[111th Congress Public Law 226]
[From the U.S. Government Printing Office]



[[Page 124 STAT. 2389]]

Public Law 111-226
111th Congress

                                 An Act


 
    To modernize the air traffic control system, improve the safety, 
  reliability, and availability of transportation by air in the United 
  States, provide for modernization of the air traffic control system, 
     reauthorize the Federal Aviation Administration, and for other 
            purposes. <<NOTE: Aug. 10, 2010 -  [H.R. 1586]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,


                               short title


  Section 1. This Act <<NOTE: 26 USC 1 note.>>  may be cited as the 
``______Act of____''.

                                 TITLE I

                           EDUCATION JOBS FUND


                          education jobs funds


    Sec. 101. There are authorized to be appropriated and there are 
appropriated out of any money in the Treasury not otherwise obligated 
for necessary expenses for an Education Jobs Fund, $10,000,000,000: 
Provided, That the amount under this heading shall be administered under 
the terms and conditions of sections 14001 through 14013 and title XV of 
division A of the American Recovery and Reinvestment Act of 2009 (Public 
Law 111-5) except as follows:
            (1) Allocation of funds.--
                    (A) Funds appropriated under this heading shall be 
                available only for allocation by the Secretary of 
                Education (in this heading referred to as the Secretary) 
                in accordance with subsections (a), (b), (d), (e), and 
                (f) of section 14001 of division A of Public Law 111-5 
                and subparagraph (B) of this paragraph, except that the 
                amount reserved under such subsection (b) shall not 
                exceed $1,000,000 and such subsection (f) shall be 
                applied by substituting one year for two years.
                    (B) Prior to allocating funds to States under 
                section 14001(d) of division A of Public Law 111-5, the 
                Secretary shall allocate 0.5 percent to the Secretary of 
                the Interior for schools operated or funded by the 
                Bureau of Indian Affairs on the basis of the schools' 
                respective needs for activities consistent with this 
                heading under such terms and conditions as the Secretary 
                of the Interior may determine.

[[Page 124 STAT. 2390]]

            (2) Reservation.--A State that receives an allocation of 
        funds appropriated under this heading may reserve not more than 
        2 percent for the administrative costs of carrying out its 
        responsibilities with respect to those funds.
            (3) Awards to local educational agencies.--
                    (A) Except as specified in paragraph (2), an 
                allocation of funds to a State shall be used only for 
                awards to local educational agencies for the support of 
                elementary and secondary education in accordance with 
                paragraph (5) for the 2010-2011 school year (or, in the 
                case of reallocations made under section 14001(f) of 
                division A of Public Law 111-5, for the 2010-2011 or the 
                2011-2012 school year).
                    (B) Funds used to support elementary and secondary 
                education shall be distributed through a State's primary 
                elementary and secondary funding formulae or based on 
                local educational agencies' relative shares of funds 
                under part A of title I of the Elementary and Secondary 
                Education Act of 1965 (20 U.S.C. 6311 et seq.) for the 
                most recent fiscal year for which data are available.
                    (C) Subsections (a) and (b) of section 14002 of 
                division A of Public Law 111-5 shall not apply to funds 
                appropriated under this heading.
            (4) Compliance with education reform assurances.--For 
        purposes of awarding funds appropriated under this heading, any 
        State that has an approved application for Phase II of the State 
        Fiscal Stabilization Fund that was submitted in accordance with 
        the application notice published in the Federal Register on 
        November 17, 2009 (74 Fed. Reg. 59142) shall be deemed to be in 
        compliance with subsection (b) and paragraphs (2) through (5) of 
        subsection (d) of section 14005 of division A of Public Law 111-
        5.
            (5) Requirement to use funds to retain or create education 
        jobs.--Notwithstanding section 14003(a) of division A of Public 
        Law 111-5, funds awarded to local educational agencies under 
        paragraph (3)--
                    (A) may be used only for compensation and benefits 
                and other expenses, such as support services, necessary 
                to retain existing employees, to recall or rehire former 
                employees, and to hire new employees, in order to 
                provide early childhood, elementary, or secondary 
                educational and related services; and
                    (B) may not be used for general administrative 
                expenses or for other support services expenditures as 
                those terms were defined by the National Center for 
                Education Statistics in its Common Core of Data as of 
                the date of enactment of this Act.
            (6) Prohibition on use of funds for rainy-day funds or debt 
        retirement.--A State that receives an allocation may not use 
        such funds, directly or indirectly, to--
                    (A) establish, restore, or supplement a rainy-day 
                fund;
                    (B) supplant State funds in a manner that has the 
                effect of establishing, restoring, or supplementing a 
                rainy-day fund;
                    (C) reduce or retire debt obligations incurred by 
                the State; or

[[Page 124 STAT. 2391]]

                    (D) supplant State funds in a manner that has the 
                effect of reducing or retiring debt obligations incurred 
                by the State.
            (7) Deadline for award.--The Secretary shall award funds 
        appropriated under this heading not later than 45 days after the 
        date of the enactment of this Act to States that have submitted 
        applications meeting the requirements applicable to funds under 
        this heading. The Secretary shall not require information in 
        applications beyond what is necessary to determine compliance 
        with applicable provisions of law.
            (8) <<NOTE: Deadline. Applicability.>>  Alternate 
        distribution of funds.--If, within 30 days after the date of the 
        enactment of this Act, a Governor has not submitted an 
        approvable application, the Secretary shall provide for funds 
        allocated to that State to be distributed to another entity or 
        other entities in the State (notwithstanding section 14001(e) of 
        division A of Public Law 111-5) for support of elementary and 
        secondary education, under such terms and conditions as the 
        Secretary may establish, provided that all terms and conditions 
        that apply to funds appropriated under this heading shall apply 
        to such funds distributed to such entity or entities. No 
        distribution shall be made to a State under this paragraph, 
        however, unless the Secretary has determined (on the basis of 
        such information as may be available) that the requirements of 
        clauses (i), (ii), or (iii) of paragraph 10(A) are likely to be 
        met, notwithstanding the lack of an application from the 
        Governor of that State.
            (9) Local educational agency application.--Section 442 of 
        the General Education Provisions Act shall not apply to a local 
        educational agency that has previously submitted an application 
        to the State under title XIV of division A of Public Law 111-5. 
        The assurances provided under that application shall continue to 
        apply to funds awarded under this heading.
            (10) Maintenance of effort.--
                    (A) Except as provided in paragraph (8), the 
                Secretary shall not allocate funds to a State under 
                paragraph (1) unless the Governor of the State provides 
                an assurance to the Secretary that--
                          (i) for State fiscal year 2011, the State will 
                      maintain State support for elementary and 
                      secondary education (in the aggregate or on the 
                      basis of expenditures per pupil) and for public 
                      institutions of higher education (not including 
                      support for capital projects or for research and 
                      development or tuition and fees paid by students) 
                      at not less than the level of such support for 
                      each of the two categories, respectively, for 
                      State fiscal year 2009;
                          (ii) for State fiscal year 2011, the State 
                      will maintain State support for elementary and 
                      secondary education and for public institutions of 
                      higher education (not including support for 
                      capital projects or for research and development 
                      or tuition and fees paid by students) at a 
                      percentage of the total revenues available to the 
                      State that is equal to or greater than the 
                      percentage provided for each of the two 
                      categories, respectively, for State fiscal year 
                      2010; or

[[Page 124 STAT. 2392]]

                          (iii) in the case of a State in which State 
                      tax collections for calendar year 2009 were less 
                      than State tax collections for calendar year 2006, 
                      for State fiscal year 2011 the State will maintain 
                      State support for elementary and secondary 
                      education (in the aggregate) and for public 
                      institutions of higher education (not including 
                      support for capital projects or for research and 
                      development or tuition and fees paid by 
                      students)--
                                    (I) at not less than the level of 
                                such support for each of the two 
                                categories, respectively, for State 
                                fiscal year 2006; or
                                    (II) at a percentage of the total 
                                revenues available to the State that is 
                                equal to or greater than the percentage 
                                provided for each of the two categories, 
                                respectively, for State fiscal year 
                                2006.
                    (B) Section 14005(d)(1) and subsections (a) through 
                (c) of section 14012 of division A of Public Law 111-5 
                shall not apply to funds appropriated under this 
                heading.
            (11) Additional requirements for the state of texas.--The 
        following <<NOTE: Applicability.>>  requirements shall apply to 
        the State of Texas:
                    (A) Notwithstanding paragraph (3)(B), funds used to 
                support elementary and secondary education shall be 
                distributed based on local educational agencies' 
                relative shares of funds under part A of title I of the 
                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 6311 et seq.) for the most recent fiscal year 
                which data are available. Funds distributed pursuant to 
                this paragraph shall be used to supplement and not 
                supplant State formula funding that is distributed on a 
                similar basis to part A of title I of the Elementary and 
                Secondary Education Act of 1965 (20 U.S.C. 6311 et 
                seq.).
                    (B) The Secretary shall not allocate funds to the 
                State of Texas under paragraph (1) unless the Governor 
                of the State provides an assurance to the Secretary that 
                the State will for fiscal years 2011, 2012, and 2013 
                maintain State support for elementary and secondary 
                education at a percentage of the total revenues 
                available to the State that is equal to or greater than 
                the percentage provided for such purpose for fiscal year 
                2011 prior to the enactment of this Act.
                    (C) Notwithstanding paragraph (8), no distribution 
                shall be made to the State of Texas or local education 
                agencies therein unless the Governor of Texas makes an 
                assurance to the Secretary that the requirements in 
                paragraphs (11)(A) and (11)(B) will be met, 
                notwithstanding the lack of an application from the 
                Governor of Texas.

[[Page 124 STAT. 2393]]

                                TITLE II

        STATE FISCAL RELIEF AND OTHER PROVISIONS; REVENUE OFFSETS

          Subtitle A--State Fiscal Relief and Other Provisions


                   extension of arra increase in fmap


    Sec. 201. Section 5001 of the American Recovery and Reinvestment Act 
of 2009 (Public Law 111-5) <<NOTE: 42 USC 1396d note.>>  is amended--
            (1) in subsection (a)(3), by striking ``first calendar 
        quarter'' and inserting ``first 3 calendar quarters'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``paragraph (2)'' 
                and inserting ``paragraphs (2) and (3)''; and
                    (B) by adding at the end the following:
            ``(3) Phase-down of general increase.--
                    ``(A) Second quarter of fiscal year 2011.--For each 
                State, for the second quarter of fiscal year 2011, the 
                FMAP percentage increase for the State under paragraph 
                (1) or (2) (as applicable) shall be 3.2 percentage 
                points.
                    ``(B) Third quarter of fiscal year 2011.--For each 
                State, for the third quarter of fiscal year 2011, the 
                FMAP percentage increase for the State under paragraph 
                (1) or (2) (as applicable) shall be 1.2 percentage 
                points.'';
            (3) in subsection (c)--
                    (A) in paragraph (2)(B), by striking ``July 1, 
                2010'' and inserting ``January 1, 2011'';
                    (B) in paragraph (3)(B)(i), by striking ``July 1, 
                2010'' and inserting ``January 1, 2011'' each place it 
                appears; and
                    (C) in paragraph (4)(C)(ii), by striking ``the 3-
                consecutive-month period beginning with January 2010'' 
                and inserting ``any 3-consecutive-month period that 
                begins after December 2009 and ends before January 
                2011'';
            (4) in subsection (e), by adding at the end the following:

``Notwithstanding paragraph <<NOTE: Effective date. Applicability.>>  
(5), effective for payments made on or after January 1, 2010, the 
increases in the FMAP for a State under this section shall apply to 
payments under title XIX of such Act that are attributable to 
expenditures for medical assistance provided to nonpregnant childless 
adults made eligible under a State plan under such title (including 
under any waiver under such title or under section 1115 of such Act (42 
U.S.C. 1315)) who would have been eligible for child health assistance 
or other health benefits under eligibility standards in effect as of 
December 31, 2009, of a waiver of the State child health plan under the 
title XXI of such Act.'';
            (5) in subsection (g)--
                    (A) in paragraph (1), by striking ``September 30, 
                2011'' and inserting ``March 31, 2012'';
                    (B) in paragraph (2), by inserting ``of such Act'' 
                after ``1923''; and
                    (C) by adding at the end the following:
            ``(3) <<NOTE: Time period. Deadline.>>  Certification by 
        chief executive officer.--No additional Federal funds shall be 
        paid to a State as a result of this section with respect to a 
        calendar quarter occurring during the period beginning on 
        January 1, 2011, and ending on June

[[Page 124 STAT. 2394]]

        30, 2011, unless, not later than 45 days after the date of 
        enactment of this paragraph, the chief executive officer of the 
        State certifies that the State will request and use such 
        additional Federal funds.''; and
            (6) in subsection (h)(3), by striking ``December 31, 2010'' 
        and inserting ``June 30, 2011''.


       treatment of certain drugs for computation of medicaid amp


    Sec. 202. Effective as if included in the enactment of Public Law 
111-148, section 1927(k)(1)(B)(i)(IV) of the Social Security Act (42 
U.S.C. 1396r-8(k)(1)(B)(i)(IV)), as amended by section 2503(a)(2)(B) of 
Public Law 111-148 and section 1101(c)(2) of Public Law 111-
152, <<NOTE: 42 USC 1396r-8 note.>>  is amended by adding at the end the 
following: ``, unless the drug is an inhalation, infusion, instilled, 
implanted, or injectable drug that is not generally dispensed through a 
retail community pharmacy; and''.


    sunset of temporary increase in benefits under the supplemental 
                      nutrition assistance program


    Sec. 203. Section 101(a) of title I of division A of Public Law 111-
5 (123 Stat. 120), as amended by section 4262 of this Act, is amended by 
striking paragraph (2) and inserting the following:
            ``(2) Termination.--The authority provided by this 
        subsection shall terminate after March 31, 2014.''.

                       Subtitle B--Revenue Offsets


rules to prevent splitting foreign tax credits from the income to which 
                               they relate


    Sec. 211.  (a) In General.--Subpart A of part III of subchapter N of 
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following new section:
``SEC. 909. <<NOTE: 26 USC 909.>>  SUSPENSION OF TAXES AND CREDITS 
                        UNTIL RELATED INCOME TAKEN INTO ACCOUNT.

    ``(a) In General.--If there is a foreign tax credit splitting event 
with respect to a foreign income tax paid or accrued by the taxpayer, 
such tax shall not be taken into account for purposes of this title 
before the taxable year in which the related income is taken into 
account under this chapter by the taxpayer.
    ``(b) Special Rules With Respect to Section 902 Corporations.--If 
there is a foreign tax credit splitting event with respect to a foreign 
income tax paid or accrued by a section 902 corporation, such tax shall 
not be taken into account--
            ``(1) for purposes of section 902 or 960, or
            ``(2) for purposes of determining earnings and profits under 
        section 964(a),

before the taxable year in which the related income is taken into 
account under this chapter by such section 902 corporation or a domestic 
corporation which meets the ownership requirements of subsection (a) or 
(b) of section 902 with respect to such section 902 corporation.
    ``(c) Special Rules.--For purposes of this section--
            ``(1) Application to partnerships, etc.--In the case of a 
        partnership, subsections (a) and (b) shall be applied at the 
        partner level. Except as otherwise provided by the Secretary,

[[Page 124 STAT. 2395]]

        a rule similar to the rule of the preceding sentence shall apply 
        in the case of any S corporation or trust.
            ``(2) Treatment of foreign taxes after suspension.--In the 
        case of any foreign income tax not taken into account by reason 
        of subsection (a) or (b), except as otherwise provided by the 
        Secretary, such tax shall be so taken into account in the 
        taxable year referred to in such subsection (other than for 
        purposes of section 986(a)) as a foreign income tax paid or 
        accrued in such taxable year.

    ``(d) Definitions.--For purposes of this section--
            ``(1) Foreign tax credit splitting event.--There is a 
        foreign tax credit splitting event with respect to a foreign 
        income tax if the related income is (or will be) taken into 
        account under this chapter by a covered person.
            ``(2) Foreign income tax.--The term `foreign income tax' 
        means any income, war profits, or excess profits tax paid or 
        accrued to any foreign country or to any possession of the 
        United States.
            ``(3) Related income.--The term `related income' means, with 
        respect to any portion of any foreign income tax, the income 
        (or, as appropriate, earnings and profits) to which such portion 
        of foreign income tax relates.
            ``(4) Covered person.--The term `covered person' means, with 
        respect to any person who pays or accrues a foreign income tax 
        (hereafter in this paragraph referred to as the `payor')--
                    ``(A) any entity in which the payor holds, directly 
                or indirectly, at least a 10 percent ownership interest 
                (determined by vote or value),
                    ``(B) any person which holds, directly or 
                indirectly, at least a 10 percent ownership interest 
                (determined by vote or value) in the payor,
                    ``(C) any person which bears a relationship to the 
                payor described in section 267(b) or 707(b), and
                    ``(D) any other person specified by the Secretary 
                for purposes of this paragraph.
            ``(5) Section 902 corporation.--The term `section 902 
        corporation' means any foreign corporation with respect to which 
        one or more domestic corporations meets the ownership 
        requirements of subsection (a) or (b) of section 902.

    ``(e) Regulations.--The Secretary may issue such regulations or 
other guidance as is necessary or appropriate to carry out the purposes 
of this section, including regulations or other guidance which 
provides--
            ``(1) appropriate exceptions from the provisions of this 
        section, and
            ``(2) for the proper application of this section with 
        respect to hybrid instruments.''.

    (b) Clerical Amendment.--The table of sections for subpart A of part 
III of subchapter N of chapter 1 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new item:

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

    (c) <<NOTE: 26 USC 909 note.>>  Effective Date.--The amendments made 
by this section shall apply to--

[[Page 124 STAT. 2396]]

            (1) foreign income taxes (as defined in section 909(d) of 
        the Internal Revenue Code of 1986, as added by this section) 
        paid or accrued in taxable years beginning after December 31, 
        2010; and
            (2) foreign income taxes (as so defined) paid or accrued by 
        a section 902 corporation (as so defined) in taxable years 
        beginning on or before such date (and not deemed paid under 
        section 902(a) or 960 of such Code on or before such date), but 
        only for purposes of applying sections 902 and 960 with respect 
        to periods after such date.

Section 909(b)(2) of the Internal Revenue Code of 1986, as added by this 
section, shall not apply to foreign income taxes described in paragraph 
(2).


denial of foreign tax credit with respect to foreign income not subject 
    to united states taxation by reason of covered asset acquisitions


    Sec. 212.  (a) In General.--Section 901 of the Internal Revenue Code 
of 1986 <<NOTE: 26 USC 901.>>  is amended by redesignating subsection 
(m) as subsection (n) and by inserting after subsection (l) the 
following new subsection:

    ``(m) <<NOTE: Definitions.>>  Denial of Foreign Tax Credit With 
Respect to Foreign Income Not Subject to United States Taxation by 
Reason of Covered Asset Acquisitions.--
            ``(1) In general.--In the case of a covered asset 
        acquisition, the disqualified portion of any foreign income tax 
        determined with respect to the income or gain attributable to 
        the relevant foreign assets--
                    ``(A) shall not be taken into account in determining 
                the credit allowed under subsection (a), and
                    ``(B) in the case of a foreign income tax paid by a 
                section 902 corporation (as defined in section 
                909(d)(5)), shall not be taken into account for purposes 
                of section 902 or 960.
            ``(2) Covered asset acquisition.--For purposes of this 
        section, the term `covered asset acquisition' means--
                    ``(A) a qualified stock purchase (as defined in 
                section 338(d)(3)) to which section 338(a) applies,
                    ``(B) any transaction which--
                          ``(i) is treated as an acquisition of assets 
                      for purposes of this chapter, and
                          ``(ii) is treated as the acquisition of stock 
                      of a corporation (or is disregarded) for purposes 
                      of the foreign income taxes of the relevant 
                      jurisdiction,
                    ``(C) any acquisition of an interest in a 
                partnership which has an election in effect under 
                section 754, and
                    ``(D) to the extent provided by the Secretary, any 
                other similar transaction.
            ``(3) Disqualified portion.--For purposes of this section--
                    ``(A) In general.--The term `disqualified portion' 
                means, with respect to any covered asset acquisition, 
                for any taxable year, the ratio (expressed as a 
                percentage) of--
                          ``(i) the aggregate basis differences (but not 
                      below zero) allocable to such taxable year under 
                      subparagraph (B) with respect to all relevant 
                      foreign assets, divided by

[[Page 124 STAT. 2397]]

                          ``(ii) the income on which the foreign income 
                      tax referred to in paragraph (1) is determined 
                      (or, if the taxpayer fails to substantiate such 
                      income to the satisfaction of the Secretary, such 
                      income shall be determined by dividing the amount 
                      of such foreign income tax by the highest marginal 
                      tax rate applicable to such income in the relevant 
                      jurisdiction).
                    ``(B) Allocation of basis difference.--For purposes 
                of subparagraph (A)(i)--
                          ``(i) In general.--The basis difference with 
                      respect to any relevant foreign asset shall be 
                      allocated to taxable years using the applicable 
                      cost recovery method under this chapter.
                          ``(ii) Special rule for disposition of 
                      assets.--Except as otherwise provided by the 
                      Secretary, in the case of the disposition of any 
                      relevant foreign asset--
                                    ``(I) the basis difference allocated 
                                to the taxable year which includes the 
                                date of such disposition shall be the 
                                excess of the basis difference with 
                                respect to such asset over the aggregate 
                                basis difference with respect to such 
                                asset which has been allocated under 
                                clause (i) to all prior taxable years, 
                                and
                                    ``(II) no basis difference with 
                                respect to such asset shall be allocated 
                                under clause (i) to any taxable year 
                                thereafter.
                    ``(C) Basis difference.--
                          ``(i) In general.--The term `basis difference' 
                      means, with respect to any relevant foreign asset, 
                      the excess of--
                                    ``(I) the adjusted basis of such 
                                asset immediately after the covered 
                                asset acquisition, over
                                    ``(II) the adjusted basis of such 
                                asset immediately before the covered 
                                asset acquisition.
                          ``(ii) Built-in loss assets.--In the case of a 
                      relevant foreign asset with respect to which the 
                      amount described in clause (i)(II) exceeds the 
                      amount described in clause (i)(I), such excess 
                      shall be taken into account under this subsection 
                      as a basis difference of a negative amount.
                          ``(iii) Special rule for section 338 
                      elections.--In the case of a covered asset 
                      acquisition described in paragraph (2)(A), the 
                      covered asset acquisition shall be treated for 
                      purposes of this subparagraph as occurring at the 
                      close of the acquisition date (as defined in 
                      section 338(h)(2)).
            ``(4) Relevant foreign assets.--For purposes of this 
        section, the term `relevant foreign asset' means, with respect 
        to any covered asset acquisition, any asset (including any 
        goodwill, going concern value, or other intangible) with respect 
        to such acquisition if income, deduction, gain, or loss 
        attributable to such asset is taken into account in determining 
        the foreign income tax referred to in paragraph (1).
            ``(5) Foreign income tax.--For purposes of this section, the 
        term `foreign income tax' means any income, war profits, or 
        excess profits tax paid or accrued to any foreign country or to 
        any possession of the United States.

[[Page 124 STAT. 2398]]

            ``(6) Taxes allowed as a deduction, etc.--Sections 275 and 
        78 shall not apply to any tax which is not allowable as a credit 
        under subsection (a) by reason of this subsection.
            ``(7) Regulations.--The Secretary may issue such regulations 
        or other guidance as is necessary or appropriate to carry out 
        the purposes of this subsection, including to exempt from the 
        application of this subsection certain covered asset 
        acquisitions, and relevant foreign assets with respect to which 
        the basis difference is de minimis.''.

    (b) <<NOTE: 26 USC 901 note.>>  Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to covered asset 
        acquisitions (as defined in section 901(m)(2) of the Internal 
        Revenue Code of 1986, as added by this section) after December 
        31, 2010.
            (2) Transition rule.--The amendments made by this section 
        shall not apply to any covered asset acquisition (as so defined) 
        with respect to which the transferor and the transferee are not 
        related if such acquisition is--
                    (A) made pursuant to a written agreement which was 
                binding on January 1, 2011, and at all times thereafter,
                    (B) described in a ruling request submitted to the 
                Internal Revenue Service on or before July 29, 2010, or
                    (C) described on or before January 1, 2011, in a 
                public announcement or in a filing with the Securities 
                and Exchange Commission.
            (3) Related persons.--For purposes of this subsection, a 
        person shall be treated as related to another person if the 
        relationship between such persons is described in section 267 or 
        707(b) of the Internal Revenue Code of 1986.


 separate application of foreign tax credit limitation, etc., to items 
                        resourced under treaties


    Sec. 213.  (a) In General.--Subsection (d) of section 904 of the 
Internal Revenue Code of 1986 <<NOTE: 26 USC 904.>>  is amended by 
redesignating paragraph (6) as paragraph (7) and by inserting after 
paragraph (5) the following new paragraph:
            ``(6) Separate application to items resourced under 
        treaties.--
                    ``(A) In general.--If--
                          ``(i) without regard to any treaty obligation 
                      of the United States, any item of income would be 
                      treated as derived from sources within the United 
                      States,
                          ``(ii) under a treaty obligation of the United 
                      States, such item would be treated as arising from 
                      sources outside the United States, and
                          ``(iii) the taxpayer chooses the benefits of 
                      such treaty obligation,
                subsections (a), (b), and (c) of this section and 
                sections 902, 907, and 960 shall be applied separately 
                with respect to each such item.
                    ``(B) Coordination with other provisions.--This 
                paragraph shall not apply to any item of income to which 
                subsection (h)(10) or section 865(h) applies.
                    ``(C) Regulations.--The Secretary may issue such 
                regulations or other guidance as is necessary or 
                appropriate

[[Page 124 STAT. 2399]]

                to carry out the purposes of this paragraph, including 
                regulations or other guidance which provides that 
                related items of income may be aggregated for purposes 
                of this paragraph.''.

    (b) <<NOTE: 26 USC 904 note.>>  Effective Date.--The amendments made 
by this section shall apply to taxable years beginning after the date of 
the enactment of this Act.


 limitation on the amount of foreign taxes deemed paid with respect to 
                         section 956 inclusions


    Sec. 214.  (a) In General.--Section 960 of the Internal Revenue Code 
of 1986 <<NOTE: 26 USC 960.>>  is amended by adding at the end the 
following new subsection:

    ``(c) Limitation With Respect to Section 956 Inclusions.--
            ``(1) In general.--If there is included under section 
        951(a)(1)(B) in the gross income of a domestic corporation any 
        amount attributable to the earnings and profits of a foreign 
        corporation which is a member of a qualified group (as defined 
        in section 902(b)) with respect to the domestic corporation, the 
        amount of any foreign income taxes deemed to have been paid 
        during the taxable year by such domestic corporation under 
        section 902 by reason of subsection (a) with respect to such 
        inclusion in gross income shall not exceed the amount of the 
        foreign income taxes which would have been deemed to have been 
        paid during the taxable year by such domestic corporation if 
        cash in an amount equal to the amount of such inclusion in gross 
        income were distributed as a series of distributions (determined 
        without regard to any foreign taxes which would be imposed on an 
        actual distribution) through the chain of ownership which begins 
        with such foreign corporation and ends with such domestic 
        corporation.
            ``(2) Authority to prevent abuse.--The 
        Secretary <<NOTE: Regulations. Guidelines.>>  shall issue such 
        regulations or other guidance as is necessary or appropriate to 
        carry out the purposes of this subsection, including regulations 
        or other guidance which prevent the inappropriate use of the 
        foreign corporation's foreign income taxes not deemed paid by 
        reason of paragraph (1).''.

    (b) <<NOTE: 26 USC 960 note.>>  Effective Date.--The amendment made 
by this section shall apply to acquisitions of United States property 
(as defined in section 956(c) of the Internal Revenue Code of 1986) 
after December 31, 2010.


special rule with respect to certain redemptions by foreign subsidiaries


    Sec. 215.  (a) In General.--Paragraph (5) of section 304(b) of the 
Internal Revenue Code of 1986 <<NOTE: 26 USC 304.>>  is amended by 
redesignating subparagraph (B) as subparagraph (C) and by inserting 
after subparagraph (A) the following new subparagraph:
                    ``(B) Special rule in case of foreign acquiring 
                corporation.--In the case of any acquisition to which 
                subsection (a) applies in which the acquiring 
                corporation is a foreign corporation, no earnings and 
                profits shall be taken into account under paragraph 
                (2)(A) (and subparagraph (A) shall not apply) if more 
                than 50 percent of the dividends arising from such 
                acquisition (determined without regard to this 
                subparagraph) would neither--

[[Page 124 STAT. 2400]]

                          ``(i) be subject to tax under this chapter for 
                      the taxable year in which the dividends arise, nor
                          ``(ii) be includible in the earnings and 
                      profits of a controlled foreign corporation (as 
                      defined in section 957 and without regard to 
                      section 953(c)).''.

    (b) <<NOTE: 26 USC 304 note.>>  Effective Date.--The amendments made 
by this section shall apply to acquisitions after the date of the 
enactment of this Act.


   modification of affiliation rules for purposes of rules allocating 
                            interest expense


    Sec. 216.  (a) In General.--Subparagraph (A) of section 864(e)(5) of 
the Internal Revenue Code of 1986 <<NOTE: 26 USC 864.>>  is amended by 
adding at the end the following: ``Notwithstanding the preceding 
sentence, a foreign corporation shall be treated as a member of the 
affiliated group if--
                          ``(i) more than 50 percent of the gross income 
                      of such foreign corporation for the taxable year 
                      is effectively connected with the conduct of a 
                      trade or business within the United States, and
                          ``(ii) at least 80 percent of either the vote 
                      or value of all outstanding stock of such foreign 
                      corporation is owned directly or indirectly by 
                      members of the affiliated group (determined with 
                      regard to this sentence).''.

    (b) <<NOTE: 26 USC 864 note.>>  Effective Date.--The amendment made 
by this section shall apply to taxable years beginning after the date of 
the enactment of this Act.


 termination of special rules for interest and dividends received from 
      persons meeting the 80-percent foreign business requirements


    Sec. 217.  (a) In General.--Paragraph (1) of section 861(a) of the 
Internal Revenue Code of 1986 <<NOTE: 26 USC 861.>>  is amended by 
striking subparagraph (A) and by redesignating subparagraphs (B) and (C) 
as subparagraphs (A) and (B), respectively.

    (b) Grandfather Rule With Respect To Withholding on Interest and 
Dividends Received From Persons Meeting the 80-percent Foreign Business 
Requirements.--
            (1) In general.--Subparagraph (B) of section 871(i)(2) of 
        the Internal Revenue Code of 1986 <<NOTE: 26 USC 871.>>  is 
        amended to read as follows:
                    ``(B) The active foreign business percentage of--
                          ``(i) any dividend paid by an existing 80/20 
                      company, and
                          ``(ii) any interest paid by an existing 80/20 
                      company.''.
            (2) Definitions and special rules.--Section 871 of such Code 
        is amended by redesignating subsections (l) and (m) as 
        subsections (m) and (n), respectively, and by inserting after 
        subsection (k) the following new subsection:

    ``(l) Rules Relating to Existing 80/20 Companies.--For purposes of 
this subsection and subsection (i)(2)(B)--
            ``(1) Existing 80/20 company.--
                    ``(A) In general.--The term `existing 80/20 company' 
                means any corporation if--

[[Page 124 STAT. 2401]]

                          ``(i) such corporation met the 80-percent 
                      foreign business requirements of section 861(c)(1) 
                      (as in effect before the date of the enactment of 
                      this subsection) for such corporation's last 
                      taxable year beginning before January 1, 2011,
                          ``(ii) such corporation meets the 80-percent 
                      foreign business requirements of subparagraph (B) 
                      with respect to each taxable year after the 
                      taxable year referred to in clause (i), and
                          ``(iii) there has not been an addition of a 
                      substantial line of business with respect to such 
                      corporation after the date of the enactment of 
                      this subsection.
                    ``(B) Foreign business requirements.--
                          ``(i) In general.--Except as provided in 
                      clause (iv), a corporation meets the 80-percent 
                      foreign business requirements of this subparagraph 
                      if it is shown to the satisfaction of the 
                      Secretary that at least 80 percent of the gross 
                      income from all sources of such corporation for 
                      the testing period is active foreign business 
                      income.
                          ``(ii) Active foreign business income.--For 
                      purposes of clause (i), the term `active foreign 
                      business income' means gross income which--
                                    ``(I) is derived from sources 
                                outside the United States (as determined 
                                under this subchapter), and
                                    ``(II) is attributable to the active 
                                conduct of a trade or business in a 
                                foreign country or possession of the 
                                United States.
                          ``(iii) Testing period.--For purposes of this 
                      subsection, the term `testing period' means the 3-
                      year period ending with the close of the taxable 
                      year of the corporation preceding the payment (or 
                      such part of such period as may be applicable). If 
                      the corporation has no gross income for such 3-
                      year period (or part thereof), the testing period 
                      shall be the taxable year in which the payment is 
                      made.
                          ``(iv) Transition rule.--In the case of a 
                      taxable year for which the testing period includes 
                      1 or more taxable years beginning before January 
                      1, 2011--
                                    ``(I) a corporation meets the 80-
                                percent foreign business requirements of 
                                this subparagraph if and only if the 
                                weighted average of--
                                            ``(aa) the percentage of the 
                                        corporation's gross income from 
                                        all sources that is active 
                                        foreign business income (as 
                                        defined in subparagraph (B) of 
                                        section 861(c)(1) (as in effect 
                                        before the date of the enactment 
                                        of this subsection)) for the 
                                        portion of the testing period 
                                        that includes taxable years 
                                        beginning before January 1, 
                                        2011, and
                                            ``(bb) the percentage of the 
                                        corporation's gross income from 
                                        all sources that is active 
                                        foreign business income (as 
                                        defined in clause (ii) of this 
                                        subparagraph) for the portion of 
                                        the testing period, if any, that 
                                        includes taxable years beginning 
                                        on or after January 1, 2011,
                                is at least 80 percent, and

[[Page 124 STAT. 2402]]

                                    ``(II) the active foreign business 
                                percentage for such taxable year shall 
                                equal the weighted average percentage 
                                determined under subclause (I).
            ``(2) Active foreign business percentage.--Except as 
        provided in paragraph (1)(B)(iv), the term `active foreign 
        business percentage' means, with respect to any existing 80/20 
        company, the percentage which--
                    ``(A) the active foreign business income of such 
                company for the testing period, is of
                    ``(B) the gross income of such company for the 
                testing period from all sources.
            ``(3) Aggregation rules.--For 
        purposes <<NOTE: Applicability.>>  of applying paragraph (1) 
        (other than subparagraphs (A)(i) and (B)(iv) thereof) and 
        paragraph (2)--
                    ``(A) In general.--The corporation referred to in 
                paragraph (1)(A) and all of such corporation's 
                subsidiaries shall be treated as one corporation.
                    ``(B) Subsidiaries.--For purposes of subparagraph 
                (A), the term `subsidiary' means any corporation in 
                which the corporation referred to in subparagraph (A) 
                owns (directly or indirectly) stock meeting the 
                requirements of section 1504(a)(2) (determined by 
                substituting `50 percent' for `80 percent' each place it 
                appears and without regard to section 1504(b)(3)).
            ``(4) Regulations.--The Secretary may issue such regulations 
        or other guidance as is necessary or appropriate to carry out 
        the purposes of this section, including regulations or other 
        guidance which provide for the proper application of the 
        aggregation rules described in paragraph (3).''.

    (c) Conforming Amendments.--
            (1) Section 861 of the Internal Revenue Code of 
        1986 <<NOTE: 26 USC 861.>>  is amended by striking subsection 
        (c) and by redesignating subsections (d), (e), and (f) as 
        subsections (c), (d), and (e), respectively.
            (2) Paragraph (9) of section 904(h) of such Code <<NOTE: 26 
        USC 904.>>  is amended to read as follows:
            ``(9) Treatment of certain domestic corporations.--In the 
        case of any dividend treated as not from sources within the 
        United States under section 861(a)(2)(A), the corporation paying 
        such dividend shall be treated for purposes of this subsection 
        as a United States-owned foreign corporation.''.
            (3) Subsection (c) of section 2104 of such Code <<NOTE: 26 
        USC 2104.>>  is amended in the last sentence by striking ``or to 
        a debt obligation of a domestic corporation'' and all that 
        follows and inserting a period.

    (d) <<NOTE: 26 USC 861 note.>>  Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 2010.
            (2) Grandfather rule for outstanding debt obligations.--
                    (A) In general.--The amendments made by this section 
                shall not apply to payments of interest on obligations 
                issued before the date of the enactment of this Act.
                    (B) Exception for related party debt.--Subparagraph 
                (A) shall not apply to any interest which is payable

[[Page 124 STAT. 2403]]

                to a related person (determined under rules similar to 
                the rules of section 954(d)(3)).
                    (C) Significant modifications treated as new 
                issues.--For purposes of subparagraph (A), a significant 
                modification of the terms of any obligation (including 
                any extension of the term of such obligation) shall be 
                treated as a new issue.


limitation on extension of statute of limitations for failure to notify 
                 secretary of certain foreign transfers


    Sec. 218.  (a) In General.--Paragraph (8) of section 6501(c) of the 
Internal Revenue Code of 1986 <<NOTE: 26 USC 6501.>>  is amended--
            (1) by striking ``In the case of any information'' and 
        inserting the following:
                    ``(A) In general.--In the case of any information''; 
                and
            (2) by adding at the end the following:
                    ``(B) Application to failures due to reasonable 
                cause.--If the failure to furnish the information 
                referred to in subparagraph (A) is due to reasonable 
                cause and not willful neglect, subparagraph (A) shall 
                apply only to the item or items related to such 
                failure.''.

    (b) <<NOTE: 26 USC 6501 note.>>  Effective Date.--The amendments 
made by this section shall take effect as if included in section 513 of 
the Hiring Incentives to Restore Employment Act.


      elimination of advance refundability of earned income credit


    Sec. 219.  (a) In General.--The following provisions of the Internal 
Revenue Code of 1986 are repealed:
            (1) <<NOTE: 26 USC 3507.>>  Section 3507.
            (2) <<NOTE: 26 USC 32.>>  Subsection (g) of section 32.
            (3) <<NOTE: 26 USC 6051.>>  Paragraph (7) of section 
        6051(a).

    (b) Conforming Amendments.--
            (1) Section 6012(a) of the Internal Revenue Code of 1986 is 
        amended <<NOTE: 26 USC 6012.>>  by striking paragraph (8) and by 
        redesignating paragraph (9) as paragraph (8).
            (2) Section 6302 of such Code <<NOTE: 26 USC 6302.>>  is 
        amended by striking subsection (i).
            (3) The table of sections for chapter 25 of such Code is 
        amended by striking the item relating to section 3507.

    (c) <<NOTE: 26 USC 32 note.>>  Effective Date.--The repeals and 
amendments made by this section shall apply to taxable years beginning 
after December 31, 2010.

                                TITLE III

                               RESCISSIONS

    Sec. 301.  There is rescinded from accounts under the heading 
``Department of Agriculture--Rural Development'', $122,000,000, to be 
derived from the unobligated balances of funds that were provided for 
such accounts in prior appropriation Acts (other than Public Law 111-5) 
and that were designated by the Congress in such Acts as an emergency 
requirement pursuant to a concurrent

[[Page 124 STAT. 2404]]

resolution on the budget or the Balanced Budget and Emergency Deficit 
Control Act of 1985.
    Sec. 302.  Of the funds made available for ``Department of 
Commerce--National Telecommunications and Information Administration--
Broadband Technology Opportunities Program'' in title II of division A 
of Public Law 111-5, $302,000,000 are rescinded.
    Sec. 303.  Of the funds appropriated in Department of Defense 
Appropriations Acts, the following funds are rescinded from the 
following accounts in the specified amounts:
            ``Aircraft Procurement, Army, 2008/2010'', $21,000,000;
            ``Procurement of Weapons and Tracked Combat Vehicles, Army, 
        2008/2010'', $21,000,000;
            ``Procurement of Ammunition, Army, 2008/2010'', $17,000,000;
            ``Other Procurement, Army, 2008/2010'', $75,000,000;
            ``Weapons Procurement, Navy, 2008/2010'', $26,000,000;
            ``Other Procurement, Navy, 2008/2010'', $42,000,000;
            ``Procurement, Marine Corps, 2008/2010'', $13,000,000;
            ``Aircraft Procurement, Air Force, 2008/2010'', 
        $102,000,000;
            ``Missile Procurement, Air Force, 2008/2010'', $28,000,000;
            ``Procurement of Ammunition, Air Force, 2008/2010'', 
        $7,000,000;
            ``Other Procurement, Air Force, 2008/2010'', $130,000,000;
            ``Procurement, Defense-Wide, 2008/2010'', $33,000,000;
            ``Research, Development, Test and Evaluation, Army, 2009/
        2010'', $76,000,000;
            ``Research, Development, Test and Evaluation, Air Force, 
        2009/2010'', $164,000,000;
            ``Research, Development, Test and Evaluation, Defense-Wide, 
        2009/2010'', $137,000,000;
            ``Operation, Test and Evaluation, Defense, 2009/2010'', 
        $1,000,000;
            ``Operation and Maintenance, Army, 2010'', $154,000,000;
            ``Operation and Maintenance, Navy, 2010'', $155,000,000;
            ``Operation and Maintenance, Marine Corps, 2010'', 
        $25,000,000;
            ``Operation and Maintenance, Air Force, 2010'', 
        $155,000,000;
            ``Operation and Maintenance, Defense-Wide, 2010'', 
        $126,000,000;
            ``Operation and Maintenance, Army Reserve, 2010'', 
        $12,000,000;
            ``Operation and Maintenance, Navy Reserve, 2010'', 
        $6,000,000;
            ``Operation and Maintenance, Marine Corps Reserve, 2010'', 
        $1,000,000;
            ``Operation and Maintenance, Air Force Reserve, 2010'', 
        $14,000,000;
            ``Operation and Maintenance, Army National Guard, 2010'', 
        $28,000,000; and
            ``Operation and Maintenance, Air National Guard, 2010'', 
        $27,000,000.

    Sec. 304. (a) Of the funds appropriated in the American Recovery and 
Reinvestment Act of 2009 (Public Law 111-5), the

[[Page 124 STAT. 2405]]

following funds are rescinded from the following accounts in the 
specified amounts:
            ``Operation and Maintenance, Army, 2009/2010'', 
        $113,500,000;
            ``Operation and Maintenance, Navy, 2009/2010'', $34,000,000;
            ``Operation and Maintenance, Marine Corps, 2009/2010'', 
        $7,000,000;
            ``Operation and Maintenance, Air Force, 2009/2010'', 
        $61,000,000;
            ``Operation and Maintenance, Army Reserve, 2009/2010'', 
        $3,500,000;
            ``Operation and Maintenance, Navy Reserve, 2009/2010'', 
        $8,000,000;
            ``Operation and Maintenance, Marine Corps Reserve, 2009/
        2010'', $1,000,000;
            ``Operation and Maintenance, Air Force Reserve, 2009/2010'', 
        $2,000,000;
            ``Operation and Maintenance, Army National Guard, 2009/
        2010'', $1,000,000;
            ``Operation and Maintenance, Air National Guard, 2009/
        2010'', $2,500,000; and
            ``Defense Health Program, 2009/2010'', $27,000,000.

    (b) Of the funds appropriated in the Supplemental Appropriations 
Act, 2008 (Public Law 110-252), the following funds are rescinded from 
the following account in the specified amount:
            ``Procurement, Marine Corps, 2009/2011'', $122,000,000.

    Sec. 305. (a) Of the funds appropriated for ``Procurement of Weapons 
and Tracked Combat Vehicles, Army'' in title III of division A of public 
Law 111-118, $116,000,000 are rescinded.
    (b) Of the funds appropriated for ``Other Procurement, Army'' in 
title III of division C of Public Law 110-329, $87,000,000 are 
rescinded.
    Sec. 306.  There are rescinded the following amounts from the 
specified accounts:
            (1) $20,000,000, to be derived from unobligated balances of 
        funds made available in prior appropriations Acts under the 
        heading ``Department of Energy--Nuclear Energy''.

    Sec. 307.  Of the unobligated balances of funds provided under the 
heading ``Nuclear Regulatory Commission'' in prior appropriations Acts, 
$18,000,000 is permanently rescinded.
    Sec. 308.  Of the funds made available for ``Department of Energy--
Title 17--Innovative Technology Loan Guarantee Program'' in title III of 
division A of Public Law 111-5, $1,500,000,000 are rescinded.
    Sec. 309.  There are permanently rescinded from ``General Services 
Administration--Real Property Activities--Federal Building Fund'', 
$75,000,000 from Rental of Space and $25,000,000 from Building 
Operations, to be derived from unobligated balances that were provided 
in previous appropriations Acts.
    Sec. 310.  Of the funds made available for ``Bureau of Indian 
Affairs--Indian Guaranteed Loan Program Account'' in title VII of 
division A of Public Law 111-5, $6,820,000 are rescinded.
    Sec. 311.  Of the funds made available for ``Environmental 
Protection Agency--Hazardous Substance Superfund'' in title VII of 
division A of Public Law 111-5, $2,600,000 are rescinded.

[[Page 124 STAT. 2406]]

    Sec. 312.  Of the funds made available for ``Environmental 
Protection Agency--Leaking Underground Storage Tank Trust Fund Program'' 
in title VII of division A of Public Law 111-5, $9,200,000 are 
rescinded.
    Sec. 313.  Of the funds made available for transfer in title VII of 
division A of Public Law 111-5, ``Environmental Protection Agency--
Environmental Programs and Management'', $10,000,000 are rescinded.
    Sec. 314.  Of the funds made available for ``National Park Service--
Construction'' in chapter 7 of division B of Public Law 108-324, 
$4,800,000 are rescinded.
    Sec. 315.  Of the funds made available for ``National Park Service--
Construction'' in chapter 5 of title II of Public Law 109-234, 
$6,400,000 are rescinded.
    Sec. 316.  Of the funds made available for ``Fish and Wildlife 
Service--Construction'' in chapter 6 of title I of division B of Public 
Law 110-329, $3,000,000 are rescinded.
    Sec. 317.  The unobligated balance of funds appropriated in the 
Departments of Labor, Health and Human Services, and Education, and 
Related Agencies Appropriations Act, 1995 (Public Law 103-333; 108 Stat. 
2574) under the heading ``Public Health and Social Services Emergency 
Fund'' is rescinded.
    Sec. 318.  Of the funds appropriated for the Commissioner of Social 
Security under section 2201(e)(2)(B) in title II of division B of Public 
Law 111-5, $47,000,000 are rescinded.
    Sec. 319.  Of the funds appropriated in part VI of subtitle I of 
title II of division B of Public Law 111-5, $110,000,000 are rescinded, 
to be derived only from the amount provided under section 1899K(b) of 
such title.
    Sec. 320.  Of the funds appropriated for ``Department of Education--
Education for the Disadvantaged'' in division D of Public Law 111-117, 
$50,000,000 are rescinded, to be derived only from the amount provided 
for a comprehensive literacy development and education program under 
section 1502 of the Elementary and Secondary Education Act of 1965.
    Sec. 321.  Of the funds appropriated for ``Department of Education--
Student Aid Administration'' in division D of Public Law 111-117, 
$82,000,000 are rescinded.
    Sec. 322.  Of the funds appropriated for ``Department of Education--
Innovation and Improvement'' in division D of Public Law 111-117, 
$10,700,000 are rescinded, to be derived only from the amount provided 
to carry out subpart 8 of part D of title V of the Elementary and 
Secondary Education Act of 1965.
    Sec. 323.  Of the unobligated balances available under ``Department 
of Defense, Military Construction, Army'' from prior appropriations 
Acts, $340,000,000 is rescinded: <<NOTE: Overseas deployments.>>  
Provided, That no funds may be rescinded from amounts that were 
designated by the Congress as an emergency requirement or as 
appropriations for overseas deployments and other activities pursuant to 
a concurrent resolution on the budget or the Balanced Budget and 
Emergency Deficit Control Act of 1985.

    Sec. 324.  Of the unobligated balances available under ``Department 
of Defense, Military Construction, Navy and Marine Corps'' from prior 
appropriations Acts, $110,000,000 is rescinded: <<NOTE: Overseas 
deployments.>>  Provided, That no funds may be rescinded from amounts 
that were designated by the Congress as an emergency requirement or as 
appropriations

[[Page 124 STAT. 2407]]

for overseas deployments and other activities pursuant to a concurrent 
resolution on the budget or the Balanced Budget and Emergency Deficit 
Control Act of 1985.

    Sec. 325.  Of the unobligated balances available under ``Department 
of Defense, Military Construction, Air Force'' from prior appropriations 
Acts, $50,000,000 is rescinded: <<NOTE: Overseas deployments.>>  
Provided, That no funds may be rescinded from amounts that were 
designated by the Congress as an emergency requirement or as 
appropriations for overseas deployments and other activities pursuant to 
a concurrent resolution on the budget or the Balanced Budget and 
Emergency Deficit Control Act of 1985.

    Sec. 326.  Of the funds made available for the General Operating 
Expenses account of the Department of Veterans Affairs in section 
2201(e)(4)(A)(ii) of division B of Public Law 111-5 (123 Stat. 454; 26 
U.S.C. 6428 note), $6,100,000 are rescinded.
    Sec. 327.  Of the amount appropriated or otherwise made available by 
title X of division A of Public Law 111-5, the American Recovery and 
Reinvestment Act of 2009, under the heading `` Departmental 
Administration, Information Technology Systems'' $5,000,000 is hereby 
rescinded.
    Sec. 328. (a) Millennium Challenge Corporation.--Of the unobligated 
balances available under the heading ``Millennium Challenge 
Corporation'' in title III of division H of Public Law 111-8 and under 
such heading in prior Acts making appropriations for the Department of 
State, foreign operations, and related programs, $50,000,000 are 
rescinded.
    (b) Civilian Stabilization Initiative.--
            (1) Department of state.--Of the unobligated balances 
        available under the heading ``Department of State--
        Administration of Foreign Affairs--Civilian Stabilization 
        Initiative'' in prior Acts making appropriations for the 
        Department of State, foreign operations, and related programs, 
        $40,000,000 are rescinded.
            (2) United states agency for international development.--Of 
        the unobligated balances available under the heading ``United 
        States Agency for International Development--Funds Appropriated 
        to the President--Civilian Stabilization Initiative'' in prior 
        Acts making appropriations for the Department of State, foreign 
        operations, and related programs, $30,000,000 are rescinded.

    Sec. 329.  There are rescinded the following amounts from the 
specified accounts:
            (1) ``Department of Transportation--Federal Aviation 
        Administration--Facilities and Equipment'', $2,182,544, to be 
        derived from unobligated balances made available under this 
        heading in Public Law 108-324.
            (2) ``Department of Transportation--Federal Aviation 
        Administration--Facilities and Equipment'', $5,705,750, to be 
        derived from unobligated balances made available under this 
        heading in Public Law 109-148.

    Sec. 330.  Of the unobligated balances of funds apportioned to each 
State under chapter 1 of title 23, United States Code, $2,200,000,000 
are permanently rescinded: <<NOTE: States.>>  Provided, That such 
rescission shall be distributed among the States in the same proportion 
as the funds subject to such rescission were apportioned to the States 
for fiscal year 2009: Provided further, That such rescission shall not 
apply to the funds distributed in accordance with

[[Page 124 STAT. 2408]]

sections 130(f) and 104(b)(5) of title 23, United States Code; sections 
133(d)(1) and 163 of such title, as in effect on the day before the date 
of enactment of Public Law 109-59; and the first sentence of section 
133(d)(3)(A) of such title: <<NOTE: States. Determination.>>  Provided 
further, That notwithstanding section 1132 of Public Law 110-140, in 
administering the rescission required under this heading, the Secretary 
of Transportation shall allow each State to determine the amount of the 
required rescission to be drawn from the programs to which the 
rescission applies.

                                TITLE IV

                          BUDGETARY PROVISIONS


                          budgetary provisions


    Sec. 401. The budgetary effects of this Act, for the purpose of 
complying with the Statutory Pay-As-You-Go Act of 2010, shall be 
determined by reference to the latest statement titled ``Budgetary 
Effects of PAYGO Legislation'' for this Act, jointly submitted for 
printing in the Congressional Record by the Chairmen of the House and 
Senate Budget Committees, provided that such statement has been 
submitted prior to the vote on passage in the House acting first on this 
conference report or amendment between the Houses.

    Approved August 10, 2010.

LEGISLATIVE HISTORY--H.R. 1586:
---------------------------------------------------------------------------

CONGRESSIONAL RECORD:
                                                        Vol. 155 (2009):
                                    Mar. 19, considered and passed 
                                        House.
                                                        Vol. 156 (2010):
                                    Mar. 10, 11, 16-19, 22, considered 
                                        and passed Senate, amended.
                                    Mar. 25, House concurred in Senate 
                                        amendments with an amendment.
                                    July 29, Aug. 2, 4, 5, Senate 
                                        considered and concurred in 
                                        House amendment with an 
                                        amendment.
                                    Aug. 10, House concurred in Senate 
                                        amendment.

                                  <all>