[House Report 117-130]
[From the U.S. Government Publishing Office]
117th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 117-130
_______________________________________________________________________
BUILD BACK BETTER ACT
----------
R E P O R T
of the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
to accompany
H.R. 5376
together with
MINORITY VIEWS
BOOK 3 OF 3
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
September 27, 2021.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
117th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 117-130
_______________________________________________________________________
BUILD BACK BETTER ACT
__________
R E P O R T
of the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
to accompany
H.R. 5376
together with
MINORITY VIEWS
BOOK 3 OF 3
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
September 27, 2021.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_________
U.S. GOVERNMENT PUBLISHING OFFICE
45-624 WASHINGTON : 2021
TITLE XII--COMMITTEE ON VETERANS AFFAIRS
SEC. 12001. DEPARTMENT OF VETERANS AFFAIRS INFRASTRUCTURE IMPROVEMENTS.
In addition to amounts otherwise available, there is
appropriated for fiscal year 2022, out of any money in the
Treasury not otherwise appropriated, $15,200,000,000, to remain
available until September 30, 2031, for facilities under the
jurisdiction of, or for the use of, the Department of Veterans
Affairs to carry out sections 2400, 2403, 2404, 2406, 2407,
2412, 8101 through 8110, 8122, and 8161 through 8169 of title
38, United States Code, taking into consideration the
integration of climate resiliency into infrastructure as well
as the needs of underserved areas and underserved veteran
populations.
SEC. 12002. MODIFICATIONS TO ENHANCED-USE LEASE AUTHORITY OF DEPARTMENT
OF VETERANS AFFAIRS.
(a) Modifications to Authority.--Paragraph (2) of section
8162(a) of title 38, United States Code, is amended to read as
follows:
``(2)(A) The Secretary may enter into an enhanced-use lease
on or after the date of the enactment of this paragraph only if
the Secretary determines--
``(i) that the lease will not be inconsistent with,
and will not adversely affect--
``(I) the mission of the Department; or
``(II) the operation of facilities, programs,
and services of the Department in the local
area; and
``(ii) that--
``(I) the lease will enhance the use of the
leased property by directly or indirectly
benefitting veterans; or
``(II) the leased property will provide
supportive housing.
``(B) The Secretary shall give priority to enhanced-use
leases that, on the leased property--
``(i) provide supportive housing for veterans;
``(ii) provide direct services or benefits targeted
to veterans; or
``(iii) provide services or benefits that indirectly
support veterans.''.
(b) Appropriation.--In addition to amounts otherwise
available, there is appropriated for fiscal year 2022, out of
any money in the Treasury not otherwise appropriated,
$455,000,000 for the Department of Veterans Affairs, to remain
available until expended, to enter into enhanced-use leases
pursuant to section 8162 of title 38, United States Code, as
amended by this section.
(c) Modification of Sunset.--Section 8169 of such title is
amended by striking ``December 31, 2023'' and inserting
``September 30, 2026''.
SEC. 12003. MAJOR MEDICAL FACILITY LEASES OF THE DEPARTMENT OF VETERANS
AFFAIRS.
(a) Authority to Enter Into Major Medical Facility Leases.--
Paragraph (2) of subsection (a) of section 8104 of title 38,
United States Code, is amended--
(1) by striking ``No funds'' and inserting ``(A) No
funds'';
(2) by striking ``or any major medical facility
lease'';
(3) by striking ``or lease''; and
(4) by adding at the end the following new
subparagraph:
``(B) Funds may be appropriated for a fiscal year, and the
Secretary may obligate and expend funds, including for advance
planning and design, for any major medical facility lease.''.
(b) Modification of Definition of Major Medical Facility
Lease.--Subparagraph (B) of paragraph (3) of such subsection is
amended to read as follows:
``(B) The term `major medical facility lease'--
``(i) means a lease for space for use as a
new medical facility approved through the
General Services Administration under section
3307(a)(2) of title 40 at an average annual
rent equal to or greater than the dollar
threshold described in such section, which
shall be subject to annual adjustment in
accordance with section 3307(h) of such title;
and
``(ii) does not include a lease for space for
use as a shared Federal medical facility for
which the Department's estimated share of the
lease costs does not exceed such dollar
threshold.''.
(c) Interim Leasing Actions.--Such section is further amended
by adding at the end the following new subsection:
``(i)(1) The Secretary may carry out interim leasing actions
as the Secretary considers necessary for major medical facility
leases (as defined in subsection (a)(3)(B)).
``(2) In this subsection, the term `interim leasing actions'
has the meaning given that term by the Administrator of the
General Services Administration.''.
(d) Applicability.--The amendments made by this section shall
apply with respect to a lease that has not been specifically
authorized by law on or before the date of the enactment of
this Act and is included as part of the annual budget
submission of the President for fiscal year 2022, 2023, or
2024.
(e) Purchase Options.--The Secretary of Veterans Affairs may
obligate and expend funds to exercise a purchase option
included in any major medical facility lease described in
subsection (d).
(f) Appropriation.--In addition to amounts otherwise
available, there is appropriated for fiscal year 2022, out of
any money in the Treasury not otherwise appropriated,
$1,805,000,000, to remain available until expended, for major
medical facility leases pursuant to subchapter I of chapter 81
of title 38, United States Code, as amended by this section, as
requested in the annual budget submission of the President for
fiscal year 2022, 2023, or 2024.
(g) Termination and Restoration.--
(1) In general.--Effective upon the date of execution
of the final lease award for leases described in
subsection (d), subsections (a) through (e) of this
section and the amendments made by those subsections
are repealed and any provision of law amended by those
subsections is restored as if those subsections had not
been enacted into law.
(2) Notification.--The Secretary of Veterans Affairs
shall submit to Congress and the Law Revision Counsel
of the House of Representatives written notification of
the date specified in paragraph (1) not later than 30
days before such date.
SEC. 12004. INCREASE IN NUMBER OF HEALTH PROFESSIONS RESIDENCY
POSITIONS AT DEPARTMENT OF VETERANS AFFAIRS MEDICAL
FACILITIES.
(a) Increase.--In carrying out section 7302(a)(1) of title
38, United States Code, during the seven-year period beginning
on the day that is one year after the date of the enactment of
this Act, the Secretary of Veterans Affairs shall increase the
number of health professions residency positions at medical
facilities of the Department of Veterans Affairs by not more
than 700 positions (which shall be allocated among occupations
included in the most current determination published in the
Federal Register pursuant to section 7412(a) of such title, or
allocated pursuant to a prioritization by the Secretary of
occupations in primary care, mental health care, and any other
health professions occupation the Secretary determines
appropriate) through the establishment of such new positions
at--
(1) medical facilities where the Secretary
established such positions pursuant to section
301(b)(2) of the Veterans Access, Choice, and
Accountability Act of 2014 (Public Law 113-146; 38
U.S.C. 7302 note); or
(2) any medical facility--
(A) the director of which expresses an
interest in establishing or expanding a health
professions residency program at the medical
facility; or
(B) that is located in a community that has a
high concentration of veterans or is
experiencing a shortage of health care
professionals.
(b) Appropriations.--In addition to amounts otherwise
available, there is appropriated to the Department of Veterans
Affairs for fiscal year 2022, out of any money in the Treasury
not otherwise appropriated, $375,000,000, to remain available
until September 30, 2029, for the purpose of carrying out this
section.
SEC. 12005. VETERAN RECORDS SCANNING.
In addition to amounts otherwise available, there is
appropriated to the Veterans Benefits Administration for fiscal
year 2022, out of any money in the Treasury not otherwise
appropriated, $150,000,000, to remain available until September
30, 2023, for costs of record scanning and claims processing,
to carry out sections 7701 and 7703 of title 38, United States
Code.
SEC. 12006. FUNDING FOR DEPARTMENT OF VETERANS AFFAIRS OFFICE OF
INSPECTOR GENERAL.
In addition to amounts otherwise available, there is
appropriated to the Office of Inspector General of the
Department of Veterans Affairs for fiscal year 2022, out of any
money in the Treasury not otherwise appropriated, $15,000,000,
to remain available until September 30, 2031, for audits,
investigations, and other oversight of projects and activities
carried out with funds made available to the Department of
Veterans Affairs.
TITLE XIII--COMMITTEE ON WAYS AND MEANS
Subtitle A--Universal Paid Family and Medical Leave
SEC. 130001. PAID FAMILY AND MEDICAL LEAVE.
The Social Security Act (42 U.S.C. 301 et seq.) is amended by
adding at the end the following:
``TITLE XXII--PAID FAMILY AND MEDICAL LEAVE BENEFITS
``SEC. 2201. TABLE OF CONTENTS.
``The table of contents for this title is as follows:
``Sec. 2201. Table of contents.
``Sec. 2202. Paid family and medical leave benefit eligibility.
``Sec. 2203. Benefit amount.
``Sec. 2204. Benefit determination and payment.
``Sec. 2205. Appeals.
``Sec. 2206. Stewardship.
``Sec. 2207. Funding for benefit payments, grants, and program
administration.
``Sec. 2208. Funding for outreach, public education, and research.
``Sec. 2209. Funding for State administration option for legacy States.
``Sec. 2210. Reimbursement option for employer-sponsored paid leave
benefits.
``Sec. 2211. Funding for small business assistance.
``Sec. 2212. Definitions.
``SEC. 2202. PAID FAMILY AND MEDICAL LEAVE BENEFIT ELIGIBILITY.
``(a) Entitlement.--Every individual who--
``(1) has filed an application for a paid family and
medical leave benefit in accordance with section
2204(a);
``(2) has, or anticipates having, at least 4
caregiving hours in a week ending at any time during
the period that begins 90 days before the date on which
such application is filed or not later than 180 days
after such date; and
``(3) has wages or self-employment income at any time
during the period--
``(A) beginning with the most recent calendar
quarter that ends at least 4 months prior to
the beginning of the individual's benefit
period specified in subsection (b); and
``(B) ending with the month before the month
in which such benefit period begins,
shall be entitled to such a benefit for each month during such
benefit period, except as otherwise provided in this section.
``(b) Benefit Period.--
``(1) In general.--Except as provided in paragraph
(2), the benefit period specified in this subsection is
the period beginning with the month in which ends the
1st week in which the individual has at least 4
caregiving hours and otherwise meets the criteria
specified in paragraphs (1), (2), and (3) of subsection
(a) and ending with the month in which ends the 52nd
week ending during such period.
``(2) Retroactive benefits.--In the case of an
application for benefits under this section with
respect to an individual who has at least 4 caregiving
hours in a week at any time during the period that
begins 90 days before the date on which such
application is filed, the benefit period specified in
this subsection is the period beginning with the later
of--
``(A) the month in which ends the 1st week in
which the individual has at least 4 caregiving
hours; or
``(B) the 1st month that begins during such
90-day period,
and ending with the month in which ends the 52nd week
ending during such period.
``(3) Limitation.--Notwithstanding paragraphs (1) and
(2), no benefit period under this title may begin with
any month beginning prior to July 2023.
``(c) Caregiving Hours.--
``(1) Caregiving hour defined.--For purposes of this
title, the term `caregiving hour' means a 1-hour period
during which the individual engaged in qualified
caregiving (determined on the basis of information
filed with the Secretary pursuant to subsection (c) of
section 2204).
``(2) Qualified caregiving.--
``(A) In general.--For purposes of this
subsection, the term `qualified caregiving'
means any activity engaged in by an individual
in lieu of work, other than for monetary
compensation, for any reason described in
paragraph (1) or (3) of section 102(a) of the
Family and Medical Leave Act of 1993 (29 U.S.C.
2612(a)), except that for purposes of this
paragraph such section shall be applied--
``(i) by treating such individual as
the employee referred to in such
paragraph;
``(ii) as if paragraph (1)(C) were
amended to read as follows:
```(C)(i) In order to care for a qualified
family member of the employee, if such
qualified family member has a serious health
condition.
```(ii) For purposes of clause (i), the term
``qualified family member'' means, with respect
to an employee--
```(I) a spouse (including a domestic
partner in a civil union or other
registered domestic partnership
recognized by a State) and a spouse's
parent;
```(II) a child and a child's spouse;
```(III) a parent and a parent's
spouse;
```(IV) a sibling and a sibling's
spouse;
```(V) a grandparent, a grandchild,
or a spouse of a grandparent or
grandchild; and
```(VI) any other individual who is
related by blood or affinity and whose
association with the employee is
equivalent of a family relationship (as
determined under regulations issued by
the Secretary of the Treasury).'; and
``(iii) by treating the criterion in
paragraph (1)(D) that an individual is
`unable to perform the functions of the
position of such employee' because of a
serious health condition as a criterion
that the individual is unable to
satisfy the requirements needed to
continue receiving the wages or self-
employment income described in
subsection (a)(3) with respect to the
individual because of such serious
health condition;
``(iv) as if paragraph (1)(E) were
amended to read as follows:
```(E) Because of any qualifying exigency (as
the Secretary shall, by regulation, determine)
arising out of the fact that a qualified family
member of the employee (as defined in
subparagraph (C)(ii)) is on covered active duty
(or has been notified of an impending call or
order to covered active duty) in the Armed
Forces.'; and
``(v) as if paragraph (1) were
amended by adding at the end the
following:
```(G) Because of the death of a spouse,
parent, or child of the employee.'.
``(vi) as if paragraph (3) were
amended by striking `the spouse, son,
daughter, parent, or next of kin' and
inserting `a qualified family member of
the employee (as defined in
subparagraph (C)(ii))'.
``(B) No monetary compensation permitted.--
For purposes of subparagraph (A), an activity
shall be considered to be engaged in by an
individual for monetary compensation if the
individual received any form of wage
compensation from an employer, including paid
vacation, paid sick leave, and any other form
of accrued paid time off (but not including any
such form of accrued paid time off or any non-
accrued paid family and medical leave benefits
sponsored by an employer to the extent that the
sum of such accrued or non-accrued paid leave
and any paid family and medical leave benefits
under section 2202 does not exceed 100 percent
of the individual's regular rate of pay (as
determined under section 7(e) of the Fair Labor
Standards Act of 1938)), for the time during
which the individual was so engaged.
``(C) Treatment of individuals eligible for
employer sponsored paid family and medical
leave benefits.--For purposes of subparagraph
(A), an activity engaged in by an individual
shall not be considered to be engaged in in
lieu of work if, for the time during which the
individual was so engaged, the individual would
be eligible for paid family and medical leave
benefits under a program sponsored by an
employer who receives a grant with respect to
such program under section 2210.
``(D) Treatment of individuals employed in
legacy states.--For purposes of subparagraph
(A), an activity engaged in by an individual
shall not be considered to be engaged in in
lieu of work if the time during which the
individual was so engaged constitutes leave
from employment for which the individual would
be eligible to receive paid family or medical
leave benefits under the law of a legacy State
(as defined in section 2209(b)).
``(d) Treatment of Bereavement Leave.--In the case of an
activity engaged in by an individual in lieu of work for a
reason described in paragraph (1)(G) of section 102(a) of the
Family and Medical Leave Act of 1993 (as such section is
applied for purposes of paragraph (2) of subsection (c)), the
total number of caregiving hours attributable to such activity,
for each death described in such paragraph (1)(G), that may be
credited under section 2203(c) to weeks during the individual's
benefit period may not exceed \3/5\ of the number of hours in
the individual's regular workweek (within the meaning of
section 2203(d)).
``(e) No Caregiving Hours in Individual's Week of Death.--No
caregiving hours of an individual may be credited under section
2203(c) to the week during which the individual dies.
``(f) Disqualification Following Certain Convictions.--An
individual who has been found to have used false statements or
representation to secure benefits under this title shall be
ineligible for benefits under this title for a 5-year period
following the date of such finding.
``SEC. 2203. BENEFIT AMOUNT.
``(a) In General.--The amount of the benefit to which an
individual is entitled under section 2202 for a month shall be
an amount equal to the sum of the weekly benefit amounts for
each week ending during such month. The weekly benefit amount
of an individual for a week shall be equal to the product of
the individual's weekly benefit rate (as determined under
subsection (b)) multiplied by a fraction--
``(1) the numerator of which is the number of
caregiving hours of the individual credited to such
week (as determined in subsection (c)); and
``(2) the denominator of which is the number of hours
in a regular workweek of the individual (as determined
in subsection (d)).
``(b) Weekly Benefit Rate.--
``(1) In general.--For purposes of this section, an
individual's weekly benefit rate shall be an amount
equal to the sum of--
``(A) 85 percent of the individual's average
weekly earnings to the extent that such
earnings do not exceed the amount established
for purposes of this subparagraph by paragraph
(2);
``(B) 75 percent of the individual's average
weekly earnings to the extent that such
earnings exceed the amount established for
purposes of subparagraph (A) but do not exceed
the amount established for purposes of this
subparagraph by paragraph (2);
``(C) 55 percent of the individual's average
weekly earnings to the extent that such
earnings exceed the amount established for
purposes of subparagraph (B) but do not exceed
the amount established for purposes of this
subparagraph by paragraph (2);
``(D) 25 percent of the individual's average
weekly earnings to the extent that such
earnings exceed the amount established for
purposes of subparagraph (C) but do not exceed
the amount established for purposes of this
subparagraph by paragraph (2); and
``(E) 5 percent of the individual's average
weekly earnings to the extent that such
earnings exceed the amount established for
purposes of subparagraph (D) but do not exceed
the amount established for purposes of this
subparagraph by paragraph (2).
``(2) Amounts established.--
``(A) Initial amounts.--For individuals whose
benefit period under this title begins in or
before calendar year 2024, the amount
established for purposes of subparagraphs (A),
(B), (C), (D), and (E) of paragraph (1) shall
be \1/52\ of $15,080, $34,248, $72,000,
$100,000, and $250,000, respectively.
``(B) Wage indexing.--For individuals whose
benefit period under this title begins in any
calendar year after 2024, each of the amounts
so established shall equal the corresponding
amount established for the calendar year
preceding such calendar year, or, if larger,
the product of the corresponding amount
established with respect to the calendar year
2024 and the quotient obtained by dividing--
``(i) the national average wage index
(as defined in section 2212) for the
second calendar year preceding such
calendar year, by
``(ii) the national average wage
index (as so defined) for 2022.
``(C) Rounding.--Each amount established
under subparagraph (B) for any calendar year
shall be rounded to the nearest $1, except that
any amount so established which is a multiple
of $0.50 but not of $1 shall be rounded to the
next higher $1.
``(3) Average weekly earnings.--For purposes of this
subsection, an individual's average weekly earnings, as
calculated by the Secretary, shall be equal to the
quotient obtained by dividing--
``(A) the total of the wages and self-
employment income received by the individual
during the most recent 8-calendar quarter
period that ends at least 4 months prior to the
beginning of the individual's benefit period;
by
``(B) 104.
``(4) Evidence of earnings.--For purposes of
determining the wages and self-employment income of an
individual with respect to an application for benefits
under section 2202, the Secretary shall make such
determination on the basis of wage data provided to the
Secretary from the National Directory of New Hires
pursuant to section 453(j)(5) and self-employment
income data provided by the Secretary, except that the
Secretary shall also consider any more recent or
additional evidence of wages or self-employment income
the individual chooses to additionally submit.
``(c) Crediting of Caregiving Hours to a Week.--The number of
caregiving hours of an individual credited to a week as
determined under this subsection shall equal the number of
caregiving hours of the individual occurring during such week,
except that--
``(1) such number may not exceed the number of hours
in a regular workweek of the individual (as determined
in subsection (d));
``(2) no caregiving hours may be credited to a week
in which fewer than 4 caregiving hours of the
individual occur;
``(3) no caregiving hours of the individual may be
credited to the individual's waiting period, consisting
of the first week during an individual's benefit period
in which at least 4 caregiving hours occur (regardless
of whether the individual received paid vacation, paid
sick leave, or any other form of accrued paid time off
from the individual's employer during such week in
accordance with section 2202(c)(2)(B)); and
``(4) the total number of caregiving hours credited
to weeks during the individual's benefit period may not
exceed the product of 12 multiplied by the number of
hours in a regular workweek of the individual (as so
determined).
``(d) Number of Hours in a Regular Workweek.--For purposes of
this section, the number of hours in a regular workweek of an
individual shall be the number of hours that the individual
regularly works in a week for all employers (or regularly
worked in the case of an individual no longer employed), as
determined under guidance to be issued by the Secretary.
``SEC. 2204. BENEFIT DETERMINATION AND PAYMENT.
``(a) In General.--An individual seeking benefits under
section 2202 shall file an application with the Secretary
containing the information described in subsection (b) and such
other information as the Secretary may require. Any information
contained in an application for benefits under section 2202, or
in a periodic benefit claim report filed with respect to such
benefits, shall be presumed to be true and accurate, unless the
Secretary demonstrates by a preponderance of the evidence that
information contained in the application or periodic benefit
claim report is false, except that the Secretary shall
establish procedures to validate the identity of the individual
filing the application.
``(b) Required Contents of Initial Application.--An
application for a paid family and medical leave benefit filed
by an individual shall include--
``(1) an attestation that the individual has, or
anticipates having, at least 4 caregiving hours in a
week ending at any time during the period that begins
90 days before the date on which such application is
filed or not later than 180 days after such date;
``(2) except as otherwise provided in this
subsection, a certification, issued by a relevant
authority determined under regulations issued by the
Secretary, that contains such information as the
Secretary shall specify in such regulations as
necessary to affirm the circumstances giving rise to
the need for such caregiving hours, which shall be no
more than the information that is required to be stated
under section 103(b) of the Family and Medical Leave
Act of 1993 (29 U.S.C. 2613(b));
``(3) an attestation from the individual that notice
of the individual's need to be absent from work during
such caregiving hours has been provided, not later than
7 days after such need arises, to the individual's
employer (except in cases of hardship or other
extenuating circumstances or if the individual does not
have (or no longer has) an employer);
``(4) pay stubs or such other evidence as the
individual may provide demonstrating the individual's
wages or self-employment income during the period
described in section 2202(a)(3), except that the
Secretary may waive this requirement in any case in
which such evidence is otherwise available to the
Secretary;
``(5) an attestation from the individual stating the
number of hours in a regular workweek of the individual
(within the meaning of section 2203(d)); and
``(6) an attestation from the individual stating that
the leave from employment with respect to which the
individual is filing such application is not employment
for which the individual has received--
``(A) a notice from a State pursuant to
subsection (b)(2)(B) of section 2209 stating
that such employment would be eligible for paid
family and medical leave benefits under a State
legacy program described in such section; or
``(B) a notice from the individual's employer
pursuant to subsection (b)(1)(F)(iv) of section
2210 stating that such employment would be
eligible for paid family and medical leave
benefits under an employer-sponsored program
described in such section.
In the case of an individual who applies for a paid family and
medical leave benefit in the anticipation of caregiving hours
occurring after the date of application, the certification
described in paragraph (2), the attestation described in
paragraph (3), and the evidence described in paragraph (4) may
be provided after the 1st week in which at least 4 such
caregiving hours occur.
``(c) Periodic Benefit Claim Report.--
``(1) In general.--Except as provided in paragraph
(2), not later than 60 days (or such longer period as
may be provided in any case in which the Secretary
determines that good cause exists for an extension)
after the end of each month during the benefit period
of an individual entitled to benefits under section
2202, the individual shall file a periodic benefit
claim report with the Secretary. Such periodic benefit
claim report shall specify the caregiving hours of the
individual that occurred during each week that ended in
such month and shall include such other information as
the Secretary may require. No periodic benefit claim
report shall be required with respect to any week in
which fewer than 4 caregiving hours occurred.
``(2) Retroactive applications.--In the case of an
application filed by an individual for a paid family
and medical leave benefit with a benefit period that
begins, in accordance with section 2202(b)(2), with a
month that ends before the date on which such
application is filed, the individual may include with
such application the information described in the
second sentence of paragraph (1) with respect to each
week in the benefit period that ends before such date.
``(d) Determinations and Notice Requirements.--
``(1) Initial application.--
``(A) In general.--The Secretary shall
determine the initial eligibility of an
individual applying for benefits under this
title in accordance with section 2202.
``(B) Notices.--To ensure payment of benefits
in the correct amount and that beneficiaries
are aware of the right to appeal a benefit
determination of the Secretary--
``(i) not later than 15 days after
each application for benefits from an
individual under this title is filed,
the Secretary shall provide notice to
the individual of--
``(I) the initial
determination of eligibility
for such benefits;
``(II)(aa) the calendar
quarter that begins the period
described in section 2202(a)(3)
with respect to the individual,
the 8 calendar quarters used to
compute the individual's
average weekly earnings under
section 2203(b)(3), and the
wages and self-employment
income received by the
individual during each of those
8 quarters as recorded by the
Secretary; and
``(bb) the individual's right
under section 2203(b)(4) to
submit more recent or
additional evidence of such
wages or self-employment
income, including a statement
that eligibility could change
or benefits could increase if
such additional evidence
results in more recent or
higher average weekly earnings;
``(III) the estimated weekly
benefit amount for a week to
which 4 caregiving hours of the
individual are credited;
``(IV) the estimated weekly
benefit amount for a week to
which a number of caregiving
hours are credited equal to the
number of hours in a regular
workweek of the individual (as
determined in subsection
2203(d));
``(V) the number of
caregiving hours credited to
weeks ending prior to the date
of such application;
``(VI) the beginning and
ending dates of the
individual's benefit period;
and
``(VII) the individual's
right to appeal such initial
determination in accordance
with the provisions of section
2205; and
``(ii) in any case in which an
individual submits additional
information with respect to such an
application, the Secretary shall
provide an updated notice to the
individual containing the same
information provided in the notice
described in clause (i), including a
specific indication of any such
information that has been updated as a
result of the additional information
submitted by the individual.
``(2) Monthly benefit determinations.--
``(A) In general.--On the basis of the
information filed with the Secretary pursuant
to subsection (c), the Secretary shall
determine, with respect to an individual for
each week ending in a month, the number of
caregiving hours to be credited to such week in
accordance with section 2203(c).
``(B) Notices.--To ensure payment of benefits
in the correct amount and that beneficiaries
are aware of the right to appeal a benefit
determination of the Secretary, not later than
15 days after each periodic benefit claim
report from an individual is filed (or after
filing of initial application for retroactive
benefits), the Secretary shall provide notice
to the individual specifying--
``(i) whether payment will be made to
the individual for each week to which
such periodic benefit claim report
pertains and the amount of such
payment;
``(ii) if the Secretary determines
that payment will not be made for a
week or that payment will be made based
on a number of caregiving hours
credited to the week inconsistent with
the number of caregiving hours
specified for such week in such
periodic benefit claim report (or
initial application), the reasons for
such determination; and
``(iii) the individual's right to
appeal such determination in accordance
with the provisions of section 2205.
``(3) Changing circumstances.--The Secretary shall
issue regulations to establish a process under which an
individual may notify the Secretary if more than one
type of circumstance gives rise to the need for
caregiving hours during the individual's benefit
period. Such caregiving hours shall be credited to
weeks within the benefit period in accordance with
section 2203(c) regardless of circumstance.
``(4) Accessibility of notices.--The Secretary shall
take such actions as are necessary to ensure that any
notice to one or more individuals issued pursuant to
this title by the Secretary is written in simple and
clear language.
``(e) Certification of Payment.--Not later than 15 days after
the making of a determination under subsection (d)(2)(A) with
respect to the number of caregiving hours of an individual to
be credited to weeks ending in a month, the Secretary shall
certify payment to such individual of the amount of the paid
family and medical leave benefit for such month.
``(f) Expedited Benefit Payment in Cases of Missing
Payment.--The Secretary shall establish and put into effect
procedures under which expedited payment of benefits under this
title will be made to an individual to whom a benefit payment
was due for a month but was not received by the individual.
``(g) Submission of Required Information.--
``(1) By phone, mail, or electronic means.--To ensure
full access to benefits by all eligible individuals,
applicable paid leave information with respect to an
individual may be submitted to the Secretary by phone,
mail, or electronic means.
``(2) By any person.--Any person may submit
applicable paid leave information with respect to an
individual, including, as applicable, the individual's
representative, the individual's employer, or any
relevant authority identified under subsection (b)(2).
The Secretary shall promptly notify an individual
whenever any other person submits such information on
the individual's behalf.
``(3) Notice of receipt.--The Secretary shall provide
prompt notice of receipt of all applicable paid leave
information submitted with respect to an individual.
``(4) Definition of applicable paid leave
information.--For purposes of this subsection, the term
`applicable paid leave information' means, with respect
to an individual, any information submitted to the
Secretary with respect to the paid family and medical
leave benefits of the individual, including any initial
application, periodic benefit claim report, appeal, and
any other information submitted in support of such
application, report, or appeal.
``SEC. 2205. APPEALS.
``(a) In General.--An individual shall have the right--
``(1) to appeal to the Secretary any determination
made with respect to--
``(A) paid family and medical leave benefits
under section 2202; and
``(B) paid family and medical leave benefits
under an employer-sponsored program described
in section 2210 whose initial appeal pursuant
to subsection (b)(1)(F)(iii)(I) of such section
results in a determination unfavorable to the
individual; and
``(2) to appeal any final decision of the Secretary
by a civil action brought in the district court of the
United States for the judicial district in which the
plaintiff resides, or in which the principal place of
business of the plaintiff sits, or, if the plaintiff
does not reside or such principal place of business
does not sit within any such judicial district, in the
United States District Court for the District of
Columbia.
``(b) Procedures.--The Secretary shall establish procedures
for appeals of such determinations that ensure that appeals
will be heard in a timely manner by a decisionmaker who is
different from the initial decisionmaker using procedures that
are similar to the procedures used for appeals of
determinations under the Medicare Low-Income Subsidy program
described under section 1860D-14(a)(3)(B)(iv)(II).
``(c) Authority to Issue and Enforce Subpoenas.--
``(1) In general.--For the purpose of any hearing,
investigation, or other proceeding authorized or
directed under this title, the Secretary shall have
power to issue subpoenas requiring the attendance and
testimony of witnesses and the production of any
evidence that relates to any matter under investigation
or in question before the Secretary. Such attendance of
witnesses and production of evidence at the designated
place of such hearing, investigation, or other
proceeding may be required from any place in the United
States or in any Territory or possession thereof.
``(2) Service; witnesses.--Subpoenas of the Secretary
shall be served by anyone authorized by the Secretary--
``(A) by delivering a copy thereof to the
individual named therein; or
``(B) by registered mail or by certified mail
addressed to such individual at his last
dwelling place or principal place of business.
A verified return by the individual serving the
subpoena setting forth the manner of service, or, in
the case of service by registered mail or by certified
mail, the return post-office receipt therefor signed by
the individual so served, shall be proof of service.
Witnesses so subpoenaed shall be paid the same fees and
mileage as are paid witnesses in the district courts of
the United States.
``(3) Contumacy or refusal to obey a subpoena.--
``(A) In general.--In case of contumacy by,
or refusal to obey a subpoena duly served upon,
any person, any district court of the United
States for the judicial district in which the
person charged with contumacy or refusal to
obey is found or resides or transacts business,
upon application by the Secretary, shall have
jurisdiction to issue an order requiring such
person to appear and give testimony, or to
appear and produce evidence, or both. Any
failure to obey such order of the court may be
punished by the court as contempt thereof.
``(B) Treatment of employers.--In the case of
contumacy by, or refusal to obey a subpoena
duly served upon, any employer, the Secretary
shall impose such penalties against the
employer as the Secretary determines may apply
pursuant to section 2210(f).
``SEC. 2206. STEWARDSHIP.
``(a) Promoting Equity.--The Secretary shall conduct a robust
program to analyze and prevent disparities on the basis of
race, color, ethnicity, religion, sex, sexual orientation,
gender identity, disability, age, national origin, family
composition, or living arrangements with respect to the
benefits provided under this title and individuals' access to
such benefits.
``(b) Underpayments and Overpayments.--
``(1) In general.--Whenever the Secretary determines
that more or less than the correct amount of payment
has been made to any individual under this title, the
Secretary shall promptly notify the individual of such
determination and inform the individual of the right to
appeal such determination in accordance with the
provisions of section 2205. Proper adjustment or
recovery shall be made, under regulations prescribed by
the Secretary, as follows:
``(A) Underpayments.--With respect to payment
to an individual of less than the correct
amount, the Secretary shall promptly pay the
balance of the amount due to such underpaid
individual.
``(B) Overpayments.--
``(i) In general.--With respect to
payment to an individual of more than
the correct amount, the Secretary shall
decrease any payment for a month under
this title to which such overpaid
individual is entitled (except that the
weekly benefit amounts for each week
ending during such month as determined
under section 2203(a) may not be
decreased below the amount specified in
clause (ii) with respect to such weekly
benefit amounts of the individual), or
shall require such overpaid individual
to refund the amount in excess of the
correct amount, or shall apply any
combination of the foregoing.
``(ii) Limitation on recovery.--
``(I) Amount specified.--The
amount specified in this clause
with respect to a weekly
benefit amount of an individual
for a week is an amount equal
to the weekly benefit amount
that would be determined for
the individual for such week
under section 2203(a) if the
individual's weekly benefit
rate (as determined under
section 2203(b)) were equal to
the applicable dollar amount as
determined under subclause
(II).
``(II) Applicable dollar
amount.--For purposes of
subclause (I), the applicable
dollar amount is--
``(aa) with respect
to a weekly benefit
amount determined for a
week ending in a month
in or before calendar
year 2024, $315; and
``(bb) with respect
to a weekly benefit
amount determined for a
week ending in a month
in any calendar year
after 2024, the
corresponding amount
established with
respect to a weekly
benefit amount
determined for a week
ending in a month in
the calendar year
preceding such calendar
year or, if larger, the
product of the
corresponding amount
specified in item (aa)
with respect to a
weekly benefit amount
determined for a week
ending in a month in
calendar year 2024
multiplied by the
quotient obtained by
dividing--
``(AA) the
national
average wage
index (as
defined in
section 2212)
for the second
calendar year
preceding such
calendar year,
by
``(BB) the
national
average wage
index (as so
defined) for
2022.
``(2) Waiver of certain overpayments.--In any case in
which more than the correct amount of payment has been
made, there shall be no adjustment of payments to, or
recovery by the United States from, any individual who
was without fault in connection with the overpayment if
such adjustment or recovery would defeat the purpose of
this title or would be against equity and good
conscience, or would impede efficient or effective
administration of this title, as determined by the
Secretary under procedures to be established by the
Secretary.
``(3) Liability of certifying or disbursing
officer.--No certifying or disbursing officer shall be
held liable for any amount certified or paid by him to
any individual where the adjustment or recovery of such
amount is waived under paragraph (2), or where
adjustment under paragraph (1) is not completed prior
to the death of the individual against whose benefits
deductions are authorized.
``(c) Penalties and Other Procedures.--
``(1) In general.--Whoever--
``(A) knowingly and willfully makes or causes
to be made any false statement or
representation of a material fact in any
application for any benefit under this title,
``(B) at any time knowingly and willfully
makes or causes to be made any false statement
or representation of a material fact for use in
determining rights to any such benefit,
``(C) having knowledge of the occurrence of
any event affecting (A) his initial or
continued right to any such benefit, or (B) the
initial or continued right to any such benefit
of any other individual in whose behalf he has
applied for or is receiving such benefit,
conceals or fails to disclose such event with
an intent fraudulently to secure such benefit
either in a greater amount or quantity than is
due or when no such benefit is authorized,
``(D) having made application to receive any
such benefit for the use and benefit of another
and having received it, knowingly and willfully
converts such benefit or any part thereof to a
use other than for the use and benefit of such
other person, or
``(E) conspires to commit any offense
described in any of subparagraphs (A) through
(C),
shall be fined under title 18, United States Code,
imprisoned not more than 5 years, or both.
``(2) Exclusion from participation.--
``(A) In general.--No person or entity who is
convicted of a violation of paragraph (1) may
represent, or submit evidence on behalf of, an
individual applying for, or receiving, benefits
under this title.
``(B) Notice, effective date, and period of
exclusion.--
``(i) In general.--An exclusion under
this paragraph shall be effective at
such time, for such period, and upon
such reasonable notice to the public
and to the individual excluded as may
be specified in regulations consistent
with clause (ii).
``(ii) Effective date.--Such an
exclusion shall be effective with
respect to services furnished to any
individual on or after the effective
date of the exclusion. Nothing in this
paragraph may be construed to preclude
consideration of any medical evidence
derived from services provided by a
health care provider before the
effective date of the exclusion of the
health care provider under this
paragraph.
``(iii) Period of exclusion.--
``(I) In general.--The
Secretary shall specify, in the
notice of exclusion under
clause (i), the period of the
exclusion.
``(II) Previous offense.--In
the case of the exclusion of a
person or entity under
subparagraph (A) who has
previously been subject to an
exclusion under such
subparagraph--
``(aa) if the person
or entity has
previously been subject
to such an exclusion
only once, the period
of exclusion shall be
not less than 10 years;
and
``(bb) if the person
or entity has
previously been subject
to such an exclusion
more than once, the
exclusion shall be
permanent.
``(C) Notice to state licensing agencies.--
The Secretary shall--
``(i) promptly notify the appropriate
State or local agency or authority
having responsibility for the licensing
or certification of a person or entity
excluded from participation under this
section of the fact and circumstances
of the exclusion;
``(ii) request that appropriate
investigations be made and sanctions
invoked in accordance with applicable
State law and policy; and
``(iii) request that the State or
local agency or authority keep the
Secretary fully and currently informed
with respect to any actions taken in
response to the request.
``(D) Notice, hearing, and judicial review.--
Any person or entity who is excluded (or
directed to be excluded) from participation
under this section is entitled to reasonable
notice and opportunity for a hearing by the
Secretary and to judicial review of such final
agency decision to the same extent as is
provided in section 2205.
``(E) Application for termination of
exclusion.--
``(i) In general.--An individual
excluded from participation under this
paragraph may apply to the Secretary,
in the manner specified by the
Secretary in regulations and at the end
of the period of exclusion provided
under subparagraph (B)(iii) and at such
other times as the Secretary may
provide, for termination of the
exclusion effected under this
paragraph.
``(ii) Criteria for termination.--The
Secretary may terminate the exclusion
if the Secretary determines, on the
basis of the conduct of the applicant
which occurred after the date of the
notice of exclusion or which was
unknown to the Secretary at the time of
the exclusion, that--
``(I) there is no basis under
subparagraph (A) for a
continuation of the exclusion;
and
``(II) there are reasonable
assurances that the types of
actions which formed the basis
for the original exclusion have
not recurred and will not
recur.
``(F) Availability of records of excluded
persons and entities.--Nothing in this section
shall be construed to have the effect of
limiting access by any applicant or beneficiary
under this title or the Secretary to records
maintained by any person or entity in
connection with services provided to the
applicant or beneficiary prior to the exclusion
of such person or entity under this paragraph.
``(G) Reporting requirement.--Any person or
entity participating in, or seeking to
participate in, the program under this title
shall inform the Secretary, in such form and
manner as the Secretary shall prescribe by
regulation, whether such person or entity has
been convicted of a violation under paragraph
(1).
``(d) Redetermination of Entitlement.--
``(1) In general.--
``(A) Procedures.--The Secretary shall
immediately redetermine the entitlement of
individuals to paid family and medical leave
benefit benefits under this title if there is
reason to believe that fraud or similar fault
was involved in the application of the
individual for such benefits, unless a United
States attorney, or equivalent State
prosecutor, with jurisdiction over potential or
actual related criminal cases, certifies, in
writing, that there is a substantial risk that
such action by the Secretary with regard to
beneficiaries in a particular investigation
would jeopardize the criminal prosecution of a
person involved in a suspected fraud.
``(B) Disregard of certain evidence.--When
redetermining the entitlement, or making an
initial determination of entitlement, of an
individual under this title, the Secretary
shall disregard any evidence if there is reason
to believe that fraud or similar fault was
involved in the providing of such evidence.
``(2) Similar fault described.--For purposes of
paragraph (1), similar fault is involved with respect
to a determination if--
``(A) an incorrect or incomplete statement
that is material to the determination is
knowingly made; or
``(B) information that is material to the
determination is knowingly concealed.
``(3) Termination of benefits.--If, after
redetermining pursuant to this subsection the
entitlement of an individual to monthly insurance
benefits, the Secretary determines that there is
insufficient evidence to support such entitlement, the
Secretary may terminate such entitlement and may treat
benefits paid on the basis of such insufficient
evidence as overpayments.
``SEC. 2207. FUNDING FOR BENEFIT PAYMENTS, GRANTS, AND PROGRAM
ADMINISTRATION.
``(a) Funding for Benefit Payments and Grants.--
``(1) In general.--There are appropriated, out of any
funds in the Treasury not otherwise appropriated, such
sums as may be necessary to pay benefits under section
2202 and for grants under sections 2209 and 2210,
subject to paragraph (2).
``(2) Limitation.--In no case shall a grant under
section 2209 exceed a total amount (for all applicable
individuals) equivalent to the sum of benefits paid
(including, in the case of a grant under section 2209,
the full cost of administering such benefits) for each
applicable individual (as described under paragraph
(3)) calculated on the basis of a total number of hours
of leave during the individual's benefit period equal
to--
``(A) the product of 12 multiplied by the
number of hours in a regular workweek of the
individual (within the meaning of section
2203(d)), minus
``(B) the number of caregiving hours (as
defined in section 2202(c)) of such individual
credited in total to months during such benefit
period under this title.
``(3) Applicable individual.--For purposes of
paragraph (2), an `applicable individual' is an
individual, with respect to whom a grant under section
2209 is awarded, receiving paid family or medical leave
benefits for days of leave under a paid family and
medical leave benefit program of a legacy State (as
defined in section 2209(b)).
``(b) Funding for Program Administration.--There are
appropriated, out of any funds in the Treasury not otherwise
appropriated, such sums as may be necessary for the following
purposes (including through the use of grants or contracts
except where otherwise specified):
``(1) Costs related to taking applications,
responding to public inquiries, assisting with problem
resolution, taking requests for appeals, and the
provision of other necessary assistance to individuals
applying for or receiving benefits under this title,
including the following:
``(A) Costs related to staffing a national
toll-free telephone number (which shall not be
carried out through the use of grants or
contracts).
``(B) Costs related to technology to support
a national toll-free telephone number and to
technology related to the design, construction
and maintenance of an online application and
customer service portal.
``(C) Costs related to mailed notices.
``(2) Costs related to determining eligibility (which
shall not be carried out through the use of grants or
contracts).
``(3) Costs related to ensuring program integrity and
combating fraud, including by issuing regulations to do
the following:
``(A) Ensure identity validation of
applicants and beneficiaries.
``(B) Verify the professional credentials of
relevant authorities who provide certifications
pursuant to section 2204(b)(2).
``(C) Ensure the accuracy of any wage and
self-employment income data used in the
administration of this title.
``(D) Ensure that the attestation requirement
in section 2204(b)(3) has been satisfied for
each applicant and beneficiary.
``(E) Ensure the accuracy of periodic benefit
claim reports.
``(F) Provide for post-effectuation quality
review of approved claims and quality review of
denied claims (which shall not be carried out
through the use of grants or contracts).
``(4) Costs related to certification of payment of
benefits (which shall not be carried out through the
use of grants or contracts).
``(5) Costs related to appeals (which shall not be
carried out through the use of grants or contracts).
``(6) Costs related to the administration by the
Secretary of the legacy State grant program under
section 2209 and the employer-sponsored plan grant
program under section 2210.
``(7) Costs related to developing systems of records
for purposes of administering the program under this
title (which shall not be carried out through the use
of grants or contracts, except that costs related to
technology to support such systems of records may be
carried out through the use of grants or contracts).
``(8) Costs related to data exchange and sharing, for
which the Secretary shall enter into an agreement with
relevant data sources including the National Directory
of New Hires and shall seek to enter into agreements
with States to obtain such information as the Secretary
may require to determine eligibility and benefits
payable under section 2202, administer the grants in
sections 2209 and 2210, and verify such other
information as the Secretary determines may be
necessary in carrying out the provisions of this title.
``(9) Costs related to the training of employees,
grantees, and contractors, including training relating
to the prevention of discrimination in the
administration of this title on the basis of race,
color, ethnicity, religion, sex, sexual orientation,
gender identity, disability, age, national origin,
family composition, or living arrangements.
``(10) Costs related to providing technical
assistance to legacy States under section 2209 and to
employers or third party administrators designated by
an employer of paid leave programs under section 2210.
``(11) Costs related to providing technical
assistance to small business employers with respect to
the requirements of the small business assistance
grants in section 2211 and the process by which their
employees may apply for benefits under section 2202;
and
``(12) Any other costs necessary for the effective
administration of this title.
``SEC. 2208. FUNDING FOR OUTREACH, PUBLIC EDUCATION, AND RESEARCH.
``(a) Funding for Outreach and Public Education.--There are
appropriated, out of any funds in the Treasury not otherwise
appropriated, $150,000,000 for each of fiscal years 2022
through 2026 for the Secretary to, with respect to benefits
provided by the program under this title--
``(1) engage in a robust program of culturally and
linguistically competent education and outreach toward
ensuring awareness of and access to such benefits;
``(2) provide information to potential beneficiaries
regarding eligibility requirements, the claims process,
benefit amounts, maximum benefits payable, notice
requirements, the appeals process, and
nondiscrimination rights, including specific benefit
estimates based on the average weekly earnings of a
potential beneficiary; and
``(3) provide employers with a model notice to be
used to inform employees of the availability of such
benefits.
``(b) Funding for Research.--There are appropriated, out of
any funds in the Treasury not otherwise appropriated,
$150,000,000 for each of fiscal years 2023 through 2027 for the
Secretary to--
``(1) develop and carry out grants for research for
the purpose of ensuring full access to the benefits
provided by the program under this title, including
through the detection and prevention of disparities on
the basis of race, color, ethnicity, religion, sex,
sexual orientation, gender identity, disability, age,
national origin, income, language, job classification,
family composition, or living arrangements; and
``(2) annually make available to the public beginning
in fiscal year 2024 a report that includes--
``(A) the number of individuals who received
such benefits;
``(B) the purposes and durations for which
such benefits were received;
``(C) an analysis of benefit use by
occupation, industry, wage levels, employer
size, and geography;
``(D) an analysis of disparities identified
by the grants for research authorized under
this subsection on the basis of race, color,
ethnicity, religion, sex, sexual orientation,
gender identity, disability, age, national
origin, family composition, or living
arrangements;
``(E) a description of the actions by the
Secretary to prevent disparities and ensure
full access to the benefits provided by the
program under this title;
``(F) a comparative analysis of paid family
and medical leave benefits received by
individuals through the program under section
2202, through a legacy State paid family and
medical leave program described in section
2209, or through an employer-sponsored program
described in section 2210 that takes into
account the number of individuals receiving
benefits, the characteristics of the benefits
received, and the patterns of leave-taking
under each program;
``(G) the number of employers who received a
reimbursement grant under section 2210 and the
number of employees of such employers who
received paid family and medical leave benefits
under an employer-sponsored program described
in such section; and
``(H) the number of employers who received
one or more small business assistance grants
under section 2211 and the total number of such
grants provided.
``SEC. 2209. FUNDING FOR STATE ADMINISTRATION OPTION FOR LEGACY STATES.
``(a) In General.--In each calendar year beginning with 2024,
the Secretary shall make a grant to each State that, for the
calendar year preceding such calendar year (or, in the case of
a grant under this section in 2024, for the portion of such
preceding calendar year occurring after June 30), was a legacy
State and that met the data sharing requirements of subsection
(c), in an amount equal to the lesser of--
``(1) an amount, as estimated by the Secretary, in
consultation with the Secretary of Labor, equal to the
total amount of paid family and medical leave benefits
that would have been paid under section 2202 (including
the full Federal cost of administering such benefits)
to individuals who received benefits under a State
program described in subsection (b) during the calendar
year preceding such calendar year (or, in the case of a
grant under this section in 2024, for the portion of
such preceding calendar year occurring after June 30)
if the State had not been a legacy State for such
preceding calendar year (or, in the case of a grant
under this section in 2024, for the portion of such
preceding calendar year occurring after June 30); or
``(2) an amount equal to the total cost of the State
paid family and medical leave program described in
subsection (b) for the calendar year preceding such
calendar year (or, in the case of a grant under this
section in 2024, for the portion of such preceding
calendar year occurring after June 30), including--
``(A) the total amount of paid family and
medical leave benefits that would have been
paid to individuals under such program for
leave that is exempt under such program on
account of being otherwise paid under a program
provided by such individual's employer; and
``(B) the full cost to the State of
administering such program.
In any case in which, during any calendar year, the Secretary
has reason to believe that a State will be a legacy State and
meet the data sharing requirements of subsection (c) for such
calendar year, the Secretary may make estimated payments during
such calendar year of the grant which would be paid to such
State in the succeeding calendar year, to be adjusted as
appropriate in the succeeding calendar year.
``(b) Legacy State.--For purposes of this section, the term
`legacy State' for a calendar year means a State that the
Secretary, in consultation with the Secretary of Labor,
determines--
``(1) has enacted, not later than the date of
enactment of this title, a State law that provides paid
family and medical leave benefits; and
``(2) for any calendar year that begins on or after
the date that is 3 years after the date of enactment of
this title, has in effect, throughout such calendar
year, a State program enacted into law--
``(A) that provides paid family and medical
leave benefits--
``(i) for at least 12 full workweeks
of leave during each 12-month period to
at least all of those individuals in
the State who would be eligible for
paid family and medical leave benefits
under section 2202 (without regard to
section 2202(c)(2)(D)) during any part
of such calendar year, provided that
such State program--
``(I) shall provide paid
family and medical leave
benefits for leave from
employment by the State or any
political subdivision thereof,
except that any State or local
employees subject to a
collective bargaining agreement
may be excluded from such
coverage with the agreement of
90 percent of the employees
covered by the collective
bargaining agreement; and
``(II) may provide such
benefits for leave from Federal
employment; and
``(ii) at a wage replacement rate
that is at least equivalent to the wage
replacement rate under the program
under this title (without regard to
section 2202(c)(2)(D)); and
``(B) that provides an annual notice to each
individual whose employment would be eligible
for such benefits under the State program.
``(c) Data Sharing.--As a condition of receiving a grant
under subsection (a) in a calendar year, a State shall enter
into an agreement with the Secretary under which the State
shall provide the Secretary--
``(1) with information, to be provided periodically
as determined by the Secretary, concerning individuals
who received a paid leave benefit under a State program
described in subsection (b), including each
individual's name, information to establish the
individual's identity, dates for which such paid leave
benefits were paid, the amount of such paid leave
benefit, and, to the extent available, such other
information concerning such individuals as the
Secretary may require for the purpose of carrying out
this section and section 2202(c)(2)(D);
``(2) not later than July 1 of such calendar year,
the amount described in subsection (a)(2) for the
calendar year preceding such calendar year; and
``(3) such other information as the Secretary
determines may be necessary in carrying out the
provisions of this title, including for the purposes of
promoting equity as described under section 2206(a) and
for research described under section 2208(b).
``(d) Funding for Transitional Costs for Legacy States.--
``(1) In general.--There are appropriated to the
Secretary, out of any funds in the Treasury not
otherwise appropriated, such sums as necessary for
grants in accordance with this subsection.
``(2) Transition grants.--The Secretary shall make a
grant under this subsection to each State that--
``(A) is a legacy State for the calendar year
in which occurs the date of enactment of this
title;
``(B) certifies to the Secretary that the
State intends to remain a legacy State and meet
the data sharing requirements of subsection (c)
at least through the first calendar year that
begins on or after the date that is 3 years
after the date of enactment of this title; and
``(C) agrees to repay the full amount of such
grant if the State fails to remain a legacy
State and meet the data sharing requirements of
subsection (c) as certified in subparagraph
(B).
``(3) Amount of grant.--The amount of a grant
provided to a State under this subsection shall be
equal to \1/2\ of the sum of the State's expenditures
from the date of enactment of this title through the
calendar year described in paragraph (2)(B) on--
``(A) the costs of creating new information
technology systems as needed to implement the
data sharing requirements of subsection (c)
(including staffing costs related to such
systems); and
``(B) other necessary costs incurred by the
State to meet the requirements of subsection
(b)(2)(A)(ii).
``(4) Estimated advance payments.--The Secretary may
make estimated payments of a grant provided to a State
under this subsection for any calendar year, to be
adjusted as appropriate in the succeeding calendar
year.
``SEC. 2210. REIMBURSEMENT OPTION FOR EMPLOYER-SPONSORED PAID LEAVE
BENEFITS.
``(a) In General.--For each calendar year beginning with
2023, the Secretary shall make a grant to each employer that is
an eligible employer for such calendar year in an amount equal
to--
``(1) in the case of an eligible employer sponsoring
a paid family and medical leave benefit program with
respect to which benefits are awarded and paid under a
contract with an insurer, an amount equal to 90 percent
of the product of--
``(A) the projected national average cost per
employee of providing paid family and medical
leave benefits as determined by the Secretary
for such calendar year under subsection (c)(3)
(or, in the case of calendar year 2023, \1/2\
of such projected national average cost);
multiplied by
``(B) the number of employees (pro-rated for
part-time employees) covered under the program
for such calendar year (or, in the case of
calendar year 2023, for the portion of such
calendar year occurring after June 30); and
``(2) in the case of an eligible employer sponsoring
a self-insured paid family and medical leave benefit
program with respect to which benefits are awarded and
paid directly by the employer (or by a third party
administrator on behalf of the employer), an amount
equal to 90 percent of--
``(A) the amount of benefits paid under the
program for such calendar year to individuals
for up to 12 weeks of leave per individual (or,
in the case of calendar year 2023, for the
portion of such calendar year occurring after
June 30); or
``(B) if lesser, the product of the national
average weekly benefit amount paid under
section 2203(a) during such calendar year (or,
in the case of calendar year 2023, during the
portion of such calendar year occurring after
June 30) multiplied by the number of weeks of
leave (up to 12 per individual) paid by the
employer for all individuals under the program
for the calendar year (or such portion in the
case of calendar year 2023).
``(b) Eligibility; Application Requirements.--
``(1) In general.--For purposes of subsection (a), an
eligible employer for a calendar year is an employer
(other than the Federal Government or the government of
any State (or political subdivision thereof) that is a
legacy State for such calendar year under section 2209)
that satisfies all of the following requirements:
``(A) Non-legacy state employees.--The
employer has one or more employees during such
calendar year whose employment with such
employer would not be eligible for paid family
or medical leave benefits under the law of any
legacy State (as defined in section 2209(b))
for such calendar year.
``(B) Application; submission of required
information.--Not later than the certification
deadline specified in paragraph (2)(A) for such
calendar year, the employer--
``(i) notifies the Secretary that the
employer intends to seek a grant under
this section for such calendar year;
``(ii) certifies to the Secretary
that the employer will have in effect
during such calendar year a paid family
and medical leave benefit program that
meets the requirements of subsection
(c) and, not later than the submission
deadline specified in paragraph (2)(B)
for such calendar year, provides all
documentation relating to such program
as the Secretary may request; and
``(iii) pays an application fee of
$1,000 (or $200 in the case of a
renewed application).
``(C) Approval by the secretary.--The paid
family and medical leave benefit program
referred to in subparagraph (B) is subsequently
approved by the Secretary as meeting all
applicable requirements.
``(D) Information submission requirement.--At
the time of application for such grant for each
calendar year, the employer--
``(i) submits to the Secretary--
``(I) an attestation that the
paid family and medical leave
benefit program referred to in
subparagraph (B) will remain in
effect during the whole of such
calendar year (or, in the case
of a program not in effect at
the beginning of such calendar
year, an attestation that such
program will remain in effect
until the end of such calendar
year); and
``(II) with respect to each
employee of the employer
covered by the program for such
calendar year, the employee's
name, information to establish
the employee's identity, and in
the case of a part-time
employee (for purposes of
determining the number of
employees (pro-rated for part-
time employees) covered under
the program for such calendar
year under subsection
(a)(1)(B)), the number of hours
the employee regularly works in
a week; and
``(ii) agrees to submit information
to the Secretary as described in
subsection (e).
``(E) Maintenance of records.--The employer
agrees to retain all records relating to the
employer's paid family and medical leave
benefit program for not less than 3 years.
``(F) Job protections and other employee
rights.--As a condition of the grant, the
employer agrees--
``(i) that, on return from leave
under the program described in
subparagraph (B), the individual taking
such leave will--
``(I) be restored by the
employer to the position of
employment held by the
individual when the leave
commenced; or
``(II) be restored to an
equivalent position with
equivalent employment benefits,
pay, and other terms and
conditions of employment;
``(ii) to maintain coverage for the
individual under any `group health
plan' (as defined in section 2212) for
the duration of such leave at the level
and under the conditions coverage would
have been provided if the individual
had continued in employment
continuously for the duration of such
leave;
``(iii) in any case in which an
employee receives an adverse
determination from the employer (or
administering entity) with respect to
paid family and medical leave benefits
under the program described in
subparagraph (B)--
``(I) to provide opportunity
for the employee to appeal such
adverse determination to the
employer (or administering
entity); and
``(II) in any case in which
the employee elects to appeal
the results of such initial
appeal to the Secretary
pursuant to section
2205(a)(1)(B) and the final
decision of the Secretary is in
the employee's favor, to
provide for the payment of such
paid family and medical leave
benefits in addition to the
costs to the Secretary of such
secondary appeal;
``(iv) to provide annual notice to
all employees of the availability of
paid family and medical leave benefits
under the program described in
subparagraph (B) and of the right to
appeal any adverse determination with
respect to such benefits; and
``(v) not to impose any fee on any
employee related to the receipt of paid
family and medical leave benefits under
the program described in subparagraph
(B).
``(G) Additional assurances.--The employer
provides assurances that the employer (or
administering entity)--
``(i) will not interfere with,
restrain, or deny the exercise of, or
the attempt to exercise, any right
provided under such policy;
``(ii) will notify an employee in any
case in which the employee is provided
reimbursable benefits; and
``(iii) will not discharge, or in any
other manner discriminate against, any
individual for opposing any practice
prohibited by such policy.
``(H) Special conditions in the case of
certain employers.--
``(i) Self-insured private
employers.--In the case of a paid
family and medical leave benefit
program of an employer (other than a
State or political subdivision thereof)
with respect to which benefits are
awarded and paid directly by the
employer (or by a third party
administrator on behalf of the
employer)--
``(I) such employer employs
at least 50 employees described
in subparagraph (A);
``(II) such benefits are
guaranteed by a surety bond
held by the employer; and
``(III) such employer (or
administering entity) holds
funds in a dedicated account
for such benefits not used for
any other business purpose.
``(ii) Self-insured state and local
employers.--In the case of a paid
family and medical leave benefit
program of an employer that is a State
(or political subdivision thereof) with
respect to which benefits are awarded
and paid directly by the employer (or
by a third party administrator on
behalf of the employer), such benefits
are negotiated pursuant to a collective
bargaining agreement.
``(2) Timing of application.--
``(A) Certification.--The certification
deadline specified in this subparagraph for a
calendar year is--
``(i) for calendar year 2023, March
31, 2023; and
``(ii) for any calendar year after
2023, 90 days before the beginning of
such calendar year,
or, if later, the date that is 90 days before a
plan described in paragraph (1)(B) first goes
into effect.
``(B) Submission of documentation.--The
submission deadline specified in this
subparagraph for a calendar year is--
``(i) for calendar year 2023, May 15,
2023; and
``(ii) for any calendar year after
2023, 45 days before the beginning of
such calendar year,
or, if later, the date that is 45 days before a
plan described in paragraph (1)(B) first goes
into effect.
``(c) Employer Program Requirements.--
``(1) In general.--A paid family and medical leave
benefit program shall not be considered to meet the
requirements of this subsection unless such program
consists of a written employer policy that provides for
the payment, through one or more employee benefit
plans, of family and medical leave benefits, which may
be guaranteed through an insurer and which may be
administered by an insurer or by another third-party
entity, that includes each element in the model
template described in paragraph (2), and that provides
for each of the following:
``(A) The provision of such benefits to all
employees described in subsection (b)(1)(A),
regardless of length of service, job type,
membership in a labor organization, seniority
status, or any other employee classification.
``(B) Each of the job protections and other
employee rights described in subsection
(b)(1)(F).
``(C) Each of the assurances described in
subsection (b)(1)(G).
``(D) Submission of information to the
Secretary as described in subsection (e).
``(2) Model template.--Not later than July 1, 2022,
the Secretary shall make available to eligible
employers a model template of a written policy
providing paid family and medical leave benefits--
``(A) at a wage replacement rate that is at
least as great as the wage replacement rate
that an employee would receive under the
program under this title (without regard to
section 2202(c)(2)(C));
``(B) for a total number of weeks of paid
leave that is at least as great as the total
number of weeks of paid leave that an employee
would receive under the program under this
title (without regard to such section);
``(C) for all of the reasons for which an
individual would be considered to be engaged in
qualified caregiving under section
2202(c)(2)(A), regardless of any pre-existing
medical conditions;
``(D) for leave which may be taken
intermittently or on a reduced leave schedule;
``(E) that does not impose any fee on any
employee related to the receipt of such
benefits.
``(F) which must be paid not less frequently
than monthly;
``(G) for which applications must be
processed and notifications provided at least
as quickly as is provided under section 2204
for benefits provided under section 2202(a);
and
``(H) for which any information contained in
an application for such benefits shall be
presumed to be true and accurate, unless the
employer (or administering entity) demonstrates
by a preponderance of the evidence that
information contained in the application is
false;
``(3) National average cost.--Not later than October
1 of the calendar year before each calendar year
beginning with 2023, the Secretary shall determine the
projected national average cost per employee for such
calendar year of a paid family and medical leave
benefit program that meets the requirements of
paragraph (2) (assuming administrative costs no greater
than the average or projected average administrative
costs of providing benefits under section 2202), taking
into account projected benefit levels, duration of
benefits, and frequency of use of the program in such
calendar year.
``(d) Timing of Payment; Penalty for Late Filing.--
``(1) Insured employers.--A grant paid under this
section for a calendar year to an eligible employer
described in subsection (a)(1) shall be paid by the
Secretary not later than 30 days after the beginning of
such calendar year, except that in the case of a grant
under this section for calendar year 2023, such grant
shall be paid by the Secretary not later than August 1,
2023.
``(2) Self-insured employers.--A grant paid under
this section for a calendar year to an eligible
employer described in subsection (a)(2) shall be paid
by the Secretary not later than March 31 of the
calendar year succeeding such calendar year.
``(3) Penalty for late filing.--In any case in which
an eligible employer seeking a grant under this
subsection for a calendar year fails to submit all
required documentation by the submission deadline for
such calendar year as required under subsection
(b)(1)(B)(ii)--
``(A) the grant for such calendar year for
such employer shall not be paid until 45 days
after the date of payment otherwise specified
in paragraph (1) or (2), as applicable; and
``(B) the amount of such grant shall be
reduced by 2 percent for each 7 days by which
such submission deadline is exceeded.
``(e) Information Submission.--As a condition of receiving a
grant under subsection (a) for a calendar year, an employer
shall provide the Secretary with information, at such times and
in such manner as determined by the Secretary, concerning
individuals who received a paid leave benefit under the paid
family and medical leave benefit program of the employer,
including each individual's name, information to establish the
individual's identity, dates for which such paid leave benefits
were paid, the amount of such paid leave benefit, and, to the
extent available, such other information concerning such
individuals as the Secretary may require for the purpose of
carrying out this section and section 2202(c)(2)(C), and for
otherwise carrying out the provisions of this title, including
for the purposes of promoting equity as described under section
2206(a) and for research described under section 2208(b).
``(f) Enforcement.--
``(1) In general.--The Secretary shall conduct
periodic reviews of employers receiving grants under
this section (and of entities administering such
grants). The Secretary may withdraw approval of the
paid family and medical leave benefit program of an
employer in any case in which the Secretary finds that
the employer (or administering entity) has violated any
requirement of this section, and may disqualify an
employer (or administering entity) from receiving (or
administering) subsequent grants under this section in
the case of repeated violations.
``(2) Penalties relating to appeals.--In any case in
which the Secretary determines that a pattern exists
with respect to an employer (or administering entity)
in which the employer (or administering entity) has
incorrectly denied claims for paid leave benefits under
the employer-sponsored program and such claims have
subsequently been approved by the Secretary pursuant to
an appeal described in section 2205(a)(1)(B), the
Secretary may impose such penalties on the employer (or
administering entity) as the Secretary deems
appropriate, which may include a reduction in, or
disqualification from receiving (or administering),
subsequent grants under this section.
``(3) Penalties on administering entities.--In the
case of a third-party entity administering a paid
family and medical leave benefit program of an
employer, such entity shall notify such employer in any
case in which a penalty is imposed under this
subsection on the administering entity not later than
30 days after the date on which such penalty has been
imposed. In any case in which the Secretary determines
that a pattern of misconduct exists with respect to an
entity administering benefits under this section for
multiple employers, the Secretary may disqualify such
entity from administering employer-sponsored programs
receiving subsequent grants under this section.
``(4) Employer and administrator appeals.--An
employer (or administering entity) with respect to
which a penalty is imposed under this subsection may
appeal such decision to the Secretary only if such
appeal is filed with the Secretary not later than 60
days after the date of such decision.
``(g) Greater Benefits Permitted.--Nothing in this section
shall be construed to prohibit an eligible employer from
providing paid family and medical leave benefits that exceed
the requirements described in this section.
``SEC. 2211. FUNDING FOR SMALL BUSINESS ASSISTANCE.
``(a) In General.--There are appropriated, out of any funds
in the Treasury not otherwise appropriated, such sums as may be
necessary for grants in accordance with this section.
``(b) Small Business Assistance Grants.--The Secretary shall
make a grant to each eligible employer (as defined in
subsection (g)) who employs a covered individual (as so
defined) if such eligible employer satisfies the requirements
of subsection (c).
``(c) Grant Requirements.--An eligible employer seeking a
grant under this section with respect to a covered individual
described in subsection (b) shall--
``(1) not later than 90 days after such individual
returns from qualified leave (as defined in subsection
(g)) from the employer, submit an application to the
Secretary in such manner as the Secretary shall
provide;
``(2) attest to the Secretary that the employer
reasonably expects to, during the period in which such
individual is taking such qualified leave, incur costs
attributable to replacing the labor of such individual
during such period in excess of the wages that would be
paid to the individual during such period if such leave
were not taken;
``(3) agree that, on return from such qualified
leave, the individual will--
``(A) be restored by the employer to the
position of employment held by the individual
when the leave commenced; or
``(B) be restored to an equivalent position
with equivalent employment benefits, pay, and
other terms and conditions of employment;
``(4) agree to maintain coverage for the individual
under any `group health plan' (as defined in section
2212) for the duration of such qualified leave at the
level and under the conditions coverage would have been
provided if the individual had continued in employment
continuously for the duration of such leave;
``(5) upon the award of such grant, notify the
individual of their rights under paragraphs (3) and
(4).
``(d) Amount of Grant.--The amount of a grant to an eligible
employer with respect to a covered individual shall be an
amount equal to the product of 2.5 multiplied by the average
weekly wage of the State in which the individual's worksite is
located for the most recent calendar year. For purposes of this
subsection, the average weekly wage of a State for a calendar
year shall be determined and annually published by the
Secretary on the basis of data prepared by the Bureau of Labor
Statistics that is based on a quarterly census of employers in
the State of wages paid for unemployment insurance-covered
employment.
``(e) Limitations.--In no case may an eligible employer--
``(1) receive more than 1 grant under this section
with respect to the same covered individual in a single
calendar year; or
``(2) receive more than 10 total grants under this
section in a single calendar year.
``(f) Enforcement.--In any case in which--
``(1) an employer's attestation with respect to costs
incurred made pursuant to subsection (c)(2) is not made
in good faith; or
``(2) an employer who receives a grant under this
section with respect to a covered individual fails to
satisfy the requirements of paragraph (3) or (4) of
subsection (c) with respect to such individual,
the Secretary may require the employer to repay the full amount
of such grant (including any applicable interest) and may
permanently prohibit the employer from applying for any
subsequent grants under this section.
``(g) Definitions.--For purposes of this section--
``(1) Covered individual.--For purposes of this
section, the term `covered individual' means an
individual employed by an eligible employer who takes 4
or more weeks of leave from such employer, or
anticipates taking 4 or more weeks, during the
individual's benefit period for which the individual
receives paid family and medical leave benefits--
``(A) under section 2202(a);
``(B) under the law of a legacy State (as
defined in section 2209(b)); or
``(C) under an eligible employer-sponsored
plan under section 2210,
but only if the eligible employer has received no other
State or Federal grant intended to cover the costs
described in subsection (c)(2) with respect to such
individual.
``(2) Eligible employer.--The term `eligible
employer' means any person (other than a governmental
agency) who regularly employs at least 1 and not more
than 50 employees.
``(3) Qualified leave.--The term `qualified leave'
means leave taken by an individual with respect to
which the individual is eligible for paid family and
medical leave benefits under section 2202, under the
law of a legacy State (as defined in section 2209(b)),
or under an eligible employer-sponsored plan under
section 2210.
``SEC. 2212. DEFINITIONS.
``For purposes of this title the following definitions apply:
``(1) Group health plan.--The term `group health
plan' has the meaning given such term in section
5000(b)(1) of the Internal Revenue Code of 1986.
``(2) National average wage index.--The term
`national average wage index' has the meaning given
such term in section 209(k)(1).
``(3) Secretary.--The term `Secretary' means the
Secretary of the Treasury.
``(4) Self-employment income.--The term `self-
employment income' has the meaning given the term in
section 1402(b) of the Internal Revenue Code of 1986
for purposes of the taxes imposed by section 1401(b) of
such Code. For purposes of section 2202(a) and
2203(b)(3), the Secretary shall determine rules for the
crediting of self-employment income to calendar
quarters, under which--
``(A) in the case of a taxable year which is
a calendar year, self-employment income shall
be credited equally to each quarter of such
calendar year; and
``(B) in the case of any other taxable year,
such income shall be credited equally to the
calendar quarter in which such taxable year
ends and to each of the next three or fewer
preceding quarters any part of which is in such
taxable year.
``(5) State.--The term `State' means any State of the
United States or the District of Columbia or any
territory or possession of the United States.
``(6) Wages.--The term `wages' has the meaning given
such term in section 3121(a) of the Internal Revenue
Code of 1986 for purposes of the taxes imposed by
sections 3101(b) and 3111(b) of such Code, except that
such term also includes--
``(A) compensation, as defined in section
3231(e) of such Code for purposes of the
Railroad Retirement Tax Act; and
``(B) unemployment compensation, as defined
in section 85(b) of such Code.
``(7) Week.--The term `week' means a 7-day period
beginning on a Sunday.''.
SEC. 130002. ACCESS TO WAGE INFORMATION FROM THE NATIONAL DIRECTORY OF
NEW HIRES FOR THE PURPOSE OF ADMINISTERING PAID
LEAVE.
(a) In General.--Section 453(j) of the Social Security Act
(42 U.S.C. 653(j)) is amended--
(1) by redesignating paragraphs (5) through (11) as
paragraphs (6) through (12), respectively; and
(2) by adding after paragraph (4) the following:
``(5) Provision of new hire information for purposes
of family and medical leave program.--
``(A) In general.--The National Directory of
New Hires shall provide the Secretary of the
Treasury with all information in the National
Directory relating to wages paid to
individuals.
``(B) Use and maintenance of information by
the secretary of the treasury.--The Secretary
of the Treasury may use information provided
under this paragraph only for purposes of
administering the paid family and medical leave
benefit program under title XXII, and shall
maintain such information in the records of the
Secretary of the Treasury for such time as the
Secretary of the Treasury deems necessary for
the administration of such program.''.
(b) Conforming Amendment.--Section 453(i)(2)(C) of such Act
(42 U.S.C. 653(i)(2)(C)) is amended by striking ``(j)(5)'' and
inserting ``(j)(6)''.
Subtitle B--Retirement
SEC. 131001. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this
subtitle an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
PART 1--AUTOMATIC CONTRIBUTION PLANS AND ARRANGEMENTS
SEC. 131101. TAX IMPOSED ON EMPLOYERS FAILING TO MAINTAIN OR FACILITATE
AUTOMATIC CONTRIBUTION PLAN OR ARRANGEMENT.
(a) Automatic Contribution Plan or Arrangement.--
(1) In general.--Section 414 is amended by adding at
the end the following:
``(aa) Automatic Contribution Plan or Arrangement.--For
purposes of this title--
``(1) In general.--The term `automatic contribution
plan or arrangement' means--
``(A) a defined contribution plan that--
``(i) is described in clause (i),
(ii), or (iv) of section 219(g)(5)(A),
``(ii) includes a qualified cash or
deferred arrangement or a salary
reduction arrangement, and
``(iii) meets the notice,
eligibility, contribution, investment,
fee, and lifetime income requirements
of paragraphs (2), (3), (4), (5), (6),
and (7), respectively,
``(B) an automatic IRA arrangement described
in paragraph (8),
``(C) an arrangement described in section
408(p) that meets the notice, contribution,
investment, and fee requirements described in
paragraphs (2), (4), (5), and (6), and
``(D) a plan described in clause (i), (ii),
(iv), (v), or (vi) of section 219(g)(5)(A) that
is established and maintained by an employer as
of the date of enactment of the Act to provide
for reconciliation pursuant to title II of S.
Con. Res. 14, or a plan described in section
219(g)(5)(A)(iv) that is not subject to title I
of the Employee Retirement Income Security Act
of 1974 and offers annuity contracts, or makes
custodial accounts available to employees, as
of such date.
``(2) Notice requirements.--A plan or arrangement
shall be treated as meeting the notice requirements of
this paragraph with respect to an employee if the plan
or arrangement meets the notice requirements of, or
similar to, the notice requirements of section
401(k)(13)(E), excluding any such notice requirements
that are not applicable or relevant to the such plan or
arrangement.
``(3) Eligibility requirements.--
``(A) In general.--The requirements of this
paragraph shall be treated as met if all
employees of the employer are eligible to
participate in an automatic contribution plan
or arrangement maintained or facilitated by the
employer.
``(B) Certain exclusions.--The following
employees may be excluded from consideration in
determining whether the requirements of this
paragraph are met:
``(i) Individuals less than 21 years
old.--Any employee who has not attained
age 21.
``(ii) Certain other employees.--Any
employee described in section
410(b)(3).
``(iii) Service requirements.--Any
employee who has not completed at least
one of the following periods of service
with the employer maintaining or
facilitating the plan or arrangement:
``(I) The period permitted
under section 410(a)(1)
(determined without regard to
subparagraph (B)(i) thereof).
``(II) A period of 2
consecutive 12-month periods
during each of which the
employee has at least 500 hours
of service.
``(C) Special rules for controlled groups.--
Eligible employees within an employer need not
be eligible to participate in the same
automatic contribution plan or arrangement. For
purposes of this subsection, the term
`employer' shall include all employers treated
as a single employer under subsection (b), (c),
(m), or (o) of section 414.
``(D) Entry dates.--Rules similar to the
rules of section 410(a)(4) shall apply with
respect to employees who have satisfied the age
and service requirements referenced in
subparagraph (B) and who are otherwise entitled
to participate in a plan or arrangement.
``(4) Contribution requirements.--
``(A) In general.--The requirements of this
paragraph shall be treated as met if, under the
plan or arrangement, each employee eligible to
participate in the plan or arrangement is
treated as having elected to have the employer
make elective contributions in an amount equal
to the qualified percentage of compensation.
``(B) Election out.--The election treated as
having been made under subparagraph (A) shall
cease to apply with respect to any employee if
such employee makes an affirmative election--
``(i) not to have such contributions
made, or
``(ii) to make elective contributions
at a level specified in such
affirmative election.
``(C) Qualified percentage.--For purposes of
this paragraph, and except as provided in
subparagraph (D)(i), the term `qualified
percentage' means, with respect to any
employee, any percentage determined under the
plan or arrangement if such percentage is
applied uniformly, does not exceed 15 percent
(10 percent during the period described in
clause (i)), and is at least--
``(i) 6 percent during the period
ending on the last day of the first
plan year which begins after the date
on which the first elective
contribution described in subparagraph
(A) is made with respect to such
employee,
``(ii) 7 percent during the first
plan year following the plan year
described in clause (i),
``(iii) 8 percent during the first
plan year following the plan year
described in clause (ii),
``(iv) 9 percent during the first
plan year following the plan year
described in clause (iii), and
``(v) 10 percent during any
subsequent plan year.
``(D) Rules relating to automatic IRA
arrangements.--For purposes of this paragraph--
``(i) Qualified percentage.--In the
case of an automatic IRA arrangement,
the term `qualified percentage' means,
with respect to an employee for any
plan year, a percentage equal to the
minimum percentage described for such
plan year under subparagraph (C).
``(ii) Payroll deduction
contributions.--In the case of an
automatic IRA arrangement, any
reference in this paragraph to elective
contributions shall be treated as
including a reference to payroll
deduction contributions.
``(5) Investment requirements.--
``(A) In general.--
``(i) Default investments.--A plan or
arrangement shall be treated as meeting
the requirements of this paragraph if
in the absence of an investment
election by a participant or
beneficiary, amounts are invested only
in the class of assets or funds
described in subparagraph (B).
``(ii) Required investment options in
automatic ira arrangement.--In addition
to the default investment requirement
of clause (i), an automatic IRA
arrangement shall be treated as meeting
the requirements of this paragraph if
the arrangement also allows the
participant to invest in any of the
class of assets or funds described in
subparagraph (B), (C), (D), or (E), and
provides for no other investment
options.
``(B) Target date/lifecycle option.--The
class of assets or funds described in this
clause is the class of assets or funds that
constitutes a qualified default investment
alternative under Department of Labor
regulation section 2550.404c-5(e)(4)(i).
``(C) Principal preservation.--The class of
assets or funds described in this clause is the
class of assets or funds that is designed to
protect the principal of the individual on an
ongoing basis.
``(D) Balanced option.--The class of assets
or funds described in this clause is the class
of assets or funds that constitutes a qualified
default investment alternative under Department
of Labor regulation section 2550.404c-
5(e)(4)(ii).
``(E) Other.--Any other class of assets or
funds determined by the Secretary to be a
qualified investment for purposes of this
section.
``(6) Fee requirements.--In the case of any plan or
arrangement not otherwise subject to title I of the
Employee Retirement Income Security Act of 1974, under
the fee requirements of this paragraph, no participant
may be charged unreasonable fees or expenses.
``(7) Lifetime income requirements.--
``(A) In general.--A plan or arrangement
shall be treated as meeting the lifetime income
requirement described in this paragraph if the
plan or arrangement permits participants to
elect to receive at least 50 percent of their
vested account balance in a form of
distribution described in section
401(a)(38)(B)(iii).
``(B) Exception.--
``(i) In general.--This paragraph
shall not apply with respect to any
participant whose vested account
balance is $200,000 or less at the time
of distribution.
``(ii) Not treated as discriminatory
in favor of highly compensated
employees.--A plan shall not be treated
as failing to meet the requirements of
section 401(a)(4) solely by reason of
applying the exception of clause (i) to
the requirements of subparagraph (A).
``(8) Automatic ira arrangement.--
``(A) In general.--For purposes of this
paragraph, the term `automatic IRA arrangement'
means, with respect to an employer (and trustee
or issuer designated by the employer), an
arrangement facilitated by the employer which
meets the requirements of this paragraph and
the eligibility, contribution, investment, and
fee requirements of paragraphs (3), (4), (5),
and (6), and under which an employee--
``(i) may elect--
``(I) to have the employer
make payroll deduction deposits
on behalf of the individual as
payroll deduction contributions
to an individual retirement
account, or
``(II) to have such payments
paid to the employee directly
in cash,
``(ii) is treated as having made the
election under clause (i)(I) at the
level determined under paragraph (4)(D)
until the individual makes an
affirmative election not to have such
contributions made (or to have such
contributions made at a level specified
in the affirmative election), and
``(iii) may elect to modify the
manner in which such amounts are
invested for such plan year.
``(B) Administrative requirements.--
``(i) Payments.--The requirements of
this subparagraph are met with respect
to any automatic IRA arrangement if the
employer makes the payments elected or
treated as elected under subparagraph
(A)(i) on or before the last day of the
month following the month in which the
compensation otherwise would have been
payable to the employee in cash.
``(ii) Notice of election period.--
The requirements of this paragraph
shall be treated as met with respect to
any year if the employer notifies each
employee eligible to participate,
within a reasonable period of time
before the beginning of such year (and,
for the first year the employee is so
eligible, a reasonable period of time
before the first day such employee is
so eligible), of--
``(I) the opportunity to
elect to have contributions
made, or to be treated as so
electing, under clause (i)(I),
or (ii), of subparagraph (A),
``(II) the opportunity to
elect not to have payroll
deduction contributions made or
to have such contributions made
at a different percentage or in
a different amount, and
``(III) the opportunity under
subparagraph (A)(iii) to modify
the manner in which such
amounts are invested for such
year.
The employer shall provide such notice
in paper form or, if the employee so
elects, in electronic form.
``(C) Limits on contributions.--An employer
shall not be treated as failing to satisfy the
requirements of this section or any other
provision of this title merely because--
``(i) aggregate payroll deduction
contributions by or on behalf of an
individual to individual retirement
accounts of the individual exceed the
deductible amount in effect under
section 219(b)(5) (determined without
regard to subparagraph (B) thereof) for
any taxable year in which any payroll
deduction contributions by the employer
under an automatic IRA arrangement are
made, or
``(ii) the employer chooses to limit
the payroll deduction contributions
under this subsection on behalf of an
employee for any calendar year in a
manner reasonably designed to avoid
exceeding such deductible amount.
``(D) Default treatment as roth ira.--An
employee on whose behalf payroll deduction
contributions are made to an individual
retirement account under subparagraph (A) may
elect, at such time and in such manner and form
as the Secretary may prescribe, whether to
treat the individual retirement account as
designated as a Roth IRA. If no such election
is made, the account shall be treated as so
designated.
``(E) Deposits to individual retirement
accounts of a designated trustee or issuer.--
``(i) In general.--An employer shall
not be treated as failing to satisfy
the requirements of this section, or
any other provision of this title,
merely because the employer makes all
payroll deduction contributions on
behalf of all employees (or all
employees who do not specify an
individual retirement account, trustee,
or issuer to receive the contributions)
to individual retirement accounts
specified in clause (ii).
``(ii) Individual retirement accounts
other than those selected by
employee.--An employer may elect to
have payroll deduction contributions
for all employees participating in an
automatic IRA arrangement made to
individual retirement accounts of a
trustee or issuer under the arrangement
that has been designated by the
employer, but only if the provider of
such accounts, and the investments
therein, are identified on the website
established under subparagraph
(F)(iii). The preceding sentence shall
not apply unless each participant is
notified in writing that the
participant's balance may be
transferred without cost or penalty to
another individual retirement account
established by or on behalf of the
participant. Such notice shall be in
paper form or, if the employee so
elects, electronic form.
``(iii) Employers may permit employee
to choose ira.--If the employer so
elects, the arrangement may provide for
an employee election to have payroll
deduction contributions made to any
individual retirement account specified
by the employee.
``(iv) Regulations.--The Secretary
may issue such regulations as are
necessary to carry out the purposes of
this subparagraph, including
establishment of procedures to assist
employers in connecting with certified
and available providers of individual
retirement accounts and to communicate
to individuals the importance of
investment diversification.
``(F) Model notice, etc.--The Secretary
shall--
``(i) provide a model notice, written
in a manner calculated to be
understandable to the average worker,
that is simple for employers to use--
``(I) to notify employees of
the requirement under this
section for the employer to
provide certain employees with
the opportunity to participate
in an automatic IRA
arrangement, and
``(II) to satisfy the
requirements of subparagraph
(B)(ii),
``(ii) provide model forms for
enrollment, including automatic
enrollment, in an automatic IRA
arrangement,
``(iii) establish a website or other
electronic means that small employers
and individuals can access and use to
obtain information on automatic IRA
arrangements (including clear,
standardized, easy-to-compare
information on fees and expenses and
investment returns in a format
prescribed by the Secretary) and to
obtain notices and forms, and
``(iv) establish a process--
``(I) for the provider of an
automatic IRA arrangement to
demonstrate to the Secretary
that the arrangement is
described in this paragraph and
meets the requirements
specified in paragraph (1)(B),
and
``(II) to certify any
arrangement that the Secretary
determines so demonstrates, to
regularly monitor compliance
and update such determinations
and certifications, and to list
all arrangements so certified
on the website described in
clause (iii) as appropriate for
use by employers and
participants.
The information referred to in clause (iii)
shall be provided in a manner designed to
assist employers and providers by facilitating
the identification by employers of private-
sector providers of individual retirement
accounts, including the provider's investment
options, that are appropriate for use in
automatic IRA arrangements.
``(G) Safe harbor for certain state-provided
arrangements.--An arrangement facilitated by an
employer shall not fail to be treated as an
automatic IRA arrangement merely because such
arrangement is provided or otherwise offered,
in whole or in part, by a State.
``(H) Individual retirement account.--For
purposes of this paragraph, the term
`individual retirement account' shall have the
meaning given such term by section 408(a),
except that such term shall include individual
retirement annuities (as defined in section
408(b)).''.
(2) Other rules applicable to automatic IRA
arrangements.--
(A) Penalty for failure to timely remit
contributions to automatic ira arrangements.--
Section 4975(c) is amended by adding at the end
the following new paragraph:
``(7) Special rule for automatic IRA arrangements.--
For purposes of paragraph (1), if an employer is
required under an automatic IRA arrangement (as defined
in section 414(aa)(1)(B)) to deposit amounts withheld
from an employee's compensation into an individual
retirement account (within the meaning of section
414(aa)(8)(H)) but fails to do so within the time
prescribed under section 414(aa)(8)(B)(i), such amounts
shall be treated as assets of the individual retirement
account.''.
(B) Waiver of early withdrawal penalty for
certain distributions following initial
election to participate in automatic ira
arrangement.--Section 72(t) is amended by
adding at the end the following new paragraph:
``(11) Distribution following initial election to
participate in automatic ira arrangement.--Paragraph
(1) shall not apply in the case of a distribution--
``(A) to an individual from an individual
retirement account (within the meaning of
section 414(aa)(8)(H)) that is part of an
automatic IRA arrangement (as defined in
section 414(aa)(8)(A)), and
``(B) made not later than 90 days after the
initial election under section
414(aa)(8)(A)(ii).''.
(C) Automatic IRA advisory group.--
(i) In general.--Not later than 90
days after the date of the enactment of
this Act, the Secretary of the Treasury
shall establish an Automatic IRA
Advisory Group (hereinafter in this
subparagraph referred to as the
``Advisory Group''). The purpose of the
Advisory Group shall be to make
recommendations, advise, and assist in
the Secretary's implementation and
administration of paragraphs (5), (6),
and (8) of section 414(aa) of the
Internal Revenue Code of 1986 with
respect to automatic IRA arrangements
in the best financial interest of
savers, including--
(I) the procedures and
criteria for the periodic
certification, website listing,
and monitoring of investment
options that meet the
requirements of those
paragraphs,
(II) user-friendly disclosure
regarding investment returns,
terms, fees, and expenses to
facilitate comparison,
(III) the use of low-cost
investment options,
(IV) the appropriate use of
electronic and paper methods to
provide notice and disclosure,
(V) any possible learnings or
efficiencies based on the
Secretary's procedures and
experience in approving nonbank
individual retirement account
trustees, and
(VI) such other related
matters as may be determined by
the Secretary.
(ii) Membership.--The Advisory Group
shall consist of not more than 15
members and shall be composed of--
(I) such individuals as the
Secretary may consider
appropriate to provide
expertise regarding the
financial needs and challenges
of lower- and middle-income
households,
(II) at least one individual
who is an expert in retirement-
related consumer protections or
who represents the general
public, and
(III) at least one
representative of the
Department of the Treasury.
(iii) Compensation.--The members of
the Advisory Group shall serve without
compensation.
(iv) Administrative support.--The
Department of the Treasury shall
provide appropriate administrative
support to the Advisory Group,
including technical assistance. The
Advisory Group may use the services and
facilities of such Department, with or
without reimbursement, as determined by
such Department.
(v) Report by advisory group.--Not
later than 1 year after the date of the
enactment of this Act, the Advisory
Group shall submit to the Secretary of
the Treasury a report containing its
recommendations. The Secretary may
request that the Advisory Group submit
subsequent reports.
(b) Excise Tax for Failure to Maintain or Facilitate
Automatic Contribution Plans or Arrangements.--
(1) In general.--Chapter 43 is amended by adding at
the end the following new section:
``SEC. 4980J. FAILURE TO MAINTAIN OR FACILITATE AUTOMATIC CONTRIBUTION
PLANS OR ARRANGEMENTS.
``(a) General Rule.--
``(1) In general.--There is hereby imposed a tax on
the failure of an employer to maintain or facilitate an
automatic contribution plan or arrangement.
``(2) Exceptions.--
``(A) Paragraph (1) shall not apply to an
employer to the extent such employer
participates in an arrangement under a
qualified State law.
``(B) Paragraph (1) shall not apply to an
employer with respect to any employee who is
eligible to participate in a different
automatic contribution plan or arrangement than
one or more other employees of the employer.
``(b) Amount of Tax.--
``(1) In general.--The amount of the tax imposed by
subsection (a) on any failure with respect to an
employee shall be $10 for each day in the noncompliance
period with respect to such failure.
``(2) Noncompliance period.--For purposes of this
section, the term `noncompliance period' means, with
respect to any failure, the period--
``(A) beginning on the date such failure
first occurs, and
``(B) ending on the earlier of--
``(i) the date such failure is
corrected, or
``(ii) with respect to any employer,
the date that is 3 months after the
last date on which the employee is
required to be eligible to participate
in an automatic contribution plan or
arrangement maintained or facilitated
by such employer.
``(3) Adjustment for inflation.--
``(A) In general.--In the case of any failure
relating to maintaining or facilitating a plan
or arrangement in a calendar year beginning
after 2023, the $10 amount under paragraph (1)
shall be increased by an amount equal to such
dollar amount multiplied by the cost-of-living
adjustment determined under section 1(f)(3) for
the calendar year determined by substituting
`calendar year 2022' for `calendar year 2016'
in subparagraph (A)(ii) thereof.
``(B) Rounding.--If any amount adjusted under
subparagraph (A) is not a whole dollar amount,
such amount shall be rounded to the nearest
whole dollar amount.
``(c) Limitations on Amount of Tax.--
``(1) Tax not to apply where failure not discovered
exercising reasonable diligence.--No tax shall be
imposed by subsection (a) on any failure during any
period for which it is established to the satisfaction
of the Secretary that none of the persons referred to
in subsection (e) knew, nor exercising reasonable
diligence would have known, that such failure existed.
``(2) Tax not to apply to failures corrected within
9\1/2\ months.--No tax shall be imposed by subsection
(a) on any failure if--
``(A) such failure was due to reasonable
cause and not to willful neglect, and
``(B) such failure is corrected during the
9\1/2\-month period beginning on the first date
any of the persons referred to in subsection
(e) knew that such failure existed, or
exercising reasonable diligence would have
known.
``(3) Overall limitation for unintentional
failures.--In the case of failures which are due to
reasonable cause and not to willful neglect--
``(A) General rule.--The tax imposed by
subsection (a) for failures during the taxable
year of the employer shall not exceed $500,000.
``(B) Taxable years in the case of certain
controlled groups.--For purposes of this
subparagraph, if not all persons who are
treated as a single employer for purposes of
this section have the same taxable year, the
taxable years taken into account shall be
determined under principles similar to the
principles of section 1561.
``(4) Waiver by secretary.--In the case of a failure
which is due to reasonable cause and not to willful
neglect, the Secretary may waive part or all of the tax
imposed by subsection (a) to the extent that the
payment of such tax would be excessive relative to the
failure involved.
``(d) Tax Not to Apply in Certain Cases.--This section shall
not apply in the case of--
``(1) any employer with respect to a plan or
arrangement that, during the prior calendar year, was
maintained or facilitated only by employers each of
which had no more than 5 employees receiving at least
$5,000 of compensation from the employer for such year,
``(2) any employer with respect to a governmental
plan (within the meaning of section 414(d)),
``(3) any employer with respect to a church plan
(within the meaning of section 414(e)), or
``(4) any employer that has been in existence for
fewer than 2 years, taking into account all predecessor
employers.
``(e) Liability for Tax.--The employer shall be liable for
the tax imposed by subsection (a) on a failure. All employers,
determined without regard to subsection (f)(2), shall be
jointly and severally liable for the liability of any other
employer with which they are aggregated under subsection
(f)(2).
``(f) Definitions.--For purposes of this section--
``(1) Automatic contribution plan or arrangement.--
The term `automatic contribution plan or arrangement'
has the meaning given such term under section 414(aa),
and
``(2) Employer.--The term `employer' includes all
employers treated as a single employer under subsection
(b), (c), (m), or (o) of section 414.
``(3) Qualified state law.--The term `qualified State
law' means a State law (as it may be amended from time
to time) that--
``(A) was enacted before the date of the
enactment of the Act to provide for
reconciliation pursuant to title II of S. Con.
Res. 14, and
``(B)(i) requires certain employers to
facilitate an automatic IRA arrangement
pursuant to a payroll deduction savings program
of the State, or
``(ii) allows certain employers to contribute
to, or participate in, a plan described in
section 413(c) of such Code established and
maintained by the State.''.
(2) Clerical amendment.--The table of sections for
chapter 43 is amended by adding at the end the
following new item:
``Sec. 4980J. Failure to maintain or facilitate automatic contribution
plans or arrangements.''.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2022.
SEC. 131102. DEFERRAL-ONLY ARRANGEMENTS.
(a) In General.--Section 401(k) is amended by adding at the
end the following new paragraph:
``(16) Deferral-only arrangement.--
``(A) In general.--A deferral-only
arrangement shall be treated as meeting the
requirements of paragraph (3)(A)(ii).
``(B) Deferral-only arrangement.--For
purposes of this paragraph, the term `deferral-
only arrangement' means any cash or deferred
arrangement which meets--
``(i) the automatic deferral
requirements of subparagraph (C),
``(ii) the elective contribution
requirement of subparagraph (D), and
``(iii) the requirements of
subparagraph (E) of paragraph (13).
``(C) Automatic deferral.--
``(i) In general.--The requirements
of this subparagraph shall be treated
as met if, under the arrangement, each
employee eligible to participate in the
arrangement is treated as having
elected to have the employer make
elective contributions in an amount
equal to the qualified percentage of
compensation.
``(ii) Election out.--The election
treated as having been made under
clause (i) shall cease to apply with
respect to any employee if such
employee makes an affirmative
election--
``(I) to not have such
contributions made, or
``(II) to make elective
contributions at a level
specified in such affirmative
election.
``(iii) Qualified percentage.--For
purposes of this subparagraph, with
respect to any employee, the term
`qualified percentage' means, in lieu
of the meaning given such term in
paragraph (13)(C)(iii), any percentage
determined under the arrangement if
such percentage is applied uniformly,
does not exceed 15 percent (10 percent
during the period described in
subclause (I)) and is at least--
``(I) 6 percent during the
period ending on the last day
of the first plan year which
begins after the date on which
the first elective contribution
described in clause (i) is made
with respect to such employee,
``(II) 7 percent during the
first plan year following the
plan year described in
subclause (I),
``(III) 8 percent during the
first plan year following the
plan year described in
subclause (II),
``(IV) 9 percent during the
first plan year following the
plan year described in
subclause (III), and
``(V) 10 percent during any
subsequent plan year.
``(D) Elective contributions.--
``(i) In general.--The requirements
of this subparagraph are met if under
the plan containing the arrangement--
``(I) the only contributions
which may be made are elective
contributions of employees who
are eligible to participate in
the arrangement, and
``(II) the aggregate amount
of such elective contributions
which may be made with respect
to any employee for any
calendar year shall not exceed
the amount in effect for the
taxable year under section
219(b)(5) (determined without
regard to subparagraph (B)
thereof).
``(ii) Cross reference.--For catch-up
contributions for individuals age 50 or
over, see section 414(v).''.
(b) Catch-up Contributions for Individuals Age 50 and Over.--
(1) Section 414(v)(2)(B)(i) is amended by inserting
``, 401(k)(16),'' after ``401(k)(11)''.
(2) Section 414(v)(2)(B) is amended by adding at the
end thereof the following clause:
``(iii) In the case of an applicable
employer plan described in section
401(k)(16), the applicable dollar
amount is $1,000.''.
(3) Section 414(v)(2)(C) is amended--
(A) by striking ``(B)(i) and'' and inserting
``(B)(i),'' and by inserting after
``subparagraph (B)(ii)'' the following: ``, and
the $1,000 amount described in subparagraph
(B)(iii)'',
(B) inserting after ``2005'' the following:
``(the calendar quarter beginning July 1, 2020,
in the case of the $1,000 amount described in
subparagraph (B)(iii))'', and
(C) by inserting before the period at the end
the following ``($100 in the case of an
increase in the amount described in
subparagraph (B)(iii) which is not a multiple
of $100)''.
(c) Plans Not Treated as Top-heavy Plans.--Section
416(g)(4)(H)(i) is amended by striking ``or 401(k)(13)'' and
inserting ``401(k)(13), or 401(k)(16)''.
(d) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2022.
SEC. 131103. INCREASE IN CREDIT LIMITATION FOR SMALL EMPLOYER PENSION
PLAN STARTUP COSTS INCLUDING FOR AUTOMATIC
CONTRIBUTION PLAN OR ARRANGEMENT.
(a) Years for Which Credit Is Allowed.--Section 45E(b)(1) is
amended by striking ``2 taxable years'' and inserting ``4
taxable years''.
(b) Special Rule for Employers With 25 or Fewer Employees.--
Section 45E(a) is amended by inserting before the period at the
end the following: ``(100 percent of such costs in the case of
an eligible employer with 25 or fewer employees, as determined
by substituting `25' for `100' in section 408(p)(2)(C)(i))''.
(c) Credit Not to Apply to Certain Plans or Arrangements.--
(1) No credit with respect to deferral-only
arrangements.--Section 45E(d)(2) is amended by
inserting ``(other than a deferral-only arrangement (as
defined in section 401(k)(16)(B))'' before the period
at the end.
(2) Termination with respect to plans other than
automatic contribution plans or arrangements.--Section
45E is amended by adding at the end the following new
subsection:
``(f) Credit Terminated for Non-automatic Contribution
Plans or Arrangements After 2022.--In the case of taxable years
beginning after December 31, 2022, no credit shall be allowed
under this section for amounts paid or incurred with respect to
an eligible employer plan that is not an automatic contribution
plan or arrangment (as defined in section 414(aa)).''.
(d) Effective Date.--The amendment made by this section shall
apply to taxable years beginning after December 31, 2021.
SEC. 131104. CREDIT FOR CERTAIN SMALL EMPLOYER AUTOMATIC RETIREMENT
ARRANGEMENTS.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
section:
``SEC. 45U. CREDIT FOR CERTAIN SMALL EMPLOYER AUTOMATIC RETIREMENT
ARRANGEMENTS.
``(a) General Rule.--For purposes of section 38, in the case
of an eligible employer, the small employer automatic
retirement arrangement credit determined under this section for
any taxable year in the credit period is $500.
``(b) Definitions.--For purposes of this section--
``(1) Eligible employer.--The term `eligible
employer' means, with respect to the calendar year in
which the taxable year begins, an employer which--
``(A)(i) participates in an automatic IRA
arrangement (as defined in section 414(aa)(8)),
or an arrangement described in 4980J(a)(2)(A),
or
``(ii) maintains a deferral-only arrangement
(as defined in section 401(k)(16)),
``(B) is described in 408(p)(2)(C)(i), and
``(C) did not maintain an eligible employer
plan during the portion of the calendar year
preceding the commencement of such arrangement,
or adoption of such deferral-only arrangement,
and the 2 preceding calendar years.
``(2) Credit period.--The term `credit period' means
the first 4 calendar years beginning after the date of
the enactment of this section in which the eligible
employer participates in the arrangement or maintains
the deferral-only arrangement.
``(3) Eligible employer plan.--The term `eligible
employer plan' means a qualified employer plan within
the meaning of section 4972(d).
``(c) Other Rules.--For purposes of this section, the rules
of section 45E(e) shall apply.''.
(b) Credit Allowed as Part of General Business Credit.--
Section 38(b) of is amended by striking ``plus'' at the end of
paragraph (32), by striking the period at the end of paragraph
(33) and inserting ``, plus'', and by adding at the end the
following new paragraph:
``(34) the small employer automatic retirement
arrangement credit determined under section 45U(a).''.
(c) Clerical Amendment.--The table of sections for subpart D
of part IV of subchapter A of chapter 1 is amended by adding at
the end the following new item:
``Sec. 45U. Credit for certain small employer automatic retirement
arrangements.''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
PART 2--SAVER'S MATCH
SEC. 131201. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL AND IRA
CONTRIBUTIONS BY CERTAIN INDIVIDUALS.
(a) In General.--Subchapter B of chapter 65 is amended by
adding at the end the following new section:
``SEC. 6433. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL AND IRA
CONTRIBUTIONS BY CERTAIN INDIVIDUALS.
``(a) In General.--
``(1) Allowance of credit.--Any eligible individual
who makes qualified retirement savings contributions
for the taxable year shall be allowed a credit for such
taxable year in an amount equal to the applicable
percentage of so much of the qualified retirement
savings contributions made by such eligible individual
for the taxable year as does not exceed $1,000.
``(2) Payment of credit.--The credit under this
section shall be--
``(A) treated as allowed by subpart C of part
IV of subchapter A of chapter 1, and
``(B) paid by the Secretary as a contribution
(as soon as practicable after the eligible
individual has filed a tax return making a
claim for such credit for the taxable year) to
the applicable retirement savings vehicle of an
eligible individual.
``(b) Applicable Percentage.--For purposes of this section--
``(1) In general.--Except as provided in paragraph
(2), the applicable percentage is 50 percent.
``(2) Phaseout.--The percentage under paragraph (1)
shall be reduced (but not below zero) by the number of
percentage points which bears the same ratio to 50
percentage points as--
``(A) the excess of--
``(i) the taxpayer's modified
adjusted gross income for such taxable
year, over
``(ii) the applicable dollar amount,
bears to
``(B) the phaseout range.
If any reduction determined under this paragraph is not
a whole percentage point, such reduction shall be
rounded to the next lowest whole percentage point.
``(3) Applicable dollar amount; phaseout range.--
``(A) Joint returns.--Except as provided in
subparagraph (B)--
``(i) the applicable dollar amount is
$50,000, and
``(ii) the phaseout range is $20,000.
``(B) Other returns.--In the case of--
``(i) a head of a household (as
defined in section 2(b)), the
applicable dollar amount and the
phaseout range shall be \3/4\ of the
amounts applicable under subparagraph
(A) (as adjusted under subsection (h)),
and
``(ii) any taxpayer who is not filing
a joint return and who is not a head of
a household (as so defined), the
applicable dollar amount and the
phaseout range shall be \1/2\ of the
amounts applicable under subparagraph
(A) (as so adjusted).
``(4) Exception; minimum credit.--In the case of an
eligible individual with respect to whom (without
regard to this paragraph) the credit determined under
subsection (a)(1) is greater than zero but less than
$100, the credit allowed under this section shall be
$100.
``(c) Eligible Individual.--For purposes of this section--
``(1) In general.--The term `eligible individual'
means any individual if such individual has attained
the age of 18 as of the close of the taxable year.
``(2) Dependents and full-time students not
eligible.--The term `eligible individual' shall not
include--
``(A) any individual with respect to whom a
deduction under section 151 is allowed to
another taxpayer for a taxable year beginning
in the calendar year in which such individual's
taxable year begins, and
``(B) any individual who is a student (as
defined in section 152(f)(2)).
``(d) Qualified Retirement Savings Contributions.--For
purposes of this section--
``(1) In general.--The term `qualified retirement
savings contributions' means, with respect to any
taxable year, the sum of--
``(A) the amount of the qualified retirement
contributions (as defined in section 219(e))
made by the eligible individual,
``(B) the amount of--
``(i) any elective deferrals (as
defined in section 402(g)(3)) of such
individual, and
``(ii) any elective deferral of
compensation by such individual under
an eligible deferred compensation plan
(as defined in section 457(b)) of an
eligible employer described in section
457(e)(1)(A),
``(C) the amount of voluntary employee
contributions by such individual to any
qualified retirement plan (as defined in
section 4974(c)), and
``(D) the amount of contributions made by
such individual to the ABLE account (within the
meaning of section 529A) of which such
individual is the designated beneficiary.
Such term shall not include any amount attributable to
a payment under subsection (a)(2).
``(2) Reduction for certain distributions.--
``(A) In general.--The qualified retirement
savings contributions determined under
paragraph (1) for a taxable year shall be
reduced (but not below zero) by the aggregate
distributions received by the individual during
the testing period from any entity of a type to
which contributions under paragraph (1) may be
made.
``(B) Testing period.--For purposes of
subparagraph (A), the testing period, with
respect to a taxable year, is the period which
includes--
``(i) such taxable year,
``(ii) the 2 preceding taxable years,
and
``(iii) the period after such taxable
year and before the due date (including
extensions) for filing the return of
tax for such taxable year.
``(C) Excepted distributions.--There shall
not be taken into account under subparagraph
(A)--
``(i) any distribution referred to in
section 72(p), 401(k)(8), 401(m)(6),
402(g)(2), 404(k), or 408(d)(4),
``(ii) any distribution to which
section 408(d)(3) or 408A(d)(3)
applies,
``(iii) any portion of a distribution
if such portion is transferred or paid
in a rollover contribution (as defined
in section 402(c), 403(a)(4),
403(b)(8), 408A(e), or 457(e)(16)) to
an account or plan to which qualified
retirement contributions can be made,
and
``(iv) the amount of distributions
under a qualified ABLE program (within
the meaning of section 529A) that is
equal to amounts not included in gross
income with respect to such
distributions under section
529A(c)(1)(B) (relating to
distributions for qualified disability
expenses).
``(D) Treatment of distributions received by
spouse of individual.--For purposes of
determining distributions received by an
individual under subparagraph (A) for any
taxable year, any distribution received by the
spouse of such individual shall be treated as
received by such individual if such individual
and spouse file a joint return for such taxable
year and for the taxable year during which the
spouse receives the distribution.
``(e) Applicable Retirement Savings Vehicle.--
``(1) In general.--The term `applicable retirement
savings vehicle' means an account or plan elected by
the eligible individual under paragraph (2).
``(2) Election.--Any such election to have
contributed the amount determined under subsection (a)
shall be to an account or plan which--
``(A) is a Roth IRA or a designated Roth
account (within the meaning of section 402A) of
an applicable retirement plan (as defined in
section 402A(e)(1)),
``(B) is for the benefit of the eligible
individual,
``(C) accepts contributions made under this
section, and
``(D) is designated by such individual (in
such form and manner as the Secretary may
provide).
``(f) Other Definitions and Special Rules.--
``(1) Modified adjusted gross income.--For purposes
of this section, the term `modified adjusted gross
income' means adjusted gross income--
``(A) determined without regard to sections
911, 931, and 933, and
``(B) determined without regard to any
exclusion or deduction allowed for any
qualified retirement savings contribution made
during the taxable year.
``(2) Treatment of contributions.--In the case of any
contribution under subsection (a)(2)--
``(A) except as otherwise provided in this
section or by the Secretary under regulations,
such contribution shall be treated as--
``(i) an elective deferral made by
the individual which is a designated
Roth contribution, if contributed to an
applicable retirement plan, or
``(ii) as a Roth IRA contribution
made by such individual, if contributed
to a Roth IRA, and
``(B) such contribution shall not be taken
into account with respect to any applicable
limitation under sections 402(g)(1), 403(b),
408(a)(1), 408(b)(2)(B), 408A(c)(2), 414(v)(2),
415(c), or 457(b)(2), and shall be disregarded
for purposes of sections 401(a)(4), 401(k)(3),
401(k)(11)(B)(i)(III), and 416.
``(3) Treatment of qualified plans, etc.--A plan or
arrangement to which a contribution is made under this
section shall not be treated as violating any
requirement under section 401, 403, 408A, or 457 solely
by reason of accepting such contribution.
``(4) Erroneous credits.--
``(A) In general.--If any contribution is
erroneously paid under subsection (a)(2),
including a payment that is not made to an
applicable retirement savings vehicle, the
amount of such erroneous payment shall be
treated as an underpayment of tax (other than
for purposes of part II of subchapter A of
chapter 68) for the taxable year in which the
Secretary determines the payment is erroneous.
``(B) Distribution of erroneous credits.--In
the case of a contribution to which
subparagraph (A) applies--
``(i) section 72 shall not apply to
the distribution of such contribution
(and any income attributable thereto)
if such distribution is received not
later than the day prescribed by law
(including extensions of time) for
filing the individual's return for such
taxable year, and
``(ii) any plan or arrangement from
which such a distribution is made under
this subparagraph shall not be treated
as violating any requirement under
section 401, 403, 408A, or 457 solely
by reason of making such distribution.
``(g) Provision by Secretary of Information Relating to
Contributions.--In the case of an amount elected by an eligible
individual to be contributed to an account or plan under
subsection (e)(2), the Secretary shall provide guidance to the
custodian of the account or the plan sponsor, as the case may
be, detailing the treatment of such contribution under
subsection (f)(2) and the reporting requirements with respect
to such contribution under section 131201(c)(2) of the Act to
provide for reconciliation pursuant to title II of S. Con. Res.
14.
``(h) Inflation Adjustments.--
``(1) In general.--In the case of any taxable year
beginning in a calendar year after 2020, each of the
dollar amounts in subsections (a)(1) and (b)(3)(A)(i)
shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2019'
for `calendar year 2016' in subparagraph
(A)(ii) thereof.
``(2) Rounding.--Any increase determined under
paragraph (1) shall be rounded to the nearest multiple
of--
``(A) $100 in the case of an adjustment of
the amount in subsection (a)(1), and
``(B) $1,000 in the case of an adjustment of
the amount in subsection (b)(3)(A)(i).''.
(b) Treatment of Certain Possessions.--
(1) Payments to possessions with mirror code tax
systems.--The Secretary of the Treasury shall pay to
each possession of the United States which has a mirror
code tax system amounts equal to the loss (if any) to
that possession by reason of the amendments made by
this section. Such amounts shall be determined by the
Secretary of the Treasury based on information provided
by the government of the respective possession.
(2) Payments to other possessions.--The Secretary of
the Treasury shall pay to each possession of the United
States which does not have a mirror code tax system
amounts estimated by the Secretary of the Treasury as
being equal to the aggregate benefits (if any) that
would have been provided to residents of such
possession by reason of the amendments made by this
section if a mirror code tax system had been in effect
in such possession. The preceding sentence shall not
apply unless the respective possession has a plan,
which has been approved by the Secretary of the
Treasury, under which such possession will promptly
distribute such payments to its residents.
(3) Coordination with credit allowed against united
states income taxes.--No credit shall be allowed
against United States income taxes under section 6433
of the Internal Revenue Code of 1986 (as added by this
section) to any person--
(A) to whom a credit is allowed against taxes
imposed by the possession by reason of the
amendments made by this section, or
(B) who is eligible for a payment under a
plan described in paragraph (2).
(4) Mirror code tax system.--For purposes of this
subsection, the term ``mirror code tax system'' means,
with respect to any possession of the United States,
the income tax system of such possession if the income
tax liability of the residents of such possession under
such system is determined by reference to the income
tax laws of the United States as if such possession
were the United States.
(5) Treatment of payments.--For purposes of section
1324 of title 31, United States Code, the payments
under this subsection shall be treated in the same
manner as a refund due from a credit provision referred
to in subsection (b)(2) of such section.
(c) Administrative Provisions.--
(1) Deficiencies.--Section 6211(b)(4) is amended by
striking ``and 7527A'' and inserting ``7527A, and
6433''.
(2) Reporting.--The Secretary of the Treasury shall--
(A) amend Form 5500 to require separate
reporting of the aggregate amount of
contributions received by the plan during the
year under section 6433 of the Internal Revenue
Code of 1986 (as added by this section), and
(B) amend Form 5498 to require similar
reporting with respect to individual retirement
accounts (as defined in section 408 of such
Code) and individual retirement annuities (as
defined in section 408(b) of such Code).
(d) Payment Authority.--Section 1324(b)(2) of title 31,
United States Code, is amended by striking ``or 7527A'' and
inserting ``7527A, or 6433''.
(e) Conforming Amendments.--
(1) Section 25B is amended by striking subsections
(a) through (f) and inserting the following:
``For payment of credit related to qualified retirement savings
contributions, see section 6433.''.
(2) The table of sections for subchapter B of chapter
65 is amended by adding at the end the following new
item:
``Sec. 6433. Matching payments for elective deferral and IRA
contributions by certain individuals.''.
(f) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2024.
SEC. 131202. DEADLINE TO FUND IRA WITH TAX REFUND.
(a) In General.--Section 219(f)(3) is amended--
(1) by striking ``is made not later than'' and
inserting ``is made--
``(i) not later than'',
(2) by striking the period at the end and inserting
``, or'', and
(3) by adding at the end the following new clause:
``(ii) by direct deposit by the
Secretary pursuant to an election on
the return for such taxable year to
contribute all or a portion of any
amount owed to the taxpayer to an
individual retirement account of the
taxpayer, but only if the return is
filed not later than the date described
in clause (i).''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2022.
Subtitle C--Child Care Access and Equity
SEC. 132001. CHILD CARE ACCESS.
Part A of title IV of the Social Security Act (42 U.S.C. 601-
619) is amended by inserting after section 418 the following:
``SEC. 418A. CHILD CARE ACCESS.
``(a) Establishing State Child Care Information Networks.--
``(1) Development.--The Secretary shall conduct a
stakeholder engagement process to make recommendations
about the development and implementation of the State
Child Care Information Networks to be operated by the
States, Indian tribes, and territories. The stakeholder
engagement process may include parents, center-based
child care providers, home-based child care providers,
child care policy experts, trade associations, labor
unions, and other organizations representing child care
providers.
``(2) Models.--The Secretary may use funds made
available to the Secretary for administrative purposes
to establish national technology models for State Child
Care Information Networks, and guidance on development
and establishment of interoperable data governance
systems that address privacy and allow for sharing and
storing data across information systems, including
guidance on alignment with State child care consumer
education websites.
``(3) Data exchange standards and interoperability.--
``(A) Designation and use of data exchange
standards.--
``(i) Designation.--The Secretary
shall, in consultation with an
interagency work group established by
the Office of Management and Budget and
considering State government
perspectives, designate data exchange
standards for necessary categories of
information that the Child Care
Information Network is required to
electronically exchange with another
agency under applicable Federal law.
``(ii) Data exchange standards must
be nonproprietary and interoperable.--
The data exchange standards designated
under clause (i) shall, to the extent
practicable, be nonproprietary and
interoperable.
``(iii) Other requirements.--In
designating data exchange standards
under this subparagraph, the Secretary
shall, to the extent practicable,
incorporate--
``(I) interoperable standards
developed and maintained by an
international voluntary
consensus standards body, as
defined by the Office of
Management and Budget;
``(II) interoperable
standards developed and
maintained by intergovernmental
partnerships, such as the
National Information Exchange
Model; and
``(III) interoperable
standards developed and
maintained by Federal entities
with authority over contracting
and financial assistance.
``(B) Data exchange standards for federal
reporting.--
``(i) Designation.--The Secretary
shall, in consultation with an
interagency work group established by
the Office of Management and Budget,
and considering State government
perspectives, designate data exchange
standards to govern Federal reporting
and exchange requirements under
applicable Federal law.
``(ii) Requirements.--The data
exchange reporting standards required
by clause (i) shall, to the extent
practicable--
``(I) incorporate a widely
accepted, nonproprietary,
searchable, computer-readable
format;
``(II) be consistent with and
implement applicable accounting
principles;
``(III) be implemented in a
manner that is cost-effective
and improves program efficiency
and effectiveness; and
``(IV) be capable of being
continually upgraded as
necessary.
``(iii) Incorporation of
nonproprietary standards.--In
designating data exchange standards
under this subparagraph, the Secretary
shall, to the extent practicable,
incorporate existing nonproprietary
standards.
``(iv) Rule of interpretation.--
Nothing in this subparagraph shall be
construed to require a change to
existing data exchange standards for
Federal reporting under this section if
the Secretary finds the standards to be
effective and efficient.
``(4) State requirements.--A State meets the
requirements of this paragraph with respect to a
quarter if--
``(A) during the quarter, the State has
maintained an up-to-date, publicly available
compilation of child care providers who are
registered, licensed, or regulated by the State
(in this section referred to as the `State
Child Care Information Network'), that
includes, with respect to each such provider--
``(i) where the provider is located,
and a description of any fees imposed
by the provider and the services
offered by the provider;
``(ii) whether the provider is
providing child care services that may
be funded under section 418;
``(iii) the hours of operation of the
provider;
``(iv) whether the provider offers
child care to the general public, and
if so, where an application for child
care services from the provider may be
obtained, or a direct link to such an
application;
``(v) the total number of children,
by age group, for whom the provider is
providing child care services, and how
many openings are available with the
provider by age group;
``(vi) whether the provider has a
waiting list for child care services,
and if so, the average length of time
parents are on the waiting list before
being offered child care services and
how to join the list;
``(vii) the type of child care (such
as family child care or center-based
care) provided, differentiating between
licensed and license-exempt child care
providers; and
``(viii) information about the
languages spoken by staff of the child
care provider, and such other
information as the Secretary may
require to help parents determine
whether the provider can meet their
child care needs and the parents can
enroll a child in care, such as quality
indicators or accreditation status;
``(B) the State Child Care Information
Network--
``(i) by grant or contract, has been
maintained or jointly maintained by--
``(I) a child care resource
and referral agency that has
operated in the last fiscal
year;
``(II) a local child care
resource and referral agency
that has operated in the most
recently completed fiscal year
and has applied to become a
State Child Information
Network; or
``(III) the lead agency, the
State licensing entity, or
other appropriate entities;
``(ii) may have been maintained in
coordination with, or jointly with,
other federally funded systems, so long
as there is no supplantation of
funding; and
``(iii) has been made--
``(I) publicly available,
including through the Internet
and by telephone, to families
seeking information about
obtaining child care services;
and
``(II) accessible to State,
county, and other government
staff involved in the provision
of child care;
``(C) the State requires each provider listed
in the State Child Care Information Network
(or, at the option of the provider, another
entity designated by the provider) to update
the information described in clauses (v) and
(vi) of subparagraph (A) on a weekly basis, and
to update all other information described in
subparagraph (A) not less frequently than
quarterly, and ensures that publicly available
information in the State Child Care Information
Network indicates when the slot availability
information about the provider was most
recently updated; and
``(D) the State has submitted to the
Secretary a plan that includes an estimate of
the total capacity of licensed, regulated, and
registered provider slots, and a description of
the eligible expenditures the State will make
in the quarter, which may be submitted with
other plans required by the Secretary.
``(b) Funding State Child Care Information Networks.--
``(1) Start-up funds.--
``(A) Grants.--For each fiscal year specified
in subparagraph (C), the Secretary shall make
grants to lead agencies to conduct activities
related to the planning and implementation of
State Child Care Information Networks, which
may include scaling systems such as non-profit
community-based referral registries, staffed
Family Child Care Networks, and child care
resource and referral systems.
``(B) Distribution.--The Secretary shall
distribute the grant funds to the States that
are not territories in accordance with the
formula referred to in section 418(a)(2)(B),
and to the territories according to relative
need.
``(C) Appropriation.--Out of any money in the
Treasury not otherwise appropriated, there are
appropriated to the Secretary $200,000,000 for
each of fiscal years 2022 and 2023 for grants
under this paragraph.
``(2) Matching grants.--
``(A) In general.--The Secretary shall pay to
each State that meets the requirements of
subsection (a)(4) with respect to a calendar
quarter in any of fiscal years 2022 through
2026 an amount equal to 75 percent of the
eligible expenditures of the State in the
quarter, subject to subsection (d)(3).
``(B) Eligible expenditures.--In this
section, the term `eligible expenditures' means
all of the following, but only to the extent
supplementing, and not supplanting, funds made
available under other law:
``(i) State child care information
network.--Expenditures to carry out
subsection (a)(4).
``(ii) Ease of application for
subsidized child care certificate.--
Expenditures to establish an option, as
indicated by the State in a plan
describing planned eligible
expenditures (which may be submitted
with other plans required by the
Secretary)--
``(I) for a family to file an
application for a subsidized
child care certificate with a
child care provider, for the
provider to submit the
application to the State for
processing, or for the lead
agency, a local child care
resource and referral agency,
or other entity under grant or
contract to respond to the
family;
``(II) to establish a
statewide common application
for child care, which--
``(aa) allows an
application with
respect to a child to
be submitted
simultaneously to
multiple child care
providers;
``(bb) allows the
application to be for a
particular site and
schedule;
``(cc) is considered
an application directly
to each such provider
involved for purposes
of any decision of the
provider regarding a
wait list or an open
slot based on the
application date;
``(dd) safeguards
confidential
information; and
``(ee) allows for
such a provider to seek
and collect information
not on the common
application so that the
provider may determine
the priority to be
given to the applicant
on any waiting list or
for other specialized
admission criteria such
as disability services;
or
``(III) to enable child care
providers to respond to
families through other
application methods.
``(iii) Expenditures for technology
needed to participate in the state
child care information network.--
Expenditures for child care providers,
lead agencies, and contractors to
support system-building and system-
implementation activities associated
with the State Child Care Information
Network, including data
interoperability and the installation
and maintenance of equipment and
software needed to develop, implement,
maintain, and provide electronic access
to the State Child Care Information
Network.
``(iv) Participation incentives.--
Expenditures to provide financial
incentives and support to child care
providers for whom participating in the
State Child Care Information Network
would be costly or time consuming. In
providing the incentives, a lead
agency--
``(I) shall take into account
the differential burden on
varying types of providers to
ensure that the incentives are
sufficient to encourage all
types of providers, including
family-based providers, to
participate in the State Child
Care Information Network;
``(II) may coordinate with
staffed Family Child Care
Networks, child care resource
and referral organizations,
labor unions, labor-management
partnerships, or other
community-based organizations,
to ensure that home-based
providers are able to
participate in the State Child
Care Information Network; and
``(III) may reimburse
coordinating partners and other
entities for expenses
associated with helping
providers participate in the
Child Care Information Network
and provide information
required under subsection
(a)(4)(A).
``(C) Appropriation.--Out of any money in the
Treasury not otherwise appropriated, there are
appropriated to the Secretary for each of
fiscal years 2022 through 2026 such sums as are
necessary for grants under this paragraph.
``(c) HHS Participating Child Care Provider Certification.--
``(1) In general.--The Secretary shall--
``(A) maintain current information on child
care providers who are qualified to receive the
HHS Participating Child Care Provider
Certification for a calendar quarter, and
historical information on child care providers
who were so qualified for a prior calendar
quarter, including a quarter in a prior year,
(in this section referred to as the `HHS
Participating Child Care Provider
Certification') based on the information
submitted by lead agencies;
``(B) update the list of providers who are so
qualified, 1 month before the end of each
quarter, and electronically share with the
Internal Revenue Service current and historical
information on the providers who are so
qualified; and
``(C) at the end of each calendar year and on
request of any provider listed in the HHS
Participating Child Care Provider Certification
who has qualified for the certification for an
entire calendar quarter, provide the provider
and the lead agency of the jurisdiction in
which the provider is located written
documentation of the quarters with respect to
which the provider was so qualified.
``(2) Qualifications.--A child care provider is
qualified to receive the HHS Participating Child Care
Provider Certification for a calendar quarter if the
provider--
``(A)(i) is licensed with a State as a
provider of child care services, or is in a
license-exempt category of providers that meets
all health and safety standards and has zero
unresolved violations;
``(ii) is providing child care services that
may be funded under section 418;
``(iii) has submitted to the State Child Care
Information Network, on a weekly basis, the
information on all available child care slots
with the provider required under subsection
(a)(4)(A)(v), and the waiting list information
required under subsection (a)(4)(A)(vi);
``(iv) makes child care slots available to
the general public, when available, subject to
any clearly explained priority system; and
``(v) is in compliance with other
requirements set by the State regarding
applications for or inquiries about available
child care slots; or
``(B) was so qualified for the entire 3-month
period preceding the most recent update made
under paragraph (1)(B).
``(d) Administrative Provisions.--
``(1) Accuracy checks.--The Secretary shall
periodically conduct accuracy checks of randomly
sampled child care providers participating in any State
Child Care Information Network to determine whether the
providers are updating their slot availability on a
weekly basis, and if not, estimate the statewide rate
at which the providers are doing so.
``(2) Privacy; security.--The Secretary shall issue
guidance regarding data interoperability (in accordance
with the data exchange standards for interoperability)
and the privacy and security of personally identifiable
information in any State Child Care Information
Network.
``(3) Penalty for excessive errors in state child
care information network.--The percentage specified in
subsection (b)(2)(A) with respect to a State shall be
70 percent if--
``(A) a check conducted under paragraph (1)
of this subsection reveals that the number of
child care providers erroneously included or
erroneously not included in the State Child
Care Information Network is at least 10 percent
of the number of providers included in the
network; and
``(B) the State has not submitted to the
Secretary a report demonstrating that action
has been taken to reduce that error rate to
less than 10 percent.
``(4) Eligible expenditures.--The Secretary shall
issue guidance to States which specifies the
expenditures that will be considered eligible
expenditures for purposes of this section.
``(5) Publication of amount of eligible expenditures
of each state.--Before issuing grant awards for fiscal
year 2023 or a succeeding fiscal year, the Secretary,
in consultation with the States, shall annually publish
the amount of eligible expenditures of each State in
the preceding fiscal year.
``(e) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated $50,000,000 for
each of fiscal years 2022 through 2026 for administrative
expenses in carrying out subsections (c) and (d).''.
SEC. 132002. INFRASTRUCTURE GRANTS TO IMPROVE CHILD CARE SAFETY.
Part A of title IV of the Social Security Act (42 U.S.C. 601-
619) is further amended by inserting after section 418A the
following:
``SEC. 418B. INFRASTRUCTURE GRANTS TO IMPROVE CHILD CARE SAFETY.
``(a) Child Care Facilities Grants.--
``(1) Grants to states.--
``(A) In general.--The Secretary shall award
grants to States for the purpose of helping
child care providers acquire, construct,
renovate, or improve child care facilities,
including adapting, reconfiguring, or expanding
facilities.
``(B) Duration of grants.--The Secretary
shall award grants under this paragraph within
12 months after the date of the enactment of
this section, for a period of not more than 5
years.
``(C) Plan approval required before using
grant.--A State to which a grant is made under
this paragraph shall not obligate or expend the
grant funds unless the State has submitted to
the Secretary, and the Secretary has approved,
a plan that--
``(i) includes an analysis or
assessment, in such form and manner as
the Secretary may require, of the need
of the State for child care
infrastructure;
``(ii) is submitted at such time, in
such manner, and containing such other
information as the Secretary may
require, which information shall--
``(I) be disaggregated as the
Secretary may require; and
``(II) include a plan to use
a portion of the grant funds to
report to the Secretary on the
effects of using the grant
funds to improve child care
facilities, including center-
based and home-based child care
facilities; and
``(iii) complies with paragraph (3),
if applicable.
``(D) Requirement.--In allocating grants
awards under this paragraph, the Secretary
shall require approved plans to include
elements that--
``(i) provide for improving center-
based and home-based child care
programs to meet or surpass State
health and safety standards, or include
a project designed so that a facility
is expected to meet or surpass State
health and safety standards on
completion of the project;
``(ii) aim to meet specific needs
across urban, suburban, or rural areas
as determined by the State;
``(iii) show evidence of
collaboration with--
``(I) local government
officials;
``(II) other State agencies;
``(III) nongovernmental
organizations, such as--
``(aa) certified
community development
financial institutions
as defined in section
103 of the Community
Development Banking and
Financial Institutions
Act of 1994 (12 U.S.C.
4702) that have been
certified by the
Community Development
Financial Institutions
Fund (12 U.S.C. 4703);
and
``(bb) organizations
that have demonstrated
experience in--
``(AA)
providing
technical or
financial
assistance for
the
acquisition,
construction,
renovation, or
improvement of
child care
facilities;
``(BB)
providing
technical,
financial, or
managerial
assistance to
child care
providers; and
``(CC)
securing
private sources
of capital
financing for
child care
facilities or
other community
development
projects
eligible for
assistance from
a child care
assistance
program; and
``(IV) local community
organizations, such as--
``(aa) child care
providers;
``(bb) community care
agencies;
``(cc) resource and
referral agencies; and
``(dd) labor unions
and other employers of
infrastructure trades
that pay the prevailing
wage; and
``(iv) provide for improving the
facilities of child care providers who
qualify for the HHS Participating Child
Care Provider Certification for at
least 1 fiscal quarter before the date
of application for the grant.
``(E) Matching requirement.--
``(i) In general.--As a condition of
the receipt of a grant under this
paragraph, a State shall agree to make
available, directly or through
donations from public or private
entities, contributions with respect to
the costs to be covered by the grant,
which may be provided in cash or in
kind, in an amount equal to 10 percent
of the funds provided through the
grant.
``(ii) Determination of amount
contributed.--Such a matching
contribution may include philanthropic
or private-sector funds.
``(F) Amount limit.--The annual amount of a
grant under this paragraph may not exceed
$250,000,000.
``(G) Prohibition.--The Secretary may not, as
a condition of making a grant under this
paragraph or section 418D, retain an interest
in any property, including any project
involving a privately-owned family child care
home or tribal land.
``(H) Report.--Not later than 6 months after
the last day of the grant period, a State to
which a grant is made under this paragraph
shall submit to the Secretary the report
referred to in subparagraph (C)(ii)(II)--
``(i) to determine the effects of the
grant in constructing, renovating, or
improving child care facilities,
including any changes in response to
public health guidelines or efforts
associated with natural disaster
emergency preparedness and response and
any effects on access to child care;
and
``(ii) to provide such other
information as the Secretary may
require.
``(I) Return of grant if plan not approved
within 2 years.--A State to which a grant is
made under this paragraph shall remit the grant
to the Secretary if the Secretary has not
provided the approval required by subparagraph
(C) within 2 years after the date the grant is
made.
``(2) Grants to intermediary organizations.--
``(A) In general.--The Secretary may award
grants to intermediary organizations, such as
certified community development financial
institutions or other organizations with
demonstrated experience in child care
facilities financing, for the purpose of
providing technical assistance, capacity-
building, and financial products to develop or
finance child care facilities.
``(B) Application.--A grant under this
paragraph may be made only to an intermediary
organization that submits to the Secretary an
application at such time, in such manner, and
containing such information as the Secretary
may require, that complies with paragraph (3)
if applicable.
``(C) Consultation.--In selecting
intermediary organizations for grants under
this paragraph, the Secretary shall conduct
consultations with organizations that--
``(i) demonstrate experience in child
care facility financing or related
community facility financing;
``(ii) demonstrate the capacity to
assist States and local governments in
developing child care facilities and
programs;
``(iii) demonstrate the ability to
leverage grant funding to support
financing tools to build the capacity
of child care providers, such as
through credit enhancements;
``(iv) propose to focus on child care
facilities that operate under
nontraditional hours;
``(v) propose to meet a diversity of
needs across urban, suburban, and rural
areas at varying types of center-based,
home-based, and other child care
settings, including early care programs
located in buildings in which the care
center is the sole occupant or in
mixed-use properties; and
``(vi) propose to focus on child care
facilities primarily serving low-income
populations and children who have not
attained 13 years of age.
``(D) Amount limit.--The amount of a grant
under this paragraph may not exceed
$15,000,000.
``(E) Annual report required.--As a condition
of receiving funds under this paragraph, the
recipient shall submit annual reports to the
lead agency of the jurisdiction in which the
recipient is located documenting how the
recipient has expended the funds and updating
the planned future expenditures described in
the application submitted by the recipient for
the funds.
``(3) Labor standards.--In the case of an application
for a grant under this subsection for a project to
construct, renovate, or improve a child care facility,
including a project to adapt, reconfigure, or expand
such a facility, the application shall include a
written assurance that all laborers and mechanics
employed by contractors or subcontractors in the
performance of construction, alteration, or repair, as
part of the project, shall be paid wages at rates not
less than those prevailing on similar work in the
locality as determined by the Secretary of Labor in
accordance with subchapter IV of chapter of part A of
subtitle II of title 40, United States Code (commonly
referred to as the `Davis-Bacon Act'), and with respect
to the labor standards specified in such subchapter,
the Secretary of Labor shall have the authority and
functions set forth in Reorganization Plan Numbered 14
of 1950 (15 Fed. Reg. 3176; 5 U.S.C. App.).
``(4) Use of funds.--
``(A) Infrastructure improvement.--
``(i) In general.--A recipient of
funds under this subsection may use the
funds only to acquire, construct,
renovate, or otherwise physically
improve the infrastructure of a
building primarily used for the
provision of child care services by a
child care provider, subject to clause
(ii).
``(ii) Prohibition.--A recipient of
funds under this subsection may not use
the funds for modernization,
renovation, or repair of facilities--
``(I) that are primarily used
for sectarian instruction or
religious worship; or
``(II) in which a substantial
portion of the functions of the
facilities are subsumed in a
religious mission.
``(B) Rules applicable to lead agencies.--A
lead agency that is a recipient of funds under
this subsection may use not more than 5 percent
of the funds for administrative purposes which
may be in addition to evaluation and reporting
activities, and shall use the balance of the
funds to enter into grants or contracts, on a
competitive basis, with entities to carry out
projects to acquire, construct, renovate, or
complete other physical improvements to
buildings in which child care services are
provided or will be provided on completion of
the project.
``(b) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated $15,000,000,000
for fiscal year 2022 to carry out this section, which shall
remain available through fiscal year 2026.
``(c) Reservations of Funds.--
``(1) Territories.--The Secretary shall reserve
$100,000,000 of the amount made available to carry out
this section, for grants to territories.
``(2) Administration.--The Secretary may reserve not
more than $200,000,000 of the amount made available to
carry out this section, for administrative costs.
``(3) Assessments and development plans.--The
Secretary shall reserve for each lead agency not more
than $100,000 to conduct assessments and develop plans
for obligating and expending funds provided under this
section, which may be expended by a lead agency
immediately on receipt.
``(4) Data exchange standards for interoperability.--
The Secretary may reserve not more than $200,000 of the
amount made available to carry out this section to
implement data exchange standards for interoperability.
``(d) Limitation on Availability of Funds for Grants for
Intermediary Organizations.--Not more than $2,250,000,000 of
the total amount made available to carry out this section may
be used to carry out subsection (a)(2).''.
SEC. 132003. TECHNICAL ASSISTANCE.
Part A of title IV of the Social Security Act (42 U.S.C. 601-
619) is further amended by inserting after section 418B the
following:
``SEC. 418C. TECHNICAL ASSISTANCE.
``(a) In General.--
``(1) Child care information network.--The Secretary
shall provide technical assistance to lead agencies to
support the development and implementation of, and
ongoing full participation in, State Child Care
Information Networks provided for in section
418A(a)(4).
``(2) Child care infrastructure.--The Secretary shall
provide technical assistance--
``(A) to child care small business owners,
entrepreneurs, nonprofit organizations, and
child care infrastructure grant recipients, for
the purpose of starting new licensed child care
businesses, or re-opening a closed child care
facility, in areas in which there is a child
care shortage or that are at risk of having
such a shortage;
``(B) to State and local governments to
incentivize public-private partnerships to
identify excess buildings and land and conduct
feasibility studies, for new or expanded child
care options that could be available to child
care entrepreneurs and infrastructure grantees,
or used for publicly-run child care facilities;
and
``(C) to support child care business
technical assistance, which may include
strategies to support management training and
shared services initiatives including provider
networks such as child care center alliances
and family child care home provider networks,
as well as fundamental business support needs
such as budgeting and fiscal management skills,
business planning, understanding the cost of
quality, and core best business practices such
as recordkeeping and payment reconciliation.
``(3) Supplementing national technical assistance
efforts.--The Secretary may provide technical
assistance to States (and submit to the Congress
reports on technical assistance activities) to increase
child care availability and affordability, including
by--
``(A) providing technical assistance on best
practices for conducting market rate surveys
and establishing State reimbursement rates and
price-per-child rates for child care for
children who have not attained 13 years of age;
``(B) increasing child care availability in
tribal communities for families with children
who have not attained 13 years of age;
``(C) improving the effectiveness and
affordability of child care assistance programs
in meeting the needs of low-income parents; or
``(D) collecting, managing, analyzing, and
reporting child care administrative data, and
use the data to support documentation of
changes in child care availability and
affordability.
``(b) Administrative Provision.--The Secretary may carry out
this section through means including the use of grants or
cooperative agreements.
``(c) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated $17,500,000 for
each of fiscal years 2022 through 2026 to carry out this
section.''.
SEC. 132004. TRIBAL CHILD CARE ACCESS AND GROWTH.
Part A of title IV of the Social Security Act (42 U.S.C. 601-
619) is further amended by inserting after section 418C the
following:
``SEC. 418D. TRIBAL CHILD CARE ACCESS AND GROWTH.
``(a) HHS Consultations With Indian Tribes.--Of the amount
appropriated under subsection (e) for each fiscal year, the
Secretary shall use not more than $1,000,000 to--
``(1) conduct such consultations with Indian tribes
and tribal organizations as are necessary to determine
how to better conduct consumer outreach and education
and provide timely availability for child care slots,
improve child care infrastructure, and otherwise inform
best practices and guidelines for carrying out the
activities described in subsection (b); and
``(2) provide technical assistance to the lead
agencies of Indian tribes and tribal organizations with
respect to carrying out the activities.
``(b) Activities Described.--The activities described in this
subsection are the following:
``(1) Planning, start-up, implementation, and
maintenance costs associated with establishing and
funding a Child Care Information Network designed to
help parents determine which child care providers can
meet their child care needs and to give parents ease of
access in enrolling their children in child care.
``(2) Coordinating with the Secretary regarding the
HHS Participating Child Care Provider Certification
provided for in section 418A(c).
``(3) Conducting infrastructure projects to improve
the safety of child care facilities.
``(c) Grants.--
``(1) In general.--Of the amount appropriated under
subsection (e) for each fiscal year, the Secretary
shall use not less than $199,000,000 to make grants to
the lead agencies of Indian tribes and tribal
organizations for activities described in subsection
(b), which are to be carried out in accordance with
such rules as the Secretary may prescribe, taking into
account the results of the consultations conducted
under subsection (a)(1).
``(2) Allocation.--The Secretary may make grants
under this subsection according to relative need.
``(d) Nonsupplantation.--An entity to which an amount is
provided under this section shall use the amount to supplement,
but not supplant, other funds provided for any purpose or
activity for which the amount is used.
``(e) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated to the Secretary
$200,000,000 for each of fiscal years 2022 through 2026 to
carry out this section.''.
SEC. 132005. RAISING THE FLOOR FOR CHILD CARE PROVIDER WAGES.
(a) Planning for Child Care Wage Grants for Small
Businesses.--
(1) In general.--For the purpose of maintaining an
effective and diverse child care workforce, effective
upon enactment, through the end of fiscal year 2022,
the Secretary of Health and Human Services shall,
regarding the development and implementation of the
Child Care Wage Grant program provided for in section
418E of the Social Security Act (as added by subsection
(b) of this section)--
(A) issue guidance or technical assistance to
lead agencies (as defined in such section) with
respect to--
(i) consultation with field
engagement organizations (as defined in
such section);
(ii) wage supplement calculations,
with the option of providing a bonus
that may not be more than the
equivalent of an annual wage;
(iii) application requirements;
(iv) reporting requirements;
(v) anti-discrimination protection
measures; and
(vi) other related activities;
(B) engage in hiring, training, developing
work plans, developing outreach materials, and
other administrative overhead activities; and
(C) consult with relevant entities such as
tribal leaders, governors, county and local
government, and community stakeholders.
(2) Funding.--Out of any money in the Treasury not
otherwise appropriated, there is appropriated to the
Secretary of Health and Human Services $10,000,000, to
remain available through September 30, 2022, to carry
out this paragraph.
(b) Implementation.--Part A of title IV of the Social
Security Act (42 U.S.C. 601-619) is further amended by
inserting after section 418D the following:
``SEC. 418E. CHILD CARE WAGE GRANTS FOR SMALL BUSINESSES.
``(a) Grants to Lead Agencies.--
``(1) Grants.--
``(A) In general.--The Secretary shall make
grants to reimburse State, tribal, and
territorial lead agencies for the amount of
child care wage grants made to qualifying child
care providers under lead agency child care
wage grant programs, and for documented costs
of administering the programs that are directly
related to determining provider eligibility,
making payments, data collection, and verifying
provider compliance with program rules.
``(B) Limitation on reimbursement for
documented administrative costs.--The amount of
the reimbursement for the documented
administrative costs shall not exceed 5 percent
of the total amount of the child care wage
grants.
``(2) Consultation required as a condition of
eligibility.--A lead agency shall not be eligible for a
grant under this section with respect to a child care
wage grant program unless the lead agency has consulted
with field engagement organizations in developing and
implementing the program, including application
process, eligibility determinations, community
outreach, and such other aspects of the program as the
Secretary deems appropriate, and if, after the
consultation, the lead agency intends to operate a
child care wage grant program for small businesses, the
lead agency shall submit to the Secretary a
certification that the lead agency has conducted such a
consultation and intends to submit a claim for
reimbursement with respect to program expenditures at
the end of the fiscal year.
``(b) State Child Care Wage Grant Program.--
``(1) In general.--A lead agency child care wage
grant program is a program operated by a lead agency
under which a child care wage grant is made to
qualified child care providers for the 1-year period
covered by the grant, in an amount equal to the
aggregate of the eligible child care wage supplements
provided by the qualified child care provider during
the year, which year shall not begin before October 1,
2022.
``(2) Reporting requirement.--
``(A) In general.--A recipient of a child
care wage grant from a lead agency shall submit
to the lead agency every fiscal quarter a
report that includes documentation of how the
grant has been expended including the number of
full or part-time workers providing child care
and whether each such worker worked for the
full year, a description of the wage levels and
demographics of the child care employees of the
qualified child care provider, and such other
information as the Secretary may require, and
may allow field engagement organizations to
support grant recipients in meeting quarterly
reporting requirements.
``(B) Authority to extend deadline.--A lead
agency may approve a request from such a
recipient to extend the reporting deadline for
90 days, but shall accompany such an approval
with a notice that failure to submit all
information required in the report will result
in future ineligibility for such a grant.
``(c) Reimbursement; Advance Estimated Payment.--A lead
agency may submit to the Secretary a request for reimbursement
or estimated advance payment of the costs of operating the lead
agency child care wage grant program for the 1-year period
covered by the request, which shall include documentation of
the grant awards made to qualified child care providers under
the program, an assurance that not more than 5 percent of the
costs in the reimbursement request are for administrative
costs, an assurance that the State will repay any advances
based on payments to child care providers that were in excess
of costs allowable under this section (including payments for
workers who did not work for the full year) or based on State
administrative costs in excess of 5 percent, and the following:
``(1) Qualified child care provider application data,
including the number of qualified child care providers
and the proportion of applications that were approved
under the program, documentation of rejected
applications, including the reason for
disqualification, and demographic data of applicants.
``(2) Qualified child care provider wage subsidy
data, including wage levels, the size and type of the
qualified child care provider, the number of children
served by the qualified child care provider,
verification that the child care wage grant provided to
the qualified child care provider was not used to
supplant Federal funds, verification that the qualified
child care provider performs child care services as the
primary function of the qualified child care provider,
verification that qualifying child care provider
applications are approved for 1 year, and documentation
of the number of full-time and part-time child care
employees (which may include sole proprietors)
including the portion of the year for which each
employee was employed with that provider to provide
child care.
``(3) Certification that each qualified child care
provider is not eligible to receive a child care
payroll tax credit under section 3135 of the Internal
Revenue Code of 1986 with respect to wages paid to any
child care employee of the qualified child care
provider.
``(4) Qualified child care provider demographic data,
including racial, ethnic, and gender data of the
qualified child care provider and child care employees.
``(5) Documentation of qualified child care provider
wages, and documentation of child care wages that, in
the absence of a grant made under this section, would
have been paid at not less than the applicable minimum
rate.
``(6) Documentation that each qualified child care
provider is licensed by, registered with, or regulated
by the State.
``(7) Documentation that each qualified child care
provider was so qualified throughout the year with
respect to which reimbursement is sought.
``(8) Documentation that each employee for which a
grant is sought was employed for the full year, or if
not, for what portion of the year they were employed.
``(9) Such other relevant items as the Secretary may
require.
``(d) Penalties.--
``(1) Misuse of child care wage grant.--If the
Secretary finds that a qualified child care provider
has used funds provided under this section with respect
to a year other than to supplement the applicable
minimum rate of child care wages for an employee
engaged in child care work for the reported period, the
qualified child care provider shall--
``(A) repay to the lead agency all funds so
provided to the child care provider for the
year; and
``(B) be ineligible for the succeeding 2
years to receive funds made available under
this section.
``(2) Decrease in number of child care employees.--If
a recipient of a child care wage grant for a year
reports under subsection (b)(2)(A) that the number of
child care employees of the recipient has decreased
during the year, then--
``(A) the lead agency shall proportionately
decrease the amount of the child care wage
grant (if any) payable to the recipient for the
next year; or
``(B) if the recipient is not awarded a child
care wage grant for the next year, the
recipient shall remit to the lead agency a
portion of the grant equal to the proportionate
decrease in the number of child care employees
of the provider.
``(e) Appropriation.--Out of any money in the Treasury not
otherwise appropriated, there is appropriated to the Secretary
for each of fiscal years 2023 through 2026 such sums as may be
necessary for reimbursements or estimated payments referred to
in subsection (a).
``(f) Definitions.--In this section:
``(1) Applicable minimum rate.--The term `applicable
minimum rate' means the rate at which basic pay is
payable for a position at level 3, step 1, of the
General Schedule under subchapter III of chapter 53 of
title 5, United States Code, including any applicable
locality-based comparability payment under section 5304
of such title or similar authority, at the time such
wages are paid and determined with respect to the
locality in which services are provided.
``(2) Child care wages.--The term `child care wages'
means--
``(A) wages paid to an employee for services
in providing child care; and
``(B) an owner's draw in lieu of wages, in
the case of a sole proprietor who provides
child care services or an owner who directly
provides child care services alongside
employees.
``(3) Child care employee.--The term `child care
employee' means an employee--
``(A) who is employed by a qualified child
care provider;
``(B) who provides child care services as a
primary function of employment; and
``(C) whose wages do not qualify under
section 3135(a) of the Internal Revenue Code of
1986.
``(4) Eligible child care wage supplement.--
``(A) In general.--The term `eligible child
care wage supplement' means, with respect to a
year, a supplement to child care wages of an
employee (or owner), but only to the extent
that the total amount of the child care wage
supplements provided to the employee (or owner)
during the year--
``(i) in the case of a full-time
employee (or an owner who works on a
full-time basis), is not more than
$16,000; or
``(ii) in the case of a part-time
employee (or an owner who works on a
part-time basis), is not more than
$10,000.
In the case of any employee who is not employed
as a child care employee for the full year, the
maximum dollar amounts set forth in the
preceding sentence shall be proportionately
reduced.
``(B) Inflation adjustment.--Each dollar
amount in effect under subparagraph (A) with
respect to a year shall be increased by a
percentage equal to the percentage (if any) by
which the Consumer Price Index for all urban
consumers (U.S. city average) increased during
the 12-month period ending with the last month
for which Consumer Price Index data is
available.
``(5) Field engagement organization.--The term `field
engagement organization' means any nonprofit,
community-based organization, labor union, trade
association, staffed family child care network, child
care resource and referral organization, or local
government entity with experience providing
representation, technical assistance, or community
supports to child care providers or individuals seeking
to enter or re-enter the child care market.
``(6) Qualified child care provider.--The term
`qualified child care provider' means an entity who--
``(A) provides child care services as the
primary function of the entity;
``(B) is registered with, or regulated or
licensed by, the State as a child care
provider;
``(C) at the time of application for a child
care wage grant under this section, does not
have an unresolved violation of a State law or
regulation pertaining to health or safety in
the provision of child care services;
``(D) has at least 1 employee whose wages may
not be taken into account under section 3135(a)
of the Internal Revenue Code of 1986 because
the employee is a sole proprietor or reports
self-employment income;
``(E) as of the time of the application, pays
child care wages at a rate that is at least the
applicable minimum rate, and certifies that the
entity will not reduce the hourly wage rate of
any employee during the 1-year period for which
the entity has applied for a child care wage
grant under this section; and
``(F) has submitted to the lead agency all
data requested by the Secretary under this
section;
``(G) has submitted the application to the
lead agency, which has approved the
application; and
``(H) has not failed to include all
information required to be included in any
quarterly report required by subsection (b)(2)
to be submitted by the entity with respect to
the year preceding the year for which the
application is submitted.''.
SEC. 132006. COMMON PROVISIONS.
(a) Definitions.--Section 419 of the Social Security Act (42
U.S.C. 619) is amended by adding at the end the following:
``(6) Lead agency.--The term `lead agency' means,
with respect to a jurisdiction, the lead agency
responsible for administering the child care assistance
program of the jurisdiction.
``(7) Territory.--The term `territory' means the
Commonwealth of Puerto Rico, the United States Virgin
Islands, Guam, American Samoa, and the Commonwealth of
the Northern Mariana Islands.''.
(b) Reports to the Congress.--Section 411 of such Act (42
U.S.C. 611) is amended by adding at the end the following:
``(e) Reports on Certain State Child Care Expenditures.--The
Secretary shall submit to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate biennial reports on--
``(1) eligible expenditures (as defined in section
418A(b)(2)(B)) by the States, and on expenditures by
the Secretary under section 418A during the period
covered by the report;
``(2) the extent to which payments under section 418A
have been made with respect to the expenditures;
``(3) to the extent that any funds made available to
carry out such section have not been expended, the
reasons therefor; and
``(4) expenditures under section 418C.''.
(c) Inapplicability of Payment Limitation.--Section 1108(a)
of such Act (42 U.S.C. 1308(a)) is amended by inserting ``418A,
418B, 418C, 418D, 418E,'' before ``or''.
Subtitle D--Trade Adjustment Assistance
SEC. 133001. SHORT TITLE.
This subtitle may be cited as the ``Trade Adjustment
Assistance Modernization Act of 2021''.
SEC. 133002. APPLICATION OF PROVISIONS RELATING TO TRADE ADJUSTMENT
ASSISTANCE.
(a) Effective Date; Applicability.--Except as otherwise
provided in this subtitle, the provisions of chapters 2 through
6 of title II of the Trade Act of 1974, as in effect on June
30, 2021, and as amended by this subtitle, shall--
(1) take effect on the date of the enactment of this
Act; and
(2) apply with respect to petitions for certification
filed under chapter 2, 3, 4, or 6 of title II of the
Trade Act of 1974 on or after such date of enactment.
(b) Reference.--Except as otherwise provided in this
subtitle, whenever in this subtitle an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
provision of chapters 2 through 6 of title II of the Trade Act
of 1974, the reference shall be considered to be made to a
provision of any such chapter, as in effect on June 30, 2021.
(c) Repeal of Snapback.--Section 406 of the Trade Adjustment
Assistance Reauthorization Act of 2015 (Public Law 114-27; 129
Stat. 379) is repealed.
PART 1--TRADE ADJUSTMENT ASSISTANCE FOR WORKERS
SEC. 133101. FILING PETITIONS.
Section 221(a)(1) of the Trade Act of 1974 (19 U.S.C.
2271(a)(1)) is amended--
(1) by amending subparagraph (A) to read as follows:
``(A) One or more workers in the group of workers.'';
and
(2) in subparagraph (C), by striking ``or a State
dislocated worker unit'' and inserting ``a State
dislocated worker unit, or workforce intermediaries,
including labor-management organizations that carry out
re-employment and training services''.
SEC. 133102. GROUP ELIGIBILITY REQUIREMENTS.
(a) In General.--Section 222(a)(2) of the Trade Act of 1974
(19 U.S.C. 2272(a)(2)) is amended--
(1) in subparagraph (A)--
(A) in clause (i), by inserting ``, failed to
increase, or will decrease absolutely due to a
scheduled or imminently anticipated, long-term
decrease in or reallocation of the production
capacity of the firm'' after ``absolutely'';
and
(B) in clause (iii)--
(i) by striking ``to the decline''
and inserting ``to any decline or
absence of increase''; and
(ii) by striking ``or'' at the end;
(2) in subparagraph (B)(ii), by striking the period
at the end and inserting ``; or''; and
(3) by adding at the end the following:
``(C)(i) the sales or production, or both, of such
firm have decreased;
``(ii)(I) exports of articles produced or services
supplied by such workers' firm have decreased; or
``(II) imports of articles or services necessary for
the production of articles or services supplied by such
firm have decreased; and
``(iii) the decrease in exports or imports described
in clause (ii) contributed to such workers' separation
or threat of separation and to the decline in the sales
or production of such firm.''.
(b) Repeal.--Section 222 of the Trade Act of 1974 (19 U.S.C.
2272) is amended--
(1) in subsections (a) and (b), by striking
``importantly'' each place it appears; and
(2) in subsection (c)--
(A) by striking paragraph (1); and
(B) by redesignating paragraphs (2) through
(4) as paragraphs (1) through (3),
respectively.
(c) Eligibility of Staffed Workers and Teleworkers.--Section
222 of the Trade Act of 1974 (19 U.S.C. 2272), as amended by
subsection (b), is further amended by adding at the end the
following:
``(f) Treatment of Staffed Workers and Teleworkers.--
``(1) In general.--For purposes of subsection (a),
workers in a firm include staffed workers and
teleworkers.
``(2) Definitions.--In this subsection:
``(A) Staffed worker.--The term `staffed
worker' means a worker who performs work under
the operational control of a firm that is the
subject of a petition filed under section 221,
even if the worker is directly employed by
another firm.
``(B) Teleworker.--The term `teleworker'
means a worker who works remotely but who
reports to the location listed for a firm in a
petition filed under section 221.''.
SEC. 133103. APPLICATION OF DETERMINATIONS OF ELIGIBILITY TO WORKERS
EMPLOYED BY SUCCESSORS-IN-INTEREST.
Section 223 of the Trade Act of 1974 (19 U.S.C. 2273) is
amended by adding at the end the following:
``(f) Treatment of Workers of Successors-in-Interest.--If the
Secretary certifies a group of workers of a firm as eligible to
apply for adjustment assistance under this chapter, a worker of
a successor-in-interest to that firm shall be covered by the
certification to the same extent as a worker of that firm.''.
SEC. 133104. PROVISION OF BENEFIT INFORMATION TO WORKERS.
Section 225 of the Trade Act of 1974 (19 U.S.C. 2275) is
amended--
(1) in subsection (a), by inserting after the second
sentence the following new sentence: ``The Secretary
shall make every effort to provide such information and
assistance to workers in their native language.''; and
(2) in subsection (b)--
(A) by redesignating paragraph (2) as
paragraph (3);
(B) by inserting after paragraph (1) the
following:
``(2) The Secretary shall provide a second notice to a worker
described in paragraph (1) before the worker has exhausted all
rights to any unemployment insurance to which the worker is
entitled (other than additional compensation described in
section 231(a)(3)(B) funded by a State and not reimbursed from
Federal funds).'';
(C) in paragraph (3), as redesignated by
paragraph (1), by striking ``newspapers of
general circulation'' and inserting
``appropriate print or digital outlets''; and
(D) by adding at the end the following:
``(4) For purposes of providing sustained outreach regarding
the benefits available under this chapter to workers covered by
a certification made under this subchapter, the Secretary may
take any necessary actions, including the following:
``(A) Collecting the email addresses and telephone
numbers of such workers from the employers of such
workers to provide sustained outreach to such workers.
``(B) Partnering with the certified or recognized
union, a community-based worker organization, or other
duly authorized representatives of such workers.
``(C) Hiring peer support workers to perform
sustained outreach to other workers covered by that
certification.
``(D) Using advertising methods and public
information campaigns, including social media, in
addition to notice published in print or digital
outlets under paragraph (3).''.
SEC. 133105. QUALIFYING REQUIREMENTS FOR WORKERS.
(a) Modification of Conditions.--
(1) In general.--Section 231(a) of the Trade Act of
1974 (19 U.S.C. 2291(a)) is amended--
(A) by striking paragraph (2);
(B) by redesignating paragraphs (3), (4), and
(5) as paragraphs (2), (3), and (4),
respectively; and
(C) in paragraph (4) (as redesignated), by
striking ``paragraphs (1) and (2)'' each place
it appears and inserting ``paragraph (1)''.
(2) Conforming amendments.--(A) Section 232 of the
Trade Act of 1974 (19 U.S.C. 2292) is amended by
striking ``section 231(a)(3)(B)'' each place it appears
and inserting ``section 231(a)(2)(B)''.
(B) Section 233(a) of the Trade Act of 1974 (19
U.S.C. 2293(a)) is amended--
(i) in paragraph (1), by striking ``section
231(a)(3)(A)'' and inserting ``section
231(a)(2)(A)''; and
(ii) in paragraph (2)--
(I) by striking ``adversely affected
employment'' and all that follows
through ``(A) within'' and inserting
``adversely affected employment
within'';
(II) by striking ``, and'' and
inserting a period; and
(III) by striking subparagraph (B).
(b) Waivers of Training Requirements.--Section 231(c)(1) of
the Trade Act of 1974 (19 U.S.C. 2291(c)(1)) is amended--
(1) by redesignating subparagraphs (A), (B), and (C)
as subparagraphs (C), (D), and (E), respectively; and
(2) by inserting before subparagraph (C) (as
redesignated) the following:
``(A) Recall.--The worker has been notified
that the worker will be recalled by the firm
from which the separation occurred.
``(B) Retirement.--The worker is within 2
years of meeting all requirements for
entitlement to either--
``(i) old-age insurance benefits
under title II of the Social Security
Act (42 U.S.C. 401 et seq.) (except for
application therefor); or
``(ii) a private pension sponsored by
an employer or labor organization.''.
SEC. 133106. MODIFICATION TO TRADE READJUSTMENT ALLOWANCES.
Section 233 of the Trade Act of 1974 (19 U.S.C. 2293) is
amended--
(1) in subsection (a)--
(A) in paragraph (2), by inserting after
``104-week period'' the following: ``(or, in
the case of an adversely affected worker who
requires a program of prerequisite education or
remedial education (as described in section
236(a)(5)(D)) in order to complete training
approved for the worker under section 236, the
130-week period)'';
(B) in paragraph (3), by striking ``65
additional weeks in the 78-week period'' and
inserting ``78 additional weeks in the 91-week
period''; and
(C) in the flush text, by striking ``78-week
period'' and inserting ``91-week period'';
(2) by striking subsection (d); and
(3) by amending subsection (f) to read as follows:
``(f) Payment of Trade Readjustment Allowances to Complete
Training.--Notwithstanding any other provision of this section,
in order to assist an adversely affected worker to complete
training approved for the worker under section 236 that
includes a program of prerequisite education or remedial
education (as described in section 236(a)(5)(D)), and in
accordance with regulations prescribed by the Secretary,
payments may be made as trade readjustment allowances for up to
26 additional weeks in the 26-week period that follows the last
week of entitlement to trade readjustment allowances otherwise
payable under this chapter.''.
SEC. 133107. AUTOMATIC EXTENSION OF TRADE READJUSTMENT ALLOWANCES.
(a) In General.--Part I of subchapter B of chapter 2 of title
II of the Trade Act of 1974 (19 U.S.C. 2291 et seq.) is amended
by inserting after section 233 the following new section:
``SEC. 233A. AUTOMATIC EXTENSION OF TRADE READJUSTMENT ALLOWANCES.
``(a) In General.--Notwithstanding the limitations under
section 233(a), the Secretary shall extend the period during
which trade readjustment allowances are payable to an adversely
affected worker who completes training approved under section
236 by the Secretary during a period of heightened unemployment
with respect to the State in which such worker seeks benefits,
for the shorter of--
``(1) the 26-week period beginning on the date of
completion of such training; or
``(2) the period ending on the date on which the
adversely affected worker secures employment.
``(b) Job Search Required.--A worker shall only be eligible
for an extension under subsection (a) if the worker is
complying with the job search requirements associated with
unemployment insurance in the applicable State.
``(c) Period of Heightened Unemployment Defined.--In this
section, the term `period of heightened unemployment' with
respect to a State means a 90-day period during which, in the
determination of the Secretary, either of the following average
rates equals or exceeds 5.5 percent:
``(1) The average rate of total unemployment in such
State (seasonally adjusted) for the period consisting
of the most recent 3-month period for which data for
all States are published before the close of such
period.
``(2) The average rate of total unemployment in all
States (seasonally adjusted) for the period consisting
of the most recent 3-month period for which data for
all States are published before the close of such
period.''.
(b) Clerical Amendment.--The table of contents for the Trade
Act of 1974 is amended by inserting after the item relating to
section 233 the following:
``Sec. 233A. Automatic extension of trade readjustment allowances.''.
SEC. 133108. EMPLOYMENT AND CASE MANAGEMENT SERVICES.
Section 235 of the Trade Act of 1974 (19 U.S.C. 2295) is
amended--
(1) in paragraph (3)--
(A) by inserting after ``regional areas'' the
following: ``(including information about
registered apprenticeship programs, on-the-job
training opportunities, and other work-based
learning opportunities)''; and
(B) by inserting after ``suitable training''
the following: ``, information regarding the
track record of a training provider's ability
to successfully place participants into
suitable employment'';
(2) by redesignating paragraph (8) as paragraph (10);
and
(3) by inserting after paragraph (7) the following:
``(8) Information related to direct job placement,
including facilitating the extent to which employers
within the community commit to employing workers who
would benefit from the employment and case management
services under this section.
``(9) Sustained outreach to groups of workers likely
to be certified as eligible for adjustment assistance
under this chapter and members of certified worker
groups who have not yet applied for or been enrolled in
benefits or services under this chapter, especially
such groups and members from underserved
communities.''.
SEC. 133109. TRAINING.
Section 236 of the Trade Act of 1974 (19 U.S.C. 2296(a)) is
amended--
(1) in subsection (a)--
(A) in paragraph (1)(D), by inserting ``,
with a demonstrated ability to place
participants into employment'' before the comma
at the end;
(B) in paragraph (3), by adding at the end
before the period the following: ``, except
that every effort shall be made to ensure that
employment opportunities are available upon the
completion of training''; and
(C) in paragraph (5)--
(i) in subparagraph (G), by striking
``, and'' and inserting a comma;
(ii) in subparagraph (H)(ii), by
striking the period at the end and
inserting ``, and''; and
(iii) by adding at the end before the
flush text the following:
``(I) pre-apprenticeship training.''; and
(2) by adding at the end the following:
``(h) Reimbursement for Out-of-pocket Training Expenses.--If
the Secretary approves training for a worker under paragraph
(1) of subsection (a), the Secretary may reimburse the worker
for out-of-pocket expenses relating to training program
described in paragraph (5) of that subsection that were
incurred by the worker on and after the date of the worker's
total or partial separation and before the date on which the
certification of eligibility under section 222 that covers the
worker is issued.''.
SEC. 133110. JOB SEARCH, RELOCATION, AND CHILD CARE ALLOWANCES.
(a) Job Search Allowances.--Section 237 of the Trade Act of
1974 (19 U.S.C. 2297) is amended--
(1) in subsection (a)(1), by striking ``may use funds
made available to the State to carry out sections 235
through 238'' and inserting ``shall use, from funds
made available to the State to carry out sections 235
through 238A, such amounts as may be necessary'';
(2) in subsection (a)(2), in the matter preceding
subparagraph (A), by striking ``may grant'' and
inserting ``shall grant''; and
(3) in subsection (b)--
(A) in paragraph (1), by striking ``not more
than 90 percent'' and inserting ``100
percent'';
(B) in paragraph (2), by striking ``$1,250''
and inserting ``$2,000 (subject to adjustment
under paragraph (4))''; and
(C) by adding at the end the following;
``(4) Adjustment of maximum allowance limitation for
inflation.--
``(A) In general.--The Secretary of Labor
shall adjust the maximum allowance limitation
under paragraph (2) on the date that is 30 days
after the date of the enactment of this
paragraph, and at the beginning of each fiscal
year thereafter, to reflect the percentage (if
any) of the increase in the average of the
Consumer Price Index for the preceding 12-month
period compared to the Consumer Price Index for
fiscal year 2020.
``(B) Special rules for calculation of
adjustment.--In making an adjustment under
subparagraph (A), the Secretary--
``(i) shall round the amount of any
increase in the Consumer Price Index to
the nearest dollar; and
``(ii) may ignore any such increase
of less than 1 percent.
``(C) Consumer price index defined.--For
purposes of this paragraph, the term `Consumer
Price Index' means the Consumer Price Index for
All Urban Consumers published by the Bureau of
Labor Statistics of the Department of Labor.''.
(b) Relocation Allowances.--Section 238 of the Trade Act of
1974 (19 U.S.C. 2298) is amended--
(1) in subsection (a)(1), by striking ``may use funds
made available to the State to carry out sections 235
through 238'' and inserting ``shall use, from funds
made available to the State to carry out sections 235
through 238A, such amounts as may be necessary'';
(2) in subsection (a)(2), in the matter preceding
subparagraph (A), by striking ``may be granted'' and
inserting ``shall be granted'';
(3) in subsection (b)--
(A) in paragraph (1), by striking ``not more
than 90 percent'' and inserting ``100
percent''; and
(B) in paragraph (2), by striking ``$1,250''
and inserting ``$2,000 (subject to adjustment
under subsection (d))''; and
(4) by adding at the end the following:
``(d) Adjustment of Maximum Payment Limitation for
Inflation.--
``(1) In general.--The Secretary of Labor shall
adjust the maximum payment limitation under subsection
(b)(2) on the date that is 30 days after the date of
the enactment of this subsection, and at the beginning
of each fiscal year thereafter, to reflect the
percentage (if any) of the increase in the average of
the Consumer Price Index for the preceding 12-month
period compared to the Consumer Price Index for fiscal
year 2020.
``(2) Special rules for calculation of adjustment.--
In making an adjustment under paragraph (1), the
Secretary--
``(A) shall round the amount of any increase
in the Consumer Price Index to the nearest
dollar; and
``(B) may ignore any such increase of less
than 1 percent.
``(3) Consumer price index defined.--For purposes of
this subsection, the term `Consumer Price Index' means
the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the
Department of Labor.''.
(c) Child Care Allowances.--
(1) In general.--Part II of subchapter B of chapter 2
of title II of the Trade Act of 1974 (19 U.S.C. 2295 et
seq.) is amended by adding at the end the following:
``SEC. 238A. CHILD CARE ALLOWANCES.
``(a) Child Care Allowances Authorized.--
``(1) In general.--Each State shall use, from funds
made available to the State to carry out sections 235
through 238A, such amounts as may be necessary to allow
an adversely affected worker covered by a certification
issued under subchapter A of this chapter to file an
application for a child care allowance with the
Secretary, and the Secretary may grant the child care
allowance, subject to the terms and conditions of this
section.
``(2) Conditions for granting allowance.--A child
care allowance shall be granted if the allowance will
assist an adversely affected worker to attend training
or seek suitable employment, by providing for the care
of one or more of the minor dependents of the worker.
``(b) Amount of Allowance.--Any child care allowance granted
to a worker under subsection (a) shall not exceed $2,000 per
minor dependent per year.
``(c) Adjustment of Maximum Allowance Limitation for
Inflation.--
``(1) In general.--The Secretary of Labor shall
adjust the maximum allowance limitation under
subsection (b) on the date that is 30 days after the
date of the enactment of this subsection, and at the
beginning of each fiscal year thereafter, to reflect
the percentage (if any) of the increase in the average
of the Consumer Price Index for the preceding 12-month
period compared to the Consumer Price Index for fiscal
year 2020.
``(2) Special rules for calculation of adjustment.--
In making an adjustment under paragraph (1), the
Secretary--
``(A) shall round the amount of any increase
in the Consumer Price Index to the nearest
dollar; and
``(B) may ignore any such increase of less
than 1 percent.
``(3) Consumer price index defined.--For purposes of
this subsection, the term `Consumer Price Index' means
the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the
Department of Labor.''.
(2) Conforming amendments.--
(A) Limitations on administrative expenses
and employment and case management services.--
Section 235A of the Trade Act of 1974 (19
U.S.C. 2295a) is amended in the matter
preceding paragraph (1) by striking ``through
238'' and inserting ``through 238A''.
(B) Training.--Section 236(a)(2) of the Trade
Act of 1974 (19 U.S.C. 2296(a)(2)) is amended--
(i) in subparagraph (A), by striking
``and 238'' and inserting ``238, and
238A'';
(ii) in subparagraph (B), by striking
``and 238'' each place it appears and
inserting ``238, and 238A'';
(iii) in subparagraph (C)(i), by
striking ``and 238'' and inserting
``238, and 238A'';
(iv) in subparagraph (C)(v), by
striking ``and 238'' and inserting
``238, and 238A''; and
(v) in subparagraph (E), by striking
``and 238'' each place it appears and
inserting ``238, and 238A''.
(3) Clerical amendment.--The table of contents for
the Trade Act of 1974 is amended by adding after the
item relating to section 238 the following new item:
``Sec. 238A. Child care allowances.''.
SEC. 133111. AGREEMENTS WITH STATES.
(a) Coordination.--Section 239(f) of the Trade Act of 1974
(19 U.S.C. 2311(f)) is amended--
(1) by striking ``(f) Any agreement'' and inserting
the following:
``(f)(1) Any agreement''; and
(2) by adding at the end the following:
``(2) In arranging for training programs to be
carried out under this chapter, each cooperating State
agency shall, among other factors, take into account
and measure the progress of the extent to which such
programs--
``(A) achieve a satisfactory rate of
completion and placement in jobs that provide a
living wage and that increase economic
security;
``(B) assist workers in developing the
skills, networks, and experiences necessary to
advance along a career path;
``(C) assist workers from underserved
communities to establish a work history,
demonstrate success in the workplace, and
develop the skills that lead to entry into and
retention in unsubsidized employment; and
``(D) adequately serve individuals who face
the greatest barriers to employment, including
people with low incomes, people of color,
immigrants, persons with disabilities, and
formerly incarcerated individuals.
``(3) Each cooperating State agency shall facilitate
joint cooperation between training programs,
representatives of workers, employers, and communities,
especially in underserved rural and urban regions, to
ensure a fair and engaging workplace that balances the
priorities and well-being of workers with the needs of
businesses.
``(4) Each cooperating State agency shall seek,
including through agreements and training programs
described in this subsection, to ensure the
reemployment of adversely affected workers upon
completion of training as described in section 236.''.
(b) Administration.--Section 239(g) of the Trade Act of 1974
(19 U.S.C. 2311(g)) is amended--
(1) by redesignating--
(A) paragraphs (1) through (4) as paragraphs
(3) through (6), respectively; and
(B) paragraph (5) as paragraph (8);
(2) by inserting before paragraph (3) (as
redesignated) the following:
``(1) review each layoff of more than 5 workers in a
firm to determine whether trade played a role in the
layoff and whether workers in such firm are potentially
eligible to receive benefits under this chapter,
``(2) perform sustained outreach to firms to
facilitate and assist with filing petitions under
section 221 and collecting necessary supporting
information,'';
(3) in paragraph (3) (as redesignated), by striking
``who applies for unemployment insurance of'' and
inserting ``identified under paragraph (1) of
unemployment insurance benefits and'';
(4) in paragraph (4) (as redesignated), by inserting
``and assist with'' after ``facilitate'';
(5) in paragraph (6) (as redesignated), by striking
``and'' at the end;
(6) by inserting after paragraph (6) (as
redesignated) the following:
``(7) perform sustained outreach to workers from
underserved communities and to firms that employ a
majority or a substantial percentage of workers from
underserved communities and develop a plan, in
consultation with the Secretary, for addressing common
barriers to receiving services that such workers have
faced,'';
(7) in paragraph (8) (as redesignated), by striking
``funds provided to carry out this chapter are
insufficient to make such services available, make
arrangements to make such services available through
other Federal programs'' and inserting ``support
services are needed beyond what this chapter can
provide, make arrangements to coordinate such services
available through other Federal programs'' ; and
(8) by adding at the end the following:
``(9) develop a strategy to engage with local
workforce development institutions, including local
community colleges and other educational institutions,
and
``(10) develop a comprehensive strategy to provide
agency staffing to support the requirements of
paragraphs (1) through (9).''.
(c) Staffing.--Section 239 of the Trade Act of 1974 (19
U.S.C. 2311) is amended by striking subsection (k) and
inserting the following:
``(k) Staffing.--An agreement entered into under this section
shall provide that the cooperating State or cooperating State
agency shall require that any individual engaged in functions
(other than functions that are not inherently governmental) to
carry out the trade adjustment assistance program under this
chapter shall be a State employee covered by a merit system of
personnel administration.''.
SEC. 133112. REEMPLOYMENT TRADE ADJUSTMENT ASSISTANCE PROGRAM.
Section 246(a) of the Trade Act of 1974 (19 U.S.C. 2318(a))
is amended--
(1) in paragraph (3)(B)(ii), by striking ``$50,000''
and inserting ``$70,000 (subject to adjustment under
paragraph (8))'';
(2) in paragraph (5)(B)(i), by striking ``$10,000''
and inserting ``$20,000 (subject to adjustment under
paragraph (8))''; and
(3) by adding at the end the following:
``(8) Adjustment of salary limitation and total
amount of payments for inflation.--
``(A) In general.--The Secretary of Labor
shall adjust the salary limitation under
paragraph (3)(B)(ii) and the amount under
paragraph (5)(B)(i) on the date that is 30 days
after the date of the enactment of this
paragraph, and at the beginning of each fiscal
year thereafter, to reflect the percentage (if
any) of the increase in the average of the
Consumer Price Index for the preceding 12-month
period compared to the Consumer Price Index for
fiscal year 2020.
``(B) Special rules for calculation of
adjustment.--In making an adjustment under
subparagraph (A), the Secretary--
``(i) shall round the amount of any
increase in the Consumer Price Index to
the nearest dollar; and
``(ii) may ignore any such increase
of less than 1 percent.
``(C) Consumer price index defined.--For
purposes of this paragraph, the term `Consumer
Price Index' means the Consumer Price Index for
All Urban Consumers published by the Bureau of
Labor Statistics of the Department of Labor.''.
SEC. 133113. EXTENSION OF TRADE ADJUSTMENT ASSISTANCE TO PUBLIC AGENCY
WORKERS.
(a) Definitions.--Section 247 of the Trade Act of 1974 (19
U.S.C. 2319) is amended--
(1) in paragraph (3)--
(A) in the matter preceding subparagraph (A),
by striking ``The'' and inserting ``Subject to
section 222(d)(5), the''; and
(B) in subparagraph (A), by striking ``or
service sector firm'' and inserting ``, service
sector firm, or public agency''; and
(2) by adding at the end the following:
``(20) The term `public agency' means a department or
agency of a State or local government or of the Federal
Government.''.
(b) Group Eligibility Requirements.--Section 222 of the Trade
Act of 1974 (19 U.S.C. 2272), as amended by subsections (b) and
(c) of section 133102, is further amended--
(1) by redesignating subsections (c), (d), (e), and
(f) as subsections (d), (e), (f), and (g),
respectively;
(2) by inserting after subsection (b) the following:
``(c) Adversely Affected Workers in Public Agencies.--A group
of workers in a public agency shall be certified by the
Secretary as eligible to apply for adjustment assistance under
this chapter pursuant to a petition filed under section 221 if
the Secretary determines that--
``(1) a significant number or proportion of the
workers in the public agency have become totally or
partially separated, or are threatened to become
totally or partially separated;
``(2) the public agency has acquired from a foreign
country services like or directly competitive with
services which are supplied by such agency; and
``(3) the acquisition of services described in
paragraph (2) contributed to such workers' separation
or threat of separation.'';
(3) in subsection (d) (as redesignated), by adding at
the end the following:
``(5) Reference to firm.--For purposes of subsections
(a) and (b), the term `firm' does not include a public
agency.''; and
(4) in paragraph (2) of subsection (e) (as
redesignated), by striking ``subsection (a) or (b)''
and inserting ``subsection (a), (b), or (c)''.
SEC. 133114. DEFINITIONS.
(a) Extension of Adjustment Assistance for Workers to
Territories.--Section 247(7) of the Trade Act of 1974 (19
U.S.C. 2319(7)) is amended--
(1) by inserting ``, Guam, the Virgin Islands of the
United States, American Samoa, the Commonwealth of the
Northern Mariana Islands,'' after ``District of
Columbia''; and
(2) by striking ``such Commonwealth.'' and inserting
``such territories.''.
(b) Underserved Community.--Section 247 of the Trade Act of
1974 (19 U.S.C. 2319), as amended by section 133113(a), is
further amended by adding at the end the following:
``(21) The term `underserved community' means a
community with populations sharing a particular
characteristic that have been systematically denied a
full opportunity to participate in aspects of economic,
social, or civic life, such as Black, Latino, and
Indigenous and Native American persons, Asian Americans
and Pacific Islanders, other persons of color, members
of other minority communities, persons with
disabilities, persons who live in rural areas, and
other populations otherwise adversely affected by
persistent poverty or inequality.''.
SEC. 133115. SUBPOENA POWER.
Section 249 of the Trade Act of 1974 (19 U.S.C. 2321) is
amended--
(1) in subsection (a), by adding at the end the
following: ``The authority under the preceding sentence
includes the authority of States to require, by
subpoena, a firm to provide information on workers
employed by, or totally or partially separated from,
the firm that is necessary to make a determination
under this chapter or to provide outreach to workers,
including the names and address of workers.''; and
(2) by adding at the end the following:
``(c) Enforcement of Subpoenas by States.--A State may
enforce compliance with a subpoena issued under subsection
(a)--
``(1) as provided for under State law; and
``(2) by petitioning an appropriate United States
district court for an order requiring compliance with
the subpoena.''.
PART 2--TRADE ADJUSTMENT ASSISTANCE FOR FIRMS
SEC. 133201. PETITIONS AND DETERMINATIONS.
Section 251 of the Trade Act of 1974 (19 U.S.C. 2341) is
amended--
(1) in the second sentence of subsection (a), by
striking ``Upon'' and inserting ``Not later than 15
days after'';
(2) by amending subsection (c) to read as follows:
``(c)(1) The Secretary shall certify a firm (including any
agricultural firm or service sector firm) as eligible to apply
for adjustment assistance under this chapter if the Secretary
determines--
``(A)(i) that a significant number or proportion of
the workers in such firm have become totally or
partially separated, or are threatened to become
totally or partially separated, or
``(ii) that--
``(I) sales or production, or both, of the
firm have decreased absolutely or failed to
increase,
``(II) sales or production, or both, of an
article or service that accounted for not less
than 25 percent of the total sales or
production of the firm during the 12-month
period preceding the most recent 12-month
period for which data are available have
decreased absolutely or failed to increase,
``(III) sales or production, or both, of the
firm during the most recent 12-month period for
which data are available have decreased or
failed to increase compared to--
``(aa) the average annual sales or
production for the firm during the 24-
month period preceding that 12-month
period, or
``(bb) the average annual sales or
production for the firm during the 36-
month period preceding that 12-month
period, and
``(IV) sales or production, or both, of an
article or service that accounted for not less
than 25 percent of the total sales or
production of the firm during the most recent
12-month period for which data are available
have decreased or failed to increase compared
to--
``(aa) the average annual sales or
production for the article or service
during the 24-month period preceding
that 12-month period, or
``(bb) the average annual sales or
production for the article or service
during the 36-month period preceding
that 12-month period, and
``(B)(i) increases of imports of articles or services
like or directly competitive with articles which are
produced or services which are supplied by such firm
contributed to such total or partial separation, or
threat thereof, or to such decline or failure to
increase in sales or production, or
``(ii) decreases in exports of articles produced or
services supplied by such firm, or imports of articles
or services necessary for the production of articles or
services supplied by such firm, contributed to such
total or partial separation, or threat thereof, or to
such decline in sales or production.
``(2) For purposes of paragraph (1)(B):
``(A) Any firm which engages in exploration or
drilling for oil or natural gas shall be considered to
be a firm producing oil or natural gas.
``(B) Any firm that engages in exploration or
drilling for oil or natural gas, or otherwise produces
oil or natural gas, shall be considered to be producing
articles directly competitive with imports of oil and
with imports of natural gas.''; and
(3) in subsection (d)--
(A) by striking ``this section,'' and
inserting ``this section.''; and
(B) by striking ``but in any event'' and all
that follows and inserting the following: ``If
the Secretary does not make a determination
with respect to a petition within 55 days after
the date on which an investigation is initiated
under subsection (a) with respect to the
petition, the Secretary shall be deemed to have
certified the firm as eligible to apply for
adjustment assistance under this chapter.''.
SEC. 133202. APPROVAL OF ADJUSTMENT PROPOSALS.
Section 252 of the Trade Act of 1974 (19 U.S.C. 2342) is
amended--
(1) in the second sentence of subsection (a), by
adding at the end before the period the following:
``and an assessment of the potential employment
outcomes of such proposal'';
(2) in subsection (b)(1)(B), by striking ``gives
adequate consideration to'' and inserting ``is in'';
(3) by redesignating subsection (c) as subsection
(d); and
(4) by inserting after subsection (b) the following:
``(c) Amount of Assistance.--
``(1) In general.--A firm may receive adjustment
assistance under this chapter with respect to the
firm's economic adjustment proposal in an amount not to
exceed $300,000, subject to adjustment under paragraph
(2) and the matching requirement under paragraph (3).
``(2) Adjustment of assistance limitation for
inflation.--
``(A) In general.--The Secretary of Commerce
shall adjust the technical assistance
limitation under paragraph (1) on the date that
is 30 days after the date of the enactment of
this paragraph, and at the beginning of each
fiscal year thereafter, to reflect the
percentage (if any) of the increase in the
average of the Consumer Price Index for the
preceding 12-month period compared to the
Consumer Price Index for fiscal year 2020.
``(B) Special rules for calculation of
adjustment.--In making an adjustment under
subparagraph (A), the Secretary--
``(i) shall round the amount of any
increase in the Consumer Price Index to
the nearest dollar; and
``(ii) may ignore any such increase
of less than 1 percent.
``(C) Consumer price index defined.--For
purposes of this paragraph, the term `Consumer
Price Index' means the Consumer Price Index for
All Urban Consumers published by the Bureau of
Labor Statistics of the Department of Labor.
``(3) Matching requirement.--A firm may receive
adjustment assistance under this chapter only if the
firm provides matching funds in an amount equal to the
amount of adjustment assistance received under
paragraph (1).''.
SEC. 133203. TECHNICAL ASSISTANCE.
Section 253(a)(3) of the Trade Act of 1974 (19 U.S.C.
2343(a)(3)) is amended by adding at the end before the period
the following: ``, including assistance to provide skills
training programs to employees of the firm''.
SEC. 133204. DEFINITIONS.
Section 259 of the Trade Act of 1974 (19 U.S.C. 2351) is
amended by adding at the end the following:
``(3) Underserved community.--The term `underserved
community' has the meaning given that term in section
247.''.
SEC. 133205. PLAN FOR SUSTAINED OUTREACH TO POTENTIALLY-ELIGIBLE FIRMS.
(a) In General.--Chapter 3 of title II of the Trade Act of
1974 (19 U.S.C. 2341 et seq.) is amended by adding at the end
the following:
``SEC. 263. PLAN FOR SUSTAINED OUTREACH TO POTENTIALLY-ELIGIBLE FIRMS.
``(a) In General.--The Secretary shall develop a plan to
provide sustained outreach to firms that may be eligible for
adjustment assistance under this chapter.
``(b) Matters to Be Included.--The plan required by paragraph
(1) shall include the following:
``(1) Outreach to the United States International
Trade Commission and to such firms in industries with
increased imports identified in the Commission's annual
report regarding the operation of the trade agreements
program under section 163(c).
``(2) Outreach to such firms in the service sector.
``(3) Outreach to such firms that are small
businesses.
``(4) Outreach to such firms that are minority- or
women-owned firms.
``(5) Outreach to such firms that employ a majority
or a substantial percentage of workers from underserved
communities.
``(c) Updates.--The Secretary shall update the plan required
under this section on an annual basis.
``(d) Submission to Congress.--The Secretary shall submit the
plan and each update to the plan required under this section to
Congress.''.
(b) Clerical Amendment.--The table of contents for the Trade
Act of 1974 is amended by inserting after the item relating to
section 262 the following new item:
``Sec. 263. Plan for sustained outreach to potentially-eligible
firms.''.
PART 3--TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES AND COMMUNITY
COLLEGES
SEC. 133301. TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES.
(a) In General.--Chapter 4 of title II of the Trade Act of
1974 (19 U.S.C. 2371 et seq.) is amended--
(1) by inserting after the chapter heading the
following:
``Subchapter B--Trade Adjustment Assistance for Community Colleges and
Career Training''; and
(2) by redesignating sections 271 and 272 as sections
279 and 279A, respectively; and
(3) by inserting before subchapter B (as designated
by paragraph (1)) the following:
``Subchapter A--Trade Adjustment Assistance for Communities
``SEC. 271. DEFINITIONS.
``In this subchapter:
``(1) Agricultural commodity producer.--The term
`agricultural commodity producer' has the meaning given
that term in section 291.
``(2) Community.--The term `community' means--
``(A) a city or other political subdivision
of a State, including a special purpose unit of
a State or local government engaged in economic
or infrastructure development activities, or a
consortium of political subdivisions;
``(B) an Economic Development District
designated by the Economic Development
Administration of the Department of Commerce;
or
``(C) an Indian Tribe.
``(3) Eligible community.--The term `eligible
community' means a community that is impacted by trade
under section 273(a)(2) and is determined to be
eligible for assistance under this subchapter.
``(4) Eligible entity.--The term `eligible entity'
means--
``(A) an eligible community;
``(B) an institution of higher education or a
consortium of institutions of higher education;
or
``(C) a public or private nonprofit
organization or association acting in
cooperation with officials of a political
subdivision of a State.
``(4) Secretary.--The term `Secretary' means the
Secretary of Commerce.
``(5) Underserved community.--The term `underserved
community' has the meaning given that term in section
247.
``SEC. 272. ESTABLISHMENT OF TRADE ADJUSTMENT ASSISTANCE FOR
COMMUNITIES PROGRAM.
``The Secretary, acting through the Assistant Secretary for
Economic Development, shall, not later than 180 days after the
date of enactment of this subchapter, establish a program to
provide communities impacted by trade with assistance in
accordance with the requirements of this subchapter.
``SEC. 273. ELIGIBILITY; NOTIFICATION OF ELIGIBILITY.
``(a) Eligibility.--
``(1) In general.--A community shall be eligible for
assistance under this subchapter if the community is a
community impacted by trade under paragraph (2).
``(2) Community impacted by trade.--A community is
impacted by trade if it meets each of the following
requirements:
``(A) One or more of the following
certifications are made with respect to the
community:
``(i) By the Secretary of Labor, that
a group of workers located in the
community is eligible to apply for
assistance under section 223.
``(ii) By the Secretary of Commerce,
that a firm located in the community is
eligible to apply for adjustment
assistance under section 251.
``(iii) By the Secretary of
Agriculture, that a group of
agricultural commodity producers
located in the community is eligible to
apply for adjustment assistance under
section 293.
``(B) The community--
``(i) applies for assistance not
later than 180 days after the date on
which the most recent certification
described in subparagraph (A) is made;
or
``(ii) in the case of a community
with respect to which one or more such
certifications were made on or after
January 1, 1994, and before the date of
the enactment of this subchapter,
applies for assistance not later than
September 30, 2024.
``(C) The community--
``(i) has a per capita income of 80
percent or less of the national
average;
``(ii) has an unemployment rate that
is, for the most recent 24-month period
for which data are available, at least
1 percent greater than the national
average unemployment rate; or
``(iii) is significantly affected by
a loss of, or threat to, the jobs
associated with any certification
described in subparagraph (A), or the
community is undergoing transition of
its economic base as a result of
changing trade patterns, as determined
by the Secretary.
``(b) Notification of Eligibility.--If one or more
certifications described in subsection (a)(2)(A) are made with
respect to a community, the applicable Secretary with respect
to such certification shall concurrently, notify the Governor
of the State in which the community is located of the ability
of the community to apply for assistance under this section.
``SEC. 274. GRANTS TO ELIGIBLE COMMUNITIES.
``(a) In General.--The Secretary may--
``(1) upon the application of an eligible community,
award a grant under this section to the community to
assist in developing or updating a strategic plan that
meets the requirements of section 275; or
``(2) upon the application of an eligible entity,
award an implementation grant under this section to the
entity to assist in implementing projects included in a
strategic plan that meets the requirements of section
275.
``(b) Special Provisions.--
``(1) Revolving loan fund grants.--
``(A) In general.--The Secretary shall
maintain the proper operation and financial
integrity of revolving loan funds established
by eligible entities with assistance under this
section.
``(B) Efficient administration.--The
Secretary may--
``(i) at the request of an eligible
entity, amend and consolidate grant
agreements governing revolving loan
funds to provide flexibility with
respect to lending areas and borrower
criteria; and
``(ii) assign or transfer assets of a
revolving loan fund to third party for
the purpose of liquidation, and the
third party may retain assets of the
fund to defray costs related to
liquidation.
``(C) Treatment of actions.--An action taken
by the Secretary under this subsection with
respect to a revolving loan fund shall not
constitute a new obligation if all grant funds
associated with the original grant award have
been disbursed to the recipient.
``(2) Use of funds in projects constructed under
project cost.--
``(A) In general.--In the case of a grant for
a construction project under this section, if
the Secretary determines, before closeout of
the project, that the cost of the project,
based on the designs and specifications that
were the basis of the grant, has decreased
because of decreases in costs, the Secretary
may approve the use of the excess funds (or a
portion of the excess funds) to improve the
project.
``(B) Other uses of excess funds.--Any amount
of excess funds remaining after application of
subparagraph (A) may be used by the Secretary
for providing assistance under this section.
``(c) Coordination.--If an eligible institution (as such term
is defined in section 279) located in an eligible community is
seeking a grant under section 279 at the same time the
community is seeking an implementation grant under subsection
(a)--
``(1) the Secretary, upon receipt of such information
from the Secretary of Labor as required under section
279(e), shall notify the community that the institution
is seeking a grant under section 279; and
``(2) the community shall provide to the Secretary,
in coordination with the institution, a description of
how the community will integrate projects included in
the strategic plan with the specific project for which
the institution submits the grant proposal under
section 279.
``(d) Limitation.--The total amount of grants awarded with
respect to an eligible community under this section for fiscal
years 2022 through 2026 may not exceed $25,000,000.
``(e) Priority.--The Secretary shall, in awarding grants
under this section, provide higher levels of funding with
respect to eligible communities that have a history of economic
distress and long-term unemployment, as determined by the
Secretary.
``(f) Geographic Diversity.--
``(1) In general.--The Secretary shall, in awarding
grants under this section, ensure that grants are
awarded with respect to eligible communities from
geographically diverse areas.
``(2) Geographic region requirement.--The Secretary
shall, in meeting the requirement under paragraph (1),
award a grant under this section for each of the fiscal
years 2022 through 2026 to at least one eligible
community located in each geographic region for which
regional offices of the Economic Development
Administration of the Department of Commerce are
responsible, to the extent that the Secretary receives
an application from at least one eligible community in
each such geographic region.
``SEC. 275. STRATEGIC PLANS.
``(a) In General.--A strategic plan meets the requirements of
this section if--
``(1) the consultation requirements of subsection (b)
are met with respect to the development of the plan;
``(2) the plan meets the requirements of subsection
(c); and
``(3) the plan is approved in accordance with the
requirements of subsection (d).
``(b) Consultation.--
``(1) In general.--To the extent practicable, an
eligible community shall consult with the entities
described in paragraph (2) in developing the strategic
plan.
``(2) Entities described.--The entities described in
this paragraph are public and private entities located
in or serving the eligible community, including--
``(A) local, county, or State government
agencies;
``(B) firms, including small- and medium-
sized firms;
``(C) local workforce investment boards;
``(D) labor organizations, including State
labor federations and labor-management
initiatives, representing workers in the
community;
``(E) educational institutions, local
educational agencies, and other training
providers; and
``(F) local civil rights organizations and
community-based organizations, including
organizations representing underserved
communities.
``(c) Contents.--The strategic plan may contain, as
applicable to the community, the following:
``(1) A description and analysis of the capacity of
the eligible community to achieve economic adjustment
to the impact of trade.
``(2) An analysis of the economic development
challenges and opportunities facing the community,
including the strengths and weaknesses of the economy
of the community.
``(3) An assessment of--
``(A) the commitment of the community to
carry out the strategic plan on a long-term
basis;
``(B) the participation and input of members
of the community who are dislocated from
employment due to the impact of trade; and
``(C) the extent to which underserved
communities have been impacted by trade.
``(4) A description of how underserved communities
will benefit from the strategic plan.
``(5) A description of the role of the entities
described in subsection (b)(2) in developing the
strategic plan.
``(6) A description of projects under the strategic
plan to facilitate the community's economic adjustment
to the impact of trade, including projects to--
``(A) develop public facilities, public
services, jobs, and businesses (including
establishing a revolving loan fund);
``(B) provide for planning and technical
assistance;
``(C) provide for training;
``(D) provide for the demolition of vacant or
abandoned commercial, industrial, or
residential property;
``(E) redevelop brownfields;
``(F) establish or support land banks;
``(G) support energy conservation; and
``(H) support historic preservation.
``(7) A strategy for continuing the community's
economic adjustment to the impact of trade after the
completion of such projects.
``(8) A description of the educational and training
programs and the potential employment opportunities
available to workers in the community, including for
workers under the age of 25, and the future employment
needs of the community.
``(9) An assessment of--
``(A) the cost of implementing the strategic
plan; and
``(B) the timing of funding required by the
community to implement the strategic plan.
``(10) A description of the methods of financing to
be used to implement the strategic plan, including--
``(A) an implementation grant received under
section 274 or under other authorities;
``(B) a loan, including the establishment of
a revolving loan fund; or
``(C) other types of financing.
``(11) An assessment of how the community will
address unemployment among agricultural commodity
producers, if applicable.
``(d) Approval; CEDS Equivalent.--
``(1) Approval.--The Secretary shall approve the
strategic plan developed by an eligible community under
this section if the Secretary determines that the
strategic plan meets the requirements of this section.
``(2) CEDS or equivalent.--The Secretary may deem an
eligible community's Comprehensive Economic Development
Strategy that substantially meets the requirements of
this section to be an approved strategic plan for
purposes of this subchapter.
``(e) Allocation.--Of the funds appropriated to carry out
this chapter for each of the fiscal years 2022 through 2026,
the Secretary may make available not more than $50,000,000 to
award grants under section 274(a)(1).
``SEC. 276. COORDINATION OF FEDERAL RESPONSE AND OTHER ADDITIONAL
TECHNICAL ASSISTANCE.
``(a) In General.--The Secretary shall coordinate the Federal
response with respect to an eligible community that is awarded
an implementation grant under section 274(a)(2) to implement
the community's strategic plan that meets the requirements of
section 275 by--
``(1) identifying and consulting, as appropriate,
with any other Federal, State, regional, or local
government agency;
``(2) assisting the community to access assistance
from other available Federal sources as necessary to
fulfill the community's strategic plan developed under
section 275; and
``(3) ensuring that such assistance is provided in a
targeted, integrated manner.
``(b) Transfer of Funds.--
``(1) Transfer of funds to other federal agencies.--
Funds appropriated to carry out this chapter may be
transferred between Federal agencies, if the funds are
used for the purposes for which the funds are
specifically appropriated.
``(2) Transfer of funds from other federal
agencies.--
``(A) In general.--Subject to subparagraph
(B), for the purposes of this chapter, the
Secretary may accept transfers of funds from
other Federal agencies if the funds are used
for the purposes for which (and in accordance
with the terms under which) the funds are
specifically appropriated.
``(B) Use of funds.--The transferred funds--
``(i) shall remain available until
expended; and
``(ii) may, to the extent necessary
to carry out this chapter, be
transferred to and merged by the
Secretary with the appropriations for
salaries and expenses.
``(c) Additional Technical Assistance.--In addition to the
coordination and assistance described in subsection (a), the
Secretary shall provide technical assistance for communities--
``(1) to identify significant impediments to economic
development that result from the impact of trade on the
community, including in the course of developing a
strategic plan under section 275; and
``(2) to access assistance under other available
sources, including State, local, or private sources, to
implement projects that diversify and strengthen the
economy in the community.
``SEC. 277. GENERAL PROVISIONS.
``(a) Regulations.--
``(1) In general.--The Secretary shall, subject to
paragraph (3), promulgate such regulations as may be
necessary to carry out this subchapter, including with
respect to--
``(A) administering the awarding of grants
under section 274, including establishing
guidelines for the submission and evaluation of
grant applications under such section; and
``(B) establishing guidelines for the
evaluation of strategic plans developed to meet
the requirements of section 275.
``(2) Consultations.--The Secretary shall consult
with the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the
Senate not later than 90 days prior to promulgating any
final rule or regulation under this subsection.
``(3) Relationship to existing regulations.--The
Secretary, to the maximum extent practicable, shall--
``(A) rely on and apply regulations
promulgated to carry out other economic
development programs of the Department of
Commerce in carrying out this subchapter; and
``(B) provide guidance regarding the manner
and extent to which such other economic
development programs relate to this subchapter.
``(b) Resources.--The Secretary shall allocate such resources
as may be necessary to provide sufficiently individualized
assistance to each eligible community that receives a grant
under section 274(a) or seeks technical assistance under
section 276(c) to develop and implement a strategic plan that
meets the requirements of section 275.''.
(b) Clerical Amendment.--The table of contents for the Trade
Act of 1974 is amended by striking the items relating to
chapter 4 of title II and inserting the following:
``Chapter 4--Trade Adjustment Assistance for Communities
``subchapter a--trade adjustment assistance for communities
``Sec. 271. Definitions.
``Sec. 272. Establishment of trade adjustment assistance for communities
program.
``Sec. 273. Eligibility; notification of eligibility.
``Sec. 274. Grants to eligible communities.
``Sec. 275. Strategic plans.
``Sec. 276. Coordination of Federal response and other additional
technical assistance.
``Sec. 277. General provisions.
``subchapter b--community college and career training grant program
``Sec. 279. Community College and Career Training Grant Program.
``Sec. 279A. Authorization of appropriations.''.
SEC. 133302. TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITY COLLEGES AND
CAREER TRAINING.
Section 279 of the Trade Act of 1974, as redesignated by
section 133301(a)(2), is amended as follows:
(1) In subsection (a)--
(A) in paragraph (1), by striking ``eligible
institutions'' and inserting ``eligible
entities''; and
(B) in paragraph (2)--
(i) in the matter preceding
subparagraph (A), by striking
``eligible institution'' and inserting
``eligible entity''; and
(ii) in subparagraph (B)--
(I) by striking
``$1,000,000'' and inserting
``$2,500,000'';
(II) by striking ``(B)'' and
inserting ``(B)(i) in the case
of an eligible institution,'';
(III) by striking the period
at the end and inserting ``;
or''; and
(IV) by adding at the end the
following:
``(ii) in the case of a consortium of
eligible institutions, a grant under this
section in excess of $15,000,000.''.
(2) In subsection (b), by adding at the end the
following:
``(3) Eligible entity.--The term `eligible entity'
means an eligible institution or a consortium of
eligible institutions.
``(4) Underserved community.--The term `underserved
community' has the meaning given that term in section
247.''.
(3) In subsection (c)--
(A) by striking ``eligible institution'' each
place it appears and inserting ``eligible
entity''; and
(B) in paragraph (5)(A)(i)--
(i) in subclause (I), by striking
``and'' at the end; and
(ii) by adding at the end the
following:
``(III) any opportunities to
support industry or sector
partnerships to develop or
expand quality academic
programs and curricula; and''.
(4) In subsection (d), by striking ``eligible
institution'' each place it appears and inserting
``eligible entity''.
(5) By redesignating subsection (e) as subsection (h)
and inserting after subsection (d) the following:
``(e) Use of Funds.--
``(1) In general.--An eligible entity shall use a
grant awarded under this section to establish and scale
career training programs, including career and
technical education programs, and career pathways and
supports for students participating in such programs.
``(2) Student support and emergency services.--Not
less than 15 percent of the amount of a grant awarded
to an eligible entity under this section shall be used
to carry out student support services, which may
include the following:
``(A) Supportive services, including
childcare, transportation, mental health
services, or substance use disorder prevention
and treatment, assistance in obtaining health
insurance coverage, housing, and other
benefits, as appropriate.
``(B) Connecting students to State or Federal
means-tested benefits programs.
``(C) The provision of direct financial
assistance to help students facing financial
hardships that may impact enrollment in or
completion of a program supported by such
funds.
``(D) Navigation, coaching, mentorship, and
case management services, including providing
information and outreach to the population
described in subparagraph (C) to take part in
such a program.
``(E) Providing access to necessary supplies,
materials, technological devices, or required
equipment, and other supports necessary to
participate in such a program.
``(f) Plan for Outreach to Underserved Communities.--
``(1) In general.--In awarding grants under this
section, the Secretary shall--
``(A) ensure that eligible institutions
effectively serve individuals from underserved
communities; and
``(B) develop a plan to ensure that grants
provided under this subchapter effectively
serve individuals from underserved communities.
``(2) Updates.--The Secretary shall update the plan
required by paragraph (1)(B) on an annual basis.
``(3) Submission to congress.--The Secretary shall
submit the plan required by paragraph (1)(B) and each
update to the plan required by paragraph (2) to
Congress.
``(g) Geographic Diversity.--The Secretary shall, in awarding
grants under this section, ensure that grants are awarded with
respect to eligible entities from geographically diverse
areas.''.
PART 4--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS
SEC. 133401. DEFINITIONS.
Section 291 of the Trade Act of 1974 (19 U.S.C. 2401) is
amended--
(1) by striking paragraph (3);
(2) by redesignating paragraphs (4) through (7) as
paragraphs (3) through (6), respectively; and
(3) by adding at the end the following:
``(7) Underserved community.--The term `underserved
community' has the meaning given that term in section
247.''.
SEC. 133402. GROUP ELIGIBILITY REQUIREMENTS.
Section 292 of the Trade Act of 1974 (19 U.S.C. 2401a) is
amended--
(1) in subsection (c)--
(A) in paragraph (1)--
(i) by striking ``85 percent of''
each place it appears; and
(ii) in subparagraph (D), by adding
``and'' at the end;
(B) in paragraph (2), by striking ``(2)'' and
inserting ``(2)(A)(i)'';
(C) by redesignating paragraph (3) as clause
(ii) of paragraph (2)(A) (as designated by
subparagraph (B));
(D) in clause (ii) of paragraph (2)(A) (as
redesignated by subparagraph (C))--
(i) by striking ``importantly''; and
(ii) by striking the period at the
end and inserting ``; or'' ; and
(E) in paragraph (2), by adding at the end
the following:
``(B)(i) the volume of exports of the agricultural
commodity produced by the group in the marketing year
with respect to which the group files the petition
decreased compared to the average volume of such
exports during the 3 marketing years preceding such
marketing year; and
``(ii) the decrease in such exports contributed to
the decrease in the national average price, quantity of
production, or value of production of, or cash receipts
for, the agricultural commodity, as described in
paragraph (1).''; and
(2) in subsection (e)(3), by adding at the end before
the period the following: ``or exports''.
SEC. 133403. BENEFIT INFORMATION TO AGRICULTURAL COMMODITY PRODUCERS.
Section 295(a) of the Trade Act of 1974 (19 U.S.C. 2401d(a))
is amended by adding at the end the following: ``The Secretary
shall develop a plan to conduct targeted sustained outreach and
offer assistance to agricultural commodity producers from
underserved communities''.
SEC. 133404. QUALIFYING REQUIREMENTS AND BENEFITS FOR AGRICULTURAL
COMMODITY PRODUCERS.
Section 296 of the Trade Act of 1974 (19 U.S.C. 2401e) is
amended--
(1) in subsection (a)(1)(A), by striking ``90 days''
and inserting ``120 days'';
(2) in subsection (b)--
(A) in paragraph (3)(B), by striking
``$4,000'' and inserting ``$12,000''; and
(B) in paragraph (4)(C), by striking
``$8,000'' and inserting ``$24,000'';
(3) in subsection (c), by striking ``$12,000'' and
inserting ``$36,000''; and
(4) by adding at the end the following new
subsection:
``(e) Adjustments for Inflation.--
``(1) In general.--The Secretary of Agriculture shall
adjust each dollar amount limitation described in this
section on the date that is 30 days after the date of
the enactment of this subsection, and at the beginning
of each fiscal year thereafter, to reflect the
percentage (if any) of the increase in the average of
the Consumer Price Index for the preceding 12-month
period compared to the Consumer Price Index for fiscal
year 2020.
``(2) Special rules for calculation of adjustment.--
In making an adjustment under paragraph (1), the
Secretary--
``(A) shall round the amount of any increase
in the Consumer Price Index to the nearest
dollar; and
``(B) may ignore any such increase of less
than 1 percent.
``(3) Consumer price index defined.--For purposes of
this subsection, the term `Consumer Price Index' means
the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the
Department of Labor.''.
PART 5--APPROPRIATIONS AND OTHER MATTERS
SEC. 133501. EXTENSION OF AND APPROPRIATIONS FOR TRADE ADJUSTMENT
ASSISTANCE PROGRAM.
(a) Extension of Termination Provisions.--Section 285 of the
Trade Act of 1974 (19 U.S.C. 2271 note) is amended by striking
``2021'' each place it appears and inserting ``2028''.
(b) Training Funds.--Section 236(a)(2)(A) of the Trade Act of
1974 (19 U.S.C. 2296(a)(2)(A)) , as amended by section
133110(c)(2)(B), is further amended--
(1) by striking ``shall not exceed $450,000,000'' and
inserting the following: ``shall not exceed--
``(i) $450,000,000'';
(2) by striking the period at the end and inserting
``; and''; and
(3) by adding at the end the following:
``(ii) $1,000,000,000 for each of the fiscal years 2022
through 2028.''.
(c) Reemployment Trade Adjustment Assistance.--Section
246(b)(1) of the Trade Act of 1974 (19 U.S.C. 2318(b)(1)) is
amended by striking ``2021'' and inserting ``2028''.
(d) Authorizations of Appropriations.--
(1) Trade adjustment assistance for workers.--Section
245 of the Trade Act of 1974 (19 U.S.C. 2317) is
amended--
(A) in subsection (a), by striking ``2021''
and inserting ``2028''; and
(B) by adding at the end the following:
``(d) Reservation by the Secretary.--Of the funds
appropriated to carry out this chapter for any fiscal year, the
Secretary of Labor may reserve not more than 0.5 percent for
technical assistance, pilots and demonstrations, and the
evaluation of activities carried out under this chapter.''.
(2) Trade adjustment assistance for firms.--Section
255(a) of the Trade Act of 1974 (19 U.S.C. 2345(a)) is
amended in the first sentence by adding at the end
before the period the following: ``and $50,000,000 for
each of the fiscal years 2022 through 2028''.
(3) Trade adjustment assistance for farmers.--Section
298 of the Trade Act of 1974 (19 U.S.C. 2401g(a)) is
amended--
(A) in subsection (a)--
(i) by striking ``$90,000,000'' and
inserting ``$50,000,000''; and
(ii) by striking ``2021'' and
inserting ``2028''; and
(B) by adding at the end the following:
``(c) Reservation by the Secretary.--Of the funds
appropriated to carry out this chapter for any fiscal year, the
Secretary of Agriculture may not reserve more than 5 percent
for technical assistance, pilots and demonstrations, and the
evaluation of activities carried out under this chapter.''.
(e) Appropriations.--
(1) Trade adjustment assistance for workers.--In
addition to amounts otherwise available, there is
appropriated for each of fiscal years 2022 through
2028, out of any money in the Treasury not otherwise
appropriated, $1,000,000,000, to remain available until
expended, to carry out the purposes of chapter 2 of
title II of the Trade Act of 1974, as authorized by
section 245 of the Trade Act of 1974 (19 U.S.C. 2317)
(as amended by subsection (d)).
(2) Trade adjustment assistance for firms.--In
addition to amounts otherwise available, there is
appropriated for each of fiscal years 2022 through
2028, out of any money in the Treasury not otherwise
appropriated, $50,000,000, to remain available until
expended, to carry out the provisions of chapter 3 of
title II of the Trade Act of 1974, as authorized by
section 255 of the Trade Act of 1974 (19 U.S.C. 2345)
(as amended by subsection (d)).
(3) Trade adjustment assistance for communities.--
(A) In general.--In addition to amounts
otherwise available, there is appropriated for
each of fiscal years 2022 through 2026, out of
any money in the Treasury not otherwise
appropriated, $1,000,000,000, to remain
available until expended, to carry out
subchapter A of chapter 4 of title II of the
Trade Act of 1974, as added by section 133301
of this Act, as added by subsection (d).
(B) Salaries and expenses.--Of the amounts
appropriated pursuant subparagraph (A) for each
of fiscal years 2022 through 2026, not more
than $40,000,000 shall be made available for
the salaries and expenses of personnel
administering subchapter A of chapter 4 of
title II of the Trade Act of 1974.
(C) Supplement and not supplant.--Amounts
appropriated pursuant to subparagraph (A) for
each of the fiscal years 2022 through 2026
shall be used to supplement, and not supplant,
other Federal, State, regional, and local
government funds made available to provide
economic development assistance for
communities.
(4) Trade adjustment assistance for community
colleges and career training.--
(A) In general.--In addition to amounts
otherwise available, there is appropriated for
each of fiscal years 2022 through 2028, out of
any money in the Treasury not otherwise
appropriated, $1,300,000,000, to remain
available until expended, to carry out
subchapter B of chapter 4 of title II of the
Trade Act of 1974, as designated by section
13301 of this Act, as authorized by section
279A of such subchapter B (as redesignated).
(B) Reservation by the secretary.--Of the
funds appropriated to carry out subchapter B of
chapter 4 of title II of the Trade Act of 1974
for each of fiscal years 2002 through 2028, the
Secretary of Labor may reserve not more than 5
percent for administration of the program,
including providing technical assistance,
sustained outreach to eligible institutions
effectively serving underserved communities,
pilots and demonstrations, and a rigorous
third-party evaluation of the program carried
out under such subchapter.
(5) Trade adjustment assistance for farmers.--In
addition to amounts otherwise available, there is
appropriated for each of fiscal years 2022 through
2028, out of any money in the Treasury not otherwise
appropriated, $50,000,000, to remain available until
expended, to carry out the purposes of chapter 6 of
title II of the Trade Act of 1974, as authorized by
section 298 of the Trade Act of 1974 (19 U.S.C. 2401)
(as amended by subsection (d)).
SEC. 133502. APPLICABILITY OF TRADE ADJUSTMENT ASSISTANCE PROVISIONS.
(a) Workers Certified Before Date of Enactment.--
(1) In general.--Except as provided in paragraphs (2)
and (3), a worker certified as eligible for adjustment
assistance under section 222 of the Trade Act of 1974
before the date of the enactment of this Act shall be
eligible, on and after such date of enactment, to
receive benefits only under the provisions of chapter 2
of title II of the Trade Act of 1974, as in effect on
such date of enactment, or as such provisions may be
amended after such date of enactment.
(2) Computation of maximum benefits.--Benefits
received by a worker described in paragraph (1) under
chapter 2 of title II of the Trade Act of 1974 before
the date of the enactment of this Act shall be included
in any determination of the maximum benefits for which
the worker is eligible under the provisions of chapter
2 of title II of the Trade Act of 1974, as in effect on
the date of the enactment of this Act, or as such
provisions may be amended after such date of enactment.
(3) Authority to make adjustments to benefits.--For
the 90-day period beginning on the date of the
enactment of this Act, the Secretary is authorized to
make any adjustments to benefits to workers described
in paragraph (1) that the Secretary determines to be
necessary and appropriate in applying and administering
the provisions of chapter 2 of title II of the Trade
Act of 1974, as in effect on the date of the enactment
of this Act, or as such provisions may be amended after
such date of enactment, in a manner that ensures parity
of treatment between the benefits of such workers and
the benefits of workers certified after such date of
enactment.
(b) Workers Not Certified Pursuant to Certain Petitions Filed
Before Date of Enactment.--
(1) Certifications of workers not certified before
date of enactment.--
(A) Criteria if a determination has not been
made.--If, as of the date of the enactment of
this Act, the Secretary of Labor has not made a
determination with respect to whether to
certify a group of workers as eligible to apply
for adjustment assistance under section 222 of
the Trade Act of 1974 pursuant to a petition
described in subparagraph (C), the Secretary
shall make that determination based on the
requirements of section 222 of the Trade Act of
1974, as in effect on such date of enactment.
(B) Reconsideration of denials of
certifications.--If, before the date of the
enactment of this Act, the Secretary made a
determination not to certify a group of workers
as eligible to apply for adjustment assistance
under section 222 of the Trade Act of 1974
pursuant to a petition described in
subparagraph (C), the Secretary shall--
(i) reconsider that determination;
and
(ii) if the group of workers meets
the requirements of section 222 of the
Trade Act of 1974, as in effect on such
date of enactment, certify the group of
workers as eligible to apply for
adjustment assistance.
(C) Petition described.--A petition described
in this subparagraph is a petition for a
certification of eligibility for a group of
workers filed under section 221 of the Trade
Act of 1974 on or after January 1, 2021, and
before the date of the enactment of this Act.
(2) Eligibility for benefits.--
(A) In general.--Except as provided in
subparagraph (B), a worker certified as
eligible to apply for adjustment assistance
under section 222 of the Trade Act of 1974
pursuant to a petition described in paragraph
(1)(C) shall be eligible, on and after the date
of the enactment of this Act, to receive
benefits only under the provisions of chapter 2
of title II of the Trade Act of 1974, as in
effect on such date of enactment, or as such
provisions may be amended after such date of
enactment.
(B) Computation of maximum benefits.--
Benefits received by a worker described in
paragraph (1) under chapter 2 of title II of
the Trade Act of 1974 before the date of the
enactment of this Act shall be included in any
determination of the maximum benefits for which
the worker is eligible under the provisions of
chapter 2 of title II of the Trade Act of 1974,
as in effect on the date of the enactment of
this Act, or as such provisions may be amended
after such date of enactment.
(c) Conforming Amendments.--
(1) Trade act of 2002.--Section 151 of the Trade Act
of 2002 (19 U.S.C. note prec. 2271) is amended by
striking subsections (a), (b), and (c).
(2) Trade and globalization adjustment assistance act
of 2009.--Section 1891 of the Trade and Globalization
Adjustment Assistance Act of 2009 (19 U.S.C. 2271 note)
is repealed.
(3) Trade adjustment assistance extension act of
2011.--The Trade Adjustment Assistance Extension Act of
2011 is amended--
(A) in section 201 (19 U.S.C. note prec.
2271), by striking subsections (b) and (c); and
(B) in section 231(a) (19 U.S.C. 2271 note),
by striking paragraphs (1)(B) and (2).
(4) Trade adjustment assistance reauthorization act
of 2015.--The Trade Adjustment Assistance
Reauthorization Act of 2015 is amended--
(A) in section 402 (19 U.S.C. note prec.
2271), by striking subsections (b) and (c); and
(B) in section 405(a)(1) (19 U.S.C.
2319(a)(1)), by striking subparagraph (B).
(d) Trade Adjustment Assistance for Firms.--
(1) Certification of firms not certified before date
of enactment.--
(A) Criteria if a determination has not been
made.--If, as of the date of the enactment of
this Act, the Secretary of Commerce has not
made a determination with respect to whether to
certify a firm as eligible to apply for
adjustment assistance under section 251 of the
Trade Act of 1974 pursuant to a petition
described in subparagraph (C), the Secretary
shall make that determination based on the
requirements of section 251 of the Trade Act of
1974, as in effect on such date of enactment.
(B) Reconsideration of denial of certain
petitions.--If, before the date of the
enactment of this Act, the Secretary made a
determination not to certify a firm as eligible
to apply for adjustment assistance under
section 251 of the Trade Act of 1974 pursuant
to a petition described in subparagraph (C),
the Secretary shall--
(i) reconsider that determination;
and
(ii) if the firm meets the
requirements of section 251 of the
Trade Act of 1974, as in effect on such
date of enactment, certify the firm as
eligible to apply for adjustment
assistance.
(C) Petition described.--A petition described
in this subparagraph is a petition for a
certification of eligibility filed by a firm or
its representative under section 251 of the
Trade Act of 1974 on or after January 1, 2021,
and before the date of the enactment of this
Act.
(2) Certification of firms that did not submit
petitions between january 1, 2021, and date of
enactment.--
(A) In general.--The Secretary of Commerce
shall certify a firm described in subparagraph
(B) as eligible to apply for adjustment
assistance under section 251 of the Trade Act
of 1974, as in effect on the date of the
enactment of this Act, if the firm or its
representative files a petition for a
certification of eligibility under section 251
of the Trade Act of 1974 not later than 90 days
after such date of enactment.
(B) Firm described.--A firm described in this
subparagraph is a firm that the Secretary
determines would have been certified as
eligible to apply for adjustment assistance
if--
(i) the firm or its representative
had filed a petition for a
certification of eligibility under
section 251 of the Trade Act of 1974 on
a date during the period beginning on
January 1, 2021, and ending on the day
before the date of the enactment of
this Act; and
(ii) the provisions of chapter 3 of
title II of the Trade Act of 1974, as
in effect on such date of enactment,
had been in effect on that date during
the period described in clause (i).
Subtitle E
PART 1--PROVISIONS RELATING TO PATHWAYS TO HEALTH CAREERS
SEC. 134101. PATHWAYS TO HEALTH CAREERS ACT.
(a) Transition Funding.--There is appropriated, out of any
funds in the Treasury not otherwise appropriated, $15,000,000
to the Secretary of Health and Human Services to provide
technical assistance and cover administrative costs associated
with implementing section 2071 of the Social Security Act (as
added by subsection (b)).
(b) Career Pathways Through Health Profession Opportunity
Grants.--Effective October 1, 2021, title XX of the Social
Security Act (42 U.S.C. 1397-1397n-13) is amended by adding at
the end the following:
``Subtitle D--Career Pathways Through Health Profession Opportunity
Grants
``SEC. 2071. CAREER PATHWAYS THROUGH HEALTH PROFESSION OPPORTUNITY
GRANTS.
``(a) Application Requirements.--An eligible entity desiring
a grant under this section for a project shall submit to the
Secretary an application for the grant, that includes the
following:
``(1) A description of how the applicant will use a
career pathways approach to train eligible individuals
for health professions that pay well or will put
eligible individuals on a career path to an occupation
that pays well, under the project.
``(2) A description of the adult basic education and
literacy activities, work readiness activities,
training activities, and case management and career
coaching services that the applicant will use to assist
eligible individuals to gain work experience,
connection to employers, and job placement, and a
description of the plan for recruiting, hiring, and
training staff to provide the case management,
mentoring, and career coaching services, under the
project directly or through local governmental,
apprenticeship, educational, or charitable
institutions.
``(3) In the case of an application for a grant under
this section for a demonstration project described in
subsection (c)(2)(B)(i)(I)--
``(A) a demonstration that the State in which
the demonstration project is to be conducted
has in effect policies or laws that permit
certain allied health and behavioral health
care credentials to be awarded to people with
certain arrest or conviction records (which
policies or laws shall include appeals
processes, waivers, certificates, and other
opportunities to demonstrate rehabilitation to
obtain credentials, licensure, and approval to
work in the proposed health careers), and a
plan described in the application that will use
a career pathway to assist participants with
such a record in acquiring credentials,
licensing, and employment in the specified
careers;
``(B) a discussion of how the project or
future strategic hiring decisions will
demonstrate the experience and expertise of the
project in working with job seekers who have
arrest or conviction records or employers with
experience working with people with arrest or
conviction records;
``(C) an identification of promising
innovations or best practices that can be used
to provide the training;
``(D) a proof of concept or demonstration
that the applicant has done sufficient research
on workforce shortage or in-demand jobs for
which people with certain types of arrest or
conviction records can be hired;
``(E) a plan for recruiting students who are
eligible individuals into the project; and
``(F) a plan for providing post-employment
support and ongoing training as part of a
career pathway under the project.
``(4) In the case of an application for a grant under
this section for a demonstration project described in
subsection (c)(2)(B)(i)(II)--
``(A) a description of the partnerships,
strategic staff hiring decisions, tailored
program activities, or other programmatic
elements of the project, such as training plans
for doulas and other community health workers
and training plans for midwives and other
allied health professions, that are designed to
support a career pathway in pregnancy, birth,
or post-partum services; and
``(B) a demonstration that the State in which
the demonstration project is to be conducted
recognizes doulas or midwives, as the case may
be.
``(5) A demonstration that the applicant has
experience working with low-income populations, or a
description of the plan of the applicant to work with a
partner organization that has the experience.
``(6) A plan for providing post-employment support
and ongoing training as part of a career pathway under
the project.
``(7) A description of the support services that the
applicant will provide under the project, including a
plan for how child care and transportation support
services will be guaranteed and, if the applicant will
provide a cash stipend or wage supplement, how the
stipend or supplement would be calculated and
distributed.
``(8) A certification by the applicant that the
project development included--
``(A) consultation with a local workforce
development board established under section 107
of the Workforce Innovation and Opportunity
Act;
``(B) consideration of apprenticeship and
pre-apprenticeship models registered under the
Act of August 16, 1937 (also known as the
`National Apprenticeship Act');
``(C) consideration of career pathway
programs in the State in which the project is
to be conducted; and
``(D) a review of the State plan under
section 102 or 103 of the Workforce Innovation
and Opportunity Act.
``(9) A description of the availability and relevance
of recent labor market information and other pertinent
evidence of in-demand jobs or worker shortages.
``(10) A certification that the applicant will
directly provide or contract for the training services
described in the application.
``(11) A commitment by the applicant that, if the
grant is made to the applicant, the applicant will--
``(A) during the planning period for the
project, provide the Secretary with any
information needed by the Secretary to
establish adequate data reporting and
administrative structure for the project;
``(B) hire a person to direct the project not
later than the end of the planning period
applicable to the project;
``(C) accept all technical assistance offered
by the Secretary with respect to the grant;
``(D) participate in peer technical
assistance conferences as are regularly
scheduled by the Secretary; and
``(E) provide all data required by the
Secretary under subsection (g).
``(b) Preferences in Considering Applications.--In
considering applications for a grant under this section, the
Secretary shall give preference to--
``(1) applications submitted by applicants to whom a
grant was made under this section or any predecessor to
this section;
``(2) applications submitted by applicants who have
business and community partners in each of the
following categories:
``(A) State and local government agencies and
social service providers, including a State or
local entity that administers a State program
funded under part A of this title;
``(B) institutions of higher education,
apprenticeship programs, and local workforce
development boards established under section
107 of the Workforce Innovation and Opportunity
Act; and
``(C) health care employers, health care
industry or sector partnerships, labor unions,
and labor-management partnerships;
``(3) applications that include opportunities for
mentoring or peer support, and make career coaching
available, as part of the case management plan;
``(4) applications which describe a project that will
serve a rural area in which--
``(A) the community in which the individuals
to be enrolled in the project reside is
located;
``(B) the project will be conducted; or
``(C) an employer partnership that has
committed to hiring individuals who
successfully complete all activities under the
project is located;
``(5) applications that include a commitment to
providing project participants with a cash stipend or
wage supplement; and
``(6) applications which have an emergency cash fund
to assist project participants financially in emergency
situations.
``(c) Grants.--
``(1) Competitive grants.--
``(A) Grant authority.--
``(i) In general.--The Secretary may
make a grant in accordance with this
paragraph to an eligible entity whose
application for the grant is approved
by the Secretary, to conduct a project
designed to train low-income
individuals for allied health
professions, health information
technology, physicians assistants,
nursing assistants, registered nurse,
advanced practice nurse, and other
professions considered part of a health
care career pathway model.
``(ii) Guarantee of grantees in each
state and the district of columbia.--
For each grant cycle, the Secretary
shall award a grant under this
paragraph to at least 2 eligible
entities in each State that is not a
territory, to the extent there are a
sufficient number of applications
submitted by the entities that meet the
requirements applicable with respect to
such a grant. If, for a grant cycle,
there are fewer than 2 such eligible
entities in a State, the Secretary
shall include that information in the
report required by subsection (g)(2)
that covers the fiscal year.
``(B) Guarantee of grants for indian
populations.--From the amount reserved under
subsection (i)(2)(B) for each fiscal year, the
Secretary shall award a grant under this
paragraph to at least 10 eligible entities that
are an Indian tribe, a tribal organization, or
a tribal college or university, to the extent
there are a sufficient number of applications
submitted by the entities that meet the
requirements applicable with respect to such a
grant.
``(C) Guarantee of grantees in the
territories.--From the amount reserved under
subsection (i)(2)(C) for each fiscal year, the
Secretary shall award a grant under this
paragraph to at least 2 eligible entities that
are located in a territory, to the extent there
are a sufficient number of applications
submitted by the entities that meet the
requirements applicable with respect to such a
grant.
``(2) Grants for demonstration projects.--
``(A) Grant authority.--The Secretary shall
make a grant in accordance with this subsection
to an eligible entity whose application for the
grant is approved by the Secretary, to conduct
a demonstration project that meets the
requirements of subparagraph (B).
``(B) Requirements.--The requirements of this
subparagraph are the following:
``(i) Type of project.--The
demonstration project shall be of 1 of
the following types:
``(I) Individuals with arrest
or conviction records
demonstration.--The
demonstration project shall be
of a type designed to provide
education and training for
eligible individuals with
arrest or conviction records to
enter and follow a career
pathway in the health
professions through occupations
that pay well and are expected
to experience a labor shortage
or be in high demand.
``(II) Pregnancy and
childbirth career pathway
demonstration.--The
demonstration project shall be
of a type designed to provide
education and training for
eligible individuals to enter
and follow a career pathway in
the field of pregnancy,
childbirth, post-partum, or
childbirth and post-partum, in
a State that recognizes doulas
or midwives and that provides
payment for services provided
by doulas or midwives, as the
case may be, under private or
public health insurance plans.
``(ii) Duration.--The demonstration
project shall be conducted for not less
than 5 years.
``(C) Minimum allocation of funds for each
type of demonstration project.--
``(i) Individuals with arrest or
conviction records demonstrations.--Not
less than $6,375,000 of the amounts
made available for grants under this
paragraph shall be used to make grants
for demonstration projects of the type
described in subparagraph (B)(i)(I).
``(ii) Pregnancy and childbirth
career pathway demonstrations.--Not
less than $6,375,000 of the amounts
made available for grants under this
paragraph shall be used to make grants
for demonstration projects of the type
described in subparagraph (B)(i)(II).
``(3) Grant cycle.--The grant cycle under this
section shall be not less than 5 years, with a planning
period of not more than the first 12 months of the
grant cycle. During the planning period, the amount of
the grant shall be in such lesser amount as the
Secretary determines appropriate.
``(d) Use of Grant.--
``(1) In general.--An entity to which a grant is made
under this section shall use the grant in accordance
with the approved application for the grant.
``(2) Support to be provided.--
``(A) Required support.--A project for which
a grant is made under this section shall
include the following:
``(i) An assessment for adult basic
skill competency, and provision of
adult basic skills education if
necessary for lower-skilled eligible
individuals to enroll in the project
and go on to enter and complete post-
secondary training, through means
including the following:
``(I) Establishing a network
of partners that offer pre-
training activities for project
participants who need to
improve basic academic skills
or English language proficiency
before entering a health
occupational training career
pathway program.
``(II) Offering resources to
enable project participants to
continue advancing adult basic
skill proficiency while
enrolled in a career pathway
program.
``(III) Embedding adult basic
skill maintenance as part of
ongoing post-graduation career
coaching and mentoring.
``(ii) A guarantee that child care is
an available and affordable support
service for project participants
through means such as the following:
``(I) Referral to, and
assistance with, enrollment in
a subsidized child care
program.
``(II) Direct payment to a
child care provider if a slot
in a subsidized child care
program is not available or
reasonably accessible.
``(III) Payment of co-
payments or associated fees for
child care.
``(iii) Case management plans that
include career coaching (with the
option to offer appropriate peer
support and mentoring opportunities to
help develop soft skills and social
capital), which may be offered on an
ongoing basis before, during, and after
initial training as part of a career
pathway model.
``(iv) A plan to provide project
participants with transportation
through means such as the following:
``(I) Referral to, and
assistance with enrollment in,
a subsidized transportation
program.
``(II) If a subsidized
transportation program is not
reasonably available, direct
payments to subsidize
transportation costs.
For purposes of this clause, the term
`transportation' includes public
transit, or gasoline for a personal
vehicle if public transit is not
reasonably accessible or available.
``(v) In the case of a demonstration
project of the type described in
subsection (c)(2)(B)(i)(I), access to
legal assistance for project
participants for the purpose of
addressing arrest or conviction records
and associated workforce barriers.
``(B) Allowed support.--The goods and
services provided under a project for which a
grant is made under this section may include
the following:
``(i) A cash stipend.
``(ii) A reserve fund for financial
assistance to project participants in
emergency situations.
``(iii) Tuition, and training
materials such as books, software,
uniforms, shoes, and hair nets, and
personal protective equipment.
``(iv) In-kind resource donations
such as interview clothing and
conference attendance fees.
``(v) Assistance with accessing and
completing high school equivalency or
adult basic education courses as
necessary to achieve success in the
project and make progress toward career
goals.
``(vi) Assistance with programs and
activities, including legal assistance,
deemed necessary to address arrest or
conviction records as an employment
barrier.
``(vii) Other support services as
deemed necessary for family well-being,
success in the project, and progress
toward career goals.
``(3) Training.--The number of hours of training
provided to an eligible individual under a project for
which a grant is made under this section, for a
recognized postsecondary credential (including an
industry-recognized credential, and a certificate
awarded by a local workforce development board
established under section 107 of the Workforce
Innovation and Opportunity Act), which is awarded in
recognition of attainment of measurable technical or
occupational skills necessary to gain employment or
advance within an occupation, shall be--
``(A) not less than the number of hours of
training required for certification in that
level of skill by the State in which the
project is conducted; or
``(B) if there is no such requirement, such
number of hours of training as the Secretary
finds is necessary to achieve that skill level.
``(4) Inclusion of tanf recipients.--In the case of a
project for which a grant is made under this section
that is conducted in a State that has a program funded
under part A of title IV, at least 10 percent of the
eligible individuals to whom support is provided under
the project shall meet the income eligibility
requirements under that State program, without regard
to whether the individuals receive benefits or services
directly under that State program.
``(5) Income limitation.--An entity to which a grant
is made under this section shall not use the grant to
provide support to a person who is not an eligible
individual.
``(6) Prohibition.--An entity to which a grant is
made under this section shall not use the grant for
purposes of entertainment, except that case management
and career coaching services may include celebrations
of specific career-based milestones such as completing
a semester, graduation, or job placement.
``(e) Technical Assistance.--
``(1) In general.--The Secretary shall provide
technical assistance--
``(A) to assist eligible entities in applying
for grants under this section;
``(B) that is tailored to meet the needs of
grantees at each stage of the administration of
projects for which grants are made under this
section;
``(C) that is tailored to meet the specific
needs of Indian tribes, tribal organizations,
and tribal colleges and universities;
``(D) that is tailored to meet the specific
needs of the territories;
``(E) that is tailored to meet the specific
needs of eligible entities in carrying out
demonstration projects for which a grant is
made under this section; and
``(F) to facilitate the exchange of
information among eligible entities regarding
best practices and promising practices used in
the projects.
``(2) Continuation of peer technical assistance
conferences.--The Secretary shall continue to hold peer
technical assistance conferences for entities to which
a grant is made under this section or was made under
the immediate predecessor of this section. The
preceding sentence shall not be interpreted to require
any such conference to be held in person.
``(f) Evaluation of Demonstration Projects.--
``(1) In general.--The Secretary shall, by grant,
contract, or interagency agreement, conduct rigorous
and well-designed evaluations of the demonstration
projects for which a grant is made under this section.
``(2) Requirement applicable to individuals with
arrest or conviction records demonstration.--In the
case of a project of the type described in subsection
(c)(2)(B)(i)(I), the evaluation shall include
identification of successful activities for creating
opportunities for developing and sustaining,
particularly with respect to low-income individuals
with arrest or conviction records, a health professions
workforce that has accessible entry points, that meets
high standards for education, training, certification,
and professional development, and that provides
increased wages and affordable benefits, including
health care coverage, that are responsive to the needs
of the workforce.
``(3) Requirement applicable to pregnancy and
childbirth career pathway demonstration.--In the case
of a project of the type described in subsection
(c)(2)(B)(i)(II), the evaluation shall include
identification of successful activities for creating
opportunities for developing and sustaining,
particularly with respect to low-income individuals and
other entry-level workers, a career pathway that has
accessible entry points, that meets high standards for
education, training, certification, and professional
development, and that provides increased wages and
affordable benefits, including health care coverage,
that are responsive to the needs of the birth,
pregnancy, and post-partum workforce.
``(4) Rule of interpretation.--Evaluations conducted
pursuant to this subsection may include a randomized
controlled trial, but this subsection shall not be
interpreted to require an evaluation to include such a
trial.
``(g) Reports.--
``(1) To the secretary.--An eligible entity awarded a
grant to conduct a project under this section shall
submit interim reports to the Secretary on the
activities carried out under the project, and, on the
conclusion of the project, a final report on the
activities. Each such report shall include data on
participant outcomes related to earnings, employment in
health professions, graduation rate, graduation
timeliness, credential attainment, participant
demographics, and other data specified by the
Secretary.
``(2) To the congress.--During each Congress, the
Secretary shall submit to the Committee on Ways and
Means of the House of Representatives and the Committee
on Finance of the Senate a report--
``(A) on the demographics of the participants
in the projects for which a grant is made under
this section;
``(B) on the rate of which project
participants completed all activities under the
projects;
``(C) on the employment credentials acquired
by project participants;
``(D) on the employment of project
participants on completion of activities under
the projects, and the earnings of project
participants at entry into employment;
``(E) on best practices and promising
practices used in the projects;
``(F) on the nature of any technical
assistance provided to grantees under this
section;
``(G) on, with respect to the period since
the period covered in the most recent prior
report submitted under this paragraph--
``(i) the number of applications
submitted under this section, with a
separate statement of the number of
applications referred to in subsection
(b)(5);
``(ii) the number of applications
that were approved, with a separate
statement of the number of such
applications referred to in subsection
(b)(5); and
``(iii) a description of how grants
were made in any case described in the
last sentence of subsection
(c)(1)(A)(ii); and
``(H) that includes an assessment of the
effectiveness of the projects with respect to
addressing health professions workforce
shortages or in-demand jobs.
``(h) Definitions.--In this section:
``(1) Allied health profession.--The term `allied
health profession' has the meaning given in section
799B(5) of the Public Health Service Act.
``(2) Career pathway.--The term `career pathway' has
the meaning given that term in section 3(7) of the
Workforce Innovation and Opportunity Act.
``(3) Doula.--The term `doula' means an individual
who--
``(A) is certified by an organization that
has been established for not less than 5 years
and that requires the completion of continuing
education to maintain the certification, to
provide non-medical advice, information,
emotional support, and physical comfort to an
individual during the individual's pregnancy,
childbirth, and post-partum period; and
``(B) maintains the certification by
completing the required continuing education.
``(4) Eligible entity.--The term `eligible entity'
means any of the following entities that demonstrates
in an application submitted under this section that the
entity has the capacity to fully develop and administer
the project described in the application:
``(A) A local workforce development board
established under section 107 of the Workforce
Innovation and Opportunity Act.
``(B) A State or territory, a political
subdivision of a State or territory, or an
agency of a State, territory, or such a
political subdivision, including a State or
local entity that administers a State program
funded under part A of this title.
``(C) An Indian tribe, a tribal organization,
or a tribal college or university.
``(D) An institution of higher education (as
defined in the Higher Education Act of 1965).
``(E) A hospital (as defined in section
1861(e)).
``(F) A high-quality skilled nursing
facility.
``(G) A Federally qualified health center (as
defined in section 1861(aa)(4)).
``(H) A nonprofit organization described in
section 501(c)(3) of the Internal Revenue Code
of 1986, a labor organization, or an entity
with shared labor-management oversight, that
has a demonstrated history of providing health
profession training to eligible individuals.
``(I) In the case of a demonstration project
of the type provided for in subsection
(c)(2)(B)(i)(II) of this section, an entity
recognized by a State, Indian tribe, or tribal
organization as qualified to train doulas or
midwives, if midwives or doulas, as the case
may be, are permitted to practice in the State
involved.
``(J) An opioid treatment program (as defined
in section 1861(jjj)(2)), and other high
quality comprehensive addiction care providers.
``(5) Eligible individual.--The term `eligible
individual' means an individual whose family income
does not exceed 200 percent of the Federal poverty
level.
``(6) Federal poverty level.--The term `Federal
poverty level' means the poverty line (as defined in
section 673(2) of the Omnibus Budget Reconciliation Act
of 1981, including any revision required by such
section applicable to a family of the size involved).
``(7) Indian tribe; tribal organization.--The terms
`Indian tribe' and `tribal organization' have the
meaning given the terms in section 4 of the Indian
Self-Determination and Education Assistance Act (25
U.S.C. 450b).
``(8) Institution of higher education.--The term
`institution of higher education' has the meaning given
the term in section 101 or 102(a)(1)(B) of the Higher
Education Act of 1965.
``(9) Territory.--The term `territory' means the
Commonwealth of Puerto Rico, the United States Virgin
Islands, Guam, the Northern Mariana Islands, and
American Samoa.
``(10) Tribal college or university.--The term
`tribal college or university' has the meaning given
the term in section 316(b) of the Higher Education Act
of 1965.
``(i) Funding.--
``(1) In general.--Out of any funds in the Treasury
of the United States not otherwise appropriated, there
are appropriated to the Secretary to carry out this
section $425,000,000 for each of fiscal years 2022
through 2026.
``(2) Allocation of funds.--Of the amount
appropriated for a fiscal year under paragraph (1) of
this subsection--
``(A) $318,750,000 shall be available for
grants under subsection (c)(1)(A);
``(B) $17,000,000 shall be reserved for
grants under subsection (c)(1)(B);
``(C) $21,250,000 shall be reserved for
grants under subsection (c)(1)(C);
``(D) $25,5000,000 shall be available for
demonstration project grants under subsection
(c)(2);
``(E) $25,500,000, plus all amounts referred
to in subparagraphs (A) through (D) of this
paragraph that remain unused after all grant
awards are made for the fiscal year, shall be
available for the provision of technical
assistance and associated staffing; and
``(F) $17,000,000 shall be available for
studying the effects of the demonstration and
non-demonstration projects for which a grant is
made under this section, and for associated
staffing, for the purpose of supporting the
rigorous evaluation of the demonstration
projects, and supporting the continued study of
the short-, medium-, and long-term effects of
all such projects, including the effectiveness
of new or added elements of the non-
demonstration projects.''.
PART 2--PROVISIONS RELATING TO ELDER JUSTICE
SEC. 134201. REAUTHORIZATION OF FUNDING FOR PROGRAMS TO PREVENT AND
INVESTIGATE ELDER ABUSE, NEGLECT, AND EXPLOITATION.
(a) Long-term Care Staff Training Grants.--Section 2041 of
the Social Security Act (42 U.S.C. 1397m) is amended to read as
follows:
``SEC. 2041. NURSING HOME WORKER TRAINING GRANTS.
``(a) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated to the Secretary
for each of fiscal years 2022 through 2025--
``(1) $392,000,000for grants under subsection (b)(1);
and
``(2) $8,000,000 for grants under subsection (b)(2).
``(b) Grants.--
``(1) State entitlement.--
``(A) In general.--Each State shall be
entitled to receive from the Secretary for each
fiscal year specified in subsection (a) a grant
in an amount equal to the amount allotted to
the State under subparagraph (B) of this
paragraph.
``(B) State allotments.--The amount allotted
to a State under this subparagraph for a fiscal
year shall be--
``(i) the amount made available by
subsection (a) for the fiscal year that
is not required to be reserved by
subsection (a); multiplied by
``(ii)(I) the number of State
residents who have attained 65 years of
age or are individuals with a
disability, as determined by the
Secretary using the most recent version
of the American Community Survey
published by the Bureau of the Census
or a successor data set; divided by
``(II) the total number of such
residents of all States.
``(2) Grants to indian tribes and tribal
organizations.--
``(A) In general.--The Secretary, in
consultation with the Indian tribes and tribal
organizations, shall make grants in accordance
with this section to Indian tribes and tribal
organizations who operate at least 1 eligible
setting.
``(B) Grant formula.--The Secretary, in
consultation with the Indian tribes and tribal
organizations, shall devise a formula for
distributing among Indian tribes and tribal
organizations the amount required to be
reserved by subsection (a) for each fiscal
year.
``(3) Sub-grants.--A State, Indian tribe, or tribal
organization to which an amount is paid under this
paragraph may use the amount to make sub-grants to
local organizations, including community organizations,
local non-profits, elder rights and justice groups, and
workforce development boards for any purpose described
in paragraph (1) or (2) of subsection (c).
``(c) Use of Funds.--
``(1) Required uses.--A State to which an amount is
paid under subsection (b) shall use the amount to--
``(A) provide wage subsidies to eligible
individuals;
``(B) provide student loan repayment or
tuition assistance to eligible individuals for
a degree or certification in a field relevant
to their position referred to in subsection
(f)(1)(A);
``(C) guarantee affordable and accessible
child care for eligible individuals, including
help with referrals, co-pays, or other direct
assistance; and
``(D) provide assistance where necessary with
obtaining appropriate transportation, including
public transportation if available, or gas
money or transit vouchers for ride share,
taxis, and similar types of transportation if
public transportation is unavailable or
impractical based on work hours or location.
``(2) Authorized uses.--A State to which an amount is
paid under subsection (b) may use the amount to--
``(A) establish a reserve fund for financial
assistance to eligible individuals in emergency
situations;
``(B) provide in-kind resource donations,
such as interview clothing and conference
attendance fees;
``(C) provide assistance with programs and
activities, including legal assistance, deemed
necessary to address arrest or conviction
records that are an employment barrier;
``(D) support employers operating an eligible
setting in the State in providing employees
with not less than 2 weeks of paid leave per
year; or
``(E) provide other support services the
Secretary deems necessary to allow for
successful recruitment and retention of
workers.
``(3) Provision of funds only for the benefit of
eligible individuals in eligible settings.--A State to
which an amount is paid under subsection (b) may
provide the amount to only an eligible individual or a
partner organization serving an eligible individual.
``(4) Nonsupplantation.--A State to which an amount
is paid under subsection (b) shall not use the amount
to supplant the expenditure of any State funds for
recruiting or retaining employees in an eligible
setting.
``(d) Administration.--A State to which a grant is made under
subsection (b) shall reserve not more than 10 percent of the
grant to--
``(1) administer subgrants in accordance with this
section;
``(2) provide technical assistance and support for
applying for and accessing such a subgrant opportunity;
``(3) publicize the availability of the subgrants;
``(4) carry out activities to increase the supply of
eligible individuals; and
``(5) provide technical assistance to help
subgrantees find and train individuals to provide the
services for which they are contracted.
``(e) Definitions.--In this section:
``(1) Eligible individual.--The term `eligible
individual' means an individual who--
``(A)(i) is a qualified home health aide, as
defined in section 484.80(a) of title 42, Code
of Federal Regulations;
``(ii) is a nurse aide approved by the State
as meeting the requirements of sections 483.150
through 483.154 of such title, and is listed in
good standing on the State nurse aide registry;
``(iii) is a personal care aide approved by
the State, and furnishes personal care
services, as defined in section 440.167 of such
title;
``(iv) is a qualified hospice aide, as
defined in section 418.76 of such title; or
``(v) is a licensed practical nurse or a
licensed or certified social worker; or
``(vi) is receiving training to be certified
or licensed as such an aide, nurse, or social
worker; and
``(B) provides (or, in the case of a trainee,
intends to provide) services as such an aide,
nurse, or social worker in an eligible setting.
``(2) Eligible setting.--The term `eligible setting'
means--
``(A) a skilled nursing facility, as defined
in section 1819;
``(B) a nursing facility, as defined in
section 1919;
``(C) a home health agency, as defined in
section 1891;
``(D) a facility provider approved to deliver
home or community-based services authorized
under State options described in subsection (c)
or (i) of section 1915 or, as relevant,
demonstration projects authorized under section
1115;
``(E) a hospice, as defined in section 1814;
or
``(F) a tribal assisted living facility.
``(3) Tribal organization.--The term `tribal
organization' has the meaning given the term in section
4 of the Indian Self-Determination and Education
Assistance Act.''.
(b) Adult Protective Services Functions and Grant Programs.--
(1) Direct funding; state entitlement.--Section 2042
of the Social Security Act (42 U.S.C. 1397m-1) is
amended--
(A) in subsection (a)--
(i) in paragraph (1)(A)--
(I) by striking ``offices''
and inserting ``programs''; and
(II) by inserting ``and
adults who are under a
disability (as defined in
section 216(i)(1))'' before the
semicolon; and
(ii) by striking paragraph (2) and
inserting the following:
``(2) Appropriation.--Out of any money in the
Treasury not otherwise appropriated, there are
appropriated to the Secretary $8,000,000 for each of
fiscal years 2023 through 2025 to carry out this
subsection.'';
(B) in subsection (b)--
(i) in paragraph (2)--
(I) in subparagraph (A), by
striking ``the availability of
appropriations and''; and
(II) in subparagraph (B)--
(aa) in the heading
for clause (i), by
inserting ``and the
district of columbia''
after ``States''; and
(bb) in clause (ii),
by inserting ``or the
District of Columbia''
after ``States''; and
(ii) by striking paragraph (5) and
inserting the following:
``(5) Appropriation.--Out of any money in the
Treasury not otherwise appropriated, there are
appropriated to the Secretary for each of fiscal years
2023 through 2025--
``(A) $392,000,000 for grants to States under
this subsection; and
``(B) $8,000,000 for grants to Indian tribes
and tribal organizations under this
subsection.''; and
(C) in subsection (c), by striking paragraph
(6) and inserting the following:
``(6) Appropriation.--Out of any money in the
Treasury not otherwise appropriated, there are
appropriated to the Secretary $75,000,000 for each of
fiscal years 2023 through 2025 to carry out this
subsection.''.
(2) State entitlement; grants to indian tribes and
tribal organizations.--Section 2042 of such Act (42
U.S.C. 1397m-1) is amended--
(A) in subsection (a)(1)(A), by striking
``State and local'' and inserting ``State,
local, and tribal'';
(B) in subsection (b)(1), by striking ``the
Secretary shall annually award grants to States
in the amounts calculated under paragraph (2)''
and inserting ``each State shall be entitled to
annually receive from the Secretary in the
amounts calculated under paragraph (2), and the
Secretary may annually award to each Indian
tribe and tribal organization in accordance
with paragraph (3), grants'';
(C) in subsection (b)(2)--
(i) in the paragraph heading, by
inserting ``for a state'' after
``payment'';
(ii) in subparagraph (A), by striking
``to carry out'' and inserting ``for
grants to States under''; and
(iii) in subparagraph (B)(i), by
striking ``such year'' and inserting
``for grants to States under this
subsection for the fiscal year''; and
(D) in subsection (b), by redesignating
paragraphs (3) through (5) as paragraphs (4)
through (6), respectively, and inserting after
paragraph (2) the following:
``(3) Amount of payment to indian tribe or tribal
organization.--The Secretary, in consultation with
Indian tribes and tribal organizations, shall determine
the amount of any grant to be made to each Indian tribe
and tribal organization under this subsection.
Paragraphs (4) and (5) shall apply to grantees under
this paragraph in the same manner in which the
paragraphs apply to States.'';
(E) in subsection (c)--
(i) in paragraph (1), by striking
``to States'' and inserting ``to
States, Indian tribes, and tribal
organizations'';
(ii) in paragraph (2)--
(I) in the matter preceding
subparagraph (A), by inserting
``and Indian tribes and tribal
organizations'' after
``government''; and
(II) in subparagraph (D), by
inserting ``or Indian tribe or
tribal organization, as the
case may be'' after
``government'';
(iii) in paragraph (4), by inserting
``or Indian tribe or tribal
organization'' after ``a State'' the
1st place it appears; and
(iv) in paragraph (5)--
(I) by inserting ``or Indian
tribe or tribal organization''
after ``Each State''; and
(II) by inserting ``or Indian
tribe or tribal organization,
as the case may be'' after
``the State''; and
(F) by adding at the end the following:
``(d) Definitions of Indian Tribe and Tribal Organization.--
In this section, the terms `Indian tribe' and `tribal
organization' have the meanings given the terms in section
419.''.
(3) Conforming amendment.--Section 2011(2) of such
Act (42 U.S.C. 1397j(2)) is amended by striking ``such
services provided to adults as the Secretary may
specify'' and inserting ``services provided by an
entity authorized by or under State law address
neglect, abuse, and exploitation of older adults and
people with disabilities''.
(c) Long-term Care Ombudsman Program Grants and Training.--
Section 2043 of the Social Security Act (42 U.S.C. 1397m-2) is
amended--
(1) in subsection (a), by striking paragraph (2) and
inserting the following:
``(2) Appropriation.--Out of any money in the
Treasury not otherwise appropriated, there are
appropriated to the Secretary to carry out this
subsection--
``(A) $22,500,000 for fiscal year 2023; and
``(B) $30,000,000 for each of fiscal years
2024 and 2025.''; and
(2) in subsection (b), by striking paragraph (2) and
inserting the following:
``(2) Appropriation.--Out of any money in the
Treasury not otherwise appropriated, there are
appropriated to the Secretary $30,000,000 for each of
fiscal years 2023 through 2025 to carry out this
subsection.''.
(d) Incentives for Developing and Sustaining Structural
Competency in Providing Health and Human Services.--Part II of
subtitle B of title XX of the Social Security Act (42 U.S.C.
1397m-1397m-5) is amended by adding at the end the following:
``SEC. 2047. INCENTIVES FOR DEVELOPING AND SUSTAINING STRUCTURAL
COMPETENCY IN PROVIDING HEALTH AND HUMAN SERVICES.
``(a) Grants to States to Support Linkages to Legal Services
and Medical Legal Partnerships.--
``(1) Appropriation.--Out of any money in the
Treasury not otherwise appropriated, there are
appropriated to the Secretary $500,000,000 for fiscal
year 2022, to remain available for the purposes of this
subsection through fiscal year 2028.
``(2) Grants.--Within 2 years after the date of the
enactment of this section, the Secretary shall
establish and administer a program of grants to States
to support the adoption of evidence-based approaches to
establishing or improving and maintaining real-time
linkages between health and social services and
supports for vulnerable elders or in conjunction with
authorized representatives of vulnerable elders,
including through the following:
``(A) Medical-legal partnerships.--The
establishment and support of medical-legal
partnerships, the incorporation of the
partnerships in the elder justice framework and
health and human services safety net, and the
implementation and operation of such a
partnership by an eligible grantee--
``(i) at the option of a State, in
conjunction with an area agency on
aging;
``(ii) in a solo provider practice in
a health professional shortage area (as
defined in section 332(a) of the Public
Health Service Act), a medically
underserved community (as defined in
section 399V of such Act), or a rural
area (as defined in section 330J of
such Act);
``(iii) in a minority-serving
institution of higher learning with
health, law, and social services
professional programs;
``(iv) in a federally qualified
health center, as described in section
330 of the Public Health Service Act,
or look-alike, as described in section
1905(l)(2)(B) of this Act; or
``(v) in certain hospitals that are
critical access hospitals, Medicare-
dependent hospitals, sole community
hospitals, rural emergency hospitals,
or that serve a high proportion of
Medicare or Medicaid patients.
``(B) Legal hotlines development or
expansion.--The provision of incentives to
develop, enhance, and integrate platforms, such
as legal assistance hotlines, that help to
facilitate the identification of older adults
who could benefit from linkages to available
legal services such as those described in
subparagraph (A).
``(3) State reports.--Each State to which a grant is
made under this subsection shall submit to the
Secretary biannual reports on the activities carried
out by the State pursuant to this subsection, which
shall include assessments of the effectiveness of the
activities with respect to--
``(A) the number of unique individuals
identified through the mechanism outlined in
paragraph (2)(B) who are referred to services
described in paragraph (2)(A), and the average
time period associated with resolving issues;
``(B) the success rate for referrals to
community-based resources; and
``(C) other factors determined relevant by
the Secretary.
``(4) Evaluation.--The Secretary shall, by grant,
contract, or interagency agreement, evaluate the
activities conducted pursuant to this subsection, which
shall include a comparison among the States.
``(5) Supplement not supplant.--Support provided to
area agencies on aging, State units on aging, eligible
entities, or other community-based organizations
pursuant to this subsection shall be used to supplement
and not supplant any other Federal, State, or local
funds expended to provide the same or comparable
services described in this subsection.
``(b) Grants and Training to Support Area Agencies on Aging
or Other Community-based Organizations to Address Social
Isolation Among Vulnerable Older Adults and People With
Disabilities.--
``(1) Appropriation.--Out of any money in the
Treasury not otherwise appropriated, there are
appropriated to the Secretary $250,000,000, to remain
available for the purposes of this subsection through
fiscal year 2028.
``(2) Grants.--The Secretary shall make grants to
eligible area agencies on aging or other community-
based organizations for the purpose of--
``(A) conducting outreach to individuals at
risk for, or already experiencing, social
isolation or loneliness, through established
screening tools or other methods identified by
the Secretary;
``(B) developing community-based
interventions for the purposes of mitigating
loneliness or social isolation (including
evidence-based programs, as defined by the
Secretary, developed with multi-stakeholder
input for the purposes of promoting social
connection, mitigating social isolation or
loneliness, or preventing social isolation or
loneliness) among at-risk individuals;
``(C) connecting at-risk individuals with
community social and clinical supports; and
``(D) evaluating the effect of programs
developed and implemented under subparagraphs
(B) and (C).
``(3) Training.--The Secretary shall establish
programs to provide and improve training for area
agencies on aging or community-based organizations with
respect to addressing and preventing social isolation
and loneliness among older adults and people with
disabilities.
``(4) Evaluation.--Not later than 3 years after the
date of the enactment of this section and at least once
after fiscal year 2025, the Secretary shall submit to
the Congress a written report which assesses the extent
to which the programs established under this subsection
address social isolation and loneliness among older
adults and people with disabilities.
``(5) Coordination.--The Secretary shall coordinate
with resource centers, grant programs, or other funding
mechanisms established under section 411(a)(18) of the
Older Americans Act (42 U.S.C. 3032(a)(18)), section
417(a)(1) of such Act (42 U.S.C. 3032F(a)(1)), or other
programs as determined by the Secretary.
``(c) Definitions.--In this section:
``(1) Area agency on aging.--The term `area agency on
aging' means an area agency on aging designated under
section 305 of the Older Americans Act of 1965.
``(2) Social isolation.--The term `social isolation'
means objectively being alone, or having few
relationships or infrequent social contact.
``(3) Loneliness.--The term `loneliness' means
subjectively feeling alone, or the discrepancy between
one's desired level of social connection and one's
actual level of social connection.
``(4) Social connection.--The term `social
connection' means the variety of ways one can connect
to others socially, through physical, behavioral,
social-cognitive, and emotional channels.
``(5) Community-based organization.--The term
`community-based organization' includes, except as
otherwise provided by the Secretary, a nonprofit
community-based organization, a consortium of nonprofit
community-based organizations, a national nonprofit
organization acting as an intermediary for a community-
based organization, or a community-based organization
that has a fiscal sponsor that allows the organization
to function as an organization described in section
501(c)(3) of the Internal Revenue Code of 1986 and
exempt from taxation under section 501(a) of such
Code.''.
(e) Technical Amendment.--Section 2011(12)(A) of the Social
Security Act (42 U.S.C. 1397j(12)(A)) is amended by striking
``450b'' and inserting ``5304''.
SEC. 134202. APPROPRIATION FOR ASSESSMENTS.
Out of any money in the Treasury not otherwise appropriated,
there are appropriated to the Secretary of Health and Human
Services $5,000,000 for each of fiscal years 2022 through 2025
to prepare and submit to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate, not later than 3 years after the date of enactment of
this Act, and at least once after fiscal year 2025, reports on
the programs, coordinating bodies, registries, and activities
established or authorized under subtitle B of title XX of the
Social Security Act (42 U.S.C. 1397l et seq.) or section
6703(b) of the Patient Protection and Affordable Care Act (42
U.S.C. 1395i-3a), which shall assess the extent to which such
programs, coordinating bodies, registries, and activities have
improved access to, and the quality of, resources available to
aging Americans and their caregivers to ultimately prevent,
detect, and treat abuse, neglect, and exploitation, and shall
include, as appropriate, recommendations to Congress on funding
levels and policy changes to help these programs, coordinating
bodies, registries, and activities better prevent, detect, and
treat abuse, neglect, and exploitation of aging Americans.
PART 3--SKILLED NURSING FACILITIES
SEC. 134301. FUNDING TO IMPROVE THE ACCURACY AND RELIABILITY OF CERTAIN
SKILLED NURSING FACILITY DATA.
Section 1888 of the Social Security Act (42 U.S.C. 1395yy) is
amended--
(1) in subsection (h)(12)--
(A) in subparagraph (A), by striking ``and
the data submitted under subsection (e)(6)''
and inserting ``, the data submitted under
subsection (e)(6), and, during the period
beginning with fiscal year 2024 and ending with
fiscal year 2031, the resident assessment data
described in section 1819(b)(3) and the direct
care staffing information described in section
1128I(g)''; and
(B) in subparagraph (B)--
(i) by striking ``Funding.--For
purposes'' and inserting ``Funding.--
``(i) Fiscal years 2023 through
2025.--For purposes''; and
(ii) by adding at the end the
following new clause:
``(ii) Fiscal years 2026 through
2031.--There is appropriated to the
Secretary, out of any monies in the
Treasury not otherwise appropriated,
$50,000,000 for the period of fiscal
years 2026 through 2031 for purposes of
carrying out this paragraph.''; and
(2) in subsection (e)(6)(A)--
(A) in the header, by striking ``for failure
to report''; and
(B) in clause (i)--
(i) by striking ``For fiscal years''
and inserting the following:
``(I) Failure to report.--For
fiscal years''; and
(ii) by adding at the end the
following new subclause:
``(II) Reporting of
inaccurate information.--For
fiscal years during the period
beginning with fiscal year 2025
and ending with fiscal year
2031, in the case of a skilled
nursing facility that submits
data under this paragraph,
measures under subsection (h),
resident assessment data
described in section
1819(b)(3), or direct care
staffing information described
in section 1128I(g) with
respect to such fiscal year
that is inaccurate (as
determined by the Secretary
through the validation process
described in section
1888(h)(12) or otherwise),
after determining the
percentage described in
paragraph (5)(B)(i), and after
application of clauses (ii) and
(iii) of paragraph (5)(B) and
of subclause (I) of this clause
(if applicable), the Secretary
shall reduce such percentage
for payment rates during such
fiscal year by 2 percentage
points.''.
SEC. 134302. ENSURING ACCURATE INFORMATION ON COST REPORTS.
Section 1888(f) of the Social Security Act (42 U.S.C.
1395yy(f)) is amended by adding at the end the following new
paragraph:
``(5) Audit of cost reports.--There is appropriated
to the Secretary, out of any monies in the Treasury not
otherwise appropriated, $250,000,000 for fiscal year
2023 to remain available until expended, for purposes
of conducting an annual audit (beginning with 2022 and
ending with 2031) of cost reports submitted under this
title for a representative sample of skilled nursing
facilities.''.
SEC. 134303. SURVEY IMPROVEMENTS.
Section 1819 of the Social Security Act (42 U.S.C. 1395i-3)
is amended by adding at the end the following new subsection:
``(l) Survey Improvements.--
``(1) In general.--There is appropriated to the
Secretary, out of any monies in the Treasury not
otherwise appropriated, $325,000,000, for the period of
fiscal years 2022 through 2031, for purposes of--
``(A) conducting reviews and identifying
plans under paragraph (2); and
``(B) providing training, tools, technical
assistance, and financial support in accordance
with paragraph (3).
``(2) Review.--The Secretary shall conduct reviews,
during the period specified in paragraph (1), of (and,
as appropriate, identify plans to improve) the
following:
``(A) The extent to which surveys conducted
under subsection (g) and the enforcement
process under subsection (h) result in
increased compliance with requirements under
this section and subpart B of part 483 of title
42, Code of Federal Regulations, with respect
to skilled nursing facilities (in this
subsection referred to as `facilities').
``(B) The timeliness and thoroughness of
State agency verification of deficiency
corrections at facilities.
``(C) The appropriateness of the scoping and
substantiation of cited deficiencies at
facilities.
``(D) The accuracy of the identification and
appropriateness of the scoping of life safety,
infection control, and emergency preparedness
deficiencies at facilities.
``(E) The timeliness of State agency
investigations of--
``(i) complaints at facilities; and
``(ii) reported allegations of abuse,
neglect, and exploitation at
facilities.
``(F) The consistency of facility reporting
of substantiated complaints to law enforcement.
``(G) The ability of the State agency to
sufficiently hire, train, and retain
individuals who conduct surveys.
``(H) Any other area related to surveys of
facilities, or the individuals conducting such
surveys, determined appropriate by the
Secretary.
``(3) Support.--Based on the review under paragraph
(2), the Secretary shall, during the period specified
in paragraph (1), provide training, tools, technical
assistance, and financial support to State agencies
that perform surveys of facilities for the purpose of
improving the surveys conducted under subsection (g)
and the enforcement process under subsection (h) with
respect to the areas reviewed under paragraph (2).''.
SEC. 134304. NURSE STAFFING REQUIREMENTS.
Section 1819(d) of the Social Security Act (42 U.S.C. 1395i-
3(d)) is amended--
(1) in paragraph (4)(A), by inserting ``and any
regulations promulgated under paragraph (5)(C)'' after
``section 1124''; and
(2) by adding at the end the following new paragraph:
``(5) Nurse staffing requirements.--
``(A) Funding.--There is appropriated to the
Secretary, out of any monies in the Treasury
not otherwise appropriated, $50,000,000 for the
period of fiscal years 2022 through 2031 for
purposes of carrying out this paragraph.
``(B) Study.--Not later than 3 years after
the date of the enactment of this paragraph,
and not less frequently than once every 5 years
thereafter, the Secretary shall, out of funds
appropriated under subparagraph (A), conduct a
study and submit to Congress a report on the
appropriateness of establishing minimum staff
to resident ratios for nursing staff for
skilled nursing facilities. Each such report
shall include--
``(i) with respect to the first such
report, recommendations regarding
appropriate minimum ratios of
registered nurses (and, if practicable,
licensed practical nurses (or licensed
vocational nurses) and certified
nursing assistants) to residents at
such skilled nursing facilities; and
``(ii) with respect to each
subsequent such report, recommendations
regarding appropriate minimum ratios of
registered nurses, licensed practical
nurses (or licensed vocational nurses),
and certified nursing assistants to
residents at such skilled nursing
facilities.
``(C) Promulgation of regulations.--
``(i) In general.--Not later than 2
years after the Secretary first submits
a report under subparagraph (B), the
Secretary shall, out of funds
appropriated under subparagraph (A)--
``(I) specify through
regulations, consistent with
such report, appropriate
minimum ratios (if any) of
registered nurses (and, if
practicable, licensed practical
nurses (or licensed vocational
nurses) and certified nursing
assistants) to residents at
skilled nursing facilities; and
``(II) except as provided in
clause (ii), require such
skilled nursing facilities to
comply with such ratios.
``(ii) Exception.--
``(I) In general.--In
addition to the authority to
waive the application of clause
(i)(II) under section 1135, the
Secretary may waive the
application of such clause with
respect to a skilled nursing
facility if the Secretary finds
that--
``(aa) the facility
is located in a rural
area and the supply of
skilled nursing
facility services in
such area is not
sufficient to meet the
needs of individuals
residing therein;
``(bb) the Secretary
provides notice of the
waiver to the State
long-term care
ombudsman (established
under section
307(a)(12) of the Older
Americans Act of 1965)
and the protection and
advocacy system in the
State for the mentally
ill; and
``(cc) the facility
that is granted such a
waiver notifies
residents of the
facility (or, where
appropriate, the
guardians or legal
representatives of such
residents) and members
of their immediate
families of the waiver.
``(II) Renewal.--Any waiver
in effect under this clause
shall be subject to annual
renewal.
``(iii) Update.--Not later than 2
years after the submission of each
subsequent report under subparagraph
(B), the Secretary shall, out of funds
appropriated under subparagraph (A) and
consistent with such report, update the
regulations described in clause (i)(I)
to reflect appropriate minimum ratios
(if any) of registered nurses, licensed
practical nurses (or licensed
vocational nurses), and certified
nursing assistants to residents at
skilled nursing facilities.''.
PART 4--MEDICARE DENTAL, HEARING, AND VISION COVERAGE
SEC. 134401. PROVIDING COVERAGE FOR DENTAL AND ORAL HEALTH CARE UNDER
THE MEDICARE PROGRAM.
(a) Coverage.--Section 1861(s)(2) of the Social Security Act
(42 U.S.C. 1395x(s)(2)) is amended--
(1) in subparagraph (GG), by striking ``and'' after
the semicolon at the end;
(2) in subparagraph (HH), by striking the period at
the end and adding ``; and''; and
(3) by adding at the end the following new
subparagraph:
``(II) dental and oral health services (as defined in
subsection (lll));''.
(b) Dental and Oral Health Services Defined.--Section 1861 of
the Social Security Act (42 U.S.C. 1395x) is amended by adding
at the end the following new subsection:
``(lll) Dental and Oral Health Services.--
``(1) In general.--The term `dental and oral health
services' means items and services (other than such
items and services for which payment may be made under
part A as inpatient hospital services) that are
furnished during 2028 or a subsequent year, for which
coverage was not provided under part B as of the date
of the enactment of this subsection, and that are--
``(A) the preventive and screening services
described in paragraph (2) furnished by a
doctor of dental surgery or of dental medicine
(as described in subsection (r)(2)) or an oral
health professional (as defined in paragraph
(4)); or
``(B) the basic treatments specified for such
year by the Secretary pursuant to paragraph
(3)(A) and the major treatments specified for
such year by the Secretary pursuant to
paragraph (3)(B) furnished by such a doctor or
such a professional.
``(2) Preventive and screening services.--The
preventive and screening services described in this
paragraph are the following:
``(A) Oral exams.
``(B) Dental cleanings.
``(C) Dental x-rays performed in the office
of a doctor or professional described in
paragraph (1)(A).
``(D) Fluoride treatments.
``(3) Basic and major treatments.--For 2028 and each
subsequent year, the Secretary shall specify--
``(A) basic treatments (which may include
basic tooth restorations, basic periodontal
services, tooth extractions, and oral disease
management services); and
``(B) major treatments (which may include
major tooth restorations, major periodontal
services, bridges, crowns, and root canals);
that shall be included as dental and oral health
services for such year.
``(4) Oral health professional.--The term `oral
health professional' means, with respect to dental and
oral health services, a health professional (other than
a doctor of dental surgery or of dental medicine (as
described in subsection (r)(2))) who is licensed to
furnish such services, acting within the scope of such
license, by the State in which such services are
furnished.''.
(c) Payment; Coinsurance; and Limitations.--
(1) In general.--Section 1833(a)(1) of the Social
Security Act (42 U.S.C. 1395l(a)(1)) is amended--
(A) in subparagraph (N), by inserting ``and
dental and oral health services (as defined in
section 1861(lll))'' after ``section
1861(hhh)(1))'';
(B) by striking ``and'' before ``(DD)''; and
(C) by inserting before the semicolon at the
end the following: ``and (EE) with respect to
dental and oral health services (as defined in
section 1861(lll)), the amount paid shall be
the payment amount specified under section
1834(z)''.
(2) Payment and limits specified.--Section 1834 of
the Social Security Act (42 U.S.C. 1395m) is amended by
adding at the end the following new subsection:
``(z) Payment and Limits for Dental and Oral Health
Services.--
``(1) In general.--The payment amount under this part
for dental and oral health services (as defined in
section 1861(lll)) shall be, subject to paragraph (3),
the applicable percent (specified in paragraph (2)) of
the lesser of--
``(A) the actual charge for the service; or
``(B) the amount determined under the payment
basis determined under section 1848 for the
service, or, in lieu of such amount, if
determined appropriate by the Secretary, an
amount specified by the Secretary for such
service under a fee schedule determined
appropriate by the Secretary, taking into
account fee schedules for such services--
``(i) under the TRICARE program under
chapter 55 of title 10 of the United
States Code;
``(ii) under the health insurance
program under chapter 89 of title 5 of
such Code;
``(iii) under State plans (or waivers
of such plans) under title XIX;
``(iv) under Medicare Advantage plans
under part C;
``(v) established by the Secretary of
Veterans Affairs; and
``(vi) established by other health
care payers.
``(2) Applicable percent.--For purposes of paragraph
(1), the applicable percent specified in this paragraph
is, with respect to dental and oral health services (as
defined in section 1861(lll)) furnished in a year--
``(A) that are preventive and screening
services described in paragraph (2) or basic
treatments specified for such year pursuant to
paragraph (3)(A) of such section, 80 percent;
and
``(B) that are major treatments specified for
such year pursuant to paragraph (3)(B) of such
section--
``(i) in the case such services are
furnished during 2028, 10 percent;
``(ii) in the case such services are
furnished during 2029 or a subsequent
year before 2032, the applicable
percent specified under this
subparagraph for the previous year,
increased by 10 percentage points; and
``(iii) in the case such services are
furnished during 2032 or a subsequent
year, 50 percent.
``(3) Limitations.--With respect to dental and oral
health services that are--
``(A) preventive and screening oral exams,
payment may be made under this part for not
more than two such exams during a 12-month
period;
``(B) dental cleanings, payment may be made
under this part for not more than two such
cleanings during a 12-month period; and
``(C) not described in subparagraph (A) or
(B), payment may be made under this part only
at such frequencies and under such
circumstances determined appropriate by the
Secretary.
``(4) Use of bundled payments.--The Secretary may
make payment for dentures and associated professional
services, and for any other dental and oral health
services, as bundled payments as the Secretary
determines appropriate.
``(5) Limitation on judicial review.--There shall be
no administrative or judicial review under section 1869
or otherwise of--
``(A) the determination of payment amounts
under this subsection for dental and oral
health services and under subsection (h)(6) or
subsection (z)(4) for dentures;
``(B) the determination of what services are
basic and major services under subparagraphs
(A) and (B) of section 1861(lll)(3); or
``(C) the determination of the frequency and
circumstance limitations for dental and oral
health services under paragraph (3)(C).''.
(d) Payment Under Physician Fee Schedule.--
(1) In general.--Section 1848(j)(3) of the Social
Security Act (42 U.S.C. 1395w-4(j)(3)) is amended by
inserting ``(2)(II),'' before ``(3)''.
(2) Exclusion from mips.--Section 1848(q)(1)(C)(ii)
of the Social Security Act (42 U.S.C. 1395w-
4(q)(1)(C)(ii)) is amended--
(A) in subclause (II), by striking ``or'' at
the end;
(B) in subclause (III), by striking the
period at the end and inserting ``; or''; and
(C) by adding at the end the following new
subclause:
``(IV) with respect to 2028
and each subsequent year, is a
doctor of dental surgery or of
dental medicine (as described
in section 1861(r)(2)) or is an
oral health professional (as
defined in section
1861(lll)(4)).''.
(3) Inclusion of oral health professionals as certain
practitioners.--Section 1842(b)(18)(C) of the Social
Security Act (42 U.S.C. 1395u(b)(18)(C)) is amended by
adding at the end the following new clause:
``(vii) With respect to 2028 and each subsequent
year, an oral health professional (as defined in
section 1861(lll)(4)).''.
(e) Dentures.--
(1) In general.--Section 1861(s)(8) of the Social
Security Act (42 U.S.C. 1395x(s)(8)) is amended--
(A) by striking ``(other than dental)''; and
(B) by inserting ``and excluding dental,
except for a full or partial set of dentures
(as described in section 1834(h)(6)) furnished
on or after January 1, 2028'' after ``colostomy
care''.
(2) Special payment rules.--
(A) Limitations.--Section 1834(h) of the
Social Security Act (42 U.S.C. 1395m(h)) is
amended by adding at the end the following new
paragraph:
``(6) Special payment rule for dentures.--Payment may
be made under this part with respect to an individual
for dentures--
``(A) not more than once during any 5-year
period (except in the case that a doctor
described in section 1861(lll)(1)(A) determines
such dentures do not fit the individual); and
``(B) only to the extent that such dentures
are furnished pursuant to a written order of
such a doctor or professional.''.
(B) Application of competitive acquisition.--
(i) In general.--Section
1834(h)(1)(H) of the Social Security
Act (42 U.S.C. 1395m(h)(1)(H)) is
amended--
(I) in the subparagraph
heading, by inserting ``,
dentures'' after ``orthotics'';
(II) by inserting ``, of
dentures described in paragraph
(2)(D) of such section,'' after
``2011,''; and
(III) in clause (i), by
inserting ``, such dentures''
after ``orthotics''.
(ii) Conforming amendment.--Section
1847(a)(2) of the Social Security Act
(42 U.S.C. 1395w-3(a)(2)) is amended by
adding at the end the following new
subparagraph:
``(D) Dentures.--Dentures described in
section 1861(s)(8) for which payment would
otherwise be made under section 1834(h).''.
(iii) Exemption of certain items from
competitive acquisition.--Section
1847(a)(7) of the Social Security Act
(42 U.S.C. 1395w-3(a)(7)) is amended by
adding at the end the following new
subparagraph:
``(C) Certain dentures.--Those items and
services described in paragraph (2)(D) if
furnished by a physician or other practitioner
(as defined by the Secretary) to the
physician's or practitioner's own patients as
part of the physician's or practitioner's
professional service.''.
(f) Exclusion Modifications.--Section 1862(a) of the Social
Security Act (42 U.S.C. 1395y(a)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (O), by striking ``and''
at the end;
(B) in subparagraph (P), by striking the
semicolon at the end and inserting ``, and'';
and
(C) by adding at the end the following new
subparagraph:
``(Q) in the case of dental and oral health services
(as defined in section 1861(lll)) that are preventive
and screening services described in paragraph (2) of
such section, which are furnished more frequently than
provided under section 1834(z)(3) or under
circumstances other than circumstances determined
appropriate under subparagraph (C) of such section;'';
and
(2) in paragraph (12), by inserting before the
semicolon at the end the following: ``and except that
payment may be made under part B for dental and oral
health services that are covered under section
1861(s)(2)(II) and for dentures under section
1861(s)(8)''.
(g) Certain Non-application.--
(1) In general.--Paragraphs (1) and (4) of section
1839(a) of the Social Security Act (42 U.S.C. 1395r(a))
are amended by adding at the end of each such
paragraphs the following: ``In applying this paragraph
there shall not be taken into account benefits and
administrative costs attributable to the amendments
made by section 134401 (other than subsection (g)) of
An Act to provide for reconciliation pursuant to title
II of S. Con. Res. 14 and the Government contribution
under section 1844(a)(5)''.
(2) Payment.--Section 1844(a) of such Act (42 U.S.C.
1395w(a)) is amended--
(A) in paragraph (4), by striking the period
at the end and inserting ``; plus'';
(B) by adding at the end the following new
paragraph:
``(5) a Government contribution equal to the amount
that is estimated to be payable for benefits and
related administrative costs incurred that are
attributable to the amendments made by section 134401
(other than subsection (g)) of the An Act to provide
for reconciliation pursuant to title II of S. Con. Res.
14.''; and
(C) in the flush matter at the end, by
striking ``paragraph (4)'' and inserting
``paragraphs (4) and (5)''.
(h) Implementation.--
(1) Funding.--
(A) In general.--In addition to amounts
otherwise available, the Secretary of Health
and Human Services (in this subsection referred
to as the ``Secretary'') shall provide for the
transfer from the Federal Supplementary Medical
Insurance Trust Fund under section 1841 of the
Social Security Act (42 U.S.C. 1395t) to the
Centers for Medicare & Medicaid Services
Program Management Account of--
(i) $20,000,000 for each of fiscal
years 2022 through 2028 for purposes of
implementing the amendments made by
this section; and
(ii) such sums as determined
appropriate by the Secretary for each
subsequent fiscal year for purposes of
administering the provisions of such
amendments.
(B) Availability and additional use of
funds.--Funds transferred pursuant to
subparagraph (A) shall remain available until
expended and may be used, in addition to the
purpose specified in subparagraph (A)(i), to
implement the amendments made by sections
134402 and 134403.
(2) Administration.--Notwithstanding any other
provision of law, the Secretary may implement, by
program instruction or otherwise, any of the provisions
of, or amendments made by, this section.
(3) Paperwork reduction act.--Chapter 35 of title 44,
United States Code, shall not apply to the provisions
of, or the amendments made by, this section.
SEC. 134402. PROVIDING COVERAGE FOR HEARING CARE UNDER THE MEDICARE
PROGRAM.
(a) Provision of Aural Rehabilitation and Treatment Services
by Qualified Audiologists.--Section 1861(ll)(3) of the Social
Security Act (42 U.S.C. 1395x(ll)(3)) is amended by inserting
``(and, beginning October 1, 2023, such aural rehabilitation
and treatment services)'' after ``assessment services''.
(b) Coverage of Hearing Aids.--
(1) Inclusion of hearing aids as prosthetic
devices.--Section 1861(s)(8) of the Social Security Act
(42 U.S.C. 1395x(s)(8)) is amended by inserting ``, and
including hearing aids (as described in section
1834(h)(7)) furnished on or after October 1, 2023, to
individuals diagnosed with profound or severe hearing
loss'' before the semicolon at the end.
(2) Payment limitations for hearing aids.--Section
1834(h) of the Social Security Act (42 U.S.C.
1395m(h)), as amended by section 134401(e)(2)(A), is
further amended by adding at the end the following new
paragraph:
``(7) Limitations for hearing aids.--
``(A) In general.--Payment may be made under
this part with respect to an individual, with
respect to hearing aids furnished on or after
October 1, 2023--
``(i) not more than once during a 5-
year period;
``(ii) only for types of such hearing
aids that are not over-the-counter
hearing aids (as defined in section
520(q)(1) of the Federal Food, Drug,
and Cosmetic Act) and that are
determined appropriate by the
Secretary; and
``(iii) only if furnished pursuant to
a written order of a physician or
qualified audiologist (as defined in
section 1861(ll)(4)(B)).
``(B) Limitation on judicial review.--There
shall be no administrative or judicial review
under section 1869 or otherwise of--
``(i) the determination of the types
of hearing aids paid for under
subparagraph (A)(ii); or
``(ii) the determination of fee
schedule rates for hearing aids
described in this paragraph.''.
(3) Application of competitive acquisition.--
(A) In general.--Section 1834(h)(1)(H) of the
Social Security Act (42 U.S.C. 1395m(h)(1)(H)),
as amended by section 134401(e)(2)(B)(i), is
further amended--
(i) in the header, by inserting ``,
hearing aids'' after ``dentures'';
(ii) by inserting ``, of hearing aids
described in paragraph (2)(E) of such
section,'' after ``paragraph (2)(D) of
such section''; and
(iii) in clause (i), by inserting ``,
such hearing aids'' after ``such
dentures''.
(B) Conforming amendment.--
(i) In general.--Section 1847(a)(2)
of the Social Security Act (42 U.S.C.
1395w-3(a)(2)), as amended by section
134401(e)(2)(B)(ii), is further amended
by adding at the end the following new
subparagraph:
``(E) Hearing aids.--Hearing aids described
in section 1861(s)(8) for which payment would
otherwise be made under section 1834(h).''.
(ii) Exemption of certain items from
competitive acquisition.--Section
1847(a)(7) of the Social Security Act
(42 U.S.C. 1395w-3(a)(7)), as amended
by section 134401(e)(2)(B)(iii), is
further amended by adding at the end
the following new subparagraph:
``(D) Certain hearing aids.--Those items and
services described in paragraph (2)(E) if
furnished by a physician or other practitioner
(as defined by the Secretary) to the
physician's or practitioner's own patients as
part of the physician's or practitioner's
professional service.''.
(4) Inclusion of audiologists as certain
practitioners to receive payment on an assignment-
related basis.--Section 1842(b)(18)(C) of the Social
Security Act (42 U.S.C. 1395u(b)(18)(C)), as amended by
section 134401(d)(4), is further amended by adding at
the end the following new clause:
``(viii) Beginning October 1, 2023, a
qualified audiologist (as defined in
section 1861(ll)(4)(B)).''.
(c) Exclusion Modification.--Section 1862(a)(7) of the Social
Security Act (42 U.S.C. 1395y(a)(7)) is amended by inserting
``(except such hearing aids or examinations therefor as
described in and otherwise allowed under section 1861(s)(8))''
after ``hearing aids or examinations therefor''.
(d) Certain Non-application.--
(1) In general.--The last sentence of section
1839(a)(1) of the Social Security Act (42 U.S.C.
1395r(a)(1)), as added by section 134401(g)(1), is
amended by striking ``section 134401 (other than
subsection (g))'' and inserting ``sections 134401
(other than subsection (g)), 134402 (other than
subsection (d))''.
(2) Payment.--Paragraph (4) of section 1844(a) of
such Act (42 U.S.C. 1395w(a)), as added by section
134401(g)(2), is amended by striking ``section 134401
(other than subsection (g))'' and inserting ``sections
134401 (other than subsection (g)), 134402 (other than
subsection (d))''.
(e) Implementation.--
(1) Funding.--
(A) In general.--In addition to amounts
otherwise available, the Secretary of Health
and Human Services (in this subsection referred
to as the ``Secretary'') shall provide for the
transfer from the Federal Supplementary Medical
Insurance Trust Fund under section 1841 of the
Social Security Act (42 U.S.C. 1395t) to the
Centers for Medicare & Medicaid Services
Program Management Account of--
(i) $20,000,000 for each of fiscal
years 2022 through 2023 for purposes of
implementing the amendments made by
this section; and
(ii) such sums as determined
appropriate by the Secretary for each
subsequent fiscal year for purposes of
administering the provisions of such
amendments.
(B) Availability and additional use of
funds.--Funds transferred pursuant to
subparagraph (A) shall remain available until
expended and may be used, in addition to the
purpose specified in subparagraph (A)(i), to
implement the amendments made by sections
134401 and 134403.
(2) Administration.--Notwithstanding any other
provision of law, the Secretary may implement, by
program instruction or otherwise, any of the provisions
of, or amendments made by, this section.
(3) Paperwork reduction act.--Chapter 35 of title 44,
United States Code, shall not apply to the provisions
of, or the amendments made by, this section.
SEC. 134403. PROVIDING COVERAGE FOR VISION CARE UNDER THE MEDICARE
PROGRAM.
(a) Coverage.--Section 1861(s)(2) of the Social Security Act
(42 U.S.C. 1395x(s)(2)), as amended by section 134401(a), is
further amended--
(1) in subparagraph (HH), by striking ``and'' after
the semicolon at the end;
(2) in subparagraph (II), by striking the period at
the end and adding ``; and''; and
(3) by adding at the end the following new
subparagraph:
``(JJ) vision services (as defined in subsection
(mmm));''.
(b) Vision Services Defined.--Section 1861 of the Social
Security Act (42 U.S.C. 1395x), as amended by section
134401(b), is further amended by adding at the end the
following new subsection:
``(mmm) Vision Services.--The term `vision services' means--
``(1) routine eye examinations to determine the
refractive state of the eyes, including procedures
performed during the course of such examination; and
``(2) contact lens fitting services;
furnished on or after October 1, 2022, by or under the direct
supervision of an ophthalmologist or optometrist who is legally
authorized to furnish such examinations, procedures, or fitting
services (as applicable) under State law (or the State
regulatory mechanism provided by State law) of the State in
which the examinations, procedures, or fitting services are
furnished.''.
(c) Payment Limitations.--Section 1834 of the Social Security
Act (42 U.S.C. 1395m), as amended by section 134401(c)(2), is
further amended by adding at the end the following new
subsection:
``(aa) Limitation for Vision Services.--With respect to
vision services (as defined in section 1861(mmm)) and an
individual, payment may be made under this part for only 1
routine eye examination described in paragraph (1) of such
section and 1 contact lens fitting service described in
paragraph (2) of such section during a 2-year period.''.
(d) Payment Under Physician Fee Schedule.--Section 1848(j)(3)
of the Social Security Act (42 U.S.C. 1395w-4(j)(3)), as
amended by section 134401(d)(1), is further amended by
inserting ``(2)(JJ),'' before ``(3)''.
(e) Coverage of Conventional Eyeglasses and Contact Lenses.--
(1) In general.--Section 1861(s)(8) of the Social
Security Act (42 U.S.C. 1395x(s)(8)), as amended by
section 134402(b)(1), is further amended by striking
``, and including one pair of conventional eyeglasses
or contact lenses furnished subsequent to each cataract
surgery with insertion of an intraocular lens'' and
inserting ``, including one pair of conventional
eyeglasses or contact lenses furnished subsequent to
each cataract surgery with insertion of an intraocular
lens, if furnished before October 1, 2022, and
including conventional eyeglasses or contact lenses (as
described in section 1834(h)(8)), whether or not
furnished subsequent to such a surgery, if furnished on
or after October 1, 2022''.
(2) Conforming amendment.--Section 1842(b)(11)(A) of
the Social Security Act (42 U.S.C. 1395u(b)(11)(A)) is
amended by inserting ``furnished prior to October 1,
2022,'' after ``relating to them,''.
(f) Special Payment Rules for Eyeglasses and Contact
Lenses.--
(1) Limitations.--Section 1834(h) of the Social
Security Act (42 U.S.C. 1395m(h)), as amended by
section 134401(e)(2)(A) and section 134402(b)(2), is
further amended by adding at the end the following new
paragraph:
``(8) Payment limitations for eyeglasses and contact
lenses.--
``(A) In general.--With respect to eyeglasses
and contact lenses furnished to an individual
on or after October 1, 2022, subject to
subparagraph (B), payment may be made under
this part only--
``(i) during a 2-year period, for
either 1 pair of eyeglasses (including
lenses and frames) or not more than a
2-year supply of contact lenses;
``(ii) with respect to amounts
attributable to the lenses and frames
of such a pair of eyeglasses or amounts
attributable to such a 2-year supply of
contact lenses, in an amount not
greater than--
``(I) for a pair of
eyeglasses furnished in, or a
2-year supply of contact lenses
beginning in, 2022--
``(aa) $85 for the
lenses of such pair of
eyeglasses and $85 for
the frames of such pair
of eyeglasses; or
``(bb) $85 for such
2-year supply of
contact lenses; and
``(II) for the lenses and
frames of a pair of eyeglasses
furnished in, or a 2-year
supply of contact lenses
beginning in, a subsequent
year, the dollar amounts
specified under this
subparagraph for the previous
year, increased by the
percentage change in the
consumer price index for all
urban consumers (United States
city average) for the 12-month
period ending with June of the
previous year;
``(iii) if furnished pursuant to a
written order of a physician described
in section 1861(lll); and
``(iv) if during the 2-year period
described in clause (i), the individual
did not already receive (as described
in subparagraph (B)) one pair of
conventional eyeglasses or contact
lenses subsequent to a cataract surgery
with insertion of an intraocular lens
furnished during such period.
``(B) Exception.--With respect to a 2-year
period described in subparagraph (A)(i), in the
case of an individual who receives cataract
surgery with insertion of an intraocular lens,
notwithstanding subparagraph (A), payment may
be made under this part for one pair of
conventional eyeglasses or contact lenses
furnished subsequent to such cataract surgery
during such period.
``(C) Limitation on judicial review.--There
shall be no administrative or judicial review
under section 1869 or otherwise of--
``(i) the determination of the types
of eyeglasses and contact lenses
covered under this paragraph; or
``(ii) the determination of fee
schedule rates under this subsection
for eyeglasses and contact lenses.''.
(2) Application of competitive acquisition.--
(A) In general.--Section 1834(h)(1)(H) of the
Social Security Act (42 U.S.C. 1395m(h)(1)(H)),
as amended by section 134401(e)(2)(B)(i) and
section 134402(b)(3)(A), is further amended--
(i) in the header by inserting ``,
eyeglasses, and contact lenses'' after
``hearing aids'';
(ii) by inserting ``and of eyeglasses
and contact lenses described in
paragraph (2)(F) of such section,''
after ``paragraph (2)(E) of such
section,''; and
(iii) in clause (i), by inserting ``,
or such eyeglasses and contact lenses''
after ``such hearing aids''.
(B) Conforming amendment.--
(i) In general.--Section 1847(a)(2)
of the Social Security Act (42 U.S.C.
1395w-3(a)(2)), as amended by section
134401(e)(2)(B)(ii) and section
134402(b)(3)(B)(i), is further amended
by adding at the end the following new
subparagraph:
``(F) Eyeglasses and contact lenses.--
Eyeglasses and contact lenses described in
section 1861(s)(8) for which payment would
otherwise be made under section 1834(h).''.
(ii) Exemption of certain items from
competitive acquisition.--Section
1847(a)(7) of the Social Security Act
(42 U.S.C. 1395w-3(a)(7)), as amended
by section 134401(e)(2)(B)(iii) and
section 134402(b)(3)(B)(ii), is further
amended by adding at the end the
following new subparagraph:
``(E) Certain eyeglasses and contact
lenses.--Those items and services described in
paragraph (2)(F) if furnished by a physician or
other practitioner (as defined by the
Secretary) to the physician's or practitioner's
own patients as part of the physician's or
practitioner's professional service.''.
(g) Exclusion Modifications.--Section 1862(a) of the Social
Security Act (42 U.S.C. 1395y(a)), as amended by section
134401(f), is further amended--
(1) in paragraph (1)--
(A) in subparagraph (P), by striking ``and''
at the end;
(B) in subparagraph (Q), by striking the
semicolon at the end and inserting ``, and'';
and
(C) by adding at the end the following new
subparagraph:
``(R) in the case of vision services (as defined in
section 1861(mmm)) that are routine eye examinations
and contact lens fitting services (as described in
paragraph (1) or (2), respectively, of such section),
which are furnished more frequently than once during a
2-year period;''; and
(2) in paragraph (7)--
(A) by inserting ``(other than such an
examination that is a vision service that is
covered under section 1861(s)(2)(JJ))'' after
``eye examinations''; and
(B) by inserting ``(other than such a
procedure that is a vision service that is
covered under section 1861(s)(2)(JJ))'' after
``refractive state of the eyes''.
(h) Certain Non-application.--
(1) In general.--The last sentence of section
1839(a)(1) of the Social Security Act (42 U.S.C.
1395r(a)(1)), as added by section 134401(g)(1) and
amended by section 134402(d)(1), is further amended by
inserting ``, and 134403 (other than subsection (h))''
after ``134402 (other than subsection (d))''.
(2) Payment.--Paragraph (4) of section 1844(a) of
such Act (42 U.S.C. 1395w(a)), as added by section
134401(g)(2) and amended by section 134402(d)(2), is
further amended by inserting ``, and 134403 (other than
subsection (h))'' after ``134402 (other than subsection
(d))''.
(i) Implementation.--
(1) Funding.--
(A) In general.--In addition to amounts
otherwise available, the Secretary of Health
and Human Services (in this subsection referred
to as the ``Secretary'') shall provide for the
transfer from the Federal Supplementary Medical
Insurance Trust Fund under section 1841 of the
Social Security Act (42 U.S.C. 1395t) to the
Centers for Medicare & Medicaid Services
Program Management Account of--
(i) $20,000,000 for each of fiscal
years 2022 and 2023 for purposes of
implementing the amendments made by
this section; and
(ii) such sums as determined
appropriate by the Secretary for each
subsequent fiscal year for purposes of
administering the provisions of such
amendments.
(B) Availability and additional use of
funds.--Funds transferred pursuant to
subparagraph (A) shall remain available until
expended and may be used, in addition to the
purpose specified in subparagraph (A)(i), to
implement the amendments made by sections
134401 and 134402.
(2) Administration.--Notwithstanding any other
provision of law, the Secretary may implement, by
program instruction or otherwise, any of the provisions
of, or amendments made by, this section.
(3) Paperwork reduction act.--Chapter 35 of title 44,
United States Code, shall not apply to the provisions
of, or the amendments made by, this section.
Subtitle F--Infrastructure Financing and Community Development
SEC. 135001. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this
subtitle an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
PART 1--INFRASTRUCTURE FINANCING
Subpart A--Bond Financing
SEC. 135101. CREDIT TO ISSUER FOR CERTAIN INFRASTRUCTURE BONDS.
(a) In General.--Subchapter B of chapter 65 is amended by
inserting before section 6432 the following new section:
``SEC. 6431A. CREDIT ALLOWED TO ISSUER FOR QUALIFIED INFRASTRUCTURE
BONDS.
``(a) In General.--In the case of a qualified infrastructure
bond, the issuer of such bond shall be allowed a credit with
respect to each interest payment under such bond which shall be
payable by the Secretary as provided in subsection (b).
``(b) Payment of Credit.--
``(1) In general.--The Secretary shall pay
(contemporaneously with each date on which interest is
paid, including any interest paid after the originally
scheduled payment date) to the issuer of such bond (or,
at the direction of the issuer, to any person who makes
such interest payments on behalf of such issuer) an
amount equal to the applicable percentage of such
interest so paid.
``(2) Applicable percentage.--For purposes of this
subsection, except as provided in subsection (d), the
applicable percentage with respect to any bond shall be
determined under the following table:
``In the case of a bThe applicable percentage is:ar:
2022 through 2024......................................... 35%
2025...................................................... 32%
2026...................................................... 30%
2027 and thereafter....................................... 28%
``(3) Limitation.--
``(A) In general.--The amount of any interest
payment taken into account under paragraph (1)
with respect to a bond for any payment date
shall not exceed the amount of interest which
would have been payable under such bond for
such payment date if interest were determined
at the applicable credit rate multiplied by the
applicable amount for such bond for such
payment date.
``(B) Applicable credit rate.--For purposes
of subparagraph (A)--
``(i) In general.--The applicable
credit rate is the rate which the
Secretary estimates will permit the
issuance of qualified infrastructure
bonds with a specified maturity or
redemption date without discount and
without additional interest cost to the
issuer.
``(ii) Date of determination.--The
applicable credit rate with respect to
any qualified infrastructure bond shall
be determined as of the first day on
which there is a binding, written
contract for the sale or exchange of
the bond.
``(C) Applicable amount.--
``(i) Bonds with more than de minimis
original issue discount.--In the case
of any bond that has more than a de
minimis amount of original issue
discount (determined under the rules of
section 1273(a)(3)), the applicable
amount for a payment date is the issue
price of such bond (within the meaning
of section 148), as adjusted for any
principal payments made prior to such
date.
``(ii) Other bonds.--In the case of
any other bond, the applicable amount
for a payment date is the outstanding
principal amount of such bond on such
payment date (determined without taking
into account any principal payment on
such bond on such date).
``(c) Qualified Infrastructure Bond.--
``(1) In general.--For purposes of this section, the
term `qualified infrastructure bond' means any bond
(other than a private activity bond) issued as part of
an issue if--
``(A) 100 percent of the excess of available
project proceeds of such issue over the amounts
in a reasonably required reserve (within the
meaning of section 150(a)(3)) with respect to
such issue are to be used for--
``(i) capital expenditures or
operations and maintenance expenditures
in connection with property the
acquisition, construction, or
improvement of which would be a capital
expenditure, or
``(ii) payments made by a State or
political subdivision of a State to a
custodian of a rail corridor for
purposes of the transfer, lease, sale,
or acquisition of an established
railroad right-of-way consistent with
section 8(d) of the National Trails Act
of 1968, but only if the Surface
Transportation Board has issued a
certificate of interim trail use or
notice of interim trail use for
purposes of authorizing such transfer,
lease, sale, or acquisition,
``(B) the interest on such bond would (but
for this section) be excludable from gross
income under section 103,
``(C) the issue price has not more than a de
minimis amount (determined under rules similar
to the rules of section 1273(a)(3)) of premium
over the stated principal amount of the bond,
and
``(D) prior to the issuance of such bond, the
issuer makes an irrevocable election to have
this section apply.
``(2) Applicable rules.--For purposes of applying
paragraph (1)--
``(A) Not treated as federally guaranteed.--
For purposes of section 149(b), a qualified
infrastructure bond shall not be treated as
federally guaranteed by reason of the credit
allowed under this section.
``(B) Application of arbitrage rules.--For
purposes of section 148, the yield on a
qualified infrastructure bond shall be reduced
by the credit allowed under this section,
except that no such reduction shall apply in
determining the amount of gross proceeds of an
issue that qualifies as a reasonably required
reserve or replacement fund.
``(d) Definition and Special Rules.--For purposes of this
section--
``(1) Interest includible in gross income.--For
purposes of this title, interest on any qualified
infrastructure bond shall be includible in gross
income.
``(2) Available project proceeds.--The term
`available project proceeds' means--
``(A) the excess of--
``(i) the proceeds from the sale of
an issue, over
``(ii) issuance costs financed by the
issue (to the extent that such costs do
not exceed 2 percent of such proceeds),
and
``(B) the proceeds from any investment of the
excess described in subparagraph (A).
``(3) Current refundings allowed.--
``(A) In general.--In the case of a bond
issued to refund a qualified infrastructure
bond, such refunding bond shall not be treated
as a qualified infrastructure bond for purposes
of this section unless--
``(i) the average maturity date of
the issue of which the refunding bond
is a part is not later than the average
maturity date of the bonds to be
refunded by such issue,
``(ii) the amount of the refunding
bond does not exceed the outstanding
amount of the refunded bond,
``(iii) the refunded bond is redeemed
not later than 90 days after the date
of the issuance of the refunding bond,
and
``(iv) the refunded bond was issued
more than 30 days after the date of the
enactment of this section.
``(B) Applicable percentage limitation.--The
applicable percentage with respect to any bond
to which subparagraph (A) applies shall be 28
percent.
``(C) Determination of average maturity.--For
purposes of subparagraph (A)(i), average
maturity shall be determined in accordance with
section 147(b)(2)(A).
``(4) Application of davis-bacon act requirements
with respect to qualified infrastructure bonds.--
Subchapter IV of chapter 31 of title 40, United States
Code, shall apply to projects financed with the
proceeds of qualified infrastructure bonds.
``(e) Regulations.--The Secretary may prescribe such
regulations and other guidance as may be necessary or
appropriate to carry out this section.''.
(b) Gross-up of Payment to Issuers in Case of
Sequestration.--In the case of any payment under section 6431A
of the Internal Revenue Code of 1986 made after the date of the
enactment of this Act to which sequestration applies, the
amount of such payment shall be increased to an amount equal
to--
(1) such payment (determined before such
sequestration), multiplied by
(2) the quotient obtained by dividing 1 by the amount
by which 1 exceeds the percentage reduction in such
payment pursuant to such sequestration.
For purposes of this subsection, the term ``sequestration''
means any reduction in direct spending ordered in accordance
with a sequestration report prepared by the Director of the
Office and Management and Budget pursuant to the Balanced
Budget and Emergency Deficit Control Act of 1985 or the
Statutory Pay-As-You-Go Act of 2010.
(c) Conforming Amendments.--
(1) Section 1324(b)(2) of title 31, United States
Code, is amended by striking ``or 6431'' and inserting
``6431, or 6431A''.
(2) The table of sections for subchapter B of chapter
65 is amended by inserting before the item relating to
section 6432 the following new item:
``Sec. 6431A. Credit allowed to issuer for qualified infrastructure
bonds.''.
(d) Effective Date.--The amendments made by this section
shall apply to bonds issued after December 31, 2021.
SEC. 135102. ADVANCE REFUNDING BONDS.
(a) In General.--Section 149(d) is amended--
(1) by striking ``to advance refund another bond.''
in paragraph (1) and inserting ``as part of an issue
described in paragraph (2), (3), or (4).'',
(2) by redesignating paragraphs (2) and (3) as
paragraphs (5) and (7), respectively,
(3) by inserting after paragraph (1) the following
new paragraphs:
``(2) Certain private activity bonds.--An issue is
described in this paragraph if any bond (issued as part
of such issue) is issued to advance refund a private
activity bond (other than a qualified 501(c)(3) bond).
``(3) Other bonds.--
``(A) In general.--An issue is described in
this paragraph if any bond (issued as part of
such issue), hereinafter in this paragraph
referred to as the `refunding bond', is issued
to advance refund a bond unless--
``(i) the refunding bond is only--
``(I) the first advance
refunding of the original bond
if the original bond is issued
after 1985, or
``(II) the first or second
advance refunding of the
original bond if the original
bond was issued before 1986,
``(ii) in the case of refunded bonds
issued before 1986, the refunded bond
is redeemed not later than the earliest
date on which such bond may be redeemed
at par or at a premium of 3 percent or
less,
``(iii) in the case of refunded bonds
issued after 1985, the refunded bond is
redeemed not later than the earliest
date on which such bond may be
redeemed,
``(iv) the initial temporary period
under section 148(c) ends--
``(I) with respect to the
proceeds of the refunding bond
not later than 30 days after
the date of issue of such bond,
and
``(II) with respect to the
proceeds of the refunded bond
on the date of issue of the
refunding bond, and
``(v) in the case of refunded bonds
to which section 148(e) did not apply,
on and after the date of issue of the
refunding bond, the amount of proceeds
of the refunded bond invested in higher
yielding investments (as defined in
section 148(b)) which are nonpurpose
investments (as defined in section
148(f)(6)(A)) does not exceed--
``(I) the amount so invested
as part of a reasonably
required reserve or replacement
fund or during an allowable
temporary period, and
``(II) the amount which is
equal to the lesser of 5
percent of the proceeds of the
issue of which the refunded
bond is a part or $100,000 (to
the extent such amount is
allocable to the refunded
bond).
``(B) Special rules for redemptions.--
``(i) Issuer must redeem only if debt
service savings.--Clause (ii) and (iii)
of subparagraph (A) shall apply only if
the issuer may realize present value
debt service savings (determined
without regard to administrative
expenses) in connection with the issue
of which the refunding bond is a part.
``(ii) Redemptions not required
before 90th day.--For purposes of
clauses (ii) and (iii) of subparagraph
(A), the earliest date referred to in
such clauses shall not be earlier than
the 90th day after the date of issuance
of the refunding bond.
``(4) Abusive transactions prohibited.--An issue is
described in this paragraph if any bond (issued as part
of such issue) is issued to advance refund another bond
and a device is employed in connection with the
issuance of such issue to obtain a material financial
advantage (based on arbitrage) apart from savings
attributable to lower interest rates.'', and
(4) by inserting after paragraph (5) (as so
redesignated) the following new paragraph:
``(6) Special rules for purposes of paragraph (3).--
For purposes of paragraph (3), bonds issued before
October 22, 1986, shall be taken into account under
subparagraph (A)(i) thereof except--
``(A) a refunding which occurred before 1986
shall be treated as an advance refunding only
if the refunding bond was issued more than 180
days before the redemption of the refunded
bond, and
``(B) a bond issued before 1986, shall be
treated as advance refunded no more than once
before March 15, 1986.''.
(b) Conforming Amendment.--Section 148(f)(4)(C) is amended by
redesignating clauses (xiv) through (xvi) as clauses (xv) to
(xvii), respectively, and by inserting after clause (xiii) the
following new clause:
``(xiv) Determination of initial
temporary period.--For purposes of this
subparagraph, the end of the initial
section temporary period shall be
determined without regard to section
149(d)(3)(A)(iv).''.
(c) Effective Date.--The amendments made by this section
shall apply to advance refunding bonds issued more than 30 days
after the date of the enactment of this Act.
SEC. 135103. PERMANENT MODIFICATION OF SMALL ISSUER EXCEPTION TO TAX-
EXEMPT INTEREST EXPENSE ALLOCATION RULES FOR
FINANCIAL INSTITUTIONS.
(a) Permanent Increase in Limitation.--Subparagraphs (C)(i),
(D)(i), and (D)(iii)(II) of section 265(b)(3) are each amended
by striking ``$10,000,000'' and inserting ``$30,000,000''.
(b) Permanent Modification of Other Special Rules.--Section
265(b)(3) is amended--
(1) by redesignating clauses (iv), (v), and (vi) of
subparagraph (G) as clauses (ii), (iii), and (iv),
respectively, and moving such clauses to the end of
subparagraph (H) (as added by paragraph (2)), and
(2) by striking so much of subparagraph (G) as
precedes such clauses and inserting the following:
``(G) Qualified 501(c)(3) bonds treated as
issued by exempt organization.--In the case of
a qualified 501(c)(3) bond (as defined in
section 145), this paragraph shall be applied
by treating the 501(c)(3) organization for
whose benefit such bond was issued as the
issuer.
``(H) Special rule for qualified
financings.--
``(i) In general.--In the case of a
qualified financing issue--
``(I) subparagraph (F) shall
not apply, and
``(II) any obligation issued
as a part of such issue shall
be treated as a qualified tax-
exempt obligation if the
requirements of this paragraph
are met with respect to each
qualified portion of the issue
(determined by treating each
qualified portion as a separate
issue which is issued by the
qualified borrower with respect
to which such portion
relates).''.
(c) Inflation Adjustment.--Section 265(b)(3), as amended by
subsection (b), is amended by adding at the end the following
new subparagraph:
``(I) Inflation adjustment.--In the case of
any calendar year after 2021, the $30,000,000
amounts contained in subparagraphs (C)(i),
(D)(i), and (D)(iii)(II) shall each be
increased by an amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
such calendar year, determined by
substituting `calendar year 2020' for
`calendar year 2016' in subparagraph
(A)(ii) thereof.
Any increase determined under the preceding
sentence shall be rounded to the nearest
multiple of $100,000.''.
(d) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 135104. MODIFICATIONS TO QUALIFIED SMALL ISSUE BONDS.
(a) Manufacturing Facilities To Include Production of
Intangible Property and Functionally Related Facilities.--
Subparagraph (C) of section 144(a)(12) is amended to read as
follows:
``(C) Manufacturing facility.--For purposes
of this paragraph--
``(i) In general.--The term
`manufacturing facility' means any
facility which--
``(I) is used in the
manufacturing or production of
tangible personal property
(including the processing
resulting in a change in the
condition of such property),
``(II) is used in the
creation or production of
intangible property which is
described in section
197(d)(1)(C)(iii), or
``(III) is functionally
related and subordinate to a
facility described in subclause
(I) or (II) if such facility is
located on the same site as the
facility described in subclause
(I) or (II).
``(ii) Certain facilities included.--
The term `manufacturing facility'
includes facilities that are directly
related and ancillary to a
manufacturing facility (determined
without regard to this clause) if--
``(I) those facilities are
located on the same site as the
manufacturing facility, and
``(II) not more than 25
percent of the net proceeds of
the issue are used to provide
those facilities.
``(iii) Limitation on office space.--
A rule similar to the rule of section
142(b)(2) shall apply for purposes of
clause (i).
``(iv) Limitation on refundings for
certain property.--Subclauses (II) and
(III) of clause (i) shall not apply to
any bond issued on or before the date
of the enactment of the Act to provide
for reconciliation pursuant to title II
of S. Con. Res. 14, or to any bond
issued to refund a bond issued on or
before such date (other than a bond to
which clause (iii) of this subparagraph
(as in effect before the date of the
enactment of such Act) applies), either
directly or in a series of
refundings.''.
(b) Increase in Limitations.--Section 144(a)(4) is amended--
(1) in subparagraph (A)(i), by striking
``$10,000,000'' and inserting ``$30,000,000'', and
(2) in the heading, by striking ``$10,000,000'' and
inserting ``$30,000,000''.
(c) Adjustment for Inflation.--Section 144(a)(4) is amended
by adding at the end the following new subparagraph:
``(H) Adjustment for inflation.--In the case
of any calendar year after 2021, the
$30,000,000 amount in subparagraph (A) shall be
increased by an amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year, determined by
substituting `calendar year 2020' for
`calendar year 2016' in subparagraph
(A)(ii) thereof.
If any amount as increased under the preceding
sentence is not a multiple of $100,000, such
amount shall be rounded to the nearest multiple
of $100,000.''.
(d) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 135105. EXPANSION OF CERTAIN EXCEPTIONS TO THE PRIVATE ACTIVITY
BOND RULES FOR FIRST-TIME FARMERS.
(a) Increase in Dollar Limitation.--
(1) In general.--Section 147(c)(2)(A) is amended by
striking ``$450,000'' and inserting ``$552,500''.
(2) Repeal of separate lower dollar limitation on
used farm equipment.--Section 147(c)(2) is amended by
striking subparagraph (F) and by redesignating
subparagraphs (G) and (H) as subparagraphs (F) and (G),
respectively.
(3) Qualified small issue bond limitation conformed
to increased dollar limitation.--Section 144(a)(11)(A)
is amended by striking ``$250,000'' and inserting
``$552,500''.
(4) Inflation adjustment.--
(A) In general.--Section 147(c)(2)(G), as
redesignated by paragraph (2), is amended--
(i) by striking ``after 2008, the
dollar amount in subparagraph (A) shall
be increased'' and inserting ``after
2021, the dollar amounts in
subparagraph (A) and section
144(a)(11)(A) shall each be
increased'', and
(ii) in clause (ii), by striking
``2007'' and inserting ``2020''.
(B) Cross-reference.--Section 144(a)(11) is
amended by adding at the end the following new
subparagraph:
``(D) Inflation adjustment.--For inflation
adjustment of dollar amount contained in
subparagraph (A), see section 147(c)(2)(G).''.
(b) Substantial Farmland Determined on Basis of Average
Rather Than Median Farm Size.--Section 147(c)(2)(E) is amended
by striking ``median'' and inserting ``average''.
(c) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment of
this Act.
SEC. 135106. CERTAIN WATER AND SEWAGE FACILITY BONDS EXEMPT FROM VOLUME
CAP ON PRIVATE ACTIVITY BONDS.
(a) In General.--Section 146(g) is amended by striking
``and'' at the end of paragraph (3), striking the period at the
end of paragraph (4) and inserting ``, and'', and inserting
after paragraph (4) the following new paragraph:
``(5) any exempt facility bond issued as part of an
issue described in paragraph (4) or (5) of section
142(a) if 95 percent or more of the net proceeds of
such issue are to be used to provide facilities which--
``(A) will be used--
``(i) by a person who was, as of July
1, 2020, engaged in operation of a
facility described in such paragraph,
and
``(ii) to provide service within the
area served by such person on such date
(or within a county or city any portion
of which is within such area), or
``(B) will be used by a successor in interest
to such person for the same use and within the
same service area as described in subparagraph
(A).''.
(b) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment of
this Act.
SEC. 135107. EXEMPT FACILITY BONDS FOR ZERO-EMISSION VEHICLE
INFRASTRUCTURE.
(a) In General.--Section 142 is amended--
(1) in subsection (a)--
(A) in paragraph (14), by striking ``or'' at
the end,
(B) in paragraph (15), by striking the period
at the end and inserting ``, or'', and
(C) by adding at the end the following new
paragraph:
``(16) zero-emission vehicle infrastructure.'', and
(2) by adding at the end the following new
subsection:
``(n) Zero-Emission Vehicle Infrastructure.--
``(1) In general.--For purposes of subsection
(a)(16), the term `zero-emission vehicle
infrastructure' means any property (not including a
building and its structural components) if such
property is part of a unit which--
``(A) is used to charge or fuel zero-
emissions vehicles,
``(B) is located where the vehicles are
charged or fueled,
``(C) is of a character subject to the
allowance for depreciation (or amortization in
lieu of depreciation),
``(D) is made available for use by members of
the general public,
``(E) accepts payment via a credit card
reader, including a credit card reader that
uses contactless technology, and
``(F) is capable of charging or fueling
vehicles produced by more than one manufacturer
(within the meaning of section 30D(d)(3)).
``(2) Inclusion of utility service connections,
etc.--The term `zero-emission vehicle infrastructure'
shall include any utility service connections, utility
panel upgrades, line extensions and conduit,
transformer upgrades, or similar property, in
connection with property meeting the requirements of
paragraph (1).
``(3) Zero-emissions vehicle.--The term `zero-
emissions vehicle' means--
``(A) a zero-emission vehicle as defined in
section 88.102-94 of title 40, Code of Federal
Regulations, or
``(B) a vehicle that produces zero exhaust
emissions of any criteria pollutant (or
precursor pollutant) or greenhouse gas under
any possible operational modes and conditions.
``(4) Zero-emissions vehicle infrastructure located
within other facilities or projects.--For purposes of
subsection (a), any zero-emission vehicle
infrastructure located within--
``(A) a facility or project described in
subsection (a), or
``(B) an area adjacent to a facility or
project described in subsection (a) that
primarily serves vehicles traveling to or from
such facility or project,
shall be treated as described in the paragraph in which
such facility or project is described.
``(5) Exception for refueling property for fleet
vehicles.--Subparagraphs (D), (E), and (F) of paragraph
(1) shall not apply to property which is part of a unit
which is used exclusively by fleets of commercial or
governmental vehicles.''.
(b) Effective Date.--The amendments made by this section
shall apply to obligations issued after December 31, 2021.
SEC. 135108. APPLICATION OF DAVIS-BACON ACT REQUIREMENTS WITH RESPECT
TO CERTAIN EXEMPT FACILITY BONDS.
(a) In General.--Section 142(b) is amended by adding at the
end the following new paragraph:
``(3) Application of davis-bacon act requirements
with respect to certain exempt facility bonds.--If any
proceeds of any issue are used for construction,
alteration, or repair of any facility otherwise
described in paragraph (4), (5), (15), or (16) of
subsection (a), such facility shall be treated for
purposes of subsection (a) as described in such
paragraph only if each entity that receives such
proceeds to conduct such construction, alteration, or
repair agrees to comply with the provisions of
subchapter IV of chapter 31 of title 40, United States
Code with respect to such construction, alteration, or
repair.''.
(b) Effective Date.--The amendment made by this section shall
apply to bonds issued after the date of the enactment of this
Act.
Subpart B--Other Provisions Related to Infrastructure Financing
SEC. 135111. CREDIT FOR OPERATIONS AND MAINTENANCE COSTS OF GOVERNMENT-
OWNED BROADBAND.
(a) In General.--Subchapter B of chapter 65, as amended by
the preceding provisions of this Act, is amended by inserting
before section 6432 the following new section:
``SEC. 6431B. CREDIT FOR OPERATIONS AND MAINTENANCE COSTS OF
GOVERNMENT-OWNED BROADBAND.
``(a) In General.--In the case of any eligible governmental
entity, there shall be allowed a credit equal to the applicable
percentage of the qualified broadband expenses paid or incurred
by such entity during the taxable year which credit shall be
payable by the Secretary as provided in subsection (b).
``(b) Payment of Credit.--Upon receipt from an eligible
governmental entity of such information as the Secretary may
require for purposes of carrying out this section, the
Secretary shall pay to such entity the amount of the credit
determined under subsection (a) for the taxable year.
``(c) Limitation.--The amount of qualified broadband expenses
taken into account under this section for any taxable year with
respect to any qualified broadband network shall not exceed the
product of $400 multiplied by the number of qualified
households subscribed to the qualified broadband service
provided by such network (determined as of any time during such
taxable year).
``(d) Definitions.--For purposes of this section--
``(1) Applicable percentage.--The term `applicable
percentage' means--
``(A) in the case of any taxable year
beginning in 2021 through 2026, 30 percent,
``(B) in the case of any taxable year
beginning in 2027, 26 percent, and
``(C) in the case of any taxable year
beginning in 2028, 24 percent.
``(2) Eligible governmental entity.--The term
`eligible governmental entity' means--
``(A) any State, local, or Indian tribal
government,
``(B) any political subdivision or
instrumentality of any government described in
subparagraph (A), and
``(C) any entity wholly owned by one or more
entities described in subparagraph (A) or (B).
For purposes of this paragraph, the term `State'
includes any possession of the United States.
``(3) Qualified broadband expenses.--The term
`qualified broadband expenses' means so much of the
amounts paid or incurred for the operation and
maintenance of a qualified broadband network as are
properly allocable to qualified households subscribed
to the qualified broadband service provided by such
network.
``(4) Qualified household.--The term `qualified
household' means a personal residence which--
``(A) is located in a low-income community
(as defined in section 45D(e)), and
``(B) did not have access to qualified
broadband service from the eligible
governmental entity (determined as of the
beginning of the taxable year of such entity).
``(5) Qualified broadband network.--The term
`qualified broadband network' means property owned by
an eligible governmental entity and used for the
purpose of providing qualified broadband service.
``(6) Qualified broadband service.--The term
`qualified broadband service' means fixed, terrestrial
broadband service providing downloads at a speed of at
least 25 megabits per second and uploads at a speed of
at least 3 megabits per second.
``(7) Taxable year.--Except as otherwise provided by
the Secretary, the term `taxable year' means, with
respect to any eligible governmental entity, the fiscal
year of such entity.
``(e) Special Rules.--
``(1) Allocations.--For purposes of subsection
(d)(3), amounts shall be treated as properly allocated
if allocated ratably among the subscribers of the
qualified broadband service.
``(2) Denial of double benefit.--Qualified broadband
expenses shall not include any amount which is paid or
reimbursed (directly or indirectly) by any grant from
the Federal Government.
``(f) Regulations.--The Secretary may prescribe such
regulations and other guidance as may be necessary or
appropriate to carry out this section.
``(g) Termination.--No credit shall be allowed under this
section for any taxable year beginning after December 31,
2028.''.
(b) Payments Made Under Section 6431B(b) of Internal Revenue
Code of 1986.--Section 255(h) of the Balanced Budget and
Emergency Deficit Control Act of 1985 (2 U.S.C. 905(h)) is
amended by inserting: ``Payments made under section 6431B(b) of
the Internal Revenue Code of 1986'' after the item related to
Payments for Foster Care and Permanency.
(c) Conforming Amendments.--
(1) Section 1324(b)(2) of title 31, United States
Code, as amended by the preceding provisions of this
Act, is amended by striking ``or 6431A'' and inserting
``6431A, or 6431B''.
(2) The table of sections for subchapter B of chapter
65, as amended by the preceding provisions of this Act,
is amended by inserting before the item relating to
section 6432 the following new item:
``Sec. 6431B. Credit for operations and maintenance costs of government-
owned broadband.''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2020.
PART 2--NEW MARKETS TAX CREDIT
SEC. 135201. PERMANENT EXTENSION OF NEW MARKETS TAX CREDIT.
(a) Temporary Limit Increase and Permanent Extension.--
Section 45D(f)(1) is amended by striking ``and'' at the end of
subparagraph (G) and by striking subparagraph (H) and inserting
the following new subparagraphs:
``(H) $5,000,000,000 for each of calendar
years 2020 and 2021,
``(I) $7,000,000,000 for calendar year 2022,
``(J) $6,000,000,000 for calendar year 2023,
and
``(K) $5,000,000,000 for calendar year 2024
and each calendar year thereafter.''.
(b) Alternative Minimum Tax Relief.--Section 38(c)(4)(B) is
amended--
(1) by redesignating clauses (v) through (xii) as
clauses (vi) through (xiii), respectively, and
(2) by inserting after clause (iv) the following new
clause:
``(v) the credit determined under
section 45D, but only with respect to
credits determined with respect to
qualified equity investments (as
defined in section 45D(b)) initially
made after December 31, 2021,''.
(c) Inflation Adjustment.--Section 45D(f) is amended by
adding at the end the following new paragraph:
``(4) Inflation adjustment.--
``(A) In general.--In the case of any
calendar year beginning after 2024, the dollar
amount paragraph (1)(H) shall be increased by
an amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year, determined by
substituting `calendar year 2023' for
`calendar year 2016' in subparagraph
(A)(ii) thereof.
``(B) Rounding rule.--Any increase under
subparagraph (A) which is not a multiple of
$1,000,000 shall be rounded to the nearest
multiple of $1,000,000.''.
(d) Conforming Amendment.--Section 45D(f)(3) is amended by
striking the last sentence.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply to new markets tax credit limitation determined
for calendar years after 2021.
(2) Alternative minimum tax relief.--The amendments
made by subsection (b) shall apply to credits
determined with respect to qualified equity investments
(as defined in section 45D(b) of the Internal Revenue
Code of 1986) initially made after December 31, 2021.
PART 3--REHABILITATION TAX CREDIT
SEC. 135301. DETERMINATION OF CREDIT PERCENTAGE.
(a) In General.--Section 47(a)(2) is amended by striking ``20
percent'' and inserting ``the applicable percentage''.
(b) Applicable Percentage.--Section 47(a) is amended by
adding at the end the following new paragraph:
``(3) Applicable percentage.--For purposes of this
subsection, the term `applicable percentage' means the
percentage determined in accordance with the following
table:
----------------------------------------------------------------------------------------------------------------
``In the case of taxable years beginning: The applicable percentage is:
----------------------------------------------------------------------------------------------------------------
Before 2020.................................. 20 percent
In 2020 through 2025......................... 30 percent
In 2026...................................... 26 percent
In 2027...................................... 23 percent
After 2027................................... 20 percent
----------------------------------------------------------------------------------------------------------------
``(4) Application of percentages to year of
expenditure.--In the case of qualified rehabilitation
expenditures with respect to the qualified
rehabilitated building that are paid or incurred in 2
or more taxable years for which there is a different
applicable percentage under paragraph (3), the ratable
share shall be determined by applying to such
expenditures the applicable percentage corresponding to
the taxable year in which such expenditures were paid
or incurred.''.
(d) Effective Date.--The amendments made by this section
shall apply to property placed in service after March 31, 2021.
SEC. 135302. INCREASE IN THE REHABILITATION CREDIT FOR CERTAIN SMALL
PROJECTS.
(a) In General.--Section 47 is amended by adding at the end
the following new subsection:
``(e) Special Rule Regarding Certain Smaller Projects.--
``(1) In general.--In the case of any smaller
project--
``(A) the applicable percentage determined
under subsection (a)(3) shall be 30 percent,
and
``(B) the qualified rehabilitation
expenditures taken into account under this
section with respect to such project shall not
exceed $2,500,000.
``(2) Smaller project.--For purposes of this
subsection, the term `smaller project' means the
rehabilitation of any qualified rehabilitated building
if--
``(A) the qualified rehabilitation
expenditures taken into account under this
section (or which would be so taken into
account but for paragraph (1)(B)) with respect
to such rehabilitation do not exceed
$3,750,000,
``(B) no credit was allowed under this
section with respect to such building to any
taxpayer for either of the 2 taxable years
immediately preceding the first taxable year in
which expenditures described in subparagraph
(A) were paid or incurred, and
``(C) the taxpayer elects (at such time and
manner as the Secretary may provide) to have
this subsection apply with respect to such
rehabilitation.''.
(b) Effective Date.--The amendment made by this section shall
apply to taxable years beginning after December 31, 2021.
SEC. 135303. MODIFICATION OF DEFINITION OF SUBSTANTIALLY REHABILITATED.
(a) In General.--Section 47(c)(1)(B)(i)(I) is amended by
inserting ``50 percent of'' before ``the adjusted basis''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to determinations with respect to 24-month periods
(referred to in clause (i) of section 47(c)(1)(B) of the
Internal Revenue Code of 1986) and 60-month periods (referred
to in clause (ii) of such section) which end after December 31,
2021.
SEC. 135304. ELIMINATION OF REHABILITATION CREDIT BASIS ADJUSTMENT.
(a) In General.--Section 50(c) is amended by adding at the
end the following new paragraph:
``(6) Exception for rehabilitation credit.--In the
case of the rehabilitation credit, paragraph (1) shall
not apply.''.
(b) Treatment in Case of Credit Allowed to Lessee.--Section
50(d) is amended by adding at the end the following: ``In the
case of the rehabilitation credit, paragraph (5)(B) of the
section 48(d) referred to in paragraph (5) of this subsection
shall not apply.''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2022.
SEC. 135305. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT USE PROPERTY.
(a) In General.--Section 47(c)(2)(B)(v) is amended by adding
at the end the following new subclause:
``(III) Disqualified lease
rules to apply only in case of
government entity.--For
purposes of subclause (I),
except in the case of a tax-
exempt entity described in
section 168(h)(2)(A)(i)
(determined without regard to
the last sentence of section
168(h)(2)(A)), the
determination of whether
property is tax-exempt use
property shall be made under
section 168(h) without regard
to whether the property is
leased in a disqualified lease
(as defined in section
168(h)(1)(B)(ii)).''.
(b) Effective Date.--The amendments made by this section
shall apply to leases entered into after December 31, 2021.
SEC. 135306. QUALIFICATION OF REHABILITATION EXPENDITURES FOR PUBLIC
SCHOOL BUILDINGS FOR REHABILITATION CREDIT.
(a) In General.--Section 47(c)(2)(B)(v), as amended by the
preceding provisions of this Act, is amended by adding at the
end the following new subclause:
``(IV) Clause not to apply to
public schools.--This clause
shall not apply in the case of
the rehabilitation of any
building which was used as a
qualified public educational
facility (as defined in section
142(k)(1), determined without
regard to subparagraph (B)
thereof) at any time during the
5-year period ending on the
date that such rehabilitation
begins and which is used as
such a facility immediately
after such rehabilitation.''.
(b) Report.--Not later than the date which is 5 years after
the date of the enactment of this Act, the Secretary of the
Treasury, after consultation with the heads of appropriate
Federal agencies, shall report to Congress on the effects
resulting from the amendment made by subsection (a),
including--
(1) the number of qualified public education
facilities rehabilitated (stated separately with
respect to each State) and the number of students using
such facilities (stated separately with respect to each
such State),
(2) the number of qualified public education
facilities rehabilitated in low income communities (as
section 45D(e)(1) of the Internal Revenue Code of 1986)
and the number of students using such facilities,
(3) the amount of qualified rehabilitation
expenditures for each qualified public education
facility rehabilitated, and
(4) and any other data determined by the Secretary to
be useful in evaluating the impact of such amendment.
(c) Effective Date.--The amendment made by this section shall
apply to property placed in service after December 31, 2021.
PART 4--DISASTER AND RESILIENCY
SEC. 135401. EXCLUSION OF AMOUNTS RECEIVED FROM STATE-BASED CATASTROPHE
LOSS MITIGATION PROGRAMS.
(a) In General.--Section 139 is amended by redesignating
subsection (h) as subsection (i) and by inserting after
subsection (g) the following new subsection:
``(h) State-Based Catastrophe Loss Mitigation Programs.--
``(1) In general.--Gross income shall not include any
amount received by an individual as a qualified
catastrophe mitigation payment under a program
established by a State, or a political subdivision or
instrumentality thereof, for the purpose of making such
payments.
``(2) Qualified catastrophe mitigation payment.--For
purposes of this section, the term `qualified
catastrophe mitigation payment' means any amount which
is received by an individual to make improvements to
such individual's residence for the sole purpose of
reducing the damage that would be done to such
residence by a windstorm, earthquake, or wildfire.
``(3) No increase in basis.--Rules similar to the
rules of subsection (g)(3) shall apply in the case of
this subsection.''.
(b) Conforming Amendments.--
(1) Section 139(d) is amended by striking ``and
qualified'' and inserting ``, qualified catastrophe
mitigation payments, and qualified''.
(2) Section 139(i) (as redesignated by subsection
(a)) is amended by striking ``or qualified'' and
inserting ``, qualified catastrophe mitigation payment,
or qualified''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2020.
SEC. 135402. REPEAL OF TEMPORARY LIMITATION ON PERSONAL CASUALTY
LOSSES.
(a) In General.--Section 165(h) is amended by striking
paragraph (5).
(b) Extension of Period of Limitation on Filing Claim in
Certain Circumstances.--In the case of a claim for credit or
refund which is properly allocable to a loss which is--
(1) deductible under section 165(a) of the Internal
Revenue Code of 1986,
(2) described in Revenue Procedure 2017-60 (as
modified by Revenue Procedure 2018-14), and
(3) claimed for a taxable year beginning after
December 31, 2016,
the period of limitation prescribed in section 6511 of the
Internal Revenue Code of 1986 for the filing of such claim
shall be treated as not expiring earlier than the date that is
1 year after the date of the enactment of this Act.
(c) Effective Date.--The amendment made by subsection (a)
shall apply to losses incurred in taxable years beginning after
December 31, 2017.
(d) Regulations.--The Secretary of the Treasury (or the
Secretary's delegate) shall issue such regulations or other
guidance as are necessary to implement the amendment made by
this section, including regulations or guidance consistent with
Revenue Procedure 2017-60 (as so modified).
SEC. 135403. CREDIT FOR QUALIFIED WILDFIRE MITIGATION EXPENDITURES.
(a) In General.--Subpart B of part IV of subchapter A of
chapter 1 is amended by inserting after section 27 the
following new section:
``SEC. 28. QUALIFIED WILDFIRE MITIGATION EXPENDITURES.
``(a) In General.--There shall be allowed as a credit against
the tax imposed by this chapter for the taxable year an amount
equal to 30 percent of the qualified wildfire mitigation
expenditures paid or incurred by the taxpayer during such
taxable year with respect to real property owned or leased by
the taxpayer.
``(b) Qualified Wildfire Mitigation Expenditures.--For
purposes of this section--
``(1) In general.--The term `qualified wildfire
mitigation expenditures' means any specified wildfire
mitigation expenditure made pursuant to a qualified
State wildfire mitigation program of a State which
requires expenditures for wildfire mitigation to be
paid both by the taxpayer and such State. Such term
shall not include any item of expenditure unless the
ratio of the State's expenditure for such item to the
sum of the State's and taxpayer's expenditures for such
item is not less than 25 percent.
``(2) Specified wildfire mitigation expenditure.--The
term `specified wildfire mitigation expenditure' means,
with respect to any real property owned or leased by
the taxpayer, any amount paid or incurred to reduce the
risk of wildfire by removing accumulations of
vegetation (including establishing, expanding, or
maintaining fuel breaks to serve as fire breaks) on
such real property.
``(3) Qualified state wildfire mitigation program.--
The term `qualified State wildfire mitigation program'
means any program of a State the primary purpose of
which is to mitigate the risk of wildfires in such
State.
``(4) Treatment of reimbursements.--Any amount
originally paid or incurred by the taxpayer which is
reimbursed by a State under a qualified wildfire
mitigation program of such State shall be treated as
paid by such State (and not by such taxpayer).
``(c) Application With Other Credits.--
``(1) Business credit treated as part of general
business credit.--So much of the credit which would be
allowed under subsection (a) for any taxable year
(determined without regard to this subsection) that is
attributable to expenditures made in the ordinary
course of the taxpayer's trade or business (or, in the
case of expenditures made by a State, would have been
expenditures made in the ordinary course of the
taxpayer's trade or business if made by the taxpayer)
shall be treated as a credit listed in section 38(b)
for taxable year (and not allowed under subsection
(a)).
``(2) Personal credit.--For purposes of this title,
the credit allowed under subsection (a) for any taxable
year (determined after application of paragraph (1))
shall be treated as a credit allowable under subpart A
for such taxable year.
``(d) Reduction of Credit Percentage Where Taxpayer
Expenditures Less Than 30 Percent.--
``(1) In general.--If the expenditure percentage with
respect to any item of qualified wildfire mitigation
expenditure is less than 30 percent, subsection (a)
shall be applied by substituting `the expenditure
percentage' for `30 percent' with respect to such item
of expenditure.
``(2) Expenditure percentage.--For purposes of this
section, the term `expenditure percentage' means, with
respect to any item of qualified wildfire mitigation
expenditure any portion of which is paid or incurred by
a State, the ratio (expressed as a percentage) of--
``(A) the taxpayer's expenditure for such
item, divided by
``(B) the sum of the taxpayer's and such
State's expenditures for such item.
``(e) Special Rules.--
``(1) Treatment of expenditures related to marketable
timber.--An expenditure shall not be taken into account
for purposes of this section (whether made by the
taxpayer or a State pursuant to a qualified State
wildfire mitigation program of such State) if such
expenditure is properly allocable to timber which is
sold or exchanged by the taxpayer. The preceding
sentence shall not apply to the extent that such amount
exceeds the gain on such sale or exchange.
``(2) Basis reduction.--For purposes of this
subtitle, if the basis of any property would (but for
this paragraph) be determined by taking into account
any qualified wildfire mitigation expenditure, the
basis of such property shall be reduced by the amount
of the credit allowed under subsection (a) with respect
to such expenditure (determined without regard to
subsection (c)).
``(3) Denial of double benefit.--The amount of any
deduction or other credit allowable under this chapter
for any expenditure for which a credit is allowable
under subsection (a) shall be reduced by the amount of
credit allowed under such subsection for such
expenditure (determined without regard to subsection
(c)).''.
(b) Conforming Amendments.--
(1) Section 38(b), as amended by the preceding
provisions of this Act, is amended by striking ``plus''
at the end of paragraph (33), by striking the period at
the end of paragraph (34) and inserting ``, plus'', and
by adding at the end the following new paragraph:
``(35) the portion of the qualified wildfire
mitigation expenditures credit to which section
28(c)(1) applies.''.
(2) Section 1016(a) is amended by redesignating
paragraphs (35) through (38) as paragraphs (36) through
(39), respectively, and by inserting after paragraph
(34) the following new paragraph:
``(35) to the extent provided in section 28(e)(2),''.
(3) The table of sections for subpart B of part IV of
subchapter A of chapter 1 is amended by inserting after
the item relating to section 27 the following new item:
``Sec. 28. Qualified wildfire mitigation expenditures.''.
(c) Effective Date.--The amendments made by this section
shall apply to expenditures paid or incurred after the date of
the enactment of this Act, in taxable years ending after such
date.
PART 5--HOUSING
Subpart A--Low Income Housing Tax Credit
SEC. 135501. INCREASES IN STATE ALLOCATIONS.
(a) In General.--Section 42(h)(3)(I) is amended to read as
follows:
``(I) Increase in state housing credit
ceiling for 2022 through 2028.--
``(i) In general.--In the case of
calendar years 2022 through 2028, the
dollar amounts under subclauses (I) and
(II) of subparagraph (C)(ii) for any
such calendar shall be determined under
clause (ii) and in accordance with the
following table:
------------------------------------------------------------------------
The The
subclause subclause
``In the case of calendar year: (I) amount (II) amount
shall be: shall be:
------------------------------------------------------------------------
2022.......................................... $3.22 $3,711,575
2023.......................................... $3.70 $4,269,471
2024.......................................... $4.25 $4,901,620
2025.......................................... $4.88 $5,632,880
------------------------------------------------------------------------
``(ii) Inflation adjustment for 2026,
2027, and 2028.--In the case of
calendar years 2026, 2027, and 2028,
the subclause (I) and (II) dollar
amounts shall be the respective dollar
amounts corresponding to calendar year
2025 in the table under clause (i) each
increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under
section 1(f)(3) for such
calendar year by substituting
`calendar year 2025' for
`calendar year 2016' in
paragraph (A)(ii) thereof.
Any increase under this clause shall be
rounded to the nearest cent in the case
of the subclause (I) amount and the
nearest dollar in the case of the
subclause (II) amount.''.
(b) Effective Date.--The amendments made by this section
shall apply to calendar years beginning after December 31,
2021.
SEC. 135502. TAX-EXEMPT BOND FINANCING REQUIREMENT.
(a) In General.--Section 42(h)(4)(B) is amended by adding at
the end the following: ``The preceding sentence shall be
applied by substituting `25 percent' for `50 percent' in the
case of any building which is financed by any obligation issued
in calendar year 2022, 2023, 2024, 2025, 2026, 2027, or 2028
(and not by any obligation on which the application of this
subparagraph is based during any taxable year beginning during
calendar year 2019, 2020, or 2021).''.
(b) Effective Date.--The amendment made by this section shall
apply to buildings placed in service in taxable years beginning
after December 31, 2021.
SEC. 135503. BUILDINGS DESIGNATED TO SERVE EXTREMELY LOW-INCOME
HOUSEHOLDS.
(a) Reserved State Allocation.--
(1) In general.--Section 42(h) is amended--
(A) by redesignating paragraphs (6), (7), and
(8) as paragraphs (7), (8), and (9),
respectively, and
(B) by inserting after paragraph (5) the
following new paragraph:
``(6) Portion of state ceiling set-aside for projects
designated to serve extremely low-income households.--
``(A) In general.--Not more than 90 percent
of the portion of the State housing credit
ceiling amount described in paragraph
(3)(C)(ii) for any State for any calendar year
shall be allocated to buildings other than
buildings described in subparagraph (B).
``(B) Buildings described.--A building is
described in this subparagraph if 20 percent or
more of the residential units in such building
are rent-restricted (determined as if the
imputed income limitation applicable to such
units were 30 percent of area median gross
income) and are designated by the taxpayer for
occupancy by households the aggregate household
income of which does not exceed the greater
of--
``(i) 30 percent of area median gross
income, or
``(ii) 100 percent of an amount equal
to the Federal poverty line (within the
meaning of section 36B(d)(3)).
``(C) State may not override set-aside.--
Nothing in subparagraph (F) of paragraph (3)
shall be construed to permit a State not to
comply with subparagraph (A) of this paragraph.
``(D) Termination.--This paragraph shall not
apply to allocations after December 31,
2031.''.
(2) Conforming amendment.--Section 42(b)(4)(C) is
amended by striking ``(h)(7)'' and inserting
``(h)(8)''.
(b) Increase in Credit.--Paragraph (5) of section 42(d) is
amended by adding at the end the following new subparagraph:
``(C) Increase in credit for projects
designated to serve extremely low-income
households.--
``(i) In general.--In the case of any
building--
``(I) which is described in
subsection (h)(6)(B), and
``(II) which is designated by
the housing credit agency as
requiring the increase in
credit under this subparagraph
in order for such building to
be financially feasible as part
of a qualified low-income
housing project,
subparagraph (B) shall not apply to the
portion of such building which is
comprised of such units, and the
eligible basis of such portion of the
building shall be 150 percent of such
basis determined without regard to this
subparagraph.
``(ii) Allocation rules applicable to
projects to which clause (i) applies.--
``(I) State housing credit
ceiling.--For any calendar
year, the housing credit agency
shall not allocate more than 15
percent of the portion of the
State housing credit ceiling
amount described in subsection
(h)(3)(C)(ii) to buildings to
which clause (i) applies, and
``(II) Private activity bond
volume cap.--In the case of
projects financed by tax-exempt
bonds as described in
subsection (h)(4), for any
calendar year, the State shall
not issue more than 10 percent
of the private activity bond
volume cap as described in
section 146(d)(1) to buildings
to which clause (i) applies.
``(iii) Termination.--This
subparagraph shall not apply to
allocations after December 31, 2031.''.
(c) Effective Date.--The amendments made by this section
shall apply to allocations, and determinations, of housing
credit dollar amount after December 31, 2021.
SEC. 135504. INCLUSION OF RURAL AREAS AS DIFFICULT DEVELOPMENT AREAS.
(a) In General.--Subclause (I) of section 42(d)(5)(B)(iii) is
amended by inserting before the period the following: ``, and
any rural area''.
(b) Rural Area.--Clause (iii) of section 42(d)(5)(B) is
amended by redesignating subclause (II) as subclause (III) and
by inserting after subclause (I) the following new subclause:
``(II) Rural area.--For
purposes of subclause (I), the
term `rural area' means any
non-metropolitan area, or any
rural area as defined by
section 520 of the Housing Act
of 1949, which is identified by
the qualified allocation plan
under subsection (m)(1)(B).''.
(c) Effective Date.--The amendments made by this section
shall apply to buildings placed in service after December 31,
2021.
SEC. 135505. REPEAL OF QUALIFIED CONTRACT OPTION.
(a) Termination of Option for Certain Buildings.--
(1) In general.--Subclause (II) of section
42(h)(7)(E)(i), as redesignated by section 135503, is
amended by inserting ``in the case of a building
described in clause (iii),'' before ``on the last
day''.
(2) Buildings described.--Subparagraph (E) of section
42(h)(7), as so redesignated, is amended by adding at
the end the following new clause:
``(iii) Buildings described.--A
building described in this clause is a
building--
``(I) which received its
allocation of housing credit
dollar amount before January 1,
2022, or
``(II) in the case of a
building any portion of which
is financed as described in
paragraph (4), which received
before January 1, 2022, a
determination from the issuer
of the tax-exempt bonds or the
housing credit agency that the
building is eligible to receive
an allocation of housing credit
dollar amount under the rules
of paragraphs (1) and (2) of
subsection (m).''.
(b) Rules Relating to Existing Projects.--Subparagraph (F) of
section 42(h)(7), as redesignated by section 135503, is amended
by striking ``the nonlow-income portion'' and all that follows
and inserting ``the nonlow-income portion and the low-income
portion of the building for fair market value (determined by
the housing credit agency by taking into account the rent
restrictions required for the low-income portion of the
building to continue to meet the standards of paragraphs (1)
and (2) of subsection (g)). The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
this paragraph.''.
(c) Conforming Amendments.--
(1) Paragraph (7) of section 42(h), as redesignated
by section 135503, is amended by striking subparagraph
(G) and by redesignating subparagraphs (H), (I), (J),
and (K) as subparagraphs (G), (H), (I), and (J),
respectively.
(2) Subclause (II) of section 42(h)(7)(E)(i), as so
redesignated and as amended by subsection (a), is
further amended by striking ``subparagraph (I)'' and
inserting ``subparagraph (H)''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2),
the amendments made by this section shall take effect
on the date of the enactment of this Act.
(2) Subsection (b).--The amendments made by
subsection (b) shall apply to buildings with respect to
which a written request described in section
42(h)(7)(H) of the Internal Revenue Code of 1986, as
redesignated by section 135503 and subsection (c), is
submitted after the date of the enactment of this Act.
SEC. 135506. MODIFICATION AND CLARIFICATION OF RIGHTS RELATING TO
BUILDING PURCHASE.
(a) Modification of Right of First Refusal.--
(1) In general.--Subparagraph (A) of section 42(i)(7)
is amended by striking ``a right of 1st refusal'' and
inserting ``an option''.
(2) Conforming amendment.--The heading of paragraph
(7) of section 42(i) is amended by striking ``right of
1st refusal'' and inserting ``option''.
(b) Clarification With Respect to Right of First Refusal and
Purchase Options.--
(1) Purchase of partnership interest.--Subparagraph
(A) of section 42(i)(7), as amended by subsection (a),
is amended by striking ``the property'' and inserting
``the property or all of the partnership interests
(other than interests of the person exercising such
option or a related party thereto (within the meaning
of section 267(b) or 707(b)(1))) relating to the
property''.
(2) Property includes assets relating to the
building.--Paragraph (7) of section 42(i) is amended by
adding at the end the following new subparagraph:
``(C) Property.--For purposes of subparagraph
(A), the term `property' may include all or any
of the assets held for the development,
operation, or maintenance of a building.''.
(3) Exercise of right of first refusal and purchase
options.--Subparagraph (A) of section 42(i)(7), as
amended by subsection (a) and paragraph (1)(A), is
amended by adding at the end the following: ``For
purposes of determining whether an option, including a
right of first refusal, to purchase property or
partnership interests holding (directly or indirectly)
such property is described in the preceding sentence--
``(i) such option or right of first
refusal shall be exercisable with or
without the approval of any owner of
the project (including any partner,
member, or affiliated organization of
such an owner), and
``(ii) a right of first refusal shall
be exercisable in response to any offer
to purchase the property or partnership
interests, including an offer by a
related party.''.
(c) Conforming Amendments.--Subparagraph (B) of section
42(i)(7) is amended by striking ``the sum of'' and all that
follows and inserting ``the principal amount of outstanding
indebtedness secured by the building (other than indebtedness
incurred within the 5-year period ending on the date of the
sale to the tenants). In the case of a purchase of a
partnership interest, the minimum purchase price is an amount
not less than such interest's ratable share of the amount
determined under the first sentence of this subparagraph.''.
(d) Effective Dates.--
(1) Modification of right of first refusal.--The
amendments made by subsections (a) and (c) shall apply
to agreements entered into or amended after the date of
the enactment of this Act.
(2) Clarification.--The amendments made by subsection
(b) shall apply to agreements among the owners of the
project (including partners, members, and their
affiliated organizations) and persons described in
section 42(i)(7)(A) of the Internal Revenue Code of
1986 entered into before, on, or after the date of the
enactment of this Act.
(3) No effect on agreements.--None of the amendments
made by this section is intended to supersede express
language in any agreement with respect to the terms of
a right of first refusal or option permitted by section
42(i)(7) of the Internal Revenue Code of 1986 in effect
on the date of the enactment of this Act.
SEC. 135507. INCREASE IN CREDIT FOR BOND-FINANCED PROJECTS DESIGNATED
BY HOUSING CREDIT AGENCY.
(a) In General.--Section 42(d)(5)(B)(v) is amended by
striking ``The preceding sentence'' and inserting ``In the case
of determinations of housing credit dollar amount after
December 31, 2028, the preceding sentence''.
(b) Effective Date.--The amendments made by this section
shall apply to buildings which receive a determination of
housing credit dollar amount pursuant to section 42(m)(2)(D) of
the Internal Revenue Code of 1986 after the date of the
enactment of this Act.
Subpart B--Neighborhood Homes Investment Act
SEC. 135511. NEIGHBORHOOD HOMES CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 is amended by inserting after section 42 the
following new section:
``SEC. 42A. NEIGHBORHOOD HOMES CREDIT.
``(a) Allowance of Credit.--For purposes of section 38, the
neighborhood homes credit determined under this section for the
taxable year is, with respect to each qualified residence sold
by the taxpayer during such taxable year in an affordable sale,
the lesser of--
``(1) the excess (if any) of--
``(A) the reasonable development costs paid
or incurred by the taxpayer with respect to
such qualified residence, over
``(B) the sale price of such qualified
residence (reduced by any reasonable expenses
paid or incurred by the taxpayer in connection
with such sale), or
``(2) 35 percent of the lesser of--
``(A) the eligible development costs paid or
incurred by the taxpayer with respect to such
qualified residence, or
``(B) 80 percent of the national median sale
price for new homes (as determined pursuant to
the most recent census data available as of the
date on which the neighborhood homes credit
agency makes an allocation for the qualified
project).
``(b) Development Costs.--For purposes of this section--
``(1) Reasonable development costs.--
``(A) In general.--The term `reasonable
development costs' means amounts paid or
incurred for the acquisition of buildings and
land, construction, substantial rehabilitation,
demolition of structures, or environmental
remediation, to the extent that the
neighborhood homes credit agency determines
that such amounts meet the standards specified
pursuant to subsection (f)(1)(C) (as of the
date on which construction or substantial
rehabilitation is substantially complete, as
determined by such agency) and are necessary to
ensure the financial feasibility of such
qualified residence.
``(B) Considerations in making
determination.--In making the determination
under subparagraph (A), the neighborhood homes
credit agency shall consider--
``(i) the sources and uses of funds
and the total financing,
``(ii) any proceeds or receipts
generated or expected to be generated
by reason of tax benefits, and
``(iii) the reasonableness of the
developmental costs and fees.
``(2) Eligible development costs.--The term `eligible
development costs' means the amount which would be
reasonable development costs if the amounts taken into
account as paid or incurred for the acquisition of
buildings and land did not exceed 75 percent of such
costs determined without regard to any amount paid or
incurred for the acquisition of buildings and land.
``(3) Substantial rehabilitation.--The term
`substantial rehabilitation' means amounts paid or
incurred for rehabilitation of a qualified residence if
such amounts exceed the greater of--
``(A) $20,000, or
``(B) 20 percent of the amounts paid or
incurred by the taxpayer for the acquisition of
buildings and land with respect to such
qualified residence.
``(4) Construction and rehabilitation only after
allocation taken into account.--
``(A) In general.--The terms `reasonable
development costs' and `eligible development
costs' shall not include any amount paid or
incurred before the date on which an allocation
is made to the taxpayer under subsection (e)
with respect to the qualified project of which
the qualified residence is part unless such
amount is paid or incurred for the acquisition
of buildings or land.
``(B) Land and building acquisition costs.--
Amounts paid or incurred for the acquisition of
buildings or land shall be included under
paragraph (A) only if paid or incurred not more
than 3 years before the date on which the
allocation referred to in subparagraph (A) is
made. If the taxpayer acquired any building or
land from an entity (or any related party to
such entity) that holds an ownership interest
in the taxpayer, then such entity must also
have acquired such property within such 3-year
period, and the acquisition cost included under
subparagraph (A) with respect to the taxpayer
shall not exceed the amount such entity paid or
incurred to acquire such property.
``(c) Qualified Residence.--For purposes of this section--
``(1) In general.--The term `qualified residence'
means a residence that--
``(A) is real property affixed on a permanent
foundation,
``(B) is--
``(i) a house which is comprised of 4
or fewer residential units,
``(ii) a condominium unit, or
``(iii) a house or an apartment owned
by a cooperative housing corporation
(as defined in section 216(b)),
``(C) is part of a qualified project with
respect to the neighborhood homes credit agency
has made an allocation under subsection (e),
and
``(D) is located in a qualified census tract
(determined as of the date of such allocation).
``(2) Qualified census tract.--
``(A) In general.--The term `qualified census
tract' means a census tract--
``(i) which--
``(I) has a median family
income which does not exceed 80
percent of the median family
income for the applicable area,
``(II) has a poverty rate
that is not less than 130
percent of the poverty rate of
the applicable area, and
``(III) has a median value
for owner-occupied homes that
does not exceed the median
value for owner-occupied homes
in the applicable area,
``(ii) which--
``(I) is located in a city
which has a population of not
less than 50,000 and such city
has a poverty rate that is not
less than 150 percent of the
poverty rate of the applicable
area,
``(II) has a median family
income which does not exceed
the median family income for
the applicable area, and
``(III) has a median value
for owner-occupied homes that
does not exceed 80 percent of
the median value for owner-
occupied homes in the
applicable area,
``(iii) which--
``(I) is located in a
nonmetropolitan county,
``(II) has a median family
income which does not exceed
the median family income for
the applicable area, and
``(III) has been designated
by a neighborhood homes credit
agency under this clause, or
``(iv) which is not otherwise a
qualified census tract and is located
in a disaster area (as defined in
section 7508A(d)(3)), but only with
respect to credits allocated in any
period during which the President of
the United States has determined that
such area warrants individual or
individual and public assistance by the
Federal Government under the Robert T.
Stafford Disaster Relief and Emergency
Assistance Act.
``(B) Applicable area.--The term `applicable
area' means--
``(i) in the case of a metropolitan
census tract, the metropolitan area in
which such census tract is located, and
``(ii) in the case of a census tract
other than a census tract described in
clause (i), the State.
``(d) Affordable Sale.--For purposes of this section--
``(1) In general.--The term `affordable sale' means a
sale to a qualified homeowner of a qualified residence
that the neighborhood homes credit agency certifies as
meeting the standards promulgated under subsection
(f)(1)(D) for a price that does not exceed--
``(A) in the case of any qualified residence
not described in subparagraph (B), (C), or (D),
the amount equal to the product of 4 multiplied
by the median family income for the applicable
area (as determined pursuant to the most recent
census data available as of the date of the
contract for such sale),
``(B) in the case of a house comprised of 2
residential units, 125 percent of the amount
described in subparagraph (A),
``(C) in the case of a house comprised of 3
residential units, 150 percent of the amount
described in subparagraph (A), or
``(D) in the case of a house comprised of 4
residential units, 175 percent of the amount
described in subparagraph (A).
``(2) Qualified homeowner.--The term `qualified
homeowner' means, with respect to a qualified
residence, an individual--
``(A) who owns and uses such qualified
residence as the principal residence of such
individual, and
``(B) whose family income (determined as of
the date that a binding contract for the
affordable sale of such residence is entered
into) is 140 percent or less of the median
family income for the applicable area in which
the qualified residence is located.
``(e) Credit Ceiling and Allocations.--
``(1) Credit limited based on allocations to
qualified projects.--
``(A) In general.--The credit allowed under
subsection (a) to any taxpayer for any taxable
year with respect to one or more qualified
residences which are part of the same qualified
project shall not exceed the excess (if any)
of--
``(i) the amount allocated by the
neighborhood homes credit agency under
this paragraph to such taxpayer with
respect to such qualified project, over
``(ii) the aggregate amount of credit
allowed under subsection (a) to such
taxpayer with respect to qualified
residences which are a part of such
qualified project for all prior taxable
years.
``(B) Deadline for completion.--No credit
shall be allowed under subsection (a) with
respect to any qualified residence unless the
affordable sale of such residence is during the
5-year period beginning on the date of the
allocation to the qualified project of which
such residence is a part (or, in the case of a
qualified residence to which subsection (i)
applies, the rehabilitation of such residence
is completed during such 5-year period).
``(2) Limitations on allocations to qualified
projects.--
``(A) Allocations limited by state
neighborhood homes credit ceiling.--The
aggregate amount allocated to taxpayers with
respect to qualified projects by the
neighborhood homes credit agency of any State
for any calendar year shall not exceed the
State neighborhood homes credit amount of such
State for such calendar year.
``(B) Set-aside for certain projects
involving qualified nonprofit organizations.--
Rules similar to the rules of section 42(h)(5)
shall apply for purposes of this section.
``(3) Determination of state neighborhood homes
credit ceiling.--
``(A) In general.--The State neighborhood
homes credit amount for a State for a calendar
year is an amount equal to the sum of--
``(i) the greater of--
``(I) the product of $6,
multiplied by the State
population (determined in
accordance with section
146(j)), or
``(II) $8,000,000, and
``(ii) any amount previously
allocated to any taxpayer with respect
to any qualified project by the
neighborhood homes credit agency of
such State which can no longer be
allocated to any qualified residence
because the 5-year period described in
paragraph (1)(B) expires during
calendar year.
``(B) 3-year carryforward of unused
limitation.--The State neighborhood homes
credit amount for a State for a calendar year
shall be increased by the excess (if any) of
the State neighborhood homes credit amount for
such State for the preceding calendar year over
the aggregate amount allocated by the
neighborhood homes credit agency of such State
during such preceding calendar year. Any amount
carried forward under the preceding sentence
shall not be carried past the third calendar
year after the calendar year in which such
credit amount originally arose, determined on a
first-in, first-out basis.
``(f) Responsibilities of Neighborhood Homes Credit
Agencies.--
``(1) In general.--Notwithstanding subsection (e),
the State neighborhood homes credit dollar amount shall
be zero for a calendar year unless the neighborhood
homes credit agency of the State--
``(A) allocates such amount pursuant to a
qualified allocation plan of the neighborhood
homes credit agency,
``(B) allocates not more than 20 percent of
amounts allocated in the previous year (or for
allocations made in 2022, not more than 20
percent of the neighborhood homes credit
ceiling for such year) to projects with respect
to qualified residences which--
``(i) are located in census tracts
described in subsection (c)(2)(A)(iii),
(c)(2)(A)(iv), (i)(5), or
``(ii) are not located in a qualified
census tract but meet the requirements
of (i)(8),
``(C) promulgates standards with respect to
reasonable qualified development costs and
fees,
``(D) promulgates standards with respect to
construction quality,
``(E) in the case of any neighborhood homes
credit agency which makes an allocation to a
qualified project which includes any qualified
residence to which subsection (i) applies,
promulgates standards with respect to
protecting the owners of such residences,
including the capacity of such owners to pay
rehabilitation costs not covered by the credit
provided by this section and providing for the
disclosure to such owners of their rights and
responsibilities with respect to the
rehabilitation of such residences, and
``(F) submits to the Secretary (at such time
and in such manner as the Secretary may
prescribe) an annual report specifying--
``(i) the amount of the neighborhood
homes credits allocated to each
qualified project for the previous
year,
``(ii) with respect to each qualified
residence completed in the preceding
calendar year--
``(I) the census tract in
which such qualified residence
is located,
``(II) with respect to the
qualified project that includes
such qualified residence, the
year in which such project
received an allocation under
this section,
``(III) whether such
qualified residence was new,
substantially rehabilitated and
sold to a qualified homeowner,
or substantially rehabilitated
pursuant to subsection (i),
``(IV) the eligible
development costs of such
qualified residence,
``(V) the amount of the
neighborhood homes credit with
respect to such qualified
residence,
``(VI) the sales price of
such qualified residence, if
applicable, and
``(VII) the family income of
the qualified homeowner
(expressed as a percentage of
the applicable area median
family income for the location
of the qualified residence),
and
``(iii) such other information as the
Secretary may require.
``(2) Qualified allocation plan.--For purposes of
this subsection, the term `qualified allocation plan'
means any plan which--
``(A) sets forth the selection criteria to be
used to prioritize qualified projects for
allocations of State neighborhood homes credit
dollar amounts, including--
``(i) the need for new or
substantially rehabilitated owner-
occupied homes in the area addressed by
the project,
``(ii) the expected contribution of
the project to neighborhood stability
and revitalization, including the
impact on neighborhood residents,
``(iii) the capability and prior
performance of the project sponsor, and
``(iv) the likelihood the project
will result in long-term homeownership,
``(B) has been made available for public
comment, and
``(C) provides a procedure that the
neighborhood homes credit agency (or any agent
or contractor of such agency) shall follow for
purposes of--
``(i) identifying noncompliance with
any provisions of this section, and
``(ii) notifying the Internal Revenue
Service of any such noncompliance of
which the agency becomes aware.
``(g) Repayment.--
``(1) In general.--
``(A) Sold during 5-year period.--If a
qualified residence is sold during the 5-year
period beginning immediately after the
affordable sale of such qualified residence
referred to in subsection (a), the seller (with
respect to the sale during such 5-year period)
shall transfer an amount equal to the repayment
amount to the relevant neighborhood homes
credit agency.
``(B) Use of repayments.--A neighborhood
homes credit agency shall use any amount
received pursuant to subparagraph (A) only for
purposes of qualified projects.
``(2) Repayment amount.--For purposes of paragraph
(1)(A), the repayment amount is an amount equal to 50
percent of the gain from the sale to which the
repayment relates, reduced by 20 percent for each year
of the 5-year period referred to in paragraph (1)(A)
which ends before the date of such sale.
``(3) Lien for repayment amount.--A neighborhood
homes credit agency receiving an allocation under this
section shall place a lien on each qualified residence
that is built or rehabilitated as part of a qualified
project for an amount such agency deems necessary to
ensure potential repayment pursuant to paragraph
(1)(A).
``(4) Denial of deductions if converted to rental
housing.--If, during the 5-year period described in
paragraph (1), an individual who owns a qualified
residence fails to use such qualified residence as such
individual's principal residence for any period of
time, no deduction shall be allowed for expenses paid
or incurred by such individual with respect to renting,
during such period of time, such qualified residence.
``(5) Waiver.--The neighborhood homes credit agency
may waive the repayment required under paragraph (1)(A)
in the case of homeowner experiencing a hardship.
``(h) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Neighborhood homes credit agency.--The term
`neighborhood homes credit agency' means the agency
designated by the governor of a State as the
neighborhood homes credit agency of the State.
``(2) Qualified project.--The term `qualified
project' means a project that a neighborhood homes
credit agency certifies will build or substantially
rehabilitate one or more qualified residences.
``(3) Determinations of family income.--Rules similar
to the rules of section 143(f)(2) shall apply for
purposes of this section.
``(4) Possessions treated as states.--The term
`State' includes the District of Columbia and the
possessions of the United States.
``(5) Special rules related to condominiums and
cooperative housing corporations.--
``(A) Determination of development costs.--In
the case of a qualified residence described in
clause (ii) or (iii) of subsection (c)(1)(A),
the reasonable development costs and eligible
development costs of such qualified residence
shall be an amount equal to such costs,
respectively, of the entire condominium or
cooperative housing property in which such
qualified residence is located, multiplied by a
fraction--
``(i) the numerator of which is the
total floor space of such qualified
residence, and
``(ii) the denominator of which is
the total floor space of all residences
within such property.
``(B) Tenant-stockholders of cooperative
housing corporations treated as owners.--In the
case of a cooperative housing corporation (as
such term is defined in section 216(b)), a
tenant-stockholder shall be treated as owning
the house or apartment which such person is
entitled to occupy.
``(6) Related party sales not treated as affordable
sales.--
``(A) In general.--A sale between related
persons shall not be treated as an affordable
sale.
``(B) Related persons.--For purposes of this
paragraph, a person (in this subparagraph
referred to as the `related person') is related
to any person if the related person bears a
relationship to such person specified in
section 267(b) or 707(b)(1), or the related
person and such person are engaged in trades or
businesses under common control (within the
meaning of subsections (a) and (b) of section
52). For purposes of the preceding sentence, in
applying section 267(b) or 707(b)(1), `10
percent' shall be substituted for `50 percent'.
``(7) Inflation adjustment.--
``(A) In general.--In the case of a calendar
year after 2022, the dollar amounts in
subsections (b)(3)(A), (e)(3)(A)(i)(I),
(e)(3)(A)(i)(II), and (i)(2)(C) shall each be
increased by an amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
such calendar year by substituting
`calendar year 2021' for `calendar year
2016' in subparagraph (A)(ii) thereof.
``(B) Rounding.--
``(i) In the case of the dollar
amounts in subsection (b)(3)(A) and
(i)(2)(C), any increase under paragraph
(1) which is not a multiple of $1,000
shall be rounded to the nearest
multiple of $1,000.
``(ii) In the case of the dollar
amount in subsection (e)(3)(A)(i)(I),
any increase under paragraph (1) which
is not a multiple of $0.01 shall be
rounded to the nearest multiple of
$0.01.
``(iii) In the case of the dollar
amount in subsection (e)(3)(A)(i)(II),
any increase under paragraph (1) which
is not a multiple of $100,000 shall be
rounded to the nearest multiple of
$100,000.
``(8) Report.--
``(A) In general.--The Secretary shall
annually issue a report, to be made available
to the public, which contains the information
submitted pursuant to subsection (f)(1)(F).
``(B) De-identification.--The Secretary shall
ensure that any information made public
pursuant to paragraph (1) excludes any
information that would allow for the
identification of qualified homeowners.
``(9) List of qualified census tracts.--The Secretary
of Housing and Urban Development shall, for each year,
make publicly available a list of qualified census
tracts under--
``(A) on a combined basis, clauses (i) and
(ii) of subsection (c)(2)(A),
``(B) clause (iii) of such subsection, and
``(C) subsection (i)(5)(A).
``(i) Application of Credit With Respect to Owner-occupied
Rehabilitations.--
``(1) In general.--In the case of a qualified
rehabilitation by the taxpayer of any qualified
residence which is owned (as of the date that the
written binding contract referred to in paragraph (3)
is entered into) by a specified homeowner, the rules of
paragraphs (2) through (7) shall apply.
``(2) Alternative credit determination.--In the case
of any qualified residence described in paragraph (1),
the neighborhood homes credit determined under
subsection (a) with respect to such residence shall (in
lieu of any credit otherwise determined under
subsection (a) with respect to such residence) be
allowed in the taxable year during which the qualified
rehabilitation is completed (as determined by the
neighborhood homes credit agency) and shall be equal to
the least of--
``(A) the excess (if any) of--
``(i) the amounts paid or incurred by
the taxpayer for the qualified
rehabilitation of the qualified
residence to the extent that such
amounts are certified by the
neighborhood homes credit agency (at
the time of the completion of such
rehabilitation) as meeting the
standards specified pursuant to
subsection (f)(1)(C), over
``(ii) any amounts paid to such
taxpayer for such rehabilitation,
``(B) 50 percent of the amounts described in
subparagraph (A)(i), or
``(C) $50,000.
``(3) Qualified rehabilitation.--
``(A) In general.--For purposes of this
subsection, the term `qualified rehabilitation'
means a rehabilitation or reconstruction
performed pursuant to a written binding
contract between the taxpayer and the qualified
homeowner if the amount paid or incurred by the
taxpayer in the performance of such
rehabilitation or reconstruction exceeds the
dollar amount in effect under subsection
(b)(3)(A).
``(B) Application of limitation to expenses
paid or incurred after allocation.--A rule
similar to the rule of section (b)(4) shall
apply for purposes of this subsection.
``(4) Specified homeowner.--For purposes of this
subsection, the term `qualified homeowner' means, with
respect to a qualified residence, an individual--
``(A) who owns and uses such qualified
residence as the principal residence of such
individual as of the date that the written
binding contract referred to in paragraph (3)
is entered into, and
``(B) whose family income (determined as of
such date) does not exceed the median family
income for the applicable area (with respect to
the census tract in which the qualified
residence is located).
``(5) Additional census tracts in which owner-
occupied residences may be located.--In the case of any
qualified residence described in paragraph (1), the
term `qualified census tract' includes any census tract
which--
``(A) meets the requirements of subsection
(c)(2)(A)(i) without regard to subclause (III)
thereof, and
``(B) is designated by the neighborhood homes
credit agency for purposes of this paragraph.
``(6) Modification of repayment requirement.--In the
case of any qualified residence described in paragraph
(1), subsection (g) shall be applied by beginning the
5-year period otherwise described therein on the date
on which the qualified owner acquired the residence.
``(7) Related parties.--Paragraph (1) shall not apply
if the taxpayer is the owner of the qualified residence
described in paragraph (1) or is related (within the
meaning of subsection (h)(6)(B)) to such owner.
``(8) Pyrrhotite remediation.--The requirement of
subsection (c)(1)(C) shall not apply to a qualified
rehabilitation under this subsection of a qualified
residence that is documented by an engineer's report
and core testing to have a foundation that is adversely
impacted by pyrrhotite or other iron sulfide minerals.
``(j) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out the
purposes of this section, including regulations that prevent
avoidance of the rules, and abuse of the purposes, of this
section.''.
(b) Credit Allowed as Part of General Business Credit.--
Section 38(b), as amended by the preceding provisions of this
Act, is amended by striking ``plus'' at the end of paragraph
(34), by striking the period at the end of paragraph (35) and
inserting ``, plus'', and by adding at the end the following
new paragraph:
``(36) the neighborhood homes credit determined under
section 42A(a),''.
(c) Credit Allowed Against Alternative Minimum Tax.--Section
38(c)(4)(B), as amended by the preceding provisions of this
Act, is amended by redesginating clauses (iv) through (xiii) as
clauses (v) through (xiv), respectively, and by inserting after
clause (iii) the following new clause:
``(iv) the credit determined under
section 42A,''.
(d) Conforming Amendments.--
(1) Subsections (i)(3)(C), (i)(6)(B)(i), and (k)(1)
of section 469 are each amended by inserting ``or 42A''
after ``section 42''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by inserting after
the item relating to section 42 the following new item:
``Sec. 42A. Neighborhood homes credit.''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
PART 6--INVESTMENTS IN TRIBAL INFRASTRUCTURE
SEC. 135601. TREATMENT OF INDIAN TRIBES AS STATES WITH RESPECT TO BOND
ISSUANCE.
(a) In General.--Section 7871(c) is amended to read as
follows:
``(c) Special Rules for Tax-exempt Bonds.--
``(1) In general.--In applying section 146 to bonds
issued by Indian Tribal Governments the Secretary shall
annually--
``(A) establish a national bond volume cap
based on the greater of--
``(i) the State population formula
approach in section 146(d)(1)(A) (using
national Tribal population estimates
supplied annually by the Department of
the Interior in consultation with the
Census Bureau), and
``(ii) the minimum State ceiling
amount in section 146(d)(1)(B) (as
adjusted in accordance with the cost of
living provision in section 146(d)(2)),
``(B) allocate such national bond volume cap
among all Indian Tribal Governments seeking
such an allocation in a particular year under
regulations prescribed by the Secretary.
``(2) Application of geographic restriction.--In the
case of national bond volume cap allocated under
paragraph (1), section 146(k)(1) shall not apply to the
extent that such cap is used with respect to financing
for a facility located on qualified Indian lands.
``(3) Restriction on financing of certain gaming
facilities.--No portion of the volume cap allocated
under this subsection may be used with respect to the
financing of any portion of a building in which class
II or class III gaming (as defined in section 4 of the
Indian Gaming Regulatory Act) is conducted or housed or
any property actually used in the conduct of such
gaming.
``(4) Definitions and special rules.--For purposes of
this subsection--
``(A) Indian tribal government.--The term
`Indian Tribal Government' means the governing
body of an Indian Tribe, band, nation, or other
organized group or community, or of Alaska
Natives, which is recognized as eligible for
the special programs and services provided by
the United States to Indians because of their
status as Indians, and also includes any
agencies, instrumentalities or political
subdivisions thereof.
``(B) Intertribal consortiums, etc.--In any
case in which an Indian Tribal Government has
authorized an intertribal consortium, a Tribal
organization, or an Alaska Native regional or
village corporation, as defined in, or
established pursuant to, the Alaska Native
Claims Settlement Act, to plan for, coordinate
or otherwise administer services, finances,
functions, or activities on its behalf under
this subsection, the authorized entity shall
have the rights and responsibilities of the
authorizing Indian Tribal Government only to
the extent provided in the Authorizing
resolution.
``(C) Qualified indian lands.--The term
`qualified Indian lands' shall mean an Indian
reservation as defined in section 3(d) of the
Indian Financing Act of 1974 (25 U.S.C.
1452(d)), including lands which are within the
jurisdictional area of an Oklahoma Indian Tribe
(as determined by the Secretary of the
Interior) and shall include lands outside a
reservation where the facility is to be placed
in service in connection with--
``(i) the active conduct of a trade
or business by an Indian Tribe on,
contiguous to, within reasonable
proximity of, or with a substantial
connection to, an Indian reservation or
Alaska Native village, or
``(ii) infrastructure (including
roads, power lines, water systems,
railroad spurs, and communication
facilities) serving an Indian
reservation or Alaska Native
village.''.
(b) Conforming Amendment.--Subparagraph (B) of section
45(c)(9) is amended to read as follows:
``(B) Indian tribe.--For purposes of this
paragraph, the term `Indian tribe' has the
meaning given the term `Indian Tribal
Government' by section 7871(c)(3)(A).''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued in calendar years beginning
after the date of the enactment of this Act.
SEC. 135602. NEW MARKETS TAX CREDIT FOR TRIBAL STATISTICAL AREAS.
(a) Additional Allocations for Tribal Statistical Areas.--
Section 45D(f), as amended by the preceding provisions of this
Act, is amended by adding at the end the following new
paragraph:
``(5) Additional allocations for tribal statistical
areas.--
``(A) In general.--In the case of each
calendar year after 2021, there is (in addition
to any limitation under any other paragraph of
this subsection) a new markets tax credit
limitation of $175,000,000 which shall be
allocated by the Secretary as provided in
paragraph (2) except that such limitation may
only be allocated with respect to Tribal
Statistical Areas.
``(B) Carryover of unused tribal statistical
area limitation.--
``(i) In general.--If the credit
limitation under subparagraph (A) for
any calendar year exceeds the amount of
such limitation allocated by the
Secretary for such calendar year, such
limitation for the succeeding calendar
year shall be increased by the amount
of such excess.
``(ii) Limitation on carryover.--No
amount of credit limitation may be
carried under clause (i) past the 5th
calendar year following the calendar
year in which such amount of credit
limitation arose.
``(iii) Transfer of expired tribal
statistical area limitation to general
limitation.--In the case of any amount
of credit limitation which would (but
for clause (ii)) be carried under
clause (i) to the 6th calendar year
following the calendar year in which
such amount of credit limitation arose,
the new market tax credit limitation
under paragraph (1) for such 6th
calendar year shall be increased by the
amount of such credit limitation.
``(C) Tribal statistical area.--For purposes
of this paragraph, the term `Tribal Statistical
Area' means--
``(i) any low-income community which
is located in any Tribal Census Tract,
Oklahoma Tribal Statistical Area,
Tribal-Designated Statistical Area,
Alaska Native Village Statistical Area,
or Hawaiian Home Land, and
``(ii) any low-income community
described in subsection (e)(1)(B).''.
(b) Eligibility of Certain Projects Serving Tribal Members.--
Section 45D(e)(1) is amended to read as follows:
``(1) In general.--The term `low-income community'
means any area--
``(A) comprising a population census tract
if--
``(i) the poverty rate for such tract
is at least 20 percent, or
``(ii)(I) in the case of a tract not
located within a metropolitan area, the
median family income for such tract
does not exceed 80 percent of statewide
median family income, or
``(II) in the case of a tract located
within a metropolitan area, the median
family income for such tract does not
exceed 80 percent of the greater of
statewide median family income or the
metropolitan area median family income,
``(B) which is used for a qualified active
low-income community business which--
``(i) services a significant
population of Tribal or Alaska Native
Village members who are residents of a
low-income community described in
subsection (f)(5)(C)(i), and
``(ii) obtains a written statement
from the relevant Indian Tribal
Government (within the meaning of
section 7871(c)) that documents the
eligibility such project with respect
to the requirement of clause (i).
Subparagraph (A)(ii) shall be applied using possession
wide median family income in the case of census tracts
located within a possession of the United States.''.
(c) Application of Inflation Adjustment.--Section 45D(f)(4),
as added by the preceding provisions of this Act, is amended by
striking ``the dollar amount paragraph (1)(H) shall be
increased'' and inserting ``the dollar amounts in paragraphs
(1)(H) and (5)(A) shall each be increased''.
(d) Coordination With Existing Carryover.--Section 45D(f)(3),
as amended by the preceding provisions of this Act, is amended
to read as follows:
``(3) Carryover of unused limitation.--If the new
markets tax credit limitation under paragraph (1) for
any calendar year exceeds the amount of such limitation
allocated by the Secretary under paragraph (2) for such
year, such limitation for the succeeding calendar year
shall be increased by the amount of such excess.''.
(e) Regulatory Authority.--Section 45D(i) is amended by
striking ``and'' at the end of paragraph (5), by striking the
period at the end of paragraph (6) and inserting ``, and'', and
by adding at the end the following new paragraph:
``(7) which provide documentation requirements for
the written statement required under subsection
(e)(1)(B)(ii), and
``(8) which provide procedures for determining which
projects under subsection (e)(1)(B) are qualified
active low-income community businesses with respect to
the populations described in such subsection. Such
procedures shall take into account the location needs
of such projects, especially with respect to projects
that serve multiple tribal or Alaska Native Village
communities.''.
(f) Effective Date.--The amendments made by this section
shall apply to new markets tax credit limitation determined for
calendar years after December 31, 2021.
SEC. 135603. INCLUSION OF INDIAN AREAS AS DIFFICULT DEVELOPMENT AREAS
FOR PURPOSES OF CERTAIN BUILDINGS.
(a) In General.--Subclause (I) of section 42(d)(5)(B)(iii),
as amended by the preceding provisions of this Act, is amended
by inserting ``, any Indian area'' after ``median gross
income''.
(b) Indian Area.--Clause (iii) of section 42(d)(5)(B), as
amended by the preceding provisions of this Act is amended by
redesignating subclause (III) as subclause (V) and by inserting
after subclause (II) the following new subclauses:
``(III) Indian area.--For
purposes of subclause (I), the
term `Indian area' means any
Indian area (as defined in
section 4(11) of the Native
American Housing Assistance and
Self Determination Act of 1996
(25 U.S.C. 4103(11))).
``(IV) Special rule for
buildings in indian areas.--In
the case of an area which is a
difficult development area
solely because it is an Indian
area, a building shall not be
treated as located in such area
unless such building is
assisted or financed under the
Native American Housing
Assistance and Self
Determination Act of 1996 (25
U.S.C. 4101 et seq.) or the
project sponsor is an Indian
tribe (as defined in section
45A(c)(6)), a tribally
designated housing entity (as
defined in section 4(22) of
such Act (25 U.S.C. 4103(22))),
or wholly owned or controlled
by such an Indian tribe or
tribally designated housing
entity.''.
(c) Effective Date.--The amendments made by this section
shall apply to buildings placed in service after December 31,
2021.
PART 7--INVESTMENTS IN THE TERRITORIES
SEC. 135701. POSSESSIONS ECONOMIC ACTIVITY CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1, as amended by the preceding provisions of this Act,
is amended by adding at the end the following new section:
``SEC. 45V. POSSESSIONS ECONOMIC ACTIVITY CREDIT.
``(a) Allowance of Credit.--For purposes of section 38, in
the case of a qualified domestic corporation the possessions
economic activity credit determined under this section for a
taxable year is an amount equal to 20 percent of the sum of the
qualified possession wages and allocable employee fringe
benefit expenses paid or incurred by the taxpayer for the
taxable year.
``(b) Qualified Domestic Corporation; Qualified
Corporation.--For purposes of this section--
``(1) In general.--The term `qualified domestic
corporation' means any domestic corporation which is--
``(A) a qualified corporation, or
``(B) a United States shareholder of a
foreign corporation which--
``(i) is a qualified corporation, and
``(ii) is wholly owned by the United
States shareholder together with any
corporations which are members of the
same affiliated group (within the
meaning of section 1504(a)) as such
United States shareholder.
``(2) Qualified corporation.--The term `qualified
corporation' means any corporation if such corporation
meets the following requirements:
``(A) Source qualification.--80 percent or
more of the gross income of the corporation for
the 3-year period immediately preceding the
close of the taxable year (or for such part of
such period immediately preceding the close of
such taxable year as may be applicable) was
derived from sources within a possession of the
United States (determined without regard to
section 904(f)).
``(B) Trade or business qualification.--75
percent or more of the gross income of the
corporation for such period or such part
thereof was derived from the active conduct of
a trade or business within a possession of the
United States.
``(3) Special rule for separate and clearly
identified units of foreign corporations.--
``(A) In general.--In the case of a United
States shareholder of a foreign corporation
which--
``(i) is not a qualified corporation
but with respect to which the ownership
requirements of paragraph (1)(B)(ii)
are met, and
``(ii) has an eligible foreign
business unit which, if such unit were
a corporation, would be a qualified
corporation with respect to which such
ownership requirements would be met,
then, for purposes of this section, the United
States shareholder may elect to treat such unit
as a separate foreign corporation which meets
the requirements of paragraph (1)(B) and with
respect to which such shareholder is a United
States shareholder.
``(B) Eligible foreign business unit.--For
purposes of this paragraph, the term `eligible
foreign business unit' means a separate and
clearly identified foreign unit of a trade or
business, including a partnership or an entity
treated as disregarded as a separate entity
from its owner (under section 7701 or other
provision under this title), which maintains
separate books and records.
``(C) Special election for affiliated
groups.--In the case of an affiliated group
described in paragraph (1)(B)(ii), the election
under subparagraph (A) with respect to any
eligible foreign business unit shall be made by
the common parent of such group and shall apply
uniformly to all members of such group which
are United States shareholders with respect to
the foreign corporation which has such unit.
``(c) Qualified Possession Wages.--For purposes of this
section--
``(1) In general.--The term `qualified possession
wages' means wages paid or incurred by the qualified
corporation during the taxable year in connection with
the active conduct of a trade or business within a
possession of the United States to any employee for
services performed in such possession, but only if such
services are performed while the principal place of
employment of such employee is within such possession.
``(2) Limitation on amount of wages taken into
account.--
``(A) In general.--The amount of wages which
may be taken into account under paragraph (1)
with respect to any employee for any taxable
year shall not exceed $50,000.
``(B) Treatment of part-time employees,
etc.--If--
``(i) any employee is not employed by
the qualified corporation on a
substantially full-time basis at all
times during the taxable year, or
``(ii) the principal place of
employment of any employee with the
qualified corporation is not within a
possession at all times during the
taxable year,
the limitation applicable under paragraph (1)
with respect to such employee shall be the
appropriate portion (as determined by the
Secretary) of the limitation which would
otherwise be in effect under paragraph (1).
``(C) Wages.--
``(i) In general.--Except as provided
in clause (ii), the term `wages' has
the meaning given to such term by
subsection (b) of section 3306
(determined without regard to any
dollar limitation contained in such
section). For purposes of the preceding
sentence, such subsection (b) shall be
applied as if the term `United States'
included all possessions of the United
States.
``(ii) Special rule for agricultural
labor and railway labor.--In any case
to which subparagraph (A) or (B) of
paragraph (1) of section 51(h) applies,
the term `wages' has the meaning given
to such term by section 51(h)(2).
``(3) Allocable employee fringe benefit expenses.--
``(A) In general.--The allocable employee
fringe benefit expenses of any qualified
corporation for any taxable year is an amount
which bears the same ratio to the amount
determined under subparagraph (B) for such
taxable year as--
``(i) the aggregate amount of the
qualified corporation's qualified
possession wages for such taxable year,
bears to
``(ii) the aggregate amount of the
wages paid or incurred by such
qualified corporation during such
taxable year.
In no event shall the amount determined under
the preceding sentence exceed 15 percent of the
amount referred to in clause (i).
``(B) Expenses taken into account.--For
purposes of subparagraph (A), the amount
determined under this subparagraph for any
taxable year is the aggregate amount allowable
(or, in the case of a foreign corporation,
which would be allowable if such foreign
corporation were a domestic corporation) as a
deduction under this chapter to the qualified
corporation for such taxable year with respect
to--
``(i) employer contributions under a
stock bonus, pension, profit-sharing,
or annuity plan,
``(ii) employer-provided coverage
under any accident or health plan for
employees, and
``(iii) the cost of life or
disability insurance provided to
employees.
Any amount treated as wages under paragraph
(2)(C) shall not be taken into account under
this subparagraph.
``(d) Special Rule for Qualified Small Domestic
Corporation.--For purposes of this section--
``(1) Increased credit percentage.--In the case of a
qualified small domestic corporation, subsection (a)
shall be applied by substituting `50 percent' for `20
percent'.
``(2) Qualified small domestic corporation.--
``(A) In general.--The term `qualified small
domestic corporation' means a qualified
domestic corporation that meets the
requirements of subparagraphs (B) and (C).
``(B) Full-time employment.--A qualified
domestic corporation meets the requirements of
this subparagraph if the qualified corporation
which is the qualified domestic corporation
under subsection (b)(1)(A) or the foreign
corporation under subsection (b)(1)(B)(i)--
``(i) has at least 5 full-time
employees in a possession of the United
States for each year in the 3-year
period immediately preceding the close
of the taxable year (or for such part
of such period immediately preceding
the close of such taxable year as may
be applicable), and
``(ii) has not more than a total of
30 full-time employees for each year in
such 3-year period.
``(C) Gross receipts.--A qualified domestic
corporation meets the requirements of this
subparagraph if the annual gross receipts of
the qualified domestic corporation (and all
persons related thereto) for each year in such
3-year period is not more than $50,000,000.
``(3) Related persons.--In determining whether the
limitations under subparagraphs (B)(ii) and (C) of
paragraph (2) are met, all persons who are treated as
related to the qualified domestic corporation for
purposes of subsection (a) or (b) of section 52 shall
be taken into account.
``(4) Amount of wages taken into account.--Subsection
(c)(2)(A) shall be applied by substituting `$139,500'
for `$50,000'.
``(e) Possession of the United States.--
``(1) In general.--The term `possession of the United
States' means American Samoa, the Commonwealth of the
Northern Mariana Islands, the Commonwealth of Puerto
Rico, Guam, and the Virgin Islands.
``(2) Mirror code possessions.--In the case of any
possession of the United States with a mirror code tax
system (as defined in section 24(k)), this section
shall not be treated as part of the income tax laws of
the United States for purposes of determining the
income tax law of such possession unless such
possession elects to have this section be so treated.
``(f) Separate Application to Each Possession.--For purposes
of determining the amount of the credit allowed under this
section, this section shall be applied separately with respect
to each possession of the United States.
``(g) Termination.--No credit shall be allowed under this
section for any taxable year beginning after December 31,
2031.''.
(b) Credit Made Part of General Business Credit.--Subsection
(b) of section 38, as amended by the preceding provisions of
this Act, is amended by striking ``plus'' at the end of
paragraph (35), by striking the period at the end of paragraph
(36) and inserting ``, plus'', and by adding at the end the
following new paragraph:
``(37) the possessions economic activity credit
determined under section 45V.''.
(c) Clerical Amendment.--The table of sections for subpart B
of part IV of subchapter A of chapter 1 is amended by adding at
the end the following:
``Sec. 45V. Possessions Economic Activity Credit.''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act, and in the case of a qualified
corporation that is a foreign corporation, to taxable years
beginning after the date of enactment and to taxable years of
United States shareholders in which or with which such taxable
years of foreign corporations end.
SEC. 135702. ADDITIONAL NEW MARKETS TAX CREDIT ALLOCATIONS FOR THE
TERRITORIES.
(a) In General.--Section 45D(f), as amended by the preceding
provisions of this Act, is amended by adding at the end the
following new paragraph:
``(6) Additional allocations for possessions of the
united states.--
``(A) In general.--In the case of each
calendar year after 2021, there is (in addition
to the limitation under paragraph (1)--
``(i) a new markets tax credit
limitation of $80,000,000 which shall
be allocated by the Secretary as
provided in paragraph (2) except that
such limitation may only be allocated
with respect to low-income communities
located in Puerto Rico, and
``(ii) a new markets tax credit
limitation of $20,000,000 which shall
be allocated by the Secretary as
provided in paragraph (2) except that
such limitation may only be allocated
with respect to low-income communities
located in possessions of the United
States other than Puerto Rico.
``(B) Carryover of unused limitation.--
``(i) In general.--If the credit
limitation under clause (i) or clause
(ii) of subparagraph (A) for any
calendar year exceeds the amount of
such limitation allocated by the
Secretary for such calendar year, such
limitation for the succeeding calendar
year shall be increased by the amount
of such excess.
``(ii) Limitation on carryover.--No
amount of credit limitation may be
carried under clause (i) past the 5th
calendar year following the calendar
year in which such amount of credit
limitation arose.
``(iii) Transfer of expired
possession limitation to general
limitation.--In the case of any amount
of credit limitation which would (but
for clause (ii)) be carried under
clause (i) to the 6th calendar year
following the calendar year in which
such amount of credit limitation arose,
the new market tax credit limitation
under paragraph (1) for such 6th
calendar year shall be increased by the
amount of such credit limitation.''.
(b) Application of Inflation Adjustment.--Section 45D(f)(4),
as added and amended by the preceding provisions of this Act,
is amended by striking ``paragraphs (1)(H) and (5)(A)'' and
inserting ``paragraphs (1)(H), (5)(A), (6)(A)(i), and
(6)(A)(ii)''.
(c) Effective Dates.--The amendments made by this section
shall apply to new markets tax credit limitation determined for
calendar years after December 31, 2021.
Subtitle G--Green Energy
SEC. 136001. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this
subtitle an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
PART 1--RENEWABLE ELECTRICITY AND REDUCING CARBON EMISSIONS
SEC. 136101. EXTENSION AND MODIFICATION OF CREDIT FOR ELECTRICITY
PRODUCED FROM CERTAIN RENEWABLE RESOURCES.
(a) In General.--The following provisions of section 45(d)
are each amended by striking ``January 1, 2022'' each place it
appears and inserting ``January 1, 2034'':
(1) Paragraph (2)(A).
(2) Paragraph (3)(A).
(3) Paragraph (4)(B).
(4) Paragraph (6).
(5) Paragraph (7).
(6) Paragraph (9).
(7) Paragraph (11)(B).
(b) Application of Extension to Solar.--Section 45(d)(4)(A)
is amended by striking ``is placed in service before January 1,
2006'' and inserting ``the construction of which begins before
January 1, 2034.''.
(c) Extension of Election to Treat Qualified Facilities as
Energy Property.--Section 48(a)(5)(C)(ii) is amended by
striking ``January 1, 2022'' and inserting ``January 1, 2034''.
(d) Application of Extension to Wind Facilities.--
(1) In general.--Section 45(d)(1) is amended by
striking ``January 1, 2022'' and inserting ``January 1,
2034''.
(2) Application of phaseout percentage.--
(A) Renewable electricity production
credit.--Section 45(b)(5)(D) is amended by
inserting ``placed in service before January 1,
2022'' after ``In the case of any facility''.
(B) Energy credit.--Section 48(a)(5)(E)(iv)
is amended by inserting ``placed in service
before January 1, 2022'' after ``In the case of
any facility''.
(3) Qualified offshore wind facilities under energy
credit.--Section 48(a)(5)(F)(i) is amended by striking
``offshore wind facility--'' and all that follows and
inserting the following: ``offshore wind facility,
subparagraph (E) shall not apply.''.
(e) Percentage Phaseout of Credit.--Section 45(b) is amended
by adding at the end the following new paragraph:
``(6) Percentage phaseout of credit.--In the case of
any facility, the amount of the credit determined under
subsection (a) shall be reduced by--
``(A) in the case of any facility the
construction of which begins after December 31,
2031 and before January 1, 2033, 20 percent,
``(B) in the case of any facility the
construction of which begins after December 31,
2032 and before January 1, 2034, 40 percent,
and
``(C) in the case of any facility the
construction of which begins after December 31,
2033, 100 percent.''.
(f) Wage and Apprenticeship Requirements.--Section 45(b) is
amended by adding at the end the following new paragraphs:
``(7) Base credit amount and increased credit amount
for qualified facilities.--
``(A) In general.--In the case of any
qualified facility which does not satisfy the
requirements of subparagraph (B), the amount of
the credit determined under subsection (a)
(determined after the application of paragraphs
(1) through (6)) shall be 20 percent of such
amount (determined without regard to this
sentence).
``(B) Increased credit for certain facilities
meeting project requirements.--
``(i) In general.--In the case of any
qualified facility which meets the
project requirements of this
subparagraph, subparagraph (A) shall
not apply.
``(ii) Project requirements.--A
project meets the requirements of this
subparagraph if it is one of the
following:
``(I) A project with a
maximum net output of less than
1 megawatt.
``(II) A project which
commences construction prior to
the date of the enactment of
this paragraph.
``(III) A project which
satisfies the requirements of
paragraphs (8) and (9).
``(8) Prevailing wage requirements.--
``(A) In general.--The requirements described
in this subparagraph with respect to any
qualified facility are that the taxpayer shall
ensure that any laborers and mechanics employed
by contractors and subcontractors in--
``(i) the construction of such
facility, and
``(ii) for the 10-year period
beginning on the date the facility was
originally placed in service, the
alteration or repair of such facility,
shall be paid wages at rates not less than the
prevailing rates for construction, alteration,
or repair of a similar character in the
locality as most recently determined by the
Secretary of Labor, in accordance with
subchapter IV of chapter 31 of title 40, United
States Code.
``(B) Correction and penalty related to
failure to satisfy wage requirements.--
``(i) In general.--In the case of any
taxpayer which fails to satisfy the
requirement under subparagraph (A) with
respect to the construction of any
qualified facility or with respect to
the alteration or repair of a facility
in any year during the period described
in subparagraph (A)(ii), such taxpayer
shall be deemed to have satisfied such
requirement under such subparagraph
with respect to such facility for any
year if, with respect to any laborer or
mechanic who was paid wages at a rate
below the rate described in such
subparagraph for any period during such
year, such taxpayer--
``(I) makes payment to such
laborer or mechanic in an
amount equal to the sum of--
``(aa) an amount
equal to the difference
between the amount of
wages paid to such
laborer or mechanic
during such period,
and--
``(AA) the
amount of wages
required to be
paid to such
laborer or
mechanic
pursuant to
such
subparagraph
during such
period, plus
``(BB)
interest on the
amount
determined
under item (aa)
at the
underpayment
rate
established
under section
6621 for the
period
described in
such item, and
``(II) makes payment to the
Secretary of a penalty in an
amount equal to the product
of--
``(aa) $5,000,
multiplied by
``(bb) the total
number of laborers and
mechanics who were paid
wages at a rate below
the rate described in
subparagraph (A) for
any period during such
year.
``(ii) Penalty assessed as tax.--The
penalty described in clause (i)(II)
shall be treated in the same manner as
a penalty imposed under subchapter B of
chapter 68.
``(9) Apprenticeship requirements.--The requirements
described in this subparagraph with respect to the
construction of any qualified facility are as follows:
``(A) Labor hours.--
``(i) Percentage of total labor
hours.--All contractors and
subcontractors engaged in the
performance of construction,
alteration, or repair work on any
project shall, subject to subparagraph
(B), ensure that not less than the
applicable percentage of the total
labor hours of such work be performed
by qualified apprentices.
``(ii) Applicable percentage.--For
purposes of paragraph (1), the
applicable percentage shall be--
``(I) in the case of any
applicable project the
construction of which begins
before January 1, 2023, 5
percent,
``(II) in the case of any
applicable project the
construction of which begins
after December 31, 2022, and
before January 1, 2024, 10
percent, and
``(III) in the case of any
applicable project the
construction of which begins
after December 31, 2023, 15
percent.
``(B) Apprentice to journeyworker ratio.--The
requirement under subparagraph (A)(i) shall be
subject to any applicable requirements for
apprentice-to-journeyworker ratios of the
Department of Labor or the applicable State
apprenticeship agency.
``(C) Participation.--Each contractor and
subcontractor who employs 4 or more individuals
to perform construction, alteration, or repair
work on an applicable project shall employ 1 or
more qualified apprentices to perform such
work.
``(D) Exception.--
``(i) In general.--Notwithstanding
any other provision of this paragraph,
this paragraph shall not apply in the
case of a taxpayer who--
``(I) demonstrates a lack of
availability of qualified
apprentices in the geographic
area of the construction,
alteration, or repair work, and
``(II) makes a good faith
effort to comply with the
requirements of this paragraph,
or
``(ii) Good faith effort.--For
purposes of clause (i), a taxpayer
shall be deemed to have satisfied the
requirements under such paragraph with
respect to an applicable project if
such taxpayer has requested qualified
apprentices from a registered
apprenticeship program, as defined in
section 3131(e)(3)(B), and such request
has been denied, provided that such
denial is not the result of a refusal
by the contractors or subcontractors
engaged in the performance of
construction, alteration, or repair
work on such applicable project to
comply with the established standards
and requirements of such apprenticeship
program.
``(E) Definitions.--For purposes of this
paragraph--
``(i) Labor hours.--The term `labor
hours'--
``(I) means the total number
of hours devoted to the
performance of construction,
alteration, or repair work by
employees of the contractor or
subcontractor, and
``(II) excludes any hours
worked by--
``(aa) foremen,
``(bb)
superintendents,
``(cc) owners, or
``(dd) persons
employed in a bona fide
executive,
administrative, or
professional capacity
(within the meaning of
those terms in part 541
of title 29, Code of
Federal Regulations).
``(ii) Qualified apprentice.--The
term `qualified apprentice' means an
individual who is an employee of the
contractor or subcontractor and who is
participating in a registered
apprenticeship program, as defined in
section 3131(e)(3)(B).
``(10) Domestic content bonus credit amount.--
``(A) In general.--In the case of any
qualified facility which satisfies the
requirement under subparagraph (B), the amount
of the credit determined under subsection (a)
(determined after the application of paragraphs
(1) through (9)) shall be increased by an
amount equal to 10 percent of the amount
otherwise in effect under such subsection.
``(B) Requirement.--
``(i) In general.--Subject to clause
(iii), the requirement described in
this subclause with respect to any
qualified facility is that, prior to
the end of the taxable year in which
such facility is placed in service, the
taxpayer shall certify to the Secretary
that, any steel, iron, or manufactured
product used in the construction of
such facility was produced in the
United States.
``(ii) Steel and iron.--In the case
of steel or iron, clause (i) shall be
applied in a manner consistent with
section 661.5(b) of title 49, Code of
Federal Regulations.
``(iii) Manufactured product.--For
purposes of clause (i), a manufactured
product shall be deemed to have been
manufactured in the United States if
not less than 55 percent of the total
cost of the components of such product
is attributable to components which are
mined, produced, or manufactured in the
United States.
``(C) International agreements.--This
paragraph shall be applied in a manner which is
consistent with the obligations of the United
States under international agreements.
``(11) Penalty for direct pay.--
``(A) In general.--In the case of a taxpayer
making an election under section 6417 with
respect to a credit under this section, the
amount of such credit shall be replaced with--
``(i) the value of such credit
(determined without regard to this
paragraph), multiplied by
``(ii) the applicable percentage.
``(B) 100 percent applicable percentage for
certain qualified facilities.--In the case of
any qualified facility--
``(i) which satisfies the
requirements under paragraph (10) with
respect to the construction of such
facility, or
``(ii) with a maximum net output of
less than 1 megawatt,
the applicable percentage shall be 100 percent.
``(C) Phased domestic content requirement.--
Subject to subparagraph (D), in the case of any
qualified facility which is not described in
subparagraph (B), the applicable percentage
shall be--
``(i) if construction of such
facility began before January 1, 2024,
100 percent,
``(ii) if construction of such
facility began in calendar year 2024,
90 percent,
``(iii) if construction of such
facility began in calendar year 2025,
85 percent, and
``(iv) if construction of such
facility began after December 31, 2025,
0 percent.
``(D) Exceptions.--In order to facilitate the
use of amounts made available in this section,
increase the tax incentives for investment in
clean energy, and grow the domestic supply
chains, the Secretary shall provide appropriate
exceptions to the domestic content requirements
for products under subparagraph (C) for the
construction of qualified facilities if either
the inclusion of domestic products increases
the overall costs of projects by more than 25
percent or relevant manufactured products are
not produced in the United States in sufficient
and reasonably available quantities or of a
satisfactory quality.
``(12) Regulations and guidance.--The Secretary shall
issue such regulations or other guidance as the
Secretary determines necessary or appropriate to carry
out the purposes of this subsection.''.
(g) Effective Date.--The amendments made by this section
shall apply to facilities placed in service after December 31,
2021.
SEC. 136102. EXTENSION AND MODIFICATION OF ENERGY CREDIT.
(a) Extension of Credit.--The following provisions of section
48 are each amended by striking ``January 1, 2024'' each place
it appears and inserting ``January 1, 2034'':
(1) Subsection (a)(3)(A)(ii).
(2) Subsection (a)(3)(A)(vii).
(3) Subsection (c)(1)(D).
(4) Subsection (c)(2)(D).
(5) Subsection (c)(3)(A)(iv).
(6) Subsection (c)(4)(C).
(b) Phaseout of Credit.--Section 48(a) is amended by striking
paragraphs (6) and (7) and inserting the following new
paragraphs:
``(6) Phaseout for solar energy property.--
``(A) In general.--Subject to subparagraph
(B), in the case of any energy property
described in paragraph (3)(A)(i) the
construction of which begins before January 1,
2034, the energy percentage determined under
paragraph (2) shall be equal to--
``(i) in the case of any property the
construction of which begins after
December 31, 2019, and which is placed
in service before January 1, 2022, 26
percent,
``(ii) in the case of any property
the construction of which begins before
January 1, 2032, and which is placed in
service after December 31, 2021, 30
percent,
``(iii) in the case of any property
the construction of which begins after
December 31, 2031 and before January 1,
2033, 26 percent, and
``(iv) in the case of any property
the construction of which begins after
December 31, 2032 and before January 1,
2034, 22 percent.
``(B) Placed in service deadline.--In the
case of any energy property described in
paragraph (3)(A)(i) the construction of which
begins before January 1, 2034, and which is not
placed in service before January 1, 2036, the
energy percentage determined under paragraph
(2) shall be equal to 10 percent.
``(7) Phaseout for certain other energy property.--
``(A) In general.--Subject to subparagraph
(B), in the case of any qualified fuel cell
property, qualified small wind property, waste
energy recovery property, or energy property
described in paragraph (3)(A)(ii), the energy
percentage determined under paragraph (2) shall
be equal to--
``(i) in the case of any property the
construction of which begins after
December 31, 2019, and which is placed
in service before January 1, 2022, 26
percent,
``(ii) in the case of any property
the construction of which begins before
January 1, 2032, and which is placed in
service after December 31, 2021, 30
percent,
``(iii) in the case of any property
the construction of which begins after
December 31, 2031 and before January 1,
2033, 26 percent, and
``(iv) in the case of any property
the construction of which begins after
December 31, 2032 and before January 1,
2034, 22 percent.
``(B) Placed in service deadline.--In the
case of any energy property described in
subparagraph (A) which is not placed in service
before January 1, 2036, the energy percentage
determined under paragraph (2) shall be equal
to 0 percent.''.
(c) 30 Percent Credit for Solar and Geothermal.--
(1) Extension for solar.--Section 48(a)(2)(A)(i)(II)
is amended by striking ``January 1, 2024'' and
inserting ``January 1, 2034''.
(2) Application to geothermal.--
(A) In general.--Paragraphs (2)(A)(i)(II),
(6)(A), and (6)(B) of section 48(a) are each
amended by striking ``paragraph (3)(A)(i)'' and
inserting ``clause (i), (iii), or (vii) of
paragraph (3)(A)''.
(B) Conforming amendment.--The heading of
section 48(a)(6) is amended by inserting ``and
geothermal'' after ``solar energy''.
(d) Energy Storage Technologies; Qualified Biogas Property;
Microgrid Controllers; Extension of Waste Energy Recovery
Property.--
(1) In general.--Section 48(a)(3)(A) is amended by
striking ``or'' at the end of clause (vii), and by
adding at the end the following new clauses:
``(viii) energy storage technology,
``(ix) qualified biogas property, or
``(x) microgrid controllers,''.
(2) Application of 30 percent credit.--Section
48(a)(2)(A)(i) is amended by striking ``and'' at the
end of subclauses (IV) and (V) and adding at the end
the following new subclauses:
``(VI) energy storage
technology,
``(VII) qualified biogas
property, and
``(VIII) microgrid
controllers, and''.
(3) Application of phaseout.--Section 48(a)(7) is
amended by inserting ``energy storage technology,
qualified biogas property, microgrid contollers,''
after ``waste energy recovery property,''.
(4) Definitions.--Section 48(c) is amended by adding
at the end the following new paragraphs:
``(6) Energy storage technology.--
``(A) In general.--The term `energy storage
technology' means equipment (other than
equipment primarily used in the transportation
of goods or individuals and not for the
production of electricity) which uses
batteries, compressed air, pumped hydropower,
hydrogen storage, thermal energy storage,
regenerative fuel cells, flywheels, capacitors,
superconducting magnets, or other technologies
identified by the Secretary, after consultation
with the Secretary of Energy, to store energy
for conversion to electricity (or, in the case
of hydrogen storage, to store energy), and has
a capacity of not less than 5 kilowatt hours.
``(B) Modifications of certain property.--In
the case of any equipment which either--
``(i) would be described in
subparagraph (A) except that such
equipment has a capacity of less than 5
kilowatt hours is modified such that
such equipment (after such
modification) has a capacity of not
less than 5 kilowatt hours, or
``(ii) is described in subparagraph
(A) and which has a capacity of not
less than 5 kilowatt hours and is
modified such that such equipment
(after such modification) has an
increased capacity,
such equipment shall be treated as described in
subparagraph (A) except that the basis of any
property which was part of such equipment
before such modification shall not be taken
into account for purposes of this section. In
the case of any property to which this
subparagraph applies, subparagraph (C) shall be
applied by substituting `modification' for
`construction'.
``(C) Termination.--The term `energy storage
technology' shall not include any property the
construction of which does not begin before
January 1, 2034.
``(7) Qualified biogas property.--
``(A) In general.--The term `qualified biogas
property' means property comprising a system
which--
``(i) converts biomass (as defined in
section 45K(c)(3), as in effect on the
date of enactment of this paragraph)
into a gas which--
``(I) consists of not less
than 52 percent methane, or
``(II) is concentrated by
such system into a gas which
consists of not less than 52
percent methane, and
``(ii) captures such gas for
productive use.
``(B) Inclusion of cleaning and conditioning
property.--The term `qualified biogas property'
includes any property which is part of such
system which cleans or conditions such gas.
``(C) Termination.--The term `qualified
biogas property' shall not include any property
the construction of which does not begin before
January 1, 2034.
``(8) Microgrid controller.--
``(A) In general.--The term `microgrid
controller' means equipment which is--
``(i) part of a qualified microgrid,
and
``(ii) designed and used to monitor
and control the energy resources and
loads on such microgrid to maintain
acceptable frequency, voltage, or
economic dispatch.
``(B) Qualified microgrid.--The term
`qualified microgrid' means an electrical
system which--
``(i) includes equipment which is
capable of generating not less than 4
kilowatts and not greater than 20
megawatts of electricity,
``(ii) is capable of operating--
``(I) in connection with the
electrical grid and as a single
controllable entity with
respect to such grid, and
``(II) independently (and
disconnected) from such grid,
and
``(iii) is not part of a bulk-power
system (as defined in section 215 of
the Federal Power Act (16 U.S.C. 24o)).
``(C) Termination.--The term `microgrid
controller' shall not include any property the
construction of which does not begin before
January 1, 2034.''.
(5) Denial of double benefit for qualified biogas
property.--Section 45(e) is amended by adding at the
end the following new paragraph:
``(12) Coordination with energy credit for qualified
biogas property.--The term `qualified facility' shall
not include any facility which produces electricity
from gas produced by qualified biogas property (as
defined in section 48(c)(7)) if a credit is determined
under section 48 with respect to such property for the
taxable year or any prior taxable year.''.
(6) Extension of waste energy recovery property.--
Section 48(c)(5)(D) is amended by striking ``January 1,
2024'' and inserting ``January 1, 2034''.
(e) Fuel Cells Using Electromechanical Processes.--
(1) In general.--Section 48(c)(1) is amended--
(A) in subparagraph (A)(i)--
(i) by inserting ``or
electromechanical'' after
``electrochemical'', and
(ii) by inserting ``(1 kilowatts in
the case of a fuel cell power plant
with a linear generator assembly)''
after ``0.5 kilowatt'', and
(B) in subparagraph (C)--
(i) by inserting ``, or linear
generator assembly,'' after ``a fuel
cell stack assembly'', and
(ii) by inserting ``or
electromechanical'' after
``electrochemical''.
(2) Linear generator assembly limitation.--Section
48(c)(1) is amended by redesignating subparagraph (D)
as subparagraph (E) and by inserting after subparagraph
(C) the following new subparagraph:
``(D) Linear generator assembly.--The term
`linear generator assembly' does not include
any assembly which contains rotating parts.''.
(f) Dynamic Glass.--Section 48(a)(3)(A)(ii) is amended by
inserting ``, or electrochromic glass which uses electricity to
change its light transmittance properties in order to heat or
cool a structure,'' after ``sunlight''.
(g) Coordination With Low Income Housing Tax Credit.--
Paragraph (3) of section 50(c) of the Internal Revenue Code of
1986 is amended--
(1) by striking ``and'' at the end of subparagraph
(A),
(2) by striking the period at the end of subparagraph
(B) and inserting ``, and'', and
(3) by adding at the end the following new
subparagraph:
``(C) paragraph (1) shall not apply for
purposes of determining eligible basis under
section 42.''.
(h) Wage and Apprenticeship Requirements.--Section 48(a) is
amended by adding at the end the following new paragraphs:
``(8) Base credit amount and increased credit amount
for energy projects.--
``(A) In general.--
``(i) Rule.--In the case of any
energy project which does not satisfy
the requirements of subparagraph (B),
the amount of the credit determined
under this subsection (determined after
the application of paragraphs (1)
through (7)) shall be 20 percent of
such amount (determined without regard
to this sentence).
``(ii) Energy project defined.--For
purposes of this subsection the term
`energy project' means a project
consisting of multiple energy
properties that are part of a single
project. The requirements of this
paragraph shall be applied to such
project.
``(B) Increased credit for energy projects
meeting project requirements.--
``(i) In general.--In the case of any
energy project which meets the project
requirements of this subparagraph,
subparagraph (A) shall not apply.
``(ii) Project requirements.--A
project meets the requirements of this
subparagraph if it is one of the
following:
``(I) A project with a
maximum net output of less than
1 megawatt.
``(II) A project which
commences construction prior to
the date of the enactment of
this paragraph.
``(III) A project which
satisfies the requirements of
paragraphs (9) and (10).
``(9) Prevailing wage requirements.--
``(A) In general.--The requirements described
in this subparagraph with respect to any energy
project are that the taxpayer shall ensure that
any laborers and mechanics employed by
contractors and subcontractors in--
``(i) the construction of such energy
project , and
``(ii) for any year during the period
beginning on the date any energy
property of such project is originally
placed in service, the alteration or
repair of such property,
shall be paid wages at rates not less than the
prevailing rates for construction, alteration,
or repair of a similar character in the
locality as most recently determined by the
Secretary of Labor, in accordance with
subchapter IV of chapter 31 of title 40, United
States Code.
``(B) Correction and penalty related to
failure to satisfy wage requirements.--A
taxpayer shall not be treated as failing to
satisfy the requirements of this paragraph if
such taxpayer meets requirements similar to the
requirements of section 45(b)(8)(B).
``(10) Apprenticeship requirements.--The requirements
described in this subparagraph with respect to the
construction of any applicable facility are as follows:
``(A) Labor hours.--
``(i) Percentage of total labor
hours.--All contractors and
subcontractors engaged in the
performance of construction,
alteration, or repair work on any
applicable facility prior to such
facility being placed into service
shall, subject to subparagraph (B),
ensure that not less than the
applicable percentage of the total
labor hours of such work be performed
by qualified apprentices.
``(ii) Applicable percentage.--For
purposes of paragraph (1), the
applicable percentage shall be--
``(I) in the case of any
applicable project the
construction of which begins
before January 1, 2023, 5
percent,
``(II) in the case of any
applicable project the
construction of which begins
after December 31, 2022, and
before January 1, 2024, 10
percent, and
``(III) in the case of any
applicable project the
construction of which begins
after December 31, 2023, 15
percent.
``(B) Apprentice to journeyworker ratio.--The
requirement under subparagraph (A)(i) shall be
subject to any applicable requirements for
apprentice-to-journeyworker ratios of the
Department of Labor or the applicable State
apprenticeship agency.
``(C) Participation.--Each contractor and
subcontractor who employs 4 or more individuals
to perform construction, alteration, or repair
work on an applicable project shall employ 1 or
more qualified apprentices to perform such
work.
``(D) Exception.--
``(i) In general.--Notwithstanding
any other provision of this paragraph,
this paragraph shall not apply in the
case of a taxpayer who--
``(I) demonstrates a lack of
availability of qualified
apprentices in the geographic
area of the construction,
alteration, or repair work, and
``(II) makes a good faith
effort to comply with the
requirements of this paragraph.
``(ii) Good faith effort.--For
purposes of clause (i), a taxpayer
shall be deemed to have satisfied the
requirements under such paragraph with
respect to an applicable project if
such taxpayer has requested qualified
apprentices from a registered
apprenticeship program, as defined in
section 3131(e)(3)(B), and such request
has been denied, provided that such
denial is not the result of a refusal
by the contractors or subcontractors
engaged in the performance of
construction, alteration, or repair
work on such applicable project to
comply with the established standards
and requirements of such apprenticeship
program.
``(E) Definitions.--For purposes of this
paragraph--
``(i) Labor hours.--The term `labor
hours' has the meaning given such term
in section 45(b)(9)(E)(i).
``(ii) Qualified apprentice.--The
term `qualified apprentice' has the
meaning given such term in section
45(b)(9)(E)(ii).
``(11) Domestic content bonus credit amount.--
``(A) In general.--In the case of any energy
project which satisfies the requirements under
subparagraph (B), the energy percentage in
subsection (a)(2) shall be increased by the
applicable rate in subparagraph (C).
``(B) Requirements.--
``(i) In general.--The requirement
described in this subclause with
respect to any energy project is
satisfied if the taxpayer certifies to
the Secretary (at such time, and in
such form and manner, as the Secretary
may prescribe) that the facility is
composed of steel, iron, or
manufactured products which were
produced in the United States.
``(ii) Steel and iron.--In the case
of steel or iron, clause (i) shall be
applied in a manner consistent with
section 661.5(b) of title 49, Code of
Federal Regulations.
``(iii) Manufactured product.--For
purposes of clause (i), a manufactured
product shall be deemed to have been
manufactured in the United States if
not less than 55 percent of the total
cost of the components of such product
is attributable to components which are
mined, produced, or manufactured in the
United States.
``(C) Applicable rate increase.--For purposes
of subparagraph (A), the applicable credit rate
increase shall be an amount equal to--
``(i) in the case of energy project
that does not meet the requirements of
subclause (I) or (III) of paragraph
(8)(B)(ii), 2 percentage points, and
``(ii) in the case of energy property
that meets the requirements of
subclause (I) or (III) of paragraph
(8)(B)(ii), 10 percentage points.
``(D) International agreements.--This
paragraph shall be applied in a manner which is
consistent with the obligations of the United
States under international agreements.
``(12) Penalty for direct pay.--
``(A) In general.--In the case of a taxpayer
making an election under section 6417 with
respect to a credit under this section, the
amount of such credit shall be replaced with--
``(i) the value of such credit
(determined without regard to this
paragraph), multiplied by
``(ii) the applicable percentage.
``(B) 100 percent applicable percentage for
certain energy projects.--In the case of any
energy project--
``(i) which satisfies the
requirements under paragraph (11) with
respect to the construction of such
project, or
``(ii) with a maximum net output of
less than 1 megawatt
the applicable percentage shall be 100 percent.
``(C) Phased domestic content requirement.--
Subject to subparagraph (D), in the case of any
energy project which is not described in
subparagraph (B), the applicable percentage
shall be--
``(i) if construction of such project
began before January 1, 2024, 100
percent,
``(ii) if construction of such
project began in calendar year 2024, 90
percent,
``(iii) if construction of such
project began in calendar year 2025, 85
percent, and
``(iv) if construction of such
project began after December 31, 2025,
0 percent.
``(D) Exceptions.--In order to facilitate the
use of amounts made available in this section,
increase the tax incentives for investment in
clean energy, and grow the domestic supply
chains, the Secretary shall provide appropriate
exceptions to the domestic content requirements
for products under subparagraph (C) for the
construction of qualified facilities if either
the inclusion of domestic products increases
the overall costs of projects by more than 25
percent or relevant manufactured products are
not produced in the United States in sufficient
and reasonably available quantities or of a
satisfactory quality.
``(13) Regulations and guidance.--The Secretary shall
issue such regulations or other guidance as the
Secretary determines necessary or appropriate to carry
out the purposes of this subsection.''.
(i) Effective Dates.--
(1) The amendments made by subsections (a), (b), (c),
(e), (f), (g), and (h) of this section shall apply to
property placed in service after December 31, 2021.
(2) The amendment made by subsection (d) shall apply
to periods after December 31, 2021, under rules similar
to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date
of the enactment of the Revenue Reconciliation Act of
1990).
SEC. 136103. INCREASE IN ENERGY CREDIT FOR SOLAR FACILITIES PLACED IN
SERVICE IN CONNECTION WITH LOW-INCOME COMMUNITIES.
(a) In General.--Section 48 is amended by adding at the end
the following new subsection:
``(e) Special Rules for Certain Solar Facilities Placed in
Service in Connection With Low-income Communities.--
``(1) In general.--In the case of any qualified solar
facility with respect to which the Secretary, after
consultation with the Secretary of Energy and the
Administrator of the Environmental Protection Agency,
makes an allocation of environmental justice solar
capacity limitation under paragraph (4)--
``(A) equipment described in paragraph (3)(B)
shall be treated for purposes of this section
as energy property described in subsection
(a)(2)(A)(i),
``(B) the energy percentage otherwise
determined under subsection (a)(2) with respect
to any eligible property which is part of such
facility shall be increased by--
``(i) in the case of a facility
described in subclause (I) of paragraph
(2)(A)(iii) and not described in
subclause (II) of such paragraph, 10
percentage points, and
``(ii) in the case of a facility
described in subclause (II) of
paragraph (2)(A)(iii), 20 percentage
points, and
``(C) the increase in the credit determined
under subsection (a) by reason of this
subsection for any taxable year with respect to
all property which is part of such facility
shall not exceed the amount which bears the
same ratio to the amount of such increase
(determined without regard to this
subparagraph) as--
``(i) the environmental justice solar
capacity limitation allocated to such
facility, bears to
``(ii) the total megawatt nameplate
capacity of such facility, as measured
in direct current.
``(2) Qualified solar facility.--For purposes of this
subsection--
``(A) In general.--The term `qualified solar
facility' means any facility--
``(i) which generates electricity
solely from property described in
subsection (a)(3)(A)(i),
``(ii) which has a nameplate capacity
of 5 megawatts or less, and
``(iii) which--
``(I) is located in a low-
income community (as defined in
section 45D(e)), or
``(II) is part of a qualified
low-income residential building
project or a qualified low-
income economic benefit
project.
``(B) Qualified low-income residential
building project.--A facility shall be treated
as part of a qualified low-income residential
building project if--
``(i) such facility is installed on a
residential rental building which
participates in a covered housing
program (as defined in section 41411(a)
of the Violence Against Women Act of
1994 (34 U.S.C. 12491(a)(3)), a Housing
Development Fund Corporation
cooperative under Article XI of the New
York State Private Housing Finance Law,
a housing assistance program
administered by the Department of
Agriculture under title V of the
Housing Act of 1949, or such other
affordable housing programs as the
Secretary may provide, and
``(ii) the financial benefits of the
electricity produced by such facility
are allocated equitably among the
occupants of the dwelling units of such
building.
``(C) Qualified low-income economic benefit
project.--A facility shall be treated as part
of a qualified low-income economic benefit
project if at least 50 percent of the financial
benefits of the electricity produced by such
facility are provided to households with income
of--
``(i) less than 200 percent of the
poverty line applicable to a family of
the size involved, or
``(ii) less than 80 percent of area
median gross income (as determined
under section 142(d)(2)(B)).
``(D) Financial benefit.--For purposes of
subparagraphs (B) and (C), electricity acquired
at a below-market rate shall not fail to be
taken into account as a financial benefit.
``(3) Eligible property.--
``(A) In general.--For purposes of this
section, the term `eligible property' means--
``(i) energy property which is
described in subsection (a)(3)(A)(i),
including energy storage property
(described in subsection
(a)(3)(A)(viii)) installed in
connection with such energy property,
and
``(ii) the amount of any expenditures
which are paid or incurred by the
taxpayer for qualified interconnection
property installed in connection with
the installation of property described
in subparagraph (A) to provide for the
transmission or distribution of the
electricity produced or stored by such
property, and which are properly
chargeable to the capital account of
the taxpayer.
``(B) Definitions.--For purposes of
subparagraph (A)--
``(i) Qualified interconnection
property.--The term `qualified
interconnection property' means, with
respect to a qualified facility which
is not a microgrid, any tangible
property--
``(I) which is part of an
addition, modification, or
upgrade to a transmission or
distribution system which is
required at or beyond the point
at which the qualified facility
interconnects to such
transmission or distribution
system in order to accommodate
such interconnection,
``(II) either--
``(aa) which is
constructed,
reconstructed, or
erected by the
taxpayer, or
``(bb) for which the
cost with respect to
the construction,
reconstruction, or
erection of such
property is paid or
incurred by such
taxpayer, and
``(III) the original use of
which, pursuant to an
interconnection agreement,
commences with the utility.
``(ii) Interconnection agreement.--
The term `interconnection agreement'
means an agreement with a utility for
the purposes of interconnecting the
qualified facility owned by such
taxpayer to the transmission or
distribution system of such utility.
``(iii) Utility.--The term `utility'
means the owner or operator of an
electrical transmission or distribution
system which is subject to the
regulatory authority of--
``(I) the Federal Energy
Regulatory Commission, or
``(II) a State or political
subdivision thereof, any agency
or instrumentality of the
United States, a public service
or public utility commission or
other similar body of any State
or political subdivision
thereof, or the governing or
ratemaking body of an electric
cooperative.
``(C) Special rule for interconnection
property.--In the case of expenses paid or
incurred for interconnection property, amounts
otherwise chargeable to capital account with
respect to such expenses shall be reduced under
rules similar to the rules of section 50(c).
``(4) Allocations.--
``(A) In general.--Not later than 180 days
after the date of enactment of this subsection,
the Secretary shall establish a program to
allocate amounts of environmental justice solar
capacity limitation to qualified solar
facilities.
``(B) Limitation.--The amount of
environmental justice solar capacity limitation
allocated by the Secretary under subparagraph
(A) during any calendar year shall not exceed
the annual capacity limitation with respect to
such year.
``(C) Annual capacity limitation.--For
purposes of this paragraph, the term `annual
capacity limitation' means 1.8 gigawatts of
direct current capacity for each of calendar
years 2022 through 2031, and zero thereafter.
``(D) Carryover of unused limitation.--If the
annual capacity limitation for any calendar
year exceeds the aggregate amount allocated for
such year under this paragraph, such limitation
for the succeeding calendar year shall be
increased by the amount of such excess. No
amount may be carried under the preceding
sentence to any calendar year after 2033.
``(E) Placed in service deadline.--
``(i) In general.--Paragraph (1)
shall not apply with respect to any
property which is placed in service
after the date that is 4 years after
the date of the allocation with respect
to the facility of which such property
is a part.
``(ii) Application of carryover.--Any
amount of environmental justice solar
capacity limitation which expires under
clause (i) during any calendar year
shall be taken into account as an
excess described in subparagraph (D)
(or as an increase in such excess) for
such calendar year, subject to the
limitation imposed by the last sentence
of such subparagraph.
``(F) Selection criteria.--In determining to
which qualified solar facilities to allocate
environmental justice solar capacity limitation
under this paragraph, the Secretary shall take
into consideration which facilities will result
in--
``(i) the greatest health and
economic benefits, including the
ability to withstand extreme weather
events, for individuals described in
section 45D(e)(2),
``(ii) the greatest employment and
wages for such individuals, and
``(iii) the greatest engagement with,
outreach to, or ownership by, such
individuals, including through
partnerships with local governments and
community-based organizations.
``(G) Disclosure of allocations.--The
Secretary shall, upon making an allocation of
environmental justice solar capacity limitation
under this paragraph, publicly disclose the
identity of the applicant, the amount of the
environmental justice solar capacity limitation
allocated to such applicant, and the location
of the facility for which such allocation is
made.
``(5) Recapture.--The Secretary shall, by regulations
or other guidance, provide for recapturing the benefit
of any increase in the credit allowed under subsection
(a) by reason of this subsection with respect to any
property which ceases to be property eligible for such
increase (but which does not cease to be investment
credit property within the meaning of section 50(a)).
The period and percentage of such recapture shall be
determined under rules similar to the rules of section
50(a). To the extent provided by the Secretary, such
recapture may not apply with respect to any property
if, within 12 months after the date the taxpayer
becomes aware (or reasonably should have become aware)
of such property ceasing to be property eligible for
such increase, the eligibility of such property for
such increase is restored. The preceding sentence shall
not apply more than once with respect to any
facility.''.
(b) Effective Date.--The amendments made by this section
shall apply to periods after December 31, 2021, under rules
similar to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).
SEC. 136104. ELECTIVE PAYMENT FOR ENERGY PROPERTY AND ELECTRICITY
PRODUCED FROM CERTAIN RENEWABLE RESOURCES, ETC.
(a) In General.--Subchapter B of chapter 65 is amended by
inserting after section 6416 the following new section:
``SEC. 6417. ELECTIVE PAYMENT OF APPLICABLE CREDITS.
``(a) In General.--In the case of a taxpayer making an
election (at such time and in such manner as the Secretary may
provide) under this section with respect to any applicable
credit determined with respect to such taxpayer, such taxpayer
shall be treated as making a payment against the tax imposed by
subtitle A (for the taxable year with respect to which such
credit was determined) equal to the amount of such credit.
``(b) Applicable Credit.--The term `applicable credit' means
each of the following:
``(1) The renewable electricity production credit
determined under section 45.
``(2) The energy credit determined under section 48.
``(3) The credit for carbon oxide sequestration
determined under section 45Q.
``(4) The credit for alternative fuel vehicle
refueling property allowed under section 30C.
``(5) The qualifying advanced energy project credit
determined under section 48C.
``(c) Special Rules.--For purposes of this section--
``(1) Application to tax-exempt and governmental
entities.--In the case of any organization exempt from
the tax imposed by subtitle A, any State or local
government (or political subdivision thereof), or any
Indian tribal government (within the meaning of section
139E), which makes the election described in subsection
(a), any applicable credit shall be determined--
``(A) without regard to paragraphs (3) and
(4)(A)(i) of section 50(b), and
``(B) by treating any property with respect
to which such credit is determined as used in a
trade or business of the taxpayer.
``(2) Application to partnerships and s
corporations.--
``(A) In general.--In the case of any
applicable credit determined with respect to
any qualified resources, qualified facility, or
energy property held directly by a partnership
or S corporation, if such partnership or S
corporation makes an election under this
subsection (in such manner as the Secretary may
provide) with respect to such credit--
``(i) the Secretary shall make a
payment to such partnership or S
corporation equal to the amount of such
credit,
``(ii) subsection (d) shall be
applied with respect to such credit
before determining any partner's
distributive share, or shareholder's
pro rata share, of such credit,
``(iii) any amount with respect to
which the election in subsection (a) is
made shall be treated as tax exempt
income for purposes of sections 705 and
1366, and
``(iv) a partner's distributive share
of such tax exempt income shall be
based on such partner's distributive
share of the otherwise applicable
credit for each taxable year.
``(B) Coordination with application at
partner or shareholder level.--In the case of
any partnership or S corporation, subsection
(a) shall be applied at the partner or
shareholder level after application of
paragraph (2)(A)(ii).
``(3) Irrevocable election.--Any election under this
subsection shall be made not later than the due date
(including extensions of time) for the return of tax
for the taxable year for which the applicable credit is
determined, but in no event earlier than 180 days after
the date of the enactment of this section. Any such
election, once made, shall be irrevocable.
``(4) Timing.--The payment described in subsection
(a) shall be treated as made on--
``(A) in the case of any government, or
political subdivision, described in paragraph
(1) and for which no return is required under
section 6011 or 6033(a), the later of the date
that a return would be due under section
6033(a) if such government or subdivision were
described in that section or the date on which
such government or subdivision submits a claim
for credit or refund (at such time and in such
manner as the Secretary shall provide), and
``(B) in any other case, the later of the due
date of the return of tax for the taxable year
or the date on which such return is filed.
``(5) Treatment of payments to partnerships and s
corporations.--For purposes of section 1324 of title
31, United States Code, the payments under subparagraph
(A)(ii) of paragraph (2) shall be treated in the same
manner as a refund due from a credit provision referred
to in subparagraph (B) of such paragraph.
``(6) Additional information.--As a condition of, and
prior to, a payment under this section, the Secretary
may require such information or registration as the
Secretary deems necessary or appropriate for purposes
of preventing duplication, fraud, improper payments, or
excessive payments under this section.
``(7) Excessive payment.--
``(A) In general.--In the case of a payment
made to a taxpayer under this subsection or any
amount treated as a payment which is made by
the taxpayer under subsection (a) which the
Secretary determines constitutes an excessive
payment, the tax imposed on such taxpayer by
chapter 1 for the taxable year in which such
determination is made shall be increased by an
amount equal to the sum of--
``(i) the amount of such excessive
payment, plus
``(ii) an amount equal to 20 percent
of such excessive payment.
``(B) Reasonable cause.--Subparagraph (A)(ii)
shall not apply if the taxpayer demonstrates to
the satisfaction of the Secretary that the
excessive payment resulted from reasonable
cause.
``(C) Excessive payment defined.--For
purposes of this paragraph, the term `excessive
payment' means, with respect to a facility for
which an election is made under this section
for any taxable year, an amount equal to the
excess of--
``(i) the amount of the payment made
to the taxpayer under this subsection
with respect to such facility for such
taxable year, over
``(ii) the amount of the credit
which, without application of this
subsection, would be otherwise
allowable under this section with
respect to such facility for such
taxable year.
``(d) Denial of Double Benefit.--In the case of a taxpayer
making an election under this section with respect to an
applicable credit, such credit shall be reduced to zero and
such taxpayer shall be deemed to have taken such credit.
``(e) Mirror Code Possessions.--In the case of any possession
of the United States with a mirror code tax system (as defined
in section 24(k)), this section shall not be treated as part of
the income tax laws of the United States for purposes of
determining the income tax law of such possession unless such
possession elects to have this section be so treated.
``(f) Basis Reduction and Recapture.--Rules similar to the
rules of subsections (a) and (c) of section 50 shall apply for
purposes of this section.
``(g) Regulations.--The Secretary shall issue such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this section,
including--
``(1) regulations or other guidance providing rules
for determining a partner's distributive share of the
tax exempt income described in subsection
(c)(2)(A)(iii), and
``(2) guidance to ensure that the amount of the
payment or deemed payment made under this section is
commensurate with the amount of the credit that would
be otherwise allowable.''.
(b) Clerical Amendment.--The table of sections for subchapter
B of chapter 65 is amended by inserting after the item relating
to section 6416 the following new item:
``Sec. 6417. Elective payment of applicable credits.''.
(c) In General.--The amendments made by this section shall
apply to property placed in service after the December 31,
2021.
SEC. 136105. INVESTMENT CREDIT FOR ELECTRIC TRANSMISSION PROPERTY.
(a) In General.--Subpart E of part IV of subchapter A of
chapter 1 is amended by inserting after section 48C the
following new section:
``SEC. 48D. QUALIFYING ELECTRIC TRANSMISSION PROPERTY.
``(a) Allowance of Credit.--For purposes of section 46, the
qualifying electric transmission property credit for any
taxable year is an amount equal to 30 percent of the basis of
qualifying electric transmission property placed in service by
the taxpayer during such taxable year.
``(b) Qualifying Electric Transmission Property.--For
purposes of this section--
``(1) In general.--The term `qualifying electric
transmission property' means tangible property--
``(A) which is a qualifying electric
transmission line or related transmission
property,
``(B)(i) the construction, reconstruction, or
erection of which is completed by the taxpayer,
or
``(ii) which is acquired by the taxpayer if
the original use of such property commences
with the taxpayer, and
``(C) with respect to which depreciation (or
amortization in lieu of depreciation) is
allowable.
``(2) Qualifying electric transmission line.--The
term `qualifying electric transmission line' means an
electric transmission line which--
``(A) is capable of transmitting electricity
at a voltage of not less than 275 kilovolts,
and
``(B) has a transmission capacity of not less
than 500 megawatts.
``(3) Related transmission property.--
``(A) In general.--The term `related
transmission property' means, with respect to
any electric transmission line, any property
which--
``(i) is listed as `transmission
plant' in the Uniform System of
Accounts for the Federal Energy
Regulatory Commission under part 101 of
subchapter C of chapter I of title 18,
Code of Federal Regulations, and
``(ii) is necessary for the operation
of such electric transmission line.
``(B) Credit not allowed separately with
respect to related property.--No credit shall
be allowed to any taxpayer under this section
with respect to any related transmission
property unless such taxpayer is allowed a
credit under this section with respect to the
qualifying electric transmission line to which
such related transmission property relates.
``(c) Application to Replacement and Upgraded Systems.--
``(1) In general.--In the case of any qualifying
electric transmission line (determined without regard
to this subsection) which replaces any existing
electric transmission line--
``(A) the 500 megawatts referred to in
subsection (b)(2)(B) shall be increased by the
transmission capacity of such existing electric
transmission line, and
``(B) in no event shall the basis of such
existing electric transmission line (or related
transmission property with respect to such
existing electric transmission line) be taken
into account in determining the credit allowed
under this section.
``(2) Upgrades treated as replacements.--For purposes
of this subsection, any upgrade of an existing electric
transmission line shall be treated as a replacement of
such line.
``(d) Exception for Certain Property and Projects Already in
Process.--No credit shall be allowed under this section with
respect to--
``(1) any property if a State or political
subdivision thereof, any agency or instrumentality of
the United States, a public service or public utility
commission or other similar body of any State or
political subdivision thereof, or the governing or
ratemaking body of an electric cooperative has, before
the date of the enactment of this section, selected for
cost allocation such property for cost recovery, or
``(2) any property if--
``(A) construction of such property begins
before January 1, 2022, or
``(B) construction of any portion of the
qualifying electric transmission line to which
such property relates begins before such date.
``(e) Certain Qualified Progress Expenditures Rules Made
Applicable.--Rules similar to the rules of subsections (c)(4)
and (d) of section 46 (as in effect on the day before the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of this section.
``(f) Credit Adjustments; Wage and Apprenticeship
Requirements.--
``(1) Base credit amount and increased credit amount
for applicable facilities.--
``(A) In general.--
``(i) Rule.--In the case of any
applicable facility which does not
satisfy the requirements of
subparagraph (B), the amount of the
credit determined under this subsection
shall be 20 percent of such amount
(determined without regard to this
sentence).
``(ii) Applicable facility defined.--
For purposes of this subsection, the
term `applicable facility' means a
qualifying electric transmission line
and related transmission property to
which such qualifying electric
transmission line relates.
``(B) Increased credit for applicable
facility meeting project requirements.--
``(i) In general.--In the case of any
applicable facility which meets the
project requirements of this
subparagraph, subparagraph (A) shall
not apply.
``(ii) Project requirements.--A
project meets the requirements of this
subparagraph if it is one of the
following:
``(I) A project with a
maximum net output of less than
1 megawatt.
``(II) A project which
commences construction prior to
the date of the enactment of
this paragraph.
``(III) A project which
satisfies the requirements of
paragraphs (2) and (3).
``(2) Prevailing wage requirements.--
``(A) In general.--The requirements described
in this subparagraph with respect to any
applicable facility are that the taxpayer shall
ensure that any laborers and mechanics employed
by contractors and subcontractors in--
``(i) the construction of such
facility, and
``(ii) for any year during the 5-year
period beginning on the date the
facility or property is originally
placed in service, the alteration or
repair of such facility or property,
shall be paid wages at rates not less than the
prevailing rates for construction, alteration,
or repair of a similar character in the
locality as most recently determined by the
Secretary of Labor, in accordance with
subchapter IV of chapter 31 of title 40, United
States Code.
``(B) Correction and penalty related to
failure to satisfy wage requirements.--A
taxpayer shall not be treated as failing to
satisfy the requirements of this paragraph if
such taxpayer meets requirements similar to the
requirements of section 45(b)(8)(B).
``(3) Apprenticeship requirements.--The requirements
described in this subparagraph with respect to the
construction of any applicable facility are as follows:
``(A) Labor hours.--
``(i) Percentage of total labor
hours.--All contractors and
subcontractors engaged in the
performance of construction,
alteration, or repair work on any
applicable facility prior to such
facility being placed into service
shall, subject to subparagraph (B),
ensure that not less than the
applicable percentage of the total
labor hours of such work be performed
by qualified apprentices.
``(ii) Applicable percentage.--For
purposes of paragraph (1), the
applicable percentage shall be--
``(I) in the case of any
applicable project the
construction of which begins
before January 1, 2023, 5
percent,
``(II) in the case of any
applicable project the
construction of which begins
after December 31, 2022, and
before January 1, 2024, 10
percent, and
``(III) in the case of any
applicable project the
construction of which begins
after December 31, 2023, 15
percent.
``(B) Apprentice to journeyworker ratio.--The
requirement under subparagraph (A)(i) shall be
subject to any applicable requirements for
apprentice-to-journeyworker ratios of the
Department of Labor or the applicable State
apprenticeship agency.
``(C) Participation.--Each contractor and
subcontractor who employs 4 or more individuals
to perform construction, alteration, or repair
work on an applicable project shall employ 1 or
more qualified apprentices to perform such
work.
``(D) Exception.--
``(i) In general.--Notwithstanding
any other provision of this paragraph,
this paragraph shall not apply in the
case of a taxpayer who--
``(I) demonstrates a lack of
availability of qualified
apprentices in the geographic
area of the construction,
alteration, or repair work, and
``(II) makes a good faith
effort to comply with the
requirements of this paragraph.
``(ii) Good faith effort.--For
purposes of clause (i), a taxpayer
shall be deemed to have satisfied the
requirements under such paragraph with
respect to an applicable project if
such taxpayer has requested qualified
apprentices from a registered
apprenticeship program, as defined in
section 3131(e)(3)(B), and such request
has been denied, provided that such
denial is not the result of a refusal
by the contractors or subcontractors
engaged in the performance of
construction, alteration, or repair
work on such applicable project to
comply with the established standards
and requirements of such apprenticeship
program.
``(E) Definitions.--For purposes of this
paragraph--
``(i) Labor hours.--The term `labor
hours' has the meaning given such term
in section 45(b)(9)(E)(i).
``(ii) Qualified apprentice.--The
term `qualified apprentice' has the
meaning given such term in section
45(b)(9)(E)(ii).
``(4) Domestic content bonus credit amount.--
``(A) In general.--In the case of any
applicable facility which satisfies the
requirements under subparagraph (B), the credit
determined under subsection (a) shall be
increased by the applicable rate in
subparagraph (C).
``(B) Requirements.--
``(i) In general.--The requirement
described in this subclause with
respect to any applicable facility is
satisfied if the taxpayer certifies to
the Secretary (at such time, and in
such form and manner, as the Secretary
may prescribe) that the facility is
composed of steel, iron, or
manufactured products which were
produced in the United States.
``(ii) Steel and iron.--In the case
of steel or iron, clause (i) shall be
applied in a manner consistent with
section 661.5(b) of title 49, Code of
Federal Regulations.
``(iii) Manufactured product.--For
purposes of clause (i), a manufactured
product shall be deemed to have been
manufactured in the United States if
not less than 55 percent of the total
cost of the components of such product
is attributable to components which are
mined, produced, or manufactured in the
United States.
``(C) Applicable rate increase.--For purposes
of subparagraph (A), the applicable credit rate
increase shall be an amount equal to--
``(i) in the case of applicable
facility that does not meet the
requirements of subclause (I) or (III)
of paragraph (1)(B)(ii), 2 percentage
points, and
``(ii) in the case of applicable
facility that meets the requirements of
subclause (I) or (III) of paragraph
(1)(B)(ii), 10 percentage points.
``(D) International agreements.--This
paragraph shall be applied in a manner which is
consistent with the obligations of the United
States under international agreements.
``(5) Penalty for direct pay.--
``(A) In general.--In the case of a taxpayer
making an election under section 6417 with
respect to a credit under this section, the
amount of such credit shall be replaced with--
``(i) the value of such credit
(determined without regard to this
paragraph), multiplied by
``(ii) the applicable percentage.
``(B) 100 percent applicable percentage for
certain applicable facility.--In the case of
any applicable facility--
``(i) which satisfies the
requirements under paragraph (11) with
respect to the construction of such
property, or
``(ii) with a maximum net output of
less than 1 megawatt,
the applicable percentage shall be 100 percent.
``(C) Phased domestic content requirement.--
Subject to subparagraph (D), in the case of any
qualified facility which is not described in
subparagraph (B), the applicable percentage
shall be--
``(i) if construction of such
facility began before January 1, 2024,
100 percent,
``(ii) if construction of such
facility began in calendar year 2024,
90 percent,
``(iii) if construction of such
facility began in calendar year 2025,
85 percent, and
``(iv) if construction of such
facility began after December 31, 2025,
0 percent.
``(D) Exceptions.--In order to facilitate the
use of amounts made available in this section,
increase the tax incentives for investment in
clean energy, and grow the domestic supply
chains, the Secretary shall provide appropriate
exceptions to the domestic content requirements
for products under subparagraph (C) for the
construction of qualified facilities if either
the inclusion of domestic products increases
the overall costs of projects by more than 25
percent or relevant manufactured products are
not produced in the United States in sufficient
and reasonably available quantities or of a
satisfactory quality.
``(g) Termination.--This section shall not apply to any
property unless--
``(1) such property is placed in service before
January 1, 2032, and
``(2) the qualifying electric transmission line with
respect to which such property relates is placed in
service before such date.
``(h) Regulations and Guidance.--The Secretary, after
consultation with the Chairman of the Federal Energy Regulatory
Commission, shall issue such regulations or other guidance as
the Secretary determines necessary or appropriate to carry out
the purposes of this section.''.
(b) Elective Payment of Credit.--Section 6417(b), as added by
the preceding provisions of this Act, is amended by adding at
the end the following new paragraph:
``(6) The qualifying electric transmission property
credit determined under section 48D.''.
(c) Conforming Amendments.--
(1) Section 46 is amended--
(A) by striking ``and'' at the end of
paragraph (5),
(B) by striking the period at the end of
paragraph (6) and inserting ``, and'', and
(C) by adding at the end the following new
paragraph:
``(7) the qualifying electric transmission property
credit.''.
(2) Section 49(a)(1)(C) is amended--
(A) by striking ``and'' at the end of clause
(iv),
(B) by striking the period at the end of
clause (v) and inserting ``, and'', and
(C) by adding at the end the following new
clause:
``(vi) the basis of any qualifying
electric transmission property under
section 48D.''.
(3) Section 50(a)(2)(E) is amended by striking ``or
48C(b)(2)'' and inserting ``48C(b)(2), or 48D''.
(4) The table of sections for subpart E of part IV of
subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 48C the
following new item:
``Sec. 48D. Qualifying electric transmission property.''.
(d) Effective Date.--
(1) In general.--The amendments made by this section
shall apply to property placed in service after
December 31, 2021.
(2) Exception for certain property and projects
already in process.--For exclusion of certain property
and projects already in process, see section 48D(d) of
the Internal Revenue Code of 1986 (as added by this
section).
SEC. 136106. ZERO EMISSIONS FACILITY CREDIT.
(a) In General.--Subpart E of part IV of subchapter A of
chapter 1 is amended by inserting after section 48C the
following new section:
``SEC. 48E. ZERO EMISSIONS FACILITY CREDIT.
``(a) In General.--For purposes of section 46, the zero
emissions facility credit for any taxable year is an amount
equal to 30 percent of the qualified investment for such
taxable year with respect to any zero emissions facility of the
taxpayer.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a),
the qualified investment for any taxable year is the
basis of eligible property placed in service by the
taxpayer during such taxable year which is part of a
zero emissions facility.
``(2) Certain qualified progress expenditures rules
made applicable.--Rules similar to the rules of
subsections (c)(4) and (d) of section 46 (as in effect
on the day before the enactment of the Revenue
Reconciliation Act of 1990) shall apply for purposes of
this section.
``(3) Limitation.--The amount which is treated as the
qualified investment for all taxable years with respect
to any zero emissions facility shall not exceed the
amount designated by the Secretary as eligible for the
credit under this section.
``(c) Zero Emissions Facility.--
``(1) In general.--For purposes of this section, the
term `zero emissions facility' means any facility--
``(A) which generates electricity,
``(B) which does not generate any greenhouse
gases (within the meaning of section
211(o)(1)(G) of the Clean Air Act (42 U.S.C.
7545(o)(1)(G)), as in effect on the date of the
enactment of this section),
``(C) which uses a technology or process
which, in the calendar year in which an amount
of credit is designated with respect to such
facility, achieved a market penetration level
of less than 3 percent,
``(D) no portion of which is--
``(i) a qualified facility (as
defined in section 45(d)),
``(ii) an advanced nuclear power
facility (as defined in section
45J(d)),
``(iii) a qualified facility (as
defined in section 45Q), or
``(iv) energy property (as defined in
section 48(a)(3)).
``(2) Market penetration level.--For purposes of this
subsection, the term `market penetration level' means,
with respect to any calendar year, the amount equal to
the greater of--
``(A) the amount (expressed as a percentage)
equal to the quotient of--
``(i) the sum of all electricity
produced (expressed in terawatt hours)
from the technology or method used for
the production of electricity by all
electricity generating facilities in
the United States during such calendar
year (as determined by the Secretary on
the basis of data reported by the
Energy Information Administration),
divided by the total domestic power
sector electricity production
(expressed in terawatt hours) for such
calendar year, or
``(ii) the amount determined under
this subparagraph for the preceding
calendar year with respect to such
technology or method.
``(d) Eligible Property.--For purposes of this section, the
term `eligible property' means any property--
``(1) which is necessary for the generation of
electricity,
``(2) which is--
``(A) tangible personal property, or
``(B) other tangible property (not including
a building or its structural components), but
only if such property is used as an integral
part of the zero emissions facility, and
``(3) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable.
``(e) Allocations.--
``(1) In general.--Not later than 180 days after the
date of enactment of this section, the Secretary, after
consultation with the Secretary of Energy and the
Administrator of the Environmental Protection Agency,
shall establish a program to consider and award
certification amounts of zero emissions facility credit
limitation to zero emissions facilities.
``(2) Annual limitation.--
``(A) In general.--The amount of zero
emissions facility credit limitation that may
be designated under this subsection during any
calendar year shall not exceed the annual
credit limitation with respect to such year.
``(B) Annual credit limitation.--For purposes
of this subsection, the term `annual credit
limitation' means $250,000,000 for each of
calendar years 2022 through 2031, and zero
thereafter.
``(C) Carryover of unused limitation.--If the
annual credit limitation for any calendar year
exceeds the aggregate amount designated for
such year under this subsection, such
limitation for the succeeding calendar year
shall be increased by the amount of such
excess. No amount may be carried under the
preceding sentence to any calendar year after
2031.
``(3) Placed in service deadline.--
``(A) In general.--No credit shall be
determined under subsection (a) with respect to
any zero emissions facility which is placed in
service after the date that is 4 years after
the date of the designation under this
subsection relating to such zero emissions
facility.
``(B) Application of carryover.--Any amount
of credit which expires under subparagraph (A)
during any calendar year shall be taken into
account as an excess described in paragraph
(2)(C) (or as an increase in such excess) for
such calendar, subject to the limitation
imposed by the last sentence of such paragraph.
``(4) Selection criteria.--In determining which zero
emissions facilities to certify under this section, the
Secretary, after consultation with the Secretary of
Energy and the Administrator of the Environmental
Protection Agency, shall--
``(A) take into consideration which
facilities--
``(i) will result in the greatest
reduction of greenhouse gas emissions,
``(ii) have the greatest potential
for technological innovation and
commercial deployment, and
``(iii) will result in the greatest
reduction of local environmental
effects that are harmful to human
health, and
``(B) require that applicants provide written
assurances to the Secretary that all laborers
and mechanics employed by contractors and
subcontractors in the performance of
construction, alteration or repair work on a
zero emissions facility shall be paid wages at
rates not less than those prevailing on
projects of a similar character in the locality
as determined by the Secretary of Labor in
accordance with subchapter IV of chapter 31 of
title 40, United States Code.
``(5) Disclosure of certifications.--The Secretary
shall, upon making a certification under this
subsection, publicly disclose the identity of the
applicant, the amount of the credit awarded with
respect to such applicant, and the location of the
zero-emissions facility for which such credit is
awarded.
``(f) Credit Conditioned Upon Wage and Apprenticeship
Requirements.--
``(1) In general.--No credit shall be allocated for a
zero emissions facility under this section unless the
zero emissions facility meets the prevailing wage
requirements of paragraph (2) and the apprenticeship
requirements of paragraph (3).
``(2) Prevailing wage requirements.--
``(A) In general.--The requirements described
in this paragraph with respect to a zero
emissions facility are that the taxpayer shall
ensure that any laborers and mechanics employed
by contractors and subcontractors in--
``(i) the construction of such zero
emissions facility, and
``(ii) for any year during the 5-year
period beginning on the date the
facility is originally placed in
service, the alteration or repair of
such zero emissions facility,
shall be paid wages at rates not less than the
prevailing rates for construction, alteration,
or repair of a similar character in the
locality as most recently determined by the
Secretary of Labor, in accordance with
subchapter IV of chapter 31 of title 40, United
States Code.
``(B) Correction and penalty related to
failure to satisfy wage requirements.--
``(i) In general.--In the case of any
taxpayer which fails to satisfy the
requirement under subparagraph (A) with
respect to the construction of any
qualified facility or with respect to
the alteration or repair of a facility
in any year during the period described
in subparagraph (A)(ii), such taxpayer
shall be deemed to have satisfied such
requirement under such subparagraph
with respect to such zero emissions
facility for any year if, with respect
to any laborer or mechanic who was paid
wages at a rate below the rate
described in such subparagraph for any
period during such year, such
taxpayer--
``(I) makes payment to such
laborer or mechanic in an
amount equal to the sum of--
``(aa) an amount
equal to the difference
between the amount of
wages paid to such
laborer or mechanic
during such period,
and--
``(bb) the amount of
wages required to be
paid to such laborer or
mechanic pursuant to
such subparagraph
during such period,
plus
``(AA)
interest on the
amount
determined
under item (aa)
at the
underpayment
rate
established
under section
6621 for the
period
described in
such item, and
``(II) makes payment to the
Secretary of a penalty in an
amount equal to the product
of--
``(aa) $5,000,
multiplied by
``(bb) the total
number of laborers and
mechanics who were paid
wages at a rate below
the rate described in
subparagraph (A) for
any period during such
year.
``(ii) Penalty assessed as tax.--The
penalty described in clause (i)(II)
shall be treated in the same manner as
a penalty imposed under subchapter B of
chapter 68.
``(3) Apprenticeship requirements.--The requirements
described in this subparagraph with respect to a zero
emissions facility are as follows:
``(A) Labor hours.--
``(i) Percentage of total labor
hours.--All contractors and
subcontractors engaged in the
performance of construction,
alteration, or repair work on any
facility prior to such facility being
placed into service shall, subject to
subparagraph (B), ensure that not less
than the applicable percentage of the
total labor hours of such work be
performed by qualified apprentices.
``(ii) Applicable percentage.--For
purposes of paragraph (1), the
applicable percentage shall be--
``(I) in the case of any
applicable zero emissions
facility the construction of
which begins before January 1,
2023, 5 percent,
``(II) in the case of any
applicable zero emissions
facility the construction of
which begins after December 31,
2022, and before January 1,
2024, 10 percent, and
``(III) in the case of any
applicable zero emissions
facility the construction of
which begins after December 31,
2023, 15 percent.
``(B) Apprentice to journeyworker ratio.--The
requirement under subparagraph (A)(i) shall be
subject to any applicable requirements for
apprentice-to-journeyworker ratios of the
Department of Labor or the applicable State
apprenticeship agency.
``(C) Participation.--Each contractor and
subcontractor who employs 4 or more individuals
to perform construction, alteration, or repair
work on an applicable zero emissions facility
shall employ 1 or more qualified apprentices to
perform such work.
``(D) Exception.--
``(i) In general.--Notwithstanding
any other provision of this paragraph,
this paragraph shall not apply in the
case of a taxpayer who--
``(I) demonstrates a lack of
availability of qualified
apprentices in the geographic
area of the construction,
alteration, or repair work, and
``(II) makes a good faith
effort to comply with the
requirements of this paragraph.
``(ii) Good faith effort.--For
purposes of clause (i), a taxpayer
shall be deemed to have satisfied the
requirements under such paragraph with
respect to an applicable project if
such taxpayer has requested qualified
apprentices from a registered
apprenticeship program, as defined in
section 3131(e)(3)(B), and such request
has been denied, provided that such
denial is not the result of a refusal
by the contractors or subcontractors
engaged in the performance of
construction, alteration, or repair
work on such applicable project to
comply with the established standards
and requirements of such apprenticeship
program.
``(E) Definitions.--For purposes of this
paragraph--
``(i) Labor hours.--The term `labor
hours'--
``(I) means the total number
of hours devoted to the
performance of construction,
alteration, or repair work by
employees of the contractor or
subcontractor prior to a
facility being placed into
service, and
``(II) excludes any hours
worked by--
``(aa) foremen,
``(bb)
superintendents,
``(cc) owners, or
``(dd) persons
employed in a bona fide
executive,
administrative, or
professional capacity
(within the meaning of
those terms in part 541
of title 29, Code of
Federal Regulations).
``(ii Qualified apprentice.--The term
`qualified apprentice' has the meaning
given such term in section
45(b)(9)(E)(ii).
``(4) Regulations and guidance.--The Secretary shall
issue such regulations or other guidance as the
Secretary determines necessary or appropriate to carry
out the purposes of this subsection.
``(5) Penalty for direct pay.--
``(A) In general.--In the case of a taxpayer
making an election under section 6417 with
respect to a credit under this section, the
amount of such credit shall be replaced with--
``(i) the value of such credit
(determined without regard to this
paragraph), multiplied by
``(ii) the applicable percentage.
``(B) 100 percent applicable percentage for
certain qualified facilities.--In the case of
any qualified facility--
``(i) which satisfies the
requirements under paragraph (5) with
respect to the construction of such
facility, or
``(ii) with a maximum net output of
less than 1 megawatt,
the applicable percentage shall be 100 percent.
``(C) Phased domestic content requirement.--
Subject to subparagraph (D), in the case of any
qualified facility which is not described in
subparagraph (B), the applicable percentage
shall be--
``(i) if construction of such
facility began before January 1, 2024,
100 percent,
``(ii) if construction of such
facility began in calendar year 2024,
90 percent,
``(iii) if construction of such
facility began in calendar year 2025,
85 percent, and
``(iv) if construction of such
facility began after December 31, 2025,
0 percent.
``(D) Exception.--If the Secretary, after
consultation with the Secretary of Commerce and
the United States Trade Representative,
determines that, for purposes of application of
the requirements under paragraph (5) with
respect to the construction of the qualified
facility--
``(i) their application would be
inconsistent with the public interest,
``(ii) such materials and products
are not produced in the United States
in sufficient and reasonably available
quantities and of a satisfactory
quality, or
``(iii) inclusion of domestic
material will increase the cost of the
construction of the qualified facility
by more than 25 percent,
the applicable percentage shall be 100
percent.''.
(b) Elective Payment of Credit.--Section 6417(b), as added
and amended by the preceding provisions of this Act, is amended
by adding at the end the following new paragraph:
``(7) The zero emissions facility credit determined
under section 48E.''.
(c) Conforming Amendments.--
(1) Section 46 is amended by striking ``and'' at the
end of paragraph (6), by striking the period at the end
of paragraph (7) and inserting ``, and'', and by adding
at the end the following new paragraph:
``(8) the zero emissions facility credit.''.
(2) Section 49(a)(1)(C) is amended by striking
``and'' at the end of clause (v), by striking the
period at the end of clause (vi) and inserting a comma,
and by adding at the end the following new clause:
``(vii) the basis of any eligible
property which is part of a zero
emissions facility under section
48D.''.
(3) Section 50(a)(2)(E) is amended by striking `` or
48D'' and inserting ``48D, or 48E(b)(2)''.
(4) The table of sections for subpart E of part IV of
subchapter A of chapter 1 is amended by inserting after
the item relating to section 48D the following new
item:
Sec. 48E. Zero emissions facility credit.
(d) Effective Date.--The amendments made by this section
shall apply to periods after December 31, 2021, under rules
similar to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990)
SEC. 136107. EXTENSION AND MODIFICATION OF CREDIT FOR CARBON OXIDE
SEQUESTRATION.
(a) Extension.--Section 45Q(d)(1) is amended by striking
``January 1, 2026'' and inserting ``January 1, 2032''.
(b) Modification of Carbon Oxide Capture Requirements.--
Section 45Q(d)(2) is amended to read as follows:
``(2) which captures--
``(A) in the case of a direct air capture
facility, not less than 1,000 metric tons of
qualified carbon oxide during the taxable year,
``(B) in the case of an electricity
generating facility, not less than 18,750
metric tons of qualified carbon oxide during
the taxable year and not less than 75 percent
of the carbon oxide that would otherwise be
released into the atmosphere by such facility
during such taxable year, and
``(C) in the case of any other facility, not
less than 12,500 metric tons of qualified
carbon oxide during the taxable year and not
less than 50 percent of the carbon oxide that
would otherwise be released into the atmosphere
by such facility during such taxable year.''.
(c) Determination of Applicable Dollar Amount.--
(1) In general.--Section 45Q(b)(1) is amended by
redesignating subparagraph (B) as subparagraph (C) and
by inserting after subparagraph (A) the following new
subparagraph:
``(B) Special rule for direct air capture
facilities.--For any taxable year beginning
after December 31, 2021, in the case of any
qualified facility described in subsection
(d)(2)(C), the applicable dollar amount shall
be an amount equal to--
``(i) for purposes of paragraph (3)
of subsection (a), an amount equal to
the product of $180 and the inflation
adjustment factor for such calendar
year determined under section
43(b)(3)(B) for such calendar year,
determined by substituting `2020' for
`1990', and
``(ii) for purposes of paragraph (4)
of such subsection, an amount equal to
the product of $130 and the inflation
adjustment factor for such calendar
year determined under section
43(b)(3)(B) for such calendar year,
determined by substituting `2020' for
`1990'.''.
(2) Conforming amendments.--
(A) Section 45Q(b)(1)(A) is amended by
striking ``The applicable dollar amount'' and
inserting ``Except as provided in subparagraph
(B), the applicable dollar amount''.
(B) Section 45Q(b)(1)(C), as redesignated by
subparagraph (A), is amended by striking
``subparagraph (A)'' and inserting
``subparagraph (A) or (B)''.
(d) Wage and Apprenticeship Requirements.--Section 45Q is
amended by redesignating subsection (h) as subsection (i) and
inserting after subsection (g) following new subsection:
``(h) Base Credit Amount and Increased Credit Amount for
Qualified Facilities and Carbon Capture Equipment.--
``(1) In general.--In the case of any qualified
facility and any carbon capture equipment which does
not satisfy the requirements of paragraph (2), the
amount of the credit determined under subsection (a)
shall be 20 percent of such amount (determined without
regard to this sentence).
``(2) Increased credit for certain facilities and
carbon capture equipment meeting project
requirements.--
``(A) In general.--In the case of any
qualified facility and any carbon capture
equipment placed in service at such facility
which meets the project requirements of this
subparagraph, subparagraph (A) shall not apply.
``(B) Project requirements.--A project meets
the requirements of this subparagraph if it is
one of the following:
``(i) A qualified facility with a
maximum net output of less than 1
megawatt.
``(ii) A qualified facility or any
carbon capture equipment placed in
service at such facility which
commences construction prior to the
date of the enactment of this
paragraph.
``(iii) A project which satisfies the
requirements of paragraphs (3) and (4).
``(3) Prevailing wage requirements.--
``(A) In general.--The requirements described
in this subparagraph with respect to any
qualified facility and any carbon capture
equipment placed in service at such facility
are that the taxpayer shall ensure that any
laborers and mechanics employed by contractors
and subcontractors in--
``(i) the construction of such
facility and carbon capture equipment,
``(ii) the alteration or repair of
such facility and carbon capture
equipment during the 12 year-period
after being placed into service, or for
carbon capture equipment placed in
service prior to 2018, until the date
determined by the Secretary under
subsection (g),
shall be paid wages at rates not less than the
prevailing rates for construction, alteration,
or repair of a similar character in the
locality as most recently determined by the
Secretary of Labor, in accordance with
subchapter IV of chapter 31 of title 40, United
States Code.
``(B) Correction and penalty related to
failure to satisfy wage requirements.--
``(i) In general.--In the case of any
taxpayer which fails to satisfy the
requirement under subparagraph (A) with
respect to the construction of any
qualified facility or with respect to
the alteration or repair of a facility
in any year during the period described
in subparagraph (A)(ii), such taxpayer
shall be deemed to have satisfied such
requirement under such subparagraph
with respect to such facility and
carbon capture equipment for any year
if, with respect to any laborer or
mechanic who was paid wages at a rate
below the rate described in such
subparagraph for any period during such
year, such taxpayer--
``(I) makes payment to such
laborer or mechanic in an
amount equal to the sum of an
amount equal to the difference
between the amount of wages
paid to such laborer or
mechanic during such period,
and--
``(aa) the amount of
wages required to be
paid to such laborer or
mechanic pursuant to
such subparagraph
during such period,
plus
``(bb) interest on
the amount determined
under item (aa) at the
underpayment rate
established under
section 6621 for the
period described in
such item, and
``(II) makes payment to the
Secretary of a penalty in an
amount equal to the product
of--
``(aa) $5,000,
multiplied by
``(bb) the total
number of laborers and
mechanics who were paid
wages at a rate below
the rate described in
subparagraph (A) for
any period during such
year.
``(ii) Penalty assessed as tax.--The
penalty described in clause (i)(II)
shall be treated in the same manner as
a penalty imposed under subchapter B of
chapter 68.
``(4) Apprenticeship requirements.--The requirements
described in this paragraph with respect to any
qualified facility and carbon capture equipment are as
follows:
``(A) Labor hours.--
``(i) Percentage of total labor
hours.--All contractors and
subcontractors engaged in the
performance of construction,
alteration, or repair work on any
facility and carbon capture equipment
prior to such facility being placed
into service shall, subject to
subparagraph (B), ensure that not less
than the applicable percentage of the
total labor hours of such work be
performed by qualified apprentices.
``(ii) Applicable percentage.--For
purposes of paragraph (1), the
applicable percentage shall be--
``(I) in the case of any
applicable project the
construction of which begins
before January 1, 2023, 5
percent,
``(II) in the case of any
applicable project the
construction of which begins
after December 31, 2022, and
before January 1, 2024, 10
percent, and
``(III) in the case of any
applicable project the
construction of which begins
after December 31, 2023, 15
percent.
``(B) Apprentice to journeyworker ratio.--The
requirement under subparagraph (A)(i) shall be
subject to any applicable requirements for
apprentice-to-journeyworker ratios of the
Department of Labor or the applicable State
apprenticeship agency.
``(C) Participation.--Each contractor and
subcontractor who employs 4 or more individuals
to perform construction, alteration, or repair
work on an applicable project shall employ 1 or
more qualified apprentices to perform such
work.
``(D) Exception.--
``(i) In general.--Notwithstanding
any other provision of this paragraph,
this paragraph shall not apply in the
case of a taxpayer who--
``(I) demonstrates a lack of
availability of qualified
apprentices in the geographic
area of the construction,
alteration, or repair work, and
``(II) makes a good faith
effort to comply with the
requirements of this paragraph.
``(ii) Good faith effort.--For
purposes of clause (i), a taxpayer
shall be deemed to have satisfied the
requirements under such paragraph with
respect to an applicable project if
such taxpayer has requested qualified
apprentices from a registered
apprenticeship program, as defined in
section 3131(e)(3)(B), and such request
has been denied, provided that such
denial is not the result of a refusal
by the contractors or subcontractors
engaged in the performance of
construction, alteration, or repair
work on such applicable project to
comply with the established standards
and requirements of such apprenticeship
program.
``(E) Definitions.--For purposes of this
paragraph--
``(i) Labor hours.--The term `labor
hours' has the meaning given such term
in section 45(b)(9)(E)(i).
``(ii) Qualified apprentice.--The
term `qualified apprentice' has the
meaning given such term in section
45(b)(9)(E)(ii).
``(5) Regulations and guidance.--The Secretary shall
issue such regulations or other guidance as the
Secretary determines necessary or appropriate to carry
out the purposes of this subsection.''.
(e) Increased Applicable Dollar Amount.--
(1) In general.--Section 45Q(b)(1) is amended--
(A) by amending clause (i) of subparagraph
(A) to read as follows:
``(i) for any taxable year beginning
in a calendar year after 2016 and
before 2027--
``(I) for purposes of
paragraph (3) of subsection
(a), $50 for each calendar year
during such period, and
``(II) for purposes of
paragraph (4) of such
subsection, $35 for each
calendar year during such
period, and'',
(B) by redesignating subparagraphs (B) and
(C) as subparagraphs (C) and (D), and
(C) by inserting after subparagraph (A) the
following new subparagraph:
``(B) Inflation adjustment.--In the case of
any taxable year beginning in a calendar year
after 2025, each of the dollar amounts in
subparagraph (A)(i) shall be increased by an
amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year in which the taxable
year begins, determined by substituting
`calendar year 2024' for `calendar year
2016' in subparagraph (A)(ii) thereof.
Any increase determined under the preceding
sentence shall be rounded to the nearest
cent.''.
(f) Effective Dates.--
(1) Extension.--The amendment made by subsection (a)
shall apply to facilities the construction of which
begins after December 31, 2025.
(2) Other amendments.--The amendments made by
subsections (b), (c), (d), and (e) shall apply to
taxable years beginning after December 31, 2021.
SEC. 136108. GREEN ENERGY PUBLICLY TRADED PARTNERSHIPS.
(a) In General.--Section 7704(d)(1)(E) is amended--
(1) by striking ``income and gains derived from the
exploration'' and inserting ``income and gains derived
from--
``(i) the exploration'',
(2) by inserting ``or'' before ``industrial source'',
and
(3) by striking ``, or the transportation or
storage'' and all that follows and inserting the
following:
``(ii) the generation of electric
power or thermal energy exclusively
using any qualified energy resource (as
defined in section 45(c)(1)),
``(iii) the operation of energy
property (as defined in section
48(a)(3), determined without regard to
any date by which the construction of
the facility is required to begin),
``(iv) in the case of a facility
described in paragraph (3) or (7) of
section 45(d) (determined without
regard to any placed in service date or
date by which construction of the
facility is required to begin), the
accepting or processing of open-loop
biomass or municipal solid waste,
``(v) the transportation or storage
of any fuel described in subsection
(b), (c), (d), or (e) of section 6426,
``(vi) the conversion of renewable
biomass (as defined in subparagraph (I)
of section 211(o)(1) of the Clean Air
Act (as in effect on the date of the
enactment of this clause)) into
renewable fuel (as defined in
subparagraph (J) of such section as so
in effect), or the storage or
transportation of such fuel,
``(vii) the production, storage, or
transportation of any fuel which--
``(I) uses as its primary
feedstock carbon oxides
captured from an anthropogenic
source or the atmosphere,
``(II) does not use as its
primary feedstock carbon oxide
which is deliberately released
from naturally occurring
subsurface springs, and
``(III) is determined by the
Secretary, after consultation
with the Secretary of Energy
and the Administrator of the
Environmental Protection
Agency, to achieve a reduction
of not less than a 60 percent
in lifecycle greenhouse gas
emissions (as defined in
section 211(o)(1)(H) of the
Clean Air Act, as in effect on
the date of the enactment of
this clause) compared to
baseline lifecycle greenhouse
gas emissions (as defined in
section 211(o)(1)(C) of such
Act, as so in effect), or
``(viii) a qualified facility (as
defined in section 45Q(d), without
regard to any date by which
construction of the facility is
required to begin).''.
(b) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 2021.
SEC. 136109. ZERO-EMISSION NUCLEAR POWER PRODUCTION CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:
``SEC. 45W. ZERO-EMISSION NUCLEAR POWER PRODUCTION CREDIT.
``(a) Amount of Credit.--For purposes of section 38, the
zero-emission nuclear power production credit for any taxable
year is an amount equal to the amount by which--
``(1) the product of--
``(A) 1.5 cents, multiplied by
``(B) the kilowatt hours of electricity--
``(i) produced by the taxpayer at a
qualified nuclear power facility, and
``(ii) sold by the taxpayer to an
unrelated person during the taxable
year, exceeds
``(2) the reduction amount for such taxable year.
``(b) Definitions.--
``(1) Qualified nuclear power facility.--For purposes
of this section, the term `qualified nuclear power
facility' means any nuclear facility--
``(A) which is owned by the taxpayer and
which uses nuclear energy to produce
electricity,
``(B) which has not received an allocation
under section 45J(b), and
``(C) which is placed in service before the
date of the enactment of this section.
``(2) Reduction amount.--
``(A) In general.--For purposes of this
section, the term `reduction amount' means,
with respect to any qualified nuclear power
facility for any taxable year, the amount equal
to the lesser of--
``(i) the amount determined under
subsection (a)(1), or
``(ii) the amount equal to 80 percent
of the excess of--
``(I) subject to subparagraph
(B), the gross receipts from
any electricity produced by
such facility (including any
electricity services or
products provided in
conjunction with the
electricity produced by such
facility) and sold to an
unrelated person during such
taxable year, over
``(II) the amount equal to
the product of--
``(aa) 2.5 cents,
multiplied by
``(bb) the amount
determined under
subsection (a)(1)(B).
``(B) Treatment of certain receipts.--
``(i) In general.--The amount
determined under subparagraph
(A)(ii)(I) shall include any amount
received by the taxpayer during the
taxable year with respect to the
qualified nuclear power facility from a
zero-emission credit program unless the
amount received by the taxpayer is
subject to reduction--
``(I) by the full amount of
the credit determined under
this section, or
``(II) by any lesser amount
if such amount entirely offsets
the amount received from a
zero-emission credit program.
``(ii) Zero-emission credit
program.--For purposes of this
subparagraph, the term `zero-emission
credit program' means any payments to a
qualified nuclear power facility as a
result of any Federal, State or local
government program for, in whole or in
part, the zero-emission, zero-carbon,
or air quality attributes of any
portion of the electricity produced by
such facility.
``(3) Electricity.--For purposes of this section, the
term `electricity' means the energy produced by a
qualified nuclear power facility from the conversion of
nuclear fuel into electric power.
``(c) Other Rules.--
``(1) Inflation adjustment.--The 1.5 cent amount in
subsection (a)(1)(A) and the 2.5 cent amount in
subsection (b)(2)(A)(ii)(II)(aa) shall each be adjusted
by multiplying such amount by the inflation adjustment
factor (as determined under section 45(e)(2), as
applied by substituting `calendar year 2022' for
`calendar year 1992' in subparagraph (B) thereof) for
the calendar year in which the sale occurs. If any
amount as increased under the preceding sentence is not
a multiple of 0.1 cent, such amount shall be rounded to
the nearest multiple of 0.1 cent.
``(2) Special rules.--Rules similar to the rules of
paragraphs (1), (3), (4), and (5) of section 45(e)
shall apply for purposes of this section.
``(3) Denial of double benefit.--No credit shall be
allowed under section 48E for any power production for
which a credit is taken under this section.
``(d) Wage and Apprenticeship Requirements.--
``(1) Base credit amount and increased credit amount
for qualified nuclear power facilities.--
``(A) In general.--In the case of any
qualified nuclear power facility which does not
satisfy the requirements of subparagraph (B),
the amount of the credit determined under
subsection (a) and the 2.5 cent amount in
subsection (b)(2)(A)(ii)(II)(aa) shall be 20
percent of such amount (determined without
regard to this sentence).
``(B) Increased credit for certain facilities
meeting project requirements.--
``(i) In general.--In the case of any
qualified nuclear power facility which
meets the project requirements of this
subparagraph, subparagraph (A) shall
not apply.
``(ii) Project requirements.--A
project meets the requirements of this
subparagraph if it is one of the
following:
``(I) A project with a
maximum net output of less than
1 megawatt.
``(II) A project which
satisfies the requirements of
paragraphs (2) and (3).
``(2) Prevailing wage requirements.--
``(A) In general.--The taxpayer shall ensure
that any laborers and mechanics employed by
contractors and subcontractors in the
alteration or repair of a facility shall be
paid wages at rates not less than the
prevailing rates for construction, alteration,
or repair of a similar character in the
locality as most recently determined by the
Secretary of Labor, in accordance with
subchapter IV of chapter 31 of title 40, United
States Code.
``(B) Correction and penalty related to
failure to satisfy wage requirements.--
``(i) In general.--In the case of any
taxpayer which fails to satisfy the
requirement under subparagraph (A),
such taxpayer shall be deemed to have
satisfied such requirement under such
subparagraph with respect to such
facility for any year if, with respect
to any laborer or mechanic who was paid
wages at a rate below the rate
described in such subparagraph for any
period during such year, such
taxpayer--
``(I) makes payment to such
laborer or mechanic in an
amount equal to the sum of--
``(aa) an amount
equal to the difference
between the amount of
wages paid to such
laborer or mechanic
during such period,
and--
``(AA) the
amount of wages
required to be
paid to such
laborer or
mechanic
pursuant to
such
subparagraph
during such
period, plus
``(BB)
interest on the
amount
determined
under item (aa)
at the
underpayment
rate
established
under section
6621 for the
period
described in
such item, and
``(II) makes payment to the
Secretary of a penalty in an
amount equal to the product
of--
``(aa) $5,000,
multiplied by
``(bb) the total
number of laborers and
mechanics who were paid
wages at a rate below
the rate described in
subparagraph (A) for
any period during such
year.
``(ii) Penalty assessed as tax.--The
penalty described in clause (i)(II)
shall be treated in the same manner as
a penalty imposed under subchapter B of
chapter 68.
``(3) Apprenticeship requirements.--The requirements
described in this subparagraph with respect to any
qualified nuclear power facility are as follows:
``(A) Labor hours.--
``(i) Percentage of total labor
hours.--All contractors and
subcontractors engaged in the
performance of alteration or repair
work on any qualified nuclear power
facility shall, subject to subparagraph
(B), ensure that not less than the
applicable percentage of the total
labor hours of such work be performed
by qualified apprentices.
``(ii) Applicable percentage.--For
purposes of paragraph (1), the
applicable percentage shall be--
``(I) in the case of any
applicable project the
construction of which begins
before January 1, 2023, 5
percent,
``(II) in the case of any
applicable project the
construction of which begins
after December 31, 2022, and
before January 1, 2024, 10
percent, and
``(III) in the case of any
applicable project the
construction of which begins
after December 31, 2023, 15
percent.
``(B) Apprentice to journeyworker ratio.--The
requirement under subparagraph (A)(i) shall be
subject to any applicable requirements for
apprentice-to-journeyworker ratios of the
Department of Labor or the applicable State
apprenticeship agency.
``(C) Participation.--Each contractor and
subcontractor who employs 4 or more individuals
to perform construction, alteration, or repair
work on an applicable project shall employ 1 or
more qualified apprentices to perform such
work.
``(D) Exception.--
``(i) In general.--Notwithstanding
any other provision of this paragraph,
this paragraph shall not apply in the
case of a taxpayer who--
``(I) demonstrates a lack of
availability of qualified
apprentices in the geographic
area of the construction,
alteration, or repair work, and
``(II) makes a good faith
effort to comply with the
requirements of this paragraph.
``(ii) Good faith effort.--For
purposes of clause (i), a taxpayer
shall be deemed to have satisfied the
requirements under such paragraph with
respect to an applicable project if
such taxpayer has requested qualified
apprentices from a registered
apprenticeship program, as defined in
section 3131(e)(3)(B), and such request
has been denied, provided that such
denial is not the result of a refusal
by the contractors or subcontractors
engaged in the performance of
construction, alteration, or repair
work on such applicable project to
comply with the established standards
and requirements of such apprenticeship
program.
``(E) Definitions.--For purposes of this
paragraph--
``(i) Labor hours.--The term `labor
hours' has the meaning given such term
in section 45(b)(9)(E)(i).
``(ii) Qualified apprentice.--The
term `qualified apprentice' has the
meaning given such term in section
45(b)(9)(E)(ii).
``(4) Regulations and guidance.--The Secretary shall
issue such regulations or other guidance as the
Secretary determines necessary or appropriate to carry
out the purposes of this subsection.
``(e) Termination.--This section shall not apply to taxable
years beginning after December 31, 2026.''.
(b) Conforming Amendments.--
(1) Section 38(b) of the Internal Revenue Code of
1986 is amended--
(A) in paragraph (36), by striking ``plus''
at the end,
(B) in paragraph (37), by striking the period
at the end and inserting ``, plus'', and
(C) by adding at the end the following new
paragraph:
``(38) the zero-emission nuclear power production
credit determined under section 45W(a).''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1 of such Code is amended by
adding at the end the following new item:
``Sec. 45W. Zero-emission nuclear power production credit.''.
(c) Elective Payment of Credit.--Section 6417(b), as added by
the preceding provisions of this Act, is amended by adding at
the end the following new paragraph:
``(8) The zero-emission nuclear power production
credit determined under section 45W.''.
(d) Effective Date.--This section shall apply to electricity
produced and sold after December 31, 2021, in taxable years
beginning after such date.
PART 2--RENEWABLE FUELS
SEC. 136201. EXTENSION OF INCENTIVES FOR BIODIESEL, RENEWABLE DIESEL
AND ALTERNATIVE FUELS.
(a) Biodiesel and Renewable Diesel Credit.--Section 40A(g) is
amended by striking ``December 31, 2022'' and inserting
``December 31, 2031''.
(b) Biodiesel Mixture Credit.--
(1) In general.--Section 6426(c)(6) is amended by
striking ``December 31, 2022'' and inserting ``December
31, 2031''.
(2) Fuels not used for taxable purposes.--Section
6427(e)(6)(B) is amended by striking ``December 31,
2022'' and inserting ``December 31, 2031''.
(c) Alternative Fuel Credit.--Section 6426(d)(5) is amended
by striking ``December 31, 2021'' and inserting ``December 31,
2031''.
(d) Alternative Fuel Mixture Credit.--Section 6426(e)(3) is
amended by striking ``December 31, 2021'' and inserting
``December 31, 2031''.
(e) Payments for Alternative Fuels.--Section 6427(e)(6)(C) is
amended by striking ``December 31, 2021'' and inserting
``December 31, 2031''.
(f) Effective Date.--The amendments made by this section
shall apply to fuel sold or used after December 31, 2021.
SEC. 136202. EXTENSION OF SECOND GENERATION BIOFUEL INCENTIVES.
(a) In General.--Section 40(b)(6)(J)(i) is amended by
striking ``2022'' and inserting ``2032''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to qualified second generation biofuel production
after December 31, 2021.
SEC. 136203. SUSTAINABLE AVIATION FUEL CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 is amended by inserting after section 40A the
following new section:
``SEC. 40B. SUSTAINABLE AVIATION FUEL CREDIT.
``(a) In General.--For purposes of section 38, the
sustainable aviation fuel credit for the taxable year is, with
respect to any sale or use of a qualified mixture which occurs
during such taxable year, an amount equal to the product of--
``(1) the number of gallons of sustainable aviation
fuel in such mixture, multiplied by
``(2) the sum of--
``(A) $1.25, plus
``(B) the applicable supplementary amount
with respect to such sustainable aviation fuel.
``(b) Applicable Supplementary Amount.--For purposes of this
section, the term `applicable supplementary amount' means, with
respect to any sustainable aviation fuel, an amount equal to
$0.01 for each percentage point by which the lifecycle
greehouse gas emissions reduction percentage with respect to
such fuel exceeds 50 percent. In no event shall the applicable
supplementary amount determined under this subsection exceed
$0.50.
``(c) Qualified Mixture.--For purposes of this section, the
term `qualified mixture' means a mixture of sustainable
aviation fuel and kerosene if--
``(1) such mixture is produced by the taxpayer in the
United States,
``(2) such mixture is used by the taxpayer (or sold
by the taxpayer for use) in an aircraft,
``(3) such sale or use is in the ordinary course of a
trade or business of the taxpayer, and
``(4) the transfer of such mixture to the fuel tank
of such aircraft occurs in the United States.
``(d) Sustainable Aviation Fuel.--For purposes of this
section, the term `sustainable aviation fuel' means liquid fuel
which--
``(1) meets the requirements of--
``(A) ASTM International Standard D7566, or
``(B) the Fischer Tropsch provisions of ASTM
International Standard D1655, Annex A1,
``(2) is not derived from palm fatty distillates or
petroleum, and
``(3) has been certified in accordance with
subsection (e) as having a lifecycle greenhouse gas
emissions reduction percentage of at least 50 percent.
``(e) Lifecycle Greenhouse Gas Emissions Reduction
Percentage.--For purposes of this section--
``(1) In general.--The term `lifecycle greenhouse gas
emissions reduction percentage' means, with respect to
any sustainable aviation fuel, the percentage reduction
in lifecycle greenhouse gas emissions achieved by such
fuel in comparison with petroleum-based jet fuel as
stated in a certification which meets the requirements
of paragraphs (2).
``(2) Certification methodology.--A certification
meets the requirements of this paragraph if such
certification (including the methodology and process of
such certification) conforms with all requirements
(including requirements related to traceability and
information transmission) of the most recent Carbon
Offsetting and Reduction Scheme for International
Aviation which has been adopted by the International
Civil Aviation Organization with the agreement of the
United States.
``(3) Option to obtain certification from
secretary.--Not later than 24 months after the date of
the enactment of this section, the Secretary, after
consultation with the Secretary of Energy and the
Administrator of the Environmental Protection Agency,
shall establish procedures pursuant to which taxpayers
may obtain a certification which meets the requirements
of paragraph (2) from the Secretary.
``(f) Registration of Sustainable Aviation Fuel Producers.--
No credit shall be allowed under this section with respect to
any sustainable aviation fuel unless the producer of such fuel
has entered into an agreement with the Secretary to provide the
Secretary such information with respect to such fuel as the
Secretary may require for purposes of carrying out this
section.
``(g) Coordination With Credit Against Excise Tax.--The
amount of the credit determined under this section with respect
to any sustainable aviation fuel shall, under rules prescribed
by the Secretary, be properly reduced to take into account any
benefit provided with respect to such sustainable aviation fuel
solely by reason of the application of section 6426 or 6427(e).
``(h) Termination.--This section shall not apply to any sale
or use after December 31, 2031.''.
(b) Credit Made Part of General Business Credit.-- Section
38(b) is amended by striking ``plus'' at the end of paragraph
(37), by striking the period at the end of paragraph (38) and
inserting ``, plus'', and by inserting after paragraph (38) the
following new paragraph:
``(39) the sustainable aviation fuel credit
determined under section 40B.''.
(c) Coordination With Biodiesel Incentives.--
(1) In general.--Section 40A(d)(1) is amended by
inserting ``or 40B'' after ``determined under section
40''.
(2) Conforming amendment.--Section 40A(f) is amended
by striking paragraph (4).
(d) Sustainable Aviation Fuel Added to Credit for Alcohol
Fuel, Biodiesel, and Alternative Fuel Mixtures.--
(1) In general.--Section 6426 is amended by adding at
the end the following new subsection:
``(k) Sustainable Aviation Fuel Credit.--
``(1) In general.--For purposes of this section, the
sustainable aviation fuel credit for the taxable year
is, with respect to any sale or use of a qualified
mixture, an amount equal to the product of--
``(A) the number of gallons of sustainable
aviation fuel in such mixture, multiplied by
``(B) the sum of--
``(i) $1.25, plus
``(ii) the applicable supplementary
amount with respect to such sustainable
aviation fuel.
``(2) Applicable supplementary amount.--For purposes
of this subsection, the term `applicable supplementary
amount' has the meaning given such term in section
40B(b).
``(3) Other definitions.--Any term used in this
subsection which is also used in section 40B shall have
the meaning given such term by section 40B.
``(4) Registration requirement.--For purposes of this
subsection, rules similar to the rules of section
40B(f) shall apply.''.
(2) Conforming amendments.--
(A) Section 6426 is amended--
(i) in subsection (a)(1), by striking
``and (e)'' and inserting ``(e), and
(k)'', and
(ii) in subsection (h), by striking
``under section 40 or 40A'' and
inserting ``under section 40, 40A, or
40B''.
(B) Section 6427(e)(6) is amended by striking
the ``and'' at the end of subparagraph (C), by
striking the period at the end of subparagraph
(D) and inserting ``, and'', and by adding at
the end the following new subparagraph:
``(E) any qualified mixture of sustainable
aviation fuel (as defined in section
6426(k)(3)) sold or used after December 31,
2031.''.
(e) Guidance.--Under rules prescribed by the Secretary of the
Treasury (or the Secretary's delegate), the amount of the
credit allowed under section 40B of the Internal Revenue Code
of 1986 (as added by this subsection) shall be properly reduced
to take into account any benefit provided with respect to
sustainable aviation fuel (as defined in such section 40B) by
reason of the application of section 6426 or section 6427(e).
(f) Amount of Credit Included in Gross Income.--Section 87 is
amended by striking ``and'' in paragraph (1), by striking the
period at the end of paragraph (2) and inserting ``, and'', and
by adding at the end the following new paragraph:
``(3) the sustainable aviation fuel credit determined
with respect to the taxpayer for the taxable year under
section 40B(a).''.
(g) Effective Date.--The amendments made by this section
shall apply to fuel sold or used after December 31, 2022.
SEC. 136204. CLEAN HYDROGEN.
(a) Credit for Production of Clean Hydrogen.--
(1) In general.--Subpart D of part IV of subchapter A
of chapter 1 is amended by adding at the end the
following new section:
``SEC. 45X. CREDIT FOR PRODUCTION OF CLEAN HYDROGEN.
``(a) Amount of Credit.--For purposes of section 38, the
clean hydrogen production credit for any taxable year is an
amount equal to the product of--
``(1) the applicable amount, multiplied by
``(2) the kilograms of qualified clean hydrogen
produced by the taxpayer during such taxable year at a
qualified clean hydrogen production facility during the
10-year period beginning on the date such facility was
originally placed in service.
``(b) Applicable Amount.--
``(1) In general.--For purposes of subsection (a)(1),
the applicable amount shall be an amount equal to the
applicable percentage of $3.00. If any amount as
determined under the preceding sentence is not a
multiple of 0.1 cent, such amount shall be rounded to
the nearest multiple of 0.1 cent.
``(2) Applicable percentage.--For purposes of
paragraph (1), the term `applicable percentage' means--
``(A) in the case of any qualified clean
hydrogen which is produced through a process
that, as compared to hydrogen produced by
steam-methane reforming, achieves a percentage
reduction in lifecycle greenhouse gas emissions
which is less than 75 percent, 20 percent,
``(B) in the case of any qualified clean
hydrogen which is produced through a process
that, as compared to hydrogen produced by
steam-methane reforming, achieves a percentage
reduction in lifecycle greenhouse gas emissions
which is not less than 75 percent and less than
85 percent, 25 percent,
``(C) in the case of any qualified clean
hydrogen which is produced through a process
that, as compared to hydrogen produced by
steam-methane reforming, achieves a percentage
reduction in lifecycle greenhouse gas emissions
which is not less than 85 percent and less than
95 percent, 34 percent, and
``(D) in the case of any qualified clean
hydrogen which is produced through a process
that, as compared to hydrogen produced by
steam-methane reforming, achieves a percentage
reduction in lifecycle greenhouse gas emissions
which is not less than 95 percent, 100 percent.
``(3) Inflation adjustment.--The $3.00 amount in
paragraph (1) shall be adjusted by multiplying such
amount by the inflation adjustment factor (as
determined under section 45(e)(2), determined by
substituting `2020' for `1992' in subparagraph (B)
thereof) for the calendar year in which the qualified
clean hydrogen is produced. If any amount as increased
under the preceding sentence is not a multiple of 0.1
cent, such amount shall be rounded to the nearest
multiple of 0.1 cent.
``(c) Definitions.--For purposes of this section--
``(1) Lifecycle greenhouse gas emissions.--For
purposes of this section, the term `lifecycle
greenhouse gas emissions' has the same meaning given
such term under subparagraph (H) of section 211(o)(1)
of the Clean Air Act (42 U.S.C. 7545(o)(1)), as in
effect on the date of enactment of this section, as
related to the full fuel lifecycle through the point of
hydrogen production.
``(2) Qualified clean hydrogen.--
``(A) In general.--The term `qualified clean
hydrogen' means hydrogen which is produced
through a process that, as compared to hydrogen
produced by steam-methane reforming, achieves a
percentage reduction in lifecycle greenhouse
gas emissions which is not less than 40
percent.
``(B) Additional requirements.--Such term
shall not include any hydrogen unless such
hydrogen is produced--
``(i) in the United States (as
defined in section 638(1) or a
possession of the United States (as
defined in section 638(2)),
``(ii) in the ordinary course of a
trade or business of the taxpayer, and
``(iii) for sale or use.
``(3) Qualified clean hydrogen production facility.--
``(A) In general.--The term `qualified clean
hydrogen production facility' means a facility
owned by the taxpayer which produces qualified
clean hydrogen and which meets the requirements
of subparagraph (B).
``(B) Termination.--The term `qualified clean
hydrogen production facility' shall not include
any facility the construction of which begins
after December 31, 2028.
``(4) Steam-methane reforming.--The term `steam-
methane reforming' means a hydrogen production process
in which high-temperature steam is used to produce
hydrogen from natural gas (other than natural gas
derived from biomass (as defined in section 45K(c)(3)
as in effect on the date of the enactment of this
section), without carbon capture and sequestration.
``(d) Special Rules.--
``(1) Treatment of facilities owned by more than 1
taxpayer.--Rules similar to the rules section 45(e)(3)
shall apply for purposes of this section.
``(2) Coordination with credit for carbon oxide
sequestration.--No credit shall be allowed under this
section with respect to any qualified clean hydrogen
produced at a facility which includes property for
which a credit is allowed under section 45Q.
``(e) Base Credit Amount and Increased Credit Amount for
Qualified Clean Hydrogen Production Facilities.--
``(1) In general.--In the case of any qualified clean
hydrogen production facility which does not satisfy the
requirements of paragraph (2)(B), the amount of the
credit determined under subsection (a) shall be 20
percent of such amount (determined without regard to
this sentence).
``(2) Increased credit for certain facilities meeting
project requirements.--
``(A) In general.--In the case of any
qualified facility which meets the project
requirements of this paragraph, paragraph (1)
shall not apply.
``(B) Project requirements.--A project meets
the requirements of this subparagraph if it is
one of the following:
``(i) A project with a maximum net
output of less than 1 megawatt.
``(ii) A project which commences
construction prior to the date of the
enactment of this paragraph.
``(iii) A project which satisfies the
requirements of paragraphs (3) and (4).
``(3) Prevailing wage requirements.--
``(A) In general.--The requirements described
in this subparagraph with respect to any
qualified clean hydrogen production facility
are that the taxpayer shall ensure that any
laborers and mechanics employed by contractors
and subcontractors in--
``(i) the construction of such
facility, and
``(ii) for the 10-year period
beginning on the date the facility was
originally placed in service, the
alteration or repair of such facility,
shall be paid wages at rates not less than the
prevailing rates for construction, alteration,
or repair of a similar character in the
locality as most recently determined by the
Secretary of Labor, in accordance with
subchapter IV of chapter 31 of title 40, United
States Code.
``(B) Correction and penalty related to
failure to satisfy wage requirements.--Rules
similar to the rules of section 45(b)(8)(B)
shall apply for purposes of this subparagraph.
``(4) Apprenticeship requirements.--Rules similar to
the rules of section 45(b)(9) shall apply for purposes
of this paragraph.
``(5) Regulations and guidance.--The Secretary shall
issue such regulations or other guidance as the
Secretary determines necessary or appropriate to carry
out the purposes of this subsection.
``(f) Regulations.--Not later than 1 year after the date of
enactment of this section, the Secretary, after consultation
with the Secretary of Energy and the Administrator of the
Environmental Protection Agency, shall issue regulations or
other guidance to carry out the purposes of this section,
including regulations or other guidance--
``(1) for determining lifecycle greenhouse gas
emissions, and
``(2) which require verification by unrelated third
parties of the production and sale or use of qualified
clean hydrogen with respect to which credit is
otherwise allowed under this section.''.
(2) Elective payment of credit.--Section 6417(b), as
added by the preceding provisions of this Act, is
amended by adding at the end the following new
paragraph:
``(9) The credit for production of clean hydrogen
determined under section 45X.''.
(3) Conforming amendments.--
(A) Section 38(b) is amended--
(i) in paragraph (38), by striking
``plus'' at the end,
(ii) in paragraph (39), by striking
the period at the end and inserting ``,
plus'', and
(iii) by adding at the end the
following new paragraph:
``(40) the clean hydrogen production credit
determined under section 45X(a).''.
(B) The table of sections for subpart D of
part IV of subchapter A of chapter 1 amended by
adding at the end the following new item:
``Sec. 45X. Credit for production of clean hydrogen.''.
(4) Effective date.--The amendments made by this
subsection shall apply to hydrogen placed in service
after December 31, 2021.
(b) Credit for Electricity Produced From Renewable Resources
Allowed if Electricity Is Used to Produce Clean Hydrogen.--
(1) In general.--Section 45(e) is amended by adding
at the end the following new paragraph:
``(13) Special rule for electricity used at a
qualified clean hydrogen production facility.--
Electricity produced by the taxpayer shall be treated
as sold by such taxpayer to an unrelated person during
the taxable year if such electricity is used during
such taxable year by the taxpayer or a person related
to the taxpayer at a qualified clean hydrogen
production facility (as defined in section 45X(d)(3))
to produce qualified clean hydrogen (as defined in
section 45X(d)(2)) during the 10 year period after such
facility is placed in service. The Secretary shall
issue such regulations or other guidance as the
Secretary determines appropriate to carry out the
purposes of this paragraph, including regulations or
other guidance to require verification by unrelated
third parties of the production and use of electricity
to which this paragraph applies.''.
(2) Effective date.--The amendment made by this
subsection shall apply to electricity produced after
December 31, 2021.
(c) Election to Treat Clean Hydrogen Production Facilities as
Energy Property.--
(1) In general.--Section 48(a) is amended by adding
at the end the following new paragraph:
``(8) Election to treat clean hydrogen production
facilities as energy property.--
``(A) In general.--In the case of any
qualified property (as defined in paragraph
(5)(D)) which is part of a specified clean
hydrogen production facility--
``(i) such property shall be treated
as energy property for purposes of this
section, and
``(ii) the energy percentage with
respect to such property is--
``(I) in the case of a
facility which is designed and
reasonably expected to produce
qualified clean hydrogen which
is described in a subparagraph
(A) of section 45X(b)(2), 6
percent,
``(II) in the case of a
facility which is designed and
reasonably expected to produce
qualified clean hydrogen which
is described in a subparagraph
(B) of such section, 7.5
percent,
``(III) in the case of a
facility which is designed and
reasonably expected to produce
qualified clean hydrogen which
is described in a subparagraph
(C) of such section, 10.2
percent, and
``(IV) in the case of a
facility which is designed and
reasonably expected to produce
qualified clean hydrogen which
is described in a subparagraph
(D) of such section, 30
percent.
``(B) Denial of production credit.--No credit
shall be allowed under section 45X for any
taxable year with respect to any specified
clean hydrogen production facility.
``(C) Specified clean hydrogen production
facility.--For purposes of this paragraph, the
term `specified clean hydrogen production
facility' means any qualified clean hydrogen
production facility (as defined in section
45X(d)(3)) or any portion of such facility--
``(i) which is placed in service
after December 31, 2021, and
``(ii) with respect to which--
``(I) no credit has been
allowed under section 45X or
45Q, and
``(II) the taxpayer makes an
irrevocable election to have
this paragraph apply.
``(D) Qualified clean hydrogen.--For purposes
of this paragraph, the term `qualified clean
hydrogen' has the meaning given such term by
section 45X(d)(2).
``(E) Regulations.--The Secretary, after
consultation with the Secretary of Energy and
the Administrator of the Environmental
Protection Agency, shall issue such regulations
or other guidance as the Secretary determines
necessary or appropriate to carry out the
purposes of this section, including regulations
or other guidance which--
``(i) requires verification by one or
more unrelated third parties that the
facility produces hydrogen which is
consistent with the hydrogen that such
facility was designed and expected to
produce under subparagraph (A)(ii), and
``(ii) recaptures so much of any
credit allowed under this section as
exceeds the amount of the credit which
would have been allowed if the expected
production were consistent with the
actual verified production (or all of
the credit so allowed in the absence of
such verification).''.
(2) Effective date.--The amendments made by this
section shall apply to periods after December 31, 2021,
under rules similar to the rules of section 48(m) of
the Internal Revenue Code of 1986 (as in effect on the
day before the date of the enactment of the Revenue
Reconciliation Act of 1990).
(d) Termination of Excise Tax Credit for Hydrogen.--
(1) In general.--Section 6426(d)(2) is amended by
striking subparagraph (D) and by redesignating
subparagraphs (E), (F), and (G) as subparagraphs (D),
(E), and (F), respectively.
(2) Conforming amendment.--Section 6426(e)(2) is
amended by striking ``(F)'' and inserting ``(E)''.
(3) Effective date.--The amendments made by this
subsection shall apply to fuel sold or used after
December 31, 2021.
PART 3--GREEN ENERGY AND EFFICIENCY INCENTIVES FOR INDIVIDUALS
SEC. 136301. EXTENSION, INCREASE, AND MODIFICATIONS OF NONBUSINESS
ENERGY PROPERTY CREDIT.
(a) Extension of Credit.--Section 25C(g)(2) is amended by
striking ``December 31, 2021'' and inserting ``December 31,
2031''.
(b) Increase in Credit Percentage for Qualified Energy
Efficiency Improvements.--Section 25C(a)(1) is amended by
striking ``10 percent'' and inserting ``30 percent''.
(c) Application of Annual Limitation in Lieu of Lifetime
Limitation.--Section 25C(b) is amended to read as follows:
``(b) Limitations.--
``(1) In general.--The credit allowed under this
section with respect to any taxpayer for any taxable
year shall not exceed $1,200.
``(2) Windows.--The credit allowed under this section
by reason of subsection (a)(1) with respect to any
taxpayer for any taxable year shall not exceed--
``(A) in the aggregate with respect to all
exterior windows and skylights which are not
described in subparagraph (B), $200,
``(B) in the aggregate with respect to all
exterior windows and skylights which meet the
standard for the most efficient certification
under applicable Energy Star program
requirements, the excess (if any) of $600 over
the credit so allowed with respect to all
windows and skylights taken into account under
subparagraph (A).
``(3) Doors.--The credit allowed under this section
by reason of subsection (a)(1) with respect to any
taxpayer for any taxable year shall not exceed--
``(A) $250 in the case of any exterior door,
and
``(B) $500 in the aggregate with respect to
all exterior doors.''.
(d) Modifications Related to Qualified Energy Efficiency
Improvements.--
(1) Standards for energy efficient building envelope
components.--Section 25C(c)(2) is amended by striking
``meets--'' and all that follows through the period at
the end and inserting the following: ``meets--
``(A) in the case of an exterior window, a
skylight, or an exterior door, applicable
Energy Star program requirements, and
``(B) in the case of any other component, the
prescriptive criteria for such component
established by the most recent International
Energy Conservation Code standard in effect as
of the beginning of the calendar year which is
2 years prior to the calendar year in which
such component is placed in service.''.
(2) Roofs not treated as building envelope
components.--Section 25C(c)(3) is amended by adding
``and'' at the end of subparagraph (B), by striking ``,
and'' at the end of subparagraph (C) and inserting a
period, and by striking subparagraph (D).
(3) Air barrier insulation added to definition of
building envelope component.--Section 25C(c)(3)(A) is
amended by striking ``material or system'' and
inserting ``material or system, including air sealing
material or system,''.
(e) Modification of Residential Energy Property
Expenditures.--Section 25C(d) is amended to read as follows:
``(d) Residential Energy Property Expenditures.--For purposes
of this section--
``(1) In general.--The term `residential energy
property expenditures' means expenditures made by the
taxpayer for qualified energy property which is--
``(A) installed on or in connection with a
dwelling unit located in the United States and
used as a residence by the taxpayer, and
``(B) originally placed in service by the
taxpayer.
Such term includes expenditures for labor costs
properly allocable to the onsite preparation, assembly,
or original installation of the property.
``(2) Qualified energy property.--The term `qualified
energy property' means any of the following which meet
or exceed the highest efficiency tier (not including
any advanced tier) established by the Consortium for
Energy Efficiency which is in effect as of the
beginning of the calendar year in which the property is
placed in service:
``(A) An electric heat pump water heater.
``(B) An electric heat pump.
``(C) A central air conditioner.
``(D) A natural gas, propane, or oil water
heater.
``(E) A natural gas, propane, or oil furnace
or hot water boiler.''.
(f) Home Energy Audits.--
(1) In general.--Section 25C(a) is amended by
striking ``and'' at the end of paragraph (1), by
striking the period at the end of paragraph (2) and
inserting ``, and'', and by adding at the end the
following new paragraph:
``(3) 30 percent of the amount paid or incurred by
the taxpayer during the taxable year for home energy
audits.''.
(2) Limitation.--Section 25C(b), as amended by
subsection (c), is amended adding at the end the
following new paragraph:
``(5) Home energy audits.--
``(A) Dollar limitation.--The amount of the
credit allowed under this section by reason of
subsection (a)(3) shall not exceed $150.
``(B) Substantiation requirement.--No credit
shall be allowed under this section by reason
of subsection (a)(3) unless the taxpayer
includes with the taxpayer's return of tax such
information or documentation as the Secretary
may require.''.
(3) Home energy audits.--
(A) In general.--Section 25C, as amended by
subsections (a), is amended by redesignating
subsections (e), (f), and (g), as subsections
(f), (g), and (h), respectively, and by
inserting after subsection (d) the following
new subsection:
``(e) Home Energy Audits.--For purposes of this section, the
term `home energy audit' means an inspection and written report
with respect to a dwelling unit located in the United States
and owned or used by the taxpayer as the taxpayer's principal
residence (within the meaning of section 121) which--
``(1) identifies the most significant and cost-
effective energy efficiency improvements with respect
to such dwelling unit, including an estimate of the
energy and cost savings with respect to each such
improvement, and
``(2) is conducted and prepared by a home energy
auditor that meets the certification or other
requirements specified by the Secretary (after
consultation with the Secretary of Energy and the
Administrator of the Environmental Protection Agency
and not later than 180 days after the date of the
enactment of this subsection) in regulations or other
guidance.''.
(B) Conforming amendment.--Section
1016(a)(33) is amended by striking ``section
25C(f)'' and inserting ``section 25C(g)''.
(4) Lack of substantiation treated as mathematical or
clerical error.--Section 6213(g)(2) is amended--
(A) in subparagraph (P), by striking ``and''
at the end,
(B) in subparagraph (Q), by striking the
period at the end and inserting ``, and'', and
(C) by adding at the end the following:
``(R) an omission of correct information or
documentation required under section
25C(b)(5)(B) (relating to home energy audits)
to be included on a return.''.
(g) Identification Number Requirement.--
(1) In general.--Section 25C, as amended by
subsections (a) and (f), is amended by redesignating
subsection (h) as subsection (i) and by inserting after
subsection (g) the following new subsection:
``(h) Product Identification Number Requirement.--
``(1) In general.--No credit shall be allowed under
subsection (a) with respect to any item of specified
property placed in service after December 31, 2023,
unless--
``(A) such item is produced by a qualified
manufacturer, and
``(B) the taxpayer includes the qualified
product identification number of such item on
the return of tax for the taxable year.
``(2) Qualified product identification number.--For
purposes of this section, the term `qualified product
identification number' means, with respect to any item
of specified property, the product identification
number assigned to such item by the qualified
manufacturer pursuant to the methodology referred to in
paragraph (3).
``(3) Qualified manufacturer.--
``(A) In general.--For purposes of this
section, the term `qualified manufacturer'
means any manufacturer of specified property
which enters into an agreement with the
Secretary which provides that such manufacturer
will--
``(i) assign a product identification
number to each item of specified
property produced by such manufacturer
utilizing a methodology that will
ensure that such number (including any
alphanumeric) is unique to each such
item (by utilizing numbers or letters
which are unique to such manufacturer
or by such other method as the
Secretary may provide),
``(ii) label such item with such
number in such manner as the Secretary
may provide, and
``(iii) make periodic written reports
to the Secretary (at such times and in
such manner as the Secretary may
provide) of the product identification
numbers so assigned and including such
information as the Secretary may
require with respect to the item of
specified property to which such number
was so assigned.
``(B) Consultation with doe and epa.--The
Secretary, after consultation with the
Secretary of Energy and the Administrator of
the Environmental Protection Agency, shall
establish procedures for manufacturers and
consumers to meet the requirements for product
identification numbers under subparagraph (A).
``(4) Specified property.--For purposes of this
subsection, the term `specified property' means any
qualified energy property and any property described in
subparagraph (B) or (C) of subsection (c)(3).''.
(2) Omission of correct product identification number
treated as mathematical or clerical error.--Section
6213(g)(2), as amended by the preceding provisions of
this Act, is amended--
(A) in subparagraph (Q), by striking ``and''
at the end,
(B) in subparagraph (R), by striking the
period at the end and inserting ``, and'', and
(C) by adding at the end the following:
``(S) an omission of a correct product
identification number required under section
25C(h) (relating to credit for nonbusiness
energy property) to be included on a return.''.
(h) Effective Dates.--
(1) In general.--Except as otherwise provided by this
subsection, the amendments made by this section shall
apply to property placed in service after December 31,
2021.
(2) Home energy audits.--The amendments made by
subsection (f) shall apply to amounts paid or incurred
after December 31, 2021.
(3) Identification number requirement.--The
amendments made subsection (g) shall apply to property
placed in service after December 31, 2023.
SEC. 136302. RESIDENTIAL ENERGY EFFICIENT PROPERTY.
(a) Extension of Credit.--
(1) In general.--Section 25D(h) is amended by
striking ``December 31, 2023'' and inserting ``December
31, 2033''.
(2) Application of phaseout.--Section 25D(g) is
amended--
(A) by striking ``before January 1, 2023'' in
paragraph (2) and inserting ``before January 1,
2022'',
(B) by striking ``and'' at the end of
paragraph (2),
(C) by redesignating paragraph (3) as
paragraph (5) and by inserting after paragraph
(2) the following new paragraphs:
``(3) in the case of property placed in service after
December 31, 2021, and before January 1, 2032, 30
percent,
``(4) in the case of property placed in service after
December 31, 2031, and before January 1, 2033, 26
percent, and'', and
(D) by striking ``December 31, 2022, and
before January 1, 2024'' in paragraph (5) (as
so redesignated) and inserting ``December 31,
2032, and before January 1, 2034''.
(b) Residential Energy Efficient Property Credit for Battery
Storage Technology.--
(1) In general.--Section 25D(a) is amended by
striking ``and'' at the end of paragraph (5) and by
inserting after paragraph (6) the following new
paragraph:
``(7) the qualified battery storage technology
expenditures,''.
(2) Qualified battery storage technology
expenditure.--Section 25D(d) is amended by adding at
the end the following new paragraph:
``(7) Qualified battery storage technology
expenditure.--The term `qualified battery storage
technology expenditure' means an expenditure for
battery storage technology which--
``(A) is installed in connection with a
dwelling unit located in the United States and
used as a residence by the taxpayer, and
``(B) has a capacity of not less than 3
kilowatt hours.''.
(c) Effective Date.--The amendments made by this section
shall apply to expenditures made after December 31, 2021.
SEC. 136303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
(a) Placed in Service Requirement.--Section 179D(c)(2) is
amended by striking ``the date that is 2 years before the date
that construction of such property begins'' and inserting ``the
date that is 2 years before the date such property is placed
into service''.
(b) Temporary Increase in Deduction, etc..--Section 179D is
amended by adding at the end the following:
``(i) Temporary Rules.--
``(1) Period of application.--The provisions of this
subsection shall apply only to taxable years beginning
after December 31, 2021, and before January 1, 2032.
``(2) Modification of efficiency standard.--
Subsection (c)(1)(D) shall be applied by substituting
`25' for `50'.
``(3) Maximum amount of deduction.--
``(A) In general.--The deduction under
subsection (a) with respect to any building for
any taxable year shall not exceed the excess
(if any) of--
``(i) the product of--
``(I) the applicable dollar
value, and
``(II) the square footage of
the building, over
``(ii) the aggregate amount of the
deductions under subsection (a) and
paragraph (6) with respect to the
building for the 3 taxable years
immediately preceding such taxable year
(or, in the case of any such deduction
allowable to a person other than the
taxpayer, for any taxable year ending
during the 4-taxable-year period ending
with such taxable year).
``(B) Applicable dollar value.--For purposes
of paragraph (3)(A)(i), the applicable dollar
value shall be an amount equal to $2.50
increased (but not above $5.00) by $0.10 for
each percentage point by which the total annual
energy and power costs for the building are
certified to be reduced by a percentage greater
than 25 percent.
``(C) Application of inflation adjustment.--
Subsection (g) shall be applied--
``(i) by substituting `2022' for
`2020',
``(ii) by substituting `subsection
(i)(3)(B)' for `subsection (b) or
subsection (d)(1)(A)', and
``(iii) by substituting `2021' for
`2019'.
``(D) Limitation to apply in lieu of current
limitation and partial allowance.--Subsections
(b) and (d)(1) shall not apply.
``(4) Base credit amount and increased credit amount
for certain property.--
``(A) In general.--In the case of any
property which does not satisfy the
requirements of subparagraph (B), paragraph
(3)(B) shall be applied by substituting `$0.50'
for `$2.50', `$.02' for `$.10', and `$1.00' for
`$5.00'.
``(B) Increased credit for certain property
meeting project requirements.--
``(i) Project requirements.--A
project meets the requirements of this
subparagraph if it is one of the
following:
``(I) A project which
commences construction prior to
the date of the enactment of
this paragraph.
``(II) A project which
commences construction after
the date of enactment of this
paragraph and satisfies the
requirements of paragraphs (5)
and (6).
``(III) A project with
respect to which initial
construction is completed and
building modifications are made
as part of a qualified retrofit
plan, and which satisfies
paragraphs (5) and (6).
``(5) Prevailing wage requirements.--
``(A) In general.--The requirements described
in this subparagraph with respect to any
project are that the taxpayer shall ensure that
any laborers and mechanics employed by
contractors and subcontractors in the
construction of any property or with respect to
building modifications made as part of a
qualified retrofit plan shall be paid wages at
rates not less than the prevailing rates for
construction, alteration, or repair of a
similar character in the locality as most
recently determined by the Secretary of Labor,
in accordance with subchapter IV of chapter 31
of title 40, United States Code.
``(B) Correction and penalty related to
failure to satisfy wage requirements.--In the
case of any taxpayer which fails to satisfy the
requirement under subparagraph (A) with respect
to any project or any building modifications
made as part of a qualified retrofit plan,
rules similar to the rules of section
45(b)(8)(B) shall apply for purposes of this
paragraph.
``(6) Apprenticeship requirements.--The requirements
described in this subparagraph with respect to any
property are as follows:
``(A) Labor hours.--
``(i) Percentage of total labor
hours.--All contractors and
subcontractors engaged in the
performance of construction of a
project or building modifications made
as part of a qualified retrofit plan
shall, subject to subparagraph (B),
ensure that not less than the
applicable percentage of the total
labor hours of such work be performed
by qualified apprentices.
``(ii) Applicable percentage.--For
purposes of paragraph (1), the
applicable percentage shall be--
``(I) in the case of any
applicable project the
construction of which begins
before January 1, 2023, 5
percent,
``(II) in the case of any
applicable project the
construction of which begins
after December 31, 2022, and
before January 1, 2024, 10
percent, and
``(III) in the case of any
applicable project the
construction of which begins
after December 31, 2023, 15
percent.
``(B) Apprentice to journeyworker ratio.--The
requirement under subparagraph (A)(i) shall be
subject to any applicable requirements for
apprentice-to-journeyworker ratios of the
Department of Labor or the applicable State
apprenticeship agency.
``(C) Participation.--Each contractor and
subcontractor who employs 4 or more individuals
to perform construction, alteration, or repair
work on an applicable project shall employ 1 or
more qualified apprentices to perform such
work.
``(D) Exception.--
``(i) In general.--Notwithstanding
any other provision of this paragraph,
this paragraph shall not apply in the
case of a taxpayer who--
``(I) demonstrates a lack of
availability of qualified
apprentices in the geographic
area of the construction,
alteration, or repair work, and
``(II) makes a good faith
effort to comply with the
requirements of this paragraph.
``(ii) Good faith effort.--For
purposes of clause (i), a taxpayer
shall be deemed to have satisfied the
requirements under such paragraph with
respect to an applicable project if
such taxpayer has requested qualified
apprentices from a registered
apprenticeship program, as defined in
section 3131(e)(3)(B), and such request
has been denied, provided that such
denial is not the result of a refusal
by the contractors or subcontractors
engaged in the performance of
construction, alteration, or repair
work on such applicable project to
comply with the established standards
and requirements of such apprenticeship
program.
``(E) Definitions.--For purposes of this
paragraph--
``(i) Labor hours.--The term `labor
hours' has the meaning given such term
in section 45(b)(9)(E)(i).
``(ii) Qualified apprentice.--The
term `qualified apprentice' has the
meaning given such term in section
45(b)(9)(E)(ii).
``(7) Allocation of deduction by certain tax-exempt
entities.--
``(A) In general.--A specified tax-exempt
entity shall be treated in the same manner as a
Federal, State, or local government for
purposes of applying subsection (d)(4).
``(B) Specified tax-exempt entity.--For
purposes of this paragraph, the term `specified
tax-exempt entity' means--
``(i) the United States, any State or
political subdivision thereof, any
possession of the United States, or any
agency or instrumentality of any of the
foregoing,
``(ii) any Indian tribal government
(within the meaning of section 139E),
and
``(iii) any organization exempt from
tax imposed by this chapter.
``(8) Alternative deduction for energy efficient
retrofit building property.--
``(A) In general.--In the case of a taxpayer
which elects (at such time and in such manner
as the Secretary, after consultation with the
administrator of the Environmental Protection
Agency, may provide) the application of this
paragraph with respect to any qualified
building, there shall be allowed as a deduction
for the taxable year which includes the date of
the qualifying final certification with respect
to the qualified retrofit plan of such
building, an amount equal to the lesser of--
``(i) the excess described in
paragraph (3) (determined by
substituting `energy usage intensity'
for `total annual energy and power
costs' in subparagraph (B) thereof), or
``(ii) the aggregate adjusted basis
(determined after taking into account
all adjustments with respect to such
taxable year other than the reduction
under subsection (e)) of energy
efficient retrofit building property
placed in service by the taxpayer
pursuant to such qualified retrofit
plan.
``(B) Qualified retrofit plan.--For purposes
of this paragraph, the term `qualified retrofit
plan' means a written plan prepared by a
qualified professional which specifies
modifications to a building which, in the
aggregate, are expected to reduce such
building's energy usage intensity by 25 percent
or more in comparison to the baseline energy
usage intensity of such building. Such plan
shall provide for a qualified professional to--
``(i) as of any date during the 1-
year period ending on the date of the
first certification described in clause
(ii), certify the energy usage
intensity of such building as of such
date,
``(ii) certify the status of property
installed pursuant to such plan as
meeting the requirements of clauses
(ii) and (iii) subparagraph (C), and
``(iii) as of any date that is more
than 1 year after completion of the
plan, certify the energy usage
intensity of such building as of such
date.
``(C) Energy efficient retrofit building
property.--For purposes of this paragraph, the
term `energy efficient retrofit building
property' means property--
``(i) with respect to which
depreciation (or amortization in lieu
of depreciation) is allowable,
``(ii) which is installed on or in
any qualified building,
``(iii) which is installed as part
of--
``(I) the interior lighting
systems,
``(II) the heating, cooling,
ventilation, and hot water
systems, or
``(III) the building
envelope, and
``(iv) which is certified in
accordance with subparagraph (B)(ii) as
meeting the requirements of clauses
(ii) and (iii).
``(D) Qualified building.--For purposes of
this paragraph, the term `qualified building'
means any building which--
``(i) is located in the United
States, and
``(ii) was originally placed in
service not less than 5 years before
the establishment of the qualified
retrofit plan with respect to such
building.
``(E) Qualifying final certification.--For
purposes of this paragraph, the term
`qualifying final certification' means, with
respect to any qualified retrofit plan, the
certification described in subparagraph
(B)(iii) if the energy usage intensity
certified in such certification is not more
than 75 percent of the baseline energy usage
intensity of the building.
``(F) Baseline energy usage intensity.--
``(i) In general.--The term `baseline
energy usage intensity' means the
energy usage intensity certified under
subparagraph (B)(i), as adjusted to
take into account weather as compared
to the energy usage intensity
determined under subparagraph
(B)(iii)(I).
``(ii) Determination of adjustment.--
For purposes of clause (i), the
adjustments described in such clause
shall be determined in such manner as
the Secretary, after consultation with
the Administrator of the Environmental
Protection Agency, may provide.
``(G) Other definitions.--For purposes of
this paragraph--
``(i) Energy usage intensity.--The
term `energy usage intensity' means the
site energy usage intensity determined
in accordance with such regulations or
other guidance as the Secretary, after
consultation with the Administrator of
the Environmental Protection Agency,
may provide and measured in British
thermal units.
``(ii) Qualified professional.--The
term `qualified professional' means an
individual who is a licensed architect
or a licenced engineer and meets such
other requirements as the Secretary may
provide.
``(H) Coordination with deduction otherwise
allowed under subsection (a).--
``(i) In general.--In the case of any
building with respect to which an
election is made under subparagraph
(A), the term `energy efficient
commercial building property' shall not
include any energy efficient retrofit
building property with respect to which
a deduction is allowable under this
paragraph.
``(ii) Certain rules not
applicable.--
``(I) In general.--Except as
provided in subclause (II),
subsection (d) shall not apply
for purposes of this paragraph.
``(II) Allocation of
deduction by certain tax-exempt
entities.--Rules similar to
subsection (d)(4) (determined
after application of paragraph
(5)) shall apply for purposes
of this paragraph.''.
(c) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendment made by this section shall
apply to taxable years beginning after December 31,
2021.
(2) Alternative deduction for energy efficient
retrofit building property.--Paragraph (6) of section
179D(i) of the Internal Revenue Code of 1986 (as added
by this section), and any other provision of such
section solely for purposes of applying such paragraph,
shall apply to property placed in service after
December 31, 2021 (in taxable years ending after such
date) if such property is placed in service pursuant to
qualified retrofit plan (within the meaning of such
section) established after such date.
SEC. 136304. EXTENSION, INCREASE, AND MODIFICATIONS OF NEW ENERGY
EFFICIENT HOME CREDIT.
(a) Extension of Credit.--Section 45L(g) is amended by
striking ``December 31, 2021'' and inserting ``December 31,
2031''.
(b) Increase in Credit Amounts.--Section 45L(a)(2) is amended
to read as follows:
``(2) Applicable amount.--For purposes of paragraph
(1), the applicable amount is an amount equal to--
``(A) in the case of a dwelling unit which is
eligible to participate in the Energy Star
Residential New Construction Program or the
Energy Star Manufactured New Homes program--
``(i) that is described in subsection
(c)(1)(A) (and not described in
subsection (c)(1)(B)), $2,500, and
``(ii) that is described in
subsection (c)(1)(B), $5000, and
``(B) in the case of a dwelling which are
part of a building eligible to participate in
the Energy Star Multifamily New Construction
Program--
``(i) that is described in subsection
(c)(1)(A) (and not described in
subsection (c)(1)(B)), $500, and
``(ii) that is described in
subsection (c)(1)(B), $1000.''.
(c) Modification of Energy Saving Requirements.--Section
45L(c) is amended to read as follows:
``(c) Energy Saving Requirements.--
``(1) In general.--A dwelling unit meets the energy
saving requirements of this subsection if--
``(A) such dwelling unit meets the
requirements of paragraph (2) or (3) (whichever
is applicable), or
``(B) such dwelling unit is certified as a
zero energy ready home under the zero energy
ready home program of the Department of Energy
(or any successor program determined by the
Secretary, after consultation with the
Secretary of Energy) as in effect on January 1,
2022.
``(2) Single-family home requirements.--A dwelling
unit meets the requirements of this paragraph if--
``(A) such dwelling unit meets--
``(i) in the case of a dwelling unit
acquired before January 1, 2025, the
Energy Star Single-Family New Homes
National Program Requirements 3.1, and
``(ii) in the case of a dwelling unit
acquired after December 31, 2024, the
Energy Star Single-Family New Homes
National Program Requirements 3.2,
``(B) such dwelling unit meets the most
recent Energy Star Single-Family New Homes
Program Requirements applicable to the location
of such dwelling unit (as in effect on the
latter of January 1, 2022 or January 1 of two
calendar years prior to the date the dwelling
was acquired), or
``(C) such dwelling unit meets the most
recent Energy Star Manufactured Home National
program requirements as in effect on the latter
of January 1, 2022 or January 1 of two calendar
years prior to the date such dwelling unit is
acquired.
``(3) Multi-family home requirements.--A dwelling
unit meets the requirements of this paragraph if--
``(A) such dwelling unit meets the most
recent Energy Star Multifamily New Construction
National Program Requirements (as in effect on
either January 1, 2022 or January 1 of three
calendar years prior to the date the dwelling
was acquired, whichever is later), and
``(B) such dwelling unit meets the most
recent Energy Star Multifamily New Construction
Regional Program Requirements applicable to the
location of such dwelling unit (as in effect on
either January 1, 2022 or January 1 of three
calendar years prior to the date the dwelling
was acquired, whichever is later).''.
(d) Prevailing Wage Requirement.--Section 45L is amended by
redesignating subsection (g) as subsection (h) and by inserting
after subsection (f) the following new subsection:
``(g) Prevailing Wage Requirement.--
``(1) In general.--In the case of a qualifying
residence described in subsection (b)(2)(B) meeting the
prevailing wage requirements of paragraph (2), the
credit amount allowed with respect to such residence
shall be--
``(A) $2,500 in the case of a residence
described in subparagraph (A) of subsection
(c)(1) (and not described in subparagraph (B)
of such subsection), and
``(B) $5,000 in the case of a residence
described in (c)(1)(B).
``(2) Prevailing wage requirements.--
``(A) In general.--The requirements described
in this paragraph with respect to any qualified
residence are that the taxpayer shall ensure
that any laborers and mechanics employed by
contractors and subcontractors in the
construction of such residence shall be paid
wages at rates not less than the prevailing
rates for construction, alteration, or repair
of a similar character in the locality as most
recently determined by the Secretary of Labor,
in accordance with subchapter IV of chapter 31
of title 40, United States Code.
``(B) Correction and penalty related to
failure to satisfy wage requirements.--In the
case of any taxpayer which fails to satisfy the
requirement under subparagraph (A) with respect
to any qualified residence, rules similar to
the rules of section 45(b)(8)(B) shall apply
for purposes of this paragraph.
``(3) Regulations and guidance.--The Secretary shall
issue such regulations or other guidance as the
Secretary determines necessary or appropriate to carry
out the purposes of this subsection.''.
(e) Effective Dates.--The amendments made by this section
shall apply to dwelling units acquired after December 31, 2021.
SEC. 136305. MODIFICATIONS TO INCOME EXCLUSION FOR CONSERVATION
SUBSIDIES.
(a) In General.--Section 136(a) is amended--
(1) by striking ``any subsidy provided'' and
inserting ``any subsidy--
``(1) provided'',
(2) by striking the period at the end and inserting a
comma, and
(3) by adding at the end the following new
paragraphs:
``(2) provided (directly or indirectly) by a public
utility to a customer, or by a State or local
government to a resident of such State or locality, for
the purchase or installation of any water conservation
or efficiency measure,
``(3) provided (directly or indirectly) by a storm
water management provider to a customer, or by a State
or local government to a resident of such State or
locality, for the purchase or installation of any storm
water management measure, or
``(4) provided (directly or indirectly) by a State or
local government to a resident of such State or
locality for the purchase or installation of any
wastewater management measure, but only if such measure
is with respect to the taxpayer's principal
residence.''.
(b) Conforming Amendments.--
(1) Definition of water conservation or efficiency
measure and storm water management measure.--Section
136(c) is amended--
(A) by striking ``Energy Conservation
Measure'' in the heading thereof and inserting
``Definitions'',
(B) by striking ``In general'' in the heading
of paragraph (1) and inserting ``Energy
conservation measure'', and
(C) by redesignating paragraph (2) as
paragraph (5) and by inserting after paragraph
(1) the following:
``(2) Water conservation or efficiency measure.--For
purposes of this section, the term `water conservation
or efficiency measure' means any evaluation of water
use, or any installation or modification of property,
the primary purpose of which is to reduce consumption
of water or to improve the management of water demand
with respect to one or more dwelling units.
``(3) Storm water management measure.--For purposes
of this section, the term `storm water management
measure' means any installation or modification of
property primarily designed to reduce or manage amounts
of storm water with respect to one or more dwelling
units.
``(4) Wastewater management measure.--For purposes of
this section, the term `wastewater management measure'
means any installation or modification of property
primarily designed to manage wastewater (including
septic tanks and cesspools) with respect to one or more
dwelling units.''.
(2) Definition of public utility.--Section 136(c)(5)
(as redesignated by paragraph (1)(C)) is amended by
striking subparagraph (B) and inserting the following:
``(B) Public utility.--The term `public
utility' means a person engaged in the sale of
electricity, natural gas, or water to
residential, commercial, or industrial
customers for use by such customers.
``(C) Storm water management provider.--The
term `storm water management provider' means a
person engaged in the provision of storm water
management measures to the public.
``(D) Person.--For purposes of subparagraphs
(B) and (C), the term `person' includes the
Federal Government, a State or local government
or any political subdivision thereof, or any
instrumentality of any of the foregoing.''.
(3) Clerical amendments.--
(A) The heading for section 136 is amended--
(i) by inserting ``AND WATER'' after
``ENERGY'', and
(ii) by striking ``PROVIDED
BY PUBLIC
UTILITIES''.
(B) The item relating to section 136 in the
table of sections of part III of subchapter B
of chapter 1 is amended--
(i) by inserting ``and water'' after
``energy'', and
(ii) by striking ``provided by public
utilities''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts received after December 31, 2018.
(d) No Inference.--Nothing in this Act or the amendments made
by this Act shall be construed to create any inference with
respect to the proper tax treatment of any subsidy received
directly or indirectly from a public utility, a storm water
management provider, or a State or local government for any
water conservation measure or storm water management measure
before January 1, 2019.
PART 4--GREENING THE FLEET AND ALTERNATIVE VEHICLES
SEC. 136401. REFUNDABLE NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR
VEHICLE CREDIT FOR INDIVIDUALS.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 is amended by inserting after section 36B the
following new section:
``SEC. 36C. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.
``(a) Allowance of Credit.--In the case of an individual,
there shall be allowed as a credit against the tax imposed by
this subtitle for the taxable year an amount equal to the sum
of the credit amounts determined under subsection (b) with
respect to each new qualified plug-in electric drive motor
vehicle placed in service by the taxpayer during the taxable
year.
``(b) Per Vehicle Dollar Limitation.--
``(1) In general.--The amount determined under this
subsection with respect to any new qualified plug-in
electric drive motor vehicle is the sum of the amounts
determined under paragraphs (2) through (5) with
respect to such vehicle (not to exceed 50 percent of
the purchase price of such vehicle).
``(2) Base amount.--The amount determined under this
paragraph is $4,000.
``(3) Battery capacity.--In the case of a new
qualified plug-in electric drive motor vehicle, the
amount determined under this paragraph is $3,500 if--
``(A) in the case of a vehicle placed in
service before January 1, 2027, such vehicle
draws propulsion energy from a battery with not
less than 40 kilowatt hours of capacity, and
``(B) in the case of a vehicle placed in
service after December 31, 2026, such vehicle
draws propulsion energy from a battery with not
less than 50 kilowatt hours of capacity.
``(4) Domestic assembly.--In the case of a new
qualified plug-in vehicle which satisfies the domestic
assembly qualifications, the amount determined under
this paragraph is $4,500.
``(5) Domestic content.--In the case of a new
qualified plug-in vehicle which satisfies domestic
content qualifications, the amount determined under
this paragraph is $500.
``(c) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--The amount of the credit allowable
under subsection (a) shall be reduced (but not below
zero) by $200 for each $1,000 (or fraction thereof) by
which the taxpayer's modified adjusted gross income
exceeds the threshold amount. For purposes of the
preceding sentence, the term `modified adjusted gross
income' means adjusted gross income increased by any
amount excluded from gross income under section 911,
931, or 933.
``(2) Special rule for determination of modified
adjusted gross income.--The modified adjusted gross
income of the taxpayer that is taken into account for
purposes of paragraph (1) shall be the lesser of--
``(A) the modified adjusted gross income for
the taxable year in which the credit is
claimed, or
``(B) the modified adjusted gross income for
the immediately preceding taxable year.
``(3) Threshold amount.--For purposes of paragraph
(1), the term `threshold amount' means--
``(A) $800,000 in the case of a joint return
or surviving spouse (half such amount for
married filing separately),
``(B) $600,000 in the case of a head of
household, and
``(C) $400,000 in any other case.
``(d) Manufacturer's Suggested Retail Price Limitation.--
``(1) In general.--No credit shall be allowed under
subsection (a) for a vehicle with a manufacturer's
suggested retail price in excess of the applicable
limitation.
``(2) Applicable limitation.--For purposes of
paragraph (1), the applicable limitation for each
vehicle classification is as follows:
``(A) Sedans.--In the case of a sedan,
$55,000.
``(B) Vans.--In the case of a van, $64,000.
``(C) Sport utility vehicles.--In the case of
a sport utility vehicle, $69,000.
``(D) Pickup trucks.--In the case of a pickup
truck, $74,000.
``(3) Regulations.--For purposes of this subsection,
the Secretary shall prescribe regulations for
determining vehicle classifications using criteria
similar to that employed by the Environmental
Protection Agency and the Department of Energy to
determine size and class of vehicles.
``(e) New Qualified Plug-in Electric Drive Motor Vehicle.--
For purposes of this section--
``(1) In general.--The term `new qualified plug-in
electric drive motor vehicle' means a motor vehicle--
``(A) the original use of which commences
with the taxpayer,
``(B) which is acquired for use by the
taxpayer and not for resale,
``(C) which is made by a qualified
manufacturer,
``(D) which is treated as a motor vehicle for
purposes of title II of the Clean Air Act,
``(E) which has a gross vehicle weight rating
of less than 14,000 pounds,
``(F) which is propelled to a significant
extent by an electric motor which draws
electricity from a battery which--
``(i) has a capacity of--
``(I) in the case of a
vehicle placed in service in
2022 or 2023, not less than 7
kilowatt hours, and
``(II) in the case of a
vehicle placed in service after
2023, not less than 10 kilowatt
hours, and
``(ii) is capable of being recharged
from an external source of electricity,
``(G) for which, in the case of a vehicle
placed into service after December 31, 2026,
final assembly is within the United States, and
``(H) is not of a character subject to an
allowance for depreciation.
``(2) Motor vehicle.--The term `motor vehicle' means
any vehicle which is manufactured primarily for use on
public streets, roads, and highways (not including a
vehicle operated exclusively on a rail or rails) and
which has at least 4 wheels.
``(3) Qualified manufacturer.--The term `qualified
manufacturer' means any manufacturer (within the
meaning of the regulations prescribed by the
Administrator of the Environmental Protection Agency
for purposes of the administration of title II of the
Clean Air Act (42 U.S.C. 7521 et seq.) which enters
into a written agreement with the Secretary under which
such manufacturer agrees--
``(A) to ensure that each vehicle
manufactured by such manufacturer after the
later of the date on which such agreement takes
effect or December 31, 2021, and that meets the
requirements of subparagraphs (D), (E), and (F)
of paragraph (1) and paragraph (6) of
subsection (e) is labeled with a unique vehicle
identification number, and
``(B) to make periodic written reports to the
Secretary (at such times and in such manner as
the Secretary may provide) providing such
vehicle identification numbers and such other
information related to such vehicle as the
Secretary may require.
``(4) Battery capacity.--The term `capacity' means,
with respect to any battery, the quantity of
electricity which the battery is capable of storing,
expressed in kilowatt hours, as measured from a 100
percent state of charge to a 0 percent state of charge.
``(f) Special Rules.--
``(1) Basis reduction.--For purposes of this
subtitle, the basis of any property for which a credit
is allowable under subsection (a) shall be reduced by
the amount of such credit so allowed.
``(2) No double benefit.--The amount of any deduction
or other credit allowable under this chapter for a
vehicle for which a credit is allowable under
subsection (a) shall be reduced by the amount of credit
allowed under such subsection for such vehicle.
``(3) Property used outside united states not
qualified.--No credit shall be allowable under
subsection (a) with respect to any property referred to
in section 50(b)(1).
``(4) Recapture.--The Secretary shall, by
regulations, provide for recapturing the benefit of any
credit allowable under subsection (a) with respect to
any property which ceases to be property eligible for
such credit.
``(5) Election not to take credit.--No credit shall
be allowed under subsection (a) for any vehicle if the
taxpayer elects to not have this section apply to such
vehicle.
``(6) Interaction with air quality and motor vehicle
safety standards.--A vehicle shall not be considered
eligible for a credit under this section unless such
vehicle is in compliance with--
``(A) the applicable provisions of the Clean
Air Act for the applicable make and model year
of the vehicle (or applicable air quality
provisions of State law in the case of a State
which has adopted such provision under a waiver
under section 209(b) of the Clean Air Act), and
``(B) the motor vehicle safety provisions of
sections 30101 through 30169 of title 49,
United States Code.
``(g) Credit Allowed for 2 and 3-wheeled Plug-in Electric
Vehicles.--
``(1) In general.--In the case of a qualified 2- or
3-wheeled plug-in electric vehicle--
``(A) there shall be allowed as a credit
against the tax imposed by this subtitle for
the taxable year an amount equal to the sum of
the applicable amount with respect to each such
qualified 2- or 3-wheeled plug-in electric
vehicle placed in service by the taxpayer
during the taxable year, and
``(B) the amount of the credit allowed under
subparagraph (A) shall be treated as a credit
allowed under subsection (a).
``(2) Applicable amount.--For purposes of paragraph
(1), the applicable amount is an amount equal to the
lesser of--
``(A) 10 percent of the cost of the qualified
2- or 3-wheeled plug-in electric vehicle, or
``(B) $2,500.
``(3) Qualified 2- or 3-wheeled plug-in electric
vehicle.--The term `qualified 2- or 3-wheeled plug-in
electric vehicle' means any vehicle which--
``(A) has 2 or 3 wheels,
``(B) meets the requirements of subparagraphs
(A), (B), (C), (E), (F), and (G) of subsection
(e)(1) (determined by substituting `2.5
kilowatt hours' for `7 kilowatt hours' in
subparagraph (F)(i)(I) and by substituting `2.5
kilowatt hours' for `10 kilowatt hours' in
subparagraph (F)(i)(II)),
``(C) is manufactured primarily for use on
public streets, roads, and highways, and
``(D) is capable of achieving a speed of 45
miles per hour or greater.
``(h) VIN Number Requirement.--No credit shall be allowed
under this section with respect to any vehicle unless the
taxpayer includes the vehicle identification number of such
vehicle on the return of tax for the taxable year.
``(i) Treatment of Certain Possessions.--
``(1) Payments to possessions with mirror code tax
systems.--The Secretary shall pay to each possession of
the United States which has a mirror code tax system
amounts equal to the loss (if any) to that possession
by reason of the application of the provisions of this
section (determined without regard to this subsection).
Such amounts shall be determined by the Secretary based
on information provided by the government of the
respective possession.
``(2) Payments to other possessions.--The Secretary
shall pay to each possession of the United States which
does not have a mirror code tax system amounts
estimated by the Secretary as being equal to the
aggregate benefits (if any) that would have been
provided to residents of such possession by reason of
the provisions of this section if a mirror code tax
system had been in effect in such possession. The
preceding sentence shall not apply unless the
respective possession has a plan which has been
approved by the Secretary under which such possession
will promptly distribute such payments to its
residents.
``(3) Mirror code tax system; treatment of
payments.--Rules similar to the rules of paragraphs (4)
and (5) of section 21(h) shall apply for purposes of
this section.
``(j) Assembly and Content Qualifications.--For purposes of
this section--
``(1) Domestic assembly qualifications.--The term
`domestic assembly qualifications' means, with respect
to any new qualified plug-in electric vehicle, that the
final assembly of such vehicle occurs at a plant,
factory, or other place which is operating under a
collective bargaining agreement negotiated by an
employee organization (as defined in section
412(c)(4)), determined in a manner consistent with
section 7701(a)(46).
``(2) Domestic content qualifications.--The term
`domestic content qualifications' means, with respect
to any model of a new qualified plug-in electric
vehicle, that vehicles of that model--
``(A) are assembled by a manufacturer which
utilizes not less than 50 percent domestic
content in the component parts for final
assembly of such vehicles, and
``(B) are powered by battery cells which are
manufactured in the United States (with
suchbattery cells to be included for purposes
of the requirement described in subparagraph
(A)), as certified by the manufacturer, at such
time, and in such form and manner, as the
Secretary may prescribe.
``(3) Final assembly.--The term `final assembly'
means the process by which a manufacturer produces a
new qualified plug-in electric vehicle at, or through
the use of, a plant, factory, or other place from which
the vehicle is delivered to a dealer or importer with
all component parts necessary for the mechanical
operation of the vehicle included with the vehicle,
whether or not the component parts are permanently
installed in or on the vehicle.
``(k) Termination.--No credit shall be allowed under this
section with respect to any vehicle acquired after December 31,
2031.''.
(b) Transfer of Credit.--Subsection (f) of section 36C is
amended by adding at the end the following new paragraphs:
``(7) In general.--Subject to such regulations or
other guidance as the Secretary determines necessary or
appropriate, if, with respect to the credit allowed
under subsection (a) for any taxable year, the taxpayer
elects the application of this subparagraph for such
taxable year with respect to such credit, the eligible
entity specified in such election, and not the taxpayer
who has purchased or leased the vehicle, shall be
treated as the taxpayer for purposes of this title with
respect to such credit.
``(8) Eligible entity.--For purposes of this
paragraph, the term `eligible entity' means, with
respect to the vehicle for which the credit is allowed
under subsection (a), the dealer which sold such
vehicle to the taxpayer and has--
``(A) subject to paragraph (10), registered
with the Secretary for purposes of this
paragraph, at such time, and in such form and
manner, as the Secretary may prescribe,
``(B) prior to the election described in
paragraph (7), disclosed to the taxpayer
purchasing such vehicle--
``(i) the manufacturer's suggested
retail price,
``(ii) the value of the credit
allowed or other incentive available
for the purchase or lease of such
vehicle,
``(iii) all fees associated with the
purchase or lease of such vehicle, and
``(iv) the amount provided by the
dealer to such taxpayer as a condition
of the election described in paragraph
(7),
``(C) made payment to such taxpayer (whether
in cash or in the form of a partial payment or
down payment for the purchase of such vehicle)
in an amount equal to the credit otherwise
allowable to such taxpayer, and
``(D) with respect to any incentive otherwise
available for the purchase of a vehicle for
which a credit is allowed under this section,
including any incentive in the form of a rebate
or discount provided by the dealer or
manufacturer, ensured that--
``(i) the availability or use of such
incentive shall not limit the ability
of a taxpayer to make an election
described in paragraph (7), and
``(ii) such election shall not limit
the value or use of such incentive.
``(9) Timing.--An election described in paragraph (7)
shall be made by the taxpayer not later than the date
on which the vehicle for which the credit is allowed
under subsection (a) is purchased.
``(10) Revocation of registration.--Upon
determination by the Secretary that a dealer has failed
to comply with the requirements described in paragraph
(8), the Secretary may revoke the registration (as
described in subparagraph (A) of such subparagraph) of
such dealer.
``(11) Tax treatment of payments.--With respect to
any payment described in paragraph (8)(C), such
payment--
``(A) shall not be includible in the gross
income of the taxpayer, and
``(B) with respect to the dealer, shall not
be deductible under this title.
``(12) Advance payment to registered dealers.--
``(A) In general.--The Secretary shall
establish a program to make advance payments to
any eligible entity in an amount equal to the
cumulative amount of the credits allowed under
subsection (a) with respect to any vehicles
sold by such entity for which an election
described in paragraph (1) has been made.
``(B) Excessive payments.--Rules similar to
the rules of section 6417(c)(8) shall apply for
purposes of this subparagraph.
``(13) Dealer.--For purposes of this paragraph, the
term `dealer' means a person licensed by a State, the
District of Columbia, the Commonwealth of Puerto Rico,
any other territory or possession of the United States,
or an Indian Tribe (as defined in section 4 of the
Indian Self-Determination and Education Assistance Act
(25 U.S.C. 5304)) to engage in the sale of vehicles.''.
(c) Repeal of Nonrefundable New Qualified Plug-in Electric
Drive Motor Vehicle Credit.--Subpart B of part IV of subchapter
A of chapter 1 is amended by striking section 30D (and by
striking the item relating to such section in the table of
sections of such subpart).
(d) Conforming Amendments.--
(1) Section 1016(a)(37) is amended by striking
``section 30D(f)(1)'' and inserting ``section
36C(f)(1)''.
(2) Section 6211(b)(4)(A) is amended by inserting
``36C,'' after ``36B,''.
(3) Section 6213(g)(2), as amended by the preceding
provisions of this Act, is amended--
(A) in subparagraph (R), by striking ``and''
at the end,
(B) in subparagraph (S), by striking the
period at the end and inserting ``, and'', and
(C) by adding at the end the following:
``(T) an omission of a correct vehicle
identification number required under section
36C(f) (relating to credit for new qualified
plug-in electric drive motor vehicles) to be
included on a return.''.
(4) Section 6501(m) is amended by striking
``30D(e)(4)'' and inserting ``36C(f)(5)''.
(5) Section 166(b)(5)(A)(ii) of title 23, United
States Code, is amended by striking ``section
30D(d)(1)'' and inserting ``section 36C(e)(1)''.
(6) Section 1324(b)(2) of title 31, United States
Code, is amended by inserting ``36C,'' after ``36B,''.
(7) The table of sections for subpart C of part IV of
subchapter A of chapter 1 is amended by inserting after
the item relating to section 36B the following new
item:
``Sec. 36C. New qualified plug-in electric drive motor vehicles.''.
(e) Effective Dates.--
(1) The amendments made by subsections (a), (c), and
(d) of this section shall apply to vehicles acquired
after December 31, 2021.
(2) The amendments made by subsection (b) shall apply
to vehicles purchased or leased after December 31,
2022.
SEC. 136402. CREDIT FOR PREVIOUSLY-OWNED QUALIFIED PLUG-IN ELECTRIC
DRIVE MOTOR VEHICLES.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1, as amended by the preceding provisions of this Act,
is amended by inserting after section 36C the following new
section:
``SEC. 36D. PREVIOUSLY-OWNED QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR
VEHICLES.
``(a) Allowance of Credit.--In the case of a qualified buyer
who during a taxable year places in service a previously-owned
qualified plug-in electric drive motor vehicle, there shall be
allowed as a credit against the tax imposed by this subtitle
for the taxable year an amount equal to the sum of--
``(1) $1,250, plus
``(2) in the case of a vehicle which draws propulsion
energy from a battery which exceeds 4 kilowatt hours of
capacity (determined at the time of sale), the lesser
of--
``(A) $1,250, and
``(B) the product of $208.50 and such excess
kilowatt hours.
``(b) Limitations.--
``(1) Sale price.--The credit allowed under
subsection (a) with respect to sale of a vehicle shall
not exceed 30 percent of the sale price.
``(2) Adjusted gross income.--The amount which would
(but for this paragraph) be allowed as a credit under
subsection (a) shall be reduced (but not below zero) by
$200 for each $1,000 (or fraction thereof) by which the
taxpayer's adjusted gross income exceeds--
``(A) $150,000 in the case of a joint return
or a surviving spouse (as defined in section
2(a)),
``(B) $112,500 in the case of a head of
household (as defined in section 2(b)), and
``(C) $75,000 in the case of a taxpayer not
described in paragraph (1) or (2).
``(c) Definitions.--For purposes of this section--
``(1) Previously-owned qualified plug-in electric
drive motor vehicle.--The term `previously-owned
qualified plug-in electric drive motor vehicle' means,
with respect to a taxpayer, a motor vehicle--
``(A) the model year of which is at least 2
earlier than the calendar year in which the
taxpayer acquires such vehicle,
``(B) the original use of which commences
with a person other than the taxpayer,
``(C) which is acquired by the taxpayer in a
qualified sale,
``(D) registered by the taxpayer for
operation in a State or possession of the
United States, and
``(E) which meets the requirements of
subparagraphs (C), (D), (E), (F), and (G) of
section 36C(e)(1).
``(2) Qualified sale.--The term `qualified sale'
means a sale of a motor vehicle--
``(A) by a seller who holds such vehicle in
inventory (within the meaning of section 471)
for sale or lease,
``(B) for a sale price not to exceed $25,000,
and
``(C) which is the first transfer since the
date of the enactment of this section to a
person other than the person with whom the
original use of such vehicle commenced.
``(3) Qualified buyer.--The term `qualified buyer'
means, with respect to a sale of a motor vehicle, a
taxpayer--
``(A) who is an individual,
``(B) who purchases such vehicle for use and
not for resale,
``(C) with respect to whom no deduction is
allowable with respect to another taxpayer
under section 151,
``(D) who has not been allowed a credit under
this section for any sale during the 3-year
period ending on the date of the sale of such
vehicle, and
``(E) who possesses a certificate issued by
the seller that certifies--
``(i) that the vehicle is a
previously-owned qualified plug-in
electric drive motor vehicle,
``(ii) the vehicle identification
number of such vehicle,
``(iii) the capacity of the battery
at time of sale, and
``(iv) such other information as the
Secretary may require.
``(4) Motor vehicle; capacity.--The terms `motor
vehicle' and `capacity' have the meaning given such
terms in paragraphs (2) and (4) of section 36C(e),
respectively.
``(d) VIN Number Requirement.--No credit shall be allowed
under subsection (a) with respect to any vehicle unless the
taxpayer includes the vehicle identification number of such
vehicle on the return of tax for the taxable year.
``(e) Application of Certain Rules.--For purposes of this
section, rules similar to the rules of paragraphs (1), (2),
(4), (5), (6) and (7) of section 36C(f) shall apply for
purposes of this section.
``(f) Certificate Submission Requirement.--The Secretary may
require that the issuer of the certificate described in
subsection (c)(3)(E) submit such certificate to the Secretary
at the time and in the manner required by the Secretary.
``(g) Treatment of Certain Possessions.--
``(1) Payments to possessions with mirror code tax
systems.--The Secretary shall pay to each possession of
the United States which has a mirror code tax system
amounts equal to the loss (if any) to that possession
by reason of the application of the provisions of this
section. Such amounts shall be determined by the
Secretary based on information provided by the
government of the respective possession.
``(2) Payments to other possessions.--The Secretary
shall pay to each possession of the United States which
does not have a mirror code tax system amounts
estimated by the Secretary as being equal to the
aggregate benefits (if any) that would have been
provided to residents of such possession by reason of
the provisions of this section if a mirror code tax
system had been in effect in such possession. The
preceding sentence shall not apply unless the
respective possession has a plan which has been
approved by the Secretary under which such possession
will promptly distribute such payments to its
residents.
``(3) Mirror code tax system; treatment of
payments.--Rules similar to the rules of paragraphs (4)
and (5) of section 21(h) shall apply for purposes of
this section.
``(h) Termination.--No credit shall be allowed under this
section with respect to any vehicle acquired after December 31,
2031.''.
(b) Conforming Amendments.--
(1) Section 6211(b)(4)(A), as amended by the
preceding provisions of this Act, is amended by
inserting ``36D,'' after ``36C,''.
(2) Section 6213(g)(2), as amended by the preceding
provisions of this Act, is amended--
(A) in subparagraph (S), by striking ``and''
at the end,
(B) in subparagraph (T), by striking the
period at the end and inserting ``, and'', and
(C) by adding at the end the following:
``(U) an omission of a correct vehicle
identification number required under section
36D(d) (relating to credit for previously-owned
qualified plug-in electric drive motor
vehicles) to be included on a return.''.
(3) Paragraph (2) of section 1324(b) of title 31,
United States Code, as amended by the preceding
provisions of this Act, is amended by inserting
``36D,'' after ``36C,''.
(c) Clerical Amendment.--The table of sections for subpart C
of part IV of subchapter A of chapter 1, as amended by the
preceding provisions of this Act, is amended by inserting after
the item relating to section 36C the following new item:
``Sec. 36D. Previously-owned qualified plug-in electric drive motor
vehicles.''.
(d) Effective Date.--The amendments made by this section
shall apply to vehicles acquired after December 31, 2021.
SEC. 136403. QUALIFIED COMMERCIAL ELECTRIC VEHICLES.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
section:
``SEC. 45Y. CREDIT FOR QUALIFIED COMMERCIAL ELECTRIC VEHICLES.
``(a) In General.--For purposes of section 38, the qualified
commercial electric vehicle credit for any taxable year is an
amount equal to the sum of the credit amounts determined under
subsection (b) with respect to each qualified commercial
electric vehicle placed in service by the taxpayer during the
taxable year.
``(b) Per Vehicle Amount.--The amount determined under this
subsection with respect to any qualified commercial electric
vehicle shall be equal to 30 percent of the basis of such
vehicle.
``(c) Qualified Commercial Electric Vehicle.--For purposes of
this section, the term `qualified commercial electric vehicle'
means any vehicle which--
``(1) meets the requirements of subparagraphs (A) and
(C) of section 36C(e)(1) without regard to any gross
vehicle weight rating, and is acquired for use or lease
by the taxpayer and not for resale,
``(2) either--
``(A) meets the requirements of subparagraph
(D) of section 36C(e)(1), or
``(B) is mobile machinery, as defined in
section 4053(8),
``(3) is primarily propelled by an electric motor
which draws electricity from a battery which--
``(A) has a capacity of not less than 30
kilowatt hours,
``(B) is capable of being recharged from an
external source of electricity,
``(C) is not powered or charged by an
internal combustion engine, or
``(D) is a new qualified fuel cell motor
vehicle described in subparagraphs (A) and (B)
of section 30B(b)(3), and
``(4) is of a character subject to the allowance for
depreciation.
``(d) Special Rules.--
``(1) In general.--Rules similar to the rules under
subsection (f) of section 36C shall apply for purposes
of this section.
``(2) Property used by tax-exempt entity.--In the
case of a vehicle the use of which is described in
paragraph (3) or (4) of section 50(b) and which is not
subject to a lease, the person who sold such vehicle to
the person or entity using such vehicle shall be
treated as the taxpayer that placed such vehicle in
service, but only if such person clearly discloses to
such person or entity in a document the amount of any
credit allowable under subsection (a) with respect to
such vehicle.
``(e) VIN Number Requirement.--No credit shall be determined
under subsection (a) with respect to any vehicle unless the
taxpayer includes the vehicle identification number of such
vehicle on the return of tax for the taxable year.
``(f) Termination.--No credit shall be determined under this
section with respect to any vehicle acquired after December 31,
2031.''.
(b) Conforming Amendments.--
(1) Section 38(b) is amended by striking paragraph
(30) and inserting the following:
``(30) the qualified commercial electric vehicle
credit determined under section 45Y,''.
(2) Section 6213(g)(2), as amended by the preceding
provisions of this Act, is amended--
(A) in subparagraph (T), by striking ``and''
at the end,
(B) in subparagraph (U), by striking the
period at the end and inserting ``, and'', and
(C) by adding at the end the following:
``(V) an omission of a correct vehicle
identification number required under section
45Y(e) (relating to commercial electric vehicle
credit) to be included on a return.''.
(3) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by adding at the
end the following new item:
``Sec. 45Y. Qualified commercial electric vehicle credit.''.
(c) Effective Date.--The amendments made by this section
shall apply to vehicles acquired after December 31, 2021.
SEC. 136404. QUALIFIED FUEL CELL MOTOR VEHICLES.
(a) In General.--Section 30B(k)(1) is amended by striking
``December 31, 2021'' and inserting ``December 31, 2031''.
(b) New Qualified Fuel Cell Motor Vehicle.--Section 30B(b) is
amended by striking ``and'' at the end of subparagraph (D), by
striking the period at the end of subparagraph (E) and
inserting ``, and'', and by adding at the end the following new
subparagraph:
``(F) which is not property of a character
subject to an allowance for depreciation.''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2021.
SEC. 136405. ALTERNATIVE FUEL REFUELING PROPERTY CREDIT.
(a) In General.--Section 30C(g) is amended by striking
``December 31, 2021'' and inserting ``December 31, 2031''.
(b) Additional Credit for Certain Electric Charging
Property.--
(1) In general.--Section 30C(a) is amended--
(A) by striking ``equal to 30 percent'' and
inserting the following: ``equal to the sum
of--
``(1) 30 percent'',
(B) by striking the period at the end and
inserting ``, plus'', and
(C) by adding at the end the following new
paragraph:
``(2) 20 percent of so much of such cost as exceeds
the limitation under subsection (b)(1) that does not
exceed the amount of cost attributable to qualified
alternative vehicle refueling property (determined
without regard to subsection (c)(1) and as if only
electricity, and fuel at least 85 percent of the volume
of which consists of hydrogen, were treated as clean-
burning fuels for purposes of section 179A(d)) which--
``(A) is intended for general public use with
no associated fee or payment arrangement,
``(B) is intended for general public use and
accepts payment via a credit card reader,
including a credit card reader that uses
contactless technology, or
``(C) is intended for use exclusively by
fleets of commercial or governmental
vehicles.''.
(2) Conforming amendment.--Section 30C(b) is
amended--
(A) by striking ``The credit allowed under
subsection (a)'' and inserting ``The amount of
cost taken into account under subsection
(a)(1)'',
(B) by striking ``$30,000'' and inserting
``$100,000'', and
(C) by striking ``$1,000'' and inserting
``$3,333.33''.
(3) Bidirectional charging equipment included as
qualified alternative fuel vehicle refueling
property.--Section 30C(c) is amended--
(A) by striking ``For purposes of this
section, the term'' and inserting ``For
purposes of this section--
``(1) In general.--The term'', and
(B) by adding at the end the following new
paragraph:
``(2) Bidirectional charging equipment.--Property
shall not fail to be treated as qualified alternative
vehicle refueling property solely because such
property--
``(A) is capable of charging the battery of a
motor vehicle propelled by electricity, and
``(B) allows discharging electricity from
such battery to an electric load external to
such motor vehicle.''.
(c) Certain Electric Charging Stations Included as Qualified
Alternative Fuel Vehicle Refueling Property.--Section 30C is
amended by redesignating subsections (f) and (g) as subsections
(g) and (h), respectively, and by inserting after subsection
(e) the following:
``(f) Special Rule for Electric Charging Stations for Certain
Vehicles With 2 or 3 Wheels.--For purposes of this section--
``(1) In general.--The term `qualified alternative
fuel vehicle refueling property' includes any property
described in subsection (c) for the recharging of a
motor vehicle described in paragraph (2) that is
propelled by electricity, but only if the property--
``(A) meets the requirements of subsection
(a)(2), and
``(B) is of a character subject to
depreciation.
``(2) Motor vehicle.--A motor vehicle is described in
this paragraph if the motor vehicle--
``(A) is manufactured primarily for use on
public streets, roads, or highways (not
including a vehicle operated exclusively on a
rail or rails), and
``(B) has at least 2, but not more than 3,
wheels.''.
(d) Wage and Apprenticeship Requirements.--Section 30C, as
amended by this section, is further amended by redesignating
subsections (g) and (h) as subsections (h) and (i) and by
inserting after subsection (f) the following new subsection:
``(g) Wage and Apprenticeship Requirements.--
``(1) Base credit amount and increased credit
amount.--
``(A) In general.--In the case of any
qualified alternative fuel vehicle refueling
property which does not satisfy the
requirements of subparagraph (B), the amount of
the credit determined under subsection (a)
shall be 20 percent of such amount (determined
without regard to this sentence).
``(B) Increased credit for certain qualified
alternative fuel vehicle refueling property
meeting project requirements.--
``(i) In general.--In the case of any
qualified alternative fuel vehicle
refueling property which meets the
project requirements of this
subparagraph, subparagraph (A) shall
not apply.
``(ii) Project requirements.--A
project meets the requirements of this
subparagraph if it is one of the
following:
``(I) A project which
commences construction prior to
the date of the enactment of
this paragraph.
``(II) A project which
satisfies the requirements of
paragraphs (2) and (3).
``(2) Prevailing wage requirements.--
``(A) In general.--The requirements described
in this subparagraph with respect to any
qualified alternative fuel vehicle refueling
property are that the taxpayer shall ensure
that any laborers and mechanics employed by
contractors and subcontractors in the
construction of such property shall be paid
wages at rates not less than the prevailing
rates for construction, alteration, or repair
of a similar character in the locality as most
recently determined by the Secretary of Labor,
in accordance with subchapter IV of chapter 31
of title 40, United States Code.
``(B) Correction and penalty related to
failure to satisfy wage requirements.--In the
case of any taxpayer which fails to satisfy the
requirement under subparagraph (A) with respect
to such qualified alternative fuel vehicle
refueling property, rules similar to the rules
of section 45(b)(8)(B) shall apply for purposes
of this paragraph.
``(3) Apprenticeship requirements.--The requirements
described in this subparagraph with respect to the
construction of any qualified alternative fuel vehicle
refueling property are as follows:
``(A) Labor hours.--
``(i) Percentage of total labor
hours.--All contractors and
subcontractors engaged in the
performance of construction on any
project shall, subject to subparagraph
(B), ensure that not less than the
applicable percentage of the total
labor hours of such work be performed
by qualified apprentices.
``(ii) Applicable percentage.--For
purposes of paragraph (1), the
applicable percentage shall be--
``(I) in the case of any
applicable project the
construction of which begins
before January 1, 2023, 5
percent,
``(II) in the case of any
applicable project the
construction of which begins
after December 31, 2022, and
before January 1, 2024, 10
percent, and
``(III) in the case of any
applicable project the
construction of which begins
after December 31, 2023, 15
percent.
``(B) Apprentice to journeyworker ratio.--The
requirement under subparagraph (A)(i) shall be
subject to any applicable requirements for
apprentice-to-journeyworker ratios of the
Department of Labor or the applicable State
apprenticeship agency.
``(C) Participation.--Each contractor and
subcontractor who employs 4 or more individuals
to perform construction, alteration, or repair
work on an applicable project shall employ 1 or
more qualified apprentices to perform such
work.
``(D) Exception.--
``(i) In general.--Notwithstanding
any other provision of this paragraph,
this paragraph shall not apply in the
case of a taxpayer who--
``(I) demonstrates a lack of
availability of qualified
apprentices in the geographic
area of the construction,
alteration, or repair work, and
``(II) makes a good faith
effort to comply with the
requirements of this paragraph.
``(ii) Good faith effort.--For
purposes of clause (i), a taxpayer
shall be deemed to have satisfied the
requirements under such paragraph with
respect to an applicable project if
such taxpayer has requested qualified
apprentices from a registered
apprenticeship program, as defined in
section 3131(e)(3)(B), and such request
has been denied, provided that such
denial is not the result of a refusal
by the contractors or subcontractors
engaged in the performance of
construction, alteration, or repair
work on such applicable project to
comply with the established standards
and requirements of such apprenticeship
program.
``(E) Definitions.--For purposes of this
paragraph--
``(i) Labor hours.--The term `labor
hours' has the meaning given such term
in section 45(b)(9)(E)(i).
``(ii) Qualified apprentice.--The
term `qualified apprentice' has the
meaning given such term in section
45(b)(9)(E)(ii).
``(4) Regulations and guidance.--The Secretary shall
issue such regulations or other guidance as the
Secretary determines necessary or appropriate to carry
out the purposes of this subsection.''.
(e) Effective Date.--The amendment made by this section shall
apply to property placed in service after December 31, 2021.
SEC. 136406. REINSTATEMENT AND EXPANSION OF EMPLOYER-PROVIDED FRINGE
BENEFITS FOR BICYCLE COMMUTING.
(a) Repeal of Suspension of Exclusion for Qualified Bicycle
Commuting Benefits.--Section 132(f) is amended by striking
paragraph (8).
(b) Expansion of Bicycle Commuting Benefits.--Section
132(f)(5)(F) is amended to read as follows:
``(F) Definitions related to bicycle
commuting benefits.--
``(i) Qualified bicycle commuting
benefit.--The term `qualified bicycle
commuting benefit' means, with respect
to any calendar year--
``(I) any employer
reimbursement during the 15-
month period beginning with the
first day of such calendar year
for reasonable expenses
incurred by the employee during
such calendar year for the
purchase (including associated
finance charges), lease, rental
(including a bikeshare),
improvement, repair, or storage
of qualified commuting
property, or
``(II) the provision by the
employer to the employee during
such calendar year of the use
(including a bikeshare),
improvement, repair, or storage
of qualified commuting
property,
if the employee regularly uses such
qualified commuting property for travel
between the employee's residence, place
of employment, or a mass transit
facility that connects the employee to
their residence or place of employment.
``(ii) Qualified commuting
property.--The term `qualified
commuting property' means--
``(I) any bicycle (other than
a bicycle equipped with any
motor),
``(II) any electric bicycle
which meets the requirements of
section 36E(c)(5),
``(III) any 2- or 3-wheel
scooter (other than a scooter
equipped with any motor), and
``(IV) any 2- or 3-wheel
scooter propelled by an
electric motor if such motor
does not provide assistance if
the speed of such scooter
exceeds 20 miler per hour (or
if the speed of such scooter is
not capable of exceeding 20
miles per hour) and the weight
of such scooter does not exceed
100 pounds.
``(iii) Bikeshare.--The term
`bikeshare' means a rental operation at
which qualified commuting property is
made available to customers to pick up
and drop off for point-to-point use
within a defined geographic area.''.
(c) Limitation on Exclusion.--Section 132(f)(2)(C) is amended
to read as follows:
``(C) 30 percent of the dollar amount in
effect under subparagraph (B) per month in the
case of any qualified bicycle commuting
benefit.''.
(d) No Constructive Receipt.--Section 132(f)(4) is amended by
striking ``(other than a qualified bicycle commuting
reimbursement)''.
(e) Conforming Amendment.--Section 132(f)(1)(D) is amended by
striking ``reimbursement'' and inserting ``benefit''.
(f) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 136407. CREDIT FOR CERTAIN NEW ELECTRIC BICYCLES.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1, as amended by the preceding provisions of this Act,
is amended by inserting after section 36D the following new
section:
``SEC. 36E. ELECTRIC BICYCLES.
``(a) Allowance of Credit.--There shall be allowed as a
credit against the tax imposed by this chapter for the taxable
year an amount equal to 15 percent of the cost of each
qualified electric bicycle placed in service by the taxpayer
during such taxable year.
``(b) Limitations.--
``(1) Limitation on cost per electric bicycle taken
into account.--The amount taken into account under
subsection (a) as the cost of any qualified electric
bicycle shall not exceed $5,000.
``(2) Bicycle limitation with respect to credit.--
``(A) Limitation on number of personal-use
bicycles.--In the case of any taxpayer for any
taxable year, the number of personal-use
bicycles taken into account under subsection
(a) shall not exceed the excess (if any) of--
``(i) 1 (2 in the case of a joint
return), reduced by
``(ii) the aggregate number of
bicycles taken into account by the
taxpayer under subsection (a) for the 2
preceding taxable years.
``(B) Phaseout based on modified adjusted
gross income.--So much of the credit allowed
under subsection (a) to any taxpayer for any
taxable year as would (but for this
subparagraph) be treated under subsection
(c)(2) as a credit allowable under subpart C
shall be reduced by $200 for each $1,000 (or
fraction thereof) by which the taxpayer's
modified adjusted gross income exceeds--
``(i) $150,000 in the case of a joint
return or a surviving spouse (as
defined in section 2(a)),
``(ii) $112,500 in the case of a head
of household (as defined in section
2(b)), and
``(iii) $75,000 in the case of a
taxpayer not described in clause (i) or
(ii).
``(C) Modified adjusted gross income.--For
purposes of subparagraph (B), the term
`modified adjusted gross income' means adjusted
gross income increased by any amount excluded
from gross income under section 911, 931, or
933.
``(D) Special rule for determination of
modified adjusted gross income.--The modified
adjusted gross income of the taxpayer that is
taken into account for purposes of this
paragraph shall be the lesser of--
``(i) the modified adjusted gross
income for the taxable year in which
the credit is claimed, or
``(ii) the modified adjusted gross
income for the immediately preceding
taxable year.
``(c) Qualified Electric Bicycle.--For purposes of this
section, the term `qualified electric bicycle' means a
bicycle--
``(1) the original use of which commences with the
taxpayer,
``(2) which is acquired for use by the taxpayer and
not for resale,
``(3) which is made by a qualified manufacturer and
is labeled with the qualified vehicle identification
number assigned to such bicycle by such manufacturer,
``(4) with respect to which the aggregate amount paid
for such acquisition does not exceed $8,000, and
``(5) which is equipped with--
``(A) fully operable pedals,
``(B) a saddle or seat for the rider, and
``(C) an electric motor of less than 750
watts which is designed to provided assistance
in propelling the bicycle and--
``(i) does not provide such
assistance if the bicycle is moving in
excess of 20 miler per hour, or
``(ii) if such motor only provides
such assistance when the rider is
pedaling, does not provide such
assistance if the bicycle is moving in
excess of 28 miles per hour.
``(d) VIN Number Requirement.--
``(1) In general.--No credit shall be allowed under
subsection (a) with respect to any qualified electric
bicycle unless the taxpayer includes the qualified
vehicle identification number of such bicycle on the
return of tax for the taxable year.
``(2) Qualified vehicle identification number.--For
purposes of this section, the term `qualified vehicle
identification number' means, with respect to any
bicycle, the vehicle identification number assigned to
such bicycle by a qualified manufacturer pursuant to
the methodology referred to in paragraph (3).
``(3) Qualified manufacturer.--For purposes of this
section, the term `qualified manufacturer' means any
manufacturer of qualified electric bicycles which
enters into an agreement with the Secretary which
provides that such manufacturer will--
``(A) assign a vehicle identification number
to each qualified electric bicycle produced by
such manufacturer utilizing a methodology that
will ensure that such number (including any
alphanumeric) is unique to such bicycle (by
utilizing numbers or letters which are unique
to such manufacturer or by such other method as
the Secretary may provide),
``(B) label such bicycle with such number in
such manner as the Secretary may provide, and
``(C) make periodic written reports to the
Secretary (at such times and in such manner as
the Secretary may provide) of the vehicle
identification numbers so assigned and
including such information as the Secretary may
require with respect to the qualified electric
bicycle to which such number was so assigned.
``(e) Special Rules.--
``(1) Basis reduction.--For purposes of this
subtitle, the basis of any property for which a credit
is allowable under subsection (a) shall be reduced by
the amount of such credit so allowed (determined
without regard to subsection (c)).
``(2) No double benefit.--The amount of any deduction
or other credit allowable under this chapter for a
qualified electric bicycle for which a credit is
allowable under subsection (a) shall be reduced by the
amount of credit allowed under such subsection for such
vehicle (determined without regard to subsection (c)).
``(3) Property used outside united states not
qualified.--No credit shall be allowable under
subsection (a) with respect to any property referred to
in section 50(b)(1).
``(4) Recapture.--The Secretary shall, by
regulations, provide for recapturing the benefit of any
credit allowable under subsection (a) with respect to
any property which ceases to be property eligible for
such credit.
``(5) Election not to take credit.--No credit shall
be allowed under subsection (a) for any bicycle if the
taxpayer elects to not have this section apply to such
bicycle.
``(f) Treatment of Certain Possessions.--
``(1) Payments to possessions with mirror code tax
systems.--The Secretary shall pay to each possession of
the United States which has a mirror code tax system
amounts equal to the loss (if any) to that possession
by reason of the application of the provisions of this
section (determined without regard to this subsection).
Such amounts shall be determined by the Secretary based
on information provided by the government of the
respective possession.
``(2) Payments to other possessions.--The Secretary
shall pay to each possession of the United States which
does not have a mirror code tax system amounts
estimated by the Secretary as being equal to the
aggregate benefits (if any) that would have been
provided to residents of such possession by reason of
the provisions of this section if a mirror code tax
system had been in effect in such possession. The
preceding sentence shall not apply unless the
respective possession has a plan which has been
approved by the Secretary under which such possession
will promptly distribute such payments to its
residents.
``(3) Mirror code tax system; treatment of
payments.--Rules similar to the rules of paragraphs (4)
and (5) of section 21(h) shall apply for purposes of
this section.
``(g) Termination.--This section shall not apply to bicycles
placed in service after December 31, 2031.''.
(b) Conforming Amendments.--
(1) Section 38(b) is amended by striking ``plus'' at
the end of paragraph (39), by striking the period at
the end of paragraph (40) and inserting ``, plus'', and
by adding at the end the following new paragraph:
``(41) the portion of the electric bicycles credit to
which section 36E(c)(1) applies.''.
(2) Section 1016(a) is amended by striking ``and'' at
the end of paragraph (37), by striking the period at
the end of paragraph (38) and inserting ``, and'', and
by adding at the end the following new paragraph:
``(39) to the extent provided in section
36E(f)(1).''.
(3) Section 6211(b)(4)(A) of such Code is amended by
inserting ``36E by reason of subsection (c)(2)
thereof,'' before ``32,''.
(4) Section 6213(g)(2), as amended by the preceding
provisions of this Act, is amended--
(A) in subparagraph (U), by striking ``and''
at the end,
(B) in subparagraph (V), by striking the
period at the end and inserting ``, and'', and
(C) by adding at the end the following:
``(W) an omission of a correct vehicle
identification number required under section
36E(e) (relating to electric bicycles credit)
to be included on a return.''.
(5) Section 6501(m) is amended by inserting
``36E(f)(4),'' after ``35(g)(11),''.
(6) Section 1324(b)(2) of title 31, United States
Code, is amended by inserting ``36E,'' after ``36B,''.
(c) Clerical Amendment.--The table of sections for subpart B
of part IV of subchapter A of chapter 1 is amended by adding at
the end the following new item:
``Sec. 36E. Electric bicycles.''.
(d) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of the
enactment of this Act, in taxable years ending after such date.
PART 5--INVESTMENT IN THE GREEN WORKFORCE
SEC. 136501. EXTENSION OF THE ADVANCED ENERGY PROJECT CREDIT.
(a) Extension of Credit.--Section 48C is amended by
redesignating subsection (e) as subsection (f) and by inserting
after subsection (d) the following new subsection:
``(e) Additional Allocations.--
``(1) In general.--Not later than 180 days after the
date of enactment of this subsection, the Secretary,
after consultation with the Secretary of Energy, shall
establish a program to consider and award
certifications for qualified investments eligible for
credits under this section to qualifying advanced
energy project sponsors.
``(2) Annual limitation.--
``(A) In general.--The amount of credits that
may be allocated under this subsection during
any calendar year shall not exceed the annual
credit limitation with respect to such year.
``(B) Annual credit limitation.--
``(i) In general.--For purposes of
this subsection, the term `annual
credit limitation' means $2,500,000,000
for each of calendar years 2022 through
2031, and zero thereafter.
``(ii) Amount set aside for
automotive communities.--
``(I) In general.--For
purposes of clause (i),
$400,000,000 of the annual
credit limitation for each of
calendar years 2022 through
2031 shall be allocated to
qualified investments located
within automotive communities.
``(II) Automotive
communities.--For purposes of
this clause, the term
`automotive communities' means
a census tract and any directly
adjoining census tract,
including a no-population
census tract, that has
experienced major job losses in
the automotive manufacturing
sector since January 1, 1994,
as determined by the Secretary
after consultation with the
Secretary of Energy and
Secretary of Labor.
``(C) Carryover of unused limitation.--If the
annual credit limitation for any calendar year
exceeds the aggregate amount designated for
such year under this subsection, such
limitation for the succeeding calendar year
shall be increased by the amount of such
excess. No amount may be carried under the
preceding sentence to any calendar year after
2036.
``(3) Certifications.--
``(A) Application requirement.--Each
applicant for certification under this
subsection shall submit an application at such
time and containing such information as the
Secretary may require.
``(B) Time to meet criteria for
certification.--Each applicant for
certification shall have 2 years from the date
of acceptance by the Secretary of the
application during which to provide to the
Secretary evidence that the requirements of the
certification have been met.
``(C) Period of issuance.--An applicant which
receives a certification shall have 2 years
from the date of issuance of the certification
in order to place the project in service and to
notify the Secretary that such project has been
so placed in service, and if such project is
not placed in service (and the Secretary so
notified) by that time period, then the
certification shall no longer be valid. If any
certification is revoked under this
subparagraph, the amount of the annual credit
limitation under paragraph (2) for the calendar
year in which such certification is revoked
shall be increased by the amount of the credit
with respect to such revoked certification.
``(4) Selection criteria.--Selection criteria similar
to those in subsection (d)(3) shall apply, except that
in determining designations under this subsection, the
Secretary, after consultation with the Secretary of
Energy, shall--
``(A) in addition to the factors described in
subsection (d)(3)(B), take into consideration
which projects--
``(i) will provide the greatest net
impact in avoiding or reducing
anthropogenic emissions of greenhouse
gases, as determined by the Secretary
after consultation with the
Administrator of the Environmental
Protection Agency,
``(ii) will provide the greatest
domestic job creation (both direct and
indirect) during the credit period,
``(iii) will provide the greatest job
creation within the vicinity of the
project, particularly with respect to--
``(I) low-income communities
(as described in section
45D(e)), and
``(II) dislocated workers who
were previously employed in
manufacturing, coal power
plants, or coal mining, and
``(iv) will provide the greatest job
creation in areas with a population
that is at risk of experiencing higher
or more adverse human health or
environmental effects and a significant
portion of such population is comprised
of communities of color, low-income
communities, Tribal and Indigenous
communities, or individuals formerly
employed in the fossil fuel industry,
and
``(B) give the highest priority to projects
which--
``(i) manufacture (other than
primarily assembly of components)
property described in a subclause of
subsection (c)(1)(A)(i) (or components
thereof), and
``(ii) have the greatest potential
for commercial deployment of new
applications.
``(5) Disclosure of allocations.--The Secretary
shall, upon allocating a credit under this subsection,
publicly disclose the identity of the applicant, the
amount of the credit with respect to such applicant,
and the project location for which such credit was
allocated.
``(6) Credit conditioned upon wage and apprenticeship
requirements.--No credit shall be allocated for a
project under this subsection unless the project meets
the prevailing wage requirements of paragraph (7) and
the apprenticeship requirements of paragraph (8).
``(7) Prevailing wage requirements.--
``(A) In general.--The requirements described
in this paragraph with respect to a project are
that the taxpayer shall ensure that any
laborers and mechanics employed by contractors
and subcontractors in the re-equipping,
expansion, or establishment of an industrial or
manufacturing facility shall be paid wages at
rates not less than the prevailing rates for
construction, alteration, or repair of a
similar character in the locality as most
recently determined by the Secretary of Labor,
in accordance with subchapter IV of chapter 31
of title 40, United States Code.
``(B) Correction and penalty related to
failure to satisfy wage requirements.--
``(i) In general.--In the case of any
taxpayer which fails to satisfy the
requirement under subparagraph (A) with
respect to any project--
``(I) rules similar to the
rules of section 45(b)(8)(B)
shall apply for purposes of
this paragraph, and
``(II) if the failure to
satisfy the requirement under
subparagraph (A) is not
corrected pursuant to the rules
described in subclause (I), the
certification with respect to
the re-equipping, expansion, or
establishment of an industrial
or manufacturing facility shall
no longer be valid.
``(8) Apprenticeship requirements.--The requirements
described in this subparagraph with respect to a
project are as follows:
``(A) Labor hours.--
``(i) Percentage of total labor
hours.--All contractors and
subcontractors engaged in the
performance of construction,
alteration, or repair work on any
project shall, subject to subparagraph
(B), ensure that not less than the
applicable percentage of the total
labor hours of such work be performed
by qualified apprentices.
``(ii) Applicable percentage.--For
purposes of paragraph (1), the
applicable percentage shall be--
``(I) in the case of any
applicable project the
construction of which begins
before January 1, 2023, 5
percent,
``(II) in the case of any
applicable project the
construction of which begins
after December 31, 2022, and
before January 1, 2024, 10
percent, and
``(III) in the case of any
applicable project the
construction of which begins
after December 31, 2023, 15
percent.
``(B) Apprentice to journeyworker ratio.--The
requirement under subparagraph (A)(i) shall be
subject to any applicable requirements for
apprentice-to-journeyworker ratios of the
Department of Labor or the applicable State
apprenticeship agency.
``(C) Participation.--Each contractor and
subcontractor who employs 4 or more individuals
to perform construction, alteration, or repair
work on an applicable project shall employ 1 or
more qualified apprentices to perform such
work.
``(D) Exception.--
``(i) In general.--Notwithstanding
any other provision of this paragraph,
this paragraph shall not apply in the
case of a taxpayer who--
``(I) demonstrates a lack of
availability of qualified
apprentices in the geographic
area of the construction,
alteration, or repair work, and
``(II) makes a good faith
effort to comply with the
requirements of this paragraph.
``(ii) Good faith effort.--For
purposes of clause (i), a taxpayer
shall be deemed to have satisfied the
requirements under such paragraph with
respect to an applicable project if
such taxpayer has requested qualified
apprentices from a registered
apprenticeship program, as defined in
section 3131(e)(3)(B), and such request
has been denied, provided that such
denial is not the result of a refusal
by the contractors or subcontractors
engaged in the performance of
construction, alteration, or repair
work on such applicable project to
comply with the established standards
and requirements of such apprenticeship
program.
``(E) Definitions.--For purposes of this
paragraph--
``(i) Labor hours.--The term `labor
hours' has the meaning given such term
in section 45(b)(9)(E)(i).
``(ii) Qualified apprentice.--The
term `qualified apprentice' has the
meaning given such term in section
45(b)(9)(E)(ii).''.
(b) Modification of Qualifying Advanced Energy Projects.--
(1) Inclusion of water as a renewable resource.--
Section 48C(c)(1)(A)(i)(I) is amended by inserting
``water,'' after ``sun,''.
(2) Energy storage systems.--Section
48C(c)(1)(A)(i)(II) is amended by striking ``an energy
storage system for use with electric or hybrid-electric
motor vehicles'' and inserting ``energy storage systems
and components''.
(3) Modification of qualifying electric grid
property.--Section 48C(c)(1)(A)(i)(III) is amended to
read as follows:
``(III) electric grid
modernization equipment or
components,''.
(4) Use of captured carbon.--Section
48C(c)(1)(A)(i)(IV) is amended by striking
``sequester'' and insert ``use or sequester''.
(5) Electric and fuel cell vehicles.--Section
48C(c)(1)(A)(i)(VI) is amended--
(A) by striking ``new qualified plug-in
electric drive motor vehicles (as defined by
section 30D)'' and inserting ``vehicles
described in section 36C, 45Y, and 36E'', and
(B) and striking ``and power control units''
and inserting ``power control units, and
equipment used for charging or refueling''.
(6) Property for production of hydrogen.--Section
48C(c)(1)(A)(i) is amended by striking ``or'' at the
end of subclause (VI), by redesignating subclause (VII)
as subclause (VIII), an by inserting after subclause
(VI) the following new subclause:
``(VII) property designed to
be used to produce qualified
clean hydrogen (as defined in
section 45X), or''.
(7) Recycling of advanced energy property.--Section
48C(c)(1) is amended by adding at the end the following
new subparagraph:
``(C) Special rule for certain recycling
facilities.--A facility which recycles
batteries or similar energy storage property
described in subparagraph (A)(i) shall be
treated as part of a manufacturing facility
described in such subparagraph.''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 136502. LABOR COSTS OF INSTALLING MECHANICAL INSULATION PROPERTY.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1, as amended by the preceding provisions of this Act,
is further amended by adding at the end the following new
section:
``SEC. 45Z. LABOR COSTS OF INSTALLING MECHANICAL INSULATION PROPERTY.
``(a) In General.--For purposes of section 38, the mechanical
insulation labor costs credit determined under this section for
any taxable year is an amount equal to 10 percent of the
mechanical insulation labor costs paid or incurred by the
taxpayer during such taxable year.
``(b) Mechanical Insulation Labor Costs.--For purposes of
this section--
``(1) In general.--The term `mechanical insulation
labor costs' means the labor cost of installing
mechanical insulation property with respect to a
mechanical system referred to in paragraph (2)(A) which
was originally placed in service not less than 1 year
before the date on which such mechanical insulation
property is installed.
``(2) Mechanical insulation property.--The term
`mechanical insulation property' means insulation
materials, and facings and accessory products installed
in connection to such insulation materials--
``(A) placed in service in connection with a
mechanical system which--
``(i) is located in the United
States,
``(ii) is of a character subject to
an allowance for depreciation, and
``(iii) meets the requirements of
section 434.403 of title 10, Code of
Federal Regulations (as in effect on
the date of enactment of this section),
and
``(B) which result in a reduction in energy
loss from the mechanical system which is
greater than the expected reduction from the
installation of insulation materials which meet
the minimum requirements of Reference Standard
90.1 (as defined in section 179D(c)(2)).
``(c) Termination.--This section shall not apply to
mechanical insulation labor costs paid or incurred after
December 31, 2031.''.
(b) Credit Allowed as Part of General Business Credit.--
Section 38(b), as amended by the preceding provisions of this
Act, is further amended by striking ``plus'' at the end of
paragraph (40), by striking the period at the end of paragraph
(41) and inserting ``, plus'', and by adding at the end the
following new paragraph:
``(42) the mechanical insulation labor costs credit
determined under section 45Z(a).''.
(c) Conforming Amendments.--
(1) Section 280C is amended by adding at the end the
following new subsection:
``(i) Mechanical Insulation Labor Costs Credit.--
``(1) In general.--No deduction shall be allowed for
that portion of the mechanical insulation labor costs
(as defined in section 45Z(b)) otherwise allowable as
deduction for the taxable year which is equal to the
amount of the credit determined for such taxable year
under section 45Z(a).
``(2) Similar rule where taxpayer capitalizes rather
than deducts expenses.--If--
``(A) the amount of the credit determined for
the taxable year under section 45Z(a), exceeds
``(B) the amount of allowable as a deduction
for such taxable year for mechanical insulation
labor costs (determined without regard to
paragraph (1)),
the amount chargeable to capital account for the
taxable year for such costs shall be reduced by the
amount of such excess.''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1, as amended by the preceding
provisions of this Act, is further amended by adding at
the end the following new item:
``Sec. 45Z. Labor costs of installing mechanical insulation property.''.
(d) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after December 31,
2021, in taxable years ending after such date.
PART 6--ENVIRONMENTAL JUSTICE
SEC. 136601. QUALIFIED ENVIRONMENTAL JUSTICE PROGRAM CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1, as amended by the preceding provisions of this Act,
is amended by inserting after section 36E the following new
section:
``SEC. 36F. QUALIFIED ENVIRONMENTAL JUSTICE PROGRAMS.
``(a) Allowance of Credit.--In the case of an eligible
educational institution, there shall be allowed as a credit
against the tax imposed by this subtitle for any taxable year
an amount equal to the applicable percentage of the amounts
paid or incurred by such taxpayer during such taxable year
which are necessary for a qualified environmental justice
program.
``(b) Qualified Environmental Justice Program.--For purposes
of this section--
``(1) In general.--The term `qualified environmental
justice program' means a program conducted by one or
more eligible educational institutions that is designed
to address, or improve data about, qualified
environmental stressors for the primary purpose of
improving, or facilitating the improvement of, health
and economic outcomes of individuals residing in low-
income areas or areas that experience, or are at risk
of experiencing, multiple exposures to qualified
environmental stressors.
``(2) Qualified environmental stressor.--The term
`qualified environmental stressor' means, with respect
to an area, a contamination of the air, water, soil, or
food with respect to such area or a change relative to
historical norms of the weather conditions of such
area, including--
``(A) toxic pollutants (such as lead,
pesticides, or fine particulate matter) in air,
soil, food, or water,
``(B) high rates of asthma prevalence and
incidence, and
``(C) such other adverse human health or
environmental effects as are identified by the
Secretary.
``(c) Eligible Educational Institution.--For purposes of this
section, the term `eligible educational institution' means an
institution of higher education (as such term is defined in
section 101 or 102(c) of the Higher Education Act of 1965) that
is eligible to participate in a program under title IV of such
Act.
``(d) Applicable Percentage.--For purposes of this section,
the term `applicable percentage' means--
``(1) in the case of a program involving material
participation of faculty and students of an institution
described in section 371(a) of the Higher Education Act
of 1965, 30 percent, and
``(2) in all other cases, 20 percent.
``(e) Credit Allocation.--
``(1) Allocation.--
``(A) In general.--The Secretary shall
allocate credit dollar amounts under this
section to eligible educational institutions,
for qualified environmental justice programs,
that--
``(i) submit applications at such
time and in such manner as the
Secretary may provide, and
``(ii) are selected by the Secretary
under subparagraph (B).
``(B) Selection criteria.--The Secretary,
after consultation with the Secretary of
Energy, the Secretary of Education, the
Secretary of Health and Human Services, and the
Administrator of the Environmental Protection
Agency, shall select applications on the basis
of the following criteria:
``(i) The extent of participation of
faculty and students of an institution
described in section 371(a) of the
Higher Education Act of 1965.
``(ii) The extent of the expected
effect on the health or economic
outcomes of individuals residing in
areas within the United States that are
low-income areas or areas that
experience, or are at risk of
experiencing, multiple exposures to
qualified environmental stressors.
``(iii) The creation or significant
expansion of qualified environmental
justice programs.
``(2) Limitations.--
``(A) In general.--The amount of the credit
determined under this section for any taxable
year to any eligible educational institution
for any qualified environmental justice program
shall not exceed the excess of--
``(i) the credit dollar amount
allocated to such institution for such
program under this subsection, over
``(ii) the credits previously claimed
by such institution for such program
under this section.
``(B) Five-year limitation.--No amounts paid
or incurred after the 5-year period beginning
on the date a credit dollar amount is allocated
to an eligible educational institution for a
qualified environmental justice program shall
be taken into account under subsection (a) with
respect to such institution for such program.
``(C) Allocation limitation.--The total
amount of credits that may be allocated under
the program shall not exceed--
``(i) $1,000,000,000 for each of
taxable years 2022 through 2031, and
``(ii) $0 for each subsequent year.
``(D) Carryover of unused limitation.--If the
annual credit limitation for any calendar year
exceeds the aggregate amount designated for
such year under this subsection, such
limitation for the succeeding calendar year
shall be increased by the amount of such
excess. No amount may be carried under the
preceding sentence to any calendar year after
2036.
``(f) Requirements.--
``(1) In general.--An eligible educational
institution that has been allocated credit dollar
amounts under this section for a qualified
environmental justice project for a taxable year
shall--
``(A) make publicly available the application
submitted to the Secretary under subsection (e)
with respect to such project, and
``(B) submit an annual report to the
Secretary that describes the amounts paid or
incurred for, and expected impact of, such
project.
``(2) Failure to comply.--In the case of an eligible
educations institution that has failed to comply with
the requirements of this subsection, the credit dollar
amount allocated to such institution under this section
is deemed to be $0.
``(g) Public Disclosure.--The Secretary, upon making an
allocation of credit dollar amounts under this section, shall
publicly disclose--
``(1) the identity of the eligible educational
institution receiving the allocation, and
``(2) the amount of such allocation.''.
(b) Conforming Amendments.--
(1) Section 6211(b)(4)(A), as amended by the
preceding provisions of this Act, is amended by
inserting ``36F,'' after ``36D,''.
(2) Paragraph (2) of section 1324(b) of title 31,
United States Code, as amended by the preceding
provisions of this Act, is amended by inserting
``36F,'' after ``36D,''.
(c) Clerical Amendment.--The table of sections for subpart C
of part IV of subchapter A of chapter 1, as amended by the
preceding provisions of this Act, is amended by inserting after
the item relating to section 36E the following new item:
``Sec. 36F. Qualified environmental justice programs.''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
PART 7--SUPERFUND
SEC. 136701. REINSTATEMENT OF SUPERFUND.
(a) Hazardous Substance Superfund Financing Rate.--
(1) Extension.--Section 4611(e) is amended to read as
follows:
``(e) Application of Hazardous Substance Superfund Financing
Rate.--The Hazardous Substance Superfund financing rate under
this section shall apply after December 31, 2021.''.
(2) Adjustment for inflation.--
(A) Section 4611(c)(2)(A) is amended by
striking ``9.7 cents'' and inserting ``16.4
cents''.
(B) Section 4611(c) is amended by adding at
the end the following:
``(3) Adjustment for inflation.--
``(A) In general.--In the case of a year
beginning after 2022, the amount in paragraph
(2)(A) shall be increased by an amount equal
to--
``(i) such amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year, determined by
substituting `calendar year 2021' for
`calendar year 2016' in subparagraph
(A)(ii) thereof.
``(B) Rounding.--If any amount as adjusted
under subparagraph (A) is not a multiple of
$0.01, such amount shall be rounded to the next
lowest multiple of $0.01.''.
(b) Authority for Advances.--Section 9507(d)(3)(B) is amended
by striking ``December 31, 1995'' and inserting ``December 31,
2031''.
(c) Effective Date.--The amendments made by this section
shall take effect on January 1, 2022.
PART 8--APPROPRIATIONS
SEC. 136801. APPROPRIATIONS.
Immediately upon the enactment of this Act, in addition to
amounts otherwise available, there are appropriated for fiscal
year 2022, out of any money in the Treasury not otherwise
appropriated, $3,831,000,000 to remain available until
September 30, 2031, for necessary expenses for the Internal
Revenue Service to carry out this subtitle (and the amendments
made by this subtitle), which shall supplement and not supplant
any other appropriations that may be available for this
purpose.
Subtitle H--Social Safety Net
SEC. 137001. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this
subtitle an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
PART 1--CHILD TAX CREDIT
SEC. 137101. MODIFICATIONS APPLICABLE BEGINNING IN 2021.
(a) Safe Harbor Exception for Fraud and Intentional Disregard
of Rules and Regulations.--Section 24(j)(2)(B) is amended--
(1) by striking ``qualified'' each place it appears
in clause (iv)(II) and inserting ``qualifying'', and
(2) by adding at the end the following new clause:
``(v) Exception for fraud and
intentional disregard of rules and
regulations.--
``(I) In general.--For
purposes of determining the
safe harbor amount under clause
(iv) with respect to any
taxpayer, an individual shall
not be treated as taken into
account in determining the
annual advance amount of such
taxpayer if the Secretary
determines that such individual
was so taken into account due
to fraud by the taxpayer or
intentional disregard of rules
and regulations by the
taxpayer.
``(II) Arrangements to take
individual into account more
than once.--For purposes of
subclause (I), a taxpayer shall
not fail to be treated as
intentionally disregarding
rules and regulations with
respect to any individual taken
into account in determining the
annual advance amount of such
taxpayer if such taxpayer
entered into a plan or other
arrangement with, or expected,
another taxpayer to take such
individual into account in
determining the credit allowed
under this section for the
taxable year.''.
(b) Treatment of Joint Returns.--Section 24(j) is amended by
adding at the end the following new paragraph:
``(3) Joint returns.--Except as otherwise provided by
the Secretary, in the case of an advance payment made
under section 7527A with respect to a joint return,
half of such payment shall be treated as having been
made to each individual filing such return.''.
(c) Annual Advance Amount.--Section 7527A(b) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A), by inserting ``or
based on any other information known to the
Secretary'' after ``reference taxable year'',
(B) in subparagraph (C), by inserting
``unless determined by the Secretary based on
any information known to the Secretary,''
before ``the only children'', and
(C) in subparagraph (D), by inserting
``unless determined by the Secretary based on
any information known to the Secretary,''
before ``the ages of'', and
(2) in paragraph (3)(A)(ii), by striking `` provided
by the taxpayer'' and inserting ``provided, or
known,''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning, and payments made,
after December 31, 2020.
SEC. 137102. EXTENSION AND MODIFICATION OF CHILD TAX CREDIT AND ADVANCE
PAYMENT FOR 2022.
(a) Extensions.--
(1) Extension of child tax credit.--Section 24(i) is
amended--
(A) by striking ``January 1, 2022'' in the
matter preceding paragraph (1) and inserting
``January 1, 2023'', and
(B) by inserting ``and 2022'' after ``2021''
in the heading thereof.
(2) Extension of provisions related to possessions of
the united states.--
(A) Section 24(k)(2)(B) is amended--
(i) by striking ``December 31, 2021''
in the matter preceding clause (i) and
inserting ``December 31, 2022'', and
(ii) by striking ``After 2021'' in
the heading thereof and inserting
``After 2022''.
(B) Section 24(k)(3)(C)(ii) is amended--
(i) in subclause (I), by inserting
``or 2022'' after ``2021'', and
(ii) in subclause (II), by striking
``December 31, 2021'' and inserting
``December 31, 2022''.
(C) The heading of section 24(k)(2)(A) is
amended by inserting ``and 2022'' after
``2021''.
(3) Extension of advance payment.--Section 7527A is
amended--
(A) in subsection (b)(1), by striking ``50
percent of'',
(B) in clauses (i) and (ii) of subsection
(e)(4)(C), by inserting ``or 2022'' after ``in
2021'', and
(C) in subsection (f), by striking ``December
31, 2021'' and inserting ``December 31, 2022''.
(b) Repeal of Social Security Number Requirement.--Section
24(h) is amended by striking paragraph (7).
(c) Application of Income Phaseout on Basis of Income for
Preceding Taxable Year.--Section 24(i) is amended by adding at
the end the following new paragraph:
``(5) Application of income phaseout on basis of
income for prior taxable year.--If the taxpayer's
modified adjusted gross income (as defined in
subsection (b)) for the taxable year for which the
credit allowed under this section is determined is
greater than such taxpayer's modified adjusted gross
income (as so defined) for the preceding taxable year,
paragraph (4) and subsection (b)(1) shall both be
applied with respect to such taxpayer's modified
adjusted gross income (as so defined) for the preceding
taxable year.''.
(d) Inflation Adjustment.--Section 24(i), as amended by
subsection (c), is amended by adding at the end the following
new paragraph:
``(6) Inflation adjustments.--
``(A) In general.--In the case of any taxable
year beginning after December 31, 2021, the
$500 amount in subsection (h)(4)(A), the $3,000
and $3,600 amounts in paragraph (3) and
subsection (j)(2)(B)(iv), and the dollar
amounts in paragraph (4)(B), shall each be
increased by an amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the percentage (if any) by
which--
``(I) the CPI (as defined in
section 1(f)(4)) for the
calendar year preceding the
calendar year in which such
taxable year begins, exceeds
``(II) the CPI (as so
defined) for calendar year
2020.
``(B) Rounding.--
``(i) $500 amount.--In the case of
the $500 amount in subsection
(h)(4)(A), any increase under
subparagraph (A) which is not a
multiple of $10 shall be rounded to the
nearest multiple of $10.
``(ii) $3,000 and $3,600 amounts.--In
the case of the $3,000 and $3,600
amounts in paragraph (3) and subsection
(j)(2)(B)(iv), any increase under
subparagraph (A) which is not a
multiple of $100 shall be rounded to
the nearest multiple of $100.
``(iii) Applicable threshold
amounts.--In the case of the dollar
amounts in paragraph (4)(B), any
increase under subparagraph (A) which
is not a multiple of $5,000 shall be
rounded to the nearest multiple of
$5,000.''.
(e) Modification of Recapture Safe Harbor for 2022.--Section
24(j)(2)(B)(iv), as amended by the preceding provisions of this
Act, is amended to read as follows:
``(iv) Safe harbor amount.--For
purposes of this subparagraph, the term
`safe harbor amount' means, with
respect to any taxpayer for any taxable
year, the aggregate of $3,000 ($3,600
in the case of a qualifying child who
has not attained age 6 as of the close
of the calendar year in which the
taxable year of the taxpayer begins)
with respect to each qualifying child
who is--
``(I) taken into account in
determining the annual advance
amount with respect to such
taxpayer under section 7527A
with respect to months
beginning in such taxable year,
and
``(II) not taken into account
in determining the credit
allowed to such taxpayer under
this section for such taxable
year.''.
(f) Effective Date.--The amendments made by this section
shall apply to taxable years beginning, and payments made,
after December 31, 2021.
SEC. 137103. ESTABLISHMENT OF MONTHLY CHILD TAX CREDIT WITH ADVANCE
PAYMENT THROUGH 2025.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 is amended by inserting after section 24 the
following new sections:
``SEC. 24A. MONTHLY CHILD TAX CREDIT.
``(a) Allowance of Credit.--There shall be allowed as a
credit against the tax imposed by this chapter for the taxable
year the sum of the monthly specified child allowances
determined with respect to the taxpayer under subsection (b)
for each calendar month during such taxable year.
``(b) Monthly Specified Child Allowance.--
``(1) In general.--For purposes of this section, the
term `monthly specified child allowance' means, with
respect to any taxpayer for any calendar month, the sum
of--
``(A) $300 with respect to each specified
child of such taxpayer who will not, as of the
close of the taxable year which includes such
month, have attained age 6, plus
``(B) $250 with respect to each specified
child of such taxpayer who will, as of the
close of the taxable year which includes such
month, have attained age 6.
``(2) Limitations based on modified adjusted gross
income.--
``(A) Initial reduction.--The monthly
specified child allowance otherwise determined
under paragraph (1) with respect to any
taxpayer for any calendar month shall be
reduced (but not below zero) by \1/12\ of 5
percent of the excess (if any) of the
taxpayer's modified adjusted gross income for
the applicable taxable year over the initial
threshold amount in effect for such applicable
taxable year.
``(B) Limitation on initial reduction.--The
amount of the reduction under subparagraph (A)
shall not exceed the lesser of--
``(i) the excess (if any) of--
``(I) the monthly specified
child allowance with respect to
the taxpayer for the calendar
month (determined without
regard to this paragraph), over
``(II) the amount which would
be determined under subclause
(I) if the dollar amounts in
effect under subparagraphs (A)
and (B) of paragraph (1) were
each equal to $166.67, or
``(ii) \1/12\ of 5 percent of the
excess of the secondary threshold
amount over the initial threshold
amount.
``(C) Secondary reduction.--The monthly
specified child allowance otherwise determined
under paragraph (1) with respect to any
taxpayer for any calendar month (determined
after the application of subparagraphs (A) and
(B)) shall be reduced (but not below zero) by
\1/12\ of 5 percent of the excess (if any) of
the taxpayer's modified adjusted gross income
for the applicable taxable year over the
secondary threshold amount.
``(D) Definitions related to limitations
based on modified adjusted gross income.--For
purposes of this paragraph--
``(i) Initial threshold amount.--The
term `initial threshold amount' means--
``(I) $150,000, in the case
of a joint return or surviving
spouse (as defined in section
2(a)),
``(II) \1/2\ the dollar
amount in effect under
subclause (I), in the case of a
married individual filing a
separate return, and
``(III) $112,500, in any
other case.
``(iii) Secondary threshold amount.--
The term `secondary threshold amount'
means--
``(I) $400,000, in the case
of a joint return or surviving
spouse (as defined in section
2(a)),
``(II) $300,000, in the case
of a head of household (as
defined in section 2(b)), and
``(III) $200,000, in any
other case.
``(iv) Applicable taxable year.--The
term `applicable taxable year' means,
with respect to any taxpayer, the
relevant taxable year with respect to
which the taxpayer has the lowest
modified adjusted gross income. For
purposes of the preceding sentence, the
term `relevant taxable year' means the
taxable year for which the credit
allowed under this section is
determined and each of the 2
immediately preceding taxable years.
``(v) Modified adjusted gross
income.--The term `modified adjusted
gross income' means adjusted gross
income increased by any amount excluded
from gross income under section 911,
931, or 933.
``(c) Specified Child.--For purposes of this section--
``(1) In general.--The term `specified child' means,
with respect to any taxpayer for any calendar month, an
individual--
``(A) who has the same principal place of
abode as the taxpayer for more than one-half of
such month,
``(B) who is younger than the taxpayer and
will not, as of the close of the calendar year
which includes such month, have attained age
18,
``(C) who receives care from the taxpayer
during such month that is not compensated,
``(D) who is not the spouse of the taxpayer
at any time during such month,
``(E) who is not a taxpayer with respect to
whom any individual is a specified child for
such month, and
``(F) who either--
``(i) is a citizen, national, or
resident of the United States, or
``(ii) if the taxpayer is a citizen
or national of the United States, such
individual is described in section
152(f)(1)(B) with respect to such
taxpayer.
``(2) Care from the taxpayer.--
``(A) In general.--Except as otherwise
provided by the Secretary, whether any
individual receives care from the taxpayer
(within the meaning of paragraph (1)(C)) shall
be determined on the basis of facts and
circumstances with respect to the following
factors:
``(i) The supervision provided by the
taxpayer regarding the daily activities
and needs of the individual.
``(ii) The maintenance by the
taxpayer of a secure environment at
which the individual resides.
``(iii) The provision or arrangement
by the taxpayer of, and transportation
by the taxpayer to, medical care at
regular intervals and as required for
the individual.
``(iv) The involvement by the
taxpayer in, and financial and other
support by the taxpayer for,
educational or similar activities of
the individual.
``(v) Any other factor that the
Secretary determines to be appropriate
to determine whether the individual
receives care from the taxpayer.
``(B) Determination of whether care is
compensated.--For purposes of determining if
care is compensated within the meaning of
paragraph (1)(C), compensation from the Federal
Government, a State or local government, a
Tribal government, or any possession of the
United States shall not be taken into account.
``(3) Application of tie-breaker rules.--
``(A) In general.--Except as provided in
subparagraph (D), if any individual would (but
for this paragraph) be a specified child of 2
or more taxpayers for any month, such
individual shall be treated as the specified
child only of the taxpayer who is--
``(i) the parent of the individual
(or, if such individual would (but for
this paragraph) be a specified child of
2 or more parents of the individual for
such month, the parent of the
individual determined under
subparagraph (B)),
``(ii) if the individual is not a
specified child of any parent of the
individual (determined without regard
to this paragraph), the specified
relative of the individual with the
highest adjusted gross income for the
taxable year which includes such month,
or
``(iii) if the individual is neither
a specified child of any parent of the
individual nor a specified child of any
specified relative of the individual
(in both cases determined without
regard to this paragraph), the taxpayer
with the highest adjusted gross income
for the taxable year which includes
such month.
``(B) Tie-breaker among parents.--If any
individual would (but for this paragraph) be
the specified child of 2 or more parents of the
individual for any month, such child shall be
treated only as the specified child of--
``(i) the parent with whom the child
resided for the longest period of time
during such month, or
``(ii) if the child resides with both
parents for the same amount of time
during such month, the parent with the
highest adjusted gross income for the
taxable year which includes such month.
``(C) Specified relative.--For purposes of
this paragraph, the term `specified relative'
means an individual who is--
``(i) an ancestor of a parent of the
specified child,
``(ii) a brother or sister of a
parent of the specified child, or
``(iii) a brother, sister,
stepbrother, or stepsister of the
specified child.
``(D) Certain parents or specified relatives
not taken into account.--This paragraph shall
be applied without regard to any parent or
specified relative of an individual for any
month if--
``(i) such parent or specified
relative elects to have such individual
not be treated as a specified child of
such parent or specified relative for
such month,
``(ii) in the case of a parent of
such individual, the adjusted gross
income of the taxpayer (with respect to
whom such individual would be treated
as a specified child after application
of this subparagraph) for the taxable
year which includes such month is
higher than the highest adjusted gross
income of any parent of the individual
for any taxable year which includes
such month (determined without regard
to any parent with respect to whom such
individual is not a specified child,
determined without regard to
subparagraphs (A) and (B) and after
application of this subparagraph), and
``(iii) in the case of a specified
relative of such individual, the
adjusted gross income of the taxpayer
(with respect to whom such individual
would be treated as a specified child
after application of this subparagraph)
for the taxable year which includes
such month is higher than the highest
adjusted gross income of any parent and
any specified relative of the
individual for any taxable year which
includes such month (determined without
regard to any parent and any specified
relative with respect to whom such
individual is not a specified child,
determined without regard to
subparagraphs (A) and (B) and after
application of this subparagraph).
``(E) Treatment of joint returns.--For
purposes of this paragraph, with respect to any
month, 2 individuals filing a joint return for
the taxable year which includes such month
shall be treated as 1 individual.
``(F) Parent.--Except as otherwise provided
by the Secretary, the term `parent' shall have
the same meaning as when used in section
152(c)(4).
``(4) Special rules with respect to birth and
death.--
``(A) Birth.--
``(i) In general.--In the case of the
birth of an individual during any
calendar year, such individual shall be
treated as a specified child of the
relevant taxpayer for each calendar
month in such calendar year which
precedes the calendar month referred to
in clause (ii).
``(ii) Relevant taxpayer.--For
purposes of clause (i), the term
`relevant taxpayer' means the taxpayer
with respect to whom the individual
referred to in clause (i) is a
specified child for the first month for
which such individual is a specified
child with respect to any taxpayer
(determined without regard to this
subparagraph).
``(B) Death.--
``(i) In general.--In the case of the
death of an individual during any
calendar year, such individual shall be
treated as a specified child of the
relevant taxpayer for each calendar
month in such calendar year which
follows the calendar month referred to
in clause (ii).
``(ii) Relevant taxpayer.--For
purposes of clause (i), the term
`relevant taxpayer' means the taxpayer
with respect to whom the individual
referred to in clause (i) is a
specified child for the last month for
which such individual is alive.
``(5) Treatment of temporary absences.--For purposes
of this subsection--
``(A) In general.--In the case of any
individual's temporary absence from such
individual's principal place of abode, each day
composing the temporary absence shall--
``(i) be treated as a day at such
individual's principal place of abode,
and
``(ii) not be treated as a day at any
other location.
``(B) Temporary absence.--For purposes of
subparagraph (A), an absence shall be treated
as temporary if--
``(i) the individual would have
resided at the place of abode but for
the absence, and
``(ii) under the facts and
circumstances, it is reasonable to
assume that the individual will return
to reside at the place of abode.
``(6) Special rule for divorced parents, etc.--Rules
similar to the rules section 152(e) shall apply for
purposes of this subsection.
``(7) Eligibilty determined on basis of presumptive
eligibility.--
``(A) In general.--If a period of presumptive
eligibility is established under section
7527B(c) for any individual with respect to any
taxpayer--
``(i) such individual shall be
treated as the specified child of such
taxpayer for any month in such period
of presumptive eligibility, and
``(ii) such individual shall not be
treated as the specified child of any
other taxpayer with respect to whom a
period of presumptive eligibility has
not been established for any such
month.
``(B) Ability of credit claimants to
establish presumptive eligibility.--Nothing in
section 7527B(c) shall be interpreted to
preclude a taxpayer who elects not to receive
monthly advance child payments under section
7527B from establishing a period of presumptive
eligibility (including any such period
described in section 7527B(c)(2)(D)) with
respect to any specified child for purposes of
this section.
``(d) Portion of Credit Refundable.--If the taxpayer (in the
case of a joint return, either spouse) has a principal place of
abode (determined as provided in section 32) in the United
States or Puerto Rico for more than one-half of any calendar
month during the taxable year, so much of the credit otherwise
allowed under subsection (a) as is attributable to monthly
specified child allowances with respect to any such calendar
month shall be allowed under subpart C (and not allowed under
this subpart).
``(e) Identification Requirements.--Rules similar to the
rules of section 24(e) shall apply for purposes of this
section.
``(f) Restrictions on Taxpayers Who Improperly Claimed Credit
or Improperly Received Monthly Advance Child Payment.--
``(1) Taxpayers making prior fraudulent or reckless
claims.--
``(A) In general.--No credit shall be allowed
under this section for any taxable year (and no
payment shall be made under section 7527B for
any month) in the disallowance period.
``(B) Disallowance period.--For purposes of
subparagraph (A), the disallowance period is--
``(i) the period of 10 taxable years
after the most recent taxable year for
which there was a final determination
that the taxpayer's claim of credit
under this section or section 24 (or
payment under section 7527A or 7527B)
was due to fraud,
``(ii) the period of 2 taxable years
after the most recent taxable year for
which there was a final determination
that the taxpayer's claim of credit
under this section or section 24 (or
payment under section 7527A or 7527B)
was due to reckless or intentional
disregard of rules and regulations (but
not due to fraud), and
``(iii) in addition to any period
determined under clause (i) or (ii) (as
the case may be), the period beginning
on the date of the final determination
described in such clause and ending
with the beginning of the period
described in such clause.
``(2) Taxpayers making improper prior claims.--In the
case of a taxpayer who is denied credit under this
section or section 24 for any taxable year as a result
of the deficiency procedures under subchapter B of
chapter 63, no credit shall be allowed under this
section for any subsequent taxable year (and no payment
shall be made under section 7527B for any subsequent
month) unless the taxpayer provides such information as
the Secretary may require to demonstrate eligibility
for such credit.
``(3) Coordination with possessions of the united
states.--In carrying out this section, the Secretary
shall coordinate with each possession of the United
States to prevent the avoidance of the application of
this subsection.
``(g) Reconciliation of Credit and Monthly Advance Child
Payments.--
``(1) In general.--The amount otherwise determined
under subsection (a) with respect to any taxpayer for
any taxable year shall be reduced (but not below zero)
by the aggregate amount of payments made under section
7527B to such taxpayer for one or more calendar months
in such taxable year. Any failure to so reduce the
credit shall be treated as arising out of a
mathematical or clerical error and assessed according
to section 6213(b)(1).
``(2) Recapture of excess advance payments in certain
circumstances.--In the case of a taxpayer described in
paragraph (3) for any taxable year, the tax imposed by
this chapter for such taxable year shall be increased
by the excess (if any) of--
``(A) the aggregate amount of payments made
to the taxpayer under section 7527B for one or
more calendar months in such taxable year, over
``(B) the amount determined under subsection
(a) with respect to the taxpayer for such
taxable year (without regard to paragraph (1)
of this subsection).
``(3) Taxpayers subject to recapture.--
``(A) Fraud or reckless or intentional
disregard of rules and regulations.--A taxpayer
is described in this paragraph with respect to
any taxable year if the Secretary determines
that the amount described in paragraph (2)(A)
with respect to the taxpayer for such taxable
year was determined on the basis of fraud or a
reckless or intentional disregard of rules and
regulations.
``(B) Understatement of income; changes in
filing status.--If the amount described in
paragraph (2)(A) with respect to the taxpayer
for the taxable year was determined on the
basis of an amount of the taxpayer's modified
adjusted gross income which was less than the
taxpayer's modified adjusted gross income for
the applicable taxable year (as defined in
subsection (b))--
``(i) such taxpayer shall be treated
as described in this paragraph, and
``(ii) the increase determined under
paragraph (2) by reason of this
subparagraph shall not exceed the
excess of--
``(I) the amount described in
paragraph (2)(A), over
``(II) the amount which would
be so described if the payments
described therein had been
determined on the basis of the
taxpayer's modified adjusted
gross income for the applicable
taxable year (as defined in
subsection (b)).
A rule similar to the rule of the
preceding sentence shall apply if the
amount described in paragraph (2)(A)
with respect to the taxpayer for the
taxable year was determined on the
basis of a filing status of the
taxpayer which differs from the
taxpayer's filing status for the
applicable taxable year (as so
defined).
``(C) Payments made outside of period of
presumptive eligibility.--If any payment
described in paragraph (2)(A) with respect to
the taxpayer for the taxable year was made with
respect to a child for a month which was not
part of a period of presumptive eligibility
established under section 7527B(c) for such
child with respect to such taxpayer--
``(i) such taxpayer shall be treated
as described in this paragraph, and
``(ii) the increase determined under
paragraph (2) by reason of this
subparagraph shall not exceed the
portion of such payment so made.
``(D) Certain payments made after notice from
secretary.--If the Secretary notifies a
taxpayer under section 7527B(j)(2) that such
taxpayer is subject to recapture with respect
to any payments--
``(i) such taxpayer shall be treated
as described in this paragraph, and
``(ii) the increase determined under
paragraph (2) by reason of this
subparagraph shall not exceed the
aggregate amount of such payments.
``(E) Taxpayers moving to another
jurisdiction.--To minimize the amount of
advance payments made under section 7527B to
ineligible individuals, the Secretary shall
issue regulations or other guidance for
purposes of this paragraph which apply with
respect to taxpayers who are described in
section 7527B(b)(4) with respect to the
reference month but are not so described with
respect to one or more months during the
taxable year for which advance payments under
section 7527B are made.
``(F) Other circumstances to prevent abuse.--
A taxpayer is described in this paragraph with
respect to any taxable year pursuant to
regulations or other guidance of the Secretary
describing other recapture circumstances to
facilitate the administration and enforcement
by the Secretary of section 7527B to minimize
the amount of advance payments made under
section 7527B to ineligible individuals and to
prevent abuse.
``(4) Joint returns.--Except as otherwise provided by
the Secretary, in the case of an advance payment made
under section 7527B with respect to a joint return,
half of such payment shall be treated as having been
made to each individual filing such return.
``(h) Inflation Adjustments.--
``(1) Monthly specified child allowance.--
``(A) In general.--In the case of any month
beginning after December 31, 2022, each of the
dollar amounts in subsection (b)(1) shall be
increased by an amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the percentage (if any) by
which--
``(I) the CPI (as defined in
section 1(f)(4)) for the
calendar year preceding the
calendar year in which such
month begins, exceeds
``(II) the CPI (as so
defined) for calendar year
2020.
``(B) Rounding.--Any increase under
subparagraph (A) which is not a multiple of $10
shall be rounded to the nearest multiple of
$10.
``(2) Initial threshold amount.--
``(A) In general.--In the case of any taxable
year beginning after December 31, 2022, the
dollar amounts in subclauses (I) and (III) of
subsection (b)(2)(D)(i) shall each be increased
by an amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the percentage (if any) by
which--
``(I) the CPI (as defined in
section 1(f)(4)) for the
calendar year preceding the
calendar year in which such
taxable year begins, exceeds
``(II) the CPI (as so
defined) for calendar year
2020.
``(B) Rounding.--Any increase under
subparagraph (A) which is not a multiple of
$5,000 shall be rounded to the nearest multiple
of $5,000.
``(i) Application of Credit in Possessions.--
``(1) Mirror code possessions.--
``(A) In general.--The Secretary shall pay to
each possession of the United States with a
mirror code tax system amounts equal to the
loss (if any) to that possession by reason of
the application of this section (determined
without regard to this subsection) with respect
to taxable years beginning after 2022 and
before 2026. Such amounts shall be determined
by the Secretary based on information provided
by the government of the respective possession.
``(B) Coordination with credit allowed
against united states income taxes.--No credit
shall be allowed under this section for any
taxable year to any individual to whom a credit
is allowable against taxes imposed by a
possession of the United States with a mirror
code tax system by reason of the application of
this section in such possession for such
taxable year.
``(C) Mirror code tax system.--For purposes
of this paragraph, the term `mirror code tax
system' means, with respect to any possession
of the United States, the income tax system of
such possession if the income tax liability of
the residents of such possession under such
system is determined by reference to the income
tax laws of the United States as if such
possession were the United States.
``(2) Cross references related to application of
credit to residents of puerto rico.--
``(A) For application of refundable credit to
residents of Puerto Rico, see subsection (d).
``(B) For application of advance payment to
residents of Puerto Rico, see section
7527B(b)(4).
``(3) American samoa.--
``(A) In general.--The Secretary shall pay to
American Samoa amounts estimated by the
Secretary as being equal to the aggregate
benefits that would have been provided to
residents of American Samoa by reason of the
application of this section for taxable years
beginning after 2022 and before 2026 if the
provisions of this section had been in effect
in American Samoa (applied as if American Samoa
were the United States and without regard to
the application of this section to residents of
Puerto Rico under subsection (d)).
``(B) Distribution requirement.--Subparagraph
(A) shall not apply unless American Samoa has a
plan, which has been approved by the Secretary,
under which American Samoa will promptly
distribute such payments to its residents.
``(C) Coordination with credit allowed
against united states income taxes.--
``(i) In general.--In the case of a
taxable year with respect to which a
plan is approved under subparagraph
(B), this section (other than this
subsection) shall not apply to any
individual eligible for a distribution
under such plan.
``(ii) Application of section in
event of absence of approved plan.--In
the case of a taxable year with respect
to which a plan is not approved under
subparagraph (B), subsection (d) shall
be applied by substituting `, Puerto
Rico, or American Samoa' for `or Puerto
Rico'.
``(4) Treatment of payments.--For purposes of section
1324 of title 31, United States Code, the payments
under this subsection shall be treated in the same
manner as a refund due from a credit provision referred
to in subsection (b)(2) of such section.
``(j) Regulations.--The Secretary shall issue such
regulations or other guidance as the Secretary determines
necessary or appropriate to carry out the purposes of this
section, including regulations or other guidance--
``(1) for determining whether an individual receives
care from a taxpayer for purposes of subsection (c)(1),
and
``(2) to coordinate or modify the application of this
section and section 24, 7527A, and 7527B in the case of
any taxpayer--
``(A) whose taxable year is other than a
calendar year,
``(B) whose filing status for a taxable year
is different from the status used for
determining one or more monthly payments under
section 7527B during such taxable year, or
``(C) whose principal place of abode for any
month is different from the principal place of
abode used for determining the monthly payment
under section 7527B for such month.
``(k) Termination.--This section shall not apply to taxable
years beginning after December 31, 2025.
``SEC. 24B. CREDIT FOR CERTAIN OTHER DEPENDENTS.
``(a) In General.--There shall be allowed as a credit against
the tax imposed by this chapter for the taxable year an amount
equal to $500 with respect to each specified dependent of such
taxpayer for such taxable year.
``(b) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--The amount of the credit allowable
under subsection (a) shall be reduced (but not below
zero) by $50 for each $1,000 (or fraction thereof) by
which the taxpayer's modified adjusted gross income
exceeds the threshold amount.
``(2) Threshold amount.--For purposes of this
subsection, the term `threshold amount' means--
``(A) $400,000, in the case of a joint return
or surviving spouse (as defined in section
2(a)),
``(B) $300,000, in the case of a head of
household (as defined in section 2(b)), and
``(C) $200,000, in any other case.
``(3) Modified adjusted gross income.--For purposes
of this subsection, the term `modified adjusted gross
income' means adjusted gross income increased by any
amount excluded from gross income under section 911,
931, or 933.
``(c) Specified Dependent.--For purposes of this section, the
term `specified dependent' means, with respect to any taxpayer
for any taxable year, any dependent of such taxpayer for such
taxable year unless such dependent--
``(1) is a specified child of the taxpayer, or any
other taxpayer, for any month during such taxable year,
or
``(2) would not be a dependent if subparagraph (A) of
section 152(b)(3) were applied without regard to all
that follows `resident of the United States'.
``(d) Identification Requirements.--Rules similar to the
rules of section 24(e) shall apply for purposes of this
section.
``(e) Taxable Year Must Be Full Taxable Year.--Except in the
case of a taxable year closed by reason of the death of the
taxpayer, no credit shall be allowable under this section in
the case of a taxable year covering a period of less than 12
months.
``(f) Inflation Adjustment.--
``(1) In general.--In the case of any taxable year
beginning after December 31, 2022, the $500 amount in
subsection (a) shall be increased by an amount equal
to--
``(A) such dollar amount, multiplied by
``(B) the percentage (if any) by which--
``(i) the CPI (as defined in section
1(f)(4)) for the calendar year
preceding the calendar year in which
such taxable year begins, exceeds
``(ii) the CPI (as so defined) for
calendar year 2020.
``(2) Rounding.--If the increase determined under
paragraph (1) is not a multiple of $10, such increase
shall be rounded to the nearest multiple of $10.
``(g) Regulations.--The Secretary shall issue such
regulations or other guidance as the Secretary determines
necessary or appropriate to carry out the purposes of this
section.
``(h) Termination.--This section shall not apply to taxable
years beginning after December 31, 2025.''.
(b) Monthly Payment of Child Tax Credit.--Chapter 77 is
amended by inserting after section 7527A the following new
section:
``SEC. 7527B. MONTHLY PAYMENTS OF CHILD TAX CREDIT.
``(a) In General.--The Secretary shall establish a program
for making payments to taxpayers with respect to each calendar
month equal to the monthly advance child payment determined
with respect to such taxpayer for such month.
``(b) Monthly Advance Child Payment.--For purposes of this
section and except as otherwise provided in this section, the
term `monthly advance child payment' means, with respect to any
taxpayer for any calendar month, the amount (if any) which is
estimated by the Secretary as being equal to the monthly
specified child allowance which would be determined under
section 24A(b) with respect to such taxpayer for such calendar
month if--
``(1) unless determined by the Secretary based on any
information known to the Secretary, the only specified
children of such taxpayer for such calendar month are
the specified children of such taxpayer for the
reference month,
``(2) unless determined by the Secretary based on any
information known to the Secretary, the ages of such
children (and the status of such children as specified
children) are determined for such calendar month by
taking into account the passage of time since such
reference month,
``(3) the limitations of section 24A(b)(2) were
applied with respect to the reference taxable year
rather than with respect to the applicable taxable
year, and
``(4) unless determined by the Secretary based on any
information known to the Secretary, no monthly
specified child allowance were determined with respect
to such taxpayer for such calendar month unless the
taxpayer (in the case of a joint return, either spouse)
has a principal place of abode (determined as provided
in section 32) in the United States or Puerto Rico for
more than one-half of the reference month.
``(c) Presumptive Eligibility.--
``(1) In general.--An individual shall be treated as
a specified child of a taxpayer for purposes of
determining any monthly advance child payment under
this section only if such month is part of the period
of presumptive eligibility determined by the Secretary
under this subsection with respect to such specified
child and such taxpayer (determined by treating the
month described in subclause (I) of paragraph
(2)(A)(ii) as being the first month beginning after the
determination described in such subclause).
``(2) Period of presumptive eligibility.--For
purposes of this section--
``(A) In general.--Except as otherwise
provided by the Secretary, the term `period of
presumptive eligibility' means the period--
``(i) beginning with the month for
which presumptive eligibility is
established, and
``(ii) ending with the earliest of--
``(I) the beginning of the
month described in clause (i)
if the Secretary determines
that the taxpayer committed
fraud or intentionally
disregarded rules or
regulations in establishing or
maintaining presumptive
eligibility,
``(II) in the case of any
notification from the Secretary
that the period of presumptive
eligibility has been terminated
or suspended by reason of any
question regarding eligibility
of the taxpayer for monthly
advance child payments with
respect to such child, the
month specified in such notice
as the month on which such
termination or suspension
begins, and
``(III) the month following
any failure of the taxpayer to
make the required annual
renewal of presumptive
eligibility by such date as the
Secretary may provide.
``(B) Establishing presumptive eligibility.--
A taxpayer shall establish presumptive
eligibility with respect to any specified child
for any month at such time and in such manner
as the Secretary may provide. Except as
otherwise provided by the Secretary, in order
to establish a period of presumptive
eligibility the taxpayer must express a
reasonable expectation and intent that the
taxpayer will continue to be eligible with
respect to such specified child for at least
the two months following the month for which
presumptive eligibility is to be established.
``(C) Method of establishing presumptive
eligibility.--The Secretary shall ensure
information to establish presumptive
eligibility under this paragraph may be
provided on the return of tax for the taxable
year ending before the calendar year which
includes the month for which such eligibility
is to be established, through the on-line
portal described in subsection (c), or in such
other manner as the Secretary may provide.
``(D) Inclusion of automatic grace periods
and periods of hardship.--The period of
presumptive eligibility shall include any
period to which paragraph (1) or (2) of
subsection (g) applies.
``(E) Automatic eligibility for birth of
child.--The Secretary shall issue regulations
or other guidance to establish procedures
pursuant to which, to the maximum extent
administratively practicable--
``(i) a parent of a child born during
a calendar month shall be treated as
automatically establishing presumptive
eligibility with respect to such child,
``(ii) the period of such automatic
presumptive eligibility is determined,
and
``(iii) the first monthly advance
child payment with respect to such
child is adjusted to properly take into
account each month in the taxable year
preceding such birth.
``(F) Presumptive eligibility based on
certain government programs.--The Secretary
shall issue regulations or other guidance to
establish procedures under which--
``(i) based on information provided
to the Secretary by one or more
government entities, a parent or
specified relative of a child is
treated as automatically establishing
presumptive eligibility with respect to
such child, and
``(ii) the period for which such
automatic presumptive eligibility is
determined (including any additional
circumstances under which such period
will terminate).
``(G) Coordination with presumption.--For
purposes of determining the status of any
individual as a specified child for purposes of
determining presumptive eligibility with
respect to any period, section 24A(c) shall be
applied without regard to paragraph (7)
thereof.
``(3) Notice of termination of presumptive
eligibility by reason of failure to make annual
renewal.--If a taxpayer's period of presumptive
eligibility with respect to any specified child
terminates by reason of paragraph (2)(A)(ii)(IV), the
Secretary shall provide the taxpayer a written notice
of such termination.
``(d) Determination of Reference Month and Reference Taxable
Year.--For purposes of this section--
``(1) Reference month.--The term `reference month'
means, with respect to any taxpayer for any calendar
month, the most recent of--
``(A) in the case of a taxpayer who filed a
return of tax for the last taxable year ending
before such calendar month, the last month of
such taxable year,
``(B) in the case of a taxpayer who filed a
return of tax for the taxable year preceding
the taxable year described in subparagraph (A),
the last month of such preceding taxable year,
and
``(C) in the case of a taxpayer who provides,
through a specified alternative mechanism,
information which is sufficient to estimate the
taxpayer's monthly advance child payment for
such month, such month.
``(2) Reference taxable year.--The term `reference
taxable year' means, with respect to any taxpayer for
any calendar month, the most recent of--
``(A) the taxable year described in
subparagraph (A) or (B) of paragraph (1), or
``(B) in the case of a taxpayer who provides,
through a specified alternative mechanism,
information which is sufficient to estimate the
taxpayer's modified adjusted gross income for
the taxable year which includes such month,
such taxable year.
``(3) Availability of information.--Any month or year
referred to in subparagraphs (A), (B), or (C) of
paragraph (1) or subparagraph (A) or (B) of paragraph
(2) shall not be taken into account in determining the
reference month or reference taxable year with respect
to any calendar month unless all relevant information
with respect to such month or year is available to the
Secretary and the Secretary has adequate time to make
estimates under this section on the basis of such
information before the beginning of such calendar
month.
``(4) Treatment of insufficient information.--Except
as otherwise provided by the Secretary--
``(A) if a taxpayer is not described in
subparagraph (A), (B), or (C) of paragraph (1)
with respect to any calendar month, the monthly
advance child payment with respect to such
taxpayer for such calendar month shall be
treated as zero unless the Secretary determines
that the Secretary can make the estimate
described in subsection (b) on the basis of
information known to the Secretary which the
Secretary determines is reasonably reliable,
and
``(B) if the taxpayer is not described in
paragraph (1)(C) and the information on the
return of tax referred to in subparagraph (A)
or (B) of paragraph (1) does not establish the
status of the taxpayer (in the case of a joint
return, either spouse) as having a principal
place of abode (determined as provided in
section 32) in the United States or Puerto Rico
for more than one-half of the reference month,
the Secretary shall determine such status based
on information known to the Secretary.
``(5) Transition rule.--In any case with respect to
which section 24A was not in effect for the taxable
year described in subparagraph (A), (B), or (C) of
paragraph (1) (whichever is applicable), subsection
(b)(1) shall be applied by substituting `the qualifying
children of such taxpayer for the taxable year which
includes the reference month' for `the specified
children of such taxpayer for the reference month'.
``(e) On-line Information Portal; Specified Alternative
Mechanisms.--
``(1) On-line information portal.--The Secretary
shall establish an on-line portal which allows
taxpayers to--
``(A) subject to such restrictions as the
Secretary may provide, elect to begin or cease
receiving payments under this section, and
``(B) provide information to the Secretary
which is relevant in determining the monthly
advance child payment and the taxpayer's
eligibility for such payment, including
information regarding--
``(i) the number of the taxpayer's
specified children, including by reason
of the birth of a child,
``(ii) the taxpayer's marital status,
``(iii) the taxpayer's modified
adjusted gross income,
``(iv) the taxpayer's principal place
of abode, and
``(v) any other factor which the
Secretary may provide.
``(2) Specified alternative mechanism.--For purposes
of this section, the term `specified alternative
mechanism' means the on-line portal established under
paragraph (1), the on-line portal established under
section 7527A, and any other mechanism or method
established by the Secretary to allow taxpayer's to
provide the information described in paragraph (1)
(including in connection with the filing of any return
of tax).
``(f) Specified Child of More Than 1 Taxpayer.--
``(1) In general.--In the event that (without regard
to this paragraph and determined without regard to any
election under subsection (e)(1)) any specified child
would be taken into account in determining the monthly
advance child payment of more than one taxpayer for the
same calendar month--
``(A) except as provided in subparagraph (B),
such child shall be so taken into account only
with respect to the taxpayer with the most
recent reference month, and
``(B) if any such taxpayer is described in
subsection (d)(1)(C) (or more than 1 taxpayer
is described in subparagraph (A) of this
paragraph), the Secretary shall establish
procedures under which the Secretary
expeditiously adjudicates the taxpayer's
competing claims of presumptive eligibility
with respect to the same child.
``(2) Provisions related to adjudication.--
``(A) Expedited process; appeals.--The
procedures established under paragraph (1)(B)
shall include--
``(i) an expedited process for
taxpayers who meet such requirements as
the Secretary may establish for such
expedited process, and
``(ii) procedures for adjudicating an
appeal of an adverse decision.
``(B) Information receipt and coordination.--
The Secretary may enter into agreements to
receive information from, and otherwise
coordinate with--
``(i) Federal agencies (including the
Social Security Administration and the
Department of Agriculture),
``(ii) any State, local government,
Tribal government, or possession of the
United States, and
``(iii) any other individual or
entity that the Secretary determines to
be appropriate for purposes of
adjudicating a competing claim
described in paragraph (1).
``(C) Adjudication not treated as
assessment.--An adjudication under the
procedures established under paragraph (1)(B)
(including the adjudication of any appeal)
shall not be treated as an assessment described
in section 6201.
``(D) Adjudication not treated as inspection
of taxpayer's books of account.--The inspection
of a taxpayer's books of account in connection
with any adjudication under the procedures
established under paragraph (1)(B) (including
the adjudication of any appeal) shall not be
treated as an examination or inspection of a
taxpayer's books of account for purposes of
section 7605(b).
``(3) Retroactive payments.--If, pursuant to the
procedures established under paragraph (1)(B), the
Secretary determines that a child is a specified child
of a taxpayer and the Secretary did not make payments
to such taxpayer with respect to such child for any
portion of the period during which the determination
was made, the Secretary may make a one-time payment to
the taxpayer with respect to which such child is the
specified child in an amount equal to the aggregate
amount by which the monthly advance child payments to
such taxpayer would have increased during such period
if such determination had been made immediately.
``(4) Recapture of payments.--If, pursuant to the
procedures established under paragraph (1)(B), the
Secretary makes payments with respect to the child
during the period during which the determination is
made--
``(A) the Secretary shall provide each
taxpayer which receives such payments notice
that such payments may be subject to recapture,
and
``(B) upon making such determination, the
Secretary shall determine on the basis of the
facts and circumstances of each such taxpayer
whether any such payments should be subject to
recapture and shall so notify each such
taxpayer.
``(g) Rules Related to Grace Periods and Hardships.--
``(1) Automatic grace period.--
``(A) In general.--Notwithstanding subsection
(f), in the case of any failure or delay in
establishing a period of presumptive
eligibility with respect to which the taxpayer
elects the application of this subparagraph,
credit under section 24A or retroactive payment
under this section (similar to the payment
described in subsection (f)(3)) shall be
allowed or made with respect to so much of the
period of such failure or delay as does not
exceed 3 months. The preceding sentence shall
not apply if the Secretary determines that such
failure or delay was due to fraud or reckless
or intentional disregard of rules and
regulations.
``(B) Limitation.--Subparagraph (A) shall not
apply with respect to any taxpayer more than
once during any 36-month period.
``(2) Hardship.--Notwithstanding subsection (f), if
the Secretary determines that a failure or delay in
establishing a period of presumptive eligibility with
respect to any specified child was due to domestic
violence, serious illness, natural disaster, or any
other hardship, credit under section 24A or retroactive
payment under this section (similar to the payment
described in subsection (f)(3)) shall be allowed or
made with respect to so much of the period of such
failure or delay as does not exceed 6 months.
``(h) Provisions Related to Form, Manner, and Treatment of
Payments.--
``(1) Application of electronic funds payment
requirement.--The payments made by the Secretary under
subsection (a) shall be made by electronic funds
transfer to the same extent and in the same manner as
if such payments were Federal payments not made under
this title.
``(2) Application of certain rules.--Rules similar to
the rules of subparagraphs (B) and (C) of section
6428A(f)(3) shall apply for purposes of this section,
applied by substituting `January 1, 2022' for `January
1, 2019' in clauses (i) and (ii) of such subparagraph
(B).
``(3) Exception from reduction or offset.--Any
payment made to any individual under this section shall
not be--
``(A) subject to reduction or offset pursuant
to subsection (c), (d), (e), or (f) of section
6402 or any similar authority permitting
offset, or
``(B) reduced or offset by other assessed
Federal taxes that would otherwise be subject
to levy or collection.
``(4) Application of advance payments in the
possessions of the united states.--
``(A) Puerto rico.--
``(i) For application of child tax
credit to residents of Puerto Rico, see
section 24A(d).
``(ii) For application of monthly
advance child payments to residents of
Puerto Rico, see subsection (b)(4).
``(B) Mirror code possessions.--In the case
of any possession of the United States with a
mirror code tax system (as defined in section
24A(i)(1)(C)), this section shall not be
treated as part of the income tax laws of the
United States for purposes of determining the
income tax law of such possession unless such
possession elects to have this section be so
treated.
``(C) Administrative expenses of advance
payments.--
``(i) Mirror code possessions.--In
the case of any possession described in
subparagraph (B) which makes the
election described in such
subparagraph, the amount otherwise paid
by the Secretary to such possession
under section 24A(i)(1)(A) with respect
to taxable years beginning in 2023,
2024, and 2025 shall each be increased
by $300,000 if such possession has a
plan, which has been approved by the
Secretary, for making monthly advance
child payments consistent with such
election.
``(ii) American samoa.-- The amount
otherwise paid by the Secretary to
American Samoa under subparagraph (A)
of section 24A(i)(3) with respect to
taxable years beginning in 2023, 2024,
and 2025 shall each be increased by
$300,000 if the plan described in
subparagraph (B) of such section
includes a program, which has been
approved by the Secretary, for making
monthly advance child payments under
rules similar to the rules of this
section.
``(iii) Timing of payment.--The
Secretary may pay, upon the request of
the possession of the United States to
which the payment is to be made, the
amount of the increase determined under
clause (i) or (ii), respectively,
immediately upon approval of the plan
with respect to which such payment
relates.
``(i) Application of Certain Definitions and Rules Applicable
to Child Tax Credit.--
``(1) Definitions.--Except as otherwise provided in
this section, terms used in this section which are also
used in section 24A shall have the same respective
meanings as when used in section 24A.
``(2) Treatment of certain deaths.--A child shall not
be taken into account in determining the monthly
advance child payment for any calendar month if the
death of such child before the beginning of the
calendar year which includes such month is known to the
Secretary as of date on which the Secretary estimates
such payment.
``(3) Identification requirements.--Rules similar to
the rules which apply under section 24A(e) shall apply
for purposes of this section except that such rules
shall apply with respect to the return of tax for the
reference taxable year or, in the case of information
provided through a specified alternative mechanism,
with respect to the information provided through such
mechanism.
``(4) Restrictions on taxpayers who improperly
claimed credit or monthly advance child payments.--For
restrictions on taxpayers who improperly claimed credit
or monthly advance child payments, see section 24A(f).
``(j) Notice of Payments.--
``(1) In general.--Not later than January 31 of the
calendar year following any calendar year during which
the Secretary makes one or more payments to any
taxpayer under this section, the Secretary shall
provide such taxpayer with a written notice which
includes--
``(A) the taxpayer's taxpayer identity (as
defined in section 6103(b)(6)),
``(B) the aggregate amount of such payments
made to such taxpayer during such calendar
year, and
``(C) such other information as the Secretary
determines appropriate.
``(2) Certain payments subject to recapture.--In the
case of any payments made to a taxpayer which the
Secretary has determined are subject to recapture, the
notice provided under paragraph (1) to such taxpayer
shall include the amount of such payments.
``(k) Regulations.--The Secretary shall issue such
regulations or other guidance as the Secretary determines
necessary or appropriate to carry out the purposes of this
section.
``(l) Termination.--No payments shall be made under the
program established under subsection (a) with respect to any
month beginning after December 31, 2025.''.
(c) Suspension of Child Tax Credit During Period That Monthly
Child Tax Credit Is in Effect.--Section 24 is amended by adding
at the end the following new subsection:
``(l) Coordination With Monthly Child Tax Credit.--This
section shall not apply to (and no payment shall be made under
subsection (k) with respect to) any taxable year beginning
after December 31, 2022, and before January 1, 2026.''.
(d) Conforming Amendments.--
(1) Section 26(b)(2) is amended by striking ``and''
at the end of subparagraph (Y), by striking the period
at the end of subparagraph (Z) and inserting ``, and'',
and by adding at the end the following new
subparagraph:
``(AA) section 24A(g)(2) (relating to
recapture of certain monthly advance child
payments).''.
(2) Section 152(f)(6)(B)(ii) is amended to read as
follows:
``(ii) the credits under sections 24,
24A, and 24B and the payments under
sections 7527A and 7527B,''.
(3) Section 3402(f)(1)(C) is amended by inserting
``or section 24A (determined after application of
subsection (g) thereof)'' after ``section 24
(determined after application of subsection (j)
thereof)''.
(4) Section 6103(l)(13)(A)(v) is amended by insert
``or section 24A, as the case may be'' after ``section
24''.
(5) Section 6211(b)(4)(A) is amended by inserting
``24A by reason of subsection (d) thereof,'' after ``24
by reason of subsections (d) and (i)(1) thereof,''.
(6) Section 6213(g)(2)(I) is amended by inserting
``or section 24A(e) (relating to monthly child tax
credit)'' after ``section 24(e) (relating to child tax
credit)''.
(7) Section 6213(g)(2)(L) is amended by inserting
``24A,'' after ``24,''.
(8) Section 6213(g)(2)(P) is amended--
(A) by inserting ``or 24A(f)(2)'' after
``section 24(g)(2)'',
(B) by inserting ``or 24A'' after ``under
section 24'', and
(C) by striking ``subsection (g)(1) thereof''
and inserting ``section 24(g)(1) or section
24A(f)(1), respectively''.
(9) Section 6695(g)(2) is amended by inserting
``24A,'' after ``24,''.
(10) Paragraph (2) of section 1324(b) of title 31,
United States Code, as amended by the preceding
provisions of this Act, is amended--
(A) by inserting ``24A,'' after ``24,'', and
(B) by inserting ``7527B,'' after ``7527A,''.
(11) The table of sections for subpart A of part IV
of subchapter A of chapter 1 is amended by inserting
after the item relating to section 24 the following new
items:
``Sec. 24A. Monthly child tax credit.
``Sec. 24B. Credit for certain other dependents.''.
(12) The table of sections for chapter 77 is amended
by inserting after the item relating to section 7527A
the following new item:
``Sec. 7527B. Monthly payments of child tax credit.''.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply to taxable years beginning after December 31,
2022.
(2) Monthly advance child payments.--The amendments
made by subsection (b) shall apply to payments made for
calendar months beginning after December 31, 2022.
SEC. 137104. REFUNDABLE CHILD TAX CREDIT AFTER 2025.
(a) In General.--Section 24, as amended by the preceding
provisions of this Act, is amended by adding at the end the
following new subsection:
``(m) Refundable Credit After 2025.--In the case of any
taxable year beginning after December 31, 2025, if the taxpayer
(in the case of a joint return, either spouse) has a principal
place of abode in the United States (determined as provided in
section 32) for more than one-half of the taxable year or is a
bona fide resident of Puerto Rico (within the meaning of
section 937(a)) for such taxable year--
``(1) subsection (d) shall not apply, and
``(2) the credit determined under subsection (a)
(after application of paragraph (1)) shall be allowed
under subpart C (and not allowed under this
subpart).''.
(b) Conforming Amendments Related to Possessions of the
United States.--
(1) Puerto rico.--Section 24(k)(2) is amended--
(A) in subparagraph (B) (as amended by the
preceding provisions of this Act)--
(i) by inserting ``and before January
1, 2026,'' after ``December 31,
2022,'', and
(ii) by inserting ``and before 2026''
after ``After 2022'', and
(B) by adding at the end the following new
subparagraph:
``(C) Application to taxable years after
2025.--For application of refundable credit to
residents of Puerto Rico for taxable years
after 2025, see subsection (m).''.
(2) American samoa.--Section 24(k)(3)(C)(ii), as
amended by the preceding provisions of this Act, is
amended--
(A) in subclause (I), by striking ``and'' at
the end,
(B) in subclause (II)--
(i) by inserting ``and before January
1, 2026,'' after ``after December 31,
2022,'', and
(ii) by striking the period at the
end and inserting ``, and'', and
(C) by adding at the end the following new
subclause:
``(III) if such taxable year
begins after December 31, 2025,
subsection (m) shall be applied
by substituting `Puerto Rico or
American Samoa' for `Puerto
Rico'.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2025.
SEC. 137105. APPROPRIATIONS.
Immediately upon the enactment of this Act, in addition to
amounts otherwise available, there are appropriated out of any
money in the Treasury not otherwise appropriated:
(1) $9,000,000,000 to remain available until
September 30, 2026, for necessary expenses for the
Internal Revenue Service to administer the Child Tax
Credit, and advance payments of the Child Tax Credit,
including the costs of disbursing such payments, which
shall supplement and not supplant any other
appropriations that may be available for this purpose,
and
(2) $1,000,000,000 is appropriated to the Department
of the Treasury, to remain available until September
30, 2026, to support efforts to increase enrollment of
eligible families in the Child Tax Credit, for advance
payments of the Child Tax Credit, and for other tax
benefits, including but not limited to program
outreach, costs of data sharing arrangements, systems
changes, forms changes, and related efforts, and
efforts by federal agencies to facilitate the cross-
enrollment of beneficiaries of other programs in the
Child Tax Credit, and for advance payments of the Child
Tax Credit, including by establishing intergovernmental
cooperative agreements with states and local
governments, tribal governments, and possessions of the
United States: Provided, that such amount shall be
available in addition to any amounts otherwise
available: Provided further, that these funds may be
awarded by federal agencies to state and local
governments, tribal governments, and possessions of the
United States, and private entities, including
organizations dedicated to free tax return preparation.
PART 2--CHILD AND DEPENDENT CARE TAX CREDIT
SEC. 137201. CERTAIN IMPROVEMENTS TO THE CHILD AND DEPENDENT CARE
CREDIT MADE PERMANENT.
(a) Credit Refundable for Taxpayers With Principal Place of
Abode in the United States.--Section 21(g) is amended to read
as follows;
``(g) Credit Refundable for Taxpayers With Principal Place of
Abode in the United States.--If the taxpayer (in the case of a
joint return, either spouse) has a principal place of abode in
the United States (determined as provided in section 32) for
more than one-half of the taxable year, the credit allowed
under subsection (a) shall be treated as a credit allowed under
subpart C (and not allowed under this subpart).''.
(b) Increase in Dollar Limit on Amount Creditable.--Section
21(c) is amended--
(1) by striking ``$3,000'' in paragraph (1) and
inserting ``$8,000'', and
(2) by striking ``$6,000'' in paragraph (2) and
inserting ``$16,000''.
(c) Increase in Applicable Percentage.--Section 21(a)(2) is
amended--
(1) by striking ``35 percent'' and inserting ``50
percent'', and
(2) by striking ``$15,000'' and inserting
``$125,000''.
(d) Application of Increased Dollar Limitation to Spouses Who
Are Students or Incapable of Caring for Themselves.--Section
21(d)(2) is amended by striking ``of not less than--'' and all
that follows through ``In the case of'' and inserting ``of not
less than \1/12\ of the dollar amount in effect under paragraph
(1) or (2) of subsection (c) (whichever is applicable to the
taxpayer for the taxable year). In the case of''.
(e) Inflation Adjustment.--Section 21(e) is amended by adding
at the end the following new paragraph:
``(11) Inflation adjustment.--
``(A) In general.--In the case of any taxable
year beginning after December 31, 2021, the
$125,000 amount in subsection (a)(2), the
$8,000 amount in subsection (c)(1), and the
$16,000 amount in subsection (c)(2) shall each
be increased by an amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year in which the taxable
year begins, determined by substituting
`calendar year 2020' for `calendar year
2016' in subparagraph (A)(ii) thereof.
``(B) Rounding.--
``(i) Limitation based on adjusted
gross income.--If any increase
determined under subparagraph (A) of
the $125,000 dollar amount in
subsection (a)(2) is not a multiple of
$5,000, such amount shall be rounded to
the nearest multiple of $5,000.
``(i) Dollar limitations.--If any
increase determined under subparagraph
(A) of any dollar amount in subsection
(c) is not a multiple of $100, such
amount shall be rounded to the nearest
multiple of $100.''.
(f) Application of Phaseout to High Income Individuals.--
(1) In general.--Section 21(a)(2) is amended by
striking ``20 percent'' and inserting ``the phaseout
percentage''.
(2) Phaseout percentage.--Section 21(a) is amended by
adding at the end the following new paragraph:
``(3) Phaseout percentage.--For purposes of paragraph
(2), the term `phaseout percentage' means 20 percent
reduced (but not below zero) by 1 percentage point for
each $2,000 (or fraction thereof) by which the
taxpayer's adjusted gross income for the taxable year
exceeds $400,000.''.
(g) Application of Credit in Possessions.--Section 21(h) is
amended--
(1) in paragraph (1)--
(A) by striking ``The Secretary'' and
inserting ``With respect to taxable years
beginning in or with calendar years after 2020,
the Secretary'', and
(B) by striking ``with respect to taxable
years beginning in or with 2021'',
(2) in paragraph (2)--
(A) by striking ``The Secretary'' and
inserting ``With respect to taxable years
beginning in or with calendar years after 2020,
the Secretary'', and
(B) by striking ``with respect to taxable
years beginning in or with 2021'', and
(3) in paragraph (3), by striking ``in or with 2021''
and inserting ``after December 31, 2020''.
(h) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 137202. INCREASE IN EXCLUSION FOR EMPLOYER-PROVIDED DEPENDENT CARE
ASSISTANCE MADE PERMANENT.
(a) In General.--Section 129(a)(2)(A) is amended by striking
``$5,000 ($2,500'' and inserting ``$10,500 (half such dollar
amount''.
(b) Inflation Adjustment.--Section 129(e) is amended by
adding at the end the following new paragraph:
``(10) Inflation adjustment.--
``(A) In general.--In the case of any taxable
year beginning after December 31, 2021, the
$10,500 amount in subsection (a)(2)(A) shall be
increased by an amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year in which the taxable
year begins, determined by substituting
`calendar year 2020' for `calendar year
2016' in subparagraph (A)(ii) thereof.
``(B) Rounding.--If any increase determined
under subparagraph (A) is not a multiple of
$100, such amount shall be rounded to the
nearest multiple of $100.''.
(c) Conforming Amendment.--Section 129(a)(2) is amended by
striking subparagraph (D).
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
(e) Retroactive Plan Amendments.--A plan that otherwise
satisfies all applicable requirements of sections 125 and 129
of the Internal Revenue Code of 1986 (including any rules or
regulations thereunder) shall not fail to be treated as a
cafeteria plan or dependent care assistance program merely
because such plan is amended pursuant to a provision under this
subsection and such amendment is retroactive, if--
(1) such amendment is adopted no later than the last
day of the plan year in which the amendment is
effective, and
(2) the plan is operated consistent with the terms of
such amendment during the period beginning on the
effective date of the amendment and ending on the date
the amendment is adopted.
PART 3--SUPPORTING CAREGIVERS
SEC. 137301. PAYROLL TAX CREDIT FOR CHILD CARE WORKERS.
(a) In General.--Subchapter D of chapter 21 is amended by
adding at the end the following:
``SEC. 3135. PAYROLL CREDIT FOR CERTAIN WAGES PAID TO CHILD CARE
WORKERS.
``(a) In General.--In the case of an eligible child care
employer, there shall be allowed as a credit against applicable
employment taxes for each calendar quarter an amount equal to
50 percent of the qualified child care wages paid with respect
to each eligible employee of such employer for such calendar
quarter.
``(b) Limitations and Refundability.--
``(1) Limitation on wages taken into account.--The
amount of qualified child care wages with respect to
any eligible employee which may be taken into account
under subsection (a) by the eligible child care
employer for any calendar quarter shall not exceed
$2,500.
``(2) Credit limited to certain employment taxes.--
The credit allowed by subsection (a) with respect to
any calendar quarter shall not exceed the applicable
employment taxes (reduced by any credits allowed under
sections 3131, 3132, 3134, and 6432) on the wages paid
with respect to the employment of all the employees of
the eligible child care employer for such calendar
quarter.
``(3) Refundability of excess credit.--
``(A) Credit is refundable.--If the amount of
the credit under subsection (a) exceeds the
limitation of paragraph (2) for any calendar
quarter, such excess shall be treated as an
overpayment that shall be refunded under
sections 6402(a) and 6413(b).
``(B) Advancing credit.--In anticipation of
the credit, including the refundable portion
under subparagraph (A), the credit shall be
advanced, according to forms and instructions
provided by the Secretary, up to an amount
calculated under subsection (a), subject to the
limits under paragraph (1), all calculated
through the end of the most recent payroll
period in the quarter.
``(c) Eligible Child Care Employer.--For purposes of this
section, the term `eligible child care employer' means any
employer which operates one or more qualified child care
facilities.
``(d) Qualified Child Care Facility.--For purposes of this
section, the term `qualified child care facility' means any
facility which is certified as an HHS Participating Child Care
Provider by the Secretary of Health and Human Services under
section 418A(c) of the Social Security Act.
``(e) Eligible Employee.--For purposes of this section, the
term `eligible employee' means, with respect to any eligible
child care employer for any calendar quarter, any employee of
such employer if--
``(1) the aggregate wages paid to such employee for
such quarter do not exceed 25 percent of the dollar
amount in effect for such quarter under section
414(q)(1)(B)(i) (relating to highly compensated
employees), and
``(2) the aggregate wages paid to such employee for
the 1-year period ending with the close of such quarter
do not exceed 100 percent of such dollar amount.
``(f) Qualified Child Care Wages.--For purposes of this
section--
``(1) In general.--The term `qualified child care
wages' means, with respect to any eligible employee for
any calendar quarter, so much of the child care wages
paid by the eligible child care employer to such
employee during such quarter as are paid at a rate in
excess of the applicable minimum rate. Such term shall
not include any wages paid by an eligible child care
employer during any period during which the
certification described in subsection (d) is not in
effect.
``(2) Applicable minimum rate.--The term `applicable
minimum rate' means, with respect to wages paid to any
eligible employee, the rate of basic pay which is
payable for GS-3, step 1 of the General Schedule under
subchapter III of chapter 53 of title 5, United States
Code (including any applicable locality-based
comparability payment under section 5304 of such title,
or similar authority) at the time such wages are paid
and determined with respect to the locality in which
the services are provided.
``(3) Child care wages.--The term `child care wages'
means wages paid for the services of the employee to
provide child care at a qualified child care facility
or to provide support services for such a facility.
``(4) Exception.--The term `child care wages' shall
not include any wages taken into account under section
41, 45A, 45P, 45R, 51, 1396, 3131, 3132, 3134, or 6432.
``(g) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Applicable employment taxes.--The term
`applicable employment taxes' means the following:
``(A) The taxes imposed under section
3111(b).
``(B) So much of the taxes imposed under
section 3221(a) as are attributable to the rate
in effect under section 3111(b).
``(2) Wages.--
``(A) In general.--The term `wages' means
wages (as defined in section 3121(a)),
determined without regard to paragraphs (1)
through (22) of section 3121(b)) and
compensation (as defined in section 3231(e),
determined without regard to the sentence in
paragraph (1) thereof which begins `Such term
does not include remuneration').
``(B) Allowance for certain health plan
expenses.--
``(i) In general.--Such term shall
include amounts paid by the eligible
child care employer to provide and
maintain a group health plan (as
defined in section 5000(b)(1)), but
only to the extent that such amounts
are excluded from the gross income of
employees by reason of section 106(a).
``(ii) Allocation rules.--For
purposes of this section, amounts
treated as wages under clause (i) shall
be treated as paid with respect to any
eligible employee (and with respect to
any period) to the extent that such
amounts are properly allocable to such
employee (and to such period) in such
manner as the Secretary may prescribe.
Except as otherwise provided by the
Secretary, such allocation shall be
treated as properly made if made on the
basis of being pro rata among periods
of coverage.
``(3) Other terms.--Any term used in this section
which is also used in this chapter or chapter 22 shall
have the same meaning as when used in such chapter.
``(4) Denial of double benefit.--For purposes of
chapter 1, the gross income of the employer, for the
taxable year which includes the last day of any
calendar quarter with respect to which a credit is
allowed under this section, shall be increased by the
amount of such credit.
``(5) Election to not take certain wages into
account.--This section shall not apply to so much of
the qualified child care wages paid by an eligible
child care employer as such employer elects (at such
time and in such manner as the Secretary may prescribe)
to not take into account for purposes of this section.
``(6) Certain governmental employers.--No credit
shall be allowed under this section to the Government
of the United States or to any agency or
instrumentality thereof. The preceding sentence shall
not apply to any organization described in section
501(c)(1) and exempt from tax under section 501(a).
``(7) Coordination with certain programs.--
``(A) In general.--This section shall not
apply to so much of the qualified child care
wages paid by an eligible child care employer
as are taken into account as payroll costs in
connection with--
``(i) a covered loan under section
7(a)(37) or 7A of the Small Business
Act,
``(ii) a grant under section 324 of
the Economic Aid to Hard-Hit Small
Businesses, Non-Profits, and Venues
Act, or
``(iii) a restaurant revitalization
grant under section 5003 of the
American Rescue Plan Act of 2021.
``(B) Application where ppp loans not
forgiven.--The Secretary shall issue guidance
providing that payroll costs paid during the
covered period shall not fail to be treated as
qualified child care wages under this section
by reason of subparagraph (A)(i) to the extent
that--
``(i) a covered loan of the taxpayer
under section 7(a)(37) of the Small
Business Act is not forgiven by reason
of a decision under section 7(a)(37)(J)
of such Act, or
``(ii) a covered loan of the taxpayer
under section 7A of the Small Business
Act is not forgiven by reason of a
decision under section 7A(g) of such
Act.
Terms used in the preceding sentence which are
also used in section 7A(g) or 7(a)(37)(J) of
the Small Business Act shall, when applied in
connection with either such section, have the
same meaning as when used in such section,
respectively.
``(8) Aggregation rule.--All persons treated as a
single employer under subsection (a) or (b) of section
52, or subsection (m) or (o) of section 414, shall be
treated as one employer for purposes of this section.
``(9) Third party payors.--Any credit allowed under
this section shall be treated as a credit described in
section 3511(d)(2).
``(10) Inflation adjustment.--In the case of any
taxable year beginning after December 31, 2022, the
$2,500 amount in subsection (b)(1) shall be increased
by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2021'
for `calendar year 2016' in subparagraph
(A)(ii) thereof.
If any amount as adjusted under the preceding sentence
is not a multiple of $100, such amount shall be rounded
to the nearest multiple of $100.
``(h) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary to carry out
the purposes of this section, including--
``(1) regulations or other guidance to prevent the
avoidance of the purposes of the limitations under this
section,
``(2) regulations or other guidance to minimize
compliance and record-keeping burdens under this
section,
``(3) regulations or other guidance providing for
waiver of penalties for failure to deposit amounts in
anticipation of the allowance of the credit allowed
under this section,
``(4) regulations or other guidance for recapturing
the benefit of credits determined under this section in
cases where there is a subsequent adjustment to the
credit determined under subsection (a),
``(5) regulations or other guidance to permit the
advancement of the credit determined under subsection
(a), and
``(6) regulations or other guidance for applying
subsection (f) with respect to eligible employees not
paid at a single rate of pay.''.
(b) Refunds.--Paragraph (2) of section 1324(b) of title 31,
United States Code, is amended by inserting ``3135,'' after
``3134,''.
(c) Clerical Amendment.--The table of sections for subchapter
D of chapter 21 is amended by adding at the end the following:
``Sec. 3135. Payroll credit for certain wages paid to child care
workers.''.
(d) Effective Date.--The amendments made by this section
shall apply to calendar quarters beginning after December 31,
2021.
SEC. 137302. CREDIT FOR CAREGIVER EXPENSES.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 is amended by inserting after section 25D the
following new section:
``SEC. 25E. CREDIT FOR CAREGIVER EXPENSES.
``(a) Allowance of Credit.--In the case of an individual for
whom there are 1 or more qualified care recipients, there shall
be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to 50 percent of the
qualified expenses paid or incurred by such individual during
the taxable year (and not compensated for by insurance or
otherwise).
``(b) Qualified Care Recipient.--For purposes of this
section--
``(1) In general.--The term `qualified care
recipient' means, with respect to any taxable year, any
individual who--
``(A) is the spouse of the taxpayer, or any
other person who bears a relationship to the
taxpayer described in any of subparagraphs (A)
through (H) of section 152(d)(2),
``(B) has been certified, before the due date
for filing the return of tax for the taxable
year, by a licensed health care practitioner
(as defined in section 7702B(c)(4)) as being an
individual with long-term care needs (as
defined in paragraph (3)) for a period--
``(i) which is expected to be at
least 180 consecutive days, and
``(ii) a portion of which occurs
within the taxable year, and
``(C) resides in a personal residence and not
an institutional care facility.
``(2) Period for making certification.--
Notwithstanding paragraph (1)(B), a certification shall
not be treated as valid unless it is made within the
18-month period ending on such due date (or such other
period as the Secretary prescribes).
``(3) Individuals with long-term care needs.--For
purposes of this subsection, the term `individual with
long-term care needs' means any individual who meets
the requirements of any of the following subparagraphs:
``(A) The individual is at least 6 years of
age and--
``(i) is unable to perform (without
substantial assistance from another
individual) at least 2 activities of
daily living (as defined in section
7702B(c)(2)(B)) due to a loss of
functional capacity, or
``(ii) requires substantial
supervision to protect such individual
from threats to health and safety due
to severe cognitive impairment and is
unable to perform, without reminding or
cuing assistance, at least 1 activity
of daily living (as so defined) or, to
the extent provided in regulations
prescribed by the Secretary (in
consultation with the Secretary of
Health and Human Services), is unable
to engage in age appropriate
activities.
``(B) The individual is at least 2 but not 6
years of age and is unable, due to a loss of
functional capacity, to perform (without
substantial assistance from another individual)
at least 2 of the following activities:
``(i) Eating.
``(ii) Transferring.
``(iii) Mobility.
``(C) The individual is under 2 years of age
and requires specific durable medical equipment
by reason of a severe health condition or
requires a skilled practitioner trained to
address the individual's condition to be
available if the individual's parents or
guardians are absent.
``(4) Institutional care facility.--For purposes of
paragraph (1)(C), an institutional care facility
(including two or more places, establishments, or
institutions owned by the same legal entity) includes
any congregate, protected living residential
arrangement that provides or coordinates personal or
health care services, including assistance with the
activities of daily living and social care, for two or
more adults who are aged, infirm, or disabled
``(c) Qualified Expenses.--For purposes of this section--
``(1) In general.--The term `qualified expenses'
means expenses for goods, services, and supports
described in paragraph (2) which--
``(A) assist a qualified care recipient with
accomplishing activities of daily living (as
defined in section 7702B(c)(2)(B)) and
instrumental activities of daily living (as
defined in section 1915(k)(6)(F) of the Social
Security Act), and
``(B) are provided solely for use by such
qualified care recipient.
``(2) Items described.--The goods, services, and
supports described in this paragraph are--
``(A) human assistance, supervision, cuing,
and standby assistance,
``(B) health maintenance tasks (such as
medication management),
``(C) respite care,
``(D) assistive technologies and devices
(including remote health monitoring),
``(E) accessibility modifications of the
qualified care recipient's residence,
``(F) counseling, support groups, or training
relating to caring for a qualified care
recipient, and
``(G) any other items which directly relate
to the health and safety of a qualified care
recipient, as determined by the Secretary after
consultation with the Secretary of Health and
Human Services.
``(3) Dollar limitation.--The amount taken into
account as qualified expenses for any taxable year
shall not exceed $4,000.
``(4) Denial of double benefit.--Amounts taken into
account for purposes of section 21, 129, 213, or
223(f), or such other circumstances as may be provided
by the Secretary, shall not be taken into account as
qualified expenses.
``(5) Documentation requirement.--An expense shall
not be treated as a qualified expense unless the
taxpayer substantiates such expense under such
regulations or guidance as the Secretary shall provide.
``(d) Credit Phaseout.--The 50 percent rate under subsection
(a) shall be reduced by 1 percentage point for every $2,500 or
fraction thereof by which the taxpayer's adjusted gross income
exceeds $75,000.
``(e) Special Rules.--For purposes of this section--
``(1) Payments to related individuals.--Rules similar
to the rules of section 21(e)(6) shall apply.
``(2) Licensed health care practitioner.--
``(A) In general.--The licensed health care
practitioner making the certification for
purposes of subsection (b)(1)(B)--
``(i) shall not be related (within
the meaning of section 51(i)(1)) to the
taxpayer or the qualified care
recipient, or have a conflict of
interest (as determined under
regulations provided by the Secretary)
with respect to the taxpayer or the
qualified care recipient,
``(ii) shall be licensed and eligible
under applicable State law to certify
limitations in performing activities of
daily living, and
``(iii) shall be a participant in the
Medicaid program, pursuant to sections
1902(a)(77) and 1932(d)(6) of the
Social Security Act, or the State
Children's Health Insurance Program
under section 2107(e)(1)(G) of such
Act.
``(B) Identification requirement.--
``(i) In general.--No credit shall be
allowed with respect to any qualified
care recipient unless the taxpayer
includes the name and specified
provider identification number of such
licensed health care practitioner on
the return of tax for the taxable year.
``(ii) Specified provider
identification number.--The term
`specified provider identification
number' means a valid National Provider
Identifier as authorized in section
1173 of the Social Security Act.
``(3) Individual may not be claimed by more than 1
taxpayer.--An individual shall be treated as a
qualified care recipient with respect to only 1
taxpayer, as determined by the Secretary, for any
taxable year.
``(4) Identification requirement.--No credit shall be
allowed with respect to any qualified care recipient
unless the taxpayer includes the name and taxpayer
identification number of the qualified care recipient
on the return of tax for the taxable year.
``(f) Termination.--No credit shall be allowed under this
section for any taxable year beginning after December 31,
2025.''.
(b) Math Error Authority.--Section 6213(g)(2), as amended by
the preceding provisions of this Act, is amended by striking
``and'' at the end of subparagraph (T), by striking the period
at the end of subparagraph (U) and inserting ``, and'', and by
inserting after subparagraph (U) the following new
subparagraph:
``(V) an omission of a correct TIN required
under section 25E(e)(4) or a correct specified
provider identification number required under
section 25E(e)(2)(B).''.
(c) Clerical Amendment.--The table of sections for subpart A
of part IV of subchapter A of chapter 1 is amended by inserting
after the item relating to section 25D the following new item:
``Sec. 25E. Credit for caregiver expenses.''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
PART 4--EARNED INCOME TAX CREDIT
SEC. 137401. CERTAIN IMPROVEMENTS TO THE EARNED INCOME TAX CREDIT MADE
PERMANENT.
(a) Decrease in Minimum Age Requirement.--
(1) In general.--Section 32(c)(1)(A)(ii)(II) is
amended by striking ``age 25'' and inserting ``the
applicable minimum age''.
(2) Applicable minimum age.--Section 32(c) is amended
by adding at the end the following new paragraph:
``(5) Applicable minimum age.--
``(A) In general.--The term `applicable
minimum age' means--
``(i) except as otherwise provided in
this subparagraph, age 19,
``(ii) in the case of a specified
student (other than a qualified former
foster youth or a qualified homeless
youth), age 24, and
``(iii) in the case of a qualified
former foster youth or a qualified
homeless youth, age 18.
``(B) Specified student.--For purposes of
this paragraph, the term `specified student'
means, with respect to any taxable year, an
individual who is an eligible student (as
defined in section 25A(b)(3)) during at least 5
calendar months during the taxable year.
``(C) Qualified former foster youth.--For
purposes of this paragraph, the term `qualified
former foster youth' means an individual who--
``(i) on or after the date that such
individual attained age 14, was in
foster care provided under the
supervision or administration of an
entity administering (or eligible to
administer) a plan under part B or part
E of title IV of the Social Security
Act (without regard to whether Federal
assistance was provided with respect to
such child under such part E), and
``(ii) provides (in such manner as
the Secretary may provide) consent for
entities which administer a plan under
part B or part E of title IV of the
Social Security Act to disclose to the
Secretary information related to the
status of such individual as a
qualified former foster youth.
``(D) Qualified homeless youth.--For purposes
of this paragraph, the term `qualified homeless
youth' means, with respect to any taxable year,
an individual who certifies, in a manner as
provided by the Secretary, that such individual
is either an unaccompanied youth who is a
homeless child or youth, or is unaccompanied,
at risk of homelessness, and self-
supporting.''.
(b) Elimination of Maximum Age for Credit.--Section
32(c)(1)(A)(ii)(II) is amended by striking ``but not attained
age 65''.
(c) Increase in Credit and Phaseout Percentages.--The table
contained in section 32(b)(1) is amended by striking ``7.65''
each place it appears therein and inserting ``15.3''.
(d) Increase in Earned Income and Phaseout Amounts.--
(1) In general.--The table contained in section
32(b)(2)(A) is amended--
(A) by striking ``$4,220'' and inserting
``$9,820'', and
(B) by striking ``$5,280'' and inserting
``$11,610''.
(2) Application of inflation adjustment.--Section
32(j)(1) is amended--
(A) by striking ``(2021 in the case of the
dollar amount in subsection (i)(1))'' and
inserting ``(2021 in the case of the $9,820 and
$11,610 amounts in subsection (b)(2)(A) and the
$10,000 amount in subsection (i)(1))'',
(B) in subparagraph (B)(i), by inserting
``(other than the $9,820 and $11,610 amounts)''
after ``subsection (b)(2)(A)'', and
(C) in subparagraph (B)(iii), by inserting
``the $9,820 and $11,610 amounts in subsection
(b)(2)(A) and'' before ``the $10,000 amount in
subsection (i)(1)''.
(e) Section 32, as amended by subsection (f), is amended by
adding at the end the following new subsection:
``(n) Election to Determine Earned Income Based on Prior
Taxable Year.--
``(1) In general.--In the case of a taxpayer whose
earned income for any taxable year is less than the
earned income of such taxpayer for the preceding
taxable year, if such taxpayer elects (at such time and
in such manner as the Secretary may provide) the
application of this subsection for such taxable year,
the earned income of such taxpayer for such taxable
year shall be treated for purposes of this section as
being equal to the earned income of such taxpayer for
such preceding taxable year.
``(2) Joint returns.--For purposes of this
subsection, in the case of a joint return, the earned
income of the taxpayer for the preceding taxable year
shall be the sum of the earned income of each spouse
for the preceding taxable year.
``(3) Treatment as mathematical or clerical error.--
In the case of a taxpayer described in paragraph (1)
who makes the election described in such paragraph, the
use on the return for purposes of this section of an
amount of earned income for the preceding taxable year
which differs from the amount of such earned income as
shown in the electronic files of the Internal Revenue
Service shall be treated as a mathematical or clerical
error for purposes of section 6213.
``(4) Treatment of references.--Any provision of this
title which defines or determines earned income by
reference to this section shall be applied without
regard to this subsection unless such provision
specifically provides otherwise.''.
(f) Repeal of Temporary Provisions.--Section 32 is amended by
striking subsection (n).
(g) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 137402. FUNDS FOR ADMINISTRATION OF EARNED INCOME TAX CREDITS IN
THE TERRITORIES.
(a) Puerto Rico.--Section 7530(a)(1) is amended by striking
``plus'' at the end of subparagraph (A), by striking the period
at the end of subparagraph (B) and inserting ``, plus'', and by
adding at the end the following new subparagraph:
``(C) reasonable administrative costs
associated with the provision of the earned
income tax credit not in excess of
$4,000,000.''.
(b) Possessions With Mirror Code Tax Systems.--Section
7530(b)(1) is amended by striking ``plus'' at the end of
subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, plus'', and by adding at the
end the following new subparagraph:
``(C) reasonable administrative costs
associated with the provision of the earned
income tax credit not in excess of $200,000.''.
(c) American Samoa.--Section 7530(c)(1) is amended by
striking ``plus'' at the end of subparagraph (A), by striking
the period at the end of subparagraph (B) and inserting ``,
plus'', and by adding at the end the following new
subparagraph:
``(C) reasonable administrative costs
associated with the provision of the earned
income tax credit not in excess of $200,000.''.
(d) Effective Date.--The amendments made by this section
shall apply to payments made for calendar years beginning after
December 31, 2021.
PART 5--EXPANDING ACCESS TO HEALTH COVERAGE AND LOWERING COSTS
SEC. 137501. IMPROVE AFFORDABILITY AND REDUCE PREMIUM COSTS OF HEALTH
INSURANCE FOR CONSUMERS.
(a) Increase in Applicable Percentage Made Permanent.--
Section 36B(b)(3)(A) is amended to read as follows:
``(A) Applicable percentage.--The applicable
percentage for any taxable year shall be the
percentage such that the applicable percentage
for any taxpayer whose household income is
within an income tier specified in the
following table shall increase, on a sliding
scale in a linear manner, from the initial
premium percentage to the final premium
percentage specified in such table for such
income tier:
------------------------------------------------------------------------
``In the case of household income
(expressed as a percent of poverty The initial The final
line) within the following income premium premium
tier: percentage is-- percentage is--
------------------------------------------------------------------------
Up to 150.0 percent.................. 0 0
150.0 percent up to 200.0 percent.... 0 2
200.0 percent up to 250.0 percent.... 2 4
250.0 percent up to 300.0 percent.... 4 6
300.0 percent up to 400.0 percent.... 6 8.5
400.0 percent and higher............. 8.5 8.5''.
------------------------------------------------------------------------
(b) Credit Allowed to Taxpayers Whose Household Income
Exceeds 400 Percent of the Poverty Line.--
(1) In general.--Section 36B(c)(1)(A) is amended by
striking ``but does not exceed 400 percent''.
(2) Conforming amendment.--Section 36B(c)(1) is
amended by striking subparagraph (E).
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 137502. MODIFICATION OF EMPLOYER-SPONSORED COVERAGE AFFORDABILITY
TEST IN HEALTH INSURANCE PREMIUM TAX CREDIT.
(a) In General.--Section 36B(c)(2)(C) is amended--
(1) in clause (i)(II), by striking ``9.5 percent''
and inserting ``8.5 percent'', and
(2) by striking clause (iv).
(b) Qualified Small Employer Health Reimbursement
Arrangements.--Section 36B(c)(4) is amended--
(1) in subparagraph (C)(ii), by striking ``9.5
percent'' and inserting ``8.5 percent'', and
(2) by striking subparagraph (F).
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 137503. TREATMENT OF LUMP-SUM SOCIAL SECURITY BENEFITS IN
DETERMINING HOUSEHOLD INCOME.
(a) In General.--Section 36B(d)(2) is amended by adding at
the end the following new subparagraph:
``(C) Exclusion of portion of lump-sum social
security benefits.--
``(i) In general.--The term `modified
adjusted gross income' shall not
include so much of any lump-sum social
security benefit payment as is
attributable to months ending before
the beginning of the taxable year.
``(ii) Lump-sum social security
benefit payment.--For purposes of this
subparagraph, the term `lump-sum social
security benefit payment' means any
payment of social security benefits (as
defined in section 86(d)(1)) which
constitutes more than 1 month of such
benefits.
``(iii) Election to include
excludable amount.--With respect to any
taxable year beginning on or after the
termination date (as defined in
subsection (h)(2)), a taxpayer may
elect (at such time and in such manner
as the Secretary may provide) to have
this subparagraph not apply for such
taxable year.''.
(b) Effective Date.--The amendment made by this section shall
apply to taxable years beginning after December 31, 2021.
SEC. 137504. TEMPORARY EXPANSION OF HEALTH INSURANCE PREMIUM TAX
CREDITS FOR CERTAIN LOW-INCOME POPULATIONS.
(a) In General.--Section 36B is amended by redesignating
subsection (h) as subsection (i) and by inserting after
subsection (g) the following new subsection:
``(h) Certain Temporary Rules Beginning in 2022.--
``(1) In general.--With respect to any taxable year
beginning after December 31, 2021, and before the
termination date--
``(A) Eligibility for credit not limited
based on income.--Section 36B(c)(1)(A) shall be
disregarded in determining whether a taxpayer
is an applicable taxpayer.
``(B) Credit allowed to certain low-income
employees offered employer-provided coverage.--
Subclause (II) of subsection (c)(2)(C)(i) shall
not apply if the taxpayer's household income
does not exceed 138 percent of the poverty line
for a family of the size involved. Subclause
(II) of subsection (c)(2)(C)(i) shall also not
apply to an individual described in the last
sentence of such subsection if the taxpayer's
household income does not exceed 138 percent of
the poverty line for a family of the size
involved.
``(C) Credit allowed to certain low-income
employees offered qualified small employer
health reimbursement arrangements.--A qualified
small employer health reimbursement arrangement
shall not be treated as constituting affordable
coverage for an employee (or any spouse or
dependent of such employee) for any months of a
taxable year if the employee's household income
for such taxable year does not exceed 138
percent of the poverty line for a family of the
size involved.
``(D) Limitations on recapture.--
``(i) In general.--In the case of a
taxpayer whose household income is less
than 200 percent of the poverty line
for the size of the family involved for
the taxable year, the amount of the
increase under subsection (f)(2)(A)
shall in no event exceed $300 (one-half
of such amount in the case of a
taxpayer whose tax is determined under
section 1(c) for the taxable year).
``(ii) Limitation on increase for
certain non-filers.--In the case of any
taxpayer who would not be required to
file a return of tax for the taxable
year but for any requirement to
reconcile advance credit payments under
subsection (f), if an Exchange
established under title I of the
Patient Protection and Affordable Care
Act has determined that--
``(I) such taxpayer is
eligible for advance payments
under section 1412 of such Act
for any portion of such taxable
year, and
``(II) such taxpayer's
household income for such
taxable year is projected to
not exceed 138 percent of the
poverty line for a family of
the size involved,
subsection (f)(2)(A) shall not apply to
such taxpayer for such taxable year and
such taxpayer shall not be required to
file such return of tax.
``(iii) Information provided by
exchange.--The information required to
be provided by an Exchange to the
Secretary and to the taxpayer under
subsection (f)(3) shall include such
information as is necessary to
determine whether such Exchange has
made the determinations described in
subclauses (I) and (II) of clause (ii)
with respect to such taxpayer.
``(2) Termination date.--For purposes of this
subsection, the term `termination date' means the later
of--
``(A) January 1, 2025, or
``(B) the date on which the Secretary of
Health and Human Services makes a written
certification to the Secretary that the
Secretary of Health and Human Services has
fully implemented the program described in
section 1948 of the Social Security Act
(relating to Federal Medicaid program to close
coverage gap in nonexpansion States).''.
(b) Employer Shared Responsibility Provision Not Applicable
With Respect to Certain Low-income Taxpayers Receiving Premium
Assistance.--Section 4980H(c)(3) is amended to read as follows:
``(3) Applicable premium tax credit and cost-sharing
reduction.--
``(A) In general.--The term `applicable
premium tax credit and cost-sharing reduction'
means--
``(i) any premium tax credit allowed
under section 36B,
``(ii) any cost-sharing reduction
under section 1402 of the Patient
Protection and Affordable Care Act, and
``(iii) any advance payment of such
credit or reduction under section 1412
of such Act.
``(B) Exception with respect to certain low-
income taxpayers.--Such term shall not include
any premium tax credit, cost-sharing reduction,
or advance payment otherwise described in
subparagraph (A) if such credit, reduction, or
payment is allowed or paid for a taxable year
of an employee (beginning after December 31,
2021, and before the termination date, as
defined in section 36B(h)(2)) with respect to
which--
``(i) an Exchange established under
title I of the Patient Protection and
Affordable Care Act has determined that
such employee's household income for
such taxable year is projected to not
exceed 138 percent of the poverty line
for a family of the size involved, or
``(ii) such employee's household
income for such taxable year does not
exceed 138 percent of the poverty line
for a family of the size involved.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 137505. ENSURING AFFORDABILITY OF COVERAGE FOR CERTAIN LOW-INCOME
POPULATIONS.
(a) Reducing Cost Sharing Under Qualified Health Plans.--
Section 1402 of the Patient Protection and Affordable Care Act
(42 U.S.C. 18071) is amended--
(1) in subsection (b)--
(A) in paragraph (2), by inserting ``(or,
with respect to plan years 2023 and 2024, whose
household income does not exceed 400 percent of
the poverty line for a family of the size
involved)'' before the period; and
(B) in the matter following paragraph (2), by
adding at the end the following new sentence:
``In the case of an individual with a household
income of less than 138 percent of the poverty
line for a family of the size involved for any
month occurring during the period beginning on
January 1, 2022, and ending on December 31,
2022, such individual shall, for such month and
for each succeeding month during such period,
be treated as having household income equal to
100 percent for purposes of applying this
section.''; and
(2) in subsection (c)--
(A) in paragraph (1)(A), in the matter
preceding clause (i), by inserting ``, with
respect to eligible insureds (other than, with
respect to plan years 2023 and 2024, specified
enrollees (as defined in paragraph (6)(C))),''
after ``first be achieved'';
(B) in paragraph (2), in the matter preceding
subparagraph (A), by inserting ``with respect
to eligible insureds (other than, with respect
to plan years 2023 and 2024, specified
enrollees)'' after ``under the plan'';
(C) in paragraph (3)--
(i) in subparagraph (A), by striking
``this subsection'' and inserting
``paragraph (1) or (2)''; and
(ii) in subparagraph (B), by striking
``this section'' and inserting
``paragraphs (1) and (2)''; and
(D) by adding at the end the following new
paragraph:
``(6) Special rule for specified enrollees.--
``(A) In general.--The Secretary shall
establish procedures under which the issuer of
a qualified health plan to which this section
applies shall reduce cost-sharing under the
plan with respect to months occurring during
plan years 2023 and 2024 for enrollees who are
specified enrollees (as defined in subparagraph
(C)) in a manner sufficient to increase the
plan's share of the total allowed costs of
benefits provided under the plan to 99 percent
of such costs.
``(B) Methods for reducing cost sharing.--
``(i) In general.--An issuer of a
qualified health plan making reductions
under this paragraph shall notify the
Secretary of such reductions and the
Secretary shall, out of funds made
available under clause (ii), make
periodic and timely payments to the
issuer equal to 12 percent of the total
allowed costs of benefits provided
under each such plan to specified
enrollees during plan years 2023 and
2024.
``(ii) Appropriation.--There are
appropriated, out of any monies in the
Treasury not otherwise appropriated,
such sums as may be necessary to the
Secretary for purposes of making
payments under clause (i).
``(C) Specified enrollee defined.--For
purposes of this section, the term `specified
enrollee' means, with respect to a month
occurring during a plan year, an eligible
insured with a household income of less than
138 percent of the poverty line for a family of
the size involved during such month. Such
insured shall be deemed to be a specified
enrollee for each succeeding month in such plan
year.''.
(b) Open Enrollments Applicable to Certain Lower-income
Populations.--Section 1311(c) of the Patient Protection and
Affordable Care Act (42 U.S.C. 18031(c)) is amended--
(1) in paragraph (6)--
(A) in subparagraph (C), by striking at the
end ``and'';
(B) in subparagraph (D), by striking the
period at the end and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(E) with respect to a qualified health plan
with respect to which section 1402 applies, for
months occurring during the period beginning on
January 1, 2022, and ending on December 31,
2024, enrollment periods described in
subparagraph (A) of paragraph (8) for
individuals described in subparagraph (B) of
such paragraph.''; and
(2) by adding at the end the following new paragraph:
``(8) Special enrollment period for certain low-
income populations.--
``(A) In general.--The enrollment period
described in this paragraph is, in the case of
an individual described in subparagraph (B),
the continuous period beginning on the first
day that such individual is so described.
``(B) Individual described.--For purposes of
subparagraph (A), an individual described in
this subparagraph is an individual--
``(i) with a household income of less
than 138 percent of the poverty line
for a family of the size involved; and
``(ii) who is not eligible for
minimum essential coverage (as defined
in section 5000A(f) of the Internal
Revenue Code of 1986), other than for
coverage described in any of
subparagraphs (B) through (E) of
paragraph (1) of such section.''.
(c) Additional Benefits for Certain Low-income Individuals
for Plan Year 2024.--Section 1301(a) of the Patient Protection
and Affordable Care Act (42 U.S.C. 18021(a)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (B), by striking ``and''
at the end;
(B) in subparagraph (C)(iv), by striking the
period and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(D) provides, with respect to a plan
offered in the silver level of coverage to
which section 1402 applies during plan year
2024, for benefits described in paragraph (5)
in the case of an individual who, for a month
during such plan year, has a household income
of less than 138 percent of the poverty line
for a family of the size involved, and who is
eligible to receive cost-sharing reductions
under section 1402.''; and
(2) by adding at the end the following new paragraph:
``(5) Additional benefits for certain low-income
individuals for plan year 2024.--
``(A) In general.--For purposes of paragraph
(1)(D), the benefits described in this
paragraph to be provided by a qualified health
plan are benefits consisting of non-emergency
medical transportation services and services
described in subsection (a)(4)(C) of section
1905 of the Social Security Act, without any
restriction on the choice of a qualified
provider from whom such an individual so
enrolled in such plan may receive such services
described in such subsection, and without any
imposition of cost sharing, which are not
otherwise provided under such plan as part of
the essential health benefits package described
in section 1302(a).
``(B) Payments for additional benefits.--
``(i) In general.--An issuer of a
qualified health plan making payments
for services described in subparagraph
(A) furnished to individuals described
in paragraph (1)(D) during plan year
2024 shall notify the Secretary of such
payments and the Secretary shall, out
of funds made available under clause
(ii), make periodic and timely payments
to the issuer equal to payments for
such services so furnished.
``(ii) Appropriation.--There is
appropriated, out of any monies in the
Treasury not otherwise appropriated,
such sums as may be necessary to the
Secretary for purposes of making
payments under clause (i).''.
(d) Education and Outreach Activities.----
(1) In general.--Section 1321(c) of the Patient
Protection and Affordable Care Act (42 U.S.C. 18041(c))
is amended by adding at the end the following new
paragraph:
``(3) Outreach and educational activities.--
``(A) In general.--In the case of an Exchange
established or operated by the Secretary within
a State pursuant to this subsection, the
Secretary shall carry out outreach and
educational activities for purposes of
informing individuals described in section
1902(a)(10)(A)(i)(VIII) of the Social Security
Act who reside in States that have not expended
amounts under a State plan (or waiver of such
plan) under title XIX of such Act for all such
individuals about qualified health plans
offered through the Exchange, including by
informing such individuals of the availability
of coverage under such plans and financial
assistance for coverage under such plans. Such
outreach and educational activities shall be
provided in a manner that is culturally and
linguistically appropriate to the needs of the
populations being served by the Exchange
(including hard-to-reach populations, such as
racial and sexual minorities, limited English
proficient populations, individuals residing in
areas where the unemployment rates exceeds the
national average unemployment rate, individuals
in rural areas, veterans, and young adults).
``(B) Limitation on use of funds.--No funds
appropriated under this paragraph shall be used
for expenditures for promoting non-ACA
compliant health insurance coverage.
``(C) Non-aca compliant health insurance
coverage.--For purposes of subparagraph (B):
``(i) The term `non-ACA compliant
health insurance coverage' means health
insurance coverage, or a group health
plan, that is not a qualified health
plan.
``(ii) Such term includes the
following:
``(I) An association health
plan.
``(II) Short-term limited
duration insurance.
``(D) Funding.--There are appropriated, out
of any monies in the Treasury not otherwise
appropriated, $15,000,000 for fiscal year 2022,
and $30,000,000 for each of fiscal years 2023
and 2024, to carry out this paragraph. Funds
appropriated under this subparagraph shall
remain available until expended.''.
(2) Navigator program.--Section 1311(i)(6) of the
Patient Protection and Affordable Care Act (42 U.S.C.
18031(i)(6)) is amended--
(A) by striking ``Funding.--Grants under''
and inserting ``Funding.--
``(A) State exchanges.--Grants under''; and
(B) by adding at the end the following new
subparagraph:
``(B) Federal exchanges.--For purposes of
carrying out this subsection, with respect to
an Exchange established and operated by the
Secretary within a State pursuant to section
1321(c), the Secretary shall obligate
$10,000,000 out of amounts collected through
the user fees on participating health insurance
issuers pursuant to section 156.50 of title 45,
Code of Federal Regulations (or any successor
regulations) for fiscal year 2022, and
$20,000,000 for each of fiscal years 2023 and
2024. Such amount so obligated for a fiscal
year shall remain available until expended.''.
SEC. 137506. ESTABLISHING A HEALTH INSURANCE AFFORDABILITY FUND.
(a) In General.--Subtitle D of title I of the Patient
Protection and Affordable Care Act is amended by inserting
after part 5 (42 U.S.C. 18061 et seq.) the following new part:
``PART 6--IMPROVE HEALTH INSURANCE AFFORDABILITY FUND
``SEC. 1351. ESTABLISHMENT OF PROGRAM.
``There is hereby established the `Improve Health Insurance
Affordability Fund' to be administered by the Secretary of
Health and Human Services, acting through the Administrator of
the Centers for Medicare & Medicaid Services (in this section
referred to as the `Administrator'), to provide funding, in
accordance with this part, to the 50 States and the District of
Columbia (each referred to in this section as a `State')
beginning on January 1, 2023, for the purposes described in
section 1352.
``SEC. 1352. USE OF FUNDS.
``(a) In General.--A State shall use the funds allocated to
the State under this part for one of the following purposes:
``(1) To provide reinsurance payments to health
insurance issuers with respect to individuals enrolled
under individual health insurance coverage (other than
through a plan described in subsection (b)) offered by
such issuers.
``(2) To provide assistance (other than through
payments described in paragraph (1)) to reduce out-of-
pocket costs, such as copayments, coinsurance,
premiums, and deductibles, of individuals enrolled
under qualified health plans offered on the individual
market through an Exchange and of individuals enrolled
under standard health plans offered through a basic
health program established under section 1331.
``(b) Exclusion of Certain Grandfathered Plans, Transitional
Plans, Student Health Plans, and Excepted Benefits.--For
purposes of subsection (a), a plan described in this subsection
is the following:
``(1) A grandfathered health plan (as defined in
section 1251).
``(2) A plan (commonly referred to as a `transitional
plan') continued under the letter issued by the Centers
for Medicare & Medicaid Services on November 14, 2013,
to the State Insurance Commissioners outlining a
transitional policy for coverage in the individual and
small group markets to which section 1251 does not
apply, and under the extension of the transitional
policy for such coverage set forth in the Insurance
Standards Bulletin Series guidance issued by the
Centers for Medicare & Medicaid Services on March 5,
2014, February 29, 2016, February 13, 2017, April 9,
2018, March 25, 2019, January 31, 2020, and January 19,
2021, or under any subsequent extensions thereof.
``(3) Student health insurance coverage (as defined
in section 147.145 of title 45, Code of Federal
Regulations, or any successor regulation).
``(4) Excepted benefits (as defined in section
2791(c) of the Public Health Service Act).
``SEC. 1353. STATE ELIGIBILITY AND APPROVAL; DEFAULT SAFEGUARD.
``(a) Encouraging State Options for Allocations.--
``(1) In general.--Subject to subsection (b), to be
eligible for an allocation of funds under this part for
a year (beginning with 2023), a State shall submit to
the Administrator an application at such time (but, in
the case of allocations for 2023, not later than 120
days after the date of the enactment of this part and,
in the case of allocations for a subsequent year, not
later than January 1 of the previous year) and in such
form and manner as specified by the Administrator
containing--
``(A) a description of how the funds will be
used; and
``(B) such other information as the
Administrator may require.
``(2) Automatic approval.--An application so
submitted is approved (as outlined in the terms of the
plan) unless the Administrator notifies the State
submitting the application, not later than 90 days
after the date of the submission of such application,
that the application has been denied for not being in
compliance with any requirement of this part and of the
reason for such denial.
``(3) 5-year application approval.--If an application
of a State is approved for a purpose described in
section 1352 for a year, such application shall be
treated as approved for such purpose for each of the
subsequent 4 years.
``(4) Oversight authority and authority to revoke
approval.--
``(A) Oversight.--The Secretary may conduct
periodic reviews of the use of funds provided
to a State under this section, with respect to
a purpose described in section 1352, to ensure
the State uses such funds for such purpose and
otherwise complies with the requirements of
this section.
``(B) Revocation of approval.--The approval
of an application of a State, with respect to a
purpose described in section 1352, may be
revoked if the State fails to use funds
provided to the State under this section for
such purpose or otherwise fails to comply with
the requirements of this section.
``(b) Default Federal Safeguard for 2023 and 2024 for Certain
States.--
``(1) In general.--For 2023 and 2024, in the case of
a State described in paragraph (5), with respect to
such year, the State shall not be eligible to submit an
application under subsection (a), and the
Administrator, in consultation with the applicable
State authority, shall from the amount calculated under
paragraph (3) for such year, carry out the purpose
described in paragraph (2) in such State for such year.
``(2) Specified use.--The amount described in
paragraph (3), with respect to a State described in
paragraph (5) for 2023 or 2024, shall be used to carry
out the purpose described in section 1352(a)(1) in such
State for such year, as applicable, by providing
reinsurance payments to health insurance issuers with
respect to attachment range claims (as defined in
section 1354(b)(2), using the dollar amounts specified
in subparagraph (B) of such section for such year) in
an amount equal to, subject to paragraph (4), the
percentage (specified for such year by the Secretary
under such subparagraph) of the amount of such claims.
``(3) Amount described.--The amount described in this
paragraph, with respect to 2023 or 2024, is the amount
equal to the total sum of amounts that the Secretary
would otherwise estimate under section 1354(b)(2)(A)(i)
for such year for each State described in paragraph (5)
for such year, as applicable, if each such State were
not so described for such year.
``(4) Adjustment.--For purposes of this subsection,
the Secretary may apply a percentage under paragraph
(3) with respect to a year that is less than the
percentage otherwise specified in section 1354(b)(2)(B)
for such year, if the cost of paying the total eligible
attachment range claims for States described in
paragraph (5) for such year at such percentage
otherwise specified would exceed the amount calculated
under paragraph (3) for such year.
``(5) State described.--A State described in this
paragraph, with respect to years 2023 and 2024, is a
State that, as of January 1 of 2022 or 2023,
respectively, was not expending amounts under the State
plan (or waiver of such plan) for all individuals
described in section 1902(a)(10)(A)(i)(VIII) during
such year.
``SEC. 1354. ALLOCATIONS.
``(a) Appropriation.--For the purpose of providing
allocations for States under subsection (b) and payments under
section 1353(b) there is appropriated, out of any money in the
Treasury not otherwise appropriated, $10,000,000,000 for 2023
and each subsequent year.
``(b) Allocations.--
``(1) Payment.--
``(A) In general.--From amounts appropriated
under subsection (a) for a year, the Secretary
shall, with respect to a State not described in
section 1353(b) for such year and not later
than the date specified under subparagraph (B)
for such year, allocate for such State the
amount determined for such State and year under
paragraph (2).
``(B) Specified date.--For purposes of
subparagraph (A), the date specified in this
subparagraph is--
``(i) for 2023, the date that is 90
days after the date of the enactment of
this part; and
``(ii) for 2024 or a subsequent year,
January 1 of the previous year.
``(C) Notifications of allocation amounts.--
For 2024 and each subsequent year, the
Secretary shall notify each State of the amount
determined for such State under paragraph (2)
for such year by not later than January 1 of
the previous year.
``(2) Allocation amount determinations.--
``(A) In general.--For purposes of paragraph
(1), the amount determined under this paragraph
for a year for a State described in paragraph
(1)(A) for such year is the amount equal to--
``(i) the amount that the Secretary
estimates would be expended under this
part for such year on attachment range
claims of individuals residing in such
State if such State used such funds
only for the purpose described in
paragraph (1) of section 1352(a) at the
dollar amounts and percentage specified
under subparagraph (B) for such year;
minus
``(ii) the amount, if any, by which
the Secretary determines--
``(I) the estimated amount of
premium tax credits under
section 36B of the Internal
Revenue Code of 1986 that would
be attributable to individuals
residing in such State for such
year without application of
this part; exceeds
``(II) the estimated amount
of premium tax credits under
section 36B of the Internal
Revenue Code of 1986 that would
be attributable to individuals
residing in such State for such
year if section 1353(b) applied
for such year and applied with
respect to such State for such
year.
For purposes of the previous sentence and
section 1353(b)(3), the term `attachment range
claims' means, with respect to an individual,
the claims for such individual that exceed a
dollar amount specified by the Secretary for a
year, but do not exceed a ceiling dollar amount
specified by the Secretary for such year, under
subparagraph (B).
``(B) Specifications.--For purposes of
subparagraph (A) and section 1353(b)(3), the
Secretary shall determine the dollar amounts
and the percentage to be specified under this
subparagraph for a year in a manner to ensure
that the total amount of expenditures under
this part for such year is estimated to equal
the total amount appropriated for such year
under subsection (a) if such expenditures were
used solely for the purpose described in
paragraph (1) of section 1352(a) for attachment
range claims at the dollar amounts and
percentage so specified for such year.
``(3) Availability.--Funds allocated to a State under
this subsection for a year shall remain available
through the end of the subsequent year.''.
(b) Basic Health Program Funding Adjustments.--Section 1331
of the Patient Protection and Affordable Care Act (42 U.S.C.
18051) is amended--
(1) in subsection (a), by adding at the end the
following new paragraph:
``(3) Provision of information on qualified health
plan premiums.--
``(A) In general.--For plan years beginning
on or after January 1, 2023, the program
described in paragraph (1) shall provide that a
State may not establish a basic health program
unless such State furnishes to the Secretary,
with respect to each qualified health plan
offered in such State during a year that
receives any reinsurance payment from funds
made available under part 6 for such year, the
adjusted premium amount (as defined in
subparagraph (B)) for each such plan and year.
``(B) Adjusted premium amount defined.--For
purposes of subparagraph (A), the term
`adjusted premium amount' means, with respect
to a qualified health plan and a year, the
monthly premium for such plan and year that
would have applied had such plan not received
any payments described in subparagraph (A) for
such year.''; and
(2) in subsection (d)(3)(A)(ii), by adding at the end
the following new sentence: ``In making such
determination, the Secretary shall calculate the value
of such premium tax credits that would have been
provided to such individuals enrolled through a basic
health program established by a State during a year
using the adjusted premium amounts (as defined in
subsection (a)(3)(B)) for qualified health plans
offered in such State during such year.''.
SEC. 137507. SPECIAL RULE FOR INDIVIDUALS RECEIVING UNEMPLOYMENT
COMPENSATION.
(a) Extension.--Section 36B(g)(1) is amended by striking
``during 2021,'' and inserting ``after December 31, 2020, and
before January 1, 2026,''.
(b) Modification of Income Not Taken Into Account.--Section
36B(g)(1)(B) is amended by striking ``133 percent'' and
inserting ``150 percent''.
(c) Conforming Amendment.--Section 36B(g) by inserting
``Through 2025'' after ``2021'' in the heading thereof.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 137508. PERMANENT CREDIT FOR HEALTH INSURANCE COSTS.
(a) In General.--Subparagraph (B) of section 35(b)(1) of the
Internal Revenue Code of 1986 is amended by striking ``, and
before January 1, 2022'' and inserting a period.
(b) Increase in Credit Percentage.--Subsection (a) of section
35 of the Internal Revenue Code of 1986 is amended by striking
``72.5 percent'' and inserting ``80 percent''.
(c) Conforming Amendments.--Subsections (b) and (e)(1) of
section 7527 of the Internal Revenue Code of 1986 are each
amended by striking ``72.5 percent'' and inserting ``80
percent''.
(d) Effective Date.--The amendments made by this section
shall apply to coverage months beginning after December 31,
2021.
PART 6--PATHWAY TO PRACTICE TRAINING PROGRAMS
SEC. 137601. ESTABLISHING RURAL AND UNDERSERVED PATHWAY TO PRACTICE
TRAINING PROGRAMS FOR POST-BACCALAUREATE STUDENTS
AND MEDICAL STUDENTS.
(a) Program.--
(1) In general.--Title XVIII of the Social Security
Act (42 U.S.C. 1395 et seq.) is amended by adding at
the end the following new section:
``SEC. 1899C. RURAL AND UNDERSERVED PATHWAY TO PRACTICE TRAINING
PROGRAM FOR POST-BACCALAUREATE AND MEDICAL
STUDENTS.
``(a) In General.--Not later than October 1, 2023, the
Secretary shall, subject to the succeeding provisions of this
section, carry out the `Rural and Underserved Pathway to
Practice Training Program for Post-Baccalaureate and Medical
Students' (in this section, referred to as the `Program') under
which the Secretary awards Pathway to Practice medical
scholarship vouchers to qualifying students described in
subsection (b) for the purpose of increasing the number of
physicians practicing in rural and underserved communities.
``(b) Qualifying Student Described.--For purposes of this
section, a qualifying student described in this subsection is
an individual who--
``(1) attests he or she--
``(A) is or will be a first-generation
student of a 4-year college, graduate school,
or professional school;
``(B) was a Pell Grant recipient; or
``(C) lived in a medically underserved area,
rural area, or health professional shortage
area for a period of 4 or more years prior to
attending an undergraduate program;
``(2) has accepted enrollment in--
``(A) a post-baccalaureate program that is
not more than 2 years and intends to enroll in
a qualifying medical school within 2 years
after completion of such program; or
``(B) a qualifying medical school;
``(3) will practice medicine in a health professional
shortage area, medically underserved area, public
hospital, rural area, or as required under subsection
(d)(5); and
``(4) submits an application and a signed copy of the
agreement described under subsection (c).
``(c) Applications.--
``(1) In general.--To be eligible to receive a
Pathway to Practice medical scholarship voucher under
this section, a qualifying student described in
subsection (b) shall submit to the Secretary an
application at such time, in such manner, and
containing such information as the Secretary may
require.
``(2) Information to be included.--As a part of the
application described in paragraph (1), the Secretary
shall include a notice of the items which are required
to be agreed to under subsection (d)(4) for the purpose
of notifying the qualifying student of the terms of the
Rural and Underserved Pathway to Practice Training
Program.
``(d) Pathway to Practice Medical Scholarship Voucher
Details.--
``(1) Number.--On an annual basis, the Secretary may
award a Pathway to Practice medical scholarship voucher
under the Program to not more than 1,000 qualifying
students described in subsection (b).
``(2) Prioritization criteria.--In determining
whether to award a Pathway to Practice medical
scholarship voucher under the Program to qualifying
students described in subsection (b), the Secretary
shall prioritize applications from any such student who
attests that he or she--
``(A) was a participant in the Health
Resources and Services Administration Health
Careers Opportunity Program or an Area Health
Education Center scholar;
``(B) is a disadvantaged student (as defined
by the National Health Service Corps of the
Health Resources & Services Administration of
the Department of Health and Human Services);
or
``(C) attended a historically black college
or other minority serving institution (as
defined in section 1067q of title 20, United
States Code).
``(3) Duration.--Each Pathway to Practice medical
scholarship voucher awarded to a qualifying student
pursuant to paragraph (1) shall be so awarded to such a
student on an annual basis for each year of enrollment
in a post-baccalaureate program and a qualifying
medical school (as appropriate).
``(4) Amount.--Subject to paragraph (5), each Pathway
to Practice medical scholarship voucher awarded under
the Program shall include amounts for--
``(A) tuition;
``(B) academic fees (as determined by the
qualifying medical school);
``(C) required textbooks and equipment;
``(D) a monthly stipend equal to the amount
provided for individuals under the health
professions scholarship and financial
assistance program described in section 2121(c)
of title 10, United States Code; and
``(E) any other educational expenses normally
incurred by students at the post-baccalaureate
program or qualifying medical school (as
appropriate).
``(5) Required agreement.--No amounts under paragraph
(4) may be provided a qualifying student awarded a
Pathway to Practice medical scholarship voucher under
the Program, unless the qualifying student submits to
the Secretary an agreement to--
``(A) complete a post-baccalaureate program
that is not more than 2 years (if applicable
pursuant to the option under subsection
(b)(2)(A));
``(B) graduate from a qualifying medical
school;
``(C) complete a residency program in an
approved residency training program (as defined
in section 1886(h)(5)(A));
``(D) complete an initial residency period or
the period of board eligibility;
``(E) practice medicine for at least the
number of years of the Pathway to Practice
medical scholarship voucher awarded under
paragraph (2) after a residency program in a
health professional shortage area, a medically
underserved area, a public hospital, or a rural
area, and during such period annually submit
documentation with respect to whether the
qualifying student practices medicine in such
an area and where;
``(F) for the purpose of determining
compliance with subparagraph (E), not later
than 180 days after the date on which
qualifying student completes a residency
program, provide to the Secretary information
with respect to where the qualifying student is
practicing medicine following the period
described in such subparagraph;
``(G) except in the case of a waiver for
hardship pursuant to section 1892(f)(3), be
liable to the United States pursuant to section
1892 for any amounts received under this
Program that is determined a past-due
obligation under subsection (b)(3) of such
section in the case qualifying student fails to
complete all of the requirements of this
agreement under this subsection; and
``(H) for the purpose of determining the
amount of Pathway to Practice medical
scholarship vouchers paid or incurred by a
qualifying medical school or any provider of a
post-baccalaureate program referred to in
subsection (b)(2)(A) for the costs of tuition
under paragraph (4)(A), consent to any
personally identifying information being shared
with the Secretary of the Treasury.
``(6) Responsibilities of participating educational
institutions.--Each annual award of an amount of
Pathway to Practice medical scholarship voucher under
paragraph (2) shall be made with respect to a specific
qualifying medical school or post-baccalaureate program
that is not more than 2 years and such school or
program shall (as a condition of, and prior to, such
award being made with respect to such school or
program)--
``(A) submit to the Secretary such
information as the Secretary may require to
determine the amount of such award on the basis
of the costs of the costs of the items
specified under paragraph (4) (except for
subparagraph (D)) with respect to such school
or program, and
``(B) enter into an agreement with the
Secretary under which such school or provider
will verify (in such manner as the Secretary
may provide) that amounts paid by such school
or provider to the qualifying student are used
for such costs.
``(e) Definitions.--In this section:
``(1) Health professional shortage area.--The team
`health professional shortage area' has the meaning
given such term in subparagraphs (A) or (B) of section
332(a)(1) of the Public Health Service Act.
``(2) Initial residency period.--The term `initial
residency period' has the meaning given such term in
section 1886(h)(5)(F).
``(3) Medically underserved area.--The term
`medically underserved area' means an area designated
pursuant to section 330(b)(3)(A) of the Public Health
Service Act.
``(4) Pell grant recipient.--The term `Pell Grant
recipient' has the meaning given such term in section
322(3) of the Higher Education Act of 1965.
``(5) Period of board eligibility.--The term `period
of board eligibility' has the meaning given such term
in section 1886(h)(5)(G).
``(6) Qualifying medical school.--The term
`qualifying medical school' means a school of medicine
accredited by the Liaison Committee on Medical
Education of the American Medical Association and the
Association of American Medical Colleges (or approved
by such Committee as meeting the standards necessary
for such accreditation) or a school of osteopathy
accredited by the American Osteopathic Association, or
approved by such Association as meeting the standards
necessary for such accreditation which--
``(A) for each academic year, enrolls at
least 10 qualifying students who are in
enrolled in such a school;
``(B) requires qualifying students to enroll
in didactic coursework and clinical experience
applicable to practicing medicine in health
professional shortage areas, medically
underserved areas, or rural areas, including--
``(i) clinical rotations in such
areas in applicable specialties (as
applicable and as available);
``(ii) coursework or training
experiences focused on medical issues
prevalent in such areas and cultural
and structural competency; and
``(C) is located in a State (as defined in
section 210(h)).
``(7) Rural area.--The term `rural area' has the
meaning given such term in section 1886(d)(2)(D).
``(f) Penalty for False Information.--Any person who
knowingly and willfully obtains by fraud, false statement, or
forgery, or fails to refund any funds, assets, or property
provided under this section or attempts to so obtain by fraud,
false statement or forgery, or fail to refund any funds,
assets, or property, received pursuant to this section shall be
fined not more than $20,000 or imprisoned for not more than 5
years, or both.''.
(2) Agreements.--Section 1892 of the Social Security
Act (42 U.S.C. 1395ccc) is amended--
(A) in subsection (a)(1)(A)--
(i) by striking ``, or the'' and
inserting ``, the''; and
(ii) by inserting ``or the Rural and
Underserved Pathway to Practice
Training Program for Post-
Baccalaureate and Medical Students
under section 1899C'' before ``, owes a
past-due obligation'';
(B) in subsection (b)--
(i) in paragraph (1), by striking at
the end ``or'';
(ii) in paragraph (2), by striking
the period at the end and inserting ``;
or''; and
(iii) by adding the end the following
new paragraph:
``(3) subject to subsection (f), owed by an
individual to the United States by breach of an
agreement under section 1899C(c) and which payment has
not been paid by the individual for any amounts
received under the Rural and Underserved Pathway to
Practice Training Program for Post-Baccalaureate and
Medical Students (and accrued interest determined in
accordance with subsection (f)(4)) in the case such
individual fails to complete the requirements of such
agreement.''; and
(C) by adding at the end the following new
subsection:
``(f) Authorities With Respect to the Collection Under the
Pathway to Practice Training Program.--The Secretary--
``(1) shall require payment to the United States for
any amount of damages that the United States is
entitled to recover under subsection (b)(3), within the
5-year period beginning on the date an eligible
individual fails to complete the requirements of such
agreement under section 1899C(d)(5) (or such longer
period beginning on such date as specified by the
Secretary), and any such amounts not paid within such
period shall be subject to collection through
deductions in Medicare payments pursuant to subsection
(e);
``(2) may allow payments described in paragraph (1)
to be paid in installments over such 5-year period,
which shall accrue interest in an amount determined
pursuant to paragraph (5);
``(3) may waive the requirement for an individual to
pay a past-due obligation under subsection (b)(3) in
the case of hardship (as determined by the Secretary);
``(4) may not disclose any past-due obligation under
subsection (b)(3) that is owed to the United States to
any credit reporting agency that the United States
entitled to be recovered the United States under this
section; and
``(5) shall make a final determination of whether the
amount of payment under section 1899C made to a
qualifying student (as described in subsection (b) of
such section) was in excess of or less than the amount
of payment that is due, and payment of such excess or
deficit is not made (or effected by offset) within 90
days of the date of the determination, and interest
shall accrue on the balance of such excess or deficit
not paid or offset (to the extent that the balance is
owed by or owing to the provider) at a rate determined
in accordance with the regulations of the Secretary of
the Treasury applicable to charges for late
payments.''.
SEC. 137602. FUNDING FOR THE RURAL AND UNDERSERVED PATHWAY TO PRACTICE
TRAINING PROGRAMS FOR POST-BACCALAUREATE STUDENTS
AND MEDICAL STUDENTS.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986, as amended by
the preceding provisions of this Act, is amended by inserting
after section 36F the following new section:
``SEC. 36G. PATHWAY TO PRACTICE MEDICAL SCHOLARSHIP VOUCHER CREDIT.
``(a) In General.--In the case of a qualified educational
institution, there shall be allowed as a credit against the tax
imposed by this subtitle for any taxable year an amount equal
to the aggregate amount paid or incurred by such institution
during such taxable year pursuant to any Pathway to Practice
medical scholarship voucher awarded to a qualifying student
with respect to such institution.
``(b) Determination of Amounts Paid Pursuant to Qualified
Scholarship Vouchers, etc.--For purposes of this section--
``(1) an amount shall be treated as paid or incurred
pursuant to an annual award of a Pathway to Practice
medical scholarship voucher only if such amount is paid
or incurred in reimbursement, or anticipation of, an
expense described in subparagraphs (A) through (E) of
paragraph (4) of section 1899C(d) of the Social
Security Act and is subject to verification in such
manner as the Secretary of Health and Human Services
may provide under paragraph (6) of such section, and
``(2) in the case of any amount credited by a
qualified educational institution against a liability
owed by the qualifying student to such institution,
such amount shall be treated as paid by such
institution to such student as of the date that such
liability would otherwise be due.
``(c) Definitions.--For purposes of this section--
``(1) Qualified educational institution.--The term
`qualified educational institution' means, with respect
to any annual award of a Pathway to Practice medical
scholarship voucher--
``(A) any qualifying medical school (as
defined in subsection (e)(6) of section 1899C
of the Social Security Act), and
``(B) any provider of a post-baccalaureate
program referred to in subsection (b)(2)(A) of
such section,
which meets the requirements of subsection (d)(6) of
such section.
``(2) Qualifying student.--The term `qualifying
student' means any student to whom the Secretary of
Health and Human Services has made an annual award of a
Pathway to Practice medical scholarship voucher under
section 1899C of the Social Security Act.
``(3) Annual award of a pathway to practice medical
scholarship voucher.--The term `annual award of a
Pathway to Practice medical scholarship voucher' means
the annual award of a Pathway to Practice medical
scholarship voucher referred to in section 1899C(d)(3)
of the Social Security Act.
``(d) Coordination of Academic and Taxable Years.--The credit
allowed under subsection (a) with respect to any Pathway to
Practice medical scholarship voucher shall not exceed the
amount of such voucher which is for expenses described in
subparagraphs (A) through (E) of section 1899C(d)(4) of the
Social Security Act, reduced by any amount of such voucher with
respect to which credit was allowed under this section for any
prior taxable year.
``(e) Regulations.--The Secretary shall issue such
regulations or other guidance as are necessary or appropriate
to carry out the purposes of this section.''.
(b) Conforming Amendments.--
(1) Section 6211(b)(4)(A), as amended by the
preceding provisions of this Act, is amended by
inserting ``36G,'' after ``36F,''.
(2) Paragraph (2) of section 1324(b) of title 31,
United States Code, as amended by the preceding
provisions of this Act, is amended by inserting
``36G,'' after ``36F,''.
(3) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code
of 1986, and amended by the preceding provisions of
this Act, is amended by inserting after the item
relating to section 36F the following new item:
``Sec. 36G. Pathway to Practice medical scholarship voucher credit.''.
(c) Information Sharing.--The Secretary of Health and Human
Services shall annually provide the Secretary of the Treasury
such information regarding the program under section 1899C of
the Social Security Act as the Secretary of the Treasury may
require to administer the tax credits determined under section
36G of the Internal Revenue Code of 1986, including information
to identify qualifying students and the qualified educational
institutions at which such students are enrolled and the amount
of the annual award of the Pathway to Practice medical
scholarship voucher awarded to each such student with respect
to such institution. Terms used in this subparagraph shall have
the same meaning as when used is such section 36G.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.
SEC. 137603. ESTABLISHING RURAL AND UNDERSERVED PATHWAY TO PRACTICE
TRAINING PROGRAMS FOR MEDICAL RESIDENTS.
Section 1886 of the Social Security Act (42 U.S.C. 1395ww) is
amended--
(1) in subsection (d)(5)(B)(v), by inserting
``(h)(4)(H)(vii),'' after ``The provisions of
subsections (h)(4)(H)(vi),''; and
(2) in subsection (h)(4)(H), by adding at the end the
following new clause:
``(vii) Increase in full-time
equivalent limitation for hospitals
implementing pathway training
programs.--
``(I) In general.--For cost
reporting periods beginning on
or after October 1, 2026,
during which a resident trains
in an applicable hospital or
hospitals (as defined in
subclause (II) in an approved
medical residency training
program), the Secretary shall,
after any adjustment made under
any preceding provision of this
paragraph or under any of
paragraphs (7) through (9),
subject to subclause (III),
increase the limitation under
subparagraph (F) for such cost
reporting period by the number
of full-time equivalent
residents so trained under such
program during such period (in
this clause, referred to as the
`Rural and Underserved Pathway
to Practice Training Programs
for Medical Residents' or
`Program').
``(II) Applicable hospital or
hospitals defined.--For
purposes of this clause, the
term `applicable hospital or
hospitals' means any hospital
that has been recognized by the
Accreditation Council for
Graduate Medical Education as
meeting at least the following
requirements for their approved
medical residency training
programs:
``(aa) The programs
provide mentorships for
residents.
``(bb) The programs
include cultural and
structural competency
as part of the training
of residents under the
programs.
``(cc) The programs
have a demonstrated
record of training
medical residents in
medically underserved
areas, rural areas, or
health professional
shortage areas.
``(dd) The hospital
agrees to promote
community-based
training of residents
under their programs,
as appropriate.
``(III) Annual limitation for
number of residents in
program.--The Secretary shall
ensure that, during any 1-year
period and across all approved
medical residency training
programs described in subclause
(I), not more than 1,000 full-
time equivalent residents are
trained each year.
``(IV) Other definitions.--
``(aa) Health
professional shortage
area.--The team `health
professional shortage
area' has the meaning
given such term in
subparagraphs (A) or
(B) of section
332(a)(1) of the Public
Health Service Act.
``(bb) Medical
underserved area.--The
term `medically
underserved area' means
an area designated
pursuant to section
330(b)(3)(A) of the
Public Health Service
Act.
``(cc) Qualifying
medical school.--The
term `qualifying
medical school' has the
meaning given such term
in section 1899C(e)(6).
``(dd) Qualifying
medical student.--The
term `qualifying
medical student' has
the meaning given such
term in section
1899C(b).
``(ee) Rural area.--
The term `rural area'
has the meaning given
such term in section
1886(d)(2)(D).''.
SEC. 137604. ADMINISTRATIVE FUNDING OF THE RURAL AND UNDERSERVED
PATHWAY TO PRACTICE TRAINING PROGRAMS FOR POST-
BACCALAUREATE STUDENTS, MEDICAL STUDENTS, AND
MEDICAL RESIDENTS.
The Secretary shall provide for the transfer of $6,000,000
from the Hospital Insurance Trust Fund established under
section 1817 of the Social Security Act (42 U.S.C. 1395i) and
the Federal Supplementary Medical Insurance Trust Fund under
section 1841 of such Act (42 U.S.C. 1395t), in addition to
amounts otherwise available to remain available until expended,
to carry out the administration of the Rural and Underserved
Pathway to Practice Training Program for Post-Baccalaureate and
Medical Students under section 1899C of such Act (42 U.S.C.
1395mmm) and the Rural and Underserved Pathway to Practice
Training Programs for Medical Residents under section
1886(h)(4)(H)(vii) of such Act (42 U.S.C.
1395ww(h)(4)(H)(vii)).
PART 7--HIGHER EDUCATION
SEC. 137701. CREDIT FOR PUBLIC UNIVERSITY RESEARCH INFRASTRUCTURE.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1, as amended by the preceding provisions of this Act,
is amended by adding at the end the following new section:
``SEC. 45AA. PUBLIC UNIVERSITY RESEARCH INFRASTRUCTURE CREDIT.
``(a) Allowance of Credit.--For purposes of section 38, the
public university research infrastructure credit determined
under this section for a taxable year is an amount equal to 40
percent of the qualified cash contributions made by a taxpayer
during such taxable year.
``(b) Qualified Cash Contribution.--
``(1) In general.--
``(A) Defined.--For purposes of subsection
(a), the qualified cash contribution for any
taxable year is the aggregate amount
contributed in cash by a taxpayer during such
taxable year to a certified educational
institution in connection with a qualifying
project that, but for this section, would be
treated as a charitable contribution for
purposes of section 170(c).
``(B) Qualified cash contributions taken into
account for purposes of charitable contribution
limitations.--Any qualified cash contributions
made by a taxpayer under this section shall be
taken into account for purposes of determining
the percentage limitations under section
170(b).
``(2) Designation required.--A contribution shall
only be treated as a qualified cash contribution to the
extent that it is designated as such by a certified
educational institution under subsection (d).
``(c) Definitions.--For purposes of this section--
``(1) Qualifying project.--The term `qualifying
project' means a project to purchase, construct, or
improve research infrastructure property.
``(2) Research infrastructure property.--The term
`research infrastructure property' means any portion of
a property, building, or structure of an eligible
educational institution, or any land associated with
such property, building, or structure, that is used for
research.
``(3) Eligible educational institution.--The term
`eligible educational institution' means--
``(A) an institution of higher education (as
such term is defined in section 101 or 102(c)
of the Higher Education Act of 1965) that is a
college or university described in section
511(a)(2)(B), or
``(B) an organization described in section
170(b)(1)(A)(iv) or section 509(a)(3) to which
authority has been delegated by an institution
described in subparagraph (A) for purposes of
applying for or administering credit amounts on
behalf of such institution.
``(4) Certified educational institution.--The term
`certified educational institution' means an eligible
educational institution which has been allocated a
credit amount for a qualifying project and--
``(A) has received a certification for such
project under subsection (d)(2), and
``(B) designates credit amounts to taxpayers
for qualifying cash contributions toward such
project under subsection (d)(4).
``(d) Qualifying University Research Infrastructure
Program.--
``(1) Establishment.--
``(A) In general.--Not later than 180 days
after the date of the enactment of this
section, the Secretary, after consultation with
the Secretary of Education, shall establish a
program to--
``(i) certify and allocate credit
amounts for qualifying projects to
eligible educational institutions, and
``(ii) allow certified educational
institutions to designate cash
contributions for qualifying projects
of such certified educational
institutions as qualified cash
contributions.
``(B) Limitations.--
``(i) Allocation limitation per
institution.--The credit amounts
allocated to a certified educational
institution under subparagraph (A)(i)
for all projects shall not exceed
$50,000,000 per calendar year.
``(ii) Overall allocation
limitation.--
``(I) In general.--The total
amount of qualifying project
credit amounts that may be
allocated under subparagraph
(A)(i) shall not exceed--
``(aa) $500,000,000
for each of calendar
years 2022, 2023, 2024,
2025, and 2026, and
``(bb) $0 for each
subsequent year.
``(II) Rollover of
unallocated credit amounts.--
Any credit amounts described in
subclause (I) that are
unallocated during a calendar
year shall be carried to the
succeeding calendar year and
added to the limitation
allowable under such subclause
for such succeeding calendar
year.
``(iii) Designation limitation.--The
aggregate amount of cash contributions
which are designated by a certified
educational institution as qualifying
cash contributions with respect to any
qualifying project shall not exceed 250
percent of the credit amount allocated
to such certified educational
institution for a qualifying project
under subparagraph (A)(i).
``(2) Certification application.--Each eligible
educational institution which applies for certification
of a project under this paragraph shall submit an
application in such time, form, and manner as the
Secretary may require.
``(3) Selection criteria for allocations to eligible
educational institutions.--The Secretary, after
consultation with the Secretary of Education, shall
select applications from eligible educational
institutions--
``(A) based on the extent of the expected
expansion of an eligible educational
institution's targeted research within
disciplines in science, mathematics,
engineering, and technology, and
``(B) in a manner that ensures consideration
is given to eligible educational institutions
with full-time student populations of less than
12,000.
``(4) Designation of qualified cash contributions to
taxpayers.--The Secretary, after consultation with the
Secretary of Education, shall establish a process by
which certified educational institutions shall
designate cash contributions to such institutions as
qualified cash contributions.
``(5) Disclosure of allocations and designations.--
``(A) Allocations.--The Secretary shall, upon
allocating credit amounts to an applicant under
this subsection, publicly disclose the identity
of the applicant and the credit amount
allocated to such applicant.
``(B) Designations.--Each certified
educational institution shall, upon designating
contributions of a taxpayer as qualified cash
contributions under this subsection, publicly
disclose the identity of the taxpayer and the
amount of contributions designated in such
time, form, and manner as the Secretary may
require.
``(e) Regulations and Guidance.--The Secretary, after
consultation with the Secretary of Education when applicable,
shall prescribe such regulations and guidance as may be
necessary or appropriate to carry out the purposes of this
section, including regulations for--
``(1) prevention of abuse,
``(2) establishment of reporting requirements,
``(3) establishment of selection criteria for
applications, and
``(4) disclosure of allocations.
``(f) Penalty for Noncompliance.--
``(1) In general.--If at any time during the 5-year
period beginning on the date of the allocation of
credit amounts to a certified educational institution
under subsection (d)(1)(A)(i) there is a noncompliance
event with respect to such credit amounts, then the
following rules shall apply:
``(A) General rule.--Any cash contribution
designated as a qualifying cash contribution
with respect to a qualifying project for which
such credit amounts were allocated under
subsection (d)(1)(A)(ii) shall be treated as
unrelated business taxable income (as defined
in section 512) of such certified educational
institution.
``(B) Rule for unused credit amounts.--In the
case of unused credit amounts described under
paragraph (2)(A) and identified pursuant to
subsection (g), the Secretary shall reallocate
any portion of such unused credit amounts to
certified educational institutions in lieu of
imposing the general rule under subparagraph
(A).
``(2) Noncompliance event.--For purposes of this
subsection, the term `noncompliance event' means, with
respect to a credit amount allocated to a certified
educational institution--
``(A) cash contributions equaling the amount
of such credit amount are not designated as
qualifying cash contributions within 2 years
after December 31 of the year such credit
amount is allocated,
``(B) a qualifying project with respect to
which such credit amount was allocated is not
placed in service within either--
``(i) 4 years after December 31 of
the year such credit amount is
allocated, or
``(ii) a period of time that the
Secretary determines is appropriate, or
``(C) the research infrastructure property
placed in service as part of a qualifying
project with respect to which such credit
amount was allocated ceases to be used for
research within five years after such property
is placed in service.
``(g) Review and Reallocation of Credit Amounts.--
``(1) Review.--Not later than 5 years after the date
of enactment of this section, the Secretary shall
review the credit amounts allocated under this section
as of such date.
``(2) Reallocation.--
``(A) In general.--The Secretary may
reallocate credit amounts allocated under this
section if the Secretary determines, as of the
date of the review in paragraph (1), that such
credit amounts are subject to a noncompliance
event.
``(B) Additional program.--If the Secretary
determines that credits under this section are
available for reallocation pursuant to the
requirements set forth in subparagraph (A), the
Secretary is authorized to conduct an
additional program for applications for
certification.
``(C) Deadline for reallocation.--The
Secretary shall not certify any project, or
reallocate any credit amount, pursuant to this
paragraph after December 31, 2031.
``(h) Denial of Double Benefit.--No credit or deduction shall
be allowed under any other provision of this chapter for any
qualified cash contribution for which a credit is allowed under
this section.
``(i) Rule for Trusts and Estates.--For purposes of this
section, rules similar to the rules of subsection (d) of
section 52 shall apply.
``(j) Termination.--This section shall not apply to qualified
cash contributions made after December 31, 2033.''.
(b) Credit Made Part of General Business Credit.--Subsection
(b) of section 38, as amended by the preceding provisions of
this Act, is amended by striking ``plus'' at the end of
paragraph (38), by striking the period at the end of paragraph
(39) and inserting ``, plus'', and by adding at the end the
following new paragraph:
``(43) the public university research infrastructure
credit determined under section 45AA.''.
(c) Clerical Amendment.--The table of sections for subpart D
of part IV of subchapter A of chapter 1, as amended by the
preceding provisions of this Act, is amended by adding at the
end the following new item:
``Sec. 45AA. Public university research infrastructure credit.''.
(d) Effective Date.--The amendments made by this section
shall apply to qualified cash contributions made after December
31, 2021.
SEC. 137702. MODIFICATION OF EXCISE TAX ON INVESTMENT INCOME OF PRIVATE
COLLEGES AND UNIVERSITIES.
(a) Phaseout of Investment Income Excise Tax for Private
Colleges and Universities Providing Sufficient Grants and
Scholarships.--Section 4968 is amended by adding at the end the
following new subsection:
``(e) Phaseout for Institutions Providing Qualified Aid.--
``(1) In general.--The amount of tax imposed by
subsection (a) (determined without regard to this
subsection) shall be reduced (but not below zero) by
the amount which bears the same ratio to such amount of
tax (as so determined) as--
``(A) the excess (if any) of--
``(i) the aggregate amount of
qualified aid awards provided by the
institution to its first-time, full-
time undergraduate students for
academic periods beginning during the
taxable year, over
``(ii) an amount equal to 20 percent
of the aggregate undergraduate tuition
and fees received by the institution
from first-time, full-time
undergraduate students for such
academic periods, bears to
``(B) an amount equal to 13 percent of such
aggregate undergraduate tuition and fees so
received.
``(2) Institution must meet reporting requirement.--
``(A) In general.--Paragraph (1) shall not
apply to an applicable educational institution
for a taxable year unless such institution
furnishes to the Secretary, and makes widely
available, a statement detailing the average
aggregate amount of Federal student loans
received by a student for attendance at the
institution, averaged among each of the
following groups of first-time, full-time
undergraduate students who during the taxable
year completed a course of study for which the
institution awarded a baccalaureate degree:
``(i) All such students.
``(ii) The students who have been
awarded a Federal Pell Grant under
subpart 1 of part A of title IV of the
Higher Education Act of 1965 for
attendance at the institution.
``(iii) The students who received
work-study assistance under part C of
title IV of such Act for attendance at
such institution.
``(iv) The students who were provided
such Federal student loans.
``(B) Form and manner for report.--Such
statement shall be furnished at such time and
in such form and manner, and made widely
available, under such regulations or guidance
as the Secretary may prescribe.
``(C) Federal student loans.--For purposes of
this paragraph, the term `Federal student
loans' means a loan made under part D of title
IV of the Higher Education Act of 1965, except
such term does not include a Federal Direct
PLUS Loan made on behalf of a dependent
student.
``(3) Other definitions.--For purposes of this
subsection--
``(A) First-time, full-time undergraduate
student.--The term `first-time, full-time
undergraduate student' shall have the same
meaning as when used in section 132 of the
Higher Education Act of 1965.
``(B) Qualified aid awards.--The term
`qualified aid awards' means, with respect to
any applicable educational institution, grants
and scholarships to the extent used for
undergraduate tuition and fees.
``(C) Undergraduate tuition and fees.--The
term `undergraduate tuition and fees' means,
with respect to any institution, the tuition
and fees required for the enrollment or
attendance of a student as an undergraduate
student at the institution.''.
(b) Inflation Adjustment to Per Student Asset Threshold.--
Section 4968(b) is amended by adding at the end the following
new paragraph:
``(3) Inflation adjustment.--In the case of any
taxable year beginning after 2022, the dollar amount in
paragraph (1)(D) shall be increased by an amount equal
to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2021'
for `calendar year 2016' in subparagraph
(A)(ii) thereof.
If any increase determined under this paragraph is not
a multiple of $1,000, such increase shall be rounded to
the nearest multiple of $1,000.''.
(c) Clarification of 500 Student Threshold.--Section
4968(b)(1)(A) is amended by inserting ``below the graduate
level'' after ``500 tuition-paying students''.
(d) Effective Date.--The amendment made by this section shall
apply to taxable years beginning after December 31, 2021.
SEC. 137703. TREATMENT OF FEDERAL PELL GRANTS FOR INCOME TAX PURPOSES.
(a) Exclusion From Gross Income.--Section 117(b)(1) is
amended by striking ``received by an individual'' and all that
follows and inserting ``received by an individual--
``(A) as a scholarship or fellowship grant to
the extent the individual establishes that, in
accordance with the conditions of the grant,
such amount was used for qualified tuition and
related expenses, or
``(B) as a Federal Pell Grant under section
401 of the Higher Education Act of 1965.''.
(b) Treatment for Purposes of American Opportunity Tax Credit
and Lifetime Learning Credit.--Section 25A(g)(2) is amended--
(1) in subparagraph (A), by inserting ``described in
section 117(b)(1)(A)'' after ``a qualified
scholarship'', and
(2) in subparagraph (C), by inserting ``or Federal
Pell Grant under section 401 of the Higher Education
Act of 1965'' after ``within the meaning of section
102(a)''.
(c) Effective Date.--The amendment made by this section shall
apply to taxable years beginning after December 31, 2021.
SEC. 137704. REPEAL OF DENIAL OF AMERICAN OPPORTUNITY TAX CREDIT ON
BASIS OF FELONY DRUG CONVICTION.
(a) In General.--Section 25A(b)(2) is amended by striking
subparagraph (D).
(b) Effective Date.--The amendment made by this section shall
apply to taxable years beginning after December 31, 2021.
Subtitle I--Responsibly Funding Our Priorities
SEC. 138001. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this
subtitle an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
PART 1--CORPORATE AND INTERNATIONAL TAX REFORMS
Subpart A--Corporate Tax Rate
SEC. 138101. INCREASE IN CORPORATE TAX RATE.
(a) In General.--Section 11(b) is amended to read as follows:
``(b) Amount of Tax.--
``(1) In general.--The amount of the tax imposed by
subsection (a) shall be the sum of--
``(A) 18 percent of so much of the taxable
income as does not exceed $400,000,
``(B) 21 percent of so much of the taxable
income as exceeds $400,000 but does not exceed
$5,000,000, and
``(C) 26.5 percent of so much of the taxable
income as exceeds $5,000,000.
In the case of a corporation which has taxable income
in excess of $10,000,000 for any taxable year, the
amount of tax determined under the preceding sentence
for such taxable year shall be increased by the lesser
of (i) 3 percent of such excess, or (ii) $287,000.
``(2) Certain personal service corporation not
eligible for graduated rates.--Notwithstanding
paragraph (1), the amount of the tax imposed by
subsection (a) on the taxable income of a qualified
personal service corporation (as defined in section
448(d)(2)) shall be equal to 26.5 percent of the
taxable income.''.
(b) Proportional Adjustment of Deduction for Dividends
Received.--
(1) In general.--Section 243(a)(1) is amended by
striking ``50 percent'' and inserting ``60 percent''.
(2) Dividends from 20-percent owned corporations.--
Section 243(c)(1) is amended--
(A) prior to amendment by subparagraph (B),
by striking ``65 percent'' and inserting ``72.5
percent'', and
(B) by striking ``50 percent'' and inserting
``60 percent''.
(c) Conforming Amendment.--Section 1561 is amended--
(1) by amending subsection (a) to read as follows:
``(a) In General.--The component members of a controlled
group of corporations on a December 31 shall, for their taxable
years which include such December 31, be limited for purposes
of this subtitle to--
``(1) amounts in each taxable income bracket in the
subparagraphs of section 11(b)(1) which do not
aggregate more than the maximum amount in each such
bracket to which a corporation which is not a component
member of a controlled group is entitled, and
``(2) one $250,000 ($150,000 if any component member
is a corporation described in section 535(c)(2)(B))
amount for purposes of computing the accumulated
earnings credit under section 535(c)(2) and (3).
The amounts specified in paragraph (1) shall be divided equally
among the component members of such group on such December 31
unless all of such component members consent (at such time and
in such manner as the Secretary shall by regulations prescribe)
to an apportionment plan providing for an unequal allocation of
such amounts. The amounts specified in paragraph (2) shall be
divided equally among the component members of such group on
such December 31 unless the Secretary prescribes regulations
permitting an unequal allocation of such amounts.
Notwithstanding paragraph (1), in applying the last sentence of
section 11(b)(1) to such component members, the taxable income
of all such component members shall be taken into account and
any increase in tax under such last sentence shall be divided
among such component members in the same manner as amounts
under paragraph (1).'', and
(2) by striking ``ACCUMULATED EARNINGS CREDIT'' in
the heading and inserting ``CERTAIN MULTIPLE TAX
BENEFITS''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
(e) Normalization Requirements.--
(1) In general.--A normalization method of accounting
shall not be treated as being used with respect to any
public utility property for purposes of section 167 or
168 of the Internal Revenue Code of 1986 if the
taxpayer, in computing its cost of service for
ratemaking purposes and reflecting operating results in
its regulated books of account, reduces the tax reserve
deficit less rapidly or to a lesser extent than such
reserve would be reduced under the average rate
assumption method.
(2) Alternative method for certain taxpayers.--If, as
of the first day of the taxable year that includes the
date of enactment of this Act--
(A) the taxpayer was required by a regulatory
agency to compute depreciation for public
utility property on the basis of an average
life or composite rate method, and
(B) the taxpayer's books and underlying
records did not contain the vintage account
data necessary to apply the average rate
assumption method,
the taxpayer will be treated as using a normalization
method of accounting if, with respect to such
jurisdiction, the taxpayer uses the alternative method
for public utility property that is subject to the
regulatory authority of that jurisdiction.
(3) Definitions.--For purposes of this subsection--
(A) Tax reserve deficit.--The term ``tax
reserve deficit'' means the excess of--
(i) the amount which would be the
balance in the reserve for deferred
taxes (as described in section
168(i)(9)(A)(ii) of the Internal
Revenue Code of 1986, or section
167(l)(3)(G)(ii) of such Code as in
effect on the day before the date of
the enactment of the Tax Reform Act of
1986) if the amount of such reserve
were determined by assuming that the
corporate rate increases provided in
the amendments made by this section
were in effect for all prior periods,
over
(ii) the balance in such reserve as
of the day before such corporate rate
increases take effect.
(B) Average rate assumption method.--The
average rate assumption method is the method
under which the excess in the reserve for
deferred taxes is reduced over the remaining
lives of the property as used in its regulated
books of account which gave rise to the reserve
for deferred taxes. Under such method, if
timing differences for the property reverse,
the amount of the adjustment to the reserve for
the deferred taxes is calculated by
multiplying--
(i) the ratio of the aggregate
deferred taxes for the property to the
aggregate timing differences for the
property as of the beginning of the
period in question, by
(ii) the amount of the timing
differences which reverse during such
period.
(C) Alternative method.--The ``alternative
method'' is the method in which the taxpayer--
(i) computes the tax reserve deficit
on all public utility property included
in the plant account on the basis of
the weighted average life or composite
rate used to compute depreciation for
regulatory purposes, and
(ii) reduces the tax reserve deficit
ratably over the remaining regulatory
life of the property.
(4) Treatment of normalization violation.--If, for
any taxable year ending after the date of the enactment
of this Act, the taxpayer does not use a normalization
method of accounting, such taxpayer shall not be
treated as using a normalization method of accounting
for purposes of subsections (f)(2) and (i)(9)(C) of
section 168 of the Internal Revenue Code of 1986.
(5) Regulations.--The Secretary of the Treasury, or
the Secretary's designee, shall issue such regulations
or other guidance as may be necessary or appropriate to
carry out this subsection, including regulations or
other guidance to provide appropriate coordination
between this subsection, section 13001(d) of Public Law
115-97, and section 203(e) of the Tax Reform Act of
1986.
Subpart B--Limitations on Deduction for Interest Expense
SEC. 138111. LIMITATIONS ON DEDUCTION FOR INTEREST EXPENSE.
(a) Interest Expense of Certain Members of International
Financial Reporting Groups.--Section 163 is amended by
redesignating subsection (n) as subsection (p) and by inserting
after subsection (m) the following new subsection:
``(n) Limitation on Deduction of Interest by Certain Members
of International Financial Reporting Groups.--
``(1) In general.--In the case of any specified
domestic corporation which is a member of any
international financial reporting group, the deduction
under this chapter for interest paid or accrued during
the taxable year in excess of the amount of interest
includible in the gross income of such corporation
shall not exceed the allowable percentage of 110
percent of such excess.
``(2) Specified domestic corporation.--For purposes
of this subsection--
``(A) In general.--The term `specified
domestic corporation' means any domestic
corporation other than--
``(i) any corporation if the excess
of--
``(I) the average amount of
interest paid or accrued by
such corporation during the 3-
taxable-year period ending with
the taxable year to which
paragraph (1) applies, over
``(II) the average amount of
interest includible in the
gross income of such
corporation for such 3-taxable-
year period,
does not exceed $12,000,000,
``(ii) any corporation to which
paragraph (1) of section 163(j) does
not apply by reason of paragraph (3)
thereof (relating to exemption for
certain small businesses), and
``(iii) any S corporation, real
estate investment trust, or regulated
investment company.
``(B) Aggregation rule.--For purposes of
subparagraph (A)(i), all domestic corporations
which are members of the same international
financial reporting group shall be treated as a
single corporation.
``(3) International financial reporting group.--For
purposes of this subsection--
``(A) In general.--The term `international
financial reporting group' means, with respect
to any reporting year, two or more entities
if--
``(i) either--
``(I) at least one entity is
a foreign corporation engaged
in a trade or business within
the United States, or
``(II) at least one entity is
a domestic corporation and
another entity is a foreign
corporation, and
``(ii) such entities are included in
the same applicable financial statement
with respect to such year.
``(B) Additional members.--
``(i) In general.--To the extent
provided by the Secretary in
regulations or other guidance, the
specified domestic corporation referred
to in paragraph (1) may elect (at such
time and in such manner as the
Secretary may provide) for purposes of
this subsection to treat any eligible
corporation as a member of the
international financial reporting group
of which such specified domestic
corporation is a member if such
eligible corporation maintains (and
such specified domestic corporation has
access to) such books and records as
the Secretary determines are
satisfactory to allow for the
application of this subsection with
respect to such eligible corporation.
Any election under this clause shall
apply only with respect to the
specified domestic corporation which
makes such election.
``(ii) Eligible corporation.--The
term `eligible corporation' means, with
respect to any international financial
reporting group, any corporation if at
least 20 percent of the stock of such
corporation (determined by vote and
value) is held (directly or indirectly)
by members of such international
financial reporting group (determined
without regard to this clause).
``(4) Allowable percentage.--For purposes of this
subsection--
``(A) In general.--The term `allowable
percentage' means, with respect to any
specified domestic corporation for any taxable
year, the ratio (expressed as a percentage and
not greater than 100 percent) of--
``(i) such corporation's allocable
share of the international financial
reporting group's reported net interest
expense for the reporting year of such
group which ends in or with such
taxable year of such corporation, over
``(ii) such corporation's reported
net interest expense for such reporting
year of such group.
``(B) Reported net interest expense.--The
term `reported net interest expense' means--
``(i) with respect to any
international financial reporting group
for any reporting year, the excess of--
``(I) the aggregate amount of
interest expense reported in
such group's applicable
financial statements for such
taxable year, over
``(II) the aggregate amount
of interest income reported in
such group's applicable
financial statements for such
taxable year, and
``(ii) with respect to any specified
domestic corporation for any reporting
year, the excess of--
``(I) the amount of interest
expense of such corporation
reported in the books and
records of the international
financial reporting group which
are used in preparing such
group's applicable financial
statements for such taxable
year, over
``(II) the amount of interest
income of such corporation
reported in such books and
records.
``(C) Allocable share of reported net
interest expense.--With respect to any
specified domestic corporation which is a
member of any international financial reporting
group, such corporation's allocable share of
such group's reported net interest expense for
any reporting year is the portion of such
expense which bears the same ratio to such
expense as--
``(i) the EBITDA of such corporation
for such reporting year, bears to
``(ii) the EBITDA of such group for
such reporting year.
``(D) EBITDA.--
``(i) In general.--The term `EBITDA'
means, with respect to any reporting
year, earnings before interest income
and interest expense, taxes,
depreciation, depletion, and
amortization--
``(I) as determined in the
international financial
reporting group's applicable
financial statements for such
year, or
``(II) for purposes of
subparagraph (A)(i), as
determined in the books and
records of the international
financial reporting group which
are used in preparing such
statements if not determined in
such statements.
``(ii) Treatment of intra-group
distributions.--The EBITDA of any
specified domestic corporation shall be
determined without regard to any
distribution received by such
corporation from any other member of
the international financial reporting
group.
``(E) Special rules for non-positive
ebitda.--
``(i) Non-positive group ebitda.--In
the case of any international financial
reporting group the EBITDA of which is
zero or less, paragraph (1) shall not
apply to any specified domestic
corporation which is a member of such
group.
``(ii) Non-positive entity ebitda.--
In the case of any specified domestic
corporation the EBITDA of which is zero
or less, the allowable percentage shall
be 0 percent.
``(5) Applicable financial statement.--For purposes
of this subsection, the term `applicable financial
statement' has the meaning given such term in section
451(b)(3).
``(6) Reporting year.--For purposes of this
subsection, the term `reporting year' means any year
for which an applicable financial statement is prepared
or required to be prepared.
``(7) Foreign corporations engaged in trade or
business within the united states.--For purposes of
this subsection, any foreign corporation engaged in a
trade or business within the United States shall be
treated as a domestic corporation with respect to any
earnings, interest income and interest expense, or
other amount, which is effectively connected with the
conduct of a trade or business in the United States.
``(8) Regulations.--The Secretary may issue such
regulations or other guidance as are necessary or
appropriate to carry out the purposes of this
subsection, including regulations or other guidance
which--
``(A) allows or requires the adjustment of
amounts reported on applicable financial
statements,
``(B) allows or requires any corporation to
be included or excluded as a member of any
international financial reporting group for
purposes of any determination or calculation
under this subsection,
``(C) provides rules for the application of
this subsection with respect to--
``(i) a domestic corporation that is
a partner (directly or indirectly) in a
partnership, and
``(ii) foreign corporation to which
this subsection applies by reason of
paragraph (7).''.
(b) Modification of Application of Limitation on Business
Interest to Partnerships and S Corporations.--Section 163(j)(4)
is amended to read as follows:
``(4) Application to partnerships and s
corporations.--In the case of any partnership or S
corporation, this subsection shall be applied at the
partner or shareholder level, respectively.''.
(c) Carryforward of Disallowed Interest.--
(1) In general.--Section 163 is amended by inserting
after subsection (n), as added by subsection (a), the
following new subsection:
``(o) Carryforward of Certain Disallowed Interest.--
``(1) In general.--The amount of any interest not
allowed as a deduction for any taxable year by reason
of subsection (j)(1) or (n)(1) (whichever imposes the
lower limitation with respect to such taxable year)
shall be treated as interest (and as business interest
for purposes of subsection (j)(1)) paid or accrued in
the succeeding taxable year.
``(2) Limitation on carryforward.--Interest paid or
accrued in a taxable year beginning after December 31,
2021 (determined without regard to paragraph (1)),
shall not be carried forward under paragraph (1) past
the fifth taxable year following the taxable year in
which such interest was so paid or accrued. For
purposes of the preceding sentence, interest shall be
treated as allowed as a deduction on a first-in, first-
out basis.''.
(2) Conforming amendments.--
(A) Section 163(j)(2) is amended to read as
follows:
``(2) Carryforward cross-reference.--For carryforward
treatment, see subsection (o).''.
(B) Section 381(c)(20) is amended to read as
follows:
``(20) Carryforward of disallowed interest.--The
carryover of disallowed interest described in section
163(o) to taxable years ending after the date of
distribution or transfer.''.
(C) Section 382(d)(3) is amended to read as
follows:
``(3) Application to carryforward of disallowed
interest.--The term `pre-change loss' shall include any
carryover of disallowed interest described in section
163(o) under rules similar to the rules of paragraph
(1).''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
(e) Transition Rule.--In the case of a partner's first
succeeding taxable year described in subclause (II) of section
163(j)(4)(B)(ii) of the Internal Revenue Code of 1986 (as in
effect before the amendment made by subsection (b)) which
begins after December 31, 2021, the amount of excess business
interest which would (but for such amendment) be carried to
such taxable year under such subclause shall be treated as
interest (and as business interest for purposes of section
163(j) of such Code, as amended by this section) paid or
accrued in such taxable year. For carryover of any such
interest disallowed for such taxable year, see section 163(o)
of such Code, as amended by this section.
Subpart C--Outbound International Provisions
SEC. 138121. MODIFICATIONS TO DEDUCTION FOR FOREIGN-DERIVED INTANGIBLE
INCOME AND GLOBAL INTANGIBLE LOW-TAXED INCOME.
(a) In General.--Section 250(a) is amended to read as
follows:
``(a) In General.--In the case of a domestic corporation for
any taxable year, there shall be allowed as a deduction an
amount equal to the sum of--
``(1) 21.875 percent of the foreign-derived
intangible income of such domestic corporation for such
taxable year, plus
``(2) 37.5 percent of--
``(A) the global intangible low-taxed income
(if any) which is included in the gross income
of such domestic corporation under section 951A
for such taxable year, and
``(B) the amount treated as a dividend
received by such corporation under section 78
which is attributable to the amount described
in subparagraph (A).''.
(b) Deduction Taken Into Account in Determining Net Operating
Loss Deduction.--Section 172(d) is amended by striking
paragraph (9).
(c) Certain Other Modifications.--
(1) Section 250(b)(3) is amended--
(A) in subparagraph (A)(i)--
(i) by striking ``and'' at the end of
subclause (V),
(ii) by striking ``over'' at the end
of subclause (VI), and
(iii) by adding at the end the
following new subclauses:
``(VII) any income received
or accrued which is of a kind
which would be foreign personal
holding company income (as
defined in section 954(c)),
``(VIII) any amount included
in the gross income of such
corporation under section 1293,
and
``(IX) any disqualified
extraterritorial income,
over'', and
(B) by adding at the end the following new
subparagraph:
``(C) Disqualified extraterritorial income.--
``(i) In general.--For purposes of
subparagraph (A)(i)(IX), the term
`disqualified extraterritorial income'
means any amount included in the gross
income of the corporation with respect
to any transaction for any taxable year
if any amount could (determined after
application of clause (ii) but without
regard to any election under section
942(a)(3) as in effect before its
repeal) be excluded from the gross
income of the corporation with respect
to such transaction for such taxable
year by reason of section 114 pursuant
to the application of subsection (d) or
(f) of section 101 of the American Jobs
Creation Act of 2004.
``(ii) Election out of
extraterritorial income benefits.--
``(I) In general.--Except as
provided in subclause (II), the
corporation referred to in
clause (i) may make an
irrevocable election (at such
time and in such form and
manner as the Secretary may
provide) to have subsections
(d) and (f) of section 101 of
the American Jobs Creation Act
of 2004 not apply with respect
to such corporation for the
taxable year for which such
election is made and all
succeeding taxable years
(applicable with respect to all
transactions, including
transactions occurring before
such taxable year).
``(II) Expanded affiliated
groups.--In the case of any
corporation which is a member
of an expanded affiliated
group, the election described
in subclause (I) may be made
only by the common parent of
such group and shall apply with
respect to all members of such
group. For purposes of the
preceding sentence, the term
`expanded affiliated group'
means an affiliated group as
defined in section 1504(a),
determined without regard to
section 1504(b)(3) and by
substituting `more than 50
percent' for `at least 80
percent' each place it
appears.''.
(2) Section 613A(d)(1) is amended by striking ``and''
at the end of subparagraph (D), by striking the period
at the end of subparagraph (E) and inserting ``, and'',
and by inserting after subparagraph (E) the following
new subparagraph:
``(F) any deduction allowable under section
250.''.
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply to taxable years beginning after December 31,
2021.
(2) Certain other modifications.--The amendments made
by subsection (c) shall apply to taxable years
beginning after December 31, 2017.
(e) Transitional Rule for Accelerated Percentage Reduction.--
(1) In general.--In the case of any taxable year
which includes December 31, 2021 (other than a taxable
year with respect to which such date is the last day of
such taxable year)--
(A) the percentage in effect under section
250(a)(1)(A) of the Internal Revenue Code of
1986 shall be treated as being equal to the sum
of--
(i) the pre-effective date percentage
of 37.5 percent, plus
(ii) the post-effective date
percentage of 21.875 percent, and
(B) the percentage in effect under section
250(a)(1)(B) of such Code shall be treated as
being equal to the sum of--
(i) the pre-effective date percentage
of 50 percent, plus
(ii) the post-effective date
percentage of 37.5 percent.
(2) Pre- and post-effective date percentages.--For
purposes of this subsection, with respect to any
taxable year--
(A) the term ``pre-effective date
percentage'' means the ratio that the portion
of such taxable year which precedes January 1,
2022, bears to the entire taxable year, and
(B) the term ``post-effective date
percentage'' means the ratio that the remainder
of such taxable year bears to the entire
taxable year.
SEC. 138122. REPEAL OF ELECTION FOR 1-MONTH DEFERRAL IN DETERMINATION
OF TAXABLE YEAR OF SPECIFIED FOREIGN CORPORATIONS.
(a) In General.--Section 898(c) is amended by striking
paragraph (2) and redesignating paragraph (3) as paragraph (2).
(b) Effective Date.--The amendments made by this section
shall apply to taxable years of specified foreign corporations
beginning after November 30, 2021.
(c) Transition Rule.--A taxpayer's first taxable year
beginning after November 30, 2021, shall end at the same time
as the first required year (within the meaning of section
898(c)(1) of the Internal Revenue Code of 1986) ending after
such date.
SEC. 138123. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO
CERTAIN TAXPAYERS RECEIVING SPECIFIC ECONOMIC
BENEFITS.
(a) In General.--Section 901 is amended by redesignating
subsection (n) as subsection (o) and by inserting after
subsection (m) the following new subsection:
``(n) Special Rules Relating to Dual Capacity Taxpayers.--
``(1) General rule.--Notwithstanding any other
provision of this chapter, any amount paid or accrued
by a dual capacity taxpayer to a foreign country or
possession of the United States for any period shall
not be considered a tax--
``(A) if, for such period, the foreign
country or possession does not impose a
generally applicable income tax, or
``(B) to the extent such amount exceeds the
amount which would be paid or accrued by such
dual capacity taxpayer under the generally
applicable income tax imposed by such country
or possession if such taxpayer were not a dual
capacity taxpayer.
Nothing in this paragraph shall be construed to
imply the proper treatment of any such amount
not in excess of the amount determined under
subparagraph (B).
``(2) Dual capacity taxpayer.--For purposes of this
subsection, the term `dual capacity taxpayer' means,
with respect to any foreign country or possession of
the United States, a person who--
``(A) is subject to a levy of such country or
possession, and
``(B) receives (or will receive) directly or
indirectly a specific economic benefit from
such country or possession.
``(3) Generally applicable income tax.--For purposes
of this subsection, the term `generally applicable
income tax' means an income tax (or a series of income
taxes) which is generally imposed under the laws of a
foreign country or possession of the United States on
residents of such foreign country or possession that
are not dual capacity taxpayers.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years of foreign corporations beginning
after December 31, 2021, and to taxable years of United States
shareholders in which or with which such taxable years of
foreign corporations end.
SEC. 138124. MODIFICATIONS TO FOREIGN TAX CREDIT LIMITATIONS.
(a) Country-by-country Application of Limitation on Foreign
Tax Credit Based on Taxable Units.--
(1) In general.--Section 904 is amended by inserting
after subsection (d) the following new subsection:
``(e) Country-by-country Application Based on Taxable
Units.--
``(1) In general.--The provisions of subsections (a),
(b), (c), and (d) and sections 907 and 960 shall be
applied separately with respect to each country by
taking into account the aggregate income properly
attributable or otherwise allocable to a taxable unit
of the taxpayer which is a tax resident of such
country.
``(2) Taxable units.--
``(A) In general.--Except as otherwise
provided by the Secretary, each item shall be
attributable or otherwise allocable to exactly
one taxable unit of the taxpayer.
``(B) Determination of taxable units.--Except
as otherwise provided by the Secretary, the
taxable units of a taxpayer are as follows:
``(i) General taxable unit.--The
person that is the taxpayer and that is
not otherwise described in a separate
clause of this subparagraph.
``(ii) Controlled foreign
corporations.--Each controlled foreign
corporation with respect to which the
taxpayer is a United States
shareholder.
``(iii) Interests in pass-through
entities.--Each interest held (directly
or indirectly) by the taxpayer or any
controlled foreign corporation referred
to in clause (ii) in a pass-through
entity if such pass-through entity is a
tax resident of a country other than
the country with respect to which such
taxpayer or controlled foreign
corporation (as the case may be) is a
tax resident.
``(iv) Branches.--Each branch (or
portion thereof) the activities of
which are directly or indirectly
carried on by the taxpayer or any
controlled foreign corporation referred
to in clause (ii) and which give rise
to a taxable presence in a country
other than the country in which the
taxpayer or any such controlled foreign
corporation (as the case may be) is a
tax resident.
``(3) Definitions and special rules.--For purposes of
this subsection--
``(A) Tax resident.--Except as otherwise
provided by the Secretary, the term `tax
resident' means a person or arrangement subject
to tax under the tax law of a country as a
resident, or a person or arrangement that gives
rise to a taxable presence by reason of its
activities in such country. If an entity is
organized under the law of a country, or
resident in a country, that does not impose an
income tax with respect to such entity, such
entity shall, except as provided by the
Secretary, be treated as subject to tax under
the tax law of such country for the purposes of
the preceding sentence.
``(B) Pass-through entity.--Except as
otherwise provided by the Secretary, the term
`pass-through entity' includes any partnership
or other entity or arrangement to the extent
that income, gain, deduction, or loss of the
entity is taken into account in determining the
income or loss of a person that owns (directly
or indirectly) an interest in such entity.
``(C) Branch.--Except as otherwise provided
by the Secretary, the term `branch' means a
taxable presence of a tax resident in a country
other than its country of residence as
determined under such other country's tax law.
The Secretary shall provide regulations or
other guidance applying such term to activities
in a country that does not subject income to
tax on the basis of residence or taxable
presence.
``(D) Treatment of fiscally autonomous
jurisdictions.--Any fiscally autonomous
jurisdiction shall be treated as a separate
country. Any possession of the United States
shall also be treated as separate country. For
purposes of the preceding sentence, the term
`possession of the United States' means each of
American Samoa, the Commonwealth of the
Northern Mariana Islands, the Commonwealth of
Puerto Rico, Guam, and the Virgin Islands.
``(4) Regulations.--The Secretary shall issue such
regulations or other guidance as may be necessary or
appropriate to carry out, or prevent avoidance of, the
purposes of this subsection, including regulations or
other guidance--
``(A) providing for the application of this
subsection to entities, arrangements, and
branches that are otherwise considered a
resident of more than one country or no
country,
``(B) providing for the application of this
subsection to hybrid entities or hybrid
transactions (as such terms are used for
purposes of section 267A), pass-through
entities, passive foreign investment companies,
trusts, and other entities or arrangements not
otherwise described in this subsection, and
``(C) providing for the assignment of any
item (including foreign taxes and deductions)
to taxable units, including in the case of
amounts not otherwise taken into account in
determining taxable income under this
chapter.''.
(2) Application of recapture of overall foreign
loss.--Section 904(f)(5)(E)(i) is amended by inserting
``applied separately with respect to each country
(within the meaning of subsection (e)) as provided in
subsection (e)'' before the period at the end.
(3) Application of separate limitation losses with
respect to global intangible low-taxed income.--Section
904(f)(5) is amended by adding at the end the following
new subparagraph:
``(G) Special rule with respect to global
intangible low-taxed income.--The amount of the
separate limitation losses for any taxable year
shall reduce income described in subparagraph
(d)(1)(A) for such taxable year only to the
extent the aggregate amount of such losses
exceeds the aggregate amount of the separate
limitation incomes for such taxable year. For
purposes of this subparagraph, separate
limitation income shall exclude income
described in subparagraph (d)(1)(A) for the
taxable year.''.
(b) Repeal of Separate Application to Foreign Branch
Income.--
(1) In general.--Section 904(d)(1) is amended by
striking subparagraph (B) and redesignating
subparagraphs (C) and (D) as subparagraph (B) and (C).
(2) Coordination with deduction for foreign-derived
intangible income.--Section 205(b)(3)(A) is amended--
(A) by striking subclause (VI) of clause (i)
and inserting the following new subclause:
``(VI) the income of a United
States person which is
attributable to 1 or more
branches (which would be
referred to in clause (iv) of
section 904(e)(2)(B) if such
clause were applied without
regard to any reference to a
controlled foreign corporation)
or pass-through entities (which
would be referred to in clause
(iii) of section 904(e)(2)(B)
if such clause were applied
without regard to any reference
to a controlled foreign
corporation) in 1 or more
foreign countries, over'', and
(B) by adding at the end the following flush
sentence:
``For purposes of clause (i)(VI), the amount of
income attributable to a branch or pass-through
entity shall be determined under rules
established by the Secretary.''.
(3) Conforming amendments.--
(A) Section 904(d)(2)(A)(ii) is amended by
striking ``, foreign branch income,''.
(B) Section 904(d)(2) is amended by striking
subparagraph (J).
(c) Modification of Foreign Tax Credit Carryback and
Carryforward.--
(1) Carryover limited to 5 taxable years.--
(A) In general.--Section 904(c) is amended by
striking ``10 succeeding taxable years'' and
inserting ``5 succeeding taxable years''.
(B) Conforming amendment.--Section
6511(d)(3)(A) is amended by striking ``10
years'' and inserting ``5 years''.
(2) Repeal of carryback.--Section 904(c) is amended--
(A) by striking ``in the first preceding
taxable year, and'',
(B) by striking ``preceding or'' each place
it appears, and
(C) by striking ``Carryback and'' in the
heading thereof.
(3) Carryover applicable to tax on global intangible
low-taxed income.--Section 904(c) is amended by
striking the last sentence.
(4) Application to limitation on foreign oil and gas
taxes.--Section 907(f)(1) is amended--
(A) by striking ``in the first preceding
taxable year and'', and
(B) by striking ``first 10'' and inserting
``first 5''.
(d) Treatment of Certain Tax-exempt Dividends.--
(1) Certain tax-exempt dividends taken into account
in applying limitations on foreign tax credits.--
Section 904(b) is amended by striking paragraph (4).
(2) Certain tax-exempt dividends not taken into
account in allocating interest expense.--Section
864(e)(3) is amended by striking ``or 245(a)'' and
inserting ``, 245(a), or 245A''.
(e) Rules for Allocation of Certain Deductions to Foreign
Source Global Intangible Low-taxed Income for Purposes of
Foreign Tax Credit Limitation.--Section 904(b), as amended by
the preceding provisions of this Act, is amended by adding at
the end the following new paragraph:
``(4) Deductions treated as allocable to foreign
source global intangible low-taxed income.--In the case
of a domestic corporation and solely for purposes of
the application of subsection (a) with respect to
amounts described in subsection (d)(1)(A), the
taxpayer's taxable income from sources without the
United States shall be determined by--
``(A) allocating any deduction allowed under
section 250 to such income, and
``(B) by treating any expense of such
domestic corporation as not allocable to such
income.''.
(f) Treatment of Certain Asset Dispositions.--Section 904(b),
as amended by the preceding provisions of this Act, is amended
by adding at the end the following new paragraph:
``(5) Treatment of certain asset dispositions.--
``(A) In general.--Except as otherwise
provided by the Secretary, in the case of any
covered asset disposition, the principles of
section 338(h)(16) shall apply in determining
the source and character of any item for
purposes of this part.
``(B) Covered asset disposition.--For
purposes of this paragraph, the term `covered
asset disposition' means any transaction
which--
``(i) is treated as a disposition of
assets for purposes of subchapter N of
this chapter, and
``(ii) is treated as a disposition of
stock of a corporation (or is
disregarded) for purposes of the tax
laws of the relevant foreign country or
possession of the United States.
``(C) Regulations.--The Secretary shall issue
such regulations or other guidance as is
necessary or appropriate to carry out, or to
the prevent the avoidance of, the purposes of
this paragraph.''.
(g) Redetermination of Foreign Taxes and Related Claims.--
(1) In general.--Section 905(c)(1) is amended by
striking ``or'' at the end of subparagraph (B) and by
inserting after subparagraph (C) the following new
subparagraphs:
``(D) the taxpayer makes a timely change in
its choice to claim a credit or deduction for
taxes paid or accrued, or
``(E) there is any other change in the
amount, or treatment, of taxes, which affects
the taxpayer's tax liability under this
chapter.''.
(2) Modification to time for claiming credit or
deduction.--Section 901(a) is amended by striking the
second sentence and inserting the following: ``The
choice to claim a credit for such amounts may be made
at any time before the expiration of the period
prescribed by section 6511(d)(3)(A), and the choice to
claim a deduction in lieu of a credit may be made at
any time before the expiration of the period prescribed
by section 6511(a), for making a claim for refund or
credit of the tax imposed by this chapter for such
taxable year, or such later period prescribed by
section 6511(c) if the period is extended by
agreement.''.
(3) Modification to special period of limitation.--
Section 6511(d)(3)(A) is amended--
(A) by inserting ``change in the liability
for'' before ``any taxes paid or accrued'',
(B) by striking ``actually paid'' and
inserting ``paid (or deemed paid under section
960)'', and
(C) by inserting ``change in the liability
for'' before ``foreign taxes'' in the heading
thereof.
(h) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply to taxable years beginning after December 31,
2021.
(2) Modification of foreign tax credit carryback and
carryforward.--Except as otherwise provided in
paragraph (3), the amendments made by subsection (c)
shall apply to taxes paid or accrued in taxable years
beginning after December 31, 2021.
(3) Certain modifications.--The amendment made by
subsection (c)(4)(B) shall apply to taxable years of
foreign corporations beginning after December 31, 2017,
and to taxable years of United States shareholders in
which or with which such taxable years of foreign
corporations end.
(4) Redetermination of foreign taxes and related
claims.--The amendments made by subsection (g) shall
take effect on the date which is 60 days after the date
of the enactment of this Act.
(i) Regulations.--The Secretary shall prescribe rules
providing for the application of subsection (e) of section 904
of the Internal Revenue Code of 1986, as added by this section,
to any amounts carried over under subsection (c) of such
section from a taxable year with respect to which such
subsection (e) did not apply to a taxable year with respect to
which such subsection (e) does apply.
SEC. 138125. FOREIGN OIL AND GAS EXTRACTION INCOME AND FOREIGN OIL
RELATED INCOME TO INCLUDE OIL SHALE AND TAR SANDS.
(a) In General.--Paragraphs (1)(A) and (2)(A) of section
907(c) are each amended by inserting ``(or oil shale or tar
sands)'' after ``oil or gas wells''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years of foreign corporations beginning
after December 31, 2021, and to taxable years of United States
shareholders in which or with which such taxable years of
foreign corporations end.
SEC. 138126. MODIFICATIONS TO INCLUSION OF GLOBAL INTANGIBLE LOW-TAXED
INCOME.
(a) Country-by-country Application of Section Based on CFC
Taxable Units.--Section 951A is amended by adding at the end
the following new subsection:
``(g) Country-by-country Application of Section Based on CFC
Taxable Units.--
``(1) In general.--If any CFC taxable unit of a
United States shareholder is a tax resident of a
country which is different from the country with
respect to which any other CFC taxable unit of such
United States shareholder is a tax resident--
``(A) such shareholder's global intangible
low-taxed income for purposes of subsection (a)
shall be the sum of the amounts of global
intangible low-taxed income determined
separately with respect to each country with
respect to which any CFC taxable unit of such
shareholder is a tax resident, and
``(B) for purposes of determining such
separate amounts of global intangible low-taxed
income--
``(i) any reference in subsection
(b), (c), or (d) to a controlled
foreign corporation of such shareholder
shall be treated as reference to a CFC
taxable unit of such shareholder, and
``(ii) net CFC tested income, net
deemed tangible income return,
qualified business asset investment,
interest expense described in
subsection (b)(2)(B), and such other
items and amounts as the Secretary may
provide, shall be determined separately
with respect to each such country by
determining such amounts with respect
to each CFC taxable unit of such
shareholder which is a tax resident of
such country.
``(2) Definitions.--For purposes of this subsection--
``(A) CFC taxable unit.--The term `CFC
taxable unit' means any taxable unit described
clause (ii), (iii), or (iv) of section
904(e)(2)(B) (determined without regard to the
references to the taxpayer in clauses (iii) and
(iv) of such section).
``(B) Application of other definitions.--
Terms used in this subsection which are also
used in section 904(e) shall have the same
meaning as when used in such section.
``(3) Special rules.--For purposes of this
subsection--
``(A) Application of certain rules.--Except
as otherwise provided by the Secretary, rules
similar to the rules of section 904(e) shall
apply.
``(B) Allocation of global intangible low-
taxed income to controlled foreign
corporations.--Except as otherwise provided by
the Secretary, subsection (f)(2) shall be
applied separately with respect to each CFC
taxable unit.''.
(b) Regulatory Authority.--
(1) In general.--Section 951A, as amended by
subsection (a), is amended by adding at the end the
following new subsection:
``(h) Regulations.--The Secretary shall issue such
regulations or other guidance as may be necessary or
appropriate to carry out, or prevent the avoidance of, the
purposes of this section, including regulations or guidance
which provide for--
``(1) the treatment of property if such property is
transferred, or held, temporarily,
``(2) the treatment of property if the avoidance of
the purposes of this section is a factor in the
transfer or holding of such property, and
``(3) appropriate adjustments to the basis of stock
and other ownership interests, and to earnings and
profits, to reflect tested losses.''.
(2) Conforming amendment.--Section 951A(d) is amended
by striking paragraph (4).
(3) Additional regulatory authority.--Section
951A(h), as added by paragraph (1), is amended by
striking ``and'' at the end of paragraph (2), by
striking the period at the end of paragraph (3) and
inserting a comma, and by adding at the end the
following new paragraphs:
``(4) rules similar to the rules provided under the
regulations or guidance issued under section 904(e)(5),
``(5) appropriate basis adjustments, and
``(6) appropriate adjustment to made, and appropriate
tax attributes and records to be maintained, separately
with respect to CFC taxable units.''.
(c) Carryover of Net CFC Tested Loss.--
(1) In general.--Section 951A(c) is amended by adding
at the end the following new paragraph:
``(3) Carryover of net cfc tested loss.--
``(A) In general.--If the amount described in
paragraph (1)(B) with respect to any United
States shareholder for any taxable year of such
United States shareholder (determined after the
application of this paragraph) exceeds the
amount described in paragraph (1)(A) with
respect to such shareholder of such taxable
year, the amount otherwise described in
paragraph (1)(B) with respect to such
shareholder for the succeeding taxable year
shall be increased by the amount of such
excess.
``(B) Proper adjustment in allocations of
global intangible low-taxed income to
controlled foreign corporations.--Proper
adjustments shall be made in the application of
subsection (f)(2)(B) to take into account any
decrease in global intangible low-taxed income
by reason of the application of subparagraph
(A).''.
(2) Coordination with country-by-country
application.--Section 951A(g)(1)(B)(ii), as added by
subsection (a), is amended by inserting ``any increase
determined under subsection (c)(3)(A),'' after
``interest expense described in subsection
(b)(2)(B),''.
(3) Application of rules with respect to ownership
changes.--Section 382(d) is amended by adding at the
end the following new paragraph:
``(4) Application to carryover of net cfc tested
loss.--The term `pre-change loss' shall include any
excess carried over under section 951A(c)(3) under
rules similar to the rules of paragraph (1).''.
(d) Reduction in Net Deemed Tangible Income Return for
Purposes of Determining Global Intangible Low-taxed Income.--
(1) In general.--Section 951A(b)(2)(A) is amended by
striking ``10 percent'' and inserting ``5 percent''.
(2) Application to assets located in possessions of
the united states.--Section 951A(b) is amended by
adding at the end the following new paragraph:
``(3) Application to assets located in possessions of
the united states.--In the case of any specified
tangible property located in a possession of the United
States, paragraph (2)(A) and subsection (d) shall be
applied by substituting `10 percent' for `5 percent' in
paragraph (2)(A).''.
(e) Inclusion of Foreign Oil and Gas Extraction Income in
Determining Tested Income and Loss.--Section 951A(c)(2)(A) is
amended by inserting ``and'' at the end of subclause (III), by
striking ``and'' at the end of subclause (IV) and inserting
``over'', and by striking subclause (V).
(f) Coordination With Other Provisions.--Section 951A(f)(1)
is amended by adding at the end the following new subparagraph:
``(C) Treatment of certain references.--
Except as otherwise provided by the Secretary,
references to section 951 or section 951(a) in
sections 959, 961, 962 and such other sections
as the Secretary may identify shall include
references to section 951A or section 951A(a),
respectively.''.
(g) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply to taxable years of foreign corporations
beginning after December 31, 2021, and to taxable years
of United States shareholders in which or with which
such taxable years of foreign corporations end.
(2) Certain related modifications.--The amendments
made by subsections (b)(1), (b)(2), and (f) shall apply
to taxable years of foreign corporations beginning
after December 31, 2017, and to taxable years of United
States shareholders in which or with which such taxable
years of foreign corporations end.
SEC. 138127. MODIFICATIONS TO DETERMINATION OF DEEMED PAID CREDIT FOR
TAXES PROPERLY ATTRIBUTABLE TO TESTED INCOME.
(a) Increase in Deemed Paid Credit.--Section 960(d)(1) is
amended by striking ``80 percent'' and inserting ``95 percent
(100 percent in the case of tested foreign income taxes paid or
accrued to a possession of the United States)''.
(b) Inclusion of Taxes Properly Attributable to Tested
Loss.--Section 960(d)(3) is amended to read as follows:
``(3) Tested foreign income taxes.--For purposes of
paragraph (1), the term `tested foreign income taxes'
means, with respect to any domestic corporation which
is a United States shareholder of a controlled foreign
corporation, such shareholder's pro rata share (as
determined under section 951A(e)(1)) of--
``(A) the foreign income taxes (within the
meaning of section 904(d)(2)(F)) which are
properly attributable to amounts taken into
account in determining tested income or tested
loss under section 951A(b)(2), and
``(B) solely to the extent provided in
regulations prescribed by the Secretary, the
foreign income taxes (as so defined) paid or
accrued by a foreign corporation (other than
such controlled foreign corporation) which
owns, directly or indirectly, 80 percent or
more (by vote or value) of the stock in such
domestic corporation but only if--
``(i) such foreign income taxes are
properly attributable to amounts of
such controlled foreign corporation
taken into account in determining
tested income or tested loss under
section 951A(b)(2), and
``(ii) no credit is allowed, in whole
or in part, for such foreign taxes in
any foreign jurisdiction.''.
(c) Application of Foreign Tax Credit Limitation to Amounts
Included Under Section 78.--
(1) Section 904(d)(2) is amended by redesignating
subparagraph (K) as subparagraph (L) and by inserting
after subparagraph (J) the following new subparagraph:
``(K) Amounts includible under section 78.--
Any amount includible in gross income under
section 78 shall be treated as income in the
same separate category as the related foreign
taxes deemed paid.''.
(2) Section 904(d)(3)(G) is amended by striking the
second sentence and inserting the following: ``Any
amount included in gross income under section 78 shall
not be treated as a dividend.''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2),
the amendments made by this section shall apply to
taxable years of foreign corporations beginning after
December 31, 2021, and to taxable years of United
States shareholders in which or with which such taxable
years of foreign corporations end.
(2) Application of foreign tax credit limitation to
amounts included under section 78.--The amendments made
by subsection (c) shall apply to taxable years
beginning after December 31, 2017.
SEC. 138128. DEDUCTION FOR FOREIGN SOURCE PORTION OF DIVIDENDS LIMITED
TO CONTROLLED FOREIGN CORPORATIONS, ETC.
(a) In General.--Section 245A is amended--
(1) in subsections (a), (c)(1), and (c)(2), by
striking ``specified 10-percent owned foreign
corporation'' each place it appears and inserting
``controlled foreign corporation'', and
(2) by striking subsection (b).
(b) Modifications Related to Determination of Status as a
Controlled Foreign Corporation.--
(1) Subpart F of part III of subchapter N of chapter
1 is amended by inserting after section 951A the
following new section:
``SEC. 951B. AMOUNTS INCLUDED IN GROSS INCOME OF FOREIGN CONTROLLED
UNITED STATES SHAREHOLDERS.
``(a) In General.--In the case of any foreign controlled
United States shareholder of a foreign controlled foreign
corporation--
``(1) this subpart (other than sections 951A, 951(b),
957, and 965) shall be applied with respect to such
shareholder (separately from, and in addition to, the
application of this subpart without regard to this
section)--
``(A) by substituting `foreign controlled
United States shareholder' for `United States
shareholder' each place it appears therein, and
``(B) by substituting `foreign controlled
foreign corporation' for `controlled foreign
corporation' each place it appears therein, and
``(2) sections 951A and 965 shall be applied with
respect to such shareholder --
``(A) by treating each reference to `United
States shareholder' in such sections as
including a reference to such shareholder, and
``(B) by treating each reference to
`controlled foreign corporation' in such
sections as including a reference to such
foreign controlled foreign corporation.
``(b) Foreign Controlled United States Shareholder.--For
purposes of this section, the term `foreign controlled United
States shareholder' means, with respect to any foreign
corporation, any United States person which would be a United
States shareholder with respect to such foreign corporation
if--
``(1) section 951(b) were applied by substituting
`more than 50 percent' for `10 percent or more', and
``(2) section 958(b) were applied without regard to
paragraph (4) thereof.
``(c) Foreign Controlled Foreign Corporation.--For purposes
of this section, the term `foreign controlled foreign
corporation' means a foreign corporation, other than a
controlled foreign corporation, which would be a controlled
foreign corporation if section 957(a) were applied--
``(1) by substituting `foreign controlled United
States shareholders' for `United States shareholders',
and
``(2) by substituting `section 958(b) (other than
paragraph (4) thereof)' for `section 958(b)'.
``(d) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this section,
including regulations or other guidance--
``(1) to treat a foreign controlled United States
shareholder or a foreign controlled foreign corporation
as a United States shareholder or as a controlled
foreign corporation, respectively, for purposes of
provisions of this title other than this subpart, and
``(2) to prevent the avoidance of the purposes of
this section.''.
(2) Section 957(a) is amended to read as follows:
``(a) Controlled Foreign Corporation.--For purposes of this
title--
``(1) In general.--The term `controlled foreign
corporation' means any foreign corporation if more than
50 percent of--
``(A) the total combined voting power of all
classes of stock of such corporation entitled
to vote, or
``(B) the total value of the stock of such
corporation,
is owned (within the meaning of section 958(a)), or is
considered as owned by applying the rules of ownership
of section 958(b), by United States shareholders on any
day during the taxable year of such foreign
corporation.
``(2) Election to treat a foreign corporation as a
controlled foreign corporation for certain purposes.--
``(A) In general.--In the case of a foreign
corporation with respect to which an election
is in effect under this paragraph, such foreign
corporation shall be treated as controlled
foreign corporation with respect to all United
States shareholders of such foreign
corporation.
``(B) Exceptions.--Notwithstanding
subparagraph (A), such foreign corporation
shall not be treated as a controlled foreign
corporation for purposes of section 951B(c) or
for any other purpose if the Secretary
determines that treatment of such foreign
corporation as a controlled foreign corporation
for such purpose would be inconsistent with the
purposes of this subchapter.
``(C) Election.--
``(i) By whom.--An election under
subparagraph (A) shall be effective
only if made by the foreign corporation
and by all United States shareholders
of such foreign corporation (determined
as of the time of such election by such
foreign corporation).
``(ii) With respect to whom.--Any
election under this paragraph, once
effective, shall apply to such foreign
corporation and to all United States
shareholders of such foreign
corporation (including any person who
becomes a United States shareholder of
such foreign corporation after such
election takes effect).
``(iii) Time, manner, etc.--The
election under this paragraph shall be
made at such time and in such manner as
the Secretary may provide and, once
effective, may be revoked only with the
consent of the Secretary.
``(D) Regulations.--The Secretary shall issue
such regulations or other guidance as may be
necessary or appropriate to carry out the
purposes of this paragraph, including
regulations or other guidance for the
application of this paragraph to an acquisition
of assets described in section 381(a) from any
corporation with respect to which an election
under this paragraph applies.''.
(3) Section 958(b) is amended--
(A) by inserting after paragraph (3) the
following:
``(4) Subparagraphs (A), (B), and (C) of section
318(a)(3) shall not be applied so as to consider a
United States person as owning stock which is owned by
a person who is not a United States person.'', and
(B) by striking ``Paragraph (1)'' in the last
sentence and inserting ``Paragraphs (1) and
(4)''.
(4) The table of sections for subpart F of part III
of subchapter N of chapter 1 is amended by inserting
after the item relating to section 951A the following
new item:
``Sec. 951B. Amounts included in gross income of foreign controlled
United States shareholders.''.
(c) Certain Other Modifications.--
(1) Section 245A(b)(1) is amended by striking ``with
respect to such corporation''.
(2) Section 245A(e)(4) is amended by striking ``an
amount received'' and all that follows through ``for
which the controlled foreign corporation received a
deduction'' and inserting ``any dividend received from
a controlled foreign corporation for which such
controlled foreign corporation received a deduction''.
(3) Section 245A(e)(1) is amended--
(A) by striking ``any dividend'' and
inserting ``any hybrid dividend'', and
(B) by striking ``if the dividend is a hybrid
dividend''.
(4) Section 245A(g) is amended to read as follows:
``(g) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out the provisions of this section,
including regulations or other guidance for--
``(1) the treatment of United States shareholders
owning stock of a controlled foreign corporation
through a partnership, and
``(2) the denial of all or a portion of the deduction
under this section with respect to dividends received
from foreign corporations in situations in which--
``(A) any portion of the dividend is out of
earnings and profits arising from dispositions
to related parties which--
``(i) are not made in the ordinary
course of a trade or business, and
``(ii) are made on or after January
1, 2018, and during a taxable year to
which section 951A did not apply, or
``(B) a transfer or issuance of stock on or
after January 1, 2018, results in a reduction
in the United States shareholder's pro rata
share of a controlled foreign corporation's
subpart F income or tested income (as defined
in section 951A).''.
(5) Section 246(b)(1) is amended to read as follows:
``(1) General rule.--Except as provided in paragraph
(2), the aggregate amount of the deductions allowed by
section 243(a)(1) and subsection (a) and (b) of section
245 shall not exceed the percentage determined under
paragraph (3) of the taxable income computed without
regard to the deductions allowed by section 172,
section 243(a)(1), subsections (a) and (b) of section
245, and section 250, without regard to any adjustment
under section 1059, and without regard to any capital
loss carryback to the taxable year under section
1212(a)(1).''.
(6) Section 246(c)(1) is amended by striking
``section 243'' and all that follows through ``245A''
and inserting ``section 243, 245, or 245A''.
(7) For purposes of section 78 of the Internal
Revenue Code of 1986, as in effect on the day before
the enactment of Public Law 115-97, with respect to
taxable years of foreign corporations beginning before
January 1, 2018, and ending after December 31, 2017,
any reference to section 245 of such Code shall be
treated as including a reference to section 245A of
such Code (as added by such Public Law).
(d) Effective Dates.--
(1) In general.--The amendment made by subsection (a)
shall apply to distributions made after the date of the
enactment of this Act.
(2) Modifications related to determination of status
as a controlled foreign corporation.--The amendments
made by subsection (b) shall apply to--
(A) the last taxable year of foreign
corporations beginning before January 1, 2018,
and each subsequent taxable year of such
foreign corporations, and
(B) taxable years of United States persons in
which or with which such taxable years of
foreign corporations end.
(3) Certain other modifications.--The amendments made
by subsection (c) shall apply to distributions made
after December 31, 2017.
SEC. 138129. LIMITATION ON FOREIGN BASE COMPANY SALES AND SERVICES
INCOME.
(a) Foreign Base Company Sales Income.--Section 954(d)(2) is
amended to read as follows:
``(2) Limitation.--
``(A) In general.--For purposes of this
subsection, the term `related person' shall not
include any person unless such person is a
taxable unit (within the meaning of section
904(e)) which is a tax resident of the United
States.
``(B) Regulations.--The Secretary shall issue
such regulations or other guidance as may be
necessary or appropriate to carry out the
purposes of this paragraph, including
regulations or other guidance providing for the
proper application of subparagraph (A) in the
case of a series of transactions in which a
person described in subparagraph (A) is a
party.''.
(b) Foreign Base Company Services Income.--Section
954(e)(1)(A) is amended by striking ``subsection (d)(3)'' and
inserting ``subsection (d)''.
(c) Certain Other Modifications.--
(1)(A) Section 951(a)(1) is amended--
(i) by striking ``the last day'' in the
matter preceding subparagraph (A) and inserting
``any day'',
(ii) by striking ``his'' each place it
appears and inserting ``such shareholder's'',
and
(iii) by inserting ``if such shareholder owns
(within the meaning of section 958(a)) stock of
such foreign corporation as of the close of the
last relevant day of such foreign corporation's
taxable year,'' before ``the amount'' in
subparagraph (B).
(B) Section 951(a) is amended by striking paragraph
(2) and inserting the following new paragraphs:
``(2) Pro rata share of subpart f income.--In the
case of any United States shareholder with respect to a
foreign corporation, the pro rata share referred to in
paragraph (1)(A) is the sum of--
``(A) if such shareholder owns (within the
meaning of section 958(a)) stock of such
foreign corporation as of the close of the last
relevant day of such foreign corporation's
taxable year, such shareholder's general pro
rata share determined under paragraph (3), plus
``(B) if such shareholder owns (within the
meaning of section 958(a)) stock of such
foreign corporation during such taxable year
but does not own (within the meaning of section
958(a)) such stock as of the close of such last
relevant day, such shareholder's nontaxed
current dividend share determined under
paragraph (4).
``(3) General pro rata share.--
``(A) In general.--In the case of any United
States shareholder with respect to a foreign
corporation, the general pro rata share
determined under this paragraph is the excess
(if any) of--
``(i) the pro rata current earnings
percentage of the amount which bears
the same ratio to such corporation's
subpart F income for the taxable year
(reduced by the aggregate nontaxed
current dividend shares determined
under paragraph (4) with respect to
such shareholder or any other United
States shareholder) as the part of such
year during which such corporation is a
controlled foreign corporation bears to
the entire year, over
``(ii) the lesser of--
``(I) the amount of any pre-
holding period dividends with
respect to stock of such
foreign corporation which such
shareholder owns (within the
meaning of section 958(a)) as
of the close of the last
relevant day of such foreign
corporation's taxable year, or
``(II) the amount which bears
the same ratio to the subpart F
income of such corporation for
the taxable year (reduced by
the aggregate nontaxed current
dividend shares determined
under paragraph (4) with
respect to such shareholder or
any other United States
shareholder) as the part of
such year during which such
shareholder did not own (within
the meaning of section 958(a))
such stock bears to the entire
year.
``(B) Pro rata current earnings percentage.--
For purposes of subparagraph (A)(i), the term
`pro rata current earnings percentage' means,
in the case of any United States shareholder
with respect to a foreign corporation for any
taxable year of such foreign corporation, the
ratio (expressed as a percentage) of--
``(i) the amount which would have
been distributed with respect to the
stock which such shareholder owns
(within the meaning of section 958(a))
in such corporation if on the last
relevant day of such taxable year it
had distributed its earnings and
profits for such taxable year (computed
as of the close of such taxable year
without diminution by reason of any
distributions made during such taxable
year), divided by
``(ii) such corporation's earnings
and profits for such taxable year (as
so computed).
``(C) Pre-holding period dividends.--For
purposes of subparagraph (A)(ii)(I), the term
`pre-holding period dividends' means, in the
case of any United States shareholder with
respect to a foreign corporation for any
taxable year of such foreign corporation,
dividends which are--
``(i) made out of such corporation's
earnings and profits for the taxable
year (other than nontaxed current
dividends as defined in paragraph
(4)(C)), and
``(ii) received--
``(I) by any other United
States person with respect to
stock of such foreign
corporation which such
shareholder owns (within the
meaning of section 958(a)) as
of the close of the last
relevant day of such foreign
corporation's taxable year, and
``(II) while such foreign
corporation was a controlled
foreign corporation and before
such shareholder owned (within
the meaning of section 958(a))
such stock.
``(4) Nontaxed current dividend share.--
``(A) In general.--In the case of any United
States shareholder with respect to a foreign
corporation, the nontaxed current dividend
share determined under this paragraph is the
nontaxed current dividend percentage of the
subpart F income of such foreign corporation
for the taxable year.
``(B) Nontaxed current dividend percentage.--
For purposes of this paragraph, the term
`nontaxed current dividend percentage' means,
in the case of any United States shareholder
with respect to a foreign corporation for any
taxable year of such foreign corporation, the
ratio (expressed as a percentage) of--
``(i) the amount of nontaxed current
dividends with respect to such taxable
year received with respect to the stock
of such foreign corporation which such
shareholder owns (within the meaning of
section 958(a)) at the time of the
dividend on a day in which such
corporation is a controlled foreign
corporation, divided by
``(ii) such foreign corporation's
earnings and profits for such taxable
year (computed as of the close of such
taxable year without diminution by
reason of any distributions made during
such taxable year).
``(C) Nontaxed current dividends.--For
purposes of this paragraph, the term `nontaxed
current dividends' means the portion of any
amount received with respect to stock to the
extent such amount (without regard to amounts
included in the gross income of a United States
shareholder for the taxable year by reason of
this subpart)--
``(i) would result in a dividend out
of the corporation's earnings and
profits for the taxable year (including
a dividend under section 1248
attributable to earnings and profits
for the taxable year), and
``(ii) either--
``(I) would give rise to a
deduction under section
245A(a), or
``(II) in the case of a
dividend paid directly or
indirectly to a controlled
foreign corporation with
respect to stock owned by the
shareholder within the meaning
of section 958(a)(2), would not
result in subpart F income with
respect to such controlled
foreign corporation by reason
of subsection (b)(4), (c)(3),
or (c)(6) of section 954.
Any amount treated as the foreign-
source portion of a dividend under
section 245A(g) shall be treated as
nontaxed current dividends for purposes
of this paragraph.
``(5) Last relevant day of taxable year of a
controlled foreign corporation.--For purposes of this
subsection, the term `last relevant day' means, with
respect to any taxable year of a foreign corporation,
the last day of such taxable year on which such
corporation is a controlled foreign corporation.
``(6) Regulations.--The Secretary may prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this
subsection, including regulations or other guidance--
``(A) to treat a partnership as an aggregate
of its partners,
``(B) to provide rules allowing a foreign
corporation to close its taxable year upon a
change in ownership, and
``(C) to treat a distribution followed by an
issuance of stock to a shareholder not subject
to tax under this chapter in the same manner as
an acquisition of stock.''.
(C) Section 951A(e)(1) is amended by striking
``determined under the rules of section 951(a)(2) in
the same manner as such section applies to subpart F
income'' and inserting ``determined under rules similar
to the rules of section 951(a)(2)''.
(D) Section 951A(e)(2) is amended to read as follows:
``(2) Treatment as united states shareholder.--A
person shall be treated as a United States shareholder
of a controlled foreign corporation for any taxable
year of such person if such person--
``(A) is a United States shareholder of such
foreign corporation on any day in such taxable
year, and
``(B) owns (within the meaning of section
958(a)) stock in such foreign corporation on
any day in such taxable year which is part of a
taxable year of such foreign corporation with
respect to which such foreign corporation is a
controlled foreign corporation.''.
(E) Section 953(c)(5)(A)(i) is amended--
(i) in subclause (I), by adding ``and'' at
the end,
(ii) in subclause (II)--
(I) by striking ``on the last day of
the taxable year'' and inserting
``during the taxable year'', and
(II) by striking ``and'' at the end
and inserting ``or'', and
(iii) by striking subclause (III).
(2) Section 78 is amended by striking ``, (b),''.
(d) Certain Related Prospective Modifications.--Section
961(c) is amended--
(1) by striking ``Basis Adjustments in'' in the
heading of such subsection and inserting ``Application
of Rules to'', and
(2) by striking ``then adjustments similar to'' and
all that follows in such subsection and inserting
``then rules similar to the rules of subsections (a)
and (b) shall apply to--
``(1) such stock,
``(2) stock in any other controlled foreign
corporation by reason of which the United States
shareholder is considered under section 958(a)(2) as
owning the stock described in paragraph (1), and
``(3) property by reason of which the United States
shareholder is considered as owning stock described in
paragraph (1) or (2).
The preceding sentence shall not apply with respect to any
stock or property to which subsection (a) or (b) applies.''.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply to taxable years of foreign corporations
beginning after December 31, 2021, and to taxable years
of United States shareholders in which or with which
such taxable years of foreign corporations end.
(2) Certain other modifications.--
(A) The amendments made by subsection (c)(1)
shall apply to distributions made after
December 31, 2017.
(B) The amendment made by subsection (c)(2)
apply to taxable years of foreign corporations
beginning after December 31, 2017, and to
taxable years of United States shareholders in
which or with which such taxable years of
foreign corporations end.
Subpart D--Inbound International Provisions
SEC. 138131. MODIFICATIONS TO BASE EROSION AND ANTI-ABUSE TAX.
(a) Modifications to Base Erosion Minimum Tax Amount.--
(1) Modification of rates.--Section 59A(b)(1)(A) is
amended by striking ``10 percent (5 percent in the case
of taxable years beginning in calendar year 2018)'' and
inserting ``the applicable percentage''.
(2) Base erosion minimum tax amount determined
without regard to credits.--Section 59A(b)(1)(B) is
amended to read as follows:
``(B) an amount equal to the regular tax
liability (as defined in section 26(b)) of the
taxpayer for the taxable year.''.
(3) Applicable percentage.--Section 59A(b)(2) is
amended to read as follows:
``(2) Applicable percentage.--For purposes of this
subsection, the term applicable percentage means--
``(A) in the case of any taxable year
beginning after December 31, 2021, and before
January 1, 2024, 10 percent,
``(B) in the case of any taxable year
beginning after December 31, 2023, and before
January 1, 2026, 12.5 percent, and
``(C) in the case of any taxable year
beginning after December 31, 2025, 15
percent.''.
(4) Taxpayers subject to rules for banks and
securities dealers.--Section 59A(b)(3)(B) is amended to
read as follows:
``(B) Taxpayer described.--A taxpayer is
described in this subparagraph if such taxpayer
is--
``(i) a bank (as defined in section
585(a)(2)),
``(ii) a securities dealer registered
under section 15(a) of the Securities
Exchange Act of 1934, or
``(iii) a member of an affiliated
group (as defined in section
1504(a)(1), determined without regard
to section 1504(b)(3)) which includes
any person described in clause (i) or
(ii).''.
(5) General business credit allowed against base
erosion and anti-abuse tax.--Section 38(c)(1) is
amended by striking ``the tax imposed by section 55''
and inserting ``the taxes imposed by sections 55 and
59A''.
(6) Conforming amendments.--
(A) Section 59A(b)(3)(A) is amended by
striking ``paragraphs (1)(A) and (2)(A) shall
each'' and inserting ``paragraph (2) shall''.
(B) Section 59A(b) is amended by striking
paragraph (4).
(b) Modification of Rules for Determining Modified Taxable
Income.--
(1) In general.--Section 59A(c) is amended to read as
follows:
``(c) Modified Taxable Income.--For purposes of this
section--
``(1) In general.--The term `modified taxable income'
means the taxable income of the taxpayer computed under
this chapter for the taxable year with the following
adjustments:
``(A) Base erosion tax benefits.--Any base
erosion tax benefit shall be determined without
regard to any base erosion payment described in
paragraphs (1) through (4) of subsection (d),
including for purposes of determining the
adjusted basis of property described in
subsection (d)(2).
``(B) Base erosion basis adjustments with
respect to cost of goods sold.--Cost of goods
sold shall be determined without regard to any
base erosion payment described in subparagraph
(A) or (B) of subsection (d)(5).
``(C) Net operating losses.--The net
operating loss deduction for the taxable year
under section 172 shall be applied--
``(i) by substituting `modified
taxable income' for `taxable income' in
subsection (a)(2)(B)(ii)(I) thereof,
``(ii) by determining any net
operating loss arising in any taxable
year beginning after December 31, 2021,
without regard to any deduction which
is a base erosion tax benefit
(determined with respect to each such
taxable year), and
``(iii) by making appropriate
adjustments in the application of
subsection (b)(2) thereof to take into
account clause (i) of this subparagraph
as though such clause applied with
respect to taxable years beginning
after December 31, 2021 (but by
applying section 172(e) for purposes of
determining the amount of modified
taxable income).
``(D) Application of certain other
adjustments.--Except as otherwise provided by
the Secretary, rules similar to the rules of
subsections (g) and (h) of section 59 shall
apply.
``(2) Base erosion tax benefit.--The term `base
erosion tax benefit' means--
``(A) any deduction allowed under this
chapter for the taxable year with respect to
any base erosion payment described in
subsection (d)(1),
``(B) in the case of a base erosion payment
described in subsection (d)(2), any deduction
allowed under this chapter for the taxable year
for depreciation (or amortization in lieu of
depreciation) with respect to the property
acquired with such payment,
``(C) in the case of a base erosion payment
described in subsection (d)(3)--
``(i) any reduction under section
803(a)(1)(B) in the gross amount of
premiums and other consideration on
insurance and annuity contracts for
premiums and other consideration
arising out of indemnity insurance, and
``(ii) any deduction under section
832(b)(4)(A) from the amount of gross
premiums written on insurance contracts
during the taxable year for premiums
paid for reinsurance, and
``(D) in the case of a base erosion payment
described in subsection (d)(4), any reduction
in gross receipts with respect to such payment
in computing gross income of the taxpayer for
the taxable year for purposes of this
chapter.''.
(2) Certain payments with respect to inventory
treated as base erosion payments.--Section 59A(d) is
amended by redesignating paragraph (5) as paragraph (6)
and by inserting after paragraph (4) the following new
paragraph:
``(5) Certain payments with respect to inventory.--
``(A) Indirect costs included in inventory
under section 263A.--Such term shall also
include any amount paid or accrued by the
taxpayer to a foreign person which is a related
party of the taxpayer if such amount is
described in paragraph (2)(B) of section
263A(a) and required to be included in
inventory costs of the taxpayer under paragraph
(1)(A) of such section.
``(B) Certain indirect costs of foreign
related parties.--Such term shall also include
so much of any amount paid or accrued by the
taxpayer to a foreign person which is a related
party of the taxpayer in connection with the
acquisition by the taxpayer from such foreign
person of property which is inventory in the
hands of the taxpayer as exceeds the sum of--
``(i) the direct costs of such
property in the hands of such foreign
person, plus
``(ii) so much of the costs described
in section 263A(a)(2)(B) with respect
to such property in the hands of such
foreign person as the taxpayer
demonstrates to the satisfaction of the
Secretary are attributable to amounts--
``(I) paid or accrued by such
foreign person to a United
States person or a person which
is not a related party of the
taxpayer, or
``(II) otherwise subject to
the tax imposed by this
subtitle.
``(C) Application to tiered related-party
transactions.--In the case of direct costs
otherwise described in clause (i) of
subparagraph (B) which are paid or incurred by
the foreign person referred to in such clause
to another foreign person which is a related
party of the taxpayer, such costs shall be
taken into account under such clause only to
the extent that the taxpayer demonstrates to
the satisfaction of the Secretary that such
costs are attributable to amounts paid or
accrued (directly or indirectly) to a United
States person or a person which is not a
related party of the taxpayer.
``(D) Safe harbor with respect indirect costs
of foreign related parties.--In the case of a
taxpayer which elects the application of this
subparagraph (at such time, in such manner, and
with respect to such inventory property, as the
Secretary may provide), the amount described in
subparagraph (B)(ii) with respect to such
property shall be treated for purposes of this
section as being equal to 20 percent of the
amount paid or incurred by the taxpayer to the
related party of the taxpayer in connection
with the acquisition of such property.''.
(3) Expansion and consolidation of rules to exempt
certain payments from treatment as base erosion
payments.--
(A) In general.--Section 59A is amended by
redesignating subsection (i) as subsection (j)
and by inserting after subsection (h) the
following new subsection:
``(i) Certain Payment Not Treated as Base Erosion Payments.--
``(1) Exception for payments on which tax is
imposed.--An amount shall not be treated as a base
erosion payment if tax is imposed by this subtitle with
respect to such amount. The amount not treated as a
base erosion payment by reason of the preceding
sentence shall be determined under rules similar to the
rules of section 163(j)(5) (as in effect before the
date of the enactment of Public Law 115-97).
``(2) Exception for certain payments subject to
sufficient foreign tax.--
``(A) In general.--An amount shall not be
treated as a base erosion payment if the
taxpayer establishes to the satisfaction of the
Secretary that such amount was subject to an
effective rate of foreign income tax (as
defined in section 904(d)(2)(F)) which is not
less than the applicable percentage in effect
under subsection (b)(2) for the taxable year in
which such amount is paid or accrued. Except as
otherwise provided by the Secretary under
subparagraph (B), the effective rate of foreign
income tax with respect to any amount may be
established on the basis of applicable
financial statements (as defined in section
451(b)(3)).
``(B) Regulations.--The Secretary shall issue
such regulations or other guidance as may be
necessary or appropriate to carry out the
purposes of this paragraph, including
regulations or other guidance providing
procedures for determining the effective rate
of foreign income tax to which any amount is
subject. Such procedures may require that any
transaction or series of transactions among
multiple parties be recharacterized as one or
more transactions directly among any 2 or more
of such parties where the Secretary determines
that such recharacterization is appropriate to
carry out, or prevent avoidance of, the
purposes of this section.
``(3) Exception for certain amounts with respect to
services.--Subsections (d)(1) and (d)(5)(A) shall not
apply to so much of any amount paid or accrued by a
taxpayer for services as does not exceed the total
services cost of such services. The preceding sentence
shall not apply unless such services meet the
requirements for eligibility for use of the services
cost method under section 482 (determined without
regard to the requirement that the services not
contribute significantly to fundamental risks of
business success or failure).''.
(B) Conforming amendment.--Section 59A(d), as
amended by paragraph (2), is amended by
striking paragraph (6).
(c) Repeal of Exemption From Base Erosion and Anti-abuse Tax
for Taxpayers With Low Base Erosion Percentage.--Section
59A(e)(1)(C) is amended by inserting ``in the case of any
taxable year beginning before January 1, 2024,'' before ``the
base erosion percentage''.
(d) Other Modifications.--
(1) Section 59A(h)(2)(B) is amended by striking
``section 6038B(b)(2)'' and inserting ``section
6038A(b)(2)''.
(2) Section 59A(j)(2), as redesignated by subsection
(b), is amended by striking ``subsection (g)(3)'' and
inserting ``subsection (h)(3)''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
Subpart E--Other Business Tax Provisions
SEC. 138141. CREDIT FOR CLINICAL TESTING OF ORPHAN DRUGS LIMITED TO
FIRST USE OR INDICATION.
(a) In General.--Section 45C(b)(2)(B) is amended to read as
follows:
``(B) Testing must be related to first use or
indication for rare disease or condition.--
Human clinical testing may be taken into
account under subparagraph (A) only to the
extent such testing is related to the first use
or indication with respect to which a drug for
a rare disease or condition is designated under
section 526 of the Federal Food, Drug, and
Cosmetic Act.''.
(b) Eligible Testing Must Be Conducted Before Approval for
Any Use or Indication.--Section 45C(b)(2)(A)(ii)(II) is amended
to read as follows:
``(II) before the first date
on which an application (with
respect to any use or
indication with respect to any
disease or condition) with
respect to such drug is
approved under section 505(c)
of such Act or, if the drug is
a biological product, before
the first date on which a
license (with respect to any
use or indication with respect
to any disease or condition)
for such drug is issued under
section 351(a) of the Public
Health Service Act, and''.
(c) Eligibility of Biological Products.--
(1) In general.--Section 45C(b)(2)(A)(i) is amended
by inserting ``or, if the drug is a biological product,
section 351(a)(3) of the Public Health Service Act''
before the comma at the end.
(2) Conforming amendment.--Section
45C(b)(2)(A)(ii)(I) is amended by striking ``such Act''
and inserting ``the Federal Food, Drug, and Cosmetic
Act''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 138142. MODIFICATIONS TO TREATMENT OF CERTAIN LOSSES.
(a) Losses From Certain Capital Assets Which Become
Worthless.--
(1) When treated as loss.--Section 165(g)(1) is
amended by striking ``on the last day of the taxable
year'' and inserting ``at the time of the identifiable
event establishing worthlessness''.
(2) Treatment of partnership indebtedness.--Section
165(g)(2)(C) is amended by inserting ``, by a
partnership,'' after ``by a corporation''.
(3) Treatment of partnership interest.--Section 165
is amended by redesignating subsection (m) as
subsection (n) and by inserting after subsection (l)
the following new subsection:
``(m) Worthless Partnership Interest.--If any interest in a
partnership becomes worthless during the taxable year, the loss
resulting therefrom shall, for purposes of this subtitle, be
treated as a loss from the sale or exchange of the interest in
the partnership, as provided in section 741, at the time of the
identifiable event establishing worthlessness.''.
(b) Deferral of Losses in Certain Controlled Group Corporate
Liquidations.--Section 267 is amended by adding at the end the
following new subsection:
``(h) Deferral of Losses in Certain Controlled Group
Liquidations.--
``(1) In general.--In the case of two corporations
described in subsection (b)(3), no loss shall be
recognized on the stock or securities of the
liquidating corporation in a complete liquidation to
which section 331 applies until the other corporation
receiving property distributed in such liquidation with
respect to such stock or in exchange for such
securities has disposed of substantially all property
such other corporation received in such liquidation to
one or more persons who are not related to such other
corporation (within the meaning of subsection (b)(3) or
section 707(b)(1)).
``(2) Regulations.--The Secretary shall issue such
regulations or other guidance as the Secretary
determines is necessary or appropriate to carry out the
purposes of this subsection, including to apply the
principles of this subsection to liquidating
corporation stock or securities owned by a corporation
indirectly through 1 or more partnerships.''.
(c) Cross Reference.--Section 331(c) is amended--
(1) by striking ``Cross Reference'' and all that
follows through ``For general rule'' and inserting the
following: ``Cross Reference.--
``(1) For general rule'', and
(2) by adding at the end the following new paragraph:
``(2) For losses in controlled group liquidations,
see section 267(h).''.
(d) Effective Date.--
(1) Subsection (a).--The amendments made by this
section shall apply to losses arising in taxable years
beginning after December 31, 2021.
(2) Subsection (b).--The amendment made by subsection
(b) shall apply to liquidations on or after the date of
the enactment of this Act.
SEC. 138143. ADJUSTED BASIS LIMITATION FOR DIVISIVE REORGANIZATION.
(a) In General.--Section 361 is amended by adding at the end
the following new subsections:
``(d) Adjusted Basis Limitation for Divisive
Reorganizations.--
``(1) In general.--Except as provided paragraph (2),
in the case of a reorganization described in section
368(a)(1)(D) with respect to which stock or securities
of the controlled corporation (within the meaning of
section 355) are distributed by the distributing
corporation (within the meaning of such section) in a
transaction which qualifies under such section,
subsection (b)(3) and subsection (c)(3) shall not apply
to so much of the money and other property transferred
to creditors as equals an amount equal to the excess
(if any) of--
``(A) the sum of--
``(i) the total amount of the
liabilities assumed (within the meaning
of section 357(c)) by the controlled
corporation,
``(ii) in the case of subsection
(b)(3), the total amount of money and
the fair market value of other property
(including stock described in section
354(a)(2)(C)) transferred to the
creditors, and
``(iii) in the case of subsection
(c)(3), the total principal amount of
securities of the controlled
corporation which is qualified property
(as defined in subsection (c)(2)(B))
transferred to the creditors, over
``(B) the total adjusted bases of the assets
transferred by the distributing corporation to
the controlled corporation.
``(2) Exception regarding certain stock or rights to
acquire stock.--Paragraph (1) shall not apply to any
stock (or right to acquire stock) described in
subsection (c)(2)(B).
``(3) Regulations.--The Secretary shall issue such
regulations as may be necessary or appropriate to
prevent avoidance of tax through abuse of subsection
(b)(3), subsection (c)(3), or this subsection,
including to determine whether a disposition of
property or any other transaction is in connection with
the reorganization or pursuant to the plan of
reorganization.
``(e) Cross-references.--For provisions providing for the
inclusion of income or recognition of gain in certain
distributions, see subsections (d), (e), (f), (g), and (h) of
section 355.''.
(b) Conforming Amendments.--
(1) Section 361(b)(3) is amended--
(A) in the first sentence, by inserting ``,
and except as provided in subsection (d)''
after ``paragraph (1)'', and
(B) by striking the second and third
sentences.
(2) Section 361(c) is amended--
(A) in paragraph (3), by inserting ``, and
except as provided in subsection (d)'' after
``this subsection'', and
(B) by striking paragraph (5).
(c) Effective Date.--The amendments made by this section
shall apply to reorganizations occurring on or after the date
of the enactment of this Act.
SEC. 138144. RENTS FROM PRISON FACILITIES NOT TREATED AS QUALIFIED
INCOME FOR PURPOSES OF REIT INCOME TESTS.
(a) In General.--Section 856(d)(2) is amended by striking
``and'' at the end of subparagraph (B), by striking the period
at the end of subparagraph (C) and inserting ``, and'', and by
adding at the end the following new subparagraph:
``(D) any amount received or accrued,
directly or indirectly, with respect to any
real or personal property which is primarily
used in connection with any correctional,
detention, or penal facility.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 138145. MODIFICATIONS TO EXEMPTION FOR PORTFOLIO INTEREST.
(a) In General.--Section 871(h)(3)(B)(i) is amended to read
as follows:
``(i) in the case of an obligation
issued by a corporation--
``(I) any person who owns 10
percent or more of the total
combined voting power of all
classes of stock of such
corporation entitled to vote,
or
``(II) any person who owns 10
percent or more of the total
value of the stock of such
corporation, and''.
(b) Effective Date.--The amendment made by this section shall
apply to obligations issued after the date of the enactment of
this Act.
SEC. 138146. CERTAIN PARTNERSHIP INTEREST DERIVATIVES.
(a) In General.--Section 871(m) is amended by adding at the
end the following new paragraphs:
``(8) Specified partnership interest income
equivalent payments.--
``(A) In general.--For purposes of this
subsection, any payment made pursuant to a
sale-repurchase transaction, or a specified
notional principal contract, that is determined
by reference to any income or gain in respect
of an interest in a specified partnership (or
any other payment the Secretary determines to
be substantially similar) shall be treated as a
dividend equivalent.
``(B) Specified partnership.--For purposes of
this paragraph, the term `specified
partnership' means--
``(i) any publicly-traded partnership
(as defined in subsection (b) of
section 7704) which is not treated as a
corporation under such section, or
``(ii) any other partnership as the
Secretary may by regulation prescribe.
``(C) Exceptions.--
``(i) Excepted contracts.--
Subparagraph (A) shall not apply to any
contract or transaction the Secretary
determines does not have the potential
for tax avoidance.
``(ii) Certain income.--Under such
regulations as the Secretary shall
prescribe, there shall not be taken
into account under subparagraph (A) any
payment the income or gain from which
would (but for this paragraph) be--
``(I) exempt from taxes under
this subtitle, or
``(II) treated as income from
sources without the United
States if paid to a nonresident
alien individual.
``(D) Treatment of definitions and special
rules with respect to partnerships.--For
purposes of this paragraph, rules similar to
the rules and definitions in paragraphs (3),
(4), (5), (6) and (7) shall apply to an
interest in a specified partnership in a manner
similar to an underlying security, and to
income or gain in respect of an interest in a
specified partnership in a manner similar to a
dividend.
``(9) Other rules relating to treatment of dividend
equivalents.--
``(A) In general.--A dividend equivalent
amount under this subsection shall be treated
as a dividend paid by a domestic corporation.
``(B) Rate of tax for publicly traded
partnership income payments.--In the case of a
payment treated as a dividend equivalent
pursuant to paragraph (8), the rate of tax
imposed on any nonresident alien individual or
foreign corporation with respect to such
payment shall not be less than the rate that
would be imposed had such individual or foreign
corporation, as the case may be, received a
dividend from a domestic corporation in which
such individual or foreign corporation owned
less than 1 percent (by vote or value) of the
stock.''.
(b) Withholding of Tax on Nonresident Aliens.--Section 1441
is amended by redesignating subsection (g) as subsection (h)
and by inserting after subsection (f) the following new
subsection:
``(g) Deemed Dividend Equivalent Payments in Case of Certain
Publicly Traded Partnerships.--The Secretary may prescribe
regulations, under rules similar to the rules of section
1446(f), to determine the manner in which the amount of income
and gain is determined for purposes of this section in the case
of amounts treated as a dividend equivalent under section
871(m)(8).''.
(c) Effective Date.--The amendments made by this section
shall apply to payments made on or after the date that is 180
days after the date of the enactment of this Act.
SEC. 138147. ADJUSTMENTS TO EARNINGS AND PROFITS OF CONTROLLED FOREIGN
CORPORATIONS.
(a) In General.--Section 312(n) is amended by adding at the
end the following new paragraph:
``(9) Special rules for controlled foreign
corporations.--Earnings and profits of any controlled
foreign corporation shall be determined without regard
to paragraphs (4), (5), and (6).''.
(b) Conforming Amendment.--Section 952(c) is amended by
striking paragraph (3).
(c) Effective Date.--The amendments made by this section
shall apply to taxable years of foreign corporations beginning
after December 31, 2021, and to taxable years of United States
shareholders in which or with which such taxable years of
foreign corporations end.
SEC. 138148. CERTAIN DIVIDENDS FROM CONTROLLED FOREIGN CORPORATIONS TO
UNITED STATES SHAREHOLDERS TREATED AS EXTRAORDINARY
DIVIDENDS.
(a) In General.--Section 1059 is amended by redesignating
subsection (g) as subsection (h) and by inserting after
subsection (f) the following new subsection:
``(g) Treatment of Certain Dividends From Controlled Foreign
Corporations to United States Shareholders.--
``(1) In general.--Except as otherwise provided by
the Secretary, any disqualified CFC dividend shall be
treated as an extraordinary dividend to which paragraph
(1) and (2) of subsection (a) applies without regard to
the period the taxpayer held the stock with respect to
which such dividend is paid.
``(2) Disqualified cfc dividend.-- For purposes of
this subsection, the term `disqualified CFC dividend'
means any dividend paid by a controlled foreign
corporation to a taxpayer which is a United States
shareholder of such foreign corporation if--
``(A) such dividend is attributable to
earnings and profits which--
``(i) were earned by such controlled
foreign corporation during a
disqualified period, or
``(ii) are attributable to gain on
property which accrued during a
disqualified period.
``(3) Disqualified period.--For purposes of this
subsection, the term `disqualified period' means, with
respect to any dividend paid with respect to any stock
of a controlled foreign corporation, any period during
which--
``(A) such foreign corporation was not a
controlled foreign corporation, or
``(B) such stock was not owned by a United
States shareholder.''.
(b) Regulations.--Section 1059(h), as redesignated by
subsection (a), is amended--
(1) by striking ``regulations'' both places it
appears and inserting ``regulations or other
guidance'', and
(2) by striking ``and'' at the end of paragraph (1),
by striking the period at the end of paragraph (2) and
inserting ``, and'', and by adding at the end the
following new paragraph:
``(3) providing for the coordination of subsection
(g) with the other provisions of this chapter,
including section 1248.''.
(c) Effective Date.--The amendments made by this section
shall apply to distributions made after the date of the
enactment of this Act.
SEC. 138149. MODIFICATION OF RULES FOR PARTNERSHIP INTERESTS HELD IN
CONNECTION WITH THE PERFORMANCE OF SERVICES.
(a) In General.--Section 1061 is amended by striking
subsections (a) and (b) and inserting the following new
subsections:
``(a) In General.--If one or more applicable partnership
interests are held by a taxpayer at any time during the taxable
year, the taxpayer's net applicable partnership gain for such
taxable year shall be treated as short-term capital gain.
``(b) Net Applicable Partnership Gain.--For purposes of this
section--
``(1) In general.--The term `net applicable
partnership gain' means--
``(A) the taxpayer's net long-term capital
gain determined by only taking into account
gains and losses with respect to one or more
applicable partnership interests described in
subsection (a), and
``(B) any other amounts which are--
``(i) includible in the gross income
of the taxpayer with respect to one or
more such applicable partnership
interests, and
``(ii) treated as capital gain or
subject to tax at the rate applicable
to capital gain.
``(2) Holding period exception.--
``(A) In general.--Net applicable partnership
gain shall be determined without regard to any
amount which is realized after the date that is
5 years after the latest of:
``(i) The date on which the taxpayer
acquired substantially all of the
applicable partnership interest with
respect to which the amount is
realized.
``(ii) The date on which the
partnership in which such applicable
partnership interest is held acquired
substantially all of the assets held by
such partnership.
``(iii) If the partnership described
in clause (i) owns, directly or
indirectly, interests in one or more
other partnerships, the dates
determined by applying rules similar to
the rules in clauses (i) and (ii) in
the case of each such other
partnership.
``(B) Shorter holding period in certain
circumstances.--Subparagraph (A) shall be
applied by substituting `3 years' for `5 years'
in the case of--
``(i) a taxpayer (other than a trust
or estate) with an adjusted gross
income (determined without regard to
sections 911, 931 and 933) of less than
$400,000, and
``(ii) any income with respect to any
applicable partnership interest that is
attributable to a real property trade
or business within the meaning of
section 469(c)(7)(C).
``(iii) The Secretary is directed to
provide guidance regarding
determination of the amount described
in subsection (a) as applied in
paragraph (1) hereof, and any necessary
and appropriate reporting by any
partnership to carry out the purposes
of this section. --
``(3) Section 83 to not apply.--This section shall be
applied without regard to section 83 and any election
in effect under section 83(b).
``(4) Special rule.--To the extent provided by the
Secretary, subsection (a) shall not apply to income or
gain attributable to any asset not held for portfolio
investment on behalf of third party investors.''.
(b) Modifications Related to Definition of Applicable
Partnership Interest.--Section 1061(c) is amended--
(1) in paragraph (1), by striking ``to such other
entity'' and inserting ``with respect to a trade or
business that is not an applicable trade or business'',
(2) in paragraph (3), by striking ``an interest in a
partnership to the extent of the partnership's
proportionate interest in any of the foregoing'' and
inserting ``except as otherwise provided by the
Secretary, an interest in a partnership if such
partnership has a direct or indirect interest in any of
the foregoing'', and
(3) in paragraph (4)--
(A) by striking ``The term'' and inserting
``Except as otherwise provided by the
Secretary, the term'', and
(B) in subparagraph (A), by striking
``corporation'' and inserting ``C
corporation''.
(c) Recognition of Gain on Transfers of Applicable
Partnership Interests to Unrelated Parties.--Section 1061(d) is
amended to read as follows:
``(d) Transfer of Applicable Partnership Interest.--If a
taxpayer transfers any applicable partnership interest, gain
shall be recognized notwithstanding any other provision of this
subtitle.''.
(d) Regulations.--Section 1061(e) is amended by striking the
period at the end and inserting the following: ``, including
regulations or other guidance to--
``(1) to prevent the avoidance of the purposes of
this section, including through the distribution of
property by a partnership and through carry waivers,
and
``(2) to provide for the application of this section
to financial instruments, contracts or interests in
entities other than partnerships to the extent
necessary or appropriate to carry out the purposes of
this section.''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 138150. LIMITATION ON CERTAIN SPECIAL RULES FOR SECTION 1202
GAINS.
(a) In General.--Section 1202(a) is amended by adding at the
end the following new paragraph:
``(5) Limitation on certain special rules.--In the
case of the sale or exchange of qualified small
business stock after September 13, 2021, paragraphs (3)
and (4) shall not apply to any taxpayer if--
``(A) the adjusted gross income of such
taxpayer (determined without regard to this
section and sections 911, 931, and 933) equals
or exceeds $400,000, or
``(B) such taxpayer is a trust or estate.''.
(b) Effective Date.--Except as provided in subsection (c),
the amendment made by this section shall apply to sales and
exchanges on or after September 13, 2021.
(c) Binding Contract Exception.--The amendment made by this
section shall not apply to any sale or exchange which is made
pursuant to written binding contract which was in effect on
September 12, 2021, and is not modified in any material respect
thereafter.
SEC. 138151. CONSTRUCTIVE SALES.
(a) Application to Appreciated Digital Assets.--
(1) In general.--Section 1259(b)(1) is amended by
inserting ``digital asset,'' after ``debt
instrument,''.
(2) Digital asset.--Section 1259(d) is amended by
adding at the end the following new paragraph:
``(3) Digital asset.--Except as otherwise provided by
the Secretary, the term `digital asset' means any
digital representation of value which is recorded on a
cryptographically secured distributed ledger or any
similar technology as specified by the Secretary.''.
(b) Treatment of Certain Contracts.--Section 1259(c)(1)(D) is
amended by inserting ``or enters into a contract to acquire''
after ``acquires''.
(c) Effective Date.--
(1) In general.--The amendments made by subsection
(a) shall apply to constructive sales (determined after
the application of the amendment made by subsection
(b)) after the date of the enactment of this Act.
(2) Treatment of certain contracts.--The amendment
made by subsection (b) shall apply to contracts entered
into after the date of the enactment of this Act.
SEC. 138152. RULES RELATING TO COMMON CONTROL.
(a) Clarification of Trade or Business.--Section 52(b) is
amended by adding at the end the following new sentence: ``For
purposes of this subsection, the term `trade or business'
includes any activity treated as a trade or business under
paragraph (5) or (6) of section 469(c).''
(b) Effective Date.--The amendment made by this section shall
apply to taxable years beginning after December 31, 2021.
SEC. 138153. WASH SALES BY RELATED PARTIES; WASH SALES OF SPECIFIED
ASSETS.
(a) Application of Wash Sale Rules to Related Parties.--
Section 1091(a) is amended by striking ``the taxpayer has
acquired'' and inserting ``the taxpayer (or a related party)
has acquired''.
(b) Modification of Basis Adjustment Rule to Prevent Transfer
of Losses to Related Parties.--Section 1091(d) is amended to
read as follows:
``(d) Adjustment to Basis in Case of Wash Sale.--If the
taxpayer (or the taxpayer's spouse) acquires substantially
identical specified assets during the period which--
``(1) begins 30 days before the disposition with
respect to which a deduction was disallowed under
subsection (a), and
``(2) ends with the close of the taxpayer's first
taxable year which begins after such disposition,
the basis of such specified assets shall be increased by the
amount of the deduction so disallowed (reduced by any amount of
such deduction taken into account under this subsection to
increase the basis of specified assets previously acquired).''
(c) Related Party.--Section 1091 is amended by adding at the
end the following new subsection:
``(g) Related Party.--For purposes of this section--
``(1) In general.--The term `related party' means--
``(A) the taxpayer's spouse,
``(B) any dependent of the taxpayer and any
other taxpayer with respect to whom the
taxpayer is a dependent,
``(C) any individual, corporation,
partnership, trust, or estate which controls,
or is controlled by, (within the meaning of
section 954(d)(3)) the taxpayer or any
individual described in subparagraph (A) or (B)
with respect to the taxpayer (or any
combination thereof),
``(D) any individual retirement plan, Archer
MSA (as defined in section 220(d)), or health
savings account (as defined in section 223(d)),
of the taxpayer or of any individual described
in subparagraph (A) or (B) with respect to the
taxpayer,
``(E) any account under a qualified tuition
program described in section 529 or a Coverdell
education savings account (as defined in
section 530(b)) if the taxpayer, or any
individual described in subparagraph (A) or (B)
with respect to the taxpayer, is the designated
beneficiary of such account or has the right to
make any decision with respect to the
investment of any amount in such account, and
``(F) any account under--
``(i) a plan described in section
401(a),
``(ii) an annuity plan described in
section 403(a),
``(iii) an annuity contract described
in section 403(b), or
``(iv) an eligible deferred
compensation plan described in section
457(b) and maintained by an employer
described in section 457(e)(1)(A),
if the taxpayer or any individual described in
subparagraph (A) or (B) with respect to the
taxpayer has the right to make any decision
with respect to the investment of any amount in
such account.
``(2) Rules for determining status.--
``(A) Relationships determined at time of
acquisition.--Determinations under paragraph
(1) shall be made as of the time of the
purchase or exchange referred to in subsection
(a) except that determinations under
subparagraphs (A) and (B) of paragraph (1)
shall be made for the taxable year which
includes such purchase or exchange.
``(B) Determination of marital status.--
``(i) In general.--Except as provided
in clause (ii), marital status shall be
determined under section 7703.
``(ii) Special rule for married
individuals filing separately and
living apart.--A husband and wife who--
``(I) file separate returns
for any taxable year, and
``(II) live apart at all
times during such taxable year,
shall not be treated as married
individuals.
``(3) Regulations.--The Secretary shall issue such
regulations or other guidance as may be necessary to
prevent the avoidance of the purposes of this
subsection, including regulations which treat persons
as related parties if such persons are formed or
availed of to avoid the purposes of this subsection.''.
(d) Wash Sale Rules to Apply With Respect to Specified
Assets.--
(1) Specified assets.--Section 1091, as amended by
the preceding provisions of this section, is amended by
adding at the end the following new subsection:
``(h) Specified Asset.--For purposes of this section, the
term `specified asset' means any of the following:
``(1) Any security described in subparagraph (A),
(B), (C), (D), or (E) of section 475(c)(2).
``(2) Any foreign currency.
``(3) Any commodity described in subparagraph (A),
(B), or (C) of section 475(e)(2).
``(4) Any digital representation of value which is
recorded on a cryptographically secured distributed
ledger or any similar technology as specified by the
Secretary.
Such term shall, except as provided in regulations, include
contracts or options to acquire or sell any specified
assets.''.
(2) Conforming amendments.--Section 1091 is amended--
(A) by striking the last sentence of
subsection (a),
(B) by striking ``stock or securities'' each
place it appears and inserting ``specified
assets'', and
(C) by striking ``shares of'' each place it
appears in subsections (a), (b), and (c).
(e) Exception for Business Needs and Hedging Transactions.--
Section 1091, as amended by the preceding provisions of this
section, is amended by adding at the end the following new
subsection:
``(i) Exception for Business Needs and Hedging
Transactions.--Except as provided in regulations prescribed by
the Secretary, subsection (a) shall not apply in the case of
any sale or other disposition--
``(1) of a foreign currency or commodity described in
subsection (h), and
``(2) which--
``(A) is directly related to the business
needs of a trade or business of the taxpayer
(other than the trade or business of trading
foreign currencies or commodities described in
subsection (h)), or
``(B) is part of a hedging transaction (as
defined in section 1221(b)(2)).''.
(f) Effective Date.--The amendments made by this section
shall apply to sales and other dispositions after December 31,
2021.
PART 2--TAX INCREASES FOR HIGH-INCOME INDIVIDUALS
SEC. 138201. INCREASE IN TOP MARGINAL INDIVIDUAL INCOME TAX RATE.
(a) Re-establishment of 39.6 Percent Rate Bracket.--
(1) Married individuals filing joint returns and
surviving spouses.--The table contained in section
1(j)(2)(A) is amended by striking the last two rows and
inserting the following: ``
``Over $400,000 bu$91,379, plus 35% of the excess over $400,000.......
Over $450,000.....$108,879, plus 39.6% of the excess over $450,000.''.
(2) Heads of households.--The table contained in
section 1(j)(2)(B) is amended by striking the last two
rows and inserting the following: ``
``Over $200,000 bu$44,298, plus 35% of the excess over $200,000.......
Over $425,000.....$123,048, plus 39.6% of the excess over $425,000.''.
(3) Unmarried individuals other than surviving
spouses and heads of households.--The table contained
in section 1(j)(2)(C) is amended by striking the last
two rows and inserting the following: ``
``Over $200,000 bu$45,689.50, plus 35% of the excess over $200,000....
Over $400,000.....$115,689.50, plus 39.6% of the excess over .........
$400,000.''.
(4) Married individuals filing separate returns.--The
table contained in section 1(j)(2)(D) is amended by
striking the last two rows and inserting the following:
``
``Over $200,000 bu$45,689.50, plus 35% of the excess over $200,000....
Over $225,000.....$54,439.50, plus 39.6% of the excess over ..........
$225,000.''.
(5) Estates and trusts.--The table contained in
section 1(j)(2)(E) is amended by striking the last row
and inserting the following: ``
``Over $12,500....$3,011.50, plus 39.6% of the excess over $12,500.''.
(b) Application of Adjustments.--Section 1(j)(3) is amended
to read as follows:
``(3) Adjustments.--For taxable years beginning after
December 31, 2021, the Secretary shall prescribe tables
which shall apply in lieu of the tables contained in
paragraph (2) in the same manner as under paragraphs
(1) and (2) of subsection (f) (applied without regard
to clauses (i) and (ii) of subsection (f)(2)(A), except
that in prescribing such tables--
``(A) except as provided in subparagraph (B),
subsection (f)(3) shall be applied by
substituting `calendar year 2017' for `calendar
year 2016' in subparagraph (A)(ii) thereof,
``(B) in the case of adjustments to the
dollar amounts at which the 39.6 percent rate
bracket begins (other than such dollar amount
in paragraph (2)(E))--
``(i) no adjustment shall be made for
taxable years beginning after December
31, 2021, and before January 1, 2023,
and
``(ii) in the case of any taxable
year beginning after December 31, 2022,
subsection (f)(3) shall be applied by
substituting `calendar year 2021' for
`calendar year 2016',
``(C) subsection (f)(7)(B) shall apply to any
unmarried individual other than a surviving
spouse, and
``(D) subsection (f)(8) shall not apply.''.
(c) Modification to 39.6 Percent Rate Bracket for High-income
Taxpayers After 2025.--Section 1(i)(3) is amended to read as
follows:
``(3) Modifications to 39.6 percent rate bracket.--In
the case of taxable years beginning after December 31,
2025--
``(A) In general.--The rate of tax under
subsections (a), (b), (c), and (d) on a
taxpayer's taxable income in excess of the 39.6
percent rate bracket threshold shall be taxed
at a rate of 39.6 percent.
``(B) 39.6 percent rate bracket threshold.--
For purposes of this paragraph, the term `39.6
percent rate bracket threshold' means--
``(i) in the case any taxpayer
described in subsection (a), $450,000,
``(ii) in the case of any taxpayer
described in subsection (b), $425,000,
``(iii) in the case of any taxpayer
described in subsection (c), $400,000,
and
``(iv) in the case of any taxpayer
described in subsection (d), $225,000.
``(C) Inflation adjustment.--For purposes of
this paragraph, with respect to taxable years
beginning in calendar years after 2025, each of
the dollar amounts in subparagraph (B) shall be
adjusted in the same manner as under paragraph
(1)(C)(i), except that subsection (f)(3)(A)(ii)
shall be applied by substituting `2021' for
`2016'.''.
(d) Conforming Amendments.--
(1) Section 1(j)(1) is amended by striking ``December
31, 2017'' and inserting ``December 31, 2021''.
(2) The heading of section 1(j) is amended by
striking ``2018'' and inserting ``2022''.
(3) The heading of section 1(i) is amended by
striking ``Rate Reductions'' and inserting
``Modifications''
(4) Section 15(f) is amended by striking ``rate
reductions'' and inserting ``modifications''.
(e) Section 15 Not to Apply.--For rules providing that
section 15 of the Internal Revenue Code of 1986 does not apply
to the amendments made by this section, see sections 1(j)(6)
and 15(f) of the Internal Revenue Code of 1986.
(f) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 138202. INCREASE IN CAPITAL GAINS RATE FOR CERTAIN HIGH INCOME
INDIVIDUALS.
(a) In General.--Section 1(h)(1)(D) is amended by striking
``20 percent'' and inserting ``25 percent''.
(b) Re-alignment of 25 Percent Capital Gains Rate Threshold
With 39.6 Percent Income Tax Rate Threshold.--Section 1(j)(5)
is amended--
(1) by striking subparagraphs (A) and (B) and
inserting the following new subparagraphs:
``(A) In general.--Section 1(h)(1) shall be
applied by substituting `below the maximum zero
rate amount' for `which would (without regard
to this paragraph) be taxed at a rate below 25
percent' in subparagraph (B)(i).
``(B) Maximum zero rate amount defined.--For
purposes of applying section 1(h) with the
modifications described in subparagraph (A),
the maximum zero rate amount shall be--
``(i) in the case of a joint return
or surviving spouse, $77,200,
``(ii) in the case of an individual
who is a head of household (as defined
in section 2(b)), $51,700,
``(iii) in the case of any other
individual (other than an estate or
trust), an amount equal to \1/2\ of the
amount in effect for the taxable year
under subclause (I), and
``(iv) in the case of an estate or
trust, $2,600.'', and
(2) by striking ``each of the dollar amounts in
clauses (i) and (ii)'' in subparagraph (C) and
inserting ``each dollar amount in clause (i), (ii), or
(iv)''.
(c) Conforming Amendments.--
(1) Section 55(b)(3) is amended by striking
subparagraph (D) and redesignating subparagraph (E) as
subparagraph (D).
(2) The following provisions are each amended by
striking ``20 percent'' and inserting ``25 percent'':
(A) Section 531.
(B) Section 541.
(C) Section 1445(e)(1).
(D) Section 1445(e)(6).
(E) The second sentence of section
7518(g)(6)(A).
(3) Section 53511(f)(2) of title 46, United States
Code, is amended to read as follows:
``(2) Maximum tax rate.--For that portion of a
nonqualified withdrawal made from the capital gain
account during a taxable year to which section 1(h) of
such Code (26 U.S.C. 1(h)) applies, the tax rate used
under paragraph (1)(B) may not exceed 25 percent.''.
(d) Section 15 Not to Apply.--The amendments made by this
section shall not be treated as a change in a rate of tax for
purposes of section 15 of the Internal Revenue Code of 1986.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply to taxable years ending after September 13, 2021.
(2) Re-alignment of 25 percent capital gains rate
threshold with 39.6 percent income tax rate
threshold.--The amendments made by subsection (b) shall
apply to taxable years beginning after December 31,
2021.
(3) Withholding under sections 1445 and 1446.--The
amendments made by subparagraphs (C) and (D) of
subsection (c)(2) shall apply to dispositions after the
date of the enactment of this Act.
(f) Transitional Rules for Taxable Years Which Include
September 13, 2021.--
(1) In general.--For purposes of applying section
1(h) of the Internal Revenue Code of 1986 with respect
to any taxable year which includes September 13, 2021,
the amount determined under subparagraph (D) of section
1(h)(1) of such Code shall be the sum of--
(A) 20 percent of the lesser of--
(i) the amount on which a tax is
determined under such subparagraph (D)
(without regard to this subsection), or
(ii) the amount (if any) of net
capital gain determined by taking into
account only dividends, gains, and
losses for the portion of the taxable
year on or before September 13, 2021
(determined without regard to
collectibles gain or loss, gain
described in section 1(h)(6)(A)(i) of
such Code, and section 1202 gain),
plus--
(B) 25 percent of the excess (if any) of the
amount described in subparagraph (A)(i) over
the amount described in subparagraph (A)(ii).
(2) Special rule for binding contracts entered into
prior to september 13, 2021.--For purposes of paragraph
(1), a gain recognized in the taxable year that
includes September 13, 2021, shall be treated as being
with respect to the portion of such taxable year on or
before such date if such gain arises from a transaction
which occurs pursuant to a written binding contract
entered into on or before such date (and which is not
modified thereafter in any material respect).
(3) Alternative minimum tax.--Rules similar to the
rules of paragraph (1) shall apply for purposes of
applying section 55(b)(3) of such Code.
(4) Application to pass-thru entities.--In applying
this subsection with respect to any pass-thru entity,
the determination of when dividends, gains, and losses
are properly taken into account shall be made at the
entity level.
(5) Definitions of certain terms.--Terms used in this
subsection which are also used in section 1(h) of such
Code shall have the respective meanings that such terms
have in such section.
SEC. 138203. APPLICATION OF NET INVESTMENT INCOME TAX TO TRADE OR
BUSINESS INCOME OF CERTAIN HIGH INCOME INDIVIDUALS.
(a) In General.--Section 1411 is amended by adding at the end
the following new subsection:
``(f) Application to Certain High Income Individuals.--
``(1) In general.--In the case of any individual
whose modified adjusted gross income for the taxable
year exceeds the high income threshold amount,
subsection (a)(1) shall be applied by substituting `the
greater of specified net income or net investment
income' for `net investment income' in subparagraph (A)
thereof.
``(2) Phase-in of increase.--The increase in the tax
imposed under subsection (a)(1) by reason of the
application of paragraph (1) of this subsection shall
not exceed the amount which bears the same ratio to the
amount of such increase (determined without regard to
this paragraph) as--
``(A) the excess described in paragraph (1),
bears to
``(B) $100,000 (\1/2\ such amount in the case
of a married taxpayer (as defined in section
7703) filing a separate return).
``(3) High income threshold amount.--For purposes of
this subsection, the term `high income threshold
amount' means--
``(A) except as provided in subparagraph (B)
or (C), $400,000,
``(B) in the case of a taxpayer making a
joint return under section 6013 or a surviving
spouse (as defined in section 2(a)), $500,000,
and
``(C) in the case of a married taxpayer (as
defined in section 7703) filing a separate
return, \1/2\ of the dollar amount determined
under subparagraph (B).
``(4) Specified net income.--For purposes of this
section, the term `specified net income' means net
investment income determined--
``(A) without regard to the phrase `other
than such income which is derived in the
ordinary course of a trade or business not
described in paragraph (2),' in subsection
(c)(1)(A)(i),
``(B) without regard to the phrase `described
in paragraph (2)' in subsection (c)(1)(A)(ii),
``(C) without regard to the phrase `other
than property held in a trade or business not
described in paragraph (2)' in subsection
(c)(1)(A)(iii),
``(D) without regard to paragraphs (2), (3),
and (4) of subsection (c), and
``(E) by treating paragraphs (5) and (6) of
section 469(c) as applying for purposes of
subsection (c) of this section.''.
(b) Application to Trusts and Estates.--Section 1411(a)(2)(A)
is amended by striking ``undistributed net investment income''
and inserting ``the greater of undistributed specified net
income or undistributed net investment income''.
(c) Clarifications With Respect to Determination of Net
Investment Income.--
(1) Wages subject to fica not taken into account.--
Section 1411(c)(6) is amended by inserting ``or wages
received with respect to employment on which a tax is
imposed under section 3101(b)'' before the period at
the end.
(2) Net operating losses not taken into account.--
Section 1411(c)(1)(B) is amended by inserting ``(other
than section 172)'' after ``this subtitle''.
(3) Inclusion of certain foreign income.--
(A) In general.--Section 1411(c)(1)(A) is
amended by striking ``and'' at the end of
clause (ii), by striking ``over'' at the end of
clause (iii) and inserting ``and'', and by
adding at the end the following new clause:
``(iv) any amount includible in gross
income under section 951, 951A, 1293,
or 1296, over''.
(B) Proper treatment of certain previously
taxed income.--Section 1411(c) is amended by
adding at the end the following new paragraph:
``(7) Certain previously taxed income.--The Secretary
shall issue regulations or other guidance providing for
the treatment of distributions of amounts previously
included in gross income for purposes of chapter 1 but
not previously subject to tax under this section.''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
(e) Transition Rule.--The regulations or other guidance
issued by the Secretary under section 1411(c)(7) of the
Internal Revenue Code of 1986 (as added by this section) shall
include provisions which provide for the proper coordination
and application of clauses (i) and (iv) of section
1411(c)(1)(A) with respect to--
(1) taxable years beginning on or before December 31,
2021, and
(2) taxable years beginning after such date.
SEC. 138204. LIMITATION ON DEDUCTION OF QUALIFIED BUSINESS INCOME FOR
CERTAIN HIGH INCOME INDIVIDUALS.
(a) In General.--Section 199A(a) is amended by striking
``or'' at the end of paragraph (1), by striking the period at
the end of paragraph (2) and inserting ``, or'', and by adding
at the end the following new paragraph:
``(3) the following amount:
``(A) $500,000 in the case of a joint return
or surviving spouse (as defined in section
2(a)),
``(B) $400,000 in the case of any taxpayer
not described in subparagraph (A), (C), or (D),
``(C) $250,000 in the case of a married
individual filing a separate return, or
``(D) $10,000 in the case of an estate or
trust.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 138205. LIMITATIONS ON EXCESS BUSINESS LOSSES OF NONCORPORATE
TAXPAYERS.
(a) Limitation Made Permanent.--
(1) In general.--Section 461(l)(1) is amended to read
as follows:
``(1) Limitation.--In the case of any taxpayer other
than a corporation, any excess business loss of the
taxpayer for the taxable year shall not be allowed.''.
(2) Conforming amendment.--Section 461 is amended by
striking subsection (j).
(b) Modification of Carryover of Disallowed Losses.--Section
461(l)(2) is amended to read as follows:
``(2) Disallowed loss carryover.--Any loss which is
disallowed under paragraph (1) for any taxable year
shall be treated (solely for purposes of this chapter)
as a deduction described in paragraph (3)(A)(i) for the
next taxable year.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2020.
SEC. 138206. SURCHARGE ON HIGH INCOME INDIVIDUALS, ESTATES, AND TRUSTS.
(a) In General.--Part I of subchapter A of chapter 1 is
amended by inserting after section 1 the following new section:
``SEC. 1A. SURCHARGE ON HIGH INCOME INDIVIDUALS, ESTATES, AND TRUSTS.
``(a) General Rule.--In the case of a taxpayer other than a
corporation, there is hereby imposed (in addition to any other
tax imposed by this subtitle) a tax equal to 3 percent of so
much of the modified adjusted gross income of the taxpayer as
exceeds--
``(1) $5,000,000, in the case of any taxpayer not
described in paragraph (2) or (3),
``(2) $2,500,000, in the case of a married individual
filing a separate return, and
``(3) $100,000, in the case of an estate or trust.
``(b) Modified Adjusted Gross Income.--For purposes of this
section, the term `modified adjusted gross income' means
adjusted gross income reduced by any deduction (not taken into
account in determining adjusted gross income) allowed for
investment interest (as defined in section 163(d)). In the case
of an estate or trust, adjusted gross income shall be
determined as provided in section 67(e).
``(c) Special Rules.--
``(1) Nonresident alien.--In the case of a
nonresident alien individual, only amounts taken into
account in connection with the tax imposed under
section 871(b) shall be taken into account under this
section.
``(2) Citizens and residents living abroad.--The
dollar amount applicable to any taxpayer under
paragraph (1), (2), or (3) of subsection (a) (as the
case may be) shall be decreased (but not below zero) by
the excess (if any) of--
``(A) the amounts excluded from the
taxpayer's gross income under section 911, over
``(B) the amounts of any deductions or
exclusions disallowed under section 911(d)(6)
with respect to the amounts described in
subparagraph (A).
``(3) Charitable trusts.--Subsection (a) shall not
apply to a trust all the unexpired interests in which
are devoted to one or more of the purposes described in
section 170(c)(2)(B).
``(4) Not treated as tax imposed by this chapter for
certain purposes.--The tax imposed under this section
shall not be treated as tax imposed by this chapter for
purposes of determining the amount of any credit under
this chapter or for purposes of section 55.''.
(b) Clerical Amendment.--The table of sections for part I of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 1 the following new item:
``Sec. 1A. Surcharge on high income individuals.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 138207. TERMINATION OF TEMPORARY INCREASE IN UNIFIED CREDIT.
(a) In General.--Section 2010(c)(3) of the Internal Revenue
Code of 1986 is amended by striking subparagraph (C).
(b) Effective Date.--The amendment made by this section shall
apply to estates of decedents dying and gifts made after
December 31, 2021.
SEC. 138208. INCREASE IN LIMITATION ON ESTATE TAX VALUATION REDUCTION
FOR CERTAIN REAL PROPERTY USED IN FARMING OR OTHER
TRADES OR BUSINESSES.
(a) In General.--Section 2032A(a)(2) of the Internal Revenue
Code of 1986 is amended by striking ``$750,000'' and inserting
``$11,700,000''.
(b) Inflation Adjustment.--Section 2032A(a)(3) of such Code
is amended--
(1) by striking ``$750,000'' both places it appears
and inserting ``$11,700,000'',
(2) by striking ``1998'' in the matter preceding
subparagraph (A) and inserting ``2021'', and
(3) by striking ``1997'' in subparagraph (B) and
inserting ``2020''.
(c) Effective Date.--The amendments made by this section
shall apply to the estates of decedents dying after December
31, 2021.
SEC. 138209. CERTAIN TAX RULES APPLICABLE TO GRANTOR TRUSTS.
(a) Application of Transfer Taxes.--
(1) In general.--Subtitle B of the Internal Revenue
Code of 1986 is amended by adding at the end the
following new chapter:
``CHAPTER 16--SPECIAL RULES FOR GRANTOR TRUSTS
``Sec. 2901. Application of transfer taxes.
``SEC. 2901. APPLICATION OF TRANSFER TAXES.
``(a) In General.--In the case of any portion of a trust with
respect to which the grantor is the deemed owner--
``(1) the value of the gross estate of the deceased
deemed owner of such portion shall include all assets
attributable to that portion at the time of the death
of such owner,
``(2) any distribution (other than to the deemed
owner or the deemed owner's spouse) from such portion
to one or more beneficiaries during the life of the
deemed owner of such portion (other than in discharge
of an obligation of the deemed owner) shall be treated
as a transfer by gift for purposes of chapter 12,
``(3) if at any time during the life of the deemed
owner of such portion, such owner ceases to be treated
as the owner of such portion under subpart E of part 1
of subchapter J of chapter 1, all assets attributable
to such portion at such time shall be treated for
purposes of chapter 12 as a transfer by gift made by
the deemed owner, and
``(4) proper adjustment shall be made with respect to
amounts so included in the gross estate, or treated as
transferred by gift, pursuant to paragraph (1), (2), or
(3), as the case may be, to account for amounts treated
previously as taxable gifts under chapter 12 with
respect to previous transfers to the trust by the
deemed owner.
``(b) Exceptions.--This section shall not apply to any trust
that is includible in the gross estate of the deemed owner
(without regard to subsection (a)(1)).
``(c) Deemed Owner Defined.--For purposes of this chapter,
the term `deemed owner' means any person who is treated as the
owner of a portion of a trust under subpart E of part 1 of
subchapter J of chapter 1.''.
(2) Cross-reference.--Section 2511 of such Code is
amended by adding at the end the following new
subsection:
``(c) Cross-reference.--For treatment of transfers to grantor
trusts, see section 2901.''.
(3) Clerical amendment.--The table of chapters for
subtitle B of such Code is amended by adding at the end
the following new item:
``Chapter 16. Special Rules for Grantor Trusts''.
(b) Certain Sales to Grantor Trust.--
(1) In general.--Part IV of subchapter O of chapter 1
of such Code is amended by redesignating section 1062
as section 1063 and inserting after section 1061 the
following new section:
``SEC. 1062. CERTAIN SALES BETWEEN GRANTOR TRUST AND DEEMED OWNER.
``(a) In General.--In the case of any transfer of property
between a trust and the a person who is the deemed owner of the
trust (or portion thereof), such treatment of the person as the
owner of the trust shall be disregarded in determining whether
the transfer is a sale or exchange for purposes of this
chapter.
``(b) Exception.--Subsection (a) shall not apply to any trust
that is fully revocable by the deemed owner.
``(c) Deemed Owner.--For purposes of this section, the term
`deemed owner' means any person who is treated as the owner of
a portion of a trust under subpart E of part 1 of subchapter
J.''.
(2) Related taxpayers.--Section 267(b) is amended by
striking ``or'' at the end of paragraph (12), by
striking the period at the end of paragraph (13) and
inserting ``; or'', and by adding at the end the
following new paragraph:
``(14) A grantor trust and the person treated as the
owner of the trust (or portion thereof) under subpart E
of part 1 of subchapter J of this chapter.''.
(3) Clerical amendment.--The table of sections for
part IV of subchapter O of chapter 1 of such Code is
amended by striking the item relating to section 1062
and inserting the following new items:
``Sec. 1062. Certain sales to grantor trusts.
``Sec. 1063. Cross references.''.
(c) Effective Date.--The amendments made by this section
shall apply--
(1) to trusts created on or after the date of the
enactment of this Act, and
(2) to any portion of a trust established before the
date of the enactment of this Act which is attributable
to a contribution made on or after such date.
SEC. 138210. VALUATION RULES FOR CERTAIN TRANSFERS OF NONBUSINESS
ASSETS.
(a) In General.--Section 2031 of the Internal Revenue Code of
1986 is amended by redesignating subsection (d) as subsection
(f) and by inserting after subsection (c) the following new
subsections:
``(d) Valuation Rules for Certain Transfers of Nonbusiness
Assets.--For purposes of this chapter and chapter 12--
``(1) In general.--In the case of the transfer of any
interest in an entity other than an interest which is
actively traded (within the meaning of section 1092)--
``(A) the value of any nonbusiness assets
held by the entity with respect to such
interest shall be determined as if the
transferor had transferred such assets directly
to the transferee (and no valuation discount
shall be allowed with respect to such
nonbusiness assets), and
``(B) such nonbusiness assets shall not be
taken into account in determining the value of
the interest in the entity.
``(2) Nonbusiness assets.--For purposes of this
subsection--
``(A) In general.--The term `nonbusiness
asset' means any passive asset which--
``(i) is held for the production or
collection of income, and
``(ii) is not used in the active
conduct of a trade or business.
``(B) Passive assets used in active conduct
of trade or business.--Except as provided in
subparagraph (C), a passive asset shall not be
treated for purposes of subparagraph (A) as
used in the active conduct of a trade or
business unless--
``(i) the asset is property described
in paragraph (1) or (4) of section
1221(a) or is a hedge with respect to
such property, or
``(ii) the asset is real property
used in the active conduct of 1 or more
real property trades or businesses
(within the meaning of section
469(c)(7)(C)) in which the transferor
materially participates and with
respect to which the transferor meets
the requirements of section
469(c)(7)(B)(ii).
For purposes of clause (ii), material
participation shall be determined under the
rules of section 469(h), except that section
469(h)(3) shall be applied without regard to
the limitation to farming activity.
``(C) Exception for working capital.--Any
passive asset which is held as a part of the
reasonably required working capital needs of a
trade or business shall be treated as used in
the active conduct of a trade or business.
``(3) Passive asset.--For purposes of this
subsection, the term `passive asset' means any--
``(A) cash or cash equivalents,
``(B) except to the extent provided by the
Secretary, stock in a corporation or any other
equity, profits, or capital interest in a
partnership,
``(C) evidence of indebtedness, option,
forward or futures contract, notional principal
contract, or derivative,
``(D) asset described in clause (iii), (iv),
or (v) of section 351(e)(1)(B),
``(E) annuity,
``(F) real property,
``(G) asset (other than a patent, trademark,
or copyright) which produces royalty income,
``(H) commodity,
``(I) collectible (within the meaning of
section 408(m)),
``(J) personal property (as defined in
section 1092(d)(1)) or position in personal
property (within the meaning of section
1092(d)(2)), or
``(K) other asset specified in regulations
prescribed by the Secretary.
``(4) Look-thru rules.--
``(A) In general.--If a passive asset of an
entity consists of a 10-percent interest in any
other entity, this subsection shall be applied
by disregarding the 10-percent interest and by
treating the entity as holding directly its
ratable share of the assets of the other
entity. This subparagraph shall be applied
successively to any 10-percent interest of such
other entity in any other entity.
``(B) 10-percent interest.--The term `10-
percent interest' means--
``(i) in the case of an interest in a
corporation, ownership of at least 10
percent (by vote or value) of the stock
in such corporation,
``(ii) in the case of an interest in
a partnership, ownership of at least 10
percent of the capital or profits
interest in the partnership, and
``(iii) in any other case, ownership
of at least 10 percent of the
beneficial interests in the entity.
For purposes of the preceding sentence, the
rules prescribed by section 318(a) shall apply.
``(5) Coordination with subsection (b).--Subsection
(b) shall apply after the application of this
subsection.
``(6) Regulations.--The Secretary shall issue such
regulations or other guidance as the Secretary
determines is necessary or appropriate to carry out
this subsection, including regulations or other
guidance to--
``(A) determine whether a passive asset is
used in the active conduct of a trade or
business, in addition to the instances
described in paragraph (2)(B), and
``(B) determine whether a passive asset is
held as a part of the reasonably required
working capital needs of a trade or business
under paragraph (2)(C).''.
(b) Effective Date.--The amendments made by this section
shall apply to transfers after the date of the enactment of
this Act.
PART 3--MODIFICATIONS OF RULES RELATING TO RETIREMENT PLANS
Subpart A--Limitations on High-income Taxpayers With Large Retirement
Account Balances
SEC. 138301. CONTRIBUTION LIMIT FOR INDIVIDUAL RETIREMENT PLANS OF
HIGH-INCOME TAXPAYERS WITH LARGE ACCOUNT BALANCES.
(a) Contribution Limit.--
(1) In general.--Subpart A of part I of subchapter D
of chapter 1 is amended by adding at the end the
following:
``SEC. 409B. CONTRIBUTION LIMIT ON INDIVIDUAL RETIREMENT PLANS OF HIGH-
INCOME TAXPAYERS WITH LARGE ACCOUNT BALANCES.
``(a) General Rule.--Notwithstanding any other provision of
this title, in the case of an individual who is an applicable
taxpayer for a taxable year, no annual additions which are
allocable to such taxable year shall be made by, or on behalf
of, such individual to any individual retirement plan to the
extent such annual additions exceed the excess (if any) of--
``(1) the applicable dollar amount for such taxable
year, over
``(2) the aggregate vested balances to the credit of
the individual (whether as a participant, owner, or
beneficiary) in all applicable retirement plans
(determined as of the close of the calendar year
preceding the calendar year in which such taxable year
begins).
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Annual addition.--
``(A) In general.--Except as provided in this
paragraph, the term `annual addition' means any
contribution to an individual retirement plan.
``(B) Contributions to sep and simple
plans.--In the case of any employer or employee
contributions by, or on behalf of, an
individual to a simplified employee pension
under section 408(k) or a simple retirement
account under section 408(p)--
``(i) such contributions shall not be
treated as annual additions for
purposes of applying the limitation
under subsection (a), but
``(ii) the excess described in
subsection (a) shall be reduced by the
amount of such contributions in
applying such limitation to other
annual additions with respect to such
individual.
``(C) Rollover contributions disregarded.--A
rollover contribution under section 402(c),
402A(c)(3)(A), 403(a)(4), 403(b)(8),
408(d)(3)(A), 408A(e)(1), or 457(e)(16) shall
not be treated as an annual addition.
``(D) Accounts acquired by death or divorce
or separation.--The acquisition of an
individual retirement plan (or the transfer to
or contribution of amounts to an individual
retirement plan) by reason of--
``(i) the death of another
individual, or
``(ii) divorce or separation
(pursuant to section 408(d)(6)),
shall not be treated as an annual addition.
``(2) Applicable dollar amount.--The term `applicable
dollar amount' means $10,000,000.
``(3) Applicable retirement plan.--The term
`applicable retirement plan' means--
``(A) a defined contribution plan to which
section 401(a) or 403(a) applies,
``(B) an annuity contract under section
403(b),
``(C) an eligible deferred compensation plan
described in section 457(b) which is maintained
by an eligible employer described in section
457(e)(1)(A), or
``(D) an individual retirement plan.
``(4) Applicable taxpayer.--
``(A) In general.--The term `applicable
taxpayer' means, with respect to any taxable
year, a taxpayer whose adjusted taxable income
for such taxable year exceeds the amount
determined under subparagraph (B).
``(B) Dollar limit.--The amount determined
under this subparagraph for any taxable year
is--
``(i) $400,000 for an individual who
is a taxpayer not described in clause
(ii) or (iii),
``(ii) $425,000 in the case of an
individual who is a head of household
(as defined in section 2(b)), and
``(iii) $450,000 in the case of an
individual who is a married individual
filing a joint return or a surviving
spouse (as defined in section 2(a)).
``(C) Adjusted taxable income.--The term
`adjusted taxable income' means taxable income
determined without regard to--
``(i) any deduction for annual
additions to individual retirement
plans to which subsection (a) applies,
and
``(ii) any increase in minimum
required distributions by reason of
section 4974(e).
``(5) Adjustments for inflation.--
``(A) In general.--In the case of any taxable
year beginning after 2022, each of the dollar
amounts under paragraph (2) and paragraph
(4)(B) shall be increased by an amount equal to
the product of--
``(i) such dollar amount, and
``(ii) the cost-of-living adjustment
under section 1(f)(3) for the calendar
year in which such taxable year begins,
determined by substituting `calendar
year 2021' for `calendar year 1992' in
subparagraph (B) thereof.
``(B) Rounding.--If any amount as adjusted
under subparagraph (A) is not--
``(i) in the case of the dollar
amount under paragraph (2), a multiple
of $250,000, such amount shall be
rounded to the next lowest multiple of
$250,000, and
``(ii) in the case of a dollar amount
under paragraph (4), a multiple of
$1,000, such amount shall be rounded to
the next lowest multiple of $1,000.
``(c) Regulations.--The Secretary shall prescribe such
regulations and guidance as are necessary or appropriate to
carry out the purposes of this section, including regulations
or guidance that provide for the application of this section
and section 4974(e) in the case of plans with a valuation date
other than the last day of a calendar year.''.
(2) Conforming amendments.--
(A) The table of contents for subpart A of
part I of subchapter D of chapter 1 is amended
by adding after the item relating to section
409A the following new item:
``Sec. 409B. Contribution limit on individual retirement plans of high-
income taxpayers with large account balances.''.
(B) Section 408(r) is amended by adding at
the end the following new paragraph:
``(3) For additional limitation on contributions to
individual retirement plans with large account
balances, see sections 402A(c)(3)(A) and 409B.''.
(b) Excise Tax on Excess Annual Additions.--
(1) In general.--Section 4973 is amended by adding at
the end the following new subsection:
``(i) Special Rule for Individual Retirement Plans With
Excess Annual Additions.--For purposes of this section, in the
case of individual retirement plans, the term `excess
contributions' with respect to any taxable year means the sum
of--
``(1) the excess of the annual additions (within the
meaning of section 409B(b)(1)) to such plans over the
limitation under section 409B(a) for such taxable year,
reduced by the amount of any excess contributions
determined under subsections (b) and (f), and
``(2) the lesser of--
``(A) the amount determined under this
subsection for the preceding taxable year with
respect to such plans, reduced by the aggregate
distributions from such plans for the taxable
year (including distributions required under
section 4974(e)) to the extent not contributed
in a rollover contribution to another eligible
retirement plan in accordance with section
402(c), 402A(c)(3)(A), 403(a)(4), 403(b)(8),
457(e)(16), 408(d)(3), or 408A(d)(3), or
``(B) the amount (if any) by which the amount
determined under section 409B(a)(2) for the
taxable year exceeds the applicable dollar
amount under section 409B(b)(2) for the taxable
year.''.
(2) Conforming amendments.--Subsections (b) and (f)
of section 4973 are each amended by inserting ``,
except as further provided in subsection (i)'' after
``For purposes of this section''.
(c) Reporting Requirements.--Section 6057(a) is amended by
adding at the end the following:
``(3) Additional information regarding high account
balances.--
``(A) In general.--If, as of the close of any
plan year, 1 or more participants in an
applicable retirement plan (as defined in
section 409B(b)(3) without regard to
subparagraph (D) thereof) have a vested account
balance of at least $2,500,000, the plan
administrator shall file a statement with the
Secretary which includes--
``(i) the name and identifying number
of each such participant (without
regard to whether such participant has
separated from employment), and
``(ii) the amount to which each such
participant is entitled.
``(B) Inclusion in registration statement.--
If both subparagraph (A) and paragraph (1)
apply to a plan, the plan administrator shall
include the information required under
subparagraph (A) in the registration statement
under paragraph (1) rather than file a
statement under subparagraph (A).
``(C) Adjustments for inflation.--In the case
of any plan year beginning after 2022, the
$2,500,000 amount under subparagraph (A) shall
be increased by an amount equal to the product
of--
``(i) such dollar amount, and
``(ii) the cost-of-living adjustment
under section 1(f)(3) for the calendar
year in which such taxable year begins,
determined by substituting `calendar
year 2021' for `calendar year 1992' in
subparagraph (B) thereof.
If the amount as adjusted under the preceding
sentence is not a multiple of $250,000, such
amount shall be rounded to the next lowest
multiple of $250,000.''.
(d) Effective Dates.--
(1) In general.--The amendments made by subsections
(a) and (b) shall apply to taxable years beginning
after December 31, 2021.
(2) Plan requirements.--The amendments made by
subsection (c) shall apply to plan years beginning
after December 31, 2021.
SEC. 138302. INCREASE IN MINIMUM REQUIRED DISTRIBUTIONS FOR HIGH-INCOME
TAXPAYERS WITH LARGE RETIREMENT ACCOUNT BALANCES.
(a) In General.--Section 4974 is amended by adding at the end
the following:
``(e) Increase in Minimum Required Distributions for High-
income Taxpayers With Large Aggregate Account Balances.--
``(1) In general.--If this subsection applies to a
payee who is an applicable taxpayer (as defined in
section 409B(b)(4)) for a taxable year--
``(A) all qualified retirement plans and
eligible deferred compensation plans of the
payee which are applicable retirement plans
taken into account in computing the excess
described in paragraph (3)(A) shall be treated
as 1 plan solely for purposes of applying this
section to the increase in minimum required
distributions for such taxable year determined
under subparagraph (B), and
``(B) the minimum required distributions
under this section for all plans treated as 1
plan under subparagraph (A) with respect to
such payee for such taxable year shall be
increased by the excess (if any) of--
``(i) the sum of--
``(I) if paragraph (2)
applies to such taxable year,
the applicable Roth excess
amount, plus
``(II) 50 percent of the
excess determined under
paragraph (3)(A), reduced by
the applicable Roth excess
amount, over
``(ii) the sum of the minimum
required distributions (determined
without regard to this subsection) for
all such plans.
``(2) Applicable roth excess amount.--
``(A) Application.--For purposes of paragraph
(1)(B)(i), this paragraph applies to a taxable
year of a payee if the aggregate vested
balances to the credit of the payee (whether as
a participant, owner, or beneficiary) in all
applicable retirement plans (determined as of
the close of the calendar year preceding the
calendar year in which the taxable year begins)
exceed 200 percent of the applicable dollar
amount for the calendar year in which the
taxable year begins.
``(B) Applicable roth excess amount.--The
applicable Roth excess amount for any taxable
year to which this paragraph applies is an
amount equal to the lesser of--
``(i) the excess determined under
subparagraph (A), or
``(ii) the aggregate balances to the
credit of the payee (whether as a
participant, owner, or beneficiary) in
all Roth IRAs and designated Roth
accounts (within the meaning of section
402A) as of the time described in
subparagraph (A).
``(3) Application.--This subsection shall apply to a
payee for a taxable year--
``(A) if the aggregate vested balances to the
credit of the payee (whether as a participant,
owner, or beneficiary) in all applicable
retirement plans (determined as of the close of
the calendar year preceding the calendar year
in which the taxable year begins) exceed the
applicable dollar amount for the calendar year
in which the taxable year begins, and
``(B) without regard to whether amounts with
respect to the payee are otherwise required to
be distributed under section 401(a)(9),
403(b)(10), 408(a)(6), 408(b)(3), or 457(d)(2).
``(4) Coordination and allocation.--
``(A) Minimum distribution requirements.--If
this subsection applies to a payee for any
taxable year--
``(i) this section shall apply first
to minimum required distributions
determined without regard to this
subsection and then to any increase in
minimum required distributions by
reason of this subsection, and
``(ii) nothing in this subsection
shall be construed to affect the amount
of any minimum required distribution
determined without regard to this
subsection or the plan or plans from
which it is required to be distributed
from.
``(B) Allocation of increase in minimum
required distributions.--
``(i) In general.--Except as provided
in clauses (ii) and (iii), the taxpayer
may, in such form and manner as the
Secretary may prescribe, allocate any
increase in minimum required
distributions by reason of this
subsection to applicable retirement
plans treated as 1 plan under
subparagraph (A) in such manner as the
taxpayer chooses.
``(ii) Allocation to roth iras and
accounts.--In the case of a taxable
year to which paragraph (2) applies,
the portion of any increase in minimum
required distributions by reason of
this subsection equal to the applicable
Roth excess amount shall be allocated
first to Roth IRAs and then to
designated Roth accounts (within the
meaning of section 402A) of the payee.
``(iii) Special rules for employee
stock ownership plans.--If any payee to
which this subsection applies for any
taxable year has account balances in 1
or more employee stock ownership plans
(as defined in section 4975(e)(7)) any
portion of which is invested in
employer securities which are not
readily tradable on an securities
market, the increase in minimum
required distributions by reason of
this subsection shall be allocated--
``(I) first to all account
balances (other than such
portions) of the payee in all
applicable retirement plans in
the manner provided by this
subparagraph (without regard to
this clause), and
``(II) then to such portions
in such manner as the taxpayer
chooses.
The Secretary shall prescribe
regulations which provide that if any
such increase is allocated to any such
portion of an account balance for the
first taxable year of the payee
beginning in 2022, the payee may elect
to have such portion distributed over a
period of years not greater than the
period specified by the Secretary in
such regulations (and any distributions
made in accordance with such election
shall be treated for purposes of this
section as made in such first taxable
year).
``(5) Distributions not eligible for rollovers.--For
purposes of determining whether a distribution is an
eligible rollover distribution, any distribution from
an applicable retirement plan which is attributable to
any increase in minimum required distributions by
reason of this subsection shall be treated as a
distribution required under section 401(a)(9),
403(b)(10), 408(a)(6), 408(b)(3), or 457(d)(2),
whichever is applicable.
``(6) Definitions.--For purposes of this subsection,
any term used in this subsection which is also used in
section 409B shall have the same meaning as when such
term is used in such section.''.
(b) Special Rules.--
(1) Distribution rights.--
(A) Qualified trusts.--Section 401(a) is
amended by inserting after paragraph (38) the
following new paragraph:
``(39) Immediate distribution right.--A trust forming
part of a defined contribution plan shall not
constitute a qualified trust under this section unless
an employee who certifies to the plan that the employee
is a taxpayer who is subject to the distribution
requirements of section 4974(e) may elect to receive a
distribution from the employee's account balance under
the plan in such amount as the employee may elect,
including any amounts attributable to a qualified cash
or deferred arrangement (as defined in subsection
(k)(2)).''.
(B) Annuity contracts.--
(i) Custodial accounts.--Section
403(b)(7)(A) is amended by adding at
the end the following new flush
sentence:
``Notwithstanding clause (i), the custodial
account shall permit an employee who certifies
that the employee is a taxpayer who is subject
to the distribution requirements of section
4974(e) to elect to receive a distribution from
the employee's custodial account in such amount
as the employee may elect.''.
(ii) Annuity contracts.--Section
403(b)(11) is amended by adding at the
end the following new sentence:
``Notwithstanding subparagraphs (A),
(B), (C), and (D), the annuity contract
shall permit an employee who certifies
that the employee is a taxpayer who is
subject to the distribution
requirements of section 4974(e) to
elect to receive a distribution of
contributions made pursuant to a salary
reduction agreement (within the meaning
of section 402(g)(3)) from the
employee's annuity contract in such
amount as the employee may elect.''
(C) Governmental plans.--Section 457(d)(1) is
amended by adding at the end the following new
flush sentence:
``Notwithstanding subparagraph (A), an eligible
deferred compensation plan of an employer described in
subsection (e)(1)(A) shall permit an employee who
certifies that the employee is a taxpayer who is
subject to the distribution requirements of section
4974(e) to elect to receive a distribution from the
plan in such amount as the employee may elect.''.
(2) Exception from 10 percent additional tax on early
distributions.--Section 72(t)(2) is amended by adding
at the end the following new subparagraph:
``(I) Distributions of excess balances.--
Distributions from an applicable retirement
plan (within the meaning of section 409B)) to
the extent such distributions for the taxable
year do not exceed the amount required to be
distributed from such plan under section
4974(e).''.
(3) Withholding.--Section 3405(b) is amended by
adding at the end the following new paragraph:
``(3) Additional withholding for required
distributions from high balance retirement accounts.--
``(A) In general.--For purposes of this
section, a distribution pursuant to section
401(a)(39), the last sentence of section
403(b)(7)(A), the last sentence of section
403(b)(11), and the last sentence of section
457(d)(1) shall be treated as a nonperiodic
distribution, except that in applying this
subsection to such distribution--
``(i) paragraph (1) shall be applied
by substituting `35 percent' for `10
percent', and
``(ii) no election may be made under
paragraph (2) with respect to such
distribution.
``(B) Exception.--Subparagraph (A) shall not
apply to any qualified distribution from a
designated Roth account (within the meaning of
section 402A).''.
(c) Effective Dates.--
(1) In general.--The amendments made by subsection
(a) shall apply to taxable years beginning after
December 31, 2021.
(2) Plan requirements.--The amendments made by
subsection (b) shall apply to plan years beginning
after December 31, 2021.
(d) Provisions Relating to Plan Amendments.--
(1) In general.--If this subsection applies to any
plan or contract amendment, such plan or contract shall
be treated as being operated in accordance with the
terms of the plan during the period described in
paragraph (2)(B)(i).
(2) Amendments to which subsection applies.--
(A) In general.--This subsection shall apply
to any amendment to any plan or annuity
contract which is made--
(i) pursuant to any amendment made by
this section or pursuant to any
regulation issued by the Secretary of
the Treasury under this section or such
amendments, and
(ii) on or before the last day of the
first plan year beginning after
December 31, 2022, or such later date
as the Secretary of the Treasury may
prescribe.
In the case of a governmental or collectively
bargained plan to which subparagraph (B) or (C)
of subsection (a)(4) applies, clause (ii) shall
be applied by substituting the date which is 2
years after the date otherwise applied under
such clause.
(B) Conditions.--This subsection shall not
apply to any amendment unless--
(i) during the period--
(I) beginning on the date the
legislative or regulatory
amendment described in
paragraph (1)(A) takes effect
(or in the case of a plan or
contract amendment not required
by such legislative or
regulatory amendment, the
effective date specified in
such amendment), and
(II) ending on the date
described in subparagraph
(A)(ii) (or, if earlier, the
date the plan or contract
amendment is adopted),
the plan or contract is operated as if
such plan or contract amendment were in
effect; and
(ii) such plan or contract amendment
applies retroactively for such period.
Subpart B--Other Provisions Relating to Individual Retirement Plans
SEC. 138311. TAX TREATMENT OF ROLLOVERS TO ROTH IRAS AND ACCOUNTS.
(a) Rollovers and Conversions Limited to Taxable Amounts.--
(1) Roth iras.--
(A) In general.--Paragraph (1) of section
408A(e) is amended by adding at the end the
following new sentence: ``A qualified rollover
contribution shall not include any rollover
contribution from any eligible retirement plan
described in subparagraph (B) (other than from
a designated Roth account (within the meaning
of section 402A)) if any portion of the
distribution from which such contribution is
made would (without regard to such
contribution) be treated as not includible in
gross income.''
(B) Conversions.--Subparagraph (C) of section
408A(d)(3) is amended by adding at the end the
following new sentence: ``This subparagraph
shall not apply if any portion of the plan
being converted would be treated as not
includible in gross income if distributed at
the time of the conversion.''
(2) Designated roth accounts.--Section 402A(c)(4)(B)
is amended by inserting ``, determined after the
application of the last sentence of paragraph (1)
thereof'' after ``section 408A(e)''.
(3) Effective date.--The amendments made by this
subsection shall apply to distributions, transfers, and
contributions made after December 31, 2021.
(b) No Rollovers or Conversions for High-income Taxpayers.--
(1) Roth iras.--
(A) Qualified rollover contribution.--Section
408A(e), as amended by subsection (a), is
amended by adding at the end the following:
``(3) High-income taxpayers may only rollover from
roth iras and accounts.--If--
``(A) a taxpayer is an applicable taxpayer
(as defined in section 409B(b)(4)) for the
taxable year in which a distribution is made,
and
``(B) such distribution is contributed to a
Roth IRA in a rollover contribution,
such contribution shall be treated as a qualified
rollover contribution under paragraph (1) only if it is
made from another Roth IRA or from a designated Roth
account (within the meaning of section 402A).''.
(B) Elimination of conversions.--Paragraph
(3) of section 408A(d), as amended by
subsection (a), is amended by adding at the end
the following:
``(G) Paragraph not to apply to high-income
taxpayers.--If a taxpayer is an applicable
taxpayer (as defined in section 409B(b)(4)) for
any taxable year, this paragraph shall not
apply to any distribution to which this
paragraph otherwise applies (or to any
conversion described in subparagraph (C)) which
is made during such taxable year.''.
(2) Designated roth accounts.--Paragraph (4) of
section 402A(c) is amended by adding at the end the
following:
``(F) Paragraph not to apply to high-income
taxpayers.--If a taxpayer is an applicable
taxpayer (as defined in section 409B(b)(4)) for
any taxable year, this paragraph shall not
apply to any distribution to which this
paragraph otherwise applies and which is made
during such taxable year.''.
(3) Effective date.--The amendments made by this
subsection shall apply to distributions, transfers, and
contributions made in taxable years beginning after
December 31, 2031.
SEC. 138312. PROHIBITION OF IRA INVESTMENTS CONDITIONED ON ACCOUNT
HOLDER'S STATUS.
(a) In General.--Subsection (a) of section 408 is amended by
adding at the end the following new paragraph:
``(7) No part of the trust funds will be invested in
any security if the issuer of such security (or any
other person specified by the Secretary) requires the
individual on whose behalf the trust is maintained to
make a representation to the issuer or such other
person that such individual--
``(A) has a specified minimum amount of
income or assets,
``(B) has completed a specified minimum level
of education, or
``(C) holds a specific license or
credential.''.
(b) Loss of Exemption of Account.--Paragraph (2) of section
408(e) is amended--
(1) by striking ``'' each place it appears in
subparagraph (A) and inserting ``maintained'',
(2) by redesignating subparagraph (B) as subparagraph
(C),
(3) by inserting after subparagraph (A) the following
new subparagraph:
``(B) Prohibited investment.--If, during any
taxable year of the individual for whose
benefit any individual retirement account is
maintained, the investment of any part of the
funds of such individual retirement account
does not comply with subsection (a)(7), such
account ceases to be an individual retirement
account as of the first day of such taxable
year. Rules similar to the rules of clauses (i)
and (ii) of subparagraph (A) shall apply for
purposes of this subparagraph.'',
(4) by striking ``where employee engages in
prohibited transaction'' in the heading and inserting
``in case of certain prohibited transactions and
investments'',
(5) by striking ``In general'' in the heading of
subparagraph (A) and inserting ``Employee engaging in
prohibited transaction'', and
(6) by striking ``(A)'' in subparagraph (C), as so
redesignated, and inserting ``(A) or (B)''.
(c) Conforming Amendments.--
(1) Paragraph (1) of section 408(c) is amended by
striking ``(1) through (6)'' and inserting ``(1)
through (7)''.
(2) Paragraph (3) of section 4975(c) is amended--
(A) striking ``'' and inserting
``maintained'',
(B) by striking ``transaction'' both places
it appears and inserting ``transaction or
investment'', and
(C) by striking ``section 408(e)(2)(A)'' and
inserting ``subparagraph (A) or (B) of section
408(e)(2)''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2),
the amendments made by this section shall apply to
taxable years beginning after December 31, 2021.
(2) Special rule for existing investments.--If, on
the date of the enactment of this Act, an individual
retirement account holds an investment prohibited under
section 408(a)(7) of the Internal Revenue Code of 1986
(as added by subsection (a)), the amendments made by
this section shall apply to such investment for taxable
years beginning after December 31, 2023.
SEC. 138313. STATUTE OF LIMITATIONS WITH RESPECT TO IRA NONCOMPLIANCE.
(a) In General.--Subsection (c) of section 6501 is amended by
adding at the end the following new paragraph:
``(13) Noncompliance relating to an individual
retirement plan.--
``(A) Misreporting.--In the case of any
substantial error (willful or otherwise) in the
reporting on a return of any information
relating to the valuation of investment assets
with respect to an individual retirement plan,
the time for assessment of any tax imposed by
this title with respect to such plan shall not
expire before the date which is 6 years after
the return containing such error was filed
(whether or not such return was filed on or
after the date prescribed).
``(B) Prohibited transactions.--The time for
assessment of any tax imposed by section 4975
shall not expire before the date which is 6
years after the return was filed (whether or
not such return was filed on or after the date
prescribed).''.
(b) Effective Date.--The amendment made by this section shall
apply to taxes with respect to which the 3-year period under
section 6501(a) of the Internal Revenue Code of 1986 (without
regard to the amendment made by this section) ends after
December 31, 2021.
SEC. 138314. PROHIBITION OF INVESTMENT OF IRA ASSETS IN ENTITIES IN
WHICH THE OWNER HAS A SUBSTANTIAL INTEREST.
(a) In General.--Subsection (a) of section 408, as amended by
the preceding provisions of this Act, is amended by adding at
the end the following new paragraph:
``(8) No part of the trust funds will be invested in
a corporation, partnership or other unincorporated
enterprise, or trust or estate if--
``(A) in the case of an entity with respect
to which interests described in clause (i),
(ii), or (iii) are not readily tradable on an
securities market, 10 percent or more of--
``(i) the combined voting power of
all classes of stock entitled to vote
or the total value of shares of all
classes of stock of such corporation,
``(ii) the capital interest or
profits interest of such partnership or
enterprise, or
``(iii) the beneficial interest of
such trust or estate,
is owned (directly or indirectly) or held by
the individual on whose behalf the trust is
maintained, or
``(B) the individual on whose behalf the
trust is maintained is an officer or director
(or an individual having powers or
responsibilities similar to officers or
directors) of such corporation, partnership, or
other unincorporated enterprise.
For purposes of subparagraph (A), the constructive
ownership rules of paragraphs (4) and (5) of section
4975(e) shall apply, and any asset or interest held by
the trust shall be treated as held by the individual
described in such subparagraph.''.
(b) Loss of Exemption of Account.--Subparagraph (B) of
section 408(e)(2), as added by this Act, is amended by striking
``(a)(7)'' and inserting ``(a)(7) or (a)(8)''.
(c) Conforming Amendment.--Paragraph (1) of section 408(c),
as amended by the preceding provisions of this Act, is amended
by striking ``(1) through (7)'' and inserting ``(1) through
(8)''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2),
the amendments made by this section shall apply to
investments made in taxable years beginning after
December 31, 2021.
(2) Special rule for existing investments.--If, on
the date of the enactment of this Act, an individual
retirement account holds an investment prohibited under
section 408(a)(8) of the Internal Revenue Code of 1986
(as added by subsection (a)), the amendments made by
this section shall apply to such investment for taxable
years beginning after December 31, 2023.
SEC. 138315. IRA OWNERS TREATED AS DISQUALIFIED PERSONS FOR PURPOSES OF
PROHIBITED TRANSACTION RULES.
(a) In General.--Paragraph (2) of section 4975(e) is
amended--
(1) by striking ``or'' at the end of subparagraph
(H),
(2) by striking the period at the end of subparagraph
(I) and inserting ``; or'',
(3) by inserting after subparagraph (I) the following
new subparagraph:
``(J) the individual for whose benefit a plan
described in subparagraph (B) or (C) of
paragraph (1) is maintained.'',
(4) by striking ``or (E)'' both places it appears in
subparagraphs (F) and (G) and inserting ``(E), or (J)
(in the case of a plan described in subparagraph (B) or
(C) of paragraph (1))'',
(5) by striking ``or (G)'' in subparagraph (I) and
inserting ``(G), or (J) (in the case of a plan
described in subparagraph (B) or (C) of paragraph
(1))'', and
(6) by adding at the end the following: ``For
purposes of subparagraphs (G) and (I), any asset or
interest held by a plan described in subparagraph (B)
or (C) of paragraph (1) shall be treated as owned by
the individual described in subparagraph (J) with
respect to such plan.''.
(b) Conforming Amendments.--
(1) Subparagraph (A) of section 408(e)(2), as amended
by the preceding provisions of this Act, is amended to
read as follows:
``(A) Employee engaging in prohibited
transaction.--If, during any taxable year of
the individual for whose benefit any individual
retirement account is maintained, that
individual engages in any transaction
prohibited by section 4975 with respect to such
account, such account ceases to be an
individual retirement account as of the first
day of such taxable year. For purposes of this
paragraph, the separate account for the benefit
of any individual within an individual
retirement account maintained by an employer or
association of employees is treated as a
separate individual retirement account.''.
(2) Subparagraph (B) of section 408(e)(2), as added
by this Act, is amended by striking the last sentence.
(c) Effective Date.--The amendments made by this section
shall apply to transactions occurring after December 31, 2021.
PART 4--FUNDING THE INTERNAL REVENUE SERVICE AND IMPROVING TAXPAYER
COMPLIANCE
SEC. 138401. FUNDING OF THE INTERNAL REVENUE SERVICE.
In addition to amounts otherwise available, there are
appropriated for fiscal year 2022, out of any money in the
Treasury not otherwise appropriated:
(1) $78,935,000,000, to remain available until
September 30, 2031, for necessary expenses for the
Internal Revenue Service (IRS) for strengthening tax
enforcement activities and increasing voluntary
compliance, expanding audits and other enforcement
activities, and modernizing information technology to
effectively support enforcement activities, except that
no use of these funds is intended to increase taxes on
any taxpayer with taxable income below $400,000;
(2) $410,000,000, to remain available until September
30, 2031, for necessary expenses for the Treasury
Inspector General for Tax Administration to provide
oversight of the IRS, including ensuring that taxpayer
privacy is protected and that no undue burden is
imposed on small businesses from IRS enforcement
activities; and
(3) $157,000,000, to remain available until September
30, 2031, for the Tax Court for adjudicating tax
disputes.
SEC. 138402. APPLICATION OF BACKUP WITHHOLDING WITH RESPECT TO THIRD
PARTY NETWORK TRANSACTIONS.
(a) In General.--Section 3406(b) is amended by adding at the
end the following new paragraph:
``(8) Other reportable payments include payments in
settlement of third party network transactions only
where aggregate for calendar year is $600 or more.--Any
payment in settlement of a third party network
transaction required to be shown on a return required
under section 6050W which is made during any calendar
year shall be treated as a reportable payment only if--
``(A) the aggregate amount of such payment
and all previous such payments made by the
third party settlement organization to the
participating payee during such calendar year
equals or exceeds $600, or
``(B) the third party settlement organization
was required under section 6050W to file a
return for the preceding calendar year with
respect to payments to the participating
payee.''.
(b) Conforming Amendment.--Section 6050W(e) is amended by
inserting ``equal or'' before ``exceed $600''.
(c) Effective Date.--The amendments made by this section
shall apply to calendar years beginning after December 31,
2021.
(d) Transitional Rule for 2022.--In the case of payments made
during calendar year 2022, section 3406(b)(8)(A) of the
Internal Revenue Code of 1986 (as added by this section) shall
be applied by inserting ``and the aggregate number of third
party network transactions settled by the third party
settlement organization with respect to the participating payee
during such calendar year exceeds 200'' before the comma at the
end.
SEC. 138403. LIMITATION ON DEDUCTION FOR QUALIFIED CONSERVATION
CONTRIBUTIONS MADE BY PASS-THROUGH ENTITIES, ETC.
(a) In General.--Section 170(h) is amended by adding at the
end the following new paragraphs:
``(7) Limitation on deduction for qualified
conservation contributions made by pass-through
entities.--
``(A) In general.--A contribution by a
partnership (whether directly or as a
distributive share of a contribution of another
partnership) shall not be treated as a
qualified conservation contribution for
purposes of this section if the amount of such
contribution exceeds 2.5 times the sum of each
partner's relevant basis in such partnership.
``(B) Relevant basis.--For purposes of this
paragraph--
``(i) In general.--The term `relevant
basis' means, with respect to any
partner, the portion of such partner's
modified basis in the partnership which
is allocable (under rules similar to
the rules of section 755) to the
portion of the real property with
respect to which the contribution
described in subparagraph (A) is made.
``(ii) Modified basis.--The term
`modified basis' means, with respect to
any partner, such partner's adjusted
basis in the partnership as
determined--
``(I) immediately before the
contribution described in
subparagraph (A),
``(II) without regard to
section 752, and
``(III) by the partnership
after taking into account the
adjustments described in
subclauses (I) and (II) and
such other adjustments as the
Secretary may provide.
``(C) Exception for contributions outside 3-
year holding period.--Subparagraph (A) shall
not apply to any contribution which is made at
least 3 years after the latest of--
``(i) the last date on which the
partnership that made such contribution
acquired any portion of the real
property with respect to which such
contribution is made,
``(ii) the last date on which any
partner in the partnership that made
such contribution acquired any interest
in such partnership, and
``(iii) if the interest in the
partnership that made such contribution
is held through one or more
partnerships--
``(I) the last date on which
any such partnership acquired
any interest in any other such
partnership, and
``(II) the last date on which
any partner in any such
partnership acquired any
interest in such partnership.
``(D) Exception for family partnerships.--
``(i) In general.--Subparagraph (A)
shall not apply with respect to any
contribution made by any partnership if
substantially all of the partnership
interests in such partnership are held,
directly or indirectly, by an
individual and members of the family of
such individual.
``(ii) Members of the family.--For
purposes of this subparagraph, the term
`members of the family' means, with
respect to any individual--
``(I) the spouse of such
individual, and
``(II) any individual who
bears a relationship to such
individual which is described
in subparagraphs (A) through
(G) of section 152(d)(2).
``(E) Application to other pass-through
entities.--Except as may be otherwise provided
by the Secretary, the rules of this paragraph
shall apply to S corporations and other pass-
through entities in the same manner as such
rules apply to partnerships.
``(F) Regulations.--The Secretary shall
prescribe such regulations or other guidance as
may be necessary or appropriate to carry out
the purposes of this paragraph, including
regulations or other guidance--
``(i) to require reporting, including
reporting related to tiered
partnerships and the modified basis of
partners, and
``(ii) to prevent the avoidance of
the purposes of this paragraph.
``(8) Notice of certain failures.--
``(A) In general.--If a donor is found by the
Secretary to have failed to meet the
requirement that a qualified conservation
contribution shall be granted and protected in
perpetuity by reason of defective language in
the deed relating to property line adjustments
or extinguishment clauses, the donor shall have
90 days from the written notice by the
Secretary to correct such failure, unless the
Secretary can demonstrate that the donor's
failure to meet those requirements was
intentional.
``(B) Exception.--Subparagraph (A) shall not
apply to any reportable transaction or any
contribution that is not treated as a qualified
conservation contribution by reason of
paragraph (7).''.
(b) Application of Accuracy-Related Penalties.--
(1) In general.--Section 6662(b) is amended by
inserting after paragraph (9) the following new
paragraph:
``(10) Any disallowance of a deduction by reason of
section 170(h)(7).''.
(2) Treatment as gross valuation misstatement.--
Section 6662(h)(2) is amended by striking ``and'' at
the end of subparagraph (B), by striking the period at
the end of subparagraph (C) and inserting ``, and'',
and by adding at the end the following new
subparagraph:
``(D) any disallowance of a deduction
described in subsection (b)(10).''.
(3) No reasonable cause exception.--Section
6664(c)(2) is amended by inserting ``or to any
disallowance of a deduction described in section
6662(b)(10)'' before the period at the end.
(4) Approval of assessment not required.--Section
6751(b)(2)(A) is amended by striking ``subsection
(b)(9)'' and inserting ``paragraph (9) or (10) of
subsection (b)''.
(c) Application of Statute of Limitations on Assessment and
Collection.--
(1) Extension for certain adjustments made under
prior law.--In the case of any disallowance of a
deduction by reason of section 170(h)(7) of the
Internal Revenue Code of 1986 (as added by this
section) or any penalty imposed under section 6662 of
such Code with respect to such disallowance, section
6229(d)(2) of such Code (as in effect before its
repeal) shall be applied by substituting ``2 years''
for ``1 year''.
(2) Extension for listed transactions.--Any
contribution described in section 170(h)(7)(A) of the
Internal Revenue Code of 1986 (as added by this
section) shall be treated for purposes of sections
6501(c)(10) and 6235(c)(6) of such Code as a
transaction specifically identified by the Secretary on
December 23, 2016, as a tax avoidance transaction for
purposes of section 6011 of such Code.
(d) Application to Certain Transactions Disallowed Under
Other Provisions of Law.--In the case of any disallowance of a
deduction under section 170 of the Internal Revenue Code of
1986 with respect to a transaction described in Internal
Revenue Service Notice 2017-10 with respect to a taxable year
ending before the date of the enactment of this Act, such
disallowance shall be treated for purposes of section
6662(b)(10) of such Code (as added by this section) and
subsection (c)(1) as being by reason of section 170(h)(7) of
such Code (as added by this section).
(e) Effective Date.--
(1) In general.--Except as provided in paragraphs (2)
and (3), the amendments made by this section shall
apply to contributions made after December 23, 2016, in
taxable years ending after such date.
(2) Notice of certain failures.--So much of the
amendment made by subsection (a) as relates to section
170(h)(8) of the Internal Revenue Code of 1986, as
added by such subsection, shall apply to--
(A) returns filed after the date of the
enactment of this Act, and
(B) returns filed on or before such date if
the period specified in section 6501 for
assessment of the taxes with respect to which
such return relates has not expired as of such
date.
(3) Certified historic structures.--In the case of
contributions the conservation purpose (as defined in
section 170(h)(4) of the Internal Revenue Code of 1986)
of which is the preservation of a certified historic
structure (as defined in section 170(h)(4)(C) of such
Code), the amendments made by this section shall apply
to contributions made in taxable years beginning after
December 31, 2018.
(4) No inference.--No inference is intended as to the
appropriate treatment of contributions made in taxable
years ending on or before the date specified in
paragraph (1) or (3), whichever is applicable, or as to
any activity not described in section 170(h)(7) of the
Internal Revenue Code of 1986, as added by this
section.
SEC. 138404. MODIFICATION OF PROCEDURAL REQUIREMENTS RELATING TO
ASSESSMENT OF PENALTIES.
(a) Repeal of Approval Requirement.--Section 6751, as amended
by the preceding provision of this Act, is amended by striking
subsection (b).
(b) Quarterly Certifications of Compliance With Procedural
Requirements.--Section 6751, as amended by subsection (a) of
this section, is amended by inserting after subsection (a) the
following new subsection:
``(b) Quarterly Certifications of Compliance.--Each
appropriate supervisor of employees of the Internal Revenue
Service shall certify quarterly by letter to the Commissioner
of Internal Revenue whether or not the requirements of
subsection (a) have been met with respect to notices of penalty
issued by such employees.''.
(c) Effective Dates.--
(1) Repeal of approval requirement.--The amendment
made by subsection (a) shall take effect as if included
in section 3306 of the Internal Revenue Service
Restructuring and Reform Act of 1998.
(2) Quarterly certifications of compliance with
procedural requirements.--The amendment made by
subsection (b) shall apply to notices of penalty issued
after the date of the enactment of this Act.
PART 5--OTHER PROVISIONS
SEC. 138501. MODIFICATIONS TO LIMITATION ON DEDUCTION OF EXCESSIVE
EMPLOYEE REMUNERATION.
(a) In General.--Section 162(m) is amended by adding at the
end the following new paragraph:
``(7) Special rules related to limitation on
deduction of excessive employee remuneration.--
``(A) Aggregation rule.--A rule similar to
the rule of paragraph (6)(C)(ii) shall apply
for purposes of paragraph (1).
``(B) Regulations.--The Secretary shall
prescribe such regulations or other guidance as
may be necessary or appropriate to carry out
the purposes of paragraph (1), including
regulations or other guidance to prevent the
avoidance of such purposes, including through
the performance of services other than as an
employee or by providing compensation through a
pass-through or other entity.''.
(b) Acceleration of Application to 5 Highest Compensated
Employees.--Section 162(m)(3)(C) is amended by striking
``December 31, 2026'' and inserting ``December 31, 2021''.
(c) Applicable Employee Remuneration.--Section 162(m)(4)(A)
is amended--
(1) by inserting ``(including performance-based
compensation, commissions, post-termination
compensation, and beneficiary payments)'' after
``remuneration for services'', and
(2) by inserting ``and whether or not such
remuneration is paid directly by the publicly held
corporation'' after ``whether or not during the taxable
year''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 138502. EXTENSION OF TAX TO FUND BLACK LUNG DISABILITY TRUST FUND.
(a) In General.--Section 4121(e)(2)(A) is amended by striking
``December 31, 2021'' and inserting ``December 31, 2025''.
(b) Effective Date.--The amendment made by this section shall
apply to sales after December 31, 2021.
SEC. 138503. PROHIBITED TRANSACTIONS RELATING TO HOLDING DISC OR FSC IN
INDIVIDUAL RETIREMENT ACCOUNT.
(a) In General.--Section 4975(c)(1) is amended by striking
``or'' at the end of subparagraph (E), by striking the period
at the end of subparagraph (F) and inserting ``; or'', and by
adding at the end the following new subparagraph:
``(G) in the case of a DISC or FSC that
receives any commission, or other payment, from
an entity any stock or interest in which is
owned by the individual for whose benefit an
individual retirement account is maintained,
holding of an interest in such DISC or FSC by
the individual retirement account.''.
(b) Special Rules of Application.--Section 4975(c) is amended
by adding at the end the following new paragraph:
``(8) Special rules of application for DISC and FSC
holdings.--
``(A) Indirect holding of DISC or FSC.--For
purposes of paragraph (1)(G), if an individual
retirement account holds an interest in an
entity that owns (directly or indirectly) an
interest in a DISC or FSC, the account shall be
treated as holding an interest in such DISC or
FSC.
``(B) Constructive ownership.--For purposes
of determining ownership of stock (or any other
interest) in an entity under paragraph (1)(G)
and ownership of an interest in a DISC or FSC
under subparagraph (A), the rules prescribed by
section 318 for determining ownership shall
apply, except that such section shall be
applied by substituting `10 percent' for `50
percent' each place it appears.
``(C) DISC and FSC.--For purposes of his
subsection, the terms `DISC' and `FSC' shall
have the respective meanings given such terms
by section 992(a)(1)) and section 922(a) (as in
effect before its repeal by the FSC Repeal and
Extraterritorial Income Exclusion Act of
2000).''.
(c) Application of Tax to Terminated Individual Retirement
Accounts.--Section 4975(c)(3) is amended by adding at the end
the following: ``The preceding sentence shall not apply in the
case of a prohibited transaction described in paragraph
(1)(G).''.
(d) Effective Date.--The amendments made by this section
shall apply to stock and other interests acquired or held on or
after December 31, 2021.
SEC. 138504. INCREASE IN TAX ON CERTAIN TOBACCO PRODUCTS AND IMPOSITION
OF TAX ON NICOTINE.
(a) Increasing Tax on Cigarettes.--
(1) Small cigarettes.--Section 5701(b)(1) is amended
by striking ``$50.33'' and inserting ``$100.66''.
(2) Large cigarettes.--Section 5701(b)(2) is amended
by striking ``$105.69'' and inserting ``$211.39''.
(b) Tax Parity for Small Cigars.--Section 5701(a)(1) is
amended by striking ``$50.33'' and inserting ``$100.66''.
(c) Tax Parity for Large Cigars.--Section 5701(a)(2) is
amended by striking ``52.75 percent'' and all that follows
through the period and inserting ``$49.56 per pound and a
proportionate tax at the like rate on all fractional parts of a
pound but not less than 10.06 cents per cigar.''.
(d) Tax Parity for Smokeless Tobacco.--
(1) Section 5701(e) is amended--
(A) in paragraph (1), by striking ``$1.51''
and inserting ``$26.84'',
(B) in paragraph (2), by striking ``50.33
cents'' and inserting ``$10.70'', and
(C) by adding at the end the following new
paragraph:
``(3) Smokeless tobacco sold in discrete single-use
units.--On discrete single-use units, $100 per
thousand.''.
(2) Section 5702(m) is amended--
(A) in paragraph (1), by striking ``or
chewing tobacco'' and inserting ``, chewing
tobacco, or discrete single-use unit'',
(B) in paragraphs (2) and (3), by inserting
``and that is not a discrete single-use unit''
before the period at the end of each such
paragraph, and
(C) by adding at the end the following new
paragraph:
``(4) Discrete single-use unit.--The term `discrete
single-use unit' means any product containing tobacco
that--
``(A) is not intended to be smoked, and
``(B) is in the form of a lozenge, tablet,
pill, pouch, dissolvable strip, or other
discrete single-use or single-dose unit.''.
(e) Tax Parity for Pipe Tobacco.--Section 5701(f) is amended
by striking ``$2.8311 cents'' and inserting ``$49.56''.
(f) Tax Parity for Roll-Your-Own Tobacco.--Section 5701(g) is
amended by striking ``$24.78'' and inserting ``$49.56''.
(g) Tax Parity for Roll-Your-Own Tobacco and Certain
Processed Tobacco.--Section 5702(o) is amended by inserting ``,
and includes processed tobacco that is removed for delivery or
delivered to a person other than a person with a permit
provided under section 5713, but does not include removals of
processed tobacco for exportation'' after ``wrappers thereof''.
(h) Imposition of Tax on Nicotine for Use in Vaping, etc.--
(1) In general.--Section 5701 is amended by
redesignating subsection (h) as subsection (i) and by
inserting after subsection (g) the following new
subsection:
``(h) Nicotine.--On taxable nicotine, manufactured in or
imported into the United States, there shall be imposed a tax
equal to the dollar amount specified in section 5701(b)(1) per
1,810 milligrams of nicotine (and a proportionate tax at the
like rate on any fractional part thereof).''.
(2) Taxable nicotine.--Section 5702 is amended by
adding at the end the following new subsection:
``(q) Taxable Nicotine.--
``(1) In general.--Except as otherwise provided in
this subsection, the term `taxable nicotine' means any
nicotine which has been extracted, concentrated, or
synthesized.
``(2) Exception for products approved by food and
drug administration.--Such term shall not include any
nicotine if the manufacturer or importer thereof
demonstrates to the satisfaction of the Secretary of
Health and Human Services that such nicotine will be
used in--
``(A) a drug--
``(i) that is approved under section
505 of the Federal Food, Drug, and
Cosmetic Act or licensed under section
351 of the Public Health Service Act;
or
``(ii) for which an investigational
use exemption has been authorized under
section 505(i) of the Federal Food,
Drug, and Cosmetic Act or under section
351(a) of the Public Health Service
Act; or
``(B) a combination product (as described in
section 503(g) of the Federal Food, Drug, and
Cosmetic Act), the constituent parts of which
were approved or cleared under section 505,
510(k), or 515 of such Act.
``(3) Coordination with taxation of other tobacco
products.--Tobacco products meeting the definition of
cigars, cigarettes, smokeless tobacco, pipe tobacco,
and roll-your-own tobacco in this section shall be
classified and taxed as such despite any concentration
of the nicotine inherent in those products or any
addition of nicotine to those products during the
manufacturing process.
``(4) Regulations.--The Secretary shall prescribe
such regulations or other guidance as is necessary or
appropriate to carry out the purposes of this
subsection, including regulations or other guidance for
coordinating the taxation of tobacco products and
taxable nicotine to protect revenue and prevent double
taxation.''.
(3) Taxable nicotine treated as a tobacco product.--
Section 5702(c) is amended by striking ``and roll-your-
own tobacco'' and inserting ``roll-your-own tobacco,
and taxable nicotine''.
(4) Manufacturer of taxable nicotine.--Section 5702,
as amended by paragraph (2), is amended by adding at
the end the following new subsection:
``(r) Manufacturer of Taxable Nicotine.--
``(1) In general.--Any person who extracts,
concentrates, or synthesizes nicotine shall be treated
as a manufacturer of taxable nicotine (and as
manufacturing such taxable nicotine).
``(2) Application of rules related to manufacturers
of tobacco products.--Any reference to a manufacturer
of tobacco products, or to manufacturing tobacco
products, shall be treated as including a reference to
a manufacturer of taxable nicotine, or to manufacturing
taxable nicotine, respectively.''.
(j) Repeal of Special Rules for Determining Price of
Cigars.--Section 5702 is amended by striking subsection (l).
(k) Floor Stocks Taxes.--
(1) Imposition of tax.--On covered tobacco products,
and cigarette papers and tubes, manufactured in or
imported into the United States which are removed
before the tax increase date and held on such date for
sale by any person, there is hereby imposed a tax in an
amount equal to the excess of--
(A) the tax which would be imposed under
section 5701 of the Internal Revenue Code of
1986 on the article if the article had been
removed on such date, over
(B) the prior tax (if any) imposed under
section 5701 of such Code on such article.
(2) Covered tobacco products.--For purposes of this
subsection, the term ``covered tobacco products'' means
any tobacco product other than--
(A) cigars described in section 5701(a)(2) of
the Internal Revenue Code of 1986,
(B) discrete single-use units (as defined in
section 5702(m)(4) of such Code, as amended by
this section), and
(C) taxable nicotine (as defined in section
5702(q) of such Code, as amended by this
section).
(3) Credit against tax.--Each person shall be allowed
as a credit against the taxes imposed by paragraph (1)
an amount equal to the lesser of $1,000 or the amount
of such taxes. For purposes of the preceding sentence,
all persons treated as a single employer under
subsection (b), (c), (m), or (o) of section 414 of the
Internal Revenue Code of 1986 shall be treated as 1
person for purposes of this paragraph.
(4) Liability for tax and method of payment.--
(A) Liability for tax.--The person referred
to in paragraph (1) shall be liable for the tax
imposed by such paragraph.
(B) Method of payment.--The tax imposed by
paragraph (1) shall be paid in such manner as
the Secretary may provide.
(5) Articles in foreign trade zones.--
(A) In general.--Notwithstanding the Act of
June 18, 1934 (commonly known as the Foreign
Trade Zone Act, 48 Stat. 998, 19 U.S.C. 81a et
seq.) or any other provision of law, any
covered tobacco products, or cigarette papers
and tubes, which are located in a foreign trade
zone on the tax increase date, shall be subject
to the tax imposed by paragraph (1) if--
(i) internal revenue taxes have been
determined, or customs duties
liquidated, with respect to such
article before such date pursuant to a
request made under the 1st proviso of
section 3(a) of such Act, or
(ii) such article is held on such
date under the supervision of an
officer of the United States Customs
and Border Protection of the Department
of Homeland Security pursuant to the 2d
proviso of such section 3(a).
(6) Tax increase date.--For purposes of this
subsection, the term ``tax increase date'' means the
first day of the first calendar quarter described in
subsection (k)(1).
(7) Certain other definitions.--Terms used in this
subsection which are also used in section 5702 of the
Internal Revenue Code of 1986 shall have the same
meaning as when used in such section.
(l) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply to articles removed in calendar quarters
beginning after the date of the enactment of this Act.
(2) Delayed effective date for certain products.--The
amendments made by subsections (c), (d)(1)(C), (d)(2),
and (h) shall apply to articles removed in calendar
quarters beginning after the date which is 180 days
after the date of the enactment of this Act.
(m) Transition Rule for Permit and Bond Requirements.--A
person which is lawfully engaged in business as a manufacturer
or importer of taxable nicotine (within the meaning of
subchapter A of chapter 52 of the Internal Revenue Code of
1986, as amended by this section) on the date of the enactment
of this Act, first becomes subject to the requirements of
subchapter B of chapter 52 of such Code by reason of the
amendments made by this section, and submits an application
under such subchapter B to engage in such business not later
than 90 days after the date of the enactment of this Act, shall
not be denied the right to carry on such business by reason of
such requirements before final action on such application.
SEC. 138505. CLARIFICATION OF RULES REGARDING TOBACCO DRAWBACK.
(a) In General.--Section 5706 is amended by adding at the end
the following: ``Exemption from tax under section 5704 is
drawback, and no further drawback shall be allowed based on
merchandise that has not been subject to tax.''.
(b) Effective Date.--The amendment made by this section shall
apply to drawback claims made on or after December 18, 2018.
(c) No Inference.--Nothing contained in this subsection or
the amendments made by this subsection shall be construed to
create any inference with respect to any drawback claim made
before December 18, 2018.
SEC. 138506. TERMINATION OF EMPLOYER CREDIT FOR PAID FAMILY AND MEDICAL
LEAVE.
Section 45S(i) is amended by striking ``December 31, 2025''
and inserting ``December 31, 2023''.
SEC. 138507. CLARIFICATION OF TREATMENT OF DISC GAINS AND DISTRIBUTIONS
OF CERTAIN FOREIGN SHAREHOLDERS.
(a) In General.--Section 996(g) of the Internal Revenue Code
of 1986 is amended by striking ``of such shareholder'' and
inserting ``deemed to be had by such shareholder''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to gains and distributions after December 31, 2021.
(c) Application to Foreign Sales Corporations.--In the case
of any distribution after December 31, 2021, section 926(b)(1)
of the Internal Revenue Code of 1986 (prior to its repeal by
the FSC Repeal and Extraterritorial Income Exclusion Act of
2000) shall be applied by substituting ``deemed to be had by
such shareholder'' for ``of such shareholder''.
SEC. 138508. ACCESS TO SELF-EMPLOYMENT INCOME INFORMATION FOR PAID
LEAVE ADMINISTRATION.
Section 6103(l) of the Internal Revenue Code of 1986 is
amended by adding at the end the following new paragraph:
``(23) Disclosure of certain return information to
carry out paid family and medical leave benefit
program.--
``(A) In general.--The Secretary shall, upon
written request, disclose to officers and
employees of the Department of the Treasury
return information with respect to a taxpayer
whose self-employment income is relevant in
determining eligibility for, or the correct
amount of, a paid family and medical leave
benefit under title XXII of the Social Security
Act. Such information shall be limited to--
``(i) the taxpayer identity
information with respect to the
taxpayer,
``(ii) the self-employment income of
the taxpayer, and
``(iii) the taxable year to which
such self-employment income relates.
``(B) Restriction on disclosure.--Return
information disclosed under subparagraph (A)
may be used by officers and employees of the
Department of the Treasury solely for the
purpose of administering the paid family and
medical leave benefit program under title XXII
of the Social Security Act.
``(C) Self-employment income.--For purposes
of this paragraph, the term `self-employment
income' has the meaning given such term in
section 1402(b) for purposes of the taxes
imposed by section 1401(b).''.
SEC. 138509. TEMPORARY RULE TO ALLOW CERTAIN S CORPORATIONS TO
REORGANIZE AS PARTNERSHIPS WITHOUT TAX.
(a) In General.--A qualified liquidation of an eligible S
corporation shall be treated for purposes of the Internal
Revenue Code of 1986 in the same manner as if--
(1) such liquidation were a complete liquidation
described in section 332(b) of such Code, and
(2) the domestic partnership referred to in
subsection (c)(2) were a corporation which is an 80-
percent distributee (within the meaning of section
337(c) of such Code).
(b) Eligible S Corporation.--For purposes of this section,
the term ``eligible S corporation'' means any corporation
(including any predecessor corporation) that was an S
corporation on May 13, 1996, and at all times thereafter
through the date on which the qualified liquidation is
completed.
(c) Qualified Liquidation.--For purposes of this section, the
term ``qualified liquidation'' means one or more transactions
occurring during the 2-year period beginning on December 31,
2021 if--
(1) such transactions constitute the complete
liquidation of an eligible S corporation, and
(2) substantially all of the assets and liabilities
of such eligible S corporation are, as a result of such
transactions, transferred to a domestic partnership.
(d) Election.--This section shall apply to any qualified
liquidation only if the eligible S corporation elects the
application of this section in such manner as the Secretary may
require and not later than the due date for filing the return
of tax under chapter 1 of such Code for the taxable year in
which such liquidation is completed.
(e) Application of Restriction on Subsection S Corporation
Elections.--In the case of any qualified liquidation to which
this section applies, the domestic partnership referred to in
subsection (c)(2) shall not fail to be treated as a successor
corporation of the eligible S corporation for purposes of
section 1362(g) of such Code.
(f) Other Definitions.--Terms used in this section which are
also used in the Internal Revenue Code of 1986 shall have the
same meaning as when used in such Code.
(g) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out this section.
SEC. 138510. TREATMENT OF CERTAIN QUALIFIED SOUND RECORDING
PRODUCTIONS.
(a) Election To Treat Costs as Expenses.--Section 181(a)(1)
is amended by striking ``qualified film or television
production, and any qualified live theatrical production,'' and
inserting ``qualified film or television production, any
qualified live theatrical production, and any qualified sound
recording production''.
(b) Dollar Limitation.--Section 181(a)(2) is amended by
adding at the end the following new subparagraph:
``(C) Qualified sound recording production.--
Paragraph (1) shall not apply to so much of the
aggregate cost of any qualified sound recording
production, or to so much of the aggregate,
cumulative cost of all such qualified sound
recording productions in the taxable year, as
exceeds $150,000.''.
(c) No Other Deduction or Amortization Deduction Allowable.--
Section 181(b) is amended by striking ``qualified film or
television production or any qualified live theatrical
production'' and inserting ``qualified film or television
production, any qualified live theatrical production, or any
qualified sound recording production''.
(d) Election.--Section 181(c)(1) is amended by striking
``qualified film or television production or any qualified live
theatrical production'' and inserting ``qualified film or
television production, any qualified live theatrical
production, or any qualified sound recording production''.
(e) Qualified Sound Recording Production Defined.--Section
181 is amended by redesignating subsections (f) and (g) as
subsections (g) and (h), respectively, and by inserting after
subsection (e) the following new subsection:
``(f) Qualified Sound Recording Production.--For purposes of
this section, the term `qualified sound recording production'
means a sound recording (as defined in section 101 of title 17,
United States Code) produced and recorded in the United
States.''.
(f) Termination.--Section 181(h) (as redesignated by
subsection (e)) is amended by striking ``qualified film or
television production or any qualified live theatrical
production'' and inserting ``qualified film or television
production, any qualified live theatrical production, or any
qualified sound recording production''.
(g) Bonus Depreciation.--
(1) Qualified sound recording production as qualified
property.--Section 168(k)(2)(A)(i) is amended--
(A) by striking ``or'' at the end of
subclause (IV), by adding ``or'' at the end of
subclause (V), and by inserting after subclause
(V) the following:
``(VI) which is a qualified
sound recording production (as
defined in subsection (f) of
section 181) for which a
deduction would have been
allowable under section 181
without regard to subsections
(a)(2) and (h) of such section
or this subsection,'', and
(B) in subclauses (IV) and (V) (as amended)
by striking ``without regard to subsections
(a)(2) and (g)'' both places it appears and
inserting ``without regard to subsections
(a)(2) and (h)''.
(2) Production placed in service.--Section
168(k)(2)(H) is amended by striking ``and'' at the end
of clause (i), by striking the period at the end of
clause (ii) and inserting ``, and'', and by adding
after clause (ii) the following:
``(iii) a qualified sound recording
production shall be considered to be
placed in service at the time of
initial release or broadcast.''.
(h) Conforming Amendments.--
(1) The heading for section 181 is amended to read as
follows: ``TREATMENT OF CERTAIN QUALIFIED
PRODUCTIONS.''.
(2) The table of sections for part VI of subchapter B
of chapter 1 is amended by striking the item relating
to section 181 and inserting the following new item:
``Sec. 181. Treatment of certain qualified productions.''.
(i) Effective Date.--The amendments made by this section
shall apply to productions commencing in taxable years ending
after the date of the enactment of this Act.
SEC. 138511. PAYMENT TO CERTAIN INDIVIDUALS WHO DYE FUEL.
(a) In General.--Subchapter B of chapter 65 is amended by
adding at the end the following new subsection:
``SEC. 6433. DYED FUEL.
``(a) In General.--If a person establishes to the
satisfaction of the Secretary that such person meets the
requirements of subsection (b) with respect to diesel fuel or
kerosene, then the Secretary shall pay to such person an amount
(without interest) equal to the tax described in subsection
(b)(2)(A) with respect to such diesel fuel or kerosene.
``(b) Requirements.--
``(1) In general.--A person meets the requirements of
this subsection with respect to diesel fuel or kerosene
if such person removes from a terminal eligible
indelibly dyed diesel fuel or kerosene.
``(2) Eligible indelibly dyed diesel fuel or kerosene
defined.--The term `eligible indelibly dyed diesel fuel
or kerosene' means diesel fuel or kerosene--
``(A) with respect to which a tax under
section 4081 was previously paid (and not
credited or refunded), and
``(B) which is exempt from taxation under
section 4082(a).
``(c) Cross Reference.--For civil penalty for excessive
claims under this section, see section 6675.''.
(b) Conforming Amendments.--
(1) Section 6206 is amended--
(A) by striking ``or 6427'' each place it
appears and inserting ``6427, or 6433'', and
(B) by striking ``6420 and 6421'' and
inserting ``6420, 6421, and 6433''.
(2) Section 6430 is amended--
(A) by striking ``or'' at the end of
paragraph (2), by striking the period at the
end of paragraph (3) and inserting ``or'', and
by adding at the end the following new
paragraph:
``(4) which are removed as eligible indelibly dyed
diesel fuel or kerosene under section 6433.''.
(3) Section 6675 is amended--
(A) in subsection (a), by striking ``or 6427
(relating to fuels not used for taxable
purposes)'' and inserting ``6427 (relating to
fuels not used for taxable purposes), or 6433
(relating to eligible indelibly dyed fuel)'',
and
(B) in subsection (b)(1), by striking ``6421,
or 6427,'' and inserting ``6421, 6427, or
6433''.
(4) The table of sections for subchapter B of chapter
65 is amended by adding at the end the following new
item:
``Sec. 6433. Dyed fuel.''.
(c) Effective Date.--The amendments made by this section
shall apply to eligible indelibly dyed diesel fuel or kerosene
removed on or after the date that is 180 days after the date of
the enactment of this section.
SEC. 138512. EXTENSION OF CREDIT FOR PORTION OF EMPLOYER SOCIAL
SECURITY TAXES PAID WITH RESPECT TO EMPLOYEE TIPS
TO BEAUTY SERVICE ESTABLISHMENTS.
(a) Extension of Tip Credit to Beauty Service Business.--
(1) In general.--Section 45B(b)(2) is amended to read
as follows:
``(2) Application only to certain lines of
business.--In applying paragraph (1), there shall be
taken into account only tips received from customers or
clients in connection with the following services:
``(A) The providing, delivering, or serving
of food or beverages for consumption, if the
tipping of employees delivering or serving food
or beverages by customers is customary.
``(B) The providing of beauty services to a
customer or client if the tipping of employees
providing such services is customary.''.
(2) Beauty service defined.--Section 45B is amended
by adding at the end the following new subsection:
``(e) Beauty Service.--For purposes of this section, the term
`beauty service' means any of the following:
``(1) Barbering and hair care.
``(2) Nail care.
``(3) Esthetics.
``(4) Body and spa treatments.''.
(b) Credit Determined With Respect to Minimum Wage in
Effect.--Section 45B(b)(1)(B) is amended--
(1) by striking ``as in effect on January 1, 2007,
and'', and
(2) by inserting ``, and in the case of food or
beverage establishments, as in effect on January 1,
2007'' after ``without regard to section 3(m) of such
Act''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 138513. ENHANCEMENT OF WORK OPPORTUNITY CREDIT DURING COVID-19
RECOVERY PERIOD.
(a) In General.--Section 51 is amended by adding at the end
the following new subsection:
``(l) Adjustment to Credit During COVID-19 Recovery Period.--
In the case of individuals (other than any individual who is a
qualified summer youth employee) hired after the date of the
enactment of this subsection and before January 1, 2023--
``(1) Increased amount of credit.--Subsection (a)
shall be applied by substituting `50 percent' for `40
percent'.
``(2) Availability of credit in second year of
employment.--
``(A) In general.--Subsection (a) shall be
applied by inserting `or qualified second-year
wages' after `wages'.
``(B) Qualified second-year wages.--For the
purposes of this paragraph, the term `qualified
second-year wages' means qualified wages which
are attributable to service rendered during the
1-year period beginning on the day after the
last day of the 1-year period with respect to
the recipient determined under subsection
(b)(2).
``(3) Increase in limitation on wages taken into
account.--Subsection (b)(3) shall be applied by
substituting `$10,000' for `$6,000'.
``(4) Eligibility of rehires.--
``(A) In general.--Subsection (i)(2) shall
not apply.
``(B) Regulations.--The Secretary shall issue
such regulations as the Secretary determines
appropriate to ensure a reasonable application
of subparagraph (A), including prohibiting
attempts to claim the benefit of this section
through the termination and rehiring of an
employee.''.
(b) Effective Date.--The amendment made by this section shall
apply to taxable years ending after the date of enactment of
this Act.
SEC. 138514. ALLOWANCE OF DEDUCTION FOR CERTAIN EXPENSES OF THE TRADE
OR BUSINESS OF BEING AN EMPLOYEE.
(a) Above-the-Line Deduction for Union Dues.--Section
62(a)(2) is amended by adding at the end the following new
subparagraph:
``(F) Union dues.--The deductions allowed by section
162 which are both--
``(A) not in excess of $250, and
``(B) attributable to a trade or business
consisting of the performance of services by
the taxpayer as an employee if such deductions
are for dues paid to a labor organization
described in section 501(c)(5) and with respect
to which such taxpayer remained a member
through the end of the taxable year.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 138515. COVER OVER OF CERTAIN DISTILLED SPIRITS TAXES.
(a) Repeal of Limitation on Cover Over of Distilled Spirits
Taxes to Puerto Rico and Virgin Islands.--
(1) In general.--Section 7652 is amended by striking
subsection (f) and by redesignating subsections (g) and
(h) as subsections (f) and (g), respectively.
(2) Effective date.--The amendments made by this
subsection shall apply to distilled spirits brought
into the United States after December 31, 2021.
(b) Required Transfer to Puerto Rico Conservation Trust Fund
of Portion of Puerto Rico Rum Cover Over.--
(1) In general.--Section 7652(a) is amended by adding
at the end the following new paragraph:
``(4) Required transfer to puerto rico conservation
trust fund of portion of rum taxes covered over.--
``(A) In general.--From any taxes collected
on rum transported to the United States that
are covered into the treasury of Puerto Rico
under paragraph (3) at a rate equal to or
greater than $10.50 per proof gallon, Puerto
Rico shall transfer to the Puerto Rico
Conservation Trust Fund an amount per proof
gallon equal to or greater than \1/6\ of the
difference between $10.50 and the rate, not to
exceed $13.25, at which such taxes are covered
into such treasury. Puerto Rico's obligations
under this paragraph shall not modify or impair
payment priorities established under Puerto
Rico law and in effect on May 21, 2021.
``(B) Puerto rico conservation trust fund.--
For purposes of this section, the term `Puerto
Rico Conservation Trust Fund' means the fund
established pursuant to a Memorandum of
Understanding between the United States
Department of the Interior and the Commonwealth
of Puerto Rico, dated December 24, 1968.''.
(2) Cover over determined without regard to certain
rate reductions.--Section 7652(h), as amended by
subsections (a) and (c), is amended by inserting
``(a)(4),'' after ``(a)(3),''.
(3) Effective date.--The amendments made by this
subsection shall apply to distilled spirits brought
into the United States after December 31, 2021.
(c) Cover Over Determined Without Regard to Certain Rate
Reductions.--
(1) In general.--Section 7652, as amended by
subsection (a), is amended by inserting after
subsection (g) the following new subsection:
``(h) Cover Over Determined Without Regard to Certain Rate
Reductions.--For purposes of subsections (a)(3), (b)(3), and
(e)(1), refunds under section 5001(c)(4) shall not be taken
into account as a refund, and the amount of taxes imposed and
collected under section 5001(a)(1) shall be determined without
regard to section 5001(c).''.
(2) Effective date.--The amendment made by paragraph
(1) shall take effect as if included in section 13807
of Public Law 116-260.
(3) Conforming amendments.--
(A) 7652(e).--
(i) In general.--Section 7652(e) is
amended by striking paragraph (5).
(ii) Effective date.--The amendment
made by this subparagraph shall take
effect as if included in section 13807
of Public Law 115-97.
(B) 7652(i).--
(i) In general.--Section 7652 is
amended by striking subsection (i).
(ii) Effective date.--The amendment
made by this subparagraph shall take
effect as if included in section 107 of
Public Law 116-260.
SEC. 138516. RESEARCH AND EXPERIMENTAL EXPENDITURES.
(a) In General.--Section 13206 of Public Law 115-97 is
amended--
(1) in subsection (b)(3), by striking ``2021'' and
inserting ``2025'', and
(2) in subsection (e), by striking ``2021'' and
inserting ``2025''.
(b) Effective Date.--The amendment made by this section shall
take effect on the date of the enactment of this Act.
SEC. 138517. PAYROLL CREDIT FOR COMPENSATION OF LOCAL NEWS JOURNALISTS.
(a) In General.--In the case of an eligible local newspaper
publisher, there shall be allowed as a credit against
applicable employment taxes for each calendar quarter an amount
equal to the applicable percentage of wages paid by such
publisher to local news journalists for such calendar quarter.
(b) Limitations and Refundability.--
(1) Wages taken into account.--The amount of wages
paid with respect to any individual which may be taken
into account under subsection (a) during any calendar
quarter by the eligible local newspaper publisher shall
not exceed $12,500.
(2) Credit limited to employment taxes.--The credit
allowed by subsection (a) with respect to any calendar
quarter shall not exceed the applicable employment
taxes (reduced by any credits allowed under sections
3131, 3132, 3134, and 6432 of the Internal Revenue Code
of 1986) on the wages paid with respect to the
employment of all the employees of the eligible local
newspaper publisher for such calendar quarter.
(3) Refundability of excess credit.--
(A) In general.--If the amount of the credit
under subsection (a) exceeds the limitation of
paragraph (2) for any calendar quarter, such
excess shall be treated as an overpayment that
shall be refunded under sections 6402(a) and
6413(b) of the Internal Revenue Code of 1986.
(B) Treatment of payments.--For purposes of
section 1324 of title 31, United States Code,
any amounts due to the employer under this
paragraph shall be treated in the same manner
as a refund due from a credit provision
referred to in subsection (b)(2) of such
section.
(c) Definitions.--For purposes of this section--
(1) Applicable percentage.--The term ``applicable
percentage'' means--
(A) in the case of each of the first 4
calendar quarters to which this section
applies, 50 percent, and
(B) in the case of each calendar quarter
thereafter, 30 percent.
(2) Applicable employment taxes.--The term
``applicable employment taxes'' means the taxes imposed
under section 3111(b) of the Internal Revenue Code of
1986.
(3) Eligible local newspaper publisher.--The term
``eligible local newspaper publisher'' means, with
respect to any calendar quarter, any employer if
substantially all of the gross receipts of such
employer for such calendar quarter are derived in the
trade or business of publishing a local newspaper.
(4) Local newspaper.--The term ``local newspaper''
means any print or digital publication if--
(A) the primary content of such publication
is original content derived from primary
sources and relating to news and current
events,
(B) such publication primarily serves the
needs of a regional or local community,
(C) the publisher of such publication employs
at least one local news journalist who resides
in such regional or local community, and
(D) the publisher of such publication employs
no more than 750 employees during the calendar
quarter with respect to which a credit is
allowed under this section.
(5) Local news journalist.--The term ``local news
journalist'' means, with respect to any eligible local
newspaper publisher for any calendar quarter, an
individual who provides at least 100 hours of service
during such calendar quarter to such eligible local
newspaper publisher, during which time such individual
regularly gathers, collects, photographs, records,
writes, or reports news or information that concerns
local events or other matters of local public interest.
(6) Secretary.--The term ``Secretary'' means the
Secretary of the Treasury or the Secretary's delegate.
(7) Wages.--The term ``wages'' means wages (as
defined in section 3121(a) of the Internal Revenue Code
of 1986).
(8) Other terms.--Any term used in this section which
is also used in chapter 21 or chapter 22 of the
Internal Revenue Code of 1986 shall have the same
meaning as when used in such chapter.
(d) Aggregation Rule.--
(1) In general.--All persons treated as a single
employer under subsection (a) or (b) of section 52 of
the Internal Revenue Code of 1986, or subsection (m) or
(o) of section 414 of such Code, shall be treated as
one employer for purposes of this section.
(2) Exception.--Paragraph (1) shall not apply unless
such persons are involved in the production of the same
print or digital publication.
(e) Certain Rules To Apply.--For purposes of this section,
rules similar to the rules of sections 51(i)(1) and 280C(a) of
the Internal Revenue Code of 1986 shall apply.
(f) Certain Governmental Employers.--This credit shall not
apply to the Government of the United States, the government of
any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing.
(g) Election To Have Section Not Apply.--This section shall
not apply with respect to any eligible local newspaper
publisher for any calendar quarter if such person elects (at
such time and in such manner as the Secretary may prescribe)
not to have this section apply.
(h) Special Rules.--
(1) Employee not taken into account more than once.--
An employee shall not be included for purposes of this
section for any period with respect to any employer if
such employer is allowed a credit under section 51 of
the Internal Revenue Code of 1986 with respect to such
employee for such period.
(2) Denial of double benefit.--Any wages taken into
account in determining the credit allowed under this
section shall not be taken into account for purposes of
determining the credits allowed under section 41, 45A,
45P, 45S, 51, 1396, 3131, 3132, 3134, and 6432 of such
Code.
(3) Third-party payors.--Any credit allowed under
this section shall be treated as a credit described in
section 3511(d)(2) of such Code.
(i) Treatment of Deposits.--The Secretary shall waive any
penalty under section 6656 of the Internal Revenue Code of 1986
for any failure to make a deposit of any applicable employment
taxes if the Secretary determines that such failure was due to
the reasonable anticipation of the credit allowed under this
section.
(j) Regulations and Guidance.--The Secretary shall issue such
forms, instructions, regulations, and guidance as are necessary
to implement the purposes of this section, including with
respect to the application of the credit under subsection (a)
to third-party payors (including professional employer
organizations, certified professional employer organizations,
or agents under section 3504 of the Internal Revenue Code of
1986), including regulations or guidance allowing such payors
to submit documentation necessary to substantiate the eligible
employer status of employers that use such payors.
(k) Application.--This section shall only apply to calendar
quarters during the first 5 calendar years beginning after the
date of the enactment of this Act.
SEC. 138518. TREATMENT OF FINANCIAL GUARANTY INSURANCE COMPANIES AS
QUALIFYING INSURANCE CORPORATIONS UNDER PASSIVE
FOREIGN INVESTMENT COMPANY RULES.
(a) In General.--Section 1297(f)(3) is amended by adding at
the end the following new subparagraph:
``(C) Special rules for financial guaranty
insurance companies.--
``(i) In general.--Notwithstanding
subparagraphs (A)(ii) and (B), the
applicable insurance liabilities of a
financial guaranty insurance company
shall include its unearned premium
reserves if--
``(I) such company is
prohibited under generally
accepted accounting principles
from reporting on its
applicable financial statements
reserves for losses and loss
adjustment expenses with
respect to a financial guaranty
insurance or reinsurance
contract except to the extent
that losses and loss adjustment
expenses are expected to exceed
the unearned premium reserves
on the contract,
``(II) the applicable
financial statement of such
company reports financial
guaranty exposure of at least
15-to-1 or State or local bond
exposure of at least 9-to-1 (8-
to-1 in the case of a taxable
year of such company which ends
on or before December 31,
2018), and
``(III) such company includes
in its insurance liabilities
only its unearned premium
reserves relating to insurance
written or assumed that is
within the single risk limits
set forth in subsection (D) of
section 4 of the Financial
Guaranty Insurance Guideline
(modified by using total
shareholder's equity as
reported on the applicable
financial statement of the
company rather than aggregate
of the surplus to policyholders
and contingency reserves).
``(ii) Application of alternative
facts and circumstances test.--A
financial guaranty insurance company
shall be treated as satisfying the
requirements of paragraph (2)(B).
``(iii) Financial guaranty insurance
company.--For purposes of this
subparagraph, the term `financial
guaranty insurance company' means any
insurance company the sole business of
which is writing or reinsuring
financial guaranty insurance (as
defined in subsection (A) of section 1
of the Financial Guaranty Insurance
Guideline) which is permitted under
subsection (B) of section 4 of such
Guideline.
``(iv) Financial guaranty exposure.--
For purposes of this subparagraph, the
term `financial guaranty exposure'
means the ratio of--
``(I) the net debt service
outstanding insured or
reinsured by the company that
is within the single risk
limits set forth in the
Financial Guaranty Insurance
Guideline (as reported on such
company's applicable financial
statement), to
``(II) the company's total
assets (as so reported).
``(v) State or local bond exposure.--
For purposes of this subparagraph, the
term `State or local bond exposure'
means the ratio of--
``(I) the net unpaid
principal of State or local
bonds (as defined in section
103(c)(1)) insured or reinsured
by the company that is within
the single risk limits set
forth in the Financial Guaranty
Insurance Guideline (as
reported on such company's
applicable financial
statement), to
``(II) the company's total
assets (as so reported).''
``(vi) Financial guaranty insurance
guideline.--For purposes of this
subparagraph--
``(I) In general.--The term
`Financial Guaranty Insurance
Guideline' means the October
2008 model regulation that was
adopted by the National
Association of Insurance
Commissioners on December 4,
2007.
``(II) Determinations made by
secretary.--The determination
of whether any provision of the
Financial Guaranty Insurance
Guideline has been satisfied
shall be made by the
Secretary.''.
(b) Reporting of Certain Items.--Section 1297(f)(4) is
amended by adding at the end the following new subparagraph:
``(C) Clarification that certain items on
applicable financial statement be separately
reported with respect to corporation.--An
amount described in paragraph (1)(B) or clause
(i)(II), (i)(III), (iv)(I), (iv)(II), (v)(I),
or (v)(II) of paragraph (3)(C) shall be treated
as reported on an applicable financial
statement for purposes of this section if--
``(i) such amount is separately
reported on such statement with respect
to the corporation referred to in
paragraph (1), or
``(ii) such amount is separately
determined for purposes of calculating
an amount which is reported on such
statement.
``(D) Authority of secretary to require
reporting.--
``(i) In general.--Each United States
person who owns an interest in a
specified non-publicly traded foreign
corporation and who takes the position
that such corporation is not a passive
foreign investment company shall report
to the Secretary such information with
respect to such corporation as the
Secretary may require.
``(ii) Specified non-publicly traded
foreign corporation.--For purposes of
this subparagraph, the term `specified
non-publicly traded foreign
corporation' means any foreign
corporation--
``(I) which would be a
passive foreign investment
company if subsection (b)(2)(B)
did not apply, and
``(II) no interest in which
is traded on an established
securities market.''.
(c) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
take effect as if included in section 14501 of Public
Law 115-97.
(2) Reporting.--The amendment made by subsection (b)
shall apply to reports made after the date of the
enactment of this Act.
SEC. 138519. CREDIT FOR QUALIFIED ACCESS TECHNOLOGY FOR THE BLIND.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 is amended by inserting after section 36G the
following new section:
``SEC. 36H. CREDIT FOR QUALIFIED ACCESS TECHNOLOGY FOR THE BLIND.
``(a) Allowance of Credit.--There shall be allowed as a
credit against the tax imposed by this subtitle an amount equal
to amounts paid or incurred during the taxable year, not
compensated for by insurance or otherwise, by the taxpayer for
qualified access technology for use by a qualified blind
individual who is the taxpayer, the taxpayer's spouse, or any
dependent (as defined in section 152) of the taxpayer.
``(b) Limitation.--The aggregate amount of the credit allowed
under subsection (a) with respect to any qualified blind
individual shall not exceed $2,000 in any 3-consecutive-
taxable-year period.
``(c) Definitions.--For purposes of this section--
``(1) Qualified blind individual.--The term
`qualified blind individual' means an individual who is
blind within the meaning of section 63(f)(4).
``(2) Qualified access technology defined.--The term
`qualified access technology' means hardware, software,
or other information technology the primary function of
which is to convert or adapt information which is
visually represented into forms or formats useable by
blind individuals.
``(d) Denial of Double Benefit.--No credit shall be allowed
under subsection (a) for any expense for which a deduction or
credit is allowed under any other provision of this chapter.
``(e) Inflation Adjustment.--
``(1) In general.--In the case of a taxable year
beginning after 2022, the $2,000 amount in subsection
(b) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2021'
for `calendar year 2016' in subparagraph
(A)(ii) thereof.
``(2) Rounding.--If the amount as adjusted under
subparagraph (A) is not a multiple of $100, such amount
shall be rounded to the next lowest multiple of $100.
``(f) Termination.--This section shall not apply with respect
to amounts paid or incurred in taxable years beginning after
December 31, 2026.''.
(b) Conforming Amendments.--
(1) Section 6211(b)(4)(A), as amended by the
preceding provisions of this Act, is amended by
inserting ``, 36H'' after ``36G''.
(2) Section 1324(b)(2) of title 31, United States
Code, is amended by inserting ``, 36H'' after ``,
36G''.
(3) The table of sections for subpart C of part IV of
subchapter A is amended by inserting after the item
relating to section 36G the following new item:
``Sec. 36H. Credit for qualified access technology for the blind.''
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2021.
SEC. 138520. MODIFICATION OF REIT CONSTRUCTIVE OWNERSHIP RULES.
(a) In General.--Section 856(d)(5) is amended by striking
``and'' at the end of subparagraph (A), by striking the period
at the end of subparagraph (B) and inserting ``, and'', and by
adding at the end the following:
``(C) except as otherwise provided by the
Secretary, stock, assets, and net profits
constructively owned by a partnership, estate,
trust, or corporation by reason of the
application of section 318(a)(3) (after
application of subparagraphs (A) and (B)) shall
not be considered as owned by it for purposes
of again applying such section in order to make
another person the constructive owner of such
stock, assets, or net profits.
Subparagraph (C) shall not prevent any person from
being the constructive owner of stock, assets, or net
profits of any person as the result of any other
application of section 318(a) (as modified by this
paragraph).''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.
(c) No Inference.--Nothing in this section or the amendments
made by this section shall be construed to create any inference
with respect to the proper application of section 318 of the
Internal Revenue Code of 1986 to cases other than cases to
which such amendments apply.
Subtitle J--Drug Pricing
PART 1--LOWERING PRICES THROUGH FAIR DRUG PRICE NEGOTIATION
SEC. 139001. PROVIDING FOR LOWER PRICES FOR CERTAIN HIGH-PRICED SINGLE
SOURCE DRUGS.
(a) Program To Lower Prices for Certain High-Priced Single
Source Drugs.--Title XI of the Social Security Act (42 U.S.C.
1301 et seq.) is amended by adding at the end the following new
part:
``PART E--FAIR PRICE NEGOTIATION PROGRAM TO LOWER PRICES FOR CERTAIN
HIGH-PRICED SINGLE SOURCE DRUGS
``SEC. 1191. ESTABLISHMENT OF PROGRAM.
``(a) In General.--The Secretary shall establish a Fair Price
Negotiation Program (in this part referred to as the
`program'). Under the program, with respect to each price
applicability period, the Secretary shall--
``(1) publish a list of selected drugs in accordance
with section 1192;
``(2) enter into agreements with manufacturers of
selected drugs with respect to such period, in
accordance with section 1193;
``(3) negotiate and, if applicable, renegotiate
maximum fair prices for such selected drugs, in
accordance with section 1194; and
``(4) carry out the administrative duties described
in section 1196.
``(b) Definitions Relating to Timing.--For purposes of this
part:
``(1) Initial price applicability year.--The term
`initial price applicability year' means a plan year
(beginning with plan year 2025) or, if agreed to in an
agreement under section 1193 by the Secretary and
manufacturer involved, a period of more than one plan
year (beginning on or after January 1, 2025).
``(2) Price applicability period.--The term `price
applicability period' means, with respect to a drug,
the period beginning with the initial price
applicability year with respect to which such drug is a
selected drug and ending with the last plan year during
which the drug is a selected drug.
``(3) Selected drug publication date.--The term
`selected drug publication date' means, with respect to
each initial price applicability year, April 15 of the
plan year that begins 2 years prior to such year.
``(4) Voluntary negotiation period.--The term
`voluntary negotiation period' means, with respect to
an initial price applicability year with respect to a
selected drug, the period--
``(A) beginning on the sooner of--
``(i) the date on which the
manufacturer of the drug and the
Secretary enter into an agreement under
section 1193 with respect to such drug;
or
``(ii) June 15 following the selected
drug publication date with respect to
such selected drug; and
``(B) ending on March 31 of the year that
begins one year prior to the initial price
applicability year.
``(c) Other Definitions.--For purposes of this part:
``(1) Fair price eligible individual.--The term `fair
price eligible individual' means, with respect to a
selected drug--
``(A) in the case such drug is furnished or
dispensed to the individual at a pharmacy or by
a mail order service--
``(i) an individual who is enrolled
under a prescription drug plan under
part D of title XVIII or an MA-PD plan
under part C of such title if coverage
is provided under such plan for such
selected drug; and
``(ii) an individual who is enrolled
under a group health plan or health
insurance coverage offered in the group
or individual market (as such terms are
defined in section 2791 of the Public
Health Service Act) with respect to
which there is in effect an agreement
with the Secretary under section 1197
with respect to such selected drug as
so furnished or dispensed; and
``(B) in the case such drug is furnished or
administered to the individual by a hospital,
physician, or other provider of services or
supplier--
``(i) an individual who is entitled
to benefits under part A of title XVIII
or enrolled under part B of such title
if such selected drug is covered under
the respective part; and
``(ii) an individual who is enrolled
under a group health plan or health
insurance coverage offered in the group
or individual market (as such terms are
defined in section 2791 of the Public
Health Service Act) with respect to
which there is in effect an agreement
with the Secretary under section 1197
with respect to such selected drug as
so furnished or administered.
``(2) Maximum fair price.--The term `maximum fair
price' means, with respect to a plan year during a
price applicability period and with respect to a
selected drug (as defined in section 1192(c)) with
respect to such period, the price published pursuant to
section 1195 in the Federal Register for such drug and
year.
``(3) Average international market price defined.--
``(A) In general.--The terms `average
international market price' and `AIM price'
mean, with respect to a drug, the average price
(which shall be the net average price, if
practicable, and volume-weighted, if
practicable) for a unit (as defined in
paragraph (4)) of the drug for sales of such
drug (calculated across different dosage forms
and strengths of the drug and not based on the
specific formulation or package size or package
type), as computed (as of the date of
publication of such drug as a selected drug
under section 1192(a)) in all countries
described in clause (ii) of subparagraph (B)
that are applicable countries (as described in
clause (i) of such subparagraph) with respect
to such drug.
``(B) Applicable countries.--
``(i) In general.--For purposes of
subparagraph (A), a country described
in clause (ii) is an applicable country
described in this clause with respect
to a drug if there is available an
average price for any unit for the drug
for sales of such drug in such country.
``(ii) Countries described.--For
purposes of this paragraph, the
following are countries described in
this clause:
``(I) Australia.
``(II) Canada.
``(III) France.
``(IV) Germany.
``(V) Japan.
``(VI) The United Kingdom.
``(4) Unit.--The term `unit' means, with respect to a
drug, the lowest identifiable quantity (such as a
capsule or tablet, milligram of molecules, or grams) of
the drug that is dispensed.
``SEC. 1192. SELECTION OF NEGOTIATION-ELIGIBLE DRUGS AS SELECTED DRUGS.
``(a) In General.--Not later than the selected drug
publication date with respect to an initial price applicability
year, subject to subsection (h), the Secretary shall select and
publish in the Federal Register a list of--
``(1)(A) with respect to an initial price
applicability year during 2025, at least 25
negotiation-eligible drugs described in subparagraphs
(A) and (B), but not subparagraph (C), of subsection
(d)(1) (or, with respect to an initial price
applicability year during such period beginning after
2025, the maximum number (if such number is less than
25) of such negotiation-eligible drugs for the year)
with respect to such year; and
``(B) with respect to an initial price applicability
year during 2026 or a subsequent year, at least 50
negotiation-eligible drugs described in subparagraphs
(A) and (B), but not subparagraph (C), of subsection
(d)(1) (or, with respect to an initial price
applicability year during such period, the maximum
number (if such number is less than 50) of such
negotiation-eligible drugs for the year) with respect
to such year;
``(2) all negotiation-eligible drugs described in
subparagraph (C) of such subsection with respect to
such year; and
``(3) all new-entrant negotiation-eligible drugs (as
defined in subsection (g)(1)) with respect to such
year.
Each drug published on the list pursuant to the previous
sentence shall be subject to the negotiation process under
section 1194 for the voluntary negotiation period with respect
to such initial price applicability year (and the renegotiation
process under such section as applicable for any subsequent
year during the applicable price applicability period). In
applying this subsection, any negotiation-eligible drug that is
selected under this subsection for an initial price
applicability year shall not count toward the required minimum
amount of drugs to be selected under paragraph (1) for any
subsequent year, including such a drug so selected that is
subject to renegotiation under section 1194.
``(b) Selection of Drugs.--In carrying out subsection (a)(1)
the Secretary shall select for inclusion on the published list
described in subsection (a) with respect to a price
applicability period, the negotiation-eligible drugs that the
Secretary projects will result in the greatest savings to the
Federal Government or fair price eligible individuals during
the price applicability period. In making this projection of
savings for drugs for which there is an AIM price for a price
applicability period, the savings shall be projected across
different dosage forms and strengths of the drugs and not based
on the specific formulation or package size or package type of
the drugs, taking into consideration both the volume of drugs
for which payment is made, to the extent such data is
available, and the amount by which the net price for the drugs
exceeds the AIM price for the drugs.
``(c) Selected Drug.--For purposes of this part, each drug
included on the list published under subsection (a) with
respect to an initial price applicability year shall be
referred to as a `selected drug' with respect to such year and
each subsequent plan year beginning before the first plan year
beginning after the date on which the Secretary determines two
or more drug products--
``(1) are approved or licensed (as applicable)--
``(A) under section 505(j) of the Federal
Food, Drug, and Cosmetic Act using such drug as
the listed drug; or
``(B) under section 351(k) of the Public
Health Service Act using such drug as the
reference product; and
``(2) continue to be marketed.
``(d) Negotiation-Eligible Drug.--
``(1) In general.--For purposes of this part, the
term `negotiation-eligible drug' means, with respect to
the selected drug publication date with respect to an
initial price applicability year, a qualifying single
source drug, as defined in subsection (e), that meets
any of the following criteria:
``(A) Covered part d drugs.--The drug is
among the 125 covered part D drugs (as defined
in section 1860D-2(e)) for which there was an
estimated greatest net spending under parts C
and D of title XVIII, as determined by the
Secretary, during the most recent plan year
prior to such drug publication date for which
data are available.
``(B) Other drugs.--The drug is among the 125
drugs for which there was an estimated greatest
net spending in the United States (including
the 50 States, the District of Columbia, and
the territories of the United States), as
determined by the Secretary, during the most
recent plan year prior to such drug publication
date for which data are available.
``(C) Insulin.--The drug is a qualifying
single source drug described in subsection
(e)(3).
``(2) Clarification.--In determining whether a
qualifying single source drug satisfies any of the
criteria described in paragraph (1), the Secretary
shall, to the extent practicable, use data that is
aggregated across dosage forms and strengths of the
drug and not based on the specific formulation or
package size or package type of the drug.
``(3) Publication.--Not later than the selected drug
publication date with respect to an initial price
applicability year, the Secretary shall publish in the
Federal Register a list of negotiation-eligible drugs
with respect to such selected drug publication date.
``(e) Qualifying Single Source Drug.--For purposes of this
part, the term `qualifying single source drug' means any of the
following:
``(1) Drug products.--A drug that--
``(A) is approved under section 505(c) of the
Federal Food, Drug, and Cosmetic Act and
continues to be marketed pursuant to such
approval; and
``(B) is not the listed drug for any drug
that is approved and continues to be marketed
under section 505(j) of such Act.
``(2) Biological products.--A biological product
that--
``(A) is licensed under section 351(a) of the
Public Health Service Act, including any
product that has been deemed to be licensed
under section 351 of such Act pursuant to
section 7002(e)(4) of the Biologics Price
Competition and Innovation Act of 2009, and
continues to be marketed under section 351 of
such Act; and
``(B) is not the reference product for any
biological product that is licensed and
continues to be marketed under section 351(k)
of such Act.
``(3) Insulin product.--Notwithstanding paragraphs
(1) and (2), any insulin product that is approved under
subsection (c) or (j) of section 505 of the Federal
Food, Drug, and Cosmetic Act or licensed under
subsection (a) or (k) of section 351 of the Public
Health Service Act and continues to be marketed under
such section 505 or 351, including any insulin product
that has been deemed to be licensed under section
351(a) of the Public Health Service Act pursuant to
section 7002(e)(4) of the Biologics Price Competition
and Innovation Act of 2009 and continues to be marketed
pursuant to such licensure.
For purposes of applying paragraphs (1) and (2), a drug or
biological product that is marketed by the same sponsor or
manufacturer (or an affiliate thereof or a cross-licensed
producer or distributor) as the listed drug or reference
product described in such respective paragraph shall not be
taken into consideration.
``(f) Information on International Drug Prices.--For purposes
of determining which negotiation-eligible drugs to select under
subsection (a) and, in the case of such drugs that are selected
drugs, to determine the maximum fair price for such a drug and
whether such maximum fair price should be renegotiated under
section 1194, the Secretary shall use data relating to the AIM
price with respect to such drug as available or provided to the
Secretary and shall on an ongoing basis request from
manufacturers of selected drugs information on the AIM price of
such a drug.
``(g) New-Entrant Negotiation-Eligible Drugs.--
``(1) In general.--For purposes of this part, the
term `new-entrant negotiation-eligible drug' means,
with respect to the selected drug publication date with
respect to an initial price applicability year, a
qualifying single source drug--
``(A) that is first approved or licensed, as
described in paragraph (1), (2), or (3) of
subsection (e), as applicable, during the year
preceding such selected drug publication date;
and
``(B) that the Secretary determines under
paragraph (2) is likely to be included as a
negotiation-eligible drug with respect to the
subsequent selected drug publication date.
``(2) Determination.--In the case of a qualifying
single source drug that meets the criteria described in
subparagraph (A) of paragraph (1), with respect to an
initial price applicability year, if the wholesale
acquisition cost at which such drug is first marketed
in the United States is equal to or greater than the
median household income (as determined according to the
most recent data collected by the United States Census
Bureau), the Secretary shall determine before the
selected drug publication date with respect to the
initial price applicability year, if the drug is likely
to be included as a negotiation-eligible drug with
respect to the subsequent selected drug publication
date, based on the projected spending under title XVIII
or in the United States on such drug. For purposes of
this paragraph the term `United States' includes the 50
States, the District of Columbia, and the territories
of the United States.
``(h) Conflict of Interest.--
``(1) In general.--In the case the Inspector General
of the Department of Health and Human Services
determines the Secretary has a conflict, with respect
to a matter described in paragraph (2), the individual
described in paragraph (3) shall carry out the duties
of the Secretary under this part, with respect to a
negotiation-eligible drug, that would otherwise be such
a conflict.
``(2) Matter described.--A matter described in this
paragraph is--
``(A) a financial interest (as described in
section 2635.402 of title 5, Code of Federal
Regulations, as in effect on the date of the
enactment of this section, (except for an
interest described in subsection (b)(2)(iv) of
such section)) on the date of the selected drug
publication date, with respect the price
applicability year (as applicable);
``(B) a personal or business relationship (as
described in section 2635.502 of such title) on
the date of the selected drug publication date,
with respect the price applicability year;
``(C) employment by a manufacturer of a
negotiation-eligible drug during the preceding
10-year period beginning on the date of the
selected drug publication date, with respect to
each price applicability year; and
``(D) any other matter the General Counsel
determines appropriate.
``(3) Individual described.--An individual described
in this paragraph is--
``(A) the highest-ranking officer or employee
of the Department of Health and Human Services
(as determined by the organizational chart of
the Department) that does not have a conflict
under this subsection; and
``(B) is nominated by the President and
confirmed by the Senate with respect to the
position.
``SEC. 1193. MANUFACTURER AGREEMENTS.
``(a) In General.--For purposes of section 1191(a)(2), the
Secretary shall enter into agreements with manufacturers of
selected drugs with respect to a price applicability period, by
not later than June 15 following the selected drug publication
date with respect to such selected drug, under which--
``(1) during the voluntary negotiation period for the
initial price applicability year for the selected drug,
the Secretary and manufacturer, in accordance with
section 1194, negotiate to determine (and, by not later
than the last date of such period and in accordance
with subsection (c), agree to) a maximum fair price for
such selected drug of the manufacturer in order to
provide access to such price--
``(A) to fair price eligible individuals who
with respect to such drug are described in
subparagraph (A) of section 1191(c)(1) and are
furnished or dispensed such drug during,
subject to subparagraph (2), the price
applicability period; and
``(B) to hospitals, physicians, and other
providers of services and suppliers with
respect to fair price eligible individuals who
with respect to such drug are described in
subparagraph (B) of such section and are
furnished or administered such drug during,
subject to subparagraph (2), the price
applicability period;
``(2) the Secretary and the manufacturer shall, in
accordance with a process and during a period specified
by the Secretary pursuant to rulemaking, renegotiate
(and, by not later than the last date of such period
and in accordance with subsection (c), agree to) the
maximum fair price for such drug if the Secretary
determines that there is a material change in any of
the factors described in section 1194(d) relating to
the drug, including changes in the AIM price for such
drug, in order to provide access to such maximum fair
price (as so renegotiated)--
``(A) to fair price eligible individuals who
with respect to such drug are described in
subparagraph (A) of section 1191(c)(1) and are
furnished or dispensed such drug during any
year during the price applicability period
(beginning after such renegotiation) with
respect to such selected drug; and
``(B) to hospitals, physicians, and other
providers of services and suppliers with
respect to fair price eligible individuals who
with respect to such drug are described in
subparagraph (B) of such section and are
furnished or administered such drug during any
year described in subparagraph (A);
``(3) the maximum fair price (including as
renegotiated pursuant to paragraph (2)), with respect
to such a selected drug, shall be provided to fair
price eligible individuals, who with respect to such
drug are described in subparagraph (A) of section
1191(c)(1), at the pharmacy or by a mail order service
at the point-of-sale of such drug;
``(4) the manufacturer, subject to subsection (d),
submits to the Secretary, in a form and manner
specified by the Secretary--
``(A) for the voluntary negotiation period
for the price applicability period (and, if
applicable, before any period of renegotiation
specified pursuant to paragraph (2)) with
respect to such drug all information that the
Secretary requires to carry out the negotiation
(or renegotiation process) under this part,
including information described in section
1192(f) and section 1194(d)(1); and
``(B) on an ongoing basis, information on
changes in prices for such drug that would
affect the AIM price for such drug or otherwise
provide a basis for renegotiation of the
maximum fair price for such drug pursuant to
paragraph (2);
``(5) the manufacturer agrees that in the case the
selected drug of a manufacturer is a drug described in
subsection (c), the manufacturer will, in accordance
with such subsection, make any payment required under
such subsection with respect to such drug; and
``(6) the manufacturer complies with requirements
imposed by the Secretary for purposes of administering
the program, including with respect to the duties
described in section 1196.
``(b) Agreement in Effect Until Drug Is No Longer a Selected
Drug.--An agreement entered into under this section shall be
effective, with respect to a drug, until such drug is no longer
considered a selected drug under section 1192(c).
``(c) Special Rule for Certain Selected Drugs Without AIM
Price.--
``(1) In general.--In the case of a selected drug for
which there is no AIM price available with respect to
the initial price applicability year for such drug and
for which an AIM price becomes available beginning with
respect to a subsequent plan year during the price
applicability period for such drug, if the Secretary
determines that the amount described in paragraph
(2)(A) for a unit of such drug is greater than the
amount described in paragraph (2)(B) for a unit of such
drug, then by not later than one year after the date of
such determination, the manufacturer of such selected
drug shall pay to the Treasury an amount equal to the
product of--
``(A) the difference between such amount
described in paragraph (2)(A) for a unit of
such drug and such amount described in
paragraph (2)(B) for a unit of such drug; and
``(B) the number of units of such drug sold
in the United States, including the 50 States,
the District of Columbia, and the territories
of the United States, during the period
described in paragraph (2)(B).
``(2) Amounts described.--
``(A) Weighted average price before aim price
available.--For purposes of paragraph (1), the
amount described in this subparagraph for a
selected drug described in such paragraph, is
the amount equal to the weighted average
manufacturer price (as defined in section
1927(k)(1)) for such dosage strength and form
for the drug during the period beginning with
the first plan year for which the drug is
included on the list of negotiation-eligible
drugs published under section 1192(d) and
ending with the last plan year during the price
applicability period for such drug with respect
to which there is no AIM price available for
such drug.
``(B) Amount multiplier after aim price
available.--For purposes of paragraph (1), the
amount described in this subparagraph for a
selected drug described in such paragraph, is
the amount equal to 200 percent of the AIM
price for such drug with respect to the first
plan year during the price applicability period
for such drug with respect to which there is an
AIM price available for such drug.
``(d) Confidentiality of Information.--Information submitted
to the Secretary under this part by a manufacturer of a
selected drug that is proprietary information of such
manufacturer (as determined by the Secretary) may be used only
by the Secretary or disclosed to and used by the Comptroller
General of the United States or the Medicare Payment Advisory
Commission for purposes of carrying out this part.
``(e) Regulations.--
``(1) In general.--The Secretary shall, pursuant to
rulemaking, specify, in accordance with paragraph (2),
the information that must be submitted under subsection
(a)(4).
``(2) Information specified.--Information described
in paragraph (1), with respect to a selected drug,
shall include information on sales of the drug (by the
manufacturer of the drug or by another entity under
license or other agreement with the manufacturer, with
respect to the sales of such drug, regardless of the
name under which the drug is sold) in any foreign
country that is part of the AIM price. The Secretary
shall verify, to the extent practicable, such sales
from appropriate officials of the government of the
foreign country involved.
``(f) Compliance With Requirements for Administration of
Program.--Each manufacturer with an agreement in effect under
this section shall comply with requirements imposed by the
Secretary or a third party with a contract under section
1196(c)(1), as applicable, for purposes of administering the
program.
``SEC. 1194. NEGOTIATION AND RENEGOTIATION PROCESS.
``(a) In General.--For purposes of this part, under an
agreement under section 1193 between the Secretary and a
manufacturer of a selected drug, with respect to the period for
which such agreement is in effect and in accordance with
subsections (b) and (c), the Secretary and the manufacturer--
``(1) shall during the voluntary negotiation period
with respect to the initial price applicability year
for such drug, in accordance with this section,
negotiate a maximum fair price for such drug for the
purpose described in section 1193(a)(1); and
``(2) as applicable pursuant to section 1193(a)(2)
and in accordance with the process specified pursuant
to such section, renegotiate such maximum fair price
for such drug for the purpose described in such
section.
``(b) Negotiating Methodology and Objective.--
``(1) In general.--The Secretary shall develop and
use a consistent methodology for negotiations under
subsection (a) that, in accordance with paragraph (2)
and subject to paragraph (3), achieves the lowest
maximum fair price for each selected drug while
appropriately rewarding innovation.
``(2) Prioritizing factors.--In considering the
factors described in subsection (d) in negotiating
(and, as applicable, renegotiating) the maximum fair
price for a selected drug, the Secretary shall, to the
extent practicable, consider all of the available
factors listed but shall prioritize the following
factors:
``(A) Research and development costs.--The
factor described in paragraph (1)(A) of
subsection (d).
``(B) Market data.--The factor described in
paragraph (1)(B) of such subsection.
``(C) Unit costs of production and
distribution.--The factor described in
paragraph (1)(C) of such subsection.
``(D) Comparison to existing therapeutic
alternatives.--The factor described in
paragraph (2)(A) of such subsection.
``(3) Requirement.--
``(A) In general.--In negotiating the maximum
fair price of a selected drug, with respect to
an initial price applicability year for the
selected drug, and, as applicable, in
renegotiating the maximum fair price for such
drug, with respect to a subsequent year during
the price applicability period for such drug,
in the case that the manufacturer of the
selected drug offers under the negotiation or
renegotiation, as applicable, a price for such
drug that is not more than the target price
described in subparagraph (B) for such drug for
the respective year, the Secretary shall agree
under such negotiation or renegotiation,
respectively, to such offered price as the
maximum fair price.
``(B) Target price.--
``(i) In general.--Subject to clause
(ii), the target price described in
this subparagraph for a selected drug
with respect to a year, is the average
price (which shall be the net average
price, if practicable, and volume-
weighted, if practicable) for a unit of
such drug for sales of such drug, as
computed (across different dosage forms
and strengths of the drug and not based
on the specific formulation or package
size or package type of the drug) in
the applicable country described in
section 1191(c)(3)(B) with respect to
such drug that, with respect to such
year, has the lowest average price for
such drug as compared to the average
prices (as so computed) of such drug
with respect to such year in the other
applicable countries described in such
section with respect to such drug.
``(ii) Selected drugs without aim
price.--In applying this paragraph in
the case of negotiating the maximum
fair price of a selected drug for which
there is no AIM price available with
respect to the initial price
applicability year for such drug, or,
as applicable, renegotiating the
maximum fair price for such drug with
respect to a subsequent year during the
price applicability period for such
drug before the first plan year for
which there is an AIM price available
for such drug, the target price
described in this subparagraph for such
drug and respective year is the amount
that is 80 percent of the average
manufacturer price (as defined in
section 1927(k)(1)) for such drug and
year.
``(c) Limitation.--
``(1) In general.--Subject to paragraph (2), the
maximum fair price negotiated (including as
renegotiated) under this section for a selected drug,
with respect to each plan year during a price
applicability period for such drug, shall not exceed
120 percent of the AIM price applicable to such drug
with respect to such year.
``(2) Selected drugs without aim price.--In the case
of a selected drug for which there is no AIM price
available with respect to the initial price
applicability year for such drug, for each plan year
during the price applicability period before the first
plan year for which there is an AIM price available for
such drug, the maximum fair price negotiated (including
as renegotiated) under this section for the selected
drug shall not exceed the amount equal to 85 percent of
the average manufacturer price for the drug with
respect to such year.
``(d) Considerations.--For purposes of negotiating and, as
applicable, renegotiating (including for purposes of
determining whether to renegotiate) the maximum fair price of a
selected drug under this part with the manufacturer of the
drug, the Secretary, consistent with subsection (b)(2), shall
take into consideration the factors described in paragraphs
(1), (2), (3), and (5), and may take into consideration the
factor described in paragraph (4):
``(1) Manufacturer-specific information.--The
following information, including as submitted by the
manufacturer:
``(A) Research and development costs of the
manufacturer for the drug and the extent to
which the manufacturer has recouped research
and development costs.
``(B) Market data for the drug, including the
distribution of sales across different programs
and purchasers and projected future revenues
for the drug.
``(C) Unit costs of production and
distribution of the drug.
``(D) Prior Federal financial support for
novel therapeutic discovery and development
with respect to the drug.
``(E) Data on patents and on existing and
pending exclusivity for the drug.
``(F) National sales data for the drug.
``(G) Information on clinical trials for the
drug in the United States or in applicable
countries described in section 1191(c)(3)(B).
``(2) Information on alternative products.--The
following information:
``(A) The extent to which the drug represents
a therapeutic advance as compared to existing
therapeutic alternatives and, to the extent
such information is available, the costs of
such existing therapeutic alternatives.
``(B) Information on approval by the Food and
Drug Administration of alternative drug
products.
``(C) Information on comparative
effectiveness analysis for such products,
taking into consideration the effects of such
products on specific populations, such as
individuals with disabilities, the elderly,
terminally ill, children, and other patient
populations.
In considering information described in subparagraph
(C), the Secretary shall not use evidence or findings
from comparative clinical effectiveness research in a
manner that treats extending the life of an elderly,
disabled, or terminally ill individual as of lower
value than extending the life of an individual who is
younger, nondisabled, or not terminally ill. Nothing in
the previous sentence shall affect the application or
consideration of an AIM price for a selected drug.
``(3) Foreign sales information.--To the extent
available on a timely basis, including as provided by a
manufacturer of the selected drug or otherwise,
information on sales of the selected drug in each of
the countries described in section 1191(c)(3)(B).
``(4) VA drug pricing information.--Information
disclosed to the Secretary pursuant to subsection (f).
``(5) Additional information.--Information submitted
to the Secretary, in accordance with a process
specified by the Secretary, by other parties that are
affected by the establishment of a maximum fair price
for the selected drug.
``(e) Request for Information.--For purposes of negotiating
and, as applicable, renegotiating (including for purposes of
determining whether to renegotiate) the maximum fair price of a
selected drug under this part with the manufacturer of the
drug, with respect to a price applicability period, and other
relevant data for purposes of this section--
``(1) the Secretary shall, not later than the
selected drug publication date with respect to the
initial price applicability year of such period,
request drug pricing information from the manufacturer
of such selected drug, including information described
in subsection (d)(1); and
``(2) by not later than October 1 following the
selected drug publication date, the manufacturer of
such selected drug shall submit to the Secretary such
requested information in such form and manner as the
Secretary may require.
The Secretary shall request, from the manufacturer or others,
such additional information as may be needed to carry out the
negotiation and renegotiation process under this section.
``(f) Disclosure of Information.--For purposes of this part,
the Secretary of Veterans Affairs may disclose to the Secretary
of Health and Human Services the price of any negotiation-
eligible drug that is purchased pursuant to section 8126 of
title 38, United States Code.
``SEC. 1195. PUBLICATION OF MAXIMUM FAIR PRICES.
``(a) In General.--With respect to an initial price
applicability year and selected drug with respect to such year,
not later than April 1 of the plan year prior to such initial
price applicability year, the Secretary shall publish in the
Federal Register the maximum fair price for such drug
negotiated under this part with the manufacturer of such drug.
``(b) Updates.--
``(1) Subsequent year maximum fair prices.--For a
selected drug, for each plan year subsequent to the
initial price applicability year for such drug with
respect to which an agreement for such drug is in
effect under section 1193, the Secretary shall publish
in the Federal Register--
``(A) subject to subparagraph (B), the amount
equal to the maximum fair price published for
such drug for the previous year, increased by
the annual percentage increase in the consumer
price index for all urban consumers (all items;
U.S. city average) as of September of such
previous year; or
``(B) in the case the maximum fair price for
such drug was renegotiated, for the first year
for which such price as so renegotiated
applies, such renegotiated maximum fair price.
``(2) Prices negotiated after deadline.--In the case
of a selected drug with respect to an initial price
applicability year for which the maximum fair price is
determined under this part after the date of
publication under this section, the Secretary shall
publish such maximum fair price in the Federal Register
by not later than 30 days after the date such maximum
price is so determined.
``SEC. 1196. ADMINISTRATIVE DUTIES; COORDINATION PROVISIONS.
``(a) Administrative Duties.--
``(1) In general.--For purposes of section 1191, the
administrative duties described in this section are the
following:
``(A) The establishment of procedures
(including through agreements with
manufacturers under this part, contracts with
prescription drug plans under part D of title
XVIII and MA-PD plans under part C of such
title, and agreements under section 1197 with
group health plans and health insurance issuers
of health insurance coverage offered in the
individual or group market) under which the
maximum fair price for a selected drug is
provided to fair price eligible individuals,
who with respect to such drug are described in
subparagraph (A) of section 1191(c)(1), at
pharmacies or by mail order service at the
point-of-sale of the drug for the applicable
price period for such drug and providing that
such maximum fair price is used for determining
cost-sharing under such plans or coverage for
the selected drug.
``(B) The establishment of procedures
(including through agreements with
manufacturers under this part and contracts
with hospitals, physicians, and other providers
of services and suppliers and agreements under
section 1197 with group health plans and health
insurance issuers of health insurance coverage
offered in the individual or group market)
under which, in the case of a selected drug
furnished or administered by such a hospital,
physician, or other provider of services or
supplier to fair price eligible individuals
(who with respect to such drug are described in
subparagraph (B) of section 1191(c)(1)), the
maximum fair price for the selected drug is
provided to such hospitals, physicians, and
other providers of services and suppliers (as
applicable) with respect to such individuals
and providing that such maximum fair price is
used for determining cost-sharing under the
respective part, plan, or coverage for the
selected drug.
``(C) The establishment of procedures
(including through agreements and contracts
described in subparagraphs (A) and (B)) to
ensure that, not later than 90 days after the
dispensing of a selected drug to a fair price
eligible individual by a pharmacy or mail order
service, the pharmacy or mail order service is
reimbursed for an amount equal to the
difference between--
``(i) the lesser of--
``(I) the wholesale
acquisition cost of the drug;
``(II) the national average
drug acquisition cost of the
drug; and
``(III) any other similar
determination of pharmacy
acquisition costs of the drug,
as determined by the Secretary;
and
``(ii) the maximum fair price for the
drug.
``(D) The establishment of procedures to
ensure that the maximum fair price for a
selected drug is applied before--
``(i) any coverage or financial
assistance under other health benefit
plans or programs that provide coverage
or financial assistance for the
purchase or provision of prescription
drug coverage on behalf of fair price
eligible individuals as the Secretary
may specify; and
``(ii) any other discounts.
``(E) The establishment of procedures to
enter into appropriate agreements and protocols
for the ongoing computation of AIM prices for
selected drugs, including, to the extent
possible, to compute the AIM price for selected
drugs and including by providing that the
manufacturer of such a selected drug should
provide information for such computation not
later than 3 months after the first date of the
voluntary negotiation period for such selected
drug.
``(F) The establishment of procedures to
compute and apply the maximum fair price across
different strengths and dosage forms of a
selected drug and not based on the specific
formulation or package size or package type of
the drug.
``(G) The establishment of procedures to
negotiate and apply the maximum fair price in a
manner that does not include any dispensing or
similar fee.
``(H) The establishment of procedures to
carry out the provisions of this part, as
applicable, with respect to--
``(i) fair price eligible individuals
who are enrolled under a prescription
drug plan under part D of title XVIII
or an MA-PD plan under part C of such
title;
``(ii) fair price eligible
individuals who are enrolled under a
group health plan or health insurance
coverage offered by a health insurance
issuer in the individual or group
market with respect to which there is
an agreement in effect under section
1197; and
``(iii) fair price eligible
individuals who are entitled to
benefits under part A of title XVIII or
enrolled under part B of such title.
``(I) The establishment of a negotiation
process and renegotiation process in accordance
with section 1194, including a process for
acquiring information described in subsection
(d) of such section and determining amounts
described in subsection (b) of such section.
``(J) The provision of a reasonable dispute
resolution mechanism to resolve disagreements
between manufacturers, fair price eligible
individuals, and the third party with a
contract under subsection (c)(1).
``(2) Monitoring compliance.--
``(A) In general.--The Secretary shall
monitor compliance by a manufacturer with the
terms of an agreement under section 1193,
including by establishing a mechanism through
which violations of such terms may be reported.
``(B) Notification.--If a third party with a
contract under subsection (c)(1) determines
that the manufacturer is not in compliance with
such agreement, the third party shall notify
the Secretary of such noncompliance for
appropriate enforcement under section 4192 of
the Internal Revenue Code of 1986 or section
1198, as applicable.
``(b) Collection of Data.--
``(1) From prescription drug plans and ma-pd plans.--
The Secretary may collect appropriate data from
prescription drug plans under part D of title XVIII and
MA-PD plans under part C of such title in a timeframe
that allows for maximum fair prices to be provided
under this part for selected drugs.
``(2) From health plans.--The Secretary may collect
appropriate data from group health plans or health
insurance issuers offering group or individual health
insurance coverage in a timeframe that allows for
maximum fair prices to be provided under this part for
selected drugs.
``(3) Coordination of data collection.--To the extent
feasible, as determined by the Secretary, the Secretary
shall ensure that data collected pursuant to this
subsection is coordinated with, and not duplicative of,
other Federal data collection efforts.
``(c) Contract With Third Parties.--
``(1) In general.--The Secretary may enter into a
contract with 1 or more third parties to administer the
requirements established by the Secretary in order to
carry out this part. At a minimum, the contract with a
third party under the preceding sentence shall require
that the third party--
``(A) receive and transmit information
between the Secretary, manufacturers, and other
individuals or entities the Secretary
determines appropriate;
``(B) receive, distribute, or facilitate the
distribution of funds of manufacturers to
appropriate individuals or entities in order to
meet the obligations of manufacturers under
agreements under this part;
``(C) provide adequate and timely information
to manufacturers, consistent with the agreement
with the manufacturer under this part, as
necessary for the manufacturer to fulfill its
obligations under this part; and
``(D) permit manufacturers to conduct
periodic audits, directly or through contracts,
of the data and information used by the third
party to determine discounts for applicable
drugs of the manufacturer under the program.
``(2) Performance requirements.--The Secretary shall
establish performance requirements for a third party
with a contract under paragraph (1) and safeguards to
protect the independence and integrity of the
activities carried out by the third party under the
program under this part.
``SEC. 1197. VOLUNTARY PARTICIPATION BY OTHER HEALTH PLANS.
``(a) Agreement To Participate Under Program.--
``(1) In general.--Subject to paragraph (2), under
the program under this part the Secretary shall be
treated as having in effect an agreement with a group
health plan or health insurance issuer offering group
or individual health insurance coverage (as such terms
are defined in section 2791 of the Public Health
Service Act), with respect to a price applicability
period and a selected drug with respect to such
period--
``(A) with respect to such selected drug
furnished or dispensed at a pharmacy or by mail
order service if coverage is provided under
such plan or coverage during such period for
such selected drug as so furnished or
dispensed; and
``(B) with respect to such selected drug
furnished or administered by a hospital,
physician, or other provider of services or
supplier if coverage is provided under such
plan or coverage during such period for such
selected drug as so furnished or administered.
``(2) Opting out of agreement.--The Secretary shall
not be treated as having in effect an agreement under
the program under this part with a group health plan or
health insurance issuer offering group or individual
health insurance coverage with respect to a price
applicability period and a selected drug with respect
to such period if such a plan or issuer affirmatively
elects, through a process specified by the Secretary,
not to participate under the program with respect to
such period and drug.
``(b) Publication of Election.--With respect to each price
applicability period and each selected drug with respect to
such period, the Secretary and the Secretary of Labor and the
Secretary of the Treasury, as applicable, shall make public a
list of each group health plan and each health insurance issuer
offering group or individual health insurance coverage, with
respect to which coverage is provided under such plan or
coverage for such drug, that has elected under subsection (a)
not to participate under the program with respect to such
period and drug.
``SEC. 1198. CIVIL MONETARY PENALTY.
``(a) Violations Relating to Offering of Maximum Fair
Price.--Any manufacturer of a selected drug that has entered
into an agreement under section 1193, with respect to a plan
year during the price applicability period for such drug, that
does not provide access to a price that is not more than the
maximum fair price (or a lesser price) for such drug for such
year--
``(1) to a fair price eligible individual who with
respect to such drug is described in subparagraph (A)
of section 1191(c)(1) and who is furnished or dispensed
such drug during such year; or
``(2) to a hospital, physician, or other provider of
services or supplier with respect to fair price
eligible individuals who with respect to such drug is
described in subparagraph (B) of such section and is
furnished or administered such drug by such hospital,
physician, or provider or supplier during such year;
shall be subject to a civil monetary penalty equal to ten times
the amount equal to the difference between the price for such
drug made available for such year by such manufacturer with
respect to such individual or hospital, physician, provider, or
supplier and the maximum fair price for such drug for such
year.
``(b) Violations of Certain Terms of Agreement.--Any
manufacturer of a selected drug that has entered into an
agreement under section 1193, with respect to a plan year
during the price applicability period for such drug, that is in
violation of a requirement imposed pursuant to section
1193(a)(6) shall be subject to a civil monetary penalty of not
more than $1,000,000 for each such violation.
``(c) Application.--The provisions of section 1128A (other
than subsections (a) and (b)) shall apply to a civil monetary
penalty under this section in the same manner as such
provisions apply to a penalty or proceeding under section
1128A(a).
``SEC. 1199. MISCELLANEOUS PROVISIONS.
``(a) Paperwork Reduction Act.--Chapter 35 of title 44,
United States Code, shall not apply to data collected under
this part.
``(b) Limitation on Judicial Review.--The following shall not
be subject to judicial review:
``(1) The selection of drugs for publication under
section 1192(a).
``(2) The determination of whether a drug is a
negotiation-eligible drug under section 1192(d).
``(3) The determination of the maximum fair price of
a selected drug under section 1194.
``(4) The determination of units of a drug for
purposes of section 1191(c)(3).
``(c) Coordination.--In carrying out this part with respect
to group health plans or health insurance coverage offered in
the group market that are subject to oversight by the Secretary
of Labor or the Secretary of the Treasury, the Secretary of
Health and Human Services shall coordinate with such respective
Secretary.
``(d) Data Sharing.--The Secretary shall share with the
Secretary of the Treasury such information as is necessary to
determine the tax imposed by section 4192 of the Internal
Revenue Code of 1986.''.
(b) Application of Maximum Fair Prices and Conforming
Amendments.--
(1) Under medicare.--
(A) Application to payments under part b.--
Section 1847A(b)(1)(B) of the Social Security
Act (42 U.S.C. 1395w-3a(b)(1)(B)) is amended by
inserting ``or in the case of such a drug or
biological that is a selected drug (as defined
in section 1192(c)), with respect to a price
applicability period (as defined in section
1191(b)(2)), 106 percent of the maximum fair
price (as defined in section 1191(c)(2))
applicable for such drug and a plan year during
such period'' after ``paragraph (4)''.
(B) Exception to part d non-interference.--
Section 1860D-11(i) of the Social Security Act
(42 U.S.C. 1395w-111(i)) is amended by
inserting ``, except as provided under part E
of title XI'' after ``the Secretary''.
(C) Application as negotiated price under
part d.--Section 1860D-2(d)(1) of the Social
Security Act (42 U.S.C. 1395w-102(d)(1)) is
amended--
(i) in subparagraph (B), by inserting
``, subject to subparagraph (D),''
after ``negotiated prices''; and
(ii) by adding at the end the
following new subparagraph:
``(D) Application of maximum fair price for
selected drugs.--In applying this section, in
the case of a covered part D drug that is a
selected drug (as defined in section 1192(c)),
with respect to a price applicability period
(as defined in section 1191(b)(2)), the
negotiated prices used for payment (as
described in this subsection) shall be the
maximum fair price (as defined in section
1191(c)(2)) for such drug and for each plan
year during such period.''.
(D) Information from prescription drug plans
and ma-pd plans required.--
(i) Prescription drug plans.--Section
1860D-12(b) of the Social Security Act
(42 U.S.C. 1395w-112(b)) is amended by
adding at the end the following new
paragraph:
``(8) Provision of information related to maximum
fair prices.--Each contract entered into with a PDP
sponsor under this part with respect to a prescription
drug plan offered by such sponsor shall require the
sponsor to provide information to the Secretary as
requested by the Secretary in accordance with section
1196(b).''.
(ii) MA-PD plans.--Section 1857(f)(3)
of the Social Security Act (42 U.S.C.
1395w-27(f)(3)) is amended by adding at
the end the following new subparagraph:
``(E) Provision of information related to
maximum fair prices.--Section 1860D-
12(b)(8).''.
(2) Under group health plans and health insurance
coverage.--
(A) PHSA.--Part D of title XXVII of the
Public Health Service Act (42 U.S.C. 300gg-111
et seq.) is amended by adding at the end the
following new section:
``SEC. 2799A-11. FAIR PRICE NEGOTIATION PROGRAM AND APPLICATION OF
MAXIMUM FAIR PRICES.
``(a) In General.--In the case of a group health plan or
health insurance issuer offering group or individual health
insurance coverage that is treated under section 1197 of the
Social Security Act as having in effect an agreement with the
Secretary under the Fair Price Negotiation Program under part E
of title XI of such Act, with respect to a price applicability
period (as defined in section 1191(b) of such Act) and a
selected drug (as defined in section 1192(c) of such Act) with
respect to such period with respect to which coverage is
provided under such plan or coverage--
``(1) the provisions of such part shall apply--
``(A) if coverage of such selected drug is
provided under such plan or coverage if the
drug is furnished or dispensed at a pharmacy or
by a mail order service, to the plans or
coverage offered by such plan or issuer, and to
the individuals enrolled under such plans or
coverage, during such period, with respect to
such selected drug, in the same manner as such
provisions apply to prescription drug plans and
MA-PD plans, and to individuals enrolled under
such prescription drug plans and MA-PD plans
during such period; and
``(B) if coverage of such selected drug is
provided under such plan or coverage if the
drug is furnished or administered by a
hospital, physician, or other provider of
services or supplier, to the plans or coverage
offered by such plan or issuers, to the
individuals enrolled under such plans or
coverage, and to hospitals, physicians, and
other providers of services and suppliers
during such period, with respect to such drug
in the same manner as such provisions apply to
the Secretary, to individuals entitled to
benefits under part A of title XVIII or
enrolled under part B of such title, and to
hospitals, physicians, and other providers and
suppliers participating under title XVIII
during such period;
``(2) the plan or issuer shall apply any cost-sharing
responsibilities under such plan or coverage, with
respect to such selected drug, by substituting an
amount not more than the maximum fair price negotiated
under such part E of title XI for such drug in lieu of
the drug price upon which the cost-sharing would have
otherwise applied, and such cost-sharing
responsibilities with respect to such selected drug may
not exceed such maximum fair price; and
``(3) the Secretary shall apply the provisions of
such part E to such plan, issuer, and coverage, such
individuals so enrolled in such plans and coverage, and
such hospitals, physicians, and other providers and
suppliers participating in such plans and coverage.
``(b) Notification Regarding Nonparticipation in Fair Price
Negotiation Program.--A group health plan or a health insurance
issuer offering group or individual health insurance coverage
shall publicly disclose in a manner and in accordance with a
process specified by the Secretary any election made under
section 1197 of the Social Security Act by the plan or issuer
to not participate in the Fair Price Negotiation Program under
part E of title XI of such Act with respect to a selected drug
(as defined in section 1192(c) of such Act) for which coverage
is provided under such plan or coverage before the beginning of
the plan year for which such election was made.''.
(B) ERISA.--
(i) In general.--Subpart B of part 7
of subtitle B of title I of the
Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1181 et seq.) is
amended by adding at the end the
following new section:
``SEC. 726. FAIR PRICE NEGOTIATION PROGRAM AND APPLICATION OF MAXIMUM
FAIR PRICES.
``(a) In General.--In the case of a group health plan or
health insurance issuer offering group health insurance
coverage that is treated under section 1197 of the Social
Security Act as having in effect an agreement with the
Secretary under the Fair Price Negotiation Program under part E
of title XI of such Act, with respect to a price applicability
period (as defined in section 1191(b) of such Act) and a
selected drug (as defined in section 1192(c) of such Act) with
respect to such period with respect to which coverage is
provided under such plan or coverage--
``(1) the provisions of such part shall apply, as
applicable--
``(A) if coverage of such selected drug is
provided under such plan or coverage if the
drug is furnished or dispensed at a pharmacy or
by a mail order service, to the plans or
coverage offered by such plan or issuer, and to
the individuals enrolled under such plans or
coverage, during such period, with respect to
such selected drug, in the same manner as such
provisions apply to prescription drug plans and
MA-PD plans, and to individuals enrolled under
such prescription drug plans and MA-PD plans
during such period; and
``(B) if coverage of such selected drug is
provided under such plan or coverage if the
drug is furnished or administered by a
hospital, physician, or other provider of
services or supplier, to the plans or coverage
offered by such plan or issuers, to the
individuals enrolled under such plans or
coverage, and to hospitals, physicians, and
other providers of services and suppliers
during such period, with respect to such drug
in the same manner as such provisions apply to
the Secretary, to individuals entitled to
benefits under part A of title XVIII or
enrolled under part B of such title, and to
hospitals, physicians, and other providers and
suppliers participating under title XVIII
during such period;
``(2) the plan or issuer shall apply any cost-sharing
responsibilities under such plan or coverage, with
respect to such selected drug, by substituting an
amount not more than the maximum fair price negotiated
under such part E of title XI for such drug in lieu of
the drug price upon which the cost-sharing would have
otherwise applied, and such cost-sharing
responsibilities with respect to such selected drug may
not exceed such maximum fair price; and
``(3) the Secretary shall apply the provisions of
such part E to such plan, issuer, and coverage, and
such individuals so enrolled in such plans.
``(b) Notification Regarding Nonparticipation in Fair Price
Negotiation Program.--A group health plan or a health insurance
issuer offering group health insurance coverage shall publicly
disclose in a manner and in accordance with a process specified
by the Secretary any election made under section 1197 of the
Social Security Act by the plan or issuer to not participate in
the Fair Price Negotiation Program under part E of title XI of
such Act with respect to a selected drug (as defined in section
1192(c) of such Act) for which coverage is provided under such
plan or coverage before the beginning of the plan year for
which such election was made.''.
(ii) Application to retiree and
certain small group health plans.--
Section 732(a) of the Employee
Retirement Income Security Act of 1974
(29 U.S.C. 1191a(a)) is amended by
striking ``section 711'' and inserting
``sections 711 and 726''.
(iii) Clerical amendment.--The table
of sections for subpart B of part 7 of
subtitle B of title I of the Employee
Retirement Income Security Act of 1974
is amended by adding at the end the
following:
``Sec. 726. Fair Price Negotiation Program and application of maximum
fair prices.''.
(C) IRC.--
(i) In general.--Subchapter B of
chapter 100 of the Internal Revenue
Code of 1986 is amended by adding at
the end the following new section:
``SEC. 9826. FAIR PRICE NEGOTIATION PROGRAM AND APPLICATION OF MAXIMUM
FAIR PRICES.
``(a) In General.--In the case of a group health plan that is
treated under section 1197 of the Social Security Act as having
in effect an agreement with the Secretary under the Fair Price
Negotiation Program under part E of title XI of such Act, with
respect to a price applicability period (as defined in section
1191(b) of such Act) and a selected drug (as defined in section
1192(c) of such Act) with respect to such period with respect
to which coverage is provided under such plan--
``(1) the provisions of such part shall apply, as
applicable--
``(A) if coverage of such selected drug is
provided under such plan if the drug is
furnished or dispensed at a pharmacy or by a
mail order service, to the plan, and to the
individuals enrolled under such plan during
such period, with respect to such selected
drug, in the same manner as such provisions
apply to prescription drug plans and MA-PD
plans, and to individuals enrolled under such
prescription drug plans and MA-PD plans during
such period; and
``(B) if coverage of such selected drug is
provided under such plan if the drug is
furnished or administered by a hospital,
physician, or other provider of services or
supplier, to the plan, to the individuals
enrolled under such plan, and to hospitals,
physicians, and other providers of services and
suppliers during such period, with respect to
such drug in the same manner as such provisions
apply to the Secretary, to individuals entitled
to benefits under part A of title XVIII or
enrolled under part B of such title, and to
hospitals, physicians, and other providers and
suppliers participating under title XVIII
during such period;
``(2) the plan shall apply any cost-sharing
responsibilities under such plan, with respect to such
selected drug, by substituting an amount not more than
the maximum fair price negotiated under such part E of
title XI for such drug in lieu of the drug price upon
which the cost-sharing would have otherwise applied,
and such cost-sharing responsibilities with respect to
such selected drug may not exceed such maximum fair
price; and
``(3) the Secretary shall apply the provisions of
such part E to such plan and such individuals so
enrolled in such plan.
``(b) Notification Regarding Nonparticipation in Fair Price
Negotiation Program.--A group health plan shall publicly
disclose in a manner and in accordance with a process specified
by the Secretary any election made under section 1197 of the
Social Security Act by the plan to not participate in the Fair
Price Negotiation Program under part E of title XI of such Act
with respect to a selected drug (as defined in section 1192(c)
of such Act) for which coverage is provided under such plan
before the beginning of the plan year for which such election
was made.''.
(ii) Application to retiree and
certain small group health plans.--
Section 9831(a)(2) of the Internal
Revenue Code of 1986 is amended by
inserting ``other than with respect to
section 9826,'' before ``any group
health plan''.
(iii) Clerical amendment.--The table
of sections for subchapter B of chapter
100 of such Code is amended by adding
at the end the following new item:
``Sec. 9826. Fair Price Negotiation Program and application of maximum
fair prices.''.
(3) Fair price negotiation program prices included in
best price and amp.--Section 1927 of the Social
Security Act (42 U.S.C. 1396r-8) is amended--
(A) in subsection (c)(1)(C)(ii)--
(i) in subclause (III), by striking
at the end ``; and'';
(ii) in subclause (IV), by striking
at the end the period and inserting ``;
and''; and
(iii) by adding at the end the
following new subclause:
``(V) in the case of a rebate
period and a covered outpatient
drug that is a selected drug
(as defined in section 1192(c))
during such rebate period,
shall be inclusive of the price
for such drug made available
from the manufacturer during
the rebate period by reason of
application of part E of title
XI to any wholesaler, retailer,
provider, health maintenance
organization, nonprofit entity,
or governmental entity within
the United States.''; and
(B) in subsection (k)(1)(B), by adding at the
end the following new clause:
``(iii) Clarification.--
Notwithstanding clause (i), in the case
of a rebate period and a covered
outpatient drug that is a selected drug
(as defined in section 1192(c)) during
such rebate period, any reduction in
price paid during the rebate period to
the manufacturer for the drug by a
wholesaler or retail community pharmacy
described in subparagraph (A) by reason
of application of part E of title XI
shall be included in the average
manufacturer price for the covered
outpatient drug.''.
(4) FEHBP.--Section 8902 of title 5, United States
Code, is amended by adding at the end the following:
``(p) A contract may not be made or a plan approved under
this chapter with any carrier that has affirmatively elected,
pursuant to section 1197 of the Social Security Act, not to
participate in the Fair Price Negotiation Program established
under section 1191 of such Act for any selected drug (as that
term is defined in section 1192(c) of such Act).''.
(5) Option of secretary of veterans affairs to
purchase covered drugs at maximum fair prices.--Section
8126 of title 38, United States Code, is amended--
(A) in subsection (a)(2), by inserting ``,
subject to subsection (j),'' after ``may not
exceed'';
(B) in subsection (d), in the matter
preceding paragraph (1), by inserting ``,
subject to subsection (j)'' after ``for the
procurement of the drug''; and
(C) by adding at the end the following new
subsection:
``(j)(1) In the case of a covered drug that is a selected
drug, for any year during the price applicability period for
such drug, if the Secretary determines that the maximum fair
price of such drug for such year is less than the price for
such drug otherwise in effect pursuant to this section
(including after application of any reduction under subsection
(a)(2) and any discount under subsection (c)), at the option of
the Secretary, in lieu of the maximum price (determined after
application of the reduction under subsection (a)(2) and any
discount under subsection (c), as applicable) that would be
permitted to be charged during such year for such drug pursuant
to this section without application of this subsection, the
maximum price permitted to be charged during such year for such
drug pursuant to this section shall be such maximum fair price
for such drug and year.
``(2) For purposes of this subsection:
``(A) The term `maximum fair price' means, with
respect to a selected drug and year during the price
applicability period for such drug, the maximum fair
price (as defined in section 1191(c)(2) of the Social
Security Act) for such drug and year.
``(B) The term `negotiation eligible drug' has the
meaning given such term in section 1192(d)(1) of the
Social Security Act.
``(C) The term `price applicability period' has, with
respect to a selected drug, the meaning given such term
in section 1191(b)(2) of such Act.
``(D) The term `selected drug' means, with respect to
a year, a drug that is a selected drug under section
1192(c) of such Act for such year.''.
SEC. 139002. SELECTED DRUG MANUFACTURER EXCISE TAX IMPOSED DURING
NONCOMPLIANCE PERIODS.
(a) In General.--Subchapter E of chapter 32 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 4192. SELECTED DRUGS DURING NONCOMPLIANCE PERIODS.
``(a) In General.--There is hereby imposed on the sale by the
manufacturer, producer, or importer of any selected drug during
a day described in subsection (b) a tax in an amount such that
the applicable percentage is equal to the ratio of--
``(1) such tax, divided by
``(2) the sum of such tax and the price for which so
sold.
``(b) Noncompliance Periods.--A day is described in this
subsection with respect to a selected drug if it is a day
during one of the following periods:
``(1) The period beginning on the June 16th
immediately following the selected drug publication
date and ending on the first date during which the
manufacturer of the drug has in place an agreement
described in subsection (a) of section 1193 of the
Social Security Act with respect to such drug.
``(2) The period beginning on the April 1st
immediately following the June 16th described in
paragraph (1) and ending on the first date during which
the manufacturer of the drug has agreed to a maximum
fair price under such agreement.
``(3) In the case of a selected drug with respect to
which the Secretary of Health and Human Services has
specified a renegotiation period under such agreement,
the period beginning on the first date after the last
date of such renegotiation period and ending on the
first date during which the manufacturer of the drug
has agreed to a renegotiated maximum fair price under
such agreement.
``(4) With respect to information that is required to
be submitted to the Secretary of Health and Human
Services under such agreement, the period beginning on
the date on which such Secretary certifies that such
information is overdue and ending on the date that such
information is so submitted.
``(5) In the case of a selected drug with respect to
which a payment is due under subsection (c) of such
section 1193, the period beginning on the date on which
the Secretary of Health and Human Services certifies
that such payment is overdue and ending on the date
that such payment is made in full.
``(c) Applicable Percentage.--For purposes of this section,
the term `applicable percentage' means--
``(1) in the case of sales of a selected drug during
the first 90 days described in subsection (b) with
respect to such drug, 65 percent,
``(2) in the case of sales of such drug during the
91st day through the 180th day described in subsection
(b) with respect to such drug, 75 percent,
``(3) in the case of sales of such drug during the
181st day through the 270th day described in subsection
(b) with respect to such drug, 85 percent, and
``(4) in the case of sales of such drug during any
subsequent day, 95 percent.
``(d) Selected Drug.--For purposes of this section--
``(1) In general.--The term `selected drug' means any
selected drug (within the meaning of section 1192 of
the Social Security Act) which is manufactured or
produced in the United States or entered into the
United States for consumption, use, or warehousing.
``(2) United states.--The term `United States' has
the meaning given such term by section 4612(a)(4).
``(3) Coordination with rules for possessions of the
united states.--Rules similar to the rules of
paragraphs (2) and (4) of section 4132(c) shall apply
for purposes of this section.
``(e) Other Definitions.--For purposes of this section, the
terms `selected drug publication date' and `maximum fair price'
have the meaning given such terms in section 1191 of the Social
Security Act.
``(f) Anti-Abuse Rule.--In the case of a sale which was timed
for the purpose of avoiding the tax imposed by this section,
the Secretary may treat such sale as occurring during a day
described in subsection (b).''.
(b) No Deduction for Excise Tax Payments.--Section 275 of the
Internal Revenue Code of 1986 is amended by adding ``or by
section 4192'' before the period at the end of subsection
(a)(6).
(c) Conforming Amendments.--
(1) Section 4221(a) of the Internal Revenue Code of
1986 is amended by inserting ``or 4192'' after
``section 4191''.
(2) Section 6416(b)(2) of such Code is amended by
inserting ``or 4192'' after ``section 4191''.
(d) Clerical Amendments.--
(1) The heading of subchapter E of chapter 32 of the
Internal Revenue Code of 1986 is amended by striking
``Medical Devices'' and inserting ``Other Medical
Products''.
(2) The table of subchapters for chapter 32 of such
Code is amended by striking the item relating to
subchapter E and inserting the following new item:
``subchapter e. other medical products''.
(3) The table of sections for subchapter E of chapter
32 of such Code is amended by adding at the end the
following new item:
``Sec. 4192. Selected drugs during noncompliance periods.''.
(e) Effective Date.--The amendments made by this section
shall apply to sales after the date of the enactment of this
Act.
SEC. 139003. FAIR PRICE NEGOTIATION IMPLEMENTATION FUND.
(a) In General.--There is hereby established a Fair Price
Negotiation Implementation Fund (referred to in this section as
the ``Fund''). The Secretary of Health and Human Services may
obligate and expend amounts in the Fund to carry out this part
and parts 2 and 3 (and the amendments made by such parts).
(b) Funding.--There is authorized to be appropriated, and
there is hereby appropriated, out of any monies in the Treasury
not otherwise appropriated, to the Fund $3,000,000,000, to
remain available until expended, of which--
(1) $600,000,000 shall become available on the date
of the enactment of this Act;
(2) $600,000,000 shall become available on October 1,
2023;
(3) $600,000,000 shall become available on October 1,
2024;
(4) $600,000,000 shall become available on October 1,
2025; and
(5) $600,000,000 shall become available on October 1,
2026.
(c) Supplement Not Supplant.--Any amounts appropriated
pursuant to this section shall be in addition to any other
amounts otherwise appropriated pursuant to any other provision
of law.
PART 2--PRESCRIPTION DRUG INFLATION REBATES
SEC. 139101. MEDICARE PART B REBATE BY MANUFACTURERS.
(a) In General.--Section 1834 of the Social Security Act (42
U.S.C. 1395m) is amended by adding at the end the following new
subsection:
``(z) Rebate by Manufacturers for Single Source Drugs With
Prices Increasing Faster Than Inflation.--
``(1) Requirements.--
``(A) Secretarial provision of information.--
Not later than 6 months after the end of each
calendar quarter beginning on or after July 1,
2023, the Secretary shall, for each part B
rebatable drug, report to each manufacturer of
such part B rebatable drug the following for
such calendar quarter:
``(i) Information on the total number
of units of the billing and payment
code described in subparagraph (A)(i)
of paragraph (3) with respect to such
drug and calendar quarter.
``(ii) Information on the amount (if
any) of the excess average sales price
increase described in subparagraph
(A)(ii) of such paragraph for such drug
and calendar quarter.
``(iii) The rebate amount specified
under such paragraph for such part B
rebatable drug and calendar quarter.
``(B) Manufacturer requirement.--For each
calendar quarter beginning on or after July 1,
2023, the manufacturer of a part B rebatable
drug shall, for such drug, not later than 30
days after the date of receipt from the
Secretary of the information described in
subparagraph (A) for such calendar quarter,
provide to the Secretary a rebate that is equal
to the amount specified in paragraph (3) for
such drug for such calendar quarter.
``(2) Part b rebatable drug defined.--
``(A) In general.--In this subsection, the
term `part B rebatable drug' means a single
source drug or biological (as defined in
subparagraph (D) of section 1847A(c)(6)),
including a biosimilar biological product (as
defined in subparagraph (H) of such section),
payable (if such drug were furnished to an
individual enrolled under this part) under this
part, except such term shall not include such a
drug or biological--
``(i) if the average total allowed
charges under this part as determined
by the Secretary for a year per
individual that uses such a drug or
biological, as determined by the
Secretary, are less than, subject to
subparagraph (B), $100; or
``(ii) that is a vaccine described in
subparagraph (A) or (B) of section
1861(s)(10).
``(B) Increase.--The dollar amount applied
under subparagraph (A)(i)--
``(i) for 2024, shall be the dollar
amount specified under such
subparagraph for 2023, increased by the
percentage increase in the consumer
price index for all urban consumers
(United States city average) for the
12-month period ending with June of the
previous year; and
``(ii) for a subsequent year, shall
be the dollar amount specified in this
clause (or clause (i)) for the previous
year, increased by the percentage
increase in the consumer price index
for all urban consumers (United States
city average) for the 12-month period
ending with June of the previous year.
Any dollar amount specified under this
subparagraph that is not a multiple of $10
shall be rounded to the nearest multiple of
$10.
``(3) Rebate amount.--
``(A) In general.--For purposes of paragraph
(1), the amount specified in this paragraph for
a part B rebatable drug assigned to a billing
and payment code for a calendar quarter is,
subject to subparagraph (B) and paragraph (4),
the amount equal to the product of--
``(i) the total number of units, as
described in section 1847A(c)(1)(B),
with respect to such drug during the
calendar quarter; and
``(ii) the amount (if any) by which--
``(I) the payment amount
under subparagraph (B) or (C)
of section 1847A(b)(1), as
applicable, for such part B
rebatable drug during the
calendar quarter; exceeds
``(II) the inflation-adjusted
payment amount determined under
subparagraph (C) for such part
B rebatable drug during the
calendar quarter.
``(B) Excluded units.--For purposes of
subparagraph (A)(i), the Secretary shall
exclude from the total number of units with
respect to a part B rebatable drug and calendar
quarter units of such part B rebatable drug for
which payment was made under a State plan under
title XIX (or waiver of such plan), as reported
by States under section 1927(b)(2)(A) for the
most recent rebate period.
``(C) Determination of inflation-adjusted
payment amount.--The inflation-adjusted payment
amount determined under this subparagraph for a
part B rebatable drug for a calendar quarter
is--
``(i) the payment amount for the
billing and payment code for such drug
in the payment amount benchmark quarter
(as defined in subparagraph (D));
increased by
``(ii) the percentage by which the
rebate period CPI-U (as defined in
subparagraph (F)) for the calendar
quarter exceeds the benchmark period
CPI-U (as defined in subparagraph (E)).
``(D) Payment amount benchmark quarter.--The
term `payment amount benchmark quarter' means
the calendar quarter beginning January 1, 2016.
``(E) Benchmark period cpi-u.--The term
`benchmark period CPI-U' means the consumer
price index for all urban consumers (United
States city average) for July 2015.
``(F) Rebate period cpi-u.--The term `rebate
period CPI-U' means, with respect to a calendar
quarter described in subparagraph (C), the
greater of the benchmark period CPI-U and the
consumer price index for all urban consumers
(United States city average) for the first
month of the calendar quarter that is two
calendar quarters prior to such described
calendar quarter.
``(4) Special treatment of certain drugs and
exemption.--
``(A) Subsequently approved drugs.--Subject
to subparagraph (B), in the case of a part B
rebatable drug first approved or licensed by
the Food and Drug Administration after July 1,
2015, clause (i) of paragraph (3)(C) shall be
applied as if the term `payment amount
benchmark quarter' were defined under paragraph
(3)(D) as the third full calendar quarter after
the day on which the drug was first marketed
and clause (ii) of paragraph (3)(C) shall be
applied as if the term `benchmark period CPI-U'
were defined under paragraph (3)(E) as if the
reference to `July 2015' under such paragraph
were a reference to `the first month of the
first full calendar quarter after the day on
which the drug was first marketed'.
``(B) Timeline for provision of rebates for
subsequently approved drugs.--In the case of a
part B rebatable drug first approved or
licensed by the Food and Drug Administration
after July 1, 2015, paragraph (1)(B) shall be
applied as if the reference to `July 1, 2023'
under such paragraph were a reference to the
later of the 6th full calendar quarter after
the day on which the drug was first marketed or
July 1, 2023.
``(C) Exemption for shortages.--The Secretary
may reduce or waive the rebate amount under
paragraph (1)(B) with respect to a part B
rebatable drug that is described as currently
in shortage on the shortage list in effect
under section 506E of the Federal Food, Drug,
and Cosmetic Act or in the case of other
exigent circumstances, as determined by the
Secretary.
``(D) Selected drugs.--In the case of a part
B rebatable drug that is a selected drug (as
defined in section 1192(c)) for a price
applicability period (as defined in section
1191(b)(2))--
``(i) for calendar quarters during
such period for which a maximum fair
price (as defined in section
1191(c)(2)) for such drug has been
determined and is applied under part E
of title XI, the rebate amount under
paragraph (1)(B) shall be waived; and
``(ii) in the case such drug is
determined (pursuant to such section
1192(c)) to no longer be a selected
drug, for each applicable year
beginning after the price applicability
period with respect to such drug,
clause (i) of paragraph (3)(C) shall be
applied as if the term `payment amount
benchmark quarter' were defined under
paragraph (3)(D) as the calendar
quarter beginning January 1 of the last
year beginning during such price
applicability period with respect to
such selected drug and clause (ii) of
paragraph (3)(C) shall be applied as if
the term `benchmark period CPI-U' were
defined under paragraph (3)(E) as if
the reference to `July 2015' under such
paragraph were a reference to the July
of the year preceding such last year.
``(5) Application to beneficiary coinsurance.--In the
case of a part B rebatable drug, if the payment amount
under this part for a quarter exceeds the inflation
adjusted payment for such quarter--
``(A) in computing the amount of any
coinsurance applicable under this part to an
individual to whom such drug is furnished, the
computation of such coinsurance shall be based
on the inflation-adjusted payment amount
determined under paragraph (3)(C) for such part
B rebatable drug; and
``(B) the amount of such coinsurance is equal
to 20 percent of such inflation-adjusted
payment amount so determined.
``(6) Rebate deposits.--Amounts paid as rebates under
paragraph (1)(B) shall be deposited into the Federal
Supplementary Medical Insurance Trust Fund established
under section 1841.
``(7) Civil money penalty.--If a manufacturer of a
part B rebatable drug has failed to comply with the
requirements under paragraph (1)(B) for such drug for a
calendar quarter, the manufacturer shall be subject to,
in accordance with a process established by the
Secretary pursuant to regulations, a civil money
penalty in an amount equal to at least 125 percent of
the amount specified in paragraph (3) for such drug for
such calendar quarter. The provisions of section 1128A
(other than subsections (a) (with respect to amounts of
penalties or additional assessments) and (b)) shall
apply to a civil money penalty under this paragraph in
the same manner as such provisions apply to a penalty
or proceeding under section 1128A(a).
``(8) Application to multiple source drugs.--The
Secretary may, pursuant to rulemaking, apply the
provisions of this subsection to multiple source drugs
(as defined in section 1847A(c)(6)(C)), including, for
purposes of determining the rebate amount under
paragraph (3), by calculating manufacturer-specific
average sales prices for the benchmark period and the
rebate period.''.
(b) Amounts Payable; Cost-Sharing.--Section 1833 of the
Social Security Act (42 U.S.C. 1395l) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) in subparagraph (G), by inserting
``, subject to subsection (i)(9),''
after ``the amounts paid'';
(ii) in subparagraph (S), by striking
``with respect to'' and inserting
``subject to subparagraph (DD), with
respect to'';
(iii) by striking ``and (DD)'' and
inserting ``(EE)''; and
(iv) by inserting before the
semicolon at the end the following: ``,
and (EE) with respect to a part B
rebatable drug (as defined in paragraph
(2) of section 1834(z)) for which the
payment amount for a calendar quarter
under paragraph (3)(A)(ii)(I) of such
section for such quarter exceeds the
inflation-adjusted payment under
paragraph (3)(A)(ii)(II) of such
section for such quarter, the amounts
paid shall be the difference between
(i) the payment amount under paragraph
(3)(A)(ii)(I) of such section for such
drug, and (ii) 20 percent of the
inflation-adjusted payment amount under
paragraph (3)(A)(ii)(II) of such
section for such drug''; and
(B) by adding at the end of the flush left
matter following paragraph (9), the following:
``For purposes of applying paragraph (1)(EE), subsections
(i)(9) and (t)(8)(F), and section 1834(z)(5), the Secretary
shall make such estimates and use such data as the Secretary
determines appropriate, and may do so by program instruction or
otherwise.'';
(2) in subsection (i), by adding at the end the
following new paragraph:
``(9) In the case of a part B rebatable drug (as defined in
paragraph (2) of section 1834(z)) for which payment under this
subsection is not packaged into a payment for a covered OPD
service (as defined in subsection (t)(1)(B)) (or group of
services) furnished on or after July 1, 2023, under the system
under this subsection, in lieu of calculation of coinsurance
and the amount of payment otherwise applicable under this
subsection, the provisions of section 1834(z)(5), paragraph
(1)(EE) of subsection (a), and the flush left matter following
paragraph (9) of subsection (a), shall, as determined
appropriate by the Secretary, apply under this subsection in
the same manner as such provisions of section 1834(z)(5) and
subsection (a) apply under such section and subsection.''; and
(3) in subsection (t)(8), by adding at the end the
following new subparagraph:
``(F) Part b rebatable drugs.--In the case of
a part B rebatable drug (as defined in
paragraph (2) of section 1834(z)) for which
payment under this part is not packaged into a
payment for a service furnished on or after
July 1, 2023, under the system under this
subsection, in lieu of calculation of
coinsurance and the amount of payment otherwise
applicable under this subsection, the
provisions of section 1834(z)(5), paragraph
(1)(EE) of subsection (a), and the flush left
matter following paragraph (9) of subsection
(a), shall, as determined appropriate by the
Secretary, apply under this subsection in the
same manner as such provisions of section
1834(z)(5) and subsection (a) apply under such
section and subsection.''.
(c) Conforming Amendments.--
(1) To part b asp calculation.--Section 1847A(c)(3)
of the Social Security Act (42 U.S.C. 1395w-3a(c)(3))
is amended by inserting ``or section 1834(z)'' after
``section 1927''.
(2) Excluding parts b drug inflation rebate from best
price.--Section 1927(c)(1)(C)(ii)(I) of the Social
Security Act (42 U.S.C. 1396r-8(c)(1)(C)(ii)(I)) is
amended by inserting ``or section 1834(z)'' after
``this section''.
(3) Coordination with medicaid rebate information
disclosure.--Section 1927(b)(3)(D)(i) of the Social
Security Act (42 U.S.C. 1396r-8(b)(3)(D)(i)) is amended
by striking ``or to carry out section 1847B'' and
inserting ``to carry out section 1847B or section
1834(z)''.
SEC. 139102. MEDICARE PART D REBATE BY MANUFACTURERS.
(a) In General.--Part D of title XVIII of the Social Security
Act is amended by inserting after section 1860D-14A (42 U.S.C.
1395w-114a) the following new section:
``SEC. 1860D-14B. MANUFACTURER REBATE FOR CERTAIN DRUGS WITH PRICES
INCREASING FASTER THAN INFLATION.
``(a) Requirements.--
``(1) Secretarial provision of information.--Not
later than 9 months after the end of each applicable
year (as defined in subsection (g)(7)), the Secretary
shall, for each part D rebatable drug, report to each
manufacturer of such part D rebatable drug the
following for such year:
``(A) Information on the amount (if any) of
the excess average manufacturer price increase
described in subsection (b)(1)(B) for each
dosage form and strength with respect to such
drug and year.
``(B) The rebate amount specified under
subsection (b) for each dosage form and
strength with respect to such drug and year.
``(2) Manufacturer requirements.--For each applicable
year, the manufacturer of a part D rebatable drug, for
each dosage form and strength with respect to such
drug, not later than 30 days after the date of receipt
from the Secretary of the information described in
paragraph (1) for such year, shall provide to the
Secretary a rebate that is equal to the amount
specified in subsection (b) for such dosage form and
strength with respect to such drug for such year.
``(b) Rebate Amount.--
``(1) In general.--
``(A) Calculation.--For purposes of this
section, the amount specified in this
subsection for a dosage form and strength with
respect to a part D rebatable drug and
applicable year is, subject to subparagraph (B)
of this paragraph and subparagraphs (B) and (C)
of paragraph (5), the amount equal to the
product of--
``(i) the total number of units that
are used to calculate the average
manufacturer price of such dosage form
and strength with respect to such part
D rebatable drug, as reported by the
manufacturer of such drug under section
1927 for each recent rebate period
under such section, with respect to
such year, under such section for which
such information is available; and
``(ii) the amount (if any) by which--
``(I) the annual manufacturer
price (as determined in
paragraph (2)) paid for such
dosage form and strength with
respect to such part D
rebatable drug for the year;
exceeds
``(II) the inflation-adjusted
payment amount determined under
paragraph (3) for such dosage
form and strength with respect
to such part D rebatable drug
for the year.
``(B) Excluded units.--For purposes of
subparagraph (A)(i), the Secretary shall
exclude from the total number of units for a
dosage form and strength with respect to a part
D rebatable drug and the most recent rebate
period under section 1927, with respect to an
applicable year, for which such information is
available, units of each dosage form and
strength of such part D rebatable drug, for
which payment was made under a State plan under
title XIX (or waiver of such plan), as reported
by States under section 1927(b)(2)(A) for such
rebate period.
``(2) Determination of annual manufacturer price.--
The annual manufacturer price determined under this
paragraph for a dosage form and strength, with respect
to a part D rebatable drug and an applicable year, is
the sum of the products of--
``(A) the average manufacturer price (as
defined in subsection (g)(6)) of such dosage
form and strength, as calculated for a unit of
such drug, with respect to each of the calendar
quarters of such year; and
``(B) the ratio of--
``(i) the total number of units of
such dosage form and strength reported
for the purpose of calculating average
manufacturer price under section 1927
during each such calendar quarter of
such year; to
``(ii) the total number of units of
such dosage form and strength reported
for the purpose of calculating average
manufacturer price under section 1927
during such year, as determined by the
Secretary.
``(3) Determination of inflation-adjusted payment
amount.--The inflation-adjusted payment amount
determined under this paragraph for a dosage form and
strength with respect to a part D rebatable drug for an
applicable year, subject to subparagraphs (A) and (D)
of paragraph (5), is--
``(A) the benchmark year manufacturer price
determined under paragraph (4) for such dosage
form and strength with respect to such drug and
year; increased by
``(B) the percentage by which the applicable
year CPI-U (as defined in subsection (g)(5))
for the year exceeds the benchmark period CPI-U
(as defined in subsection (g)(4)).
``(4) Determination of benchmark year manufacturer
price.--The benchmark year manufacturer price
determined under this paragraph for a dosage form and
strength, with respect to a part D rebatable drug and
an applicable year, is the sum of the products of--
``(A) the average manufacturer price (as
defined in subsection (g)(6)) of such dosage
form and strength, as calculated for a unit of
such drug, with respect to each of the calendar
quarters of the payment amount benchmark year
(as defined in subsection (g)(3)); and
``(B) the ratio of--
``(i) the total number of units of
such dosage form and strength dispensed
during each such calendar quarter of
such payment amount benchmark year; to
``(ii) the total number of units of
such dosage form and strength dispensed
during such payment amount benchmark
year.
``(5) Special treatment of certain drugs and
exemption.--
``(A) Subsequently approved drugs.--In the
case of a part D rebatable drug first approved
or licensed by the Food and Drug Administration
after January 1, 2016, subparagraphs (A) and
(B) of paragraph (4) shall be applied as if the
term `payment amount benchmark year' were
defined under subsection (g)(3) as the first
calendar year beginning after the day on which
the drug was first marketed by any manufacturer
and subparagraph (B) of paragraph (3) shall be
applied as if the term `benchmark period CPI-U'
were defined under subsection (g)(4) as if the
reference to `January 2016' under such
subsection were a reference to `January of the
first year beginning after the date on which
the drug was first marketed by any
manufacturer'.
``(B) Exemption for shortages.--The Secretary
may reduce or waive the rebate under paragraph
(1) with respect to a part D rebatable drug
that is described as currently in shortage on
the shortage list in effect under section 506E
of the Federal Food, Drug, and Cosmetic Act or
in the case of other exigent circumstances, as
determined by the Secretary.
``(C) Treatment of new formulations.--
``(i) In general.--In the case of a
part D rebatable drug that is a line
extension of a part D rebatable drug
that is an oral solid dosage form, the
Secretary shall establish a formula for
determining the amount specified in
this subsection with respect to such
part D rebatable drug and an applicable
year with consideration of the original
part D rebatable drug.
``(ii) Line extension defined.--In
this subparagraph, the term `line
extension' means, with respect to a
part D rebatable drug, a new
formulation of the drug, such as an
extended release formulation, but does
not include an abuse-deterrent
formulation of the drug (as determined
by the Secretary), regardless of
whether such abuse-deterrent
formulation is an extended release
formulation.
``(D) Selected drugs.--In the case of a part
D rebatable drug that is a selected drug (as
defined in section 1192(c)) for a price
applicability period (as defined in section
1191(b)(2))--
``(i) for plan years during such
period for which a maximum fair price
(as defined in section 1191(c)(2)) for
such drug has been determined and is
applied under part E of title XI, the
rebate under subsection (a)(1)(B) shall
be waived; and
``(ii) in the case such drug is
determined (pursuant to such section
1192(c)) to no longer be a selected
drug, for each applicable year
beginning after the price applicability
period with respect to such drug,
subparagraphs (A) and (B) of paragraph
(4) shall be applied as if the term
`payment amount benchmark year' were
defined under subsection (g)(3) as the
last year beginning during such price
applicability period with respect to
such selected drug and subparagraph (B)
of paragraph (3) shall be applied as if
the term `benchmark period CPI-U' were
defined under subsection (g)(4) as if
the reference to `January 2016' under
such subsection were a reference to
January of the last year beginning
during such price applicability period
with respect to such drug.
``(c) Rebate Deposits.--Amounts paid as rebates under
subsection (b) shall be deposited into the Medicare
Prescription Drug Account in the Federal Supplementary Medical
Insurance Trust Fund established under section 1841.
``(d) Information.--For purposes of carrying out this
section, the Secretary shall use information submitted by
manufacturers under section 1927(b)(3) and information
submitted by States under section 1927(b)(2)(A).
``(e) Civil Money Penalty.--If a manufacturer of a part D
rebatable drug has failed to comply with the requirement under
subsection (a)(1)(B) with respect to such drug for an
applicable year, the manufacturer shall be subject to, in
accordance with a process established by the Secretary pursuant
to regulations, a civil money penalty in an amount equal to 125
percent of the amount specified in subsection (b) for such drug
for such year. The provisions of section 1128A (other than
subsections (a) (with respect to amounts of penalties or
additional assessments) and (b)) shall apply to a civil money
penalty under this subsection in the same manner as such
provisions apply to a penalty or proceeding under section
1128A(a).
``(f) Judicial Review.--There shall be no judicial review of
the following:
``(1) The determination of units under this section.
``(2) The determination of whether a drug is a part D
rebatable drug under this section.
``(3) The calculation of the rebate amount under this
section.
``(g) Definitions.--In this section:
``(1) Part d rebatable drug defined.--
``(A) In general.--The term `part D rebatable
drug' means a drug or biological that would
(without application of this section) be a
covered part D drug, except such term shall,
with respect to an applicable year, not include
such a drug or biological if the average annual
total cost under this part for such year per
individual who uses such a drug or biological,
as determined by the Secretary, is less than,
subject to subparagraph (B), $100, as
determined by the Secretary using the most
recent data available or, if data is not
available, as estimated by the Secretary.
``(B) Increase.--The dollar amount applied
under subparagraph (A)--
``(i) for 2024, shall be the dollar
amount specified under such
subparagraph for 2023, increased by the
percentage increase in the consumer
price index for all urban consumers
(United States city average) for the
12-month period beginning with January
of 2023; and
``(ii) for a subsequent year, shall
be the dollar amount specified in this
subparagraph for the previous year,
increased by the percentage increase in
the consumer price index for all urban
consumers (United States city average)
for the 12-month period beginning with
January of the previous year.
Any dollar amount specified under this
subparagraph that is not a multiple of $10
shall be rounded to the nearest multiple of
$10.
``(2) Unit defined.--The term `unit' means, with
respect to a part D rebatable drug, the lowest
identifiable quantity (such as a capsule or tablet,
milligram of molecules, or grams) of the part D
rebatable drug, including data reported under section
1927.
``(3) Payment amount benchmark year.--The term
`payment amount benchmark year' means the year
beginning January 1, 2016.
``(4) Benchmark period cpi-u.--The term `benchmark
period CPI-U' means the consumer price index for all
urban consumers (United States city average) for
January 2016.
``(5) Applicable year cpi-u.--The term `applicable
year CPI-U' means, with respect to an applicable year,
the consumer price index for all urban consumers
(United States city average) for January of such year.
``(6) Average manufacturer price.--The term `average
manufacturer price' has the meaning, with respect to a
part D rebatable drug of a manufacturer, given such
term in section 1927(k)(1), with respect to a covered
outpatient drug of a manufacturer for a rebate period
under section 1927.
``(7) Applicable year.--The term `applicable year'
means a year beginning with 2023.''.
(b) Conforming Amendments.--
(1) To part b asp calculation.--Section 1847A(c)(3)
of the Social Security Act (42 U.S.C. 1395w-3a(c)(3)),
as amended by section 139101(c)(1), is further amended
by striking ``section 1927 or section 1834(z)'' and
inserting ``section 1927, section 1834(z), or section
1860D-14B''.
(2) Excluding part d drug inflation rebate from best
price.--Section 1927(c)(1)(C)(ii)(I) of the Social
Security Act (42 U.S.C. 1396r-8(c)(1)(C)(ii)(I)), as
amended by section 139101(c)(2), is further amended by
striking ``or section 1834(z)'' and inserting ``,
section 1834(z), or section 1860D-14B''.
(3) Coordination with medicaid rebate information
disclosure.--Section 1927(b)(3)(D)(i) of the Social
Security Act (42 U.S.C. 1396r-8(b)(3)(D)(i)), as
amended by section 139101(c)(3), is further amended by
striking ``or section 1834(z)'' and inserting ``,
section 1834(z), or section 1860D-14B''.
PART 3--PART D IMPROVEMENTS AND MAXIMUM OUT-OF-POCKET CAP FOR MEDICARE
BENEFICIARIES
SEC. 139201. MEDICARE PART D BENEFIT REDESIGN.
(a) Benefit Structure Redesign.--Section 1860D-2(b) of the
Social Security Act (42 U.S.C. 1395w-102(b)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A), in the matter
preceding clause (i), by inserting ``for a year
preceding 2024 and for costs above the annual
deductible specified in paragraph (1) and up to
the annual out-of-pocket threshold specified in
paragraph (4)(B) for 2024 and each subsequent
year'' after ``paragraph (3)'';
(B) in subparagraph (C)--
(i) in clause (i), in the matter
preceding subclause (I), by inserting
``for a year preceding 2024,'' after
``paragraph (4),''; and
(ii) in clause (ii)(III), by striking
``and each subsequent year'' and
inserting ``through 2023''; and
(C) in subparagraph (D)--
(i) in clause (i)--
(I) in the matter preceding
subclause (I), by inserting
``for a year preceding 2024,''
after ``paragraph (4),''; and
(II) in subclause (I)(bb), by
striking ``a year after 2018''
and inserting ``each of years
2018 through 2023''; and
(ii) in clause (ii)(V), by striking
``2019 and each subsequent year'' and
inserting ``each of years 2019 through
2023'';
(2) in paragraph (3)(A)--
(A) in the matter preceding clause (i), by
inserting ``for a year preceding 2024,'' after
``and (4),''; and
(B) in clause (ii), by striking ``for a
subsequent year'' and inserting ``for each of
years 2007 through 2023''; and
(3) in paragraph (4)--
(A) in subparagraph (A)--
(i) in clause (i)--
(I) by redesignating
subclauses (I) and (II) as
items (aa) and (bb),
respectively, and moving the
margin of each such
redesignated item 2 ems to the
right;
(II) in the matter preceding
item (aa), as redesignated by
subclause (I), by striking ``is
equal to the greater of--'' and
inserting ``is equal to--
``(I) for a year preceding
2024, the greater of--'';
(III) by striking the period
at the end of item (bb), as
redesignated by subclause (I),
and inserting ``; and''; and
(IV) by adding at the end the
following:
``(II) for 2024 and each
succeeding year, $0.''; and
(ii) in clause (ii), by striking
``clause (i)(I)'' and inserting
``clause (i)(I)(aa)'';
(B) in subparagraph (B)--
(i) in clause (i)--
(I) in subclause (V), by
striking ``or'' at the end;
(II) in subclause (VI)--
(aa) by striking
``for a subsequent
year'' and inserting
``for each of years
2021 through 2023'';
and
(bb) by striking the
period at the end and
inserting a semicolon;
and
(III) by adding at the end
the following new subclauses:
``(VII) for 2024, is equal to
$2,000; or
``(VIII) for a subsequent
year, is equal to the amount
specified in this subparagraph
for the previous year,
increased by the annual
percentage increase described
in paragraph (6) for the year
involved.''; and
(ii) in clause (ii), by striking
``clause (i)(II)'' and inserting
``clause (i)'';
(C) in subparagraph (C)(i), by striking ``and
for amounts'' and inserting ``and, for a year
preceding 2024, for amounts''; and
(D) in subparagraph (E), by striking ``In
applying'' and inserting ``For each of years
2011 through 2023, in applying''.
(b) Decreasing Reinsurance Payment Amount.--Section 1860D-
15(b)(1) of the Social Security Act (42 U.S.C. 1395w-115(b)(1))
is amended by inserting after ``80 percent'' the following:
``(or, with respect to a coverage year after 2023, 20
percent)''.
(c) Manufacturer Discount Program.--
(1) In general.--Part D of title XVIII of the Social
Security Act (42 U.S.C. 1395w-101 et seq.), as amended
by section 139102, is further amended by inserting
after section 1860D-14B the following new section:
``SEC. 1860D-14C. MANUFACTURER DISCOUNT PROGRAM.
``(a) Establishment.--The Secretary shall establish a
manufacturer discount program (in this section referred to as
the `program'). Under the program, the Secretary shall enter
into agreements described in subsection (b) with manufacturers
and provide for the performance of the duties described in
subsection (c). The Secretary shall establish a model agreement
for use under the program by not later than January 1, 2023, in
consultation with manufacturers, and allow for comment on such
model agreement.
``(b) Terms of Agreement.--
``(1) In general.--
``(A) Agreement.--An agreement under this
section shall require the manufacturer to
provide applicable beneficiaries access to
discounted prices for applicable drugs of the
manufacturer that are dispensed on or after
January 1, 2024.
``(B) Provision of discounted prices at the
point-of-sale.--The discounted prices described
in subparagraph (A) shall be provided to the
applicable beneficiary at the pharmacy or by
the mail order service at the point-of-sale of
an applicable drug.
``(C) Timing of agreement.--
``(i) Special rule for 2024.--In
order for an agreement with a
manufacturer to be in effect under this
section with respect to the period
beginning on January 1, 2024, and
ending on December 31, 2024, the
manufacturer shall enter into such
agreement not later than 30 days after
the date of the establishment of a
model agreement under subsection (a).
``(ii) 2025 and subsequent years.--In
order for an agreement with a
manufacturer to be in effect under this
section with respect to plan year 2025
or a subsequent plan year, the
manufacturer shall enter into such
agreement (or such agreement shall be
renewed under paragraph (4)(A)) not
later than January 30 of the preceding
year.
``(2) Provision of appropriate data.--Each
manufacturer with an agreement in effect under this
section shall collect and have available appropriate
data, as determined by the Secretary, to ensure that it
can demonstrate to the Secretary compliance with the
requirements under the program.
``(3) Compliance with requirements for administration
of program.--Each manufacturer with an agreement in
effect under this section shall comply with
requirements imposed by the Secretary or a third party
with a contract under subsection (d)(3), as applicable,
for purposes of administering the program, including
any determination under subparagraph (A) of subsection
(c)(1) or procedures established under such subsection
(c)(1).
``(4) Length of agreement.--
``(A) In general.--An agreement under this
section shall be effective for an initial
period of not less than 12 months and shall be
automatically renewed for a period of not less
than 1 year unless terminated under
subparagraph (B).
``(B) Termination.--
``(i) By the secretary.--The
Secretary may provide for termination
of an agreement under this section for
a knowing and willful violation of the
requirements of the agreement or other
good cause shown. Such termination
shall not be effective earlier than 30
days after the date of notice to the
manufacturer of such termination. The
Secretary shall provide, upon request,
a manufacturer with a hearing
concerning such a termination, and such
hearing shall take place prior to the
effective date of the termination with
sufficient time for such effective date
to be repealed if the Secretary
determines appropriate.
``(ii) By a manufacturer.--A
manufacturer may terminate an agreement
under this section for any reason. Any
such termination shall be effective,
with respect to a plan year--
``(I) if the termination
occurs before January 30 of a
plan year, as of the day after
the end of the plan year; and
``(II) if the termination
occurs on or after January 30
of a plan year, as of the day
after the end of the succeeding
plan year.
``(iii) Effectiveness of
termination.--Any termination under
this subparagraph shall not affect
discounts for applicable drugs of the
manufacturer that are due under the
agreement before the effective date of
its termination.
``(iv) Notice to third party.--The
Secretary shall provide notice of such
termination to a third party with a
contract under subsection (d)(3) within
not less than 30 days before the
effective date of such termination.
``(c) Duties Described.--The duties described in this
subsection are the following:
``(1) Administration of program.--Administering the
program, including--
``(A) the determination of the amount of the
discounted price of an applicable drug of a
manufacturer;
``(B) the establishment of procedures under
which discounted prices are provided to
applicable beneficiaries at pharmacies or by
mail order service at the point-of-sale of an
applicable drug;
``(C) the establishment of procedures to
ensure that, not later than the applicable
number of calendar days after the dispensing of
an applicable drug by a pharmacy or mail order
service, the pharmacy or mail order service is
reimbursed for an amount equal to the
difference between--
``(i) the negotiated price of the
applicable drug; and
``(ii) the discounted price of the
applicable drug;
``(D) the establishment of procedures to
ensure that the discounted price for an
applicable drug under this section is applied
before any coverage or financial assistance
under other health benefit plans or programs
that provide coverage or financial assistance
for the purchase or provision of prescription
drug coverage on behalf of applicable
beneficiaries as the Secretary may specify; and
``(E) providing a reasonable dispute
resolution mechanism to resolve disagreements
between manufacturers, applicable
beneficiaries, and the third party with a
contract under subsection (d)(3).
``(2) Monitoring compliance.--
``(A) In general.--The Secretary shall
monitor compliance by a manufacturer with the
terms of an agreement under this section.
``(B) Notification.--If a third party with a
contract under subsection (d)(3) determines
that the manufacturer is not in compliance with
such agreement, the third party shall notify
the Secretary of such noncompliance for
appropriate enforcement under subsection (e).
``(3) Collection of data from prescription drug plans
and ma-pd plans.--The Secretary may collect appropriate
data from prescription drug plans and MA-PD plans in a
timeframe that allows for discounted prices to be
provided for applicable drugs under this section.
``(d) Administration.--
``(1) In general.--Subject to paragraph (2), the
Secretary shall provide for the implementation of this
section, including the performance of the duties
described in subsection (c).
``(2) Limitation.--In providing for the
implementation of this section, the Secretary shall not
receive or distribute any funds of a manufacturer under
the program.
``(3) Contract with third parties.--The Secretary
shall enter into a contract with 1 or more third
parties to administer the requirements established by
the Secretary in order to carry out this section. At a
minimum, the contract with a third party under the
preceding sentence shall require that the third party--
``(A) receive and transmit information
between the Secretary, manufacturers, and other
individuals or entities the Secretary
determines appropriate;
``(B) receive, distribute, or facilitate the
distribution of funds of manufacturers to
appropriate individuals or entities in order to
meet the obligations of manufacturers under
agreements under this section;
``(C) provide adequate and timely information
to manufacturers, consistent with the agreement
with the manufacturer under this section, as
necessary for the manufacturer to fulfill its
obligations under this section; and
``(D) permit manufacturers to conduct
periodic audits, directly or through contracts,
of the data and information used by the third
party to determine discounts for applicable
drugs of the manufacturer under the program.
``(4) Performance requirements.--The Secretary shall
establish performance requirements for a third party
with a contract under paragraph (3) and safeguards to
protect the independence and integrity of the
activities carried out by the third party under the
program under this section.
``(5) Implementation.--The Secretary may implement
the program under this section by program instruction
or otherwise.
``(6) Administration.--Chapter 35 of title 44, United
States Code, shall not apply to the program under this
section.
``(e) Enforcement.--
``(1) Audits.--Each manufacturer with an agreement in
effect under this section shall be subject to periodic
audit by the Secretary.
``(2) Civil money penalty.--
``(A) In general.--The Secretary may impose a
civil money penalty on a manufacturer that
fails to provide applicable beneficiaries
discounts for applicable drugs of the
manufacturer in accordance with such agreement
for each such failure in an amount the
Secretary determines is equal to the sum of--
``(i) the amount that the
manufacturer would have paid with
respect to such discounts under the
agreement, which will then be used to
pay the discounts which the
manufacturer had failed to provide; and
``(ii) 25 percent of such amount.
``(B) Application.--The provisions of section
1128A (other than subsections (a) and (b))
shall apply to a civil money penalty under this
paragraph in the same manner as such provisions
apply to a penalty or proceeding under section
1128A(a).
``(f) Clarification Regarding Availability of Other Covered
Part D Drugs.--Nothing in this section shall prevent an
applicable beneficiary from purchasing a covered part D drug
that is not an applicable drug (including a generic drug or a
drug that is not on the formulary of the prescription drug plan
or MA-PD plan that the applicable beneficiary is enrolled in).
``(g) Definitions.--In this section:
``(1) Applicable beneficiary.--The term `applicable
beneficiary' means an individual who, on the date of
dispensing a covered part D drug--
``(A) is enrolled in a prescription drug plan
or an MA-PD plan;
``(B) is not enrolled in a qualified retiree
prescription drug plan; and
``(C) has incurred costs, as determined in
accordance with section 1860D-2(b)(4)(C), for
covered part D drugs in the year that exceed
the annual deductible with respect to such
individual for such year, as specified in
section 1860D-2(b)(1), section 1860D-
14(a)(1)(B), or section 1860D-14(a)(2)(B), as
applicable.
``(2) Applicable drug.--The term `applicable drug',
with respect to an applicable beneficiary--
``(A) means a covered part D drug--
``(i) approved under a new drug
application under section 505(c) of the
Federal Food, Drug, and Cosmetic Act
or, in the case of a biologic product,
licensed under section 351 of the
Public Health Service Act; and
``(ii)(I) if the PDP sponsor of the
prescription drug plan or the MA
organization offering the MA-PD plan
uses a formulary, which is on the
formulary of the prescription drug plan
or MA-PD plan that the applicable
beneficiary is enrolled in;
``(II) if the PDP sponsor of the
prescription drug plan or the MA
organization offering the MA-PD plan
does not use a formulary, for which
benefits are available under the
prescription drug plan or MA-PD plan
that the applicable beneficiary is
enrolled in; or
``(III) is provided through an
exception or appeal; and
``(B) does not include a selected drug (as
defined in section 1192(c)) during a price
applicability period (as defined in section
1191(b)(2)) with respect to such drug.
``(3) Applicable number of calendar days.--The term
`applicable number of calendar days' means--
``(A) with respect to claims for
reimbursement submitted electronically, 14
days; and
``(B) with respect to claims for
reimbursement submitted otherwise, 30 days.
``(4) Discounted price.--
``(A) In general.--The term `discounted
price' means, with respect to an applicable
drug of a manufacturer dispensed during a year
to an applicable beneficiary--
``(i) who has not incurred costs, as
determined in accordance with section
1860D-2(b)(4)(C), for covered part D
drugs in the year that are equal to or
exceed the annual out-of-pocket
threshold specified in section 1860D-
2(b)(4)(B)(i) for the year, 90 percent
of the negotiated price of such drug;
and
``(ii) who has incurred such costs,
as so determined, in the year that are
equal to or exceed such threshold for
the year, 70 percent of the negotiated
price of such drug.
``(B) Clarification.--Nothing in this section
shall be construed as affecting the
responsibility of an applicable beneficiary for
payment of a dispensing fee for an applicable
drug.
``(C) Special case for certain claims.--
``(i) Claims spanning deductible.--In
the case where the entire amount of the
negotiated price of an individual claim
for an applicable drug with respect to
an applicable beneficiary does not fall
above the annual deductible specified
in section 1860D-2(b)(1) for the year,
the manufacturer of the applicable drug
shall provide the discounted price
under this section on only the portion
of the negotiated price of the
applicable drug that falls above such
annual deductible.
``(ii) Claims spanning out-of-pocket
threshold.--In the case where the
entire amount of the negotiated price
of an individual claim for an
applicable drug with respect to an
applicable beneficiary does not fall
entirely below or entirely above the
annual out-of-pocket threshold
specified in section 1860D-
2(b)(4)(B)(i) for the year, the
manufacturer of the applicable drug
shall provide the discounted price--
``(I) in accordance with
subparagraph (A)(i) on the
portion of the negotiated price
of the applicable drug that
falls below such threshold; and
``(II) in accordance with
subparagraph (A)(ii) on the
portion of such price of such
drug that falls at or above
such threshold.
``(5) Manufacturer.--The term `manufacturer' means
any entity which is engaged in the production,
preparation, propagation, compounding, conversion, or
processing of prescription drug products, either
directly or indirectly by extraction from substances of
natural origin, or independently by means of chemical
synthesis, or by a combination of extraction and
chemical synthesis. Such term does not include a
wholesale distributor of drugs or a retail pharmacy
licensed under State law.
``(6) Negotiated price.--The term `negotiated price'
has the meaning given such term in section 423.100 of
title 42, Code of Federal Regulations (or any successor
regulation), except that, with respect to an applicable
drug, such negotiated price shall not include any
dispensing fee for the applicable drug.
``(7) Qualified retiree prescription drug plan.--The
term `qualified retiree prescription drug plan' has the
meaning given such term in section 1860D-22(a)(2).''.
(2) Sunset of medicare coverage gap discount
program.--Section 1860D-14A of the Social Security Act
(42 U.S.C. 1395-114a) is amended--
(A) in subsection (a), in the first sentence,
by striking ``The Secretary'' and inserting
``Subject to subsection (h), the Secretary'';
and
(B) by adding at the end the following new
subsection:
``(h) Sunset of Program.--
``(1) In general.--The program shall not apply with
respect to applicable drugs dispensed on or after
January 1, 2024, and, subject to paragraph (2),
agreements under this section shall be terminated as of
such date.
``(2) Continued application for applicable drugs
dispensed prior to sunset.--The provisions of this
section (including all responsibilities and duties)
shall continue to apply after January 1, 2024, with
respect to applicable drugs dispensed prior to such
date.''.
(3) Inclusion of actuarial value of manufacturer
discounts in bids.--Section 1860D-11 of the Social
Security Act (42 U.S.C. 1395w-111) is amended--
(A) in subsection (b)(2)(C)(iii)--
(i) by striking ``assumptions
regarding the reinsurance'' and
inserting ``assumptions regarding--
``(I) the reinsurance''; and
(ii) by adding at the end the
following:
``(II) for 2024 and each
subsequent year, the
manufacturer discounts provided
under section 1860D-14C
subtracted from the actuarial
value to produce such bid;
and''; and
(B) in subsection (c)(1)(C)--
(i) by striking ``an actuarial
valuation of the reinsurance'' and
inserting ``an actuarial valuation of--
``(i) the reinsurance'';
(ii) in clause (i), as inserted by
clause (i) of this subparagraph, by
adding ``and'' at the end; and
(iii) by adding at the end the
following:
``(ii) for 2024 and each subsequent
year, the manufacturer discounts
provided under section 1860D-14C;''.
(d) Conforming Amendments.--
(1) Section 1860D-2 of the Social Security Act (42
U.S.C. 1395w-102) is amended--
(A) in subsection (a)(2)(A)(i)(I), by
striking ``, or an increase in the initial''
and inserting ``or, for a year preceding 2024,
an increase in the initial'';
(B) in subsection (c)(1)(C)--
(i) in the subparagraph heading, by
striking ``at initial coverage limit'';
and
(ii) by inserting ``for a year
preceding 2024 or the annual out-of-
pocket threshold specified in
subsection (b)(4)(B) for the year for
2024 and each subsequent year'' after
``subsection (b)(3) for the year'' each
place it appears; and
(C) in subsection (d)(1)(A), by striking ``or
an initial'' and inserting ``or, for a year
preceding 2024, an initial''.
(2) Section 1860D-4(a)(4)(B)(i) of the Social
Security Act (42 U.S.C. 1395w-104(a)(4)(B)(i)) is
amended by striking ``the initial'' and inserting ``for
a year preceding 2024, the initial''.
(3) Section 1860D-14(a) of the Social Security Act
(42 U.S.C. 1395w-114(a)) is amended--
(A) in paragraph (1)--
(i) in subparagraph (C), by striking
``The continuation'' and inserting
``For a year preceding 2024, the
continuation'';
(ii) in subparagraph (D)(iii), by
striking ``1860D-2(b)(4)(A)(i)(I)'' and
inserting ``1860D-
2(b)(4)(A)(i)(I)(aa)''; and
(iii) in subparagraph (E), by
striking ``The elimination'' and
inserting ``For a year preceding 2024,
the elimination''; and
(B) in paragraph (2)--
(i) in subparagraph (C), by striking
``The continuation'' and inserting
``For a year preceding 2024, the
continuation''; and
(ii) in subparagraph (E), by striking
``1860D-2(b)(4)(A)(i)(I)'' and
inserting ``1860D-
2(b)(4)(A)(i)(I)(aa)''.
(4) Section 1860D-21(d)(7) of the Social Security Act
(42 U.S.C. 1395w-131(d)(7)) is amended by striking
``section 1860D-2(b)(4)(B)(i)'' and inserting ``section
1860D-2(b)(4)(C)(i)''.
(5) Section 1860D-22(a)(2)(A) of the Social Security
Act (42 U.S.C. 1395w-132(a)(2)(A)) is amended--
(A) by striking ``the value of any discount''
and inserting the following: ``the value of--
``(i) for years prior to 2024, any
discount'';
(B) in clause (i), as inserted by
subparagraph (A) of this paragraph, by striking
the period at the end and inserting ``; and'';
and
(C) by adding at the end the following new
clause:
``(ii) for 2024 and each subsequent
year, any discount provided pursuant to
section 1860D-14C.''.
(6) Section 1860D-41(a)(6) of the Social Security Act
(42 U.S.C. 1395w-151(a)(6)) is amended--
(A) by inserting ``for a year before 2024''
after ``1860D-2(b)(3)''; and
(B) by inserting ``for such year'' before the
period.
(7) Section 1860D-43 of the Social Security Act (42
U.S.C. 1395w-153) is amended--
(A) in subsection (a)--
(i) by striking paragraph (1) and
inserting the following:
``(1) participate in--
``(A) for 2011 through 2023, the Medicare
coverage gap discount program under section
1860D-14A; and
``(B) for 2024 and each subsequent year, the
manufacturer discount program under section
1860D-14C;'';
(ii) by striking paragraph (2) and
inserting the following:
``(2) have entered into and have in effect--
``(A) for 2011 through 2023, an agreement
described in subsection (b) of section 1860D-
14A with the Secretary; and
``(B) for 2024 and each subsequent year, an
agreement described in subsection (b) of
section 1860D-14C with the Secretary; and'';
and
(iii) by striking paragraph (3) and
inserting the following:
``(3) have entered into and have in effect, under
terms and conditions specified by the Secretary--
``(A) for 2011 through 2023, a contract with
a third party that the Secretary has entered
into a contract with under subsection (d)(3) of
section 1860D-14A; and
``(B) for 2024 and each subsequent year, a
contract with a third party that the Secretary
has entered into a contract with under
subsection (d)(3) of section 1860D-14C.''; and
(B) by striking subsection (b) and inserting
the following:
``(b) Effective Date.--Paragraphs (1)(A), (2)(A), and (3)(A)
of subsection (a) shall apply to covered part D drugs dispensed
under this part on or after January 1, 2011, and before January
1, 2024, and paragraphs (1)(B), (2)(B), and (3)(B) of such
subsection shall apply to covered part D drugs dispensed under
this part on or after January 1, 2024.''.
(8) Section 1927 of the Social Security Act (42
U.S.C. 1396r-8) is amended--
(A) in subsection (c)(1)(C)(i)(VI), by
inserting before the period at the end the
following: ``or under the manufacturer discount
program under section 1860D-14C''; and
(B) in subsection (k)(1)(B)(i)(V), by
inserting before the period at the end the
following: ``or under section 1860D-14C''.
(e) Effective Date.--The amendments made by this section
shall apply with respect to plan year 2024 and subsequent plan
years.
SEC. 139202. ALLOWING CERTAIN ENROLLEES OF PRESCRIPTION DRUG PLANS AND
MA-PD PLANS UNDER MEDICARE PROGRAM TO SPREAD OUT
COST-SHARING UNDER CERTAIN CIRCUMSTANCES.
Section 1860D-2(b)(2) of the Social Security Act (42 U.S.C.
1395w-102(b)(2)), as amended by section 139201, is further
amended--
(1) in subparagraph (A), by striking ``Subject to
subparagraphs (C) and (D)'' and inserting ``Subject to
subparagraphs (C), (D), and (E)''; and
(2) by adding at the end the following new
subparagraph:
``(E) Enrollee option regarding spreading
cost-sharing.--The Secretary shall establish by
regulation a process under which, with respect
to plan year 2024 and subsequent plan years, a
prescription drug plan or an MA-PD plan shall,
in the case of a part D eligible individual
enrolled with such plan for such plan year who
is not a subsidy eligible individual (as
defined in section 1860D-14(a)(3)) and with
respect to whom the plan projects that the
dispensing of the first fill of a covered part
D drug to such individual will result in the
individual incurring costs that are equal to or
above the annual out-of-pocket threshold
specified in paragraph (4)(B) for such plan
year, provide such individual with the option
to make the coinsurance payment required under
subparagraph (A) (for the portion of such costs
that are not above such annual out-of-pocket
threshold) in the form of periodic installments
over the remainder of such plan year.''.
PART 4--REPEAL OF CERTAIN PRESCRIPTION DRUG REBATE RULE
SEC. 139301. PROHIBITING IMPLEMENTATION OF RULE RELATING TO ELIMINATING
THE ANTI-KICKBACK STATUTE SAFE HARBOR PROTECTION
FOR PRESCRIPTION DRUG REBATES.
Beginning January 1, 2026, the Secretary of Health and Human
Services shall not implement, administer, or enforce the
provisions of the final rule published by the Office of the
Inspector General of the Department of Health and Human
Services on November 30, 2020, and titled ``Fraud and Abuse;
Removal of Safe Harbor Protection for Rebates Involving
Prescription Pharmaceuticals and Creation of New Safe Harbor
Protection for Certain Point-of-Sale Reductions in Price on
Prescription Pharmaceuticals and Certain Pharmacy Benefit
Manager Service Fees'' (85 Fed. Reg. 76666).
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