility if the Secretary finds
                                    that--
                                              ``(aa) the facility
                                            is located in a rural
                                            area and the supply of
                                            skilled nursing
                                            facility services in
                                            such area is not
                                            sufficient to meet the
                                            needs of individuals
                                            residing therein;
                                              ``(bb) the Secretary
                                            provides notice of the
                                            waiver to the State
                                            long-term care
                                            ombudsman (established
                                            under section
                                            307(a)(12) of the Older
                                            Americans Act of 1965)
                                            and the protection and
                                            advocacy system in the
                                            State for the mentally
                                            ill; and
                                              ``(cc) the facility
                                            that is granted such a
                                            waiver notifies
                                            residents of the
                                            facility (or, where
                                            appropriate, the
                                            guardians or legal
                                            representatives of such
                                            residents) and members
                                            of their immediate
                                            families of the waiver.
                                      ``(II) Renewal.--Any waiver
                                    in effect under this clause
                                    shall be subject to annual
                                    renewal.
                              ``(iii) Update.--Not later than 2
                            years after the submission of each
                            subsequent report under subparagraph
                            (B), the Secretary shall, out of funds
                            appropriated under subparagraph (A) and
                            consistent with such report, update the
                            regulations described in clause (i)(I)
                            to reflect appropriate minimum ratios
                            (if any) of registered nurses, licensed
                            practical nurses (or licensed
                            vocational nurses), and certified
                            nursing assistants to residents at
                            skilled nursing facilities.''.

             PART 4--MEDICARE DENTAL, HEARING, AND VISION COVERAGE

    SEC. 134401. PROVIDING COVERAGE FOR DENTAL AND ORAL HEALTH CARE UNDER
                        THE MEDICARE PROGRAM.

      (a) Coverage.--Section 1861(s)(2) of the Social Security Act
    (42 U.S.C. 1395x(s)(2)) is amended--
              (1) in subparagraph (GG), by striking ``and'' after
            the semicolon at the end;
              (2) in subparagraph (HH), by striking the period at
            the end and adding ``; and''; and
              (3) by adding at the end the following new
            subparagraph:
              ``(II) dental and oral health services (as defined in
            subsection (lll));''.
      (b) Dental and Oral Health Services Defined.--Section 1861 of
    the Social Security Act (42 U.S.C. 1395x) is amended by adding
    at the end the following new subsection:
      ``(lll) Dental and Oral Health Services.--
              ``(1) In general.--The term `dental and oral health
            services' means items and services (other than such
            items and services for which payment may be made under
            part A as inpatient hospital services) that are
            furnished during 2028 or a subsequent year, for which
            coverage was not provided under part B as of the date
            of the enactment of this subsection, and that are--
                      ``(A) the preventive and screening services
                    described in paragraph (2) furnished by a
                    doctor of dental surgery or of dental medicine
                    (as described in subsection (r)(2)) or an oral
                    health professional (as defined in paragraph
                    (4)); or
                      ``(B) the basic treatments specified for such
                    year by the Secretary pursuant to paragraph
                    (3)(A) and the major treatments specified for
                    such year by the Secretary pursuant to
                    paragraph (3)(B) furnished by such a doctor or
                    such a professional.
              ``(2) Preventive and screening services.--The
            preventive and screening services described in this
            paragraph are the following:
                      ``(A) Oral exams.
                      ``(B) Dental cleanings.
                      ``(C) Dental x-rays performed in the office
                    of a doctor or professional described in
                    paragraph (1)(A).
                      ``(D) Fluoride treatments.
              ``(3) Basic and major treatments.--For 2028 and each
            subsequent year, the Secretary shall specify--
                      ``(A) basic treatments (which may include
                    basic tooth restorations, basic periodontal
                    services, tooth extractions, and oral disease
                    management services); and
                      ``(B) major treatments (which may include
                    major tooth restorations, major periodontal
                    services, bridges, crowns, and root canals);
            that shall be included as dental and oral health
            services for such year.
              ``(4) Oral health professional.--The term `oral
            health professional' means, with respect to dental and
            oral health services, a health professional (other than
            a doctor of dental surgery or of dental medicine (as
            described in subsection (r)(2))) who is licensed to
            furnish such services, acting within the scope of such
            license, by the State in which such services are
            furnished.''.
      (c) Payment; Coinsurance; and Limitations.--
              (1) In general.--Section 1833(a)(1) of the Social
            Security Act (42 U.S.C. 1395l(a)(1)) is amended--
                      (A) in subparagraph (N), by inserting ``and
                    dental and oral health services (as defined in
                    section 1861(lll))'' after ``section
                    1861(hhh)(1))'';
                      (B) by striking ``and'' before ``(DD)''; and
                      (C) by inserting before the semicolon at the
                    end the following: ``and (EE) with respect to
                    dental and oral health services (as defined in
                    section 1861(lll)), the amount paid shall be
                    the payment amount specified under section
                    1834(z)''.
              (2) Payment and limits specified.--Section 1834 of
            the Social Security Act (42 U.S.C. 1395m) is amended by
            adding at the end the following new subsection:
      ``(z) Payment and Limits for Dental and Oral Health
    Services.--
              ``(1) In general.--The payment amount under this part
            for dental and oral health services (as defined in
            section 1861(lll)) shall be, subject to paragraph (3),
            the applicable percent (specified in paragraph (2)) of
            the lesser of--
                      ``(A) the actual charge for the service; or
                      ``(B) the amount determined under the payment
                    basis determined under section 1848 for the
                    service, or, in lieu of such amount, if
                    determined appropriate by the Secretary, an
                    amount specified by the Secretary for such
                    service under a fee schedule determined
                    appropriate by the Secretary, taking into
                    account fee schedules for such services--
                              ``(i) under the TRICARE program under
                            chapter 55 of title 10 of the United
                            States Code;
                              ``(ii) under the health insurance
                            program under chapter 89 of title 5 of
                            such Code;
                              ``(iii) under State plans (or waivers
                            of such plans) under title XIX;
                              ``(iv) under Medicare Advantage plans
                            under part C;
                              ``(v) established by the Secretary of
                            Veterans Affairs; and
                              ``(vi) established by other health
                            care payers.
              ``(2) Applicable percent.--For purposes of paragraph
            (1), the applicable percent specified in this paragraph
            is, with respect to dental and oral health services (as
            defined in section 1861(lll)) furnished in a year--
                      ``(A) that are preventive and screening
                    services described in paragraph (2) or basic
                    treatments specified for such year pursuant to
                    paragraph (3)(A) of such section, 80 percent;
                    and
                      ``(B) that are major treatments specified for
                    such year pursuant to paragraph (3)(B) of such
                    section--
                              ``(i) in the case such services are
                            furnished during 2028, 10 percent;
                              ``(ii) in the case such services are
                            furnished during 2029 or a subsequent
                            year before 2032, the applicable
                            percent specified under this
                            subparagraph for the previous year,
                            increased by 10 percentage points; and
                              ``(iii) in the case such services are
                            furnished during 2032 or a subsequent
                            year, 50 percent.
              ``(3) Limitations.--With respect to dental and oral
            health services that are--
                      ``(A) preventive and screening oral exams,
                    payment may be made under this part for not
                    more than two such exams during a 12-month
                    period;
                      ``(B) dental cleanings, payment may be made
                    under this part for not more than two such
                    cleanings during a 12-month period; and
                      ``(C) not described in subparagraph (A) or
                    (B), payment may be made under this part only
                    at such frequencies and under such
                    circumstances determined appropriate by the
                    Secretary.
              ``(4) Use of bundled payments.--The Secretary may
            make payment for dentures and associated professional
            services, and for any other dental and oral health
            services, as bundled payments as the Secretary
            determines appropriate.
              ``(5) Limitation on judicial review.--There shall be
            no administrative or judicial review under section 1869
            or otherwise of--
                      ``(A) the determination of payment amounts
                    under this subsection for dental and oral
                    health services and under subsection (h)(6) or
                    subsection (z)(4) for dentures;
                      ``(B) the determination of what services are
                    basic and major services under subparagraphs
                    (A) and (B) of section 1861(lll)(3); or
                      ``(C) the determination of the frequency and
                    circumstance limitations for dental and oral
                    health services under paragraph (3)(C).''.
      (d) Payment Under Physician Fee Schedule.--
              (1) In general.--Section 1848(j)(3) of the Social
            Security Act (42 U.S.C. 1395w-4(j)(3)) is amended by
            inserting ``(2)(II),'' before ``(3)''.
              (2) Exclusion from mips.--Section 1848(q)(1)(C)(ii)
            of the Social Security Act (42 U.S.C. 1395w-
            4(q)(1)(C)(ii)) is amended--
                      (A) in subclause (II), by striking ``or'' at
                    the end;
                      (B) in subclause (III), by striking the
                    period at the end and inserting ``; or''; and
                      (C) by adding at the end the following new
                    subclause:
                                      ``(IV) with respect to 2028
                                    and each subsequent year, is a
                                    doctor of dental surgery or of
                                    dental medicine (as described
                                    in section 1861(r)(2)) or is an
                                    oral health professional (as
                                    defined in section
                                    1861(lll)(4)).''.
              (3) Inclusion of oral health professionals as certain
            practitioners.--Section 1842(b)(18)(C) of the Social
            Security Act (42 U.S.C. 1395u(b)(18)(C)) is amended by
            adding at the end the following new clause:
              ``(vii) With respect to 2028 and each subsequent
            year, an oral health professional (as defined in
            section 1861(lll)(4)).''.
      (e) Dentures.--
              (1) In general.--Section 1861(s)(8) of the Social
            Security Act (42 U.S.C. 1395x(s)(8)) is amended--
                      (A) by striking ``(other than dental)''; and
                      (B) by inserting ``and excluding dental,
                    except for a full or partial set of dentures
                    (as described in section 1834(h)(6)) furnished
                    on or after January 1, 2028'' after ``colostomy
                    care''.
              (2) Special payment rules.--
                      (A) Limitations.--Section 1834(h) of the
                    Social Security Act (42 U.S.C. 1395m(h)) is
                    amended by adding at the end the following new
                    paragraph:
              ``(6) Special payment rule for dentures.--Payment may
            be made under this part with respect to an individual
            for dentures--
                      ``(A) not more than once during any 5-year
                    period (except in the case that a doctor
                    described in section 1861(lll)(1)(A) determines
                    such dentures do not fit the individual); and
                      ``(B) only to the extent that such dentures
                    are furnished pursuant to a written order of
                    such a doctor or professional.''.
                      (B) Application of competitive acquisition.--
                              (i) In general.--Section
                            1834(h)(1)(H) of the Social Security
                            Act (42 U.S.C. 1395m(h)(1)(H)) is
                            amended--
                                      (I) in the subparagraph
                                    heading, by inserting ``,
                                    dentures'' after ``orthotics'';
                                      (II) by inserting ``, of
                                    dentures described in paragraph
                                    (2)(D) of such section,'' after
                                    ``2011,''; and
                                      (III) in clause (i), by
                                    inserting ``, such dentures''
                                    after ``orthotics''.
                              (ii) Conforming amendment.--Section
                            1847(a)(2) of the Social Security Act
                            (42 U.S.C. 1395w-3(a)(2)) is amended by
                            adding at the end the following new
                            subparagraph:
                      ``(D) Dentures.--Dentures described in
                    section 1861(s)(8) for which payment would
                    otherwise be made under section 1834(h).''.
                              (iii) Exemption of certain items from
                            competitive acquisition.--Section
                            1847(a)(7) of the Social Security Act
                            (42 U.S.C. 1395w-3(a)(7)) is amended by
                            adding at the end the following new
                            subparagraph:
                      ``(C) Certain dentures.--Those items and
                    services described in paragraph (2)(D) if
                    furnished by a physician or other practitioner
                    (as defined by the Secretary) to the
                    physician's or practitioner's own patients as
                    part of the physician's or practitioner's
                    professional service.''.
      (f) Exclusion Modifications.--Section 1862(a) of the Social
    Security Act (42 U.S.C. 1395y(a)) is amended--
              (1) in paragraph (1)--
                      (A) in subparagraph (O), by striking ``and''
                    at the end;
                      (B) in subparagraph (P), by striking the
                    semicolon at the end and inserting ``, and'';
                    and
                      (C) by adding at the end the following new
                    subparagraph:
              ``(Q) in the case of dental and oral health services
            (as defined in section 1861(lll)) that are preventive
            and screening services described in paragraph (2) of
            such section, which are furnished more frequently than
            provided under section 1834(z)(3) or under
            circumstances other than circumstances determined
            appropriate under subparagraph (C) of such section;'';
            and
              (2) in paragraph (12), by inserting before the
            semicolon at the end the following: ``and except that
            payment may be made under part B for dental and oral
            health services that are covered under section
            1861(s)(2)(II) and for dentures under section
            1861(s)(8)''.
      (g) Certain Non-application.--
              (1) In general.--Paragraphs (1) and (4) of section
            1839(a) of the Social Security Act (42 U.S.C. 1395r(a))
            are amended by adding at the end of each such
            paragraphs the following: ``In applying this paragraph
            there shall not be taken into account benefits and
            administrative costs attributable to the amendments
            made by section 134401 (other than subsection (g)) of
            An Act to provide for reconciliation pursuant to title
            II of S. Con. Res. 14 and the Government contribution
            under section 1844(a)(5)''.
              (2) Payment.--Section 1844(a) of such Act (42 U.S.C.
            1395w(a)) is amended--
                      (A) in paragraph (4), by striking the period
                    at the end and inserting ``; plus'';
                      (B) by adding at the end the following new
                    paragraph:
              ``(5) a Government contribution equal to the amount
            that is estimated to be payable for benefits and
            related administrative costs incurred that are
            attributable to the amendments made by section 134401
            (other than subsection (g)) of the An Act to provide
            for reconciliation pursuant to title II of S. Con. Res.
            14.''; and
                      (C) in the flush matter at the end, by
                    striking ``paragraph (4)'' and inserting
                    ``paragraphs (4) and (5)''.
      (h) Implementation.--
              (1) Funding.--
                      (A) In general.--In addition to amounts
                    otherwise available, the Secretary of Health
                    and Human Services (in this subsection referred
                    to as the ``Secretary'') shall provide for the
                    transfer from the Federal Supplementary Medical
                    Insurance Trust Fund under section 1841 of the
                    Social Security Act (42 U.S.C. 1395t) to the
                    Centers for Medicare & Medicaid Services
                    Program Management Account of--
                              (i) $20,000,000 for each of fiscal
                            years 2022 through 2028 for purposes of
                            implementing the amendments made by
                            this section; and
                              (ii) such sums as determined
                            appropriate by the Secretary for each
                            subsequent fiscal year for purposes of
                            administering the provisions of such
                            amendments.
                      (B) Availability and additional use of
                    funds.--Funds transferred pursuant to
                    subparagraph (A) shall remain available until
                    expended and may be used, in addition to the
                    purpose specified in subparagraph (A)(i), to
                    implement the amendments made by sections
                    134402 and 134403.
              (2) Administration.--Notwithstanding any other
            provision of law, the Secretary may implement, by
            program instruction or otherwise, any of the provisions
            of, or amendments made by, this section.
              (3) Paperwork reduction act.--Chapter 35 of title 44,
            United States Code, shall not apply to the provisions
            of, or the amendments made by, this section.

    SEC. 134402. PROVIDING COVERAGE FOR HEARING CARE UNDER THE MEDICARE
                        PROGRAM.

      (a) Provision of Aural Rehabilitation and Treatment Services
    by Qualified Audiologists.--Section 1861(ll)(3) of the Social
    Security Act (42 U.S.C. 1395x(ll)(3)) is amended by inserting
    ``(and, beginning October 1, 2023, such aural rehabilitation
    and treatment services)'' after ``assessment services''.
      (b) Coverage of Hearing Aids.--
              (1) Inclusion of hearing aids as prosthetic
            devices.--Section 1861(s)(8) of the Social Security Act
            (42 U.S.C. 1395x(s)(8)) is amended by inserting ``, and
            including hearing aids (as described in section
            1834(h)(7)) furnished on or after October 1, 2023, to
            individuals diagnosed with profound or severe hearing
            loss'' before the semicolon at the end.
              (2) Payment limitations for hearing aids.--Section
            1834(h) of the Social Security Act (42 U.S.C.
            1395m(h)), as amended by section 134401(e)(2)(A), is
            further amended by adding at the end the following new
            paragraph:
              ``(7) Limitations for hearing aids.--
                      ``(A) In general.--Payment may be made under
                    this part with respect to an individual, with
                    respect to hearing aids furnished on or after
                    October 1, 2023--
                              ``(i) not more than once during a 5-
                            year period;
                              ``(ii) only for types of such hearing
                            aids that are not over-the-counter
                            hearing aids (as defined in section
                            520(q)(1) of the Federal Food, Drug,
                            and Cosmetic Act) and that are
                            determined appropriate by the
                            Secretary; and
                              ``(iii) only if furnished pursuant to
                            a written order of a physician or
                            qualified audiologist (as defined in
                            section 1861(ll)(4)(B)).
                      ``(B) Limitation on judicial review.--There
                    shall be no administrative or judicial review
                    under section 1869 or otherwise of--
                              ``(i) the determination of the types
                            of hearing aids paid for under
                            subparagraph (A)(ii); or
                              ``(ii) the determination of fee
                            schedule rates for hearing aids
                            described in this paragraph.''.
              (3) Application of competitive acquisition.--
                      (A) In general.--Section 1834(h)(1)(H) of the
                    Social Security Act (42 U.S.C. 1395m(h)(1)(H)),
                    as amended by section 134401(e)(2)(B)(i), is
                    further amended--
                              (i) in the header, by inserting ``,
                            hearing aids'' after ``dentures'';
                              (ii) by inserting ``, of hearing aids
                            described in paragraph (2)(E) of such
                            section,'' after ``paragraph (2)(D) of
                            such section''; and
                              (iii) in clause (i), by inserting ``,
                            such hearing aids'' after ``such
                            dentures''.
                      (B) Conforming amendment.--
                              (i) In general.--Section 1847(a)(2)
                            of the Social Security Act (42 U.S.C.
                            1395w-3(a)(2)), as amended by section
                            134401(e)(2)(B)(ii), is further amended
                            by adding at the end the following new
                            subparagraph:
                      ``(E) Hearing aids.--Hearing aids described
                    in section 1861(s)(8) for which payment would
                    otherwise be made under section 1834(h).''.
                              (ii) Exemption of certain items from
                            competitive acquisition.--Section
                            1847(a)(7) of the Social Security Act
                            (42 U.S.C. 1395w-3(a)(7)), as amended
                            by section 134401(e)(2)(B)(iii), is
                            further amended by adding at the end
                            the following new subparagraph:
                      ``(D) Certain hearing aids.--Those items and
                    services described in paragraph (2)(E) if
                    furnished by a physician or other practitioner
                    (as defined by the Secretary) to the
                    physician's or practitioner's own patients as
                    part of the physician's or practitioner's
                    professional service.''.
              (4) Inclusion of audiologists as certain
            practitioners to receive payment on an assignment-
            related basis.--Section 1842(b)(18)(C) of the Social
            Security Act (42 U.S.C. 1395u(b)(18)(C)), as amended by
            section 134401(d)(4), is further amended by adding at
            the end the following new clause:
                              ``(viii) Beginning October 1, 2023, a
                            qualified audiologist (as defined in
                            section 1861(ll)(4)(B)).''.
      (c) Exclusion Modification.--Section 1862(a)(7) of the Social
    Security Act (42 U.S.C. 1395y(a)(7)) is amended by inserting
    ``(except such hearing aids or examinations therefor as
    described in and otherwise allowed under section 1861(s)(8))''
    after ``hearing aids or examinations therefor''.
      (d) Certain Non-application.--
              (1) In general.--The last sentence of section
            1839(a)(1) of the Social Security Act (42 U.S.C.
            1395r(a)(1)), as added by section 134401(g)(1), is
            amended by striking ``section 134401 (other than
            subsection (g))'' and inserting ``sections 134401
            (other than subsection (g)), 134402 (other than
            subsection (d))''.
              (2) Payment.--Paragraph (4) of section 1844(a) of
            such Act (42 U.S.C. 1395w(a)), as added by section
            134401(g)(2), is amended by striking ``section 134401
            (other than subsection (g))'' and inserting ``sections
            134401 (other than subsection (g)), 134402 (other than
            subsection (d))''.
      (e) Implementation.--
              (1) Funding.--
                      (A) In general.--In addition to amounts
                    otherwise available, the Secretary of Health
                    and Human Services (in this subsection referred
                    to as the ``Secretary'') shall provide for the
                    transfer from the Federal Supplementary Medical
                    Insurance Trust Fund under section 1841 of the
                    Social Security Act (42 U.S.C. 1395t) to the
                    Centers for Medicare & Medicaid Services
                    Program Management Account of--
                              (i) $20,000,000 for each of fiscal
                            years 2022 through 2023 for purposes of
                            implementing the amendments made by
                            this section; and
                              (ii) such sums as determined
                            appropriate by the Secretary for each
                            subsequent fiscal year for purposes of
                            administering the provisions of such
                            amendments.
                      (B) Availability and additional use of
                    funds.--Funds transferred pursuant to
                    subparagraph (A) shall remain available until
                    expended and may be used, in addition to the
                    purpose specified in subparagraph (A)(i), to
                    implement the amendments made by sections
                    134401 and 134403.
              (2) Administration.--Notwithstanding any other
            provision of law, the Secretary may implement, by
            program instruction or otherwise, any of the provisions
            of, or amendments made by, this section.
              (3) Paperwork reduction act.--Chapter 35 of title 44,
            United States Code, shall not apply to the provisions
            of, or the amendments made by, this section.

    SEC. 134403. PROVIDING COVERAGE FOR VISION CARE UNDER THE MEDICARE
                        PROGRAM.

      (a) Coverage.--Section 1861(s)(2) of the Social Security Act
    (42 U.S.C. 1395x(s)(2)), as amended by section 134401(a), is
    further amended--
              (1) in subparagraph (HH), by striking ``and'' after
            the semicolon at the end;
              (2) in subparagraph (II), by striking the period at
            the end and adding ``; and''; and
              (3) by adding at the end the following new
            subparagraph:
              ``(JJ) vision services (as defined in subsection
            (mmm));''.
      (b) Vision Services Defined.--Section 1861 of the Social
    Security Act (42 U.S.C. 1395x), as amended by section
    134401(b), is further amended by adding at the end the
    following new subsection:
      ``(mmm) Vision Services.--The term `vision services' means--
              ``(1) routine eye examinations to determine the
            refractive state of the eyes, including procedures
            performed during the course of such examination; and
              ``(2) contact lens fitting services;
    furnished on or after October 1, 2022, by or under the direct
    supervision of an ophthalmologist or optometrist who is legally
    authorized to furnish such examinations, procedures, or fitting
    services (as applicable) under State law (or the State
    regulatory mechanism provided by State law) of the State in
    which the examinations, procedures, or fitting services are
    furnished.''.
      (c) Payment Limitations.--Section 1834 of the Social Security
    Act (42 U.S.C. 1395m), as amended by section 134401(c)(2), is
    further amended by adding at the end the following new
    subsection:
      ``(aa) Limitation for Vision Services.--With respect to
    vision services (as defined in section 1861(mmm)) and an
    individual, payment may be made under this part for only 1
    routine eye examination described in paragraph (1) of such
    section and 1 contact lens fitting service described in
    paragraph (2) of such section during a 2-year period.''.
      (d) Payment Under Physician Fee Schedule.--Section 1848(j)(3)
    of the Social Security Act (42 U.S.C. 1395w-4(j)(3)), as
    amended by section 134401(d)(1), is further amended by
    inserting ``(2)(JJ),'' before ``(3)''.
      (e) Coverage of Conventional Eyeglasses and Contact Lenses.--
              (1) In general.--Section 1861(s)(8) of the Social
            Security Act (42 U.S.C. 1395x(s)(8)), as amended by
            section 134402(b)(1), is further amended by striking
            ``, and including one pair of conventional eyeglasses
            or contact lenses furnished subsequent to each cataract
            surgery with insertion of an intraocular lens'' and
            inserting ``, including one pair of conventional
            eyeglasses or contact lenses furnished subsequent to
            each cataract surgery with insertion of an intraocular
            lens, if furnished before October 1, 2022, and
            including conventional eyeglasses or contact lenses (as
            described in section 1834(h)(8)), whether or not
            furnished subsequent to such a surgery, if furnished on
            or after October 1, 2022''.
              (2) Conforming amendment.--Section 1842(b)(11)(A) of
            the Social Security Act (42 U.S.C. 1395u(b)(11)(A)) is
            amended by inserting ``furnished prior to October 1,
            2022,'' after ``relating to them,''.
      (f) Special Payment Rules for Eyeglasses and Contact
    Lenses.--
              (1) Limitations.--Section 1834(h) of the Social
            Security Act (42 U.S.C. 1395m(h)), as amended by
            section 134401(e)(2)(A) and section 134402(b)(2), is
            further amended by adding at the end the following new
            paragraph:
              ``(8) Payment limitations for eyeglasses and contact
            lenses.--
                      ``(A) In general.--With respect to eyeglasses
                    and contact lenses furnished to an individual
                    on or after October 1, 2022, subject to
                    subparagraph (B), payment may be made under
                    this part only--
                              ``(i) during a 2-year period, for
                            either 1 pair of eyeglasses (including
                            lenses and frames) or not more than a
                            2-year supply of contact lenses;
                              ``(ii) with respect to amounts
                            attributable to the lenses and frames
                            of such a pair of eyeglasses or amounts
                            attributable to such a 2-year supply of
                            contact lenses, in an amount not
                            greater than--
                                      ``(I) for a pair of
                                    eyeglasses furnished in, or a
                                    2-year supply of contact lenses
                                    beginning in, 2022--
                                              ``(aa) $85 for the
                                            lenses of such pair of
                                            eyeglasses and $85 for
                                            the frames of such pair
                                            of eyeglasses; or
                                              ``(bb) $85 for such
                                            2-year supply of
                                            contact lenses; and
                                      ``(II) for the lenses and
                                    frames of a pair of eyeglasses
                                    furnished in, or a 2-year
                                    supply of contact lenses
                                    beginning in, a subsequent
                                    year, the dollar amounts
                                    specified under this
                                    subparagraph for the previous
                                    year, increased by the
                                    percentage change in the
                                    consumer price index for all
                                    urban consumers (United States
                                    city average) for the 12-month
                                    period ending with June of the
                                    previous year;
                              ``(iii) if furnished pursuant to a
                            written order of a physician described
                            in section 1861(lll); and
                              ``(iv) if during the 2-year period
                            described in clause (i), the individual
                            did not already receive (as described
                            in subparagraph (B)) one pair of
                            conventional eyeglasses or contact
                            lenses subsequent to a cataract surgery
                            with insertion of an intraocular lens
                            furnished during such period.
                      ``(B) Exception.--With respect to a 2-year
                    period described in subparagraph (A)(i), in the
                    case of an individual who receives cataract
                    surgery with insertion of an intraocular lens,
                    notwithstanding subparagraph (A), payment may
                    be made under this part for one pair of
                    conventional eyeglasses or contact lenses
                    furnished subsequent to such cataract surgery
                    during such period.
                      ``(C) Limitation on judicial review.--There
                    shall be no administrative or judicial review
                    under section 1869 or otherwise of--
                              ``(i) the determination of the types
                            of eyeglasses and contact lenses
                            covered under this paragraph; or
                              ``(ii) the determination of fee
                            schedule rates under this subsection
                            for eyeglasses and contact lenses.''.
              (2) Application of competitive acquisition.--
                      (A) In general.--Section 1834(h)(1)(H) of the
                    Social Security Act (42 U.S.C. 1395m(h)(1)(H)),
                    as amended by section 134401(e)(2)(B)(i) and
                    section 134402(b)(3)(A), is further amended--
                              (i) in the header by inserting ``,
                            eyeglasses, and contact lenses'' after
                            ``hearing aids'';
                              (ii) by inserting ``and of eyeglasses
                            and contact lenses described in
                            paragraph (2)(F) of such section,''
                            after ``paragraph (2)(E) of such
                            section,''; and
                              (iii) in clause (i), by inserting ``,
                            or such eyeglasses and contact lenses''
                            after ``such hearing aids''.
                      (B) Conforming amendment.--
                              (i) In general.--Section 1847(a)(2)
                            of the Social Security Act (42 U.S.C.
                            1395w-3(a)(2)), as amended by section
                            134401(e)(2)(B)(ii) and section
                            134402(b)(3)(B)(i), is further amended
                            by adding at the end the following new
                            subparagraph:
                      ``(F) Eyeglasses and contact lenses.--
                    Eyeglasses and contact lenses described in
                    section 1861(s)(8) for which payment would
                    otherwise be made under section 1834(h).''.
                              (ii) Exemption of certain items from
                            competitive acquisition.--Section
                            1847(a)(7) of the Social Security Act
                            (42 U.S.C. 1395w-3(a)(7)), as amended
                            by section 134401(e)(2)(B)(iii) and
                            section 134402(b)(3)(B)(ii), is further
                            amended by adding at the end the
                            following new subparagraph:
                      ``(E) Certain eyeglasses and contact
                    lenses.--Those items and services described in
                    paragraph (2)(F) if furnished by a physician or
                    other practitioner (as defined by the
                    Secretary) to the physician's or practitioner's
                    own patients as part of the physician's or
                    practitioner's professional service.''.
      (g) Exclusion Modifications.--Section 1862(a) of the Social
    Security Act (42 U.S.C. 1395y(a)), as amended by section
    134401(f), is further amended--
              (1) in paragraph (1)--
                      (A) in subparagraph (P), by striking ``and''
                    at the end;
                      (B) in subparagraph (Q), by striking the
                    semicolon at the end and inserting ``, and'';
                    and
                      (C) by adding at the end the following new
                    subparagraph:
              ``(R) in the case of vision services (as defined in
            section 1861(mmm)) that are routine eye examinations
            and contact lens fitting services (as described in
            paragraph (1) or (2), respectively, of such section),
            which are furnished more frequently than once during a
            2-year period;''; and
              (2) in paragraph (7)--
                      (A) by inserting ``(other than such an
                    examination that is a vision service that is
                    covered under section 1861(s)(2)(JJ))'' after
                    ``eye examinations''; and
                      (B) by inserting ``(other than such a
                    procedure that is a vision service that is
                    covered under section 1861(s)(2)(JJ))'' after
                    ``refractive state of the eyes''.
      (h) Certain Non-application.--
              (1) In general.--The last sentence of section
            1839(a)(1) of the Social Security Act (42 U.S.C.
            1395r(a)(1)), as added by section 134401(g)(1) and
            amended by section 134402(d)(1), is further amended by
            inserting ``, and 134403 (other than subsection (h))''
            after ``134402 (other than subsection (d))''.
              (2) Payment.--Paragraph (4) of section 1844(a) of
            such Act (42 U.S.C. 1395w(a)), as added by section
            134401(g)(2) and amended by section 134402(d)(2), is
            further amended by inserting ``, and 134403 (other than
            subsection (h))'' after ``134402 (other than subsection
            (d))''.
      (i) Implementation.--
              (1) Funding.--
                      (A) In general.--In addition to amounts
                    otherwise available, the Secretary of Health
                    and Human Services (in this subsection referred
                    to as the ``Secretary'') shall provide for the
                    transfer from the Federal Supplementary Medical
                    Insurance Trust Fund under section 1841 of the
                    Social Security Act (42 U.S.C. 1395t) to the
                    Centers for Medicare & Medicaid Services
                    Program Management Account of--
                              (i) $20,000,000 for each of fiscal
                            years 2022 and 2023 for purposes of
                            implementing the amendments made by
                            this section; and
                              (ii) such sums as determined
                            appropriate by the Secretary for each
                            subsequent fiscal year for purposes of
                            administering the provisions of such
                            amendments.
                      (B) Availability and additional use of
                    funds.--Funds transferred pursuant to
                    subparagraph (A) shall remain available until
                    expended and may be used, in addition to the
                    purpose specified in subparagraph (A)(i), to
                    implement the amendments made by sections
                    134401 and 134402.
              (2) Administration.--Notwithstanding any other
            provision of law, the Secretary may implement, by
            program instruction or otherwise, any of the provisions
            of, or amendments made by, this section.
              (3) Paperwork reduction act.--Chapter 35 of title 44,
            United States Code, shall not apply to the provisions
            of, or the amendments made by, this section.

         Subtitle F--Infrastructure Financing and Community Development

    SEC. 135001. AMENDMENT OF 1986 CODE.

      Except as otherwise expressly provided, whenever in this
    subtitle 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.

                        PART 1--INFRASTRUCTURE FINANCING

                           Subpart A--Bond Financing

    SEC. 135101. CREDIT TO ISSUER FOR CERTAIN INFRASTRUCTURE BONDS.

      (a) In General.--Subchapter B of chapter 65 is amended by
    inserting before section 6432 the following new section:

    ``SEC. 6431A. CREDIT ALLOWED TO ISSUER FOR QUALIFIED INFRASTRUCTURE
                        BONDS.

      ``(a) In General.--In the case of a qualified infrastructure
    bond, the issuer of such bond shall be allowed a credit with
    respect to each interest payment under such bond which shall be
    payable by the Secretary as provided in subsection (b).
      ``(b) Payment of Credit.--
              ``(1) In general.--The Secretary shall pay
            (contemporaneously with each date on which interest is
            paid, including any interest paid after the originally
            scheduled payment date) to the issuer of such bond (or,
            at the direction of the issuer, to any person who makes
            such interest payments on behalf of such issuer) an
            amount equal to the applicable percentage of such
            interest so paid.
              ``(2) Applicable percentage.--For purposes of this
            subsection, except as provided in subsection (d), the
            applicable percentage with respect to any bond shall be
            determined under the following table:
    ``In the case of a bThe applicable percentage is:ar:
        2022 through 2024.........................................       35%
        2025......................................................       32%
        2026......................................................       30%
        2027 and thereafter.......................................       28%
              ``(3) Limitation.--
                      ``(A) In general.--The amount of any interest
                    payment taken into account under paragraph (1)
                    with respect to a bond for any payment date
                    shall not exceed the amount of interest which
                    would have been payable under such bond for
                    such payment date if interest were determined
                    at the applicable credit rate multiplied by the
                    applicable amount for such bond for such
                    payment date.
                      ``(B) Applicable credit rate.--For purposes
                    of subparagraph (A)--
                              ``(i) In general.--The applicable
                            credit rate is the rate which the
                            Secretary estimates will permit the
                            issuance of qualified infrastructure
                            bonds with a specified maturity or
                            redemption date without discount and
                            without additional interest cost to the
                            issuer.
                              ``(ii) Date of determination.--The
                            applicable credit rate with respect to
                            any qualified infrastructure bond shall
                            be determined as of the first day on
                            which there is a binding, written
                            contract for the sale or exchange of
                            the bond.
                      ``(C) Applicable amount.--
                              ``(i) Bonds with more than de minimis
                            original issue discount.--In the case
                            of any bond that has more than a de
                            minimis amount of original issue
                            discount (determined under the rules of
                            section 1273(a)(3)), the applicable
                            amount for a payment date is the issue
                            price of such bond (within the meaning
                            of section 148), as adjusted for any
                            principal payments made prior to such
                            date.
                              ``(ii) Other bonds.--In the case of
                            any other bond, the applicable amount
                            for a payment date is the outstanding
                            principal amount of such bond on such
                            payment date (determined without taking
                            into account any principal payment on
                            such bond on such date).
      ``(c) Qualified Infrastructure Bond.--
              ``(1) In general.--For purposes of this section, the
            term `qualified infrastructure bond' means any bond
            (other than a private activity bond) issued as part of
            an issue if--
                      ``(A) 100 percent of the excess of available
                    project proceeds of such issue over the amounts
                    in a reasonably required reserve (within the
                    meaning of section 150(a)(3)) with respect to
                    such issue are to be used for--
                              ``(i) capital expenditures or
                            operations and maintenance expenditures
                            in connection with property the
                            acquisition, construction, or
                            improvement of which would be a capital
                            expenditure, or
                              ``(ii) payments made by a State or
                            political subdivision of a State to a
                            custodian of a rail corridor for
                            purposes of the transfer, lease, sale,
                            or acquisition of an established
                            railroad right-of-way consistent with
                            section 8(d) of the National Trails Act
                            of 1968, but only if the Surface
                            Transportation Board has issued a
                            certificate of interim trail use or
                            notice of interim trail use for
                            purposes of authorizing such transfer,
                            lease, sale, or acquisition,
                      ``(B) the interest on such bond would (but
                    for this section) be excludable from gross
                    income under section 103,
                      ``(C) the issue price has not more than a de
                    minimis amount (determined under rules similar
                    to the rules of section 1273(a)(3)) of premium
                    over the stated principal amount of the bond,
                    and
                      ``(D) prior to the issuance of such bond, the
                    issuer makes an irrevocable election to have
                    this section apply.
              ``(2) Applicable rules.--For purposes of applying
            paragraph (1)--
                      ``(A) Not treated as federally guaranteed.--
                    For purposes of section 149(b), a qualified
                    infrastructure bond shall not be treated as
                    federally guaranteed by reason of the credit
                    allowed under this section.
                      ``(B) Application of arbitrage rules.--For
                    purposes of section 148, the yield on a
                    qualified infrastructure bond shall be reduced
                    by the credit allowed under this section,
                    except that no such reduction shall apply in
                    determining the amount of gross proceeds of an
                    issue that qualifies as a reasonably required
                    reserve or replacement fund.
      ``(d) Definition and Special Rules.--For purposes of this
    section--
              ``(1) Interest includible in gross income.--For
            purposes of this title, interest on any qualified
            infrastructure bond shall be includible in gross
            income.
              ``(2) Available project proceeds.--The term
            `available project proceeds' means--
                      ``(A) the excess of--
                              ``(i) the proceeds from the sale of
                            an issue, over
                              ``(ii) issuance costs financed by the
                            issue (to the extent that such costs do
                            not exceed 2 percent of such proceeds),
                            and
                      ``(B) the proceeds from any investment of the
                    excess described in subparagraph (A).
              ``(3) Current refundings allowed.--
                      ``(A) In general.--In the case of a bond
                    issued to refund a qualified infrastructure
                    bond, such refunding bond shall not be treated
                    as a qualified infrastructure bond for purposes
                    of this section unless--
                              ``(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,
                              ``(iii) the refunded bond is redeemed
                            not later than 90 days after the date
                            of the issuance of the refunding bond,
                            and
                              ``(iv) the refunded bond was issued
                            more than 30 days after the date of the
                            enactment of this section.
                      ``(B) Applicable percentage limitation.--The
                    applicable percentage with respect to any bond
                    to which subparagraph (A) applies shall be 28
                    percent.
                      ``(C) Determination of average maturity.--For
                    purposes of subparagraph (A)(i), average
                    maturity shall be determined in accordance with
                    section 147(b)(2)(A).
              ``(4) Application of davis-bacon act requirements
            with respect to qualified infrastructure bonds.--
            Subchapter IV of chapter 31 of title 40, United States
            Code, shall apply to projects financed with the
            proceeds of qualified infrastructure bonds.
      ``(e) Regulations.--The Secretary may prescribe such
    regulations and other guidance as may be necessary or
    appropriate to carry out this section.''.
      (b) Gross-up of Payment to Issuers in Case of
    Sequestration.--In the case of any payment under section 6431A
    of the Internal Revenue Code of 1986 made after the date of the
    enactment of this Act to which sequestration applies, the
    amount of such payment shall be increased to an amount equal
    to--
              (1) such payment (determined before such
            sequestration), multiplied by
              (2) the quotient obtained by dividing 1 by the amount
            by which 1 exceeds the percentage reduction in such
            payment pursuant to such sequestration.
    For purposes of this subsection, the term ``sequestration''
    means any reduction in direct spending ordered in accordance
    with a sequestration report prepared by the Director of the
    Office and Management and Budget pursuant to the Balanced
    Budget and Emergency Deficit Control Act of 1985 or the
    Statutory Pay-As-You-Go Act of 2010.
      (c) Conforming Amendments.--
              (1) Section 1324(b)(2) of title 31, United States
            Code, is amended by striking ``or 6431'' and inserting
            ``6431, or 6431A''.
              (2) The table of sections for subchapter B of chapter
            65 is amended by inserting before the item relating to
            section 6432 the following new item:

    ``Sec. 6431A. Credit allowed to issuer for qualified infrastructure
              bonds.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to bonds issued after December 31, 2021.

    SEC. 135102. ADVANCE REFUNDING BONDS.

      (a) In General.--Section 149(d) is amended--
              (1) by striking ``to advance refund another bond.''
            in paragraph (1) and inserting ``as part of an issue
            described in paragraph (2), (3), or (4).'',
              (2) by redesignating paragraphs (2) and (3) as
            paragraphs (5) and (7), respectively,
              (3) by inserting after paragraph (1) the following
            new paragraphs:
              ``(2) Certain private activity bonds.--An issue is
            described in this paragraph if any bond (issued as part
            of such issue) is issued to advance refund a private
            activity bond (other than a qualified 501(c)(3) bond).
              ``(3) Other bonds.--
                      ``(A) In general.--An issue is described in
                    this paragraph if any bond (issued as part of
                    such issue), hereinafter in this paragraph
                    referred to as the `refunding bond', is issued
                    to advance refund a bond unless--
                              ``(i) the refunding bond is only--
                                      ``(I) the first advance
                                    refunding of the original bond
                                    if the original bond is issued
                                    after 1985, or
                                      ``(II) the first or second
                                    advance refunding of the
                                    original bond if the original
                                    bond was issued before 1986,
                              ``(ii) in the case of refunded bonds
                            issued before 1986, the refunded bond
                            is redeemed not later than the earliest
                            date on which such bond may be redeemed
                            at par or at a premium of 3 percent or
                            less,
                              ``(iii) in the case of refunded bonds
                            issued after 1985, the refunded bond is
                            redeemed not later than the earliest
                            date on which such bond may be
                            redeemed,
                              ``(iv) the initial temporary period
                            under section 148(c) ends--
                                      ``(I) with respect to the
                                    proceeds of the refunding bond
                                    not later than 30 days after
                                    the date of issue of such bond,
                                    and
                                      ``(II) with respect to the
                                    proceeds of the refunded bond
                                    on the date of issue of the
                                    refunding bond, and
                              ``(v) in the case of refunded bonds
                            to which section 148(e) did not apply,
                            on and after the date of issue of the
                            refunding bond, the amount of proceeds
                            of the refunded bond invested in higher
                            yielding investments (as defined in
                            section 148(b)) which are nonpurpose
                            investments (as defined in section
                            148(f)(6)(A)) does not exceed--
                                      ``(I) the amount so invested
                                    as part of a reasonably
                                    required reserve or replacement
                                    fund or during an allowable
                                    temporary period, and
                                      ``(II) the amount which is
                                    equal to the lesser of 5
                                    percent of the proceeds of the
                                    issue of which the refunded
                                    bond is a part or $100,000 (to
                                    the extent such amount is
                                    allocable to the refunded
                                    bond).
                      ``(B) Special rules for redemptions.--
                              ``(i) Issuer must redeem only if debt
                            service savings.--Clause (ii) and (iii)
                            of subparagraph (A) shall apply only if
                            the issuer may realize present value
                            debt service savings (determined
                            without regard to administrative
                            expenses) in connection with the issue
                            of which the refunding bond is a part.
                              ``(ii) Redemptions not required
                            before 90th day.--For purposes of
                            clauses (ii) and (iii) of subparagraph
                            (A), the earliest date referred to in
                            such clauses shall not be earlier than
                            the 90th day after the date of issuance
                            of the refunding bond.
              ``(4) Abusive transactions prohibited.--An issue is
            described in this paragraph if any bond (issued as part
            of such issue) is issued to advance refund another bond
            and a device is employed in connection with the
            issuance of such issue to obtain a material financial
            advantage (based on arbitrage) apart from savings
            attributable to lower interest rates.'', and
              (4) by inserting after paragraph (5) (as so
            redesignated) the following new paragraph:
              ``(6) Special rules for purposes of paragraph (3).--
            For purposes of paragraph (3), bonds issued before
            October 22, 1986, shall be taken into account under
            subparagraph (A)(i) thereof except--
                      ``(A) a refunding which occurred before 1986
                    shall be treated as an advance refunding only
                    if the refunding bond was issued more than 180
                    days before the redemption of the refunded
                    bond, and
                      ``(B) a bond issued before 1986, shall be
                    treated as advance refunded no more than once
                    before March 15, 1986.''.
      (b) Conforming Amendment.--Section 148(f)(4)(C) is amended by
    redesignating clauses (xiv) through (xvi) as clauses (xv) to
    (xvii), respectively, and by inserting after clause (xiii) the
    following new clause:
                              ``(xiv) Determination of initial
                            temporary period.--For purposes of this
                            subparagraph, the end of the initial
                            section temporary period shall be
                            determined without regard to section
                            149(d)(3)(A)(iv).''.
      (c) Effective Date.--The amendments made by this section
    shall apply to advance refunding bonds issued more than 30 days
    after the date of the enactment of this Act.

    SEC. 135103. PERMANENT MODIFICATION OF SMALL ISSUER EXCEPTION TO TAX-
                        EXEMPT INTEREST EXPENSE ALLOCATION RULES FOR
                        FINANCIAL INSTITUTIONS.

      (a) Permanent Increase in Limitation.--Subparagraphs (C)(i),
    (D)(i), and (D)(iii)(II) of section 265(b)(3) are each amended
    by striking ``$10,000,000'' and inserting ``$30,000,000''.
      (b) Permanent Modification of Other Special Rules.--Section
    265(b)(3) is amended--
              (1) by redesignating clauses (iv), (v), and (vi) of
            subparagraph (G) as clauses (ii), (iii), and (iv),
            respectively, and moving such clauses to the end of
            subparagraph (H) (as added by paragraph (2)), and
              (2) by striking so much of subparagraph (G) as
            precedes such clauses and inserting the following:
                      ``(G) Qualified 501(c)(3) bonds treated as
                    issued by exempt organization.--In the case of
                    a qualified 501(c)(3) bond (as defined in
                    section 145), this paragraph shall be applied
                    by treating the 501(c)(3) organization for
                    whose benefit such bond was issued as the
                    issuer.
                      ``(H) Special rule for qualified
                    financings.--
                              ``(i) In general.--In the case of a
                            qualified financing issue--
                                      ``(I) subparagraph (F) shall
                                    not apply, and
                                      ``(II) any obligation issued
                                    as a part of such issue shall
                                    be treated as a qualified tax-
                                    exempt obligation if the
                                    requirements of this paragraph
                                    are met with respect to each
                                    qualified portion of the issue
                                    (determined by treating each
                                    qualified portion as a separate
                                    issue which is issued by the
                                    qualified borrower with respect
                                    to which such portion
                                    relates).''.
      (c) Inflation Adjustment.--Section 265(b)(3), as amended by
    subsection (b), is amended by adding at the end the following
    new subparagraph:
                      ``(I) Inflation adjustment.--In the case of
                    any calendar year after 2021, the $30,000,000
                    amounts contained in subparagraphs (C)(i),
                    (D)(i), and (D)(iii)(II) shall each be
                    increased by an amount equal to--
                              ``(i) such dollar amount, multiplied
                            by
                              ``(ii) the cost-of-living adjustment
                            determined under section 1(f)(3) for
                            such calendar year, determined by
                            substituting `calendar year 2020' for
                            `calendar year 2016' in subparagraph
                            (A)(ii) thereof.
                    Any increase determined under the preceding
                    sentence shall be rounded to the nearest
                    multiple of $100,000.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to obligations issued after the date of the
    enactment of this Act.

    SEC. 135104. MODIFICATIONS TO QUALIFIED SMALL ISSUE BONDS.

      (a) Manufacturing Facilities To Include Production of
    Intangible Property and Functionally Related Facilities.--
    Subparagraph (C) of section 144(a)(12) is amended to read as
    follows:
                      ``(C) Manufacturing facility.--For purposes
                    of this paragraph--
                              ``(i) In general.--The term
                            `manufacturing facility' means any
                            facility which--
                                      ``(I) is used in the
                                    manufacturing or production of
                                    tangible personal property
                                    (including the processing
                                    resulting in a change in the
                                    condition of such property),
                                      ``(II) is used in the
                                    creation or production of
                                    intangible property which is
                                    described in section
                                    197(d)(1)(C)(iii), or
                                      ``(III) is functionally
                                    related and subordinate to a
                                    facility described in subclause
                                    (I) or (II) if such facility is
                                    located on the same site as the
                                    facility described in subclause
                                    (I) or (II).
                              ``(ii) Certain facilities included.--
                            The term `manufacturing facility'
                            includes facilities that are directly
                            related and ancillary to a
                            manufacturing facility (determined
                            without regard to this clause) if--
                                      ``(I) those facilities are
                                    located on the same site as the
                                    manufacturing facility, and
                                      ``(II) not more than 25
                                    percent of the net proceeds of
                                    the issue are used to provide
                                    those facilities.
                              ``(iii) Limitation on office space.--
                            A rule similar to the rule of section
                            142(b)(2) shall apply for purposes of
                            clause (i).
                              ``(iv) Limitation on refundings for
                            certain property.--Subclauses (II) and
                            (III) of clause (i) shall not apply to
                            any bond issued on or before the date
                            of the enactment of the Act to provide
                            for reconciliation pursuant to title II
                            of S. Con. Res. 14, or to any bond
                            issued to refund a bond issued on or
                            before such date (other than a bond to
                            which clause (iii) of this subparagraph
                            (as in effect before the date of the
                            enactment of such Act) applies), either
                            directly or in a series of
                            refundings.''.
      (b) Increase in Limitations.--Section 144(a)(4) is amended--
              (1) in subparagraph (A)(i), by striking
            ``$10,000,000'' and inserting ``$30,000,000'', and
              (2) in the heading, by striking ``$10,000,000'' and
            inserting ``$30,000,000''.
      (c) Adjustment for Inflation.--Section 144(a)(4) is amended
    by adding at the end the following new subparagraph:
                      ``(H) Adjustment for inflation.--In the case
                    of any calendar year after 2021, the
                    $30,000,000 amount in subparagraph (A) shall be
                    increased by an amount equal to--
                              ``(i) such dollar amount, multiplied
                            by
                              ``(ii) the cost-of-living adjustment
                            determined under section 1(f)(3) for
                            the calendar year, determined by
                            substituting `calendar year 2020' for
                            `calendar year 2016' in subparagraph
                            (A)(ii) thereof.
                    If any amount as increased under the preceding
                    sentence is not a multiple of $100,000, such
                    amount shall be rounded to the nearest multiple
                    of $100,000.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to obligations issued after the date of the
    enactment of this Act.

    SEC. 135105. EXPANSION OF CERTAIN EXCEPTIONS TO THE PRIVATE ACTIVITY
                        BOND RULES FOR FIRST-TIME FARMERS.

      (a) Increase in Dollar Limitation.--
              (1) In general.--Section 147(c)(2)(A) is amended by
            striking ``$450,000'' and inserting ``$552,500''.
              (2) Repeal of separate lower dollar limitation on
            used farm equipment.--Section 147(c)(2) is amended by
            striking subparagraph (F) and by redesignating
            subparagraphs (G) and (H) as subparagraphs (F) and (G),
            respectively.
              (3) Qualified small issue bond limitation conformed
            to increased dollar limitation.--Section 144(a)(11)(A)
            is amended by striking ``$250,000'' and inserting
            ``$552,500''.
              (4) Inflation adjustment.--
                      (A) In general.--Section 147(c)(2)(G), as
                    redesignated by paragraph (2), is amended--
                              (i) by striking ``after 2008, the
                            dollar amount in subparagraph (A) shall
                            be increased'' and inserting ``after
                            2021, the dollar amounts in
                            subparagraph (A) and section
                            144(a)(11)(A) shall each be
                            increased'', and
                              (ii) in clause (ii), by striking
                            ``2007'' and inserting ``2020''.
                      (B) Cross-reference.--Section 144(a)(11) is
                    amended by adding at the end the following new
                    subparagraph:
                      ``(D) Inflation adjustment.--For inflation
                    adjustment of dollar amount contained in
                    subparagraph (A), see section 147(c)(2)(G).''.
      (b) Substantial Farmland Determined on Basis of Average
    Rather Than Median Farm Size.--Section 147(c)(2)(E) is amended
    by striking ``median'' and inserting ``average''.
      (c) Effective Date.--The amendments made by this section
    shall apply to bonds issued after the date of the enactment of
    this Act.

    SEC. 135106. CERTAIN WATER AND SEWAGE FACILITY BONDS EXEMPT FROM VOLUME
                        CAP ON PRIVATE ACTIVITY BONDS.

      (a) In General.--Section 146(g) is amended by striking
    ``and'' at the end of paragraph (3), striking the period at the
    end of paragraph (4) and inserting ``, and'', and inserting
    after paragraph (4) the following new paragraph:
              ``(5) any exempt facility bond issued as part of an
            issue described in paragraph (4) or (5) of section
            142(a) if 95 percent or more of the net proceeds of
            such issue are to be used to provide facilities which--
                      ``(A) will be used--
                              ``(i) by a person who was, as of July
                            1, 2020, engaged in operation of a
                            facility described in such paragraph,
                            and
                              ``(ii) to provide service within the
                            area served by such person on such date
                            (or within a county or city any portion
                            of which is within such area), or
                      ``(B) will be used by a successor in interest
                    to such person for the same use and within the
                    same service area as described in subparagraph
                    (A).''.
      (b) Effective Date.--The amendments made by this section
    shall apply to bonds issued after the date of the enactment of
    this Act.

    SEC. 135107. EXEMPT FACILITY BONDS FOR ZERO-EMISSION VEHICLE
                        INFRASTRUCTURE.

      (a) In General.--Section 142 is amended--
              (1) in subsection (a)--
                      (A) in paragraph (14), by striking ``or'' at
                    the end,
                      (B) in paragraph (15), by striking the period
                    at the end and inserting ``, or'', and
                      (C) by adding at the end the following new
                    paragraph:
              ``(16) zero-emission vehicle infrastructure.'', and
              (2) by adding at the end the following new
            subsection:
      ``(n) Zero-Emission Vehicle Infrastructure.--
              ``(1) In general.--For purposes of subsection
            (a)(16), the term `zero-emission vehicle
            infrastructure' means any property (not including a
            building and its structural components) if such
            property is part of a unit which--
                      ``(A) is used to charge or fuel zero-
                    emissions vehicles,
                      ``(B) is located where the vehicles are
                    charged or fueled,
                      ``(C) is of a character subject to the
                    allowance for depreciation (or amortization in
                    lieu of depreciation),
                      ``(D) is made available for use by members of
                    the general public,
                      ``(E) accepts payment via a credit card
                    reader, including a credit card reader that
                    uses contactless technology, and
                      ``(F) is capable of charging or fueling
                    vehicles produced by more than one manufacturer
                    (within the meaning of section 30D(d)(3)).
              ``(2) Inclusion of utility service connections,
            etc.--The term `zero-emission vehicle infrastructure'
            shall include any utility service connections, utility
            panel upgrades, line extensions and conduit,
            transformer upgrades, or similar property, in
            connection with property meeting the requirements of
            paragraph (1).
              ``(3) Zero-emissions vehicle.--The term `zero-
            emissions vehicle' means--
                      ``(A) a zero-emission vehicle as defined in
                    section 88.102-94 of title 40, Code of Federal
                    Regulations, or
                      ``(B) a vehicle that produces zero exhaust
                    emissions of any criteria pollutant (or
                    precursor pollutant) or greenhouse gas under
                    any possible operational modes and conditions.
              ``(4) Zero-emissions vehicle infrastructure located
            within other facilities or projects.--For purposes of
            subsection (a), any zero-emission vehicle
            infrastructure located within--
                      ``(A) a facility or project described in
                    subsection (a), or
                      ``(B) an area adjacent to a facility or
                    project described in subsection (a) that
                    primarily serves vehicles traveling to or from
                    such facility or project,
            shall be treated as described in the paragraph in which
            such facility or project is described.
              ``(5) Exception for refueling property for fleet
            vehicles.--Subparagraphs (D), (E), and (F) of paragraph
            (1) shall not apply to property which is part of a unit
            which is used exclusively by fleets of commercial or
            governmental vehicles.''.
      (b) Effective Date.--The amendments made by this section
    shall apply to obligations issued after December 31, 2021.

    SEC. 135108. APPLICATION OF DAVIS-BACON ACT REQUIREMENTS WITH RESPECT
                        TO CERTAIN EXEMPT FACILITY BONDS.

      (a) In General.--Section 142(b) is amended by adding at the
    end the following new paragraph:
              ``(3) Application of davis-bacon act requirements
            with respect to certain exempt facility bonds.--If any
            proceeds of any issue are used for construction,
            alteration, or repair of any facility otherwise
            described in paragraph (4), (5), (15), or (16) of
            subsection (a), such facility shall be treated for
            purposes of subsection (a) as described in such
            paragraph only if each entity that receives such
            proceeds to conduct such construction, alteration, or
            repair agrees to comply with the provisions of
            subchapter IV of chapter 31 of title 40, United States
            Code with respect to such construction, alteration, or
            repair.''.
      (b) Effective Date.--The amendment made by this section shall
    apply to bonds issued after the date of the enactment of this
    Act.

        Subpart B--Other Provisions Related to Infrastructure Financing

    SEC. 135111. CREDIT FOR OPERATIONS AND MAINTENANCE COSTS OF GOVERNMENT-
                        OWNED BROADBAND.

      (a) In General.--Subchapter B of chapter 65, as amended by
    the preceding provisions of this Act, is amended by inserting
    before section 6432 the following new section:

    ``SEC. 6431B. CREDIT FOR OPERATIONS AND MAINTENANCE COSTS OF
                        GOVERNMENT-OWNED BROADBAND.

      ``(a) In General.--In the case of any eligible governmental
    entity, there shall be allowed a credit equal to the applicable
    percentage of the qualified broadband expenses paid or incurred
    by such entity during the taxable year which credit shall be
    payable by the Secretary as provided in subsection (b).
      ``(b) Payment of Credit.--Upon receipt from an eligible
    governmental entity of such information as the Secretary may
    require for purposes of carrying out this section, the
    Secretary shall pay to such entity the amount of the credit
    determined under subsection (a) for the taxable year.
      ``(c) Limitation.--The amount of qualified broadband expenses
    taken into account under this section for any taxable year with
    respect to any qualified broadband network shall not exceed the
    product of $400 multiplied by the number of qualified
    households subscribed to the qualified broadband service
    provided by such network (determined as of any time during such
    taxable year).
      ``(d) Definitions.--For purposes of this section--
              ``(1) Applicable percentage.--The term `applicable
            percentage' means--
                      ``(A) in the case of any taxable year
                    beginning in 2021 through 2026, 30 percent,
                      ``(B) in the case of any taxable year
                    beginning in 2027, 26 percent, and
                      ``(C) in the case of any taxable year
                    beginning in 2028, 24 percent.
              ``(2) Eligible governmental entity.--The term
            `eligible governmental entity' means--
                      ``(A) any State, local, or Indian tribal
                    government,
                      ``(B) any political subdivision or
                    instrumentality of any government described in
                    subparagraph (A), and
                      ``(C) any entity wholly owned by one or more
                    entities described in subparagraph (A) or (B).
            For purposes of this paragraph, the term `State'
            includes any possession of the United States.
              ``(3) Qualified broadband expenses.--The term
            `qualified broadband expenses' means so much of the
            amounts paid or incurred for the operation and
            maintenance of a qualified broadband network as are
            properly allocable to qualified households subscribed
            to the qualified broadband service provided by such
            network.
              ``(4) Qualified household.--The term `qualified
            household' means a personal residence which--
                      ``(A) is located in a low-income community
                    (as defined in section 45D(e)), and
                      ``(B) did not have access to qualified
                    broadband service from the eligible
                    governmental entity (determined as of the
                    beginning of the taxable year of such entity).
              ``(5) Qualified broadband network.--The term
            `qualified broadband network' means property owned by
            an eligible governmental entity and used for the
            purpose of providing qualified broadband service.
              ``(6) Qualified broadband service.--The term
            `qualified broadband service' means fixed, terrestrial
            broadband service providing downloads at a speed of at
            least 25 megabits per second and uploads at a speed of
            at least 3 megabits per second.
              ``(7) Taxable year.--Except as otherwise provided by
            the Secretary, the term `taxable year' means, with
            respect to any eligible governmental entity, the fiscal
            year of such entity.
      ``(e) Special Rules.--
              ``(1) Allocations.--For purposes of subsection
            (d)(3), amounts shall be treated as properly allocated
            if allocated ratably among the subscribers of the
            qualified broadband service.
              ``(2) Denial of double benefit.--Qualified broadband
            expenses shall not include any amount which is paid or
            reimbursed (directly or indirectly) by any grant from
            the Federal Government.
      ``(f) Regulations.--The Secretary may prescribe such
    regulations and other guidance as may be necessary or
    appropriate to carry out this section.
      ``(g) Termination.--No credit shall be allowed under this
    section for any taxable year beginning after December 31,
    2028.''.
      (b) Payments Made Under Section 6431B(b) of Internal Revenue
    Code of 1986.--Section 255(h) of the Balanced Budget and
    Emergency Deficit Control Act of 1985 (2 U.S.C. 905(h)) is
    amended by inserting: ``Payments made under section 6431B(b) of
    the Internal Revenue Code of 1986'' after the item related to
    Payments for Foster Care and Permanency.
      (c) Conforming Amendments.--
              (1) Section 1324(b)(2) of title 31, United States
            Code, as amended by the preceding provisions of this
            Act, is amended by striking ``or 6431A'' and inserting
            ``6431A, or 6431B''.
              (2) The table of sections for subchapter B of chapter
            65, as amended by the preceding provisions of this Act,
            is amended by inserting before the item relating to
            section 6432 the following new item:

    ``Sec. 6431B. Credit for operations and maintenance costs of government-
              owned broadband.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2020.

                         PART 2--NEW MARKETS TAX CREDIT

    SEC. 135201. PERMANENT EXTENSION OF NEW MARKETS TAX CREDIT.

      (a) Temporary Limit Increase and Permanent Extension.--
    Section 45D(f)(1) is amended by striking ``and'' at the end of
    subparagraph (G) and by striking subparagraph (H) and inserting
    the following new subparagraphs:
                      ``(H) $5,000,000,000 for each of calendar
                    years 2020 and 2021,
                      ``(I) $7,000,000,000 for calendar year 2022,
                      ``(J) $6,000,000,000 for calendar year 2023,
                    and
                      ``(K) $5,000,000,000 for calendar year 2024
                    and each calendar year thereafter.''.
      (b) Alternative Minimum Tax Relief.--Section 38(c)(4)(B) is
    amended--
              (1) by redesignating clauses (v) through (xii) as
            clauses (vi) through (xiii), respectively, and
              (2) 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 after December 31, 2021,''.
      (c) Inflation Adjustment.--Section 45D(f) is amended by
    adding at the end the following new paragraph:
              ``(4) Inflation adjustment.--
                      ``(A) In general.--In the case of any
                    calendar year beginning after 2024, the dollar
                    amount paragraph (1)(H) shall be increased by
                    an amount equal to--
                              ``(i) such dollar amount, multiplied
                            by
                              ``(ii) the cost-of-living adjustment
                            determined under section 1(f)(3) for
                            the calendar year, determined by
                            substituting `calendar year 2023' for
                            `calendar year 2016' in subparagraph
                            (A)(ii) thereof.
                      ``(B) Rounding rule.--Any increase under
                    subparagraph (A) which is not a multiple of
                    $1,000,000 shall be rounded to the nearest
                    multiple of $1,000,000.''.
      (d) Conforming Amendment.--Section 45D(f)(3) is amended by
    striking the last sentence.
      (e) Effective Dates.--
              (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall
            apply to new markets tax credit limitation determined
            for calendar years after 2021.
              (2) Alternative minimum tax relief.--The amendments
            made by subsection (b) 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 December 31, 2021.

                       PART 3--REHABILITATION TAX CREDIT

    SEC. 135301. DETERMINATION OF CREDIT PERCENTAGE.

      (a) In General.--Section 47(a)(2) is amended by striking ``20
    percent'' and inserting ``the applicable percentage''.
      (b) Applicable Percentage.--Section 47(a) is amended by
    adding at the end the following new paragraph:
              ``(3) 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 taxable years beginning:                      The applicable percentage is:
    ----------------------------------------------------------------------------------------------------------------
    Before 2020..................................  20 percent
    In 2020 through 2025.........................  30 percent
    In 2026......................................  26 percent
    In 2027......................................  23 percent
    After 2027...................................  20 percent
    ----------------------------------------------------------------------------------------------------------------

              ``(4) Application of percentages to year of
            expenditure.--In the case of qualified rehabilitation
            expenditures with respect to the qualified
            rehabilitated building that are paid or incurred in 2
            or more taxable years for which there is a different
            applicable percentage under paragraph (3), the ratable
            share shall be determined by applying to such
            expenditures the applicable percentage corresponding to
            the taxable year in which such expenditures were paid
            or incurred.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to property placed in service after March 31, 2021.

    SEC. 135302. INCREASE IN THE REHABILITATION CREDIT FOR CERTAIN SMALL
                        PROJECTS.

      (a) In General.--Section 47 is amended by adding at the end
    the following new subsection:
      ``(e) Special Rule Regarding Certain Smaller Projects.--
              ``(1) In general.--In the case of any smaller
            project--
                      ``(A) the applicable percentage determined
                    under subsection (a)(3) shall be 30 percent,
                    and
                      ``(B) the qualified rehabilitation
                    expenditures taken into account under this
                    section with respect to such project shall not
                    exceed $2,500,000.
              ``(2) Smaller project.--For purposes of this
            subsection, the term `smaller project' means the
            rehabilitation of any qualified rehabilitated building
            if--
                      ``(A) the qualified rehabilitation
                    expenditures taken into account under this
                    section (or which would be so taken into
                    account but for paragraph (1)(B)) with respect
                    to such rehabilitation do not exceed
                    $3,750,000,
                      ``(B) no credit was allowed under this
                    section with respect to such building to any
                    taxpayer for either of the 2 taxable years
                    immediately preceding the first taxable year in
                    which expenditures described in subparagraph
                    (A) were paid or incurred, and
                      ``(C) the taxpayer elects (at such time and
                    manner as the Secretary may provide) to have
                    this subsection apply with respect to such
                    rehabilitation.''.
      (b) Effective Date.--The amendment made by this section shall
    apply to taxable years beginning after December 31, 2021.

    SEC. 135303. MODIFICATION OF DEFINITION OF SUBSTANTIALLY REHABILITATED.

      (a) In General.--Section 47(c)(1)(B)(i)(I) is amended by
    inserting ``50 percent of'' before ``the adjusted basis''.
      (b) Effective Date.--The amendment made by subsection (a)
    shall apply to determinations with respect to 24-month periods
    (referred to in clause (i) of section 47(c)(1)(B) of the
    Internal Revenue Code of 1986) and 60-month periods (referred
    to in clause (ii) of such section) which end after December 31,
    2021.

    SEC. 135304. ELIMINATION OF REHABILITATION CREDIT BASIS ADJUSTMENT.

      (a) In General.--Section 50(c) is amended by adding at the
    end the following new paragraph:
              ``(6) Exception for rehabilitation credit.--In the
            case of the rehabilitation credit, paragraph (1) shall
            not apply.''.
      (b) Treatment in Case of Credit Allowed to Lessee.--Section
    50(d) is amended by adding at the end the following: ``In the
    case of the rehabilitation credit, paragraph (5)(B) of the
    section 48(d) referred to in paragraph (5) of this subsection
    shall not apply.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to property placed in service after December 31,
    2022.

    SEC. 135305. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT USE PROPERTY.

      (a) In General.--Section 47(c)(2)(B)(v) is amended by adding
    at the end the following new subclause:
                                      ``(III) Disqualified lease
                                    rules to apply only in case of
                                    government entity.--For
                                    purposes of subclause (I),
                                    except in the case of a tax-
                                    exempt entity described in
                                    section 168(h)(2)(A)(i)
                                    (determined without regard to
                                    the last sentence of section
                                    168(h)(2)(A)), the
                                    determination of whether
                                    property is tax-exempt use
                                    property shall be made under
                                    section 168(h) without regard
                                    to whether the property is
                                    leased in a disqualified lease
                                    (as defined in section
                                    168(h)(1)(B)(ii)).''.
      (b) Effective Date.--The amendments made by this section
    shall apply to leases entered into after December 31, 2021.

    SEC. 135306. QUALIFICATION OF REHABILITATION EXPENDITURES FOR PUBLIC
                        SCHOOL BUILDINGS FOR REHABILITATION CREDIT.

      (a) In General.--Section 47(c)(2)(B)(v), as amended by the
    preceding provisions of this Act, is amended by adding at the
    end the following new subclause:
                                      ``(IV) Clause not to apply to
                                    public schools.--This clause
                                    shall not apply in the case of
                                    the rehabilitation of any
                                    building which was used as a
                                    qualified public educational
                                    facility (as defined in section
                                    142(k)(1), determined without
                                    regard to subparagraph (B)
                                    thereof) at any time during the
                                    5-year period ending on the
                                    date that such rehabilitation
                                    begins and which is used as
                                    such a facility immediately
                                    after such rehabilitation.''.
      (b) Report.--Not later than the date which is 5 years after
    the date of the enactment of this Act, the Secretary of the
    Treasury, after consultation with the heads of appropriate
    Federal agencies, shall report to Congress on the effects
    resulting from the amendment made by subsection (a),
    including--
              (1) the number of qualified public education
            facilities rehabilitated (stated separately with
            respect to each State) and the number of students using
            such facilities (stated separately with respect to each
            such State),
              (2) the number of qualified public education
            facilities rehabilitated in low income communities (as
            section 45D(e)(1) of the Internal Revenue Code of 1986)
            and the number of students using such facilities,
              (3) the amount of qualified rehabilitation
            expenditures for each qualified public education
            facility rehabilitated, and
              (4) and any other data determined by the Secretary to
            be useful in evaluating the impact of such amendment.
      (c) Effective Date.--The amendment made by this section shall
    apply to property placed in service after December 31, 2021.

                        PART 4--DISASTER AND RESILIENCY

    SEC. 135401. EXCLUSION OF AMOUNTS RECEIVED FROM STATE-BASED CATASTROPHE
                        LOSS MITIGATION PROGRAMS.

      (a) In General.--Section 139 is amended by redesignating
    subsection (h) as subsection (i) and by inserting after
    subsection (g) the following new subsection:
      ``(h) State-Based Catastrophe Loss Mitigation Programs.--
              ``(1) In general.--Gross income shall not include any
            amount received by an individual as a qualified
            catastrophe mitigation payment under a program
            established by a State, or a political subdivision or
            instrumentality thereof, for the purpose of making such
            payments.
              ``(2) Qualified catastrophe mitigation payment.--For
            purposes of this section, the term `qualified
            catastrophe mitigation payment' means any amount which
            is received by an individual to make improvements to
            such individual's residence for the sole purpose of
            reducing the damage that would be done to such
            residence by a windstorm, earthquake, or wildfire.
              ``(3) No increase in basis.--Rules similar to the
            rules of subsection (g)(3) shall apply in the case of
            this subsection.''.
      (b) Conforming Amendments.--
              (1) Section 139(d) is amended by striking ``and
            qualified'' and inserting ``, qualified catastrophe
            mitigation payments, and qualified''.
              (2) Section 139(i) (as redesignated by subsection
            (a)) is amended by striking ``or qualified'' and
            inserting ``, qualified catastrophe mitigation payment,
            or qualified''.
      (c) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2020.

    SEC. 135402. REPEAL OF TEMPORARY LIMITATION ON PERSONAL CASUALTY
                        LOSSES.

      (a) In General.--Section 165(h) is amended by striking
    paragraph (5).
      (b) Extension of Period of Limitation on Filing Claim in
    Certain Circumstances.--In the case of a claim for credit or
    refund which is properly allocable to a loss which is--
              (1) deductible under section 165(a) of the Internal
            Revenue Code of 1986,
              (2) described in Revenue Procedure 2017-60 (as
            modified by Revenue Procedure 2018-14), and
              (3) claimed for a taxable year beginning after
            December 31, 2016,
    the period of limitation prescribed in section 6511 of the
    Internal Revenue Code of 1986 for the filing of such claim
    shall be treated as not expiring earlier than the date that is
    1 year after the date of the enactment of this Act.
      (c) Effective Date.--The amendment made by subsection (a)
    shall apply to losses incurred in taxable years beginning after
    December 31, 2017.
      (d) Regulations.--The Secretary of the Treasury (or the
    Secretary's delegate) shall issue such regulations or other
    guidance as are necessary to implement the amendment made by
    this section, including regulations or guidance consistent with
    Revenue Procedure 2017-60 (as so modified).

    SEC. 135403. CREDIT FOR QUALIFIED WILDFIRE MITIGATION EXPENDITURES.

      (a) In General.--Subpart B of part IV of subchapter A of
    chapter 1 is amended by inserting after section 27 the
    following new section:

    ``SEC. 28. QUALIFIED WILDFIRE MITIGATION EXPENDITURES.

      ``(a) In General.--There shall be allowed as a credit against
    the tax imposed by this chapter for the taxable year an amount
    equal to 30 percent of the qualified wildfire mitigation
    expenditures paid or incurred by the taxpayer during such
    taxable year with respect to real property owned or leased by
    the taxpayer.
      ``(b) Qualified Wildfire Mitigation Expenditures.--For
    purposes of this section--
              ``(1) In general.--The term `qualified wildfire
            mitigation expenditures' means any specified wildfire
            mitigation expenditure made pursuant to a qualified
            State wildfire mitigation program of a State which
            requires expenditures for wildfire mitigation to be
            paid both by the taxpayer and such State. Such term
            shall not include any item of expenditure unless the
            ratio of the State's expenditure for such item to the
            sum of the State's and taxpayer's expenditures for such
            item is not less than 25 percent.
              ``(2) Specified wildfire mitigation expenditure.--The
            term `specified wildfire mitigation expenditure' means,
            with respect to any real property owned or leased by
            the taxpayer, any amount paid or incurred to reduce the
            risk of wildfire by removing accumulations of
            vegetation (including establishing, expanding, or
            maintaining fuel breaks to serve as fire breaks) on
            such real property.
              ``(3) Qualified state wildfire mitigation program.--
            The term `qualified State wildfire mitigation program'
            means any program of a State the primary purpose of
            which is to mitigate the risk of wildfires in such
            State.
              ``(4) Treatment of reimbursements.--Any amount
            originally paid or incurred by the taxpayer which is
            reimbursed by a State under a qualified wildfire
            mitigation program of such State shall be treated as
            paid by such State (and not by such taxpayer).
      ``(c) Application With Other Credits.--
              ``(1) Business credit treated as part of general
            business credit.--So much of the credit which would be
            allowed under subsection (a) for any taxable year
            (determined without regard to this subsection) that is
            attributable to expenditures made in the ordinary
            course of the taxpayer's trade or business (or, in the
            case of expenditures made by a State, would have been
            expenditures made in the ordinary course of the
            taxpayer's trade or business if made by the taxpayer)
            shall be treated as a credit listed in section 38(b)
            for taxable year (and not allowed under subsection
            (a)).
              ``(2) Personal credit.--For purposes of this title,
            the credit allowed under subsection (a) for any taxable
            year (determined after application of paragraph (1))
            shall be treated as a credit allowable under subpart A
            for such taxable year.
      ``(d) Reduction of Credit Percentage Where Taxpayer
    Expenditures Less Than 30 Percent.--
              ``(1) In general.--If the expenditure percentage with
            respect to any item of qualified wildfire mitigation
            expenditure is less than 30 percent, subsection (a)
            shall be applied by substituting `the expenditure
            percentage' for `30 percent' with respect to such item
            of expenditure.
              ``(2) Expenditure percentage.--For purposes of this
            section, the term `expenditure percentage' means, with
            respect to any item of qualified wildfire mitigation
            expenditure any portion of which is paid or incurred by
            a State, the ratio (expressed as a percentage) of--
                      ``(A) the taxpayer's expenditure for such
                    item, divided by
                      ``(B) the sum of the taxpayer's and such
                    State's expenditures for such item.
      ``(e) Special Rules.--
              ``(1) Treatment of expenditures related to marketable
            timber.--An expenditure shall not be taken into account
            for purposes of this section (whether made by the
            taxpayer or a State pursuant to a qualified State
            wildfire mitigation program of such State) if such
            expenditure is properly allocable to timber which is
            sold or exchanged by the taxpayer. The preceding
            sentence shall not apply to the extent that such amount
            exceeds the gain on such sale or exchange.
              ``(2) Basis reduction.--For purposes of this
            subtitle, if the basis of any property would (but for
            this paragraph) be determined by taking into account
            any qualified wildfire mitigation expenditure, the
            basis of such property shall be reduced by the amount
            of the credit allowed under subsection (a) with respect
            to such expenditure (determined without regard to
            subsection (c)).
              ``(3) Denial of double benefit.--The amount of any
            deduction or other credit allowable under this chapter
            for any expenditure for which a credit is allowable
            under subsection (a) shall be reduced by the amount of
            credit allowed under such subsection for such
            expenditure (determined without regard to subsection
            (c)).''.
      (b) Conforming Amendments.--
              (1) Section 38(b), as amended by the preceding
            provisions of this Act, is amended by striking ``plus''
            at the end of paragraph (33), by striking the period at
            the end of paragraph (34) and inserting ``, plus'', and
            by adding at the end the following new paragraph:
              ``(35) the portion of the qualified wildfire
            mitigation expenditures credit to which section
            28(c)(1) applies.''.
              (2) Section 1016(a) is amended by redesignating
            paragraphs (35) through (38) as paragraphs (36) through
            (39), respectively, and by inserting after paragraph
            (34) the following new paragraph:
              ``(35) to the extent provided in section 28(e)(2),''.
              (3) The table of sections for subpart B of part IV of
            subchapter A of chapter 1 is amended by inserting after
            the item relating to section 27 the following new item:

    ``Sec. 28. Qualified wildfire mitigation expenditures.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to expenditures paid or incurred after the date of
    the enactment of this Act, in taxable years ending after such
    date.

                                PART 5--HOUSING

                    Subpart A--Low Income Housing Tax Credit

    SEC. 135501. INCREASES IN STATE ALLOCATIONS.

      (a) In General.--Section 42(h)(3)(I) is amended to read as
    follows:
                      ``(I) Increase in state housing credit
                    ceiling for 2022 through 2028.--
                              ``(i) In general.--In the case of
                            calendar years 2022 through 2028, the
                            dollar amounts under subclauses (I) and
                            (II) of subparagraph (C)(ii) for any
                            such calendar shall be determined under
                            clause (ii) and in accordance with the
                            following table:

    ------------------------------------------------------------------------
                                                        The          The
                                                     subclause    subclause
            ``In the case of calendar year:          (I) amount  (II) amount
                                                     shall be:    shall be:
    ------------------------------------------------------------------------
    2022..........................................        $3.22   $3,711,575
    2023..........................................        $3.70   $4,269,471
    2024..........................................        $4.25   $4,901,620
    2025..........................................        $4.88   $5,632,880
    ------------------------------------------------------------------------

                              ``(ii) Inflation adjustment for 2026,
                            2027, and 2028.--In the case of
                            calendar years 2026, 2027, and 2028,
                            the subclause (I) and (II) dollar
                            amounts shall be the respective dollar
                            amounts corresponding to calendar year
                            2025 in the table under clause (i) each
                            increased by an amount equal to--
                                      ``(I) such dollar amount,
                                    multiplied by
                                      ``(II) the cost-of-living
                                    adjustment determined under
                                    section 1(f)(3) for such
                                    calendar year by substituting
                                    `calendar year 2025' for
                                    `calendar year 2016' in
                                    paragraph (A)(ii) thereof.
                            Any increase under this clause shall be
                            rounded to the nearest cent in the case
                            of the subclause (I) amount and the
                            nearest dollar in the case of the
                            subclause (II) amount.''.
      (b) Effective Date.--The amendments made by this section
    shall apply to calendar years beginning after December 31,
    2021.

    SEC. 135502. TAX-EXEMPT BOND FINANCING REQUIREMENT.

      (a) In General.--Section 42(h)(4)(B) is amended by adding at
    the end the following: ``The preceding sentence shall be
    applied by substituting `25 percent' for `50 percent' in the
    case of any building which is financed by any obligation issued
    in calendar year 2022, 2023, 2024, 2025, 2026, 2027, or 2028
    (and not by any obligation on which the application of this
    subparagraph is based during any taxable year beginning during
    calendar year 2019, 2020, or 2021).''.
      (b) Effective Date.--The amendment made by this section shall
    apply to buildings placed in service in taxable years beginning
    after December 31, 2021.

    SEC. 135503. BUILDINGS DESIGNATED TO SERVE EXTREMELY LOW-INCOME
                        HOUSEHOLDS.

      (a) Reserved State Allocation.--
              (1) In general.--Section 42(h) is amended--
                      (A) by redesignating paragraphs (6), (7), and
                    (8) as paragraphs (7), (8), and (9),
                    respectively, and
                      (B) by inserting after paragraph (5) the
                    following new paragraph:
              ``(6) Portion of state ceiling set-aside for projects
            designated to serve extremely low-income households.--
                      ``(A) In general.--Not more than 90 percent
                    of the portion of the State housing credit
                    ceiling amount described in paragraph
                    (3)(C)(ii) for any State for any calendar year
                    shall be allocated to buildings other than
                    buildings described in subparagraph (B).
                      ``(B) Buildings described.--A building is
                    described in this subparagraph if 20 percent or
                    more of the residential units in such building
                    are rent-restricted (determined as if the
                    imputed income limitation applicable to such
                    units were 30 percent of area median gross
                    income) and are designated by the taxpayer for
                    occupancy by households the aggregate household
                    income of which does not exceed the greater
                    of--
                              ``(i) 30 percent of area median gross
                            income, or
                              ``(ii) 100 percent of an amount equal
                            to the Federal poverty line (within the
                            meaning of section 36B(d)(3)).
                      ``(C) State may not override set-aside.--
                    Nothing in subparagraph (F) of paragraph (3)
                    shall be construed to permit a State not to
                    comply with subparagraph (A) of this paragraph.
                      ``(D) Termination.--This paragraph shall not
                    apply to allocations after December 31,
                    2031.''.
              (2) Conforming amendment.--Section 42(b)(4)(C) is
            amended by striking ``(h)(7)'' and inserting
            ``(h)(8)''.
      (b) Increase in Credit.--Paragraph (5) of section 42(d) is
    amended by adding at the end the following new subparagraph:
                      ``(C) Increase in credit for projects
                    designated to serve extremely low-income
                    households.--
                              ``(i) In general.--In the case of any
                            building--
                                      ``(I) which is described in
                                    subsection (h)(6)(B), and
                                      ``(II) which is designated by
                                    the housing credit agency as
                                    requiring the increase in
                                    credit under this subparagraph
                                    in order for such building to
                                    be financially feasible as part
                                    of a qualified low-income
                                    housing project,
                            subparagraph (B) shall not apply to the
                            portion of such building which is
                            comprised of such units, and the
                            eligible basis of such portion of the
                            building shall be 150 percent of such
                            basis determined without regard to this
                            subparagraph.
                              ``(ii) Allocation rules applicable to
                            projects to which clause (i) applies.--
                                      ``(I) State housing credit
                                    ceiling.--For any calendar
                                    year, the housing credit agency
                                    shall not allocate more than 15
                                    percent of the portion of the
                                    State housing credit ceiling
                                    amount described in subsection
                                    (h)(3)(C)(ii) to buildings to
                                    which clause (i) applies, and
                                      ``(II) Private activity bond
                                    volume cap.--In the case of
                                    projects financed by tax-exempt
                                    bonds as described in
                                    subsection (h)(4), for any
                                    calendar year, the State shall
                                    not issue more than 10 percent
                                    of the private activity bond
                                    volume cap as described in
                                    section 146(d)(1) to buildings
                                    to which clause (i) applies.
                              ``(iii) Termination.--This
                            subparagraph shall not apply to
                            allocations after December 31, 2031.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to allocations, and determinations, of housing
    credit dollar amount after December 31, 2021.

    SEC. 135504. INCLUSION OF RURAL AREAS AS DIFFICULT DEVELOPMENT AREAS.

      (a) In General.--Subclause (I) of section 42(d)(5)(B)(iii) is
    amended by inserting before the period the following: ``, and
    any rural area''.
      (b) Rural Area.--Clause (iii) of section 42(d)(5)(B) is
    amended by redesignating subclause (II) as subclause (III) and
    by inserting after subclause (I) the following new subclause:
                                      ``(II) Rural area.--For
                                    purposes of subclause (I), the
                                    term `rural area' means any
                                    non-metropolitan area, or any
                                    rural area as defined by
                                    section 520 of the Housing Act
                                    of 1949, which is identified by
                                    the qualified allocation plan
                                    under subsection (m)(1)(B).''.
      (c) Effective Date.--The amendments made by this section
    shall apply to buildings placed in service after December 31,
    2021.

    SEC. 135505. REPEAL OF QUALIFIED CONTRACT OPTION.

      (a) Termination of Option for Certain Buildings.--
              (1) In general.--Subclause (II) of section
            42(h)(7)(E)(i), as redesignated by section 135503, is
            amended by inserting ``in the case of a building
            described in clause (iii),'' before ``on the last
            day''.
              (2) Buildings described.--Subparagraph (E) of section
            42(h)(7), as so redesignated, is amended by adding at
            the end the following new clause:
                              ``(iii) Buildings described.--A
                            building described in this clause is a
                            building--
                                      ``(I) which received its
                                    allocation of housing credit
                                    dollar amount before January 1,
                                    2022, or
                                      ``(II) in the case of a
                                    building any portion of which
                                    is financed as described in
                                    paragraph (4), which received
                                    before January 1, 2022, a
                                    determination from the issuer
                                    of the tax-exempt bonds or the
                                    housing credit agency that the
                                    building is eligible to receive
                                    an allocation of housing credit
                                    dollar amount under the rules
                                    of paragraphs (1) and (2) of
                                    subsection (m).''.
      (b) Rules Relating to Existing Projects.--Subparagraph (F) of
    section 42(h)(7), as redesignated by section 135503, is amended
    by striking ``the nonlow-income portion'' and all that follows
    and inserting ``the nonlow-income portion and the low-income
    portion of the building for fair market value (determined by
    the housing credit agency by taking into account the rent
    restrictions required for the low-income portion of the
    building to continue to meet the standards of paragraphs (1)
    and (2) of subsection (g)). The Secretary shall prescribe such
    regulations as may be necessary or appropriate to carry out
    this paragraph.''.
      (c) Conforming Amendments.--
              (1) Paragraph (7) of section 42(h), as redesignated
            by section 135503, is amended by striking subparagraph
            (G) and by redesignating subparagraphs (H), (I), (J),
            and (K) as subparagraphs (G), (H), (I), and (J),
            respectively.
              (2) Subclause (II) of section 42(h)(7)(E)(i), as so
            redesignated and as amended by subsection (a), is
            further amended by striking ``subparagraph (I)'' and
            inserting ``subparagraph (H)''.
      (d) Effective Date.--
              (1) In general.--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) Subsection (b).--The amendments made by
            subsection (b) shall apply to buildings with respect to
            which a written request described in section
            42(h)(7)(H) of the Internal Revenue Code of 1986, as
            redesignated by section 135503 and subsection (c), is
            submitted after the date of the enactment of this Act.

    SEC. 135506. MODIFICATION AND CLARIFICATION OF RIGHTS RELATING TO
                        BUILDING PURCHASE.

      (a) Modification of Right of First Refusal.--
              (1) In general.--Subparagraph (A) of section 42(i)(7)
            is amended by striking ``a right of 1st refusal'' and
            inserting ``an option''.
              (2) Conforming amendment.--The heading of paragraph
            (7) of section 42(i) is amended by striking ``right of
            1st refusal'' and inserting ``option''.
      (b) Clarification With Respect to Right of First Refusal and
    Purchase Options.--
              (1) Purchase of partnership interest.--Subparagraph
            (A) of section 42(i)(7), as amended by subsection (a),
            is amended by striking ``the property'' and inserting
            ``the property or all of the partnership interests
            (other than interests of the person exercising such
            option or a related party thereto (within the meaning
            of section 267(b) or 707(b)(1))) relating to the
            property''.
              (2) Property includes assets relating to the
            building.--Paragraph (7) of section 42(i) is amended by
            adding at the end the following new subparagraph:
                      ``(C) Property.--For purposes of subparagraph
                    (A), the term `property' may include all or any
                    of the assets held for the development,
                    operation, or maintenance of a building.''.
              (3) Exercise of right of first refusal and purchase
            options.--Subparagraph (A) of section 42(i)(7), as
            amended by subsection (a) and paragraph (1)(A), is
            amended by adding at the end the following: ``For
            purposes of determining whether an option, including a
            right of first refusal, to purchase property or
            partnership interests holding (directly or indirectly)
            such property is described in the preceding sentence--
                              ``(i) such option or right of first
                            refusal shall be exercisable with or
                            without the approval of any owner of
                            the project (including any partner,
                            member, or affiliated organization of
                            such an owner), and
                              ``(ii) a right of first refusal shall
                            be exercisable in response to any offer
                            to purchase the property or partnership
                            interests, including an offer by a
                            related party.''.
      (c) Conforming Amendments.--Subparagraph (B) of section
    42(i)(7) is amended by striking ``the sum of'' and all that
    follows and inserting ``the principal amount of outstanding
    indebtedness secured by the building (other than indebtedness
    incurred within the 5-year period ending on the date of the
    sale to the tenants). In the case of a purchase of a
    partnership interest, the minimum purchase price is an amount
    not less than such interest's ratable share of the amount
    determined under the first sentence of this subparagraph.''.
      (d) Effective Dates.--
              (1) Modification of right of first refusal.--The
            amendments made by subsections (a) and (c) shall apply
            to agreements entered into or amended after the date of
            the enactment of this Act.
              (2) Clarification.--The amendments made by subsection
            (b) shall apply to agreements among the owners of the
            project (including partners, members, and their
            affiliated organizations) and persons described in
            section 42(i)(7)(A) of the Internal Revenue Code of
            1986 entered into before, on, or after the date of the
            enactment of this Act.
              (3) No effect on agreements.--None of the amendments
            made by this section is intended to supersede express
            language in any agreement with respect to the terms of
            a right of first refusal or option permitted by section
            42(i)(7) of the Internal Revenue Code of 1986 in effect
            on the date of the enactment of this Act.

    SEC. 135507. INCREASE IN CREDIT FOR BOND-FINANCED PROJECTS DESIGNATED
                        BY HOUSING CREDIT AGENCY.

      (a) In General.--Section 42(d)(5)(B)(v) is amended by
    striking ``The preceding sentence'' and inserting ``In the case
    of determinations of housing credit dollar amount after
    December 31, 2028, the preceding sentence''.
      (b) Effective Date.--The amendments made by this section
    shall apply to buildings which receive a determination of
    housing credit dollar amount pursuant to section 42(m)(2)(D) of
    the Internal Revenue Code of 1986 after the date of the
    enactment of this Act.

                  Subpart B--Neighborhood Homes Investment Act

    SEC. 135511. NEIGHBORHOOD HOMES CREDIT.

      (a) In General.--Subpart D of part IV of subchapter A of
    chapter 1 is amended by inserting after section 42 the
    following new section:

    ``SEC. 42A. NEIGHBORHOOD HOMES CREDIT.

      ``(a) Allowance of Credit.--For purposes of section 38, the
    neighborhood homes credit determined under this section for the
    taxable year is, with respect to each qualified residence sold
    by the taxpayer during such taxable year in an affordable sale,
    the lesser of--
              ``(1) the excess (if any) of--
                      ``(A) the reasonable development costs paid
                    or incurred by the taxpayer with respect to
                    such qualified residence, over
                      ``(B) the sale price of such qualified
                    residence (reduced by any reasonable expenses
                    paid or incurred by the taxpayer in connection
                    with such sale), or
              ``(2) 35 percent of the lesser of--
                      ``(A) the eligible development costs paid or
                    incurred by the taxpayer with respect to such
                    qualified residence, or
                      ``(B) 80 percent of the national median sale
                    price for new homes (as determined pursuant to
                    the most recent census data available as of the
                    date on which the neighborhood homes credit
                    agency makes an allocation for the qualified
                    project).
      ``(b) Development Costs.--For purposes of this section--
              ``(1) Reasonable development costs.--
                      ``(A) In general.--The term `reasonable
                    development costs' means amounts paid or
                    incurred for the acquisition of buildings and
                    land, construction, substantial rehabilitation,
                    demolition of structures, or environmental
                    remediation, to the extent that the
                    neighborhood homes credit agency determines
                    that such amounts meet the standards specified
                    pursuant to subsection (f)(1)(C) (as of the
                    date on which construction or substantial
                    rehabilitation is substantially complete, as
                    determined by such agency) and are necessary to
                    ensure the financial feasibility of such
                    qualified residence.
                      ``(B) Considerations in making
                    determination.--In making the determination
                    under subparagraph (A), the neighborhood homes
                    credit agency shall consider--
                              ``(i) the sources and uses of funds
                            and the total financing,
                              ``(ii) any proceeds or receipts
                            generated or expected to be generated
                            by reason of tax benefits, and
                              ``(iii) the reasonableness of the
                            developmental costs and fees.
              ``(2) Eligible development costs.--The term `eligible
            development costs' means the amount which would be
            reasonable development costs if the amounts taken into
            account as paid or incurred for the acquisition of
            buildings and land did not exceed 75 percent of such
            costs determined without regard to any amount paid or
            incurred for the acquisition of buildings and land.
              ``(3) Substantial rehabilitation.--The term
            `substantial rehabilitation' means amounts paid or
            incurred for rehabilitation of a qualified residence if
            such amounts exceed the greater of--
                      ``(A) $20,000, or
                      ``(B) 20 percent of the amounts paid or
                    incurred by the taxpayer for the acquisition of
                    buildings and land with respect to such
                    qualified residence.
              ``(4) Construction and rehabilitation only after
            allocation taken into account.--
                      ``(A) In general.--The terms `reasonable
                    development costs' and `eligible development
                    costs' shall not include any amount paid or
                    incurred before the date on which an allocation
                    is made to the taxpayer under subsection (e)
                    with respect to the qualified project of which
                    the qualified residence is part unless such
                    amount is paid or incurred for the acquisition
                    of buildings or land.
                      ``(B) Land and building acquisition costs.--
                    Amounts paid or incurred for the acquisition of
                    buildings or land shall be included under
                    paragraph (A) only if paid or incurred not more
                    than 3 years before the date on which the
                    allocation referred to in subparagraph (A) is
                    made. If the taxpayer acquired any building or
                    land from an entity (or any related party to
                    such entity) that holds an ownership interest
                    in the taxpayer, then such entity must also
                    have acquired such property within such 3-year
                    period, and the acquisition cost included under
                    subparagraph (A) with respect to the taxpayer
                    shall not exceed the amount such entity paid or
                    incurred to acquire such property.
      ``(c) Qualified Residence.--For purposes of this section--
              ``(1) In general.--The term `qualified residence'
            means a residence that--
                      ``(A) is real property affixed on a permanent
                    foundation,
                      ``(B) is--
                              ``(i) a house which is comprised of 4
                            or fewer residential units,
                              ``(ii) a condominium unit, or
                              ``(iii) a house or an apartment owned
                            by a cooperative housing corporation
                            (as defined in section 216(b)),
                      ``(C) is part of a qualified project with
                    respect to the neighborhood homes credit agency
                    has made an allocation under subsection (e),
                    and
                      ``(D) is located in a qualified census tract
                    (determined as of the date of such allocation).
              ``(2) Qualified census tract.--
                      ``(A) In general.--The term `qualified census
                    tract' means a census tract--
                              ``(i) which--
                                      ``(I) has a median family
                                    income which does not exceed 80
                                    percent of the median family
                                    income for the applicable area,
                                      ``(II) has a poverty rate
                                    that is not less than 130
                                    percent of the poverty rate of
                                    the applicable area, and
                                      ``(III) has a median value
                                    for owner-occupied homes that
                                    does not exceed the median
                                    value for owner-occupied homes
                                    in the applicable area,
                              ``(ii) which--
                                      ``(I) is located in a city
                                    which has a population of not
                                    less than 50,000 and such city
                                    has a poverty rate that is not
                                    less than 150 percent of the
                                    poverty rate of the applicable
                                    area,
                                      ``(II) has a median family
                                    income which does not exceed
                                    the median family income for
                                    the applicable area, and
                                      ``(III) has a median value
                                    for owner-occupied homes that
                                    does not exceed 80 percent of
                                    the median value for owner-
                                    occupied homes in the
                                    applicable area,
                              ``(iii) which--
                                      ``(I) is located in a
                                    nonmetropolitan county,
                                      ``(II) has a median family
                                    income which does not exceed
                                    the median family income for
                                    the applicable area, and
                                      ``(III) has been designated
                                    by a neighborhood homes credit
                                    agency under this clause, or
                              ``(iv) which is not otherwise a
                            qualified census tract and is located
                            in a disaster area (as defined in
                            section 7508A(d)(3)), but only with
                            respect to credits allocated in any
                            period during which the President of
                            the United States has determined that
                            such area warrants individual or
                            individual and public assistance by the
                            Federal Government under the Robert T.
                            Stafford Disaster Relief and Emergency
                            Assistance Act.
                      ``(B) Applicable area.--The term `applicable
                    area' means--
                              ``(i) in the case of a metropolitan
                            census tract, the metropolitan area in
                            which such census tract is located, and
                              ``(ii) in the case of a census tract
                            other than a census tract described in
                            clause (i), the State.
      ``(d) Affordable Sale.--For purposes of this section--
              ``(1) In general.--The term `affordable sale' means a
            sale to a qualified homeowner of a qualified residence
            that the neighborhood homes credit agency certifies as
            meeting the standards promulgated under subsection
            (f)(1)(D) for a price that does not exceed--
                      ``(A) in the case of any qualified residence
                    not described in subparagraph (B), (C), or (D),
                    the amount equal to the product of 4 multiplied
                    by the median family income for the applicable
                    area (as determined pursuant to the most recent
                    census data available as of the date of the
                    contract for such sale),
                      ``(B) in the case of a house comprised of 2
                    residential units, 125 percent of the amount
                    described in subparagraph (A),
                      ``(C) in the case of a house comprised of 3
                    residential units, 150 percent of the amount
                    described in subparagraph (A), or
                      ``(D) in the case of a house comprised of 4
                    residential units, 175 percent of the amount
                    described in subparagraph (A).
              ``(2) Qualified homeowner.--The term `qualified
            homeowner' means, with respect to a qualified
            residence, an individual--
                      ``(A) who owns and uses such qualified
                    residence as the principal residence of such
                    individual, and
                      ``(B) whose family income (determined as of
                    the date that a binding contract for the
                    affordable sale of such residence is entered
                    into) is 140 percent or less of the median
                    family income for the applicable area in which
                    the qualified residence is located.
      ``(e) Credit Ceiling and Allocations.--
              ``(1) Credit limited based on allocations to
            qualified projects.--
                      ``(A) In general.--The credit allowed under
                    subsection (a) to any taxpayer for any taxable
                    year with respect to one or more qualified
                    residences which are part of the same qualified
                    project shall not exceed the excess (if any)
                    of--
                              ``(i) the amount allocated by the
                            neighborhood homes credit agency under
                            this paragraph to such taxpayer with
                            respect to such qualified project, over
                              ``(ii) the aggregate amount of credit
                            allowed under subsection (a) to such
                            taxpayer with respect to qualified
                            residences which are a part of such
                            qualified project for all prior taxable
                            years.
                      ``(B) Deadline for completion.--No credit
                    shall be allowed under subsection (a) with
                    respect to any qualified residence unless the
                    affordable sale of such residence is during the
                    5-year period beginning on the date of the
                    allocation to the qualified project of which
                    such residence is a part (or, in the case of a
                    qualified residence to which subsection (i)
                    applies, the rehabilitation of such residence
                    is completed during such 5-year period).
              ``(2) Limitations on allocations to qualified
            projects.--
                      ``(A) Allocations limited by state
                    neighborhood homes credit ceiling.--The
                    aggregate amount allocated to taxpayers with
                    respect to qualified projects by the
                    neighborhood homes credit agency of any State
                    for any calendar year shall not exceed the
                    State neighborhood homes credit amount of such
                    State for such calendar year.
                      ``(B) Set-aside for certain projects
                    involving qualified nonprofit organizations.--
                    Rules similar to the rules of section 42(h)(5)
                    shall apply for purposes of this section.
              ``(3) Determination of state neighborhood homes
            credit ceiling.--
                      ``(A) In general.--The State neighborhood
                    homes credit amount for a State for a calendar
                    year is an amount equal to the sum of--
                              ``(i) the greater of--
                                      ``(I) the product of $6,
                                    multiplied by the State
                                    population (determined in
                                    accordance with section
                                    146(j)), or
                                      ``(II) $8,000,000, and
                              ``(ii) any amount previously
                            allocated to any taxpayer with respect
                            to any qualified project by the
                            neighborhood homes credit agency of
                            such State which can no longer be
                            allocated to any qualified residence
                            because the 5-year period described in
                            paragraph (1)(B) expires during
                            calendar year.
                      ``(B) 3-year carryforward of unused
                    limitation.--The State neighborhood homes
                    credit amount for a State for a calendar year
                    shall be increased by the excess (if any) of
                    the State neighborhood homes credit amount for
                    such State for the preceding calendar year over
                    the aggregate amount allocated by the
                    neighborhood homes credit agency of such State
                    during such preceding calendar year. Any amount
                    carried forward under the preceding sentence
                    shall not be carried past the third calendar
                    year after the calendar year in which such
                    credit amount originally arose, determined on a
                    first-in, first-out basis.
      ``(f) Responsibilities of Neighborhood Homes Credit
    Agencies.--
              ``(1) In general.--Notwithstanding subsection (e),
            the State neighborhood homes credit dollar amount shall
            be zero for a calendar year unless the neighborhood
            homes credit agency of the State--
                      ``(A) allocates such amount pursuant to a
                    qualified allocation plan of the neighborhood
                    homes credit agency,
                      ``(B) allocates not more than 20 percent of
                    amounts allocated in the previous year (or for
                    allocations made in 2022, not more than 20
                    percent of the neighborhood homes credit
                    ceiling for such year) to projects with respect
                    to qualified residences which--
                              ``(i) are located in census tracts
                            described in subsection (c)(2)(A)(iii),
                            (c)(2)(A)(iv), (i)(5), or
                              ``(ii) are not located in a qualified
                            census tract but meet the requirements
                            of (i)(8),
                      ``(C) promulgates standards with respect to
                    reasonable qualified development costs and
                    fees,
                      ``(D) promulgates standards with respect to
                    construction quality,
                      ``(E) in the case of any neighborhood homes
                    credit agency which makes an allocation to a
                    qualified project which includes any qualified
                    residence to which subsection (i) applies,
                    promulgates standards with respect to
                    protecting the owners of such residences,
                    including the capacity of such owners to pay
                    rehabilitation costs not covered by the credit
                    provided by this section and providing for the
                    disclosure to such owners of their rights and
                    responsibilities with respect to the
                    rehabilitation of such residences, and
                      ``(F) submits to the Secretary (at such time
                    and in such manner as the Secretary may
                    prescribe) an annual report specifying--
                              ``(i) the amount of the neighborhood
                            homes credits allocated to each
                            qualified project for the previous
                            year,
                              ``(ii) with respect to each qualified
                            residence completed in the preceding
                            calendar year--
                                      ``(I) the census tract in
                                    which such qualified residence
                                    is located,
                                      ``(II) with respect to the
                                    qualified project that includes
                                    such qualified residence, the
                                    year in which such project
                                    received an allocation under
                                    this section,
                                      ``(III) whether such
                                    qualified residence was new,
                                    substantially rehabilitated and
                                    sold to a qualified homeowner,
                                    or substantially rehabilitated
                                    pursuant to subsection (i),
                                      ``(IV) the eligible
                                    development costs of such
                                    qualified residence,
                                      ``(V) the amount of the
                                    neighborhood homes credit with
                                    respect to such qualified
                                    residence,
                                      ``(VI) the sales price of
                                    such qualified residence, if
                                    applicable, and
                                      ``(VII) the family income of
                                    the qualified homeowner
                                    (expressed as a percentage of
                                    the applicable area median
                                    family income for the location
                                    of the qualified residence),
                                    and
                              ``(iii) such other information as the
                            Secretary may require.
              ``(2) Qualified allocation plan.--For purposes of
            this subsection, the term `qualified allocation plan'
            means any plan which--
                      ``(A) sets forth the selection criteria to be
                    used to prioritize qualified projects for
                    allocations of State neighborhood homes credit
                    dollar amounts, including--
                              ``(i) the need for new or
                            substantially rehabilitated owner-
                            occupied homes in the area addressed by
                            the project,
                              ``(ii) the expected contribution of
                            the project to neighborhood stability
                            and revitalization, including the
                            impact on neighborhood residents,
                              ``(iii) the capability and prior
                            performance of the project sponsor, and
                              ``(iv) the likelihood the project
                            will result in long-term homeownership,
                      ``(B) has been made available for public
                    comment, and
                      ``(C) provides a procedure that the
                    neighborhood homes credit agency (or any agent
                    or contractor of such agency) shall follow for
                    purposes of--
                              ``(i) identifying noncompliance with
                            any provisions of this section, and
                              ``(ii) notifying the Internal Revenue
                            Service of any such noncompliance of
                            which the agency becomes aware.
      ``(g) Repayment.--
              ``(1) In general.--
                      ``(A) Sold during 5-year period.--If a
                    qualified residence is sold during the 5-year
                    period beginning immediately after the
                    affordable sale of such qualified residence
                    referred to in subsection (a), the seller (with
                    respect to the sale during such 5-year period)
                    shall transfer an amount equal to the repayment
                    amount to the relevant neighborhood homes
                    credit agency.
                      ``(B) Use of repayments.--A neighborhood
                    homes credit agency shall use any amount
                    received pursuant to subparagraph (A) only for
                    purposes of qualified projects.
              ``(2) Repayment amount.--For purposes of paragraph
            (1)(A), the repayment amount is an amount equal to 50
            percent of the gain from the sale to which the
            repayment relates, reduced by 20 percent for each year
            of the 5-year period referred to in paragraph (1)(A)
            which ends before the date of such sale.
              ``(3) Lien for repayment amount.--A neighborhood
            homes credit agency receiving an allocation under this
            section shall place a lien on each qualified residence
            that is built or rehabilitated as part of a qualified
            project for an amount such agency deems necessary to
            ensure potential repayment pursuant to paragraph
            (1)(A).
              ``(4) Denial of deductions if converted to rental
            housing.--If, during the 5-year period described in
            paragraph (1), an individual who owns a qualified
            residence fails to use such qualified residence as such
            individual's principal residence for any period of
            time, no deduction shall be allowed for expenses paid
            or incurred by such individual with respect to renting,
            during such period of time, such qualified residence.
              ``(5) Waiver.--The neighborhood homes credit agency
            may waive the repayment required under paragraph (1)(A)
            in the case of homeowner experiencing a hardship.
      ``(h) Other Definitions and Special Rules.--For purposes of
    this section--
              ``(1) Neighborhood homes credit agency.--The term
            `neighborhood homes credit agency' means the agency
            designated by the governor of a State as the
            neighborhood homes credit agency of the State.
              ``(2) Qualified project.--The term `qualified
            project' means a project that a neighborhood homes
            credit agency certifies will build or substantially
            rehabilitate one or more qualified residences.
              ``(3) Determinations of family income.--Rules similar
            to the rules of section 143(f)(2) shall apply for
            purposes of this section.
              ``(4) Possessions treated as states.--The term
            `State' includes the District of Columbia and the
            possessions of the United States.
              ``(5) Special rules related to condominiums and
            cooperative housing corporations.--
                      ``(A) Determination of development costs.--In
                    the case of a qualified residence described in
                    clause (ii) or (iii) of subsection (c)(1)(A),
                    the reasonable development costs and eligible
                    development costs of such qualified residence
                    shall be an amount equal to such costs,
                    respectively, of the entire condominium or
                    cooperative housing property in which such
                    qualified residence is located, multiplied by a
                    fraction--
                              ``(i) the numerator of which is the
                            total floor space of such qualified
                            residence, and
                              ``(ii) the denominator of which is
                            the total floor space of all residences
                            within such property.
                      ``(B) Tenant-stockholders of cooperative
                    housing corporations treated as owners.--In the
                    case of a cooperative housing corporation (as
                    such term is defined in section 216(b)), a
                    tenant-stockholder shall be treated as owning
                    the house or apartment which such person is
                    entitled to occupy.
              ``(6) Related party sales not treated as affordable
            sales.--
                      ``(A) In general.--A sale between related
                    persons shall not be treated as an affordable
                    sale.
                      ``(B) Related persons.--For purposes of this
                    paragraph, a person (in this subparagraph
                    referred to as the `related person') is related
                    to any person if the related person bears a
                    relationship to such person specified in
                    section 267(b) or 707(b)(1), or the related
                    person and such person are engaged in trades or
                    businesses under common control (within the
                    meaning of subsections (a) and (b) of section
                    52). For purposes of the preceding sentence, in
                    applying section 267(b) or 707(b)(1), `10
                    percent' shall be substituted for `50 percent'.
              ``(7) Inflation adjustment.--
                      ``(A) In general.--In the case of a calendar
                    year after 2022, the dollar amounts in
                    subsections (b)(3)(A), (e)(3)(A)(i)(I),
                    (e)(3)(A)(i)(II), and (i)(2)(C) shall each be
                    increased by an amount equal to--
                              ``(i) such dollar amount, multiplied
                            by
                              ``(ii) the cost-of-living adjustment
                            determined under section 1(f)(3) for
                            such calendar year by substituting
                            `calendar year 2021' for `calendar year
                            2016' in subparagraph (A)(ii) thereof.
                      ``(B) Rounding.--
                              ``(i) In the case of the dollar
                            amounts in subsection (b)(3)(A) and
                            (i)(2)(C), any increase under paragraph
                            (1) which is not a multiple of $1,000
                            shall be rounded to the nearest
                            multiple of $1,000.
                              ``(ii) In the case of the dollar
                            amount in subsection (e)(3)(A)(i)(I),
                            any increase under paragraph (1) which
                            is not a multiple of $0.01 shall be
                            rounded to the nearest multiple of
                            $0.01.
                              ``(iii) In the case of the dollar
                            amount in subsection (e)(3)(A)(i)(II),
                            any increase under paragraph (1) which
                            is not a multiple of $100,000 shall be
                            rounded to the nearest multiple of
                            $100,000.
              ``(8) Report.--
                      ``(A) In general.--The Secretary shall
                    annually issue a report, to be made available
                    to the public, which contains the information
                    submitted pursuant to subsection (f)(1)(F).
                      ``(B) De-identification.--The Secretary shall
                    ensure that any information made public
                    pursuant to paragraph (1) excludes any
                    information that would allow for the
                    identification of qualified homeowners.
              ``(9) List of qualified census tracts.--The Secretary
            of Housing and Urban Development shall, for each year,
            make publicly available a list of qualified census
            tracts under--
                      ``(A) on a combined basis, clauses (i) and
                    (ii) of subsection (c)(2)(A),
                      ``(B) clause (iii) of such subsection, and
                      ``(C) subsection (i)(5)(A).
      ``(i) Application of Credit With Respect to Owner-occupied
    Rehabilitations.--
              ``(1) In general.--In the case of a qualified
            rehabilitation by the taxpayer of any qualified
            residence which is owned (as of the date that the
            written binding contract referred to in paragraph (3)
            is entered into) by a specified homeowner, the rules of
            paragraphs (2) through (7) shall apply.
              ``(2) Alternative credit determination.--In the case
            of any qualified residence described in paragraph (1),
            the neighborhood homes credit determined under
            subsection (a) with respect to such residence shall (in
            lieu of any credit otherwise determined under
            subsection (a) with respect to such residence) be
            allowed in the taxable year during which the qualified
            rehabilitation is completed (as determined by the
            neighborhood homes credit agency) and shall be equal to
            the least of--
                      ``(A) the excess (if any) of--
                              ``(i) the amounts paid or incurred by
                            the taxpayer for the qualified
                            rehabilitation of the qualified
                            residence to the extent that such
                            amounts are certified by the
                            neighborhood homes credit agency (at
                            the time of the completion of such
                            rehabilitation) as meeting the
                            standards specified pursuant to
                            subsection (f)(1)(C), over
                              ``(ii) any amounts paid to such
                            taxpayer for such rehabilitation,
                      ``(B) 50 percent of the amounts described in
                    subparagraph (A)(i), or
                      ``(C) $50,000.
              ``(3) Qualified rehabilitation.--
                      ``(A) In general.--For purposes of this
                    subsection, the term `qualified rehabilitation'
                    means a rehabilitation or reconstruction
                    performed pursuant to a written binding
                    contract between the taxpayer and the qualified
                    homeowner if the amount paid or incurred by the
                    taxpayer in the performance of such
                    rehabilitation or reconstruction exceeds the
                    dollar amount in effect under subsection
                    (b)(3)(A).
                      ``(B) Application of limitation to expenses
                    paid or incurred after allocation.--A rule
                    similar to the rule of section (b)(4) shall
                    apply for purposes of this subsection.
              ``(4) Specified homeowner.--For purposes of this
            subsection, the term `qualified homeowner' means, with
            respect to a qualified residence, an individual--
                      ``(A) who owns and uses such qualified
                    residence as the principal residence of such
                    individual as of the date that the written
                    binding contract referred to in paragraph (3)
                    is entered into, and
                      ``(B) whose family income (determined as of
                    such date) does not exceed the median family
                    income for the applicable area (with respect to
                    the census tract in which the qualified
                    residence is located).
              ``(5) Additional census tracts in which owner-
            occupied residences may be located.--In the case of any
            qualified residence described in paragraph (1), the
            term `qualified census tract' includes any census tract
            which--
                      ``(A) meets the requirements of subsection
                    (c)(2)(A)(i) without regard to subclause (III)
                    thereof, and
                      ``(B) is designated by the neighborhood homes
                    credit agency for purposes of this paragraph.
              ``(6) Modification of repayment requirement.--In the
            case of any qualified residence described in paragraph
            (1), subsection (g) shall be applied by beginning the
            5-year period otherwise described therein on the date
            on which the qualified owner acquired the residence.
              ``(7) Related parties.--Paragraph (1) shall not apply
            if the taxpayer is the owner of the qualified residence
            described in paragraph (1) or is related (within the
            meaning of subsection (h)(6)(B)) to such owner.
              ``(8) Pyrrhotite remediation.--The requirement of
            subsection (c)(1)(C) shall not apply to a qualified
            rehabilitation under this subsection of a qualified
            residence that is documented by an engineer's report
            and core testing to have a foundation that is adversely
            impacted by pyrrhotite or other iron sulfide minerals.
      ``(j) Regulations.--The Secretary shall prescribe such
    regulations as may be necessary or appropriate to carry out the
    purposes of this section, including regulations that prevent
    avoidance of the rules, and abuse of the purposes, of this
    section.''.
      (b) Credit Allowed as Part of General Business Credit.--
    Section 38(b), as amended by the preceding provisions of this
    Act, is amended by striking ``plus'' at the end of paragraph
    (34), by striking the period at the end of paragraph (35) and
    inserting ``, plus'', and by adding at the end the following
    new paragraph:
              ``(36) the neighborhood homes credit determined under
            section 42A(a),''.
      (c) Credit Allowed Against Alternative Minimum Tax.--Section
    38(c)(4)(B), as amended by the preceding provisions of this
    Act, is amended by redesginating clauses (iv) through (xiii) as
    clauses (v) through (xiv), respectively, and by inserting after
    clause (iii) the following new clause:
                              ``(iv) the credit determined under
                            section 42A,''.
      (d) Conforming Amendments.--
              (1) Subsections (i)(3)(C), (i)(6)(B)(i), and (k)(1)
            of section 469 are each amended by inserting ``or 42A''
            after ``section 42''.
              (2) The table of sections for subpart D of part IV of
            subchapter A of chapter 1 is amended by inserting after
            the item relating to section 42 the following new item:

    ``Sec. 42A. Neighborhood homes credit.''.
      (e) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

                  PART 6--INVESTMENTS IN TRIBAL INFRASTRUCTURE

    SEC. 135601. TREATMENT OF INDIAN TRIBES AS STATES WITH RESPECT TO BOND
                        ISSUANCE.

      (a) In General.--Section 7871(c) is amended to read as
    follows:
      ``(c) Special Rules for Tax-exempt Bonds.--
              ``(1) In general.--In applying section 146 to bonds
            issued by Indian Tribal Governments the Secretary shall
            annually--
                      ``(A) establish a national bond volume cap
                    based on the greater of--
                              ``(i) the State population formula
                            approach in section 146(d)(1)(A) (using
                            national Tribal population estimates
                            supplied annually by the Department of
                            the Interior in consultation with the
                            Census Bureau), and
                              ``(ii) the minimum State ceiling
                            amount in section 146(d)(1)(B) (as
                            adjusted in accordance with the cost of
                            living provision in section 146(d)(2)),
                      ``(B) allocate such national bond volume cap
                    among all Indian Tribal Governments seeking
                    such an allocation in a particular year under
                    regulations prescribed by the Secretary.
              ``(2) Application of geographic restriction.--In the
            case of national bond volume cap allocated under
            paragraph (1), section 146(k)(1) shall not apply to the
            extent that such cap is used with respect to financing
            for a facility located on qualified Indian lands.
              ``(3) Restriction on financing of certain gaming
            facilities.--No portion of the volume cap allocated
            under this subsection may be used with respect to the
            financing of any portion of a building in which class
            II or class III gaming (as defined in section 4 of the
            Indian Gaming Regulatory Act) is conducted or housed or
            any property actually used in the conduct of such
            gaming.
              ``(4) Definitions and special rules.--For purposes of
            this subsection--
                      ``(A) Indian tribal government.--The term
                    `Indian Tribal Government' means the governing
                    body of an Indian Tribe, band, nation, or other
                    organized group or community, or of Alaska
                    Natives, which is recognized as eligible for
                    the special programs and services provided by
                    the United States to Indians because of their
                    status as Indians, and also includes any
                    agencies, instrumentalities or political
                    subdivisions thereof.
                      ``(B) Intertribal consortiums, etc.--In any
                    case in which an Indian Tribal Government has
                    authorized an intertribal consortium, a Tribal
                    organization, or an Alaska Native regional or
                    village corporation, as defined in, or
                    established pursuant to, the Alaska Native
                    Claims Settlement Act, to plan for, coordinate
                    or otherwise administer services, finances,
                    functions, or activities on its behalf under
                    this subsection, the authorized entity shall
                    have the rights and responsibilities of the
                    authorizing Indian Tribal Government only to
                    the extent provided in the Authorizing
                    resolution.
                      ``(C) Qualified indian lands.--The term
                    `qualified Indian lands' shall mean an Indian
                    reservation as defined in section 3(d) of the
                    Indian Financing Act of 1974 (25 U.S.C.
                    1452(d)), including lands which are within the
                    jurisdictional area of an Oklahoma Indian Tribe
                    (as determined by the Secretary of the
                    Interior) and shall include lands outside a
                    reservation where the facility is to be placed
                    in service in connection with--
                              ``(i) the active conduct of a trade
                            or business by an Indian Tribe on,
                            contiguous to, within reasonable
                            proximity of, or with a substantial
                            connection to, an Indian reservation or
                            Alaska Native village, or
                              ``(ii) infrastructure (including
                            roads, power lines, water systems,
                            railroad spurs, and communication
                            facilities) serving an Indian
                            reservation or Alaska Native
                            village.''.
      (b) Conforming Amendment.--Subparagraph (B) of section
    45(c)(9) is amended to read as follows:
                      ``(B) Indian tribe.--For purposes of this
                    paragraph, the term `Indian tribe' has the
                    meaning given the term `Indian Tribal
                    Government' by section 7871(c)(3)(A).''.
      (c) Effective Date.--The amendments made by this section
    shall apply to obligations issued in calendar years beginning
    after the date of the enactment of this Act.

    SEC. 135602. NEW MARKETS TAX CREDIT FOR TRIBAL STATISTICAL AREAS.

      (a) Additional Allocations for Tribal Statistical Areas.--
    Section 45D(f), as amended by the preceding provisions of this
    Act, is amended by adding at the end the following new
    paragraph:
              ``(5) Additional allocations for tribal statistical
            areas.--
                      ``(A) In general.--In the case of each
                    calendar year after 2021, there is (in addition
                    to any limitation under any other paragraph of
                    this subsection) a new markets tax credit
                    limitation of $175,000,000 which shall be
                    allocated by the Secretary as provided in
                    paragraph (2) except that such limitation may
                    only be allocated with respect to Tribal
                    Statistical Areas.
                      ``(B) Carryover of unused tribal statistical
                    area limitation.--
                              ``(i) In general.--If the credit
                            limitation under subparagraph (A) for
                            any calendar year exceeds the amount of
                            such limitation allocated by the
                            Secretary for such calendar year, such
                            limitation for the succeeding calendar
                            year shall be increased by the amount
                            of such excess.
                              ``(ii) Limitation on carryover.--No
                            amount of credit limitation may be
                            carried under clause (i) past the 5th
                            calendar year following the calendar
                            year in which such amount of credit
                            limitation arose.
                              ``(iii) Transfer of expired tribal
                            statistical area limitation to general
                            limitation.--In the case of any amount
                            of credit limitation which would (but
                            for clause (ii)) be carried under
                            clause (i) to the 6th calendar year
                            following the calendar year in which
                            such amount of credit limitation arose,
                            the new market tax credit limitation
                            under paragraph (1) for such 6th
                            calendar year shall be increased by the
                            amount of such credit limitation.
                      ``(C) Tribal statistical area.--For purposes
                    of this paragraph, the term `Tribal Statistical
                    Area' means--
                              ``(i) any low-income community which
                            is located in any Tribal Census Tract,
                            Oklahoma Tribal Statistical Area,
                            Tribal-Designated Statistical Area,
                            Alaska Native Village Statistical Area,
                            or Hawaiian Home Land, and
                              ``(ii) any low-income community
                            described in subsection (e)(1)(B).''.
      (b) Eligibility of Certain Projects Serving Tribal Members.--
    Section 45D(e)(1) is amended to read as follows:
              ``(1) In general.--The term `low-income community'
            means any area--
                      ``(A) comprising a population census tract
                    if--
                              ``(i) the poverty rate for such tract
                            is at least 20 percent, or
                              ``(ii)(I) in the case of a tract not
                            located within a metropolitan area, the
                            median family income for such tract
                            does not exceed 80 percent of statewide
                            median family income, or
                              ``(II) in the case of a tract located
                            within a metropolitan area, the median
                            family income for such tract does not
                            exceed 80 percent of the greater of
                            statewide median family income or the
                            metropolitan area median family income,
                      ``(B) which is used for a qualified active
                    low-income community business which--
                              ``(i) services a significant
                            population of Tribal or Alaska Native
                            Village members who are residents of a
                            low-income community described in
                            subsection (f)(5)(C)(i), and
                              ``(ii) obtains a written statement
                            from the relevant Indian Tribal
                            Government (within the meaning of
                            section 7871(c)) that documents the
                            eligibility such project with respect
                            to the requirement of clause (i).
            Subparagraph (A)(ii) shall be applied using possession
            wide median family income in the case of census tracts
            located within a possession of the United States.''.
      (c) Application of Inflation Adjustment.--Section 45D(f)(4),
    as added by the preceding provisions of this Act, is amended by
    striking ``the dollar amount paragraph (1)(H) shall be
    increased'' and inserting ``the dollar amounts in paragraphs
    (1)(H) and (5)(A) shall each be increased''.
      (d) Coordination With Existing Carryover.--Section 45D(f)(3),
    as amended by the preceding provisions of this Act, is amended
    to read as follows:
              ``(3) Carryover of unused limitation.--If the new
            markets tax credit limitation under paragraph (1) for
            any calendar year exceeds the amount of such limitation
            allocated by the Secretary under paragraph (2) for such
            year, such limitation for the succeeding calendar year
            shall be increased by the amount of such excess.''.
      (e) Regulatory Authority.--Section 45D(i) is amended by
    striking ``and'' at the end of paragraph (5), by striking the
    period at the end of paragraph (6) and inserting ``, and'', and
    by adding at the end the following new paragraph:
              ``(7) which provide documentation requirements for
            the written statement required under subsection
            (e)(1)(B)(ii), and
              ``(8) which provide procedures for determining which
            projects under subsection (e)(1)(B) are qualified
            active low-income community businesses with respect to
            the populations described in such subsection. Such
            procedures shall take into account the location needs
            of such projects, especially with respect to projects
            that serve multiple tribal or Alaska Native Village
            communities.''.
      (f) Effective Date.--The amendments made by this section
    shall apply to new markets tax credit limitation determined for
    calendar years after December 31, 2021.

    SEC. 135603. INCLUSION OF INDIAN AREAS AS DIFFICULT DEVELOPMENT AREAS
                        FOR PURPOSES OF CERTAIN BUILDINGS.

      (a) In General.--Subclause (I) of section 42(d)(5)(B)(iii),
    as amended by the preceding provisions of this Act, is amended
    by inserting ``, any Indian area'' after ``median gross
    income''.
      (b) Indian Area.--Clause (iii) of section 42(d)(5)(B), as
    amended by the preceding provisions of this Act is amended by
    redesignating subclause (III) as subclause (V) and by inserting
    after subclause (II) the following new subclauses:
                                      ``(III) Indian area.--For
                                    purposes of subclause (I), the
                                    term `Indian area' means any
                                    Indian area (as defined in
                                    section 4(11) of the Native
                                    American Housing Assistance and
                                    Self Determination Act of 1996
                                    (25 U.S.C. 4103(11))).
                                      ``(IV) Special rule for
                                    buildings in indian areas.--In
                                    the case of an area which is a
                                    difficult development area
                                    solely because it is an Indian
                                    area, a building shall not be
                                    treated as located in such area
                                    unless such building is
                                    assisted or financed under the
                                    Native American Housing
                                    Assistance and Self
                                    Determination Act of 1996 (25
                                    U.S.C. 4101 et seq.) or the
                                    project sponsor is an Indian
                                    tribe (as defined in section
                                    45A(c)(6)), a tribally
                                    designated housing entity (as
                                    defined in section 4(22) of
                                    such Act (25 U.S.C. 4103(22))),
                                    or wholly owned or controlled
                                    by such an Indian tribe or
                                    tribally designated housing
                                    entity.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to buildings placed in service after December 31,
    2021.

                     PART 7--INVESTMENTS IN THE TERRITORIES

    SEC. 135701. POSSESSIONS ECONOMIC ACTIVITY CREDIT.

      (a) In General.--Subpart D of part IV of subchapter A of
    chapter 1, as amended by the preceding provisions of this Act,
    is amended by adding at the end the following new section:

    ``SEC. 45V. POSSESSIONS ECONOMIC ACTIVITY CREDIT.

      ``(a) Allowance of Credit.--For purposes of section 38, in
    the case of a qualified domestic corporation the possessions
    economic activity credit determined under this section for a
    taxable year is an amount equal to 20 percent of the sum of the
    qualified possession wages and allocable employee fringe
    benefit expenses paid or incurred by the taxpayer for the
    taxable year.
      ``(b) Qualified Domestic Corporation; Qualified
    Corporation.--For purposes of this section--
              ``(1) In general.--The term `qualified domestic
            corporation' means any domestic corporation which is--
                      ``(A) a qualified corporation, or
                      ``(B) a United States shareholder of a
                    foreign corporation which--
                              ``(i) is a qualified corporation, and
                              ``(ii) is wholly owned by the United
                            States shareholder together with any
                            corporations which are members of the
                            same affiliated group (within the
                            meaning of section 1504(a)) as such
                            United States shareholder.
              ``(2) Qualified corporation.--The term `qualified
            corporation' means any corporation if such corporation
            meets the following requirements:
                      ``(A) Source qualification.--80 percent or
                    more of the gross income of the corporation for
                    the 3-year period immediately preceding the
                    close of the taxable year (or for such part of
                    such period immediately preceding the close of
                    such taxable year as may be applicable) was
                    derived from sources within a possession of the
                    United States (determined without regard to
                    section 904(f)).
                      ``(B) Trade or business qualification.--75
                    percent or more of the gross income of the
                    corporation for such period or such part
                    thereof was derived from the active conduct of
                    a trade or business within a possession of the
                    United States.
              ``(3) Special rule for separate and clearly
            identified units of foreign corporations.--
                      ``(A) In general.--In the case of a United
                    States shareholder of a foreign corporation
                    which--
                              ``(i) is not a qualified corporation
                            but with respect to which the ownership
                            requirements of paragraph (1)(B)(ii)
                            are met, and
                              ``(ii) has an eligible foreign
                            business unit which, if such unit were
                            a corporation, would be a qualified
                            corporation with respect to which such
                            ownership requirements would be met,
                    then, for purposes of this section, the United
                    States shareholder may elect to treat such unit
                    as a separate foreign corporation which meets
                    the requirements of paragraph (1)(B) and with
                    respect to which such shareholder is a United
                    States shareholder.
                      ``(B) Eligible foreign business unit.--For
                    purposes of this paragraph, the term `eligible
                    foreign business unit' means a separate and
                    clearly identified foreign unit of a trade or
                    business, including a partnership or an entity
                    treated as disregarded as a separate entity
                    from its owner (under section 7701 or other
                    provision under this title), which maintains
                    separate books and records.
                      ``(C) Special election for affiliated
                    groups.--In the case of an affiliated group
                    described in paragraph (1)(B)(ii), the election
                    under subparagraph (A) with respect to any
                    eligible foreign business unit shall be made by
                    the common parent of such group and shall apply
                    uniformly to all members of such group which
                    are United States shareholders with respect to
                    the foreign corporation which has such unit.
      ``(c) Qualified Possession Wages.--For purposes of this
    section--
              ``(1) In general.--The term `qualified possession
            wages' means wages paid or incurred by the qualified
            corporation during the taxable year in connection with
            the active conduct of a trade or business within a
            possession of the United States to any employee for
            services performed in such possession, but only if such
            services are performed while the principal place of
            employment of such employee is within such possession.
              ``(2) Limitation on amount of wages taken into
            account.--
                      ``(A) In general.--The amount of wages which
                    may be taken into account under paragraph (1)
                    with respect to any employee for any taxable
                    year shall not exceed $50,000.
                      ``(B) Treatment of part-time employees,
                    etc.--If--
                              ``(i) any employee is not employed by
                            the qualified corporation on a
                            substantially full-time basis at all
                            times during the taxable year, or
                              ``(ii) the principal place of
                            employment of any employee with the
                            qualified corporation is not within a
                            possession at all times during the
                            taxable year,
                    the limitation applicable under paragraph (1)
                    with respect to such employee shall be the
                    appropriate portion (as determined by the
                    Secretary) of the limitation which would
                    otherwise be in effect under paragraph (1).
                      ``(C) Wages.--
                              ``(i) In general.--Except as provided
                            in clause (ii), the term `wages' has
                            the meaning given to such term by
                            subsection (b) of section 3306
                            (determined without regard to any
                            dollar limitation contained in such
                            section). For purposes of the preceding
                            sentence, such subsection (b) shall be
                            applied as if the term `United States'
                            included all possessions of the United
                            States.
                              ``(ii) Special rule for agricultural
                            labor and railway labor.--In any case
                            to which subparagraph (A) or (B) of
                            paragraph (1) of section 51(h) applies,
                            the term `wages' has the meaning given
                            to such term by section 51(h)(2).
              ``(3) Allocable employee fringe benefit expenses.--
                      ``(A) In general.--The allocable employee
                    fringe benefit expenses of any qualified
                    corporation for any taxable year is an amount
                    which bears the same ratio to the amount
                    determined under subparagraph (B) for such
                    taxable year as--
                              ``(i) the aggregate amount of the
                            qualified corporation's qualified
                            possession wages for such taxable year,
                            bears to
                              ``(ii) the aggregate amount of the
                            wages paid or incurred by such
                            qualified corporation during such
                            taxable year.
                    In no event shall the amount determined under
                    the preceding sentence exceed 15 percent of the
                    amount referred to in clause (i).
                      ``(B) Expenses taken into account.--For
                    purposes of subparagraph (A), the amount
                    determined under this subparagraph for any
                    taxable year is the aggregate amount allowable
                    (or, in the case of a foreign corporation,
                    which would be allowable if such foreign
                    corporation were a domestic corporation) as a
                    deduction under this chapter to the qualified
                    corporation for such taxable year with respect
                    to--
                              ``(i) employer contributions under a
                            stock bonus, pension, profit-sharing,
                            or annuity plan,
                              ``(ii) employer-provided coverage
                            under any accident or health plan for
                            employees, and
                              ``(iii) the cost of life or
                            disability insurance provided to
                            employees.
                    Any amount treated as wages under paragraph
                    (2)(C) shall not be taken into account under
                    this subparagraph.
      ``(d) Special Rule for Qualified Small Domestic
    Corporation.--For purposes of this section--
              ``(1) Increased credit percentage.--In the case of a
            qualified small domestic corporation, subsection (a)
            shall be applied by substituting `50 percent' for `20
            percent'.
              ``(2) Qualified small domestic corporation.--
                      ``(A) In general.--The term `qualified small
                    domestic corporation' means a qualified
                    domestic corporation that meets the
                    requirements of subparagraphs (B) and (C).
                      ``(B) Full-time employment.--A qualified
                    domestic corporation meets the requirements of
                    this subparagraph if the qualified corporation
                    which is the qualified domestic corporation
                    under subsection (b)(1)(A) or the foreign
                    corporation under subsection (b)(1)(B)(i)--
                              ``(i) has at least 5 full-time
                            employees in a possession of the United
                            States for each year in the 3-year
                            period immediately preceding the close
                            of the taxable year (or for such part
                            of such period immediately preceding
                            the close of such taxable year as may
                            be applicable), and
                              ``(ii) has not more than a total of
                            30 full-time employees for each year in
                            such 3-year period.
                      ``(C) Gross receipts.--A qualified domestic
                    corporation meets the requirements of this
                    subparagraph if the annual gross receipts of
                    the qualified domestic corporation (and all
                    persons related thereto) for each year in such
                    3-year period is not more than $50,000,000.
              ``(3) Related persons.--In determining whether the
            limitations under subparagraphs (B)(ii) and (C) of
            paragraph (2) are met, all persons who are treated as
            related to the qualified domestic corporation for
            purposes of subsection (a) or (b) of section 52 shall
            be taken into account.
              ``(4) Amount of wages taken into account.--Subsection
            (c)(2)(A) shall be applied by substituting `$139,500'
            for `$50,000'.
      ``(e) Possession of the United States.--
              ``(1) In general.--The term `possession of the United
            States' means American Samoa, the Commonwealth of the
            Northern Mariana Islands, the Commonwealth of Puerto
            Rico, Guam, and the Virgin Islands.
              ``(2) Mirror code possessions.--In the case of any
            possession of the United States with a mirror code tax
            system (as defined in section 24(k)), this section
            shall not be treated as part of the income tax laws of
            the United States for purposes of determining the
            income tax law of such possession unless such
            possession elects to have this section be so treated.
      ``(f) Separate Application to Each Possession.--For purposes
    of determining the amount of the credit allowed under this
    section, this section shall be applied separately with respect
    to each possession of the United States.
      ``(g) Termination.--No credit shall be allowed under this
    section for any taxable year beginning after December 31,
    2031.''.
      (b) Credit Made Part of General Business Credit.--Subsection
    (b) of section 38, as amended by the preceding provisions of
    this Act, is amended by striking ``plus'' at the end of
    paragraph (35), by striking the period at the end of paragraph
    (36) and inserting ``, plus'', and by adding at the end the
    following new paragraph:
              ``(37) the possessions economic activity credit
            determined under section 45V.''.
      (c) Clerical Amendment.--The table of sections for subpart B
    of part IV of subchapter A of chapter 1 is amended by adding at
    the end the following:

    ``Sec. 45V. Possessions Economic Activity Credit.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after the date of the
    enactment of this Act, and in the case of a qualified
    corporation that is a foreign corporation, to taxable years
    beginning after the date of enactment and to taxable years of
    United States shareholders in which or with which such taxable
    years of foreign corporations end.

    SEC. 135702. ADDITIONAL NEW MARKETS TAX CREDIT ALLOCATIONS FOR THE
                        TERRITORIES.

      (a) In General.--Section 45D(f), as amended by the preceding
    provisions of this Act, is amended by adding at the end the
    following new paragraph:
              ``(6) Additional allocations for possessions of the
            united states.--
                      ``(A) In general.--In the case of each
                    calendar year after 2021, there is (in addition
                    to the limitation under paragraph (1)--
                              ``(i) a new markets tax credit
                            limitation of $80,000,000 which shall
                            be allocated by the Secretary as
                            provided in paragraph (2) except that
                            such limitation may only be allocated
                            with respect to low-income communities
                            located in Puerto Rico, and
                              ``(ii) a new markets tax credit
                            limitation of $20,000,000 which shall
                            be allocated by the Secretary as
                            provided in paragraph (2) except that
                            such limitation may only be allocated
                            with respect to low-income communities
                            located in possessions of the United
                            States other than Puerto Rico.
                      ``(B) Carryover of unused limitation.--
                              ``(i) In general.--If the credit
                            limitation under clause (i) or clause
                            (ii) of subparagraph (A) for any
                            calendar year exceeds the amount of
                            such limitation allocated by the
                            Secretary for such calendar year, such
                            limitation for the succeeding calendar
                            year shall be increased by the amount
                            of such excess.
                              ``(ii) Limitation on carryover.--No
                            amount of credit limitation may be
                            carried under clause (i) past the 5th
                            calendar year following the calendar
                            year in which such amount of credit
                            limitation arose.
                              ``(iii) Transfer of expired
                            possession limitation to general
                            limitation.--In the case of any amount
                            of credit limitation which would (but
                            for clause (ii)) be carried under
                            clause (i) to the 6th calendar year
                            following the calendar year in which
                            such amount of credit limitation arose,
                            the new market tax credit limitation
                            under paragraph (1) for such 6th
                            calendar year shall be increased by the
                            amount of such credit limitation.''.
      (b) Application of Inflation Adjustment.--Section 45D(f)(4),
    as added and amended by the preceding provisions of this Act,
    is amended by striking ``paragraphs (1)(H) and (5)(A)'' and
    inserting ``paragraphs (1)(H), (5)(A), (6)(A)(i), and
    (6)(A)(ii)''.
      (c) Effective Dates.--The amendments made by this section
    shall apply to new markets tax credit limitation determined for
    calendar years after December 31, 2021.

                            Subtitle G--Green Energy

    SEC. 136001. AMENDMENT OF 1986 CODE.

      Except as otherwise expressly provided, whenever in this
    subtitle 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.

          PART 1--RENEWABLE ELECTRICITY AND REDUCING CARBON EMISSIONS

    SEC. 136101. EXTENSION AND MODIFICATION OF CREDIT FOR ELECTRICITY
                        PRODUCED FROM CERTAIN RENEWABLE RESOURCES.

      (a) In General.--The following provisions of section 45(d)
    are each amended by striking ``January 1, 2022'' each place it
    appears and inserting ``January 1, 2034'':
              (1) Paragraph (2)(A).
              (2) Paragraph (3)(A).
              (3) Paragraph (4)(B).
              (4) Paragraph (6).
              (5) Paragraph (7).
              (6) Paragraph (9).
              (7) Paragraph (11)(B).
      (b) Application of Extension to Solar.--Section 45(d)(4)(A)
    is amended by striking ``is placed in service before January 1,
    2006'' and inserting ``the construction of which begins before
    January 1, 2034.''.
      (c) Extension of Election to Treat Qualified Facilities as
    Energy Property.--Section 48(a)(5)(C)(ii) is amended by
    striking ``January 1, 2022'' and inserting ``January 1, 2034''.
      (d) Application of Extension to Wind Facilities.--
              (1) In general.--Section 45(d)(1) is amended by
            striking ``January 1, 2022'' and inserting ``January 1,
            2034''.
              (2) Application of phaseout percentage.--
                      (A) Renewable electricity production
                    credit.--Section 45(b)(5)(D) is amended by
                    inserting ``placed in service before January 1,
                    2022'' after ``In the case of any facility''.
                      (B) Energy credit.--Section 48(a)(5)(E)(iv)
                    is amended by inserting ``placed in service
                    before January 1, 2022'' after ``In the case of
                    any facility''.
              (3) Qualified offshore wind facilities under energy
            credit.--Section 48(a)(5)(F)(i) is amended by striking
            ``offshore wind facility--'' and all that follows and
            inserting the following: ``offshore wind facility,
            subparagraph (E) shall not apply.''.
      (e) Percentage Phaseout of Credit.--Section 45(b) is amended
    by adding at the end the following new paragraph:
              ``(6) Percentage phaseout of credit.--In the case of
            any facility, the amount of the credit determined under
            subsection (a) shall be reduced by--
                      ``(A) in the case of any facility the
                    construction of which begins after December 31,
                    2031 and before January 1, 2033, 20 percent,
                      ``(B) in the case of any facility the
                    construction of which begins after December 31,
                    2032 and before January 1, 2034, 40 percent,
                    and
                      ``(C) in the case of any facility the
                    construction of which begins after December 31,
                    2033, 100 percent.''.
      (f) Wage and Apprenticeship Requirements.--Section 45(b) is
    amended by adding at the end the following new paragraphs:
              ``(7) Base credit amount and increased credit amount
            for qualified facilities.--
                      ``(A) In general.--In the case of any
                    qualified facility which does not satisfy the
                    requirements of subparagraph (B), the amount of
                    the credit determined under subsection (a)
                    (determined after the application of paragraphs
                    (1) through (6)) shall be 20 percent of such
                    amount (determined without regard to this
                    sentence).
                      ``(B) Increased credit for certain facilities
                    meeting project requirements.--
                              ``(i) In general.--In the case of any
                            qualified facility which meets the
                            project requirements of this
                            subparagraph, subparagraph (A) shall
                            not apply.
                              ``(ii) Project requirements.--A
                            project meets the requirements of this
                            subparagraph if it is one of the
                            following:
                                      ``(I) A project with a
                                    maximum net output of less than
                                    1 megawatt.
                                      ``(II) A project which
                                    commences construction prior to
                                    the date of the enactment of
                                    this paragraph.
                                      ``(III) A project which
                                    satisfies the requirements of
                                    paragraphs (8) and (9).
              ``(8) Prevailing wage requirements.--
                      ``(A) In general.--The requirements described
                    in this subparagraph with respect to any
                    qualified facility are that the taxpayer shall
                    ensure that any laborers and mechanics employed
                    by contractors and subcontractors in--
                              ``(i) the construction of such
                            facility, and
                              ``(ii) for the 10-year period
                            beginning on the date the facility was
                            originally placed in service, the
                            alteration or repair of such facility,
                    shall be paid wages at rates not less than the
                    prevailing rates for construction, alteration,
                    or repair of a similar character in the
                    locality as most recently determined by the
                    Secretary of Labor, in accordance with
                    subchapter IV of chapter 31 of title 40, United
                    States Code.
                      ``(B) Correction and penalty related to
                    failure to satisfy wage requirements.--
                              ``(i) In general.--In the case of any
                            taxpayer which fails to satisfy the
                            requirement under subparagraph (A) with
                            respect to the construction of any
                            qualified facility or with respect to
                            the alteration or repair of a facility
                            in any year during the period described
                            in subparagraph (A)(ii), such taxpayer
                            shall be deemed to have satisfied such
                            requirement under such subparagraph
                            with respect to such facility for any
                            year if, with respect to any laborer or
                            mechanic who was paid wages at a rate
                            below the rate described in such
                            subparagraph for any period during such
                            year, such taxpayer--
                                      ``(I) makes payment to such
                                    laborer or mechanic in an
                                    amount equal to the sum of--
                                              ``(aa) an amount
                                            equal to the difference
                                            between the amount of
                                            wages paid to such
                                            laborer or mechanic
                                            during such period,
                                            and--
                                                      ``(AA) the
                                                    amount of wages
                                                    required to be
                                                    paid to such
                                                    laborer or
                                                    mechanic
                                                    pursuant to
                                                    such
                                                    subparagraph
                                                    during such
                                                    period, plus
                                                      ``(BB)
                                                    interest on the
                                                    amount
                                                    determined
                                                    under item (aa)
                                                    at the
                                                    underpayment
                                                    rate
                                                    established
                                                    under section
                                                    6621 for the
                                                    period
                                                    described in
                                                    such item, and
                                      ``(II) makes payment to the
                                    Secretary of a penalty in an
                                    amount equal to the product
                                    of--
                                              ``(aa) $5,000,
                                            multiplied by
                                              ``(bb) the total
                                            number of laborers and
                                            mechanics who were paid
                                            wages at a rate below
                                            the rate described in
                                            subparagraph (A) for
                                            any period during such
                                            year.
                              ``(ii) Penalty assessed as tax.--The
                            penalty described in clause (i)(II)
                            shall be treated in the same manner as
                            a penalty imposed under subchapter B of
                            chapter 68.
              ``(9) Apprenticeship requirements.--The requirements
            described in this subparagraph with respect to the
            construction of any qualified facility are as follows:
                      ``(A) Labor hours.--
                              ``(i) Percentage of total labor
                            hours.--All contractors and
                            subcontractors engaged in the
                            performance of construction,
                            alteration, or repair work on any
                            project shall, subject to subparagraph
                            (B), ensure that not less than the
                            applicable percentage of the total
                            labor hours of such work be performed
                            by qualified apprentices.
                              ``(ii) Applicable percentage.--For
                            purposes of paragraph (1), the
                            applicable percentage shall be--
                                      ``(I) in the case of any
                                    applicable project the
                                    construction of which begins
                                    before January 1, 2023, 5
                                    percent,
                                      ``(II) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2022, and
                                    before January 1, 2024, 10
                                    percent, and
                                      ``(III) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2023, 15
                                    percent.
                      ``(B) Apprentice to journeyworker ratio.--The
                    requirement under subparagraph (A)(i) shall be
                    subject to any applicable requirements for
                    apprentice-to-journeyworker ratios of the
                    Department of Labor or the applicable State
                    apprenticeship agency.
                      ``(C) Participation.--Each contractor and
                    subcontractor who employs 4 or more individuals
                    to perform construction, alteration, or repair
                    work on an applicable project shall employ 1 or
                    more qualified apprentices to perform such
                    work.
                      ``(D) Exception.--
                              ``(i) In general.--Notwithstanding
                            any other provision of this paragraph,
                            this paragraph shall not apply in the
                            case of a taxpayer who--
                                      ``(I) demonstrates a lack of
                                    availability of qualified
                                    apprentices in the geographic
                                    area of the construction,
                                    alteration, or repair work, and
                                      ``(II) makes a good faith
                                    effort to comply with the
                                    requirements of this paragraph,
                                    or
                              ``(ii) Good faith effort.--For
                            purposes of clause (i), a taxpayer
                            shall be deemed to have satisfied the
                            requirements under such paragraph with
                            respect to an applicable project if
                            such taxpayer has requested qualified
                            apprentices from a registered
                            apprenticeship program, as defined in
                            section 3131(e)(3)(B), and such request
                            has been denied, provided that such
                            denial is not the result of a refusal
                            by the contractors or subcontractors
                            engaged in the performance of
                            construction, alteration, or repair
                            work on such applicable project to
                            comply with the established standards
                            and requirements of such apprenticeship
                            program.
                      ``(E) Definitions.--For purposes of this
                    paragraph--
                              ``(i) Labor hours.--The term `labor
                            hours'--
                                      ``(I) means the total number
                                    of hours devoted to the
                                    performance of construction,
                                    alteration, or repair work by
                                    employees of the contractor or
                                    subcontractor, and
                                      ``(II) excludes any hours
                                    worked by--
                                              ``(aa) foremen,
                                              ``(bb)
                                            superintendents,
                                              ``(cc) owners, or
                                              ``(dd) persons
                                            employed in a bona fide
                                            executive,
                                            administrative, or
                                            professional capacity
                                            (within the meaning of
                                            those terms in part 541
                                            of title 29, Code of
                                            Federal Regulations).
                              ``(ii) Qualified apprentice.--The
                            term `qualified apprentice' means an
                            individual who is an employee of the
                            contractor or subcontractor and who is
                            participating in a registered
                            apprenticeship program, as defined in
                            section 3131(e)(3)(B).
              ``(10) Domestic content bonus credit amount.--
                      ``(A) In general.--In the case of any
                    qualified facility which satisfies the
                    requirement under subparagraph (B), the amount
                    of the credit determined under subsection (a)
                    (determined after the application of paragraphs
                    (1) through (9)) shall be increased by an
                    amount equal to 10 percent of the amount
                    otherwise in effect under such subsection.
                      ``(B) Requirement.--
                              ``(i) In general.--Subject to clause
                            (iii), the requirement described in
                            this subclause with respect to any
                            qualified facility is that, prior to
                            the end of the taxable year in which
                            such facility is placed in service, the
                            taxpayer shall certify to the Secretary
                            that, any steel, iron, or manufactured
                            product used in the construction of
                            such facility was produced in the
                            United States.
                              ``(ii) Steel and iron.--In the case
                            of steel or iron, clause (i) shall be
                            applied in a manner consistent with
                            section 661.5(b) of title 49, Code of
                            Federal Regulations.
                              ``(iii) Manufactured product.--For
                            purposes of clause (i), a manufactured
                            product shall be deemed to have been
                            manufactured in the United States if
                            not less than 55 percent of the total
                            cost of the components of such product
                            is attributable to components which are
                            mined, produced, or manufactured in the
                            United States.
                      ``(C) International agreements.--This
                    paragraph shall be applied in a manner which is
                    consistent with the obligations of the United
                    States under international agreements.
              ``(11) Penalty for direct pay.--
                      ``(A) In general.--In the case of a taxpayer
                    making an election under section 6417 with
                    respect to a credit under this section, the
                    amount of such credit shall be replaced with--
                              ``(i) the value of such credit
                            (determined without regard to this
                            paragraph), multiplied by
                              ``(ii) the applicable percentage.
                      ``(B) 100 percent applicable percentage for
                    certain qualified facilities.--In the case of
                    any qualified facility--
                              ``(i) which satisfies the
                            requirements under paragraph (10) with
                            respect to the construction of such
                            facility, or
                              ``(ii) with a maximum net output of
                            less than 1 megawatt,
                    the applicable percentage shall be 100 percent.
                      ``(C) Phased domestic content requirement.--
                    Subject to subparagraph (D), in the case of any
                    qualified facility which is not described in
                    subparagraph (B), the applicable percentage
                    shall be--
                              ``(i) if construction of such
                            facility began before January 1, 2024,
                            100 percent,
                              ``(ii) if construction of such
                            facility began in calendar year 2024,
                            90 percent,
                              ``(iii) if construction of such
                            facility began in calendar year 2025,
                            85 percent, and
                              ``(iv) if construction of such
                            facility began after December 31, 2025,
                            0 percent.
                      ``(D) Exceptions.--In order to facilitate the
                    use of amounts made available in this section,
                    increase the tax incentives for investment in
                    clean energy, and grow the domestic supply
                    chains, the Secretary shall provide appropriate
                    exceptions to the domestic content requirements
                    for products under subparagraph (C) for the
                    construction of qualified facilities if either
                    the inclusion of domestic products increases
                    the overall costs of projects by more than 25
                    percent or relevant manufactured products are
                    not produced in the United States in sufficient
                    and reasonably available quantities or of a
                    satisfactory quality.
              ``(12) Regulations and guidance.--The Secretary shall
            issue such regulations or other guidance as the
            Secretary determines necessary or appropriate to carry
            out the purposes of this subsection.''.
      (g) Effective Date.--The amendments made by this section
    shall apply to facilities placed in service after December 31,
    2021.

    SEC. 136102. EXTENSION AND MODIFICATION OF ENERGY CREDIT.

      (a) Extension of Credit.--The following provisions of section
    48 are each amended by striking ``January 1, 2024'' each place
    it appears and inserting ``January 1, 2034'':
              (1) Subsection (a)(3)(A)(ii).
              (2) Subsection (a)(3)(A)(vii).
              (3) Subsection (c)(1)(D).
              (4) Subsection (c)(2)(D).
              (5) Subsection (c)(3)(A)(iv).
              (6) Subsection (c)(4)(C).
      (b) Phaseout of Credit.--Section 48(a) is amended by striking
    paragraphs (6) and (7) and inserting the following new
    paragraphs:
              ``(6) Phaseout for solar energy property.--
                      ``(A) In general.--Subject to subparagraph
                    (B), in the case of any energy property
                    described in paragraph (3)(A)(i) the
                    construction of which begins before January 1,
                    2034, the energy percentage determined under
                    paragraph (2) shall be equal to--
                              ``(i) in the case of any property the
                            construction of which begins after
                            December 31, 2019, and which is placed
                            in service before January 1, 2022, 26
                            percent,
                              ``(ii) in the case of any property
                            the construction of which begins before
                            January 1, 2032, and which is placed in
                            service after December 31, 2021, 30
                            percent,
                              ``(iii) in the case of any property
                            the construction of which begins after
                            December 31, 2031 and before January 1,
                            2033, 26 percent, and
                              ``(iv) in the case of any property
                            the construction of which begins after
                            December 31, 2032 and before January 1,
                            2034, 22 percent.
                      ``(B) Placed in service deadline.--In the
                    case of any energy property described in
                    paragraph (3)(A)(i) the construction of which
                    begins before January 1, 2034, and which is not
                    placed in service before January 1, 2036, the
                    energy percentage determined under paragraph
                    (2) shall be equal to 10 percent.
              ``(7) Phaseout for certain other energy property.--
                      ``(A) In general.--Subject to subparagraph
                    (B), in the case of any qualified fuel cell
                    property, qualified small wind property, waste
                    energy recovery property, or energy property
                    described in paragraph (3)(A)(ii), the energy
                    percentage determined under paragraph (2) shall
                    be equal to--
                              ``(i) in the case of any property the
                            construction of which begins after
                            December 31, 2019, and which is placed
                            in service before January 1, 2022, 26
                            percent,
                              ``(ii) in the case of any property
                            the construction of which begins before
                            January 1, 2032, and which is placed in
                            service after December 31, 2021, 30
                            percent,
                              ``(iii) in the case of any property
                            the construction of which begins after
                            December 31, 2031 and before January 1,
                            2033, 26 percent, and
                              ``(iv) in the case of any property
                            the construction of which begins after
                            December 31, 2032 and before January 1,
                            2034, 22 percent.
                      ``(B) Placed in service deadline.--In the
                    case of any energy property described in
                    subparagraph (A) which is not placed in service
                    before January 1, 2036, the energy percentage
                    determined under paragraph (2) shall be equal
                    to 0 percent.''.
      (c) 30 Percent Credit for Solar and Geothermal.--
              (1) Extension for solar.--Section 48(a)(2)(A)(i)(II)
            is amended by striking ``January 1, 2024'' and
            inserting ``January 1, 2034''.
              (2) Application to geothermal.--
                      (A) In general.--Paragraphs (2)(A)(i)(II),
                    (6)(A), and (6)(B) of section 48(a) are each
                    amended by striking ``paragraph (3)(A)(i)'' and
                    inserting ``clause (i), (iii), or (vii) of
                    paragraph (3)(A)''.
                      (B) Conforming amendment.--The heading of
                    section 48(a)(6) is amended by inserting ``and
                    geothermal'' after ``solar energy''.
      (d) Energy Storage Technologies; Qualified Biogas Property;
    Microgrid Controllers; Extension of Waste Energy Recovery
    Property.--
              (1) In general.--Section 48(a)(3)(A) is amended by
            striking ``or'' at the end of clause (vii), and by
            adding at the end the following new clauses:
                              ``(viii) energy storage technology,
                              ``(ix) qualified biogas property, or
                              ``(x) microgrid controllers,''.
              (2) Application of 30 percent credit.--Section
            48(a)(2)(A)(i) is amended by striking ``and'' at the
            end of subclauses (IV) and (V) and adding at the end
            the following new subclauses:
                                      ``(VI) energy storage
                                    technology,
                                      ``(VII) qualified biogas
                                    property, and
                                      ``(VIII) microgrid
                                    controllers, and''.
              (3) Application of phaseout.--Section 48(a)(7) is
            amended by inserting ``energy storage technology,
            qualified biogas property, microgrid contollers,''
            after ``waste energy recovery property,''.
              (4) Definitions.--Section 48(c) is amended by adding
            at the end the following new paragraphs:
              ``(6) Energy storage technology.--
                      ``(A) In general.--The term `energy storage
                    technology' means equipment (other than
                    equipment primarily used in the transportation
                    of goods or individuals and not for the
                    production of electricity) which uses
                    batteries, compressed air, pumped hydropower,
                    hydrogen storage, thermal energy storage,
                    regenerative fuel cells, flywheels, capacitors,
                    superconducting magnets, or other technologies
                    identified by the Secretary, after consultation
                    with the Secretary of Energy, to store energy
                    for conversion to electricity (or, in the case
                    of hydrogen storage, to store energy), and has
                    a capacity of not less than 5 kilowatt hours.
                      ``(B) Modifications of certain property.--In
                    the case of any equipment which either--
                              ``(i) would be described in
                            subparagraph (A) except that such
                            equipment has a capacity of less than 5
                            kilowatt hours is modified such that
                            such equipment (after such
                            modification) has a capacity of not
                            less than 5 kilowatt hours, or
                              ``(ii) is described in subparagraph
                            (A) and which has a capacity of not
                            less than 5 kilowatt hours and is
                            modified such that such equipment
                            (after such modification) has an
                            increased capacity,
                    such equipment shall be treated as described in
                    subparagraph (A) except that the basis of any
                    property which was part of such equipment
                    before such modification shall not be taken
                    into account for purposes of this section. In
                    the case of any property to which this
                    subparagraph applies, subparagraph (C) shall be
                    applied by substituting `modification' for
                    `construction'.
                      ``(C) Termination.--The term `energy storage
                    technology' shall not include any property the
                    construction of which does not begin before
                    January 1, 2034.
              ``(7) Qualified biogas property.--
                      ``(A) In general.--The term `qualified biogas
                    property' means property comprising a system
                    which--
                              ``(i) converts biomass (as defined in
                            section 45K(c)(3), as in effect on the
                            date of enactment of this paragraph)
                            into a gas which--
                                      ``(I) consists of not less
                                    than 52 percent methane, or
                                      ``(II) is concentrated by
                                    such system into a gas which
                                    consists of not less than 52
                                    percent methane, and
                              ``(ii) captures such gas for
                            productive use.
                      ``(B) Inclusion of cleaning and conditioning
                    property.--The term `qualified biogas property'
                    includes any property which is part of such
                    system which cleans or conditions such gas.
                      ``(C) Termination.--The term `qualified
                    biogas property' shall not include any property
                    the construction of which does not begin before
                    January 1, 2034.
              ``(8) Microgrid controller.--
                      ``(A) In general.--The term `microgrid
                    controller' means equipment which is--
                              ``(i) part of a qualified microgrid,
                            and
                              ``(ii) designed and used to monitor
                            and control the energy resources and
                            loads on such microgrid to maintain
                            acceptable frequency, voltage, or
                            economic dispatch.
                      ``(B) Qualified microgrid.--The term
                    `qualified microgrid' means an electrical
                    system which--
                              ``(i) includes equipment which is
                            capable of generating not less than 4
                            kilowatts and not greater than 20
                            megawatts of electricity,
                              ``(ii) is capable of operating--
                                      ``(I) in connection with the
                                    electrical grid and as a single
                                    controllable entity with
                                    respect to such grid, and
                                      ``(II) independently (and
                                    disconnected) from such grid,
                                    and
                              ``(iii) is not part of a bulk-power
                            system (as defined in section 215 of
                            the Federal Power Act (16 U.S.C. 24o)).
                      ``(C) Termination.--The term `microgrid
                    controller' shall not include any property the
                    construction of which does not begin before
                    January 1, 2034.''.
              (5) Denial of double benefit for qualified biogas
            property.--Section 45(e) is amended by adding at the
            end the following new paragraph:
              ``(12) Coordination with energy credit for qualified
            biogas property.--The term `qualified facility' shall
            not include any facility which produces electricity
            from gas produced by qualified biogas property (as
            defined in section 48(c)(7)) if a credit is determined
            under section 48 with respect to such property for the
            taxable year or any prior taxable year.''.
              (6) Extension of waste energy recovery property.--
            Section 48(c)(5)(D) is amended by striking ``January 1,
            2024'' and inserting ``January 1, 2034''.
      (e) Fuel Cells Using Electromechanical Processes.--
              (1) In general.--Section 48(c)(1) is amended--
                      (A) in subparagraph (A)(i)--
                              (i) by inserting ``or
                            electromechanical'' after
                            ``electrochemical'', and
                              (ii) by inserting ``(1 kilowatts in
                            the case of a fuel cell power plant
                            with a linear generator assembly)''
                            after ``0.5 kilowatt'', and
                      (B) in subparagraph (C)--
                              (i) by inserting ``, or linear
                            generator assembly,'' after ``a fuel
                            cell stack assembly'', and
                              (ii) by inserting ``or
                            electromechanical'' after
                            ``electrochemical''.
              (2) Linear generator assembly limitation.--Section
            48(c)(1) is amended by redesignating subparagraph (D)
            as subparagraph (E) and by inserting after subparagraph
            (C) the following new subparagraph:
                      ``(D) Linear generator assembly.--The term
                    `linear generator assembly' does not include
                    any assembly which contains rotating parts.''.
      (f) Dynamic Glass.--Section 48(a)(3)(A)(ii) is amended by
    inserting ``, or electrochromic glass which uses electricity to
    change its light transmittance properties in order to heat or
    cool a structure,'' after ``sunlight''.
      (g) Coordination With Low Income Housing Tax Credit.--
    Paragraph (3) of section 50(c) of the Internal Revenue Code of
    1986 is amended--
              (1) by striking ``and'' at the end of subparagraph
            (A),
              (2) by striking the period at the end of subparagraph
            (B) and inserting ``, and'', and
              (3) by adding at the end the following new
            subparagraph:
                      ``(C) paragraph (1) shall not apply for
                    purposes of determining eligible basis under
                    section 42.''.
      (h) Wage and Apprenticeship Requirements.--Section 48(a) is
    amended by adding at the end the following new paragraphs:
              ``(8) Base credit amount and increased credit amount
            for energy projects.--
                      ``(A) In general.--
                              ``(i) Rule.--In the case of any
                            energy project which does not satisfy
                            the requirements of subparagraph (B),
                            the amount of the credit determined
                            under this subsection (determined after
                            the application of paragraphs (1)
                            through (7)) shall be 20 percent of
                            such amount (determined without regard
                            to this sentence).
                              ``(ii) Energy project defined.--For
                            purposes of this subsection the term
                            `energy project' means a project
                            consisting of multiple energy
                            properties that are part of a single
                            project. The requirements of this
                            paragraph shall be applied to such
                            project.
                      ``(B) Increased credit for energy projects
                    meeting project requirements.--
                              ``(i) In general.--In the case of any
                            energy project which meets the project
                            requirements of this subparagraph,
                            subparagraph (A) shall not apply.
                              ``(ii) Project requirements.--A
                            project meets the requirements of this
                            subparagraph if it is one of the
                            following:
                                      ``(I) A project with a
                                    maximum net output of less than
                                    1 megawatt.
                                      ``(II) A project which
                                    commences construction prior to
                                    the date of the enactment of
                                    this paragraph.
                                      ``(III) A project which
                                    satisfies the requirements of
                                    paragraphs (9) and (10).
              ``(9) Prevailing wage requirements.--
                      ``(A) In general.--The requirements described
                    in this subparagraph with respect to any energy
                    project are that the taxpayer shall ensure that
                    any laborers and mechanics employed by
                    contractors and subcontractors in--
                              ``(i) the construction of such energy
                            project , and
                              ``(ii) for any year during the period
                            beginning on the date any energy
                            property of such project is originally
                            placed in service, the alteration or
                            repair of such property,
                    shall be paid wages at rates not less than the
                    prevailing rates for construction, alteration,
                    or repair of a similar character in the
                    locality as most recently determined by the
                    Secretary of Labor, in accordance with
                    subchapter IV of chapter 31 of title 40, United
                    States Code.
                      ``(B) Correction and penalty related to
                    failure to satisfy wage requirements.--A
                    taxpayer shall not be treated as failing to
                    satisfy the requirements of this paragraph if
                    such taxpayer meets requirements similar to the
                    requirements of section 45(b)(8)(B).
              ``(10) Apprenticeship requirements.--The requirements
            described in this subparagraph with respect to the
            construction of any applicable facility are as follows:
                      ``(A) Labor hours.--
                              ``(i) Percentage of total labor
                            hours.--All contractors and
                            subcontractors engaged in the
                            performance of construction,
                            alteration, or repair work on any
                            applicable facility prior to such
                            facility being placed into service
                            shall, subject to subparagraph (B),
                            ensure that not less than the
                            applicable percentage of the total
                            labor hours of such work be performed
                            by qualified apprentices.
                              ``(ii) Applicable percentage.--For
                            purposes of paragraph (1), the
                            applicable percentage shall be--
                                      ``(I) in the case of any
                                    applicable project the
                                    construction of which begins
                                    before January 1, 2023, 5
                                    percent,
                                      ``(II) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2022, and
                                    before January 1, 2024, 10
                                    percent, and
                                      ``(III) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2023, 15
                                    percent.
                      ``(B) Apprentice to journeyworker ratio.--The
                    requirement under subparagraph (A)(i) shall be
                    subject to any applicable requirements for
                    apprentice-to-journeyworker ratios of the
                    Department of Labor or the applicable State
                    apprenticeship agency.
                      ``(C) Participation.--Each contractor and
                    subcontractor who employs 4 or more individuals
                    to perform construction, alteration, or repair
                    work on an applicable project shall employ 1 or
                    more qualified apprentices to perform such
                    work.
                      ``(D) Exception.--
                              ``(i) In general.--Notwithstanding
                            any other provision of this paragraph,
                            this paragraph shall not apply in the
                            case of a taxpayer who--
                                      ``(I) demonstrates a lack of
                                    availability of qualified
                                    apprentices in the geographic
                                    area of the construction,
                                    alteration, or repair work, and
                                      ``(II) makes a good faith
                                    effort to comply with the
                                    requirements of this paragraph.
                              ``(ii) Good faith effort.--For
                            purposes of clause (i), a taxpayer
                            shall be deemed to have satisfied the
                            requirements under such paragraph with
                            respect to an applicable project if
                            such taxpayer has requested qualified
                            apprentices from a registered
                            apprenticeship program, as defined in
                            section 3131(e)(3)(B), and such request
                            has been denied, provided that such
                            denial is not the result of a refusal
                            by the contractors or subcontractors
                            engaged in the performance of
                            construction, alteration, or repair
                            work on such applicable project to
                            comply with the established standards
                            and requirements of such apprenticeship
                            program.
                      ``(E) Definitions.--For purposes of this
                    paragraph--
                              ``(i) Labor hours.--The term `labor
                            hours' has the meaning given such term
                            in section 45(b)(9)(E)(i).
                              ``(ii) Qualified apprentice.--The
                            term `qualified apprentice' has the
                            meaning given such term in section
                            45(b)(9)(E)(ii).
              ``(11) Domestic content bonus credit amount.--
                      ``(A) In general.--In the case of any energy
                    project which satisfies the requirements under
                    subparagraph (B), the energy percentage in
                    subsection (a)(2) shall be increased by the
                    applicable rate in subparagraph (C).
                      ``(B) Requirements.--
                              ``(i) In general.--The requirement
                            described in this subclause with
                            respect to any energy project is
                            satisfied if the taxpayer certifies to
                            the Secretary (at such time, and in
                            such form and manner, as the Secretary
                            may prescribe) that the facility is
                            composed of steel, iron, or
                            manufactured products which were
                            produced in the United States.
                              ``(ii) Steel and iron.--In the case
                            of steel or iron, clause (i) shall be
                            applied in a manner consistent with
                            section 661.5(b) of title 49, Code of
                            Federal Regulations.
                              ``(iii) Manufactured product.--For
                            purposes of clause (i), a manufactured
                            product shall be deemed to have been
                            manufactured in the United States if
                            not less than 55 percent of the total
                            cost of the components of such product
                            is attributable to components which are
                            mined, produced, or manufactured in the
                            United States.
                      ``(C) Applicable rate increase.--For purposes
                    of subparagraph (A), the applicable credit rate
                    increase shall be an amount equal to--
                              ``(i) in the case of energy project
                            that does not meet the requirements of
                            subclause (I) or (III) of paragraph
                            (8)(B)(ii), 2 percentage points, and
                              ``(ii) in the case of energy property
                            that meets the requirements of
                            subclause (I) or (III) of paragraph
                            (8)(B)(ii), 10 percentage points.
                      ``(D) International agreements.--This
                    paragraph shall be applied in a manner which is
                    consistent with the obligations of the United
                    States under international agreements.
              ``(12) Penalty for direct pay.--
                      ``(A) In general.--In the case of a taxpayer
                    making an election under section 6417 with
                    respect to a credit under this section, the
                    amount of such credit shall be replaced with--
                              ``(i) the value of such credit
                            (determined without regard to this
                            paragraph), multiplied by
                              ``(ii) the applicable percentage.
                      ``(B) 100 percent applicable percentage for
                    certain energy projects.--In the case of any
                    energy project--
                              ``(i) which satisfies the
                            requirements under paragraph (11) with
                            respect to the construction of such
                            project, or
                              ``(ii) with a maximum net output of
                            less than 1 megawatt
                    the applicable percentage shall be 100 percent.
                      ``(C) Phased domestic content requirement.--
                    Subject to subparagraph (D), in the case of any
                    energy project which is not described in
                    subparagraph (B), the applicable percentage
                    shall be--
                              ``(i) if construction of such project
                            began before January 1, 2024, 100
                            percent,
                              ``(ii) if construction of such
                            project began in calendar year 2024, 90
                            percent,
                              ``(iii) if construction of such
                            project began in calendar year 2025, 85
                            percent, and
                              ``(iv) if construction of such
                            project began after December 31, 2025,
                            0 percent.
                      ``(D) Exceptions.--In order to facilitate the
                    use of amounts made available in this section,
                    increase the tax incentives for investment in
                    clean energy, and grow the domestic supply
                    chains, the Secretary shall provide appropriate
                    exceptions to the domestic content requirements
                    for products under subparagraph (C) for the
                    construction of qualified facilities if either
                    the inclusion of domestic products increases
                    the overall costs of projects by more than 25
                    percent or relevant manufactured products are
                    not produced in the United States in sufficient
                    and reasonably available quantities or of a
                    satisfactory quality.
              ``(13) Regulations and guidance.--The Secretary shall
            issue such regulations or other guidance as the
            Secretary determines necessary or appropriate to carry
            out the purposes of this subsection.''.
      (i) Effective Dates.--
              (1) The amendments made by subsections (a), (b), (c),
            (e), (f), (g), and (h) of this section shall apply to
            property placed in service after December 31, 2021.
              (2) The amendment made by subsection (d) shall apply
            to periods after December 31, 2021, under rules similar
            to the rules of section 48(m) of the Internal Revenue
            Code of 1986 (as in effect on the day before the date
            of the enactment of the Revenue Reconciliation Act of
            1990).

    SEC. 136103. INCREASE IN ENERGY CREDIT FOR SOLAR FACILITIES PLACED IN
                        SERVICE IN CONNECTION WITH LOW-INCOME COMMUNITIES.

      (a) In General.--Section 48 is amended by adding at the end
    the following new subsection:
      ``(e) Special Rules for Certain Solar Facilities Placed in
    Service in Connection With Low-income Communities.--
              ``(1) In general.--In the case of any qualified solar
            facility with respect to which the Secretary, after
            consultation with the Secretary of Energy and the
            Administrator of the Environmental Protection Agency,
            makes an allocation of environmental justice solar
            capacity limitation under paragraph (4)--
                      ``(A) equipment described in paragraph (3)(B)
                    shall be treated for purposes of this section
                    as energy property described in subsection
                    (a)(2)(A)(i),
                      ``(B) the energy percentage otherwise
                    determined under subsection (a)(2) with respect
                    to any eligible property which is part of such
                    facility shall be increased by--
                              ``(i) in the case of a facility
                            described in subclause (I) of paragraph
                            (2)(A)(iii) and not described in
                            subclause (II) of such paragraph, 10
                            percentage points, and
                              ``(ii) in the case of a facility
                            described in subclause (II) of
                            paragraph (2)(A)(iii), 20 percentage
                            points, and
                      ``(C) the increase in the credit determined
                    under subsection (a) by reason of this
                    subsection for any taxable year with respect to
                    all property which is part of such facility
                    shall not exceed the amount which bears the
                    same ratio to the amount of such increase
                    (determined without regard to this
                    subparagraph) as--
                              ``(i) the environmental justice solar
                            capacity limitation allocated to such
                            facility, bears to
                              ``(ii) the total megawatt nameplate
                            capacity of such facility, as measured
                            in direct current.
              ``(2) Qualified solar facility.--For purposes of this
            subsection--
                      ``(A) In general.--The term `qualified solar
                    facility' means any facility--
                              ``(i) which generates electricity
                            solely from property described in
                            subsection (a)(3)(A)(i),
                              ``(ii) which has a nameplate capacity
                            of 5 megawatts or less, and
                              ``(iii) which--
                                      ``(I) is located in a low-
                                    income community (as defined in
                                    section 45D(e)), or
                                      ``(II) is part of a qualified
                                    low-income residential building
                                    project or a qualified low-
                                    income economic benefit
                                    project.
                      ``(B) Qualified low-income residential
                    building project.--A facility shall be treated
                    as part of a qualified low-income residential
                    building project if--
                              ``(i) such facility is installed on a
                            residential rental building which
                            participates in a covered housing
                            program (as defined in section 41411(a)
                            of the Violence Against Women Act of
                            1994 (34 U.S.C. 12491(a)(3)), a Housing
                            Development Fund Corporation
                            cooperative under Article XI of the New
                            York State Private Housing Finance Law,
                            a housing assistance program
                            administered by the Department of
                            Agriculture under title V of the
                            Housing Act of 1949, or such other
                            affordable housing programs as the
                            Secretary may provide, and
                              ``(ii) the financial benefits of the
                            electricity produced by such facility
                            are allocated equitably among the
                            occupants of the dwelling units of such
                            building.
                      ``(C) Qualified low-income economic benefit
                    project.--A facility shall be treated as part
                    of a qualified low-income economic benefit
                    project if at least 50 percent of the financial
                    benefits of the electricity produced by such
                    facility are provided to households with income
                    of--
                              ``(i) less than 200 percent of the
                            poverty line applicable to a family of
                            the size involved, or
                              ``(ii) less than 80 percent of area
                            median gross income (as determined
                            under section 142(d)(2)(B)).
                      ``(D) Financial benefit.--For purposes of
                    subparagraphs (B) and (C), electricity acquired
                    at a below-market rate shall not fail to be
                    taken into account as a financial benefit.
              ``(3) Eligible property.--
                      ``(A) In general.--For purposes of this
                    section, the term `eligible property' means--
                              ``(i) energy property which is
                            described in subsection (a)(3)(A)(i),
                            including energy storage property
                            (described in subsection
                            (a)(3)(A)(viii)) installed in
                            connection with such energy property,
                            and
                              ``(ii) the amount of any expenditures
                            which are paid or incurred by the
                            taxpayer for qualified interconnection
                            property installed in connection with
                            the installation of property described
                            in subparagraph (A) to provide for the
                            transmission or distribution of the
                            electricity produced or stored by such
                            property, and which are properly
                            chargeable to the capital account of
                            the taxpayer.
                      ``(B) Definitions.--For purposes of
                    subparagraph (A)--
                              ``(i) Qualified interconnection
                            property.--The term `qualified
                            interconnection property' means, with
                            respect to a qualified facility which
                            is not a microgrid, any tangible
                            property--
                                      ``(I) which is part of an
                                    addition, modification, or
                                    upgrade to a transmission or
                                    distribution system which is
                                    required at or beyond the point
                                    at which the qualified facility
                                    interconnects to such
                                    transmission or distribution
                                    system in order to accommodate
                                    such interconnection,
                                      ``(II) either--
                                              ``(aa) which is
                                            constructed,
                                            reconstructed, or
                                            erected by the
                                            taxpayer, or
                                              ``(bb) for which the
                                            cost with respect to
                                            the construction,
                                            reconstruction, or
                                            erection of such
                                            property is paid or
                                            incurred by such
                                            taxpayer, and
                                      ``(III) the original use of
                                    which, pursuant to an
                                    interconnection agreement,
                                    commences with the utility.
                              ``(ii) Interconnection agreement.--
                            The term `interconnection agreement'
                            means an agreement with a utility for
                            the purposes of interconnecting the
                            qualified facility owned by such
                            taxpayer to the transmission or
                            distribution system of such utility.
                              ``(iii) Utility.--The term `utility'
                            means the owner or operator of an
                            electrical transmission or distribution
                            system which is subject to the
                            regulatory authority of--
                                      ``(I) the Federal Energy
                                    Regulatory Commission, or
                                      ``(II) a State or political
                                    subdivision thereof, any agency
                                    or instrumentality of the
                                    United States, a public service
                                    or public utility commission or
                                    other similar body of any State
                                    or political subdivision
                                    thereof, or the governing or
                                    ratemaking body of an electric
                                    cooperative.
                      ``(C) Special rule for interconnection
                    property.--In the case of expenses paid or
                    incurred for interconnection property, amounts
                    otherwise chargeable to capital account with
                    respect to such expenses shall be reduced under
                    rules similar to the rules of section 50(c).
              ``(4) Allocations.--
                      ``(A) In general.--Not later than 180 days
                    after the date of enactment of this subsection,
                    the Secretary shall establish a program to
                    allocate amounts of environmental justice solar
                    capacity limitation to qualified solar
                    facilities.
                      ``(B) Limitation.--The amount of
                    environmental justice solar capacity limitation
                    allocated by the Secretary under subparagraph
                    (A) during any calendar year shall not exceed
                    the annual capacity limitation with respect to
                    such year.
                      ``(C) Annual capacity limitation.--For
                    purposes of this paragraph, the term `annual
                    capacity limitation' means 1.8 gigawatts of
                    direct current capacity for each of calendar
                    years 2022 through 2031, and zero thereafter.
                      ``(D) Carryover of unused limitation.--If the
                    annual capacity limitation for any calendar
                    year exceeds the aggregate amount allocated for
                    such year under this paragraph, such limitation
                    for the succeeding calendar year shall be
                    increased by the amount of such excess. No
                    amount may be carried under the preceding
                    sentence to any calendar year after 2033.
                      ``(E) Placed in service deadline.--
                              ``(i) In general.--Paragraph (1)
                            shall not apply with respect to any
                            property which is placed in service
                            after the date that is 4 years after
                            the date of the allocation with respect
                            to the facility of which such property
                            is a part.
                              ``(ii) Application of carryover.--Any
                            amount of environmental justice solar
                            capacity limitation which expires under
                            clause (i) during any calendar year
                            shall be taken into account as an
                            excess described in subparagraph (D)
                            (or as an increase in such excess) for
                            such calendar year, subject to the
                            limitation imposed by the last sentence
                            of such subparagraph.
                      ``(F) Selection criteria.--In determining to
                    which qualified solar facilities to allocate
                    environmental justice solar capacity limitation
                    under this paragraph, the Secretary shall take
                    into consideration which facilities will result
                    in--
                              ``(i) the greatest health and
                            economic benefits, including the
                            ability to withstand extreme weather
                            events, for individuals described in
                            section 45D(e)(2),
                              ``(ii) the greatest employment and
                            wages for such individuals, and
                              ``(iii) the greatest engagement with,
                            outreach to, or ownership by, such
                            individuals, including through
                            partnerships with local governments and
                            community-based organizations.
                      ``(G) Disclosure of allocations.--The
                    Secretary shall, upon making an allocation of
                    environmental justice solar capacity limitation
                    under this paragraph, publicly disclose the
                    identity of the applicant, the amount of the
                    environmental justice solar capacity limitation
                    allocated to such applicant, and the location
                    of the facility for which such allocation is
                    made.
              ``(5) Recapture.--The Secretary shall, by regulations
            or other guidance, provide for recapturing the benefit
            of any increase in the credit allowed under subsection
            (a) by reason of this subsection with respect to any
            property which ceases to be property eligible for such
            increase (but which does not cease to be investment
            credit property within the meaning of section 50(a)).
            The period and percentage of such recapture shall be
            determined under rules similar to the rules of section
            50(a). To the extent provided by the Secretary, such
            recapture may not apply with respect to any property
            if, within 12 months after the date the taxpayer
            becomes aware (or reasonably should have become aware)
            of such property ceasing to be property eligible for
            such increase, the eligibility of such property for
            such increase is restored. The preceding sentence shall
            not apply more than once with respect to any
            facility.''.
      (b) Effective Date.--The amendments made by this section
    shall apply to periods after December 31, 2021, under rules
    similar to the rules of section 48(m) of the Internal Revenue
    Code of 1986 (as in effect on the day before the date of the
    enactment of the Revenue Reconciliation Act of 1990).

    SEC. 136104. ELECTIVE PAYMENT FOR ENERGY PROPERTY AND ELECTRICITY
                        PRODUCED FROM CERTAIN RENEWABLE RESOURCES, ETC.

      (a) In General.--Subchapter B of chapter 65 is amended by
    inserting after section 6416 the following new section:

    ``SEC. 6417. ELECTIVE PAYMENT OF APPLICABLE CREDITS.

      ``(a) In General.--In the case of a taxpayer making an
    election (at such time and in such manner as the Secretary may
    provide) under this section with respect to any applicable
    credit determined with respect to such taxpayer, such taxpayer
    shall be treated as making a payment against the tax imposed by
    subtitle A (for the taxable year with respect to which such
    credit was determined) equal to the amount of such credit.
      ``(b) Applicable Credit.--The term `applicable credit' means
    each of the following:
              ``(1) The renewable electricity production credit
            determined under section 45.
              ``(2) The energy credit determined under section 48.
              ``(3) The credit for carbon oxide sequestration
            determined under section 45Q.
              ``(4) The credit for alternative fuel vehicle
            refueling property allowed under section 30C.
              ``(5) The qualifying advanced energy project credit
            determined under section 48C.
      ``(c) Special Rules.--For purposes of this section--
              ``(1) Application to tax-exempt and governmental
            entities.--In the case of any organization exempt from
            the tax imposed by subtitle A, any State or local
            government (or political subdivision thereof), or any
            Indian tribal government (within the meaning of section
            139E), which makes the election described in subsection
            (a), any applicable credit shall be determined--
                      ``(A) without regard to paragraphs (3) and
                    (4)(A)(i) of section 50(b), and
                      ``(B) by treating any property with respect
                    to which such credit is determined as used in a
                    trade or business of the taxpayer.
              ``(2) Application to partnerships and s
            corporations.--
                      ``(A) In general.--In the case of any
                    applicable credit determined with respect to
                    any qualified resources, qualified facility, or
                    energy property held directly by a partnership
                    or S corporation, if such partnership or S
                    corporation makes an election under this
                    subsection (in such manner as the Secretary may
                    provide) with respect to such credit--
                              ``(i) the Secretary shall make a
                            payment to such partnership or S
                            corporation equal to the amount of such
                            credit,
                              ``(ii) subsection (d) shall be
                            applied with respect to such credit
                            before determining any partner's
                            distributive share, or shareholder's
                            pro rata share, of such credit,
                              ``(iii) any amount with respect to
                            which the election in subsection (a) is
                            made shall be treated as tax exempt
                            income for purposes of sections 705 and
                            1366, and
                              ``(iv) a partner's distributive share
                            of such tax exempt income shall be
                            based on such partner's distributive
                            share of the otherwise applicable
                            credit for each taxable year.
                      ``(B) Coordination with application at
                    partner or shareholder level.--In the case of
                    any partnership or S corporation, subsection
                    (a) shall be applied at the partner or
                    shareholder level after application of
                    paragraph (2)(A)(ii).
              ``(3) Irrevocable election.--Any election under this
            subsection shall be made not later than the due date
            (including extensions of time) for the return of tax
            for the taxable year for which the applicable credit is
            determined, but in no event earlier than 180 days after
            the date of the enactment of this section. Any such
            election, once made, shall be irrevocable.
              ``(4) Timing.--The payment described in subsection
            (a) shall be treated as made on--
                      ``(A) in the case of any government, or
                    political subdivision, described in paragraph
                    (1) and for which no return is required under
                    section 6011 or 6033(a), the later of the date
                    that a return would be due under section
                    6033(a) if such government or subdivision were
                    described in that section or the date on which
                    such government or subdivision submits a claim
                    for credit or refund (at such time and in such
                    manner as the Secretary shall provide), and
                      ``(B) in any other case, the later of the due
                    date of the return of tax for the taxable year
                    or the date on which such return is filed.
              ``(5) Treatment of payments to partnerships and s
            corporations.--For purposes of section 1324 of title
            31, United States Code, the payments under subparagraph
            (A)(ii) of paragraph (2) shall be treated in the same
            manner as a refund due from a credit provision referred
            to in subparagraph (B) of such paragraph.
              ``(6) Additional information.--As a condition of, and
            prior to, a payment under this section, the Secretary
            may require such information or registration as the
            Secretary deems necessary or appropriate for purposes
            of preventing duplication, fraud, improper payments, or
            excessive payments under this section.
              ``(7) Excessive payment.--
                      ``(A) In general.--In the case of a payment
                    made to a taxpayer under this subsection or any
                    amount treated as a payment which is made by
                    the taxpayer under subsection (a) which the
                    Secretary determines constitutes an excessive
                    payment, the tax imposed on such taxpayer by
                    chapter 1 for the taxable year in which such
                    determination is made shall be increased by an
                    amount equal to the sum of--
                              ``(i) the amount of such excessive
                            payment, plus
                              ``(ii) an amount equal to 20 percent
                            of such excessive payment.
                      ``(B) Reasonable cause.--Subparagraph (A)(ii)
                    shall not apply if the taxpayer demonstrates to
                    the satisfaction of the Secretary that the
                    excessive payment resulted from reasonable
                    cause.
                      ``(C) Excessive payment defined.--For
                    purposes of this paragraph, the term `excessive
                    payment' means, with respect to a facility for
                    which an election is made under this section
                    for any taxable year, an amount equal to the
                    excess of--
                              ``(i) the amount of the payment made
                            to the taxpayer under this subsection
                            with respect to such facility for such
                            taxable year, over
                              ``(ii) the amount of the credit
                            which, without application of this
                            subsection, would be otherwise
                            allowable under this section with
                            respect to such facility for such
                            taxable year.
      ``(d) Denial of Double Benefit.--In the case of a taxpayer
    making an election under this section with respect to an
    applicable credit, such credit shall be reduced to zero and
    such taxpayer shall be deemed to have taken such credit.
      ``(e) Mirror Code Possessions.--In the case of any possession
    of the United States with a mirror code tax system (as defined
    in section 24(k)), this section shall not be treated as part of
    the income tax laws of the United States for purposes of
    determining the income tax law of such possession unless such
    possession elects to have this section be so treated.
      ``(f) Basis Reduction and Recapture.--Rules similar to the
    rules of subsections (a) and (c) of section 50 shall apply for
    purposes of this section.
      ``(g) Regulations.--The Secretary shall issue such
    regulations or other guidance as may be necessary or
    appropriate to carry out the purposes of this section,
    including--
              ``(1) regulations or other guidance providing rules
            for determining a partner's distributive share of the
            tax exempt income described in subsection
            (c)(2)(A)(iii), and
              ``(2) guidance to ensure that the amount of the
            payment or deemed payment made under this section is
            commensurate with the amount of the credit that would
            be otherwise allowable.''.
      (b) Clerical Amendment.--The table of sections for subchapter
    B of chapter 65 is amended by inserting after the item relating
    to section 6416 the following new item:

    ``Sec. 6417. Elective payment of applicable credits.''.
      (c) In General.--The amendments made by this section shall
    apply to property placed in service after the December 31,
    2021.

    SEC. 136105. INVESTMENT CREDIT FOR ELECTRIC TRANSMISSION PROPERTY.

      (a) In General.--Subpart E of part IV of subchapter A of
    chapter 1 is amended by inserting after section 48C the
    following new section:

    ``SEC. 48D. QUALIFYING ELECTRIC TRANSMISSION PROPERTY.

      ``(a) Allowance of Credit.--For purposes of section 46, the
    qualifying electric transmission property credit for any
    taxable year is an amount equal to 30 percent of the basis of
    qualifying electric transmission property placed in service by
    the taxpayer during such taxable year.
      ``(b) Qualifying Electric Transmission Property.--For
    purposes of this section--
              ``(1) In general.--The term `qualifying electric
            transmission property' means tangible property--
                      ``(A) which is a qualifying electric
                    transmission line or related transmission
                    property,
                      ``(B)(i) the construction, reconstruction, or
                    erection of which is completed by the taxpayer,
                    or
                      ``(ii) which is acquired by the taxpayer if
                    the original use of such property commences
                    with the taxpayer, and
                      ``(C) with respect to which depreciation (or
                    amortization in lieu of depreciation) is
                    allowable.
              ``(2) Qualifying electric transmission line.--The
            term `qualifying electric transmission line' means an
            electric transmission line which--
                      ``(A) is capable of transmitting electricity
                    at a voltage of not less than 275 kilovolts,
                    and
                      ``(B) has a transmission capacity of not less
                    than 500 megawatts.
              ``(3) Related transmission property.--
                      ``(A) In general.--The term `related
                    transmission property' means, with respect to
                    any electric transmission line, any property
                    which--
                              ``(i) is listed as `transmission
                            plant' in the Uniform System of
                            Accounts for the Federal Energy
                            Regulatory Commission under part 101 of
                            subchapter C of chapter I of title 18,
                            Code of Federal Regulations, and
                              ``(ii) is necessary for the operation
                            of such electric transmission line.
                      ``(B) Credit not allowed separately with
                    respect to related property.--No credit shall
                    be allowed to any taxpayer under this section
                    with respect to any related transmission
                    property unless such taxpayer is allowed a
                    credit under this section with respect to the
                    qualifying electric transmission line to which
                    such related transmission property relates.
      ``(c) Application to Replacement and Upgraded Systems.--
              ``(1) In general.--In the case of any qualifying
            electric transmission line (determined without regard
            to this subsection) which replaces any existing
            electric transmission line--
                      ``(A) the 500 megawatts referred to in
                    subsection (b)(2)(B) shall be increased by the
                    transmission capacity of such existing electric
                    transmission line, and
                      ``(B) in no event shall the basis of such
                    existing electric transmission line (or related
                    transmission property with respect to such
                    existing electric transmission line) be taken
                    into account in determining the credit allowed
                    under this section.
              ``(2) Upgrades treated as replacements.--For purposes
            of this subsection, any upgrade of an existing electric
            transmission line shall be treated as a replacement of
            such line.
      ``(d) Exception for Certain Property and Projects Already in
    Process.--No credit shall be allowed under this section with
    respect to--
              ``(1) any property if a State or political
            subdivision thereof, any agency or instrumentality of
            the United States, a public service or public utility
            commission or other similar body of any State or
            political subdivision thereof, or the governing or
            ratemaking body of an electric cooperative has, before
            the date of the enactment of this section, selected for
            cost allocation such property for cost recovery, or
              ``(2) any property if--
                      ``(A) construction of such property begins
                    before January 1, 2022, or
                      ``(B) construction of any portion of the
                    qualifying electric transmission line to which
                    such property relates begins before such date.
      ``(e) Certain Qualified Progress Expenditures Rules Made
    Applicable.--Rules similar to the rules of subsections (c)(4)
    and (d) of section 46 (as in effect on the day before the
    enactment of the Revenue Reconciliation Act of 1990) shall
    apply for purposes of this section.
      ``(f) Credit Adjustments; Wage and Apprenticeship
    Requirements.--
              ``(1) Base credit amount and increased credit amount
            for applicable facilities.--
                      ``(A) In general.--
                              ``(i) Rule.--In the case of any
                            applicable facility which does not
                            satisfy the requirements of
                            subparagraph (B), the amount of the
                            credit determined under this subsection
                            shall be 20 percent of such amount
                            (determined without regard to this
                            sentence).
                              ``(ii) Applicable facility defined.--
                            For purposes of this subsection, the
                            term `applicable facility' means a
                            qualifying electric transmission line
                            and related transmission property to
                            which such qualifying electric
                            transmission line relates.
                      ``(B) Increased credit for applicable
                    facility meeting project requirements.--
                              ``(i) In general.--In the case of any
                            applicable facility which meets the
                            project requirements of this
                            subparagraph, subparagraph (A) shall
                            not apply.
                              ``(ii) Project requirements.--A
                            project meets the requirements of this
                            subparagraph if it is one of the
                            following:
                                      ``(I) A project with a
                                    maximum net output of less than
                                    1 megawatt.
                                      ``(II) A project which
                                    commences construction prior to
                                    the date of the enactment of
                                    this paragraph.
                                      ``(III) A project which
                                    satisfies the requirements of
                                    paragraphs (2) and (3).
              ``(2) Prevailing wage requirements.--
                      ``(A) In general.--The requirements described
                    in this subparagraph with respect to any
                    applicable facility are that the taxpayer shall
                    ensure that any laborers and mechanics employed
                    by contractors and subcontractors in--
                              ``(i) the construction of such
                            facility, and
                              ``(ii) for any year during the 5-year
                            period beginning on the date the
                            facility or property is originally
                            placed in service, the alteration or
                            repair of such facility or property,
                    shall be paid wages at rates not less than the
                    prevailing rates for construction, alteration,
                    or repair of a similar character in the
                    locality as most recently determined by the
                    Secretary of Labor, in accordance with
                    subchapter IV of chapter 31 of title 40, United
                    States Code.
                      ``(B) Correction and penalty related to
                    failure to satisfy wage requirements.--A
                    taxpayer shall not be treated as failing to
                    satisfy the requirements of this paragraph if
                    such taxpayer meets requirements similar to the
                    requirements of section 45(b)(8)(B).
              ``(3) Apprenticeship requirements.--The requirements
            described in this subparagraph with respect to the
            construction of any applicable facility are as follows:
                      ``(A) Labor hours.--
                              ``(i) Percentage of total labor
                            hours.--All contractors and
                            subcontractors engaged in the
                            performance of construction,
                            alteration, or repair work on any
                            applicable facility prior to such
                            facility being placed into service
                            shall, subject to subparagraph (B),
                            ensure that not less than the
                            applicable percentage of the total
                            labor hours of such work be performed
                            by qualified apprentices.
                              ``(ii) Applicable percentage.--For
                            purposes of paragraph (1), the
                            applicable percentage shall be--
                                      ``(I) in the case of any
                                    applicable project the
                                    construction of which begins
                                    before January 1, 2023, 5
                                    percent,
                                      ``(II) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2022, and
                                    before January 1, 2024, 10
                                    percent, and
                                      ``(III) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2023, 15
                                    percent.
                      ``(B) Apprentice to journeyworker ratio.--The
                    requirement under subparagraph (A)(i) shall be
                    subject to any applicable requirements for
                    apprentice-to-journeyworker ratios of the
                    Department of Labor or the applicable State
                    apprenticeship agency.
                      ``(C) Participation.--Each contractor and
                    subcontractor who employs 4 or more individuals
                    to perform construction, alteration, or repair
                    work on an applicable project shall employ 1 or
                    more qualified apprentices to perform such
                    work.
                      ``(D) Exception.--
                              ``(i) In general.--Notwithstanding
                            any other provision of this paragraph,
                            this paragraph shall not apply in the
                            case of a taxpayer who--
                                      ``(I) demonstrates a lack of
                                    availability of qualified
                                    apprentices in the geographic
                                    area of the construction,
                                    alteration, or repair work, and
                                      ``(II) makes a good faith
                                    effort to comply with the
                                    requirements of this paragraph.
                              ``(ii) Good faith effort.--For
                            purposes of clause (i), a taxpayer
                            shall be deemed to have satisfied the
                            requirements under such paragraph with
                            respect to an applicable project if
                            such taxpayer has requested qualified
                            apprentices from a registered
                            apprenticeship program, as defined in
                            section 3131(e)(3)(B), and such request
                            has been denied, provided that such
                            denial is not the result of a refusal
                            by the contractors or subcontractors
                            engaged in the performance of
                            construction, alteration, or repair
                            work on such applicable project to
                            comply with the established standards
                            and requirements of such apprenticeship
                            program.
                      ``(E) Definitions.--For purposes of this
                    paragraph--
                              ``(i) Labor hours.--The term `labor
                            hours' has the meaning given such term
                            in section 45(b)(9)(E)(i).
                              ``(ii) Qualified apprentice.--The
                            term `qualified apprentice' has the
                            meaning given such term in section
                            45(b)(9)(E)(ii).
              ``(4) Domestic content bonus credit amount.--
                      ``(A) In general.--In the case of any
                    applicable facility which satisfies the
                    requirements under subparagraph (B), the credit
                    determined under subsection (a) shall be
                    increased by the applicable rate in
                    subparagraph (C).
                      ``(B) Requirements.--
                              ``(i) In general.--The requirement
                            described in this subclause with
                            respect to any applicable facility is
                            satisfied if the taxpayer certifies to
                            the Secretary (at such time, and in
                            such form and manner, as the Secretary
                            may prescribe) that the facility is
                            composed of steel, iron, or
                            manufactured products which were
                            produced in the United States.
                              ``(ii) Steel and iron.--In the case
                            of steel or iron, clause (i) shall be
                            applied in a manner consistent with
                            section 661.5(b) of title 49, Code of
                            Federal Regulations.
                              ``(iii) Manufactured product.--For
                            purposes of clause (i), a manufactured
                            product shall be deemed to have been
                            manufactured in the United States if
                            not less than 55 percent of the total
                            cost of the components of such product
                            is attributable to components which are
                            mined, produced, or manufactured in the
                            United States.
                      ``(C) Applicable rate increase.--For purposes
                    of subparagraph (A), the applicable credit rate
                    increase shall be an amount equal to--
                              ``(i) in the case of applicable
                            facility that does not meet the
                            requirements of subclause (I) or (III)
                            of paragraph (1)(B)(ii), 2 percentage
                            points, and
                              ``(ii) in the case of applicable
                            facility that meets the requirements of
                            subclause (I) or (III) of paragraph
                            (1)(B)(ii), 10 percentage points.
                      ``(D) International agreements.--This
                    paragraph shall be applied in a manner which is
                    consistent with the obligations of the United
                    States under international agreements.
              ``(5) Penalty for direct pay.--
                      ``(A) In general.--In the case of a taxpayer
                    making an election under section 6417 with
                    respect to a credit under this section, the
                    amount of such credit shall be replaced with--
                              ``(i) the value of such credit
                            (determined without regard to this
                            paragraph), multiplied by
                              ``(ii) the applicable percentage.
                      ``(B) 100 percent applicable percentage for
                    certain applicable facility.--In the case of
                    any applicable facility--
                              ``(i) which satisfies the
                            requirements under paragraph (11) with
                            respect to the construction of such
                            property, or
                              ``(ii) with a maximum net output of
                            less than 1 megawatt,
                    the applicable percentage shall be 100 percent.
                      ``(C) Phased domestic content requirement.--
                    Subject to subparagraph (D), in the case of any
                    qualified facility which is not described in
                    subparagraph (B), the applicable percentage
                    shall be--
                              ``(i) if construction of such
                            facility began before January 1, 2024,
                            100 percent,
                              ``(ii) if construction of such
                            facility began in calendar year 2024,
                            90 percent,
                              ``(iii) if construction of such
                            facility began in calendar year 2025,
                            85 percent, and
                              ``(iv) if construction of such
                            facility began after December 31, 2025,
                            0 percent.
                      ``(D) Exceptions.--In order to facilitate the
                    use of amounts made available in this section,
                    increase the tax incentives for investment in
                    clean energy, and grow the domestic supply
                    chains, the Secretary shall provide appropriate
                    exceptions to the domestic content requirements
                    for products under subparagraph (C) for the
                    construction of qualified facilities if either
                    the inclusion of domestic products increases
                    the overall costs of projects by more than 25
                    percent or relevant manufactured products are
                    not produced in the United States in sufficient
                    and reasonably available quantities or of a
                    satisfactory quality.
      ``(g) Termination.--This section shall not apply to any
    property unless--
              ``(1) such property is placed in service before
            January 1, 2032, and
              ``(2) the qualifying electric transmission line with
            respect to which such property relates is placed in
            service before such date.
      ``(h) Regulations and Guidance.--The Secretary, after
    consultation with the Chairman of the Federal Energy Regulatory
    Commission, shall issue such regulations or other guidance as
    the Secretary determines necessary or appropriate to carry out
    the purposes of this section.''.
      (b) Elective Payment of Credit.--Section 6417(b), as added by
    the preceding provisions of this Act, is amended by adding at
    the end the following new paragraph:
              ``(6) The qualifying electric transmission property
            credit determined under section 48D.''.
      (c) Conforming Amendments.--
              (1) Section 46 is amended--
                      (A) by striking ``and'' at the end of
                    paragraph (5),
                      (B) by striking the period at the end of
                    paragraph (6) and inserting ``, and'', and
                      (C) by adding at the end the following new
                    paragraph:
              ``(7) the qualifying electric transmission property
            credit.''.
              (2) Section 49(a)(1)(C) is amended--
                      (A) by striking ``and'' at the end of clause
                    (iv),
                      (B) by striking the period at the end of
                    clause (v) and inserting ``, and'', and
                      (C) by adding at the end the following new
                    clause:
                              ``(vi) the basis of any qualifying
                            electric transmission property under
                            section 48D.''.
              (3) Section 50(a)(2)(E) is amended by striking ``or
            48C(b)(2)'' and inserting ``48C(b)(2), or 48D''.
              (4) The table of sections for subpart E of part IV of
            subchapter A of chapter 1 of such Code is amended by
            inserting after the item relating to section 48C the
            following new item:

    ``Sec. 48D. Qualifying electric transmission property.''.
      (d) Effective Date.--
              (1) In general.--The amendments made by this section
            shall apply to property placed in service after
            December 31, 2021.
              (2) Exception for certain property and projects
            already in process.--For exclusion of certain property
            and projects already in process, see section 48D(d) of
            the Internal Revenue Code of 1986 (as added by this
            section).

    SEC. 136106. ZERO EMISSIONS FACILITY CREDIT.

      (a) In General.--Subpart E of part IV of subchapter A of
    chapter 1 is amended by inserting after section 48C the
    following new section:

    ``SEC. 48E. ZERO EMISSIONS FACILITY CREDIT.

      ``(a) In General.--For purposes of section 46, the zero
    emissions facility credit for any taxable year is an amount
    equal to 30 percent of the qualified investment for such
    taxable year with respect to any zero emissions facility of the
    taxpayer.
      ``(b) Qualified Investment.--
              ``(1) In general.--For purposes of subsection (a),
            the qualified investment for any taxable year is the
            basis of eligible property placed in service by the
            taxpayer during such taxable year which is part of a
            zero emissions facility.
              ``(2) Certain qualified progress expenditures rules
            made applicable.--Rules similar to the rules of
            subsections (c)(4) and (d) of section 46 (as in effect
            on the day before the enactment of the Revenue
            Reconciliation Act of 1990) shall apply for purposes of
            this section.
              ``(3) Limitation.--The amount which is treated as the
            qualified investment for all taxable years with respect
            to any zero emissions facility shall not exceed the
            amount designated by the Secretary as eligible for the
            credit under this section.
      ``(c) Zero Emissions Facility.--
              ``(1) In general.--For purposes of this section, the
            term `zero emissions facility' means any facility--
                      ``(A) which generates electricity,
                      ``(B) which does not generate any greenhouse
                    gases (within the meaning of section
                    211(o)(1)(G) of the Clean Air Act (42 U.S.C.
                    7545(o)(1)(G)), as in effect on the date of the
                    enactment of this section),
                      ``(C) which uses a technology or process
                    which, in the calendar year in which an amount
                    of credit is designated with respect to such
                    facility, achieved a market penetration level
                    of less than 3 percent,
                      ``(D) no portion of which is--
                              ``(i) a qualified facility (as
                            defined in section 45(d)),
                              ``(ii) an advanced nuclear power
                            facility (as defined in section
                            45J(d)),
                              ``(iii) a qualified facility (as
                            defined in section 45Q), or
                              ``(iv) energy property (as defined in
                            section 48(a)(3)).
              ``(2) Market penetration level.--For purposes of this
            subsection, the term `market penetration level' means,
            with respect to any calendar year, the amount equal to
            the greater of--
                      ``(A) the amount (expressed as a percentage)
                    equal to the quotient of--
                              ``(i) the sum of all electricity
                            produced (expressed in terawatt hours)
                            from the technology or method used for
                            the production of electricity by all
                            electricity generating facilities in
                            the United States during such calendar
                            year (as determined by the Secretary on
                            the basis of data reported by the
                            Energy Information Administration),
                            divided by the total domestic power
                            sector electricity production
                            (expressed in terawatt hours) for such
                            calendar year, or
                              ``(ii) the amount determined under
                            this subparagraph for the preceding
                            calendar year with respect to such
                            technology or method.
      ``(d) Eligible Property.--For purposes of this section, the
    term `eligible property' means any property--
              ``(1) which is necessary for the generation of
            electricity,
              ``(2) which is--
                      ``(A) tangible personal property, or
                      ``(B) other tangible property (not including
                    a building or its structural components), but
                    only if such property is used as an integral
                    part of the zero emissions facility, and
              ``(3) with respect to which depreciation (or
            amortization in lieu of depreciation) is allowable.
      ``(e) Allocations.--
              ``(1) In general.--Not later than 180 days after the
            date of enactment of this section, the Secretary, after
            consultation with the Secretary of Energy and the
            Administrator of the Environmental Protection Agency,
            shall establish a program to consider and award
            certification amounts of zero emissions facility credit
            limitation to zero emissions facilities.
              ``(2) Annual limitation.--
                      ``(A) In general.--The amount of zero
                    emissions facility credit limitation that may
                    be designated under this subsection during any
                    calendar year shall not exceed the annual
                    credit limitation with respect to such year.
                      ``(B) Annual credit limitation.--For purposes
                    of this subsection, the term `annual credit
                    limitation' means $250,000,000 for each of
                    calendar years 2022 through 2031, and zero
                    thereafter.
                      ``(C) Carryover of unused limitation.--If the
                    annual credit limitation for any calendar year
                    exceeds the aggregate amount designated for
                    such year under this subsection, such
                    limitation for the succeeding calendar year
                    shall be increased by the amount of such
                    excess. No amount may be carried under the
                    preceding sentence to any calendar year after
                    2031.
              ``(3) Placed in service deadline.--
                      ``(A) In general.--No credit shall be
                    determined under subsection (a) with respect to
                    any zero emissions facility which is placed in
                    service after the date that is 4 years after
                    the date of the designation under this
                    subsection relating to such zero emissions
                    facility.
                      ``(B) Application of carryover.--Any amount
                    of credit which expires under subparagraph (A)
                    during any calendar year shall be taken into
                    account as an excess described in paragraph
                    (2)(C) (or as an increase in such excess) for
                    such calendar, subject to the limitation
                    imposed by the last sentence of such paragraph.
              ``(4) Selection criteria.--In determining which zero
            emissions facilities to certify under this section, the
            Secretary, after consultation with the Secretary of
            Energy and the Administrator of the Environmental
            Protection Agency, shall--
                      ``(A) take into consideration which
                    facilities--
                              ``(i) will result in the greatest
                            reduction of greenhouse gas emissions,
                              ``(ii) have the greatest potential
                            for technological innovation and
                            commercial deployment, and
                              ``(iii) will result in the greatest
                            reduction of local environmental
                            effects that are harmful to human
                            health, and
                      ``(B) require that applicants provide written
                    assurances to the Secretary that all laborers
                    and mechanics employed by contractors and
                    subcontractors in the performance of
                    construction, alteration or repair work on a
                    zero emissions facility shall be paid wages at
                    rates not less than those prevailing on
                    projects of a similar character in the locality
                    as determined by the Secretary of Labor in
                    accordance with subchapter IV of chapter 31 of
                    title 40, United States Code.
              ``(5) Disclosure of certifications.--The Secretary
            shall, upon making a certification under this
            subsection, publicly disclose the identity of the
            applicant, the amount of the credit awarded with
            respect to such applicant, and the location of the
            zero-emissions facility for which such credit is
            awarded.
      ``(f) Credit Conditioned Upon Wage and Apprenticeship
    Requirements.--
              ``(1) In general.--No credit shall be allocated for a
            zero emissions facility under this section unless the
            zero emissions facility meets the prevailing wage
            requirements of paragraph (2) and the apprenticeship
            requirements of paragraph (3).
              ``(2) Prevailing wage requirements.--
                      ``(A) In general.--The requirements described
                    in this paragraph with respect to a zero
                    emissions facility are that the taxpayer shall
                    ensure that any laborers and mechanics employed
                    by contractors and subcontractors in--
                              ``(i) the construction of such zero
                            emissions facility, and
                              ``(ii) for any year during the 5-year
                            period beginning on the date the
                            facility is originally placed in
                            service, the alteration or repair of
                            such zero emissions facility,
                    shall be paid wages at rates not less than the
                    prevailing rates for construction, alteration,
                    or repair of a similar character in the
                    locality as most recently determined by the
                    Secretary of Labor, in accordance with
                    subchapter IV of chapter 31 of title 40, United
                    States Code.
                      ``(B) Correction and penalty related to
                    failure to satisfy wage requirements.--
                              ``(i) In general.--In the case of any
                            taxpayer which fails to satisfy the
                            requirement under subparagraph (A) with
                            respect to the construction of any
                            qualified facility or with respect to
                            the alteration or repair of a facility
                            in any year during the period described
                            in subparagraph (A)(ii), such taxpayer
                            shall be deemed to have satisfied such
                            requirement under such subparagraph
                            with respect to such zero emissions
                            facility for any year if, with respect
                            to any laborer or mechanic who was paid
                            wages at a rate below the rate
                            described in such subparagraph for any
                            period during such year, such
                            taxpayer--
                                      ``(I) makes payment to such
                                    laborer or mechanic in an
                                    amount equal to the sum of--
                                              ``(aa) an amount
                                            equal to the difference
                                            between the amount of
                                            wages paid to such
                                            laborer or mechanic
                                            during such period,
                                            and--
                                              ``(bb) the amount of
                                            wages required to be
                                            paid to such laborer or
                                            mechanic pursuant to
                                            such subparagraph
                                            during such period,
                                            plus
                                                      ``(AA)
                                                    interest on the
                                                    amount
                                                    determined
                                                    under item (aa)
                                                    at the
                                                    underpayment
                                                    rate
                                                    established
                                                    under section
                                                    6621 for the
                                                    period
                                                    described in
                                                    such item, and
                                      ``(II) makes payment to the
                                    Secretary of a penalty in an
                                    amount equal to the product
                                    of--
                                              ``(aa) $5,000,
                                            multiplied by
                                              ``(bb) the total
                                            number of laborers and
                                            mechanics who were paid
                                            wages at a rate below
                                            the rate described in
                                            subparagraph (A) for
                                            any period during such
                                            year.
                              ``(ii) Penalty assessed as tax.--The
                            penalty described in clause (i)(II)
                            shall be treated in the same manner as
                            a penalty imposed under subchapter B of
                            chapter 68.
              ``(3) Apprenticeship requirements.--The requirements
            described in this subparagraph with respect to a zero
            emissions facility are as follows:
                      ``(A) Labor hours.--
                              ``(i) Percentage of total labor
                            hours.--All contractors and
                            subcontractors engaged in the
                            performance of construction,
                            alteration, or repair work on any
                            facility prior to such facility being
                            placed into service shall, subject to
                            subparagraph (B), ensure that not less
                            than the applicable percentage of the
                            total labor hours of such work be
                            performed by qualified apprentices.
                              ``(ii) Applicable percentage.--For
                            purposes of paragraph (1), the
                            applicable percentage shall be--
                                      ``(I) in the case of any
                                    applicable zero emissions
                                    facility the construction of
                                    which begins before January 1,
                                    2023, 5 percent,
                                      ``(II) in the case of any
                                    applicable zero emissions
                                    facility the construction of
                                    which begins after December 31,
                                    2022, and before January 1,
                                    2024, 10 percent, and
                                      ``(III) in the case of any
                                    applicable zero emissions
                                    facility the construction of
                                    which begins after December 31,
                                    2023, 15 percent.
                      ``(B) Apprentice to journeyworker ratio.--The
                    requirement under subparagraph (A)(i) shall be
                    subject to any applicable requirements for
                    apprentice-to-journeyworker ratios of the
                    Department of Labor or the applicable State
                    apprenticeship agency.
                      ``(C) Participation.--Each contractor and
                    subcontractor who employs 4 or more individuals
                    to perform construction, alteration, or repair
                    work on an applicable zero emissions facility
                    shall employ 1 or more qualified apprentices to
                    perform such work.
                      ``(D) Exception.--
                              ``(i) In general.--Notwithstanding
                            any other provision of this paragraph,
                            this paragraph shall not apply in the
                            case of a taxpayer who--
                                      ``(I) demonstrates a lack of
                                    availability of qualified
                                    apprentices in the geographic
                                    area of the construction,
                                    alteration, or repair work, and
                                      ``(II) makes a good faith
                                    effort to comply with the
                                    requirements of this paragraph.
                              ``(ii) Good faith effort.--For
                            purposes of clause (i), a taxpayer
                            shall be deemed to have satisfied the
                            requirements under such paragraph with
                            respect to an applicable project if
                            such taxpayer has requested qualified
                            apprentices from a registered
                            apprenticeship program, as defined in
                            section 3131(e)(3)(B), and such request
                            has been denied, provided that such
                            denial is not the result of a refusal
                            by the contractors or subcontractors
                            engaged in the performance of
                            construction, alteration, or repair
                            work on such applicable project to
                            comply with the established standards
                            and requirements of such apprenticeship
                            program.
                      ``(E) Definitions.--For purposes of this
                    paragraph--
                              ``(i) Labor hours.--The term `labor
                            hours'--
                                      ``(I) means the total number
                                    of hours devoted to the
                                    performance of construction,
                                    alteration, or repair work by
                                    employees of the contractor or
                                    subcontractor prior to a
                                    facility being placed into
                                    service, and
                                      ``(II) excludes any hours
                                    worked by--
                                              ``(aa) foremen,
                                              ``(bb)
                                            superintendents,
                                              ``(cc) owners, or
                                              ``(dd) persons
                                            employed in a bona fide
                                            executive,
                                            administrative, or
                                            professional capacity
                                            (within the meaning of
                                            those terms in part 541
                                            of title 29, Code of
                                            Federal Regulations).
                              ``(ii Qualified apprentice.--The term
                            `qualified apprentice' has the meaning
                            given such term in section
                            45(b)(9)(E)(ii).
              ``(4) Regulations and guidance.--The Secretary shall
            issue such regulations or other guidance as the
            Secretary determines necessary or appropriate to carry
            out the purposes of this subsection.
              ``(5) Penalty for direct pay.--
                      ``(A) In general.--In the case of a taxpayer
                    making an election under section 6417 with
                    respect to a credit under this section, the
                    amount of such credit shall be replaced with--
                              ``(i) the value of such credit
                            (determined without regard to this
                            paragraph), multiplied by
                              ``(ii) the applicable percentage.
                      ``(B) 100 percent applicable percentage for
                    certain qualified facilities.--In the case of
                    any qualified facility--
                              ``(i) which satisfies the
                            requirements under paragraph (5) with
                            respect to the construction of such
                            facility, or
                              ``(ii) with a maximum net output of
                            less than 1 megawatt,
                    the applicable percentage shall be 100 percent.
                      ``(C) Phased domestic content requirement.--
                    Subject to subparagraph (D), in the case of any
                    qualified facility which is not described in
                    subparagraph (B), the applicable percentage
                    shall be--
                              ``(i) if construction of such
                            facility began before January 1, 2024,
                            100 percent,
                              ``(ii) if construction of such
                            facility began in calendar year 2024,
                            90 percent,
                              ``(iii) if construction of such
                            facility began in calendar year 2025,
                            85 percent, and
                              ``(iv) if construction of such
                            facility began after December 31, 2025,
                            0 percent.
                      ``(D) Exception.--If the Secretary, after
                    consultation with the Secretary of Commerce and
                    the United States Trade Representative,
                    determines that, for purposes of application of
                    the requirements under paragraph (5) with
                    respect to the construction of the qualified
                    facility--
                              ``(i) their application would be
                            inconsistent with the public interest,
                              ``(ii) such materials and products
                            are not produced in the United States
                            in sufficient and reasonably available
                            quantities and of a satisfactory
                            quality, or
                              ``(iii) inclusion of domestic
                            material will increase the cost of the
                            construction of the qualified facility
                            by more than 25 percent,
                    the applicable percentage shall be 100
                    percent.''.
      (b) Elective Payment of Credit.--Section 6417(b), as added
    and amended by the preceding provisions of this Act, is amended
    by adding at the end the following new paragraph:
              ``(7) The zero emissions facility credit determined
            under section 48E.''.
      (c) Conforming Amendments.--
              (1) Section 46 is amended by striking ``and'' at the
            end of paragraph (6), by striking the period at the end
            of paragraph (7) and inserting ``, and'', and by adding
            at the end the following new paragraph:
              ``(8) the zero emissions facility credit.''.
              (2) Section 49(a)(1)(C) is amended by striking
            ``and'' at the end of clause (v), by striking the
            period at the end of clause (vi) and inserting a comma,
            and by adding at the end the following new clause:
                              ``(vii) the basis of any eligible
                            property which is part of a zero
                            emissions facility under section
                            48D.''.
              (3) Section 50(a)(2)(E) is amended by striking `` or
            48D'' and inserting ``48D, or 48E(b)(2)''.
              (4) The table of sections for subpart E of part IV of
            subchapter A of chapter 1 is amended by inserting after
            the item relating to section 48D the following new
            item:

    Sec. 48E. Zero emissions facility credit.
      (d) Effective Date.--The amendments made by this section
    shall apply to periods after December 31, 2021, under rules
    similar to the rules of section 48(m) of the Internal Revenue
    Code of 1986 (as in effect on the day before the date of the
    enactment of the Revenue Reconciliation Act of 1990)

    SEC. 136107. EXTENSION AND MODIFICATION OF CREDIT FOR CARBON OXIDE
                        SEQUESTRATION.

      (a) Extension.--Section 45Q(d)(1) is amended by striking
    ``January 1, 2026'' and inserting ``January 1, 2032''.
      (b) Modification of Carbon Oxide Capture Requirements.--
    Section 45Q(d)(2) is amended to read as follows:
              ``(2) which captures--
                      ``(A) in the case of a direct air capture
                    facility, not less than 1,000 metric tons of
                    qualified carbon oxide during the taxable year,
                      ``(B) in the case of an electricity
                    generating facility, not less than 18,750
                    metric tons of qualified carbon oxide during
                    the taxable year and not less than 75 percent
                    of the carbon oxide that would otherwise be
                    released into the atmosphere by such facility
                    during such taxable year, and
                      ``(C) in the case of any other facility, not
                    less than 12,500 metric tons of qualified
                    carbon oxide during the taxable year and not
                    less than 50 percent of the carbon oxide that
                    would otherwise be released into the atmosphere
                    by such facility during such taxable year.''.
      (c) Determination of Applicable Dollar Amount.--
              (1) In general.--Section 45Q(b)(1) is amended by
            redesignating subparagraph (B) as subparagraph (C) and
            by inserting after subparagraph (A) the following new
            subparagraph:
                      ``(B) Special rule for direct air capture
                    facilities.--For any taxable year beginning
                    after December 31, 2021, in the case of any
                    qualified facility described in subsection
                    (d)(2)(C), the applicable dollar amount shall
                    be an amount equal to--
                              ``(i) for purposes of paragraph (3)
                            of subsection (a), an amount equal to
                            the product of $180 and the inflation
                            adjustment factor for such calendar
                            year determined under section
                            43(b)(3)(B) for such calendar year,
                            determined by substituting `2020' for
                            `1990', and
                              ``(ii) for purposes of paragraph (4)
                            of such subsection, an amount equal to
                            the product of $130 and the inflation
                            adjustment factor for such calendar
                            year determined under section
                            43(b)(3)(B) for such calendar year,
                            determined by substituting `2020' for
                            `1990'.''.
              (2) Conforming amendments.--
                      (A) Section 45Q(b)(1)(A) is amended by
                    striking ``The applicable dollar amount'' and
                    inserting ``Except as provided in subparagraph
                    (B), the applicable dollar amount''.
                      (B) Section 45Q(b)(1)(C), as redesignated by
                    subparagraph (A), is amended by striking
                    ``subparagraph (A)'' and inserting
                    ``subparagraph (A) or (B)''.
      (d) Wage and Apprenticeship Requirements.--Section 45Q is
    amended by redesignating subsection (h) as subsection (i) and
    inserting after subsection (g) following new subsection:
      ``(h) Base Credit Amount and Increased Credit Amount for
    Qualified Facilities and Carbon Capture Equipment.--
              ``(1) In general.--In the case of any qualified
            facility and any carbon capture equipment which does
            not satisfy the requirements of paragraph (2), the
            amount of the credit determined under subsection (a)
            shall be 20 percent of such amount (determined without
            regard to this sentence).
              ``(2) Increased credit for certain facilities and
            carbon capture equipment meeting project
            requirements.--
                      ``(A) In general.--In the case of any
                    qualified facility and any carbon capture
                    equipment placed in service at such facility
                    which meets the project requirements of this
                    subparagraph, subparagraph (A) shall not apply.
                      ``(B) Project requirements.--A project meets
                    the requirements of this subparagraph if it is
                    one of the following:
                              ``(i) A qualified facility with a
                            maximum net output of less than 1
                            megawatt.
                              ``(ii) A qualified facility or any
                            carbon capture equipment placed in
                            service at such facility which
                            commences construction prior to the
                            date of the enactment of this
                            paragraph.
                              ``(iii) A project which satisfies the
                            requirements of paragraphs (3) and (4).
              ``(3) Prevailing wage requirements.--
                      ``(A) In general.--The requirements described
                    in this subparagraph with respect to any
                    qualified facility and any carbon capture
                    equipment placed in service at such facility
                    are that the taxpayer shall ensure that any
                    laborers and mechanics employed by contractors
                    and subcontractors in--
                              ``(i) the construction of such
                            facility and carbon capture equipment,
                              ``(ii) the alteration or repair of
                            such facility and carbon capture
                            equipment during the 12 year-period
                            after being placed into service, or for
                            carbon capture equipment placed in
                            service prior to 2018, until the date
                            determined by the Secretary under
                            subsection (g),
                    shall be paid wages at rates not less than the
                    prevailing rates for construction, alteration,
                    or repair of a similar character in the
                    locality as most recently determined by the
                    Secretary of Labor, in accordance with
                    subchapter IV of chapter 31 of title 40, United
                    States Code.
                      ``(B) Correction and penalty related to
                    failure to satisfy wage requirements.--
                              ``(i) In general.--In the case of any
                            taxpayer which fails to satisfy the
                            requirement under subparagraph (A) with
                            respect to the construction of any
                            qualified facility or with respect to
                            the alteration or repair of a facility
                            in any year during the period described
                            in subparagraph (A)(ii), such taxpayer
                            shall be deemed to have satisfied such
                            requirement under such subparagraph
                            with respect to such facility and
                            carbon capture equipment for any year
                            if, with respect to any laborer or
                            mechanic who was paid wages at a rate
                            below the rate described in such
                            subparagraph for any period during such
                            year, such taxpayer--
                                      ``(I) makes payment to such
                                    laborer or mechanic in an
                                    amount equal to the sum of an
                                    amount equal to the difference
                                    between the amount of wages
                                    paid to such laborer or
                                    mechanic during such period,
                                    and--
                                              ``(aa) the amount of
                                            wages required to be
                                            paid to such laborer or
                                            mechanic pursuant to
                                            such subparagraph
                                            during such period,
                                            plus
                                              ``(bb) interest on
                                            the amount determined
                                            under item (aa) at the
                                            underpayment rate
                                            established under
                                            section 6621 for the
                                            period described in
                                            such item, and
                                      ``(II) makes payment to the
                                    Secretary of a penalty in an
                                    amount equal to the product
                                    of--
                                              ``(aa) $5,000,
                                            multiplied by
                                              ``(bb) the total
                                            number of laborers and
                                            mechanics who were paid
                                            wages at a rate below
                                            the rate described in
                                            subparagraph (A) for
                                            any period during such
                                            year.
                              ``(ii) Penalty assessed as tax.--The
                            penalty described in clause (i)(II)
                            shall be treated in the same manner as
                            a penalty imposed under subchapter B of
                            chapter 68.
              ``(4) Apprenticeship requirements.--The requirements
            described in this paragraph with respect to any
            qualified facility and carbon capture equipment are as
            follows:
                      ``(A) Labor hours.--
                              ``(i) Percentage of total labor
                            hours.--All contractors and
                            subcontractors engaged in the
                            performance of construction,
                            alteration, or repair work on any
                            facility and carbon capture equipment
                            prior to such facility being placed
                            into service shall, subject to
                            subparagraph (B), ensure that not less
                            than the applicable percentage of the
                            total labor hours of such work be
                            performed by qualified apprentices.
                              ``(ii) Applicable percentage.--For
                            purposes of paragraph (1), the
                            applicable percentage shall be--
                                      ``(I) in the case of any
                                    applicable project the
                                    construction of which begins
                                    before January 1, 2023, 5
                                    percent,
                                      ``(II) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2022, and
                                    before January 1, 2024, 10
                                    percent, and
                                      ``(III) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2023, 15
                                    percent.
                      ``(B) Apprentice to journeyworker ratio.--The
                    requirement under subparagraph (A)(i) shall be
                    subject to any applicable requirements for
                    apprentice-to-journeyworker ratios of the
                    Department of Labor or the applicable State
                    apprenticeship agency.
                      ``(C) Participation.--Each contractor and
                    subcontractor who employs 4 or more individuals
                    to perform construction, alteration, or repair
                    work on an applicable project shall employ 1 or
                    more qualified apprentices to perform such
                    work.
                      ``(D) Exception.--
                              ``(i) In general.--Notwithstanding
                            any other provision of this paragraph,
                            this paragraph shall not apply in the
                            case of a taxpayer who--
                                      ``(I) demonstrates a lack of
                                    availability of qualified
                                    apprentices in the geographic
                                    area of the construction,
                                    alteration, or repair work, and
                                      ``(II) makes a good faith
                                    effort to comply with the
                                    requirements of this paragraph.
                              ``(ii) Good faith effort.--For
                            purposes of clause (i), a taxpayer
                            shall be deemed to have satisfied the
                            requirements under such paragraph with
                            respect to an applicable project if
                            such taxpayer has requested qualified
                            apprentices from a registered
                            apprenticeship program, as defined in
                            section 3131(e)(3)(B), and such request
                            has been denied, provided that such
                            denial is not the result of a refusal
                            by the contractors or subcontractors
                            engaged in the performance of
                            construction, alteration, or repair
                            work on such applicable project to
                            comply with the established standards
                            and requirements of such apprenticeship
                            program.
                      ``(E) Definitions.--For purposes of this
                    paragraph--
                              ``(i) Labor hours.--The term `labor
                            hours' has the meaning given such term
                            in section 45(b)(9)(E)(i).
                              ``(ii) Qualified apprentice.--The
                            term `qualified apprentice' has the
                            meaning given such term in section
                            45(b)(9)(E)(ii).
              ``(5) Regulations and guidance.--The Secretary shall
            issue such regulations or other guidance as the
            Secretary determines necessary or appropriate to carry
            out the purposes of this subsection.''.
      (e) Increased Applicable Dollar Amount.--
              (1) In general.--Section 45Q(b)(1) is amended--
                      (A) by amending clause (i) of subparagraph
                    (A) to read as follows:
                              ``(i) for any taxable year beginning
                            in a calendar year after 2016 and
                            before 2027--
                                      ``(I) for purposes of
                                    paragraph (3) of subsection
                                    (a), $50 for each calendar year
                                    during such period, and
                                      ``(II) for purposes of
                                    paragraph (4) of such
                                    subsection, $35 for each
                                    calendar year during such
                                    period, and'',
                      (B) by redesignating subparagraphs (B) and
                    (C) as subparagraphs (C) and (D), and
                      (C) by inserting after subparagraph (A) the
                    following new subparagraph:
                      ``(B) Inflation adjustment.--In the case of
                    any taxable year beginning in a calendar year
                    after 2025, each of the dollar amounts in
                    subparagraph (A)(i) shall be increased by an
                    amount equal to--
                              ``(i) such dollar amount, multiplied
                            by
                              ``(ii) the cost-of-living adjustment
                            determined under section 1(f)(3) for
                            the calendar year in which the taxable
                            year begins, determined by substituting
                            `calendar year 2024' for `calendar year
                            2016' in subparagraph (A)(ii) thereof.
                    Any increase determined under the preceding
                    sentence shall be rounded to the nearest
                    cent.''.
      (f) Effective Dates.--
              (1) Extension.--The amendment made by subsection (a)
            shall apply to facilities the construction of which
            begins after December 31, 2025.
              (2) Other amendments.--The amendments made by
            subsections (b), (c), (d), and (e) shall apply to
            taxable years beginning after December 31, 2021.

    SEC. 136108. GREEN ENERGY PUBLICLY TRADED PARTNERSHIPS.

      (a) In General.--Section 7704(d)(1)(E) is amended--
              (1) by striking ``income and gains derived from the
            exploration'' and inserting ``income and gains derived
            from--
                              ``(i) the exploration'',
              (2) by inserting ``or'' before ``industrial source'',
            and
              (3) by striking ``, or the transportation or
            storage'' and all that follows and inserting the
            following:
                              ``(ii) the generation of electric
                            power or thermal energy exclusively
                            using any qualified energy resource (as
                            defined in section 45(c)(1)),
                              ``(iii) the operation of energy
                            property (as defined in section
                            48(a)(3), determined without regard to
                            any date by which the construction of
                            the facility is required to begin),
                              ``(iv) in the case of a facility
                            described in paragraph (3) or (7) of
                            section 45(d) (determined without
                            regard to any placed in service date or
                            date by which construction of the
                            facility is required to begin), the
                            accepting or processing of open-loop
                            biomass or municipal solid waste,
                              ``(v) the transportation or storage
                            of any fuel described in subsection
                            (b), (c), (d), or (e) of section 6426,
                              ``(vi) the conversion of renewable
                            biomass (as defined in subparagraph (I)
                            of section 211(o)(1) of the Clean Air
                            Act (as in effect on the date of the
                            enactment of this clause)) into
                            renewable fuel (as defined in
                            subparagraph (J) of such section as so
                            in effect), or the storage or
                            transportation of such fuel,
                              ``(vii) the production, storage, or
                            transportation of any fuel which--
                                      ``(I) uses as its primary
                                    feedstock carbon oxides
                                    captured from an anthropogenic
                                    source or the atmosphere,
                                      ``(II) does not use as its
                                    primary feedstock carbon oxide
                                    which is deliberately released
                                    from naturally occurring
                                    subsurface springs, and
                                      ``(III) is determined by the
                                    Secretary, after consultation
                                    with the Secretary of Energy
                                    and the Administrator of the
                                    Environmental Protection
                                    Agency, to achieve a reduction
                                    of not less than a 60 percent
                                    in lifecycle greenhouse gas
                                    emissions (as defined in
                                    section 211(o)(1)(H) of the
                                    Clean Air Act, as in effect on
                                    the date of the enactment of
                                    this clause) compared to
                                    baseline lifecycle greenhouse
                                    gas emissions (as defined in
                                    section 211(o)(1)(C) of such
                                    Act, as so in effect), or
                              ``(viii) a qualified facility (as
                            defined in section 45Q(d), without
                            regard to any date by which
                            construction of the facility is
                            required to begin).''.
      (b) Effective Date.--The amendments made by this section
    apply to taxable years beginning after December 31, 2021.

    SEC. 136109. ZERO-EMISSION NUCLEAR POWER PRODUCTION CREDIT.

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

    ``SEC. 45W. ZERO-EMISSION NUCLEAR POWER PRODUCTION CREDIT.

      ``(a) Amount of Credit.--For purposes of section 38, the
    zero-emission nuclear power production credit for any taxable
    year is an amount equal to the amount by which--
              ``(1) the product of--
                      ``(A) 1.5 cents, multiplied by
                      ``(B) the kilowatt hours of electricity--
                              ``(i) produced by the taxpayer at a
                            qualified nuclear power facility, and
                              ``(ii) sold by the taxpayer to an
                            unrelated person during the taxable
                            year, exceeds
              ``(2) the reduction amount for such taxable year.
      ``(b) Definitions.--
              ``(1) Qualified nuclear power facility.--For purposes
            of this section, the term `qualified nuclear power
            facility' means any nuclear facility--
                      ``(A) which is owned by the taxpayer and
                    which uses nuclear energy to produce
                    electricity,
                      ``(B) which has not received an allocation
                    under section 45J(b), and
                      ``(C) which is placed in service before the
                    date of the enactment of this section.
              ``(2) Reduction amount.--
                      ``(A) In general.--For purposes of this
                    section, the term `reduction amount' means,
                    with respect to any qualified nuclear power
                    facility for any taxable year, the amount equal
                    to the lesser of--
                              ``(i) the amount determined under
                            subsection (a)(1), or
                              ``(ii) the amount equal to 80 percent
                            of the excess of--
                                      ``(I) subject to subparagraph
                                    (B), the gross receipts from
                                    any electricity produced by
                                    such facility (including any
                                    electricity services or
                                    products provided in
                                    conjunction with the
                                    electricity produced by such
                                    facility) and sold to an
                                    unrelated person during such
                                    taxable year, over
                                      ``(II) the amount equal to
                                    the product of--
                                              ``(aa) 2.5 cents,
                                            multiplied by
                                              ``(bb) the amount
                                            determined under
                                            subsection (a)(1)(B).
                      ``(B) Treatment of certain receipts.--
                              ``(i) In general.--The amount
                            determined under subparagraph
                            (A)(ii)(I) shall include any amount
                            received by the taxpayer during the
                            taxable year with respect to the
                            qualified nuclear power facility from a
                            zero-emission credit program unless the
                            amount received by the taxpayer is
                            subject to reduction--
                                      ``(I) by the full amount of
                                    the credit determined under
                                    this section, or
                                      ``(II) by any lesser amount
                                    if such amount entirely offsets
                                    the amount received from a
                                    zero-emission credit program.
                              ``(ii) Zero-emission credit
                            program.--For purposes of this
                            subparagraph, the term `zero-emission
                            credit program' means any payments to a
                            qualified nuclear power facility as a
                            result of any Federal, State or local
                            government program for, in whole or in
                            part, the zero-emission, zero-carbon,
                            or air quality attributes of any
                            portion of the electricity produced by
                            such facility.
              ``(3) Electricity.--For purposes of this section, the
            term `electricity' means the energy produced by a
            qualified nuclear power facility from the conversion of
            nuclear fuel into electric power.
      ``(c) Other Rules.--
              ``(1) Inflation adjustment.--The 1.5 cent amount in
            subsection (a)(1)(A) and the 2.5 cent amount in
            subsection (b)(2)(A)(ii)(II)(aa) shall each be adjusted
            by multiplying such amount by the inflation adjustment
            factor (as determined under section 45(e)(2), as
            applied by substituting `calendar year 2022' for
            `calendar year 1992' in subparagraph (B) thereof) for
            the calendar year in which the sale occurs. If any
            amount as increased under the preceding sentence is not
            a multiple of 0.1 cent, such amount shall be rounded to
            the nearest multiple of 0.1 cent.
              ``(2) Special rules.--Rules similar to the rules of
            paragraphs (1), (3), (4), and (5) of section 45(e)
            shall apply for purposes of this section.
              ``(3) Denial of double benefit.--No credit shall be
            allowed under section 48E for any power production for
            which a credit is taken under this section.
      ``(d) Wage and Apprenticeship Requirements.--
              ``(1) Base credit amount and increased credit amount
            for qualified nuclear power facilities.--
                      ``(A) In general.--In the case of any
                    qualified nuclear power facility which does not
                    satisfy the requirements of subparagraph (B),
                    the amount of the credit determined under
                    subsection (a) and the 2.5 cent amount in
                    subsection (b)(2)(A)(ii)(II)(aa) shall be 20
                    percent of such amount (determined without
                    regard to this sentence).
                      ``(B) Increased credit for certain facilities
                    meeting project requirements.--
                              ``(i) In general.--In the case of any
                            qualified nuclear power facility which
                            meets the project requirements of this
                            subparagraph, subparagraph (A) shall
                            not apply.
                              ``(ii) Project requirements.--A
                            project meets the requirements of this
                            subparagraph if it is one of the
                            following:
                                      ``(I) A project with a
                                    maximum net output of less than
                                    1 megawatt.
                                      ``(II) A project which
                                    satisfies the requirements of
                                    paragraphs (2) and (3).
              ``(2) Prevailing wage requirements.--
                      ``(A) In general.--The taxpayer shall ensure
                    that any laborers and mechanics employed by
                    contractors and subcontractors in the
                    alteration or repair of a facility shall be
                    paid wages at rates not less than the
                    prevailing rates for construction, alteration,
                    or repair of a similar character in the
                    locality as most recently determined by the
                    Secretary of Labor, in accordance with
                    subchapter IV of chapter 31 of title 40, United
                    States Code.
                      ``(B) Correction and penalty related to
                    failure to satisfy wage requirements.--
                              ``(i) In general.--In the case of any
                            taxpayer which fails to satisfy the
                            requirement under subparagraph (A),
                            such taxpayer shall be deemed to have
                            satisfied such requirement under such
                            subparagraph with respect to such
                            facility for any year if, with respect
                            to any laborer or mechanic who was paid
                            wages at a rate below the rate
                            described in such subparagraph for any
                            period during such year, such
                            taxpayer--
                                      ``(I) makes payment to such
                                    laborer or mechanic in an
                                    amount equal to the sum of--
                                              ``(aa) an amount
                                            equal to the difference
                                            between the amount of
                                            wages paid to such
                                            laborer or mechanic
                                            during such period,
                                            and--
                                                      ``(AA) the
                                                    amount of wages
                                                    required to be
                                                    paid to such
                                                    laborer or
                                                    mechanic
                                                    pursuant to
                                                    such
                                                    subparagraph
                                                    during such
                                                    period, plus
                                                      ``(BB)
                                                    interest on the
                                                    amount
                                                    determined
                                                    under item (aa)
                                                    at the
                                                    underpayment
                                                    rate
                                                    established
                                                    under section
                                                    6621 for the
                                                    period
                                                    described in
                                                    such item, and
                                      ``(II) makes payment to the
                                    Secretary of a penalty in an
                                    amount equal to the product
                                    of--
                                              ``(aa) $5,000,
                                            multiplied by
                                              ``(bb) the total
                                            number of laborers and
                                            mechanics who were paid
                                            wages at a rate below
                                            the rate described in
                                            subparagraph (A) for
                                            any period during such
                                            year.
                              ``(ii) Penalty assessed as tax.--The
                            penalty described in clause (i)(II)
                            shall be treated in the same manner as
                            a penalty imposed under subchapter B of
                            chapter 68.
              ``(3) Apprenticeship requirements.--The requirements
            described in this subparagraph with respect to any
            qualified nuclear power facility are as follows:
                      ``(A) Labor hours.--
                              ``(i) Percentage of total labor
                            hours.--All contractors and
                            subcontractors engaged in the
                            performance of alteration or repair
                            work on any qualified nuclear power
                            facility shall, subject to subparagraph
                            (B), ensure that not less than the
                            applicable percentage of the total
                            labor hours of such work be performed
                            by qualified apprentices.
                              ``(ii) Applicable percentage.--For
                            purposes of paragraph (1), the
                            applicable percentage shall be--
                                      ``(I) in the case of any
                                    applicable project the
                                    construction of which begins
                                    before January 1, 2023, 5
                                    percent,
                                      ``(II) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2022, and
                                    before January 1, 2024, 10
                                    percent, and
                                      ``(III) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2023, 15
                                    percent.
                      ``(B) Apprentice to journeyworker ratio.--The
                    requirement under subparagraph (A)(i) shall be
                    subject to any applicable requirements for
                    apprentice-to-journeyworker ratios of the
                    Department of Labor or the applicable State
                    apprenticeship agency.
                      ``(C) Participation.--Each contractor and
                    subcontractor who employs 4 or more individuals
                    to perform construction, alteration, or repair
                    work on an applicable project shall employ 1 or
                    more qualified apprentices to perform such
                    work.
                      ``(D) Exception.--
                              ``(i) In general.--Notwithstanding
                            any other provision of this paragraph,
                            this paragraph shall not apply in the
                            case of a taxpayer who--
                                      ``(I) demonstrates a lack of
                                    availability of qualified
                                    apprentices in the geographic
                                    area of the construction,
                                    alteration, or repair work, and
                                      ``(II) makes a good faith
                                    effort to comply with the
                                    requirements of this paragraph.
                              ``(ii) Good faith effort.--For
                            purposes of clause (i), a taxpayer
                            shall be deemed to have satisfied the
                            requirements under such paragraph with
                            respect to an applicable project if
                            such taxpayer has requested qualified
                            apprentices from a registered
                            apprenticeship program, as defined in
                            section 3131(e)(3)(B), and such request
                            has been denied, provided that such
                            denial is not the result of a refusal
                            by the contractors or subcontractors
                            engaged in the performance of
                            construction, alteration, or repair
                            work on such applicable project to
                            comply with the established standards
                            and requirements of such apprenticeship
                            program.
                      ``(E) Definitions.--For purposes of this
                    paragraph--
                              ``(i) Labor hours.--The term `labor
                            hours' has the meaning given such term
                            in section 45(b)(9)(E)(i).
                              ``(ii) Qualified apprentice.--The
                            term `qualified apprentice' has the
                            meaning given such term in section
                            45(b)(9)(E)(ii).
              ``(4) Regulations and guidance.--The Secretary shall
            issue such regulations or other guidance as the
            Secretary determines necessary or appropriate to carry
            out the purposes of this subsection.
      ``(e) Termination.--This section shall not apply to taxable
    years beginning after December 31, 2026.''.
      (b) Conforming Amendments.--
              (1) Section 38(b) of the Internal Revenue Code of
            1986 is amended--
                      (A) in paragraph (36), by striking ``plus''
                    at the end,
                      (B) in paragraph (37), by striking the period
                    at the end and inserting ``, plus'', and
                      (C) by adding at the end the following new
                    paragraph:
              ``(38) the zero-emission nuclear power production
            credit determined under section 45W(a).''.
              (2) The table of sections for subpart D of part IV of
            subchapter A of chapter 1 of such Code is amended by
            adding at the end the following new item:

    ``Sec. 45W. Zero-emission nuclear power production credit.''.
      (c) Elective Payment of Credit.--Section 6417(b), as added by
    the preceding provisions of this Act, is amended by adding at
    the end the following new paragraph:
              ``(8) The zero-emission nuclear power production
            credit determined under section 45W.''.
      (d) Effective Date.--This section shall apply to electricity
    produced and sold after December 31, 2021, in taxable years
    beginning after such date.

                            PART 2--RENEWABLE FUELS

    SEC. 136201. EXTENSION OF INCENTIVES FOR BIODIESEL, RENEWABLE DIESEL
                        AND ALTERNATIVE FUELS.

      (a) Biodiesel and Renewable Diesel Credit.--Section 40A(g) is
    amended by striking ``December 31, 2022'' and inserting
    ``December 31, 2031''.
      (b) Biodiesel Mixture Credit.--
              (1) In general.--Section 6426(c)(6) is amended by
            striking ``December 31, 2022'' and inserting ``December
            31, 2031''.
              (2) Fuels not used for taxable purposes.--Section
            6427(e)(6)(B) is amended by striking ``December 31,
            2022'' and inserting ``December 31, 2031''.
      (c) Alternative Fuel Credit.--Section 6426(d)(5) is amended
    by striking ``December 31, 2021'' and inserting ``December 31,
    2031''.
      (d) Alternative Fuel Mixture Credit.--Section 6426(e)(3) is
    amended by striking ``December 31, 2021'' and inserting
    ``December 31, 2031''.
      (e) Payments for Alternative Fuels.--Section 6427(e)(6)(C) is
    amended by striking ``December 31, 2021'' and inserting
    ``December 31, 2031''.
      (f) Effective Date.--The amendments made by this section
    shall apply to fuel sold or used after December 31, 2021.

    SEC. 136202. EXTENSION OF SECOND GENERATION BIOFUEL INCENTIVES.

      (a) In General.--Section 40(b)(6)(J)(i) is amended by
    striking ``2022'' and inserting ``2032''.
      (b) Effective Date.--The amendment made by subsection (a)
    shall apply to qualified second generation biofuel production
    after December 31, 2021.

    SEC. 136203. SUSTAINABLE AVIATION FUEL CREDIT.

      (a) In General.--Subpart D of part IV of subchapter A of
    chapter 1 is amended by inserting after section 40A the
    following new section:

    ``SEC. 40B. SUSTAINABLE AVIATION FUEL CREDIT.

      ``(a) In General.--For purposes of section 38, the
    sustainable aviation fuel credit for the taxable year is, with
    respect to any sale or use of a qualified mixture which occurs
    during such taxable year, an amount equal to the product of--
              ``(1) the number of gallons of sustainable aviation
            fuel in such mixture, multiplied by
              ``(2) the sum of--
                      ``(A) $1.25, plus
                      ``(B) the applicable supplementary amount
                    with respect to such sustainable aviation fuel.
      ``(b) Applicable Supplementary Amount.--For purposes of this
    section, the term `applicable supplementary amount' means, with
    respect to any sustainable aviation fuel, an amount equal to
    $0.01 for each percentage point by which the lifecycle
    greehouse gas emissions reduction percentage with respect to
    such fuel exceeds 50 percent. In no event shall the applicable
    supplementary amount determined under this subsection exceed
    $0.50.
      ``(c) Qualified Mixture.--For purposes of this section, the
    term `qualified mixture' means a mixture of sustainable
    aviation fuel and kerosene if--
              ``(1) such mixture is produced by the taxpayer in the
            United States,
              ``(2) such mixture is used by the taxpayer (or sold
            by the taxpayer for use) in an aircraft,
              ``(3) such sale or use is in the ordinary course of a
            trade or business of the taxpayer, and
              ``(4) the transfer of such mixture to the fuel tank
            of such aircraft occurs in the United States.
      ``(d) Sustainable Aviation Fuel.--For purposes of this
    section, the term `sustainable aviation fuel' means liquid fuel
    which--
              ``(1) meets the requirements of--
                      ``(A) ASTM International Standard D7566, or
                      ``(B) the Fischer Tropsch provisions of ASTM
                    International Standard D1655, Annex A1,
              ``(2) is not derived from palm fatty distillates or
            petroleum, and
              ``(3) has been certified in accordance with
            subsection (e) as having a lifecycle greenhouse gas
            emissions reduction percentage of at least 50 percent.
      ``(e) Lifecycle Greenhouse Gas Emissions Reduction
    Percentage.--For purposes of this section--
              ``(1) In general.--The term `lifecycle greenhouse gas
            emissions reduction percentage' means, with respect to
            any sustainable aviation fuel, the percentage reduction
            in lifecycle greenhouse gas emissions achieved by such
            fuel in comparison with petroleum-based jet fuel as
            stated in a certification which meets the requirements
            of paragraphs (2).
              ``(2) Certification methodology.--A certification
            meets the requirements of this paragraph if such
            certification (including the methodology and process of
            such certification) conforms with all requirements
            (including requirements related to traceability and
            information transmission) of the most recent Carbon
            Offsetting and Reduction Scheme for International
            Aviation which has been adopted by the International
            Civil Aviation Organization with the agreement of the
            United States.
              ``(3) Option to obtain certification from
            secretary.--Not later than 24 months after the date of
            the enactment of this section, the Secretary, after
            consultation with the Secretary of Energy and the
            Administrator of the Environmental Protection Agency,
            shall establish procedures pursuant to which taxpayers
            may obtain a certification which meets the requirements
            of paragraph (2) from the Secretary.
      ``(f) Registration of Sustainable Aviation Fuel Producers.--
    No credit shall be allowed under this section with respect to
    any sustainable aviation fuel unless the producer of such fuel
    has entered into an agreement with the Secretary to provide the
    Secretary such information with respect to such fuel as the
    Secretary may require for purposes of carrying out this
    section.
      ``(g) Coordination With Credit Against Excise Tax.--The
    amount of the credit determined under this section with respect
    to any sustainable aviation fuel shall, under rules prescribed
    by the Secretary, be properly reduced to take into account any
    benefit provided with respect to such sustainable aviation fuel
    solely by reason of the application of section 6426 or 6427(e).
      ``(h) Termination.--This section shall not apply to any sale
    or use after December 31, 2031.''.
      (b) Credit Made Part of General Business Credit.-- Section
    38(b) is amended by striking ``plus'' at the end of paragraph
    (37), by striking the period at the end of paragraph (38) and
    inserting ``, plus'', and by inserting after paragraph (38) the
    following new paragraph:
              ``(39) the sustainable aviation fuel credit
            determined under section 40B.''.
      (c) Coordination With Biodiesel Incentives.--
              (1) In general.--Section 40A(d)(1) is amended by
            inserting ``or 40B'' after ``determined under section
            40''.
              (2) Conforming amendment.--Section 40A(f) is amended
            by striking paragraph (4).
      (d) Sustainable Aviation Fuel Added to Credit for Alcohol
    Fuel, Biodiesel, and Alternative Fuel Mixtures.--
              (1) In general.--Section 6426 is amended by adding at
            the end the following new subsection:
      ``(k) Sustainable Aviation Fuel Credit.--
              ``(1) In general.--For purposes of this section, the
            sustainable aviation fuel credit for the taxable year
            is, with respect to any sale or use of a qualified
            mixture, an amount equal to the product of--
                      ``(A) the number of gallons of sustainable
                    aviation fuel in such mixture, multiplied by
                      ``(B) the sum of--
                              ``(i) $1.25, plus
                              ``(ii) the applicable supplementary
                            amount with respect to such sustainable
                            aviation fuel.
              ``(2) Applicable supplementary amount.--For purposes
            of this subsection, the term `applicable supplementary
            amount' has the meaning given such term in section
            40B(b).
              ``(3) Other definitions.--Any term used in this
            subsection which is also used in section 40B shall have
            the meaning given such term by section 40B.
              ``(4) Registration requirement.--For purposes of this
            subsection, rules similar to the rules of section
            40B(f) shall apply.''.
              (2) Conforming amendments.--
                      (A) Section 6426 is amended--
                              (i) in subsection (a)(1), by striking
                            ``and (e)'' and inserting ``(e), and
                            (k)'', and
                              (ii) in subsection (h), by striking
                            ``under section 40 or 40A'' and
                            inserting ``under section 40, 40A, or
                            40B''.
                      (B) Section 6427(e)(6) is amended by striking
                    the ``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 qualified mixture of sustainable
                    aviation fuel (as defined in section
                    6426(k)(3)) sold or used after December 31,
                    2031.''.
      (e) Guidance.--Under rules prescribed by the Secretary of the
    Treasury (or the Secretary's delegate), the amount of the
    credit allowed under section 40B of the Internal Revenue Code
    of 1986 (as added by this subsection) shall be properly reduced
    to take into account any benefit provided with respect to
    sustainable aviation fuel (as defined in such section 40B) by
    reason of the application of section 6426 or section 6427(e).
      (f) Amount of Credit Included in Gross Income.--Section 87 is
    amended by striking ``and'' in paragraph (1), by striking the
    period at the end of paragraph (2) and inserting ``, and'', and
    by adding at the end the following new paragraph:
              ``(3) the sustainable aviation fuel credit determined
            with respect to the taxpayer for the taxable year under
            section 40B(a).''.
      (g) Effective Date.--The amendments made by this section
    shall apply to fuel sold or used after December 31, 2022.

    SEC. 136204. CLEAN HYDROGEN.

      (a) Credit for Production of Clean Hydrogen.--
              (1) In general.--Subpart D of part IV of subchapter A
            of chapter 1 is amended by adding at the end the
            following new section:

    ``SEC. 45X. CREDIT FOR PRODUCTION OF CLEAN HYDROGEN.

      ``(a) Amount of Credit.--For purposes of section 38, the
    clean hydrogen production credit for any taxable year is an
    amount equal to the product of--
              ``(1) the applicable amount, multiplied by
              ``(2) the kilograms of qualified clean hydrogen
            produced by the taxpayer during such taxable year at a
            qualified clean hydrogen production facility during the
            10-year period beginning on the date such facility was
            originally placed in service.
      ``(b) Applicable Amount.--
              ``(1) In general.--For purposes of subsection (a)(1),
            the applicable amount shall be an amount equal to the
            applicable percentage of $3.00. If any amount as
            determined under the preceding sentence is not a
            multiple of 0.1 cent, such amount shall be rounded to
            the nearest multiple of 0.1 cent.
              ``(2) Applicable percentage.--For purposes of
            paragraph (1), the term `applicable percentage' means--
                      ``(A) in the case of any qualified clean
                    hydrogen which is produced through a process
                    that, as compared to hydrogen produced by
                    steam-methane reforming, achieves a percentage
                    reduction in lifecycle greenhouse gas emissions
                    which is less than 75 percent, 20 percent,
                      ``(B) in the case of any qualified clean
                    hydrogen which is produced through a process
                    that, as compared to hydrogen produced by
                    steam-methane reforming, achieves a percentage
                    reduction in lifecycle greenhouse gas emissions
                    which is not less than 75 percent and less than
                    85 percent, 25 percent,
                      ``(C) in the case of any qualified clean
                    hydrogen which is produced through a process
                    that, as compared to hydrogen produced by
                    steam-methane reforming, achieves a percentage
                    reduction in lifecycle greenhouse gas emissions
                    which is not less than 85 percent and less than
                    95 percent, 34 percent, and
                      ``(D) in the case of any qualified clean
                    hydrogen which is produced through a process
                    that, as compared to hydrogen produced by
                    steam-methane reforming, achieves a percentage
                    reduction in lifecycle greenhouse gas emissions
                    which is not less than 95 percent, 100 percent.
              ``(3) Inflation adjustment.--The $3.00 amount in
            paragraph (1) shall be adjusted by multiplying such
            amount by the inflation adjustment factor (as
            determined under section 45(e)(2), determined by
            substituting `2020' for `1992' in subparagraph (B)
            thereof) for the calendar year in which the qualified
            clean hydrogen is produced. If any amount as increased
            under the preceding sentence is not a multiple of 0.1
            cent, such amount shall be rounded to the nearest
            multiple of 0.1 cent.
      ``(c) Definitions.--For purposes of this section--
              ``(1) Lifecycle greenhouse gas emissions.--For
            purposes of this section, the term `lifecycle
            greenhouse gas emissions' has the same meaning given
            such term under subparagraph (H) of section 211(o)(1)
            of the Clean Air Act (42 U.S.C. 7545(o)(1)), as in
            effect on the date of enactment of this section, as
            related to the full fuel lifecycle through the point of
            hydrogen production.
              ``(2) Qualified clean hydrogen.--
                      ``(A) In general.--The term `qualified clean
                    hydrogen' means hydrogen which is produced
                    through a process that, as compared to hydrogen
                    produced by steam-methane reforming, achieves a
                    percentage reduction in lifecycle greenhouse
                    gas emissions which is not less than 40
                    percent.
                      ``(B) Additional requirements.--Such term
                    shall not include any hydrogen unless such
                    hydrogen is produced--
                              ``(i) in the United States (as
                            defined in section 638(1) or a
                            possession of the United States (as
                            defined in section 638(2)),
                              ``(ii) in the ordinary course of a
                            trade or business of the taxpayer, and
                              ``(iii) for sale or use.
              ``(3) Qualified clean hydrogen production facility.--
                      ``(A) In general.--The term `qualified clean
                    hydrogen production facility' means a facility
                    owned by the taxpayer which produces qualified
                    clean hydrogen and which meets the requirements
                    of subparagraph (B).
                      ``(B) Termination.--The term `qualified clean
                    hydrogen production facility' shall not include
                    any facility the construction of which begins
                    after December 31, 2028.
              ``(4) Steam-methane reforming.--The term `steam-
            methane reforming' means a hydrogen production process
            in which high-temperature steam is used to produce
            hydrogen from natural gas (other than natural gas
            derived from biomass (as defined in section 45K(c)(3)
            as in effect on the date of the enactment of this
            section), without carbon capture and sequestration.
      ``(d) Special Rules.--
              ``(1) Treatment of facilities owned by more than 1
            taxpayer.--Rules similar to the rules section 45(e)(3)
            shall apply for purposes of this section.
              ``(2) Coordination with credit for carbon oxide
            sequestration.--No credit shall be allowed under this
            section with respect to any qualified clean hydrogen
            produced at a facility which includes property for
            which a credit is allowed under section 45Q.
      ``(e) Base Credit Amount and Increased Credit Amount for
    Qualified Clean Hydrogen Production Facilities.--
              ``(1) In general.--In the case of any qualified clean
            hydrogen production facility which does not satisfy the
            requirements of paragraph (2)(B), the amount of the
            credit determined under subsection (a) shall be 20
            percent of such amount (determined without regard to
            this sentence).
              ``(2) Increased credit for certain facilities meeting
            project requirements.--
                      ``(A) In general.--In the case of any
                    qualified facility which meets the project
                    requirements of this paragraph, paragraph (1)
                    shall not apply.
                      ``(B) Project requirements.--A project meets
                    the requirements of this subparagraph if it is
                    one of the following:
                              ``(i) A project with a maximum net
                            output of less than 1 megawatt.
                              ``(ii) A project which commences
                            construction prior to the date of the
                            enactment of this paragraph.
                              ``(iii) A project which satisfies the
                            requirements of paragraphs (3) and (4).
              ``(3) Prevailing wage requirements.--
                      ``(A) In general.--The requirements described
                    in this subparagraph with respect to any
                    qualified clean hydrogen production facility
                    are that the taxpayer shall ensure that any
                    laborers and mechanics employed by contractors
                    and subcontractors in--
                              ``(i) the construction of such
                            facility, and
                              ``(ii) for the 10-year period
                            beginning on the date the facility was
                            originally placed in service, the
                            alteration or repair of such facility,
                    shall be paid wages at rates not less than the
                    prevailing rates for construction, alteration,
                    or repair of a similar character in the
                    locality as most recently determined by the
                    Secretary of Labor, in accordance with
                    subchapter IV of chapter 31 of title 40, United
                    States Code.
                      ``(B) Correction and penalty related to
                    failure to satisfy wage requirements.--Rules
                    similar to the rules of section 45(b)(8)(B)
                    shall apply for purposes of this subparagraph.
              ``(4) Apprenticeship requirements.--Rules similar to
            the rules of section 45(b)(9) shall apply for purposes
            of this paragraph.
              ``(5) Regulations and guidance.--The Secretary shall
            issue such regulations or other guidance as the
            Secretary determines necessary or appropriate to carry
            out the purposes of this subsection.
      ``(f) Regulations.--Not later than 1 year after the date of
    enactment of this section, the Secretary, after consultation
    with the Secretary of Energy and the Administrator of the
    Environmental Protection Agency, shall issue regulations or
    other guidance to carry out the purposes of this section,
    including regulations or other guidance--
              ``(1) for determining lifecycle greenhouse gas
            emissions, and
              ``(2) which require verification by unrelated third
            parties of the production and sale or use of qualified
            clean hydrogen with respect to which credit is
            otherwise allowed under this section.''.
              (2) Elective payment of credit.--Section 6417(b), as
            added by the preceding provisions of this Act, is
            amended by adding at the end the following new
            paragraph:
              ``(9) The credit for production of clean hydrogen
            determined under section 45X.''.
              (3) Conforming amendments.--
                      (A) Section 38(b) is amended--
                              (i) in paragraph (38), by striking
                            ``plus'' at the end,
                              (ii) in paragraph (39), by striking
                            the period at the end and inserting ``,
                            plus'', and
                              (iii) by adding at the end the
                            following new paragraph:
              ``(40) the clean hydrogen production credit
            determined under section 45X(a).''.
                      (B) The table of sections for subpart D of
                    part IV of subchapter A of chapter 1 amended by
                    adding at the end the following new item:

    ``Sec. 45X. Credit for production of clean hydrogen.''.
              (4) Effective date.--The amendments made by this
            subsection shall apply to hydrogen placed in service
            after December 31, 2021.
      (b) Credit for Electricity Produced From Renewable Resources
    Allowed if Electricity Is Used to Produce Clean Hydrogen.--
              (1) In general.--Section 45(e) is amended by adding
            at the end the following new paragraph:
              ``(13) Special rule for electricity used at a
            qualified clean hydrogen production facility.--
            Electricity produced by the taxpayer shall be treated
            as sold by such taxpayer to an unrelated person during
            the taxable year if such electricity is used during
            such taxable year by the taxpayer or a person related
            to the taxpayer at a qualified clean hydrogen
            production facility (as defined in section 45X(d)(3))
            to produce qualified clean hydrogen (as defined in
            section 45X(d)(2)) during the 10 year period after such
            facility is placed in service. The Secretary shall
            issue such regulations or other guidance as the
            Secretary determines appropriate to carry out the
            purposes of this paragraph, including regulations or
            other guidance to require verification by unrelated
            third parties of the production and use of electricity
            to which this paragraph applies.''.
              (2) Effective date.--The amendment made by this
            subsection shall apply to electricity produced after
            December 31, 2021.
      (c) Election to Treat Clean Hydrogen Production Facilities as
    Energy Property.--
              (1) In general.--Section 48(a) is amended by adding
            at the end the following new paragraph:
              ``(8) Election to treat clean hydrogen production
            facilities as energy property.--
                      ``(A) In general.--In the case of any
                    qualified property (as defined in paragraph
                    (5)(D)) which is part of a specified clean
                    hydrogen production facility--
                              ``(i) such property shall be treated
                            as energy property for purposes of this
                            section, and
                              ``(ii) the energy percentage with
                            respect to such property is--
                                      ``(I) in the case of a
                                    facility which is designed and
                                    reasonably expected to produce
                                    qualified clean hydrogen which
                                    is described in a subparagraph
                                    (A) of section 45X(b)(2), 6
                                    percent,
                                      ``(II) in the case of a
                                    facility which is designed and
                                    reasonably expected to produce
                                    qualified clean hydrogen which
                                    is described in a subparagraph
                                    (B) of such section, 7.5
                                    percent,
                                      ``(III) in the case of a
                                    facility which is designed and
                                    reasonably expected to produce
                                    qualified clean hydrogen which
                                    is described in a subparagraph
                                    (C) of such section, 10.2
                                    percent, and
                                      ``(IV) in the case of a
                                    facility which is designed and
                                    reasonably expected to produce
                                    qualified clean hydrogen which
                                    is described in a subparagraph
                                    (D) of such section, 30
                                    percent.
                      ``(B) Denial of production credit.--No credit
                    shall be allowed under section 45X for any
                    taxable year with respect to any specified
                    clean hydrogen production facility.
                      ``(C) Specified clean hydrogen production
                    facility.--For purposes of this paragraph, the
                    term `specified clean hydrogen production
                    facility' means any qualified clean hydrogen
                    production facility (as defined in section
                    45X(d)(3)) or any portion of such facility--
                              ``(i) which is placed in service
                            after December 31, 2021, and
                              ``(ii) with respect to which--
                                      ``(I) no credit has been
                                    allowed under section 45X or
                                    45Q, and
                                      ``(II) the taxpayer makes an
                                    irrevocable election to have
                                    this paragraph apply.
                      ``(D) Qualified clean hydrogen.--For purposes
                    of this paragraph, the term `qualified clean
                    hydrogen' has the meaning given such term by
                    section 45X(d)(2).
                      ``(E) Regulations.--The Secretary, after
                    consultation with the Secretary of Energy and
                    the Administrator of the Environmental
                    Protection Agency, shall issue such regulations
                    or other guidance as the Secretary determines
                    necessary or appropriate to carry out the
                    purposes of this section, including regulations
                    or other guidance which--
                              ``(i) requires verification by one or
                            more unrelated third parties that the
                            facility produces hydrogen which is
                            consistent with the hydrogen that such
                            facility was designed and expected to
                            produce under subparagraph (A)(ii), and
                              ``(ii) recaptures so much of any
                            credit allowed under this section as
                            exceeds the amount of the credit which
                            would have been allowed if the expected
                            production were consistent with the
                            actual verified production (or all of
                            the credit so allowed in the absence of
                            such verification).''.
              (2) Effective date.--The amendments made by this
            section shall apply to periods after December 31, 2021,
            under rules similar to the rules of section 48(m) of
            the Internal Revenue Code of 1986 (as in effect on the
            day before the date of the enactment of the Revenue
            Reconciliation Act of 1990).
      (d) Termination of Excise Tax Credit for Hydrogen.--
              (1) In general.--Section 6426(d)(2) is amended by
            striking subparagraph (D) and by redesignating
            subparagraphs (E), (F), and (G) as subparagraphs (D),
            (E), and (F), respectively.
              (2) Conforming amendment.--Section 6426(e)(2) is
            amended by striking ``(F)'' and inserting ``(E)''.
              (3) Effective date.--The amendments made by this
            subsection shall apply to fuel sold or used after
            December 31, 2021.

         PART 3--GREEN ENERGY AND EFFICIENCY INCENTIVES FOR INDIVIDUALS

    SEC. 136301. EXTENSION, INCREASE, AND MODIFICATIONS OF NONBUSINESS
                        ENERGY PROPERTY CREDIT.

      (a) Extension of Credit.--Section 25C(g)(2) is amended by
    striking ``December 31, 2021'' and inserting ``December 31,
    2031''.
      (b) Increase in Credit Percentage for Qualified Energy
    Efficiency Improvements.--Section 25C(a)(1) is amended by
    striking ``10 percent'' and inserting ``30 percent''.
      (c) Application of Annual Limitation in Lieu of Lifetime
    Limitation.--Section 25C(b) is amended to read as follows:
      ``(b) Limitations.--
              ``(1) In general.--The credit allowed under this
            section with respect to any taxpayer for any taxable
            year shall not exceed $1,200.
              ``(2) Windows.--The credit allowed under this section
            by reason of subsection (a)(1) with respect to any
            taxpayer for any taxable year shall not exceed--
                      ``(A) in the aggregate with respect to all
                    exterior windows and skylights which are not
                    described in subparagraph (B), $200,
                      ``(B) in the aggregate with respect to all
                    exterior windows and skylights which meet the
                    standard for the most efficient certification
                    under applicable Energy Star program
                    requirements, the excess (if any) of $600 over
                    the credit so allowed with respect to all
                    windows and skylights taken into account under
                    subparagraph (A).
              ``(3) Doors.--The credit allowed under this section
            by reason of subsection (a)(1) with respect to any
            taxpayer for any taxable year shall not exceed--
                      ``(A) $250 in the case of any exterior door,
                    and
                      ``(B) $500 in the aggregate with respect to
                    all exterior doors.''.
      (d) Modifications Related to Qualified Energy Efficiency
    Improvements.--
              (1) Standards for energy efficient building envelope
            components.--Section 25C(c)(2) is amended by striking
            ``meets--'' and all that follows through the period at
            the end and inserting the following: ``meets--
                      ``(A) in the case of an exterior window, a
                    skylight, or an exterior door, applicable
                    Energy Star program requirements, and
                      ``(B) in the case of any other component, the
                    prescriptive criteria for such component
                    established by the most recent International
                    Energy Conservation Code standard in effect as
                    of the beginning of the calendar year which is
                    2 years prior to the calendar year in which
                    such component is placed in service.''.
              (2) Roofs not treated as building envelope
            components.--Section 25C(c)(3) is amended by adding
            ``and'' at the end of subparagraph (B), by striking ``,
            and'' at the end of subparagraph (C) and inserting a
            period, and by striking subparagraph (D).
              (3) Air barrier insulation added to definition of
            building envelope component.--Section 25C(c)(3)(A) is
            amended by striking ``material or system'' and
            inserting ``material or system, including air sealing
            material or system,''.
      (e) Modification of Residential Energy Property
    Expenditures.--Section 25C(d) is amended to read as follows:
      ``(d) Residential Energy Property Expenditures.--For purposes
    of this section--
              ``(1) In general.--The term `residential energy
            property expenditures' means expenditures made by the
            taxpayer for qualified energy property which is--
                      ``(A) installed on or in connection with a
                    dwelling unit located in the United States and
                    used as a residence by the taxpayer, and
                      ``(B) originally placed in service by the
                    taxpayer.
            Such term includes expenditures for labor costs
            properly allocable to the onsite preparation, assembly,
            or original installation of the property.
              ``(2) Qualified energy property.--The term `qualified
            energy property' means any of the following which meet
            or exceed the highest efficiency tier (not including
            any advanced tier) established by the Consortium for
            Energy Efficiency which is in effect as of the
            beginning of the calendar year in which the property is
            placed in service:
                      ``(A) An electric heat pump water heater.
                      ``(B) An electric heat pump.
                      ``(C) A central air conditioner.
                      ``(D) A natural gas, propane, or oil water
                    heater.
                      ``(E) A natural gas, propane, or oil furnace
                    or hot water boiler.''.
      (f) Home Energy Audits.--
              (1) In general.--Section 25C(a) is amended by
            striking ``and'' at the end of paragraph (1), by
            striking the period at the end of paragraph (2) and
            inserting ``, and'', and by adding at the end the
            following new paragraph:
              ``(3) 30 percent of the amount paid or incurred by
            the taxpayer during the taxable year for home energy
            audits.''.
              (2) Limitation.--Section 25C(b), as amended by
            subsection (c), is amended adding at the end the
            following new paragraph:
              ``(5) Home energy audits.--
                      ``(A) Dollar limitation.--The amount of the
                    credit allowed under this section by reason of
                    subsection (a)(3) shall not exceed $150.
                      ``(B) Substantiation requirement.--No credit
                    shall be allowed under this section by reason
                    of subsection (a)(3) unless the taxpayer
                    includes with the taxpayer's return of tax such
                    information or documentation as the Secretary
                    may require.''.
              (3) Home energy audits.--
                      (A) In general.--Section 25C, as amended by
                    subsections (a), is amended by redesignating
                    subsections (e), (f), and (g), as subsections
                    (f), (g), and (h), respectively, and by
                    inserting after subsection (d) the following
                    new subsection:
      ``(e) Home Energy Audits.--For purposes of this section, the
    term `home energy audit' means an inspection and written report
    with respect to a dwelling unit located in the United States
    and owned or used by the taxpayer as the taxpayer's principal
    residence (within the meaning of section 121) which--
              ``(1) identifies the most significant and cost-
            effective energy efficiency improvements with respect
            to such dwelling unit, including an estimate of the
            energy and cost savings with respect to each such
            improvement, and
              ``(2) is conducted and prepared by a home energy
            auditor that meets the certification or other
            requirements specified by the Secretary (after
            consultation with the Secretary of Energy and the
            Administrator of the Environmental Protection Agency
            and not later than 180 days after the date of the
            enactment of this subsection) in regulations or other
            guidance.''.
                      (B) Conforming amendment.--Section
                    1016(a)(33) is amended by striking ``section
                    25C(f)'' and inserting ``section 25C(g)''.
              (4) Lack of substantiation treated as mathematical or
            clerical error.--Section 6213(g)(2) is amended--
                      (A) in subparagraph (P), by striking ``and''
                    at the end,
                      (B) in subparagraph (Q), by striking the
                    period at the end and inserting ``, and'', and
                      (C) by adding at the end the following:
                      ``(R) an omission of correct information or
                    documentation required under section
                    25C(b)(5)(B) (relating to home energy audits)
                    to be included on a return.''.
      (g) Identification Number Requirement.--
              (1) In general.--Section 25C, as amended by
            subsections (a) and (f), is amended by redesignating
            subsection (h) as subsection (i) and by inserting after
            subsection (g) the following new subsection:
      ``(h) Product Identification Number Requirement.--
              ``(1) In general.--No credit shall be allowed under
            subsection (a) with respect to any item of specified
            property placed in service after December 31, 2023,
            unless--
                      ``(A) such item is produced by a qualified
                    manufacturer, and
                      ``(B) the taxpayer includes the qualified
                    product identification number of such item on
                    the return of tax for the taxable year.
              ``(2) Qualified product identification number.--For
            purposes of this section, the term `qualified product
            identification number' means, with respect to any item
            of specified property, the product identification
            number assigned to such item by the qualified
            manufacturer pursuant to the methodology referred to in
            paragraph (3).
              ``(3) Qualified manufacturer.--
                      ``(A) In general.--For purposes of this
                    section, the term `qualified manufacturer'
                    means any manufacturer of specified property
                    which enters into an agreement with the
                    Secretary which provides that such manufacturer
                    will--
                              ``(i) assign a product identification
                            number to each item of specified
                            property produced by such manufacturer
                            utilizing a methodology that will
                            ensure that such number (including any
                            alphanumeric) is unique to each such
                            item (by utilizing numbers or letters
                            which are unique to such manufacturer
                            or by such other method as the
                            Secretary may provide),
                              ``(ii) label such item with such
                            number in such manner as the Secretary
                            may provide, and
                              ``(iii) make periodic written reports
                            to the Secretary (at such times and in
                            such manner as the Secretary may
                            provide) of the product identification
                            numbers so assigned and including such
                            information as the Secretary may
                            require with respect to the item of
                            specified property to which such number
                            was so assigned.
                      ``(B) Consultation with doe and epa.--The
                    Secretary, after consultation with the
                    Secretary of Energy and the Administrator of
                    the Environmental Protection Agency, shall
                    establish procedures for manufacturers and
                    consumers to meet the requirements for product
                    identification numbers under subparagraph (A).
              ``(4) Specified property.--For purposes of this
            subsection, the term `specified property' means any
            qualified energy property and any property described in
            subparagraph (B) or (C) of subsection (c)(3).''.
              (2) Omission of correct product identification number
            treated as mathematical or clerical error.--Section
            6213(g)(2), as amended by the preceding provisions of
            this Act, is amended--
                      (A) in subparagraph (Q), by striking ``and''
                    at the end,
                      (B) in subparagraph (R), by striking the
                    period at the end and inserting ``, and'', and
                      (C) by adding at the end the following:
                      ``(S) an omission of a correct product
                    identification number required under section
                    25C(h) (relating to credit for nonbusiness
                    energy property) to be included on a return.''.
      (h) Effective Dates.--
              (1) In general.--Except as otherwise provided by this
            subsection, the amendments made by this section shall
            apply to property placed in service after December 31,
            2021.
              (2) Home energy audits.--The amendments made by
            subsection (f) shall apply to amounts paid or incurred
            after December 31, 2021.
              (3) Identification number requirement.--The
            amendments made subsection (g) shall apply to property
            placed in service after December 31, 2023.

    SEC. 136302. RESIDENTIAL ENERGY EFFICIENT PROPERTY.

      (a) Extension of Credit.--
              (1) In general.--Section 25D(h) is amended by
            striking ``December 31, 2023'' and inserting ``December
            31, 2033''.
              (2) Application of phaseout.--Section 25D(g) is
            amended--
                      (A) by striking ``before January 1, 2023'' in
                    paragraph (2) and inserting ``before January 1,
                    2022'',
                      (B) by striking ``and'' at the end of
                    paragraph (2),
                      (C) by redesignating paragraph (3) as
                    paragraph (5) and by inserting after paragraph
                    (2) the following new paragraphs:
              ``(3) in the case of property placed in service after
            December 31, 2021, and before January 1, 2032, 30
            percent,
              ``(4) in the case of property placed in service after
            December 31, 2031, and before January 1, 2033, 26
            percent, and'', and
                      (D) by striking ``December 31, 2022, and
                    before January 1, 2024'' in paragraph (5) (as
                    so redesignated) and inserting ``December 31,
                    2032, and before January 1, 2034''.
      (b) Residential Energy Efficient Property Credit for Battery
    Storage Technology.--
              (1) In general.--Section 25D(a) is amended by
            striking ``and'' at the end of paragraph (5) and by
            inserting after paragraph (6) the following new
            paragraph:
              ``(7) the qualified battery storage technology
            expenditures,''.
              (2) Qualified battery storage technology
            expenditure.--Section 25D(d) is amended by adding at
            the end the following new paragraph:
              ``(7) Qualified battery storage technology
            expenditure.--The term `qualified battery storage
            technology expenditure' means an expenditure for
            battery storage technology which--
                      ``(A) is installed in connection with a
                    dwelling unit located in the United States and
                    used as a residence by the taxpayer, and
                      ``(B) has a capacity of not less than 3
                    kilowatt hours.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to expenditures made after December 31, 2021.

    SEC. 136303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

      (a) Placed in Service Requirement.--Section 179D(c)(2) is
    amended by striking ``the date that is 2 years before the date
    that construction of such property begins'' and inserting ``the
    date that is 2 years before the date such property is placed
    into service''.
      (b) Temporary Increase in Deduction, etc..--Section 179D is
    amended by adding at the end the following:
      ``(i) Temporary Rules.--
              ``(1) Period of application.--The provisions of this
            subsection shall apply only to taxable years beginning
            after December 31, 2021, and before January 1, 2032.
              ``(2) Modification of efficiency standard.--
            Subsection (c)(1)(D) shall be applied by substituting
            `25' for `50'.
              ``(3) Maximum amount of deduction.--
                      ``(A) In general.--The deduction under
                    subsection (a) with respect to any building for
                    any taxable year shall not exceed the excess
                    (if any) of--
                              ``(i) the product of--
                                      ``(I) the applicable dollar
                                    value, and
                                      ``(II) the square footage of
                                    the building, over
                              ``(ii) the aggregate amount of the
                            deductions under subsection (a) and
                            paragraph (6) with respect to the
                            building for the 3 taxable years
                            immediately preceding such taxable year
                            (or, in the case of any such deduction
                            allowable to a person other than the
                            taxpayer, for any taxable year ending
                            during the 4-taxable-year period ending
                            with such taxable year).
                      ``(B) Applicable dollar value.--For purposes
                    of paragraph (3)(A)(i), the applicable dollar
                    value shall be an amount equal to $2.50
                    increased (but not above $5.00) by $0.10 for
                    each percentage point by which the total annual
                    energy and power costs for the building are
                    certified to be reduced by a percentage greater
                    than 25 percent.
                      ``(C) Application of inflation adjustment.--
                    Subsection (g) shall be applied--
                              ``(i) by substituting `2022' for
                            `2020',
                              ``(ii) by substituting `subsection
                            (i)(3)(B)' for `subsection (b) or
                            subsection (d)(1)(A)', and
                              ``(iii) by substituting `2021' for
                            `2019'.
                      ``(D) Limitation to apply in lieu of current
                    limitation and partial allowance.--Subsections
                    (b) and (d)(1) shall not apply.
              ``(4) Base credit amount and increased credit amount
            for certain property.--
                      ``(A) In general.--In the case of any
                    property which does not satisfy the
                    requirements of subparagraph (B), paragraph
                    (3)(B) shall be applied by substituting `$0.50'
                    for `$2.50', `$.02' for `$.10', and `$1.00' for
                    `$5.00'.
                      ``(B) Increased credit for certain property
                    meeting project requirements.--
                              ``(i) Project requirements.--A
                            project meets the requirements of this
                            subparagraph if it is one of the
                            following:
                                      ``(I) A project which
                                    commences construction prior to
                                    the date of the enactment of
                                    this paragraph.
                                      ``(II) A project which
                                    commences construction after
                                    the date of enactment of this
                                    paragraph and satisfies the
                                    requirements of paragraphs (5)
                                    and (6).
                                      ``(III) A project with
                                    respect to which initial
                                    construction is completed and
                                    building modifications are made
                                    as part of a qualified retrofit
                                    plan, and which satisfies
                                    paragraphs (5) and (6).
              ``(5) Prevailing wage requirements.--
                      ``(A) In general.--The requirements described
                    in this subparagraph with respect to any
                    project are that the taxpayer shall ensure that
                    any laborers and mechanics employed by
                    contractors and subcontractors in the
                    construction of any property or with respect to
                    building modifications made as part of a
                    qualified retrofit plan shall be paid wages at
                    rates not less than the prevailing rates for
                    construction, alteration, or repair of a
                    similar character in the locality as most
                    recently determined by the Secretary of Labor,
                    in accordance with subchapter IV of chapter 31
                    of title 40, United States Code.
                      ``(B) Correction and penalty related to
                    failure to satisfy wage requirements.--In the
                    case of any taxpayer which fails to satisfy the
                    requirement under subparagraph (A) with respect
                    to any project or any building modifications
                    made as part of a qualified retrofit plan,
                    rules similar to the rules of section
                    45(b)(8)(B) shall apply for purposes of this
                    paragraph.
              ``(6) Apprenticeship requirements.--The requirements
            described in this subparagraph with respect to any
            property are as follows:
                      ``(A) Labor hours.--
                              ``(i) Percentage of total labor
                            hours.--All contractors and
                            subcontractors engaged in the
                            performance of construction of a
                            project or building modifications made
                            as part of a qualified retrofit plan
                            shall, subject to subparagraph (B),
                            ensure that not less than the
                            applicable percentage of the total
                            labor hours of such work be performed
                            by qualified apprentices.
                              ``(ii) Applicable percentage.--For
                            purposes of paragraph (1), the
                            applicable percentage shall be--
                                      ``(I) in the case of any
                                    applicable project the
                                    construction of which begins
                                    before January 1, 2023, 5
                                    percent,
                                      ``(II) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2022, and
                                    before January 1, 2024, 10
                                    percent, and
                                      ``(III) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2023, 15
                                    percent.
                      ``(B) Apprentice to journeyworker ratio.--The
                    requirement under subparagraph (A)(i) shall be
                    subject to any applicable requirements for
                    apprentice-to-journeyworker ratios of the
                    Department of Labor or the applicable State
                    apprenticeship agency.
                      ``(C) Participation.--Each contractor and
                    subcontractor who employs 4 or more individuals
                    to perform construction, alteration, or repair
                    work on an applicable project shall employ 1 or
                    more qualified apprentices to perform such
                    work.
                      ``(D) Exception.--
                              ``(i) In general.--Notwithstanding
                            any other provision of this paragraph,
                            this paragraph shall not apply in the
                            case of a taxpayer who--
                                      ``(I) demonstrates a lack of
                                    availability of qualified
                                    apprentices in the geographic
                                    area of the construction,
                                    alteration, or repair work, and
                                      ``(II) makes a good faith
                                    effort to comply with the
                                    requirements of this paragraph.
                              ``(ii) Good faith effort.--For
                            purposes of clause (i), a taxpayer
                            shall be deemed to have satisfied the
                            requirements under such paragraph with
                            respect to an applicable project if
                            such taxpayer has requested qualified
                            apprentices from a registered
                            apprenticeship program, as defined in
                            section 3131(e)(3)(B), and such request
                            has been denied, provided that such
                            denial is not the result of a refusal
                            by the contractors or subcontractors
                            engaged in the performance of
                            construction, alteration, or repair
                            work on such applicable project to
                            comply with the established standards
                            and requirements of such apprenticeship
                            program.
                      ``(E) Definitions.--For purposes of this
                    paragraph--
                              ``(i) Labor hours.--The term `labor
                            hours' has the meaning given such term
                            in section 45(b)(9)(E)(i).
                              ``(ii) Qualified apprentice.--The
                            term `qualified apprentice' has the
                            meaning given such term in section
                            45(b)(9)(E)(ii).
              ``(7) Allocation of deduction by certain tax-exempt
            entities.--
                      ``(A) In general.--A specified tax-exempt
                    entity shall be treated in the same manner as a
                    Federal, State, or local government for
                    purposes of applying subsection (d)(4).
                      ``(B) Specified tax-exempt entity.--For
                    purposes of this paragraph, the term `specified
                    tax-exempt entity' means--
                              ``(i) the United States, any State or
                            political subdivision thereof, any
                            possession of the United States, or any
                            agency or instrumentality of any of the
                            foregoing,
                              ``(ii) any Indian tribal government
                            (within the meaning of section 139E),
                            and
                              ``(iii) any organization exempt from
                            tax imposed by this chapter.
              ``(8) Alternative deduction for energy efficient
            retrofit building property.--
                      ``(A) In general.--In the case of a taxpayer
                    which elects (at such time and in such manner
                    as the Secretary, after consultation with the
                    administrator of the Environmental Protection
                    Agency, may provide) the application of this
                    paragraph with respect to any qualified
                    building, there shall be allowed as a deduction
                    for the taxable year which includes the date of
                    the qualifying final certification with respect
                    to the qualified retrofit plan of such
                    building, an amount equal to the lesser of--
                              ``(i) the excess described in
                            paragraph (3) (determined by
                            substituting `energy usage intensity'
                            for `total annual energy and power
                            costs' in subparagraph (B) thereof), or
                              ``(ii) the aggregate adjusted basis
                            (determined after taking into account
                            all adjustments with respect to such
                            taxable year other than the reduction
                            under subsection (e)) of energy
                            efficient retrofit building property
                            placed in service by the taxpayer
                            pursuant to such qualified retrofit
                            plan.
                      ``(B) Qualified retrofit plan.--For purposes
                    of this paragraph, the term `qualified retrofit
                    plan' means a written plan prepared by a
                    qualified professional which specifies
                    modifications to a building which, in the
                    aggregate, are expected to reduce such
                    building's energy usage intensity by 25 percent
                    or more in comparison to the baseline energy
                    usage intensity of such building. Such plan
                    shall provide for a qualified professional to--
                              ``(i) as of any date during the 1-
                            year period ending on the date of the
                            first certification described in clause
                            (ii), certify the energy usage
                            intensity of such building as of such
                            date,
                              ``(ii) certify the status of property
                            installed pursuant to such plan as
                            meeting the requirements of clauses
                            (ii) and (iii) subparagraph (C), and
                              ``(iii) as of any date that is more
                            than 1 year after completion of the
                            plan, certify the energy usage
                            intensity of such building as of such
                            date.
                      ``(C) Energy efficient retrofit building
                    property.--For purposes of this paragraph, the
                    term `energy efficient retrofit building
                    property' means property--
                              ``(i) with respect to which
                            depreciation (or amortization in lieu
                            of depreciation) is allowable,
                              ``(ii) which is installed on or in
                            any qualified building,
                              ``(iii) which is installed as part
                            of--
                                      ``(I) the interior lighting
                                    systems,
                                      ``(II) the heating, cooling,
                                    ventilation, and hot water
                                    systems, or
                                      ``(III) the building
                                    envelope, and
                              ``(iv) which is certified in
                            accordance with subparagraph (B)(ii) as
                            meeting the requirements of clauses
                            (ii) and (iii).
                      ``(D) Qualified building.--For purposes of
                    this paragraph, the term `qualified building'
                    means any building which--
                              ``(i) is located in the United
                            States, and
                              ``(ii) was originally placed in
                            service not less than 5 years before
                            the establishment of the qualified
                            retrofit plan with respect to such
                            building.
                      ``(E) Qualifying final certification.--For
                    purposes of this paragraph, the term
                    `qualifying final certification' means, with
                    respect to any qualified retrofit plan, the
                    certification described in subparagraph
                    (B)(iii) if the energy usage intensity
                    certified in such certification is not more
                    than 75 percent of the baseline energy usage
                    intensity of the building.
                      ``(F) Baseline energy usage intensity.--
                              ``(i) In general.--The term `baseline
                            energy usage intensity' means the
                            energy usage intensity certified under
                            subparagraph (B)(i), as adjusted to
                            take into account weather as compared
                            to the energy usage intensity
                            determined under subparagraph
                            (B)(iii)(I).
                              ``(ii) Determination of adjustment.--
                            For purposes of clause (i), the
                            adjustments described in such clause
                            shall be determined in such manner as
                            the Secretary, after consultation with
                            the Administrator of the Environmental
                            Protection Agency, may provide.
                      ``(G) Other definitions.--For purposes of
                    this paragraph--
                              ``(i) Energy usage intensity.--The
                            term `energy usage intensity' means the
                            site energy usage intensity determined
                            in accordance with such regulations or
                            other guidance as the Secretary, after
                            consultation with the Administrator of
                            the Environmental Protection Agency,
                            may provide and measured in British
                            thermal units.
                              ``(ii) Qualified professional.--The
                            term `qualified professional' means an
                            individual who is a licensed architect
                            or a licenced engineer and meets such
                            other requirements as the Secretary may
                            provide.
                      ``(H) Coordination with deduction otherwise
                    allowed under subsection (a).--
                              ``(i) In general.--In the case of any
                            building with respect to which an
                            election is made under subparagraph
                            (A), the term `energy efficient
                            commercial building property' shall not
                            include any energy efficient retrofit
                            building property with respect to which
                            a deduction is allowable under this
                            paragraph.
                              ``(ii) Certain rules not
                            applicable.--
                                      ``(I) In general.--Except as
                                    provided in subclause (II),
                                    subsection (d) shall not apply
                                    for purposes of this paragraph.
                                      ``(II) Allocation of
                                    deduction by certain tax-exempt
                                    entities.--Rules similar to
                                    subsection (d)(4) (determined
                                    after application of paragraph
                                    (5)) shall apply for purposes
                                    of this paragraph.''.
      (c) Effective Date.--
              (1) In general.--Except as otherwise provided in this
            subsection, the amendment made by this section shall
            apply to taxable years beginning after December 31,
            2021.
              (2) Alternative deduction for energy efficient
            retrofit building property.--Paragraph (6) of section
            179D(i) of the Internal Revenue Code of 1986 (as added
            by this section), and any other provision of such
            section solely for purposes of applying such paragraph,
            shall apply to property placed in service after
            December 31, 2021 (in taxable years ending after such
            date) if such property is placed in service pursuant to
            qualified retrofit plan (within the meaning of such
            section) established after such date.

    SEC. 136304. EXTENSION, INCREASE, AND MODIFICATIONS OF NEW ENERGY
                        EFFICIENT HOME CREDIT.

      (a) Extension of Credit.--Section 45L(g) is amended by
    striking ``December 31, 2021'' and inserting ``December 31,
    2031''.
      (b) Increase in Credit Amounts.--Section 45L(a)(2) is amended
    to read as follows:
              ``(2) Applicable amount.--For purposes of paragraph
            (1), the applicable amount is an amount equal to--
                      ``(A) in the case of a dwelling unit which is
                    eligible to participate in the Energy Star
                    Residential New Construction Program or the
                    Energy Star Manufactured New Homes program--
                              ``(i) that is described in subsection
                            (c)(1)(A) (and not described in
                            subsection (c)(1)(B)), $2,500, and
                              ``(ii) that is described in
                            subsection (c)(1)(B), $5000, and
                      ``(B) in the case of a dwelling which are
                    part of a building eligible to participate in
                    the Energy Star Multifamily New Construction
                    Program--
                              ``(i) that is described in subsection
                            (c)(1)(A) (and not described in
                            subsection (c)(1)(B)), $500, and
                              ``(ii) that is described in
                            subsection (c)(1)(B), $1000.''.
      (c) Modification of Energy Saving Requirements.--Section
    45L(c) is amended to read as follows:
      ``(c) Energy Saving Requirements.--
              ``(1) In general.--A dwelling unit meets the energy
            saving requirements of this subsection if--
                      ``(A) such dwelling unit meets the
                    requirements of paragraph (2) or (3) (whichever
                    is applicable), or
                      ``(B) such dwelling unit is certified as a
                    zero energy ready home under the zero energy
                    ready home program of the Department of Energy
                    (or any successor program determined by the
                    Secretary, after consultation with the
                    Secretary of Energy) as in effect on January 1,
                    2022.
              ``(2) Single-family home requirements.--A dwelling
            unit meets the requirements of this paragraph if--
                      ``(A) such dwelling unit meets--
                              ``(i) in the case of a dwelling unit
                            acquired before January 1, 2025, the
                            Energy Star Single-Family New Homes
                            National Program Requirements 3.1, and
                              ``(ii) in the case of a dwelling unit
                            acquired after December 31, 2024, the
                            Energy Star Single-Family New Homes
                            National Program Requirements 3.2,
                      ``(B) such dwelling unit meets the most
                    recent Energy Star Single-Family New Homes
                    Program Requirements applicable to the location
                    of such dwelling unit (as in effect on the
                    latter of January 1, 2022 or January 1 of two
                    calendar years prior to the date the dwelling
                    was acquired), or
                      ``(C) such dwelling unit meets the most
                    recent Energy Star Manufactured Home National
                    program requirements as in effect on the latter
                    of January 1, 2022 or January 1 of two calendar
                    years prior to the date such dwelling unit is
                    acquired.
              ``(3) Multi-family home requirements.--A dwelling
            unit meets the requirements of this paragraph if--
                      ``(A) such dwelling unit meets the most
                    recent Energy Star Multifamily New Construction
                    National Program Requirements (as in effect on
                    either January 1, 2022 or January 1 of three
                    calendar years prior to the date the dwelling
                    was acquired, whichever is later), and
                      ``(B) such dwelling unit meets the most
                    recent Energy Star Multifamily New Construction
                    Regional Program Requirements applicable to the
                    location of such dwelling unit (as in effect on
                    either January 1, 2022 or January 1 of three
                    calendar years prior to the date the dwelling
                    was acquired, whichever is later).''.
      (d) Prevailing Wage Requirement.--Section 45L is amended by
    redesignating subsection (g) as subsection (h) and by inserting
    after subsection (f) the following new subsection:
      ``(g) Prevailing Wage Requirement.--
              ``(1) In general.--In the case of a qualifying
            residence described in subsection (b)(2)(B) meeting the
            prevailing wage requirements of paragraph (2), the
            credit amount allowed with respect to such residence
            shall be--
                      ``(A) $2,500 in the case of a residence
                    described in subparagraph (A) of subsection
                    (c)(1) (and not described in subparagraph (B)
                    of such subsection), and
                      ``(B) $5,000 in the case of a residence
                    described in (c)(1)(B).
              ``(2) Prevailing wage requirements.--
                      ``(A) In general.--The requirements described
                    in this paragraph with respect to any qualified
                    residence are that the taxpayer shall ensure
                    that any laborers and mechanics employed by
                    contractors and subcontractors in the
                    construction of such residence shall be paid
                    wages at rates not less than the prevailing
                    rates for construction, alteration, or repair
                    of a similar character in the locality as most
                    recently determined by the Secretary of Labor,
                    in accordance with subchapter IV of chapter 31
                    of title 40, United States Code.
                      ``(B) Correction and penalty related to
                    failure to satisfy wage requirements.--In the
                    case of any taxpayer which fails to satisfy the
                    requirement under subparagraph (A) with respect
                    to any qualified residence, rules similar to
                    the rules of section 45(b)(8)(B) shall apply
                    for purposes of this paragraph.
              ``(3) Regulations and guidance.--The Secretary shall
            issue such regulations or other guidance as the
            Secretary determines necessary or appropriate to carry
            out the purposes of this subsection.''.
      (e) Effective Dates.--The amendments made by this section
    shall apply to dwelling units acquired after December 31, 2021.

    SEC. 136305. MODIFICATIONS TO INCOME EXCLUSION FOR CONSERVATION
                        SUBSIDIES.

      (a) In General.--Section 136(a) is amended--
              (1) by striking ``any subsidy provided'' and
            inserting ``any subsidy--
              ``(1) provided'',
              (2) by striking the period at the end and inserting a
            comma, and
              (3) by adding at the end the following new
            paragraphs:
              ``(2) provided (directly or indirectly) by a public
            utility to a customer, or by a State or local
            government to a resident of such State or locality, for
            the purchase or installation of any water conservation
            or efficiency measure,
              ``(3) provided (directly or indirectly) by a storm
            water management provider to a customer, or by a State
            or local government to a resident of such State or
            locality, for the purchase or installation of any storm
            water management measure, or
              ``(4) provided (directly or indirectly) by a State or
            local government to a resident of such State or
            locality for the purchase or installation of any
            wastewater management measure, but only if such measure
            is with respect to the taxpayer's principal
            residence.''.
      (b) Conforming Amendments.--
              (1) Definition of water conservation or efficiency
            measure and storm water management measure.--Section
            136(c) is amended--
                      (A) by striking ``Energy Conservation
                    Measure'' in the heading thereof and inserting
                    ``Definitions'',
                      (B) by striking ``In general'' in the heading
                    of paragraph (1) and inserting ``Energy
                    conservation measure'', and
                      (C) by redesignating paragraph (2) as
                    paragraph (5) and by inserting after paragraph
                    (1) the following:
              ``(2) Water conservation or efficiency measure.--For
            purposes of this section, the term `water conservation
            or efficiency measure' means any evaluation of water
            use, or any installation or modification of property,
            the primary purpose of which is to reduce consumption
            of water or to improve the management of water demand
            with respect to one or more dwelling units.
              ``(3) Storm water management measure.--For purposes
            of this section, the term `storm water management
            measure' means any installation or modification of
            property primarily designed to reduce or manage amounts
            of storm water with respect to one or more dwelling
            units.
              ``(4) Wastewater management measure.--For purposes of
            this section, the term `wastewater management measure'
            means any installation or modification of property
            primarily designed to manage wastewater (including
            septic tanks and cesspools) with respect to one or more
            dwelling units.''.
              (2) Definition of public utility.--Section 136(c)(5)
            (as redesignated by paragraph (1)(C)) is amended by
            striking subparagraph (B) and inserting the following:
                      ``(B) Public utility.--The term `public
                    utility' means a person engaged in the sale of
                    electricity, natural gas, or water to
                    residential, commercial, or industrial
                    customers for use by such customers.
                      ``(C) Storm water management provider.--The
                    term `storm water management provider' means a
                    person engaged in the provision of storm water
                    management measures to the public.
                      ``(D) Person.--For purposes of subparagraphs
                    (B) and (C), the term `person' includes the
                    Federal Government, a State or local government
                    or any political subdivision thereof, or any
                    instrumentality of any of the foregoing.''.
              (3) Clerical amendments.--
                      (A) The heading for section 136 is amended--
                              (i) by inserting ``AND WATER'' after
                            ``ENERGY'', and
                              (ii) by striking ``PROVIDED
                            BY PUBLIC
                            UTILITIES''.
                      (B) The item relating to section 136 in the
                    table of sections of part III of subchapter B
                    of chapter 1 is amended--
                              (i) by inserting ``and water'' after
                            ``energy'', and
                              (ii) by striking ``provided by public
                            utilities''.
      (c) Effective Date.--The amendments made by this section
    shall apply to amounts received after December 31, 2018.
      (d) No Inference.--Nothing in this Act or the amendments made
    by this Act shall be construed to create any inference with
    respect to the proper tax treatment of any subsidy received
    directly or indirectly from a public utility, a storm water
    management provider, or a State or local government for any
    water conservation measure or storm water management measure
    before January 1, 2019.

              PART 4--GREENING THE FLEET AND ALTERNATIVE VEHICLES

    SEC. 136401. REFUNDABLE NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR
                        VEHICLE CREDIT FOR INDIVIDUALS.

      (a) In General.--Subpart C of part IV of subchapter A of
    chapter 1 is amended by inserting after section 36B the
    following new section:

    ``SEC. 36C. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.

      ``(a) Allowance of Credit.--In the case of an individual,
    there shall be allowed as a credit against the tax imposed by
    this subtitle for the taxable year an amount equal to the sum
    of the credit amounts determined under subsection (b) with
    respect to each new qualified plug-in electric drive motor
    vehicle placed in service by the taxpayer during the taxable
    year.
      ``(b) Per Vehicle Dollar Limitation.--
              ``(1) In general.--The amount determined under this
            subsection with respect to any new qualified plug-in
            electric drive motor vehicle is the sum of the amounts
            determined under paragraphs (2) through (5) with
            respect to such vehicle (not to exceed 50 percent of
            the purchase price of such vehicle).
              ``(2) Base amount.--The amount determined under this
            paragraph is $4,000.
              ``(3) Battery capacity.--In the case of a new
            qualified plug-in electric drive motor vehicle, the
            amount determined under this paragraph is $3,500 if--
                      ``(A) in the case of a vehicle placed in
                    service before January 1, 2027, such vehicle
                    draws propulsion energy from a battery with not
                    less than 40 kilowatt hours of capacity, and
                      ``(B) in the case of a vehicle placed in
                    service after December 31, 2026, such vehicle
                    draws propulsion energy from a battery with not
                    less than 50 kilowatt hours of capacity.
              ``(4) Domestic assembly.--In the case of a new
            qualified plug-in vehicle which satisfies the domestic
            assembly qualifications, the amount determined under
            this paragraph is $4,500.
              ``(5) Domestic content.--In the case of a new
            qualified plug-in vehicle which satisfies domestic
            content qualifications, the amount determined under
            this paragraph is $500.
      ``(c) Limitation Based on Modified Adjusted Gross Income.--
              ``(1) In general.--The amount of the credit allowable
            under subsection (a) shall be reduced (but not below
            zero) by $200 for each $1,000 (or fraction thereof) by
            which the taxpayer's modified adjusted gross income
            exceeds the threshold amount. For purposes of the
            preceding sentence, the term `modified adjusted gross
            income' means adjusted gross income increased by any
            amount excluded from gross income under section 911,
            931, or 933.
              ``(2) Special rule for determination of modified
            adjusted gross income.--The modified adjusted gross
            income of the taxpayer that is taken into account for
            purposes of paragraph (1) shall be the lesser of--
                      ``(A) the modified adjusted gross income for
                    the taxable year in which the credit is
                    claimed, or
                      ``(B) the modified adjusted gross income for
                    the immediately preceding taxable year.
              ``(3) Threshold amount.--For purposes of paragraph
            (1), the term `threshold amount' means--
                      ``(A) $800,000 in the case of a joint return
                    or surviving spouse (half such amount for
                    married filing separately),
                      ``(B) $600,000 in the case of a head of
                    household, and
                      ``(C) $400,000 in any other case.
      ``(d) Manufacturer's Suggested Retail Price Limitation.--
              ``(1) In general.--No credit shall be allowed under
            subsection (a) for a vehicle with a manufacturer's
            suggested retail price in excess of the applicable
            limitation.
              ``(2) Applicable limitation.--For purposes of
            paragraph (1), the applicable limitation for each
            vehicle classification is as follows:
                      ``(A) Sedans.--In the case of a sedan,
                    $55,000.
                      ``(B) Vans.--In the case of a van, $64,000.
                      ``(C) Sport utility vehicles.--In the case of
                    a sport utility vehicle, $69,000.
                      ``(D) Pickup trucks.--In the case of a pickup
                    truck, $74,000.
              ``(3) Regulations.--For purposes of this subsection,
            the Secretary shall prescribe regulations for
            determining vehicle classifications using criteria
            similar to that employed by the Environmental
            Protection Agency and the Department of Energy to
            determine size and class of vehicles.
      ``(e) New Qualified Plug-in Electric Drive Motor Vehicle.--
    For purposes of this section--
              ``(1) In general.--The term `new qualified plug-in
            electric drive motor vehicle' means a motor vehicle--
                      ``(A) the original use of which commences
                    with the taxpayer,
                      ``(B) which is acquired for use by the
                    taxpayer and not for resale,
                      ``(C) which is made by a qualified
                    manufacturer,
                      ``(D) which is treated as a motor vehicle for
                    purposes of title II of the Clean Air Act,
                      ``(E) which has a gross vehicle weight rating
                    of less than 14,000 pounds,
                      ``(F) which is propelled to a significant
                    extent by an electric motor which draws
                    electricity from a battery which--
                              ``(i) has a capacity of--
                                      ``(I) in the case of a
                                    vehicle placed in service in
                                    2022 or 2023, not less than 7
                                    kilowatt hours, and
                                      ``(II) in the case of a
                                    vehicle placed in service after
                                    2023, not less than 10 kilowatt
                                    hours, and
                              ``(ii) is capable of being recharged
                            from an external source of electricity,
                      ``(G) for which, in the case of a vehicle
                    placed into service after December 31, 2026,
                    final assembly is within the United States, and
                      ``(H) is not of a character subject to an
                    allowance for depreciation.
              ``(2) Motor vehicle.--The term `motor vehicle' means
            any vehicle which is manufactured primarily for use on
            public streets, roads, and highways (not including a
            vehicle operated exclusively on a rail or rails) and
            which has at least 4 wheels.
              ``(3) Qualified manufacturer.--The term `qualified
            manufacturer' means any manufacturer (within the
            meaning of the regulations prescribed by the
            Administrator of the Environmental Protection Agency
            for purposes of the administration of title II of the
            Clean Air Act (42 U.S.C. 7521 et seq.) which enters
            into a written agreement with the Secretary under which
            such manufacturer agrees--
                      ``(A) to ensure that each vehicle
                    manufactured by such manufacturer after the
                    later of the date on which such agreement takes
                    effect or December 31, 2021, and that meets the
                    requirements of subparagraphs (D), (E), and (F)
                    of paragraph (1) and paragraph (6) of
                    subsection (e) is labeled with a unique vehicle
                    identification number, and
                      ``(B) to make periodic written reports to the
                    Secretary (at such times and in such manner as
                    the Secretary may provide) providing such
                    vehicle identification numbers and such other
                    information related to such vehicle as the
                    Secretary may require.
              ``(4) Battery capacity.--The term `capacity' means,
            with respect to any battery, the quantity of
            electricity which the battery is capable of storing,
            expressed in kilowatt hours, as measured from a 100
            percent state of charge to a 0 percent state of charge.
      ``(f) Special Rules.--
              ``(1) Basis reduction.--For purposes of this
            subtitle, the basis of any property for which a credit
            is allowable under subsection (a) shall be reduced by
            the amount of such credit so allowed.
              ``(2) No double benefit.--The amount of any deduction
            or other credit allowable under this chapter for a
            vehicle for which a credit is allowable under
            subsection (a) shall be reduced by the amount of credit
            allowed under such subsection for such vehicle.
              ``(3) Property used outside united states not
            qualified.--No credit shall be allowable under
            subsection (a) with respect to any property referred to
            in section 50(b)(1).
              ``(4) Recapture.--The Secretary shall, by
            regulations, provide for recapturing the benefit of any
            credit allowable under subsection (a) with respect to
            any property which ceases to be property eligible for
            such credit.
              ``(5) Election not to take credit.--No credit shall
            be allowed under subsection (a) for any vehicle if the
            taxpayer elects to not have this section apply to such
            vehicle.
              ``(6) Interaction with air quality and motor vehicle
            safety standards.--A vehicle shall not be considered
            eligible for a credit under this section unless such
            vehicle is in compliance with--
                      ``(A) the applicable provisions of the Clean
                    Air Act for the applicable make and model year
                    of the vehicle (or applicable air quality
                    provisions of State law in the case of a State
                    which has adopted such provision under a waiver
                    under section 209(b) of the Clean Air Act), and
                      ``(B) the motor vehicle safety provisions of
                    sections 30101 through 30169 of title 49,
                    United States Code.
      ``(g) Credit Allowed for 2 and 3-wheeled Plug-in Electric
    Vehicles.--
              ``(1) In general.--In the case of a qualified 2- or
            3-wheeled plug-in electric vehicle--
                      ``(A) there shall be allowed as a credit
                    against the tax imposed by this subtitle for
                    the taxable year an amount equal to the sum of
                    the applicable amount with respect to each such
                    qualified 2- or 3-wheeled plug-in electric
                    vehicle placed in service by the taxpayer
                    during the taxable year, and
                      ``(B) the amount of the credit allowed under
                    subparagraph (A) shall be treated as a credit
                    allowed under subsection (a).
              ``(2) Applicable amount.--For purposes of paragraph
            (1), the applicable amount is an amount equal to the
            lesser of--
                      ``(A) 10 percent of the cost of the qualified
                    2- or 3-wheeled plug-in electric vehicle, or
                      ``(B) $2,500.
              ``(3) Qualified 2- or 3-wheeled plug-in electric
            vehicle.--The term `qualified 2- or 3-wheeled plug-in
            electric vehicle' means any vehicle which--
                      ``(A) has 2 or 3 wheels,
                      ``(B) meets the requirements of subparagraphs
                    (A), (B), (C), (E), (F), and (G) of subsection
                    (e)(1) (determined by substituting `2.5
                    kilowatt hours' for `7 kilowatt hours' in
                    subparagraph (F)(i)(I) and by substituting `2.5
                    kilowatt hours' for `10 kilowatt hours' in
                    subparagraph (F)(i)(II)),
                      ``(C) is manufactured primarily for use on
                    public streets, roads, and highways, and
                      ``(D) is capable of achieving a speed of 45
                    miles per hour or greater.
      ``(h) VIN Number Requirement.--No credit shall be allowed
    under this section with respect to any vehicle unless the
    taxpayer includes the vehicle identification number of such
    vehicle on the return of tax for the taxable year.
      ``(i) Treatment of Certain Possessions.--
              ``(1) Payments to possessions with mirror code tax
            systems.--The Secretary shall pay to each possession of
            the United States which has a mirror code tax system
            amounts equal to the loss (if any) to that possession
            by reason of the application of the provisions of this
            section (determined without regard to this subsection).
            Such amounts shall be determined by the Secretary based
            on information provided by the government of the
            respective possession.
              ``(2) Payments to other possessions.--The Secretary
            shall pay to each possession of the United States which
            does not have a mirror code tax system amounts
            estimated by the Secretary as being equal to the
            aggregate benefits (if any) that would have been
            provided to residents of such possession by reason of
            the provisions of this section if a mirror code tax
            system had been in effect in such possession. The
            preceding sentence shall not apply unless the
            respective possession has a plan which has been
            approved by the Secretary under which such possession
            will promptly distribute such payments to its
            residents.
              ``(3) Mirror code tax system; treatment of
            payments.--Rules similar to the rules of paragraphs (4)
            and (5) of section 21(h) shall apply for purposes of
            this section.
      ``(j) Assembly and Content Qualifications.--For purposes of
    this section--
              ``(1) Domestic assembly qualifications.--The term
            `domestic assembly qualifications' means, with respect
            to any new qualified plug-in electric vehicle, that the
            final assembly of such vehicle occurs at a plant,
            factory, or other place which is operating under a
            collective bargaining agreement negotiated by an
            employee organization (as defined in section
            412(c)(4)), determined in a manner consistent with
            section 7701(a)(46).
              ``(2) Domestic content qualifications.--The term
            `domestic content qualifications' means, with respect
            to any model of a new qualified plug-in electric
            vehicle, that vehicles of that model--
                      ``(A) are assembled by a manufacturer which
                    utilizes not less than 50 percent domestic
                    content in the component parts for final
                    assembly of such vehicles, and
                      ``(B) are powered by battery cells which are
                    manufactured in the United States (with
                    suchbattery cells to be included for purposes
                    of the requirement described in subparagraph
                    (A)), as certified by the manufacturer, at such
                    time, and in such form and manner, as the
                    Secretary may prescribe.
              ``(3) Final assembly.--The term `final assembly'
            means the process by which a manufacturer produces a
            new qualified plug-in electric vehicle at, or through
            the use of, a plant, factory, or other place from which
            the vehicle is delivered to a dealer or importer with
            all component parts necessary for the mechanical
            operation of the vehicle included with the vehicle,
            whether or not the component parts are permanently
            installed in or on the vehicle.
      ``(k) Termination.--No credit shall be allowed under this
    section with respect to any vehicle acquired after December 31,
    2031.''.
      (b) Transfer of Credit.--Subsection (f) of section 36C is
    amended by adding at the end the following new paragraphs:
              ``(7) In general.--Subject to such regulations or
            other guidance as the Secretary determines necessary or
            appropriate, if, with respect to the credit allowed
            under subsection (a) for any taxable year, the taxpayer
            elects the application of this subparagraph for such
            taxable year with respect to such credit, the eligible
            entity specified in such election, and not the taxpayer
            who has purchased or leased the vehicle, shall be
            treated as the taxpayer for purposes of this title with
            respect to such credit.
              ``(8) Eligible entity.--For purposes of this
            paragraph, the term `eligible entity' means, with
            respect to the vehicle for which the credit is allowed
            under subsection (a), the dealer which sold such
            vehicle to the taxpayer and has--
                      ``(A) subject to paragraph (10), registered
                    with the Secretary for purposes of this
                    paragraph, at such time, and in such form and
                    manner, as the Secretary may prescribe,
                      ``(B) prior to the election described in
                    paragraph (7), disclosed to the taxpayer
                    purchasing such vehicle--
                              ``(i) the manufacturer's suggested
                            retail price,
                              ``(ii) the value of the credit
                            allowed or other incentive available
                            for the purchase or lease of such
                            vehicle,
                              ``(iii) all fees associated with the
                            purchase or lease of such vehicle, and
                              ``(iv) the amount provided by the
                            dealer to such taxpayer as a condition
                            of the election described in paragraph
                            (7),
                      ``(C) made payment to such taxpayer (whether
                    in cash or in the form of a partial payment or
                    down payment for the purchase of such vehicle)
                    in an amount equal to the credit otherwise
                    allowable to such taxpayer, and
                      ``(D) with respect to any incentive otherwise
                    available for the purchase of a vehicle for
                    which a credit is allowed under this section,
                    including any incentive in the form of a rebate
                    or discount provided by the dealer or
                    manufacturer, ensured that--
                              ``(i) the availability or use of such
                            incentive shall not limit the ability
                            of a taxpayer to make an election
                            described in paragraph (7), and
                              ``(ii) such election shall not limit
                            the value or use of such incentive.
              ``(9) Timing.--An election described in paragraph (7)
            shall be made by the taxpayer not later than the date
            on which the vehicle for which the credit is allowed
            under subsection (a) is purchased.
              ``(10) Revocation of registration.--Upon
            determination by the Secretary that a dealer has failed
            to comply with the requirements described in paragraph
            (8), the Secretary may revoke the registration (as
            described in subparagraph (A) of such subparagraph) of
            such dealer.
              ``(11) Tax treatment of payments.--With respect to
            any payment described in paragraph (8)(C), such
            payment--
                      ``(A) shall not be includible in the gross
                    income of the taxpayer, and
                      ``(B) with respect to the dealer, shall not
                    be deductible under this title.
              ``(12) Advance payment to registered dealers.--
                      ``(A) In general.--The Secretary shall
                    establish a program to make advance payments to
                    any eligible entity in an amount equal to the
                    cumulative amount of the credits allowed under
                    subsection (a) with respect to any vehicles
                    sold by such entity for which an election
                    described in paragraph (1) has been made.
                      ``(B) Excessive payments.--Rules similar to
                    the rules of section 6417(c)(8) shall apply for
                    purposes of this subparagraph.
              ``(13) Dealer.--For purposes of this paragraph, the
            term `dealer' means a person licensed by a State, the
            District of Columbia, the Commonwealth of Puerto Rico,
            any other territory or possession of the United States,
            or an Indian Tribe (as defined in section 4 of the
            Indian Self-Determination and Education Assistance Act
            (25 U.S.C. 5304)) to engage in the sale of vehicles.''.
      (c) Repeal of Nonrefundable New Qualified Plug-in Electric
    Drive Motor Vehicle Credit.--Subpart B of part IV of subchapter
    A of chapter 1 is amended by striking section 30D (and by
    striking the item relating to such section in the table of
    sections of such subpart).
      (d) Conforming Amendments.--
              (1) Section 1016(a)(37) is amended by striking
            ``section 30D(f)(1)'' and inserting ``section
            36C(f)(1)''.
              (2) Section 6211(b)(4)(A) is amended by inserting
            ``36C,'' after ``36B,''.
              (3) Section 6213(g)(2), as amended by the preceding
            provisions of this Act, is amended--
                      (A) in subparagraph (R), by striking ``and''
                    at the end,
                      (B) in subparagraph (S), by striking the
                    period at the end and inserting ``, and'', and
                      (C) by adding at the end the following:
                      ``(T) an omission of a correct vehicle
                    identification number required under section
                    36C(f) (relating to credit for new qualified
                    plug-in electric drive motor vehicles) to be
                    included on a return.''.
              (4) Section 6501(m) is amended by striking
            ``30D(e)(4)'' and inserting ``36C(f)(5)''.
              (5) Section 166(b)(5)(A)(ii) of title 23, United
            States Code, is amended by striking ``section
            30D(d)(1)'' and inserting ``section 36C(e)(1)''.
              (6) Section 1324(b)(2) of title 31, United States
            Code, is amended by inserting ``36C,'' after ``36B,''.
              (7) The table of sections for subpart C of part IV of
            subchapter A of chapter 1 is amended by inserting after
            the item relating to section 36B the following new
            item:

    ``Sec. 36C. New qualified plug-in electric drive motor vehicles.''.
      (e) Effective Dates.--
              (1) The amendments made by subsections (a), (c), and
            (d) of this section shall apply to vehicles acquired
            after December 31, 2021.
              (2) The amendments made by subsection (b) shall apply
            to vehicles purchased or leased after December 31,
            2022.

    SEC. 136402. CREDIT FOR PREVIOUSLY-OWNED QUALIFIED PLUG-IN ELECTRIC
                        DRIVE MOTOR VEHICLES.

      (a) In General.--Subpart C of part IV of subchapter A of
    chapter 1, as amended by the preceding provisions of this Act,
    is amended by inserting after section 36C the following new
    section:

    ``SEC. 36D. PREVIOUSLY-OWNED QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR
                        VEHICLES.

      ``(a) Allowance of Credit.--In the case of a qualified buyer
    who during a taxable year places in service a previously-owned
    qualified plug-in electric drive motor vehicle, there shall be
    allowed as a credit against the tax imposed by this subtitle
    for the taxable year an amount equal to the sum of--
              ``(1) $1,250, plus
              ``(2) in the case of a vehicle which draws propulsion
            energy from a battery which exceeds 4 kilowatt hours of
            capacity (determined at the time of sale), the lesser
            of--
                      ``(A) $1,250, and
                      ``(B) the product of $208.50 and such excess
                    kilowatt hours.
      ``(b) Limitations.--
              ``(1) Sale price.--The credit allowed under
            subsection (a) with respect to sale of a vehicle shall
            not exceed 30 percent of the sale price.
              ``(2) Adjusted gross income.--The amount which would
            (but for this paragraph) be allowed as a credit under
            subsection (a) shall be reduced (but not below zero) by
            $200 for each $1,000 (or fraction thereof) by which the
            taxpayer's adjusted gross income exceeds--
                      ``(A) $150,000 in the case of a joint return
                    or a surviving spouse (as defined in section
                    2(a)),
                      ``(B) $112,500 in the case of a head of
                    household (as defined in section 2(b)), and
                      ``(C) $75,000 in the case of a taxpayer not
                    described in paragraph (1) or (2).
      ``(c) Definitions.--For purposes of this section--
              ``(1) Previously-owned qualified plug-in electric
            drive motor vehicle.--The term `previously-owned
            qualified plug-in electric drive motor vehicle' means,
            with respect to a taxpayer, a motor vehicle--
                      ``(A) the model year of which is at least 2
                    earlier than the calendar year in which the
                    taxpayer acquires such vehicle,
                      ``(B) the original use of which commences
                    with a person other than the taxpayer,
                      ``(C) which is acquired by the taxpayer in a
                    qualified sale,
                      ``(D) registered by the taxpayer for
                    operation in a State or possession of the
                    United States, and
                      ``(E) which meets the requirements of
                    subparagraphs (C), (D), (E), (F), and (G) of
                    section 36C(e)(1).
              ``(2) Qualified sale.--The term `qualified sale'
            means a sale of a motor vehicle--
                      ``(A) by a seller who holds such vehicle in
                    inventory (within the meaning of section 471)
                    for sale or lease,
                      ``(B) for a sale price not to exceed $25,000,
                    and
                      ``(C) which is the first transfer since the
                    date of the enactment of this section to a
                    person other than the person with whom the
                    original use of such vehicle commenced.
              ``(3) Qualified buyer.--The term `qualified buyer'
            means, with respect to a sale of a motor vehicle, a
            taxpayer--
                      ``(A) who is an individual,
                      ``(B) who purchases such vehicle for use and
                    not for resale,
                      ``(C) with respect to whom no deduction is
                    allowable with respect to another taxpayer
                    under section 151,
                      ``(D) who has not been allowed a credit under
                    this section for any sale during the 3-year
                    period ending on the date of the sale of such
                    vehicle, and
                      ``(E) who possesses a certificate issued by
                    the seller that certifies--
                              ``(i) that the vehicle is a
                            previously-owned qualified plug-in
                            electric drive motor vehicle,
                              ``(ii) the vehicle identification
                            number of such vehicle,
                              ``(iii) the capacity of the battery
                            at time of sale, and
                              ``(iv) such other information as the
                            Secretary may require.
              ``(4) Motor vehicle; capacity.--The terms `motor
            vehicle' and `capacity' have the meaning given such
            terms in paragraphs (2) and (4) of section 36C(e),
            respectively.
      ``(d) VIN Number Requirement.--No credit shall be allowed
    under subsection (a) with respect to any vehicle unless the
    taxpayer includes the vehicle identification number of such
    vehicle on the return of tax for the taxable year.
      ``(e) Application of Certain Rules.--For purposes of this
    section, rules similar to the rules of paragraphs (1), (2),
    (4), (5), (6) and (7) of section 36C(f) shall apply for
    purposes of this section.
      ``(f) Certificate Submission Requirement.--The Secretary may
    require that the issuer of the certificate described in
    subsection (c)(3)(E) submit such certificate to the Secretary
    at the time and in the manner required by the Secretary.
      ``(g) Treatment of Certain Possessions.--
              ``(1) Payments to possessions with mirror code tax
            systems.--The Secretary shall pay to each possession of
            the United States which has a mirror code tax system
            amounts equal to the loss (if any) to that possession
            by reason of the application of the provisions of this
            section. Such amounts shall be determined by the
            Secretary based on information provided by the
            government of the respective possession.
              ``(2) Payments to other possessions.--The Secretary
            shall pay to each possession of the United States which
            does not have a mirror code tax system amounts
            estimated by the Secretary as being equal to the
            aggregate benefits (if any) that would have been
            provided to residents of such possession by reason of
            the provisions of this section if a mirror code tax
            system had been in effect in such possession. The
            preceding sentence shall not apply unless the
            respective possession has a plan which has been
            approved by the Secretary under which such possession
            will promptly distribute such payments to its
            residents.
              ``(3) Mirror code tax system; treatment of
            payments.--Rules similar to the rules of paragraphs (4)
            and (5) of section 21(h) shall apply for purposes of
            this section.
      ``(h) Termination.--No credit shall be allowed under this
    section with respect to any vehicle acquired after December 31,
    2031.''.
      (b) Conforming Amendments.--
              (1) Section 6211(b)(4)(A), as amended by the
            preceding provisions of this Act, is amended by
            inserting ``36D,'' after ``36C,''.
              (2) Section 6213(g)(2), as amended by the preceding
            provisions of this Act, is amended--
                      (A) in subparagraph (S), by striking ``and''
                    at the end,
                      (B) in subparagraph (T), by striking the
                    period at the end and inserting ``, and'', and
                      (C) by adding at the end the following:
                      ``(U) an omission of a correct vehicle
                    identification number required under section
                    36D(d) (relating to credit for previously-owned
                    qualified plug-in electric drive motor
                    vehicles) to be included on a return.''.
              (3) Paragraph (2) of section 1324(b) of title 31,
            United States Code, as amended by the preceding
            provisions of this Act, is amended by inserting
            ``36D,'' after ``36C,''.
      (c) Clerical Amendment.--The table of sections for subpart C
    of part IV of subchapter A of chapter 1, as amended by the
    preceding provisions of this Act, is amended by inserting after
    the item relating to section 36C the following new item:

    ``Sec. 36D. Previously-owned qualified plug-in electric drive motor
              vehicles.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to vehicles acquired after December 31, 2021.

    SEC. 136403. QUALIFIED COMMERCIAL ELECTRIC VEHICLES.

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

    ``SEC. 45Y. CREDIT FOR QUALIFIED COMMERCIAL ELECTRIC VEHICLES.

      ``(a) In General.--For purposes of section 38, the qualified
    commercial electric vehicle credit for any taxable year is an
    amount equal to the sum of the credit amounts determined under
    subsection (b) with respect to each qualified commercial
    electric vehicle placed in service by the taxpayer during the
    taxable year.
      ``(b) Per Vehicle Amount.--The amount determined under this
    subsection with respect to any qualified commercial electric
    vehicle shall be equal to 30 percent of the basis of such
    vehicle.
      ``(c) Qualified Commercial Electric Vehicle.--For purposes of
    this section, the term `qualified commercial electric vehicle'
    means any vehicle which--
              ``(1) meets the requirements of subparagraphs (A) and
            (C) of section 36C(e)(1) without regard to any gross
            vehicle weight rating, and is acquired for use or lease
            by the taxpayer and not for resale,
              ``(2) either--
                      ``(A) meets the requirements of subparagraph
                    (D) of section 36C(e)(1), or
                      ``(B) is mobile machinery, as defined in
                    section 4053(8),
              ``(3) is primarily propelled by an electric motor
            which draws electricity from a battery which--
                      ``(A) has a capacity of not less than 30
                    kilowatt hours,
                      ``(B) is capable of being recharged from an
                    external source of electricity,
                      ``(C) is not powered or charged by an
                    internal combustion engine, or
                      ``(D) is a new qualified fuel cell motor
                    vehicle described in subparagraphs (A) and (B)
                    of section 30B(b)(3), and
              ``(4) is of a character subject to the allowance for
            depreciation.
      ``(d) Special Rules.--
              ``(1) In general.--Rules similar to the rules under
            subsection (f) of section 36C shall apply for purposes
            of this section.
              ``(2) Property used by tax-exempt entity.--In the
            case of a vehicle the use of which is described in
            paragraph (3) or (4) of section 50(b) and which is not
            subject to a lease, the person who sold such vehicle to
            the person or entity using such vehicle shall be
            treated as the taxpayer that placed such vehicle in
            service, but only if such person clearly discloses to
            such person or entity in a document the amount of any
            credit allowable under subsection (a) with respect to
            such vehicle.
      ``(e) VIN Number Requirement.--No credit shall be determined
    under subsection (a) with respect to any vehicle unless the
    taxpayer includes the vehicle identification number of such
    vehicle on the return of tax for the taxable year.
      ``(f) Termination.--No credit shall be determined under this
    section with respect to any vehicle acquired after December 31,
    2031.''.
      (b) Conforming Amendments.--
              (1) Section 38(b) is amended by striking paragraph
            (30) and inserting the following:
              ``(30) the qualified commercial electric vehicle
            credit determined under section 45Y,''.
              (2) Section 6213(g)(2), as amended by the preceding
            provisions of this Act, is amended--
                      (A) in subparagraph (T), by striking ``and''
                    at the end,
                      (B) in subparagraph (U), by striking the
                    period at the end and inserting ``, and'', and
                      (C) by adding at the end the following:
                      ``(V) an omission of a correct vehicle
                    identification number required under section
                    45Y(e) (relating to commercial electric vehicle
                    credit) to be included on a return.''.
              (3) The table of sections for subpart D of part IV of
            subchapter A of chapter 1 is amended by adding at the
            end the following new item:

    ``Sec. 45Y. Qualified commercial electric vehicle credit.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to vehicles acquired after December 31, 2021.

    SEC. 136404. QUALIFIED FUEL CELL MOTOR VEHICLES.

      (a) In General.--Section 30B(k)(1) is amended by striking
    ``December 31, 2021'' and inserting ``December 31, 2031''.
      (b) New Qualified Fuel Cell Motor Vehicle.--Section 30B(b) is
    amended by striking ``and'' at the end of subparagraph (D), by
    striking the period at the end of subparagraph (E) and
    inserting ``, and'', and by adding at the end the following new
    subparagraph:
                      ``(F) which is not property of a character
                    subject to an allowance for depreciation.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to property placed in service after December 31,
    2021.

    SEC. 136405. ALTERNATIVE FUEL REFUELING PROPERTY CREDIT.

      (a) In General.--Section 30C(g) is amended by striking
    ``December 31, 2021'' and inserting ``December 31, 2031''.
      (b) Additional Credit for Certain Electric Charging
    Property.--
              (1) In general.--Section 30C(a) is amended--
                      (A) by striking ``equal to 30 percent'' and
                    inserting the following: ``equal to the sum
                    of--
              ``(1) 30 percent'',
                      (B) by striking the period at the end and
                    inserting ``, plus'', and
                      (C) by adding at the end the following new
                    paragraph:
              ``(2) 20 percent of so much of such cost as exceeds
            the limitation under subsection (b)(1) that does not
            exceed the amount of cost attributable to qualified
            alternative vehicle refueling property (determined
            without regard to subsection (c)(1) and as if only
            electricity, and fuel at least 85 percent of the volume
            of which consists of hydrogen, were treated as clean-
            burning fuels for purposes of section 179A(d)) which--
                      ``(A) is intended for general public use with
                    no associated fee or payment arrangement,
                      ``(B) is intended for general public use and
                    accepts payment via a credit card reader,
                    including a credit card reader that uses
                    contactless technology, or
                      ``(C) is intended for use exclusively by
                    fleets of commercial or governmental
                    vehicles.''.
              (2) Conforming amendment.--Section 30C(b) is
            amended--
                      (A) by striking ``The credit allowed under
                    subsection (a)'' and inserting ``The amount of
                    cost taken into account under subsection
                    (a)(1)'',
                      (B) by striking ``$30,000'' and inserting
                    ``$100,000'', and
                      (C) by striking ``$1,000'' and inserting
                    ``$3,333.33''.
              (3) Bidirectional charging equipment included as
            qualified alternative fuel vehicle refueling
            property.--Section 30C(c) is amended--
                      (A) by striking ``For purposes of this
                    section, the term'' and inserting ``For
                    purposes of this section--
              ``(1) In general.--The term'', and
                      (B) by adding at the end the following new
                    paragraph:
              ``(2) Bidirectional charging equipment.--Property
            shall not fail to be treated as qualified alternative
            vehicle refueling property solely because such
            property--
                      ``(A) is capable of charging the battery of a
                    motor vehicle propelled by electricity, and
                      ``(B) allows discharging electricity from
                    such battery to an electric load external to
                    such motor vehicle.''.
      (c) Certain Electric Charging Stations Included as Qualified
    Alternative Fuel Vehicle Refueling Property.--Section 30C is
    amended by redesignating subsections (f) and (g) as subsections
    (g) and (h), respectively, and by inserting after subsection
    (e) the following:
      ``(f) Special Rule for Electric Charging Stations for Certain
    Vehicles With 2 or 3 Wheels.--For purposes of this section--
              ``(1) In general.--The term `qualified alternative
            fuel vehicle refueling property' includes any property
            described in subsection (c) for the recharging of a
            motor vehicle described in paragraph (2) that is
            propelled by electricity, but only if the property--
                      ``(A) meets the requirements of subsection
                    (a)(2), and
                      ``(B) is of a character subject to
                    depreciation.
              ``(2) Motor vehicle.--A motor vehicle is described in
            this paragraph if the motor vehicle--
                      ``(A) is manufactured primarily for use on
                    public streets, roads, or highways (not
                    including a vehicle operated exclusively on a
                    rail or rails), and
                      ``(B) has at least 2, but not more than 3,
                    wheels.''.
      (d) Wage and Apprenticeship Requirements.--Section 30C, as
    amended by this section, is further amended by redesignating
    subsections (g) and (h) as subsections (h) and (i) and by
    inserting after subsection (f) the following new subsection:
      ``(g) Wage and Apprenticeship Requirements.--
              ``(1) Base credit amount and increased credit
            amount.--
                      ``(A) In general.--In the case of any
                    qualified alternative fuel vehicle refueling
                    property which does not satisfy the
                    requirements of subparagraph (B), the amount of
                    the credit determined under subsection (a)
                    shall be 20 percent of such amount (determined
                    without regard to this sentence).
                      ``(B) Increased credit for certain qualified
                    alternative fuel vehicle refueling property
                    meeting project requirements.--
                              ``(i) In general.--In the case of any
                            qualified alternative fuel vehicle
                            refueling property which meets the
                            project requirements of this
                            subparagraph, subparagraph (A) shall
                            not apply.
                              ``(ii) Project requirements.--A
                            project meets the requirements of this
                            subparagraph if it is one of the
                            following:
                                      ``(I) A project which
                                    commences construction prior to
                                    the date of the enactment of
                                    this paragraph.
                                      ``(II) A project which
                                    satisfies the requirements of
                                    paragraphs (2) and (3).
              ``(2) Prevailing wage requirements.--
                      ``(A) In general.--The requirements described
                    in this subparagraph with respect to any
                    qualified alternative fuel vehicle refueling
                    property are that the taxpayer shall ensure
                    that any laborers and mechanics employed by
                    contractors and subcontractors in the
                    construction of such property shall be paid
                    wages at rates not less than the prevailing
                    rates for construction, alteration, or repair
                    of a similar character in the locality as most
                    recently determined by the Secretary of Labor,
                    in accordance with subchapter IV of chapter 31
                    of title 40, United States Code.
                      ``(B) Correction and penalty related to
                    failure to satisfy wage requirements.--In the
                    case of any taxpayer which fails to satisfy the
                    requirement under subparagraph (A) with respect
                    to such qualified alternative fuel vehicle
                    refueling property, rules similar to the rules
                    of section 45(b)(8)(B) shall apply for purposes
                    of this paragraph.
              ``(3) Apprenticeship requirements.--The requirements
            described in this subparagraph with respect to the
            construction of any qualified alternative fuel vehicle
            refueling property are as follows:
                      ``(A) Labor hours.--
                              ``(i) Percentage of total labor
                            hours.--All contractors and
                            subcontractors engaged in the
                            performance of construction on any
                            project shall, subject to subparagraph
                            (B), ensure that not less than the
                            applicable percentage of the total
                            labor hours of such work be performed
                            by qualified apprentices.
                              ``(ii) Applicable percentage.--For
                            purposes of paragraph (1), the
                            applicable percentage shall be--
                                      ``(I) in the case of any
                                    applicable project the
                                    construction of which begins
                                    before January 1, 2023, 5
                                    percent,
                                      ``(II) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2022, and
                                    before January 1, 2024, 10
                                    percent, and
                                      ``(III) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2023, 15
                                    percent.
                      ``(B) Apprentice to journeyworker ratio.--The
                    requirement under subparagraph (A)(i) shall be
                    subject to any applicable requirements for
                    apprentice-to-journeyworker ratios of the
                    Department of Labor or the applicable State
                    apprenticeship agency.
                      ``(C) Participation.--Each contractor and
                    subcontractor who employs 4 or more individuals
                    to perform construction, alteration, or repair
                    work on an applicable project shall employ 1 or
                    more qualified apprentices to perform such
                    work.
                      ``(D) Exception.--
                              ``(i) In general.--Notwithstanding
                            any other provision of this paragraph,
                            this paragraph shall not apply in the
                            case of a taxpayer who--
                                      ``(I) demonstrates a lack of
                                    availability of qualified
                                    apprentices in the geographic
                                    area of the construction,
                                    alteration, or repair work, and
                                      ``(II) makes a good faith
                                    effort to comply with the
                                    requirements of this paragraph.
                              ``(ii) Good faith effort.--For
                            purposes of clause (i), a taxpayer
                            shall be deemed to have satisfied the
                            requirements under such paragraph with
                            respect to an applicable project if
                            such taxpayer has requested qualified
                            apprentices from a registered
                            apprenticeship program, as defined in
                            section 3131(e)(3)(B), and such request
                            has been denied, provided that such
                            denial is not the result of a refusal
                            by the contractors or subcontractors
                            engaged in the performance of
                            construction, alteration, or repair
                            work on such applicable project to
                            comply with the established standards
                            and requirements of such apprenticeship
                            program.
                      ``(E) Definitions.--For purposes of this
                    paragraph--
                              ``(i) Labor hours.--The term `labor
                            hours' has the meaning given such term
                            in section 45(b)(9)(E)(i).
                              ``(ii) Qualified apprentice.--The
                            term `qualified apprentice' has the
                            meaning given such term in section
                            45(b)(9)(E)(ii).
              ``(4) Regulations and guidance.--The Secretary shall
            issue such regulations or other guidance as the
            Secretary determines necessary or appropriate to carry
            out the purposes of this subsection.''.
      (e) Effective Date.--The amendment made by this section shall
    apply to property placed in service after December 31, 2021.

    SEC. 136406. REINSTATEMENT AND EXPANSION OF EMPLOYER-PROVIDED FRINGE
                        BENEFITS FOR BICYCLE COMMUTING.

      (a) Repeal of Suspension of Exclusion for Qualified Bicycle
    Commuting Benefits.--Section 132(f) is amended by striking
    paragraph (8).
      (b) Expansion of Bicycle Commuting Benefits.--Section
    132(f)(5)(F) is amended to read as follows:
                      ``(F) Definitions related to bicycle
                    commuting benefits.--
                              ``(i) Qualified bicycle commuting
                            benefit.--The term `qualified bicycle
                            commuting benefit' means, with respect
                            to any calendar year--
                                      ``(I) any employer
                                    reimbursement during the 15-
                                    month period beginning with the
                                    first day of such calendar year
                                    for reasonable expenses
                                    incurred by the employee during
                                    such calendar year for the
                                    purchase (including associated
                                    finance charges), lease, rental
                                    (including a bikeshare),
                                    improvement, repair, or storage
                                    of qualified commuting
                                    property, or
                                      ``(II) the provision by the
                                    employer to the employee during
                                    such calendar year of the use
                                    (including a bikeshare),
                                    improvement, repair, or storage
                                    of qualified commuting
                                    property,
                            if the employee regularly uses such
                            qualified commuting property for travel
                            between the employee's residence, place
                            of employment, or a mass transit
                            facility that connects the employee to
                            their residence or place of employment.
                              ``(ii) Qualified commuting
                            property.--The term `qualified
                            commuting property' means--
                                      ``(I) any bicycle (other than
                                    a bicycle equipped with any
                                    motor),
                                      ``(II) any electric bicycle
                                    which meets the requirements of
                                    section 36E(c)(5),
                                      ``(III) any 2- or 3-wheel
                                    scooter (other than a scooter
                                    equipped with any motor), and
                                      ``(IV) any 2- or 3-wheel
                                    scooter propelled by an
                                    electric motor if such motor
                                    does not provide assistance if
                                    the speed of such scooter
                                    exceeds 20 miler per hour (or
                                    if the speed of such scooter is
                                    not capable of exceeding 20
                                    miles per hour) and the weight
                                    of such scooter does not exceed
                                    100 pounds.
                              ``(iii) Bikeshare.--The term
                            `bikeshare' means a rental operation at
                            which qualified commuting property is
                            made available to customers to pick up
                            and drop off for point-to-point use
                            within a defined geographic area.''.
      (c) Limitation on Exclusion.--Section 132(f)(2)(C) is amended
    to read as follows:
                      ``(C) 30 percent of the dollar amount in
                    effect under subparagraph (B) per month in the
                    case of any qualified bicycle commuting
                    benefit.''.
      (d) No Constructive Receipt.--Section 132(f)(4) is amended by
    striking ``(other than a qualified bicycle commuting
    reimbursement)''.
      (e) Conforming Amendment.--Section 132(f)(1)(D) is amended by
    striking ``reimbursement'' and inserting ``benefit''.
      (f) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 136407. CREDIT FOR CERTAIN NEW ELECTRIC BICYCLES.

      (a) In General.--Subpart C of part IV of subchapter A of
    chapter 1, as amended by the preceding provisions of this Act,
    is amended by inserting after section 36D the following new
    section:

    ``SEC. 36E. ELECTRIC BICYCLES.

      ``(a) Allowance of Credit.--There shall be allowed as a
    credit against the tax imposed by this chapter for the taxable
    year an amount equal to 15 percent of the cost of each
    qualified electric bicycle placed in service by the taxpayer
    during such taxable year.
      ``(b) Limitations.--
              ``(1) Limitation on cost per electric bicycle taken
            into account.--The amount taken into account under
            subsection (a) as the cost of any qualified electric
            bicycle shall not exceed $5,000.
              ``(2) Bicycle limitation with respect to credit.--
                      ``(A) Limitation on number of personal-use
                    bicycles.--In the case of any taxpayer for any
                    taxable year, the number of personal-use
                    bicycles taken into account under subsection
                    (a) shall not exceed the excess (if any) of--
                              ``(i) 1 (2 in the case of a joint
                            return), reduced by
                              ``(ii) the aggregate number of
                            bicycles taken into account by the
                            taxpayer under subsection (a) for the 2
                            preceding taxable years.
                      ``(B) Phaseout based on modified adjusted
                    gross income.--So much of the credit allowed
                    under subsection (a) to any taxpayer for any
                    taxable year as would (but for this
                    subparagraph) be treated under subsection
                    (c)(2) as a credit allowable under subpart C
                    shall be reduced by $200 for each $1,000 (or
                    fraction thereof) by which the taxpayer's
                    modified adjusted gross income exceeds--
                              ``(i) $150,000 in the case of a joint
                            return or a surviving spouse (as
                            defined in section 2(a)),
                              ``(ii) $112,500 in the case of a head
                            of household (as defined in section
                            2(b)), and
                              ``(iii) $75,000 in the case of a
                            taxpayer not described in clause (i) or
                            (ii).
                      ``(C) Modified adjusted gross income.--For
                    purposes of subparagraph (B), the term
                    `modified adjusted gross income' means adjusted
                    gross income increased by any amount excluded
                    from gross income under section 911, 931, or
                    933.
                      ``(D) Special rule for determination of
                    modified adjusted gross income.--The modified
                    adjusted gross income of the taxpayer that is
                    taken into account for purposes of this
                    paragraph shall be the lesser of--
                              ``(i) the modified adjusted gross
                            income for the taxable year in which
                            the credit is claimed, or
                              ``(ii) the modified adjusted gross
                            income for the immediately preceding
                            taxable year.
      ``(c) Qualified Electric Bicycle.--For purposes of this
    section, the term `qualified electric bicycle' means a
    bicycle--
              ``(1) the original use of which commences with the
            taxpayer,
              ``(2) which is acquired for use by the taxpayer and
            not for resale,
              ``(3) which is made by a qualified manufacturer and
            is labeled with the qualified vehicle identification
            number assigned to such bicycle by such manufacturer,
              ``(4) with respect to which the aggregate amount paid
            for such acquisition does not exceed $8,000, and
              ``(5) which is equipped with--
                      ``(A) fully operable pedals,
                      ``(B) a saddle or seat for the rider, and
                      ``(C) an electric motor of less than 750
                    watts which is designed to provided assistance
                    in propelling the bicycle and--
                              ``(i) does not provide such
                            assistance if the bicycle is moving in
                            excess of 20 miler per hour, or
                              ``(ii) if such motor only provides
                            such assistance when the rider is
                            pedaling, does not provide such
                            assistance if the bicycle is moving in
                            excess of 28 miles per hour.
      ``(d) VIN Number Requirement.--
              ``(1) In general.--No credit shall be allowed under
            subsection (a) with respect to any qualified electric
            bicycle unless the taxpayer includes the qualified
            vehicle identification number of such bicycle on the
            return of tax for the taxable year.
              ``(2) Qualified vehicle identification number.--For
            purposes of this section, the term `qualified vehicle
            identification number' means, with respect to any
            bicycle, the vehicle identification number assigned to
            such bicycle by a qualified manufacturer pursuant to
            the methodology referred to in paragraph (3).
              ``(3) Qualified manufacturer.--For purposes of this
            section, the term `qualified manufacturer' means any
            manufacturer of qualified electric bicycles which
            enters into an agreement with the Secretary which
            provides that such manufacturer will--
                      ``(A) assign a vehicle identification number
                    to each qualified electric bicycle produced by
                    such manufacturer utilizing a methodology that
                    will ensure that such number (including any
                    alphanumeric) is unique to such bicycle (by
                    utilizing numbers or letters which are unique
                    to such manufacturer or by such other method as
                    the Secretary may provide),
                      ``(B) label such bicycle with such number in
                    such manner as the Secretary may provide, and
                      ``(C) make periodic written reports to the
                    Secretary (at such times and in such manner as
                    the Secretary may provide) of the vehicle
                    identification numbers so assigned and
                    including such information as the Secretary may
                    require with respect to the qualified electric
                    bicycle to which such number was so assigned.
      ``(e) Special Rules.--
              ``(1) Basis reduction.--For purposes of this
            subtitle, the basis of any property for which a credit
            is allowable under subsection (a) shall be reduced by
            the amount of such credit so allowed (determined
            without regard to subsection (c)).
              ``(2) No double benefit.--The amount of any deduction
            or other credit allowable under this chapter for a
            qualified electric bicycle for which a credit is
            allowable under subsection (a) shall be reduced by the
            amount of credit allowed under such subsection for such
            vehicle (determined without regard to subsection (c)).
              ``(3) Property used outside united states not
            qualified.--No credit shall be allowable under
            subsection (a) with respect to any property referred to
            in section 50(b)(1).
              ``(4) Recapture.--The Secretary shall, by
            regulations, provide for recapturing the benefit of any
            credit allowable under subsection (a) with respect to
            any property which ceases to be property eligible for
            such credit.
              ``(5) Election not to take credit.--No credit shall
            be allowed under subsection (a) for any bicycle if the
            taxpayer elects to not have this section apply to such
            bicycle.
      ``(f) Treatment of Certain Possessions.--
              ``(1) Payments to possessions with mirror code tax
            systems.--The Secretary shall pay to each possession of
            the United States which has a mirror code tax system
            amounts equal to the loss (if any) to that possession
            by reason of the application of the provisions of this
            section (determined without regard to this subsection).
            Such amounts shall be determined by the Secretary based
            on information provided by the government of the
            respective possession.
              ``(2) Payments to other possessions.--The Secretary
            shall pay to each possession of the United States which
            does not have a mirror code tax system amounts
            estimated by the Secretary as being equal to the
            aggregate benefits (if any) that would have been
            provided to residents of such possession by reason of
            the provisions of this section if a mirror code tax
            system had been in effect in such possession. The
            preceding sentence shall not apply unless the
            respective possession has a plan which has been
            approved by the Secretary under which such possession
            will promptly distribute such payments to its
            residents.
              ``(3) Mirror code tax system; treatment of
            payments.--Rules similar to the rules of paragraphs (4)
            and (5) of section 21(h) shall apply for purposes of
            this section.
      ``(g) Termination.--This section shall not apply to bicycles
    placed in service after December 31, 2031.''.
      (b) Conforming Amendments.--
              (1) Section 38(b) is amended by striking ``plus'' at
            the end of paragraph (39), by striking the period at
            the end of paragraph (40) and inserting ``, plus'', and
            by adding at the end the following new paragraph:
              ``(41) the portion of the electric bicycles credit to
            which section 36E(c)(1) applies.''.
              (2) Section 1016(a) is amended by striking ``and'' at
            the end of paragraph (37), by striking the period at
            the end of paragraph (38) and inserting ``, and'', and
            by adding at the end the following new paragraph:
              ``(39) to the extent provided in section
            36E(f)(1).''.
              (3) Section 6211(b)(4)(A) of such Code is amended by
            inserting ``36E by reason of subsection (c)(2)
            thereof,'' before ``32,''.
              (4) Section 6213(g)(2), as amended by the preceding
            provisions of this Act, is amended--
                      (A) in subparagraph (U), by striking ``and''
                    at the end,
                      (B) in subparagraph (V), by striking the
                    period at the end and inserting ``, and'', and
                      (C) by adding at the end the following:
                      ``(W) an omission of a correct vehicle
                    identification number required under section
                    36E(e) (relating to electric bicycles credit)
                    to be included on a return.''.
              (5) Section 6501(m) is amended by inserting
            ``36E(f)(4),'' after ``35(g)(11),''.
              (6) Section 1324(b)(2) of title 31, United States
            Code, is amended by inserting ``36E,'' after ``36B,''.
      (c) Clerical Amendment.--The table of sections for subpart B
    of part IV of subchapter A of chapter 1 is amended by adding at
    the end the following new item:

    ``Sec. 36E. Electric bicycles.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to property placed in service after the date of the
    enactment of this Act, in taxable years ending after such date.

                   PART 5--INVESTMENT IN THE GREEN WORKFORCE

    SEC. 136501. EXTENSION OF THE ADVANCED ENERGY PROJECT CREDIT.

      (a) Extension of Credit.--Section 48C is amended by
    redesignating subsection (e) as subsection (f) and by inserting
    after subsection (d) the following new subsection:
      ``(e) Additional Allocations.--
              ``(1) In general.--Not later than 180 days after the
            date of enactment of this subsection, the Secretary,
            after consultation with the Secretary of Energy, shall
            establish a program to consider and award
            certifications for qualified investments eligible for
            credits under this section to qualifying advanced
            energy project sponsors.
              ``(2) Annual limitation.--
                      ``(A) In general.--The amount of credits that
                    may be allocated under this subsection during
                    any calendar year shall not exceed the annual
                    credit limitation with respect to such year.
                      ``(B) Annual credit limitation.--
                              ``(i) In general.--For purposes of
                            this subsection, the term `annual
                            credit limitation' means $2,500,000,000
                            for each of calendar years 2022 through
                            2031, and zero thereafter.
                              ``(ii) Amount set aside for
                            automotive communities.--
                                      ``(I) In general.--For
                                    purposes of clause (i),
                                    $400,000,000 of the annual
                                    credit limitation for each of
                                    calendar years 2022 through
                                    2031 shall be allocated to
                                    qualified investments located
                                    within automotive communities.
                                      ``(II) Automotive
                                    communities.--For purposes of
                                    this clause, the term
                                    `automotive communities' means
                                    a census tract and any directly
                                    adjoining census tract,
                                    including a no-population
                                    census tract, that has
                                    experienced major job losses in
                                    the automotive manufacturing
                                    sector since January 1, 1994,
                                    as determined by the Secretary
                                    after consultation with the
                                    Secretary of Energy and
                                    Secretary of Labor.
                      ``(C) Carryover of unused limitation.--If the
                    annual credit limitation for any calendar year
                    exceeds the aggregate amount designated for
                    such year under this subsection, such
                    limitation for the succeeding calendar year
                    shall be increased by the amount of such
                    excess. No amount may be carried under the
                    preceding sentence to any calendar year after
                    2036.
              ``(3) Certifications.--
                      ``(A) Application requirement.--Each
                    applicant for certification under this
                    subsection shall submit an application at such
                    time and containing such information as the
                    Secretary may require.
                      ``(B) Time to meet criteria for
                    certification.--Each applicant for
                    certification shall have 2 years from the date
                    of acceptance by the Secretary of the
                    application during which to provide to the
                    Secretary evidence that the requirements of the
                    certification have been met.
                      ``(C) Period of issuance.--An applicant which
                    receives a certification shall have 2 years
                    from the date of issuance of the certification
                    in order to place the project in service and to
                    notify the Secretary that such project has been
                    so placed in service, and if such project is
                    not placed in service (and the Secretary so
                    notified) by that time period, then the
                    certification shall no longer be valid. If any
                    certification is revoked under this
                    subparagraph, the amount of the annual credit
                    limitation under paragraph (2) for the calendar
                    year in which such certification is revoked
                    shall be increased by the amount of the credit
                    with respect to such revoked certification.
              ``(4) Selection criteria.--Selection criteria similar
            to those in subsection (d)(3) shall apply, except that
            in determining designations under this subsection, the
            Secretary, after consultation with the Secretary of
            Energy, shall--
                      ``(A) in addition to the factors described in
                    subsection (d)(3)(B), take into consideration
                    which projects--
                              ``(i) will provide the greatest net
                            impact in avoiding or reducing
                            anthropogenic emissions of greenhouse
                            gases, as determined by the Secretary
                            after consultation with the
                            Administrator of the Environmental
                            Protection Agency,
                              ``(ii) will provide the greatest
                            domestic job creation (both direct and
                            indirect) during the credit period,
                              ``(iii) will provide the greatest job
                            creation within the vicinity of the
                            project, particularly with respect to--
                                      ``(I) low-income communities
                                    (as described in section
                                    45D(e)), and
                                      ``(II) dislocated workers who
                                    were previously employed in
                                    manufacturing, coal power
                                    plants, or coal mining, and
                              ``(iv) will provide the greatest job
                            creation in areas with a population
                            that is at risk of experiencing higher
                            or more adverse human health or
                            environmental effects and a significant
                            portion of such population is comprised
                            of communities of color, low-income
                            communities, Tribal and Indigenous
                            communities, or individuals formerly
                            employed in the fossil fuel industry,
                            and
                      ``(B) give the highest priority to projects
                    which--
                              ``(i) manufacture (other than
                            primarily assembly of components)
                            property described in a subclause of
                            subsection (c)(1)(A)(i) (or components
                            thereof), and
                              ``(ii) have the greatest potential
                            for commercial deployment of new
                            applications.
              ``(5) Disclosure of allocations.--The Secretary
            shall, upon allocating a credit under this subsection,
            publicly disclose the identity of the applicant, the
            amount of the credit with respect to such applicant,
            and the project location for which such credit was
            allocated.
              ``(6) Credit conditioned upon wage and apprenticeship
            requirements.--No credit shall be allocated for a
            project under this subsection unless the project meets
            the prevailing wage requirements of paragraph (7) and
            the apprenticeship requirements of paragraph (8).
              ``(7) Prevailing wage requirements.--
                      ``(A) In general.--The requirements described
                    in this paragraph with respect to a project are
                    that the taxpayer shall ensure that any
                    laborers and mechanics employed by contractors
                    and subcontractors in the re-equipping,
                    expansion, or establishment of an industrial or
                    manufacturing facility shall be paid wages at
                    rates not less than the prevailing rates for
                    construction, alteration, or repair of a
                    similar character in the locality as most
                    recently determined by the Secretary of Labor,
                    in accordance with subchapter IV of chapter 31
                    of title 40, United States Code.
                      ``(B) Correction and penalty related to
                    failure to satisfy wage requirements.--
                              ``(i) In general.--In the case of any
                            taxpayer which fails to satisfy the
                            requirement under subparagraph (A) with
                            respect to any project--
                                      ``(I) rules similar to the
                                    rules of section 45(b)(8)(B)
                                    shall apply for purposes of
                                    this paragraph, and
                                      ``(II) if the failure to
                                    satisfy the requirement under
                                    subparagraph (A) is not
                                    corrected pursuant to the rules
                                    described in subclause (I), the
                                    certification with respect to
                                    the re-equipping, expansion, or
                                    establishment of an industrial
                                    or manufacturing facility shall
                                    no longer be valid.
              ``(8) Apprenticeship requirements.--The requirements
            described in this subparagraph with respect to a
            project are as follows:
                      ``(A) Labor hours.--
                              ``(i) Percentage of total labor
                            hours.--All contractors and
                            subcontractors engaged in the
                            performance of construction,
                            alteration, or repair work on any
                            project shall, subject to subparagraph
                            (B), ensure that not less than the
                            applicable percentage of the total
                            labor hours of such work be performed
                            by qualified apprentices.
                              ``(ii) Applicable percentage.--For
                            purposes of paragraph (1), the
                            applicable percentage shall be--
                                      ``(I) in the case of any
                                    applicable project the
                                    construction of which begins
                                    before January 1, 2023, 5
                                    percent,
                                      ``(II) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2022, and
                                    before January 1, 2024, 10
                                    percent, and
                                      ``(III) in the case of any
                                    applicable project the
                                    construction of which begins
                                    after December 31, 2023, 15
                                    percent.
                      ``(B) Apprentice to journeyworker ratio.--The
                    requirement under subparagraph (A)(i) shall be
                    subject to any applicable requirements for
                    apprentice-to-journeyworker ratios of the
                    Department of Labor or the applicable State
                    apprenticeship agency.
                      ``(C) Participation.--Each contractor and
                    subcontractor who employs 4 or more individuals
                    to perform construction, alteration, or repair
                    work on an applicable project shall employ 1 or
                    more qualified apprentices to perform such
                    work.
                      ``(D) Exception.--
                              ``(i) In general.--Notwithstanding
                            any other provision of this paragraph,
                            this paragraph shall not apply in the
                            case of a taxpayer who--
                                      ``(I) demonstrates a lack of
                                    availability of qualified
                                    apprentices in the geographic
                                    area of the construction,
                                    alteration, or repair work, and
                                      ``(II) makes a good faith
                                    effort to comply with the
                                    requirements of this paragraph.
                              ``(ii) Good faith effort.--For
                            purposes of clause (i), a taxpayer
                            shall be deemed to have satisfied the
                            requirements under such paragraph with
                            respect to an applicable project if
                            such taxpayer has requested qualified
                            apprentices from a registered
                            apprenticeship program, as defined in
                            section 3131(e)(3)(B), and such request
                            has been denied, provided that such
                            denial is not the result of a refusal
                            by the contractors or subcontractors
                            engaged in the performance of
                            construction, alteration, or repair
                            work on such applicable project to
                            comply with the established standards
                            and requirements of such apprenticeship
                            program.
                      ``(E) Definitions.--For purposes of this
                    paragraph--
                              ``(i) Labor hours.--The term `labor
                            hours' has the meaning given such term
                            in section 45(b)(9)(E)(i).
                              ``(ii) Qualified apprentice.--The
                            term `qualified apprentice' has the
                            meaning given such term in section
                            45(b)(9)(E)(ii).''.
      (b) Modification of Qualifying Advanced Energy Projects.--
              (1) Inclusion of water as a renewable resource.--
            Section 48C(c)(1)(A)(i)(I) is amended by inserting
            ``water,'' after ``sun,''.
              (2) Energy storage systems.--Section
            48C(c)(1)(A)(i)(II) is amended by striking ``an energy
            storage system for use with electric or hybrid-electric
            motor vehicles'' and inserting ``energy storage systems
            and components''.
              (3) Modification of qualifying electric grid
            property.--Section 48C(c)(1)(A)(i)(III) is amended to
            read as follows:
                                      ``(III) electric grid
                                    modernization equipment or
                                    components,''.
              (4) Use of captured carbon.--Section
            48C(c)(1)(A)(i)(IV) is amended by striking
            ``sequester'' and insert ``use or sequester''.
              (5) Electric and fuel cell vehicles.--Section
            48C(c)(1)(A)(i)(VI) is amended--
                      (A) by striking ``new qualified plug-in
                    electric drive motor vehicles (as defined by
                    section 30D)'' and inserting ``vehicles
                    described in section 36C, 45Y, and 36E'', and
                      (B) and striking ``and power control units''
                    and inserting ``power control units, and
                    equipment used for charging or refueling''.
              (6) Property for production of hydrogen.--Section
            48C(c)(1)(A)(i) is amended by striking ``or'' at the
            end of subclause (VI), by redesignating subclause (VII)
            as subclause (VIII), an by inserting after subclause
            (VI) the following new subclause:
                                      ``(VII) property designed to
                                    be used to produce qualified
                                    clean hydrogen (as defined in
                                    section 45X), or''.
              (7) Recycling of advanced energy property.--Section
            48C(c)(1) is amended by adding at the end the following
            new subparagraph:
                      ``(C) Special rule for certain recycling
                    facilities.--A facility which recycles
                    batteries or similar energy storage property
                    described in subparagraph (A)(i) shall be
                    treated as part of a manufacturing facility
                    described in such subparagraph.''.
      (c) Effective Date.--The amendments made by this section
    shall take effect on the date of the enactment of this Act.

    SEC. 136502. LABOR COSTS OF INSTALLING MECHANICAL INSULATION PROPERTY.

      (a) In General.--Subpart D of part IV of subchapter A of
    chapter 1, as amended by the preceding provisions of this Act,
    is further amended by adding at the end the following new
    section:

    ``SEC. 45Z. LABOR COSTS OF INSTALLING MECHANICAL INSULATION PROPERTY.

      ``(a) In General.--For purposes of section 38, the mechanical
    insulation labor costs credit determined under this section for
    any taxable year is an amount equal to 10 percent of the
    mechanical insulation labor costs paid or incurred by the
    taxpayer during such taxable year.
      ``(b) Mechanical Insulation Labor Costs.--For purposes of
    this section--
              ``(1) In general.--The term `mechanical insulation
            labor costs' means the labor cost of installing
            mechanical insulation property with respect to a
            mechanical system referred to in paragraph (2)(A) which
            was originally placed in service not less than 1 year
            before the date on which such mechanical insulation
            property is installed.
              ``(2) Mechanical insulation property.--The term
            `mechanical insulation property' means insulation
            materials, and facings and accessory products installed
            in connection to such insulation materials--
                      ``(A) placed in service in connection with a
                    mechanical system which--
                              ``(i) is located in the United
                            States,
                              ``(ii) is of a character subject to
                            an allowance for depreciation, and
                              ``(iii) meets the requirements of
                            section 434.403 of title 10, Code of
                            Federal Regulations (as in effect on
                            the date of enactment of this section),
                            and
                      ``(B) which result in a reduction in energy
                    loss from the mechanical system which is
                    greater than the expected reduction from the
                    installation of insulation materials which meet
                    the minimum requirements of Reference Standard
                    90.1 (as defined in section 179D(c)(2)).
      ``(c) Termination.--This section shall not apply to
    mechanical insulation labor costs paid or incurred after
    December 31, 2031.''.
      (b) Credit Allowed as Part of General Business Credit.--
    Section 38(b), as amended by the preceding provisions of this
    Act, is further amended by striking ``plus'' at the end of
    paragraph (40), by striking the period at the end of paragraph
    (41) and inserting ``, plus'', and by adding at the end the
    following new paragraph:
              ``(42) the mechanical insulation labor costs credit
            determined under section 45Z(a).''.
      (c) Conforming Amendments.--
              (1) Section 280C is amended by adding at the end the
            following new subsection:
      ``(i) Mechanical Insulation Labor Costs Credit.--
              ``(1) In general.--No deduction shall be allowed for
            that portion of the mechanical insulation labor costs
            (as defined in section 45Z(b)) otherwise allowable as
            deduction for the taxable year which is equal to the
            amount of the credit determined for such taxable year
            under section 45Z(a).
              ``(2) Similar rule where taxpayer capitalizes rather
            than deducts expenses.--If--
                      ``(A) the amount of the credit determined for
                    the taxable year under section 45Z(a), exceeds
                      ``(B) the amount of allowable as a deduction
                    for such taxable year for mechanical insulation
                    labor costs (determined without regard to
                    paragraph (1)),
            the amount chargeable to capital account for the
            taxable year for such costs shall be reduced by the
            amount of such excess.''.
              (2) The table of sections for subpart D of part IV of
            subchapter A of chapter 1, as amended by the preceding
            provisions of this Act, is further amended by adding at
            the end the following new item:

    ``Sec. 45Z. Labor costs of installing mechanical insulation property.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to amounts paid or incurred after December 31,
    2021, in taxable years ending after such date.

                         PART 6--ENVIRONMENTAL JUSTICE

    SEC. 136601. QUALIFIED ENVIRONMENTAL JUSTICE PROGRAM CREDIT.

      (a) In General.--Subpart C of part IV of subchapter A of
    chapter 1, as amended by the preceding provisions of this Act,
    is amended by inserting after section 36E the following new
    section:

    ``SEC. 36F. QUALIFIED ENVIRONMENTAL JUSTICE PROGRAMS.

      ``(a) Allowance of Credit.--In the case of an eligible
    educational institution, there shall be allowed as a credit
    against the tax imposed by this subtitle for any taxable year
    an amount equal to the applicable percentage of the amounts
    paid or incurred by such taxpayer during such taxable year
    which are necessary for a qualified environmental justice
    program.
      ``(b) Qualified Environmental Justice Program.--For purposes
    of this section--
              ``(1) In general.--The term `qualified environmental
            justice program' means a program conducted by one or
            more eligible educational institutions that is designed
            to address, or improve data about, qualified
            environmental stressors for the primary purpose of
            improving, or facilitating the improvement of, health
            and economic outcomes of individuals residing in low-
            income areas or areas that experience, or are at risk
            of experiencing, multiple exposures to qualified
            environmental stressors.
              ``(2) Qualified environmental stressor.--The term
            `qualified environmental stressor' means, with respect
            to an area, a contamination of the air, water, soil, or
            food with respect to such area or a change relative to
            historical norms of the weather conditions of such
            area, including--
                      ``(A) toxic pollutants (such as lead,
                    pesticides, or fine particulate matter) in air,
                    soil, food, or water,
                      ``(B) high rates of asthma prevalence and
                    incidence, and
                      ``(C) such other adverse human health or
                    environmental effects as are identified by the
                    Secretary.
      ``(c) Eligible Educational Institution.--For purposes of this
    section, the term `eligible educational institution' means an
    institution of higher education (as such term is defined in
    section 101 or 102(c) of the Higher Education Act of 1965) that
    is eligible to participate in a program under title IV of such
    Act.
      ``(d) Applicable Percentage.--For purposes of this section,
    the term `applicable percentage' means--
              ``(1) in the case of a program involving material
            participation of faculty and students of an institution
            described in section 371(a) of the Higher Education Act
            of 1965, 30 percent, and
              ``(2) in all other cases, 20 percent.
      ``(e) Credit Allocation.--
              ``(1) Allocation.--
                      ``(A) In general.--The Secretary shall
                    allocate credit dollar amounts under this
                    section to eligible educational institutions,
                    for qualified environmental justice programs,
                    that--
                              ``(i) submit applications at such
                            time and in such manner as the
                            Secretary may provide, and
                              ``(ii) are selected by the Secretary
                            under subparagraph (B).
                      ``(B) Selection criteria.--The Secretary,
                    after consultation with the Secretary of
                    Energy, the Secretary of Education, the
                    Secretary of Health and Human Services, and the
                    Administrator of the Environmental Protection
                    Agency, shall select applications on the basis
                    of the following criteria:
                              ``(i) The extent of participation of
                            faculty and students of an institution
                            described in section 371(a) of the
                            Higher Education Act of 1965.
                              ``(ii) The extent of the expected
                            effect on the health or economic
                            outcomes of individuals residing in
                            areas within the United States that are
                            low-income areas or areas that
                            experience, or are at risk of
                            experiencing, multiple exposures to
                            qualified environmental stressors.
                              ``(iii) The creation or significant
                            expansion of qualified environmental
                            justice programs.
              ``(2) Limitations.--
                      ``(A) In general.--The amount of the credit
                    determined under this section for any taxable
                    year to any eligible educational institution
                    for any qualified environmental justice program
                    shall not exceed the excess of--
                              ``(i) the credit dollar amount
                            allocated to such institution for such
                            program under this subsection, over
                              ``(ii) the credits previously claimed
                            by such institution for such program
                            under this section.
                      ``(B) Five-year limitation.--No amounts paid
                    or incurred after the 5-year period beginning
                    on the date a credit dollar amount is allocated
                    to an eligible educational institution for a
                    qualified environmental justice program shall
                    be taken into account under subsection (a) with
                    respect to such institution for such program.
                      ``(C) Allocation limitation.--The total
                    amount of credits that may be allocated under
                    the program shall not exceed--
                              ``(i) $1,000,000,000 for each of
                            taxable years 2022 through 2031, and
                              ``(ii) $0 for each subsequent year.
                      ``(D) Carryover of unused limitation.--If the
                    annual credit limitation for any calendar year
                    exceeds the aggregate amount designated for
                    such year under this subsection, such
                    limitation for the succeeding calendar year
                    shall be increased by the amount of such
                    excess. No amount may be carried under the
                    preceding sentence to any calendar year after
                    2036.
      ``(f) Requirements.--
              ``(1) In general.--An eligible educational
            institution that has been allocated credit dollar
            amounts under this section for a qualified
            environmental justice project for a taxable year
            shall--
                      ``(A) make publicly available the application
                    submitted to the Secretary under subsection (e)
                    with respect to such project, and
                      ``(B) submit an annual report to the
                    Secretary that describes the amounts paid or
                    incurred for, and expected impact of, such
                    project.
              ``(2) Failure to comply.--In the case of an eligible
            educations institution that has failed to comply with
            the requirements of this subsection, the credit dollar
            amount allocated to such institution under this section
            is deemed to be $0.
      ``(g) Public Disclosure.--The Secretary, upon making an
    allocation of credit dollar amounts under this section, shall
    publicly disclose--
              ``(1) the identity of the eligible educational
            institution receiving the allocation, and
              ``(2) the amount of such allocation.''.
      (b) Conforming Amendments.--
              (1) Section 6211(b)(4)(A), as amended by the
            preceding provisions of this Act, is amended by
            inserting ``36F,'' after ``36D,''.
              (2) Paragraph (2) of section 1324(b) of title 31,
            United States Code, as amended by the preceding
            provisions of this Act, is amended by inserting
            ``36F,'' after ``36D,''.
      (c) Clerical Amendment.--The table of sections for subpart C
    of part IV of subchapter A of chapter 1, as amended by the
    preceding provisions of this Act, is amended by inserting after
    the item relating to section 36E the following new item:

    ``Sec. 36F. Qualified environmental justice programs.''.
      (d) Effective Date.--The amendments made by this section
    shall take effect on the date of the enactment of this Act.

                               PART 7--SUPERFUND

    SEC. 136701. REINSTATEMENT OF SUPERFUND.

      (a)  Hazardous Substance Superfund Financing Rate.--
              (1) Extension.--Section 4611(e) is amended to read as
            follows:
      ``(e) Application of Hazardous Substance Superfund Financing
    Rate.--The Hazardous Substance Superfund financing rate under
    this section shall apply after December 31, 2021.''.
              (2) Adjustment for inflation.--
                      (A) Section 4611(c)(2)(A) is amended by
                    striking ``9.7 cents'' and inserting ``16.4
                    cents''.
                      (B) Section 4611(c) is amended by adding at
                    the end the following:
              ``(3) Adjustment for inflation.--
                      ``(A) In general.--In the case of a year
                    beginning after 2022, the amount in paragraph
                    (2)(A) shall be increased by an amount equal
                    to--
                              ``(i) such amount, multiplied by
                              ``(ii) the cost-of-living adjustment
                            determined under section 1(f)(3) for
                            the calendar year, determined by
                            substituting `calendar year 2021' for
                            `calendar year 2016' in subparagraph
                            (A)(ii) thereof.
                      ``(B) Rounding.--If any amount as adjusted
                    under subparagraph (A) is not a multiple of
                    $0.01, such amount shall be rounded to the next
                    lowest multiple of $0.01.''.
      (b) Authority for Advances.--Section 9507(d)(3)(B) is amended
    by striking ``December 31, 1995'' and inserting ``December 31,
    2031''.
      (c) Effective Date.--The amendments made by this section
    shall take effect on January 1, 2022.

                             PART 8--APPROPRIATIONS

    SEC. 136801. APPROPRIATIONS.

      Immediately upon the enactment of this Act, in addition to
    amounts otherwise available, there are appropriated for fiscal
    year 2022, out of any money in the Treasury not otherwise
    appropriated, $3,831,000,000 to remain available until
    September 30, 2031, for necessary expenses for the Internal
    Revenue Service to carry out this subtitle (and the amendments
    made by this subtitle), which shall supplement and not supplant
    any other appropriations that may be available for this
    purpose.

                         Subtitle H--Social Safety Net

    SEC. 137001. AMENDMENT OF 1986 CODE.

      Except as otherwise expressly provided, whenever in this
    subtitle 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.

                            PART 1--CHILD TAX CREDIT

    SEC. 137101. MODIFICATIONS APPLICABLE BEGINNING IN 2021.

      (a) Safe Harbor Exception for Fraud and Intentional Disregard
    of Rules and Regulations.--Section 24(j)(2)(B) is amended--
              (1) by striking ``qualified'' each place it appears
            in clause (iv)(II) and inserting ``qualifying'', and
              (2) by adding at the end the following new clause:
                              ``(v) Exception for fraud and
                            intentional disregard of rules and
                            regulations.--
                                      ``(I) In general.--For
                                    purposes of determining the
                                    safe harbor amount under clause
                                    (iv) with respect to any
                                    taxpayer, an individual shall
                                    not be treated as taken into
                                    account in determining the
                                    annual advance amount of such
                                    taxpayer if the Secretary
                                    determines that such individual
                                    was so taken into account due
                                    to fraud by the taxpayer or
                                    intentional disregard of rules
                                    and regulations by the
                                    taxpayer.
                                      ``(II) Arrangements to take
                                    individual into account more
                                    than once.--For purposes of
                                    subclause (I), a taxpayer shall
                                    not fail to be treated as
                                    intentionally disregarding
                                    rules and regulations with
                                    respect to any individual taken
                                    into account in determining the
                                    annual advance amount of such
                                    taxpayer if such taxpayer
                                    entered into a plan or other
                                    arrangement with, or expected,
                                    another taxpayer to take such
                                    individual into account in
                                    determining the credit allowed
                                    under this section for the
                                    taxable year.''.
      (b) Treatment of Joint Returns.--Section 24(j) is amended by
    adding at the end the following new paragraph:
              ``(3) Joint returns.--Except as otherwise provided by
            the Secretary, in the case of an advance payment made
            under section 7527A with respect to a joint return,
            half of such payment shall be treated as having been
            made to each individual filing such return.''.
      (c) Annual Advance Amount.--Section 7527A(b) is amended--
              (1) in paragraph (1)--
                      (A) in subparagraph (A), by inserting ``or
                    based on any other information known to the
                    Secretary'' after ``reference taxable year'',
                      (B) in subparagraph (C), by inserting
                    ``unless determined by the Secretary based on
                    any information known to the Secretary,''
                    before ``the only children'', and
                      (C) in subparagraph (D), by inserting
                    ``unless determined by the Secretary based on
                    any information known to the Secretary,''
                    before ``the ages of'', and
              (2) in paragraph (3)(A)(ii), by striking `` provided
            by the taxpayer'' and inserting ``provided, or
            known,''.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning, and payments made,
    after December 31, 2020.

    SEC. 137102. EXTENSION AND MODIFICATION OF CHILD TAX CREDIT AND ADVANCE
                        PAYMENT FOR 2022.

      (a) Extensions.--
              (1) Extension of child tax credit.--Section 24(i) is
            amended--
                      (A) by striking ``January 1, 2022'' in the
                    matter preceding paragraph (1) and inserting
                    ``January 1, 2023'', and
                      (B) by inserting ``and 2022'' after ``2021''
                    in the heading thereof.
              (2) Extension of provisions related to possessions of
            the united states.--
                      (A) Section 24(k)(2)(B) is amended--
                              (i) by striking ``December 31, 2021''
                            in the matter preceding clause (i) and
                            inserting ``December 31, 2022'', and
                              (ii) by striking ``After 2021'' in
                            the heading thereof and inserting
                            ``After 2022''.
                      (B) Section 24(k)(3)(C)(ii) is amended--
                              (i) in subclause (I), by inserting
                            ``or 2022'' after ``2021'', and
                              (ii) in subclause (II), by striking
                            ``December 31, 2021'' and inserting
                            ``December 31, 2022''.
                      (C) The heading of section 24(k)(2)(A) is
                    amended by inserting ``and 2022'' after
                    ``2021''.
              (3) Extension of advance payment.--Section 7527A is
            amended--
                      (A) in subsection (b)(1), by striking ``50
                    percent of'',
                      (B) in clauses (i) and (ii) of subsection
                    (e)(4)(C), by inserting ``or 2022'' after ``in
                    2021'', and
                      (C) in subsection (f), by striking ``December
                    31, 2021'' and inserting ``December 31, 2022''.
      (b) Repeal of Social Security Number Requirement.--Section
    24(h) is amended by striking paragraph (7).
      (c) Application of Income Phaseout on Basis of Income for
    Preceding Taxable Year.--Section 24(i) is amended by adding at
    the end the following new paragraph:
              ``(5) Application of income phaseout on basis of
            income for prior taxable year.--If the taxpayer's
            modified adjusted gross income (as defined in
            subsection (b)) for the taxable year for which the
            credit allowed under this section is determined is
            greater than such taxpayer's modified adjusted gross
            income (as so defined) for the preceding taxable year,
            paragraph (4) and subsection (b)(1) shall both be
            applied with respect to such taxpayer's modified
            adjusted gross income (as so defined) for the preceding
            taxable year.''.
      (d) Inflation Adjustment.--Section 24(i), as amended by
    subsection (c), is amended by adding at the end the following
    new paragraph:
              ``(6) Inflation adjustments.--
                      ``(A) In general.--In the case of any taxable
                    year beginning after December 31, 2021, the
                    $500 amount in subsection (h)(4)(A), the $3,000
                    and $3,600 amounts in paragraph (3) and
                    subsection (j)(2)(B)(iv), and the dollar
                    amounts in paragraph (4)(B), shall each be
                    increased by an amount equal to--
                              ``(i) such dollar amount, multiplied
                            by
                              ``(ii) the percentage (if any) by
                            which--
                                      ``(I) the CPI (as defined in
                                    section 1(f)(4)) for the
                                    calendar year preceding the
                                    calendar year in which such
                                    taxable year begins, exceeds
                                      ``(II) the CPI (as so
                                    defined) for calendar year
                                    2020.
                      ``(B) Rounding.--
                              ``(i) $500 amount.--In the case of
                            the $500 amount in subsection
                            (h)(4)(A), any increase under
                            subparagraph (A) which is not a
                            multiple of $10 shall be rounded to the
                            nearest multiple of $10.
                              ``(ii) $3,000 and $3,600 amounts.--In
                            the case of the $3,000 and $3,600
                            amounts in paragraph (3) and subsection
                            (j)(2)(B)(iv), any increase under
                            subparagraph (A) which is not a
                            multiple of $100 shall be rounded to
                            the nearest multiple of $100.
                              ``(iii) Applicable threshold
                            amounts.--In the case of the dollar
                            amounts in paragraph (4)(B), any
                            increase under subparagraph (A) which
                            is not a multiple of $5,000 shall be
                            rounded to the nearest multiple of
                            $5,000.''.
      (e) Modification of Recapture Safe Harbor for 2022.--Section
    24(j)(2)(B)(iv), as amended by the preceding provisions of this
    Act, is amended to read as follows:
                              ``(iv) Safe harbor amount.--For
                            purposes of this subparagraph, the term
                            `safe harbor amount' means, with
                            respect to any taxpayer for any taxable
                            year, the aggregate of $3,000 ($3,600
                            in the case of a qualifying child who
                            has not attained age 6 as of the close
                            of the calendar year in which the
                            taxable year of the taxpayer begins)
                            with respect to each qualifying child
                            who is--
                                      ``(I) taken into account in
                                    determining the annual advance
                                    amount with respect to such
                                    taxpayer under section 7527A
                                    with respect to months
                                    beginning in such taxable year,
                                    and
                                      ``(II) not taken into account
                                    in determining the credit
                                    allowed to such taxpayer under
                                    this section for such taxable
                                    year.''.
      (f) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning, and payments made,
    after December 31, 2021.

    SEC. 137103. ESTABLISHMENT OF MONTHLY CHILD TAX CREDIT WITH ADVANCE
                        PAYMENT THROUGH 2025.

      (a) In General.--Subpart A of part IV of subchapter A of
    chapter 1 is amended by inserting after section 24 the
    following new sections:

    ``SEC. 24A. MONTHLY CHILD TAX CREDIT.

      ``(a) Allowance of Credit.--There shall be allowed as a
    credit against the tax imposed by this chapter for the taxable
    year the sum of the monthly specified child allowances
    determined with respect to the taxpayer under subsection (b)
    for each calendar month during such taxable year.
      ``(b) Monthly Specified Child Allowance.--
              ``(1) In general.--For purposes of this section, the
            term `monthly specified child allowance' means, with
            respect to any taxpayer for any calendar month, the sum
            of--
                      ``(A) $300 with respect to each specified
                    child of such taxpayer who will not, as of the
                    close of the taxable year which includes such
                    month, have attained age 6, plus
                      ``(B) $250 with respect to each specified
                    child of such taxpayer who will, as of the
                    close of the taxable year which includes such
                    month, have attained age 6.
              ``(2) Limitations based on modified adjusted gross
            income.--
                      ``(A) Initial reduction.--The monthly
                    specified child allowance otherwise determined
                    under paragraph (1) with respect to any
                    taxpayer for any calendar month shall be
                    reduced (but not below zero) by \1/12\ of 5
                    percent of the excess (if any) of the
                    taxpayer's modified adjusted gross income for
                    the applicable taxable year over the initial
                    threshold amount in effect for such applicable
                    taxable year.
                      ``(B) Limitation on initial reduction.--The
                    amount of the reduction under subparagraph (A)
                    shall not exceed the lesser of--
                              ``(i) the excess (if any) of--
                                      ``(I) the monthly specified
                                    child allowance with respect to
                                    the taxpayer for the calendar
                                    month (determined without
                                    regard to this paragraph), over
                                      ``(II) the amount which would
                                    be determined under subclause
                                    (I) if the dollar amounts in
                                    effect under subparagraphs (A)
                                    and (B) of paragraph (1) were
                                    each equal to $166.67, or
                              ``(ii) \1/12\ of 5 percent of the
                            excess of the secondary threshold
                            amount over the initial threshold
                            amount.
                      ``(C) Secondary reduction.--The monthly
                    specified child allowance otherwise determined
                    under paragraph (1) with respect to any
                    taxpayer for any calendar month (determined
                    after the application of subparagraphs (A) and
                    (B)) shall be reduced (but not below zero) by
                    \1/12\ of 5 percent of the excess (if any) of
                    the taxpayer's modified adjusted gross income
                    for the applicable taxable year over the
                    secondary threshold amount.
                      ``(D) Definitions related to limitations
                    based on modified adjusted gross income.--For
                    purposes of this paragraph--
                              ``(i) Initial threshold amount.--The
                            term `initial threshold amount' means--
                                      ``(I) $150,000, in the case
                                    of a joint return or surviving
                                    spouse (as defined in section
                                    2(a)),
                                      ``(II) \1/2\ the dollar
                                    amount in effect under
                                    subclause (I), in the case of a
                                    married individual filing a
                                    separate return, and
                                      ``(III) $112,500, in any
                                    other case.
                              ``(iii) Secondary threshold amount.--
                            The term `secondary threshold amount'
                            means--
                                      ``(I) $400,000, in the case
                                    of a joint return or surviving
                                    spouse (as defined in section
                                    2(a)),
                                      ``(II) $300,000, in the case
                                    of a head of household (as
                                    defined in section 2(b)), and
                                      ``(III) $200,000, in any
                                    other case.
                              ``(iv) Applicable taxable year.--The
                            term `applicable taxable year' means,
                            with respect to any taxpayer, the
                            relevant taxable year with respect to
                            which the taxpayer has the lowest
                            modified adjusted gross income. For
                            purposes of the preceding sentence, the
                            term `relevant taxable year' means the
                            taxable year for which the credit
                            allowed under this section is
                            determined and each of the 2
                            immediately preceding taxable years.
                              ``(v) Modified adjusted gross
                            income.--The term `modified adjusted
                            gross income' means adjusted gross
                            income increased by any amount excluded
                            from gross income under section 911,
                            931, or 933.
      ``(c) Specified Child.--For purposes of this section--
              ``(1) In general.--The term `specified child' means,
            with respect to any taxpayer for any calendar month, an
            individual--
                      ``(A) who has the same principal place of
                    abode as the taxpayer for more than one-half of
                    such month,
                      ``(B) who is younger than the taxpayer and
                    will not, as of the close of the calendar year
                    which includes such month, have attained age
                    18,
                      ``(C) who receives care from the taxpayer
                    during such month that is not compensated,
                      ``(D) who is not the spouse of the taxpayer
                    at any time during such month,
                      ``(E) who is not a taxpayer with respect to
                    whom any individual is a specified child for
                    such month, and
                      ``(F) who either--
                              ``(i) is a citizen, national, or
                            resident of the United States, or
                              ``(ii) if the taxpayer is a citizen
                            or national of the United States, such
                            individual is described in section
                            152(f)(1)(B) with respect to such
                            taxpayer.
              ``(2) Care from the taxpayer.--
                      ``(A) In general.--Except as otherwise
                    provided by the Secretary, whether any
                    individual receives care from the taxpayer
                    (within the meaning of paragraph (1)(C)) shall
                    be determined on the basis of facts and
                    circumstances with respect to the following
                    factors:
                              ``(i) The supervision provided by the
                            taxpayer regarding the daily activities
                            and needs of the individual.
                              ``(ii) The maintenance by the
                            taxpayer of a secure environment at
                            which the individual resides.
                              ``(iii) The provision or arrangement
                            by the taxpayer of, and transportation
                            by the taxpayer to, medical care at
                            regular intervals and as required for
                            the individual.
                              ``(iv) The involvement by the
                            taxpayer in, and financial and other
                            support by the taxpayer for,
                            educational or similar activities of
                            the individual.
                              ``(v) Any other factor that the
                            Secretary determines to be appropriate
                            to determine whether the individual
                            receives care from the taxpayer.
                      ``(B) Determination of whether care is
                    compensated.--For purposes of determining if
                    care is compensated within the meaning of
                    paragraph (1)(C), compensation from the Federal
                    Government, a State or local government, a
                    Tribal government, or any possession of the
                    United States shall not be taken into account.
              ``(3) Application of tie-breaker rules.--
                      ``(A) In general.--Except as provided in
                    subparagraph (D), if any individual would (but
                    for this paragraph) be a specified child of 2
                    or more taxpayers for any month, such
                    individual shall be treated as the specified
                    child only of the taxpayer who is--
                              ``(i) the parent of the individual
                            (or, if such individual would (but for
                            this paragraph) be a specified child of
                            2 or more parents of the individual for
                            such month, the parent of the
                            individual determined under
                            subparagraph (B)),
                              ``(ii) if the individual is not a
                            specified child of any parent of the
                            individual (determined without regard
                            to this paragraph), the specified
                            relative of the individual with the
                            highest adjusted gross income for the
                            taxable year which includes such month,
                            or
                              ``(iii) if the individual is neither
                            a specified child of any parent of the
                            individual nor a specified child of any
                            specified relative of the individual
                            (in both cases determined without
                            regard to this paragraph), the taxpayer
                            with the highest adjusted gross income
                            for the taxable year which includes
                            such month.
                      ``(B) Tie-breaker among parents.--If any
                    individual would (but for this paragraph) be
                    the specified child of 2 or more parents of the
                    individual for any month, such child shall be
                    treated only as the specified child of--
                              ``(i) the parent with whom the child
                            resided for the longest period of time
                            during such month, or
                              ``(ii) if the child resides with both
                            parents for the same amount of time
                            during such month, the parent with the
                            highest adjusted gross income for the
                            taxable year which includes such month.
                      ``(C) Specified relative.--For purposes of
                    this paragraph, the term `specified relative'
                    means an individual who is--
                              ``(i) an ancestor of a parent of the
                            specified child,
                              ``(ii) a brother or sister of a
                            parent of the specified child, or
                              ``(iii) a brother, sister,
                            stepbrother, or stepsister of the
                            specified child.
                      ``(D) Certain parents or specified relatives
                    not taken into account.--This paragraph shall
                    be applied without regard to any parent or
                    specified relative of an individual for any
                    month if--
                              ``(i) such parent or specified
                            relative elects to have such individual
                            not be treated as a specified child of
                            such parent or specified relative for
                            such month,
                              ``(ii) in the case of a parent of
                            such individual, the adjusted gross
                            income of the taxpayer (with respect to
                            whom such individual would be treated
                            as a specified child after application
                            of this subparagraph) for the taxable
                            year which includes such month is
                            higher than the highest adjusted gross
                            income of any parent of the individual
                            for any taxable year which includes
                            such month (determined without regard
                            to any parent with respect to whom such
                            individual is not a specified child,
                            determined without regard to
                            subparagraphs (A) and (B) and after
                            application of this subparagraph), and
                              ``(iii) in the case of a specified
                            relative of such individual, the
                            adjusted gross income of the taxpayer
                            (with respect to whom such individual
                            would be treated as a specified child
                            after application of this subparagraph)
                            for the taxable year which includes
                            such month is higher than the highest
                            adjusted gross income of any parent and
                            any specified relative of the
                            individual for any taxable year which
                            includes such month (determined without
                            regard to any parent and any specified
                            relative with respect to whom such
                            individual is not a specified child,
                            determined without regard to
                            subparagraphs (A) and (B) and after
                            application of this subparagraph).
                      ``(E) Treatment of joint returns.--For
                    purposes of this paragraph, with respect to any
                    month, 2 individuals filing a joint return for
                    the taxable year which includes such month
                    shall be treated as 1 individual.
                      ``(F) Parent.--Except as otherwise provided
                    by the Secretary, the term `parent' shall have
                    the same meaning as when used in section
                    152(c)(4).
              ``(4) Special rules with respect to birth and
            death.--
                      ``(A) Birth.--
                              ``(i) In general.--In the case of the
                            birth of an individual during any
                            calendar year, such individual shall be
                            treated as a specified child of the
                            relevant taxpayer for each calendar
                            month in such calendar year which
                            precedes the calendar month referred to
                            in clause (ii).
                              ``(ii) Relevant taxpayer.--For
                            purposes of clause (i), the term
                            `relevant taxpayer' means the taxpayer
                            with respect to whom the individual
                            referred to in clause (i) is a
                            specified child for the first month for
                            which such individual is a specified
                            child with respect to any taxpayer
                            (determined without regard to this
                            subparagraph).
                      ``(B) Death.--
                              ``(i) In general.--In the case of the
                            death of an individual during any
                            calendar year, such individual shall be
                            treated as a specified child of the
                            relevant taxpayer for each calendar
                            month in such calendar year which
                            follows the calendar month referred to
                            in clause (ii).
                              ``(ii) Relevant taxpayer.--For
                            purposes of clause (i), the term
                            `relevant taxpayer' means the taxpayer
                            with respect to whom the individual
                            referred to in clause (i) is a
                            specified child for the last month for
                            which such individual is alive.
              ``(5) Treatment of temporary absences.--For purposes
            of this subsection--
                      ``(A) In general.--In the case of any
                    individual's temporary absence from such
                    individual's principal place of abode, each day
                    composing the temporary absence shall--
                              ``(i) be treated as a day at such
                            individual's principal place of abode,
                            and
                              ``(ii) not be treated as a day at any
                            other location.
                      ``(B) Temporary absence.--For purposes of
                    subparagraph (A), an absence shall be treated
                    as temporary if--
                              ``(i) the individual would have
                            resided at the place of abode but for
                            the absence, and
                              ``(ii) under the facts and
                            circumstances, it is reasonable to
                            assume that the individual will return
                            to reside at the place of abode.
              ``(6) Special rule for divorced parents, etc.--Rules
            similar to the rules section 152(e) shall apply for
            purposes of this subsection.
              ``(7) Eligibilty determined on basis of presumptive
            eligibility.--
                      ``(A) In general.--If a period of presumptive
                    eligibility is established under section
                    7527B(c) for any individual with respect to any
                    taxpayer--
                              ``(i) such individual shall be
                            treated as the specified child of such
                            taxpayer for any month in such period
                            of presumptive eligibility, and
                              ``(ii) such individual shall not be
                            treated as the specified child of any
                            other taxpayer with respect to whom a
                            period of presumptive eligibility has
                            not been established for any such
                            month.
                      ``(B) Ability of credit claimants to
                    establish presumptive eligibility.--Nothing in
                    section 7527B(c) shall be interpreted to
                    preclude a taxpayer who elects not to receive
                    monthly advance child payments under section
                    7527B from establishing a period of presumptive
                    eligibility (including any such period
                    described in section 7527B(c)(2)(D)) with
                    respect to any specified child for purposes of
                    this section.
      ``(d) Portion of Credit Refundable.--If the taxpayer (in the
    case of a joint return, either spouse) has a principal place of
    abode (determined as provided in section 32) in the United
    States or Puerto Rico for more than one-half of any calendar
    month during the taxable year, so much of the credit otherwise
    allowed under subsection (a) as is attributable to monthly
    specified child allowances with respect to any such calendar
    month shall be allowed under subpart C (and not allowed under
    this subpart).
      ``(e) Identification Requirements.--Rules similar to the
    rules of section 24(e) shall apply for purposes of this
    section.
      ``(f) Restrictions on Taxpayers Who Improperly Claimed Credit
    or Improperly Received Monthly Advance Child Payment.--
              ``(1) Taxpayers making prior fraudulent or reckless
            claims.--
                      ``(A) In general.--No credit shall be allowed
                    under this section for any taxable year (and no
                    payment shall be made under section 7527B for
                    any month) in the disallowance period.
                      ``(B) Disallowance period.--For purposes of
                    subparagraph (A), the disallowance period is--
                              ``(i) the period of 10 taxable years
                            after the most recent taxable year for
                            which there was a final determination
                            that the taxpayer's claim of credit
                            under this section or section 24 (or
                            payment under section 7527A or 7527B)
                            was due to fraud,
                              ``(ii) the period of 2 taxable years
                            after the most recent taxable year for
                            which there was a final determination
                            that the taxpayer's claim of credit
                            under this section or section 24 (or
                            payment under section 7527A or 7527B)
                            was due to reckless or intentional
                            disregard of rules and regulations (but
                            not due to fraud), and
                              ``(iii) in addition to any period
                            determined under clause (i) or (ii) (as
                            the case may be), the period beginning
                            on the date of the final determination
                            described in such clause and ending
                            with the beginning of the period
                            described in such clause.
              ``(2) Taxpayers making improper prior claims.--In the
            case of a taxpayer who is denied credit under this
            section or section 24 for any taxable year as a result
            of the deficiency procedures under subchapter B of
            chapter 63, no credit shall be allowed under this
            section for any subsequent taxable year (and no payment
            shall be made under section 7527B for any subsequent
            month) unless the taxpayer provides such information as
            the Secretary may require to demonstrate eligibility
            for such credit.
              ``(3) Coordination with possessions of the united
            states.--In carrying out this section, the Secretary
            shall coordinate with each possession of the United
            States to prevent the avoidance of the application of
            this subsection.
      ``(g) Reconciliation of Credit and Monthly Advance Child
    Payments.--
              ``(1) In general.--The amount otherwise determined
            under subsection (a) with respect to any taxpayer for
            any taxable year shall be reduced (but not below zero)
            by the aggregate amount of payments made under section
            7527B to such taxpayer for one or more calendar months
            in such taxable year. Any failure to so reduce the
            credit shall be treated as arising out of a
            mathematical or clerical error and assessed according
            to section 6213(b)(1).
              ``(2) Recapture of excess advance payments in certain
            circumstances.--In the case of a taxpayer described in
            paragraph (3) for any taxable year, the tax imposed by
            this chapter for such taxable year shall be increased
            by the excess (if any) of--
                      ``(A) the aggregate amount of payments made
                    to the taxpayer under section 7527B for one or
                    more calendar months in such taxable year, over
                      ``(B) the amount determined under subsection
                    (a) with respect to the taxpayer for such
                    taxable year (without regard to paragraph (1)
                    of this subsection).
              ``(3) Taxpayers subject to recapture.--
                      ``(A) Fraud or reckless or intentional
                    disregard of rules and regulations.--A taxpayer
                    is described in this paragraph with respect to
                    any taxable year if the Secretary determines
                    that the amount described in paragraph (2)(A)
                    with respect to the taxpayer for such taxable
                    year was determined on the basis of fraud or a
                    reckless or intentional disregard of rules and
                    regulations.
                      ``(B) Understatement of income; changes in
                    filing status.--If the amount described in
                    paragraph (2)(A) with respect to the taxpayer
                    for the taxable year was determined on the
                    basis of an amount of the taxpayer's modified
                    adjusted gross income which was less than the
                    taxpayer's modified adjusted gross income for
                    the applicable taxable year (as defined in
                    subsection (b))--
                              ``(i) such taxpayer shall be treated
                            as described in this paragraph, and
                              ``(ii) the increase determined under
                            paragraph (2) by reason of this
                            subparagraph shall not exceed the
                            excess of--
                                      ``(I) the amount described in
                                    paragraph (2)(A), over
                                      ``(II) the amount which would
                                    be so described if the payments
                                    described therein had been
                                    determined on the basis of the
                                    taxpayer's modified adjusted
                                    gross income for the applicable
                                    taxable year (as defined in
                                    subsection (b)).
                            A rule similar to the rule of the
                            preceding sentence shall apply if the
                            amount described in paragraph (2)(A)
                            with respect to the taxpayer for the
                            taxable year was determined on the
                            basis of a filing status of the
                            taxpayer which differs from the
                            taxpayer's filing status for the
                            applicable taxable year (as so
                            defined).
                      ``(C) Payments made outside of period of
                    presumptive eligibility.--If any payment
                    described in paragraph (2)(A) with respect to
                    the taxpayer for the taxable year was made with
                    respect to a child for a month which was not
                    part of a period of presumptive eligibility
                    established under section 7527B(c) for such
                    child with respect to such taxpayer--
                              ``(i) such taxpayer shall be treated
                            as described in this paragraph, and
                              ``(ii) the increase determined under
                            paragraph (2) by reason of this
                            subparagraph shall not exceed the
                            portion of such payment so made.
                      ``(D) Certain payments made after notice from
                    secretary.--If the Secretary notifies a
                    taxpayer under section 7527B(j)(2) that such
                    taxpayer is subject to recapture with respect
                    to any payments--
                              ``(i) such taxpayer shall be treated
                            as described in this paragraph, and
                              ``(ii) the increase determined under
                            paragraph (2) by reason of this
                            subparagraph shall not exceed the
                            aggregate amount of such payments.
                      ``(E) Taxpayers moving to another
                    jurisdiction.--To minimize the amount of
                    advance payments made under section 7527B to
                    ineligible individuals, the Secretary shall
                    issue regulations or other guidance for
                    purposes of this paragraph which apply with
                    respect to taxpayers who are described in
                    section 7527B(b)(4) with respect to the
                    reference month but are not so described with
                    respect to one or more months during the
                    taxable year for which advance payments under
                    section 7527B are made.
                      ``(F) Other circumstances to prevent abuse.--
                    A taxpayer is described in this paragraph with
                    respect to any taxable year pursuant to
                    regulations or other guidance of the Secretary
                    describing other recapture circumstances to
                    facilitate the administration and enforcement
                    by the Secretary of section 7527B to minimize
                    the amount of advance payments made under
                    section 7527B to ineligible individuals and to
                    prevent abuse.
              ``(4) Joint returns.--Except as otherwise provided by
            the Secretary, in the case of an advance payment made
            under section 7527B with respect to a joint return,
            half of such payment shall be treated as having been
            made to each individual filing such return.
      ``(h) Inflation Adjustments.--
              ``(1) Monthly specified child allowance.--
                      ``(A) In general.--In the case of any month
                    beginning after December 31, 2022, each of the
                    dollar amounts in subsection (b)(1) shall be
                    increased by an amount equal to--
                              ``(i) such dollar amount, multiplied
                            by
                              ``(ii) the percentage (if any) by
                            which--
                                      ``(I) the CPI (as defined in
                                    section 1(f)(4)) for the
                                    calendar year preceding the
                                    calendar year in which such
                                    month begins, exceeds
                                      ``(II) the CPI (as so
                                    defined) for calendar year
                                    2020.
                      ``(B) Rounding.--Any increase under
                    subparagraph (A) which is not a multiple of $10
                    shall be rounded to the nearest multiple of
                    $10.
              ``(2) Initial threshold amount.--
                      ``(A) In general.--In the case of any taxable
                    year beginning after December 31, 2022, the
                    dollar amounts in subclauses (I) and (III) of
                    subsection (b)(2)(D)(i) shall each be increased
                    by an amount equal to--
                              ``(i) such dollar amount, multiplied
                            by
                              ``(ii) the percentage (if any) by
                            which--
                                      ``(I) the CPI (as defined in
                                    section 1(f)(4)) for the
                                    calendar year preceding the
                                    calendar year in which such
                                    taxable year begins, exceeds
                                      ``(II) the CPI (as so
                                    defined) for calendar year
                                    2020.
                      ``(B) Rounding.--Any increase under
                    subparagraph (A) which is not a multiple of
                    $5,000 shall be rounded to the nearest multiple
                    of $5,000.
      ``(i) Application of Credit in Possessions.--
              ``(1) Mirror code possessions.--
                      ``(A) In general.--The Secretary shall pay to
                    each possession of the United States with a
                    mirror code tax system amounts equal to the
                    loss (if any) to that possession by reason of
                    the application of this section (determined
                    without regard to this subsection) with respect
                    to taxable years beginning after 2022 and
                    before 2026. Such amounts shall be determined
                    by the Secretary based on information provided
                    by the government of the respective possession.
                      ``(B) Coordination with credit allowed
                    against united states income taxes.--No credit
                    shall be allowed under this section for any
                    taxable year to any individual to whom a credit
                    is allowable against taxes imposed by a
                    possession of the United States with a mirror
                    code tax system by reason of the application of
                    this section in such possession for such
                    taxable year.
                      ``(C) Mirror code tax system.--For purposes
                    of this paragraph, the term `mirror code tax
                    system' means, with respect to any possession
                    of the United States, the income tax system of
                    such possession if the income tax liability of
                    the residents of such possession under such
                    system is determined by reference to the income
                    tax laws of the United States as if such
                    possession were the United States.
              ``(2) Cross references related to application of
            credit to residents of puerto rico.--
                      ``(A) For application of refundable credit to
                    residents of Puerto Rico, see subsection (d).
                      ``(B) For application of advance payment to
                    residents of Puerto Rico, see section
                    7527B(b)(4).
              ``(3) American samoa.--
                      ``(A) In general.--The Secretary shall pay to
                    American Samoa amounts estimated by the
                    Secretary as being equal to the aggregate
                    benefits that would have been provided to
                    residents of American Samoa by reason of the
                    application of this section for taxable years
                    beginning after 2022 and before 2026 if the
                    provisions of this section had been in effect
                    in American Samoa (applied as if American Samoa
                    were the United States and without regard to
                    the application of this section to residents of
                    Puerto Rico under subsection (d)).
                      ``(B) Distribution requirement.--Subparagraph
                    (A) shall not apply unless American Samoa has a
                    plan, which has been approved by the Secretary,
                    under which American Samoa will promptly
                    distribute such payments to its residents.
                      ``(C) Coordination with credit allowed
                    against united states income taxes.--
                              ``(i) In general.--In the case of a
                            taxable year with respect to which a
                            plan is approved under subparagraph
                            (B), this section (other than this
                            subsection) shall not apply to any
                            individual eligible for a distribution
                            under such plan.
                              ``(ii) Application of section in
                            event of absence of approved plan.--In
                            the case of a taxable year with respect
                            to which a plan is not approved under
                            subparagraph (B), subsection (d) shall
                            be applied by substituting `, Puerto
                            Rico, or American Samoa' for `or Puerto
                            Rico'.
              ``(4) Treatment of payments.--For purposes of section
            1324 of title 31, United States Code, the payments
            under this subsection shall be treated in the same
            manner as a refund due from a credit provision referred
            to in subsection (b)(2) of such section.
      ``(j) Regulations.--The Secretary shall issue such
    regulations or other guidance as the Secretary determines
    necessary or appropriate to carry out the purposes of this
    section, including regulations or other guidance--
              ``(1) for determining whether an individual receives
            care from a taxpayer for purposes of subsection (c)(1),
            and
              ``(2) to coordinate or modify the application of this
            section and section 24, 7527A, and 7527B in the case of
            any taxpayer--
                      ``(A) whose taxable year is other than a
                    calendar year,
                      ``(B) whose filing status for a taxable year
                    is different from the status used for
                    determining one or more monthly payments under
                    section 7527B during such taxable year, or
                      ``(C) whose principal place of abode for any
                    month is different from the principal place of
                    abode used for determining the monthly payment
                    under section 7527B for such month.
      ``(k) Termination.--This section shall not apply to taxable
    years beginning after December 31, 2025.

    ``SEC. 24B. CREDIT FOR CERTAIN OTHER DEPENDENTS.

      ``(a) In General.--There shall be allowed as a credit against
    the tax imposed by this chapter for the taxable year an amount
    equal to $500 with respect to each specified dependent of such
    taxpayer for such taxable year.
      ``(b) Limitation Based on Modified Adjusted Gross Income.--
              ``(1) In general.--The amount of the credit allowable
            under subsection (a) shall be reduced (but not below
            zero) by $50 for each $1,000 (or fraction thereof) by
            which the taxpayer's modified adjusted gross income
            exceeds the threshold amount.
              ``(2) Threshold amount.--For purposes of this
            subsection, the term `threshold amount' means--
                      ``(A) $400,000, in the case of a joint return
                    or surviving spouse (as defined in section
                    2(a)),
                      ``(B) $300,000, in the case of a head of
                    household (as defined in section 2(b)), and
                      ``(C) $200,000, in any other case.
              ``(3) Modified adjusted gross income.--For purposes
            of this subsection, the term `modified adjusted gross
            income' means adjusted gross income increased by any
            amount excluded from gross income under section 911,
            931, or 933.
      ``(c) Specified Dependent.--For purposes of this section, the
    term `specified dependent' means, with respect to any taxpayer
    for any taxable year, any dependent of such taxpayer for such
    taxable year unless such dependent--
              ``(1) is a specified child of the taxpayer, or any
            other taxpayer, for any month during such taxable year,
            or
              ``(2) would not be a dependent if subparagraph (A) of
            section 152(b)(3) were applied without regard to all
            that follows `resident of the United States'.
      ``(d) Identification Requirements.--Rules similar to the
    rules of section 24(e) shall apply for purposes of this
    section.
      ``(e) Taxable Year Must Be Full Taxable Year.--Except in the
    case of a taxable year closed by reason of the death of the
    taxpayer, no credit shall be allowable under this section in
    the case of a taxable year covering a period of less than 12
    months.
      ``(f) Inflation Adjustment.--
              ``(1) In general.--In the case of any taxable year
            beginning after December 31, 2022, the $500 amount in
            subsection (a) shall be increased by an amount equal
            to--
                      ``(A) such dollar amount, multiplied by
                      ``(B) the percentage (if any) by which--
                              ``(i) the CPI (as defined in section
                            1(f)(4)) for the calendar year
                            preceding the calendar year in which
                            such taxable year begins, exceeds
                              ``(ii) the CPI (as so defined) for
                            calendar year 2020.
              ``(2) Rounding.--If the increase determined under
            paragraph (1) is not a multiple of $10, such increase
            shall be rounded to the nearest multiple of $10.
      ``(g) Regulations.--The Secretary shall issue such
    regulations or other guidance as the Secretary determines
    necessary or appropriate to carry out the purposes of this
    section.
      ``(h) Termination.--This section shall not apply to taxable
    years beginning after December 31, 2025.''.
      (b) Monthly Payment of Child Tax Credit.--Chapter 77 is
    amended by inserting after section 7527A the following new
    section:

    ``SEC. 7527B. MONTHLY PAYMENTS OF CHILD TAX CREDIT.

      ``(a) In General.--The Secretary shall establish a program
    for making payments to taxpayers with respect to each calendar
    month equal to the monthly advance child payment determined
    with respect to such taxpayer for such month.
      ``(b) Monthly Advance Child Payment.--For purposes of this
    section and except as otherwise provided in this section, the
    term `monthly advance child payment' means, with respect to any
    taxpayer for any calendar month, the amount (if any) which is
    estimated by the Secretary as being equal to the monthly
    specified child allowance which would be determined under
    section 24A(b) with respect to such taxpayer for such calendar
    month if--
              ``(1) unless determined by the Secretary based on any
            information known to the Secretary, the only specified
            children of such taxpayer for such calendar month are
            the specified children of such taxpayer for the
            reference month,
              ``(2) unless determined by the Secretary based on any
            information known to the Secretary, the ages of such
            children (and the status of such children as specified
            children) are determined for such calendar month by
            taking into account the passage of time since such
            reference month,
              ``(3) the limitations of section 24A(b)(2) were
            applied with respect to the reference taxable year
            rather than with respect to the applicable taxable
            year, and
              ``(4) unless determined by the Secretary based on any
            information known to the Secretary, no monthly
            specified child allowance were determined with respect
            to such taxpayer for such calendar month unless the
            taxpayer (in the case of a joint return, either spouse)
            has a principal place of abode (determined as provided
            in section 32) in the United States or Puerto Rico for
            more than one-half of the reference month.
      ``(c) Presumptive Eligibility.--
              ``(1) In general.--An individual shall be treated as
            a specified child of a taxpayer for purposes of
            determining any monthly advance child payment under
            this section only if such month is part of the period
            of presumptive eligibility determined by the Secretary
            under this subsection with respect to such specified
            child and such taxpayer (determined by treating the
            month described in subclause (I) of paragraph
            (2)(A)(ii) as being the first month beginning after the
            determination described in such subclause).
              ``(2) Period of presumptive eligibility.--For
            purposes of this section--
                      ``(A) In general.--Except as otherwise
                    provided by the Secretary, the term `period of
                    presumptive eligibility' means the period--
                              ``(i) beginning with the month for
                            which presumptive eligibility is
                            established, and
                              ``(ii) ending with the earliest of--
                                      ``(I) the beginning of the
                                    month described in clause (i)
                                    if the Secretary determines
                                    that the taxpayer committed
                                    fraud or intentionally
                                    disregarded rules or
                                    regulations in establishing or
                                    maintaining presumptive
                                    eligibility,
                                      ``(II) in the case of any
                                    notification from the Secretary
                                    that the period of presumptive
                                    eligibility has been terminated
                                    or suspended by reason of any
                                    question regarding eligibility
                                    of the taxpayer for monthly
                                    advance child payments with
                                    respect to such child, the
                                    month specified in such notice
                                    as the month on which such
                                    termination or suspension
                                    begins, and
                                      ``(III) the month following
                                    any failure of the taxpayer to
                                    make the required annual
                                    renewal of presumptive
                                    eligibility by such date as the
                                    Secretary may provide.
                      ``(B) Establishing presumptive eligibility.--
                    A taxpayer shall establish presumptive
                    eligibility with respect to any specified child
                    for any month at such time and in such manner
                    as the Secretary may provide. Except as
                    otherwise provided by the Secretary, in order
                    to establish a period of presumptive
                    eligibility the taxpayer must express a
                    reasonable expectation and intent that the
                    taxpayer will continue to be eligible with
                    respect to such specified child for at least
                    the two months following the month for which
                    presumptive eligibility is to be established.
                      ``(C) Method of establishing presumptive
                    eligibility.--The Secretary shall ensure
                    information to establish presumptive
                    eligibility under this paragraph may be
                    provided on the return of tax for the taxable
                    year ending before the calendar year which
                    includes the month for which such eligibility
                    is to be established, through the on-line
                    portal described in subsection (c), or in such
                    other manner as the Secretary may provide.
                      ``(D) Inclusion of automatic grace periods
                    and periods of hardship.--The period of
                    presumptive eligibility shall include any
                    period to which paragraph (1) or (2) of
                    subsection (g) applies.
                      ``(E) Automatic eligibility for birth of
                    child.--The Secretary shall issue regulations
                    or other guidance to establish procedures
                    pursuant to which, to the maximum extent
                    administratively practicable--
                              ``(i) a parent of a child born during
                            a calendar month shall be treated as
                            automatically establishing presumptive
                            eligibility with respect to such child,
                              ``(ii) the period of such automatic
                            presumptive eligibility is determined,
                            and
                              ``(iii) the first monthly advance
                            child payment with respect to such
                            child is adjusted to properly take into
                            account each month in the taxable year
                            preceding such birth.
                      ``(F) Presumptive eligibility based on
                    certain government programs.--The Secretary
                    shall issue regulations or other guidance to
                    establish procedures under which--
                              ``(i) based on information provided
                            to the Secretary by one or more
                            government entities, a parent or
                            specified relative of a child is
                            treated as automatically establishing
                            presumptive eligibility with respect to
                            such child, and
                              ``(ii) the period for which such
                            automatic presumptive eligibility is
                            determined (including any additional
                            circumstances under which such period
                            will terminate).
                      ``(G) Coordination with presumption.--For
                    purposes of determining the status of any
                    individual as a specified child for purposes of
                    determining presumptive eligibility with
                    respect to any period, section 24A(c) shall be
                    applied without regard to paragraph (7)
                    thereof.
              ``(3) Notice of termination of presumptive
            eligibility by reason of failure to make annual
            renewal.--If a taxpayer's period of presumptive
            eligibility with respect to any specified child
            terminates by reason of paragraph (2)(A)(ii)(IV), the
            Secretary shall provide the taxpayer a written notice
            of such termination.
      ``(d) Determination of Reference Month and Reference Taxable
    Year.--For purposes of this section--
              ``(1) Reference month.--The term `reference month'
            means, with respect to any taxpayer for any calendar
            month, the most recent of--
                      ``(A) in the case of a taxpayer who filed a
                    return of tax for the last taxable year ending
                    before such calendar month, the last month of
                    such taxable year,
                      ``(B) in the case of a taxpayer who filed a
                    return of tax for the taxable year preceding
                    the taxable year described in subparagraph (A),
                    the last month of such preceding taxable year,
                    and
                      ``(C) in the case of a taxpayer who provides,
                    through a specified alternative mechanism,
                    information which is sufficient to estimate the
                    taxpayer's monthly advance child payment for
                    such month, such month.
              ``(2) Reference taxable year.--The term `reference
            taxable year' means, with respect to any taxpayer for
            any calendar month, the most recent of--
                      ``(A) the taxable year described in
                    subparagraph (A) or (B) of paragraph (1), or
                      ``(B) in the case of a taxpayer who provides,
                    through a specified alternative mechanism,
                    information which is sufficient to estimate the
                    taxpayer's modified adjusted gross income for
                    the taxable year which includes such month,
                    such taxable year.
              ``(3) Availability of information.--Any month or year
            referred to in subparagraphs (A), (B), or (C) of
            paragraph (1) or subparagraph (A) or (B) of paragraph
            (2) shall not be taken into account in determining the
            reference month or reference taxable year with respect
            to any calendar month unless all relevant information
            with respect to such month or year is available to the
            Secretary and the Secretary has adequate time to make
            estimates under this section on the basis of such
            information before the beginning of such calendar
            month.
              ``(4) Treatment of insufficient information.--Except
            as otherwise provided by the Secretary--
                      ``(A) if a taxpayer is not described in
                    subparagraph (A), (B), or (C) of paragraph (1)
                    with respect to any calendar month, the monthly
                    advance child payment with respect to such
                    taxpayer for such calendar month shall be
                    treated as zero unless the Secretary determines
                    that the Secretary can make the estimate
                    described in subsection (b) on the basis of
                    information known to the Secretary which the
                    Secretary determines is reasonably reliable,
                    and
                      ``(B) if the taxpayer is not described in
                    paragraph (1)(C) and the information on the
                    return of tax referred to in subparagraph (A)
                    or (B) of paragraph (1) does not establish the
                    status of the taxpayer (in the case of a joint
                    return, either spouse) as having a principal
                    place of abode (determined as provided in
                    section 32) in the United States or Puerto Rico
                    for more than one-half of the reference month,
                    the Secretary shall determine such status based
                    on information known to the Secretary.
              ``(5) Transition rule.--In any case with respect to
            which section 24A was not in effect for the taxable
            year described in subparagraph (A), (B), or (C) of
            paragraph (1) (whichever is applicable), subsection
            (b)(1) shall be applied by substituting `the qualifying
            children of such taxpayer for the taxable year which
            includes the reference month' for `the specified
            children of such taxpayer for the reference month'.
      ``(e) On-line Information Portal; Specified Alternative
    Mechanisms.--
              ``(1) On-line information portal.--The Secretary
            shall establish an on-line portal which allows
            taxpayers to--
                      ``(A) subject to such restrictions as the
                    Secretary may provide, elect to begin or cease
                    receiving payments under this section, and
                      ``(B) provide information to the Secretary
                    which is relevant in determining the monthly
                    advance child payment and the taxpayer's
                    eligibility for such payment, including
                    information regarding--
                              ``(i) the number of the taxpayer's
                            specified children, including by reason
                            of the birth of a child,
                              ``(ii) the taxpayer's marital status,
                              ``(iii) the taxpayer's modified
                            adjusted gross income,
                              ``(iv) the taxpayer's principal place
                            of abode, and
                              ``(v) any other factor which the
                            Secretary may provide.
              ``(2) Specified alternative mechanism.--For purposes
            of this section, the term `specified alternative
            mechanism' means the on-line portal established under
            paragraph (1), the on-line portal established under
            section 7527A, and any other mechanism or method
            established by the Secretary to allow taxpayer's to
            provide the information described in paragraph (1)
            (including in connection with the filing of any return
            of tax).
      ``(f) Specified Child of More Than 1 Taxpayer.--
              ``(1) In general.--In the event that (without regard
            to this paragraph and determined without regard to any
            election under subsection (e)(1)) any specified child
            would be taken into account in determining the monthly
            advance child payment of more than one taxpayer for the
            same calendar month--
                      ``(A) except as provided in subparagraph (B),
                    such child shall be so taken into account only
                    with respect to the taxpayer with the most
                    recent reference month, and
                      ``(B) if any such taxpayer is described in
                    subsection (d)(1)(C) (or more than 1 taxpayer
                    is described in subparagraph (A) of this
                    paragraph), the Secretary shall establish
                    procedures under which the Secretary
                    expeditiously adjudicates the taxpayer's
                    competing claims of presumptive eligibility
                    with respect to the same child.
              ``(2) Provisions related to adjudication.--
                      ``(A) Expedited process; appeals.--The
                    procedures established under paragraph (1)(B)
                    shall include--
                              ``(i) an expedited process for
                            taxpayers who meet such requirements as
                            the Secretary may establish for such
                            expedited process, and
                              ``(ii) procedures for adjudicating an
                            appeal of an adverse decision.
                      ``(B) Information receipt and coordination.--
                    The Secretary may enter into agreements to
                    receive information from, and otherwise
                    coordinate with--
                              ``(i) Federal agencies (including the
                            Social Security Administration and the
                            Department of Agriculture),
                              ``(ii) any State, local government,
                            Tribal government, or possession of the
                            United States, and
                              ``(iii) any other individual or
                            entity that the Secretary determines to
                            be appropriate for purposes of
                            adjudicating a competing claim
                            described in paragraph (1).
                      ``(C) Adjudication not treated as
                    assessment.--An adjudication under the
                    procedures established under paragraph (1)(B)
                    (including the adjudication of any appeal)
                    shall not be treated as an assessment described
                    in section 6201.
                      ``(D) Adjudication not treated as inspection
                    of taxpayer's books of account.--The inspection
                    of a taxpayer's books of account in connection
                    with any adjudication under the procedures
                    established under paragraph (1)(B) (including
                    the adjudication of any appeal) shall not be
                    treated as an examination or inspection of a
                    taxpayer's books of account for purposes of
                    section 7605(b).
              ``(3) Retroactive payments.--If, pursuant to the
            procedures established under paragraph (1)(B), the
            Secretary determines that a child is a specified child
            of a taxpayer and the Secretary did not make payments
            to such taxpayer with respect to such child for any
            portion of the period during which the determination
            was made, the Secretary may make a one-time payment to
            the taxpayer with respect to which such child is the
            specified child in an amount equal to the aggregate
            amount by which the monthly advance child payments to
            such taxpayer would have increased during such period
            if such determination had been made immediately.
              ``(4) Recapture of payments.--If, pursuant to the
            procedures established under paragraph (1)(B), the
            Secretary makes payments with respect to the child
            during the period during which the determination is
            made--
                      ``(A) the Secretary shall provide each
                    taxpayer which receives such payments notice
                    that such payments may be subject to recapture,
                    and
                      ``(B) upon making such determination, the
                    Secretary shall determine on the basis of the
                    facts and circumstances of each such taxpayer
                    whether any such payments should be subject to
                    recapture and shall so notify each such
                    taxpayer.
      ``(g) Rules Related to Grace Periods and Hardships.--
              ``(1) Automatic grace period.--
                      ``(A) In general.--Notwithstanding subsection
                    (f), in the case of any failure or delay in
                    establishing a period of presumptive
                    eligibility with respect to which the taxpayer
                    elects the application of this subparagraph,
                    credit under section 24A or retroactive payment
                    under this section (similar to the payment
                    described in subsection (f)(3)) shall be
                    allowed or made with respect to so much of the
                    period of such failure or delay as does not
                    exceed 3 months. The preceding sentence shall
                    not apply if the Secretary determines that such
                    failure or delay was due to fraud or reckless
                    or intentional disregard of rules and
                    regulations.
                      ``(B) Limitation.--Subparagraph (A) shall not
                    apply with respect to any taxpayer more than
                    once during any 36-month period.
              ``(2) Hardship.--Notwithstanding subsection (f), if
            the Secretary determines that a failure or delay in
            establishing a period of presumptive eligibility with
            respect to any specified child was due to domestic
            violence, serious illness, natural disaster, or any
            other hardship, credit under section 24A or retroactive
            payment under this section (similar to the payment
            described in subsection (f)(3)) shall be allowed or
            made with respect to so much of the period of such
            failure or delay as does not exceed 6 months.
      ``(h) Provisions Related to Form, Manner, and Treatment of
    Payments.--
              ``(1) Application of electronic funds payment
            requirement.--The payments made by the Secretary under
            subsection (a) shall be made by electronic funds
            transfer to the same extent and in the same manner as
            if such payments were Federal payments not made under
            this title.
              ``(2) Application of certain rules.--Rules similar to
            the rules of subparagraphs (B) and (C) of section
            6428A(f)(3) shall apply for purposes of this section,
            applied by substituting `January 1, 2022' for `January
            1, 2019' in clauses (i) and (ii) of such subparagraph
            (B).
              ``(3) Exception from reduction or offset.--Any
            payment made to any individual under this section shall
            not be--
                      ``(A) subject to reduction or offset pursuant
                    to subsection (c), (d), (e), or (f) of section
                    6402 or any similar authority permitting
                    offset, or
                      ``(B) reduced or offset by other assessed
                    Federal taxes that would otherwise be subject
                    to levy or collection.
              ``(4) Application of advance payments in the
            possessions of the united states.--
                      ``(A) Puerto rico.--
                              ``(i) For application of child tax
                            credit to residents of Puerto Rico, see
                            section 24A(d).
                              ``(ii) For application of monthly
                            advance child payments to residents of
                            Puerto Rico, see subsection (b)(4).
                      ``(B) Mirror code possessions.--In the case
                    of any possession of the United States with a
                    mirror code tax system (as defined in section
                    24A(i)(1)(C)), this section shall not be
                    treated as part of the income tax laws of the
                    United States for purposes of determining the
                    income tax law of such possession unless such
                    possession elects to have this section be so
                    treated.
                      ``(C) Administrative expenses of advance
                    payments.--
                              ``(i) Mirror code possessions.--In
                            the case of any possession described in
                            subparagraph (B) which makes the
                            election described in such
                            subparagraph, the amount otherwise paid
                            by the Secretary to such possession
                            under section 24A(i)(1)(A) with respect
                            to taxable years beginning in 2023,
                            2024, and 2025 shall each be increased
                            by $300,000 if such possession has a
                            plan, which has been approved by the
                            Secretary, for making monthly advance
                            child payments consistent with such
                            election.
                              ``(ii) American samoa.-- The amount
                            otherwise paid by the Secretary to
                            American Samoa under subparagraph (A)
                            of section 24A(i)(3) with respect to
                            taxable years beginning in 2023, 2024,
                            and 2025 shall each be increased by
                            $300,000 if the plan described in
                            subparagraph (B) of such section
                            includes a program, which has been
                            approved by the Secretary, for making
                            monthly advance child payments under
                            rules similar to the rules of this
                            section.
                              ``(iii) Timing of payment.--The
                            Secretary may pay, upon the request of
                            the possession of the United States to
                            which the payment is to be made, the
                            amount of the increase determined under
                            clause (i) or (ii), respectively,
                            immediately upon approval of the plan
                            with respect to which such payment
                            relates.
      ``(i) Application of Certain Definitions and Rules Applicable
    to Child Tax Credit.--
              ``(1) Definitions.--Except as otherwise provided in
            this section, terms used in this section which are also
            used in section 24A shall have the same respective
            meanings as when used in section 24A.
              ``(2) Treatment of certain deaths.--A child shall not
            be taken into account in determining the monthly
            advance child payment for any calendar month if the
            death of such child before the beginning of the
            calendar year which includes such month is known to the
            Secretary as of date on which the Secretary estimates
            such payment.
              ``(3) Identification requirements.--Rules similar to
            the rules which apply under section 24A(e) shall apply
            for purposes of this section except that such rules
            shall apply with respect to the return of tax for the
            reference taxable year or, in the case of information
            provided through a specified alternative mechanism,
            with respect to the information provided through such
            mechanism.
              ``(4) Restrictions on taxpayers who improperly
            claimed credit or monthly advance child payments.--For
            restrictions on taxpayers who improperly claimed credit
            or monthly advance child payments, see section 24A(f).
      ``(j) Notice of Payments.--
              ``(1) In general.--Not later than January 31 of the
            calendar year following any calendar year during which
            the Secretary makes one or more payments to any
            taxpayer under this section, the Secretary shall
            provide such taxpayer with a written notice which
            includes--
                      ``(A) the taxpayer's taxpayer identity (as
                    defined in section 6103(b)(6)),
                      ``(B) the aggregate amount of such payments
                    made to such taxpayer during such calendar
                    year, and
                      ``(C) such other information as the Secretary
                    determines appropriate.
              ``(2) Certain payments subject to recapture.--In the
            case of any payments made to a taxpayer which the
            Secretary has determined are subject to recapture, the
            notice provided under paragraph (1) to such taxpayer
            shall include the amount of such payments.
      ``(k) Regulations.--The Secretary shall issue such
    regulations or other guidance as the Secretary determines
    necessary or appropriate to carry out the purposes of this
    section.
      ``(l) Termination.--No payments shall be made under the
    program established under subsection (a) with respect to any
    month beginning after December 31, 2025.''.
      (c) Suspension of Child Tax Credit During Period That Monthly
    Child Tax Credit Is in Effect.--Section 24 is amended by adding
    at the end the following new subsection:
      ``(l) Coordination With Monthly Child Tax Credit.--This
    section shall not apply to (and no payment shall be made under
    subsection (k) with respect to) any taxable year beginning
    after December 31, 2022, and before January 1, 2026.''.
      (d) Conforming Amendments.--
              (1) Section 26(b)(2) is amended by striking ``and''
            at the end of subparagraph (Y), by striking the period
            at the end of subparagraph (Z) and inserting ``, and'',
            and by adding at the end the following new
            subparagraph:
                      ``(AA) section 24A(g)(2) (relating to
                    recapture of certain monthly advance child
                    payments).''.
              (2) Section 152(f)(6)(B)(ii) is amended to read as
            follows:
                              ``(ii) the credits under sections 24,
                            24A, and 24B and the payments under
                            sections 7527A and 7527B,''.
              (3) Section 3402(f)(1)(C) is amended by inserting
            ``or section 24A (determined after application of
            subsection (g) thereof)'' after ``section 24
            (determined after application of subsection (j)
            thereof)''.
              (4) Section 6103(l)(13)(A)(v) is amended by insert
            ``or section 24A, as the case may be'' after ``section
            24''.
              (5) Section 6211(b)(4)(A) is amended by inserting
            ``24A by reason of subsection (d) thereof,'' after ``24
            by reason of subsections (d) and (i)(1) thereof,''.
              (6) Section 6213(g)(2)(I) is amended by inserting
            ``or section 24A(e) (relating to monthly child tax
            credit)'' after ``section 24(e) (relating to child tax
            credit)''.
              (7) Section 6213(g)(2)(L) is amended by inserting
            ``24A,'' after ``24,''.
              (8) Section 6213(g)(2)(P) is amended--
                      (A) by inserting ``or 24A(f)(2)'' after
                    ``section 24(g)(2)'',
                      (B) by inserting ``or 24A'' after ``under
                    section 24'', and
                      (C) by striking ``subsection (g)(1) thereof''
                    and inserting ``section 24(g)(1) or section
                    24A(f)(1), respectively''.
              (9) Section 6695(g)(2) is amended by inserting
            ``24A,'' after ``24,''.
              (10) Paragraph (2) of section 1324(b) of title 31,
            United States Code, as amended by the preceding
            provisions of this Act, is amended--
                      (A) by inserting ``24A,'' after ``24,'', and
                      (B) by inserting ``7527B,'' after ``7527A,''.
              (11) The table of sections for subpart A of part IV
            of subchapter A of chapter 1 is amended by inserting
            after the item relating to section 24 the following new
            items:

    ``Sec. 24A. Monthly child tax credit.
    ``Sec. 24B. Credit for certain other dependents.''.
              (12) The table of sections for chapter 77 is amended
            by inserting after the item relating to section 7527A
            the following new item:

    ``Sec. 7527B. Monthly payments of child tax credit.''.
      (e) Effective Dates.--
              (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall
            apply to taxable years beginning after December 31,
            2022.
              (2) Monthly advance child payments.--The amendments
            made by subsection (b) shall apply to payments made for
            calendar months beginning after December 31, 2022.

    SEC. 137104. REFUNDABLE CHILD TAX CREDIT AFTER 2025.

      (a) In General.--Section 24, as amended by the preceding
    provisions of this Act, is amended by adding at the end the
    following new subsection:
      ``(m) Refundable Credit After 2025.--In the case of any
    taxable year beginning after December 31, 2025, if the taxpayer
    (in the case of a joint return, either spouse) has a principal
    place of abode in the United States (determined as provided in
    section 32) for more than one-half of the taxable year or is a
    bona fide resident of Puerto Rico (within the meaning of
    section 937(a)) for such taxable year--
              ``(1) subsection (d) shall not apply, and
              ``(2) the credit determined under subsection (a)
            (after application of paragraph (1)) shall be allowed
            under subpart C (and not allowed under this
            subpart).''.
      (b) Conforming Amendments Related to Possessions of the
    United States.--
              (1) Puerto rico.--Section 24(k)(2) is amended--
                      (A) in subparagraph (B) (as amended by the
                    preceding provisions of this Act)--
                              (i) by inserting ``and before January
                            1, 2026,'' after ``December 31,
                            2022,'', and
                              (ii) by inserting ``and before 2026''
                            after ``After 2022'', and
                      (B) by adding at the end the following new
                    subparagraph:
                      ``(C) Application to taxable years after
                    2025.--For application of refundable credit to
                    residents of Puerto Rico for taxable years
                    after 2025, see subsection (m).''.
              (2) American samoa.--Section 24(k)(3)(C)(ii), as
            amended by the preceding provisions of this Act, is
            amended--
                      (A) in subclause (I), by striking ``and'' at
                    the end,
                      (B) in subclause (II)--
                              (i) by inserting ``and before January
                            1, 2026,'' after ``after December 31,
                            2022,'', and
                              (ii) by striking the period at the
                            end and inserting ``, and'', and
                      (C) by adding at the end the following new
                    subclause:
                                      ``(III) if such taxable year
                                    begins after December 31, 2025,
                                    subsection (m) shall be applied
                                    by substituting `Puerto Rico or
                                    American Samoa' for `Puerto
                                    Rico'.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2025.

    SEC. 137105. APPROPRIATIONS.

      Immediately upon the enactment of this Act, in addition to
    amounts otherwise available, there are appropriated out of any
    money in the Treasury not otherwise appropriated:
              (1) $9,000,000,000 to remain available until
            September 30, 2026, for necessary expenses for the
            Internal Revenue Service to administer the Child Tax
            Credit, and advance payments of the Child Tax Credit,
            including the costs of disbursing such payments, which
            shall supplement and not supplant any other
            appropriations that may be available for this purpose,
            and
              (2) $1,000,000,000 is appropriated to the Department
            of the Treasury, to remain available until September
            30, 2026, to support efforts to increase enrollment of
            eligible families in the Child Tax Credit, for advance
            payments of the Child Tax Credit, and for other tax
            benefits, including but not limited to program
            outreach, costs of data sharing arrangements, systems
            changes, forms changes, and related efforts, and
            efforts by federal agencies to facilitate the cross-
            enrollment of beneficiaries of other programs in the
            Child Tax Credit, and for advance payments of the Child
            Tax Credit, including by establishing intergovernmental
            cooperative agreements with states and local
            governments, tribal governments, and possessions of the
            United States: Provided, that such amount shall be
            available in addition to any amounts otherwise
            available: Provided further, that these funds may be
            awarded by federal agencies to state and local
            governments, tribal governments, and possessions of the
            United States, and private entities, including
            organizations dedicated to free tax return preparation.

                  PART 2--CHILD AND DEPENDENT CARE TAX CREDIT

    SEC. 137201. CERTAIN IMPROVEMENTS TO THE CHILD AND DEPENDENT CARE
                        CREDIT MADE PERMANENT.

      (a) Credit Refundable for Taxpayers With Principal Place of
    Abode in the United States.--Section 21(g) is amended to read
    as follows;
      ``(g) Credit Refundable for Taxpayers With Principal Place of
    Abode in the United States.--If the taxpayer (in the case of a
    joint return, either spouse) has a principal place of abode in
    the United States (determined as provided in section 32) for
    more than one-half of the taxable year, the credit allowed
    under subsection (a) shall be treated as a credit allowed under
    subpart C (and not allowed under this subpart).''.
      (b) Increase in Dollar Limit on Amount Creditable.--Section
    21(c) is amended--
              (1) by striking ``$3,000'' in paragraph (1) and
            inserting ``$8,000'', and
              (2) by striking ``$6,000'' in paragraph (2) and
            inserting ``$16,000''.
      (c) Increase in Applicable Percentage.--Section 21(a)(2) is
    amended--
              (1) by striking ``35 percent'' and inserting ``50
            percent'', and
              (2) by striking ``$15,000'' and inserting
            ``$125,000''.
      (d) Application of Increased Dollar Limitation to Spouses Who
    Are Students or Incapable of Caring for Themselves.--Section
    21(d)(2) is amended by striking ``of not less than--'' and all
    that follows through ``In the case of'' and inserting ``of not
    less than \1/12\ of the dollar amount in effect under paragraph
    (1) or (2) of subsection (c) (whichever is applicable to the
    taxpayer for the taxable year). In the case of''.
      (e) Inflation Adjustment.--Section 21(e) is amended by adding
    at the end the following new paragraph:
              ``(11) Inflation adjustment.--
                      ``(A) In general.--In the case of any taxable
                    year beginning after December 31, 2021, the
                    $125,000 amount in subsection (a)(2), the
                    $8,000 amount in subsection (c)(1), and the
                    $16,000 amount in subsection (c)(2) shall each
                    be increased by an amount equal to--
                              ``(i) such dollar amount, multiplied
                            by
                              ``(ii) the cost-of-living adjustment
                            determined under section 1(f)(3) for
                            the calendar year in which the taxable
                            year begins, determined by substituting
                            `calendar year 2020' for `calendar year
                            2016' in subparagraph (A)(ii) thereof.
                      ``(B) Rounding.--
                              ``(i) Limitation based on adjusted
                            gross income.--If any increase
                            determined under subparagraph (A) of
                            the $125,000 dollar amount in
                            subsection (a)(2) is not a multiple of
                            $5,000, such amount shall be rounded to
                            the nearest multiple of $5,000.
                              ``(i) Dollar limitations.--If any
                            increase determined under subparagraph
                            (A) of any dollar amount in subsection
                            (c) is not a multiple of $100, such
                            amount shall be rounded to the nearest
                            multiple of $100.''.
      (f) Application of Phaseout to High Income Individuals.--
              (1) In general.--Section 21(a)(2) is amended by
            striking ``20 percent'' and inserting ``the phaseout
            percentage''.
              (2) Phaseout percentage.--Section 21(a) is amended by
            adding at the end the following new paragraph:
              ``(3) Phaseout percentage.--For purposes of paragraph
            (2), the term `phaseout percentage' means 20 percent
            reduced (but not below zero) by 1 percentage point for
            each $2,000 (or fraction thereof) by which the
            taxpayer's adjusted gross income for the taxable year
            exceeds $400,000.''.
      (g) Application of Credit in Possessions.--Section 21(h) is
    amended--
              (1) in paragraph (1)--
                      (A) by striking ``The Secretary'' and
                    inserting ``With respect to taxable years
                    beginning in or with calendar years after 2020,
                    the Secretary'', and
                      (B) by striking ``with respect to taxable
                    years beginning in or with 2021'',
              (2) in paragraph (2)--
                      (A) by striking ``The Secretary'' and
                    inserting ``With respect to taxable years
                    beginning in or with calendar years after 2020,
                    the Secretary'', and
                      (B) by striking ``with respect to taxable
                    years beginning in or with 2021'', and
              (3) in paragraph (3), by striking ``in or with 2021''
            and inserting ``after December 31, 2020''.
      (h) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 137202. INCREASE IN EXCLUSION FOR EMPLOYER-PROVIDED DEPENDENT CARE
                        ASSISTANCE MADE PERMANENT.

      (a) In General.--Section 129(a)(2)(A) is amended by striking
    ``$5,000 ($2,500'' and inserting ``$10,500 (half such dollar
    amount''.
      (b) Inflation Adjustment.--Section 129(e) is amended by
    adding at the end the following new paragraph:
              ``(10) Inflation adjustment.--
                      ``(A) In general.--In the case of any taxable
                    year beginning after December 31, 2021, the
                    $10,500 amount in subsection (a)(2)(A) shall be
                    increased by an amount equal to--
                              ``(i) such dollar amount, multiplied
                            by
                              ``(ii) the cost-of-living adjustment
                            determined under section 1(f)(3) for
                            the calendar year in which the taxable
                            year begins, determined by substituting
                            `calendar year 2020' for `calendar year
                            2016' in subparagraph (A)(ii) thereof.
                      ``(B) Rounding.--If any increase determined
                    under subparagraph (A) is not a multiple of
                    $100, such amount shall be rounded to the
                    nearest multiple of $100.''.
      (c) Conforming Amendment.--Section 129(a)(2) is amended by
    striking subparagraph (D).
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.
      (e) Retroactive Plan Amendments.--A plan that otherwise
    satisfies all applicable requirements of sections 125 and 129
    of the Internal Revenue Code of 1986 (including any rules or
    regulations thereunder) shall not fail to be treated as a
    cafeteria plan or dependent care assistance program merely
    because such plan is amended pursuant to a provision under this
    subsection and such amendment is retroactive, if--
              (1) such amendment is adopted no later than the last
            day of the plan year in which the amendment is
            effective, and
              (2) the plan is operated consistent with the terms of
            such amendment during the period beginning on the
            effective date of the amendment and ending on the date
            the amendment is adopted.

                         PART 3--SUPPORTING CAREGIVERS

    SEC. 137301. PAYROLL TAX CREDIT FOR CHILD CARE WORKERS.

      (a) In General.--Subchapter D of chapter 21 is amended by
    adding at the end the following:

    ``SEC. 3135. PAYROLL CREDIT FOR CERTAIN WAGES PAID TO CHILD CARE
                        WORKERS.

      ``(a) In General.--In the case of an eligible child care
    employer, there shall be allowed as a credit against applicable
    employment taxes for each calendar quarter an amount equal to
    50 percent of the qualified child care wages paid with respect
    to each eligible employee of such employer for such calendar
    quarter.
      ``(b) Limitations and Refundability.--
              ``(1) Limitation on wages taken into account.--The
            amount of qualified child care wages with respect to
            any eligible employee which may be taken into account
            under subsection (a) by the eligible child care
            employer for any calendar quarter shall not exceed
            $2,500.
              ``(2) Credit limited to certain employment taxes.--
            The credit allowed by subsection (a) with respect to
            any calendar quarter shall not exceed the applicable
            employment taxes (reduced by any credits allowed under
            sections 3131, 3132, 3134, and 6432) on the wages paid
            with respect to the employment of all the employees of
            the eligible child care employer for such calendar
            quarter.
              ``(3) Refundability of excess credit.--
                      ``(A) Credit is refundable.--If the amount of
                    the credit under subsection (a) exceeds the
                    limitation of paragraph (2) for any calendar
                    quarter, such excess shall be treated as an
                    overpayment that shall be refunded under
                    sections 6402(a) and 6413(b).
                      ``(B) Advancing credit.--In anticipation of
                    the credit, including the refundable portion
                    under subparagraph (A), the credit shall be
                    advanced, according to forms and instructions
                    provided by the Secretary, up to an amount
                    calculated under subsection (a), subject to the
                    limits under paragraph (1), all calculated
                    through the end of the most recent payroll
                    period in the quarter.
      ``(c) Eligible Child Care Employer.--For purposes of this
    section, the term `eligible child care employer' means any
    employer which operates one or more qualified child care
    facilities.
      ``(d) Qualified Child Care Facility.--For purposes of this
    section, the term `qualified child care facility' means any
    facility which is certified as an HHS Participating Child Care
    Provider by the Secretary of Health and Human Services under
    section 418A(c) of the Social Security Act.
      ``(e) Eligible Employee.--For purposes of this section, the
    term `eligible employee' means, with respect to any eligible
    child care employer for any calendar quarter, any employee of
    such employer if--
              ``(1) the aggregate wages paid to such employee for
            such quarter do not exceed 25 percent of the dollar
            amount in effect for such quarter under section
            414(q)(1)(B)(i) (relating to highly compensated
            employees), and
              ``(2) the aggregate wages paid to such employee for
            the 1-year period ending with the close of such quarter
            do not exceed 100 percent of such dollar amount.
      ``(f) Qualified Child Care Wages.--For purposes of this
    section--
              ``(1) In general.--The term `qualified child care
            wages' means, with respect to any eligible employee for
            any calendar quarter, so much of the child care wages
            paid by the eligible child care employer to such
            employee during such quarter as are paid at a rate in
            excess of the applicable minimum rate. Such term shall
            not include any wages paid by an eligible child care
            employer during any period during which the
            certification described in subsection (d) is not in
            effect.
              ``(2) Applicable minimum rate.--The term `applicable
            minimum rate' means, with respect to wages paid to any
            eligible employee, the rate of basic pay which is
            payable for GS-3, step 1 of the General Schedule under
            subchapter III of chapter 53 of title 5, United States
            Code (including any applicable locality-based
            comparability payment under section 5304 of such title,
            or similar authority) at the time such wages are paid
            and determined with respect to the locality in which
            the services are provided.
              ``(3) Child care wages.--The term `child care wages'
            means wages paid for the services of the employee to
            provide child care at a qualified child care facility
            or to provide support services for such a facility.
              ``(4) Exception.--The term `child care wages' shall
            not include any wages taken into account under section
            41, 45A, 45P, 45R, 51, 1396, 3131, 3132, 3134, or 6432.
      ``(g) Other Definitions and Special Rules.--For purposes of
    this section--
              ``(1) Applicable employment taxes.--The term
            `applicable employment taxes' means the following:
                      ``(A) The taxes imposed under section
                    3111(b).
                      ``(B) So much of the taxes imposed under
                    section 3221(a) as are attributable to the rate
                    in effect under section 3111(b).
              ``(2) Wages.--
                      ``(A) In general.--The term `wages' means
                    wages (as defined in section 3121(a)),
                    determined without regard to paragraphs (1)
                    through (22) of section 3121(b)) and
                    compensation (as defined in section 3231(e),
                    determined without regard to the sentence in
                    paragraph (1) thereof which begins `Such term
                    does not include remuneration').
                      ``(B) Allowance for certain health plan
                    expenses.--
                              ``(i) In general.--Such term shall
                            include amounts paid by the eligible
                            child care employer to provide and
                            maintain a group health plan (as
                            defined in section 5000(b)(1)), but
                            only to the extent that such amounts
                            are excluded from the gross income of
                            employees by reason of section 106(a).
                              ``(ii) Allocation rules.--For
                            purposes of this section, amounts
                            treated as wages under clause (i) shall
                            be treated as paid with respect to any
                            eligible employee (and with respect to
                            any period) to the extent that such
                            amounts are properly allocable to such
                            employee (and to such period) in such
                            manner as the Secretary may prescribe.
                            Except as otherwise provided by the
                            Secretary, such allocation shall be
                            treated as properly made if made on the
                            basis of being pro rata among periods
                            of coverage.
              ``(3) Other terms.--Any term used in this section
            which is also used in this chapter or chapter 22 shall
            have the same meaning as when used in such chapter.
              ``(4) Denial of double benefit.--For purposes of
            chapter 1, the gross income of the employer, for the
            taxable year which includes the last day of any
            calendar quarter with respect to which a credit is
            allowed under this section, shall be increased by the
            amount of such credit.
              ``(5) Election to not take certain wages into
            account.--This section shall not apply to so much of
            the qualified child care wages paid by an eligible
            child care employer as such employer elects (at such
            time and in such manner as the Secretary may prescribe)
            to not take into account for purposes of this section.
              ``(6) Certain governmental employers.--No credit
            shall be allowed under this section to the Government
            of the United States or to any agency or
            instrumentality thereof. The preceding sentence shall
            not apply to any organization described in section
            501(c)(1) and exempt from tax under section 501(a).
              ``(7) Coordination with certain programs.--
                      ``(A) In general.--This section shall not
                    apply to so much of the qualified child care
                    wages paid by an eligible child care employer
                    as are taken into account as payroll costs in
                    connection with--
                              ``(i) a covered loan under section
                            7(a)(37) or 7A of the Small Business
                            Act,
                              ``(ii) a grant under section 324 of
                            the Economic Aid to Hard-Hit Small
                            Businesses, Non-Profits, and Venues
                            Act, or
                              ``(iii) a restaurant revitalization
                            grant under section 5003 of the
                            American Rescue Plan Act of 2021.
                      ``(B) Application where ppp loans not
                    forgiven.--The Secretary shall issue guidance
                    providing that payroll costs paid during the
                    covered period shall not fail to be treated as
                    qualified child care wages under this section
                    by reason of subparagraph (A)(i) to the extent
                    that--
                              ``(i) a covered loan of the taxpayer
                            under section 7(a)(37) of the Small
                            Business Act is not forgiven by reason
                            of a decision under section 7(a)(37)(J)
                            of such Act, or
                              ``(ii) a covered loan of the taxpayer
                            under section 7A of the Small Business
                            Act is not forgiven by reason of a
                            decision under section 7A(g) of such
                            Act.
                    Terms used in the preceding sentence which are
                    also used in section 7A(g) or 7(a)(37)(J) of
                    the Small Business Act shall, when applied in
                    connection with either such section, have the
                    same meaning as when used in such section,
                    respectively.
              ``(8) Aggregation rule.--All persons treated as a
            single employer under subsection (a) or (b) of section
            52, or subsection (m) or (o) of section 414, shall be
            treated as one employer for purposes of this section.
              ``(9) Third party payors.--Any credit allowed under
            this section shall be treated as a credit described in
            section 3511(d)(2).
              ``(10) Inflation adjustment.--In the case of any
            taxable year beginning after December 31, 2022, the
            $2,500 amount in subsection (b)(1) shall be increased
            by an amount equal to--
                      ``(A) such dollar amount, multiplied by
                      ``(B) the cost-of-living adjustment
                    determined under section 1(f)(3) for the
                    calendar year in which the taxable year begins,
                    determined by substituting `calendar year 2021'
                    for `calendar year 2016' in subparagraph
                    (A)(ii) thereof.
            If any amount as adjusted under the preceding sentence
            is not a multiple of $100, such amount shall be rounded
            to the nearest multiple of $100.
      ``(h) Regulations.--The Secretary shall prescribe such
    regulations or other guidance as may be necessary to carry out
    the purposes of this section, including--
              ``(1) regulations or other guidance to prevent the
            avoidance of the purposes of the limitations under this
            section,
              ``(2) regulations or other guidance to minimize
            compliance and record-keeping burdens under this
            section,
              ``(3) regulations or other guidance providing for
            waiver of penalties for failure to deposit amounts in
            anticipation of the allowance of the credit allowed
            under this section,
              ``(4) regulations or other guidance for recapturing
            the benefit of credits determined under this section in
            cases where there is a subsequent adjustment to the
            credit determined under subsection (a),
              ``(5) regulations or other guidance to permit the
            advancement of the credit determined under subsection
            (a), and
              ``(6) regulations or other guidance for applying
            subsection (f) with respect to eligible employees not
            paid at a single rate of pay.''.
      (b) Refunds.--Paragraph (2) of section 1324(b) of title 31,
    United States Code, is amended by inserting ``3135,'' after
    ``3134,''.
      (c) Clerical Amendment.--The table of sections for subchapter
    D of chapter 21 is amended by adding at the end the following:

    ``Sec. 3135. Payroll credit for certain wages paid to child care
              workers.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to calendar quarters beginning after December 31,
    2021.

    SEC. 137302. CREDIT FOR CAREGIVER EXPENSES.

      (a) In General.--Subpart A of part IV of subchapter A of
    chapter 1 is amended by inserting after section 25D the
    following new section:

    ``SEC. 25E. CREDIT FOR CAREGIVER EXPENSES.

      ``(a) Allowance of Credit.--In the case of an individual for
    whom there are 1 or more qualified care recipients, there shall
    be allowed as a credit against the tax imposed by this chapter
    for the taxable year an amount equal to 50 percent of the
    qualified expenses paid or incurred by such individual during
    the taxable year (and not compensated for by insurance or
    otherwise).
      ``(b) Qualified Care Recipient.--For purposes of this
    section--
              ``(1) In general.--The term `qualified care
            recipient' means, with respect to any taxable year, any
            individual who--
                      ``(A) is the spouse of the taxpayer, or any
                    other person who bears a relationship to the
                    taxpayer described in any of subparagraphs (A)
                    through (H) of section 152(d)(2),
                      ``(B) has been certified, before the due date
                    for filing the return of tax for the taxable
                    year, by a licensed health care practitioner
                    (as defined in section 7702B(c)(4)) as being an
                    individual with long-term care needs (as
                    defined in paragraph (3)) for a period--
                              ``(i) which is expected to be at
                            least 180 consecutive days, and
                              ``(ii) a portion of which occurs
                            within the taxable year, and
                      ``(C) resides in a personal residence and not
                    an institutional care facility.
              ``(2) Period for making certification.--
            Notwithstanding paragraph (1)(B), a certification shall
            not be treated as valid unless it is made within the
            18-month period ending on such due date (or such other
            period as the Secretary prescribes).
              ``(3) Individuals with long-term care needs.--For
            purposes of this subsection, the term `individual with
            long-term care needs' means any individual who meets
            the requirements of any of the following subparagraphs:
                      ``(A) The individual is at least 6 years of
                    age and--
                              ``(i) is unable to perform (without
                            substantial assistance from another
                            individual) at least 2 activities of
                            daily living (as defined in section
                            7702B(c)(2)(B)) due to a loss of
                            functional capacity, or
                              ``(ii) requires substantial
                            supervision to protect such individual
                            from threats to health and safety due
                            to severe cognitive impairment and is
                            unable to perform, without reminding or
                            cuing assistance, at least 1 activity
                            of daily living (as so defined) or, to
                            the extent provided in regulations
                            prescribed by the Secretary (in
                            consultation with the Secretary of
                            Health and Human Services), is unable
                            to engage in age appropriate
                            activities.
                      ``(B) The individual is at least 2 but not 6
                    years of age and is unable, due to a loss of
                    functional capacity, to perform (without
                    substantial assistance from another individual)
                    at least 2 of the following activities:
                              ``(i) Eating.
                              ``(ii) Transferring.
                              ``(iii) Mobility.
                      ``(C) The individual is under 2 years of age
                    and requires specific durable medical equipment
                    by reason of a severe health condition or
                    requires a skilled practitioner trained to
                    address the individual's condition to be
                    available if the individual's parents or
                    guardians are absent.
              ``(4) Institutional care facility.--For purposes of
            paragraph (1)(C), an institutional care facility
            (including two or more places, establishments, or
            institutions owned by the same legal entity) includes
            any congregate, protected living residential
            arrangement that provides or coordinates personal or
            health care services, including assistance with the
            activities of daily living and social care, for two or
            more adults who are aged, infirm, or disabled
      ``(c) Qualified Expenses.--For purposes of this section--
              ``(1) In general.--The term `qualified expenses'
            means expenses for goods, services, and supports
            described in paragraph (2) which--
                      ``(A) assist a qualified care recipient with
                    accomplishing activities of daily living (as
                    defined in section 7702B(c)(2)(B)) and
                    instrumental activities of daily living (as
                    defined in section 1915(k)(6)(F) of the Social
                    Security Act), and
                      ``(B) are provided solely for use by such
                    qualified care recipient.
              ``(2) Items described.--The goods, services, and
            supports described in this paragraph are--
                      ``(A) human assistance, supervision, cuing,
                    and standby assistance,
                      ``(B) health maintenance tasks (such as
                    medication management),
                      ``(C) respite care,
                      ``(D) assistive technologies and devices
                    (including remote health monitoring),
                      ``(E) accessibility modifications of the
                    qualified care recipient's residence,
                      ``(F) counseling, support groups, or training
                    relating to caring for a qualified care
                    recipient, and
                      ``(G) any other items which directly relate
                    to the health and safety of a qualified care
                    recipient, as determined by the Secretary after
                    consultation with the Secretary of Health and
                    Human Services.
              ``(3) Dollar limitation.--The amount taken into
            account as qualified expenses for any taxable year
            shall not exceed $4,000.
              ``(4) Denial of double benefit.--Amounts taken into
            account for purposes of section 21, 129, 213, or
            223(f), or such other circumstances as may be provided
            by the Secretary, shall not be taken into account as
            qualified expenses.
              ``(5) Documentation requirement.--An expense shall
            not be treated as a qualified expense unless the
            taxpayer substantiates such expense under such
            regulations or guidance as the Secretary shall provide.
      ``(d) Credit Phaseout.--The 50 percent rate under subsection
    (a) shall be reduced by 1 percentage point for every $2,500 or
    fraction thereof by which the taxpayer's adjusted gross income
    exceeds $75,000.
      ``(e) Special Rules.--For purposes of this section--
              ``(1) Payments to related individuals.--Rules similar
            to the rules of section 21(e)(6) shall apply.
              ``(2) Licensed health care practitioner.--
                      ``(A) In general.--The licensed health care
                    practitioner making the certification for
                    purposes of subsection (b)(1)(B)--
                              ``(i) shall not be related (within
                            the meaning of section 51(i)(1)) to the
                            taxpayer or the qualified care
                            recipient, or have a conflict of
                            interest (as determined under
                            regulations provided by the Secretary)
                            with respect to the taxpayer or the
                            qualified care recipient,
                              ``(ii) shall be licensed and eligible
                            under applicable State law to certify
                            limitations in performing activities of
                            daily living, and
                              ``(iii) shall be a participant in the
                            Medicaid program, pursuant to sections
                            1902(a)(77) and 1932(d)(6) of the
                            Social Security Act, or the State
                            Children's Health Insurance Program
                            under section 2107(e)(1)(G) of such
                            Act.
                      ``(B) Identification requirement.--
                              ``(i) In general.--No credit shall be
                            allowed with respect to any qualified
                            care recipient unless the taxpayer
                            includes the name and specified
                            provider identification number of such
                            licensed health care practitioner on
                            the return of tax for the taxable year.
                              ``(ii) Specified provider
                            identification number.--The term
                            `specified provider identification
                            number' means a valid National Provider
                            Identifier as authorized in section
                            1173 of the Social Security Act.
              ``(3) Individual may not be claimed by more than 1
            taxpayer.--An individual shall be treated as a
            qualified care recipient with respect to only 1
            taxpayer, as determined by the Secretary, for any
            taxable year.
              ``(4) Identification requirement.--No credit shall be
            allowed with respect to any qualified care recipient
            unless the taxpayer includes the name and taxpayer
            identification number of the qualified care recipient
            on the return of tax for the taxable year.
      ``(f) Termination.--No credit shall be allowed under this
    section for any taxable year beginning after December 31,
    2025.''.
      (b) Math Error Authority.--Section 6213(g)(2), as amended by
    the preceding provisions of this Act, is amended by striking
    ``and'' at the end of subparagraph (T), by striking the period
    at the end of subparagraph (U) and inserting ``, and'', and by
    inserting after subparagraph (U) the following new
    subparagraph:
                      ``(V) an omission of a correct TIN required
                    under section 25E(e)(4) or a correct specified
                    provider identification number required under
                    section 25E(e)(2)(B).''.
      (c) Clerical Amendment.--The table of sections for subpart A
    of part IV of subchapter A of chapter 1 is amended by inserting
    after the item relating to section 25D the following new item:

    ``Sec. 25E. Credit for caregiver expenses.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

                        PART 4--EARNED INCOME TAX CREDIT

    SEC. 137401. CERTAIN IMPROVEMENTS TO THE EARNED INCOME TAX CREDIT MADE
                        PERMANENT.

      (a) Decrease in Minimum Age Requirement.--
              (1) In general.--Section 32(c)(1)(A)(ii)(II) is
            amended by striking ``age 25'' and inserting ``the
            applicable minimum age''.
              (2) Applicable minimum age.--Section 32(c) is amended
            by adding at the end the following new paragraph:
              ``(5) Applicable minimum age.--
                      ``(A) In general.--The term `applicable
                    minimum age' means--
                              ``(i) except as otherwise provided in
                            this subparagraph, age 19,
                              ``(ii) in the case of a specified
                            student (other than a qualified former
                            foster youth or a qualified homeless
                            youth), age 24, and
                              ``(iii) in the case of a qualified
                            former foster youth or a qualified
                            homeless youth, age 18.
                      ``(B) Specified student.--For purposes of
                    this paragraph, the term `specified student'
                    means, with respect to any taxable year, an
                    individual who is an eligible student (as
                    defined in section 25A(b)(3)) during at least 5
                    calendar months during the taxable year.
                      ``(C) Qualified former foster youth.--For
                    purposes of this paragraph, the term `qualified
                    former foster youth' means an individual who--
                              ``(i) on or after the date that such
                            individual attained age 14, was in
                            foster care provided under the
                            supervision or administration of an
                            entity administering (or eligible to
                            administer) a plan under part B or part
                            E of title IV of the Social Security
                            Act (without regard to whether Federal
                            assistance was provided with respect to
                            such child under such part E), and
                              ``(ii) provides (in such manner as
                            the Secretary may provide) consent for
                            entities which administer a plan under
                            part B or part E of title IV of the
                            Social Security Act to disclose to the
                            Secretary information related to the
                            status of such individual as a
                            qualified former foster youth.
                      ``(D) Qualified homeless youth.--For purposes
                    of this paragraph, the term `qualified homeless
                    youth' means, with respect to any taxable year,
                    an individual who certifies, in a manner as
                    provided by the Secretary, that such individual
                    is either an unaccompanied youth who is a
                    homeless child or youth, or is unaccompanied,
                    at risk of homelessness, and self-
                    supporting.''.
      (b) Elimination of Maximum Age for Credit.--Section
    32(c)(1)(A)(ii)(II) is amended by striking ``but not attained
    age 65''.
      (c) Increase in Credit and Phaseout Percentages.--The table
    contained in section 32(b)(1) is amended by striking ``7.65''
    each place it appears therein and inserting ``15.3''.
      (d) Increase in Earned Income and Phaseout Amounts.--
              (1) In general.--The table contained in section
            32(b)(2)(A) is amended--
                      (A) by striking ``$4,220'' and inserting
                    ``$9,820'', and
                      (B) by striking ``$5,280'' and inserting
                    ``$11,610''.
              (2) Application of inflation adjustment.--Section
            32(j)(1) is amended--
                      (A) by striking ``(2021 in the case of the
                    dollar amount in subsection (i)(1))'' and
                    inserting ``(2021 in the case of the $9,820 and
                    $11,610 amounts in subsection (b)(2)(A) and the
                    $10,000 amount in subsection (i)(1))'',
                      (B) in subparagraph (B)(i), by inserting
                    ``(other than the $9,820 and $11,610 amounts)''
                    after ``subsection (b)(2)(A)'', and
                      (C) in subparagraph (B)(iii), by inserting
                    ``the $9,820 and $11,610 amounts in subsection
                    (b)(2)(A) and'' before ``the $10,000 amount in
                    subsection (i)(1)''.
      (e) Section 32, as amended by subsection (f), is amended by
    adding at the end the following new subsection:
      ``(n) Election to Determine Earned Income Based on Prior
    Taxable Year.--
              ``(1) In general.--In the case of a taxpayer whose
            earned income for any taxable year is less than the
            earned income of such taxpayer for the preceding
            taxable year, if such taxpayer elects (at such time and
            in such manner as the Secretary may provide) the
            application of this subsection for such taxable year,
            the earned income of such taxpayer for such taxable
            year shall be treated for purposes of this section as
            being equal to the earned income of such taxpayer for
            such preceding taxable year.
              ``(2) Joint returns.--For purposes of this
            subsection, in the case of a joint return, the earned
            income of the taxpayer for the preceding taxable year
            shall be the sum of the earned income of each spouse
            for the preceding taxable year.
              ``(3) Treatment as mathematical or clerical error.--
            In the case of a taxpayer described in paragraph (1)
            who makes the election described in such paragraph, the
            use on the return for purposes of this section of an
            amount of earned income for the preceding taxable year
            which differs from the amount of such earned income as
            shown in the electronic files of the Internal Revenue
            Service shall be treated as a mathematical or clerical
            error for purposes of section 6213.
              ``(4) Treatment of references.--Any provision of this
            title which defines or determines earned income by
            reference to this section shall be applied without
            regard to this subsection unless such provision
            specifically provides otherwise.''.
      (f) Repeal of Temporary Provisions.--Section 32 is amended by
    striking subsection (n).
      (g) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 137402. FUNDS FOR ADMINISTRATION OF EARNED INCOME TAX CREDITS IN
                        THE TERRITORIES.

      (a) Puerto Rico.--Section 7530(a)(1) is amended by striking
    ``plus'' at the end of subparagraph (A), by striking the period
    at the end of subparagraph (B) and inserting ``, plus'', and by
    adding at the end the following new subparagraph:
                      ``(C) reasonable administrative costs
                    associated with the provision of the earned
                    income tax credit not in excess of
                    $4,000,000.''.
      (b) Possessions With Mirror Code Tax Systems.--Section
    7530(b)(1) is amended by striking ``plus'' at the end of
    subparagraph (A), by striking the period at the end of
    subparagraph (B) and inserting ``, plus'', and by adding at the
    end the following new subparagraph:
                      ``(C) reasonable administrative costs
                    associated with the provision of the earned
                    income tax credit not in excess of $200,000.''.
      (c) American Samoa.--Section 7530(c)(1) is amended by
    striking ``plus'' at the end of subparagraph (A), by striking
    the period at the end of subparagraph (B) and inserting ``,
    plus'', and by adding at the end the following new
    subparagraph:
                      ``(C) reasonable administrative costs
                    associated with the provision of the earned
                    income tax credit not in excess of $200,000.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to payments made for calendar years beginning after
    December 31, 2021.

         PART 5--EXPANDING ACCESS TO HEALTH COVERAGE AND LOWERING COSTS

    SEC. 137501. IMPROVE AFFORDABILITY AND REDUCE PREMIUM COSTS OF HEALTH
                        INSURANCE FOR CONSUMERS.

      (a) Increase in Applicable Percentage Made Permanent.--
    Section 36B(b)(3)(A) is amended to read as follows:
                      ``(A) Applicable percentage.--The applicable
                    percentage for any taxable year shall be the
                    percentage such that the applicable percentage
                    for any taxpayer whose household income is
                    within an income tier specified in the
                    following table shall increase, on a sliding
                    scale in a linear manner, from the initial
                    premium percentage to the final premium
                    percentage specified in such table for such
                    income tier:

    ------------------------------------------------------------------------
      ``In the case of household  income
     (expressed as  a percent of poverty     The initial        The final
      line)  within the following income       premium           premium
                    tier:                  percentage is--   percentage is--
    ------------------------------------------------------------------------
    Up to 150.0 percent..................                0                0
    150.0 percent up to 200.0 percent....                0                2
    200.0 percent up to 250.0 percent....                2                4
    250.0 percent up to 300.0 percent....                4                6
    300.0 percent up to 400.0 percent....                6              8.5
    400.0 percent and higher.............              8.5           8.5''.
    ------------------------------------------------------------------------

      (b) Credit Allowed to Taxpayers Whose Household Income
    Exceeds 400 Percent of the Poverty Line.--
              (1) In general.--Section 36B(c)(1)(A) is amended by
            striking ``but does not exceed 400 percent''.
              (2) Conforming amendment.--Section 36B(c)(1) is
            amended by striking subparagraph (E).
      (c) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 137502. MODIFICATION OF EMPLOYER-SPONSORED COVERAGE AFFORDABILITY
                        TEST IN HEALTH INSURANCE PREMIUM TAX CREDIT.

      (a) In General.--Section 36B(c)(2)(C) is amended--
              (1) in clause (i)(II), by striking ``9.5 percent''
            and inserting ``8.5 percent'', and
              (2) by striking clause (iv).
      (b) Qualified Small Employer Health Reimbursement
    Arrangements.--Section 36B(c)(4) is amended--
              (1) in subparagraph (C)(ii), by striking ``9.5
            percent'' and inserting ``8.5 percent'', and
              (2) by striking subparagraph (F).
      (c) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 137503. TREATMENT OF LUMP-SUM SOCIAL SECURITY BENEFITS IN
                        DETERMINING HOUSEHOLD INCOME.

      (a) In General.--Section 36B(d)(2) is amended by adding at
    the end the following new subparagraph:
                      ``(C) Exclusion of portion of lump-sum social
                    security benefits.--
                              ``(i) In general.--The term `modified
                            adjusted gross income' shall not
                            include so much of any lump-sum social
                            security benefit payment as is
                            attributable to months ending before
                            the beginning of the taxable year.
                              ``(ii) Lump-sum social security
                            benefit payment.--For purposes of this
                            subparagraph, the term `lump-sum social
                            security benefit payment' means any
                            payment of social security benefits (as
                            defined in section 86(d)(1)) which
                            constitutes more than 1 month of such
                            benefits.
                              ``(iii) Election to include
                            excludable amount.--With respect to any
                            taxable year beginning on or after the
                            termination date (as defined in
                            subsection (h)(2)), a taxpayer may
                            elect (at such time and in such manner
                            as the Secretary may provide) to have
                            this subparagraph not apply for such
                            taxable year.''.
      (b) Effective Date.--The amendment made by this section shall
    apply to taxable years beginning after December 31, 2021.

    SEC. 137504. TEMPORARY EXPANSION OF HEALTH INSURANCE PREMIUM TAX
                        CREDITS FOR CERTAIN LOW-INCOME POPULATIONS.

      (a) In General.--Section 36B is amended by redesignating
    subsection (h) as subsection (i) and by inserting after
    subsection (g) the following new subsection:
      ``(h) Certain Temporary Rules Beginning in 2022.--
              ``(1) In general.--With respect to any taxable year
            beginning after December 31, 2021, and before the
            termination date--
                      ``(A) Eligibility for credit not limited
                    based on income.--Section 36B(c)(1)(A) shall be
                    disregarded in determining whether a taxpayer
                    is an applicable taxpayer.
                      ``(B) Credit allowed to certain low-income
                    employees offered employer-provided coverage.--
                    Subclause (II) of subsection (c)(2)(C)(i) shall
                    not apply if the taxpayer's household income
                    does not exceed 138 percent of the poverty line
                    for a family of the size involved. Subclause
                    (II) of subsection (c)(2)(C)(i) shall also not
                    apply to an individual described in the last
                    sentence of such subsection if the taxpayer's
                    household income does not exceed 138 percent of
                    the poverty line for a family of the size
                    involved.
                      ``(C) Credit allowed to certain low-income
                    employees offered qualified small employer
                    health reimbursement arrangements.--A qualified
                    small employer health reimbursement arrangement
                    shall not be treated as constituting affordable
                    coverage for an employee (or any spouse or
                    dependent of such employee) for any months of a
                    taxable year if the employee's household income
                    for such taxable year does not exceed 138
                    percent of the poverty line for a family of the
                    size involved.
                      ``(D) Limitations on recapture.--
                              ``(i) In general.--In the case of a
                            taxpayer whose household income is less
                            than 200 percent of the poverty line
                            for the size of the family involved for
                            the taxable year, the amount of the
                            increase under subsection (f)(2)(A)
                            shall in no event exceed $300 (one-half
                            of such amount in the case of a
                            taxpayer whose tax is determined under
                            section 1(c) for the taxable year).
                              ``(ii) Limitation on increase for
                            certain non-filers.--In the case of any
                            taxpayer who would not be required to
                            file a return of tax for the taxable
                            year but for any requirement to
                            reconcile advance credit payments under
                            subsection (f), if an Exchange
                            established under title I of the
                            Patient Protection and Affordable Care
                            Act has determined that--
                                      ``(I) such taxpayer is
                                    eligible for advance payments
                                    under section 1412 of such Act
                                    for any portion of such taxable
                                    year, and
                                      ``(II) such taxpayer's
                                    household income for such
                                    taxable year is projected to
                                    not exceed 138 percent of the
                                    poverty line for a family of
                                    the size involved,
                            subsection (f)(2)(A) shall not apply to
                            such taxpayer for such taxable year and
                            such taxpayer shall not be required to
                            file such return of tax.
                              ``(iii) Information provided by
                            exchange.--The information required to
                            be provided by an Exchange to the
                            Secretary and to the taxpayer under
                            subsection (f)(3) shall include such
                            information as is necessary to
                            determine whether such Exchange has
                            made the determinations described in
                            subclauses (I) and (II) of clause (ii)
                            with respect to such taxpayer.
              ``(2) Termination date.--For purposes of this
            subsection, the term `termination date' means the later
            of--
                      ``(A) January 1, 2025, or
                      ``(B) the date on which the Secretary of
                    Health and Human Services makes a written
                    certification to the Secretary that the
                    Secretary of Health and Human Services has
                    fully implemented the program described in
                    section 1948 of the Social Security Act
                    (relating to Federal Medicaid program to close
                    coverage gap in nonexpansion States).''.
      (b) Employer Shared Responsibility Provision Not Applicable
    With Respect to Certain Low-income Taxpayers Receiving Premium
    Assistance.--Section 4980H(c)(3) is amended to read as follows:
              ``(3) Applicable premium tax credit and cost-sharing
            reduction.--
                      ``(A) In general.--The term `applicable
                    premium tax credit and cost-sharing reduction'
                    means--
                              ``(i) any premium tax credit allowed
                            under section 36B,
                              ``(ii) any cost-sharing reduction
                            under section 1402 of the Patient
                            Protection and Affordable Care Act, and
                              ``(iii) any advance payment of such
                            credit or reduction under section 1412
                            of such Act.
                      ``(B) Exception with respect to certain low-
                    income taxpayers.--Such term shall not include
                    any premium tax credit, cost-sharing reduction,
                    or advance payment otherwise described in
                    subparagraph (A) if such credit, reduction, or
                    payment is allowed or paid for a taxable year
                    of an employee (beginning after December 31,
                    2021, and before the termination date, as
                    defined in section 36B(h)(2)) with respect to
                    which--
                              ``(i) an Exchange established under
                            title I of the Patient Protection and
                            Affordable Care Act has determined that
                            such employee's household income for
                            such taxable year is projected to not
                            exceed 138 percent of the poverty line
                            for a family of the size involved, or
                              ``(ii) such employee's household
                            income for such taxable year does not
                            exceed 138 percent of the poverty line
                            for a family of the size involved.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 137505. ENSURING AFFORDABILITY OF COVERAGE FOR CERTAIN LOW-INCOME
                        POPULATIONS.

      (a) Reducing Cost Sharing Under Qualified Health Plans.--
    Section 1402 of the Patient Protection and Affordable Care Act
    (42 U.S.C. 18071) is amended--
              (1) in subsection (b)--
                      (A) in paragraph (2), by inserting ``(or,
                    with respect to plan years 2023 and 2024, whose
                    household income does not exceed 400 percent of
                    the poverty line for a family of the size
                    involved)'' before the period; and
                      (B) in the matter following paragraph (2), by
                    adding at the end the following new sentence:
                    ``In the case of an individual with a household
                    income of less than 138 percent of the poverty
                    line for a family of the size involved for any
                    month occurring during the period beginning on
                    January 1, 2022, and ending on December 31,
                    2022, such individual shall, for such month and
                    for each succeeding month during such period,
                    be treated as having household income equal to
                    100 percent for purposes of applying this
                    section.''; and
              (2) in subsection (c)--
                      (A) in paragraph (1)(A), in the matter
                    preceding clause (i), by inserting ``, with
                    respect to eligible insureds (other than, with
                    respect to plan years 2023 and 2024, specified
                    enrollees (as defined in paragraph (6)(C))),''
                    after ``first be achieved'';
                      (B) in paragraph (2), in the matter preceding
                    subparagraph (A), by inserting ``with respect
                    to eligible insureds (other than, with respect
                    to plan years 2023 and 2024, specified
                    enrollees)'' after ``under the plan'';
                      (C) in paragraph (3)--
                              (i) in subparagraph (A), by striking
                            ``this subsection'' and inserting
                            ``paragraph (1) or (2)''; and
                              (ii) in subparagraph (B), by striking
                            ``this section'' and inserting
                            ``paragraphs (1) and (2)''; and
                      (D) by adding at the end the following new
                    paragraph:
              ``(6) Special rule for specified enrollees.--
                      ``(A) In general.--The Secretary shall
                    establish procedures under which the issuer of
                    a qualified health plan to which this section
                    applies shall reduce cost-sharing under the
                    plan with respect to months occurring during
                    plan years 2023 and 2024 for enrollees who are
                    specified enrollees (as defined in subparagraph
                    (C)) in a manner sufficient to increase the
                    plan's share of the total allowed costs of
                    benefits provided under the plan to 99 percent
                    of such costs.
                      ``(B) Methods for reducing cost sharing.--
                              ``(i) In general.--An issuer of a
                            qualified health plan making reductions
                            under this paragraph shall notify the
                            Secretary of such reductions and the
                            Secretary shall, out of funds made
                            available under clause (ii), make
                            periodic and timely payments to the
                            issuer equal to 12 percent of the total
                            allowed costs of benefits provided
                            under each such plan to specified
                            enrollees during plan years 2023 and
                            2024.
                              ``(ii) Appropriation.--There are
                            appropriated, out of any monies in the
                            Treasury not otherwise appropriated,
                            such sums as may be necessary to the
                            Secretary for purposes of making
                            payments under clause (i).
                      ``(C) Specified enrollee defined.--For
                    purposes of this section, the term `specified
                    enrollee' means, with respect to a month
                    occurring during a plan year, an eligible
                    insured with a household income of less than
                    138 percent of the poverty line for a family of
                    the size involved during such month. Such
                    insured shall be deemed to be a specified
                    enrollee for each succeeding month in such plan
                    year.''.
      (b) Open Enrollments Applicable to Certain Lower-income
    Populations.--Section 1311(c) of the Patient Protection and
    Affordable Care Act (42 U.S.C. 18031(c)) is amended--
              (1) in paragraph (6)--
                      (A) in subparagraph (C), by striking at the
                    end ``and'';
                      (B) in subparagraph (D), by striking the
                    period at the end and inserting ``; and''; and
                      (C) by adding at the end the following new
                    subparagraph:
                      ``(E) with respect to a qualified health plan
                    with respect to which section 1402 applies, for
                    months occurring during the period beginning on
                    January 1, 2022, and ending on December 31,
                    2024, enrollment periods described in
                    subparagraph (A) of paragraph (8) for
                    individuals described in subparagraph (B) of
                    such paragraph.''; and
              (2) by adding at the end the following new paragraph:
              ``(8) Special enrollment period for certain low-
            income populations.--
                      ``(A) In general.--The enrollment period
                    described in this paragraph is, in the case of
                    an individual described in subparagraph (B),
                    the continuous period beginning on the first
                    day that such individual is so described.
                      ``(B) Individual described.--For purposes of
                    subparagraph (A), an individual described in
                    this subparagraph is an individual--
                              ``(i) with a household income of less
                            than 138 percent of the poverty line
                            for a family of the size involved; and
                              ``(ii) who is not eligible for
                            minimum essential coverage (as defined
                            in section 5000A(f) of the Internal
                            Revenue Code of 1986), other than for
                            coverage described in any of
                            subparagraphs (B) through (E) of
                            paragraph (1) of such section.''.
      (c) Additional Benefits for Certain Low-income Individuals
    for Plan Year 2024.--Section 1301(a) of the Patient Protection
    and Affordable Care Act (42 U.S.C. 18021(a)) is amended--
              (1) in paragraph (1)--
                      (A) in subparagraph (B), by striking ``and''
                    at the end;
                      (B) in subparagraph (C)(iv), by striking the
                    period and inserting ``; and''; and
                      (C) by adding at the end the following new
                    subparagraph:
                      ``(D) provides, with respect to a plan
                    offered in the silver level of coverage to
                    which section 1402 applies during plan year
                    2024, for benefits described in paragraph (5)
                    in the case of an individual who, for a month
                    during such plan year, has a household income
                    of less than 138 percent of the poverty line
                    for a family of the size involved, and who is
                    eligible to receive cost-sharing reductions
                    under section 1402.''; and
              (2) by adding at the end the following new paragraph:
              ``(5) Additional benefits for certain low-income
            individuals for plan year 2024.--
                      ``(A) In general.--For purposes of paragraph
                    (1)(D), the benefits described in this
                    paragraph to be provided by a qualified health
                    plan are benefits consisting of non-emergency
                    medical transportation services and services
                    described in subsection (a)(4)(C) of section
                    1905 of the Social Security Act, without any
                    restriction on the choice of a qualified
                    provider from whom such an individual so
                    enrolled in such plan may receive such services
                    described in such subsection, and without any
                    imposition of cost sharing, which are not
                    otherwise provided under such plan as part of
                    the essential health benefits package described
                    in section 1302(a).
                      ``(B) Payments for additional benefits.--
                              ``(i) In general.--An issuer of a
                            qualified health plan making payments
                            for services described in subparagraph
                            (A) furnished to individuals described
                            in paragraph (1)(D) during plan year
                            2024 shall notify the Secretary of such
                            payments and the Secretary shall, out
                            of funds made available under clause
                            (ii), make periodic and timely payments
                            to the issuer equal to payments for
                            such services so furnished.
                              ``(ii) Appropriation.--There is
                            appropriated, out of any monies in the
                            Treasury not otherwise appropriated,
                            such sums as may be necessary to the
                            Secretary for purposes of making
                            payments under clause (i).''.
      (d) Education and Outreach Activities.----
              (1) In general.--Section 1321(c) of the Patient
            Protection and Affordable Care Act (42 U.S.C. 18041(c))
            is amended by adding at the end the following new
            paragraph:
              ``(3) Outreach and educational activities.--
                      ``(A) In general.--In the case of an Exchange
                    established or operated by the Secretary within
                    a State pursuant to this subsection, the
                    Secretary shall carry out outreach and
                    educational activities for purposes of
                    informing individuals described in section
                    1902(a)(10)(A)(i)(VIII) of the Social Security
                    Act who reside in States that have not expended
                    amounts under a State plan (or waiver of such
                    plan) under title XIX of such Act for all such
                    individuals about qualified health plans
                    offered through the Exchange, including by
                    informing such individuals of the availability
                    of coverage under such plans and financial
                    assistance for coverage under such plans. Such
                    outreach and educational activities shall be
                    provided in a manner that is culturally and
                    linguistically appropriate to the needs of the
                    populations being served by the Exchange
                    (including hard-to-reach populations, such as
                    racial and sexual minorities, limited English
                    proficient populations, individuals residing in
                    areas where the unemployment rates exceeds the
                    national average unemployment rate, individuals
                    in rural areas, veterans, and young adults).
                      ``(B) Limitation on use of funds.--No funds
                    appropriated under this paragraph shall be used
                    for expenditures for promoting non-ACA
                    compliant health insurance coverage.
                      ``(C) Non-aca compliant health insurance
                    coverage.--For purposes of subparagraph (B):
                              ``(i) The term `non-ACA compliant
                            health insurance coverage' means health
                            insurance coverage, or a group health
                            plan, that is not a qualified health
                            plan.
                              ``(ii) Such term includes the
                            following:
                                      ``(I) An association health
                                    plan.
                                      ``(II) Short-term limited
                                    duration insurance.
                      ``(D) Funding.--There are appropriated, out
                    of any monies in the Treasury not otherwise
                    appropriated, $15,000,000 for fiscal year 2022,
                    and $30,000,000 for each of fiscal years 2023
                    and 2024, to carry out this paragraph. Funds
                    appropriated under this subparagraph shall
                    remain available until expended.''.
              (2) Navigator program.--Section 1311(i)(6) of the
            Patient Protection and Affordable Care Act (42 U.S.C.
            18031(i)(6)) is amended--
                      (A) by striking ``Funding.--Grants under''
                    and inserting ``Funding.--
                      ``(A) State exchanges.--Grants under''; and
                      (B) by adding at the end the following new
                    subparagraph:
                      ``(B) Federal exchanges.--For purposes of
                    carrying out this subsection, with respect to
                    an Exchange established and operated by the
                    Secretary within a State pursuant to section
                    1321(c), the Secretary shall obligate
                    $10,000,000 out of amounts collected through
                    the user fees on participating health insurance
                    issuers pursuant to section 156.50 of title 45,
                    Code of Federal Regulations (or any successor
                    regulations) for fiscal year 2022, and
                    $20,000,000 for each of fiscal years 2023 and
                    2024. Such amount so obligated for a fiscal
                    year shall remain available until expended.''.

    SEC. 137506. ESTABLISHING A HEALTH INSURANCE AFFORDABILITY FUND.

      (a) In General.--Subtitle D of title I of the Patient
    Protection and Affordable Care Act is amended by inserting
    after part 5 (42 U.S.C. 18061 et seq.) the following new part:

             ``PART 6--IMPROVE HEALTH INSURANCE AFFORDABILITY FUND

    ``SEC. 1351. ESTABLISHMENT OF PROGRAM.

      ``There is hereby established the `Improve Health Insurance
    Affordability Fund' to be administered by the Secretary of
    Health and Human Services, acting through the Administrator of
    the Centers for Medicare & Medicaid Services (in this section
    referred to as the `Administrator'), to provide funding, in
    accordance with this part, to the 50 States and the District of
    Columbia (each referred to in this section as a `State')
    beginning on January 1, 2023, for the purposes described in
    section 1352.

    ``SEC. 1352. USE OF FUNDS.

      ``(a) In General.--A State shall use the funds allocated to
    the State under this part for one of the following purposes:
              ``(1) To provide reinsurance payments to health
            insurance issuers with respect to individuals enrolled
            under individual health insurance coverage (other than
            through a plan described in subsection (b)) offered by
            such issuers.
              ``(2) To provide assistance (other than through
            payments described in paragraph (1)) to reduce out-of-
            pocket costs, such as copayments, coinsurance,
            premiums, and deductibles, of individuals enrolled
            under qualified health plans offered on the individual
            market through an Exchange and of individuals enrolled
            under standard health plans offered through a basic
            health program established under section 1331.
      ``(b) Exclusion of Certain Grandfathered Plans, Transitional
    Plans, Student Health Plans, and Excepted Benefits.--For
    purposes of subsection (a), a plan described in this subsection
    is the following:
              ``(1) A grandfathered health plan (as defined in
            section 1251).
              ``(2) A plan (commonly referred to as a `transitional
            plan') continued under the letter issued by the Centers
            for Medicare & Medicaid Services on November 14, 2013,
            to the State Insurance Commissioners outlining a
            transitional policy for coverage in the individual and
            small group markets to which section 1251 does not
            apply, and under the extension of the transitional
            policy for such coverage set forth in the Insurance
            Standards Bulletin Series guidance issued by the
            Centers for Medicare & Medicaid Services on March 5,
            2014, February 29, 2016, February 13, 2017, April 9,
            2018, March 25, 2019, January 31, 2020, and January 19,
            2021, or under any subsequent extensions thereof.
              ``(3) Student health insurance coverage (as defined
            in section 147.145 of title 45, Code of Federal
            Regulations, or any successor regulation).
              ``(4) Excepted benefits (as defined in section
            2791(c) of the Public Health Service Act).

    ``SEC. 1353. STATE ELIGIBILITY AND APPROVAL; DEFAULT SAFEGUARD.

      ``(a) Encouraging State Options for Allocations.--
              ``(1) In general.--Subject to subsection (b), to be
            eligible for an allocation of funds under this part for
            a year (beginning with 2023), a State shall submit to
            the Administrator an application at such time (but, in
            the case of allocations for 2023, not later than 120
            days after the date of the enactment of this part and,
            in the case of allocations for a subsequent year, not
            later than January 1 of the previous year) and in such
            form and manner as specified by the Administrator
            containing--
                      ``(A) a description of how the funds will be
                    used; and
                      ``(B) such other information as the
                    Administrator may require.
              ``(2) Automatic approval.--An application so
            submitted is approved (as outlined in the terms of the
            plan) unless the Administrator notifies the State
            submitting the application, not later than 90 days
            after the date of the submission of such application,
            that the application has been denied for not being in
            compliance with any requirement of this part and of the
            reason for such denial.
              ``(3) 5-year application approval.--If an application
            of a State is approved for a purpose described in
            section 1352 for a year, such application shall be
            treated as approved for such purpose for each of the
            subsequent 4 years.
              ``(4) Oversight authority and authority to revoke
            approval.--
                      ``(A) Oversight.--The Secretary may conduct
                    periodic reviews of the use of funds provided
                    to a State under this section, with respect to
                    a purpose described in section 1352, to ensure
                    the State uses such funds for such purpose and
                    otherwise complies with the requirements of
                    this section.
                      ``(B) Revocation of approval.--The approval
                    of an application of a State, with respect to a
                    purpose described in section 1352, may be
                    revoked if the State fails to use funds
                    provided to the State under this section for
                    such purpose or otherwise fails to comply with
                    the requirements of this section.
      ``(b) Default Federal Safeguard for 2023 and 2024 for Certain
    States.--
              ``(1) In general.--For 2023 and 2024, in the case of
            a State described in paragraph (5), with respect to
            such year, the State shall not be eligible to submit an
            application under subsection (a), and the
            Administrator, in consultation with the applicable
            State authority, shall from the amount calculated under
            paragraph (3) for such year, carry out the purpose
            described in paragraph (2) in such State for such year.
              ``(2) Specified use.--The amount described in
            paragraph (3), with respect to a State described in
            paragraph (5) for 2023 or 2024, shall be used to carry
            out the purpose described in section 1352(a)(1) in such
            State for such year, as applicable, by providing
            reinsurance payments to health insurance issuers with
            respect to attachment range claims (as defined in
            section 1354(b)(2), using the dollar amounts specified
            in subparagraph (B) of such section for such year) in
            an amount equal to, subject to paragraph (4), the
            percentage (specified for such year by the Secretary
            under such subparagraph) of the amount of such claims.
              ``(3) Amount described.--The amount described in this
            paragraph, with respect to 2023 or 2024, is the amount
            equal to the total sum of amounts that the Secretary
            would otherwise estimate under section 1354(b)(2)(A)(i)
            for such year for each State described in paragraph (5)
            for such year, as applicable, if each such State were
            not so described for such year.
              ``(4) Adjustment.--For purposes of this subsection,
            the Secretary may apply a percentage under paragraph
            (3) with respect to a year that is less than the
            percentage otherwise specified in section 1354(b)(2)(B)
            for such year, if the cost of paying the total eligible
            attachment range claims for States described in
            paragraph (5) for such year at such percentage
            otherwise specified would exceed the amount calculated
            under paragraph (3) for such year.
              ``(5) State described.--A State described in this
            paragraph, with respect to years 2023 and 2024, is a
            State that, as of January 1 of 2022 or 2023,
            respectively, was not expending amounts under the State
            plan (or waiver of such plan) for all individuals
            described in section 1902(a)(10)(A)(i)(VIII) during
            such year.

    ``SEC. 1354. ALLOCATIONS.

      ``(a) Appropriation.--For the purpose of providing
    allocations for States under subsection (b) and payments under
    section 1353(b) there is appropriated, out of any money in the
    Treasury not otherwise appropriated, $10,000,000,000 for 2023
    and each subsequent year.
      ``(b) Allocations.--
              ``(1) Payment.--
                      ``(A) In general.--From amounts appropriated
                    under subsection (a) for a year, the Secretary
                    shall, with respect to a State not described in
                    section 1353(b) for such year and not later
                    than the date specified under subparagraph (B)
                    for such year, allocate for such State the
                    amount determined for such State and year under
                    paragraph (2).
                      ``(B) Specified date.--For purposes of
                    subparagraph (A), the date specified in this
                    subparagraph is--
                              ``(i) for 2023, the date that is 90
                            days after the date of the enactment of
                            this part; and
                              ``(ii) for 2024 or a subsequent year,
                            January 1 of the previous year.
                      ``(C) Notifications of allocation amounts.--
                    For 2024 and each subsequent year, the
                    Secretary shall notify each State of the amount
                    determined for such State under paragraph (2)
                    for such year by not later than January 1 of
                    the previous year.
              ``(2) Allocation amount determinations.--
                      ``(A) In general.--For purposes of paragraph
                    (1), the amount determined under this paragraph
                    for a year for a State described in paragraph
                    (1)(A) for such year is the amount equal to--
                              ``(i) the amount that the Secretary
                            estimates would be expended under this
                            part for such year on attachment range
                            claims of individuals residing in such
                            State if such State used such funds
                            only for the purpose described in
                            paragraph (1) of section 1352(a) at the
                            dollar amounts and percentage specified
                            under subparagraph (B) for such year;
                            minus
                              ``(ii) the amount, if any, by which
                            the Secretary determines--
                                      ``(I) the estimated amount of
                                    premium tax credits under
                                    section 36B of the Internal
                                    Revenue Code of 1986 that would
                                    be attributable to individuals
                                    residing in such State for such
                                    year without application of
                                    this part; exceeds
                                      ``(II) the estimated amount
                                    of premium tax credits under
                                    section 36B of the Internal
                                    Revenue Code of 1986 that would
                                    be attributable to individuals
                                    residing in such State for such
                                    year if section 1353(b) applied
                                    for such year and applied with
                                    respect to such State for such
                                    year.
                    For purposes of the previous sentence and
                    section 1353(b)(3), the term `attachment range
                    claims' means, with respect to an individual,
                    the claims for such individual that exceed a
                    dollar amount specified by the Secretary for a
                    year, but do not exceed a ceiling dollar amount
                    specified by the Secretary for such year, under
                    subparagraph (B).
                      ``(B) Specifications.--For purposes of
                    subparagraph (A) and section 1353(b)(3), the
                    Secretary shall determine the dollar amounts
                    and the percentage to be specified under this
                    subparagraph for a year in a manner to ensure
                    that the total amount of expenditures under
                    this part for such year is estimated to equal
                    the total amount appropriated for such year
                    under subsection (a) if such expenditures were
                    used solely for the purpose described in
                    paragraph (1) of section 1352(a) for attachment
                    range claims at the dollar amounts and
                    percentage so specified for such year.
              ``(3) Availability.--Funds allocated to a State under
            this subsection for a year shall remain available
            through the end of the subsequent year.''.
      (b) Basic Health Program Funding Adjustments.--Section 1331
    of the Patient Protection and Affordable Care Act (42 U.S.C.
    18051) is amended--
              (1) in subsection (a), by adding at the end the
            following new paragraph:
              ``(3) Provision of information on qualified health
            plan premiums.--
                      ``(A) In general.--For plan years beginning
                    on or after January 1, 2023, the program
                    described in paragraph (1) shall provide that a
                    State may not establish a basic health program
                    unless such State furnishes to the Secretary,
                    with respect to each qualified health plan
                    offered in such State during a year that
                    receives any reinsurance payment from funds
                    made available under part 6 for such year, the
                    adjusted premium amount (as defined in
                    subparagraph (B)) for each such plan and year.
                      ``(B) Adjusted premium amount defined.--For
                    purposes of subparagraph (A), the term
                    `adjusted premium amount' means, with respect
                    to a qualified health plan and a year, the
                    monthly premium for such plan and year that
                    would have applied had such plan not received
                    any payments described in subparagraph (A) for
                    such year.''; and
              (2) in subsection (d)(3)(A)(ii), by adding at the end
            the following new sentence: ``In making such
            determination, the Secretary shall calculate the value
            of such premium tax credits that would have been
            provided to such individuals enrolled through a basic
            health program established by a State during a year
            using the adjusted premium amounts (as defined in
            subsection (a)(3)(B)) for qualified health plans
            offered in such State during such year.''.

    SEC. 137507. SPECIAL RULE FOR INDIVIDUALS RECEIVING UNEMPLOYMENT
                        COMPENSATION.

      (a) Extension.--Section 36B(g)(1) is amended by striking
    ``during 2021,'' and inserting ``after December 31, 2020, and
    before January 1, 2026,''.
      (b) Modification of Income Not Taken Into Account.--Section
    36B(g)(1)(B) is amended by striking ``133 percent'' and
    inserting ``150 percent''.
      (c) Conforming Amendment.--Section 36B(g) by inserting
    ``Through 2025'' after ``2021'' in the heading thereof.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 137508. PERMANENT CREDIT FOR HEALTH INSURANCE COSTS.

      (a) In General.--Subparagraph (B) of section 35(b)(1) of the
    Internal Revenue Code of 1986 is amended by striking ``, and
    before January 1, 2022'' and inserting a period.
      (b) Increase in Credit Percentage.--Subsection (a) of section
    35 of the Internal Revenue Code of 1986 is amended by striking
    ``72.5 percent'' and inserting ``80 percent''.
      (c) Conforming Amendments.--Subsections (b) and (e)(1) of
    section 7527 of the Internal Revenue Code of 1986 are each
    amended by striking ``72.5 percent'' and inserting ``80
    percent''.
      (d) Effective Date.--The amendments made by this section
    shall apply to coverage months beginning after December 31,
    2021.

                 PART 6--PATHWAY TO PRACTICE TRAINING PROGRAMS

    SEC. 137601. ESTABLISHING RURAL AND UNDERSERVED PATHWAY TO PRACTICE
                        TRAINING PROGRAMS FOR POST-BACCALAUREATE STUDENTS
                        AND MEDICAL STUDENTS.

      (a) Program.--
              (1) In general.--Title XVIII of the Social Security
            Act (42 U.S.C. 1395 et seq.) is amended by adding at
            the end the following new section:

    ``SEC. 1899C. RURAL AND UNDERSERVED PATHWAY TO PRACTICE TRAINING
                        PROGRAM FOR POST-BACCALAUREATE AND MEDICAL
                        STUDENTS.

      ``(a) In General.--Not later than October 1, 2023, the
    Secretary shall, subject to the succeeding provisions of this
    section, carry out the `Rural and Underserved Pathway to
    Practice Training Program for Post-Baccalaureate and Medical
    Students' (in this section, referred to as the `Program') under
    which the Secretary awards Pathway to Practice medical
    scholarship vouchers to qualifying students described in
    subsection (b) for the purpose of increasing the number of
    physicians practicing in rural and underserved communities.
      ``(b) Qualifying Student Described.--For purposes of this
    section, a qualifying student described in this subsection is
    an individual who--
              ``(1) attests he or she--
                      ``(A) is or will be a first-generation
                    student of a 4-year college, graduate school,
                    or professional school;
                      ``(B) was a Pell Grant recipient; or
                      ``(C) lived in a medically underserved area,
                    rural area, or health professional shortage
                    area for a period of 4 or more years prior to
                    attending an undergraduate program;
              ``(2) has accepted enrollment in--
                      ``(A) a post-baccalaureate program that is
                    not more than 2 years and intends to enroll in
                    a qualifying medical school within 2 years
                    after completion of such program; or
                      ``(B) a qualifying medical school;
              ``(3) will practice medicine in a health professional
            shortage area, medically underserved area, public
            hospital, rural area, or as required under subsection
            (d)(5); and
              ``(4) submits an application and a signed copy of the
            agreement described under subsection (c).
      ``(c) Applications.--
              ``(1) In general.--To be eligible to receive a
            Pathway to Practice medical scholarship voucher under
            this section, a qualifying student described in
            subsection (b) shall submit to the Secretary an
            application at such time, in such manner, and
            containing such information as the Secretary may
            require.
              ``(2) Information to be included.--As a part of the
            application described in paragraph (1), the Secretary
            shall include a notice of the items which are required
            to be agreed to under subsection (d)(4) for the purpose
            of notifying the qualifying student of the terms of the
            Rural and Underserved Pathway to Practice Training
            Program.
      ``(d) Pathway to Practice Medical Scholarship Voucher
    Details.--
              ``(1) Number.--On an annual basis, the Secretary may
            award a Pathway to Practice medical scholarship voucher
            under the Program to not more than 1,000 qualifying
            students described in subsection (b).
              ``(2) Prioritization criteria.--In determining
            whether to award a Pathway to Practice medical
            scholarship voucher under the Program to qualifying
            students described in subsection (b), the Secretary
            shall prioritize applications from any such student who
            attests that he or she--
                      ``(A) was a participant in the Health
                    Resources and Services Administration Health
                    Careers Opportunity Program or an Area Health
                    Education Center scholar;
                      ``(B) is a disadvantaged student (as defined
                    by the National Health Service Corps of the
                    Health Resources & Services Administration of
                    the Department of Health and Human Services);
                    or
                      ``(C) attended a historically black college
                    or other minority serving institution (as
                    defined in section 1067q of title 20, United
                    States Code).
              ``(3) Duration.--Each Pathway to Practice medical
            scholarship voucher awarded to a qualifying student
            pursuant to paragraph (1) shall be so awarded to such a
            student on an annual basis for each year of enrollment
            in a post-baccalaureate program and a qualifying
            medical school (as appropriate).
              ``(4) Amount.--Subject to paragraph (5), each Pathway
            to Practice medical scholarship voucher awarded under
            the Program shall include amounts for--
                      ``(A) tuition;
                      ``(B) academic fees (as determined by the
                    qualifying medical school);
                      ``(C) required textbooks and equipment;
                      ``(D) a monthly stipend equal to the amount
                    provided for individuals under the health
                    professions scholarship and financial
                    assistance program described in section 2121(c)
                    of title 10, United States Code; and
                      ``(E) any other educational expenses normally
                    incurred by students at the post-baccalaureate
                    program or qualifying medical school (as
                    appropriate).
              ``(5) Required agreement.--No amounts under paragraph
            (4) may be provided a qualifying student awarded a
            Pathway to Practice medical scholarship voucher under
            the Program, unless the qualifying student submits to
            the Secretary an agreement to--
                      ``(A) complete a post-baccalaureate program
                    that is not more than 2 years (if applicable
                    pursuant to the option under subsection
                    (b)(2)(A));
                      ``(B) graduate from a qualifying medical
                    school;
                      ``(C) complete a residency program in an
                    approved residency training program (as defined
                    in section 1886(h)(5)(A));
                      ``(D) complete an initial residency period or
                    the period of board eligibility;
                      ``(E) practice medicine for at least the
                    number of years of the Pathway to Practice
                    medical scholarship voucher awarded under
                    paragraph (2) after a residency program in a
                    health professional shortage area, a medically
                    underserved area, a public hospital, or a rural
                    area, and during such period annually submit
                    documentation with respect to whether the
                    qualifying student practices medicine in such
                    an area and where;
                      ``(F) for the purpose of determining
                    compliance with subparagraph (E), not later
                    than 180 days after the date on which
                    qualifying student completes a residency
                    program, provide to the Secretary information
                    with respect to where the qualifying student is
                    practicing medicine following the period
                    described in such subparagraph;
                      ``(G) except in the case of a waiver for
                    hardship pursuant to section 1892(f)(3), be
                    liable to the United States pursuant to section
                    1892 for any amounts received under this
                    Program that is determined a past-due
                    obligation under subsection (b)(3) of such
                    section in the case qualifying student fails to
                    complete all of the requirements of this
                    agreement under this subsection; and
                      ``(H) for the purpose of determining the
                    amount of Pathway to Practice medical
                    scholarship vouchers paid or incurred by a
                    qualifying medical school or any provider of a
                    post-baccalaureate program referred to in
                    subsection (b)(2)(A) for the costs of tuition
                    under paragraph (4)(A), consent to any
                    personally identifying information being shared
                    with the Secretary of the Treasury.
              ``(6) Responsibilities of participating educational
            institutions.--Each annual award of an amount of
            Pathway to Practice medical scholarship voucher under
            paragraph (2) shall be made with respect to a specific
            qualifying medical school or post-baccalaureate program
            that is not more than 2 years and such school or
            program shall (as a condition of, and prior to, such
            award being made with respect to such school or
            program)--
                      ``(A) submit to the Secretary such
                    information as the Secretary may require to
                    determine the amount of such award on the basis
                    of the costs of the costs of the items
                    specified under paragraph (4) (except for
                    subparagraph (D)) with respect to such school
                    or program, and
                      ``(B) enter into an agreement with the
                    Secretary under which such school or provider
                    will verify (in such manner as the Secretary
                    may provide) that amounts paid by such school
                    or provider to the qualifying student are used
                    for such costs.
      ``(e) Definitions.--In this section:
              ``(1) Health professional shortage area.--The team
            `health professional shortage area' has the meaning
            given such term in subparagraphs (A) or (B) of section
            332(a)(1) of the Public Health Service Act.
              ``(2) Initial residency period.--The term `initial
            residency period' has the meaning given such term in
            section 1886(h)(5)(F).
              ``(3) Medically underserved area.--The term
            `medically underserved area' means an area designated
            pursuant to section 330(b)(3)(A) of the Public Health
            Service Act.
              ``(4) Pell grant recipient.--The term `Pell Grant
            recipient' has the meaning given such term in section
            322(3) of the Higher Education Act of 1965.
              ``(5) Period of board eligibility.--The term `period
            of board eligibility' has the meaning given such term
            in section 1886(h)(5)(G).
              ``(6) Qualifying medical school.--The term
            `qualifying medical school' means a school of medicine
            accredited by the Liaison Committee on Medical
            Education of the American Medical Association and the
            Association of American Medical Colleges (or approved
            by such Committee as meeting the standards necessary
            for such accreditation) or a school of osteopathy
            accredited by the American Osteopathic Association, or
            approved by such Association as meeting the standards
            necessary for such accreditation which--
                      ``(A) for each academic year, enrolls at
                    least 10 qualifying students who are in
                    enrolled in such a school;
                      ``(B) requires qualifying students to enroll
                    in didactic coursework and clinical experience
                    applicable to practicing medicine in health
                    professional shortage areas, medically
                    underserved areas, or rural areas, including--
                              ``(i) clinical rotations in such
                            areas in applicable specialties (as
                            applicable and as available);
                              ``(ii) coursework or training
                            experiences focused on medical issues
                            prevalent in such areas and cultural
                            and structural competency; and
                      ``(C) is located in a State (as defined in
                    section 210(h)).
              ``(7) Rural area.--The term `rural area' has the
            meaning given such term in section 1886(d)(2)(D).
      ``(f) Penalty for False Information.--Any person who
    knowingly and willfully obtains by fraud, false statement, or
    forgery, or fails to refund any funds, assets, or property
    provided under this section or attempts to so obtain by fraud,
    false statement or forgery, or fail to refund any funds,
    assets, or property, received pursuant to this section shall be
    fined not more than $20,000 or imprisoned for not more than 5
    years, or both.''.
              (2) Agreements.--Section 1892 of the Social Security
            Act (42 U.S.C. 1395ccc) is amended--
                      (A) in subsection (a)(1)(A)--
                              (i) by striking ``, or the'' and
                            inserting ``, the''; and
                              (ii) by inserting ``or the Rural and
                            Underserved Pathway to Practice
                            Training Program for Post-
                            Baccalaureate and Medical Students
                            under section 1899C'' before ``, owes a
                            past-due obligation'';
                      (B) in subsection (b)--
                              (i) in paragraph (1), by striking at
                            the end ``or'';
                              (ii) in paragraph (2), by striking
                            the period at the end and inserting ``;
                            or''; and
                              (iii) by adding the end the following
                            new paragraph:
              ``(3) subject to subsection (f), owed by an
            individual to the United States by breach of an
            agreement under section 1899C(c) and which payment has
            not been paid by the individual for any amounts
            received under the Rural and Underserved Pathway to
            Practice Training Program for Post-Baccalaureate and
            Medical Students (and accrued interest determined in
            accordance with subsection (f)(4)) in the case such
            individual fails to complete the requirements of such
            agreement.''; and
                      (C) by adding at the end the following new
                    subsection:
      ``(f) Authorities With Respect to the Collection Under the
    Pathway to Practice Training Program.--The Secretary--
              ``(1) shall require payment to the United States for
            any amount of damages that the United States is
            entitled to recover under subsection (b)(3), within the
            5-year period beginning on the date an eligible
            individual fails to complete the requirements of such
            agreement under section 1899C(d)(5) (or such longer
            period beginning on such date as specified by the
            Secretary), and any such amounts not paid within such
            period shall be subject to collection through
            deductions in Medicare payments pursuant to subsection
            (e);
              ``(2) may allow payments described in paragraph (1)
            to be paid in installments over such 5-year period,
            which shall accrue interest in an amount determined
            pursuant to paragraph (5);
              ``(3) may waive the requirement for an individual to
            pay a past-due obligation under subsection (b)(3) in
            the case of hardship (as determined by the Secretary);
              ``(4) may not disclose any past-due obligation under
            subsection (b)(3) that is owed to the United States to
            any credit reporting agency that the United States
            entitled to be recovered the United States under this
            section; and
              ``(5) shall make a final determination of whether the
            amount of payment under section 1899C made to a
            qualifying student (as described in subsection (b) of
            such section) was in excess of or less than the amount
            of payment that is due, and payment of such excess or
            deficit is not made (or effected by offset) within 90
            days of the date of the determination, and interest
            shall accrue on the balance of such excess or deficit
            not paid or offset (to the extent that the balance is
            owed by or owing to the provider) at a rate determined
            in accordance with the regulations of the Secretary of
            the Treasury applicable to charges for late
            payments.''.

    SEC. 137602. FUNDING FOR THE RURAL AND UNDERSERVED PATHWAY TO PRACTICE
                        TRAINING PROGRAMS FOR POST-BACCALAUREATE STUDENTS
                        AND MEDICAL STUDENTS.

      (a) In General.--Subpart C of part IV of subchapter A of
    chapter 1 of the Internal Revenue Code of 1986, as amended by
    the preceding provisions of this Act, is amended by inserting
    after section 36F the following new section:

    ``SEC. 36G. PATHWAY TO PRACTICE MEDICAL SCHOLARSHIP VOUCHER CREDIT.

      ``(a) In General.--In the case of a qualified educational
    institution, there shall be allowed as a credit against the tax
    imposed by this subtitle for any taxable year an amount equal
    to the aggregate amount paid or incurred by such institution
    during such taxable year pursuant to any Pathway to Practice
    medical scholarship voucher awarded to a qualifying student
    with respect to such institution.
      ``(b) Determination of Amounts Paid Pursuant to Qualified
    Scholarship Vouchers, etc.--For purposes of this section--
              ``(1) an amount shall be treated as paid or incurred
            pursuant to an annual award of a Pathway to Practice
            medical scholarship voucher only if such amount is paid
            or incurred in reimbursement, or anticipation of, an
            expense described in subparagraphs (A) through (E) of
            paragraph (4) of section 1899C(d) of the Social
            Security Act and is subject to verification in such
            manner as the Secretary of Health and Human Services
            may provide under paragraph (6) of such section, and
              ``(2) in the case of any amount credited by a
            qualified educational institution against a liability
            owed by the qualifying student to such institution,
            such amount shall be treated as paid by such
            institution to such student as of the date that such
            liability would otherwise be due.
      ``(c) Definitions.--For purposes of this section--
              ``(1) Qualified educational institution.--The term
            `qualified educational institution' means, with respect
            to any annual award of a Pathway to Practice medical
            scholarship voucher--
                      ``(A) any qualifying medical school (as
                    defined in subsection (e)(6) of section 1899C
                    of the Social Security Act), and
                      ``(B) any provider of a post-baccalaureate
                    program referred to in subsection (b)(2)(A) of
                    such section,
            which meets the requirements of subsection (d)(6) of
            such section.
              ``(2) Qualifying student.--The term `qualifying
            student' means any student to whom the Secretary of
            Health and Human Services has made an annual award of a
            Pathway to Practice medical scholarship voucher under
            section 1899C of the Social Security Act.
              ``(3) Annual award of a pathway to practice medical
            scholarship voucher.--The term `annual award of a
            Pathway to Practice medical scholarship voucher' means
            the annual award of a Pathway to Practice medical
            scholarship voucher referred to in section 1899C(d)(3)
            of the Social Security Act.
      ``(d) Coordination of Academic and Taxable Years.--The credit
    allowed under subsection (a) with respect to any Pathway to
    Practice medical scholarship voucher shall not exceed the
    amount of such voucher which is for expenses described in
    subparagraphs (A) through (E) of section 1899C(d)(4) of the
    Social Security Act, reduced by any amount of such voucher with
    respect to which credit was allowed under this section for any
    prior taxable year.
      ``(e) Regulations.--The Secretary shall issue such
    regulations or other guidance as are necessary or appropriate
    to carry out the purposes of this section.''.
      (b) Conforming Amendments.--
              (1) Section 6211(b)(4)(A), as amended by the
            preceding provisions of this Act, is amended by
            inserting ``36G,'' after ``36F,''.
              (2) Paragraph (2) of section 1324(b) of title 31,
            United States Code, as amended by the preceding
            provisions of this Act, is amended by inserting
            ``36G,'' after ``36F,''.
              (3) The table of sections for subpart C of part IV of
            subchapter A of chapter 1 of the Internal Revenue Code
            of 1986, and amended by the preceding provisions of
            this Act, is amended by inserting after the item
            relating to section 36F the following new item:

    ``Sec. 36G. Pathway to Practice medical scholarship voucher credit.''.
      (c) Information Sharing.--The Secretary of Health and Human
    Services shall annually provide the Secretary of the Treasury
    such information regarding the program under section 1899C of
    the Social Security Act as the Secretary of the Treasury may
    require to administer the tax credits determined under section
    36G of the Internal Revenue Code of 1986, including information
    to identify qualifying students and the qualified educational
    institutions at which such students are enrolled and the amount
    of the annual award of the Pathway to Practice medical
    scholarship voucher awarded to each such student with respect
    to such institution. Terms used in this subparagraph shall have
    the same meaning as when used is such section 36G.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years ending after the date of the
    enactment of this Act.

    SEC. 137603. ESTABLISHING RURAL AND UNDERSERVED PATHWAY TO PRACTICE
                        TRAINING PROGRAMS FOR MEDICAL RESIDENTS.

      Section 1886 of the Social Security Act (42 U.S.C. 1395ww) is
    amended--
              (1) in subsection (d)(5)(B)(v), by inserting
            ``(h)(4)(H)(vii),'' after ``The provisions of
            subsections (h)(4)(H)(vi),''; and
              (2) in subsection (h)(4)(H), by adding at the end the
            following new clause:
                              ``(vii) Increase in full-time
                            equivalent limitation for hospitals
                            implementing pathway training
                            programs.--
                                      ``(I) In general.--For cost
                                    reporting periods beginning on
                                    or after October 1, 2026,
                                    during which a resident trains
                                    in an applicable hospital or
                                    hospitals (as defined in
                                    subclause (II) in an approved
                                    medical residency training
                                    program), the Secretary shall,
                                    after any adjustment made under
                                    any preceding provision of this
                                    paragraph or under any of
                                    paragraphs (7) through (9),
                                    subject to subclause (III),
                                    increase the limitation under
                                    subparagraph (F) for such cost
                                    reporting period by the number
                                    of full-time equivalent
                                    residents so trained under such
                                    program during such period (in
                                    this clause, referred to as the
                                    `Rural and Underserved Pathway
                                    to Practice Training Programs
                                    for Medical Residents' or
                                    `Program').
                                      ``(II) Applicable hospital or
                                    hospitals defined.--For
                                    purposes of this clause, the
                                    term `applicable hospital or
                                    hospitals' means any hospital
                                    that has been recognized by the
                                    Accreditation Council for
                                    Graduate Medical Education as
                                    meeting at least the following
                                    requirements for their approved
                                    medical residency training
                                    programs:
                                              ``(aa) The programs
                                            provide mentorships for
                                            residents.
                                              ``(bb) The programs
                                            include cultural and
                                            structural competency
                                            as part of the training
                                            of residents under the
                                            programs.
                                              ``(cc) The programs
                                            have a demonstrated
                                            record of training
                                            medical residents in
                                            medically underserved
                                            areas, rural areas, or
                                            health professional
                                            shortage areas.
                                              ``(dd) The hospital
                                            agrees to promote
                                            community-based
                                            training of residents
                                            under their programs,
                                            as appropriate.
                                      ``(III) Annual limitation for
                                    number of residents in
                                    program.--The Secretary shall
                                    ensure that, during any 1-year
                                    period and across all approved
                                    medical residency training
                                    programs described in subclause
                                    (I), not more than 1,000 full-
                                    time equivalent residents are
                                    trained each year.
                                      ``(IV) Other definitions.--
                                              ``(aa) Health
                                            professional shortage
                                            area.--The team `health
                                            professional shortage
                                            area' has the meaning
                                            given such term in
                                            subparagraphs (A) or
                                            (B) of section
                                            332(a)(1) of the Public
                                            Health Service Act.
                                              ``(bb) Medical
                                            underserved area.--The
                                            term `medically
                                            underserved area' means
                                            an area designated
                                            pursuant to section
                                            330(b)(3)(A) of the
                                            Public Health Service
                                            Act.
                                              ``(cc) Qualifying
                                            medical school.--The
                                            term `qualifying
                                            medical school' has the
                                            meaning given such term
                                            in section 1899C(e)(6).
                                              ``(dd) Qualifying
                                            medical student.--The
                                            term `qualifying
                                            medical student' has
                                            the meaning given such
                                            term in section
                                            1899C(b).
                                              ``(ee) Rural area.--
                                            The term `rural area'
                                            has the meaning given
                                            such term in section
                                            1886(d)(2)(D).''.

    SEC. 137604. ADMINISTRATIVE FUNDING OF THE RURAL AND UNDERSERVED
                        PATHWAY TO PRACTICE TRAINING PROGRAMS FOR POST-
                        BACCALAUREATE STUDENTS, MEDICAL STUDENTS, AND
                        MEDICAL RESIDENTS.

      The Secretary shall provide for the transfer of $6,000,000
    from the Hospital Insurance Trust Fund established under
    section 1817 of the Social Security Act (42 U.S.C. 1395i) and
    the Federal Supplementary Medical Insurance Trust Fund under
    section 1841 of such Act (42 U.S.C. 1395t), in addition to
    amounts otherwise available to remain available until expended,
    to carry out the administration of the Rural and Underserved
    Pathway to Practice Training Program for Post-Baccalaureate and
    Medical Students under section 1899C of such Act (42 U.S.C.
    1395mmm) and the Rural and Underserved Pathway to Practice
    Training Programs for Medical Residents under section
    1886(h)(4)(H)(vii) of such Act (42 U.S.C.
    1395ww(h)(4)(H)(vii)).

                            PART 7--HIGHER EDUCATION

    SEC. 137701. CREDIT FOR PUBLIC UNIVERSITY RESEARCH INFRASTRUCTURE.

      (a) In General.--Subpart D of part IV of subchapter A of
    chapter 1, as amended by the preceding provisions of this Act,
    is amended by adding at the end the following new section:

    ``SEC. 45AA. PUBLIC UNIVERSITY RESEARCH INFRASTRUCTURE CREDIT.

      ``(a) Allowance of Credit.--For purposes of section 38, the
    public university research infrastructure credit determined
    under this section for a taxable year is an amount equal to 40
    percent of the qualified cash contributions made by a taxpayer
    during such taxable year.
      ``(b) Qualified Cash Contribution.--
              ``(1) In general.--
                      ``(A) Defined.--For purposes of subsection
                    (a), the qualified cash contribution for any
                    taxable year is the aggregate amount
                    contributed in cash by a taxpayer during such
                    taxable year to a certified educational
                    institution in connection with a qualifying
                    project that, but for this section, would be
                    treated as a charitable contribution for
                    purposes of section 170(c).
                      ``(B) Qualified cash contributions taken into
                    account for purposes of charitable contribution
                    limitations.--Any qualified cash contributions
                    made by a taxpayer under this section shall be
                    taken into account for purposes of determining
                    the percentage limitations under section
                    170(b).
              ``(2) Designation required.--A contribution shall
            only be treated as a qualified cash contribution to the
            extent that it is designated as such by a certified
            educational institution under subsection (d).
      ``(c) Definitions.--For purposes of this section--
              ``(1) Qualifying project.--The term `qualifying
            project' means a project to purchase, construct, or
            improve research infrastructure property.
              ``(2) Research infrastructure property.--The term
            `research infrastructure property' means any portion of
            a property, building, or structure of an eligible
            educational institution, or any land associated with
            such property, building, or structure, that is used for
            research.
              ``(3) Eligible educational institution.--The term
            `eligible educational institution' means--
                      ``(A) an institution of higher education (as
                    such term is defined in section 101 or 102(c)
                    of the Higher Education Act of 1965) that is a
                    college or university described in section
                    511(a)(2)(B), or
                      ``(B) an organization described in section
                    170(b)(1)(A)(iv) or section 509(a)(3) to which
                    authority has been delegated by an institution
                    described in subparagraph (A) for purposes of
                    applying for or administering credit amounts on
                    behalf of such institution.
              ``(4) Certified educational institution.--The term
            `certified educational institution' means an eligible
            educational institution which has been allocated a
            credit amount for a qualifying project and--
                      ``(A) has received a certification for such
                    project under subsection (d)(2), and
                      ``(B) designates credit amounts to taxpayers
                    for qualifying cash contributions toward such
                    project under subsection (d)(4).
      ``(d) Qualifying University Research Infrastructure
    Program.--
              ``(1) Establishment.--
                      ``(A) In general.--Not later than 180 days
                    after the date of the enactment of this
                    section, the Secretary, after consultation with
                    the Secretary of Education, shall establish a
                    program to--
                              ``(i) certify and allocate credit
                            amounts for qualifying projects to
                            eligible educational institutions, and
                              ``(ii) allow certified educational
                            institutions to designate cash
                            contributions for qualifying projects
                            of such certified educational
                            institutions as qualified cash
                            contributions.
                      ``(B) Limitations.--
                              ``(i) Allocation limitation per
                            institution.--The credit amounts
                            allocated to a certified educational
                            institution under subparagraph (A)(i)
                            for all projects shall not exceed
                            $50,000,000 per calendar year.
                              ``(ii) Overall allocation
                            limitation.--
                                      ``(I) In general.--The total
                                    amount of qualifying project
                                    credit amounts that may be
                                    allocated under subparagraph
                                    (A)(i) shall not exceed--
                                              ``(aa) $500,000,000
                                            for each of calendar
                                            years 2022, 2023, 2024,
                                            2025, and 2026, and
                                              ``(bb) $0 for each
                                            subsequent year.
                                      ``(II) Rollover of
                                    unallocated credit amounts.--
                                    Any credit amounts described in
                                    subclause (I) that are
                                    unallocated during a calendar
                                    year shall be carried to the
                                    succeeding calendar year and
                                    added to the limitation
                                    allowable under such subclause
                                    for such succeeding calendar
                                    year.
                              ``(iii) Designation limitation.--The
                            aggregate amount of cash contributions
                            which are designated by a certified
                            educational institution as qualifying
                            cash contributions with respect to any
                            qualifying project shall not exceed 250
                            percent of the credit amount allocated
                            to such certified educational
                            institution for a qualifying project
                            under subparagraph (A)(i).
              ``(2) Certification application.--Each eligible
            educational institution which applies for certification
            of a project under this paragraph shall submit an
            application in such time, form, and manner as the
            Secretary may require.
              ``(3) Selection criteria for allocations to eligible
            educational institutions.--The Secretary, after
            consultation with the Secretary of Education, shall
            select applications from eligible educational
            institutions--
                      ``(A) based on the extent of the expected
                    expansion of an eligible educational
                    institution's targeted research within
                    disciplines in science, mathematics,
                    engineering, and technology, and
                      ``(B) in a manner that ensures consideration
                    is given to eligible educational institutions
                    with full-time student populations of less than
                    12,000.
              ``(4) Designation of qualified cash contributions to
            taxpayers.--The Secretary, after consultation with the
            Secretary of Education, shall establish a process by
            which certified educational institutions shall
            designate cash contributions to such institutions as
            qualified cash contributions.
              ``(5) Disclosure of allocations and designations.--
                      ``(A) Allocations.--The Secretary shall, upon
                    allocating credit amounts to an applicant under
                    this subsection, publicly disclose the identity
                    of the applicant and the credit amount
                    allocated to such applicant.
                      ``(B) Designations.--Each certified
                    educational institution shall, upon designating
                    contributions of a taxpayer as qualified cash
                    contributions under this subsection, publicly
                    disclose the identity of the taxpayer and the
                    amount of contributions designated in such
                    time, form, and manner as the Secretary may
                    require.
      ``(e) Regulations and Guidance.--The Secretary, after
    consultation with the Secretary of Education when applicable,
    shall prescribe such regulations and guidance as may be
    necessary or appropriate to carry out the purposes of this
    section, including regulations for--
              ``(1) prevention of abuse,
              ``(2) establishment of reporting requirements,
              ``(3) establishment of selection criteria for
            applications, and
              ``(4) disclosure of allocations.
      ``(f) Penalty for Noncompliance.--
              ``(1) In general.--If at any time during the 5-year
            period beginning on the date of the allocation of
            credit amounts to a certified educational institution
            under subsection (d)(1)(A)(i) there is a noncompliance
            event with respect to such credit amounts, then the
            following rules shall apply:
                      ``(A) General rule.--Any cash contribution
                    designated as a qualifying cash contribution
                    with respect to a qualifying project for which
                    such credit amounts were allocated under
                    subsection (d)(1)(A)(ii) shall be treated as
                    unrelated business taxable income (as defined
                    in section 512) of such certified educational
                    institution.
                      ``(B) Rule for unused credit amounts.--In the
                    case of unused credit amounts described under
                    paragraph (2)(A) and identified pursuant to
                    subsection (g), the Secretary shall reallocate
                    any portion of such unused credit amounts to
                    certified educational institutions in lieu of
                    imposing the general rule under subparagraph
                    (A).
              ``(2) Noncompliance event.--For purposes of this
            subsection, the term `noncompliance event' means, with
            respect to a credit amount allocated to a certified
            educational institution--
                      ``(A) cash contributions equaling the amount
                    of such credit amount are not designated as
                    qualifying cash contributions within 2 years
                    after December 31 of the year such credit
                    amount is allocated,
                      ``(B) a qualifying project with respect to
                    which such credit amount was allocated is not
                    placed in service within either--
                              ``(i) 4 years after December 31 of
                            the year such credit amount is
                            allocated, or
                              ``(ii) a period of time that the
                            Secretary determines is appropriate, or
                      ``(C) the research infrastructure property
                    placed in service as part of a qualifying
                    project with respect to which such credit
                    amount was allocated ceases to be used for
                    research within five years after such property
                    is placed in service.
      ``(g) Review and Reallocation of Credit Amounts.--
              ``(1) Review.--Not later than 5 years after the date
            of enactment of this section, the Secretary shall
            review the credit amounts allocated under this section
            as of such date.
              ``(2) Reallocation.--
                      ``(A) In general.--The Secretary may
                    reallocate credit amounts allocated under this
                    section if the Secretary determines, as of the
                    date of the review in paragraph (1), that such
                    credit amounts are subject to a noncompliance
                    event.
                      ``(B) Additional program.--If the Secretary
                    determines that credits under this section are
                    available for reallocation pursuant to the
                    requirements set forth in subparagraph (A), the
                    Secretary is authorized to conduct an
                    additional program for applications for
                    certification.
                      ``(C) Deadline for reallocation.--The
                    Secretary shall not certify any project, or
                    reallocate any credit amount, pursuant to this
                    paragraph after December 31, 2031.
      ``(h) Denial of Double Benefit.--No credit or deduction shall
    be allowed under any other provision of this chapter for any
    qualified cash contribution for which a credit is allowed under
    this section.
      ``(i) Rule for Trusts and Estates.--For purposes of this
    section, rules similar to the rules of subsection (d) of
    section 52 shall apply.
      ``(j) Termination.--This section shall not apply to qualified
    cash contributions made after December 31, 2033.''.
      (b) Credit Made Part of General Business Credit.--Subsection
    (b) of section 38, as amended by the preceding provisions of
    this Act, is amended by striking ``plus'' at the end of
    paragraph (38), by striking the period at the end of paragraph
    (39) and inserting ``, plus'', and by adding at the end the
    following new paragraph:
              ``(43) the public university research infrastructure
            credit determined under section 45AA.''.
      (c) Clerical Amendment.--The table of sections for subpart D
    of part IV of subchapter A of chapter 1, as amended by the
    preceding provisions of this Act, is amended by adding at the
    end the following new item:

    ``Sec. 45AA. Public university research infrastructure credit.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to qualified cash contributions made after December
    31, 2021.

    SEC. 137702. MODIFICATION OF EXCISE TAX ON INVESTMENT INCOME OF PRIVATE
                        COLLEGES AND UNIVERSITIES.

      (a) Phaseout of Investment Income Excise Tax for Private
    Colleges and Universities Providing Sufficient Grants and
    Scholarships.--Section 4968 is amended by adding at the end the
    following new subsection:
      ``(e) Phaseout for Institutions Providing Qualified Aid.--
              ``(1) In general.--The amount of tax imposed by
            subsection (a) (determined without regard to this
            subsection) shall be reduced (but not below zero) by
            the amount which bears the same ratio to such amount of
            tax (as so determined) as--
                      ``(A) the excess (if any) of--
                              ``(i) the aggregate amount of
                            qualified aid awards provided by the
                            institution to its first-time, full-
                            time undergraduate students for
                            academic periods beginning during the
                            taxable year, over
                              ``(ii) an amount equal to 20 percent
                            of the aggregate undergraduate tuition
                            and fees received by the institution
                            from first-time, full-time
                            undergraduate students for such
                            academic periods, bears to
                      ``(B) an amount equal to 13 percent of such
                    aggregate undergraduate tuition and fees so
                    received.
              ``(2) Institution must meet reporting requirement.--
                      ``(A) In general.--Paragraph (1) shall not
                    apply to an applicable educational institution
                    for a taxable year unless such institution
                    furnishes to the Secretary, and makes widely
                    available, a statement detailing the average
                    aggregate amount of Federal student loans
                    received by a student for attendance at the
                    institution, averaged among each of the
                    following groups of first-time, full-time
                    undergraduate students who during the taxable
                    year completed a course of study for which the
                    institution awarded a baccalaureate degree:
                              ``(i) All such students.
                              ``(ii) The students who have been
                            awarded a Federal Pell Grant under
                            subpart 1 of part A of title IV of the
                            Higher Education Act of 1965 for
                            attendance at the institution.
                              ``(iii) The students who received
                            work-study assistance under part C of
                            title IV of such Act for attendance at
                            such institution.
                              ``(iv) The students who were provided
                            such Federal student loans.
                      ``(B) Form and manner for report.--Such
                    statement shall be furnished at such time and
                    in such form and manner, and made widely
                    available, under such regulations or guidance
                    as the Secretary may prescribe.
                      ``(C) Federal student loans.--For purposes of
                    this paragraph, the term `Federal student
                    loans' means a loan made under part D of title
                    IV of the Higher Education Act of 1965, except
                    such term does not include a Federal Direct
                    PLUS Loan made on behalf of a dependent
                    student.
              ``(3) Other definitions.--For purposes of this
            subsection--
                      ``(A) First-time, full-time undergraduate
                    student.--The term `first-time, full-time
                    undergraduate student' shall have the same
                    meaning as when used in section 132 of the
                    Higher Education Act of 1965.
                      ``(B) Qualified aid awards.--The term
                    `qualified aid awards' means, with respect to
                    any applicable educational institution, grants
                    and scholarships to the extent used for
                    undergraduate tuition and fees.
                      ``(C) Undergraduate tuition and fees.--The
                    term `undergraduate tuition and fees' means,
                    with respect to any institution, the tuition
                    and fees required for the enrollment or
                    attendance of a student as an undergraduate
                    student at the institution.''.
      (b) Inflation Adjustment to Per Student Asset Threshold.--
    Section 4968(b) is amended by adding at the end the following
    new paragraph:
              ``(3) Inflation adjustment.--In the case of any
            taxable year beginning after 2022, the dollar amount in
            paragraph (1)(D) shall be increased by an amount equal
            to--
                      ``(A) such dollar amount, multiplied by
                      ``(B) the cost-of-living adjustment
                    determined under section 1(f)(3) for the
                    calendar year in which the taxable year begins,
                    determined by substituting `calendar year 2021'
                    for `calendar year 2016' in subparagraph
                    (A)(ii) thereof.
            If any increase determined under this paragraph is not
            a multiple of $1,000, such increase shall be rounded to
            the nearest multiple of $1,000.''.
      (c) Clarification of 500 Student Threshold.--Section
    4968(b)(1)(A) is amended by inserting ``below the graduate
    level'' after ``500 tuition-paying students''.
      (d) Effective Date.--The amendment made by this section shall
    apply to taxable years beginning after December 31, 2021.

    SEC. 137703. TREATMENT OF FEDERAL PELL GRANTS FOR INCOME TAX PURPOSES.

      (a) Exclusion From Gross Income.--Section 117(b)(1) is
    amended by striking ``received by an individual'' and all that
    follows and inserting ``received by an individual--
                      ``(A) as a scholarship or fellowship grant to
                    the extent the individual establishes that, in
                    accordance with the conditions of the grant,
                    such amount was used for qualified tuition and
                    related expenses, or
                      ``(B) as a Federal Pell Grant under section
                    401 of the Higher Education Act of 1965.''.
      (b) Treatment for Purposes of American Opportunity Tax Credit
    and Lifetime Learning Credit.--Section 25A(g)(2) is amended--
              (1) in subparagraph (A), by inserting ``described in
            section 117(b)(1)(A)'' after ``a qualified
            scholarship'', and
              (2) in subparagraph (C), by inserting ``or Federal
            Pell Grant under section 401 of the Higher Education
            Act of 1965'' after ``within the meaning of section
            102(a)''.
      (c) Effective Date.--The amendment made by this section shall
    apply to taxable years beginning after December 31, 2021.

    SEC. 137704. REPEAL OF DENIAL OF AMERICAN OPPORTUNITY TAX CREDIT ON
                        BASIS OF FELONY DRUG CONVICTION.

      (a) In General.--Section 25A(b)(2) is amended by striking
    subparagraph (D).
      (b) Effective Date.--The amendment made by this section shall
    apply to taxable years beginning after December 31, 2021.

                 Subtitle I--Responsibly Funding Our Priorities

    SEC. 138001. AMENDMENT OF 1986 CODE.

      Except as otherwise expressly provided, whenever in this
    subtitle 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.

                PART 1--CORPORATE AND INTERNATIONAL TAX REFORMS

                         Subpart A--Corporate Tax Rate

    SEC. 138101. INCREASE IN CORPORATE TAX RATE.

      (a) In General.--Section 11(b) is amended to read as follows:
      ``(b) Amount of Tax.--
              ``(1) In general.--The amount of the tax imposed by
            subsection (a) shall be the sum of--
                      ``(A) 18 percent of so much of the taxable
                    income as does not exceed $400,000,
                      ``(B) 21 percent of so much of the taxable
                    income as exceeds $400,000 but does not exceed
                    $5,000,000, and
                      ``(C) 26.5 percent of so much of the taxable
                    income as exceeds $5,000,000.
            In the case of a corporation which has taxable income
            in excess of $10,000,000 for any taxable year, the
            amount of tax determined under the preceding sentence
            for such taxable year shall be increased by the lesser
            of (i) 3 percent of such excess, or (ii) $287,000.
              ``(2) Certain personal service corporation not
            eligible for graduated rates.--Notwithstanding
            paragraph (1), the amount of the tax imposed by
            subsection (a) on the taxable income of a qualified
            personal service corporation (as defined in section
            448(d)(2)) shall be equal to 26.5 percent of the
            taxable income.''.
      (b) Proportional Adjustment of Deduction for Dividends
    Received.--
              (1) In general.--Section 243(a)(1) is amended by
            striking ``50 percent'' and inserting ``60 percent''.
              (2) Dividends from 20-percent owned corporations.--
            Section 243(c)(1) is amended--
                      (A) prior to amendment by subparagraph (B),
                    by striking ``65 percent'' and inserting ``72.5
                    percent'', and
                      (B) by striking ``50 percent'' and inserting
                    ``60 percent''.
      (c) Conforming Amendment.--Section 1561 is amended--
              (1) by amending subsection (a) to read as follows:
      ``(a) In General.--The component members of a controlled
    group of corporations on a December 31 shall, for their taxable
    years which include such December 31, be limited for purposes
    of this subtitle to--
              ``(1) amounts in each taxable income bracket in the
            subparagraphs of section 11(b)(1) which do not
            aggregate more than the maximum amount in each such
            bracket to which a corporation which is not a component
            member of a controlled group is entitled, and
              ``(2) one $250,000 ($150,000 if any component member
            is a corporation described in section 535(c)(2)(B))
            amount for purposes of computing the accumulated
            earnings credit under section 535(c)(2) and (3).
    The amounts specified in paragraph (1) shall be divided equally
    among the component members of such group on such December 31
    unless all of such component members consent (at such time and
    in such manner as the Secretary shall by regulations prescribe)
    to an apportionment plan providing for an unequal allocation of
    such amounts. The amounts specified in paragraph (2) shall be
    divided equally among the component members of such group on
    such December 31 unless the Secretary prescribes regulations
    permitting an unequal allocation of such amounts.
    Notwithstanding paragraph (1), in applying the last sentence of
    section 11(b)(1) to such component members, the taxable income
    of all such component members shall be taken into account and
    any increase in tax under such last sentence shall be divided
    among such component members in the same manner as amounts
    under paragraph (1).'', and
              (2) by striking ``ACCUMULATED EARNINGS CREDIT'' in
            the heading and inserting ``CERTAIN MULTIPLE TAX
            BENEFITS''.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.
      (e) Normalization Requirements.--
              (1) In general.--A normalization method of accounting
            shall not be treated as being used with respect to any
            public utility property for purposes of section 167 or
            168 of the Internal Revenue Code of 1986 if the
            taxpayer, in computing its cost of service for
            ratemaking purposes and reflecting operating results in
            its regulated books of account, reduces the tax reserve
            deficit less rapidly or to a lesser extent than such
            reserve would be reduced under the average rate
            assumption method.
              (2) Alternative method for certain taxpayers.--If, as
            of the first day of the taxable year that includes the
            date of enactment of this Act--
                      (A) the taxpayer was required by a regulatory
                    agency to compute depreciation for public
                    utility property on the basis of an average
                    life or composite rate method, and
                      (B) the taxpayer's books and underlying
                    records did not contain the vintage account
                    data necessary to apply the average rate
                    assumption method,
            the taxpayer will be treated as using a normalization
            method of accounting if, with respect to such
            jurisdiction, the taxpayer uses the alternative method
            for public utility property that is subject to the
            regulatory authority of that jurisdiction.
              (3) Definitions.--For purposes of this subsection--
                      (A) Tax reserve deficit.--The term ``tax
                    reserve deficit'' means the excess of--
                              (i) the amount which would be the
                            balance in the reserve for deferred
                            taxes (as described in section
                            168(i)(9)(A)(ii) of the Internal
                            Revenue Code of 1986, or section
                            167(l)(3)(G)(ii) of such Code as in
                            effect on the day before the date of
                            the enactment of the Tax Reform Act of
                            1986) if the amount of such reserve
                            were determined by assuming that the
                            corporate rate increases provided in
                            the amendments made by this section
                            were in effect for all prior periods,
                            over
                              (ii) the balance in such reserve as
                            of the day before such corporate rate
                            increases take effect.
                      (B) Average rate assumption method.--The
                    average rate assumption method is the method
                    under which the excess in the reserve for
                    deferred taxes is reduced over the remaining
                    lives of the property as used in its regulated
                    books of account which gave rise to the reserve
                    for deferred taxes. Under such method, if
                    timing differences for the property reverse,
                    the amount of the adjustment to the reserve for
                    the deferred taxes is calculated by
                    multiplying--
                              (i) the ratio of the aggregate
                            deferred taxes for the property to the
                            aggregate timing differences for the
                            property as of the beginning of the
                            period in question, by
                              (ii) the amount of the timing
                            differences which reverse during such
                            period.
                      (C) Alternative method.--The ``alternative
                    method'' is the method in which the taxpayer--
                              (i) computes the tax reserve deficit
                            on all public utility property included
                            in the plant account on the basis of
                            the weighted average life or composite
                            rate used to compute depreciation for
                            regulatory purposes, and
                              (ii) reduces the tax reserve deficit
                            ratably over the remaining regulatory
                            life of the property.
              (4) Treatment of normalization violation.--If, for
            any taxable year ending after the date of the enactment
            of this Act, the taxpayer does not use a normalization
            method of accounting, such taxpayer shall not be
            treated as using a normalization method of accounting
            for purposes of subsections (f)(2) and (i)(9)(C) of
            section 168 of the Internal Revenue Code of 1986.
              (5) Regulations.--The Secretary of the Treasury, or
            the Secretary's designee, shall issue such regulations
            or other guidance as may be necessary or appropriate to
            carry out this subsection, including regulations or
            other guidance to provide appropriate coordination
            between this subsection, section 13001(d) of Public Law
            115-97, and section 203(e) of the Tax Reform Act of
            1986.

            Subpart B--Limitations on Deduction for Interest Expense

    SEC. 138111. LIMITATIONS ON DEDUCTION FOR INTEREST EXPENSE.

      (a) Interest Expense of Certain Members of International
    Financial Reporting Groups.--Section 163 is amended by
    redesignating subsection (n) as subsection (p) and by inserting
    after subsection (m) the following new subsection:
      ``(n) Limitation on Deduction of Interest by Certain Members
    of International Financial Reporting Groups.--
              ``(1) In general.--In the case of any specified
            domestic corporation which is a member of any
            international financial reporting group, the deduction
            under this chapter for interest paid or accrued during
            the taxable year in excess of the amount of interest
            includible in the gross income of such corporation
            shall not exceed the allowable percentage of 110
            percent of such excess.
              ``(2) Specified domestic corporation.--For purposes
            of this subsection--
                      ``(A) In general.--The term `specified
                    domestic corporation' means any domestic
                    corporation other than--
                              ``(i) any corporation if the excess
                            of--
                                      ``(I) the average amount of
                                    interest paid or accrued by
                                    such corporation during the 3-
                                    taxable-year period ending with
                                    the taxable year to which
                                    paragraph (1) applies, over
                                      ``(II) the average amount of
                                    interest includible in the
                                    gross income of such
                                    corporation for such 3-taxable-
                                    year period,
                            does not exceed $12,000,000,
                              ``(ii) any corporation to which
                            paragraph (1) of section 163(j) does
                            not apply by reason of paragraph (3)
                            thereof (relating to exemption for
                            certain small businesses), and
                              ``(iii) any S corporation, real
                            estate investment trust, or regulated
                            investment company.
                      ``(B) Aggregation rule.--For purposes of
                    subparagraph (A)(i), all domestic corporations
                    which are members of the same international
                    financial reporting group shall be treated as a
                    single corporation.
              ``(3) International financial reporting group.--For
            purposes of this subsection--
                      ``(A) In general.--The term `international
                    financial reporting group' means, with respect
                    to any reporting year, two or more entities
                    if--
                              ``(i) either--
                                      ``(I) at least one entity is
                                    a foreign corporation engaged
                                    in a trade or business within
                                    the United States, or
                                      ``(II) at least one entity is
                                    a domestic corporation and
                                    another entity is a foreign
                                    corporation, and
                              ``(ii) such entities are included in
                            the same applicable financial statement
                            with respect to such year.
                      ``(B) Additional members.--
                              ``(i) In general.--To the extent
                            provided by the Secretary in
                            regulations or other guidance, the
                            specified domestic corporation referred
                            to in paragraph (1) may elect (at such
                            time and in such manner as the
                            Secretary may provide) for purposes of
                            this subsection to treat any eligible
                            corporation as a member of the
                            international financial reporting group
                            of which such specified domestic
                            corporation is a member if such
                            eligible corporation maintains (and
                            such specified domestic corporation has
                            access to) such books and records as
                            the Secretary determines are
                            satisfactory to allow for the
                            application of this subsection with
                            respect to such eligible corporation.
                            Any election under this clause shall
                            apply only with respect to the
                            specified domestic corporation which
                            makes such election.
                              ``(ii) Eligible corporation.--The
                            term `eligible corporation' means, with
                            respect to any international financial
                            reporting group, any corporation if at
                            least 20 percent of the stock of such
                            corporation (determined by vote and
                            value) is held (directly or indirectly)
                            by members of such international
                            financial reporting group (determined
                            without regard to this clause).
              ``(4) Allowable percentage.--For purposes of this
            subsection--
                      ``(A) In general.--The term `allowable
                    percentage' means, with respect to any
                    specified domestic corporation for any taxable
                    year, the ratio (expressed as a percentage and
                    not greater than 100 percent) of--
                              ``(i) such corporation's allocable
                            share of the international financial
                            reporting group's reported net interest
                            expense for the reporting year of such
                            group which ends in or with such
                            taxable year of such corporation, over
                              ``(ii) such corporation's reported
                            net interest expense for such reporting
                            year of such group.
                      ``(B) Reported net interest expense.--The
                    term `reported net interest expense' means--
                              ``(i) with respect to any
                            international financial reporting group
                            for any reporting year, the excess of--
                                      ``(I) the aggregate amount of
                                    interest expense reported in
                                    such group's applicable
                                    financial statements for such
                                    taxable year, over
                                      ``(II) the aggregate amount
                                    of interest income reported in
                                    such group's applicable
                                    financial statements for such
                                    taxable year, and
                              ``(ii) with respect to any specified
                            domestic corporation for any reporting
                            year, the excess of--
                                      ``(I) the amount of interest
                                    expense of such corporation
                                    reported in the books and
                                    records of the international
                                    financial reporting group which
                                    are used in preparing such
                                    group's applicable financial
                                    statements for such taxable
                                    year, over
                                      ``(II) the amount of interest
                                    income of such corporation
                                    reported in such books and
                                    records.
                      ``(C) Allocable share of reported net
                    interest expense.--With respect to any
                    specified domestic corporation which is a
                    member of any international financial reporting
                    group, such corporation's allocable share of
                    such group's reported net interest expense for
                    any reporting year is the portion of such
                    expense which bears the same ratio to such
                    expense as--
                              ``(i) the EBITDA of such corporation
                            for such reporting year, bears to
                              ``(ii) the EBITDA of such group for
                            such reporting year.
                      ``(D) EBITDA.--
                              ``(i) In general.--The term `EBITDA'
                            means, with respect to any reporting
                            year, earnings before interest income
                            and interest expense, taxes,
                            depreciation, depletion, and
                            amortization--
                                      ``(I) as determined in the
                                    international financial
                                    reporting group's applicable
                                    financial statements for such
                                    year, or
                                      ``(II) for purposes of
                                    subparagraph (A)(i), as
                                    determined in the books and
                                    records of the international
                                    financial reporting group which
                                    are used in preparing such
                                    statements if not determined in
                                    such statements.
                              ``(ii) Treatment of intra-group
                            distributions.--The EBITDA of any
                            specified domestic corporation shall be
                            determined without regard to any
                            distribution received by such
                            corporation from any other member of
                            the international financial reporting
                            group.
                      ``(E) Special rules for non-positive
                    ebitda.--
                              ``(i) Non-positive group ebitda.--In
                            the case of any international financial
                            reporting group the EBITDA of which is
                            zero or less, paragraph (1) shall not
                            apply to any specified domestic
                            corporation which is a member of such
                            group.
                              ``(ii) Non-positive entity ebitda.--
                            In the case of any specified domestic
                            corporation the EBITDA of which is zero
                            or less, the allowable percentage shall
                            be 0 percent.
              ``(5) Applicable financial statement.--For purposes
            of this subsection, the term `applicable financial
            statement' has the meaning given such term in section
            451(b)(3).
              ``(6) Reporting year.--For purposes of this
            subsection, the term `reporting year' means any year
            for which an applicable financial statement is prepared
            or required to be prepared.
              ``(7) Foreign corporations engaged in trade or
            business within the united states.--For purposes of
            this subsection, any foreign corporation engaged in a
            trade or business within the United States shall be
            treated as a domestic corporation with respect to any
            earnings, interest income and interest expense, or
            other amount, which is effectively connected with the
            conduct of a trade or business in the United States.
              ``(8) Regulations.--The Secretary may issue such
            regulations or other guidance as are necessary or
            appropriate to carry out the purposes of this
            subsection, including regulations or other guidance
            which--
                      ``(A) allows or requires the adjustment of
                    amounts reported on applicable financial
                    statements,
                      ``(B) allows or requires any corporation to
                    be included or excluded as a member of any
                    international financial reporting group for
                    purposes of any determination or calculation
                    under this subsection,
                      ``(C) provides rules for the application of
                    this subsection with respect to--
                              ``(i) a domestic corporation that is
                            a partner (directly or indirectly) in a
                            partnership, and
                              ``(ii) foreign corporation to which
                            this subsection applies by reason of
                            paragraph (7).''.
      (b) Modification of Application of Limitation on Business
    Interest to Partnerships and S Corporations.--Section 163(j)(4)
    is amended to read as follows:
              ``(4) Application to partnerships and s
            corporations.--In the case of any partnership or S
            corporation, this subsection shall be applied at the
            partner or shareholder level, respectively.''.
      (c) Carryforward of Disallowed Interest.--
              (1) In general.--Section 163 is amended by inserting
            after subsection (n), as added by subsection (a), the
            following new subsection:
      ``(o) Carryforward of Certain Disallowed Interest.--
              ``(1) In general.--The amount of any interest not
            allowed as a deduction for any taxable year by reason
            of subsection (j)(1) or (n)(1) (whichever imposes the
            lower limitation with respect to such taxable year)
            shall be treated as interest (and as business interest
            for purposes of subsection (j)(1)) paid or accrued in
            the succeeding taxable year.
              ``(2) Limitation on carryforward.--Interest paid or
            accrued in a taxable year beginning after December 31,
            2021 (determined without regard to paragraph (1)),
            shall not be carried forward under paragraph (1) past
            the fifth taxable year following the taxable year in
            which such interest was so paid or accrued. For
            purposes of the preceding sentence, interest shall be
            treated as allowed as a deduction on a first-in, first-
            out basis.''.
              (2) Conforming amendments.--
                      (A) Section 163(j)(2) is amended to read as
                    follows:
              ``(2) Carryforward cross-reference.--For carryforward
            treatment, see subsection (o).''.
                      (B) Section 381(c)(20) is amended to read as
                    follows:
              ``(20) Carryforward of disallowed interest.--The
            carryover of disallowed interest described in section
            163(o) to taxable years ending after the date of
            distribution or transfer.''.
                      (C) Section 382(d)(3) is amended to read as
                    follows:
              ``(3) Application to carryforward of disallowed
            interest.--The term `pre-change loss' shall include any
            carryover of disallowed interest described in section
            163(o) under rules similar to the rules of paragraph
            (1).''.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.
      (e) Transition Rule.--In the case of a partner's first
    succeeding taxable year described in subclause (II) of section
    163(j)(4)(B)(ii) of the Internal Revenue Code of 1986 (as in
    effect before the amendment made by subsection (b)) which
    begins after December 31, 2021, the amount of excess business
    interest which would (but for such amendment) be carried to
    such taxable year under such subclause shall be treated as
    interest (and as business interest for purposes of section
    163(j) of such Code, as amended by this section) paid or
    accrued in such taxable year. For carryover of any such
    interest disallowed for such taxable year, see section 163(o)
    of such Code, as amended by this section.

                  Subpart C--Outbound International Provisions

    SEC. 138121. MODIFICATIONS TO DEDUCTION FOR FOREIGN-DERIVED INTANGIBLE
                        INCOME AND GLOBAL INTANGIBLE LOW-TAXED INCOME.

      (a) In General.--Section 250(a) is amended to read as
    follows:
      ``(a) In General.--In the case of a domestic corporation for
    any taxable year, there shall be allowed as a deduction an
    amount equal to the sum of--
              ``(1) 21.875 percent of the foreign-derived
            intangible income of such domestic corporation for such
            taxable year, plus
              ``(2) 37.5 percent of--
                      ``(A) the global intangible low-taxed income
                    (if any) which is included in the gross income
                    of such domestic corporation under section 951A
                    for such taxable year, and
                      ``(B) the amount treated as a dividend
                    received by such corporation under section 78
                    which is attributable to the amount described
                    in subparagraph (A).''.
      (b) Deduction Taken Into Account in Determining Net Operating
    Loss Deduction.--Section 172(d) is amended by striking
    paragraph (9).
      (c) Certain Other Modifications.--
              (1) Section 250(b)(3) is amended--
                      (A) in subparagraph (A)(i)--
                              (i) by striking ``and'' at the end of
                            subclause (V),
                              (ii) by striking ``over'' at the end
                            of subclause (VI), and
                              (iii) by adding at the end the
                            following new subclauses:
                                      ``(VII) any income received
                                    or accrued which is of a kind
                                    which would be foreign personal
                                    holding company income (as
                                    defined in section 954(c)),
                                      ``(VIII) any amount included
                                    in the gross income of such
                                    corporation under section 1293,
                                    and
                                      ``(IX) any disqualified
                                    extraterritorial income,
                                    over'', and
                      (B) by adding at the end the following new
                    subparagraph:
                      ``(C) Disqualified extraterritorial income.--
                              ``(i) In general.--For purposes of
                            subparagraph (A)(i)(IX), the term
                            `disqualified extraterritorial income'
                            means any amount included in the gross
                            income of the corporation with respect
                            to any transaction for any taxable year
                            if any amount could (determined after
                            application of clause (ii) but without
                            regard to any election under section
                            942(a)(3) as in effect before its
                            repeal) be excluded from the gross
                            income of the corporation with respect
                            to such transaction for such taxable
                            year by reason of section 114 pursuant
                            to the application of subsection (d) or
                            (f) of section 101 of the American Jobs
                            Creation Act of 2004.
                              ``(ii) Election out of
                            extraterritorial income benefits.--
                                      ``(I) In general.--Except as
                                    provided in subclause (II), the
                                    corporation referred to in
                                    clause (i) may make an
                                    irrevocable election (at such
                                    time and in such form and
                                    manner as the Secretary may
                                    provide) to have subsections
                                    (d) and (f) of section 101 of
                                    the American Jobs Creation Act
                                    of 2004 not apply with respect
                                    to such corporation for the
                                    taxable year for which such
                                    election is made and all
                                    succeeding taxable years
                                    (applicable with respect to all
                                    transactions, including
                                    transactions occurring before
                                    such taxable year).
                                      ``(II) Expanded affiliated
                                    groups.--In the case of any
                                    corporation which is a member
                                    of an expanded affiliated
                                    group, the election described
                                    in subclause (I) may be made
                                    only by the common parent of
                                    such group and shall apply with
                                    respect to all members of such
                                    group. For purposes of the
                                    preceding sentence, the term
                                    `expanded affiliated group'
                                    means an affiliated group as
                                    defined in section 1504(a),
                                    determined without regard to
                                    section 1504(b)(3) and by
                                    substituting `more than 50
                                    percent' for `at least 80
                                    percent' each place it
                                    appears.''.
              (2) Section 613A(d)(1) is amended by striking ``and''
            at the end of subparagraph (D), by striking the period
            at the end of subparagraph (E) and inserting ``, and'',
            and by inserting after subparagraph (E) the following
            new subparagraph:
                      ``(F) any deduction allowable under section
                    250.''.
      (d) Effective Date.--
              (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall
            apply to taxable years beginning after December 31,
            2021.
              (2) Certain other modifications.--The amendments made
            by subsection (c) shall apply to taxable years
            beginning after December 31, 2017.
      (e) Transitional Rule for Accelerated Percentage Reduction.--
              (1) In general.--In the case of any taxable year
            which includes December 31, 2021 (other than a taxable
            year with respect to which such date is the last day of
            such taxable year)--
                      (A) the percentage in effect under section
                    250(a)(1)(A) of the Internal Revenue Code of
                    1986 shall be treated as being equal to the sum
                    of--
                              (i) the pre-effective date percentage
                            of 37.5 percent, plus
                              (ii) the post-effective date
                            percentage of 21.875 percent, and
                      (B) the percentage in effect under section
                    250(a)(1)(B) of such Code shall be treated as
                    being equal to the sum of--
                              (i) the pre-effective date percentage
                            of 50 percent, plus
                              (ii) the post-effective date
                            percentage of 37.5 percent.
              (2) Pre- and post-effective date percentages.--For
            purposes of this subsection, with respect to any
            taxable year--
                      (A) the term ``pre-effective date
                    percentage'' means the ratio that the portion
                    of such taxable year which precedes January 1,
                    2022, bears to the entire taxable year, and
                      (B) the term ``post-effective date
                    percentage'' means the ratio that the remainder
                    of such taxable year bears to the entire
                    taxable year.

    SEC. 138122. REPEAL OF ELECTION FOR 1-MONTH DEFERRAL IN DETERMINATION
                        OF TAXABLE YEAR OF SPECIFIED FOREIGN CORPORATIONS.

      (a) In General.--Section 898(c) is amended by striking
    paragraph (2) and redesignating paragraph (3) as paragraph (2).
      (b) Effective Date.--The amendments made by this section
    shall apply to taxable years of specified foreign corporations
    beginning after November 30, 2021.
      (c) Transition Rule.--A taxpayer's first taxable year
    beginning after November 30, 2021, shall end at the same time
    as the first required year (within the meaning of section
    898(c)(1) of the Internal Revenue Code of 1986) ending after
    such date.

    SEC. 138123. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO
                        CERTAIN TAXPAYERS RECEIVING SPECIFIC ECONOMIC
                        BENEFITS.

      (a) In General.--Section 901 is amended by redesignating
    subsection (n) as subsection (o) and by inserting after
    subsection (m) the following new subsection:
      ``(n) Special Rules Relating to Dual Capacity Taxpayers.--
              ``(1) General rule.--Notwithstanding any other
            provision of this chapter, any amount paid or accrued
            by a dual capacity taxpayer to a foreign country or
            possession of the United States for any period shall
            not be considered a tax--
                      ``(A) if, for such period, the foreign
                    country or possession does not impose a
                    generally applicable income tax, or
                      ``(B) to the extent such amount exceeds the
                    amount which would be paid or accrued by such
                    dual capacity taxpayer under the generally
                    applicable income tax imposed by such country
                    or possession if such taxpayer were not a dual
                    capacity taxpayer.
                    Nothing in this paragraph shall be construed to
                    imply the proper treatment of any such amount
                    not in excess of the amount determined under
                    subparagraph (B).
              ``(2) Dual capacity taxpayer.--For purposes of this
            subsection, the term `dual capacity taxpayer' means,
            with respect to any foreign country or possession of
            the United States, a person who--
                      ``(A) is subject to a levy of such country or
                    possession, and
                      ``(B) receives (or will receive) directly or
                    indirectly a specific economic benefit from
                    such country or possession.
              ``(3) Generally applicable income tax.--For purposes
            of this subsection, the term `generally applicable
            income tax' means an income tax (or a series of income
            taxes) which is generally imposed under the laws of a
            foreign country or possession of the United States on
            residents of such foreign country or possession that
            are not dual capacity taxpayers.''.
      (b) Effective Date.--The amendments made by this section
    shall apply to taxable years of foreign corporations beginning
    after December 31, 2021, and to taxable years of United States
    shareholders in which or with which such taxable years of
    foreign corporations end.

    SEC. 138124. MODIFICATIONS TO FOREIGN TAX CREDIT LIMITATIONS.

      (a) Country-by-country Application of Limitation on Foreign
    Tax Credit Based on Taxable Units.--
              (1) In general.--Section 904 is amended by inserting
            after subsection (d) the following new subsection:
      ``(e) Country-by-country Application Based on Taxable
    Units.--
              ``(1) In general.--The provisions of subsections (a),
            (b), (c), and (d) and sections 907 and 960 shall be
            applied separately with respect to each country by
            taking into account the aggregate income properly
            attributable or otherwise allocable to a taxable unit
            of the taxpayer which is a tax resident of such
            country.
              ``(2) Taxable units.--
                      ``(A) In general.--Except as otherwise
                    provided by the Secretary, each item shall be
                    attributable or otherwise allocable to exactly
                    one taxable unit of the taxpayer.
                      ``(B) Determination of taxable units.--Except
                    as otherwise provided by the Secretary, the
                    taxable units of a taxpayer are as follows:
                              ``(i) General taxable unit.--The
                            person that is the taxpayer and that is
                            not otherwise described in a separate
                            clause of this subparagraph.
                              ``(ii) Controlled foreign
                            corporations.--Each controlled foreign
                            corporation with respect to which the
                            taxpayer is a United States
                            shareholder.
                              ``(iii) Interests in pass-through
                            entities.--Each interest held (directly
                            or indirectly) by the taxpayer or any
                            controlled foreign corporation referred
                            to in clause (ii) in a pass-through
                            entity if such pass-through entity is a
                            tax resident of a country other than
                            the country with respect to which such
                            taxpayer or controlled foreign
                            corporation (as the case may be) is a
                            tax resident.
                              ``(iv) Branches.--Each branch (or
                            portion thereof) the activities of
                            which are directly or indirectly
                            carried on by the taxpayer or any
                            controlled foreign corporation referred
                            to in clause (ii) and which give rise
                            to a taxable presence in a country
                            other than the country in which the
                            taxpayer or any such controlled foreign
                            corporation (as the case may be) is a
                            tax resident.
              ``(3) Definitions and special rules.--For purposes of
            this subsection--
                      ``(A) Tax resident.--Except as otherwise
                    provided by the Secretary, the term `tax
                    resident' means a person or arrangement subject
                    to tax under the tax law of a country as a
                    resident, or a person or arrangement that gives
                    rise to a taxable presence by reason of its
                    activities in such country. If an entity is
                    organized under the law of a country, or
                    resident in a country, that does not impose an
                    income tax with respect to such entity, such
                    entity shall, except as provided by the
                    Secretary, be treated as subject to tax under
                    the tax law of such country for the purposes of
                    the preceding sentence.
                      ``(B) Pass-through entity.--Except as
                    otherwise provided by the Secretary, the term
                    `pass-through entity' includes any partnership
                    or other entity or arrangement to the extent
                    that income, gain, deduction, or loss of the
                    entity is taken into account in determining the
                    income or loss of a person that owns (directly
                    or indirectly) an interest in such entity.
                      ``(C) Branch.--Except as otherwise provided
                    by the Secretary, the term `branch' means a
                    taxable presence of a tax resident in a country
                    other than its country of residence as
                    determined under such other country's tax law.
                    The Secretary shall provide regulations or
                    other guidance applying such term to activities
                    in a country that does not subject income to
                    tax on the basis of residence or taxable
                    presence.
                      ``(D) Treatment of fiscally autonomous
                    jurisdictions.--Any fiscally autonomous
                    jurisdiction shall be treated as a separate
                    country. Any possession of the United States
                    shall also be treated as separate country. For
                    purposes of the preceding sentence, the term
                    `possession of the United States' means each of
                    American Samoa, the Commonwealth of the
                    Northern Mariana Islands, the Commonwealth of
                    Puerto Rico, Guam, and the Virgin Islands.
              ``(4) Regulations.--The Secretary shall issue such
            regulations or other guidance as may be necessary or
            appropriate to carry out, or prevent avoidance of, the
            purposes of this subsection, including regulations or
            other guidance--
                      ``(A) providing for the application of this
                    subsection to entities, arrangements, and
                    branches that are otherwise considered a
                    resident of more than one country or no
                    country,
                      ``(B) providing for the application of this
                    subsection to hybrid entities or hybrid
                    transactions (as such terms are used for
                    purposes of section 267A), pass-through
                    entities, passive foreign investment companies,
                    trusts, and other entities or arrangements not
                    otherwise described in this subsection, and
                      ``(C) providing for the assignment of any
                    item (including foreign taxes and deductions)
                    to taxable units, including in the case of
                    amounts not otherwise taken into account in
                    determining taxable income under this
                    chapter.''.
              (2) Application of recapture of overall foreign
            loss.--Section 904(f)(5)(E)(i) is amended by inserting
            ``applied separately with respect to each country
            (within the meaning of subsection (e)) as provided in
            subsection (e)'' before the period at the end.
              (3) Application of separate limitation losses with
            respect to global intangible low-taxed income.--Section
            904(f)(5) is amended by adding at the end the following
            new subparagraph:
                      ``(G) Special rule with respect to global
                    intangible low-taxed income.--The amount of the
                    separate limitation losses for any taxable year
                    shall reduce income described in subparagraph
                    (d)(1)(A) for such taxable year only to the
                    extent the aggregate amount of such losses
                    exceeds the aggregate amount of the separate
                    limitation incomes for such taxable year. For
                    purposes of this subparagraph, separate
                    limitation income shall exclude income
                    described in subparagraph (d)(1)(A) for the
                    taxable year.''.
      (b) Repeal of Separate Application to Foreign Branch
    Income.--
              (1) In general.--Section 904(d)(1) is amended by
            striking subparagraph (B) and redesignating
            subparagraphs (C) and (D) as subparagraph (B) and (C).
              (2) Coordination with deduction for foreign-derived
            intangible income.--Section 205(b)(3)(A) is amended--
                      (A) by striking subclause (VI) of clause (i)
                    and inserting the following new subclause:
                                      ``(VI) the income of a United
                                    States person which is
                                    attributable to 1 or more
                                    branches (which would be
                                    referred to in clause (iv) of
                                    section 904(e)(2)(B) if such
                                    clause were applied without
                                    regard to any reference to a
                                    controlled foreign corporation)
                                    or pass-through entities (which
                                    would be referred to in clause
                                    (iii) of section 904(e)(2)(B)
                                    if such clause were applied
                                    without regard to any reference
                                    to a controlled foreign
                                    corporation) in 1 or more
                                    foreign countries, over'', and
                      (B) by adding at the end the following flush
                    sentence:
                    ``For purposes of clause (i)(VI), the amount of
                    income attributable to a branch or pass-through
                    entity shall be determined under rules
                    established by the Secretary.''.
              (3) Conforming amendments.--
                      (A) Section 904(d)(2)(A)(ii) is amended by
                    striking ``, foreign branch income,''.
                      (B) Section 904(d)(2) is amended by striking
                    subparagraph (J).
      (c) Modification of Foreign Tax Credit Carryback and
    Carryforward.--
              (1) Carryover limited to 5 taxable years.--
                      (A) In general.--Section 904(c) is amended by
                    striking ``10 succeeding taxable years'' and
                    inserting ``5 succeeding taxable years''.
                      (B) Conforming amendment.--Section
                    6511(d)(3)(A) is amended by striking ``10
                    years'' and inserting ``5 years''.
              (2) Repeal of carryback.--Section 904(c) is amended--
                      (A) by striking ``in the first preceding
                    taxable year, and'',
                      (B) by striking ``preceding or'' each place
                    it appears, and
                      (C) by striking ``Carryback and'' in the
                    heading thereof.
              (3) Carryover applicable to tax on global intangible
            low-taxed income.--Section 904(c) is amended by
            striking the last sentence.
              (4) Application to limitation on foreign oil and gas
            taxes.--Section 907(f)(1) is amended--
                      (A) by striking ``in the first preceding
                    taxable year and'', and
                      (B) by striking ``first 10'' and inserting
                    ``first 5''.
      (d) Treatment of Certain Tax-exempt Dividends.--
              (1) Certain tax-exempt dividends taken into account
            in applying limitations on foreign tax credits.--
            Section 904(b) is amended by striking paragraph (4).
              (2) Certain tax-exempt dividends not taken into
            account in allocating interest expense.--Section
            864(e)(3) is amended by striking ``or 245(a)'' and
            inserting ``, 245(a), or 245A''.
      (e) Rules for Allocation of Certain Deductions to Foreign
    Source Global Intangible Low-taxed Income for Purposes of
    Foreign Tax Credit Limitation.--Section 904(b), as amended by
    the preceding provisions of this Act, is amended by adding at
    the end the following new paragraph:
              ``(4) Deductions treated as allocable to foreign
            source global intangible low-taxed income.--In the case
            of a domestic corporation and solely for purposes of
            the application of subsection (a) with respect to
            amounts described in subsection (d)(1)(A), the
            taxpayer's taxable income from sources without the
            United States shall be determined by--
                      ``(A) allocating any deduction allowed under
                    section 250 to such income, and
                      ``(B) by treating any expense of such
                    domestic corporation as not allocable to such
                    income.''.
      (f) Treatment of Certain Asset Dispositions.--Section 904(b),
    as amended by the preceding provisions of this Act, is amended
    by adding at the end the following new paragraph:
              ``(5) Treatment of certain asset dispositions.--
                      ``(A) In general.--Except as otherwise
                    provided by the Secretary, in the case of any
                    covered asset disposition, the principles of
                    section 338(h)(16) shall apply in determining
                    the source and character of any item for
                    purposes of this part.
                      ``(B) Covered asset disposition.--For
                    purposes of this paragraph, the term `covered
                    asset disposition' means any transaction
                    which--
                              ``(i) is treated as a disposition of
                            assets for purposes of subchapter N of
                            this chapter, and
                              ``(ii) is treated as a disposition of
                            stock of a corporation (or is
                            disregarded) for purposes of the tax
                            laws of the relevant foreign country or
                            possession of the United States.
                      ``(C) Regulations.--The Secretary shall issue
                    such regulations or other guidance as is
                    necessary or appropriate to carry out, or to
                    the prevent the avoidance of, the purposes of
                    this paragraph.''.
      (g) Redetermination of Foreign Taxes and Related Claims.--
              (1) In general.--Section 905(c)(1) is amended by
            striking ``or'' at the end of subparagraph (B) and by
            inserting after subparagraph (C) the following new
            subparagraphs:
                      ``(D) the taxpayer makes a timely change in
                    its choice to claim a credit or deduction for
                    taxes paid or accrued, or
                      ``(E) there is any other change in the
                    amount, or treatment, of taxes, which affects
                    the taxpayer's tax liability under this
                    chapter.''.
              (2) Modification to time for claiming credit or
            deduction.--Section 901(a) is amended by striking the
            second sentence and inserting the following: ``The
            choice to claim a credit for such amounts may be made
            at any time before the expiration of the period
            prescribed by section 6511(d)(3)(A), and the choice to
            claim a deduction in lieu of a credit may be made at
            any time before the expiration of the period prescribed
            by section 6511(a), for making a claim for refund or
            credit of the tax imposed by this chapter for such
            taxable year, or such later period prescribed by
            section 6511(c) if the period is extended by
            agreement.''.
              (3) Modification to special period of limitation.--
            Section 6511(d)(3)(A) is amended--
                      (A) by inserting ``change in the liability
                    for'' before ``any taxes paid or accrued'',
                      (B) by striking ``actually paid'' and
                    inserting ``paid (or deemed paid under section
                    960)'', and
                      (C) by inserting ``change in the liability
                    for'' before ``foreign taxes'' in the heading
                    thereof.
      (h) Effective Dates.--
              (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall
            apply to taxable years beginning after December 31,
            2021.
              (2) Modification of foreign tax credit carryback and
            carryforward.--Except as otherwise provided in
            paragraph (3), the amendments made by subsection (c)
            shall apply to taxes paid or accrued in taxable years
            beginning after December 31, 2021.
              (3) Certain modifications.--The amendment made by
            subsection (c)(4)(B) shall apply to taxable years of
            foreign corporations beginning after December 31, 2017,
            and to taxable years of United States shareholders in
            which or with which such taxable years of foreign
            corporations end.
              (4) Redetermination of foreign taxes and related
            claims.--The amendments made by subsection (g) shall
            take effect on the date which is 60 days after the date
            of the enactment of this Act.
      (i) Regulations.--The Secretary shall prescribe rules
    providing for the application of subsection (e) of section 904
    of the Internal Revenue Code of 1986, as added by this section,
    to any amounts carried over under subsection (c) of such
    section from a taxable year with respect to which such
    subsection (e) did not apply to a taxable year with respect to
    which such subsection (e) does apply.

    SEC. 138125. FOREIGN OIL AND GAS EXTRACTION INCOME AND FOREIGN OIL
                        RELATED INCOME TO INCLUDE OIL SHALE AND TAR SANDS.

      (a) In General.--Paragraphs (1)(A) and (2)(A) of section
    907(c) are each amended by inserting ``(or oil shale or tar
    sands)'' after ``oil or gas wells''.
      (b) Effective Date.--The amendments made by this section
    shall apply to taxable years of foreign corporations beginning
    after December 31, 2021, and to taxable years of United States
    shareholders in which or with which such taxable years of
    foreign corporations end.

    SEC. 138126. MODIFICATIONS TO INCLUSION OF GLOBAL INTANGIBLE LOW-TAXED
                        INCOME.

      (a) Country-by-country Application of Section Based on CFC
    Taxable Units.--Section 951A is amended by adding at the end
    the following new subsection:
      ``(g) Country-by-country Application of Section Based on CFC
    Taxable Units.--
              ``(1) In general.--If any CFC taxable unit of a
            United States shareholder is a tax resident of a
            country which is different from the country with
            respect to which any other CFC taxable unit of such
            United States shareholder is a tax resident--
                      ``(A) such shareholder's global intangible
                    low-taxed income for purposes of subsection (a)
                    shall be the sum of the amounts of global
                    intangible low-taxed income determined
                    separately with respect to each country with
                    respect to which any CFC taxable unit of such
                    shareholder is a tax resident, and
                      ``(B) for purposes of determining such
                    separate amounts of global intangible low-taxed
                    income--
                              ``(i) any reference in subsection
                            (b), (c), or (d) to a controlled
                            foreign corporation of such shareholder
                            shall be treated as reference to a CFC
                            taxable unit of such shareholder, and
                              ``(ii) net CFC tested income, net
                            deemed tangible income return,
                            qualified business asset investment,
                            interest expense described in
                            subsection (b)(2)(B), and such other
                            items and amounts as the Secretary may
                            provide, shall be determined separately
                            with respect to each such country by
                            determining such amounts with respect
                            to each CFC taxable unit of such
                            shareholder which is a tax resident of
                            such country.
              ``(2) Definitions.--For purposes of this subsection--
                      ``(A) CFC taxable unit.--The term `CFC
                    taxable unit' means any taxable unit described
                    clause (ii), (iii), or (iv) of section
                    904(e)(2)(B) (determined without regard to the
                    references to the taxpayer in clauses (iii) and
                    (iv) of such section).
                      ``(B) Application of other definitions.--
                    Terms used in this subsection which are also
                    used in section 904(e) shall have the same
                    meaning as when used in such section.
              ``(3) Special rules.--For purposes of this
            subsection--
                      ``(A) Application of certain rules.--Except
                    as otherwise provided by the Secretary, rules
                    similar to the rules of section 904(e) shall
                    apply.
                      ``(B) Allocation of global intangible low-
                    taxed income to controlled foreign
                    corporations.--Except as otherwise provided by
                    the Secretary, subsection (f)(2) shall be
                    applied separately with respect to each CFC
                    taxable unit.''.
      (b) Regulatory Authority.--
              (1) In general.--Section 951A, as amended by
            subsection (a), is amended by adding at the end the
            following new subsection:
      ``(h) Regulations.--The Secretary shall issue such
    regulations or other guidance as may be necessary or
    appropriate to carry out, or prevent the avoidance of, the
    purposes of this section, including regulations or guidance
    which provide for--
              ``(1) the treatment of property if such property is
            transferred, or held, temporarily,
              ``(2) the treatment of property if the avoidance of
            the purposes of this section is a factor in the
            transfer or holding of such property, and
              ``(3) appropriate adjustments to the basis of stock
            and other ownership interests, and to earnings and
            profits, to reflect tested losses.''.
              (2) Conforming amendment.--Section 951A(d) is amended
            by striking paragraph (4).
              (3) Additional regulatory authority.--Section
            951A(h), as added by paragraph (1), is amended by
            striking ``and'' at the end of paragraph (2), by
            striking the period at the end of paragraph (3) and
            inserting a comma, and by adding at the end the
            following new paragraphs:
              ``(4) rules similar to the rules provided under the
            regulations or guidance issued under section 904(e)(5),
              ``(5) appropriate basis adjustments, and
              ``(6) appropriate adjustment to made, and appropriate
            tax attributes and records to be maintained, separately
            with respect to CFC taxable units.''.
      (c) Carryover of Net CFC Tested Loss.--
              (1) In general.--Section 951A(c) is amended by adding
            at the end the following new paragraph:
              ``(3) Carryover of net cfc tested loss.--
                      ``(A) In general.--If the amount described in
                    paragraph (1)(B) with respect to any United
                    States shareholder for any taxable year of such
                    United States shareholder (determined after the
                    application of this paragraph) exceeds the
                    amount described in paragraph (1)(A) with
                    respect to such shareholder of such taxable
                    year, the amount otherwise described in
                    paragraph (1)(B) with respect to such
                    shareholder for the succeeding taxable year
                    shall be increased by the amount of such
                    excess.
                      ``(B) Proper adjustment in allocations of
                    global intangible low-taxed income to
                    controlled foreign corporations.--Proper
                    adjustments shall be made in the application of
                    subsection (f)(2)(B) to take into account any
                    decrease in global intangible low-taxed income
                    by reason of the application of subparagraph
                    (A).''.
              (2) Coordination with country-by-country
            application.--Section 951A(g)(1)(B)(ii), as added by
            subsection (a), is amended by inserting ``any increase
            determined under subsection (c)(3)(A),'' after
            ``interest expense described in subsection
            (b)(2)(B),''.
              (3) Application of rules with respect to ownership
            changes.--Section 382(d) is amended by adding at the
            end the following new paragraph:
              ``(4) Application to carryover of net cfc tested
            loss.--The term `pre-change loss' shall include any
            excess carried over under section 951A(c)(3) under
            rules similar to the rules of paragraph (1).''.
      (d) Reduction in Net Deemed Tangible Income Return for
    Purposes of Determining Global Intangible Low-taxed Income.--
              (1) In general.--Section 951A(b)(2)(A) is amended by
            striking ``10 percent'' and inserting ``5 percent''.
              (2) Application to assets located in possessions of
            the united states.--Section 951A(b) is amended by
            adding at the end the following new paragraph:
              ``(3) Application to assets located in possessions of
            the united states.--In the case of any specified
            tangible property located in a possession of the United
            States, paragraph (2)(A) and subsection (d) shall be
            applied by substituting `10 percent' for `5 percent' in
            paragraph (2)(A).''.
      (e) Inclusion of Foreign Oil and Gas Extraction Income in
    Determining Tested Income and Loss.--Section 951A(c)(2)(A) is
    amended by inserting ``and'' at the end of subclause (III), by
    striking ``and'' at the end of subclause (IV) and inserting
    ``over'', and by striking subclause (V).
      (f) Coordination With Other Provisions.--Section 951A(f)(1)
    is amended by adding at the end the following new subparagraph:
                      ``(C) Treatment of certain references.--
                    Except as otherwise provided by the Secretary,
                    references to section 951 or section 951(a) in
                    sections 959, 961, 962 and such other sections
                    as the Secretary may identify shall include
                    references to section 951A or section 951A(a),
                    respectively.''.
      (g) Effective Date.--
              (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall
            apply to taxable years of foreign corporations
            beginning after December 31, 2021, and to taxable years
            of United States shareholders in which or with which
            such taxable years of foreign corporations end.
              (2) Certain related modifications.--The amendments
            made by subsections (b)(1), (b)(2), and (f) shall apply
            to taxable years of foreign corporations beginning
            after December 31, 2017, and to taxable years of United
            States shareholders in which or with which such taxable
            years of foreign corporations end.

    SEC. 138127. MODIFICATIONS TO DETERMINATION OF DEEMED PAID CREDIT FOR
                        TAXES PROPERLY ATTRIBUTABLE TO TESTED INCOME.

      (a) Increase in Deemed Paid Credit.--Section 960(d)(1) is
    amended by striking ``80 percent'' and inserting ``95 percent
    (100 percent in the case of tested foreign income taxes paid or
    accrued to a possession of the United States)''.
      (b) Inclusion of Taxes Properly Attributable to Tested
    Loss.--Section 960(d)(3) is amended to read as follows:
              ``(3) Tested foreign income taxes.--For purposes of
            paragraph (1), the term `tested foreign income taxes'
            means, with respect to any domestic corporation which
            is a United States shareholder of a controlled foreign
            corporation, such shareholder's pro rata share (as
            determined under section 951A(e)(1)) of--
                      ``(A) the foreign income taxes (within the
                    meaning of section 904(d)(2)(F)) which are
                    properly attributable to amounts taken into
                    account in determining tested income or tested
                    loss under section 951A(b)(2), and
                      ``(B) solely to the extent provided in
                    regulations prescribed by the Secretary, the
                    foreign income taxes (as so defined) paid or
                    accrued by a foreign corporation (other than
                    such controlled foreign corporation) which
                    owns, directly or indirectly, 80 percent or
                    more (by vote or value) of the stock in such
                    domestic corporation but only if--
                              ``(i) such foreign income taxes are
                            properly attributable to amounts of
                            such controlled foreign corporation
                            taken into account in determining
                            tested income or tested loss under
                            section 951A(b)(2), and
                              ``(ii) no credit is allowed, in whole
                            or in part, for such foreign taxes in
                            any foreign jurisdiction.''.
      (c) Application of Foreign Tax Credit Limitation to Amounts
    Included Under Section 78.--
              (1) Section 904(d)(2) is amended by redesignating
            subparagraph (K) as subparagraph (L) and by inserting
            after subparagraph (J) the following new subparagraph:
                      ``(K) Amounts includible under section 78.--
                    Any amount includible in gross income under
                    section 78 shall be treated as income in the
                    same separate category as the related foreign
                    taxes deemed paid.''.
              (2) Section 904(d)(3)(G) is amended by striking the
            second sentence and inserting the following: ``Any
            amount included in gross income under section 78 shall
            not be treated as a dividend.''.
      (d) Effective Date.--
              (1) In general.--Except as provided in paragraph (2),
            the amendments made by this section shall apply to
            taxable years of foreign corporations beginning after
            December 31, 2021, and to taxable years of United
            States shareholders in which or with which such taxable
            years of foreign corporations end.
              (2) Application of foreign tax credit limitation to
            amounts included under section 78.--The amendments made
            by subsection (c) shall apply to taxable years
            beginning after December 31, 2017.

    SEC. 138128. DEDUCTION FOR FOREIGN SOURCE PORTION OF DIVIDENDS LIMITED
                        TO CONTROLLED FOREIGN CORPORATIONS, ETC.

      (a) In General.--Section 245A is amended--
              (1) in subsections (a), (c)(1), and (c)(2), by
            striking ``specified 10-percent owned foreign
            corporation'' each place it appears and inserting
            ``controlled foreign corporation'', and
              (2) by striking subsection (b).
      (b) Modifications Related to Determination of Status as a
    Controlled Foreign Corporation.--
              (1) Subpart F of part III of subchapter N of chapter
            1 is amended by inserting after section 951A the
            following new section:

    ``SEC. 951B. AMOUNTS INCLUDED IN GROSS INCOME OF FOREIGN CONTROLLED
                        UNITED STATES SHAREHOLDERS.

      ``(a) In General.--In the case of any foreign controlled
    United States shareholder of a foreign controlled foreign
    corporation--
              ``(1) this subpart (other than sections 951A, 951(b),
            957, and 965) shall be applied with respect to such
            shareholder (separately from, and in addition to, the
            application of this subpart without regard to this
            section)--
                      ``(A) by substituting `foreign controlled
                    United States shareholder' for `United States
                    shareholder' each place it appears therein, and
                      ``(B) by substituting `foreign controlled
                    foreign corporation' for `controlled foreign
                    corporation' each place it appears therein, and
              ``(2) sections 951A and 965 shall be applied with
            respect to such shareholder --
                      ``(A) by treating each reference to `United
                    States shareholder' in such sections as
                    including a reference to such shareholder, and
                      ``(B) by treating each reference to
                    `controlled foreign corporation' in such
                    sections as including a reference to such
                    foreign controlled foreign corporation.
      ``(b) Foreign Controlled United States Shareholder.--For
    purposes of this section, the term `foreign controlled United
    States shareholder' means, with respect to any foreign
    corporation, any United States person which would be a United
    States shareholder with respect to such foreign corporation
    if--
              ``(1) section 951(b) were applied by substituting
            `more than 50 percent' for `10 percent or more', and
              ``(2) section 958(b) were applied without regard to
            paragraph (4) thereof.
      ``(c) Foreign Controlled Foreign Corporation.--For purposes
    of this section, the term `foreign controlled foreign
    corporation' means a foreign corporation, other than a
    controlled foreign corporation, which would be a controlled
    foreign corporation if section 957(a) were applied--
              ``(1) by substituting `foreign controlled United
            States shareholders' for `United States shareholders',
            and
              ``(2) by substituting `section 958(b) (other than
            paragraph (4) thereof)' for `section 958(b)'.
      ``(d) 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--
              ``(1) to treat a foreign controlled United States
            shareholder or a foreign controlled foreign corporation
            as a United States shareholder or as a controlled
            foreign corporation, respectively, for purposes of
            provisions of this title other than this subpart, and
              ``(2) to prevent the avoidance of the purposes of
            this section.''.
              (2) Section 957(a) is amended to read as follows:
      ``(a) Controlled Foreign Corporation.--For purposes of this
    title--
              ``(1) In general.--The term `controlled foreign
            corporation' means any foreign corporation if more than
            50 percent of--
                      ``(A) the total combined voting power of all
                    classes of stock of such corporation entitled
                    to vote, or
                      ``(B) the total value of the stock of such
                    corporation,
            is owned (within the meaning of section 958(a)), or is
            considered as owned by applying the rules of ownership
            of section 958(b), by United States shareholders on any
            day during the taxable year of such foreign
            corporation.
              ``(2) Election to treat a foreign corporation as a
            controlled foreign corporation for certain purposes.--
                      ``(A) In general.--In the case of a foreign
                    corporation with respect to which an election
                    is in effect under this paragraph, such foreign
                    corporation shall be treated as controlled
                    foreign corporation with respect to all United
                    States shareholders of such foreign
                    corporation.
                      ``(B) Exceptions.--Notwithstanding
                    subparagraph (A), such foreign corporation
                    shall not be treated as a controlled foreign
                    corporation for purposes of section 951B(c) or
                    for any other purpose if the Secretary
                    determines that treatment of such foreign
                    corporation as a controlled foreign corporation
                    for such purpose would be inconsistent with the
                    purposes of this subchapter.
                      ``(C) Election.--
                              ``(i) By whom.--An election under
                            subparagraph (A) shall be effective
                            only if made by the foreign corporation
                            and by all United States shareholders
                            of such foreign corporation (determined
                            as of the time of such election by such
                            foreign corporation).
                              ``(ii) With respect to whom.--Any
                            election under this paragraph, once
                            effective, shall apply to such foreign
                            corporation and to all United States
                            shareholders of such foreign
                            corporation (including any person who
                            becomes a United States shareholder of
                            such foreign corporation after such
                            election takes effect).
                              ``(iii) Time, manner, etc.--The
                            election under this paragraph shall be
                            made at such time and in such manner as
                            the Secretary may provide and, once
                            effective, may be revoked only with the
                            consent of the Secretary.
                      ``(D) Regulations.--The Secretary shall issue
                    such regulations or other guidance as may be
                    necessary or appropriate to carry out the
                    purposes of this paragraph, including
                    regulations or other guidance for the
                    application of this paragraph to an acquisition
                    of assets described in section 381(a) from any
                    corporation with respect to which an election
                    under this paragraph applies.''.
              (3) Section 958(b) is amended--
                      (A) by inserting after paragraph (3) the
                    following:
              ``(4) Subparagraphs (A), (B), and (C) of section
            318(a)(3) shall not be applied so as to consider a
            United States person as owning stock which is owned by
            a person who is not a United States person.'', and
                      (B) by striking ``Paragraph (1)'' in the last
                    sentence and inserting ``Paragraphs (1) and
                    (4)''.
              (4) The table of sections for subpart F of part III
            of subchapter N of chapter 1 is amended by inserting
            after the item relating to section 951A the following
            new item:

    ``Sec. 951B. Amounts included in gross income of foreign controlled
              United States shareholders.''.
      (c) Certain Other Modifications.--
              (1) Section 245A(b)(1) is amended by striking ``with
            respect to such corporation''.
              (2) Section 245A(e)(4) is amended by striking ``an
            amount received'' and all that follows through ``for
            which the controlled foreign corporation received a
            deduction'' and inserting ``any dividend received from
            a controlled foreign corporation for which such
            controlled foreign corporation received a deduction''.
              (3) Section 245A(e)(1) is amended--
                      (A) by striking ``any dividend'' and
                    inserting ``any hybrid dividend'', and
                      (B) by striking ``if the dividend is a hybrid
                    dividend''.
              (4) Section 245A(g) is amended to read as follows:
      ``(g) Regulations.--The Secretary shall prescribe such
    regulations or other guidance as may be necessary or
    appropriate to carry out the provisions of this section,
    including regulations or other guidance for--
              ``(1) the treatment of United States shareholders
            owning stock of a controlled foreign corporation
            through a partnership, and
              ``(2) the denial of all or a portion of the deduction
            under this section with respect to dividends received
            from foreign corporations in situations in which--
                      ``(A) any portion of the dividend is out of
                    earnings and profits arising from dispositions
                    to related parties which--
                              ``(i) are not made in the ordinary
                            course of a trade or business, and
                              ``(ii) are made on or after January
                            1, 2018, and during a taxable year to
                            which section 951A did not apply, or
                      ``(B) a transfer or issuance of stock on or
                    after January 1, 2018, results in a reduction
                    in the United States shareholder's pro rata
                    share of a controlled foreign corporation's
                    subpart F income or tested income (as defined
                    in section 951A).''.
              (5) Section 246(b)(1) is amended to read as follows:
              ``(1) General rule.--Except as provided in paragraph
            (2), the aggregate amount of the deductions allowed by
            section 243(a)(1) and subsection (a) and (b) of section
            245 shall not exceed the percentage determined under
            paragraph (3) of the taxable income computed without
            regard to the deductions allowed by section 172,
            section 243(a)(1), subsections (a) and (b) of section
            245, and section 250, without regard to any adjustment
            under section 1059, and without regard to any capital
            loss carryback to the taxable year under section
            1212(a)(1).''.
              (6) Section 246(c)(1) is amended by striking
            ``section 243'' and all that follows through ``245A''
            and inserting ``section 243, 245, or 245A''.
              (7) For purposes of section 78 of the Internal
            Revenue Code of 1986, as in effect on the day before
            the enactment of Public Law 115-97, with respect to
            taxable years of foreign corporations beginning before
            January 1, 2018, and ending after December 31, 2017,
            any reference to section 245 of such Code shall be
            treated as including a reference to section 245A of
            such Code (as added by such Public Law).
      (d) Effective Dates.--
              (1) In general.--The amendment made by subsection (a)
            shall apply to distributions made after the date of the
            enactment of this Act.
              (2) Modifications related to determination of status
            as a controlled foreign corporation.--The amendments
            made by subsection (b) shall apply to--
                      (A) the last taxable year of foreign
                    corporations beginning before January 1, 2018,
                    and each subsequent taxable year of such
                    foreign corporations, and
                      (B) taxable years of United States persons in
                    which or with which such taxable years of
                    foreign corporations end.
              (3) Certain other modifications.--The amendments made
            by subsection (c) shall apply to distributions made
            after December 31, 2017.

    SEC. 138129. LIMITATION ON FOREIGN BASE COMPANY SALES AND SERVICES
                        INCOME.

      (a) Foreign Base Company Sales Income.--Section 954(d)(2) is
    amended to read as follows:
              ``(2) Limitation.--
                      ``(A) In general.--For purposes of this
                    subsection, the term `related person' shall not
                    include any person unless such person is a
                    taxable unit (within the meaning of section
                    904(e)) which is a tax resident of the United
                    States.
                      ``(B) Regulations.--The Secretary shall issue
                    such regulations or other guidance as may be
                    necessary or appropriate to carry out the
                    purposes of this paragraph, including
                    regulations or other guidance providing for the
                    proper application of subparagraph (A) in the
                    case of a series of transactions in which a
                    person described in subparagraph (A) is a
                    party.''.
      (b) Foreign Base Company Services Income.--Section
    954(e)(1)(A) is amended by striking ``subsection (d)(3)'' and
    inserting ``subsection (d)''.
      (c) Certain Other Modifications.--
              (1)(A) Section 951(a)(1) is amended--
                      (i) by striking ``the last day'' in the
                    matter preceding subparagraph (A) and inserting
                    ``any day'',
                      (ii) by striking ``his'' each place it
                    appears and inserting ``such shareholder's'',
                    and
                      (iii) by inserting ``if such shareholder owns
                    (within the meaning of section 958(a)) stock of
                    such foreign corporation as of the close of the
                    last relevant day of such foreign corporation's
                    taxable year,'' before ``the amount'' in
                    subparagraph (B).
              (B) Section 951(a) is amended by striking paragraph
            (2) and inserting the following new paragraphs:
              ``(2) Pro rata share of subpart f income.--In the
            case of any United States shareholder with respect to a
            foreign corporation, the pro rata share referred to in
            paragraph (1)(A) is the sum of--
                      ``(A) if such shareholder owns (within the
                    meaning of section 958(a)) stock of such
                    foreign corporation as of the close of the last
                    relevant day of such foreign corporation's
                    taxable year, such shareholder's general pro
                    rata share determined under paragraph (3), plus
                      ``(B) if such shareholder owns (within the
                    meaning of section 958(a)) stock of such
                    foreign corporation during such taxable year
                    but does not own (within the meaning of section
                    958(a)) such stock as of the close of such last
                    relevant day, such shareholder's nontaxed
                    current dividend share determined under
                    paragraph (4).
              ``(3) General pro rata share.--
                      ``(A) In general.--In the case of any United
                    States shareholder with respect to a foreign
                    corporation, the general pro rata share
                    determined under this paragraph is the excess
                    (if any) of--
                              ``(i) the pro rata current earnings
                            percentage of the amount which bears
                            the same ratio to such corporation's
                            subpart F income for the taxable year
                            (reduced by the aggregate nontaxed
                            current dividend shares determined
                            under paragraph (4) with respect to
                            such shareholder or any other United
                            States shareholder) as the part of such
                            year during which such corporation is a
                            controlled foreign corporation bears to
                            the entire year, over
                              ``(ii) the lesser of--
                                      ``(I) the amount of any pre-
                                    holding period dividends with
                                    respect to stock of such
                                    foreign corporation which such
                                    shareholder owns (within the
                                    meaning of section 958(a)) as
                                    of the close of the last
                                    relevant day of such foreign
                                    corporation's taxable year, or
                                      ``(II) the amount which bears
                                    the same ratio to the subpart F
                                    income of such corporation for
                                    the taxable year (reduced by
                                    the aggregate nontaxed current
                                    dividend shares determined
                                    under paragraph (4) with
                                    respect to such shareholder or
                                    any other United States
                                    shareholder) as the part of
                                    such year during which such
                                    shareholder did not own (within
                                    the meaning of section 958(a))
                                    such stock bears to the entire
                                    year.
                      ``(B) Pro rata current earnings percentage.--
                    For purposes of subparagraph (A)(i), the term
                    `pro rata current earnings percentage' means,
                    in the case of any United States shareholder
                    with respect to a foreign corporation for any
                    taxable year of such foreign corporation, the
                    ratio (expressed as a percentage) of--
                              ``(i) the amount which would have
                            been distributed with respect to the
                            stock which such shareholder owns
                            (within the meaning of section 958(a))
                            in such corporation if on the last
                            relevant day of such taxable year it
                            had distributed its earnings and
                            profits for such taxable year (computed
                            as of the close of such taxable year
                            without diminution by reason of any
                            distributions made during such taxable
                            year), divided by
                              ``(ii) such corporation's earnings
                            and profits for such taxable year (as
                            so computed).
                      ``(C) Pre-holding period dividends.--For
                    purposes of subparagraph (A)(ii)(I), the term
                    `pre-holding period dividends' means, in the
                    case of any United States shareholder with
                    respect to a foreign corporation for any
                    taxable year of such foreign corporation,
                    dividends which are--
                              ``(i) made out of such corporation's
                            earnings and profits for the taxable
                            year (other than nontaxed current
                            dividends as defined in paragraph
                            (4)(C)), and
                              ``(ii) received--
                                      ``(I) by any other United
                                    States person with respect to
                                    stock of such foreign
                                    corporation which such
                                    shareholder owns (within the
                                    meaning of section 958(a)) as
                                    of the close of the last
                                    relevant day of such foreign
                                    corporation's taxable year, and
                                      ``(II) while such foreign
                                    corporation was a controlled
                                    foreign corporation and before
                                    such shareholder owned (within
                                    the meaning of section 958(a))
                                    such stock.
              ``(4) Nontaxed current dividend share.--
                      ``(A) In general.--In the case of any United
                    States shareholder with respect to a foreign
                    corporation, the nontaxed current dividend
                    share determined under this paragraph is the
                    nontaxed current dividend percentage of the
                    subpart F income of such foreign corporation
                    for the taxable year.
                      ``(B) Nontaxed current dividend percentage.--
                    For purposes of this paragraph, the term
                    `nontaxed current dividend percentage' means,
                    in the case of any United States shareholder
                    with respect to a foreign corporation for any
                    taxable year of such foreign corporation, the
                    ratio (expressed as a percentage) of--
                              ``(i) the amount of nontaxed current
                            dividends with respect to such taxable
                            year received with respect to the stock
                            of such foreign corporation which such
                            shareholder owns (within the meaning of
                            section 958(a)) at the time of the
                            dividend on a day in which such
                            corporation is a controlled foreign
                            corporation, divided by
                              ``(ii) such foreign corporation's
                            earnings and profits for such taxable
                            year (computed as of the close of such
                            taxable year without diminution by
                            reason of any distributions made during
                            such taxable year).
                      ``(C) Nontaxed current dividends.--For
                    purposes of this paragraph, the term `nontaxed
                    current dividends' means the portion of any
                    amount received with respect to stock to the
                    extent such amount (without regard to amounts
                    included in the gross income of a United States
                    shareholder for the taxable year by reason of
                    this subpart)--
                              ``(i) would result in a dividend out
                            of the corporation's earnings and
                            profits for the taxable year (including
                            a dividend under section 1248
                            attributable to earnings and profits
                            for the taxable year), and
                              ``(ii) either--
                                      ``(I) would give rise to a
                                    deduction under section
                                    245A(a), or
                                      ``(II) in the case of a
                                    dividend paid directly or
                                    indirectly to a controlled
                                    foreign corporation with
                                    respect to stock owned by the
                                    shareholder within the meaning
                                    of section 958(a)(2), would not
                                    result in subpart F income with
                                    respect to such controlled
                                    foreign corporation by reason
                                    of subsection (b)(4), (c)(3),
                                    or (c)(6) of section 954.
                            Any amount treated as the foreign-
                            source portion of a dividend under
                            section 245A(g) shall be treated as
                            nontaxed current dividends for purposes
                            of this paragraph.
              ``(5) Last relevant day of taxable year of a
            controlled foreign corporation.--For purposes of this
            subsection, the term `last relevant day' means, with
            respect to any taxable year of a foreign corporation,
            the last day of such taxable year on which such
            corporation is a controlled foreign corporation.
              ``(6) Regulations.--The Secretary may prescribe such
            regulations or other guidance as may be necessary or
            appropriate to carry out the purposes of this
            subsection, including regulations or other guidance--
                      ``(A) to treat a partnership as an aggregate
                    of its partners,
                      ``(B) to provide rules allowing a foreign
                    corporation to close its taxable year upon a
                    change in ownership, and
                      ``(C) to treat a distribution followed by an
                    issuance of stock to a shareholder not subject
                    to tax under this chapter in the same manner as
                    an acquisition of stock.''.
              (C) Section 951A(e)(1) is amended by striking
            ``determined under the rules of section 951(a)(2) in
            the same manner as such section applies to subpart F
            income'' and inserting ``determined under rules similar
            to the rules of section 951(a)(2)''.
              (D) Section 951A(e)(2) is amended to read as follows:
              ``(2) Treatment as united states shareholder.--A
            person shall be treated as a United States shareholder
            of a controlled foreign corporation for any taxable
            year of such person if such person--
                      ``(A) is a United States shareholder of such
                    foreign corporation on any day in such taxable
                    year, and
                      ``(B) owns (within the meaning of section
                    958(a)) stock in such foreign corporation on
                    any day in such taxable year which is part of a
                    taxable year of such foreign corporation with
                    respect to which such foreign corporation is a
                    controlled foreign corporation.''.
              (E) Section 953(c)(5)(A)(i) is amended--
                      (i) in subclause (I), by adding ``and'' at
                    the end,
                      (ii) in subclause (II)--
                              (I) by striking ``on the last day of
                            the taxable year'' and inserting
                            ``during the taxable year'', and
                              (II) by striking ``and'' at the end
                            and inserting ``or'', and
                      (iii) by striking subclause (III).
              (2) Section 78 is amended by striking ``, (b),''.
      (d) Certain Related Prospective Modifications.--Section
    961(c) is amended--
              (1) by striking ``Basis Adjustments in'' in the
            heading of such subsection and inserting ``Application
            of Rules to'', and
              (2) by striking ``then adjustments similar to'' and
            all that follows in such subsection and inserting
            ``then rules similar to the rules of subsections (a)
            and (b) shall apply to--
              ``(1) such stock,
              ``(2) stock in any other controlled foreign
            corporation by reason of which the United States
            shareholder is considered under section 958(a)(2) as
            owning the stock described in paragraph (1), and
              ``(3) property by reason of which the United States
            shareholder is considered as owning stock described in
            paragraph (1) or (2).
    The preceding sentence shall not apply with respect to any
    stock or property to which subsection (a) or (b) applies.''.
      (e) Effective Dates.--
              (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall
            apply to taxable years of foreign corporations
            beginning after December 31, 2021, and to taxable years
            of United States shareholders in which or with which
            such taxable years of foreign corporations end.
              (2) Certain other modifications.--
                      (A) The amendments made by subsection (c)(1)
                    shall apply to distributions made after
                    December 31, 2017.
                      (B) The amendment made by subsection (c)(2)
                    apply to taxable years of foreign corporations
                    beginning after December 31, 2017, and to
                    taxable years of United States shareholders in
                    which or with which such taxable years of
                    foreign corporations end.

                  Subpart D--Inbound International Provisions

    SEC. 138131. MODIFICATIONS TO BASE EROSION AND ANTI-ABUSE TAX.

      (a) Modifications to Base Erosion Minimum Tax Amount.--
              (1) Modification of rates.--Section 59A(b)(1)(A) is
            amended by striking ``10 percent (5 percent in the case
            of taxable years beginning in calendar year 2018)'' and
            inserting ``the applicable percentage''.
              (2) Base erosion minimum tax amount determined
            without regard to credits.--Section 59A(b)(1)(B) is
            amended to read as follows:
                      ``(B) an amount equal to the regular tax
                    liability (as defined in section 26(b)) of the
                    taxpayer for the taxable year.''.
              (3) Applicable percentage.--Section 59A(b)(2) is
            amended to read as follows:
              ``(2) Applicable percentage.--For purposes of this
            subsection, the term applicable percentage means--
                      ``(A) in the case of any taxable year
                    beginning after December 31, 2021, and before
                    January 1, 2024, 10 percent,
                      ``(B) in the case of any taxable year
                    beginning after December 31, 2023, and before
                    January 1, 2026, 12.5 percent, and
                      ``(C) in the case of any taxable year
                    beginning after December 31, 2025, 15
                    percent.''.
              (4) Taxpayers subject to rules for banks and
            securities dealers.--Section 59A(b)(3)(B) is amended to
            read as follows:
                      ``(B) Taxpayer described.--A taxpayer is
                    described in this subparagraph if such taxpayer
                    is--
                              ``(i) a bank (as defined in section
                            585(a)(2)),
                              ``(ii) a securities dealer registered
                            under section 15(a) of the Securities
                            Exchange Act of 1934, or
                              ``(iii) a member of an affiliated
                            group (as defined in section
                            1504(a)(1), determined without regard
                            to section 1504(b)(3)) which includes
                            any person described in clause (i) or
                            (ii).''.
              (5) General business credit allowed against base
            erosion and anti-abuse tax.--Section 38(c)(1) is
            amended by striking ``the tax imposed by section 55''
            and inserting ``the taxes imposed by sections 55 and
            59A''.
              (6) Conforming amendments.--
                      (A) Section 59A(b)(3)(A) is amended by
                    striking ``paragraphs (1)(A) and (2)(A) shall
                    each'' and inserting ``paragraph (2) shall''.
                      (B) Section 59A(b) is amended by striking
                    paragraph (4).
      (b) Modification of Rules for Determining Modified Taxable
    Income.--
              (1) In general.--Section 59A(c) is amended to read as
            follows:
      ``(c) Modified Taxable Income.--For purposes of this
    section--
              ``(1) In general.--The term `modified taxable income'
            means the taxable income of the taxpayer computed under
            this chapter for the taxable year with the following
            adjustments:
                      ``(A) Base erosion tax benefits.--Any base
                    erosion tax benefit shall be determined without
                    regard to any base erosion payment described in
                    paragraphs (1) through (4) of subsection (d),
                    including for purposes of determining the
                    adjusted basis of property described in
                    subsection (d)(2).
                      ``(B) Base erosion basis adjustments with
                    respect to cost of goods sold.--Cost of goods
                    sold shall be determined without regard to any
                    base erosion payment described in subparagraph
                    (A) or (B) of subsection (d)(5).
                      ``(C) Net operating losses.--The net
                    operating loss deduction for the taxable year
                    under section 172 shall be applied--
                              ``(i) by substituting `modified
                            taxable income' for `taxable income' in
                            subsection (a)(2)(B)(ii)(I) thereof,
                              ``(ii) by determining any net
                            operating loss arising in any taxable
                            year beginning after December 31, 2021,
                            without regard to any deduction which
                            is a base erosion tax benefit
                            (determined with respect to each such
                            taxable year), and
                              ``(iii) by making appropriate
                            adjustments in the application of
                            subsection (b)(2) thereof to take into
                            account clause (i) of this subparagraph
                            as though such clause applied with
                            respect to taxable years beginning
                            after December 31, 2021 (but by
                            applying section 172(e) for purposes of
                            determining the amount of modified
                            taxable income).
                      ``(D) Application of certain other
                    adjustments.--Except as otherwise provided by
                    the Secretary, rules similar to the rules of
                    subsections (g) and (h) of section 59 shall
                    apply.
              ``(2) Base erosion tax benefit.--The term `base
            erosion tax benefit' means--
                      ``(A) any deduction allowed under this
                    chapter for the taxable year with respect to
                    any base erosion payment described in
                    subsection (d)(1),
                      ``(B) in the case of a base erosion payment
                    described in subsection (d)(2), any deduction
                    allowed under this chapter for the taxable year
                    for depreciation (or amortization in lieu of
                    depreciation) with respect to the property
                    acquired with such payment,
                      ``(C) in the case of a base erosion payment
                    described in subsection (d)(3)--
                              ``(i) any reduction under section
                            803(a)(1)(B) in the gross amount of
                            premiums and other consideration on
                            insurance and annuity contracts for
                            premiums and other consideration
                            arising out of indemnity insurance, and
                              ``(ii) any deduction under section
                            832(b)(4)(A) from the amount of gross
                            premiums written on insurance contracts
                            during the taxable year for premiums
                            paid for reinsurance, and
                      ``(D) in the case of a base erosion payment
                    described in subsection (d)(4), any reduction
                    in gross receipts with respect to such payment
                    in computing gross income of the taxpayer for
                    the taxable year for purposes of this
                    chapter.''.
              (2) Certain payments with respect to inventory
            treated as base erosion payments.--Section 59A(d) is
            amended by redesignating paragraph (5) as paragraph (6)
            and by inserting after paragraph (4) the following new
            paragraph:
              ``(5) Certain payments with respect to inventory.--
                      ``(A) Indirect costs included in inventory
                    under section 263A.--Such term shall also
                    include any amount paid or accrued by the
                    taxpayer to a foreign person which is a related
                    party of the taxpayer if such amount is
                    described in paragraph (2)(B) of section
                    263A(a) and required to be included in
                    inventory costs of the taxpayer under paragraph
                    (1)(A) of such section.
                      ``(B) Certain indirect costs of foreign
                    related parties.--Such term shall also include
                    so much of any amount paid or accrued by the
                    taxpayer to a foreign person which is a related
                    party of the taxpayer in connection with the
                    acquisition by the taxpayer from such foreign
                    person of property which is inventory in the
                    hands of the taxpayer as exceeds the sum of--
                              ``(i) the direct costs of such
                            property in the hands of such foreign
                            person, plus
                              ``(ii) so much of the costs described
                            in section 263A(a)(2)(B) with respect
                            to such property in the hands of such
                            foreign person as the taxpayer
                            demonstrates to the satisfaction of the
                            Secretary are attributable to amounts--
                                      ``(I) paid or accrued by such
                                    foreign person to a United
                                    States person or a person which
                                    is not a related party of the
                                    taxpayer, or
                                      ``(II) otherwise subject to
                                    the tax imposed by this
                                    subtitle.
                      ``(C) Application to tiered related-party
                    transactions.--In the case of direct costs
                    otherwise described in clause (i) of
                    subparagraph (B) which are paid or incurred by
                    the foreign person referred to in such clause
                    to another foreign person which is a related
                    party of the taxpayer, such costs shall be
                    taken into account under such clause only to
                    the extent that the taxpayer demonstrates to
                    the satisfaction of the Secretary that such
                    costs are attributable to amounts paid or
                    accrued (directly or indirectly) to a United
                    States person or a person which is not a
                    related party of the taxpayer.
                      ``(D) Safe harbor with respect indirect costs
                    of foreign related parties.--In the case of a
                    taxpayer which elects the application of this
                    subparagraph (at such time, in such manner, and
                    with respect to such inventory property, as the
                    Secretary may provide), the amount described in
                    subparagraph (B)(ii) with respect to such
                    property shall be treated for purposes of this
                    section as being equal to 20 percent of the
                    amount paid or incurred by the taxpayer to the
                    related party of the taxpayer in connection
                    with the acquisition of such property.''.
              (3) Expansion and consolidation of rules to exempt
            certain payments from treatment as base erosion
            payments.--
                      (A) In general.--Section 59A is amended by
                    redesignating subsection (i) as subsection (j)
                    and by inserting after subsection (h) the
                    following new subsection:
      ``(i) Certain Payment Not Treated as Base Erosion Payments.--
              ``(1) Exception for payments on which tax is
            imposed.--An amount shall not be treated as a base
            erosion payment if tax is imposed by this subtitle with
            respect to such amount. The amount not treated as a
            base erosion payment by reason of the preceding
            sentence shall be determined under rules similar to the
            rules of section 163(j)(5) (as in effect before the
            date of the enactment of Public Law 115-97).
              ``(2) Exception for certain payments subject to
            sufficient foreign tax.--
                      ``(A) In general.--An amount shall not be
                    treated as a base erosion payment if the
                    taxpayer establishes to the satisfaction of the
                    Secretary that such amount was subject to an
                    effective rate of foreign income tax (as
                    defined in section 904(d)(2)(F)) which is not
                    less than the applicable percentage in effect
                    under subsection (b)(2) for the taxable year in
                    which such amount is paid or accrued. Except as
                    otherwise provided by the Secretary under
                    subparagraph (B), the effective rate of foreign
                    income tax with respect to any amount may be
                    established on the basis of applicable
                    financial statements (as defined in section
                    451(b)(3)).
                      ``(B) Regulations.--The Secretary shall issue
                    such regulations or other guidance as may be
                    necessary or appropriate to carry out the
                    purposes of this paragraph, including
                    regulations or other guidance providing
                    procedures for determining the effective rate
                    of foreign income tax to which any amount is
                    subject. Such procedures may require that any
                    transaction or series of transactions among
                    multiple parties be recharacterized as one or
                    more transactions directly among any 2 or more
                    of such parties where the Secretary determines
                    that such recharacterization is appropriate to
                    carry out, or prevent avoidance of, the
                    purposes of this section.
              ``(3) Exception for certain amounts with respect to
            services.--Subsections (d)(1) and (d)(5)(A) shall not
            apply to so much of any amount paid or accrued by a
            taxpayer for services as does not exceed the total
            services cost of such services. The preceding sentence
            shall not apply unless such services meet the
            requirements for eligibility for use of the services
            cost method under section 482 (determined without
            regard to the requirement that the services not
            contribute significantly to fundamental risks of
            business success or failure).''.
                      (B) Conforming amendment.--Section 59A(d), as
                    amended by paragraph (2), is amended by
                    striking paragraph (6).
      (c) Repeal of Exemption From Base Erosion and Anti-abuse Tax
    for Taxpayers With Low Base Erosion Percentage.--Section
    59A(e)(1)(C) is amended by inserting ``in the case of any
    taxable year beginning before January 1, 2024,'' before ``the
    base erosion percentage''.
      (d) Other Modifications.--
              (1) Section 59A(h)(2)(B) is amended by striking
            ``section 6038B(b)(2)'' and inserting ``section
            6038A(b)(2)''.
              (2) Section 59A(j)(2), as redesignated by subsection
            (b), is amended by striking ``subsection (g)(3)'' and
            inserting ``subsection (h)(3)''.
      (e) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

                    Subpart E--Other Business Tax Provisions

    SEC. 138141. CREDIT FOR CLINICAL TESTING OF ORPHAN DRUGS LIMITED TO
                        FIRST USE OR INDICATION.

      (a) In General.--Section 45C(b)(2)(B) is amended to read as
    follows:
                      ``(B) Testing must be related to first use or
                    indication for rare disease or condition.--
                    Human clinical testing may be taken into
                    account under subparagraph (A) only to the
                    extent such testing is related to the first use
                    or indication with respect to which a drug for
                    a rare disease or condition is designated under
                    section 526 of the Federal Food, Drug, and
                    Cosmetic Act.''.
      (b) Eligible Testing Must Be Conducted Before Approval for
    Any Use or Indication.--Section 45C(b)(2)(A)(ii)(II) is amended
    to read as follows:
                                      ``(II) before the first date
                                    on which an application (with
                                    respect to any use or
                                    indication with respect to any
                                    disease or condition) with
                                    respect to such drug is
                                    approved under section 505(c)
                                    of such Act or, if the drug is
                                    a biological product, before
                                    the first date on which a
                                    license (with respect to any
                                    use or indication with respect
                                    to any disease or condition)
                                    for such drug is issued under
                                    section 351(a) of the Public
                                    Health Service Act, and''.
      (c) Eligibility of Biological Products.--
              (1) In general.--Section 45C(b)(2)(A)(i) is amended
            by inserting ``or, if the drug is a biological product,
            section 351(a)(3) of the Public Health Service Act''
            before the comma at the end.
              (2) Conforming amendment.--Section
            45C(b)(2)(A)(ii)(I) is amended by striking ``such Act''
            and inserting ``the Federal Food, Drug, and Cosmetic
            Act''.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 138142. MODIFICATIONS TO TREATMENT OF CERTAIN LOSSES.

      (a) Losses From Certain Capital Assets Which Become
    Worthless.--
              (1) When treated as loss.--Section 165(g)(1) is
            amended by striking ``on the last day of the taxable
            year'' and inserting ``at the time of the identifiable
            event establishing worthlessness''.
              (2) Treatment of partnership indebtedness.--Section
            165(g)(2)(C) is amended by inserting ``, by a
            partnership,'' after ``by a corporation''.
              (3) Treatment of partnership interest.--Section 165
            is amended by redesignating subsection (m) as
            subsection (n) and by inserting after subsection (l)
            the following new subsection:
      ``(m) Worthless Partnership Interest.--If any interest in a
    partnership becomes worthless during the taxable year, the loss
    resulting therefrom shall, for purposes of this subtitle, be
    treated as a loss from the sale or exchange of the interest in
    the partnership, as provided in section 741, at the time of the
    identifiable event establishing worthlessness.''.
      (b) Deferral of Losses in Certain Controlled Group Corporate
    Liquidations.--Section 267 is amended by adding at the end the
    following new subsection:
      ``(h) Deferral of Losses in Certain Controlled Group
    Liquidations.--
              ``(1) In general.--In the case of two corporations
            described in subsection (b)(3), no loss shall be
            recognized on the stock or securities of the
            liquidating corporation in a complete liquidation to
            which section 331 applies until the other corporation
            receiving property distributed in such liquidation with
            respect to such stock or in exchange for such
            securities has disposed of substantially all property
            such other corporation received in such liquidation to
            one or more persons who are not related to such other
            corporation (within the meaning of subsection (b)(3) or
            section 707(b)(1)).
              ``(2) Regulations.--The Secretary shall issue such
            regulations or other guidance as the Secretary
            determines is necessary or appropriate to carry out the
            purposes of this subsection, including to apply the
            principles of this subsection to liquidating
            corporation stock or securities owned by a corporation
            indirectly through 1 or more partnerships.''.
      (c) Cross Reference.--Section 331(c) is amended--
              (1) by striking ``Cross Reference'' and all that
            follows through ``For general rule'' and inserting the
            following: ``Cross Reference.--
              ``(1) For general rule'', and
              (2) by adding at the end the following new paragraph:
              ``(2) For losses in controlled group liquidations,
            see section 267(h).''.
      (d) Effective Date.--
              (1) Subsection (a).--The amendments made by this
            section shall apply to losses arising in taxable years
            beginning after December 31, 2021.
              (2) Subsection (b).--The amendment made by subsection
            (b) shall apply to liquidations on or after the date of
            the enactment of this Act.

    SEC. 138143. ADJUSTED BASIS LIMITATION FOR DIVISIVE REORGANIZATION.

      (a) In General.--Section 361 is amended by adding at the end
    the following new subsections:
      ``(d) Adjusted Basis Limitation for Divisive
    Reorganizations.--
              ``(1) In general.--Except as provided paragraph (2),
            in the case of a reorganization described in section
            368(a)(1)(D) with respect to which stock or securities
            of the controlled corporation (within the meaning of
            section 355) are distributed by the distributing
            corporation (within the meaning of such section) in a
            transaction which qualifies under such section,
            subsection (b)(3) and subsection (c)(3) shall not apply
            to so much of the money and other property transferred
            to creditors as equals an amount equal to the excess
            (if any) of--
                      ``(A) the sum of--
                              ``(i) the total amount of the
                            liabilities assumed (within the meaning
                            of section 357(c)) by the controlled
                            corporation,
                              ``(ii) in the case of subsection
                            (b)(3), the total amount of money and
                            the fair market value of other property
                            (including stock described in section
                            354(a)(2)(C)) transferred to the
                            creditors, and
                              ``(iii) in the case of subsection
                            (c)(3), the total principal amount of
                            securities of the controlled
                            corporation which is qualified property
                            (as defined in subsection (c)(2)(B))
                            transferred to the creditors, over
                      ``(B) the total adjusted bases of the assets
                    transferred by the distributing corporation to
                    the controlled corporation.
              ``(2) Exception regarding certain stock or rights to
            acquire stock.--Paragraph (1) shall not apply to any
            stock (or right to acquire stock) described in
            subsection (c)(2)(B).
              ``(3) Regulations.--The Secretary shall issue such
            regulations as may be necessary or appropriate to
            prevent avoidance of tax through abuse of subsection
            (b)(3), subsection (c)(3), or this subsection,
            including to determine whether a disposition of
            property or any other transaction is in connection with
            the reorganization or pursuant to the plan of
            reorganization.
      ``(e) Cross-references.--For provisions providing for the
    inclusion of income or recognition of gain in certain
    distributions, see subsections (d), (e), (f), (g), and (h) of
    section 355.''.
      (b) Conforming Amendments.--
              (1) Section 361(b)(3) is amended--
                      (A) in the first sentence, by inserting ``,
                    and except as provided in subsection (d)''
                    after ``paragraph (1)'', and
                      (B) by striking the second and third
                    sentences.
              (2) Section 361(c) is amended--
                      (A) in paragraph (3), by inserting ``, and
                    except as provided in subsection (d)'' after
                    ``this subsection'', and
                      (B) by striking paragraph (5).
      (c) Effective Date.--The amendments made by this section
    shall apply to reorganizations occurring on or after the date
    of the enactment of this Act.

    SEC. 138144. RENTS FROM PRISON FACILITIES NOT TREATED AS QUALIFIED
                        INCOME FOR PURPOSES OF REIT INCOME TESTS.

      (a) In General.--Section 856(d)(2) is amended by striking
    ``and'' at the end of subparagraph (B), by striking the period
    at the end of subparagraph (C) and inserting ``, and'', and by
    adding at the end the following new subparagraph:
                      ``(D) any amount received or accrued,
                    directly or indirectly, with respect to any
                    real or personal property which is primarily
                    used in connection with any correctional,
                    detention, or penal facility.''.
      (b) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 138145. MODIFICATIONS TO EXEMPTION FOR PORTFOLIO INTEREST.

      (a) In General.--Section 871(h)(3)(B)(i) is amended to read
    as follows:
                              ``(i) in the case of an obligation
                            issued by a corporation--
                                      ``(I) any person who owns 10
                                    percent or more of the total
                                    combined voting power of all
                                    classes of stock of such
                                    corporation entitled to vote,
                                    or
                                      ``(II) any person who owns 10
                                    percent or more of the total
                                    value of the stock of such
                                    corporation, and''.
      (b) Effective Date.--The amendment made by this section shall
    apply to obligations issued after the date of the enactment of
    this Act.

    SEC. 138146. CERTAIN PARTNERSHIP INTEREST DERIVATIVES.

      (a) In General.--Section 871(m) is amended by adding at the
    end the following new paragraphs:
              ``(8) Specified partnership interest income
            equivalent payments.--
                      ``(A) In general.--For purposes of this
                    subsection, any payment made pursuant to a
                    sale-repurchase transaction, or a specified
                    notional principal contract, that is determined
                    by reference to any income or gain in respect
                    of an interest in a specified partnership (or
                    any other payment the Secretary determines to
                    be substantially similar) shall be treated as a
                    dividend equivalent.
                      ``(B) Specified partnership.--For purposes of
                    this paragraph, the term `specified
                    partnership' means--
                              ``(i) any publicly-traded partnership
                            (as defined in subsection (b) of
                            section 7704) which is not treated as a
                            corporation under such section, or
                              ``(ii) any other partnership as the
                            Secretary may by regulation prescribe.
                      ``(C) Exceptions.--
                              ``(i) Excepted contracts.--
                            Subparagraph (A) shall not apply to any
                            contract or transaction the Secretary
                            determines does not have the potential
                            for tax avoidance.
                              ``(ii) Certain income.--Under such
                            regulations as the Secretary shall
                            prescribe, there shall not be taken
                            into account under subparagraph (A) any
                            payment the income or gain from which
                            would (but for this paragraph) be--
                                      ``(I) exempt from taxes under
                                    this subtitle, or
                                      ``(II) treated as income from
                                    sources without the United
                                    States if paid to a nonresident
                                    alien individual.
                      ``(D) Treatment of definitions and special
                    rules with respect to partnerships.--For
                    purposes of this paragraph, rules similar to
                    the rules and definitions in paragraphs (3),
                    (4), (5), (6) and (7) shall apply to an
                    interest in a specified partnership in a manner
                    similar to an underlying security, and to
                    income or gain in respect of an interest in a
                    specified partnership in a manner similar to a
                    dividend.
              ``(9) Other rules relating to treatment of dividend
            equivalents.--
                      ``(A) In general.--A dividend equivalent
                    amount under this subsection shall be treated
                    as a dividend paid by a domestic corporation.
                      ``(B) Rate of tax for publicly traded
                    partnership income payments.--In the case of a
                    payment treated as a dividend equivalent
                    pursuant to paragraph (8), the rate of tax
                    imposed on any nonresident alien individual or
                    foreign corporation with respect to such
                    payment shall not be less than the rate that
                    would be imposed had such individual or foreign
                    corporation, as the case may be, received a
                    dividend from a domestic corporation in which
                    such individual or foreign corporation owned
                    less than 1 percent (by vote or value) of the
                    stock.''.
      (b) Withholding of Tax on Nonresident Aliens.--Section 1441
    is amended by redesignating subsection (g) as subsection (h)
    and by inserting after subsection (f) the following new
    subsection:
      ``(g) Deemed Dividend Equivalent Payments in Case of Certain
    Publicly Traded Partnerships.--The Secretary may prescribe
    regulations, under rules similar to the rules of section
    1446(f), to determine the manner in which the amount of income
    and gain is determined for purposes of this section in the case
    of amounts treated as a dividend equivalent under section
    871(m)(8).''.
      (c) Effective Date.--The amendments made by this section
    shall apply to payments made on or after the date that is 180
    days after the date of the enactment of this Act.

    SEC. 138147. ADJUSTMENTS TO EARNINGS AND PROFITS OF CONTROLLED FOREIGN
                        CORPORATIONS.

      (a) In General.--Section 312(n) is amended by adding at the
    end the following new paragraph:
              ``(9) Special rules for controlled foreign
            corporations.--Earnings and profits of any controlled
            foreign corporation shall be determined without regard
            to paragraphs (4), (5), and (6).''.
      (b) Conforming Amendment.--Section 952(c) is amended by
    striking paragraph (3).
      (c) Effective Date.--The amendments made by this section
    shall apply to taxable years of foreign corporations beginning
    after December 31, 2021, and to taxable years of United States
    shareholders in which or with which such taxable years of
    foreign corporations end.

    SEC. 138148. CERTAIN DIVIDENDS FROM CONTROLLED FOREIGN CORPORATIONS TO
                        UNITED STATES SHAREHOLDERS TREATED AS EXTRAORDINARY
                        DIVIDENDS.

      (a) In General.--Section 1059 is amended by redesignating
    subsection (g) as subsection (h) and by inserting after
    subsection (f) the following new subsection:
      ``(g) Treatment of Certain Dividends From Controlled Foreign
    Corporations to United States Shareholders.--
              ``(1) In general.--Except as otherwise provided by
            the Secretary, any disqualified CFC dividend shall be
            treated as an extraordinary dividend to which paragraph
            (1) and (2) of subsection (a) applies without regard to
            the period the taxpayer held the stock with respect to
            which such dividend is paid.
              ``(2) Disqualified cfc dividend.-- For purposes of
            this subsection, the term `disqualified CFC dividend'
            means any dividend paid by a controlled foreign
            corporation to a taxpayer which is a United States
            shareholder of such foreign corporation if--
                      ``(A) such dividend is attributable to
                    earnings and profits which--
                              ``(i) were earned by such controlled
                            foreign corporation during a
                            disqualified period, or
                              ``(ii) are attributable to gain on
                            property which accrued during a
                            disqualified period.
              ``(3) Disqualified period.--For purposes of this
            subsection, the term `disqualified period' means, with
            respect to any dividend paid with respect to any stock
            of a controlled foreign corporation, any period during
            which--
                      ``(A) such foreign corporation was not a
                    controlled foreign corporation, or
                      ``(B) such stock was not owned by a United
                    States shareholder.''.
      (b) Regulations.--Section 1059(h), as redesignated by
    subsection (a), is amended--
              (1) by striking ``regulations'' both places it
            appears and inserting ``regulations or other
            guidance'', and
              (2) by striking ``and'' at the end of paragraph (1),
            by striking the period at the end of paragraph (2) and
            inserting ``, and'', and by adding at the end the
            following new paragraph:
              ``(3) providing for the coordination of subsection
            (g) with the other provisions of this chapter,
            including section 1248.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to distributions made after the date of the
    enactment of this Act.

    SEC. 138149. MODIFICATION OF RULES FOR PARTNERSHIP INTERESTS HELD IN
                        CONNECTION WITH THE PERFORMANCE OF SERVICES.

      (a) In General.--Section 1061 is amended by striking
    subsections (a) and (b) and inserting the following new
    subsections:
      ``(a) In General.--If one or more applicable partnership
    interests are held by a taxpayer at any time during the taxable
    year, the taxpayer's net applicable partnership gain for such
    taxable year shall be treated as short-term capital gain.
      ``(b) Net Applicable Partnership Gain.--For purposes of this
    section--
              ``(1) In general.--The term `net applicable
            partnership gain' means--
                      ``(A) the taxpayer's net long-term capital
                    gain determined by only taking into account
                    gains and losses with respect to one or more
                    applicable partnership interests described in
                    subsection (a), and
                      ``(B) any other amounts which are--
                              ``(i) includible in the gross income
                            of the taxpayer with respect to one or
                            more such applicable partnership
                            interests, and
                              ``(ii) treated as capital gain or
                            subject to tax at the rate applicable
                            to capital gain.
              ``(2) Holding period exception.--
                      ``(A) In general.--Net applicable partnership
                    gain shall be determined without regard to any
                    amount which is realized after the date that is
                    5 years after the latest of:
                              ``(i) The date on which the taxpayer
                            acquired substantially all of the
                            applicable partnership interest with
                            respect to which the amount is
                            realized.
                              ``(ii) The date on which the
                            partnership in which such applicable
                            partnership interest is held acquired
                            substantially all of the assets held by
                            such partnership.
                              ``(iii) If the partnership described
                            in clause (i) owns, directly or
                            indirectly, interests in one or more
                            other partnerships, the dates
                            determined by applying rules similar to
                            the rules in clauses (i) and (ii) in
                            the case of each such other
                            partnership.
                      ``(B) Shorter holding period in certain
                    circumstances.--Subparagraph (A) shall be
                    applied by substituting `3 years' for `5 years'
                    in the case of--
                              ``(i) a taxpayer (other than a trust
                            or estate) with an adjusted gross
                            income (determined without regard to
                            sections 911, 931 and 933) of less than
                            $400,000, and
                              ``(ii) any income with respect to any
                            applicable partnership interest that is
                            attributable to a real property trade
                            or business within the meaning of
                            section 469(c)(7)(C).
                              ``(iii) The Secretary is directed to
                            provide guidance regarding
                            determination of the amount described
                            in subsection (a) as applied in
                            paragraph (1) hereof, and any necessary
                            and appropriate reporting by any
                            partnership to carry out the purposes
                            of this section. --
              ``(3) Section 83 to not apply.--This section shall be
            applied without regard to section 83 and any election
            in effect under section 83(b).
              ``(4) Special rule.--To the extent provided by the
            Secretary, subsection (a) shall not apply to income or
            gain attributable to any asset not held for portfolio
            investment on behalf of third party investors.''.
      (b) Modifications Related to Definition of Applicable
    Partnership Interest.--Section 1061(c) is amended--
              (1) in paragraph (1), by striking ``to such other
            entity'' and inserting ``with respect to a trade or
            business that is not an applicable trade or business'',
              (2) in paragraph (3), by striking ``an interest in a
            partnership to the extent of the partnership's
            proportionate interest in any of the foregoing'' and
            inserting ``except as otherwise provided by the
            Secretary, an interest in a partnership if such
            partnership has a direct or indirect interest in any of
            the foregoing'', and
              (3) in paragraph (4)--
                      (A) by striking ``The term'' and inserting
                    ``Except as otherwise provided by the
                    Secretary, the term'', and
                      (B) in subparagraph (A), by striking
                    ``corporation'' and inserting ``C
                    corporation''.
      (c) Recognition of Gain on Transfers of Applicable
    Partnership Interests to Unrelated Parties.--Section 1061(d) is
    amended to read as follows:
      ``(d) Transfer of Applicable Partnership Interest.--If a
    taxpayer transfers any applicable partnership interest, gain
    shall be recognized notwithstanding any other provision of this
    subtitle.''.
      (d) Regulations.--Section 1061(e) is amended by striking the
    period at the end and inserting the following: ``, including
    regulations or other guidance to--
              ``(1) to prevent the avoidance of the purposes of
            this section, including through the distribution of
            property by a partnership and through carry waivers,
            and
              ``(2) to provide for the application of this section
            to financial instruments, contracts or interests in
            entities other than partnerships to the extent
            necessary or appropriate to carry out the purposes of
            this section.''.
      (e) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 138150. LIMITATION ON CERTAIN SPECIAL RULES FOR SECTION 1202
                        GAINS.

      (a) In General.--Section 1202(a) is amended by adding at the
    end the following new paragraph:
              ``(5) Limitation on certain special rules.--In the
            case of the sale or exchange of qualified small
            business stock after September 13, 2021, paragraphs (3)
            and (4) shall not apply to any taxpayer if--
                      ``(A) the adjusted gross income of such
                    taxpayer (determined without regard to this
                    section and sections 911, 931, and 933) equals
                    or exceeds $400,000, or
                      ``(B) such taxpayer is a trust or estate.''.
      (b) Effective Date.--Except as provided in subsection (c),
    the amendment made by this section shall apply to sales and
    exchanges on or after September 13, 2021.
      (c) Binding Contract Exception.--The amendment made by this
    section shall not apply to any sale or exchange which is made
    pursuant to written binding contract which was in effect on
    September 12, 2021, and is not modified in any material respect
    thereafter.

    SEC. 138151. CONSTRUCTIVE SALES.

      (a) Application to Appreciated Digital Assets.--
              (1) In general.--Section 1259(b)(1) is amended by
            inserting ``digital asset,'' after ``debt
            instrument,''.
              (2) Digital asset.--Section 1259(d) is amended by
            adding at the end the following new paragraph:
              ``(3) Digital asset.--Except as otherwise provided by
            the Secretary, the term `digital asset' means any
            digital representation of value which is recorded on a
            cryptographically secured distributed ledger or any
            similar technology as specified by the Secretary.''.
      (b) Treatment of Certain Contracts.--Section 1259(c)(1)(D) is
    amended by inserting ``or enters into a contract to acquire''
    after ``acquires''.
      (c) Effective Date.--
              (1) In general.--The amendments made by subsection
            (a) shall apply to constructive sales (determined after
            the application of the amendment made by subsection
            (b)) after the date of the enactment of this Act.
              (2) Treatment of certain contracts.--The amendment
            made by subsection (b) shall apply to contracts entered
            into after the date of the enactment of this Act.

    SEC. 138152. RULES RELATING TO COMMON CONTROL.

      (a) Clarification of Trade or Business.--Section 52(b) is
    amended by adding at the end the following new sentence: ``For
    purposes of this subsection, the term `trade or business'
    includes any activity treated as a trade or business under
    paragraph (5) or (6) of section 469(c).''
      (b) Effective Date.--The amendment made by this section shall
    apply to taxable years beginning after December 31, 2021.

    SEC. 138153. WASH SALES BY RELATED PARTIES; WASH SALES OF SPECIFIED
                        ASSETS.

      (a) Application of Wash Sale Rules to Related Parties.--
    Section 1091(a) is amended by striking ``the taxpayer has
    acquired'' and inserting ``the taxpayer (or a related party)
    has acquired''.
      (b) Modification of Basis Adjustment Rule to Prevent Transfer
    of Losses to Related Parties.--Section 1091(d) is amended to
    read as follows:
      ``(d) Adjustment to Basis in Case of Wash Sale.--If the
    taxpayer (or the taxpayer's spouse) acquires substantially
    identical specified assets during the period which--
              ``(1) begins 30 days before the disposition with
            respect to which a deduction was disallowed under
            subsection (a), and
              ``(2) ends with the close of the taxpayer's first
            taxable year which begins after such disposition,
    the basis of such specified assets shall be increased by the
    amount of the deduction so disallowed (reduced by any amount of
    such deduction taken into account under this subsection to
    increase the basis of specified assets previously acquired).''
      (c) Related Party.--Section 1091 is amended by adding at the
    end the following new subsection:
      ``(g) Related Party.--For purposes of this section--
              ``(1) In general.--The term `related party' means--
                      ``(A) the taxpayer's spouse,
                      ``(B) any dependent of the taxpayer and any
                    other taxpayer with respect to whom the
                    taxpayer is a dependent,
                      ``(C) any individual, corporation,
                    partnership, trust, or estate which controls,
                    or is controlled by, (within the meaning of
                    section 954(d)(3)) the taxpayer or any
                    individual described in subparagraph (A) or (B)
                    with respect to the taxpayer (or any
                    combination thereof),
                      ``(D) any individual retirement plan, Archer
                    MSA (as defined in section 220(d)), or health
                    savings account (as defined in section 223(d)),
                    of the taxpayer or of any individual described
                    in subparagraph (A) or (B) with respect to the
                    taxpayer,
                      ``(E) any account under a qualified tuition
                    program described in section 529 or a Coverdell
                    education savings account (as defined in
                    section 530(b)) if the taxpayer, or any
                    individual described in subparagraph (A) or (B)
                    with respect to the taxpayer, is the designated
                    beneficiary of such account or has the right to
                    make any decision with respect to the
                    investment of any amount in such account, and
                      ``(F) any account under--
                              ``(i) a plan described in section
                            401(a),
                              ``(ii) an annuity plan described in
                            section 403(a),
                              ``(iii) an annuity contract described
                            in section 403(b), or
                              ``(iv) an eligible deferred
                            compensation plan described in section
                            457(b) and maintained by an employer
                            described in section 457(e)(1)(A),
                    if the taxpayer or any individual described in
                    subparagraph (A) or (B) with respect to the
                    taxpayer has the right to make any decision
                    with respect to the investment of any amount in
                    such account.
              ``(2) Rules for determining status.--
                      ``(A) Relationships determined at time of
                    acquisition.--Determinations under paragraph
                    (1) shall be made as of the time of the
                    purchase or exchange referred to in subsection
                    (a) except that determinations under
                    subparagraphs (A) and (B) of paragraph (1)
                    shall be made for the taxable year which
                    includes such purchase or exchange.
                      ``(B) Determination of marital status.--
                              ``(i) In general.--Except as provided
                            in clause (ii), marital status shall be
                            determined under section 7703.
                              ``(ii) Special rule for married
                            individuals filing separately and
                            living apart.--A husband and wife who--
                                      ``(I) file separate returns
                                    for any taxable year, and
                                      ``(II) live apart at all
                                    times during such taxable year,
                            shall not be treated as married
                            individuals.
              ``(3) Regulations.--The Secretary shall issue such
            regulations or other guidance as may be necessary to
            prevent the avoidance of the purposes of this
            subsection, including regulations which treat persons
            as related parties if such persons are formed or
            availed of to avoid the purposes of this subsection.''.
      (d) Wash Sale Rules to Apply With Respect to Specified
    Assets.--
              (1) Specified assets.--Section 1091, as amended by
            the preceding provisions of this section, is amended by
            adding at the end the following new subsection:
      ``(h) Specified Asset.--For purposes of this section, the
    term `specified asset' means any of the following:
              ``(1) Any security described in subparagraph (A),
            (B), (C), (D), or (E) of section 475(c)(2).
              ``(2) Any foreign currency.
              ``(3) Any commodity described in subparagraph (A),
            (B), or (C) of section 475(e)(2).
              ``(4) Any digital representation of value which is
            recorded on a cryptographically secured distributed
            ledger or any similar technology as specified by the
            Secretary.
    Such term shall, except as provided in regulations, include
    contracts or options to acquire or sell any specified
    assets.''.
              (2) Conforming amendments.--Section 1091 is amended--
                      (A) by striking the last sentence of
                    subsection (a),
                      (B) by striking ``stock or securities'' each
                    place it appears and inserting ``specified
                    assets'', and
                      (C) by striking ``shares of'' each place it
                    appears in subsections (a), (b), and (c).
      (e) Exception for Business Needs and Hedging Transactions.--
    Section 1091, as amended by the preceding provisions of this
    section, is amended by adding at the end the following new
    subsection:
      ``(i) Exception for Business Needs and Hedging
    Transactions.--Except as provided in regulations prescribed by
    the Secretary, subsection (a) shall not apply in the case of
    any sale or other disposition--
              ``(1) of a foreign currency or commodity described in
            subsection (h), and
              ``(2) which--
                      ``(A) is directly related to the business
                    needs of a trade or business of the taxpayer
                    (other than the trade or business of trading
                    foreign currencies or commodities described in
                    subsection (h)), or
                      ``(B) is part of a hedging transaction (as
                    defined in section 1221(b)(2)).''.
      (f) Effective Date.--The amendments made by this section
    shall apply to sales and other dispositions after December 31,
    2021.

               PART 2--TAX INCREASES FOR HIGH-INCOME INDIVIDUALS

    SEC. 138201. INCREASE IN TOP MARGINAL INDIVIDUAL INCOME TAX RATE.

      (a) Re-establishment of 39.6 Percent Rate Bracket.--
              (1) Married individuals filing joint returns and
            surviving spouses.--The table contained in section
            1(j)(2)(A) is amended by striking the last two rows and
            inserting the following: ``

      ``Over $400,000 bu$91,379, plus 35% of the excess over $400,000.......
      Over $450,000.....$108,879, plus 39.6% of the excess over $450,000.''.
              (2) Heads of households.--The table contained in
            section 1(j)(2)(B) is amended by striking the last two
            rows and inserting the following: ``

      ``Over $200,000 bu$44,298, plus 35% of the excess over $200,000.......
      Over $425,000.....$123,048, plus 39.6% of the excess over $425,000.''.
              (3) Unmarried individuals other than surviving
            spouses and heads of households.--The table contained
            in section 1(j)(2)(C) is amended by striking the last
            two rows and inserting the following: ``

      ``Over $200,000 bu$45,689.50, plus 35% of the excess over $200,000....
      Over $400,000.....$115,689.50, plus 39.6% of the excess over .........
                        $400,000.''.
              (4) Married individuals filing separate returns.--The
            table contained in section 1(j)(2)(D) is amended by
            striking the last two rows and inserting the following:
            ``

      ``Over $200,000 bu$45,689.50, plus 35% of the excess over $200,000....
      Over $225,000.....$54,439.50, plus 39.6% of the excess over ..........
                        $225,000.''.
              (5) Estates and trusts.--The table contained in
            section 1(j)(2)(E) is amended by striking the last row
            and inserting the following: ``

      ``Over $12,500....$3,011.50, plus 39.6% of the excess over $12,500.''.
      (b) Application of Adjustments.--Section 1(j)(3) is amended
    to read as follows:
              ``(3) Adjustments.--For taxable years beginning after
            December 31, 2021, the Secretary shall prescribe tables
            which shall apply in lieu of the tables contained in
            paragraph (2) in the same manner as under paragraphs
            (1) and (2) of subsection (f) (applied without regard
            to clauses (i) and (ii) of subsection (f)(2)(A), except
            that in prescribing such tables--
                      ``(A) except as provided in subparagraph (B),
                    subsection (f)(3) shall be applied by
                    substituting `calendar year 2017' for `calendar
                    year 2016' in subparagraph (A)(ii) thereof,
                      ``(B) in the case of adjustments to the
                    dollar amounts at which the 39.6 percent rate
                    bracket begins (other than such dollar amount
                    in paragraph (2)(E))--
                              ``(i) no adjustment shall be made for
                            taxable years beginning after December
                            31, 2021, and before January 1, 2023,
                            and
                              ``(ii) in the case of any taxable
                            year beginning after December 31, 2022,
                            subsection (f)(3) shall be applied by
                            substituting `calendar year 2021' for
                            `calendar year 2016',
                      ``(C) subsection (f)(7)(B) shall apply to any
                    unmarried individual other than a surviving
                    spouse, and
                      ``(D) subsection (f)(8) shall not apply.''.
      (c) Modification to 39.6 Percent Rate Bracket for High-income
    Taxpayers After 2025.--Section 1(i)(3) is amended to read as
    follows:
              ``(3) Modifications to 39.6 percent rate bracket.--In
            the case of taxable years beginning after December 31,
            2025--
                      ``(A) In general.--The rate of tax under
                    subsections (a), (b), (c), and (d) on a
                    taxpayer's taxable income in excess of the 39.6
                    percent rate bracket threshold shall be taxed
                    at a rate of 39.6 percent.
                      ``(B) 39.6 percent rate bracket threshold.--
                    For purposes of this paragraph, the term `39.6
                    percent rate bracket threshold' means--
                              ``(i) in the case any taxpayer
                            described in subsection (a), $450,000,
                              ``(ii) in the case of any taxpayer
                            described in subsection (b), $425,000,
                              ``(iii) in the case of any taxpayer
                            described in subsection (c), $400,000,
                            and
                              ``(iv) in the case of any taxpayer
                            described in subsection (d), $225,000.
                      ``(C) Inflation adjustment.--For purposes of
                    this paragraph, with respect to taxable years
                    beginning in calendar years after 2025, each of
                    the dollar amounts in subparagraph (B) shall be
                    adjusted in the same manner as under paragraph
                    (1)(C)(i), except that subsection (f)(3)(A)(ii)
                    shall be applied by substituting `2021' for
                    `2016'.''.
      (d) Conforming Amendments.--
              (1) Section 1(j)(1) is amended by striking ``December
            31, 2017'' and inserting ``December 31, 2021''.
              (2) The heading of section 1(j) is amended by
            striking ``2018'' and inserting ``2022''.
              (3) The heading of section 1(i) is amended by
            striking ``Rate Reductions'' and inserting
            ``Modifications''
              (4) Section 15(f) is amended by striking ``rate
            reductions'' and inserting ``modifications''.
      (e) Section 15 Not to Apply.--For rules providing that
    section 15 of the Internal Revenue Code of 1986 does not apply
    to the amendments made by this section, see sections 1(j)(6)
    and 15(f) of the Internal Revenue Code of 1986.
      (f) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 138202. INCREASE IN CAPITAL GAINS RATE FOR CERTAIN HIGH INCOME
                        INDIVIDUALS.

      (a) In General.--Section 1(h)(1)(D) is amended by striking
    ``20 percent'' and inserting ``25 percent''.
      (b) Re-alignment of 25 Percent Capital Gains Rate Threshold
    With 39.6 Percent Income Tax Rate Threshold.--Section 1(j)(5)
    is amended--
              (1) by striking subparagraphs (A) and (B) and
            inserting the following new subparagraphs:
                      ``(A) In general.--Section 1(h)(1) shall be
                    applied by substituting `below the maximum zero
                    rate amount' for `which would (without regard
                    to this paragraph) be taxed at a rate below 25
                    percent' in subparagraph (B)(i).
                      ``(B) Maximum zero rate amount defined.--For
                    purposes of applying section 1(h) with the
                    modifications described in subparagraph (A),
                    the maximum zero rate amount shall be--
                              ``(i) in the case of a joint return
                            or surviving spouse, $77,200,
                              ``(ii) in the case of an individual
                            who is a head of household (as defined
                            in section 2(b)), $51,700,
                              ``(iii) in the case of any other
                            individual (other than an estate or
                            trust), an amount equal to \1/2\ of the
                            amount in effect for the taxable year
                            under subclause (I), and
                              ``(iv) in the case of an estate or
                            trust, $2,600.'', and
              (2) by striking ``each of the dollar amounts in
            clauses (i) and (ii)'' in subparagraph (C) and
            inserting ``each dollar amount in clause (i), (ii), or
            (iv)''.
      (c) Conforming Amendments.--
              (1) Section 55(b)(3) is amended by striking
            subparagraph (D) and redesignating subparagraph (E) as
            subparagraph (D).
              (2) The following provisions are each amended by
            striking ``20 percent'' and inserting ``25 percent'':
                      (A) Section 531.
                      (B) Section 541.
                      (C) Section 1445(e)(1).
                      (D) Section 1445(e)(6).
                      (E) The second sentence of section
                    7518(g)(6)(A).
              (3) Section 53511(f)(2) of title 46, United States
            Code, is amended to read as follows:
              ``(2) Maximum tax rate.--For that portion of a
            nonqualified withdrawal made from the capital gain
            account during a taxable year to which section 1(h) of
            such Code (26 U.S.C. 1(h)) applies, the tax rate used
            under paragraph (1)(B) may not exceed 25 percent.''.
      (d) Section 15 Not to Apply.--The amendments made by this
    section shall not be treated as a change in a rate of tax for
    purposes of section 15 of the Internal Revenue Code of 1986.
      (e) Effective Dates.--
              (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall
            apply to taxable years ending after September 13, 2021.
              (2) Re-alignment of 25 percent capital gains rate
            threshold with 39.6 percent income tax rate
            threshold.--The amendments made by subsection (b) shall
            apply to taxable years beginning after December 31,
            2021.
              (3) Withholding under sections 1445 and 1446.--The
            amendments made by subparagraphs (C) and (D) of
            subsection (c)(2) shall apply to dispositions after the
            date of the enactment of this Act.
      (f) Transitional Rules for Taxable Years Which Include
    September 13, 2021.--
              (1) In general.--For purposes of applying section
            1(h) of the Internal Revenue Code of 1986 with respect
            to any taxable year which includes September 13, 2021,
            the amount determined under subparagraph (D) of section
            1(h)(1) of such Code shall be the sum of--
                      (A) 20 percent of the lesser of--
                              (i) the amount on which a tax is
                            determined under such subparagraph (D)
                            (without regard to this subsection), or
                              (ii) the amount (if any) of net
                            capital gain determined by taking into
                            account only dividends, gains, and
                            losses for the portion of the taxable
                            year on or before September 13, 2021
                            (determined without regard to
                            collectibles gain or loss, gain
                            described in section 1(h)(6)(A)(i) of
                            such Code, and section 1202 gain),
                            plus--
                      (B) 25 percent of the excess (if any) of the
                    amount described in subparagraph (A)(i) over
                    the amount described in subparagraph (A)(ii).
              (2) Special rule for binding contracts entered into
            prior to september 13, 2021.--For purposes of paragraph
            (1), a gain recognized in the taxable year that
            includes September 13, 2021, shall be treated as being
            with respect to the portion of such taxable year on or
            before such date if such gain arises from a transaction
            which occurs pursuant to a written binding contract
            entered into on or before such date (and which is not
            modified thereafter in any material respect).
              (3) Alternative minimum tax.--Rules similar to the
            rules of paragraph (1) shall apply for purposes of
            applying section 55(b)(3) of such Code.
              (4) Application to pass-thru entities.--In applying
            this subsection with respect to any pass-thru entity,
            the determination of when dividends, gains, and losses
            are properly taken into account shall be made at the
            entity level.
              (5) Definitions of certain terms.--Terms used in this
            subsection which are also used in section 1(h) of such
            Code shall have the respective meanings that such terms
            have in such section.

    SEC. 138203. APPLICATION OF NET INVESTMENT INCOME TAX TO TRADE OR
                        BUSINESS INCOME OF CERTAIN HIGH INCOME INDIVIDUALS.

      (a) In General.--Section 1411 is amended by adding at the end
    the following new subsection:
      ``(f) Application to Certain High Income Individuals.--
              ``(1) In general.--In the case of any individual
            whose modified adjusted gross income for the taxable
            year exceeds the high income threshold amount,
            subsection (a)(1) shall be applied by substituting `the
            greater of specified net income or net investment
            income' for `net investment income' in subparagraph (A)
            thereof.
              ``(2) Phase-in of increase.--The increase in the tax
            imposed under subsection (a)(1) by reason of the
            application of paragraph (1) of this subsection shall
            not exceed the amount which bears the same ratio to the
            amount of such increase (determined without regard to
            this paragraph) as--
                      ``(A) the excess described in paragraph (1),
                    bears to
                      ``(B) $100,000 (\1/2\ such amount in the case
                    of a married taxpayer (as defined in section
                    7703) filing a separate return).
              ``(3) High income threshold amount.--For purposes of
            this subsection, the term `high income threshold
            amount' means--
                      ``(A) except as provided in subparagraph (B)
                    or (C), $400,000,
                      ``(B) in the case of a taxpayer making a
                    joint return under section 6013 or a surviving
                    spouse (as defined in section 2(a)), $500,000,
                    and
                      ``(C) in the case of a married taxpayer (as
                    defined in section 7703) filing a separate
                    return, \1/2\ of the dollar amount determined
                    under subparagraph (B).
              ``(4) Specified net income.--For purposes of this
            section, the term `specified net income' means net
            investment income determined--
                      ``(A) without regard to the phrase `other
                    than such income which is derived in the
                    ordinary course of a trade or business not
                    described in paragraph (2),' in subsection
                    (c)(1)(A)(i),
                      ``(B) without regard to the phrase `described
                    in paragraph (2)' in subsection (c)(1)(A)(ii),
                      ``(C) without regard to the phrase `other
                    than property held in a trade or business not
                    described in paragraph (2)' in subsection
                    (c)(1)(A)(iii),
                      ``(D) without regard to paragraphs (2), (3),
                    and (4) of subsection (c), and
                      ``(E) by treating paragraphs (5) and (6) of
                    section 469(c) as applying for purposes of
                    subsection (c) of this section.''.
      (b) Application to Trusts and Estates.--Section 1411(a)(2)(A)
    is amended by striking ``undistributed net investment income''
    and inserting ``the greater of undistributed specified net
    income or undistributed net investment income''.
      (c) Clarifications With Respect to Determination of Net
    Investment Income.--
              (1) Wages subject to fica not taken into account.--
            Section 1411(c)(6) is amended by inserting ``or wages
            received with respect to employment on which a tax is
            imposed under section 3101(b)'' before the period at
            the end.
              (2) Net operating losses not taken into account.--
            Section 1411(c)(1)(B) is amended by inserting ``(other
            than section 172)'' after ``this subtitle''.
              (3) Inclusion of certain foreign income.--
                      (A) In general.--Section 1411(c)(1)(A) is
                    amended by striking ``and'' at the end of
                    clause (ii), by striking ``over'' at the end of
                    clause (iii) and inserting ``and'', and by
                    adding at the end the following new clause:
                              ``(iv) any amount includible in gross
                            income under section 951, 951A, 1293,
                            or 1296, over''.
                      (B) Proper treatment of certain previously
                    taxed income.--Section 1411(c) is amended by
                    adding at the end the following new paragraph:
              ``(7) Certain previously taxed income.--The Secretary
            shall issue regulations or other guidance providing for
            the treatment of distributions of amounts previously
            included in gross income for purposes of chapter 1 but
            not previously subject to tax under this section.''.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.
      (e) Transition Rule.--The regulations or other guidance
    issued by the Secretary under section 1411(c)(7) of the
    Internal Revenue Code of 1986 (as added by this section) shall
    include provisions which provide for the proper coordination
    and application of clauses (i) and (iv) of section
    1411(c)(1)(A) with respect to--
              (1) taxable years beginning on or before December 31,
            2021, and
              (2) taxable years beginning after such date.

    SEC. 138204. LIMITATION ON DEDUCTION OF QUALIFIED BUSINESS INCOME FOR
                        CERTAIN HIGH INCOME INDIVIDUALS.

      (a) In General.--Section 199A(a) is amended by striking
    ``or'' at the end of paragraph (1), by striking the period at
    the end of paragraph (2) and inserting ``, or'', and by adding
    at the end the following new paragraph:
              ``(3) the following amount:
                      ``(A) $500,000 in the case of a joint return
                    or surviving spouse (as defined in section
                    2(a)),
                      ``(B) $400,000 in the case of any taxpayer
                    not described in subparagraph (A), (C), or (D),
                      ``(C) $250,000 in the case of a married
                    individual filing a separate return, or
                      ``(D) $10,000 in the case of an estate or
                    trust.''.
      (b) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 138205. LIMITATIONS ON EXCESS BUSINESS LOSSES OF NONCORPORATE
                        TAXPAYERS.

      (a) Limitation Made Permanent.--
              (1) In general.--Section 461(l)(1) is amended to read
            as follows:
              ``(1) Limitation.--In the case of any taxpayer other
            than a corporation, any excess business loss of the
            taxpayer for the taxable year shall not be allowed.''.
              (2) Conforming amendment.--Section 461 is amended by
            striking subsection (j).
      (b) Modification of Carryover of Disallowed Losses.--Section
    461(l)(2) is amended to read as follows:
              ``(2) Disallowed loss carryover.--Any loss which is
            disallowed under paragraph (1) for any taxable year
            shall be treated (solely for purposes of this chapter)
            as a deduction described in paragraph (3)(A)(i) for the
            next taxable year.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2020.

    SEC. 138206. SURCHARGE ON HIGH INCOME INDIVIDUALS, ESTATES, AND TRUSTS.

      (a) In General.--Part I of subchapter A of chapter 1 is
    amended by inserting after section 1 the following new section:

    ``SEC. 1A. SURCHARGE ON HIGH INCOME INDIVIDUALS, ESTATES, AND TRUSTS.

      ``(a) General Rule.--In the case of a taxpayer other than a
    corporation, there is hereby imposed (in addition to any other
    tax imposed by this subtitle) a tax equal to 3 percent of so
    much of the modified adjusted gross income of the taxpayer as
    exceeds--
              ``(1) $5,000,000, in the case of any taxpayer not
            described in paragraph (2) or (3),
              ``(2) $2,500,000, in the case of a married individual
            filing a separate return, and
              ``(3) $100,000, in the case of an estate or trust.
      ``(b) Modified Adjusted Gross Income.--For purposes of this
    section, the term `modified adjusted gross income' means
    adjusted gross income reduced by any deduction (not taken into
    account in determining adjusted gross income) allowed for
    investment interest (as defined in section 163(d)). In the case
    of an estate or trust, adjusted gross income shall be
    determined as provided in section 67(e).
      ``(c) Special Rules.--
              ``(1) Nonresident alien.--In the case of a
            nonresident alien individual, only amounts taken into
            account in connection with the tax imposed under
            section 871(b) shall be taken into account under this
            section.
              ``(2) Citizens and residents living abroad.--The
            dollar amount applicable to any taxpayer under
            paragraph (1), (2), or (3) of subsection (a) (as the
            case may be) shall be decreased (but not below zero) by
            the excess (if any) of--
                      ``(A) the amounts excluded from the
                    taxpayer's gross income under section 911, over
                      ``(B) the amounts of any deductions or
                    exclusions disallowed under section 911(d)(6)
                    with respect to the amounts described in
                    subparagraph (A).
              ``(3) Charitable trusts.--Subsection (a) shall not
            apply to a trust all the unexpired interests in which
            are devoted to one or more of the purposes described in
            section 170(c)(2)(B).
              ``(4) Not treated as tax imposed by this chapter for
            certain purposes.--The tax imposed under this section
            shall not be treated as tax imposed by this chapter for
            purposes of determining the amount of any credit under
            this chapter or for purposes of section 55.''.
      (b) Clerical Amendment.--The table of sections for part I of
    subchapter A of chapter 1 is amended by inserting after the
    item relating to section 1 the following new item:

    ``Sec. 1A. Surcharge on high income individuals.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 138207. TERMINATION OF TEMPORARY INCREASE IN UNIFIED CREDIT.

      (a) In General.--Section 2010(c)(3) of the Internal Revenue
    Code of 1986 is amended by striking subparagraph (C).
      (b) Effective Date.--The amendment made by this section shall
    apply to estates of decedents dying and gifts made after
    December 31, 2021.

    SEC. 138208. INCREASE IN LIMITATION ON ESTATE TAX VALUATION REDUCTION
                        FOR CERTAIN REAL PROPERTY USED IN FARMING OR OTHER
                        TRADES OR BUSINESSES.

      (a) In General.--Section 2032A(a)(2) of the Internal Revenue
    Code of 1986 is amended by striking ``$750,000'' and inserting
    ``$11,700,000''.
      (b) Inflation Adjustment.--Section 2032A(a)(3) of such Code
    is amended--
              (1) by striking ``$750,000'' both places it appears
            and inserting ``$11,700,000'',
              (2) by striking ``1998'' in the matter preceding
            subparagraph (A) and inserting ``2021'', and
              (3) by striking ``1997'' in subparagraph (B) and
            inserting ``2020''.
      (c) Effective Date.--The amendments made by this section
    shall apply to the estates of decedents dying after December
    31, 2021.

    SEC. 138209. CERTAIN TAX RULES APPLICABLE TO GRANTOR TRUSTS.

      (a) Application of Transfer Taxes.--
              (1) In general.--Subtitle B of the Internal Revenue
            Code of 1986 is amended by adding at the end the
            following new chapter:

                 ``CHAPTER 16--SPECIAL RULES FOR GRANTOR TRUSTS

    ``Sec. 2901. Application of transfer taxes.

    ``SEC. 2901. APPLICATION OF TRANSFER TAXES.

      ``(a) In General.--In the case of any portion of a trust with
    respect to which the grantor is the deemed owner--
              ``(1) the value of the gross estate of the deceased
            deemed owner of such portion shall include all assets
            attributable to that portion at the time of the death
            of such owner,
              ``(2) any distribution (other than to the deemed
            owner or the deemed owner's spouse) from such portion
            to one or more beneficiaries during the life of the
            deemed owner of such portion (other than in discharge
            of an obligation of the deemed owner) shall be treated
            as a transfer by gift for purposes of chapter 12,
              ``(3) if at any time during the life of the deemed
            owner of such portion, such owner ceases to be treated
            as the owner of such portion under subpart E of part 1
            of subchapter J of chapter 1, all assets attributable
            to such portion at such time shall be treated for
            purposes of chapter 12 as a transfer by gift made by
            the deemed owner, and
              ``(4) proper adjustment shall be made with respect to
            amounts so included in the gross estate, or treated as
            transferred by gift, pursuant to paragraph (1), (2), or
            (3), as the case may be, to account for amounts treated
            previously as taxable gifts under chapter 12 with
            respect to previous transfers to the trust by the
            deemed owner.
      ``(b) Exceptions.--This section shall not apply to any trust
    that is includible in the gross estate of the deemed owner
    (without regard to subsection (a)(1)).
      ``(c) Deemed Owner Defined.--For purposes of this chapter,
    the term `deemed owner' means any person who is treated as the
    owner of a portion of a trust under subpart E of part 1 of
    subchapter J of chapter 1.''.
              (2) Cross-reference.--Section 2511 of such Code is
            amended by adding at the end the following new
            subsection:
      ``(c) Cross-reference.--For treatment of transfers to grantor
    trusts, see section 2901.''.
              (3) Clerical amendment.--The table of chapters for
            subtitle B of such Code is amended by adding at the end
            the following new item:

                ``Chapter 16. Special Rules for Grantor Trusts''.

      (b) Certain Sales to Grantor Trust.--
              (1) In general.--Part IV of subchapter O of chapter 1
            of such Code is amended by redesignating section 1062
            as section 1063 and inserting after section 1061 the
            following new section:

    ``SEC. 1062. CERTAIN SALES BETWEEN GRANTOR TRUST AND DEEMED OWNER.

      ``(a) In General.--In the case of any transfer of property
    between a trust and the a person who is the deemed owner of the
    trust (or portion thereof), such treatment of the person as the
    owner of the trust shall be disregarded in determining whether
    the transfer is a sale or exchange for purposes of this
    chapter.
      ``(b) Exception.--Subsection (a) shall not apply to any trust
    that is fully revocable by the deemed owner.
      ``(c) Deemed Owner.--For purposes of this section, the term
    `deemed owner' means any person who is treated as the owner of
    a portion of a trust under subpart E of part 1 of subchapter
    J.''.
              (2) Related taxpayers.--Section 267(b) is amended by
            striking ``or'' at the end of paragraph (12), by
            striking the period at the end of paragraph (13) and
            inserting ``; or'', and by adding at the end the
            following new paragraph:
              ``(14) A grantor trust and the person treated as the
            owner of the trust (or portion thereof) under subpart E
            of part 1 of subchapter J of this chapter.''.
              (3) Clerical amendment.--The table of sections for
            part IV of subchapter O of chapter 1 of such Code is
            amended by striking the item relating to section 1062
            and inserting the following new items:

    ``Sec. 1062. Certain sales to grantor trusts.
    ``Sec. 1063. Cross references.''.
      (c) Effective Date.--The amendments made by this section
    shall apply--
              (1) to trusts created on or after the date of the
            enactment of this Act, and
              (2) to any portion of a trust established before the
            date of the enactment of this Act which is attributable
            to a contribution made on or after such date.

    SEC. 138210. VALUATION RULES FOR CERTAIN TRANSFERS OF NONBUSINESS
                        ASSETS.

      (a) In General.--Section 2031 of the Internal Revenue Code of
    1986 is amended by redesignating subsection (d) as subsection
    (f) and by inserting after subsection (c) the following new
    subsections:
      ``(d) Valuation Rules for Certain Transfers of Nonbusiness
    Assets.--For purposes of this chapter and chapter 12--
              ``(1) In general.--In the case of the transfer of any
            interest in an entity other than an interest which is
            actively traded (within the meaning of section 1092)--
                      ``(A) the value of any nonbusiness assets
                    held by the entity with respect to such
                    interest shall be determined as if the
                    transferor had transferred such assets directly
                    to the transferee (and no valuation discount
                    shall be allowed with respect to such
                    nonbusiness assets), and
                      ``(B) such nonbusiness assets shall not be
                    taken into account in determining the value of
                    the interest in the entity.
              ``(2) Nonbusiness assets.--For purposes of this
            subsection--
                      ``(A) In general.--The term `nonbusiness
                    asset' means any passive asset which--
                              ``(i) is held for the production or
                            collection of income, and
                              ``(ii) is not used in the active
                            conduct of a trade or business.
                      ``(B) Passive assets used in active conduct
                    of trade or business.--Except as provided in
                    subparagraph (C), a passive asset shall not be
                    treated for purposes of subparagraph (A) as
                    used in the active conduct of a trade or
                    business unless--
                              ``(i) the asset is property described
                            in paragraph (1) or (4) of section
                            1221(a) or is a hedge with respect to
                            such property, or
                              ``(ii) the asset is real property
                            used in the active conduct of 1 or more
                            real property trades or businesses
                            (within the meaning of section
                            469(c)(7)(C)) in which the transferor
                            materially participates and with
                            respect to which the transferor meets
                            the requirements of section
                            469(c)(7)(B)(ii).
                    For purposes of clause (ii), material
                    participation shall be determined under the
                    rules of section 469(h), except that section
                    469(h)(3) shall be applied without regard to
                    the limitation to farming activity.
                      ``(C) Exception for working capital.--Any
                    passive asset which is held as a part of the
                    reasonably required working capital needs of a
                    trade or business shall be treated as used in
                    the active conduct of a trade or business.
              ``(3) Passive asset.--For purposes of this
            subsection, the term `passive asset' means any--
                      ``(A) cash or cash equivalents,
                      ``(B) except to the extent provided by the
                    Secretary, stock in a corporation or any other
                    equity, profits, or capital interest in a
                    partnership,
                      ``(C) evidence of indebtedness, option,
                    forward or futures contract, notional principal
                    contract, or derivative,
                      ``(D) asset described in clause (iii), (iv),
                    or (v) of section 351(e)(1)(B),
                      ``(E) annuity,
                      ``(F) real property,
                      ``(G) asset (other than a patent, trademark,
                    or copyright) which produces royalty income,
                      ``(H) commodity,
                      ``(I) collectible (within the meaning of
                    section 408(m)),
                      ``(J) personal property (as defined in
                    section 1092(d)(1)) or position in personal
                    property (within the meaning of section
                    1092(d)(2)), or
                      ``(K) other asset specified in regulations
                    prescribed by the Secretary.
              ``(4) Look-thru rules.--
                      ``(A) In general.--If a passive asset of an
                    entity consists of a 10-percent interest in any
                    other entity, this subsection shall be applied
                    by disregarding the 10-percent interest and by
                    treating the entity as holding directly its
                    ratable share of the assets of the other
                    entity. This subparagraph shall be applied
                    successively to any 10-percent interest of such
                    other entity in any other entity.
                      ``(B) 10-percent interest.--The term `10-
                    percent interest' means--
                              ``(i) in the case of an interest in a
                            corporation, ownership of at least 10
                            percent (by vote or value) of the stock
                            in such corporation,
                              ``(ii) in the case of an interest in
                            a partnership, ownership of at least 10
                            percent of the capital or profits
                            interest in the partnership, and
                              ``(iii) in any other case, ownership
                            of at least 10 percent of the
                            beneficial interests in the entity.
                    For purposes of the preceding sentence, the
                    rules prescribed by section 318(a) shall apply.
              ``(5) Coordination with subsection (b).--Subsection
            (b) shall apply after the application of this
            subsection.
              ``(6) Regulations.--The Secretary shall issue such
            regulations or other guidance as the Secretary
            determines is necessary or appropriate to carry out
            this subsection, including regulations or other
            guidance to--
                      ``(A) determine whether a passive asset is
                    used in the active conduct of a trade or
                    business, in addition to the instances
                    described in paragraph (2)(B), and
                      ``(B) determine whether a passive asset is
                    held as a part of the reasonably required
                    working capital needs of a trade or business
                    under paragraph (2)(C).''.
      (b) Effective Date.--The amendments made by this section
    shall apply to transfers after the date of the enactment of
    this Act.

          PART 3--MODIFICATIONS OF RULES RELATING TO RETIREMENT PLANS

     Subpart A--Limitations on High-income Taxpayers With Large Retirement
                                Account Balances

    SEC. 138301. CONTRIBUTION LIMIT FOR INDIVIDUAL RETIREMENT PLANS OF
                        HIGH-INCOME TAXPAYERS WITH LARGE ACCOUNT BALANCES.

      (a) Contribution Limit.--
              (1) In general.--Subpart A of part I of subchapter D
            of chapter 1 is amended by adding at the end the
            following:

    ``SEC. 409B. CONTRIBUTION LIMIT ON INDIVIDUAL RETIREMENT PLANS OF HIGH-
                        INCOME TAXPAYERS WITH LARGE ACCOUNT BALANCES.

      ``(a) General Rule.--Notwithstanding any other provision of
    this title, in the case of an individual who is an applicable
    taxpayer for a taxable year, no annual additions which are
    allocable to such taxable year shall be made by, or on behalf
    of, such individual to any individual retirement plan to the
    extent such annual additions exceed the excess (if any) of--
              ``(1) the applicable dollar amount for such taxable
            year, over
              ``(2) the aggregate vested balances to the credit of
            the individual (whether as a participant, owner, or
            beneficiary) in all applicable retirement plans
            (determined as of the close of the calendar year
            preceding the calendar year in which such taxable year
            begins).
      ``(b) Definitions and Special Rules.--For purposes of this
    section--
              ``(1) Annual addition.--
                      ``(A) In general.--Except as provided in this
                    paragraph, the term `annual addition' means any
                    contribution to an individual retirement plan.
                      ``(B) Contributions to sep and simple
                    plans.--In the case of any employer or employee
                    contributions by, or on behalf of, an
                    individual to a simplified employee pension
                    under section 408(k) or a simple retirement
                    account under section 408(p)--
                              ``(i) such contributions shall not be
                            treated as annual additions for
                            purposes of applying the limitation
                            under subsection (a), but
                              ``(ii) the excess described in
                            subsection (a) shall be reduced by the
                            amount of such contributions in
                            applying such limitation to other
                            annual additions with respect to such
                            individual.
                      ``(C) Rollover contributions disregarded.--A
                    rollover contribution under section 402(c),
                    402A(c)(3)(A), 403(a)(4), 403(b)(8),
                    408(d)(3)(A), 408A(e)(1), or 457(e)(16) shall
                    not be treated as an annual addition.
                      ``(D) Accounts acquired by death or divorce
                    or separation.--The acquisition of an
                    individual retirement plan (or the transfer to
                    or contribution of amounts to an individual
                    retirement plan) by reason of--
                              ``(i) the death of another
                            individual, or
                              ``(ii) divorce or separation
                            (pursuant to section 408(d)(6)),
                    shall not be treated as an annual addition.
              ``(2) Applicable dollar amount.--The term `applicable
            dollar amount' means $10,000,000.
              ``(3) Applicable retirement plan.--The term
            `applicable retirement plan' means--
                      ``(A) a defined contribution plan to which
                    section 401(a) or 403(a) applies,
                      ``(B) an annuity contract under section
                    403(b),
                      ``(C) an eligible deferred compensation plan
                    described in section 457(b) which is maintained
                    by an eligible employer described in section
                    457(e)(1)(A), or
                      ``(D) an individual retirement plan.
              ``(4) Applicable taxpayer.--
                      ``(A) In general.--The term `applicable
                    taxpayer' means, with respect to any taxable
                    year, a taxpayer whose adjusted taxable income
                    for such taxable year exceeds the amount
                    determined under subparagraph (B).
                      ``(B) Dollar limit.--The amount determined
                    under this subparagraph for any taxable year
                    is--
                              ``(i) $400,000 for an individual who
                            is a taxpayer not described in clause
                            (ii) or (iii),
                              ``(ii) $425,000 in the case of an
                            individual who is a head of household
                            (as defined in section 2(b)), and
                              ``(iii) $450,000 in the case of an
                            individual who is a married individual
                            filing a joint return or a surviving
                            spouse (as defined in section 2(a)).
                      ``(C) Adjusted taxable income.--The term
                    `adjusted taxable income' means taxable income
                    determined without regard to--
                              ``(i) any deduction for annual
                            additions to individual retirement
                            plans to which subsection (a) applies,
                            and
                              ``(ii) any increase in minimum
                            required distributions by reason of
                            section 4974(e).
              ``(5) Adjustments for inflation.--
                      ``(A) In general.--In the case of any taxable
                    year beginning after 2022, each of the dollar
                    amounts under paragraph (2) and paragraph
                    (4)(B) shall be increased by an amount equal to
                    the product of--
                              ``(i) such dollar amount, and
                              ``(ii) the cost-of-living adjustment
                            under section 1(f)(3) for the calendar
                            year in which such taxable year begins,
                            determined by substituting `calendar
                            year 2021' for `calendar year 1992' in
                            subparagraph (B) thereof.
                      ``(B) Rounding.--If any amount as adjusted
                    under subparagraph (A) is not--
                              ``(i) in the case of the dollar
                            amount under paragraph (2), a multiple
                            of $250,000, such amount shall be
                            rounded to the next lowest multiple of
                            $250,000, and
                              ``(ii) in the case of a dollar amount
                            under paragraph (4), a multiple of
                            $1,000, such amount shall be rounded to
                            the next lowest multiple of $1,000.
      ``(c) Regulations.--The Secretary shall prescribe such
    regulations and guidance as are necessary or appropriate to
    carry out the purposes of this section, including regulations
    or guidance that provide for the application of this section
    and section 4974(e) in the case of plans with a valuation date
    other than the last day of a calendar year.''.
              (2) Conforming amendments.--
                      (A) The table of contents for subpart A of
                    part I of subchapter D of chapter 1 is amended
                    by adding after the item relating to section
                    409A the following new item:

    ``Sec. 409B. Contribution limit on individual retirement plans of high-
              income taxpayers with large account balances.''.
                      (B) Section 408(r) is amended by adding at
                    the end the following new paragraph:
              ``(3) For additional limitation on contributions to
            individual retirement plans with large account
            balances, see sections 402A(c)(3)(A) and 409B.''.
      (b) Excise Tax on Excess Annual Additions.--
              (1) In general.--Section 4973 is amended by adding at
            the end the following new subsection:
      ``(i) Special Rule for Individual Retirement Plans With
    Excess Annual Additions.--For purposes of this section, in the
    case of individual retirement plans, the term `excess
    contributions' with respect to any taxable year means the sum
    of--
              ``(1) the excess of the annual additions (within the
            meaning of section 409B(b)(1)) to such plans over the
            limitation under section 409B(a) for such taxable year,
            reduced by the amount of any excess contributions
            determined under subsections (b) and (f), and
              ``(2) the lesser of--
                      ``(A) the amount determined under this
                    subsection for the preceding taxable year with
                    respect to such plans, reduced by the aggregate
                    distributions from such plans for the taxable
                    year (including distributions required under
                    section 4974(e)) to the extent not contributed
                    in a rollover contribution to another eligible
                    retirement plan in accordance with section
                    402(c), 402A(c)(3)(A), 403(a)(4), 403(b)(8),
                    457(e)(16), 408(d)(3), or 408A(d)(3), or
                      ``(B) the amount (if any) by which the amount
                    determined under section 409B(a)(2) for the
                    taxable year exceeds the applicable dollar
                    amount under section 409B(b)(2) for the taxable
                    year.''.
              (2) Conforming amendments.--Subsections (b) and (f)
            of section 4973 are each amended by inserting ``,
            except as further provided in subsection (i)'' after
            ``For purposes of this section''.
      (c) Reporting Requirements.--Section 6057(a) is amended by
    adding at the end the following:
              ``(3) Additional information regarding high account
            balances.--
                      ``(A) In general.--If, as of the close of any
                    plan year, 1 or more participants in an
                    applicable retirement plan (as defined in
                    section 409B(b)(3) without regard to
                    subparagraph (D) thereof) have a vested account
                    balance of at least $2,500,000, the plan
                    administrator shall file a statement with the
                    Secretary which includes--
                              ``(i) the name and identifying number
                            of each such participant (without
                            regard to whether such participant has
                            separated from employment), and
                              ``(ii) the amount to which each such
                            participant is entitled.
                      ``(B) Inclusion in registration statement.--
                    If both subparagraph (A) and paragraph (1)
                    apply to a plan, the plan administrator shall
                    include the information required under
                    subparagraph (A) in the registration statement
                    under paragraph (1) rather than file a
                    statement under subparagraph (A).
                      ``(C) Adjustments for inflation.--In the case
                    of any plan year beginning after 2022, the
                    $2,500,000 amount under subparagraph (A) shall
                    be increased by an amount equal to the product
                    of--
                              ``(i) such dollar amount, and
                              ``(ii) the cost-of-living adjustment
                            under section 1(f)(3) for the calendar
                            year in which such taxable year begins,
                            determined by substituting `calendar
                            year 2021' for `calendar year 1992' in
                            subparagraph (B) thereof.
                    If the amount as adjusted under the preceding
                    sentence is not a multiple of $250,000, such
                    amount shall be rounded to the next lowest
                    multiple of $250,000.''.
      (d) Effective Dates.--
              (1) In general.--The amendments made by subsections
            (a) and (b) shall apply to taxable years beginning
            after December 31, 2021.
              (2) Plan requirements.--The amendments made by
            subsection (c) shall apply to plan years beginning
            after December 31, 2021.

    SEC. 138302. INCREASE IN MINIMUM REQUIRED DISTRIBUTIONS FOR HIGH-INCOME
                        TAXPAYERS WITH LARGE RETIREMENT ACCOUNT BALANCES.

      (a) In General.--Section 4974 is amended by adding at the end
    the following:
      ``(e) Increase in Minimum Required Distributions for High-
    income Taxpayers With Large Aggregate Account Balances.--
              ``(1) In general.--If this subsection applies to a
            payee who is an applicable taxpayer (as defined in
            section 409B(b)(4)) for a taxable year--
                      ``(A) all qualified retirement plans and
                    eligible deferred compensation plans of the
                    payee which are applicable retirement plans
                    taken into account in computing the excess
                    described in paragraph (3)(A) shall be treated
                    as 1 plan solely for purposes of applying this
                    section to the increase in minimum required
                    distributions for such taxable year determined
                    under subparagraph (B), and
                      ``(B) the minimum required distributions
                    under this section for all plans treated as 1
                    plan under subparagraph (A) with respect to
                    such payee for such taxable year shall be
                    increased by the excess (if any) of--
                              ``(i) the sum of--
                                      ``(I) if paragraph (2)
                                    applies to such taxable year,
                                    the applicable Roth excess
                                    amount, plus
                                      ``(II) 50 percent of the
                                    excess determined under
                                    paragraph (3)(A), reduced by
                                    the applicable Roth excess
                                    amount, over
                              ``(ii) the sum of the minimum
                            required distributions (determined
                            without regard to this subsection) for
                            all such plans.
              ``(2) Applicable roth excess amount.--
                      ``(A) Application.--For purposes of paragraph
                    (1)(B)(i), this paragraph applies to a taxable
                    year of a payee if the aggregate vested
                    balances to the credit of the payee (whether as
                    a participant, owner, or beneficiary) in all
                    applicable retirement plans (determined as of
                    the close of the calendar year preceding the
                    calendar year in which the taxable year begins)
                    exceed 200 percent of the applicable dollar
                    amount for the calendar year in which the
                    taxable year begins.
                      ``(B) Applicable roth excess amount.--The
                    applicable Roth excess amount for any taxable
                    year to which this paragraph applies is an
                    amount equal to the lesser of--
                              ``(i) the excess determined under
                            subparagraph (A), or
                              ``(ii) the aggregate balances to the
                            credit of the payee (whether as a
                            participant, owner, or beneficiary) in
                            all Roth IRAs and designated Roth
                            accounts (within the meaning of section
                            402A) as of the time described in
                            subparagraph (A).
              ``(3) Application.--This subsection shall apply to a
            payee for a taxable year--
                      ``(A) if the aggregate vested balances to the
                    credit of the payee (whether as a participant,
                    owner, or beneficiary) in all applicable
                    retirement plans (determined as of the close of
                    the calendar year preceding the calendar year
                    in which the taxable year begins) exceed the
                    applicable dollar amount for the calendar year
                    in which the taxable year begins, and
                      ``(B) without regard to whether amounts with
                    respect to the payee are otherwise required to
                    be distributed under section 401(a)(9),
                    403(b)(10), 408(a)(6), 408(b)(3), or 457(d)(2).
              ``(4) Coordination and allocation.--
                      ``(A) Minimum distribution requirements.--If
                    this subsection applies to a payee for any
                    taxable year--
                              ``(i) this section shall apply first
                            to minimum required distributions
                            determined without regard to this
                            subsection and then to any increase in
                            minimum required distributions by
                            reason of this subsection, and
                              ``(ii) nothing in this subsection
                            shall be construed to affect the amount
                            of any minimum required distribution
                            determined without regard to this
                            subsection or the plan or plans from
                            which it is required to be distributed
                            from.
                      ``(B) Allocation of increase in minimum
                    required distributions.--
                              ``(i) In general.--Except as provided
                            in clauses (ii) and (iii), the taxpayer
                            may, in such form and manner as the
                            Secretary may prescribe, allocate any
                            increase in minimum required
                            distributions by reason of this
                            subsection to applicable retirement
                            plans treated as 1 plan under
                            subparagraph (A) in such manner as the
                            taxpayer chooses.
                              ``(ii) Allocation to roth iras and
                            accounts.--In the case of a taxable
                            year to which paragraph (2) applies,
                            the portion of any increase in minimum
                            required distributions by reason of
                            this subsection equal to the applicable
                            Roth excess amount shall be allocated
                            first to Roth IRAs and then to
                            designated Roth accounts (within the
                            meaning of section 402A) of the payee.
                              ``(iii) Special rules for employee
                            stock ownership plans.--If any payee to
                            which this subsection applies for any
                            taxable year has account balances in 1
                            or more employee stock ownership plans
                            (as defined in section 4975(e)(7)) any
                            portion of which is invested in
                            employer securities which are not
                            readily tradable on an securities
                            market, the increase in minimum
                            required distributions by reason of
                            this subsection shall be allocated--
                                      ``(I) first to all account
                                    balances (other than such
                                    portions) of the payee in all
                                    applicable retirement plans in
                                    the manner provided by this
                                    subparagraph (without regard to
                                    this clause), and
                                      ``(II) then to such portions
                                    in such manner as the taxpayer
                                    chooses.
                            The Secretary shall prescribe
                            regulations which provide that if any
                            such increase is allocated to any such
                            portion of an account balance for the
                            first taxable year of the payee
                            beginning in 2022, the payee may elect
                            to have such portion distributed over a
                            period of years not greater than the
                            period specified by the Secretary in
                            such regulations (and any distributions
                            made in accordance with such election
                            shall be treated for purposes of this
                            section as made in such first taxable
                            year).
              ``(5) Distributions not eligible for rollovers.--For
            purposes of determining whether a distribution is an
            eligible rollover distribution, any distribution from
            an applicable retirement plan which is attributable to
            any increase in minimum required distributions by
            reason of this subsection shall be treated as a
            distribution required under section 401(a)(9),
            403(b)(10), 408(a)(6), 408(b)(3), or 457(d)(2),
            whichever is applicable.
              ``(6) Definitions.--For purposes of this subsection,
            any term used in this subsection which is also used in
            section 409B shall have the same meaning as when such
            term is used in such section.''.
      (b) Special Rules.--
              (1) Distribution rights.--
                      (A) Qualified trusts.--Section 401(a) is
                    amended by inserting after paragraph (38) the
                    following new paragraph:
              ``(39) Immediate distribution right.--A trust forming
            part of a defined contribution plan shall not
            constitute a qualified trust under this section unless
            an employee who certifies to the plan that the employee
            is a taxpayer who is subject to the distribution
            requirements of section 4974(e) may elect to receive a
            distribution from the employee's account balance under
            the plan in such amount as the employee may elect,
            including any amounts attributable to a qualified cash
            or deferred arrangement (as defined in subsection
            (k)(2)).''.
                      (B) Annuity contracts.--
                              (i) Custodial accounts.--Section
                            403(b)(7)(A) is amended by adding at
                            the end the following new flush
                            sentence:
                    ``Notwithstanding clause (i), the custodial
                    account shall permit an employee who certifies
                    that the employee is a taxpayer who is subject
                    to the distribution requirements of section
                    4974(e) to elect to receive a distribution from
                    the employee's custodial account in such amount
                    as the employee may elect.''.
                              (ii) Annuity contracts.--Section
                            403(b)(11) is amended by adding at the
                            end the following new sentence:
                            ``Notwithstanding subparagraphs (A),
                            (B), (C), and (D), the annuity contract
                            shall permit an employee who certifies
                            that the employee is a taxpayer who is
                            subject to the distribution
                            requirements of section 4974(e) to
                            elect to receive a distribution of
                            contributions made pursuant to a salary
                            reduction agreement (within the meaning
                            of section 402(g)(3)) from the
                            employee's annuity contract in such
                            amount as the employee may elect.''
                      (C) Governmental plans.--Section 457(d)(1) is
                    amended by adding at the end the following new
                    flush sentence:
            ``Notwithstanding subparagraph (A), an eligible
            deferred compensation plan of an employer described in
            subsection (e)(1)(A) shall permit an employee who
            certifies that the employee is a taxpayer who is
            subject to the distribution requirements of section
            4974(e) to elect to receive a distribution from the
            plan in such amount as the employee may elect.''.
              (2) Exception from 10 percent additional tax on early
            distributions.--Section 72(t)(2) is amended by adding
            at the end the following new subparagraph:
                      ``(I) Distributions of excess balances.--
                    Distributions from an applicable retirement
                    plan (within the meaning of section 409B)) to
                    the extent such distributions for the taxable
                    year do not exceed the amount required to be
                    distributed from such plan under section
                    4974(e).''.
              (3) Withholding.--Section 3405(b) is amended by
            adding at the end the following new paragraph:
              ``(3) Additional withholding for required
            distributions from high balance retirement accounts.--
                      ``(A) In general.--For purposes of this
                    section, a distribution pursuant to section
                    401(a)(39), the last sentence of section
                    403(b)(7)(A), the last sentence of section
                    403(b)(11), and the last sentence of section
                    457(d)(1) shall be treated as a nonperiodic
                    distribution, except that in applying this
                    subsection to such distribution--
                              ``(i) paragraph (1) shall be applied
                            by substituting `35 percent' for `10
                            percent', and
                              ``(ii) no election may be made under
                            paragraph (2) with respect to such
                            distribution.
                      ``(B) Exception.--Subparagraph (A) shall not
                    apply to any qualified distribution from a
                    designated Roth account (within the meaning of
                    section 402A).''.
      (c) Effective Dates.--
              (1) In general.--The amendments made by subsection
            (a) shall apply to taxable years beginning after
            December 31, 2021.
              (2) Plan requirements.--The amendments made by
            subsection (b) shall apply to plan years beginning
            after December 31, 2021.
      (d) Provisions Relating to Plan Amendments.--
              (1) In general.--If this subsection applies to any
            plan or contract amendment, such plan or contract shall
            be treated as being operated in accordance with the
            terms of the plan during the period described in
            paragraph (2)(B)(i).
              (2) Amendments to which subsection applies.--
                      (A) In general.--This subsection shall apply
                    to any amendment to any plan or annuity
                    contract which is made--
                              (i) pursuant to any amendment made by
                            this section or pursuant to any
                            regulation issued by the Secretary of
                            the Treasury under this section or such
                            amendments, and
                              (ii) on or before the last day of the
                            first plan year beginning after
                            December 31, 2022, or such later date
                            as the Secretary of the Treasury may
                            prescribe.
                    In the case of a governmental or collectively
                    bargained plan to which subparagraph (B) or (C)
                    of subsection (a)(4) applies, clause (ii) shall
                    be applied by substituting the date which is 2
                    years after the date otherwise applied under
                    such clause.
                      (B) Conditions.--This subsection shall not
                    apply to any amendment unless--
                              (i) during the period--
                                      (I) beginning on the date the
                                    legislative or regulatory
                                    amendment described in
                                    paragraph (1)(A) takes effect
                                    (or in the case of a plan or
                                    contract amendment not required
                                    by such legislative or
                                    regulatory amendment, the
                                    effective date specified in
                                    such amendment), and
                                      (II) ending on the date
                                    described in subparagraph
                                    (A)(ii) (or, if earlier, the
                                    date the plan or contract
                                    amendment is adopted),
                            the plan or contract is operated as if
                            such plan or contract amendment were in
                            effect; and
                              (ii) such plan or contract amendment
                            applies retroactively for such period.

      Subpart B--Other Provisions Relating to Individual Retirement Plans

    SEC. 138311. TAX TREATMENT OF ROLLOVERS TO ROTH IRAS AND ACCOUNTS.

      (a) Rollovers and Conversions Limited to Taxable Amounts.--
              (1) Roth iras.--
                      (A) In general.--Paragraph (1) of section
                    408A(e) is amended by adding at the end the
                    following new sentence: ``A qualified rollover
                    contribution shall not include any rollover
                    contribution from any eligible retirement plan
                    described in subparagraph (B) (other than from
                    a designated Roth account (within the meaning
                    of section 402A)) if any portion of the
                    distribution from which such contribution is
                    made would (without regard to such
                    contribution) be treated as not includible in
                    gross income.''
                      (B) Conversions.--Subparagraph (C) of section
                    408A(d)(3) is amended by adding at the end the
                    following new sentence: ``This subparagraph
                    shall not apply if any portion of the plan
                    being converted would be treated as not
                    includible in gross income if distributed at
                    the time of the conversion.''
              (2) Designated roth accounts.--Section 402A(c)(4)(B)
            is amended by inserting ``, determined after the
            application of the last sentence of paragraph (1)
            thereof'' after ``section 408A(e)''.
              (3) Effective date.--The amendments made by this
            subsection shall apply to distributions, transfers, and
            contributions made after December 31, 2021.
      (b) No Rollovers or Conversions for High-income Taxpayers.--
              (1) Roth iras.--
                      (A) Qualified rollover contribution.--Section
                    408A(e), as amended by subsection (a), is
                    amended by adding at the end the following:
              ``(3) High-income taxpayers may only rollover from
            roth iras and accounts.--If--
                      ``(A) a taxpayer is an applicable taxpayer
                    (as defined in section 409B(b)(4)) for the
                    taxable year in which a distribution is made,
                    and
                      ``(B) such distribution is contributed to a
                    Roth IRA in a rollover contribution,
            such contribution shall be treated as a qualified
            rollover contribution under paragraph (1) only if it is
            made from another Roth IRA or from a designated Roth
            account (within the meaning of section 402A).''.
                      (B) Elimination of conversions.--Paragraph
                    (3) of section 408A(d), as amended by
                    subsection (a), is amended by adding at the end
                    the following:
                      ``(G) Paragraph not to apply to high-income
                    taxpayers.--If a taxpayer is an applicable
                    taxpayer (as defined in section 409B(b)(4)) for
                    any taxable year, this paragraph shall not
                    apply to any distribution to which this
                    paragraph otherwise applies (or to any
                    conversion described in subparagraph (C)) which
                    is made during such taxable year.''.
              (2) Designated roth accounts.--Paragraph (4) of
            section 402A(c) is amended by adding at the end the
            following:
                      ``(F) Paragraph not to apply to high-income
                    taxpayers.--If a taxpayer is an applicable
                    taxpayer (as defined in section 409B(b)(4)) for
                    any taxable year, this paragraph shall not
                    apply to any distribution to which this
                    paragraph otherwise applies and which is made
                    during such taxable year.''.
              (3) Effective date.--The amendments made by this
            subsection shall apply to distributions, transfers, and
            contributions made in taxable years beginning after
            December 31, 2031.

    SEC. 138312. PROHIBITION OF IRA INVESTMENTS CONDITIONED ON ACCOUNT
                        HOLDER'S STATUS.

      (a) In General.--Subsection (a) of section 408 is amended by
    adding at the end the following new paragraph:
              ``(7) No part of the trust funds will be invested in
            any security if the issuer of such security (or any
            other person specified by the Secretary) requires the
            individual on whose behalf the trust is maintained to
            make a representation to the issuer or such other
            person that such individual--
                      ``(A) has a specified minimum amount of
                    income or assets,
                      ``(B) has completed a specified minimum level
                    of education, or
                      ``(C) holds a specific license or
                    credential.''.
      (b) Loss of Exemption of Account.--Paragraph (2) of section
    408(e) is amended--
              (1) by striking ``'' each place it appears in
            subparagraph (A) and inserting ``maintained'',
              (2) by redesignating subparagraph (B) as subparagraph
            (C),
              (3) by inserting after subparagraph (A) the following
            new subparagraph:
                      ``(B) Prohibited investment.--If, during any
                    taxable year of the individual for whose
                    benefit any individual retirement account is
                    maintained, the investment of any part of the
                    funds of such individual retirement account
                    does not comply with subsection (a)(7), such
                    account ceases to be an individual retirement
                    account as of the first day of such taxable
                    year. Rules similar to the rules of clauses (i)
                    and (ii) of subparagraph (A) shall apply for
                    purposes of this subparagraph.'',
              (4) by striking ``where employee engages in
            prohibited transaction'' in the heading and inserting
            ``in case of certain prohibited transactions and
            investments'',
              (5) by striking ``In general'' in the heading of
            subparagraph (A) and inserting ``Employee engaging in
            prohibited transaction'', and
              (6) by striking ``(A)'' in subparagraph (C), as so
            redesignated, and inserting ``(A) or (B)''.
      (c) Conforming Amendments.--
              (1) Paragraph (1) of section 408(c) is amended by
            striking ``(1) through (6)'' and inserting ``(1)
            through (7)''.
              (2) Paragraph (3) of section 4975(c) is amended--
                      (A) striking ``'' and inserting
                    ``maintained'',
                      (B) by striking ``transaction'' both places
                    it appears and inserting ``transaction or
                    investment'', and
                      (C) by striking ``section 408(e)(2)(A)'' and
                    inserting ``subparagraph (A) or (B) of section
                    408(e)(2)''.
      (d) Effective Dates.--
              (1) In general.--Except as provided in paragraph (2),
            the amendments made by this section shall apply to
            taxable years beginning after December 31, 2021.
              (2) Special rule for existing investments.--If, on
            the date of the enactment of this Act, an individual
            retirement account holds an investment prohibited under
            section 408(a)(7) of the Internal Revenue Code of 1986
            (as added by subsection (a)), the amendments made by
            this section shall apply to such investment for taxable
            years beginning after December 31, 2023.

    SEC. 138313. STATUTE OF LIMITATIONS WITH RESPECT TO IRA NONCOMPLIANCE.

      (a) In General.--Subsection (c) of section 6501 is amended by
    adding at the end the following new paragraph:
              ``(13) Noncompliance relating to an individual
            retirement plan.--
                      ``(A) Misreporting.--In the case of any
                    substantial error (willful or otherwise) in the
                    reporting on a return of any information
                    relating to the valuation of investment assets
                    with respect to an individual retirement plan,
                    the time for assessment of any tax imposed by
                    this title with respect to such plan shall not
                    expire before the date which is 6 years after
                    the return containing such error was filed
                    (whether or not such return was filed on or
                    after the date prescribed).
                      ``(B) Prohibited transactions.--The time for
                    assessment of any tax imposed by section 4975
                    shall not expire before the date which is 6
                    years after the return was filed (whether or
                    not such return was filed on or after the date
                    prescribed).''.
      (b) Effective Date.--The amendment made by this section shall
    apply to taxes with respect to which the 3-year period under
    section 6501(a) of the Internal Revenue Code of 1986 (without
    regard to the amendment made by this section) ends after
    December 31, 2021.

    SEC. 138314. PROHIBITION OF INVESTMENT OF IRA ASSETS IN ENTITIES IN
                        WHICH THE OWNER HAS A SUBSTANTIAL INTEREST.

      (a) In General.--Subsection (a) of section 408, as amended by
    the preceding provisions of this Act, is amended by adding at
    the end the following new paragraph:
              ``(8) No part of the trust funds will be invested in
            a corporation, partnership or other unincorporated
            enterprise, or trust or estate if--
                      ``(A) in the case of an entity with respect
                    to which interests described in clause (i),
                    (ii), or (iii) are not readily tradable on an
                    securities market, 10 percent or more of--
                              ``(i) the combined voting power of
                            all classes of stock entitled to vote
                            or the total value of shares of all
                            classes of stock of such corporation,
                              ``(ii) the capital interest or
                            profits interest of such partnership or
                            enterprise, or
                              ``(iii) the beneficial interest of
                            such trust or estate,
                    is owned (directly or indirectly) or held by
                    the individual on whose behalf the trust is
                    maintained, or
                      ``(B) the individual on whose behalf the
                    trust is maintained is an officer or director
                    (or an individual having powers or
                    responsibilities similar to officers or
                    directors) of such corporation, partnership, or
                    other unincorporated enterprise.
             For purposes of subparagraph (A), the constructive
            ownership rules of paragraphs (4) and (5) of section
            4975(e) shall apply, and any asset or interest held by
            the trust shall be treated as held by the individual
            described in such subparagraph.''.
      (b) Loss of Exemption of Account.--Subparagraph (B) of
    section 408(e)(2), as added by this Act, is amended by striking
    ``(a)(7)'' and inserting ``(a)(7) or (a)(8)''.
      (c) Conforming Amendment.--Paragraph (1) of section 408(c),
    as amended by the preceding provisions of this Act, is amended
    by striking ``(1) through (7)'' and inserting ``(1) through
    (8)''.
      (d) Effective Dates.--
              (1) In general.--Except as provided in paragraph (2),
            the amendments made by this section shall apply to
            investments made in taxable years beginning after
            December 31, 2021.
              (2) Special rule for existing investments.--If, on
            the date of the enactment of this Act, an individual
            retirement account holds an investment prohibited under
            section 408(a)(8) of the Internal Revenue Code of 1986
            (as added by subsection (a)), the amendments made by
            this section shall apply to such investment for taxable
            years beginning after December 31, 2023.

    SEC. 138315. IRA OWNERS TREATED AS DISQUALIFIED PERSONS FOR PURPOSES OF
                        PROHIBITED TRANSACTION RULES.

      (a) In General.--Paragraph (2) of section 4975(e) is
    amended--
              (1) by striking ``or'' at the end of subparagraph
            (H),
              (2) by striking the period at the end of subparagraph
            (I) and inserting ``; or'',
              (3) by inserting after subparagraph (I) the following
            new subparagraph:
                      ``(J) the individual for whose benefit a plan
                    described in subparagraph (B) or (C) of
                    paragraph (1) is maintained.'',
              (4) by striking ``or (E)'' both places it appears in
            subparagraphs (F) and (G) and inserting ``(E), or (J)
            (in the case of a plan described in subparagraph (B) or
            (C) of paragraph (1))'',
              (5) by striking ``or (G)'' in subparagraph (I) and
            inserting ``(G), or (J) (in the case of a plan
            described in subparagraph (B) or (C) of paragraph
            (1))'', and
              (6) by adding at the end the following: ``For
            purposes of subparagraphs (G) and (I), any asset or
            interest held by a plan described in subparagraph (B)
            or (C) of paragraph (1) shall be treated as owned by
            the individual described in subparagraph (J) with
            respect to such plan.''.
      (b) Conforming Amendments.--
              (1) Subparagraph (A) of section 408(e)(2), as amended
            by the preceding provisions of this Act, is amended to
            read as follows:
                      ``(A) Employee engaging in prohibited
                    transaction.--If, during any taxable year of
                    the individual for whose benefit any individual
                    retirement account is maintained, that
                    individual engages in any transaction
                    prohibited by section 4975 with respect to such
                    account, such account ceases to be an
                    individual retirement account as of the first
                    day of such taxable year. For purposes of this
                    paragraph, the separate account for the benefit
                    of any individual within an individual
                    retirement account maintained by an employer or
                    association of employees is treated as a
                    separate individual retirement account.''.
              (2) Subparagraph (B) of section 408(e)(2), as added
            by this Act, is amended by striking the last sentence.
      (c) Effective Date.--The amendments made by this section
    shall apply to transactions occurring after December 31, 2021.

      PART 4--FUNDING THE INTERNAL REVENUE SERVICE AND IMPROVING TAXPAYER
                                   COMPLIANCE

    SEC. 138401. FUNDING OF THE INTERNAL REVENUE SERVICE.

      In addition to amounts otherwise available, there are
    appropriated for fiscal year 2022, out of any money in the
    Treasury not otherwise appropriated:
              (1) $78,935,000,000, to remain available until
            September 30, 2031, for necessary expenses for the
            Internal Revenue Service (IRS) for strengthening tax
            enforcement activities and increasing voluntary
            compliance, expanding audits and other enforcement
            activities, and modernizing information technology to
            effectively support enforcement activities, except that
            no use of these funds is intended to increase taxes on
            any taxpayer with taxable income below $400,000;
              (2) $410,000,000, to remain available until September
            30, 2031, for necessary expenses for the Treasury
            Inspector General for Tax Administration to provide
            oversight of the IRS, including ensuring that taxpayer
            privacy is protected and that no undue burden is
            imposed on small businesses from IRS enforcement
            activities; and
              (3) $157,000,000, to remain available until September
            30, 2031, for the Tax Court for adjudicating tax
            disputes.

    SEC. 138402. APPLICATION OF BACKUP WITHHOLDING WITH RESPECT TO THIRD
                        PARTY NETWORK TRANSACTIONS.

      (a) In General.--Section 3406(b) is amended by adding at the
    end the following new paragraph:
              ``(8) Other reportable payments include payments in
            settlement of third party network transactions only
            where aggregate for calendar year is $600 or more.--Any
            payment in settlement of a third party network
            transaction required to be shown on a return required
            under section 6050W which is made during any calendar
            year shall be treated as a reportable payment only if--
                      ``(A) the aggregate amount of such payment
                    and all previous such payments made by the
                    third party settlement organization to the
                    participating payee during such calendar year
                    equals or exceeds $600, or
                      ``(B) the third party settlement organization
                    was required under section 6050W to file a
                    return for the preceding calendar year with
                    respect to payments to the participating
                    payee.''.
      (b) Conforming Amendment.--Section 6050W(e) is amended by
    inserting ``equal or'' before ``exceed $600''.
      (c) Effective Date.--The amendments made by this section
    shall apply to calendar years beginning after December 31,
    2021.
      (d) Transitional Rule for 2022.--In the case of payments made
    during calendar year 2022, section 3406(b)(8)(A) of the
    Internal Revenue Code of 1986 (as added by this section) shall
    be applied by inserting ``and the aggregate number of third
    party network transactions settled by the third party
    settlement organization with respect to the participating payee
    during such calendar year exceeds 200'' before the comma at the
    end.

    SEC. 138403. LIMITATION ON DEDUCTION FOR QUALIFIED CONSERVATION
                        CONTRIBUTIONS MADE BY PASS-THROUGH ENTITIES, ETC.

      (a) In General.--Section 170(h) is amended by adding at the
    end the following new paragraphs:
              ``(7) Limitation on deduction for qualified
            conservation contributions made by pass-through
            entities.--
                      ``(A) In general.--A contribution by a
                    partnership (whether directly or as a
                    distributive share of a contribution of another
                    partnership) shall not be treated as a
                    qualified conservation contribution for
                    purposes of this section if the amount of such
                    contribution exceeds 2.5 times the sum of each
                    partner's relevant basis in such partnership.
                      ``(B) Relevant basis.--For purposes of this
                    paragraph--
                              ``(i) In general.--The term `relevant
                            basis' means, with respect to any
                            partner, the portion of such partner's
                            modified basis in the partnership which
                            is allocable (under rules similar to
                            the rules of section 755) to the
                            portion of the real property with
                            respect to which the contribution
                            described in subparagraph (A) is made.
                              ``(ii) Modified basis.--The term
                            `modified basis' means, with respect to
                            any partner, such partner's adjusted
                            basis in the partnership as
                            determined--
                                      ``(I) immediately before the
                                    contribution described in
                                    subparagraph (A),
                                      ``(II) without regard to
                                    section 752, and
                                      ``(III) by the partnership
                                    after taking into account the
                                    adjustments described in
                                    subclauses (I) and (II) and
                                    such other adjustments as the
                                    Secretary may provide.
                      ``(C) Exception for contributions outside 3-
                    year holding period.--Subparagraph (A) shall
                    not apply to any contribution which is made at
                    least 3 years after the latest of--
                              ``(i) the last date on which the
                            partnership that made such contribution
                            acquired any portion of the real
                            property with respect to which such
                            contribution is made,
                              ``(ii) the last date on which any
                            partner in the partnership that made
                            such contribution acquired any interest
                            in such partnership, and
                              ``(iii) if the interest in the
                            partnership that made such contribution
                            is held through one or more
                            partnerships--
                                      ``(I) the last date on which
                                    any such partnership acquired
                                    any interest in any other such
                                    partnership, and
                                      ``(II) the last date on which
                                    any partner in any such
                                    partnership acquired any
                                    interest in such partnership.
                      ``(D) Exception for family partnerships.--
                              ``(i) In general.--Subparagraph (A)
                            shall not apply with respect to any
                            contribution made by any partnership if
                            substantially all of the partnership
                            interests in such partnership are held,
                            directly or indirectly, by an
                            individual and members of the family of
                            such individual.
                              ``(ii) Members of the family.--For
                            purposes of this subparagraph, the term
                            `members of the family' means, with
                            respect to any individual--
                                      ``(I) the spouse of such
                                    individual, and
                                      ``(II) any individual who
                                    bears a relationship to such
                                    individual which is described
                                    in subparagraphs (A) through
                                    (G) of section 152(d)(2).
                      ``(E) Application to other pass-through
                    entities.--Except as may be otherwise provided
                    by the Secretary, the rules of this paragraph
                    shall apply to S corporations and other pass-
                    through entities in the same manner as such
                    rules apply to partnerships.
                      ``(F) Regulations.--The Secretary shall
                    prescribe such regulations or other guidance as
                    may be necessary or appropriate to carry out
                    the purposes of this paragraph, including
                    regulations or other guidance--
                              ``(i) to require reporting, including
                            reporting related to tiered
                            partnerships and the modified basis of
                            partners, and
                              ``(ii) to prevent the avoidance of
                            the purposes of this paragraph.
              ``(8) Notice of certain failures.--
                      ``(A) In general.--If a donor is found by the
                    Secretary to have failed to meet the
                    requirement that a qualified conservation
                    contribution shall be granted and protected in
                    perpetuity by reason of defective language in
                    the deed relating to property line adjustments
                    or extinguishment clauses, the donor shall have
                    90 days from the written notice by the
                    Secretary to correct such failure, unless the
                    Secretary can demonstrate that the donor's
                    failure to meet those requirements was
                    intentional.
                      ``(B) Exception.--Subparagraph (A) shall not
                    apply to any reportable transaction or any
                    contribution that is not treated as a qualified
                    conservation contribution by reason of
                    paragraph (7).''.
      (b) Application of Accuracy-Related Penalties.--
              (1) In general.--Section 6662(b) is amended by
            inserting after paragraph (9) the following new
            paragraph:
              ``(10) Any disallowance of a deduction by reason of
            section 170(h)(7).''.
              (2) Treatment as gross valuation misstatement.--
            Section 6662(h)(2) is amended by striking ``and'' at
            the end of subparagraph (B), by striking the period at
            the end of subparagraph (C) and inserting ``, and'',
            and by adding at the end the following new
            subparagraph:
                      ``(D) any disallowance of a deduction
                    described in subsection (b)(10).''.
              (3) No reasonable cause exception.--Section
            6664(c)(2) is amended by inserting ``or to any
            disallowance of a deduction described in section
            6662(b)(10)'' before the period at the end.
              (4) Approval of assessment not required.--Section
            6751(b)(2)(A) is amended by striking ``subsection
            (b)(9)'' and inserting ``paragraph (9) or (10) of
            subsection (b)''.
      (c) Application of Statute of Limitations on Assessment and
    Collection.--
              (1) Extension for certain adjustments made under
            prior law.--In the case of any disallowance of a
            deduction by reason of section 170(h)(7) of the
            Internal Revenue Code of 1986 (as added by this
            section) or any penalty imposed under section 6662 of
            such Code with respect to such disallowance, section
            6229(d)(2) of such Code (as in effect before its
            repeal) shall be applied by substituting ``2 years''
            for ``1 year''.
              (2) Extension for listed transactions.--Any
            contribution described in section 170(h)(7)(A) of the
            Internal Revenue Code of 1986 (as added by this
            section) shall be treated for purposes of sections
            6501(c)(10) and 6235(c)(6) of such Code as a
            transaction specifically identified by the Secretary on
            December 23, 2016, as a tax avoidance transaction for
            purposes of section 6011 of such Code.
      (d) Application to Certain Transactions Disallowed Under
    Other Provisions of Law.--In the case of any disallowance of a
    deduction under section 170 of the Internal Revenue Code of
    1986 with respect to a transaction described in Internal
    Revenue Service Notice 2017-10 with respect to a taxable year
    ending before the date of the enactment of this Act, such
    disallowance shall be treated for purposes of section
    6662(b)(10) of such Code (as added by this section) and
    subsection (c)(1) as being by reason of section 170(h)(7) of
    such Code (as added by this section).
      (e) Effective Date.--
              (1) In general.--Except as provided in paragraphs (2)
            and (3), the amendments made by this section shall
            apply to contributions made after December 23, 2016, in
            taxable years ending after such date.
              (2) Notice of certain failures.--So much of the
            amendment made by subsection (a) as relates to section
            170(h)(8) of the Internal Revenue Code of 1986, as
            added by such subsection, shall apply to--
                      (A) returns filed after the date of the
                    enactment of this Act, and
                      (B) returns filed on or before such date if
                    the period specified in section 6501 for
                    assessment of the taxes with respect to which
                    such return relates has not expired as of such
                    date.
              (3) Certified historic structures.--In the case of
            contributions the conservation purpose (as defined in
            section 170(h)(4) of the Internal Revenue Code of 1986)
            of which is the preservation of a certified historic
            structure (as defined in section 170(h)(4)(C) of such
            Code), the amendments made by this section shall apply
            to contributions made in taxable years beginning after
            December 31, 2018.
              (4) No inference.--No inference is intended as to the
            appropriate treatment of contributions made in taxable
            years ending on or before the date specified in
            paragraph (1) or (3), whichever is applicable, or as to
            any activity not described in section 170(h)(7) of the
            Internal Revenue Code of 1986, as added by this
            section.

    SEC. 138404. MODIFICATION OF PROCEDURAL REQUIREMENTS RELATING TO
                        ASSESSMENT OF PENALTIES.

      (a) Repeal of Approval Requirement.--Section 6751, as amended
    by the preceding provision of this Act, is amended by striking
    subsection (b).
      (b) Quarterly Certifications of Compliance With Procedural
    Requirements.--Section 6751, as amended by subsection (a) of
    this section, is amended by inserting after subsection (a) the
    following new subsection:
      ``(b) Quarterly Certifications of Compliance.--Each
    appropriate supervisor of employees of the Internal Revenue
    Service shall certify quarterly by letter to the Commissioner
    of Internal Revenue whether or not the requirements of
    subsection (a) have been met with respect to notices of penalty
    issued by such employees.''.
      (c) Effective Dates.--
              (1) Repeal of approval requirement.--The amendment
            made by subsection (a) shall take effect as if included
            in section 3306 of the Internal Revenue Service
            Restructuring and Reform Act of 1998.
              (2) Quarterly certifications of compliance with
            procedural requirements.--The amendment made by
            subsection (b) shall apply to notices of penalty issued
            after the date of the enactment of this Act.

                            PART 5--OTHER PROVISIONS

    SEC. 138501. MODIFICATIONS TO LIMITATION ON DEDUCTION OF EXCESSIVE
                        EMPLOYEE REMUNERATION.

      (a) In General.--Section 162(m) is amended by adding at the
    end the following new paragraph:
              ``(7) Special rules related to limitation on
            deduction of excessive employee remuneration.--
                      ``(A) Aggregation rule.--A rule similar to
                    the rule of paragraph (6)(C)(ii) shall apply
                    for purposes of paragraph (1).
                      ``(B) Regulations.--The Secretary shall
                    prescribe such regulations or other guidance as
                    may be necessary or appropriate to carry out
                    the purposes of paragraph (1), including
                    regulations or other guidance to prevent the
                    avoidance of such purposes, including through
                    the performance of services other than as an
                    employee or by providing compensation through a
                    pass-through or other entity.''.
      (b) Acceleration of Application to 5 Highest Compensated
    Employees.--Section 162(m)(3)(C) is amended by striking
    ``December 31, 2026'' and inserting ``December 31, 2021''.
      (c) Applicable Employee Remuneration.--Section 162(m)(4)(A)
    is amended--
              (1) by inserting ``(including performance-based
            compensation, commissions, post-termination
            compensation, and beneficiary payments)'' after
            ``remuneration for services'', and
              (2) by inserting ``and whether or not such
            remuneration is paid directly by the publicly held
            corporation'' after ``whether or not during the taxable
            year''.
      (d) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 138502. EXTENSION OF TAX TO FUND BLACK LUNG DISABILITY TRUST FUND.

      (a) In General.--Section 4121(e)(2)(A) is amended by striking
    ``December 31, 2021'' and inserting ``December 31, 2025''.
      (b) Effective Date.--The amendment made by this section shall
    apply to sales after December 31, 2021.

    SEC. 138503. PROHIBITED TRANSACTIONS RELATING TO HOLDING DISC OR FSC IN
                        INDIVIDUAL RETIREMENT ACCOUNT.

      (a) In General.--Section 4975(c)(1) is amended by striking
    ``or'' at the end of subparagraph (E), by striking the period
    at the end of subparagraph (F) and inserting ``; or'', and by
    adding at the end the following new subparagraph:
                      ``(G) in the case of a DISC or FSC that
                    receives any commission, or other payment, from
                    an entity any stock or interest in which is
                    owned by the individual for whose benefit an
                    individual retirement account is maintained,
                    holding of an interest in such DISC or FSC by
                    the individual retirement account.''.
      (b) Special Rules of Application.--Section 4975(c) is amended
    by adding at the end the following new paragraph:
              ``(8) Special rules of application for DISC and FSC
            holdings.--
                      ``(A) Indirect holding of DISC or FSC.--For
                    purposes of paragraph (1)(G), if an individual
                    retirement account holds an interest in an
                    entity that owns (directly or indirectly) an
                    interest in a DISC or FSC, the account shall be
                    treated as holding an interest in such DISC or
                    FSC.
                      ``(B) Constructive ownership.--For purposes
                    of determining ownership of stock (or any other
                    interest) in an entity under paragraph (1)(G)
                    and ownership of an interest in a DISC or FSC
                    under subparagraph (A), the rules prescribed by
                    section 318 for determining ownership shall
                    apply, except that such section shall be
                    applied by substituting `10 percent' for `50
                    percent' each place it appears.
                      ``(C) DISC and FSC.--For purposes of his
                    subsection, the terms `DISC' and `FSC' shall
                    have the respective meanings given such terms
                    by section 992(a)(1)) and section 922(a) (as in
                    effect before its repeal by the FSC Repeal and
                    Extraterritorial Income Exclusion Act of
                    2000).''.
      (c) Application of Tax to Terminated Individual Retirement
    Accounts.--Section 4975(c)(3) is amended by adding at the end
    the following: ``The preceding sentence shall not apply in the
    case of a prohibited transaction described in paragraph
    (1)(G).''.
      (d) Effective Date.--The amendments made by this section
    shall apply to stock and other interests acquired or held on or
    after December 31, 2021.

    SEC. 138504. INCREASE IN TAX ON CERTAIN TOBACCO PRODUCTS AND IMPOSITION
                        OF TAX ON NICOTINE.

      (a) Increasing Tax on Cigarettes.--
              (1) Small cigarettes.--Section 5701(b)(1) is amended
            by striking ``$50.33'' and inserting ``$100.66''.
              (2) Large cigarettes.--Section 5701(b)(2) is amended
            by striking ``$105.69'' and inserting ``$211.39''.
      (b) Tax Parity for Small Cigars.--Section 5701(a)(1) is
    amended by striking ``$50.33'' and inserting ``$100.66''.
      (c) Tax Parity for Large Cigars.--Section 5701(a)(2) is
    amended by striking ``52.75 percent'' and all that follows
    through the period and inserting ``$49.56 per pound and a
    proportionate tax at the like rate on all fractional parts of a
    pound but not less than 10.06 cents per cigar.''.
      (d) Tax Parity for Smokeless Tobacco.--
              (1) Section 5701(e) is amended--
                      (A) in paragraph (1), by striking ``$1.51''
                    and inserting ``$26.84'',
                      (B) in paragraph (2), by striking ``50.33
                    cents'' and inserting ``$10.70'', and
                      (C) by adding at the end the following new
                    paragraph:
              ``(3)  Smokeless tobacco sold in discrete single-use
            units.--On discrete single-use units, $100 per
            thousand.''.
              (2) Section 5702(m) is amended--
                      (A) in paragraph (1), by striking ``or
                    chewing tobacco'' and inserting ``, chewing
                    tobacco, or discrete single-use unit'',
                      (B) in paragraphs (2) and (3), by inserting
                    ``and that is not a discrete single-use unit''
                    before the period at the end of each such
                    paragraph, and
                      (C) by adding at the end the following new
                    paragraph:
              ``(4) Discrete single-use unit.--The term `discrete
            single-use unit' means any product containing tobacco
            that--
                      ``(A) is not intended to be smoked, and
                      ``(B) is in the form of a lozenge, tablet,
                    pill, pouch, dissolvable strip, or other
                    discrete single-use or single-dose unit.''.
      (e) Tax Parity for Pipe Tobacco.--Section 5701(f) is amended
    by striking ``$2.8311 cents'' and inserting ``$49.56''.
      (f) Tax Parity for Roll-Your-Own Tobacco.--Section 5701(g) is
    amended by striking ``$24.78'' and inserting ``$49.56''.
      (g) Tax Parity for Roll-Your-Own Tobacco and Certain
    Processed Tobacco.--Section 5702(o) is amended by inserting ``,
    and includes processed tobacco that is removed for delivery or
    delivered to a person other than a person with a permit
    provided under section 5713, but does not include removals of
    processed tobacco for exportation'' after ``wrappers thereof''.
      (h) Imposition of Tax on Nicotine for Use in Vaping, etc.--
              (1) In general.--Section 5701 is amended by
            redesignating subsection (h) as subsection (i) and by
            inserting after subsection (g) the following new
            subsection:
      ``(h) Nicotine.--On taxable nicotine, manufactured in or
    imported into the United States, there shall be imposed a tax
    equal to the dollar amount specified in section 5701(b)(1) per
    1,810 milligrams of nicotine (and a proportionate tax at the
    like rate on any fractional part thereof).''.
              (2) Taxable nicotine.--Section 5702 is amended by
            adding at the end the following new subsection:
      ``(q) Taxable Nicotine.--
              ``(1) In general.--Except as otherwise provided in
            this subsection, the term `taxable nicotine' means any
            nicotine which has been extracted, concentrated, or
            synthesized.
              ``(2) Exception for products approved by food and
            drug administration.--Such term shall not include any
            nicotine if the manufacturer or importer thereof
            demonstrates to the satisfaction of the Secretary of
            Health and Human Services that such nicotine will be
            used in--
                      ``(A) a drug--
                              ``(i) that is approved under section
                            505 of the Federal Food, Drug, and
                            Cosmetic Act or licensed under section
                            351 of the Public Health Service Act;
                            or
                              ``(ii) for which an investigational
                            use exemption has been authorized under
                            section 505(i) of the Federal Food,
                            Drug, and Cosmetic Act or under section
                            351(a) of the Public Health Service
                            Act; or
                      ``(B) a combination product (as described in
                    section 503(g) of the Federal Food, Drug, and
                    Cosmetic Act), the constituent parts of which
                    were approved or cleared under section 505,
                    510(k), or 515 of such Act.
              ``(3) Coordination with taxation of other tobacco
            products.--Tobacco products meeting the definition of
            cigars, cigarettes, smokeless tobacco, pipe tobacco,
            and roll-your-own tobacco in this section shall be
            classified and taxed as such despite any concentration
            of the nicotine inherent in those products or any
            addition of nicotine to those products during the
            manufacturing process.
              ``(4) Regulations.--The Secretary shall prescribe
            such regulations or other guidance as is necessary or
            appropriate to carry out the purposes of this
            subsection, including regulations or other guidance for
            coordinating the taxation of tobacco products and
            taxable nicotine to protect revenue and prevent double
            taxation.''.
              (3) Taxable nicotine treated as a tobacco product.--
            Section 5702(c) is amended by striking ``and roll-your-
            own tobacco'' and inserting ``roll-your-own tobacco,
            and taxable nicotine''.
              (4) Manufacturer of taxable nicotine.--Section 5702,
            as amended by paragraph (2), is amended by adding at
            the end the following new subsection:
      ``(r) Manufacturer of Taxable Nicotine.--
              ``(1) In general.--Any person who extracts,
            concentrates, or synthesizes nicotine shall be treated
            as a manufacturer of taxable nicotine (and as
            manufacturing such taxable nicotine).
              ``(2) Application of rules related to manufacturers
            of tobacco products.--Any reference to a manufacturer
            of tobacco products, or to manufacturing tobacco
            products, shall be treated as including a reference to
            a manufacturer of taxable nicotine, or to manufacturing
            taxable nicotine, respectively.''.
      (j) Repeal of Special Rules for Determining Price of
    Cigars.--Section 5702 is amended by striking subsection (l).
      (k) Floor Stocks Taxes.--
              (1) Imposition of tax.--On covered tobacco products,
            and cigarette papers and tubes, manufactured in or
            imported into the United States which are removed
            before the tax increase date and held on such date for
            sale by any person, there is hereby imposed a tax in an
            amount equal to the excess of--
                      (A) the tax which would be imposed under
                    section 5701 of the Internal Revenue Code of
                    1986 on the article if the article had been
                    removed on such date, over
                      (B) the prior tax (if any) imposed under
                    section 5701 of such Code on such article.
              (2) Covered tobacco products.--For purposes of this
            subsection, the term ``covered tobacco products'' means
            any tobacco product other than--
                      (A) cigars described in section 5701(a)(2) of
                    the Internal Revenue Code of 1986,
                      (B) discrete single-use units (as defined in
                    section 5702(m)(4) of such Code, as amended by
                    this section), and
                      (C) taxable nicotine (as defined in section
                    5702(q) of such Code, as amended by this
                    section).
              (3) Credit against tax.--Each person shall be allowed
            as a credit against the taxes imposed by paragraph (1)
            an amount equal to the lesser of $1,000 or the amount
            of such taxes. For purposes of the preceding sentence,
            all persons treated as a single employer under
            subsection (b), (c), (m), or (o) of section 414 of the
            Internal Revenue Code of 1986 shall be treated as 1
            person for purposes of this paragraph.
              (4) Liability for tax and method of payment.--
                      (A) Liability for tax.--The person referred
                    to in paragraph (1) shall be liable for the tax
                    imposed by such paragraph.
                      (B) Method of payment.--The tax imposed by
                    paragraph (1) shall be paid in such manner as
                    the Secretary may provide.
              (5) Articles in foreign trade zones.--
                      (A) In general.--Notwithstanding the Act of
                    June 18, 1934 (commonly known as the Foreign
                    Trade Zone Act, 48 Stat. 998, 19 U.S.C. 81a et
                    seq.) or any other provision of law, any
                    covered tobacco products, or cigarette papers
                    and tubes, which are located in a foreign trade
                    zone on the tax increase date, shall be subject
                    to the tax imposed by paragraph (1) if--
                              (i) internal revenue taxes have been
                            determined, or customs duties
                            liquidated, with respect to such
                            article before such date pursuant to a
                            request made under the 1st proviso of
                            section 3(a) of such Act, or
                              (ii) such article is held on such
                            date under the supervision of an
                            officer of the United States Customs
                            and Border Protection of the Department
                            of Homeland Security pursuant to the 2d
                            proviso of such section 3(a).
              (6) Tax increase date.--For purposes of this
            subsection, the term ``tax increase date'' means the
            first day of the first calendar quarter described in
            subsection (k)(1).
              (7) Certain other definitions.--Terms used in this
            subsection which are also used in section 5702 of the
            Internal Revenue Code of 1986 shall have the same
            meaning as when used in such section.
      (l) Effective Date.--
              (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall
            apply to articles removed in calendar quarters
            beginning after the date of the enactment of this Act.
              (2) Delayed effective date for certain products.--The
            amendments made by subsections (c), (d)(1)(C), (d)(2),
            and (h) shall apply to articles removed in calendar
            quarters beginning after the date which is 180 days
            after the date of the enactment of this Act.
      (m) Transition Rule for Permit and Bond Requirements.--A
    person which is lawfully engaged in business as a manufacturer
    or importer of taxable nicotine (within the meaning of
    subchapter A of chapter 52 of the Internal Revenue Code of
    1986, as amended by this section) on the date of the enactment
    of this Act, first becomes subject to the requirements of
    subchapter B of chapter 52 of such Code by reason of the
    amendments made by this section, and submits an application
    under such subchapter B to engage in such business not later
    than 90 days after the date of the enactment of this Act, shall
    not be denied the right to carry on such business by reason of
    such requirements before final action on such application.

    SEC. 138505. CLARIFICATION OF RULES REGARDING TOBACCO DRAWBACK.

      (a) In General.--Section 5706 is amended by adding at the end
    the following: ``Exemption from tax under section 5704 is
    drawback, and no further drawback shall be allowed based on
    merchandise that has not been subject to tax.''.
      (b) Effective Date.--The amendment made by this section shall
    apply to drawback claims made on or after December 18, 2018.
      (c) No Inference.--Nothing contained in this subsection or
    the amendments made by this subsection shall be construed to
    create any inference with respect to any drawback claim made
    before December 18, 2018.

    SEC. 138506. TERMINATION OF EMPLOYER CREDIT FOR PAID FAMILY AND MEDICAL
                        LEAVE.

      Section 45S(i) is amended by striking ``December 31, 2025''
    and inserting ``December 31, 2023''.

    SEC. 138507. CLARIFICATION OF TREATMENT OF DISC GAINS AND DISTRIBUTIONS
                        OF CERTAIN FOREIGN SHAREHOLDERS.

      (a) In General.--Section 996(g) of the Internal Revenue Code
    of 1986 is amended by striking ``of such shareholder'' and
    inserting ``deemed to be had by such shareholder''.
      (b) Effective Date.--The amendments made by subsection (a)
    shall apply to gains and distributions after December 31, 2021.
      (c) Application to Foreign Sales Corporations.--In the case
    of any distribution after December 31, 2021, section 926(b)(1)
    of the Internal Revenue Code of 1986 (prior to its repeal by
    the FSC Repeal and Extraterritorial Income Exclusion Act of
    2000) shall be applied by substituting ``deemed to be had by
    such shareholder'' for ``of such shareholder''.

    SEC. 138508. ACCESS TO SELF-EMPLOYMENT INCOME INFORMATION FOR PAID
                        LEAVE ADMINISTRATION.

      Section 6103(l) of the Internal Revenue Code of 1986 is
    amended by adding at the end the following new paragraph:
              ``(23) Disclosure of certain return information to
            carry out paid family and medical leave benefit
            program.--
                      ``(A) In general.--The Secretary shall, upon
                    written request, disclose to officers and
                    employees of the Department of the Treasury
                    return information with respect to a taxpayer
                    whose self-employment income is relevant in
                    determining eligibility for, or the correct
                    amount of, a paid family and medical leave
                    benefit under title XXII of the Social Security
                    Act. Such information shall be limited to--
                              ``(i) the taxpayer identity
                            information with respect to the
                            taxpayer,
                              ``(ii) the self-employment income of
                            the taxpayer, and
                              ``(iii) the taxable year to which
                            such self-employment income relates.
                      ``(B) Restriction on disclosure.--Return
                    information disclosed under subparagraph (A)
                    may be used by officers and employees of the
                    Department of the Treasury solely for the
                    purpose of administering the paid family and
                    medical leave benefit program under title XXII
                    of the Social Security Act.
                      ``(C) Self-employment income.--For purposes
                    of this paragraph, the term `self-employment
                    income' has the meaning given such term in
                    section 1402(b) for purposes of the taxes
                    imposed by section 1401(b).''.

    SEC. 138509. TEMPORARY RULE TO ALLOW CERTAIN S CORPORATIONS TO
                        REORGANIZE AS PARTNERSHIPS WITHOUT TAX.

      (a) In General.--A qualified liquidation of an eligible S
    corporation shall be treated for purposes of the Internal
    Revenue Code of 1986 in the same manner as if--
              (1) such liquidation were a complete liquidation
            described in section 332(b) of such Code, and
              (2) the domestic partnership referred to in
            subsection (c)(2) were a corporation which is an 80-
            percent distributee (within the meaning of section
            337(c) of such Code).
      (b) Eligible S Corporation.--For purposes of this section,
    the term ``eligible S corporation'' means any corporation
    (including any predecessor corporation) that was an S
    corporation on May 13, 1996, and at all times thereafter
    through the date on which the qualified liquidation is
    completed.
      (c) Qualified Liquidation.--For purposes of this section, the
    term ``qualified liquidation'' means one or more transactions
    occurring during the 2-year period beginning on December 31,
    2021 if--
              (1) such transactions constitute the complete
            liquidation of an eligible S corporation, and
              (2) substantially all of the assets and liabilities
            of such eligible S corporation are, as a result of such
            transactions, transferred to a domestic partnership.
      (d) Election.--This section shall apply to any qualified
    liquidation only if the eligible S corporation elects the
    application of this section in such manner as the Secretary may
    require and not later than the due date for filing the return
    of tax under chapter 1 of such Code for the taxable year in
    which such liquidation is completed.
      (e) Application of Restriction on Subsection S Corporation
    Elections.--In the case of any qualified liquidation to which
    this section applies, the domestic partnership referred to in
    subsection (c)(2) shall not fail to be treated as a successor
    corporation of the eligible S corporation for purposes of
    section 1362(g) of such Code.
      (f) Other Definitions.--Terms used in this section which are
    also used in the Internal Revenue Code of 1986 shall have the
    same meaning as when used in such Code.
      (g) Regulations.--The Secretary shall prescribe such
    regulations or other guidance as may be necessary or
    appropriate to carry out this section.

    SEC. 138510. TREATMENT OF CERTAIN QUALIFIED SOUND RECORDING
                        PRODUCTIONS.

      (a) Election To Treat Costs as Expenses.--Section 181(a)(1)
    is amended by striking ``qualified film or television
    production, and any qualified live theatrical production,'' and
    inserting ``qualified film or television production, any
    qualified live theatrical production, and any qualified sound
    recording production''.
      (b) Dollar Limitation.--Section 181(a)(2) is amended by
    adding at the end the following new subparagraph:
                      ``(C) Qualified sound recording production.--
                    Paragraph (1) shall not apply to so much of the
                    aggregate cost of any qualified sound recording
                    production, or to so much of the aggregate,
                    cumulative cost of all such qualified sound
                    recording productions in the taxable year, as
                    exceeds $150,000.''.
      (c) No Other Deduction or Amortization Deduction Allowable.--
    Section 181(b) is amended by striking ``qualified film or
    television production or any qualified live theatrical
    production'' and inserting ``qualified film or television
    production, any qualified live theatrical production, or any
    qualified sound recording production''.
      (d) Election.--Section 181(c)(1) is amended by striking
    ``qualified film or television production or any qualified live
    theatrical production'' and inserting ``qualified film or
    television production, any qualified live theatrical
    production, or any qualified sound recording production''.
      (e) Qualified Sound Recording Production Defined.--Section
    181 is amended by redesignating subsections (f) and (g) as
    subsections (g) and (h), respectively, and by inserting after
    subsection (e) the following new subsection:
      ``(f) Qualified Sound Recording Production.--For purposes of
    this section, the term `qualified sound recording production'
    means a sound recording (as defined in section 101 of title 17,
    United States Code) produced and recorded in the United
    States.''.
      (f) Termination.--Section 181(h) (as redesignated by
    subsection (e)) is amended by striking ``qualified film or
    television production or any qualified live theatrical
    production'' and inserting ``qualified film or television
    production, any qualified live theatrical production, or any
    qualified sound recording production''.
      (g) Bonus Depreciation.--
              (1) Qualified sound recording production as qualified
            property.--Section 168(k)(2)(A)(i) is amended--
                      (A) by striking ``or'' at the end of
                    subclause (IV), by adding ``or'' at the end of
                    subclause (V), and by inserting after subclause
                    (V) the following:
                                      ``(VI) which is a qualified
                                    sound recording production (as
                                    defined in subsection (f) of
                                    section 181) for which a
                                    deduction would have been
                                    allowable under section 181
                                    without regard to subsections
                                    (a)(2) and (h) of such section
                                    or this subsection,'', and
                      (B) in subclauses (IV) and (V) (as amended)
                    by striking ``without regard to subsections
                    (a)(2) and (g)'' both places it appears and
                    inserting ``without regard to subsections
                    (a)(2) and (h)''.
              (2) Production placed in service.--Section
            168(k)(2)(H) is amended by striking ``and'' at the end
            of clause (i), by striking the period at the end of
            clause (ii) and inserting ``, and'', and by adding
            after clause (ii) the following:
                              ``(iii) a qualified sound recording
                            production shall be considered to be
                            placed in service at the time of
                            initial release or broadcast.''.
      (h) Conforming Amendments.--
              (1) The heading for section 181 is amended to read as
            follows: ``TREATMENT OF CERTAIN QUALIFIED
            PRODUCTIONS.''.
              (2) The table of sections for part VI of subchapter B
            of chapter 1 is amended by striking the item relating
            to section 181 and inserting the following new item:

    ``Sec. 181. Treatment of certain qualified productions.''.
      (i) Effective Date.--The amendments made by this section
    shall apply to productions commencing in taxable years ending
    after the date of the enactment of this Act.

    SEC. 138511. PAYMENT TO CERTAIN INDIVIDUALS WHO DYE FUEL.

      (a) In General.--Subchapter B of chapter 65 is amended by
    adding at the end the following new subsection:

    ``SEC. 6433. DYED FUEL.

      ``(a) In General.--If a person establishes to the
    satisfaction of the Secretary that such person meets the
    requirements of subsection (b) with respect to diesel fuel or
    kerosene, then the Secretary shall pay to such person an amount
    (without interest) equal to the tax described in subsection
    (b)(2)(A) with respect to such diesel fuel or kerosene.
      ``(b) Requirements.--
              ``(1) In general.--A person meets the requirements of
            this subsection with respect to diesel fuel or kerosene
            if such person removes from a terminal eligible
            indelibly dyed diesel fuel or kerosene.
              ``(2) Eligible indelibly dyed diesel fuel or kerosene
            defined.--The term `eligible indelibly dyed diesel fuel
            or kerosene' means diesel fuel or kerosene--
                      ``(A) with respect to which a tax under
                    section 4081 was previously paid (and not
                    credited or refunded), and
                      ``(B) which is exempt from taxation under
                    section 4082(a).
      ``(c) Cross Reference.--For civil penalty for excessive
    claims under this section, see section 6675.''.
      (b) Conforming Amendments.--
              (1) Section 6206 is amended--
                      (A) by striking ``or 6427'' each place it
                    appears and inserting ``6427, or 6433'', and
                      (B) by striking ``6420 and 6421'' and
                    inserting ``6420, 6421, and 6433''.
              (2) Section 6430 is amended--
                      (A) by striking ``or'' at the end of
                    paragraph (2), by striking the period at the
                    end of paragraph (3) and inserting ``or'', and
                    by adding at the end the following new
                    paragraph:
              ``(4) which are removed as eligible indelibly dyed
            diesel fuel or kerosene under section 6433.''.
              (3) Section 6675 is amended--
                      (A) in subsection (a), by striking ``or 6427
                    (relating to fuels not used for taxable
                    purposes)'' and inserting ``6427 (relating to
                    fuels not used for taxable purposes), or 6433
                    (relating to eligible indelibly dyed fuel)'',
                    and
                      (B) in subsection (b)(1), by striking ``6421,
                    or 6427,'' and inserting ``6421, 6427, or
                    6433''.
              (4) The table of sections for subchapter B of chapter
            65 is amended by adding at the end the following new
            item:

    ``Sec. 6433. Dyed fuel.''.
      (c) Effective Date.--The amendments made by this section
    shall apply to eligible indelibly dyed diesel fuel or kerosene
    removed on or after the date that is 180 days after the date of
    the enactment of this section.

    SEC. 138512. EXTENSION OF CREDIT FOR PORTION OF EMPLOYER SOCIAL
                        SECURITY TAXES PAID WITH RESPECT TO EMPLOYEE TIPS
                        TO BEAUTY SERVICE ESTABLISHMENTS.

      (a) Extension of Tip Credit to Beauty Service Business.--
              (1) In general.--Section 45B(b)(2) is amended to read
            as follows:
              ``(2) Application only to certain lines of
            business.--In applying paragraph (1), there shall be
            taken into account only tips received from customers or
            clients in connection with the following services:
                      ``(A) The providing, delivering, or serving
                    of food or beverages for consumption, if the
                    tipping of employees delivering or serving food
                    or beverages by customers is customary.
                      ``(B) The providing of beauty services to a
                    customer or client if the tipping of employees
                    providing such services is customary.''.
              (2) Beauty service defined.--Section 45B is amended
            by adding at the end the following new subsection:
      ``(e) Beauty Service.--For purposes of this section, the term
    `beauty service' means any of the following:
              ``(1) Barbering and hair care.
              ``(2) Nail care.
              ``(3) Esthetics.
              ``(4) Body and spa treatments.''.
      (b) Credit Determined With Respect to Minimum Wage in
    Effect.--Section 45B(b)(1)(B) is amended--
              (1) by striking ``as in effect on January 1, 2007,
            and'', and
              (2) by inserting ``, and in the case of food or
            beverage establishments, as in effect on January 1,
            2007'' after ``without regard to section 3(m) of such
            Act''.
      (c) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 138513. ENHANCEMENT OF WORK OPPORTUNITY CREDIT DURING COVID-19
                        RECOVERY PERIOD.

      (a) In General.--Section 51 is amended by adding at the end
    the following new subsection:
      ``(l) Adjustment to Credit During COVID-19 Recovery Period.--
    In the case of individuals (other than any individual who is a
    qualified summer youth employee) hired after the date of the
    enactment of this subsection and before January 1, 2023--
              ``(1) Increased amount of credit.--Subsection (a)
            shall be applied by substituting `50 percent' for `40
            percent'.
              ``(2) Availability of credit in second year of
            employment.--
                      ``(A) In general.--Subsection (a) shall be
                    applied by inserting `or qualified second-year
                    wages' after `wages'.
                      ``(B) Qualified second-year wages.--For the
                    purposes of this paragraph, the term `qualified
                    second-year wages' means qualified wages which
                    are attributable to service rendered during the
                    1-year period beginning on the day after the
                    last day of the 1-year period with respect to
                    the recipient determined under subsection
                    (b)(2).
              ``(3) Increase in limitation on wages taken into
            account.--Subsection (b)(3) shall be applied by
            substituting `$10,000' for `$6,000'.
              ``(4) Eligibility of rehires.--
                      ``(A) In general.--Subsection (i)(2) shall
                    not apply.
                      ``(B) Regulations.--The Secretary shall issue
                    such regulations as the Secretary determines
                    appropriate to ensure a reasonable application
                    of subparagraph (A), including prohibiting
                    attempts to claim the benefit of this section
                    through the termination and rehiring of an
                    employee.''.
      (b) Effective Date.--The amendment made by this section shall
    apply to taxable years ending after the date of enactment of
    this Act.

    SEC. 138514. ALLOWANCE OF DEDUCTION FOR CERTAIN EXPENSES OF THE TRADE
                        OR BUSINESS OF BEING AN EMPLOYEE.

      (a) Above-the-Line Deduction for Union Dues.--Section
    62(a)(2) is amended by adding at the end the following new
    subparagraph:
              ``(F) Union dues.--The deductions allowed by section
            162 which are both--
                      ``(A) not in excess of $250, and
                      ``(B) attributable to a trade or business
                    consisting of the performance of services by
                    the taxpayer as an employee if such deductions
                    are for dues paid to a labor organization
                    described in section 501(c)(5) and with respect
                    to which such taxpayer remained a member
                    through the end of the taxable year.''.
      (b) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 138515. COVER OVER OF CERTAIN DISTILLED SPIRITS TAXES.

      (a) Repeal of Limitation on Cover Over of Distilled Spirits
    Taxes to Puerto Rico and Virgin Islands.--
              (1) In general.--Section 7652 is amended by striking
            subsection (f) and by redesignating subsections (g) and
            (h) as subsections (f) and (g), respectively.
              (2) Effective date.--The amendments made by this
            subsection shall apply to distilled spirits brought
            into the United States after December 31, 2021.
      (b) Required Transfer to Puerto Rico Conservation Trust Fund
    of Portion of Puerto Rico Rum Cover Over.--
              (1) In general.--Section 7652(a) is amended by adding
            at the end the following new paragraph:
              ``(4) Required transfer to puerto rico conservation
            trust fund of portion of rum taxes covered over.--
                      ``(A) In general.--From any taxes collected
                    on rum transported to the United States that
                    are covered into the treasury of Puerto Rico
                    under paragraph (3) at a rate equal to or
                    greater than $10.50 per proof gallon, Puerto
                    Rico shall transfer to the Puerto Rico
                    Conservation Trust Fund an amount per proof
                    gallon equal to or greater than \1/6\ of the
                    difference between $10.50 and the rate, not to
                    exceed $13.25, at which such taxes are covered
                    into such treasury. Puerto Rico's obligations
                    under this paragraph shall not modify or impair
                    payment priorities established under Puerto
                    Rico law and in effect on May 21, 2021.
                      ``(B) Puerto rico conservation trust fund.--
                    For purposes of this section, the term `Puerto
                    Rico Conservation Trust Fund' means the fund
                    established pursuant to a Memorandum of
                    Understanding between the United States
                    Department of the Interior and the Commonwealth
                    of Puerto Rico, dated December 24, 1968.''.
              (2) Cover over determined without regard to certain
            rate reductions.--Section 7652(h), as amended by
            subsections (a) and (c), is amended by inserting
            ``(a)(4),'' after ``(a)(3),''.
              (3) Effective date.--The amendments made by this
            subsection shall apply to distilled spirits brought
            into the United States after December 31, 2021.
      (c) Cover Over Determined Without Regard to Certain Rate
    Reductions.--
              (1) In general.--Section 7652, as amended by
            subsection (a), is amended by inserting after
            subsection (g) the following new subsection:
      ``(h) Cover Over Determined Without Regard to Certain Rate
    Reductions.--For purposes of subsections (a)(3), (b)(3), and
    (e)(1), refunds under section 5001(c)(4) shall not be taken
    into account as a refund, and the amount of taxes imposed and
    collected under section 5001(a)(1) shall be determined without
    regard to section 5001(c).''.
              (2) Effective date.--The amendment made by paragraph
            (1) shall take effect as if included in section 13807
            of Public Law 116-260.
              (3) Conforming amendments.--
                      (A) 7652(e).--
                              (i) In general.--Section 7652(e) is
                            amended by striking paragraph (5).
                              (ii) Effective date.--The amendment
                            made by this subparagraph shall take
                            effect as if included in section 13807
                            of Public Law 115-97.
                      (B) 7652(i).--
                              (i) In general.--Section 7652 is
                            amended by striking subsection (i).
                              (ii) Effective date.--The amendment
                            made by this subparagraph shall take
                            effect as if included in section 107 of
                            Public Law 116-260.

    SEC. 138516. RESEARCH AND EXPERIMENTAL EXPENDITURES.

      (a) In General.--Section 13206 of Public Law 115-97 is
    amended--
              (1) in subsection (b)(3), by striking ``2021'' and
            inserting ``2025'', and
              (2) in subsection (e), by striking ``2021'' and
            inserting ``2025''.
      (b) Effective Date.--The amendment made by this section shall
    take effect on the date of the enactment of this Act.

    SEC. 138517. PAYROLL CREDIT FOR COMPENSATION OF LOCAL NEWS JOURNALISTS.

      (a) In General.--In the case of an eligible local newspaper
    publisher, there shall be allowed as a credit against
    applicable employment taxes for each calendar quarter an amount
    equal to the applicable percentage of wages paid by such
    publisher to local news journalists for such calendar quarter.
      (b) Limitations and Refundability.--
              (1) Wages taken into account.--The amount of wages
            paid with respect to any individual which may be taken
            into account under subsection (a) during any calendar
            quarter by the eligible local newspaper publisher shall
            not exceed $12,500.
              (2) Credit limited to employment taxes.--The credit
            allowed by subsection (a) with respect to any calendar
            quarter shall not exceed the applicable employment
            taxes (reduced by any credits allowed under sections
            3131, 3132, 3134, and 6432 of the Internal Revenue Code
            of 1986) on the wages paid with respect to the
            employment of all the employees of the eligible local
            newspaper publisher for such calendar quarter.
              (3) Refundability of excess credit.--
                      (A) In general.--If the amount of the credit
                    under subsection (a) exceeds the limitation of
                    paragraph (2) for any calendar quarter, such
                    excess shall be treated as an overpayment that
                    shall be refunded under sections 6402(a) and
                    6413(b) of the Internal Revenue Code of 1986.
                      (B) Treatment of payments.--For purposes of
                    section 1324 of title 31, United States Code,
                    any amounts due to the employer under this
                    paragraph shall be treated in the same manner
                    as a refund due from a credit provision
                    referred to in subsection (b)(2) of such
                    section.
      (c) Definitions.--For purposes of this section--
              (1) Applicable percentage.--The term ``applicable
            percentage'' means--
                      (A) in the case of each of the first 4
                    calendar quarters to which this section
                    applies, 50 percent, and
                      (B) in the case of each calendar quarter
                    thereafter, 30 percent.
              (2) Applicable employment taxes.--The term
            ``applicable employment taxes'' means the taxes imposed
            under section 3111(b) of the Internal Revenue Code of
            1986.
              (3) Eligible local newspaper publisher.--The term
            ``eligible local newspaper publisher'' means, with
            respect to any calendar quarter, any employer if
            substantially all of the gross receipts of such
            employer for such calendar quarter are derived in the
            trade or business of publishing a local newspaper.
              (4) Local newspaper.--The term ``local newspaper''
            means any print or digital publication if--
                      (A) the primary content of such publication
                    is original content derived from primary
                    sources and relating to news and current
                    events,
                      (B) such publication primarily serves the
                    needs of a regional or local community,
                      (C) the publisher of such publication employs
                    at least one local news journalist who resides
                    in such regional or local community, and
                      (D) the publisher of such publication employs
                    no more than 750 employees during the calendar
                    quarter with respect to which a credit is
                    allowed under this section.
              (5) Local news journalist.--The term ``local news
            journalist'' means, with respect to any eligible local
            newspaper publisher for any calendar quarter, an
            individual who provides at least 100 hours of service
            during such calendar quarter to such eligible local
            newspaper publisher, during which time such individual
            regularly gathers, collects, photographs, records,
            writes, or reports news or information that concerns
            local events or other matters of local public interest.
              (6) Secretary.--The term ``Secretary'' means the
            Secretary of the Treasury or the Secretary's delegate.
              (7) Wages.--The term ``wages'' means wages (as
            defined in section 3121(a) of the Internal Revenue Code
            of 1986).
              (8) Other terms.--Any term used in this section which
            is also used in chapter 21 or chapter 22 of the
            Internal Revenue Code of 1986 shall have the same
            meaning as when used in such chapter.
      (d) Aggregation Rule.--
              (1) In general.--All persons treated as a single
            employer under subsection (a) or (b) of section 52 of
            the Internal Revenue Code of 1986, or subsection (m) or
            (o) of section 414 of such Code, shall be treated as
            one employer for purposes of this section.
              (2) Exception.--Paragraph (1) shall not apply unless
            such persons are involved in the production of the same
            print or digital publication.
      (e) Certain Rules To Apply.--For purposes of this section,
    rules similar to the rules of sections 51(i)(1) and 280C(a) of
    the Internal Revenue Code of 1986 shall apply.
      (f) Certain Governmental Employers.--This credit shall not
    apply to the Government of the United States, the government of
    any State or political subdivision thereof, or any agency or
    instrumentality of any of the foregoing.
      (g) Election To Have Section Not Apply.--This section shall
    not apply with respect to any eligible local newspaper
    publisher for any calendar quarter if such person elects (at
    such time and in such manner as the Secretary may prescribe)
    not to have this section apply.
      (h) Special Rules.--
              (1) Employee not taken into account more than once.--
            An employee shall not be included for purposes of this
            section for any period with respect to any employer if
            such employer is allowed a credit under section 51 of
            the Internal Revenue Code of 1986 with respect to such
            employee for such period.
              (2) Denial of double benefit.--Any wages taken into
            account in determining the credit allowed under this
            section shall not be taken into account for purposes of
            determining the credits allowed under section 41, 45A,
            45P, 45S, 51, 1396, 3131, 3132, 3134, and 6432 of such
            Code.
              (3) Third-party payors.--Any credit allowed under
            this section shall be treated as a credit described in
            section 3511(d)(2) of such Code.
      (i) Treatment of Deposits.--The Secretary shall waive any
    penalty under section 6656 of the Internal Revenue Code of 1986
    for any failure to make a deposit of any applicable employment
    taxes if the Secretary determines that such failure was due to
    the reasonable anticipation of the credit allowed under this
    section.
      (j) Regulations and Guidance.--The Secretary shall issue such
    forms, instructions, regulations, and guidance as are necessary
    to implement the purposes of this section, including with
    respect to the application of the credit under subsection (a)
    to third-party payors (including professional employer
    organizations, certified professional employer organizations,
    or agents under section 3504 of the Internal Revenue Code of
    1986), including regulations or guidance allowing such payors
    to submit documentation necessary to substantiate the eligible
    employer status of employers that use such payors.
      (k) Application.--This section shall only apply to calendar
    quarters during the first 5 calendar years beginning after the
    date of the enactment of this Act.

    SEC. 138518. TREATMENT OF FINANCIAL GUARANTY INSURANCE COMPANIES AS
                        QUALIFYING INSURANCE CORPORATIONS UNDER PASSIVE
                        FOREIGN INVESTMENT COMPANY RULES.

      (a) In General.--Section 1297(f)(3) is amended by adding at
    the end the following new subparagraph:
                      ``(C) Special rules for financial guaranty
                    insurance companies.--
                              ``(i) In general.--Notwithstanding
                            subparagraphs (A)(ii) and (B), the
                            applicable insurance liabilities of a
                            financial guaranty insurance company
                            shall include its unearned premium
                            reserves if--
                                      ``(I) such company is
                                    prohibited under generally
                                    accepted accounting principles
                                    from reporting on its
                                    applicable financial statements
                                    reserves for losses and loss
                                    adjustment expenses with
                                    respect to a financial guaranty
                                    insurance or reinsurance
                                    contract except to the extent
                                    that losses and loss adjustment
                                    expenses are expected to exceed
                                    the unearned premium reserves
                                    on the contract,
                                      ``(II) the applicable
                                    financial statement of such
                                    company reports financial
                                    guaranty exposure of at least
                                    15-to-1 or State or local bond
                                    exposure of at least 9-to-1 (8-
                                    to-1 in the case of a taxable
                                    year of such company which ends
                                    on or before December 31,
                                    2018), and
                                      ``(III) such company includes
                                    in its insurance liabilities
                                    only its unearned premium
                                    reserves relating to insurance
                                    written or assumed that is
                                    within the single risk limits
                                    set forth in subsection (D) of
                                    section 4 of the Financial
                                    Guaranty Insurance Guideline
                                    (modified by using total
                                    shareholder's equity as
                                    reported on the applicable
                                    financial statement of the
                                    company rather than aggregate
                                    of the surplus to policyholders
                                    and contingency reserves).
                              ``(ii) Application of alternative
                            facts and circumstances test.--A
                            financial guaranty insurance company
                            shall be treated as satisfying the
                            requirements of paragraph (2)(B).
                              ``(iii) Financial guaranty insurance
                            company.--For purposes of this
                            subparagraph, the term `financial
                            guaranty insurance company' means any
                            insurance company the sole business of
                            which is writing or reinsuring
                            financial guaranty insurance (as
                            defined in subsection (A) of section 1
                            of the Financial Guaranty Insurance
                            Guideline) which is permitted under
                            subsection (B) of section 4 of such
                            Guideline.
                              ``(iv) Financial guaranty exposure.--
                            For purposes of this subparagraph, the
                            term `financial guaranty exposure'
                            means the ratio of--
                                      ``(I) the net debt service
                                    outstanding insured or
                                    reinsured by the company that
                                    is within the single risk
                                    limits set forth in the
                                    Financial Guaranty Insurance
                                    Guideline (as reported on such
                                    company's applicable financial
                                    statement), to
                                      ``(II) the company's total
                                    assets (as so reported).
                              ``(v) State or local bond exposure.--
                            For purposes of this subparagraph, the
                            term `State or local bond exposure'
                            means the ratio of--
                                      ``(I) the net unpaid
                                    principal of State or local
                                    bonds (as defined in section
                                    103(c)(1)) insured or reinsured
                                    by the company that is within
                                    the single risk limits set
                                    forth in the Financial Guaranty
                                    Insurance Guideline (as
                                    reported on such company's
                                    applicable financial
                                    statement), to
                                      ``(II) the company's total
                                    assets (as so reported).''
                              ``(vi) Financial guaranty insurance
                            guideline.--For purposes of this
                            subparagraph--
                                      ``(I) In general.--The term
                                    `Financial Guaranty Insurance
                                    Guideline' means the October
                                    2008 model regulation that was
                                    adopted by the National
                                    Association of Insurance
                                    Commissioners on December 4,
                                    2007.
                                      ``(II) Determinations made by
                                    secretary.--The determination
                                    of whether any provision of the
                                    Financial Guaranty Insurance
                                    Guideline has been satisfied
                                    shall be made by the
                                    Secretary.''.
      (b) Reporting of Certain Items.--Section 1297(f)(4) is
    amended by adding at the end the following new subparagraph:
                      ``(C) Clarification that certain items on
                    applicable financial statement be separately
                    reported with respect to corporation.--An
                    amount described in paragraph (1)(B) or clause
                    (i)(II), (i)(III), (iv)(I), (iv)(II), (v)(I),
                    or (v)(II) of paragraph (3)(C) shall be treated
                    as reported on an applicable financial
                    statement for purposes of this section if--
                              ``(i) such amount is separately
                            reported on such statement with respect
                            to the corporation referred to in
                            paragraph (1), or
                              ``(ii) such amount is separately
                            determined for purposes of calculating
                            an amount which is reported on such
                            statement.
                      ``(D) Authority of secretary to require
                    reporting.--
                              ``(i) In general.--Each United States
                            person who owns an interest in a
                            specified non-publicly traded foreign
                            corporation and who takes the position
                            that such corporation is not a passive
                            foreign investment company shall report
                            to the Secretary such information with
                            respect to such corporation as the
                            Secretary may require.
                              ``(ii) Specified non-publicly traded
                            foreign corporation.--For purposes of
                            this subparagraph, the term `specified
                            non-publicly traded foreign
                            corporation' means any foreign
                            corporation--
                                      ``(I) which would be a
                                    passive foreign investment
                                    company if subsection (b)(2)(B)
                                    did not apply, and
                                      ``(II) no interest in which
                                    is traded on an established
                                    securities market.''.
      (c) Effective Date.--
              (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall
            take effect as if included in section 14501 of Public
            Law 115-97.
              (2) Reporting.--The amendment made by subsection (b)
            shall apply to reports made after the date of the
            enactment of this Act.

    SEC. 138519. CREDIT FOR QUALIFIED ACCESS TECHNOLOGY FOR THE BLIND.

      (a) In General.--Subpart C of part IV of subchapter A of
    chapter 1 is amended by inserting after section 36G the
    following new section:

    ``SEC. 36H. CREDIT FOR QUALIFIED ACCESS TECHNOLOGY FOR THE BLIND.

      ``(a) Allowance of Credit.--There shall be allowed as a
    credit against the tax imposed by this subtitle an amount equal
    to amounts paid or incurred during the taxable year, not
    compensated for by insurance or otherwise, by the taxpayer for
    qualified access technology for use by a qualified blind
    individual who is the taxpayer, the taxpayer's spouse, or any
    dependent (as defined in section 152) of the taxpayer.
      ``(b) Limitation.--The aggregate amount of the credit allowed
    under subsection (a) with respect to any qualified blind
    individual shall not exceed $2,000 in any 3-consecutive-
    taxable-year period.
      ``(c) Definitions.--For purposes of this section--
              ``(1) Qualified blind individual.--The term
            `qualified blind individual' means an individual who is
            blind within the meaning of section 63(f)(4).
              ``(2) Qualified access technology defined.--The term
            `qualified access technology' means hardware, software,
            or other information technology the primary function of
            which is to convert or adapt information which is
            visually represented into forms or formats useable by
            blind individuals.
      ``(d) Denial of Double Benefit.--No credit shall be allowed
    under subsection (a) for any expense for which a deduction or
    credit is allowed under any other provision of this chapter.
      ``(e) Inflation Adjustment.--
              ``(1) In general.--In the case of a taxable year
            beginning after 2022, the $2,000 amount in subsection
            (b) shall be increased by an amount equal to--
                      ``(A) such dollar amount, multiplied by
                      ``(B) the cost-of-living adjustment
                    determined under section 1(f)(3) for the
                    calendar year in which the taxable year begins,
                    determined by substituting `calendar year 2021'
                    for `calendar year 2016' in subparagraph
                    (A)(ii) thereof.
              ``(2) Rounding.--If the amount as adjusted under
            subparagraph (A) is not a multiple of $100, such amount
            shall be rounded to the next lowest multiple of $100.
      ``(f) Termination.--This section shall not apply with respect
    to amounts paid or incurred in taxable years beginning after
    December 31, 2026.''.
      (b) Conforming Amendments.--
              (1) Section 6211(b)(4)(A), as amended by the
            preceding provisions of this Act, is amended by
            inserting ``, 36H'' after ``36G''.
              (2) Section 1324(b)(2) of title 31, United States
            Code, is amended by inserting ``, 36H'' after ``,
            36G''.
              (3) The table of sections for subpart C of part IV of
            subchapter A is amended by inserting after the item
            relating to section 36G the following new item:

    ``Sec. 36H. Credit for qualified access technology for the blind.''
      (c) Effective Date.--The amendments made by this section
    shall apply to taxable years beginning after December 31, 2021.

    SEC. 138520. MODIFICATION OF REIT CONSTRUCTIVE OWNERSHIP RULES.

      (a) In General.--Section 856(d)(5) is amended by striking
    ``and'' at the end of subparagraph (A), by striking the period
    at the end of subparagraph (B) and inserting ``, and'', and by
    adding at the end the following:
                      ``(C) except as otherwise provided by the
                    Secretary, stock, assets, and net profits
                    constructively owned by a partnership, estate,
                    trust, or corporation by reason of the
                    application of section 318(a)(3) (after
                    application of subparagraphs (A) and (B)) shall
                    not be considered as owned by it for purposes
                    of again applying such section in order to make
                    another person the constructive owner of such
                    stock, assets, or net profits.
            Subparagraph (C) shall not prevent any person from
            being the constructive owner of stock, assets, or net
            profits of any person as the result of any other
            application of section 318(a) (as modified by this
            paragraph).''.
      (b) Effective Date.--The amendments made by this section
    shall apply to taxable years ending after the date of the
    enactment of this Act.
      (c) No Inference.--Nothing in this section or the amendments
    made by this section shall be construed to create any inference
    with respect to the proper application of section 318 of the
    Internal Revenue Code of 1986 to cases other than cases to
    which such amendments apply.

                            Subtitle J--Drug Pricing

          PART 1--LOWERING PRICES THROUGH FAIR DRUG PRICE NEGOTIATION

    SEC. 139001. PROVIDING FOR LOWER PRICES FOR CERTAIN HIGH-PRICED SINGLE
                        SOURCE DRUGS.

      (a) Program To Lower Prices for Certain High-Priced Single
    Source Drugs.--Title XI of the Social Security Act (42 U.S.C.
    1301 et seq.) is amended by adding at the end the following new
    part:

     ``PART E--FAIR PRICE NEGOTIATION PROGRAM TO LOWER PRICES FOR CERTAIN
                        HIGH-PRICED SINGLE SOURCE DRUGS

    ``SEC. 1191. ESTABLISHMENT OF PROGRAM.

      ``(a) In General.--The Secretary shall establish a Fair Price
    Negotiation Program (in this part referred to as the
    `program'). Under the program, with respect to each price
    applicability period, the Secretary shall--
              ``(1) publish a list of selected drugs in accordance
            with section 1192;
              ``(2) enter into agreements with manufacturers of
            selected drugs with respect to such period, in
            accordance with section 1193;
              ``(3) negotiate and, if applicable, renegotiate
            maximum fair prices for such selected drugs, in
            accordance with section 1194; and
              ``(4) carry out the administrative duties described
            in section 1196.
      ``(b) Definitions Relating to Timing.--For purposes of this
    part:
              ``(1) Initial price applicability year.--The term
            `initial price applicability year' means a plan year
            (beginning with plan year 2025) or, if agreed to in an
            agreement under section 1193 by the Secretary and
            manufacturer involved, a period of more than one plan
            year (beginning on or after January 1, 2025).
              ``(2) Price applicability period.--The term `price
            applicability period' means, with respect to a drug,
            the period beginning with the initial price
            applicability year with respect to which such drug is a
            selected drug and ending with the last plan year during
            which the drug is a selected drug.
              ``(3) Selected drug publication date.--The term
            `selected drug publication date' means, with respect to
            each initial price applicability year, April 15 of the
            plan year that begins 2 years prior to such year.
              ``(4) Voluntary negotiation period.--The term
            `voluntary negotiation period' means, with respect to
            an initial price applicability year with respect to a
            selected drug, the period--
                      ``(A) beginning on the sooner of--
                              ``(i) the date on which the
                            manufacturer of the drug and the
                            Secretary enter into an agreement under
                            section 1193 with respect to such drug;
                            or
                              ``(ii) June 15 following the selected
                            drug publication date with respect to
                            such selected drug; and
                      ``(B) ending on March 31 of the year that
                    begins one year prior to the initial price
                    applicability year.
      ``(c) Other Definitions.--For purposes of this part:
              ``(1) Fair price eligible individual.--The term `fair
            price eligible individual' means, with respect to a
            selected drug--
                      ``(A) in the case such drug is furnished or
                    dispensed to the individual at a pharmacy or by
                    a mail order service--
                              ``(i) an individual who is enrolled
                            under a prescription drug plan under
                            part D of title XVIII or an MA-PD plan
                            under part C of such title if coverage
                            is provided under such plan for such
                            selected drug; and
                              ``(ii) an individual who is enrolled
                            under a group health plan or health
                            insurance coverage offered in the group
                            or individual market (as such terms are
                            defined in section 2791 of the Public
                            Health Service Act) with respect to
                            which there is in effect an agreement
                            with the Secretary under section 1197
                            with respect to such selected drug as
                            so furnished or dispensed; and
                      ``(B) in the case such drug is furnished or
                    administered to the individual by a hospital,
                    physician, or other provider of services or
                    supplier--
                              ``(i) an individual who is entitled
                            to benefits under part A of title XVIII
                            or enrolled under part B of such title
                            if such selected drug is covered under
                            the respective part; and
                              ``(ii) an individual who is enrolled
                            under a group health plan or health
                            insurance coverage offered in the group
                            or individual market (as such terms are
                            defined in section 2791 of the Public
                            Health Service Act) with respect to
                            which there is in effect an agreement
                            with the Secretary under section 1197
                            with respect to such selected drug as
                            so furnished or administered.
              ``(2) Maximum fair price.--The term `maximum fair
            price' means, with respect to a plan year during a
            price applicability period and with respect to a
            selected drug (as defined in section 1192(c)) with
            respect to such period, the price published pursuant to
            section 1195 in the Federal Register for such drug and
            year.
              ``(3) Average international market price defined.--
                      ``(A) In general.--The terms `average
                    international market price' and `AIM price'
                    mean, with respect to a drug, the average price
                    (which shall be the net average price, if
                    practicable, and volume-weighted, if
                    practicable) for a unit (as defined in
                    paragraph (4)) of the drug for sales of such
                    drug (calculated across different dosage forms
                    and strengths of the drug and not based on the
                    specific formulation or package size or package
                    type), as computed (as of the date of
                    publication of such drug as a selected drug
                    under section 1192(a)) in all countries
                    described in clause (ii) of subparagraph (B)
                    that are applicable countries (as described in
                    clause (i) of such subparagraph) with respect
                    to such drug.
                      ``(B) Applicable countries.--
                              ``(i) In general.--For purposes of
                            subparagraph (A), a country described
                            in clause (ii) is an applicable country
                            described in this clause with respect
                            to a drug if there is available an
                            average price for any unit for the drug
                            for sales of such drug in such country.
                              ``(ii) Countries described.--For
                            purposes of this paragraph, the
                            following are countries described in
                            this clause:
                                      ``(I) Australia.
                                      ``(II) Canada.
                                      ``(III) France.
                                      ``(IV) Germany.
                                      ``(V) Japan.
                                      ``(VI) The United Kingdom.
              ``(4) Unit.--The term `unit' means, with respect to a
            drug, the lowest identifiable quantity (such as a
            capsule or tablet, milligram of molecules, or grams) of
            the drug that is dispensed.

    ``SEC. 1192. SELECTION OF NEGOTIATION-ELIGIBLE DRUGS AS SELECTED DRUGS.

      ``(a) In General.--Not later than the selected drug
    publication date with respect to an initial price applicability
    year, subject to subsection (h), the Secretary shall select and
    publish in the Federal Register a list of--
              ``(1)(A) with respect to an initial price
            applicability year during 2025, at least 25
            negotiation-eligible drugs described in subparagraphs
            (A) and (B), but not subparagraph (C), of subsection
            (d)(1) (or, with respect to an initial price
            applicability year during such period beginning after
            2025, the maximum number (if such number is less than
            25) of such negotiation-eligible drugs for the year)
            with respect to such year; and
              ``(B) with respect to an initial price applicability
            year during 2026 or a subsequent year, at least 50
            negotiation-eligible drugs described in subparagraphs
            (A) and (B), but not subparagraph (C), of subsection
            (d)(1) (or, with respect to an initial price
            applicability year during such period, the maximum
            number (if such number is less than 50) of such
            negotiation-eligible drugs for the year) with respect
            to such year;
              ``(2) all negotiation-eligible drugs described in
            subparagraph (C) of such subsection with respect to
            such year; and
              ``(3) all new-entrant negotiation-eligible drugs (as
            defined in subsection (g)(1)) with respect to such
            year.
    Each drug published on the list pursuant to the previous
    sentence shall be subject to the negotiation process under
    section 1194 for the voluntary negotiation period with respect
    to such initial price applicability year (and the renegotiation
    process under such section as applicable for any subsequent
    year during the applicable price applicability period). In
    applying this subsection, any negotiation-eligible drug that is
    selected under this subsection for an initial price
    applicability year shall not count toward the required minimum
    amount of drugs to be selected under paragraph (1) for any
    subsequent year, including such a drug so selected that is
    subject to renegotiation under section 1194.
      ``(b) Selection of Drugs.--In carrying out subsection (a)(1)
    the Secretary shall select for inclusion on the published list
    described in subsection (a) with respect to a price
    applicability period, the negotiation-eligible drugs that the
    Secretary projects will result in the greatest savings to the
    Federal Government or fair price eligible individuals during
    the price applicability period. In making this projection of
    savings for drugs for which there is an AIM price for a price
    applicability period, the savings shall be projected across
    different dosage forms and strengths of the drugs and not based
    on the specific formulation or package size or package type of
    the drugs, taking into consideration both the volume of drugs
    for which payment is made, to the extent such data is
    available, and the amount by which the net price for the drugs
    exceeds the AIM price for the drugs.
      ``(c) Selected Drug.--For purposes of this part, each drug
    included on the list published under subsection (a) with
    respect to an initial price applicability year shall be
    referred to as a `selected drug' with respect to such year and
    each subsequent plan year beginning before the first plan year
    beginning after the date on which the Secretary determines two
    or more drug products--
              ``(1) are approved or licensed (as applicable)--
                      ``(A) under section 505(j) of the Federal
                    Food, Drug, and Cosmetic Act using such drug as
                    the listed drug; or
                      ``(B) under section 351(k) of the Public
                    Health Service Act using such drug as the
                    reference product; and
              ``(2) continue to be marketed.
      ``(d) Negotiation-Eligible Drug.--
              ``(1) In general.--For purposes of this part, the
            term `negotiation-eligible drug' means, with respect to
            the selected drug publication date with respect to an
            initial price applicability year, a qualifying single
            source drug, as defined in subsection (e), that meets
            any of the following criteria:
                      ``(A) Covered part d drugs.--The drug is
                    among the 125 covered part D drugs (as defined
                    in section 1860D-2(e)) for which there was an
                    estimated greatest net spending under parts C
                    and D of title XVIII, as determined by the
                    Secretary, during the most recent plan year
                    prior to such drug publication date for which
                    data are available.
                      ``(B) Other drugs.--The drug is among the 125
                    drugs for which there was an estimated greatest
                    net spending in the United States (including
                    the 50 States, the District of Columbia, and
                    the territories of the United States), as
                    determined by the Secretary, during the most
                    recent plan year prior to such drug publication
                    date for which data are available.
                      ``(C) Insulin.--The drug is a qualifying
                    single source drug described in subsection
                    (e)(3).
              ``(2) Clarification.--In determining whether a
            qualifying single source drug satisfies any of the
            criteria described in paragraph (1), the Secretary
            shall, to the extent practicable, use data that is
            aggregated across dosage forms and strengths of the
            drug and not based on the specific formulation or
            package size or package type of the drug.
              ``(3) Publication.--Not later than the selected drug
            publication date with respect to an initial price
            applicability year, the Secretary shall publish in the
            Federal Register a list of negotiation-eligible drugs
            with respect to such selected drug publication date.
      ``(e) Qualifying Single Source Drug.--For purposes of this
    part, the term `qualifying single source drug' means any of the
    following:
              ``(1) Drug products.--A drug that--
                      ``(A) is approved under section 505(c) of the
                    Federal Food, Drug, and Cosmetic Act and
                    continues to be marketed pursuant to such
                    approval; and
                      ``(B) is not the listed drug for any drug
                    that is approved and continues to be marketed
                    under section 505(j) of such Act.
              ``(2) Biological products.--A biological product
            that--
                      ``(A) is licensed under section 351(a) of the
                    Public Health Service Act, including any
                    product that has been deemed to be licensed
                    under section 351 of such Act pursuant to
                    section 7002(e)(4) of the Biologics Price
                    Competition and Innovation Act of 2009, and
                    continues to be marketed under section 351 of
                    such Act; and
                      ``(B) is not the reference product for any
                    biological product that is licensed and
                    continues to be marketed under section 351(k)
                    of such Act.
              ``(3) Insulin product.--Notwithstanding paragraphs
            (1) and (2), any insulin product that is approved under
            subsection (c) or (j) of section 505 of the Federal
            Food, Drug, and Cosmetic Act or licensed under
            subsection (a) or (k) of section 351 of the Public
            Health Service Act and continues to be marketed under
            such section 505 or 351, including any insulin product
            that has been deemed to be licensed under section
            351(a) of the Public Health Service Act pursuant to
            section 7002(e)(4) of the Biologics Price Competition
            and Innovation Act of 2009 and continues to be marketed
            pursuant to such licensure.
    For purposes of applying paragraphs (1) and (2), a drug or
    biological product that is marketed by the same sponsor or
    manufacturer (or an affiliate thereof or a cross-licensed
    producer or distributor) as the listed drug or reference
    product described in such respective paragraph shall not be
    taken into consideration.
      ``(f) Information on International Drug Prices.--For purposes
    of determining which negotiation-eligible drugs to select under
    subsection (a) and, in the case of such drugs that are selected
    drugs, to determine the maximum fair price for such a drug and
    whether such maximum fair price should be renegotiated under
    section 1194, the Secretary shall use data relating to the AIM
    price with respect to such drug as available or provided to the
    Secretary and shall on an ongoing basis request from
    manufacturers of selected drugs information on the AIM price of
    such a drug.
      ``(g) New-Entrant Negotiation-Eligible Drugs.--
              ``(1) In general.--For purposes of this part, the
            term `new-entrant negotiation-eligible drug' means,
            with respect to the selected drug publication date with
            respect to an initial price applicability year, a
            qualifying single source drug--
                      ``(A) that is first approved or licensed, as
                    described in paragraph (1), (2), or (3) of
                    subsection (e), as applicable, during the year
                    preceding such selected drug publication date;
                    and
                      ``(B) that the Secretary determines under
                    paragraph (2) is likely to be included as a
                    negotiation-eligible drug with respect to the
                    subsequent selected drug publication date.
              ``(2) Determination.--In the case of a qualifying
            single source drug that meets the criteria described in
            subparagraph (A) of paragraph (1), with respect to an
            initial price applicability year, if the wholesale
            acquisition cost at which such drug is first marketed
            in the United States is equal to or greater than the
            median household income (as determined according to the
            most recent data collected by the United States Census
            Bureau), the Secretary shall determine before the
            selected drug publication date with respect to the
            initial price applicability year, if the drug is likely
            to be included as a negotiation-eligible drug with
            respect to the subsequent selected drug publication
            date, based on the projected spending under title XVIII
            or in the United States on such drug. For purposes of
            this paragraph the term `United States' includes the 50
            States, the District of Columbia, and the territories
            of the United States.
      ``(h) Conflict of Interest.--
              ``(1) In general.--In the case the Inspector General
            of the Department of Health and Human Services
            determines the Secretary has a conflict, with respect
            to a matter described in paragraph (2), the individual
            described in paragraph (3) shall carry out the duties
            of the Secretary under this part, with respect to a
            negotiation-eligible drug, that would otherwise be such
            a conflict.
              ``(2) Matter described.--A matter described in this
            paragraph is--
                      ``(A) a financial interest (as described in
                    section 2635.402 of title 5, Code of Federal
                    Regulations, as in effect on the date of the
                    enactment of this section, (except for an
                    interest described in subsection (b)(2)(iv) of
                    such section)) on the date of the selected drug
                    publication date, with respect the price
                    applicability year (as applicable);
                      ``(B) a personal or business relationship (as
                    described in section 2635.502 of such title) on
                    the date of the selected drug publication date,
                    with respect the price applicability year;
                      ``(C) employment by a manufacturer of a
                    negotiation-eligible drug during the preceding
                    10-year period beginning on the date of the
                    selected drug publication date, with respect to
                    each price applicability year; and
                      ``(D) any other matter the General Counsel
                    determines appropriate.
              ``(3) Individual described.--An individual described
            in this paragraph is--
                      ``(A) the highest-ranking officer or employee
                    of the Department of Health and Human Services
                    (as determined by the organizational chart of
                    the Department) that does not have a conflict
                    under this subsection; and
                      ``(B) is nominated by the President and
                    confirmed by the Senate with respect to the
                    position.

    ``SEC. 1193. MANUFACTURER AGREEMENTS.

      ``(a) In General.--For purposes of section 1191(a)(2), the
    Secretary shall enter into agreements with manufacturers of
    selected drugs with respect to a price applicability period, by
    not later than June 15 following the selected drug publication
    date with respect to such selected drug, under which--
              ``(1) during the voluntary negotiation period for the
            initial price applicability year for the selected drug,
            the Secretary and manufacturer, in accordance with
            section 1194, negotiate to determine (and, by not later
            than the last date of such period and in accordance
            with subsection (c), agree to) a maximum fair price for
            such selected drug of the manufacturer in order to
            provide access to such price--
                      ``(A) to fair price eligible individuals who
                    with respect to such drug are described in
                    subparagraph (A) of section 1191(c)(1) and are
                    furnished or dispensed such drug during,
                    subject to subparagraph (2), the price
                    applicability period; and
                      ``(B) to hospitals, physicians, and other
                    providers of services and suppliers with
                    respect to fair price eligible individuals who
                    with respect to such drug are described in
                    subparagraph (B) of such section and are
                    furnished or administered such drug during,
                    subject to subparagraph (2), the price
                    applicability period;
              ``(2) the Secretary and the manufacturer shall, in
            accordance with a process and during a period specified
            by the Secretary pursuant to rulemaking, renegotiate
            (and, by not later than the last date of such period
            and in accordance with subsection (c), agree to) the
            maximum fair price for such drug if the Secretary
            determines that there is a material change in any of
            the factors described in section 1194(d) relating to
            the drug, including changes in the AIM price for such
            drug, in order to provide access to such maximum fair
            price (as so renegotiated)--
                      ``(A) to fair price eligible individuals who
                    with respect to such drug are described in
                    subparagraph (A) of section 1191(c)(1) and are
                    furnished or dispensed such drug during any
                    year during the price applicability period
                    (beginning after such renegotiation) with
                    respect to such selected drug; and
                      ``(B) to hospitals, physicians, and other
                    providers of services and suppliers with
                    respect to fair price eligible individuals who
                    with respect to such drug are described in
                    subparagraph (B) of such section and are
                    furnished or administered such drug during any
                    year described in subparagraph (A);
              ``(3) the maximum fair price (including as
            renegotiated pursuant to paragraph (2)), with respect
            to such a selected drug, shall be provided to fair
            price eligible individuals, who with respect to such
            drug are described in subparagraph (A) of section
            1191(c)(1), at the pharmacy or by a mail order service
            at the point-of-sale of such drug;
              ``(4) the manufacturer, subject to subsection (d),
            submits to the Secretary, in a form and manner
            specified by the Secretary--
                      ``(A) for the voluntary negotiation period
                    for the price applicability period (and, if
                    applicable, before any period of renegotiation
                    specified pursuant to paragraph (2)) with
                    respect to such drug all information that the
                    Secretary requires to carry out the negotiation
                    (or renegotiation process) under this part,
                    including information described in section
                    1192(f) and section 1194(d)(1); and
                      ``(B) on an ongoing basis, information on
                    changes in prices for such drug that would
                    affect the AIM price for such drug or otherwise
                    provide a basis for renegotiation of the
                    maximum fair price for such drug pursuant to
                    paragraph (2);
              ``(5) the manufacturer agrees that in the case the
            selected drug of a manufacturer is a drug described in
            subsection (c), the manufacturer will, in accordance
            with such subsection, make any payment required under
            such subsection with respect to such drug; and
              ``(6) the manufacturer complies with requirements
            imposed by the Secretary for purposes of administering
            the program, including with respect to the duties
            described in section 1196.
      ``(b) Agreement in Effect Until Drug Is No Longer a Selected
    Drug.--An agreement entered into under this section shall be
    effective, with respect to a drug, until such drug is no longer
    considered a selected drug under section 1192(c).
      ``(c) Special Rule for Certain Selected Drugs Without AIM
    Price.--
              ``(1) In general.--In the case of a selected drug for
            which there is no AIM price available with respect to
            the initial price applicability year for such drug and
            for which an AIM price becomes available beginning with
            respect to a subsequent plan year during the price
            applicability period for such drug, if the Secretary
            determines that the amount described in paragraph
            (2)(A) for a unit of such drug is greater than the
            amount described in paragraph (2)(B) for a unit of such
            drug, then by not later than one year after the date of
            such determination, the manufacturer of such selected
            drug shall pay to the Treasury an amount equal to the
            product of--
                      ``(A) the difference between such amount
                    described in paragraph (2)(A) for a unit of
                    such drug and such amount described in
                    paragraph (2)(B) for a unit of such drug; and
                      ``(B) the number of units of such drug sold
                    in the United States, including the 50 States,
                    the District of Columbia, and the territories
                    of the United States, during the period
                    described in paragraph (2)(B).
              ``(2) Amounts described.--
                      ``(A) Weighted average price before aim price
                    available.--For purposes of paragraph (1), the
                    amount described in this subparagraph for a
                    selected drug described in such paragraph, is
                    the amount equal to the weighted average
                    manufacturer price (as defined in section
                    1927(k)(1)) for such dosage strength and form
                    for the drug during the period beginning with
                    the first plan year for which the drug is
                    included on the list of negotiation-eligible
                    drugs published under section 1192(d) and
                    ending with the last plan year during the price
                    applicability period for such drug with respect
                    to which there is no AIM price available for
                    such drug.
                      ``(B) Amount multiplier after aim price
                    available.--For purposes of paragraph (1), the
                    amount described in this subparagraph for a
                    selected drug described in such paragraph, is
                    the amount equal to 200 percent of the AIM
                    price for such drug with respect to the first
                    plan year during the price applicability period
                    for such drug with respect to which there is an
                    AIM price available for such drug.
      ``(d) Confidentiality of Information.--Information submitted
    to the Secretary under this part by a manufacturer of a
    selected drug that is proprietary information of such
    manufacturer (as determined by the Secretary) may be used only
    by the Secretary or disclosed to and used by the Comptroller
    General of the United States or the Medicare Payment Advisory
    Commission for purposes of carrying out this part.
      ``(e) Regulations.--
              ``(1) In general.--The Secretary shall, pursuant to
            rulemaking, specify, in accordance with paragraph (2),
            the information that must be submitted under subsection
            (a)(4).
              ``(2) Information specified.--Information described
            in paragraph (1), with respect to a selected drug,
            shall include information on sales of the drug (by the
            manufacturer of the drug or by another entity under
            license or other agreement with the manufacturer, with
            respect to the sales of such drug, regardless of the
            name under which the drug is sold) in any foreign
            country that is part of the AIM price. The Secretary
            shall verify, to the extent practicable, such sales
            from appropriate officials of the government of the
            foreign country involved.
      ``(f) Compliance With Requirements for Administration of
    Program.--Each manufacturer with an agreement in effect under
    this section shall comply with requirements imposed by the
    Secretary or a third party with a contract under section
    1196(c)(1), as applicable, for purposes of administering the
    program.

    ``SEC. 1194. NEGOTIATION AND RENEGOTIATION PROCESS.

      ``(a) In General.--For purposes of this part, under an
    agreement under section 1193 between the Secretary and a
    manufacturer of a selected drug, with respect to the period for
    which such agreement is in effect and in accordance with
    subsections (b) and (c), the Secretary and the manufacturer--
              ``(1) shall during the voluntary negotiation period
            with respect to the initial price applicability year
            for such drug, in accordance with this section,
            negotiate a maximum fair price for such drug for the
            purpose described in section 1193(a)(1); and
              ``(2) as applicable pursuant to section 1193(a)(2)
            and in accordance with the process specified pursuant
            to such section, renegotiate such maximum fair price
            for such drug for the purpose described in such
            section.
      ``(b) Negotiating Methodology and Objective.--
              ``(1) In general.--The Secretary shall develop and
            use a consistent methodology for negotiations under
            subsection (a) that, in accordance with paragraph (2)
            and subject to paragraph (3), achieves the lowest
            maximum fair price for each selected drug while
            appropriately rewarding innovation.
              ``(2) Prioritizing factors.--In considering the
            factors described in subsection (d) in negotiating
            (and, as applicable, renegotiating) the maximum fair
            price for a selected drug, the Secretary shall, to the
            extent practicable, consider all of the available
            factors listed but shall prioritize the following
            factors:
                      ``(A) Research and development costs.--The
                    factor described in paragraph (1)(A) of
                    subsection (d).
                      ``(B) Market data.--The factor described in
                    paragraph (1)(B) of such subsection.
                      ``(C) Unit costs of production and
                    distribution.--The factor described in
                    paragraph (1)(C) of such subsection.
                      ``(D) Comparison to existing therapeutic
                    alternatives.--The factor described in
                    paragraph (2)(A) of such subsection.
              ``(3) Requirement.--
                      ``(A) In general.--In negotiating the maximum
                    fair price of a selected drug, with respect to
                    an initial price applicability year for the
                    selected drug, and, as applicable, in
                    renegotiating the maximum fair price for such
                    drug, with respect to a subsequent year during
                    the price applicability period for such drug,
                    in the case that the manufacturer of the
                    selected drug offers under the negotiation or
                    renegotiation, as applicable, a price for such
                    drug that is not more than the target price
                    described in subparagraph (B) for such drug for
                    the respective year, the Secretary shall agree
                    under such negotiation or renegotiation,
                    respectively, to such offered price as the
                    maximum fair price.
                      ``(B) Target price.--
                              ``(i) In general.--Subject to clause
                            (ii), the target price described in
                            this subparagraph for a selected drug
                            with respect to a year, is the average
                            price (which shall be the net average
                            price, if practicable, and volume-
                            weighted, if practicable) for a unit of
                            such drug for sales of such drug, as
                            computed (across different dosage forms
                            and strengths of the drug and not based
                            on the specific formulation or package
                            size or package type of the drug) in
                            the applicable country described in
                            section 1191(c)(3)(B) with respect to
                            such drug that, with respect to such
                            year, has the lowest average price for
                            such drug as compared to the average
                            prices (as so computed) of such drug
                            with respect to such year in the other
                            applicable countries described in such
                            section with respect to such drug.
                              ``(ii) Selected drugs without aim
                            price.--In applying this paragraph in
                            the case of negotiating the maximum
                            fair price of a selected drug for which
                            there is no AIM price available with
                            respect to the initial price
                            applicability year for such drug, or,
                            as applicable, renegotiating the
                            maximum fair price for such drug with
                            respect to a subsequent year during the
                            price applicability period for such
                            drug before the first plan year for
                            which there is an AIM price available
                            for such drug, the target price
                            described in this subparagraph for such
                            drug and respective year is the amount
                            that is 80 percent of the average
                            manufacturer price (as defined in
                            section 1927(k)(1)) for such drug and
                            year.
      ``(c) Limitation.--
              ``(1) In general.--Subject to paragraph (2), the
            maximum fair price negotiated (including as
            renegotiated) under this section for a selected drug,
            with respect to each plan year during a price
            applicability period for such drug, shall not exceed
            120 percent of the AIM price applicable to such drug
            with respect to such year.
              ``(2) Selected drugs without aim price.--In the case
            of a selected drug for which there is no AIM price
            available with respect to the initial price
            applicability year for such drug, for each plan year
            during the price applicability period before the first
            plan year for which there is an AIM price available for
            such drug, the maximum fair price negotiated (including
            as renegotiated) under this section for the selected
            drug shall not exceed the amount equal to 85 percent of
            the average manufacturer price for the drug with
            respect to such year.
      ``(d) Considerations.--For purposes of negotiating and, as
    applicable, renegotiating (including for purposes of
    determining whether to renegotiate) the maximum fair price of a
    selected drug under this part with the manufacturer of the
    drug, the Secretary, consistent with subsection (b)(2), shall
    take into consideration the factors described in paragraphs
    (1), (2), (3), and (5), and may take into consideration the
    factor described in paragraph (4):
              ``(1) Manufacturer-specific information.--The
            following information, including as submitted by the
            manufacturer:
                      ``(A) Research and development costs of the
                    manufacturer for the drug and the extent to
                    which the manufacturer has recouped research
                    and development costs.
                      ``(B) Market data for the drug, including the
                    distribution of sales across different programs
                    and purchasers and projected future revenues
                    for the drug.
                      ``(C) Unit costs of production and
                    distribution of the drug.
                      ``(D) Prior Federal financial support for
                    novel therapeutic discovery and development
                    with respect to the drug.
                      ``(E) Data on patents and on existing and
                    pending exclusivity for the drug.
                      ``(F) National sales data for the drug.
                      ``(G) Information on clinical trials for the
                    drug in the United States or in applicable
                    countries described in section 1191(c)(3)(B).
              ``(2) Information on alternative products.--The
            following information:
                      ``(A) The extent to which the drug represents
                    a therapeutic advance as compared to existing
                    therapeutic alternatives and, to the extent
                    such information is available, the costs of
                    such existing therapeutic alternatives.
                      ``(B) Information on approval by the Food and
                    Drug Administration of alternative drug
                    products.
                      ``(C) Information on comparative
                    effectiveness analysis for such products,
                    taking into consideration the effects of such
                    products on specific populations, such as
                    individuals with disabilities, the elderly,
                    terminally ill, children, and other patient
                    populations.
            In considering information described in subparagraph
            (C), the Secretary shall not use evidence or findings
            from comparative clinical effectiveness research in a
            manner that treats extending the life of an elderly,
            disabled, or terminally ill individual as of lower
            value than extending the life of an individual who is
            younger, nondisabled, or not terminally ill. Nothing in
            the previous sentence shall affect the application or
            consideration of an AIM price for a selected drug.
              ``(3) Foreign sales information.--To the extent
            available on a timely basis, including as provided by a
            manufacturer of the selected drug or otherwise,
            information on sales of the selected drug in each of
            the countries described in section 1191(c)(3)(B).
              ``(4) VA drug pricing information.--Information
            disclosed to the Secretary pursuant to subsection (f).
              ``(5) Additional information.--Information submitted
            to the Secretary, in accordance with a process
            specified by the Secretary, by other parties that are
            affected by the establishment of a maximum fair price
            for the selected drug.
      ``(e) Request for Information.--For purposes of negotiating
    and, as applicable, renegotiating (including for purposes of
    determining whether to renegotiate) the maximum fair price of a
    selected drug under this part with the manufacturer of the
    drug, with respect to a price applicability period, and other
    relevant data for purposes of this section--
              ``(1) the Secretary shall, not later than the
            selected drug publication date with respect to the
            initial price applicability year of such period,
            request drug pricing information from the manufacturer
            of such selected drug, including information described
            in subsection (d)(1); and
              ``(2) by not later than October 1 following the
            selected drug publication date, the manufacturer of
            such selected drug shall submit to the Secretary such
            requested information in such form and manner as the
            Secretary may require.
    The Secretary shall request, from the manufacturer or others,
    such additional information as may be needed to carry out the
    negotiation and renegotiation process under this section.
      ``(f) Disclosure of Information.--For purposes of this part,
    the Secretary of Veterans Affairs may disclose to the Secretary
    of Health and Human Services the price of any negotiation-
    eligible drug that is purchased pursuant to section 8126 of
    title 38, United States Code.

    ``SEC. 1195. PUBLICATION OF MAXIMUM FAIR PRICES.

      ``(a) In General.--With respect to an initial price
    applicability year and selected drug with respect to such year,
    not later than April 1 of the plan year prior to such initial
    price applicability year, the Secretary shall publish in the
    Federal Register the maximum fair price for such drug
    negotiated under this part with the manufacturer of such drug.
      ``(b) Updates.--
              ``(1) Subsequent year maximum fair prices.--For a
            selected drug, for each plan year subsequent to the
            initial price applicability year for such drug with
            respect to which an agreement for such drug is in
            effect under section 1193, the Secretary shall publish
            in the Federal Register--
                      ``(A) subject to subparagraph (B), the amount
                    equal to the maximum fair price published for
                    such drug for the previous year, increased by
                    the annual percentage increase in the consumer
                    price index for all urban consumers (all items;
                    U.S. city average) as of September of such
                    previous year; or
                      ``(B) in the case the maximum fair price for
                    such drug was renegotiated, for the first year
                    for which such price as so renegotiated
                    applies, such renegotiated maximum fair price.
              ``(2) Prices negotiated after deadline.--In the case
            of a selected drug with respect to an initial price
            applicability year for which the maximum fair price is
            determined under this part after the date of
            publication under this section, the Secretary shall
            publish such maximum fair price in the Federal Register
            by not later than 30 days after the date such maximum
            price is so determined.

    ``SEC. 1196. ADMINISTRATIVE DUTIES; COORDINATION PROVISIONS.

      ``(a) Administrative Duties.--
              ``(1) In general.--For purposes of section 1191, the
            administrative duties described in this section are the
            following:
                      ``(A) The establishment of procedures
                    (including through agreements with
                    manufacturers under this part, contracts with
                    prescription drug plans under part D of title
                    XVIII and MA-PD plans under part C of such
                    title, and agreements under section 1197 with
                    group health plans and health insurance issuers
                    of health insurance coverage offered in the
                    individual or group market) under which the
                    maximum fair price for a selected drug is
                    provided to fair price eligible individuals,
                    who with respect to such drug are described in
                    subparagraph (A) of section 1191(c)(1), at
                    pharmacies or by mail order service at the
                    point-of-sale of the drug for the applicable
                    price period for such drug and providing that
                    such maximum fair price is used for determining
                    cost-sharing under such plans or coverage for
                    the selected drug.
                      ``(B) The establishment of procedures
                    (including through agreements with
                    manufacturers under this part and contracts
                    with hospitals, physicians, and other providers
                    of services and suppliers and agreements under
                    section 1197 with group health plans and health
                    insurance issuers of health insurance coverage
                    offered in the individual or group market)
                    under which, in the case of a selected drug
                    furnished or administered by such a hospital,
                    physician, or other provider of services or
                    supplier to fair price eligible individuals
                    (who with respect to such drug are described in
                    subparagraph (B) of section 1191(c)(1)), the
                    maximum fair price for the selected drug is
                    provided to such hospitals, physicians, and
                    other providers of services and suppliers (as
                    applicable) with respect to such individuals
                    and providing that such maximum fair price is
                    used for determining cost-sharing under the
                    respective part, plan, or coverage for the
                    selected drug.
                      ``(C) The establishment of procedures
                    (including through agreements and contracts
                    described in subparagraphs (A) and (B)) to
                    ensure that, not later than 90 days after the
                    dispensing of a selected drug to a fair price
                    eligible individual by a pharmacy or mail order
                    service, the pharmacy or mail order service is
                    reimbursed for an amount equal to the
                    difference between--
                              ``(i) the lesser of--
                                      ``(I) the wholesale
                                    acquisition cost of the drug;
                                      ``(II) the national average
                                    drug acquisition cost of the
                                    drug; and
                                      ``(III) any other similar
                                    determination of pharmacy
                                    acquisition costs of the drug,
                                    as determined by the Secretary;
                                    and
                              ``(ii) the maximum fair price for the
                            drug.
                      ``(D) The establishment of procedures to
                    ensure that the maximum fair price for a
                    selected drug is applied before--
                              ``(i) any coverage or financial
                            assistance under other health benefit
                            plans or programs that provide coverage
                            or financial assistance for the
                            purchase or provision of prescription
                            drug coverage on behalf of fair price
                            eligible individuals as the Secretary
                            may specify; and
                              ``(ii) any other discounts.
                      ``(E) The establishment of procedures to
                    enter into appropriate agreements and protocols
                    for the ongoing computation of AIM prices for
                    selected drugs, including, to the extent
                    possible, to compute the AIM price for selected
                    drugs and including by providing that the
                    manufacturer of such a selected drug should
                    provide information for such computation not
                    later than 3 months after the first date of the
                    voluntary negotiation period for such selected
                    drug.
                      ``(F) The establishment of procedures to
                    compute and apply the maximum fair price across
                    different strengths and dosage forms of a
                    selected drug and not based on the specific
                    formulation or package size or package type of
                    the drug.
                      ``(G) The establishment of procedures to
                    negotiate and apply the maximum fair price in a
                    manner that does not include any dispensing or
                    similar fee.
                      ``(H) The establishment of procedures to
                    carry out the provisions of this part, as
                    applicable, with respect to--
                              ``(i) fair price eligible individuals
                            who are enrolled under a prescription
                            drug plan under part D of title XVIII
                            or an MA-PD plan under part C of such
                            title;
                              ``(ii) fair price eligible
                            individuals who are enrolled under a
                            group health plan or health insurance
                            coverage offered by a health insurance
                            issuer in the individual or group
                            market with respect to which there is
                            an agreement in effect under section
                            1197; and
                              ``(iii) fair price eligible
                            individuals who are entitled to
                            benefits under part A of title XVIII or
                            enrolled under part B of such title.
                      ``(I) The establishment of a negotiation
                    process and renegotiation process in accordance
                    with section 1194, including a process for
                    acquiring information described in subsection
                    (d) of such section and determining amounts
                    described in subsection (b) of such section.
                      ``(J) The provision of a reasonable dispute
                    resolution mechanism to resolve disagreements
                    between manufacturers, fair price eligible
                    individuals, and the third party with a
                    contract under subsection (c)(1).
              ``(2) Monitoring compliance.--
                      ``(A) In general.--The Secretary shall
                    monitor compliance by a manufacturer with the
                    terms of an agreement under section 1193,
                    including by establishing a mechanism through
                    which violations of such terms may be reported.
                      ``(B) Notification.--If a third party with a
                    contract under subsection (c)(1) determines
                    that the manufacturer is not in compliance with
                    such agreement, the third party shall notify
                    the Secretary of such noncompliance for
                    appropriate enforcement under section 4192 of
                    the Internal Revenue Code of 1986 or section
                    1198, as applicable.
      ``(b) Collection of Data.--
              ``(1) From prescription drug plans and ma-pd plans.--
            The Secretary may collect appropriate data from
            prescription drug plans under part D of title XVIII and
            MA-PD plans under part C of such title in a timeframe
            that allows for maximum fair prices to be provided
            under this part for selected drugs.
              ``(2) From health plans.--The Secretary may collect
            appropriate data from group health plans or health
            insurance issuers offering group or individual health
            insurance coverage in a timeframe that allows for
            maximum fair prices to be provided under this part for
            selected drugs.
              ``(3) Coordination of data collection.--To the extent
            feasible, as determined by the Secretary, the Secretary
            shall ensure that data collected pursuant to this
            subsection is coordinated with, and not duplicative of,
            other Federal data collection efforts.
      ``(c) Contract With Third Parties.--
              ``(1) In general.--The Secretary may enter into a
            contract with 1 or more third parties to administer the
            requirements established by the Secretary in order to
            carry out this part. At a minimum, the contract with a
            third party under the preceding sentence shall require
            that the third party--
                      ``(A) receive and transmit information
                    between the Secretary, manufacturers, and other
                    individuals or entities the Secretary
                    determines appropriate;
                      ``(B) receive, distribute, or facilitate the
                    distribution of funds of manufacturers to
                    appropriate individuals or entities in order to
                    meet the obligations of manufacturers under
                    agreements under this part;
                      ``(C) provide adequate and timely information
                    to manufacturers, consistent with the agreement
                    with the manufacturer under this part, as
                    necessary for the manufacturer to fulfill its
                    obligations under this part; and
                      ``(D) permit manufacturers to conduct
                    periodic audits, directly or through contracts,
                    of the data and information used by the third
                    party to determine discounts for applicable
                    drugs of the manufacturer under the program.
              ``(2) Performance requirements.--The Secretary shall
            establish performance requirements for a third party
            with a contract under paragraph (1) and safeguards to
            protect the independence and integrity of the
            activities carried out by the third party under the
            program under this part.

    ``SEC. 1197. VOLUNTARY PARTICIPATION BY OTHER HEALTH PLANS.

      ``(a) Agreement To Participate Under Program.--
              ``(1) In general.--Subject to paragraph (2), under
            the program under this part the Secretary shall be
            treated as having in effect an agreement with a group
            health plan or health insurance issuer offering group
            or individual health insurance coverage (as such terms
            are defined in section 2791 of the Public Health
            Service Act), with respect to a price applicability
            period and a selected drug with respect to such
            period--
                      ``(A) with respect to such selected drug
                    furnished or dispensed at a pharmacy or by mail
                    order service if coverage is provided under
                    such plan or coverage during such period for
                    such selected drug as so furnished or
                    dispensed; and
                      ``(B) with respect to such selected drug
                    furnished or administered by a hospital,
                    physician, or other provider of services or
                    supplier if coverage is provided under such
                    plan or coverage during such period for such
                    selected drug as so furnished or administered.
              ``(2) Opting out of agreement.--The Secretary shall
            not be treated as having in effect an agreement under
            the program under this part with a group health plan or
            health insurance issuer offering group or individual
            health insurance coverage with respect to a price
            applicability period and a selected drug with respect
            to such period if such a plan or issuer affirmatively
            elects, through a process specified by the Secretary,
            not to participate under the program with respect to
            such period and drug.
      ``(b) Publication of Election.--With respect to each price
    applicability period and each selected drug with respect to
    such period, the Secretary and the Secretary of Labor and the
    Secretary of the Treasury, as applicable, shall make public a
    list of each group health plan and each health insurance issuer
    offering group or individual health insurance coverage, with
    respect to which coverage is provided under such plan or
    coverage for such drug, that has elected under subsection (a)
    not to participate under the program with respect to such
    period and drug.

    ``SEC. 1198. CIVIL MONETARY PENALTY.

      ``(a) Violations Relating to Offering of Maximum Fair
    Price.--Any manufacturer of a selected drug that has entered
    into an agreement under section 1193, with respect to a plan
    year during the price applicability period for such drug, that
    does not provide access to a price that is not more than the
    maximum fair price (or a lesser price) for such drug for such
    year--
              ``(1) to a fair price eligible individual who with
            respect to such drug is described in subparagraph (A)
            of section 1191(c)(1) and who is furnished or dispensed
            such drug during such year; or
              ``(2) to a hospital, physician, or other provider of
            services or supplier with respect to fair price
            eligible individuals who with respect to such drug is
            described in subparagraph (B) of such section and is
            furnished or administered such drug by such hospital,
            physician, or provider or supplier during such year;
    shall be subject to a civil monetary penalty equal to ten times
    the amount equal to the difference between the price for such
    drug made available for such year by such manufacturer with
    respect to such individual or hospital, physician, provider, or
    supplier and the maximum fair price for such drug for such
    year.
      ``(b) Violations of Certain Terms of Agreement.--Any
    manufacturer of a selected drug that has entered into an
    agreement under section 1193, with respect to a plan year
    during the price applicability period for such drug, that is in
    violation of a requirement imposed pursuant to section
    1193(a)(6) shall be subject to a civil monetary penalty of not
    more than $1,000,000 for each such violation.
      ``(c) Application.--The provisions of section 1128A (other
    than subsections (a) and (b)) shall apply to a civil monetary
    penalty under this section in the same manner as such
    provisions apply to a penalty or proceeding under section
    1128A(a).

    ``SEC. 1199. MISCELLANEOUS PROVISIONS.

      ``(a) Paperwork Reduction Act.--Chapter 35 of title 44,
    United States Code, shall not apply to data collected under
    this part.
      ``(b) Limitation on Judicial Review.--The following shall not
    be subject to judicial review:
              ``(1) The selection of drugs for publication under
            section 1192(a).
              ``(2) The determination of whether a drug is a
            negotiation-eligible drug under section 1192(d).
              ``(3) The determination of the maximum fair price of
            a selected drug under section 1194.
              ``(4) The determination of units of a drug for
            purposes of section 1191(c)(3).
      ``(c) Coordination.--In carrying out this part with respect
    to group health plans or health insurance coverage offered in
    the group market that are subject to oversight by the Secretary
    of Labor or the Secretary of the Treasury, the Secretary of
    Health and Human Services shall coordinate with such respective
    Secretary.
      ``(d) Data Sharing.--The Secretary shall share with the
    Secretary of the Treasury such information as is necessary to
    determine the tax imposed by section 4192 of the Internal
    Revenue Code of 1986.''.
      (b) Application of Maximum Fair Prices and Conforming
    Amendments.--
              (1) Under medicare.--
                      (A) Application to payments under part b.--
                    Section 1847A(b)(1)(B) of the Social Security
                    Act (42 U.S.C. 1395w-3a(b)(1)(B)) is amended by
                    inserting ``or in the case of such a drug or
                    biological that is a selected drug (as defined
                    in section 1192(c)), with respect to a price
                    applicability period (as defined in section
                    1191(b)(2)), 106 percent of the maximum fair
                    price (as defined in section 1191(c)(2))
                    applicable for such drug and a plan year during
                    such period'' after ``paragraph (4)''.
                      (B) Exception to part d non-interference.--
                    Section 1860D-11(i) of the Social Security Act
                    (42 U.S.C. 1395w-111(i)) is amended by
                    inserting ``, except as provided under part E
                    of title XI'' after ``the Secretary''.
                      (C) Application as negotiated price under
                    part d.--Section 1860D-2(d)(1) of the Social
                    Security Act (42 U.S.C. 1395w-102(d)(1)) is
                    amended--
                              (i) in subparagraph (B), by inserting
                            ``, subject to subparagraph (D),''
                            after ``negotiated prices''; and
                              (ii) by adding at the end the
                            following new subparagraph:
                      ``(D) Application of maximum fair price for
                    selected drugs.--In applying this section, in
                    the case of a covered part D drug that is a
                    selected drug (as defined in section 1192(c)),
                    with respect to a price applicability period
                    (as defined in section 1191(b)(2)), the
                    negotiated prices used for payment (as
                    described in this subsection) shall be the
                    maximum fair price (as defined in section
                    1191(c)(2)) for such drug and for each plan
                    year during such period.''.
                      (D) Information from prescription drug plans
                    and ma-pd plans required.--
                              (i) Prescription drug plans.--Section
                            1860D-12(b) of the Social Security Act
                            (42 U.S.C. 1395w-112(b)) is amended by
                            adding at the end the following new
                            paragraph:
              ``(8) Provision of information related to maximum
            fair prices.--Each contract entered into with a PDP
            sponsor under this part with respect to a prescription
            drug plan offered by such sponsor shall require the
            sponsor to provide information to the Secretary as
            requested by the Secretary in accordance with section
            1196(b).''.
                              (ii) MA-PD plans.--Section 1857(f)(3)
                            of the Social Security Act (42 U.S.C.
                            1395w-27(f)(3)) is amended by adding at
                            the end the following new subparagraph:
                      ``(E) Provision of information related to
                    maximum fair prices.--Section 1860D-
                    12(b)(8).''.
              (2) Under group health plans and health insurance
            coverage.--
                      (A) PHSA.--Part D of title XXVII of the
                    Public Health Service Act (42 U.S.C. 300gg-111
                    et seq.) is amended by adding at the end the
                    following new section:

    ``SEC. 2799A-11. FAIR PRICE NEGOTIATION PROGRAM AND APPLICATION OF
                        MAXIMUM FAIR PRICES.

      ``(a) In General.--In the case of a group health plan or
    health insurance issuer offering group or individual health
    insurance coverage that is treated under section 1197 of the
    Social Security Act as having in effect an agreement with the
    Secretary under the Fair Price Negotiation Program under part E
    of title XI of such Act, with respect to a price applicability
    period (as defined in section 1191(b) of such Act) and a
    selected drug (as defined in section 1192(c) of such Act) with
    respect to such period with respect to which coverage is
    provided under such plan or coverage--
              ``(1) the provisions of such part shall apply--
                      ``(A) if coverage of such selected drug is
                    provided under such plan or coverage if the
                    drug is furnished or dispensed at a pharmacy or
                    by a mail order service, to the plans or
                    coverage offered by such plan or issuer, and to
                    the individuals enrolled under such plans or
                    coverage, during such period, with respect to
                    such selected drug, in the same manner as such
                    provisions apply to prescription drug plans and
                    MA-PD plans, and to individuals enrolled under
                    such prescription drug plans and MA-PD plans
                    during such period; and
                      ``(B) if coverage of such selected drug is
                    provided under such plan or coverage if the
                    drug is furnished or administered by a
                    hospital, physician, or other provider of
                    services or supplier, to the plans or coverage
                    offered by such plan or issuers, to the
                    individuals enrolled under such plans or
                    coverage, and to hospitals, physicians, and
                    other providers of services and suppliers
                    during such period, with respect to such drug
                    in the same manner as such provisions apply to
                    the Secretary, to individuals entitled to
                    benefits under part A of title XVIII or
                    enrolled under part B of such title, and to
                    hospitals, physicians, and other providers and
                    suppliers participating under title XVIII
                    during such period;
              ``(2) the plan or issuer shall apply any cost-sharing
            responsibilities under such plan or coverage, with
            respect to such selected drug, by substituting an
            amount not more than the maximum fair price negotiated
            under such part E of title XI for such drug in lieu of
            the drug price upon which the cost-sharing would have
            otherwise applied, and such cost-sharing
            responsibilities with respect to such selected drug may
            not exceed such maximum fair price; and
              ``(3) the Secretary shall apply the provisions of
            such part E to such plan, issuer, and coverage, such
            individuals so enrolled in such plans and coverage, and
            such hospitals, physicians, and other providers and
            suppliers participating in such plans and coverage.
      ``(b) Notification Regarding Nonparticipation in Fair Price
    Negotiation Program.--A group health plan or a health insurance
    issuer offering group or individual health insurance coverage
    shall publicly disclose in a manner and in accordance with a
    process specified by the Secretary any election made under
    section 1197 of the Social Security Act by the plan or issuer
    to not participate in the Fair Price Negotiation Program under
    part E of title XI of such Act with respect to a selected drug
    (as defined in section 1192(c) of such Act) for which coverage
    is provided under such plan or coverage before the beginning of
    the plan year for which such election was made.''.
                      (B) ERISA.--
                              (i) In general.--Subpart B of part 7
                            of subtitle B of title I of the
                            Employee Retirement Income Security Act
                            of 1974 (29 U.S.C. 1181 et seq.) is
                            amended by adding at the end the
                            following new section:

    ``SEC. 726. FAIR PRICE NEGOTIATION PROGRAM AND APPLICATION OF MAXIMUM
                        FAIR PRICES.

      ``(a) In General.--In the case of a group health plan or
    health insurance issuer offering group health insurance
    coverage that is treated under section 1197 of the Social
    Security Act as having in effect an agreement with the
    Secretary under the Fair Price Negotiation Program under part E
    of title XI of such Act, with respect to a price applicability
    period (as defined in section 1191(b) of such Act) and a
    selected drug (as defined in section 1192(c) of such Act) with
    respect to such period with respect to which coverage is
    provided under such plan or coverage--
              ``(1) the provisions of such part shall apply, as
            applicable--
                      ``(A) if coverage of such selected drug is
                    provided under such plan or coverage if the
                    drug is furnished or dispensed at a pharmacy or
                    by a mail order service, to the plans or
                    coverage offered by such plan or issuer, and to
                    the individuals enrolled under such plans or
                    coverage, during such period, with respect to
                    such selected drug, in the same manner as such
                    provisions apply to prescription drug plans and
                    MA-PD plans, and to individuals enrolled under
                    such prescription drug plans and MA-PD plans
                    during such period; and
                      ``(B) if coverage of such selected drug is
                    provided under such plan or coverage if the
                    drug is furnished or administered by a
                    hospital, physician, or other provider of
                    services or supplier, to the plans or coverage
                    offered by such plan or issuers, to the
                    individuals enrolled under such plans or
                    coverage, and to hospitals, physicians, and
                    other providers of services and suppliers
                    during such period, with respect to such drug
                    in the same manner as such provisions apply to
                    the Secretary, to individuals entitled to
                    benefits under part A of title XVIII or
                    enrolled under part B of such title, and to
                    hospitals, physicians, and other providers and
                    suppliers participating under title XVIII
                    during such period;
              ``(2) the plan or issuer shall apply any cost-sharing
            responsibilities under such plan or coverage, with
            respect to such selected drug, by substituting an
            amount not more than the maximum fair price negotiated
            under such part E of title XI for such drug in lieu of
            the drug price upon which the cost-sharing would have
            otherwise applied, and such cost-sharing
            responsibilities with respect to such selected drug may
            not exceed such maximum fair price; and
              ``(3) the Secretary shall apply the provisions of
            such part E to such plan, issuer, and coverage, and
            such individuals so enrolled in such plans.
      ``(b) Notification Regarding Nonparticipation in Fair Price
    Negotiation Program.--A group health plan or a health insurance
    issuer offering group health insurance coverage shall publicly
    disclose in a manner and in accordance with a process specified
    by the Secretary any election made under section 1197 of the
    Social Security Act by the plan or issuer to not participate in
    the Fair Price Negotiation Program under part E of title XI of
    such Act with respect to a selected drug (as defined in section
    1192(c) of such Act) for which coverage is provided under such
    plan or coverage before the beginning of the plan year for
    which such election was made.''.
                              (ii) Application to retiree and
                            certain small group health plans.--
                            Section 732(a) of the Employee
                            Retirement Income Security Act of 1974
                            (29 U.S.C. 1191a(a)) is amended by
                            striking ``section 711'' and inserting
                            ``sections 711 and 726''.
                              (iii) Clerical amendment.--The table
                            of sections for subpart B of part 7 of
                            subtitle B of title I of the Employee
                            Retirement Income Security Act of 1974
                            is amended by adding at the end the
                            following:

    ``Sec. 726. Fair Price Negotiation Program and application of maximum
              fair prices.''.
                      (C) IRC.--
                              (i) In general.--Subchapter B of
                            chapter 100 of the Internal Revenue
                            Code of 1986 is amended by adding at
                            the end the following new section:

    ``SEC. 9826. FAIR PRICE NEGOTIATION PROGRAM AND APPLICATION OF MAXIMUM
                        FAIR PRICES.

      ``(a) In General.--In the case of a group health plan that is
    treated under section 1197 of the Social Security Act as having
    in effect an agreement with the Secretary under the Fair Price
    Negotiation Program under part E of title XI of such Act, with
    respect to a price applicability period (as defined in section
    1191(b) of such Act) and a selected drug (as defined in section
    1192(c) of such Act) with respect to such period with respect
    to which coverage is provided under such plan--
              ``(1) the provisions of such part shall apply, as
            applicable--
                      ``(A) if coverage of such selected drug is
                    provided under such plan if the drug is
                    furnished or dispensed at a pharmacy or by a
                    mail order service, to the plan, and to the
                    individuals enrolled under such plan during
                    such period, with respect to such selected
                    drug, in the same manner as such provisions
                    apply to prescription drug plans and MA-PD
                    plans, and to individuals enrolled under such
                    prescription drug plans and MA-PD plans during
                    such period; and
                      ``(B) if coverage of such selected drug is
                    provided under such plan if the drug is
                    furnished or administered by a hospital,
                    physician, or other provider of services or
                    supplier, to the plan, to the individuals
                    enrolled under such plan, and to hospitals,
                    physicians, and other providers of services and
                    suppliers during such period, with respect to
                    such drug in the same manner as such provisions
                    apply to the Secretary, to individuals entitled
                    to benefits under part A of title XVIII or
                    enrolled under part B of such title, and to
                    hospitals, physicians, and other providers and
                    suppliers participating under title XVIII
                    during such period;
              ``(2) the plan shall apply any cost-sharing
            responsibilities under such plan, with respect to such
            selected drug, by substituting an amount not more than
            the maximum fair price negotiated under such part E of
            title XI for such drug in lieu of the drug price upon
            which the cost-sharing would have otherwise applied,
            and such cost-sharing responsibilities with respect to
            such selected drug may not exceed such maximum fair
            price; and
              ``(3) the Secretary shall apply the provisions of
            such part E to such plan and such individuals so
            enrolled in such plan.
      ``(b) Notification Regarding Nonparticipation in Fair Price
    Negotiation Program.--A group health plan shall publicly
    disclose in a manner and in accordance with a process specified
    by the Secretary any election made under section 1197 of the
    Social Security Act by the plan to not participate in the Fair
    Price Negotiation Program under part E of title XI of such Act
    with respect to a selected drug (as defined in section 1192(c)
    of such Act) for which coverage is provided under such plan
    before the beginning of the plan year for which such election
    was made.''.
                              (ii) Application to retiree and
                            certain small group health plans.--
                            Section 9831(a)(2) of the Internal
                            Revenue Code of 1986 is amended by
                            inserting ``other than with respect to
                            section 9826,'' before ``any group
                            health plan''.
                              (iii) Clerical amendment.--The table
                            of sections for subchapter B of chapter
                            100 of such Code is amended by adding
                            at the end the following new item:

    ``Sec. 9826. Fair Price Negotiation Program and application of maximum
              fair prices.''.
              (3) Fair price negotiation program prices included in
            best price and amp.--Section 1927 of the Social
            Security Act (42 U.S.C. 1396r-8) is amended--
                      (A) in subsection (c)(1)(C)(ii)--
                              (i) in subclause (III), by striking
                            at the end ``; and'';
                              (ii) in subclause (IV), by striking
                            at the end the period and inserting ``;
                            and''; and
                              (iii) by adding at the end the
                            following new subclause:
                                      ``(V) in the case of a rebate
                                    period and a covered outpatient
                                    drug that is a selected drug
                                    (as defined in section 1192(c))
                                    during such rebate period,
                                    shall be inclusive of the price
                                    for such drug made available
                                    from the manufacturer during
                                    the rebate period by reason of
                                    application of part E of title
                                    XI to any wholesaler, retailer,
                                    provider, health maintenance
                                    organization, nonprofit entity,
                                    or governmental entity within
                                    the United States.''; and
                      (B) in subsection (k)(1)(B), by adding at the
                    end the following new clause:
                              ``(iii) Clarification.--
                            Notwithstanding clause (i), in the case
                            of a rebate period and a covered
                            outpatient drug that is a selected drug
                            (as defined in section 1192(c)) during
                            such rebate period, any reduction in
                            price paid during the rebate period to
                            the manufacturer for the drug by a
                            wholesaler or retail community pharmacy
                            described in subparagraph (A) by reason
                            of application of part E of title XI
                            shall be included in the average
                            manufacturer price for the covered
                            outpatient drug.''.
              (4) FEHBP.--Section 8902 of title 5, United States
            Code, is amended by adding at the end the following:
      ``(p) A contract may not be made or a plan approved under
    this chapter with any carrier that has affirmatively elected,
    pursuant to section 1197 of the Social Security Act, not to
    participate in the Fair Price Negotiation Program established
    under section 1191 of such Act for any selected drug (as that
    term is defined in section 1192(c) of such Act).''.
              (5) Option of secretary of veterans affairs to
            purchase covered drugs at maximum fair prices.--Section
            8126 of title 38, United States Code, is amended--
                      (A) in subsection (a)(2), by inserting ``,
                    subject to subsection (j),'' after ``may not
                    exceed'';
                      (B) in subsection (d), in the matter
                    preceding paragraph (1), by inserting ``,
                    subject to subsection (j)'' after ``for the
                    procurement of the drug''; and
                      (C) by adding at the end the following new
                    subsection:
      ``(j)(1) In the case of a covered drug that is a selected
    drug, for any year during the price applicability period for
    such drug, if the Secretary determines that the maximum fair
    price of such drug for such year is less than the price for
    such drug otherwise in effect pursuant to this section
    (including after application of any reduction under subsection
    (a)(2) and any discount under subsection (c)), at the option of
    the Secretary, in lieu of the maximum price (determined after
    application of the reduction under subsection (a)(2) and any
    discount under subsection (c), as applicable) that would be
    permitted to be charged during such year for such drug pursuant
    to this section without application of this subsection, the
    maximum price permitted to be charged during such year for such
    drug pursuant to this section shall be such maximum fair price
    for such drug and year.
      ``(2) For purposes of this subsection:
              ``(A) The term `maximum fair price' means, with
            respect to a selected drug and year during the price
            applicability period for such drug, the maximum fair
            price (as defined in section 1191(c)(2) of the Social
            Security Act) for such drug and year.
              ``(B) The term `negotiation eligible drug' has the
            meaning given such term in section 1192(d)(1) of the
            Social Security Act.
              ``(C) The term `price applicability period' has, with
            respect to a selected drug, the meaning given such term
            in section 1191(b)(2) of such Act.
              ``(D) The term `selected drug' means, with respect to
            a year, a drug that is a selected drug under section
            1192(c) of such Act for such year.''.

    SEC. 139002. SELECTED DRUG MANUFACTURER EXCISE TAX IMPOSED DURING
                        NONCOMPLIANCE PERIODS.

      (a) In General.--Subchapter E of chapter 32 of the Internal
    Revenue Code of 1986 is amended by adding at the end the
    following new section:

    ``SEC. 4192. SELECTED DRUGS DURING NONCOMPLIANCE PERIODS.

      ``(a) In General.--There is hereby imposed on the sale by the
    manufacturer, producer, or importer of any selected drug during
    a day described in subsection (b) a tax in an amount such that
    the applicable percentage is equal to the ratio of--
              ``(1) such tax, divided by
              ``(2) the sum of such tax and the price for which so
            sold.
      ``(b) Noncompliance Periods.--A day is described in this
    subsection with respect to a selected drug if it is a day
    during one of the following periods:
              ``(1) The period beginning on the June 16th
            immediately following the selected drug publication
            date and ending on the first date during which the
            manufacturer of the drug has in place an agreement
            described in subsection (a) of section 1193 of the
            Social Security Act with respect to such drug.
              ``(2) The period beginning on the April 1st
            immediately following the June 16th described in
            paragraph (1) and ending on the first date during which
            the manufacturer of the drug has agreed to a maximum
            fair price under such agreement.
              ``(3) In the case of a selected drug with respect to
            which the Secretary of Health and Human Services has
            specified a renegotiation period under such agreement,
            the period beginning on the first date after the last
            date of such renegotiation period and ending on the
            first date during which the manufacturer of the drug
            has agreed to a renegotiated maximum fair price under
            such agreement.
              ``(4) With respect to information that is required to
            be submitted to the Secretary of Health and Human
            Services under such agreement, the period beginning on
            the date on which such Secretary certifies that such
            information is overdue and ending on the date that such
            information is so submitted.
              ``(5) In the case of a selected drug with respect to
            which a payment is due under subsection (c) of such
            section 1193, the period beginning on the date on which
            the Secretary of Health and Human Services certifies
            that such payment is overdue and ending on the date
            that such payment is made in full.
      ``(c) Applicable Percentage.--For purposes of this section,
    the term `applicable percentage' means--
              ``(1) in the case of sales of a selected drug during
            the first 90 days described in subsection (b) with
            respect to such drug, 65 percent,
              ``(2) in the case of sales of such drug during the
            91st day through the 180th day described in subsection
            (b) with respect to such drug, 75 percent,
              ``(3) in the case of sales of such drug during the
            181st day through the 270th day described in subsection
            (b) with respect to such drug, 85 percent, and
              ``(4) in the case of sales of such drug during any
            subsequent day, 95 percent.
      ``(d) Selected Drug.--For purposes of this section--
              ``(1) In general.--The term `selected drug' means any
            selected drug (within the meaning of section 1192 of
            the Social Security Act) which is manufactured or
            produced in the United States or entered into the
            United States for consumption, use, or warehousing.
              ``(2) United states.--The term `United States' has
            the meaning given such term by section 4612(a)(4).
              ``(3) Coordination with rules for possessions of the
            united states.--Rules similar to the rules of
            paragraphs (2) and (4) of section 4132(c) shall apply
            for purposes of this section.
      ``(e) Other Definitions.--For purposes of this section, the
    terms `selected drug publication date' and `maximum fair price'
    have the meaning given such terms in section 1191 of the Social
    Security Act.
      ``(f) Anti-Abuse Rule.--In the case of a sale which was timed
    for the purpose of avoiding the tax imposed by this section,
    the Secretary may treat such sale as occurring during a day
    described in subsection (b).''.
      (b) No Deduction for Excise Tax Payments.--Section 275 of the
    Internal Revenue Code of 1986 is amended by adding ``or by
    section 4192'' before the period at the end of subsection
    (a)(6).
      (c) Conforming Amendments.--
              (1) Section 4221(a) of the Internal Revenue Code of
            1986 is amended by inserting ``or 4192'' after
            ``section 4191''.
              (2) Section 6416(b)(2) of such Code is amended by
            inserting ``or 4192'' after ``section 4191''.
      (d) Clerical Amendments.--
              (1) The heading of subchapter E of chapter 32 of the
            Internal Revenue Code of 1986 is amended by striking
            ``Medical Devices'' and inserting ``Other Medical
            Products''.
              (2) The table of subchapters for chapter 32 of such
            Code is amended by striking the item relating to
            subchapter E and inserting the following new item:

                    ``subchapter e. other medical products''.

              (3) The table of sections for subchapter E of chapter
            32 of such Code is amended by adding at the end the
            following new item:

    ``Sec. 4192. Selected drugs during noncompliance periods.''.
      (e) Effective Date.--The amendments made by this section
    shall apply to sales after the date of the enactment of this
    Act.

    SEC. 139003. FAIR PRICE NEGOTIATION IMPLEMENTATION FUND.

      (a) In General.--There is hereby established a Fair Price
    Negotiation Implementation Fund (referred to in this section as
    the ``Fund''). The Secretary of Health and Human Services may
    obligate and expend amounts in the Fund to carry out this part
    and parts 2 and 3 (and the amendments made by such parts).
      (b) Funding.--There is authorized to be appropriated, and
    there is hereby appropriated, out of any monies in the Treasury
    not otherwise appropriated, to the Fund $3,000,000,000, to
    remain available until expended, of which--
              (1) $600,000,000 shall become available on the date
            of the enactment of this Act;
              (2) $600,000,000 shall become available on October 1,
            2023;
              (3) $600,000,000 shall become available on October 1,
            2024;
              (4) $600,000,000 shall become available on October 1,
            2025; and
              (5) $600,000,000 shall become available on October 1,
            2026.
      (c) Supplement Not Supplant.--Any amounts appropriated
    pursuant to this section shall be in addition to any other
    amounts otherwise appropriated pursuant to any other provision
    of law.

                  PART 2--PRESCRIPTION DRUG INFLATION REBATES

    SEC. 139101. MEDICARE PART B REBATE BY MANUFACTURERS.

      (a) In General.--Section 1834 of the Social Security Act (42
    U.S.C. 1395m) is amended by adding at the end the following new
    subsection:
      ``(z) Rebate by Manufacturers for Single Source Drugs With
    Prices Increasing Faster Than Inflation.--
              ``(1) Requirements.--
                      ``(A) Secretarial provision of information.--
                    Not later than 6 months after the end of each
                    calendar quarter beginning on or after July 1,
                    2023, the Secretary shall, for each part B
                    rebatable drug, report to each manufacturer of
                    such part B rebatable drug the following for
                    such calendar quarter:
                              ``(i) Information on the total number
                            of units of the billing and payment
                            code described in subparagraph (A)(i)
                            of paragraph (3) with respect to such
                            drug and calendar quarter.
                              ``(ii) Information on the amount (if
                            any) of the excess average sales price
                            increase described in subparagraph
                            (A)(ii) of such paragraph for such drug
                            and calendar quarter.
                              ``(iii) The rebate amount specified
                            under such paragraph for such part B
                            rebatable drug and calendar quarter.
                      ``(B) Manufacturer requirement.--For each
                    calendar quarter beginning on or after July 1,
                    2023, the manufacturer of a part B rebatable
                    drug shall, for such drug, not later than 30
                    days after the date of receipt from the
                    Secretary of the information described in
                    subparagraph (A) for such calendar quarter,
                    provide to the Secretary a rebate that is equal
                    to the amount specified in paragraph (3) for
                    such drug for such calendar quarter.
              ``(2) Part b rebatable drug defined.--
                      ``(A) In general.--In this subsection, the
                    term `part B rebatable drug' means a single
                    source drug or biological (as defined in
                    subparagraph (D) of section 1847A(c)(6)),
                    including a biosimilar biological product (as
                    defined in subparagraph (H) of such section),
                    payable (if such drug were furnished to an
                    individual enrolled under this part) under this
                    part, except such term shall not include such a
                    drug or biological--
                              ``(i) if the average total allowed
                            charges under this part as determined
                            by the Secretary for a year per
                            individual that uses such a drug or
                            biological, as determined by the
                            Secretary, are less than, subject to
                            subparagraph (B), $100; or
                              ``(ii) that is a vaccine described in
                            subparagraph (A) or (B) of section
                            1861(s)(10).
                      ``(B) Increase.--The dollar amount applied
                    under subparagraph (A)(i)--
                              ``(i) for 2024, shall be the dollar
                            amount specified under such
                            subparagraph for 2023, increased by the
                            percentage increase in the consumer
                            price index for all urban consumers
                            (United States city average) for the
                            12-month period ending with June of the
                            previous year; and
                              ``(ii) for a subsequent year, shall
                            be the dollar amount specified in this
                            clause (or clause (i)) for the previous
                            year, increased by the percentage
                            increase in the consumer price index
                            for all urban consumers (United States
                            city average) for the 12-month period
                            ending with June of the previous year.
                    Any dollar amount specified under this
                    subparagraph that is not a multiple of $10
                    shall be rounded to the nearest multiple of
                    $10.
              ``(3) Rebate amount.--
                      ``(A) In general.--For purposes of paragraph
                    (1), the amount specified in this paragraph for
                    a part B rebatable drug assigned to a billing
                    and payment code for a calendar quarter is,
                    subject to subparagraph (B) and paragraph (4),
                    the amount equal to the product of--
                              ``(i) the total number of units, as
                            described in section 1847A(c)(1)(B),
                            with respect to such drug during the
                            calendar quarter; and
                              ``(ii) the amount (if any) by which--
                                      ``(I) the payment amount
                                    under subparagraph (B) or (C)
                                    of section 1847A(b)(1), as
                                    applicable, for such part B
                                    rebatable drug during the
                                    calendar quarter; exceeds
                                      ``(II) the inflation-adjusted
                                    payment amount determined under
                                    subparagraph (C) for such part
                                    B rebatable drug during the
                                    calendar quarter.
                      ``(B) Excluded units.--For purposes of
                    subparagraph (A)(i), the Secretary shall
                    exclude from the total number of units with
                    respect to a part B rebatable drug and calendar
                    quarter units of such part B rebatable drug for
                    which payment was made under a State plan under
                    title XIX (or waiver of such plan), as reported
                    by States under section 1927(b)(2)(A) for the
                    most recent rebate period.
                      ``(C) Determination of inflation-adjusted
                    payment amount.--The inflation-adjusted payment
                    amount determined under this subparagraph for a
                    part B rebatable drug for a calendar quarter
                    is--
                              ``(i) the payment amount for the
                            billing and payment code for such drug
                            in the payment amount benchmark quarter
                            (as defined in subparagraph (D));
                            increased by
                              ``(ii) the percentage by which the
                            rebate period CPI-U (as defined in
                            subparagraph (F)) for the calendar
                            quarter exceeds the benchmark period
                            CPI-U (as defined in subparagraph (E)).
                      ``(D) Payment amount benchmark quarter.--The
                    term `payment amount benchmark quarter' means
                    the calendar quarter beginning January 1, 2016.
                      ``(E) Benchmark period cpi-u.--The term
                    `benchmark period CPI-U' means the consumer
                    price index for all urban consumers (United
                    States city average) for July 2015.
                      ``(F) Rebate period cpi-u.--The term `rebate
                    period CPI-U' means, with respect to a calendar
                    quarter described in subparagraph (C), the
                    greater of the benchmark period CPI-U and the
                    consumer price index for all urban consumers
                    (United States city average) for the first
                    month of the calendar quarter that is two
                    calendar quarters prior to such described
                    calendar quarter.
              ``(4) Special treatment of certain drugs and
            exemption.--
                      ``(A) Subsequently approved drugs.--Subject
                    to subparagraph (B), in the case of a part B
                    rebatable drug first approved or licensed by
                    the Food and Drug Administration after July 1,
                    2015, clause (i) of paragraph (3)(C) shall be
                    applied as if the term `payment amount
                    benchmark quarter' were defined under paragraph
                    (3)(D) as the third full calendar quarter after
                    the day on which the drug was first marketed
                    and clause (ii) of paragraph (3)(C) shall be
                    applied as if the term `benchmark period CPI-U'
                    were defined under paragraph (3)(E) as if the
                    reference to `July 2015' under such paragraph
                    were a reference to `the first month of the
                    first full calendar quarter after the day on
                    which the drug was first marketed'.
                      ``(B) Timeline for provision of rebates for
                    subsequently approved drugs.--In the case of a
                    part B rebatable drug first approved or
                    licensed by the Food and Drug Administration
                    after July 1, 2015, paragraph (1)(B) shall be
                    applied as if the reference to `July 1, 2023'
                    under such paragraph were a reference to the
                    later of the 6th full calendar quarter after
                    the day on which the drug was first marketed or
                    July 1, 2023.
                      ``(C) Exemption for shortages.--The Secretary
                    may reduce or waive the rebate amount under
                    paragraph (1)(B) with respect to a part B
                    rebatable drug that is described as currently
                    in shortage on the shortage list in effect
                    under section 506E of the Federal Food, Drug,
                    and Cosmetic Act or in the case of other
                    exigent circumstances, as determined by the
                    Secretary.
                      ``(D) Selected drugs.--In the case of a part
                    B rebatable drug that is a selected drug (as
                    defined in section 1192(c)) for a price
                    applicability period (as defined in section
                    1191(b)(2))--
                              ``(i) for calendar quarters during
                            such period for which a maximum fair
                            price (as defined in section
                            1191(c)(2)) for such drug has been
                            determined and is applied under part E
                            of title XI, the rebate amount under
                            paragraph (1)(B) shall be waived; and
                              ``(ii) in the case such drug is
                            determined (pursuant to such section
                            1192(c)) to no longer be a selected
                            drug, for each applicable year
                            beginning after the price applicability
                            period with respect to such drug,
                            clause (i) of paragraph (3)(C) shall be
                            applied as if the term `payment amount
                            benchmark quarter' were defined under
                            paragraph (3)(D) as the calendar
                            quarter beginning January 1 of the last
                            year beginning during such price
                            applicability period with respect to
                            such selected drug and clause (ii) of
                            paragraph (3)(C) shall be applied as if
                            the term `benchmark period CPI-U' were
                            defined under paragraph (3)(E) as if
                            the reference to `July 2015' under such
                            paragraph were a reference to the July
                            of the year preceding such last year.
              ``(5) Application to beneficiary coinsurance.--In the
            case of a part B rebatable drug, if the payment amount
            under this part for a quarter exceeds the inflation
            adjusted payment for such quarter--
                      ``(A) in computing the amount of any
                    coinsurance applicable under this part to an
                    individual to whom such drug is furnished, the
                    computation of such coinsurance shall be based
                    on the inflation-adjusted payment amount
                    determined under paragraph (3)(C) for such part
                    B rebatable drug; and
                      ``(B) the amount of such coinsurance is equal
                    to 20 percent of such inflation-adjusted
                    payment amount so determined.
              ``(6) Rebate deposits.--Amounts paid as rebates under
            paragraph (1)(B) shall be deposited into the Federal
            Supplementary Medical Insurance Trust Fund established
            under section 1841.
              ``(7) Civil money penalty.--If a manufacturer of a
            part B rebatable drug has failed to comply with the
            requirements under paragraph (1)(B) for such drug for a
            calendar quarter, the manufacturer shall be subject to,
            in accordance with a process established by the
            Secretary pursuant to regulations, a civil money
            penalty in an amount equal to at least 125 percent of
            the amount specified in paragraph (3) for such drug for
            such calendar quarter. The provisions of section 1128A
            (other than subsections (a) (with respect to amounts of
            penalties or additional assessments) and (b)) shall
            apply to a civil money penalty under this paragraph in
            the same manner as such provisions apply to a penalty
            or proceeding under section 1128A(a).
              ``(8) Application to multiple source drugs.--The
            Secretary may, pursuant to rulemaking, apply the
            provisions of this subsection to multiple source drugs
            (as defined in section 1847A(c)(6)(C)), including, for
            purposes of determining the rebate amount under
            paragraph (3), by calculating manufacturer-specific
            average sales prices for the benchmark period and the
            rebate period.''.
      (b) Amounts Payable; Cost-Sharing.--Section 1833 of the
    Social Security Act (42 U.S.C. 1395l) is amended--
              (1) in subsection (a)--
                      (A) in paragraph (1)--
                              (i) in subparagraph (G), by inserting
                            ``, subject to subsection (i)(9),''
                            after ``the amounts paid'';
                              (ii) in subparagraph (S), by striking
                            ``with respect to'' and inserting
                            ``subject to subparagraph (DD), with
                            respect to'';
                              (iii) by striking ``and (DD)'' and
                            inserting ``(EE)''; and
                              (iv) by inserting before the
                            semicolon at the end the following: ``,
                            and (EE) with respect to a part B
                            rebatable drug (as defined in paragraph
                            (2) of section 1834(z)) for which the
                            payment amount for a calendar quarter
                            under paragraph (3)(A)(ii)(I) of such
                            section for such quarter exceeds the
                            inflation-adjusted payment under
                            paragraph (3)(A)(ii)(II) of such
                            section for such quarter, the amounts
                            paid shall be the difference between
                            (i) the payment amount under paragraph
                            (3)(A)(ii)(I) of such section for such
                            drug, and (ii) 20 percent of the
                            inflation-adjusted payment amount under
                            paragraph (3)(A)(ii)(II) of such
                            section for such drug''; and
                      (B) by adding at the end of the flush left
                    matter following paragraph (9), the following:
    ``For purposes of applying paragraph (1)(EE), subsections
    (i)(9) and (t)(8)(F), and section 1834(z)(5), the Secretary
    shall make such estimates and use such data as the Secretary
    determines appropriate, and may do so by program instruction or
    otherwise.'';
              (2) in subsection (i), by adding at the end the
            following new paragraph:
      ``(9) In the case of a part B rebatable drug (as defined in
    paragraph (2) of section 1834(z)) for which payment under this
    subsection is not packaged into a payment for a covered OPD
    service (as defined in subsection (t)(1)(B)) (or group of
    services) furnished on or after July 1, 2023, under the system
    under this subsection, in lieu of calculation of coinsurance
    and the amount of payment otherwise applicable under this
    subsection, the provisions of section 1834(z)(5), paragraph
    (1)(EE) of subsection (a), and the flush left matter following
    paragraph (9) of subsection (a), shall, as determined
    appropriate by the Secretary, apply under this subsection in
    the same manner as such provisions of section 1834(z)(5) and
    subsection (a) apply under such section and subsection.''; and
              (3) in subsection (t)(8), by adding at the end the
            following new subparagraph:
                      ``(F) Part b rebatable drugs.--In the case of
                    a part B rebatable drug (as defined in
                    paragraph (2) of section 1834(z)) for which
                    payment under this part is not packaged into a
                    payment for a service furnished on or after
                    July 1, 2023, under the system under this
                    subsection, in lieu of calculation of
                    coinsurance and the amount of payment otherwise
                    applicable under this subsection, the
                    provisions of section 1834(z)(5), paragraph
                    (1)(EE) of subsection (a), and the flush left
                    matter following paragraph (9) of subsection
                    (a), shall, as determined appropriate by the
                    Secretary, apply under this subsection in the
                    same manner as such provisions of section
                    1834(z)(5) and subsection (a) apply under such
                    section and subsection.''.
      (c) Conforming Amendments.--
              (1) To part b asp calculation.--Section 1847A(c)(3)
            of the Social Security Act (42 U.S.C. 1395w-3a(c)(3))
            is amended by inserting ``or section 1834(z)'' after
            ``section 1927''.
              (2) Excluding parts b drug inflation rebate from best
            price.--Section 1927(c)(1)(C)(ii)(I) of the Social
            Security Act (42 U.S.C. 1396r-8(c)(1)(C)(ii)(I)) is
            amended by inserting ``or section 1834(z)'' after
            ``this section''.
              (3) Coordination with medicaid rebate information
            disclosure.--Section 1927(b)(3)(D)(i) of the Social
            Security Act (42 U.S.C. 1396r-8(b)(3)(D)(i)) is amended
            by striking ``or to carry out section 1847B'' and
            inserting ``to carry out section 1847B or section
            1834(z)''.

    SEC. 139102. MEDICARE PART D REBATE BY MANUFACTURERS.

      (a) In General.--Part D of title XVIII of the Social Security
    Act is amended by inserting after section 1860D-14A (42 U.S.C.
    1395w-114a) the following new section:

    ``SEC. 1860D-14B. MANUFACTURER REBATE FOR CERTAIN DRUGS WITH PRICES
                        INCREASING FASTER THAN INFLATION.

      ``(a) Requirements.--
              ``(1) Secretarial provision of information.--Not
            later than 9 months after the end of each applicable
            year (as defined in subsection (g)(7)), the Secretary
            shall, for each part D rebatable drug, report to each
            manufacturer of such part D rebatable drug the
            following for such year:
                      ``(A) Information on the amount (if any) of
                    the excess average manufacturer price increase
                    described in subsection (b)(1)(B) for each
                    dosage form and strength with respect to such
                    drug and year.
                      ``(B) The rebate amount specified under
                    subsection (b) for each dosage form and
                    strength with respect to such drug and year.
              ``(2) Manufacturer requirements.--For each applicable
            year, the manufacturer of a part D rebatable drug, for
            each dosage form and strength with respect to such
            drug, not later than 30 days after the date of receipt
            from the Secretary of the information described in
            paragraph (1) for such year, shall provide to the
            Secretary a rebate that is equal to the amount
            specified in subsection (b) for such dosage form and
            strength with respect to such drug for such year.
      ``(b) Rebate Amount.--
              ``(1) In general.--
                      ``(A) Calculation.--For purposes of this
                    section, the amount specified in this
                    subsection for a dosage form and strength with
                    respect to a part D rebatable drug and
                    applicable year is, subject to subparagraph (B)
                    of this paragraph and subparagraphs (B) and (C)
                    of paragraph (5), the amount equal to the
                    product of--
                              ``(i) the total number of units that
                            are used to calculate the average
                            manufacturer price of such dosage form
                            and strength with respect to such part
                            D rebatable drug, as reported by the
                            manufacturer of such drug under section
                            1927 for each recent rebate period
                            under such section, with respect to
                            such year, under such section for which
                            such information is available; and
                              ``(ii) the amount (if any) by which--
                                      ``(I) the annual manufacturer
                                    price (as determined in
                                    paragraph (2)) paid for such
                                    dosage form and strength with
                                    respect to such part D
                                    rebatable drug for the year;
                                    exceeds
                                      ``(II) the inflation-adjusted
                                    payment amount determined under
                                    paragraph (3) for such dosage
                                    form and strength with respect
                                    to such part D rebatable drug
                                    for the year.
                      ``(B) Excluded units.--For purposes of
                    subparagraph (A)(i), the Secretary shall
                    exclude from the total number of units for a
                    dosage form and strength with respect to a part
                    D rebatable drug and the most recent rebate
                    period under section 1927, with respect to an
                    applicable year, for which such information is
                    available, units of each dosage form and
                    strength of such part D rebatable drug, for
                    which payment was made under a State plan under
                    title XIX (or waiver of such plan), as reported
                    by States under section 1927(b)(2)(A) for such
                    rebate period.
              ``(2) Determination of annual manufacturer price.--
            The annual manufacturer price determined under this
            paragraph for a dosage form and strength, with respect
            to a part D rebatable drug and an applicable year, is
            the sum of the products of--
                      ``(A) the average manufacturer price (as
                    defined in subsection (g)(6)) of such dosage
                    form and strength, as calculated for a unit of
                    such drug, with respect to each of the calendar
                    quarters of such year; and
                      ``(B) the ratio of--
                              ``(i) the total number of units of
                            such dosage form and strength reported
                            for the purpose of calculating average
                            manufacturer price under section 1927
                            during each such calendar quarter of
                            such year; to
                              ``(ii) the total number of units of
                            such dosage form and strength reported
                            for the purpose of calculating average
                            manufacturer price under section 1927
                            during such year, as determined by the
                            Secretary.
              ``(3) Determination of inflation-adjusted payment
            amount.--The inflation-adjusted payment amount
            determined under this paragraph for a dosage form and
            strength with respect to a part D rebatable drug for an
            applicable year, subject to subparagraphs (A) and (D)
            of paragraph (5), is--
                      ``(A) the benchmark year manufacturer price
                    determined under paragraph (4) for such dosage
                    form and strength with respect to such drug and
                    year; increased by
                      ``(B) the percentage by which the applicable
                    year CPI-U (as defined in subsection (g)(5))
                    for the year exceeds the benchmark period CPI-U
                    (as defined in subsection (g)(4)).
              ``(4) Determination of benchmark year manufacturer
            price.--The benchmark year manufacturer price
            determined under this paragraph for a dosage form and
            strength, with respect to a part D rebatable drug and
            an applicable year, is the sum of the products of--
                      ``(A) the average manufacturer price (as
                    defined in subsection (g)(6)) of such dosage
                    form and strength, as calculated for a unit of
                    such drug, with respect to each of the calendar
                    quarters of the payment amount benchmark year
                    (as defined in subsection (g)(3)); and
                      ``(B) the ratio of--
                              ``(i) the total number of units of
                            such dosage form and strength dispensed
                            during each such calendar quarter of
                            such payment amount benchmark year; to
                              ``(ii) the total number of units of
                            such dosage form and strength dispensed
                            during such payment amount benchmark
                            year.
              ``(5) Special treatment of certain drugs and
            exemption.--
                      ``(A) Subsequently approved drugs.--In the
                    case of a part D rebatable drug first approved
                    or licensed by the Food and Drug Administration
                    after January 1, 2016, subparagraphs (A) and
                    (B) of paragraph (4) shall be applied as if the
                    term `payment amount benchmark year' were
                    defined under subsection (g)(3) as the first
                    calendar year beginning after the day on which
                    the drug was first marketed by any manufacturer
                    and subparagraph (B) of paragraph (3) shall be
                    applied as if the term `benchmark period CPI-U'
                    were defined under subsection (g)(4) as if the
                    reference to `January 2016' under such
                    subsection were a reference to `January of the
                    first year beginning after the date on which
                    the drug was first marketed by any
                    manufacturer'.
                      ``(B) Exemption for shortages.--The Secretary
                    may reduce or waive the rebate under paragraph
                    (1) with respect to a part D rebatable drug
                    that is described as currently in shortage on
                    the shortage list in effect under section 506E
                    of the Federal Food, Drug, and Cosmetic Act or
                    in the case of other exigent circumstances, as
                    determined by the Secretary.
                      ``(C) Treatment of new formulations.--
                              ``(i) In general.--In the case of a
                            part D rebatable drug that is a line
                            extension of a part D rebatable drug
                            that is an oral solid dosage form, the
                            Secretary shall establish a formula for
                            determining the amount specified in
                            this subsection with respect to such
                            part D rebatable drug and an applicable
                            year with consideration of the original
                            part D rebatable drug.
                              ``(ii) Line extension defined.--In
                            this subparagraph, the term `line
                            extension' means, with respect to a
                            part D rebatable drug, a new
                            formulation of the drug, such as an
                            extended release formulation, but does
                            not include an abuse-deterrent
                            formulation of the drug (as determined
                            by the Secretary), regardless of
                            whether such abuse-deterrent
                            formulation is an extended release
                            formulation.
                      ``(D) Selected drugs.--In the case of a part
                    D rebatable drug that is a selected drug (as
                    defined in section 1192(c)) for a price
                    applicability period (as defined in section
                    1191(b)(2))--
                              ``(i) for plan years during such
                            period for which a maximum fair price
                            (as defined in section 1191(c)(2)) for
                            such drug has been determined and is
                            applied under part E of title XI, the
                            rebate under subsection (a)(1)(B) shall
                            be waived; and
                              ``(ii) in the case such drug is
                            determined (pursuant to such section
                            1192(c)) to no longer be a selected
                            drug, for each applicable year
                            beginning after the price applicability
                            period with respect to such drug,
                            subparagraphs (A) and (B) of paragraph
                            (4) shall be applied as if the term
                            `payment amount benchmark year' were
                            defined under subsection (g)(3) as the
                            last year beginning during such price
                            applicability period with respect to
                            such selected drug and subparagraph (B)
                            of paragraph (3) shall be applied as if
                            the term `benchmark period CPI-U' were
                            defined under subsection (g)(4) as if
                            the reference to `January 2016' under
                            such subsection were a reference to
                            January of the last year beginning
                            during such price applicability period
                            with respect to such drug.
      ``(c) Rebate Deposits.--Amounts paid as rebates under
    subsection (b) shall be deposited into the Medicare
    Prescription Drug Account in the Federal Supplementary Medical
    Insurance Trust Fund established under section 1841.
      ``(d) Information.--For purposes of carrying out this
    section, the Secretary shall use information submitted by
    manufacturers under section 1927(b)(3) and information
    submitted by States under section 1927(b)(2)(A).
      ``(e) Civil Money Penalty.--If a manufacturer of a part D
    rebatable drug has failed to comply with the requirement under
    subsection (a)(1)(B) with respect to such drug for an
    applicable year, the manufacturer shall be subject to, in
    accordance with a process established by the Secretary pursuant
    to regulations, a civil money penalty in an amount equal to 125
    percent of the amount specified in subsection (b) for such drug
    for such year. The provisions of section 1128A (other than
    subsections (a) (with respect to amounts of penalties or
    additional assessments) and (b)) shall apply to a civil money
    penalty under this subsection in the same manner as such
    provisions apply to a penalty or proceeding under section
    1128A(a).
      ``(f) Judicial Review.--There shall be no judicial review of
    the following:
              ``(1) The determination of units under this section.
              ``(2) The determination of whether a drug is a part D
            rebatable drug under this section.
              ``(3) The calculation of the rebate amount under this
            section.
      ``(g) Definitions.--In this section:
              ``(1) Part d rebatable drug defined.--
                      ``(A) In general.--The term `part D rebatable
                    drug' means a drug or biological that would
                    (without application of this section) be a
                    covered part D drug, except such term shall,
                    with respect to an applicable year, not include
                    such a drug or biological if the average annual
                    total cost under this part for such year per
                    individual who uses such a drug or biological,
                    as determined by the Secretary, is less than,
                    subject to subparagraph (B), $100, as
                    determined by the Secretary using the most
                    recent data available or, if data is not
                    available, as estimated by the Secretary.
                      ``(B) Increase.--The dollar amount applied
                    under subparagraph (A)--
                              ``(i) for 2024, shall be the dollar
                            amount specified under such
                            subparagraph for 2023, increased by the
                            percentage increase in the consumer
                            price index for all urban consumers
                            (United States city average) for the
                            12-month period beginning with January
                            of 2023; and
                              ``(ii) for a subsequent year, shall
                            be the dollar amount specified in this
                            subparagraph for the previous year,
                            increased by the percentage increase in
                            the consumer price index for all urban
                            consumers (United States city average)
                            for the 12-month period beginning with
                            January of the previous year.
                    Any dollar amount specified under this
                    subparagraph that is not a multiple of $10
                    shall be rounded to the nearest multiple of
                    $10.
              ``(2) Unit defined.--The term `unit' means, with
            respect to a part D rebatable drug, the lowest
            identifiable quantity (such as a capsule or tablet,
            milligram of molecules, or grams) of the part D
            rebatable drug, including data reported under section
            1927.
              ``(3) Payment amount benchmark year.--The term
            `payment amount benchmark year' means the year
            beginning January 1, 2016.
              ``(4) Benchmark period cpi-u.--The term `benchmark
            period CPI-U' means the consumer price index for all
            urban consumers (United States city average) for
            January 2016.
              ``(5) Applicable year cpi-u.--The term `applicable
            year CPI-U' means, with respect to an applicable year,
            the consumer price index for all urban consumers
            (United States city average) for January of such year.
              ``(6) Average manufacturer price.--The term `average
            manufacturer price' has the meaning, with respect to a
            part D rebatable drug of a manufacturer, given such
            term in section 1927(k)(1), with respect to a covered
            outpatient drug of a manufacturer for a rebate period
            under section 1927.
              ``(7) Applicable year.--The term `applicable year'
            means a year beginning with 2023.''.
      (b) Conforming Amendments.--
              (1) To part b asp calculation.--Section 1847A(c)(3)
            of the Social Security Act (42 U.S.C. 1395w-3a(c)(3)),
            as amended by section 139101(c)(1), is further amended
            by striking ``section 1927 or section 1834(z)'' and
            inserting ``section 1927, section 1834(z), or section
            1860D-14B''.
              (2) Excluding part d drug inflation rebate from best
            price.--Section 1927(c)(1)(C)(ii)(I) of the Social
            Security Act (42 U.S.C. 1396r-8(c)(1)(C)(ii)(I)), as
            amended by section 139101(c)(2), is further amended by
            striking ``or section 1834(z)'' and inserting ``,
            section 1834(z), or section 1860D-14B''.
              (3) Coordination with medicaid rebate information
            disclosure.--Section 1927(b)(3)(D)(i) of the Social
            Security Act (42 U.S.C. 1396r-8(b)(3)(D)(i)), as
            amended by section 139101(c)(3), is further amended by
            striking ``or section 1834(z)'' and inserting ``,
            section 1834(z), or section 1860D-14B''.

    PART 3--PART D IMPROVEMENTS AND MAXIMUM OUT-OF-POCKET CAP FOR MEDICARE
                                 BENEFICIARIES

    SEC. 139201. MEDICARE PART D BENEFIT REDESIGN.

      (a) Benefit Structure Redesign.--Section 1860D-2(b) of the
    Social Security Act (42 U.S.C. 1395w-102(b)) is amended--
              (1) in paragraph (2)--
                      (A) in subparagraph (A), in the matter
                    preceding clause (i), by inserting ``for a year
                    preceding 2024 and for costs above the annual
                    deductible specified in paragraph (1) and up to
                    the annual out-of-pocket threshold specified in
                    paragraph (4)(B) for 2024 and each subsequent
                    year'' after ``paragraph (3)'';
                      (B) in subparagraph (C)--
                              (i) in clause (i), in the matter
                            preceding subclause (I), by inserting
                            ``for a year preceding 2024,'' after
                            ``paragraph (4),''; and
                              (ii) in clause (ii)(III), by striking
                            ``and each subsequent year'' and
                            inserting ``through 2023''; and
                      (C) in subparagraph (D)--
                              (i) in clause (i)--
                                      (I) in the matter preceding
                                    subclause (I), by inserting
                                    ``for a year preceding 2024,''
                                    after ``paragraph (4),''; and
                                      (II) in subclause (I)(bb), by
                                    striking ``a year after 2018''
                                    and inserting ``each of years
                                    2018 through 2023''; and
                              (ii) in clause (ii)(V), by striking
                            ``2019 and each subsequent year'' and
                            inserting ``each of years 2019 through
                            2023'';
              (2) in paragraph (3)(A)--
                      (A) in the matter preceding clause (i), by
                    inserting ``for a year preceding 2024,'' after
                    ``and (4),''; and
                      (B) in clause (ii), by striking ``for a
                    subsequent year'' and inserting ``for each of
                    years 2007 through 2023''; and
              (3) in paragraph (4)--
                      (A) in subparagraph (A)--
                              (i) in clause (i)--
                                      (I) by redesignating
                                    subclauses (I) and (II) as
                                    items (aa) and (bb),
                                    respectively, and moving the
                                    margin of each such
                                    redesignated item 2 ems to the
                                    right;
                                      (II) in the matter preceding
                                    item (aa), as redesignated by
                                    subclause (I), by striking ``is
                                    equal to the greater of--'' and
                                    inserting ``is equal to--
                                      ``(I) for a year preceding
                                    2024, the greater of--'';
                                      (III) by striking the period
                                    at the end of item (bb), as
                                    redesignated by subclause (I),
                                    and inserting ``; and''; and
                                      (IV) by adding at the end the
                                    following:
                                      ``(II) for 2024 and each
                                    succeeding year, $0.''; and
                              (ii) in clause (ii), by striking
                            ``clause (i)(I)'' and inserting
                            ``clause (i)(I)(aa)'';
                      (B) in subparagraph (B)--
                              (i) in clause (i)--
                                      (I) in subclause (V), by
                                    striking ``or'' at the end;
                                      (II) in subclause (VI)--
                                              (aa) by striking
                                            ``for a subsequent
                                            year'' and inserting
                                            ``for each of years
                                            2021 through 2023'';
                                            and
                                              (bb) by striking the
                                            period at the end and
                                            inserting a semicolon;
                                            and
                                      (III) by adding at the end
                                    the following new subclauses:
                                      ``(VII) for 2024, is equal to
                                    $2,000; or
                                      ``(VIII) for a subsequent
                                    year, is equal to the amount
                                    specified in this subparagraph
                                    for the previous year,
                                    increased by the annual
                                    percentage increase described
                                    in paragraph (6) for the year
                                    involved.''; and
                              (ii) in clause (ii), by striking
                            ``clause (i)(II)'' and inserting
                            ``clause (i)'';
                      (C) in subparagraph (C)(i), by striking ``and
                    for amounts'' and inserting ``and, for a year
                    preceding 2024, for amounts''; and
                      (D) in subparagraph (E), by striking ``In
                    applying'' and inserting ``For each of years
                    2011 through 2023, in applying''.
      (b) Decreasing Reinsurance Payment Amount.--Section 1860D-
    15(b)(1) of the Social Security Act (42 U.S.C. 1395w-115(b)(1))
    is amended by inserting after ``80 percent'' the following:
    ``(or, with respect to a coverage year after 2023, 20
    percent)''.
      (c) Manufacturer Discount Program.--
              (1) In general.--Part D of title XVIII of the Social
            Security Act (42 U.S.C. 1395w-101 et seq.), as amended
            by section 139102, is further amended by inserting
            after section 1860D-14B the following new section:

    ``SEC. 1860D-14C. MANUFACTURER DISCOUNT PROGRAM.

      ``(a) Establishment.--The Secretary shall establish a
    manufacturer discount program (in this section referred to as
    the `program'). Under the program, the Secretary shall enter
    into agreements described in subsection (b) with manufacturers
    and provide for the performance of the duties described in
    subsection (c). The Secretary shall establish a model agreement
    for use under the program by not later than January 1, 2023, in
    consultation with manufacturers, and allow for comment on such
    model agreement.
      ``(b) Terms of Agreement.--
              ``(1) In general.--
                      ``(A) Agreement.--An agreement under this
                    section shall require the manufacturer to
                    provide applicable beneficiaries access to
                    discounted prices for applicable drugs of the
                    manufacturer that are dispensed on or after
                    January 1, 2024.
                      ``(B) Provision of discounted prices at the
                    point-of-sale.--The discounted prices described
                    in subparagraph (A) shall be provided to the
                    applicable beneficiary at the pharmacy or by
                    the mail order service at the point-of-sale of
                    an applicable drug.
                      ``(C) Timing of agreement.--
                              ``(i) Special rule for 2024.--In
                            order for an agreement with a
                            manufacturer to be in effect under this
                            section with respect to the period
                            beginning on January 1, 2024, and
                            ending on December 31, 2024, the
                            manufacturer shall enter into such
                            agreement not later than 30 days after
                            the date of the establishment of a
                            model agreement under subsection (a).
                              ``(ii) 2025 and subsequent years.--In
                            order for an agreement with a
                            manufacturer to be in effect under this
                            section with respect to plan year 2025
                            or a subsequent plan year, the
                            manufacturer shall enter into such
                            agreement (or such agreement shall be
                            renewed under paragraph (4)(A)) not
                            later than January 30 of the preceding
                            year.
              ``(2) Provision of appropriate data.--Each
            manufacturer with an agreement in effect under this
            section shall collect and have available appropriate
            data, as determined by the Secretary, to ensure that it
            can demonstrate to the Secretary compliance with the
            requirements under the program.
              ``(3) Compliance with requirements for administration
            of program.--Each manufacturer with an agreement in
            effect under this section shall comply with
            requirements imposed by the Secretary or a third party
            with a contract under subsection (d)(3), as applicable,
            for purposes of administering the program, including
            any determination under subparagraph (A) of subsection
            (c)(1) or procedures established under such subsection
            (c)(1).
              ``(4) Length of agreement.--
                      ``(A) In general.--An agreement under this
                    section shall be effective for an initial
                    period of not less than 12 months and shall be
                    automatically renewed for a period of not less
                    than 1 year unless terminated under
                    subparagraph (B).
                      ``(B) Termination.--
                              ``(i) By the secretary.--The
                            Secretary may provide for termination
                            of an agreement under this section for
                            a knowing and willful violation of the
                            requirements of the agreement or other
                            good cause shown. Such termination
                            shall not be effective earlier than 30
                            days after the date of notice to the
                            manufacturer of such termination. The
                            Secretary shall provide, upon request,
                            a manufacturer with a hearing
                            concerning such a termination, and such
                            hearing shall take place prior to the
                            effective date of the termination with
                            sufficient time for such effective date
                            to be repealed if the Secretary
                            determines appropriate.
                              ``(ii) By a manufacturer.--A
                            manufacturer may terminate an agreement
                            under this section for any reason. Any
                            such termination shall be effective,
                            with respect to a plan year--
                                      ``(I) if the termination
                                    occurs before January 30 of a
                                    plan year, as of the day after
                                    the end of the plan year; and
                                      ``(II) if the termination
                                    occurs on or after January 30
                                    of a plan year, as of the day
                                    after the end of the succeeding
                                    plan year.
                              ``(iii) Effectiveness of
                            termination.--Any termination under
                            this subparagraph shall not affect
                            discounts for applicable drugs of the
                            manufacturer that are due under the
                            agreement before the effective date of
                            its termination.
                              ``(iv) Notice to third party.--The
                            Secretary shall provide notice of such
                            termination to a third party with a
                            contract under subsection (d)(3) within
                            not less than 30 days before the
                            effective date of such termination.
      ``(c) Duties Described.--The duties described in this
    subsection are the following:
              ``(1) Administration of program.--Administering the
            program, including--
                      ``(A) the determination of the amount of the
                    discounted price of an applicable drug of a
                    manufacturer;
                      ``(B) the establishment of procedures under
                    which discounted prices are provided to
                    applicable beneficiaries at pharmacies or by
                    mail order service at the point-of-sale of an
                    applicable drug;
                      ``(C) the establishment of procedures to
                    ensure that, not later than the applicable
                    number of calendar days after the dispensing of
                    an applicable drug by a pharmacy or mail order
                    service, the pharmacy or mail order service is
                    reimbursed for an amount equal to the
                    difference between--
                              ``(i) the negotiated price of the
                            applicable drug; and
                              ``(ii) the discounted price of the
                            applicable drug;
                      ``(D) the establishment of procedures to
                    ensure that the discounted price for an
                    applicable drug under this section is applied
                    before any coverage or financial assistance
                    under other health benefit plans or programs
                    that provide coverage or financial assistance
                    for the purchase or provision of prescription
                    drug coverage on behalf of applicable
                    beneficiaries as the Secretary may specify; and
                      ``(E) providing a reasonable dispute
                    resolution mechanism to resolve disagreements
                    between manufacturers, applicable
                    beneficiaries, and the third party with a
                    contract under subsection (d)(3).
              ``(2) Monitoring compliance.--
                      ``(A) In general.--The Secretary shall
                    monitor compliance by a manufacturer with the
                    terms of an agreement under this section.
                      ``(B) Notification.--If a third party with a
                    contract under subsection (d)(3) determines
                    that the manufacturer is not in compliance with
                    such agreement, the third party shall notify
                    the Secretary of such noncompliance for
                    appropriate enforcement under subsection (e).
              ``(3) Collection of data from prescription drug plans
            and ma-pd plans.--The Secretary may collect appropriate
            data from prescription drug plans and MA-PD plans in a
            timeframe that allows for discounted prices to be
            provided for applicable drugs under this section.
      ``(d) Administration.--
              ``(1) In general.--Subject to paragraph (2), the
            Secretary shall provide for the implementation of this
            section, including the performance of the duties
            described in subsection (c).
              ``(2) Limitation.--In providing for the
            implementation of this section, the Secretary shall not
            receive or distribute any funds of a manufacturer under
            the program.
              ``(3) Contract with third parties.--The Secretary
            shall enter into a contract with 1 or more third
            parties to administer the requirements established by
            the Secretary in order to carry out this section. At a
            minimum, the contract with a third party under the
            preceding sentence shall require that the third party--
                      ``(A) receive and transmit information
                    between the Secretary, manufacturers, and other
                    individuals or entities the Secretary
                    determines appropriate;
                      ``(B) receive, distribute, or facilitate the
                    distribution of funds of manufacturers to
                    appropriate individuals or entities in order to
                    meet the obligations of manufacturers under
                    agreements under this section;
                      ``(C) provide adequate and timely information
                    to manufacturers, consistent with the agreement
                    with the manufacturer under this section, as
                    necessary for the manufacturer to fulfill its
                    obligations under this section; and
                      ``(D) permit manufacturers to conduct
                    periodic audits, directly or through contracts,
                    of the data and information used by the third
                    party to determine discounts for applicable
                    drugs of the manufacturer under the program.
              ``(4) Performance requirements.--The Secretary shall
            establish performance requirements for a third party
            with a contract under paragraph (3) and safeguards to
            protect the independence and integrity of the
            activities carried out by the third party under the
            program under this section.
              ``(5) Implementation.--The Secretary may implement
            the program under this section by program instruction
            or otherwise.
              ``(6) Administration.--Chapter 35 of title 44, United
            States Code, shall not apply to the program under this
            section.
      ``(e) Enforcement.--
              ``(1) Audits.--Each manufacturer with an agreement in
            effect under this section shall be subject to periodic
            audit by the Secretary.
              ``(2) Civil money penalty.--
                      ``(A) In general.--The Secretary may impose a
                    civil money penalty on a manufacturer that
                    fails to provide applicable beneficiaries
                    discounts for applicable drugs of the
                    manufacturer in accordance with such agreement
                    for each such failure in an amount the
                    Secretary determines is equal to the sum of--
                              ``(i) the amount that the
                            manufacturer would have paid with
                            respect to such discounts under the
                            agreement, which will then be used to
                            pay the discounts which the
                            manufacturer had failed to provide; and
                              ``(ii) 25 percent of such amount.
                      ``(B) Application.--The provisions of section
                    1128A (other than subsections (a) and (b))
                    shall apply to a civil money penalty under this
                    paragraph in the same manner as such provisions
                    apply to a penalty or proceeding under section
                    1128A(a).
      ``(f) Clarification Regarding Availability of Other Covered
    Part D Drugs.--Nothing in this section shall prevent an
    applicable beneficiary from purchasing a covered part D drug
    that is not an applicable drug (including a generic drug or a
    drug that is not on the formulary of the prescription drug plan
    or MA-PD plan that the applicable beneficiary is enrolled in).
      ``(g) Definitions.--In this section:
              ``(1) Applicable beneficiary.--The term `applicable
            beneficiary' means an individual who, on the date of
            dispensing a covered part D drug--
                      ``(A) is enrolled in a prescription drug plan
                    or an MA-PD plan;
                      ``(B) is not enrolled in a qualified retiree
                    prescription drug plan; and
                      ``(C) has incurred costs, as determined in
                    accordance with section 1860D-2(b)(4)(C), for
                    covered part D drugs in the year that exceed
                    the annual deductible with respect to such
                    individual for such year, as specified in
                    section 1860D-2(b)(1), section 1860D-
                    14(a)(1)(B), or section 1860D-14(a)(2)(B), as
                    applicable.
              ``(2) Applicable drug.--The term `applicable drug',
            with respect to an applicable beneficiary--
                      ``(A) means a covered part D drug--
                              ``(i) approved under a new drug
                            application under section 505(c) of the
                            Federal Food, Drug, and Cosmetic Act
                            or, in the case of a biologic product,
                            licensed under section 351 of the
                            Public Health Service Act; and
                              ``(ii)(I) if the PDP sponsor of the
                            prescription drug plan or the MA
                            organization offering the MA-PD plan
                            uses a formulary, which is on the
                            formulary of the prescription drug plan
                            or MA-PD plan that the applicable
                            beneficiary is enrolled in;
                              ``(II) if the PDP sponsor of the
                            prescription drug plan or the MA
                            organization offering the MA-PD plan
                            does not use a formulary, for which
                            benefits are available under the
                            prescription drug plan or MA-PD plan
                            that the applicable beneficiary is
                            enrolled in; or
                              ``(III) is provided through an
                            exception or appeal; and
                      ``(B) does not include a selected drug (as
                    defined in section 1192(c)) during a price
                    applicability period (as defined in section
                    1191(b)(2)) with respect to such drug.
              ``(3) Applicable number of calendar days.--The term
            `applicable number of calendar days' means--
                      ``(A) with respect to claims for
                    reimbursement submitted electronically, 14
                    days; and
                      ``(B) with respect to claims for
                    reimbursement submitted otherwise, 30 days.
              ``(4) Discounted price.--
                      ``(A) In general.--The term `discounted
                    price' means, with respect to an applicable
                    drug of a manufacturer dispensed during a year
                    to an applicable beneficiary--
                              ``(i) who has not incurred costs, as
                            determined in accordance with section
                            1860D-2(b)(4)(C), for covered part D
                            drugs in the year that are equal to or
                            exceed the annual out-of-pocket
                            threshold specified in section 1860D-
                            2(b)(4)(B)(i) for the year, 90 percent
                            of the negotiated price of such drug;
                            and
                              ``(ii) who has incurred such costs,
                            as so determined, in the year that are
                            equal to or exceed such threshold for
                            the year, 70 percent of the negotiated
                            price of such drug.
                      ``(B) Clarification.--Nothing in this section
                    shall be construed as affecting the
                    responsibility of an applicable beneficiary for
                    payment of a dispensing fee for an applicable
                    drug.
                      ``(C) Special case for certain claims.--
                              ``(i) Claims spanning deductible.--In
                            the case where the entire amount of the
                            negotiated price of an individual claim
                            for an applicable drug with respect to
                            an applicable beneficiary does not fall
                            above the annual deductible specified
                            in section 1860D-2(b)(1) for the year,
                            the manufacturer of the applicable drug
                            shall provide the discounted price
                            under this section on only the portion
                            of the negotiated price of the
                            applicable drug that falls above such
                            annual deductible.
                              ``(ii) Claims spanning out-of-pocket
                            threshold.--In the case where the
                            entire amount of the negotiated price
                            of an individual claim for an
                            applicable drug with respect to an
                            applicable beneficiary does not fall
                            entirely below or entirely above the
                            annual out-of-pocket threshold
                            specified in section 1860D-
                            2(b)(4)(B)(i) for the year, the
                            manufacturer of the applicable drug
                            shall provide the discounted price--
                                      ``(I) in accordance with
                                    subparagraph (A)(i) on the
                                    portion of the negotiated price
                                    of the applicable drug that
                                    falls below such threshold; and
                                      ``(II) in accordance with
                                    subparagraph (A)(ii) on the
                                    portion of such price of such
                                    drug that falls at or above
                                    such threshold.
              ``(5) Manufacturer.--The term `manufacturer' means
            any entity which is engaged in the production,
            preparation, propagation, compounding, conversion, or
            processing of prescription drug products, either
            directly or indirectly by extraction from substances of
            natural origin, or independently by means of chemical
            synthesis, or by a combination of extraction and
            chemical synthesis. Such term does not include a
            wholesale distributor of drugs or a retail pharmacy
            licensed under State law.
              ``(6) Negotiated price.--The term `negotiated price'
            has the meaning given such term in section 423.100 of
            title 42, Code of Federal Regulations (or any successor
            regulation), except that, with respect to an applicable
            drug, such negotiated price shall not include any
            dispensing fee for the applicable drug.
              ``(7) Qualified retiree prescription drug plan.--The
            term `qualified retiree prescription drug plan' has the
            meaning given such term in section 1860D-22(a)(2).''.
              (2) Sunset of medicare coverage gap discount
            program.--Section 1860D-14A of the Social Security Act
            (42 U.S.C. 1395-114a) is amended--
                      (A) in subsection (a), in the first sentence,
                    by striking ``The Secretary'' and inserting
                    ``Subject to subsection (h), the Secretary'';
                    and
                      (B) by adding at the end the following new
                    subsection:
      ``(h) Sunset of Program.--
              ``(1) In general.--The program shall not apply with
            respect to applicable drugs dispensed on or after
            January 1, 2024, and, subject to paragraph (2),
            agreements under this section shall be terminated as of
            such date.
              ``(2) Continued application for applicable drugs
            dispensed prior to sunset.--The provisions of this
            section (including all responsibilities and duties)
            shall continue to apply after January 1, 2024, with
            respect to applicable drugs dispensed prior to such
            date.''.
              (3) Inclusion of actuarial value of manufacturer
            discounts in bids.--Section 1860D-11 of the Social
            Security Act (42 U.S.C. 1395w-111) is amended--
                      (A) in subsection (b)(2)(C)(iii)--
                              (i) by striking ``assumptions
                            regarding the reinsurance'' and
                            inserting ``assumptions regarding--
                                      ``(I) the reinsurance''; and
                              (ii) by adding at the end the
                            following:
                                      ``(II) for 2024 and each
                                    subsequent year, the
                                    manufacturer discounts provided
                                    under section 1860D-14C
                                    subtracted from the actuarial
                                    value to produce such bid;
                                    and''; and
                      (B) in subsection (c)(1)(C)--
                              (i) by striking ``an actuarial
                            valuation of the reinsurance'' and
                            inserting ``an actuarial valuation of--
                              ``(i) the reinsurance'';
                              (ii) in clause (i), as inserted by
                            clause (i) of this subparagraph, by
                            adding ``and'' at the end; and
                              (iii) by adding at the end the
                            following:
                              ``(ii) for 2024 and each subsequent
                            year, the manufacturer discounts
                            provided under section 1860D-14C;''.
      (d) Conforming Amendments.--
              (1) Section 1860D-2 of the Social Security Act (42
            U.S.C. 1395w-102) is amended--
                      (A) in subsection (a)(2)(A)(i)(I), by
                    striking ``, or an increase in the initial''
                    and inserting ``or, for a year preceding 2024,
                    an increase in the initial'';
                      (B) in subsection (c)(1)(C)--
                              (i) in the subparagraph heading, by
                            striking ``at initial coverage limit'';
                            and
                              (ii) by inserting ``for a year
                            preceding 2024 or the annual out-of-
                            pocket threshold specified in
                            subsection (b)(4)(B) for the year for
                            2024 and each subsequent year'' after
                            ``subsection (b)(3) for the year'' each
                            place it appears; and
                      (C) in subsection (d)(1)(A), by striking ``or
                    an initial'' and inserting ``or, for a year
                    preceding 2024, an initial''.
              (2) Section 1860D-4(a)(4)(B)(i) of the Social
            Security Act (42 U.S.C. 1395w-104(a)(4)(B)(i)) is
            amended by striking ``the initial'' and inserting ``for
            a year preceding 2024, the initial''.
              (3) Section 1860D-14(a) of the Social Security Act
            (42 U.S.C. 1395w-114(a)) is amended--
                      (A) in paragraph (1)--
                              (i) in subparagraph (C), by striking
                            ``The continuation'' and inserting
                            ``For a year preceding 2024, the
                            continuation'';
                              (ii) in subparagraph (D)(iii), by
                            striking ``1860D-2(b)(4)(A)(i)(I)'' and
                            inserting ``1860D-
                            2(b)(4)(A)(i)(I)(aa)''; and
                              (iii) in subparagraph (E), by
                            striking ``The elimination'' and
                            inserting ``For a year preceding 2024,
                            the elimination''; and
                      (B) in paragraph (2)--
                              (i) in subparagraph (C), by striking
                            ``The continuation'' and inserting
                            ``For a year preceding 2024, the
                            continuation''; and
                              (ii) in subparagraph (E), by striking
                            ``1860D-2(b)(4)(A)(i)(I)'' and
                            inserting ``1860D-
                            2(b)(4)(A)(i)(I)(aa)''.
              (4) Section 1860D-21(d)(7) of the Social Security Act
            (42 U.S.C. 1395w-131(d)(7)) is amended by striking
            ``section 1860D-2(b)(4)(B)(i)'' and inserting ``section
            1860D-2(b)(4)(C)(i)''.
              (5) Section 1860D-22(a)(2)(A) of the Social Security
            Act (42 U.S.C. 1395w-132(a)(2)(A)) is amended--
                      (A) by striking ``the value of any discount''
                    and inserting the following: ``the value of--
                              ``(i) for years prior to 2024, any
                            discount'';
                      (B) in clause (i), as inserted by
                    subparagraph (A) of this paragraph, by striking
                    the period at the end and inserting ``; and'';
                    and
                      (C) by adding at the end the following new
                    clause:
                              ``(ii) for 2024 and each subsequent
                            year, any discount provided pursuant to
                            section 1860D-14C.''.
              (6) Section 1860D-41(a)(6) of the Social Security Act
            (42 U.S.C. 1395w-151(a)(6)) is amended--
                      (A) by inserting ``for a year before 2024''
                    after ``1860D-2(b)(3)''; and
                      (B) by inserting ``for such year'' before the
                    period.
              (7) Section 1860D-43 of the Social Security Act (42
            U.S.C. 1395w-153) is amended--
                      (A) in subsection (a)--
                              (i) by striking paragraph (1) and
                            inserting the following:
              ``(1) participate in--
                      ``(A) for 2011 through 2023, the Medicare
                    coverage gap discount program under section
                    1860D-14A; and
                      ``(B) for 2024 and each subsequent year, the
                    manufacturer discount program under section
                    1860D-14C;'';
                              (ii) by striking paragraph (2) and
                            inserting the following:
              ``(2) have entered into and have in effect--
                      ``(A) for 2011 through 2023, an agreement
                    described in subsection (b) of section 1860D-
                    14A with the Secretary; and
                      ``(B) for 2024 and each subsequent year, an
                    agreement described in subsection (b) of
                    section 1860D-14C with the Secretary; and'';
                    and
                              (iii) by striking paragraph (3) and
                            inserting the following:
              ``(3) have entered into and have in effect, under
            terms and conditions specified by the Secretary--
                      ``(A) for 2011 through 2023, a contract with
                    a third party that the Secretary has entered
                    into a contract with under subsection (d)(3) of
                    section 1860D-14A; and
                      ``(B) for 2024 and each subsequent year, a
                    contract with a third party that the Secretary
                    has entered into a contract with under
                    subsection (d)(3) of section 1860D-14C.''; and
                      (B) by striking subsection (b) and inserting
                    the following:
      ``(b) Effective Date.--Paragraphs (1)(A), (2)(A), and (3)(A)
    of subsection (a) shall apply to covered part D drugs dispensed
    under this part on or after January 1, 2011, and before January
    1, 2024, and paragraphs (1)(B), (2)(B), and (3)(B) of such
    subsection shall apply to covered part D drugs dispensed under
    this part on or after January 1, 2024.''.
              (8) Section 1927 of the Social Security Act (42
            U.S.C. 1396r-8) is amended--
                      (A) in subsection (c)(1)(C)(i)(VI), by
                    inserting before the period at the end the
                    following: ``or under the manufacturer discount
                    program under section 1860D-14C''; and
                      (B) in subsection (k)(1)(B)(i)(V), by
                    inserting before the period at the end the
                    following: ``or under section 1860D-14C''.
      (e) Effective Date.--The amendments made by this section
    shall apply with respect to plan year 2024 and subsequent plan
    years.

    SEC. 139202. ALLOWING CERTAIN ENROLLEES OF PRESCRIPTION DRUG PLANS AND
                        MA-PD PLANS UNDER MEDICARE PROGRAM TO SPREAD OUT
                        COST-SHARING UNDER CERTAIN CIRCUMSTANCES.

      Section 1860D-2(b)(2) of the Social Security Act (42 U.S.C.
    1395w-102(b)(2)), as amended by section 139201, is further
    amended--
              (1) in subparagraph (A), by striking ``Subject to
            subparagraphs (C) and (D)'' and inserting ``Subject to
            subparagraphs (C), (D), and (E)''; and
              (2) by adding at the end the following new
            subparagraph:
                      ``(E) Enrollee option regarding spreading
                    cost-sharing.--The Secretary shall establish by
                    regulation a process under which, with respect
                    to plan year 2024 and subsequent plan years, a
                    prescription drug plan or an MA-PD plan shall,
                    in the case of a part D eligible individual
                    enrolled with such plan for such plan year who
                    is not a subsidy eligible individual (as
                    defined in section 1860D-14(a)(3)) and with
                    respect to whom the plan projects that the
                    dispensing of the first fill of a covered part
                    D drug to such individual will result in the
                    individual incurring costs that are equal to or
                    above the annual out-of-pocket threshold
                    specified in paragraph (4)(B) for such plan
                    year, provide such individual with the option
                    to make the coinsurance payment required under
                    subparagraph (A) (for the portion of such costs
                    that are not above such annual out-of-pocket
                    threshold) in the form of periodic installments
                    over the remainder of such plan year.''.

            PART 4--REPEAL OF CERTAIN PRESCRIPTION DRUG REBATE RULE

    SEC. 139301. PROHIBITING IMPLEMENTATION OF RULE RELATING TO ELIMINATING
                        THE ANTI-KICKBACK STATUTE SAFE HARBOR PROTECTION
                        FOR PRESCRIPTION DRUG REBATES.

      Beginning January 1, 2026, the Secretary of Health and Human
    Services shall not implement, administer, or enforce the
    provisions of the final rule published by the Office of the
    Inspector General of the Department of Health and Human
    Services on November 30, 2020, and titled ``Fraud and Abuse;
    Removal of Safe Harbor Protection for Rebates Involving
    Prescription Pharmaceuticals and Creation of New Safe Harbor
    Protection for Certain Point-of-Sale Reductions in Price on
    Prescription Pharmaceuticals and Certain Pharmacy Benefit
    Manager Service Fees'' (85 Fed. Reg. 76666).

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