[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).

                                  [all]