In the nature of a substitute.

SA 3310. Mr. REID proposed an amendment to the bill H.R. 2847, making
appropriations for the Departments of Commerce and Justice, and
Science, and Related Agencies for the fiscal year ending September 30,
2010, and for other purposes; as follows:

In lieu of the matter proposed to be inserted by the
amendment of the House to the amendment of the Senate insert
the following:

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF
CONTENTS.

(a) Short Title.--This Act may be cited as the ``Hiring
Incentives to Restore Employment Act''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

TITLE I--INCENTIVES FOR HIRING AND RETAINING UNEMPLOYED WORKERS

Sec. 101. Payroll tax forgiveness for hiring unemployed workers.
Sec. 102. Business credit for retention of certain newly hired
individuals in 2010.

TITLE II--EXPENSING

Sec. 201. Increase in expensing of certain depreciable business assets.

TITLE III--QUALIFIED TAX CREDIT BONDS

Sec. 301. Issuer allowed refundable credit for certain qualified tax
credit bonds.

TITLE IV--EXTENSION OF CURRENT SURFACE TRANSPORTATION PROGRAMS

Sec. 401. Short title.

Subtitle A--Federal-Aid Highways

Sec. 411. In general.
Sec. 412. Administrative expenses.
Sec. 413. Rescission of unobligated balances.
Sec. 414. Reconciliation of funds.

Subtitle B--National Highway Traffic Safety Administration, Federal
Motor Carrier Safety Administration, and Additional Programs

Sec. 421. Extension of National Highway Traffic Safety Administration
Highway Safety Programs.
Sec. 422. Extension of Federal Motor Carrier Safety Administration
Programs.
Sec. 423. Additional programs.

Subtitle C--Public Transportation Programs

Sec. 431. Allocation of funds for planning programs.
Sec. 432. Special rule for urbanized area formula grants.
Sec. 433. Allocating amounts for capital investment grants.
Sec. 434. Apportionment of formula grants for other than urbanized
areas.
Sec. 435. Apportionment based on fixed guideway factors.
Sec. 436. Authorizations for public transportation.
Sec. 437. Amendments to SAFETEA-LU.

Subtitle D--Revenue Provisions

Sec. 441. Repeal of provision prohibiting the crediting of interest to
the Highway Trust Fund.
Sec. 442. Restoration of certain foregone interest to Highway Trust
Fund.
Sec. 443. Treatment of certain amounts appropriated to Highway Trust
Fund.
Sec. 444. Termination of transfers from highway trust fund for certain
repayments and credits.
Sec. 445. Extension of authority for expenditures.
Sec. 446. Level of obligation limitations.

TITLE V--OFFSET PROVISIONS

Subtitle A--Foreign Account Tax Compliance

PART I--Increased Disclosure of Beneficial Owners

Sec. 501. Reporting on certain foreign accounts.
Sec. 502. Repeal of certain foreign exceptions to registered bond
requirements.

PART II--Under Reporting With Respect to Foreign Assets

Sec. 511. Disclosure of information with respect to foreign financial
assets.
Sec. 512. Penalties for underpayments attributable to undisclosed
foreign financial assets.
Sec. 513. Modification of statute of limitations for significant
omission of income in connection with foreign assets.

PART III--Other Disclosure Provisions

Sec. 521. Reporting of activities with respect to passive foreign
investment companies.
Sec. 522. Secretary permitted to require financial institutions to file
certain returns related to withholding on foreign
transfers electronically.

PART IV--Provisions Related to Foreign Trusts

Sec. 531. Clarifications with respect to foreign trusts which are
treated as having a United States beneficiary.
Sec. 532. Presumption that foreign trust has United States beneficiary.
Sec. 533. Uncompensated use of trust property.
Sec. 534. Reporting requirement of United States owners of foreign
trusts.
Sec. 535. Minimum penalty with respect to failure to report on certain
foreign trusts.

PART V--Substitute Dividends and Dividend Equivalent Payments Received
by Foreign Persons Treated as Dividends

Sec. 541. Substitute dividends and dividend equivalent payments
received by foreign persons treated as dividends.

Subtitle B--Delay in Application of Worldwide Allocation of Interest

Sec. 551. Delay in application of worldwide allocation of interest.

TITLE I--INCENTIVES FOR HIRING AND RETAINING UNEMPLOYED WORKERS

SEC. 101. PAYROLL TAX FORGIVENESS FOR HIRING UNEMPLOYED
WORKERS.

(a) In General.--Section 3111 is amended by adding at the
end the following new subsection:
``(d) Special Exemption for Certain Individuals Hired in
2010.--
``(1) In general.--Subsection (a) shall not apply to wages
paid by a qualified employer with respect to employment
during the period beginning on the day after the date of the
enactment of this subsection and ending on December 31, 2010,
of any qualified individual for services performed--
``(A) in a trade or business of such qualified employer, or
``(B) in the case of a qualified employer exempt from tax
under section 501(a), in furtherance of the activities
related to the purpose or function constituting the basis of
the employer's exemption under section 501.
``(2) Qualified employer.--For purposes of this
subsection--
``(A) In general.--The term `qualified employer' means any
employer other than the United States, any State, or any
political subdivision thereof, or any instrumentality of the
foregoing.
``(B) Treatment of employees of post-secondary educational
institutions.--Notwithstanding subparagraph (A), the term
`qualified employer' includes any employer

[[Page S576]]

which is a public institution of higher education (as defined
in section 101(b) of the Higher Education Act of 1965).
``(3) Qualified individual.--For purposes of this
subsection, the term `qualified individual' means any
individual who--
``(A) begins employment with a qualified employer after
February 3, 2010, and before January 1, 2011,
``(B) certifies by signed affidavit, under penalties of
perjury, that such individual has not been employed for more
than 40 hours during the 60-day period ending on the date
such individual begins such employment,
``(C) is not employed by the qualified employer to replace
another employee of such employer unless such other employee
separated from employment voluntarily or for cause, and
``(D) is not an individual described in section 51(i)(1)
(applied by substituting `qualified employer' for `taxpayer'
each place it appears).
``(4) Election.--A qualified employer may elect to have
this subsection not apply. Such election shall be made in
such manner as the Secretary may require.''.
(b) Coordination With Work Opportunity Credit.--Section
51(c) is amended by adding at the end the following new
paragraph:
``(5) Coordination with payroll tax forgiveness.--The term
`wages' shall not include any amount paid or incurred to a
qualified individual (as defined in section 3111(d)(3))
during the 1-year period beginning on the hiring date of such
individual by a qualified employer (as defined in section
3111(d)) unless such qualified employer makes an election not
to have section 3111(d) apply.''.
(c) Transfers to Federal Old-Age and Survivors Insurance
Trust Fund.--There are hereby appropriated to the Federal
Old-Age and Survivors Trust Fund and the Federal Disability
Insurance Trust Fund established under section 201 of the
Social Security Act (42 U.S.C. 401) amounts equal to the
reduction in revenues to the Treasury by reason of the
amendments made by subsection (a). Amounts appropriated by
the preceding sentence shall be transferred from the general
fund at such times and in such manner as to replicate to the
extent possible the transfers which would have occurred to
such Trust Fund had such amendments not been enacted.
(d) Effective Date.--The amendments made by this section
shall apply to wages paid after the date of the enactment of
this Act.

SEC. 102. BUSINESS CREDIT FOR RETENTION OF CERTAIN NEWLY
HIRED INDIVIDUALS IN 2010.

(a) In General.--In the case of any taxable year ending
after the date of the enactment of this Act, the current year
business credit determined under section 38(b) of the
Internal Revenue Code of 1986 for such taxable year shall be
increased by an amount equal to the product of--
(1) $1,000, and
(2) the number of retained workers with respect to which
subsection (b)(2) is first satisfied during such taxable
year.
(b) Retained Worker.--For purposes of this section, the
term ``retained worker'' means any qualified individual (as
defined in section 3111(d)(3) of the Internal Revenue Code of
1986)--
(1) who was employed by the taxpayer on any date during the
taxable year,
(2) who was so employed by the taxpayer for a period of not
less than 52 consecutive weeks, and
(3) whose wages for such employment during the last 26
weeks of such period equaled at least 80 percent of such
wages for the first 26 weeks of such period.
(c) Limitation on Carrybacks.--No portion of the unused
business credit under section 38 of the Internal Revenue Code
of 1986 for any taxable year which is attributable to the
increase in the current year business credit under this
section may be carried to a taxable year beginning before the
date of the enactment of this section.

TITLE II--EXPENSING

SEC. 201. INCREASE IN EXPENSING OF CERTAIN DEPRECIABLE
BUSINESS ASSETS.

(a) In General.--Subsection (b) of section 179 is amended--
(1) by striking ``($125,000 in the case of taxable years
beginning after 2006 and before 2011)'' in paragraph (1) and
inserting ``($250,000 in the case of taxable years beginning
after 2007 and before 2011)'',
(2) by striking ``($500,000 in the case of taxable years
beginning after 2006 and before 2011)'' in paragraph (2) and
inserting ``($800,000 in the case of taxable years beginning
after 2007 and before 2011)'',
(3) by striking paragraphs (5) and (7), and
(4) by redesignating paragraph (6) as paragraph (5).
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.

TITLE III--QUALIFIED TAX CREDIT BONDS

SEC. 301. ISSUER ALLOWED REFUNDABLE CREDIT FOR CERTAIN
QUALIFIED TAX CREDIT BONDS.

(a) Credit Allowed.--Section 6431 is amended by adding at
the end the following new subsection:
``(f) Application of Section to Certain Qualified Tax
Credit Bonds.--
``(1) In general.--In the case of any specified tax credit
bond--
``(A) such bond shall be treated as a qualified bond for
purposes of this section,
``(B) subsection (a) shall be applied without regard to the
requirement that the qualified bond be issued before January
1, 2011,
``(C) the amount of the payment determined under subsection
(b) with respect to any interest payment date under such bond
shall be--
``(i) in the case of a bond issued by a qualified small
issuer, 65 percent of the amount of interest payable on such
bond by such issuer with respect to such date, and
``(ii) in the case of a bond issued by any other person, 45
percent of the amount of interest payable on such bond by
such issuer with respect to such date,
``(D) interest on any such bond shall be includible in
gross income for purposes of this title,
``(E) no credit shall be allowed under section 54A with
respect to such bond,
``(F) any payment made under subsection (b) shall not be
includible as income for purposes of this title, and
``(G) the deduction otherwise allowed under this title to
the issuer of such bond with respect to interest paid under
such bond shall be reduced by the amount of the payment made
under this section with respect to such interest.
``(2) Definitions.--For purposes of this subsection--
``(A) Specified tax credit bond.--The term `specified tax
credit bond' means any qualified tax credit bond (as defined
in section 54A(d)) if--
``(i) such bond is--

``(I) a new clean renewable energy bond (as defined in
section 54C),
``(II) a qualified energy conservation bond (as defined in
section 54D),
``(III) a qualified zone academy bond (as defined in
section 54E), or
``(IV) a qualified school construction bond (as defined in
section 54F), and

``(ii) the issuer of such bond makes an irrevocable
election to have this subsection apply
``(B) Qualified small issuer.--The term `qualified small
issuer' means, with respect to any calendar year, any issuer
who is not reasonably expected to issue tax-exempt bonds
(other than private activity bonds) and specified tax credit
bonds (determined without regard to whether an election is
made under this subsection) during such calendar year in an
aggregate face amount exceeding $30,000,000.''.
(b) Technical Corrections Relating to Qualified School
Construction Bonds.--
(1) The second sentence of section 54F(d)(1) is amended by
striking ``by the State'' and inserting ``by the State
education agency (or such other agency as is authorized under
State law to make such allocation)''.
(2) The second sentence of section 54F(e) is amended by
striking ``subsection (d)(4)'' and inserting ``paragraphs (2)
and (4) of subsection (d)''.
(c) Effective Dates.--
(1) In general.--The amendment made by subsection (a) shall
apply to bonds issued after the date of the enactment of this
Act.
(2) Technical corrections.--The amendments made by
subsection (b) shall take effect as if included in section
1521 of the American Recovery and Reinvestment Tax Act of
2009.

TITLE IV--EXTENSION OF CURRENT SURFACE TRANSPORTATION PROGRAMS

SEC. 401. SHORT TITLE.

This title may be cited as the ``Surface Transportation
Extension Act of 2010''

Subtitle A--Federal-Aid Highways

SEC. 411. IN GENERAL.

(a) In General.--Except as provided in this Act,
requirements, authorities, conditions, eligibilities,
limitations, and other provisions authorized under titles I,
V, and VI of the SAFETEA-LU (119 Stat. 1144), the SAFETEA-LU
Technical Corrections Act of 2008 (122 Stat. 1572), titles I
and VI of the Intermodal Surface Transportation Act of 1991
(105 Stat. 1914), titles I and V of the Transportation Equity
Act for the 21st Century (112 Stat. 107), and title 23,
United States Code (excluding chapter 4 of that title), which
would otherwise expire on or cease to apply after September
30, 2009, or the date specified in section 106(3) of the
Continuing Appropriations Resolution, 2010 (Public Law 111-
68), are incorporated by reference and shall continue in
effect until December 31, 2010.
(b) Authorization of Appropriations.--Except as provided in
section 412, there are authorized to be appropriated out of
the Highway Trust Fund (other than the Mass Transit
Account)--
(1) for fiscal year 2010, a sum equal to the total amount
authorized to be appropriated out of the Highway Trust Fund
for programs, projects, and activities for fiscal year 2009
under titles I, V, and VI of the SAFETEA-LU (119 Stat. 1144),
and title 23, United States Code (excluding chapter 4 of that
title); and
(2) for the period beginning on October 1, 2010, and ending
on December 31, 2010, a sum equal to \1/4\ of the total
amount authorized to be appropriated out of the Highway Trust
Fund for programs, projects, and activities for fiscal year
2009 under titles I, V, and VI of the SAFETEA-LU (119 Stat.
1144), and title 23, United States Code (excluding chapter 4
of that title).
(c) Use of Funds.--
(1) Fiscal year 2010.--Except as otherwise expressly
provided in this Act, funds authorized to be appropriated
under subsection (b)(1) for fiscal year 2010 shall be
distributed, administered, limited, and made available

[[Page S577]]

for obligation in the same manner and at the same level as
funds authorized to be appropriated out of the Highway Trust
Fund for fiscal year 2009 to carry out programs, projects,
activities, eligibilities, and requirements under the
SAFETEA-LU (119 Stat. 1144), the SAFETEA-LU Technical
Corrections Act of 2008 (122 Stat. 1572), titles I and VI of
the Intermodal Surface Transportation Act of 1991 (105 Stat.
1914), titles I and V of the Transportation Equity Act for
the 21st Century (112 Stat. 107), and title 23, United States
Code (excluding chapter 4 of that title).
(2) Fiscal year 2011.--Except as otherwise expressly
provided in this Act, funds authorized to be appropriated
under subsection (b)(2) for the period beginning on October
1, 2010, and ending on December 31, 2010, shall be
distributed, administered, limited, and made available for
obligation in the same manner and at the same level as \1/4\
of the total amount of funds authorized to be appropriated
out of the Highway Trust Fund for fiscal year 2009 to carry
out programs, projects, activities, eligibilities, and
requirements under the SAFETEA-LU (119 Stat. 1144), the
SAFETEA-LU Technical Corrections Act of 2008 (122 Stat.
1572), titles I and VI of the Intermodal Surface
Transportation Act of 1991 (105 Stat. 1914), titles I and V
of the Transportation Equity Act for the 21st Century (112
Stat. 107), and title 23, United States Code (excluding
chapter 4 of that title).
(3) Calculation.--The amounts authorized to be appropriated
under subsection (b) shall be calculated without regard to
any rescission or cancellation of funds or contract authority
for fiscal year 2009 under the SAFETEA-LU (119 Stat. 1144) or
any other law.
(4) Contract authority.--
(A) In general.--Except as provided in subparagraph (B),
funds authorized to be appropriated under this section shall
be available for obligation and shall be administered in the
same manner as if such funds were apportioned under chapter 1
of title 23, United States Code, and--
(i) for fiscal year 2010, shall be subject to a limitation
on obligations for Federal-aid highways and highway safety
construction programs included in an Act making
appropriations for fiscal year 2010 or a portion of that
fiscal year; and
(ii) for the period beginning on October 1, 2010, and
ending on December 31, 2010, shall be subject to a limitation
on obligations included in an Act making appropriations for
fiscal year 2011 or a portion of that fiscal year, except
that during such period obligations subject to such
limitation shall not exceed \1/4\ of the limitation on
obligations included in an Act making appropriations for
fiscal year 2011.
(B) Exceptions.--A limitation on obligations described in
clause (i) or (ii) of subparagraph (A) shall not apply to any
obligation under--
(i) section 125 of title 23, United States Code; or
(ii) section 105 of title 23, United States Code--

(I) for fiscal year 2010, only in an amount equal to
$639,000,000; and
(II) for the period beginning on October 1, 2010, and
ending on December 31, 2010, only in an amount equal to
$159,750,000.

(5) Calculations for distribution of obligation
limitation.--Upon enactment of an Act making appropriations
for the Department of Transportation for fiscal year 2011
(other than an Act or resolution making continuing
appropriations), the Secretary shall--
(A) as necessary for purposes of making the calculations
for the distribution of any obligation limitation under such
Act, annualize the amount of contract authority provided
under this Act for Federal-aid highways and highway safety
construction programs; and
(B) multiply the resulting distribution of any obligation
limitation under such Act by \1/4\.
(d) Extension and Flexibility for Certain Allocated
Programs.--
(1) Fiscal year 2010.--Notwithstanding any other provision
of law, for fiscal year 2010, the portion of the share of
funds of a State under subsection (b)(1) determined by the
amount that the State received or was authorized to receive
for fiscal year 2009 to carry out sections 1301, 1302, 1307,
1702, and 1934 of the SAFETEA-LU (119 Stat. 1198, 1204, 1217,
1256, and 1485), and section 144(f)(1) of title 23, United
States Code, shall be--
(A) made available to the State for programs apportioned
under sections 104(b) and 144 of title 23, United States
Code, and in the same proportion for each such program that--
(i) the amount apportioned to the State for that program
for fiscal year 2009; bears to
(ii) the amount apportioned to the State for fiscal year
2009 for all programs apportioned under such sections of such
Code; and
(B) administered in the same manner and with the same
period of availability as such funding is administered under
programs identified in subparagraph (A), except that no funds
may be used to carry out the project described in section
1307(d)(1) of the SAFETEA-LU (119 Stat. 1217; 122 Stat.
1577).
(2) Fiscal year 2011.--Notwithstanding any other provision
of law, for the period beginning on October 1, 2010, and
ending on December 31, 2010, the portion of the share of
funds of a State under subsection (b)(2) determined by \1/4\
of the amount that the State received or was authorized to
receive for fiscal year 2009 to carry out sections 1301,
1302, 1307, 1702, and 1934 of the SAFETEA-LU (119 Stat. 1198,
1204, 1217, 1256, and 1485) and section 144(f)(1) of title
23, United States Code, shall be--
(A) made available to the State for programs apportioned
under sections 104(b) and 144 of title 23, United States
Code, and in the same proportion for each such program that--
(i) the amount apportioned to the State for that program
for fiscal year 2009; bears to
(ii) the amount apportioned to the State for fiscal year
2009 for all programs apportioned under such sections of such
Code; and
(B) administered in the same manner and with the same
period of availability as such funding is administered under
programs identified in subparagraph (A), except that no funds
may be used to carry out the project described in section
1307(d)(1) of the SAFETEA-LU (119 Stat. 1217; 122 Stat.
1577).
(3) Territories and puerto rico.--
(A) Fiscal year 2010.--Notwithstanding any other provision
of law, for fiscal year 2010, the portion of the share of
funds of a territory or Puerto Rico under paragraph (b)(1)
determined by the amount that the territory or Puerto Rico
received or was authorized to receive for fiscal year 2009 to
carry out section 1934 of SAFETEA-LU (119 Stat. 1485), shall
be--
(i) for a territory, made available and administered in the
same manner as funding is made available and administered
under section 215 of title 23, United States Code; and
(ii) for Puerto Rico, made available and administered in
the same manner as funding is made available and administered
under section 165 of title 23, United States Code.
(B) Fiscal year 2011.--Notwithstanding any other provision
of law, for the period beginning on October 1, 2010, and
ending on December 31, 2010, the portion of the share of
funds of a territory or Puerto Rico under paragraph (b)(2)
determined by \1/4\ of the amount that the territory or
Puerto Rico received or was authorized to receive for fiscal
year 2009 to carry out section 1934 of SAFETEA-LU (119 Stat.
1485), shall be--
(i) for a territory, made available and administered in the
same manner as funding is made available and administered
under section 215 of title 23, United States Code; and
(ii) for Puerto Rico, made available and administered in
the same manner as funding is made available and administered
under section 165 of title 23, United States Code.
(C) Territory defined.--In this paragraph, the term
``territory'' means any of the following territories of the
United States: American Samoa, the Commonwealth of the
Northern Mariana Islands, Guam, or the United States Virgin
Islands.
(4) Additional funds.--
(A) In general.--No additional funds shall be provided for
any project or activity under subsection (c), or paragraph
(1) or (2) of this subsection, that the Secretary of
Transportation determines was sufficiently funded before or
during fiscal year 2009 to achieve the authorized purpose of
the project or activity.
(B) Reservation and redistribution of funds.--Funds made
available in accordance with paragraph (1) or (2) of
subsection (c) or paragraph (1) or (2) of this subsection for
a project or activity described in subparagraph (A) shall
be--
(i) reserved by the Secretary of Transportation; and
(ii) distributed to each State in accordance with paragraph
(1) or (2) of subsection (c), or paragraph (1) or (2) of this
subsection, as appropriate, for use in carrying out other
highway projects and activities extended by subsection (c) or
this subsection, in the proportion that--

(I) the total amount of funds made available for fiscal
year 2009 for projects and activities described in
subparagraph (A) in the State; bears to
(II) the total amount of funds made available for fiscal
year 2009 for those projects and activities in all States.

(e) Extension of Authorizations Under Title V of SAFETEA-
LU.--
(1) In general.--The programs authorized under paragraphs
(1) through (5) of section 5101(a) of the SAFETEA-LU (119
Stat. 1779) shall be continued--
(A) for fiscal year 2010, at the funding levels authorized
for those programs for fiscal year 2009; and
(B) for the period beginning on October 1, 2010, and ending
on December 31, 2010, at \1/4\ the funding levels authorized
for those programs for fiscal year 2009.
(2) Distribution of funds.--Funds for programs continued
under paragraph (1) shall be distributed to major program
areas under those programs in the same proportions as funds
were allocated for those program areas for fiscal year 2009,
except that designations for specific activities shall not be
required to be continued for--
(A) fiscal year 2010; or
(B) the period beginning on October 1, 2010, and ending on
December 31, 2010.
(3) Additional funds.--
(A) In general.--No additional funds shall be provided for
any project or activity under this subsection that the
Secretary of Transportation determines was sufficiently
funded before or during fiscal year 2009 to achieve the
authorized purpose of the project or activity.
(B) Distribution.--Funds that would have been made
available under paragraph (1) for a project or activity but
for the prohibition under subparagraph (A) shall be
distributed in accordance with paragraph (2).

[[Page S578]]

SEC. 412. ADMINISTRATIVE EXPENSES.

(a) Authorization of Contract Authority.--Notwithstanding
any other provision of this Act or any other law, there are
authorized to be appropriated from the Highway Trust Fund
(other than the Mass Transit Account), from amounts provided
under section 411, for administrative expenses of the
Federal-aid highway program--
(1) $422,425,000 for fiscal year 2010; and
(2) $105,606,250 for the period beginning on October 1,
2010, and ending on December 31, 2010.
(b) Contract Authority.--Funds authorized to be
appropriated by this section shall be--
(1) available for obligation, and shall be administered, in
the same manner as if such funds were apportioned under
chapter 1 of title 23, United States Code; and
(2) subject to a limitation on obligations for Federal-aid
highways and highway safety construction programs, except
that such funds shall remain available until expended.

SEC. 413. RESCISSION OF UNOBLIGATED BALANCES.

(a) In General.--The Secretary of Transportation shall
restore funds rescinded pursuant to section 10212 of the
SAFETEA-LU (Public Law 109-59; 119 Stat. 1937) to the States
and to the programs from which the funds were rescinded.
(b) Administration of Funds.--The restored amounts shall be
administered in the same manner as the funds originally
rescinded, except those funds may only be used with an
obligation limitation provided in an Act making
appropriations for Federal-aid highways and highway safety
construction programs enacted after implementation of the
rescission under section 10212 of the SAFETEA-LU (Public Law
109-59; 119 Stat. 1937).
(c) Funding.--
(1) In general.--There is authorized to be appropriated
from the Highway Trust Fund (other than the Mass Transit
Account) for fiscal year 2010 to carry out this section an
amount equal to the amount of funds rescinded under section
10212 of the SAFETEA-LU (Public Law 109-59; 119 Stat. 1937).
(2) Availability for obligation.--Funds authorized to be
appropriated by this section shall be--
(A) made available under this section and available for
obligation in the same manner as if the funds were
apportioned under chapter 1 of title 23, United States Code,
except that the funds shall retain the characteristics of the
funds originally rescinded; and
(B) subject to a limitation on obligations for Federal-aid
highways and highway safety construction programs included in
an Act making appropriations for fiscal year 2010 or a
portion of the fiscal year.
(d) Limitation.--No funds authorized to be restored under
this section shall be restored after the end of fiscal year
2010.

SEC. 414. RECONCILIATION OF FUNDS.

The Secretary shall reduce the amount apportioned or
allocated for a program, project, or activity under this
title by amounts apportioned or allocated pursuant to the
Continuing Appropriations Resolution, 2010 (Public Law 111-
68).

Subtitle B--National Highway Traffic Safety Administration, Federal
Motor Carrier Safety Administration, and Additional Programs

SEC. 421. EXTENSION OF NATIONAL HIGHWAY TRAFFIC SAFETY
ADMINISTRATION HIGHWAY SAFETY PROGRAMS.

(a) Chapter 4 Highway Safety Programs.--Section 2001(a)(1)
of the SAFETEA-LU (119 Stat. 1519) is amended--
(1) by striking ``and''; and
(2) by striking ``2009.'' and inserting ``2009,
$235,000,000 for fiscal year 2010, and $58,750,000 for the
period beginning on October 1, 2010, and ending on December
31, 2010.''.
(b) Highway Safety Research and Development.--Section
2001(a)(2) of the SAFETEA-LU (119 Stat. 1519) is amended--
(1) by striking ``and''; and
(2) by striking ``2009.'' and inserting ``2009,
$107,329,000 for fiscal year 2010, and $27,061,000 for the
period beginning on October 1, 2010, and ending on December
31, 2010.''.
(c) Occupant Protection Incentive Grants.--
(1) Extension of program.--Section 405(a) of title 23,
United States Code, is amended--
(A) in paragraph (3), by striking ``6'' and inserting
``8''; and
(B) in paragraph (4)(C), by striking ``fifth and sixth''
and inserting ``fifth through eighth''.
(2) Authorization of appropriations.--Section 2001(a)(3) of
the SAFETEA-LU (119 Stat. 1519) is amended--
(A) by striking ``and''; and
(B) by striking ``2009.'' and inserting ``2009, $25,000,000
for fiscal year 2010, and $6,250,000 for the period beginning
on October 1, 2010, and ending on December 31, 2010.''.
(d) Safety Belt Performance Grants.--Section 2001(a)(4) of
the SAFETEA-LU (119 Stat. 1519) is amended--
(1) by striking ``and''; and
(2) by striking ``2009.'' and inserting ``2009,
$124,500,000 for fiscal year 2010, and $31,125,000 for the
period beginning on October 1, 2010, and ending on December
31, 2010.''.
(e) State Traffic Safety Information System Improvements.--
Section 2001(a)(5) of the SAFETEA-LU (119 Stat. 1519) is
amended--
(1) by striking ``and''; and
(2) by striking ``2009.'' and inserting ``2009, $34,500,000
for fiscal year 2010, and $8,625,000 for the period beginning
on October 1, 2010, and ending on December 31, 2010.''.
(f) Alcohol-Impaired Driving Countermeasures Incentive
Grant Program.--
(1) Extension of program.--Section 410 of title 23, United
States Code, is amended--
(A) in subsection (a)(3)(C), by striking ``fifth, sixth,,
seventh, and eighth'' and inserting ``fifth through tenth'';
and
(B) in subsection (b)(2)(C), by striking ``2008 and 2009''
and inserting ``2008, 2009, 2010, and 2011''.
(2) Authorization of appropriations.--Section 2001(a)(6) of
the SAFETEA-LU (119 Stat. 1519) is amended--
(A) by striking ``and''; and
(B) by striking ``2009.'' and inserting ``2009,
$139,000,000 for fiscal year 2010, and $34,750,000 for the
period beginning on October 1, 2010, and ending on December
31, 2010.''.
(g) National Driver Register.--Section 2001(a)(7) of the
SAFETEA-LU (119 Stat. 1520) is amended--
(1) by striking ``and''; and
(2) by striking ``2009.'' and inserting ``2009, $4,078,000
for fiscal year 2010, and $1,029,000 for the period beginning
on October 1, 2010, and ending on December 31, 2010.''.
(h) High Visibility Enforcement Program.--
(1) Extension of program.--Section 2009(a) of the SAFETEA-
LU (23 U.S.C. 402 note) is amended by striking ``2009'' and
inserting ``2011''.
(2) Authorization of appropriations.--Section 2001(a)(8) of
the SAFETEA-LU (119 Stat. 1520) is amended--
(A) by striking ``and''; and
(B) by striking ``2009.'' and inserting ``2009, $29,000,000
for fiscal year 2010, and $7,250,000 for the period beginning
on October 1, 2010, and ending on December 31, 2010.''.
(i) Motorcyclist Safety.--
(1) Extension of program.--Section 2010(d)(1)(B) of the
SAFETEA-LU (23 U.S.C. 402 note) is amended by striking ``and
fourth'' and inserting ``fourth, fifth, and sixth''.
(2) Authorization of appropriations.--Section 2001(a)(9) of
the SAFETEA-LU (119 Stat. 1520) is amended--
(A) by striking ``and''; and
(B) by striking ``2009.'' and inserting ``2009, $7,000,000
for fiscal year 2010, and $1,750,000 for the period beginning
on October 1, 2010, and ending on December 31, 2010.''.
(j) Child Safety and Child Booster Seat Safety Incentive
Grants.--
(1) Extension of program.--Section 2011(c)(2) of the
SAFETEA-LU (23 U.S.C. 405 note) is amended by striking
``fourth fiscal year'' and inserting ``fourth, fifth, and
sixth fiscal years''.
(2) Authorization of appropriations.--Section 2001(a)(10)
of the SAFETEA-LU (119 Stat. 1520) is amended--
(A) by striking ``and''; and
(B) by striking ``2009.'' and inserting ``2009, $7,000,000
for fiscal year 2010, and $1,750,000 for the period beginning
on October 1, 2010, and ending on December 31, 2010.''.
(k) Administrative Expenses.--Section 2001(a)(11) of the
SAFETEA-LU (119 Stat. 1520) is amended--
(1) by striking ``and'' the last place it appears; and
(2) by striking ``2009.'' and inserting ``2009, $25,047,000
for fiscal year 2010, and $6,332,000 for the period beginning
on October 1, 2010, and ending on December 31, 2010.''.
(l) Applicability of Title 23.--Section 2001(c) of the
SAFETEA-LU (119 Stat. 1520) is amended by striking ``2009''
and inserting ``2011''.
(m) Drug-Impaired Driving Enforcement.--Section 2013(f) of
the SAFETEA-LU (23 U.S.C. 403 note) is amended by striking
``2009'' and inserting ``2011''.
(n) Older Driver Safety; Law Enforcement Training.--Section
2017 of the SAFETEA-LU is amended--
(1) in subsection (a)(1) (119 Stat. 1541), by striking
``2009'' and inserting ``2011''; and
(2) in subsection (b)(2) (23 U.S.C. 402 note), by striking
``2009'' and inserting ``2011''.

SEC. 422. EXTENSION OF FEDERAL MOTOR CARRIER SAFETY
ADMINISTRATION PROGRAMS.

(a) Motor Carrier Safety Grants.--Section 31104(a) of title
49, United States Code, is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(6) $209,000,000 for fiscal year 2010; and
``(7) $52,679,000 for the period beginning on October 1,
2010, and ending on December 31, 2010.''.
(b) Administrative Expenses.--Section 31104(i)(1) of title
49, United States Code, is amended--
(1) in subparagraph (D), by striking ``and'';
(2) in subparagraph (E), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(F) ``(F) $239,828,000 for fiscal year 2010; and
``(G) ``(G) $61,036,000 for the period beginning on October
1, 2010, and ending on December 31, 2010.''.
(c) Grant Programs.--Section 4101(c) of the SAFETEA-LU (119
Stat.1715) is amended--
(1) in paragraph (1), by striking ``2009.'' and inserting
``2009, and $25,000,000 for fiscal year 2010, and $6,301,000
for the period beginning on October 1, 2010, and ending on
December 31, 2010.'';
(2) in paragraph (2), by striking ``2009.'' and inserting
``2009, $32,000,000 for fiscal year 2010, and $8,066,000 for
the period beginning on October 1, 2010, and ending on
December 31, 2010.'';

[[Page S579]]

(3) in paragraph (3), by striking ``2009.'' and inserting
``2009, $5,000,000 for fiscal year 2010, and $1,260,000 for
the period beginning on October 1, 2010, and ending on
December 31, 2010.'';
(4) in paragraph (4), by striking ``2009.'' and inserting
``2009, $25,000,000 for fiscal year 2010, and $6,301,000 for
the period beginning on October 1, 2010, and ending on
December 31, 2010.''; and
(5) in paragraph (5), by striking ``2009.'' and inserting
``2009, $3,000,000 for fiscal year 2010, and $756,000 for the
period beginning on October 1, 2010, and ending on December
31, 2010.''.
(d) High-Priority Activities.--Section 31104(k) of title
49, United States Code, is amended by striking ``2009'' in
paragraph (2) and inserting ``2009, $15,000,000 for fiscal
year 2010, and $3,781,000 for the period beginning on October
1, 2010, and ending on December 31, 2010''.
(e) New Entrant Audits.--Section 31144(g)(5)(B) of title
49, United States Code, is amended by inserting ``(and up to
$7,310,000 for the period beginning on October 1, 2010, and
ending on December 31, 2010)'' after ``fiscal year''.
(f) Commercial Driver's License Information System
Modernization.--Section 4123(d) of the SAFETEA-LU (119
Stat.1736) is amended--
(1) in paragraph (3), by striking ``and'' at the end;
(2) in paragraph (4), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(5) $8,000,000 for fiscal year 2010; and
``(6) $2,016,000 for the period beginning on October 1,
2010, and ending on December 31, 2010.''.
(g) Outreach and Education.--Section 4127(e) of the
SAFETEA-LU (119 Stat.1741) is amended by striking ``and
2009'' and inserting ``2009, and 2010, and $252,000 to the
Federal Motor Carrier Safety Administration, and $756,000 to
the National Highway Traffic Safety Administration, for the
period beginning on October 1, 2010, and ending on December
31, 2010,''.
(h) Grant Program for Commercial Motor Vehicle Operators.--
Section 4134(c) of the SAFETEA-LU (119 Stat.1744) is amended
by striking ``2009'' and inserting ``2009, 2010, and $252,000
for the period beginning on October 1, 2010, and ending on
December 31, 2010,''.
(i) Motor Carrier Safety Advisory Committee.--Section
4144(d) of the SAFETEA-LU (1119 Stat.1748) is amended by
striking ``September 30, 2010'' and inserting ``December 31,
2010''.
(j) Working Group for Development of Practices and
Procedures to Enhance Federal-State Relations.--Section
4213(d) of the SAFETEA-LU (49 U.S.C. 14710 note) is amended
by striking ``September 30, 2009'' and inserting ``December
31, 2010''.

SEC. 423. ADDITIONAL PROGRAMS.

(a) Hazardous Materials Research Projects.--Section 7131(c)
of the SAFETEA-LU (119 Stat. 1910) is amended by striking
``through 2009'' and inserting ``through 2010,and $315,000
for the period beginning on October 1, 2010, and ending on
December 31, 2010,''.
(b) Dingell-Johnson Sport Fish Restoration Act.--Section 4
of the Dingell-Johnson Sport Fish Restoration Act (16 U.S.C.
777c) is amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by striking ``2009,'' and inserting ``2010 and for the
period beginning on October 1, 2010, and ending on December
31, 2010,''; and
(2) in subsection (b)(1)(A), by striking ``2010,'' and
inserting ``and for the period beginning on October 1, 2010,
and ending on December 31, 2010,''.

Subtitle C--Public Transportation Programs

SEC. 431. ALLOCATION OF FUNDS FOR PLANNING PROGRAMS.

Section 5305(g) of title 49, United States Code, is amended
by striking ``2009'' and inserting ``2010, and for the period
beginning October 1, 2010, and ending December 31, 2010,''.

SEC. 432. SPECIAL RULE FOR URBANIZED AREA FORMULA GRANTS.

Section 5307(b)(2) of title 49, United States Code, is
amended--
(1) in the paragraph heading, by striking ``2009'' and
inserting ``2010, and the period beginning october 1, 2010,
and ending december 31, 2010'';
(2) in subparagraph (A), by striking ``2009,'' and
inserting ``2010, and the period beginning October 1, 2010,
and ending December 31, 2010,''; and
(3) in subparagraph (E)--
(A) in the subparagraph heading, by striking ``and 2009''
and inserting ``through 2010 and during the period beginning
october 1, 2010, and ending december 31, 2010''; and
(B) in the matter preceding clause (i), by striking ``and
2009'' and inserting ``through 2010, and during the period
beginning October 1, 2010, and ending December 31, 2010,''.

SEC. 433. ALLOCATING AMOUNTS FOR CAPITAL INVESTMENT GRANTS.

Section 5309(m) of title 49, United States Code, is
amended--
(1) in paragraph (2)--
(A) in the heading, by striking ``2009'' and inserting
``2010 and october 1, 2010, through december 31, 2010'';
(B) in the matter preceding subparagraph (A), by striking
``2009'' and inserting ``2010, and during the period
beginning October 1, 2010, and ending December 31, 2010,'';
and
(C) in subparagraph (A)(i), by striking ``2009'' and
inserting ``2010, and $50,000,000 for the period beginning
October 1, 2010, and ending December 31, 2010,'';
(2) in paragraph (6)--
(A) in subparagraph (B), by striking ``2009'' and inserting
``2010, and $3,750,000 shall be available for the period
beginning October 1, 2010, and ending December 31, 2010,'';
and
(B) in subparagraph (C), by striking ``2009'' and inserting
``2010, and $1,250,000 shall be available for the period
beginning October 1, 2010 and ending December 31, 2010,'';
and
(3) in paragraph (7)--
(A) in subparagraph (A)--
(i) by redesignating clauses (i) through (viii) as
subclauses (I) through (VIII), respectively;
(ii) in the matter preceding subclause (I), as so
redesignated, by striking ``$10,000,000'' and all that
follows through ``2009'' and inserting the following:
``(i) Fiscal years 2006 through 2010.--$10,000,000 shall be
available in each of fiscal years 2006 through 2010''; and
(iii) by inserting after subclause (VIII), as so
redesignated, the following:
``(ii) Special rule for october 1, 2010, through december
31, 2010.--$2,500,000 shall be available in the period
beginning October 1, 2010, and ending December 31, 2010, for
ferry boats or ferry terminal facilities. The Secretary shall
set aside a portion of such amount in accordance with clause
(i), except that the Secretary shall set aside 25 percent of
each dollar amount specified in subclauses (I) through
(VIII).'';''.
(B) in subparagraph (B), by inserting after ``2009.'' the
following:
``(v) $13,500,000 for fiscal year 2010.
``(vi) $3,375,000 for the period beginning October 1, 2010,
and ending December 31, 2010.'';
(C) in subparagraph (C), by inserting ``, and during the
period beginning October 1, 2010, and ending December 31,
2010,'' after ``fiscal year'';
(D) in subparagraph (D), by inserting ``, and not less than
$8,750,000 shall be available for the period beginning
October 1, 2010, and ending December 31, 2010,'' after
``year''; and
(E) in subparagraph (E), by inserting ``, and $750,000
shall be available for the period beginning October 1, 2010,
and ending December 31, 2010,'' after ``year''.

SEC. 434. APPORTIONMENT OF FORMULA GRANTS FOR OTHER THAN
URBANIZED AREAS.

Section 5311(c)(1) of title 49, United States Code, is
amended by adding at the end the following:
``(E) $15,000,000 for fiscal year 2010.
``(F) $3,750,000 for the period beginning October 1, 2010,
and ending December 31, 2010.''.''.

SEC. 435. APPORTIONMENT BASED ON FIXED GUIDEWAY FACTORS.

Section 5337 of title 49, United States Code, is amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by striking ``2009'' and inserting ``2010''; and
(2) by adding at the end the following:
``(g) Special Rule for October 1, 2010, Through December
31, 2010.--The Secretary shall apportion amounts made
available for fixed guideway modernization under section 5309
for the period beginning October 1, 2010, and ending December
31, 2010, in accordance with subsection (a), except that the
Secretary shall apportion 25 percent of each dollar amount
specified in subsection (a).''.

SEC. 436. AUTHORIZATIONS FOR PUBLIC TRANSPORTATION.

(a) Formula and Bus Grants.--Section 5338(b) of title 49,
United States Code, is amended--
(1) in paragraph (1)--
(A) in subparagraph (C), by striking ``and'' at the end;
(B) in subparagraph (D), by striking the period at the end
and inserting a semicolon; and
(C) by adding at the end the following:
``(E) $8,360,565,000 for fiscal year 2010; and
``(F) $2,090,141,250 for the period beginning October 1,
2010, and ending December 31, 2010.''; and
(2) in paragraph (2)--
(A) in subparagraph (A), by striking ``and $113,500,000 for
fiscal year 2009'' and inserting ``$113,500,000 for each of
fiscal years 2009 and 2010, and $28,375,000 for the period
beginning October 1, 2010, and ending December 31, 2010,'';
(B) in subparagraph (B), by striking ``and $4,160,365,000
for fiscal year 2009'' and inserting ``$4,160,365,000 for
each of fiscal years 2009 and 2010, and $1,040,091,250 for
the period beginning October 1, 2010, and ending December 31,
2010,'';
(C) in subparagraph (C), by striking ``and $51,500,000 for
fiscal year 2009'' and inserting ``$51,500,000 for each of
fiscal years 2009 and 2010, and $12,875,000 for the period
beginning October 1, 2010, and ending December 31, 2010,'';
(D) in subparagraph (D), by striking ``and $1,666,500,000
for fiscal year 2009'' and inserting ``$1,666,500,000 for
each of fiscal years 2009 and 2010, and $416,625,000 for the
period beginning October 1, 2010 and ending December 31,
2010,'';
(E) in subparagraph (E), by striking ``and $984,000,000 for
fiscal year 2009'' and inserting ``$984,000,000 for each of
fiscal years 2009 and 2010, and $246,000,000 for the period
beginning October 1, 2010 and ending December 31, 2010,'';
(F) in subparagraph (F), by striking ``and $133,500,000 for
fiscal year 2009'' and inserting ``$133,500,000 for each of
fiscal years 2009 and

[[Page S580]]

2010, and $33,375,000 for the period beginning October 1,
2010 and ending December 31, 2010,'';
(G) in subparagraph (G), by striking ``and $465,000,000 for
fiscal year 2009'' and inserting ``$465,000,000 for each of
fiscal years 2009 and 2010, and $116,250,000 for the period
beginning October 1, 2010 and ending December 31, 2010,'';
(H) in subparagraph (H), by striking ``and $164,500,000 for
fiscal year 2009'' and inserting ``$164,500,000 for each of
fiscal years 2009 and 2010, and $41,125,000 for the period
beginning October 1, 2010 and ending December 31, 2010,'';
(I) in subparagraph (I), by striking ``and $92,500,000 for
fiscal year 2009'' and inserting ``$92,500,000 for each of
fiscal years 2009 and 2010, and $23,125,000 for the period
beginning October 1, 2010 and ending December 31, 2010,'';
(J) in subparagraph (J), by striking ``and $26,900,000 for
fiscal year 2009'' and inserting ``$26,900,000 for each of
fiscal years 2009 and 2010, and $6,725,000 for the period
beginning October 1, 2010 and ending December 31, 2010,'';
(K) in subparagraph (K), by striking ``and $3,500,000 for
fiscal year 2009'' and inserting ``$3,500,000 for each of
fiscal years 2009 and 2010, and $875,000 for the period
beginning October 1, 2010 and ending December 31, 2010,'';
(L) in subparagraph (L), by striking ``and $25,000,000 for
fiscal year 2009'' and inserting ``$25,000,000 for each of
fiscal years 2009 and 2010, and $6,250,000 for the period
beginning October 1, 2010 and ending December 31, 2010,'';
(M) in subparagraph (M), by striking ``and $465,000,000 for
fiscal year 2009'' and inserting ``$465,000,000 for each of
fiscal years 2009 and 2010, and $116,250,000 for the period
beginning October 1, 2010 and ending December 31, 2010,'';
and
(N) in subparagraph (N), by striking ``and $8,800,000 for
fiscal year 2009'' and inserting ``$8,800,000 for each of
fiscal years 2009 and 2010, and $2,200,000 for the period
beginning October 1, 2010 and ending December 31, 2010,''.
(b) Capital Investment Grants.--Section 5338(c) of title
49, United States Code, is amended--
(1) in paragraph (3), by striking ``and'' at the end;
(2) in paragraph (4), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(5) $2,000,000,000 for fiscal year 2010; and
``(6) $500,000,000 for the period of October 1, 2010
through December 31, 2010.''.
(c) Research and University Research Centers.--Section
5338(d) of title 49, United States Code, is amended--
(1) in paragraph (1), in the matter preceding subparagraph
(A), by striking ``and $69,750,000 for fiscal year 2009'' and
inserting ``$69,750,000 for each of fiscal years 2009 and
2010, and $17,437,500 for the period beginning October 1,
2010, and ending December 31, 2010''; and
(2) by adding at the end the following:
``(3) Additional authorizations.--
``(A) In general.--
``(i) Fiscal year 2010.--Of amounts authorized to be
appropriated for fiscal year 2010 under paragraph (1), the
Secretary shall allocate for each of the activities and
projects described in subparagraphs (A) through (F) of
paragraph (1) an amount equal to the amount allocated for
fiscal year 2009 under each such subparagraph.
``(ii) October 1, 2010 through december 31, 2010.--Of
amounts authorized to be appropriated for the period
beginning October 1, 2010, through December 31, 2010, under
paragraph (1), the Secretary shall allocate for each of the
activities and projects described in subparagraphs (A)
through (F) of paragraph (1) an amount equal to 25 percent of
the amount allocated for fiscal year 2009 under each such
subparagraph.
``(B) University centers program.--
``(i) Fiscal year 2010.--Of the amounts allocated under
subparagraph (A)(i) for the university centers program under
section 5506 for fiscal year 2010, the Secretary shall
allocate for each program described in clauses (i) through
(iii) and (v) through (viii) of paragraph (2)(A) an amount
equal to the amount allocated for fiscal year 2009 under each
such clause.
``(ii) October 1, 2010 through december 31, 2010.--Of the
amounts allocated under subparagraph (A)(i) for the
university centers program under section 5506 for the period
beginning October 1, 2010, and ending December 31, 2010, the
Secretary shall allocate for each program described in
clauses (i) through (iii) and (v) through (viii) of paragraph
(2)(A) an amount equal to 25 percent of the amount allocated
for fiscal year 2009 under each such clause.
``(iii) Funding.--If the Secretary determines that a
project or activity described in paragraph (2) received
sufficient funds in fiscal year 2009, or a previous fiscal
year, to carry out the purpose for which the project or
activity was authorized, the Secretary may not allocate any
amounts under clause (i) or (ii) for the project or activity
for fiscal year 2010, or any subsequent fiscal year.''.
(d) Administration.--Section 5338(e) of title 49, United
States Code, is amended--
(1) in paragraph (3), by striking ``and'' at the end;
(2) in paragraph (4), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(5) $98,911,000 for fiscal year 2010; and
``(6) $24,727,750 for the period beginning October 1, 2010,
and ending December 31, 2010.''.

SEC. 437. AMENDMENTS TO SAFETEA-LU.

(a) Contracted Paratransit Pilot.--Section 3009(i)(1) of
the SAFETEA-LU (Public Law 109-59; 119 Stat. 1572) is amended
by striking ``2009'' and inserting ``2010, and for the period
beginning October 1, 2010, and ending December 31, 2010''.
(b) Public-Private Partnership Pilot Program.--Section 3011
of the SAFETEA-LU (49 U.S.C. 5309 note) is amended--
(1) in subsection (c)(5), by striking ``2009'' and
inserting ``2010 and the period beginning October 1, 2010,
and ending December 31, 2010''; and
(2) in subsection (d), by striking ``2009'' and inserting
``2010, and for the period beginning October 1, 2010, and
ending December 31, 2010''.
(c) Elderly Individuals and Individuals With Disabilities
Pilot Program.--Section 3012(b)(8) of the SAFETEA-LU (49
U.S.C. 5310 note) is amended by striking ``September 30,
2009'' and inserting ``December 31, 2010''.
(d) Obligation Ceiling.--Section 3040 of the SAFETEA-LU
(Public Law 109-59; 119 Stat. 1639) is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(6) $10,507,752,000 for fiscal year 2010, of which not
more than $8,360,565,000 shall be from the Mass Transit
Account; and
``(7) $2,626,938,000 for the period beginning October 1,
2010, and ending December 31, 2010, of which not more than
$2,090,141,250 shall be from the Mass Transit Account.''.
(e) Project Authorizations for New Fixed Guideway Capital
Projects.--Section 3043 of the SAFETEA-LU (Public Law 109-59;
119 Stat. 1640) is amended--
(1) in subsection (b), in the matter preceding paragraph
(1), by striking ``2009'' and inserting ``2010, and for the
period beginning October 1, 2010, and ending December 31,
2010,''; and
(2) in subsection (c), in the matter preceding paragraph
(1), by striking ``2009'' and inserting ``2010, and for the
period beginning October 1, 2010, and ending December 31,
2010,''.
(f) Allocations for National Research and Technology
Programs.--Section 3046 of the SAFETEA-LU (49 U.S.C. 5338
note) is amended--
(1) in subsection (b), by inserting ``or period'' after
``fiscal year''; and
(2) by adding at the end the following:
``(c) Additional Appropriations.--The Secretary shall
allocate amounts appropriated pursuant to section 5338(d) of
title 49, United States Code, for national research and
technology programs under sections 5312, 5314, and 5322 of
such title--
``(1) for fiscal year 2010, in amounts equal to the amounts
allocated for fiscal year 2009 under each of paragraphs (2),
(3), (5), (6), and (8) through (25) of subsection (a); and
``(2) for the period beginning October 1, 2010, and ending
December 31, 2010, in amounts equal to 25 percent of the
amounts allocated for fiscal year 2009 under each of
paragraphs (2), (3), (5), (6), and (8) through (25) of
subsection (a).
``(d) Funding.--If the Secretary determines that a project
or activity described in subsection (a) received sufficient
funds in fiscal year 2009, or a previous fiscal year, to
carry out the purpose for which the project or activity was
authorized, the Secretary may not allocate any amounts under
subsection (c) for the project or activity for fiscal year
2010, or any subsequent fiscal year.''.

Subtitle D--Revenue Provisions

SEC. 441. REPEAL OF PROVISION PROHIBITING THE CREDITING OF
INTEREST TO THE HIGHWAY TRUST FUND.

(a) In General.--Paragraph (1) of section 9503(f) is
amended by striking subparagraph (B).
(b) Conforming Amendments.--Such paragraph, as amended by
paragraph (1), is further amended--
(1) by striking ``, and'' at the end of subparagraph (A)
and inserting a period; and
(2) by striking ``1998'' in the matter preceding
subparagraph (A) and all that follows through ``the opening
balance'' and inserting ``1998, the opening balance''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this title.

SEC. 442. RESTORATION OF CERTAIN FOREGONE INTEREST TO HIGHWAY
TRUST FUND.

(a) In General.--Paragraph (2) of section 9503(f) is
amended to read as follows:
``(2) Restoration of foregone interest.--Out of money in
the Treasury not otherwise appropriated, there is hereby
appropriated--
``(A) $14,700,000,000 to the Highway Account (as defined in
subsection (e)(5)(B)) in the Highway Trust Fund; and
``(B) $4,800,000,000 to the Mass Transit Account in the
Highway Trust Fund.''.
(b) Conforming Amendment.--Paragraph (1) of section 9503(e)
is amended by striking ``this subsection'' and inserting
``this section''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.

SEC. 443. TREATMENT OF CERTAIN AMOUNTS APPROPRIATED TO
HIGHWAY TRUST FUND.

(a) In General.--Section 9503(f), as amended by this Act,
is amended by adding at the end the following new paragraph:
``(4) Treatment of appropriated amounts.--Any amount
appropriated under

[[Page S581]]

this subsection to the Highway Trust Fund shall remain
available without fiscal year limitation.''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of the enactment of this Act.

SEC. 444. TERMINATION OF TRANSFERS FROM HIGHWAY TRUST FUND
FOR CERTAIN REPAYMENTS AND CREDITS.

(a) In General.--Section 9503(c) is amended by striking
paragraph (2) and by redesignating paragraphs (3), (4), (5),
and (6) as paragraphs (2), (3), (4), and (5), respectively.
(b) Conforming Amendments.--
(1) Section 9502(a) is amended by striking ``section
9503(c)(7)'' and inserting ``section 9503(c)(5)''.
(2) Section 9503(b)(4)(D) is amended by striking
``paragraph (4)(D) or (5)(B)'' and inserting ``paragraph
(3)(D) or (4)(B)''.
(3) Paragraph (2) of section 9503(c), as redesignated by
subsection (a), is amended by adding at the end the following
new sentence: ``The amounts payable from the Highway Trust
Fund under the preceding sentence shall be determined by
taking into account only the portion of the taxes which are
deposited into the Highway Trust Fund.''.
(4) Section 9503(e)(5)(A) is amended by striking ``(2),
(3), and (4)'' and inserting ``(2) and (3)''.
(5) Section 9504(a) is amended by striking ``section
9503(c)(4), section 9503(c)(5)'' and inserting ``section
9503(c)(3), section 9503(c)(4)''.
(6) Section 9504(b)(2) is amended by striking ``section
9503(c)(5)'' and inserting ``section 9503(c)(4)''.
(7) Section 9504(e) is amended by striking ``section
9503(c)(4)'' and inserting section ``9503(c)(3)''.
(c) Effective Date.--The amendment made by this section
shall apply to transfers relating to amounts paid and credits
allowed after the date of the enactment of this Act.

SEC. 445. EXTENSION OF AUTHORITY FOR EXPENDITURES.

(a) Highways Trust Fund.--
(1) Highway account.--Paragraph (1) of section 9503(c) is
amended--
(A) by striking ``September 30, 2009 (October 1, 2009'' and
inserting ``December 31, 2010 (January 1, 2011''; and
(B) by striking ``under'' and all that follows and
inserting ``under the Surface Transportation Extension Act of
2010 or any other provision of law which was referred to in
this paragraph before the date of the enactment of such Act
(as such Act and provisions of law are in effect on the date
of the enactment of such Act).''.
(2) Mass transit account.--Paragraph (3) of section 9503(e)
is amended--
(A) by striking ``October 1, 2009'' and inserting ``January
1, 2011''; and
(B) by striking ``in accordance with'' and all that follows
and inserting ``in accordance with the Surface Transportation
Extension Act of 2010 or any other provision of law which was
referred to in this paragraph before the date of the
enactment of such Act (as such Act and provisions of law are
in effect on the date of the enactment of such Act).''.
(3) Exception to limitation on transfers.--Subparagraph (B)
of section 9503(b)(6) is amended by striking ``September 30,
2009 (October 1, 2009'' and inserting ``December 31, 2010
(January 1, 2011''.
(b) Sport Fish Restoration and Boating Trust Fund.--
(1) In general.--Paragraph (2) of section 9504(b) is
amended--
(A) by striking ``(as in effect'' in subparagraph (A) and
all that follows in such subparagraph and inserting ``(as in
effect on the date of the enactment of the Surface
Transportation Extension Act of 2010),'',
(B) by striking ``(as in effect'' in subparagraph (B) and
all that follows in such subparagraph and inserting ``(as in
effect on the date of the enactment of the Surface
Transportation Extension Act of 2010), and'', and
(C) by striking ``(as in effect'' in subparagraph (C) and
all that follows in such subparagraph and inserting ``(as in
effect on the date of the enactment of the Surface
Transportation Extension Act of 2010).''.
(2) Exception to limitation on transfers.--Paragraph (2) of
section 9504(d) is amended by striking ``October 1, 2009''
and inserting ``January 1, 2011''.
(c) Effective Date.--The amendments made by this section
shall take effect on September 30, 2009.

SEC. 446. LEVEL OF OBLIGATION LIMITATIONS.

(a) Highway Category.--Section 8003(a) of the SAFETEA-LU (2
U.S.C. 901 note; 119 Stat. 1917) is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(6) for the period beginning on October 1, 2009, and
ending on September 30, 2010, $42,469,970,178.
``(7) for the period beginning on October 1, 2010, and
ending on December 31, 2010, $10,617,492,545.''.
(b) Mass Transit Category.--Section 8003(b) of the SAFETEA-
LU (2 U.S.C. 901 note; 119 Stat. 1917) is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(6) for the period beginning on October 1, 2009, and
ending on December 31, 2010, $10,338,065,000.
``(7) for the period beginning on October 1, 2010, and
ending on December 31, 2010, $2,584,516,250.''.
(c) Treatment of Funds.--No adjustment pursuant to section
110 of title 23, United States Code, shall be made for fiscal
year 2010 or fiscal year 2011.

TITLE V--OFFSET PROVISIONS

Subtitle A--Foreign Account Tax Compliance

PART I--INCREASED DISCLOSURE OF BENEFICIAL OWNERS

SEC. 501. REPORTING ON CERTAIN FOREIGN ACCOUNTS.

(a) In General.--The Internal Revenue Code of 1986 is
amended by inserting after chapter 3 the following new
chapter:

``CHAPTER 4--TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS

``Sec. 1471. Withholdable payments to foreign financial institutions.
``Sec. 1472. Withholdable payments to other foreign entities.
``Sec. 1473. Definitions.
``Sec. 1474. Special rules.

``SEC. 1471. WITHHOLDABLE PAYMENTS TO FOREIGN FINANCIAL
INSTITUTIONS.

``(a) In General.--In the case of any withholdable payment
to a foreign financial institution which does not meet the
requirements of subsection (b), the withholding agent with
respect to such payment shall deduct and withhold from such
payment a tax equal to 30 percent of the amount of such
payment.
``(b) Reporting Requirements, etc.--
``(1) In general.--The requirements of this subsection are
met with respect to any foreign financial institution if an
agreement is in effect between such institution and the
Secretary under which such institution agrees--
``(A) to obtain such information regarding each holder of
each account maintained by such institution as is necessary
to determine which (if any) of such accounts are United
States accounts,
``(B) to comply with such verification and due diligence
procedures as the Secretary may require with respect to the
identification of United States accounts,
``(C) in the case of any United States account maintained
by such institution, to report on an annual basis the
information described in subsection (c) with respect to such
account,
``(D) to deduct and withhold a tax equal to 30 percent of--
``(i) any passthru payment which is made by such
institution to a recalcitrant account holder or another
foreign financial institution which does not meet the
requirements of this subsection, and
``(ii) in the case of any passthru payment which is made by
such institution to a foreign financial institution which has
in effect an election under paragraph (3) with respect to
such payment, so much of such payment as is allocable to
accounts held by recalcitrant account holders or foreign
financial institutions which do not meet the requirements of
this subsection,
``(E) to comply with requests by the Secretary for
additional information with respect to any United States
account maintained by such institution, and
``(F) in any case in which any foreign law would (but for a
waiver described in clause (i)) prevent the reporting of any
information referred to in this subsection or subsection (c)
with respect to any United States account maintained by such
institution--
``(i) to attempt to obtain a valid and effective waiver of
such law from each holder of such account, and
``(ii) if a waiver described in clause (i) is not obtained
from each such holder within a reasonable period of time, to
close such account.

Any agreement entered into under this subsection may be
terminated by the Secretary upon a determination by the
Secretary that the foreign financial institution is out of
compliance with such agreement.
``(2) Financial institutions deemed to meet requirements in
certain cases.--A foreign financial institution may be
treated by the Secretary as meeting the requirements of this
subsection if--
``(A) such institution--
``(i) complies with such procedures as the Secretary may
prescribe to ensure that such institution does not maintain
United States accounts, and
``(ii) meets such other requirements as the Secretary may
prescribe with respect to accounts of other foreign financial
institutions maintained by such institution, or
``(B) such institution is a member of a class of
institutions with respect to which the Secretary has
determined that the application of this section is not
necessary to carry out the purposes of this section.
``(3) Election to be withheld upon rather than withhold on
payments to recalcitrant account holders and nonparticipating
foreign financial institutions.--In the case of a foreign
financial institution which meets the requirements of this
subsection and such other requirements as the Secretary may
provide and which elects the application of this paragraph--
``(A) the requirements of paragraph (1)(D) shall not apply,
``(B) the withholding tax imposed under subsection (a)
shall apply with respect to any withholdable payment to such
institution to the extent such payment is allocable to
accounts held by recalcitrant account holders or foreign
financial institutions which do not meet the requirements of
this subsection, and

[[Page S582]]

``(C) the agreement described in paragraph (1) shall--
``(i) require such institution to notify the withholding
agent with respect to each such payment of the institution's
election under this paragraph and such other information as
may be necessary for the withholding agent to determine the
appropriate amount to deduct and withhold from such payment,
and
``(ii) include a waiver of any right under any treaty of
the United States with respect to any amount deducted and
withheld pursuant to an election under this paragraph.
To the extent provided by the Secretary, the election under
this paragraph may be made with respect to certain classes or
types of accounts of the foreign financial institution.
``(c) Information Required To Be Reported on United States
Accounts.--
``(1) In general.--The agreement described in subsection
(b) shall require the foreign financial institution to report
the following with respect to each United States account
maintained by such institution:
``(A) The name, address, and TIN of each account holder
which is a specified United States person and, in the case of
any account holder which is a United States owned foreign
entity, the name, address, and TIN of each substantial United
States owner of such entity.
``(B) The account number.
``(C) The account balance or value (determined at such time
and in such manner as the Secretary may provide).
``(D) Except to the extent provided by the Secretary, the
gross receipts and gross withdrawals or payments from the
account (determined for such period and in such manner as the
Secretary may provide).
``(2) Election to be subject to same reporting as united
states financial institutions.--In the case of a foreign
financial institution which elects the application of this
paragraph--
``(A) subparagraphs (C) and (D) of paragraph (1) shall not
apply, and
``(B) the agreement described in subsection (b) shall
require such foreign financial institution to report such
information with respect to each United States account
maintained by such institution as such institution would be
required to report under sections 6041, 6042, 6045, and 6049
if--
``(i) such institution were a United States person, and
``(ii) each holder of such account which is a specified
United States person or United States owned foreign entity
were a natural person and citizen of the United States.
An election under this paragraph shall be made at such time,
in such manner, and subject to such conditions as the
Secretary may provide.
``(3) Separate requirements for qualified intermediaries.--
In the case of a foreign financial institution which is
treated as a qualified intermediary by the Secretary for
purposes of section 1441 and the regulations issued
thereunder, the requirements of this section shall be in
addition to any reporting or other requirements imposed by
the Secretary for purposes of such treatment.
``(d) Definitions.--For purposes of this section--
``(1) United states account.--
``(A) In general.--The term `United States account' means
any financial account which is held by one or more specified
United States persons or United States owned foreign
entities.
``(B) Exception for certain accounts held by individuals.--
Unless the foreign financial institution elects to not have
this subparagraph apply, such term shall not include any
depository account maintained by such financial institution
if--
``(i) each holder of such account is a natural person, and
``(ii) with respect to each holder of such account, the
aggregate value of all depository accounts held (in whole or
in part) by such holder and maintained by the same financial
institution which maintains such account does not exceed
$50,000.

To the extent provided by the Secretary, financial
institutions which are members of the same expanded
affiliated group shall be treated for purposes of clause (ii)
as a single financial institution.
``(C) Elimination of duplicative reporting requirements.--
Such term shall not include any financial account in a
foreign financial institution if--
``(i) such account is held by another financial institution
which meets the requirements of subsection (b), or
``(ii) the holder of such account is otherwise subject to
information reporting requirements which the Secretary
determines would make the reporting required by this section
with respect to United States accounts duplicative.
``(2) Financial account.--Except as otherwise provided by
the Secretary, the term `financial account' means, with
respect to any financial institution--
``(A) any depository account maintained by such financial
institution,
``(B) any custodial account maintained by such financial
institution, and
``(C) any equity or debt interest in such financial
institution (other than interests which are regularly traded
on an established securities market).

Any equity or debt interest which constitutes a financial
account under subparagraph (C) with respect to any financial
institution shall be treated for purposes of this section as
maintained by such financial institution.
``(3) United states owned foreign entity.--The term `United
States owned foreign entity' means any foreign entity which
has one or more substantial United States owners.
``(4) Foreign financial institution.--The term `foreign
financial institution' means any financial institution which
is a foreign entity. Except as otherwise provided by the
Secretary, such term shall not include a financial
institution which is organized under the laws of any
possession of the United States.
``(5) Financial institution.--Except as otherwise provided
by the Secretary, the term `financial institution' means any
entity that--
``(A) accepts deposits in the ordinary course of a banking
or similar business,
``(B) as a substantial portion of its business, holds
financial assets for the account of others, or
``(C) is engaged (or holding itself out as being engaged)
primarily in the business of investing, reinvesting, or
trading in securities (as defined in section 475(c)(2)
without regard to the last sentence thereof), partnership
interests, commodities (as defined in section 475(e)(2)), or
any interest (including a futures or forward contract or
option) in such securities, partnership interests, or
commodities.
``(6) Recalcitrant account holder.--The term `recalcitrant
account holder' means any account holder which--
``(A) fails to comply with reasonable requests for the
information referred to in subsection (b)(1)(A) or (c)(1)(A),
or
``(B) fails to provide a waiver described in subsection
(b)(1)(F) upon request.
``(7) Passthru payment.--The term `passthru payment' means
any withholdable payment or other payment to the extent
attributable to a withholdable payment.
``(e) Affiliated Groups.--
``(1) In general.--The requirements of subsections (b) and
(c)(1) shall apply--
``(A) with respect to United States accounts maintained by
the foreign financial institution, and
``(B) except as otherwise provided by the Secretary, with
respect to United States accounts maintained by each other
foreign financial institution (other than any foreign
financial institution which meets the requirements of
subsection (b)) which is a member of the same expanded
affiliated group as such foreign financial institution.
``(2) Expanded affiliated group.--For purposes of this
section, the term `expanded affiliated group' means an
affiliated group as defined in section 1504(a), determined--
``(A) by substituting `more than 50 percent' for `at least
80 percent' each place it appears, and
``(B) without regard to paragraphs (2) and (3) of section
1504(b).

A partnership or any other entity (other than a corporation)
shall be treated as a member of an expanded affiliated group
if such entity is controlled (within the meaning of section
954(d)(3)) by members of such group (including any entity
treated as a member of such group by reason of this
sentence).
``(f) Exception for Certain Payments.--Subsection (a) shall
not apply to any payment to the extent that the beneficial
owner of such payment is--
``(1) any foreign government, any political subdivision of
a foreign government, or any wholly owned agency or
instrumentality of any one or more of the foregoing,
``(2) any international organization or any wholly owned
agency or instrumentality thereof,
``(3) any foreign central bank of issue, or
``(4) any other class of persons identified by the
Secretary for purposes of this subsection as posing a low
risk of tax evasion.

``SEC. 1472. WITHHOLDABLE PAYMENTS TO OTHER FOREIGN ENTITIES.

``(a) In General.--In the case of any withholdable payment
to a non-financial foreign entity, if--
``(1) the beneficial owner of such payment is such entity
or any other non-financial foreign entity, and
``(2) the requirements of subsection (b) are not met with
respect to such beneficial owner,

then the withholding agent with respect to such payment shall
deduct and withhold from such payment a tax equal to 30
percent of the amount of such payment.
``(b) Requirements for Waiver of Withholding.--The
requirements of this subsection are met with respect to the
beneficial owner of a payment if--
``(1) such beneficial owner or the payee provides the
withholding agent with either--
``(A) a certification that such beneficial owner does not
have any substantial United States owners, or
``(B) the name, address, and TIN of each substantial United
States owner of such beneficial owner,
``(2) the withholding agent does not know, or have reason
to know, that any information provided under paragraph (1) is
incorrect, and
``(3) the withholding agent reports the information
provided under paragraph (1)(B) to the Secretary in such
manner as the Secretary may provide.
``(c) Exceptions.--Subsection (a) shall not apply to--
``(1) except as otherwise provided by the Secretary, any
payment beneficially owned by--

[[Page S583]]

``(A) any corporation the stock of which is regularly
traded on an established securities market,
``(B) any corporation which is a member of the same
expanded affiliated group (as defined in section 1471(e)(2)
without regard to the last sentence thereof) as a corporation
described in subparagraph (A),
``(C) any entity which is organized under the laws of a
possession of the United States and which is wholly owned by
one or more bona fide residents (as defined in section
937(a)) of such possession,
``(D) any foreign government, any political subdivision of
a foreign government, or any wholly owned agency or
instrumentality of any one or more of the foregoing,
``(E) any international organization or any wholly owned
agency or instrumentality thereof,
``(F) any foreign central bank of issue, or
``(G) any other class of persons identified by the
Secretary for purposes of this subsection, and
``(2) any class of payments identified by the Secretary for
purposes of this subsection as posing a low risk of tax
evasion.
``(d) Non-Financial Foreign Entity.--For purposes of this
section, the term `non-financial foreign entity' means any
foreign entity which is not a financial institution (as
defined in section 1471(d)(5)).

``SEC. 1473. DEFINITIONS.

``For purposes of this chapter--
``(1) Withholdable payment.--Except as otherwise provided
by the Secretary--
``(A) In general.--The term `withholdable payment' means--
``(i) any payment of interest (including any original issue
discount), dividends, rents, salaries, wages, premiums,
annuities, compensations, remunerations, emoluments, and
other fixed or determinable annual or periodical gains,
profits, and income, if such payment is from sources within
the United States, and
``(ii) any gross proceeds from the sale or other
disposition of any property of a type which can produce
interest or dividends from sources within the United States.
``(B) Exception for income connected with united states
business.--Such term shall not include any item of income
which is taken into account under section 871(b)(1) or
882(a)(1) for the taxable year.
``(C) Special rule for sourcing interest paid by foreign
branches of domestic financial institutions.--Subparagraph
(B) of section 861(a)(1) shall not apply.
``(2) Substantial united states owner.--
``(A) In general.--The term `substantial United States
owner' means--
``(i) with respect to any corporation, any specified United
States person which owns, directly or indirectly, more than
10 percent of the stock of such corporation (by vote or
value),
``(ii) with respect to any partnership, any specified
United States person which owns, directly or indirectly, more
than 10 percent of the profits interests or capital interests
in such partnership, and
``(iii) in the case of a trust--

``(I) any specified United States person treated as an
owner of any portion of such trust under subpart E of part I
of subchapter J of chapter 1, and
``(II) to the extent provided by the Secretary in
regulations or other guidance, any specified United States
person which holds, directly or indirectly, more than 10
percent of the beneficial interests of such trust.

``(B) Special rule for investment vehicles.--In the case of
any financial institution described in section 1471(d)(5)(C),
clauses (i), (ii), and (iii) of subparagraph (A) shall be
applied by substituting `0 percent' for `10 percent'.
``(3) Specified united states person.--Except as otherwise
provided by the Secretary, the term `specified United States
person' means any United States person other than--
``(A) any corporation the stock of which is regularly
traded on an established securities market,
``(B) any corporation which is a member of the same
expanded affiliated group (as defined in section 1471(e)(2)
without regard to the last sentence thereof) as a corporation
the stock of which is regularly traded on an established
securities market,
``(C) any organization exempt from taxation under section
501(a) or an individual retirement plan,
``(D) the United States or any wholly owned agency or
instrumentality thereof,
``(E) any State, the District of Columbia, any possession
of the United States, any political subdivision of any of the
foregoing, or any wholly owned agency or instrumentality of
any one or more of the foregoing,
``(F) any bank (as defined in section 581),
``(G) any real estate investment trust (as defined in
section 856),
``(H) any regulated investment company (as defined in
section 851),
``(I) any common trust fund (as defined in section 584(a)),
and
``(J) any trust which--
``(i) is exempt from tax under section 664(c), or
``(ii) is described in section 4947(a)(1).
``(4) Withholding agent.--The term `withholding agent'
means all persons, in whatever capacity acting, having the
control, receipt, custody, disposal, or payment of any
withholdable payment.
``(5) Foreign entity.--The term `foreign entity' means any
entity which is not a United States person.

``SEC. 1474. SPECIAL RULES.

``(a) Liability for Withheld Tax.--Every person required to
deduct and withhold any tax under this chapter is hereby made
liable for such tax and is hereby indemnified against the
claims and demands of any person for the amount of any
payments made in accordance with the provisions of this
chapter.
``(b) Credits and Refunds.--
``(1) In general.--Except as provided in paragraph (2), the
determination of whether any tax deducted and withheld under
this chapter results in an overpayment by the beneficial
owner of the payment to which such tax is attributable shall
be made as if such tax had been deducted and withheld under
subchapter A of chapter 3.
``(2) Special rule where foreign financial institution is
beneficial owner of payment.--
``(A) In general.--In the case of any tax properly deducted
and withheld under section 1471 from a specified financial
institution payment--
``(i) if the foreign financial institution referred to in
subparagraph (B) with respect to such payment is entitled to
a reduced rate of tax with respect to such payment by reason
of any treaty obligation of the United States--

``(I) the amount of any credit or refund with respect to
such tax shall not exceed the amount of credit or refund
attributable to such reduction in rate, and
``(II) no interest shall be allowed or paid with respect to
such credit or refund, and

``(ii) if such foreign financial institution is not so
entitled, no credit or refund shall be allowed or paid with
respect to such tax.
``(B) Specified financial institution payment.--The term
`specified financial institution payment' means any payment
if the beneficial owner of such payment is a foreign
financial institution.
``(3) Requirement to identify substantial united states
owners.--No credit or refund shall be allowed or paid with
respect to any tax properly deducted and withheld under this
chapter unless the beneficial owner of the payment provides
the Secretary such information as the Secretary may require
to determine whether such beneficial owner is a United States
owned foreign entity (as defined in section 1471(d)(3)) and
the identity of any substantial United States owners of such
entity.
``(c) Confidentiality of Information.--
``(1) In general.--For purposes of this chapter, rules
similar to the rules of section 3406(f) shall apply.
``(2) Disclosure of list of participating foreign financial
institutions permitted.--The identity of a foreign financial
institution which meets the requirements of section 1471(b)
shall not be treated as return information for purposes of
section 6103.
``(d) Coordination With Other Withholding Provisions.--The
Secretary shall provide for the coordination of this chapter
with other withholding provisions under this title, including
providing for the proper crediting of amounts deducted and
withheld under this chapter against amounts required to be
deducted and withheld under such other provisions.
``(e) Treatment of Withholding Under Agreements.--Any tax
deducted and withheld pursuant to an agreement described in
section 1471(b) shall be treated for purposes of this title
as a tax deducted and withheld by a withholding agent under
section 1471(a).
``(f) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of, and prevent the
avoidance of, this chapter.''.
(b) Special Rule for Interest on Overpayments.--Subsection
(e) of section 6611 is amended by adding at the end the
following new paragraph:
``(4) Certain withholding taxes.--In the case of any
overpayment resulting from tax deducted and withheld under
chapter 3 or 4, paragraphs (1), (2), and (3) shall be applied
by substituting `180 days' for `45 days' each place it
appears.''.
(c) Conforming Amendments.--
(1) Section 6414 is amended by inserting ``or 4'' after
``chapter 3''.
(2) Paragraph (1) of section 6501(b) is amended by
inserting ``4,'' after ``chapter 3,''.
(3) Paragraph (2) of section 6501(b) is amended--
(A) by inserting ``4,'' after ``chapter 3,'' in the text
thereof, and
(B) by striking ``taxes and tax imposed by chapter 3'' in
the heading thereof and inserting ``and withholding taxes''.
(4) Paragraph (3) of section 6513(b) is amended--
(A) by inserting ``or 4'' after ``chapter 3'', and
(B) by inserting ``or 1474(b)'' after ``section 1462''.
(5) Subsection (c) of section 6513 is amended by inserting
``4,'' after ``chapter 3,''.
(6) Paragraph (1) of section 6724(d) is amended by
inserting ``under chapter 4 or'' after ``filed with the
Secretary'' in the last sentence thereof.
(7) Paragraph (2) of section 6724(d) is amended by
inserting ``or 4'' after ``chapter 3''.
(8) The table of chapters of the Internal Revenue Code of
1986 is amended by adding at the end the following new item:

``Chapter 4. Taxes To Enforce Reporting on Certain Foreign Accounts.''.

(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments

[[Page S584]]

made by this section shall apply to payments made after
December 31, 2012.
(2) Grandfathered treatment of outstanding obligations.--
The amendments made by this section shall not require any
amount to be deducted or withheld from any payment under any
obligation outstanding on the date which is 2 years after the
date of the enactment of this Act or from the gross proceeds
from any disposition of such an obligation.
(3) Interest on overpayments.--The amendment made by
subsection (b) shall apply--
(A) in the case of such amendment's application to
paragraph (1) of section 6611(e) of the Internal Revenue Code
of 1986, to returns the due date for which (determined
without regard to extensions) is after the date of the
enactment of this Act,
(B) in the case of such amendment's application to
paragraph (2) of such section, to claims for credit or refund
of any overpayment filed after the date of the enactment of
this Act (regardless of the taxable period to which such
refund relates), and
(C) in the case of such amendment's application to
paragraph (3) of such section, to refunds paid after the date
of the enactment of this Act (regardless of the taxable
period to which such refund relates).

SEC. 502. REPEAL OF CERTAIN FOREIGN EXCEPTIONS TO REGISTERED
BOND REQUIREMENTS.

(a) Repeal of Exception to Denial of Deduction for Interest
on Non-Registered Bonds.--
(1) In general.--Paragraph (2) of section 163(f) is amended
by striking subparagraph (B) and by redesignating
subparagraph (C) as subparagraph (B).
(2) Conforming amendments.--
(A) Paragraph (2) of section 149(a) is amended by inserting
``or'' at the end of subparagraph (A), by striking ``, or''
at the end of subparagraph (B) and inserting a period, and by
striking subparagraph (C).
(B) Subparagraph (A) of section 163(f)(2) is amended by
inserting ``or'' at the end of clause (ii), by striking ``,
or'' at the end of clause (iii) and inserting a period, and
by striking clause (iv).
(C) Subparagraph (B) of section 163(f)(2), as redesignated
by paragraph (1), is amended--
(i) by striking ``, and subparagraph (B),'' in the matter
preceding clause (i), and
(ii) by amending clause (i) to read as follows:
``(i) such obligation is of a type which the Secretary has
determined by regulations to be used frequently in avoiding
Federal taxes, and''.
(D) Sections 165(j)(2)(A) and 1287(b)(1) are each amended
by striking ``except that clause (iv) of subparagraph (A),
and subparagraph (B), of such section shall not apply''.
(b) Repeal of Treatment as Portfolio Debt.--
(1) In general.--Paragraph (2) of section 871(h) is amended
to read as follows:
``(2) Portfolio interest.--For purposes of this subsection,
the term `portfolio interest' means any interest (including
original issue discount) which--
``(A) would be subject to tax under subsection (a) but for
this subsection, and
``(B) is paid on an obligation--
``(i) which is in registered form, and
``(ii) with respect to which--

``(I) the United States person who would otherwise be
required to deduct and withhold tax from such interest under
section 1441(a) receives a statement (which meets the
requirements of paragraph (5)) that the beneficial owner of
the obligation is not a United States person, or
``(II) the Secretary has determined that such a statement
is not required in order to carry out the purposes of this
subsection.''.

(2) Conforming amendments.--
(A) Section 871(h)(3)(A) is amended by striking
``subparagraph (A) or (B) of''.
(B) Paragraph (2) of section 881(c) is amended to read as
follows:
``(2) Portfolio interest.--For purposes of this subsection,
the term `portfolio interest' means any interest (including
original issue discount) which--
``(A) would be subject to tax under subsection (a) but for
this subsection, and
``(B) is paid on an obligation--
``(i) which is in registered form, and
``(ii) with respect to which--

``(I) the person who would otherwise be required to deduct
and withhold tax from such interest under section 1442(a)
receives a statement which meets the requirements of section
871(h)(5) that the beneficial owner of the obligation is not
a United States person, or
``(II) the Secretary has determined that such a statement
is not required in order to carry out the purposes of this
subsection.''.

(c) Dematerialized Book Entry Systems Treated as Registered
Form.--Paragraph (3) of section 163(f) is amended by
inserting ``, except that a dematerialized book entry system
or other book entry system specified by the Secretary shall
be treated as a book entry system described in such section''
before the period at the end.
(d) Repeal of Exception to Requirement That Treasury
Obligations Be in Registered Form.--
(1) In general.--Subsection (g) of section 3121 of title
31, United States Code, is amended by striking paragraph (2)
and by redesignating paragraphs (3) and (4) as paragraphs (2)
and (3), respectively.
(2) Conforming amendments.--Paragraph (1) of section
3121(g) of such title is amended--
(A) by adding ``or'' at the end of subparagraph (A),
(B) by striking ``; or'' at the end of subparagraph (B) and
inserting a period, and
(C) by striking subparagraph (C).
(e) Preservation of Exception for Excise Tax Purposes.--
Paragraph (1) of section 4701(b) is amended to read as
follows:
``(1) Registration-required obligation.--
``(A) In general.--The term `registration-required
obligation' has the same meaning as when used in section
163(f), except that such term shall not include any
obligation which--
``(i) is required to be registered under section 149(a), or
``(ii) is described in subparagraph (B).
``(B) Certain obligations not included.--An obligation is
described in this subparagraph if--
``(i) there are arrangements reasonably designed to ensure
that such obligation will be sold (or resold in connection
with the original issue) only to a person who is not a United
States person,
``(ii) interest on such obligation is payable only outside
the United States and its possessions, and
``(iii) on the face of such obligation there is a statement
that any United States person who holds such obligation will
be subject to limitations under the United States income tax
laws.''.
(f) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date which is 2
years after the date of the enactment of this Act.

PART II--UNDER REPORTING WITH RESPECT TO FOREIGN ASSETS

SEC. 511. DISCLOSURE OF INFORMATION WITH RESPECT TO FOREIGN
FINANCIAL ASSETS.

(a) In General.--Subpart A of part III of subchapter A of
chapter 61 is amended by inserting after section 6038C the
following new section:

``SEC. 6038D. INFORMATION WITH RESPECT TO FOREIGN FINANCIAL
ASSETS.

``(a) In General.--Any individual who, during any taxable
year, holds any interest in a specified foreign financial
asset shall attach to such person's return of tax imposed by
subtitle A for such taxable year the information described in
subsection (c) with respect to each such asset if the
aggregate value of all such assets exceeds $50,000 (or such
higher dollar amount as the Secretary may prescribe).
``(b) Specified Foreign Financial Assets.--For purposes of
this section, the term `specified foreign financial asset'
means--
``(1) any financial account (as defined in section
1471(d)(2)) maintained by a foreign financial institution (as
defined in section 1471(d)(4)), and
``(2) any of the following assets which are not held in an
account maintained by a financial institution (as defined in
section 1471(d)(5))--
``(A) any stock or security issued by a person other than a
United States person,
``(B) any financial instrument or contract held for
investment that has an issuer or counterparty which is other
than a United States person, and
``(C) any interest in a foreign entity (as defined in
section 1473).
``(c) Required Information.--The information described in
this subsection with respect to any asset is:
``(1) In the case of any account, the name and address of
the financial institution in which such account is maintained
and the number of such account.
``(2) In the case of any stock or security, the name and
address of the issuer and such information as is necessary to
identify the class or issue of which such stock or security
is a part.
``(3) In the case of any other instrument, contract, or
interest--
``(A) such information as is necessary to identify such
instrument, contract, or interest, and
``(B) the names and addresses of all issuers and
counterparties with respect to such instrument, contract, or
interest.
``(4) The maximum value of the asset during the taxable
year.
``(d) Penalty for Failure To Disclose.--
``(1) In general.--If any individual fails to furnish the
information described in subsection (c) with respect to any
taxable year at the time and in the manner described in
subsection (a), such person shall pay a penalty of $10,000.
``(2) Increase in penalty where failure continues after
notification.--If any failure described in paragraph (1)
continues for more than 90 days after the day on which the
Secretary mails notice of such failure to the individual,
such individual shall pay a penalty (in addition to the
penalties under paragraph (1)) of $10,000 for each 30-day
period (or fraction thereof) during which such failure
continues after the expiration of such 90-day period. The
penalty imposed under this paragraph with respect to any
failure shall not exceed $50,000.
``(e) Presumption That Value of Specified Foreign Financial
Assets Exceeds Dollar Threshold.--If--
``(1) the Secretary determines that an individual has an
interest in one or more specified foreign financial assets,
and

[[Page S585]]

``(2) such individual does not provide sufficient
information to demonstrate the aggregate value of such
assets,
then the aggregate value of such assets shall be treated as
being in excess of $50,000 (or such higher dollar amount as
the Secretary prescribes for purposes of subsection (a)) for
purposes of assessing the penalties imposed under this
section.
``(f) Application to Certain Entities.--To the extent
provided by the Secretary in regulations or other guidance,
the provisions of this section shall apply to any domestic
entity which is formed or availed of for purposes of holding,
directly or indirectly, specified foreign financial assets,
in the same manner as if such entity were an individual.
``(g) Reasonable Cause Exception.--No penalty shall be
imposed by this section on any failure which is shown to be
due to reasonable cause and not due to willful neglect. The
fact that a foreign jurisdiction would impose a civil or
criminal penalty on the taxpayer (or any other person) for
disclosing the required information is not reasonable cause.
``(h) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this section,
including regulations or other guidance which provide
appropriate exceptions from the application of this section
in the case of--
``(1) classes of assets identified by the Secretary,
including any assets with respect to which the Secretary
determines that disclosure under this section would be
duplicative of other disclosures,
``(2) nonresident aliens, and
``(3) bona fide residents of any possession of the United
States.''.
(b) Clerical Amendment.--The table of sections for subpart
A of part III of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6038C the
following new item:

``Sec. 6038D. Information with respect to foreign financial assets.''.

(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.

SEC. 512. PENALTIES FOR UNDERPAYMENTS ATTRIBUTABLE TO
UNDISCLOSED FOREIGN FINANCIAL ASSETS.

(a) In General.--Section 6662, as amended by this Act, is
amended--
(1) in subsection (b), by inserting after paragraph (6) the
following new paragraph:
``(7) Any undisclosed foreign financial asset
understatement.'', and
(2) by adding at the end the following new subsection:
``(j) Undisclosed Foreign Financial Asset Understatement.--
``(1) In general.--For purposes of this section, the term
`undisclosed foreign financial asset understatement' means,
for any taxable year, the portion of the understatement for
such taxable year which is attributable to any transaction
involving an undisclosed foreign financial asset.
``(2) Undisclosed foreign financial asset.--For purposes of
this subsection, the term `undisclosed foreign financial
asset' means, with respect to any taxable year, any asset
with respect to which information was required to be provided
under section 6038, 6038B, 6038D, 6046A, or 6048 for such
taxable year but was not provided by the taxpayer as required
under the provisions of those sections.
``(3) Increase in penalty for undisclosed foreign financial
asset understatements.--In the case of any portion of an
underpayment which is attributable to any undisclosed foreign
financial asset understatement, subsection (a) shall be
applied with respect to such portion by substituting `40
percent' for `20 percent'.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.

SEC. 513. MODIFICATION OF STATUTE OF LIMITATIONS FOR
SIGNIFICANT OMISSION OF INCOME IN CONNECTION
WITH FOREIGN ASSETS.

(a) Extension of Statute of Limitations.--
(1) In general.--Paragraph (1) of section 6501(e) is
amended by redesignating subparagraphs (A) and (B) as
subparagraphs (B) and (C), respectively, and by inserting
before subparagraph (B) (as so redesignated) the following
new subparagraph:
``(A) General rule.--If the taxpayer omits from gross
income an amount properly includible therein and--
``(i) such amount is in excess of 25 percent of the amount
of gross income stated in the return, or
``(ii) such amount--

``(I) is attributable to one or more assets with respect to
which information is required to be reported under section
6038D (or would be so required if such section were applied
without regard to the dollar threshold specified in
subsection (a) thereof and without regard to any exceptions
provided pursuant to subsection (h)(1) thereof), and
``(II) is in excess of $5,000,

the tax may be assessed, or a proceeding in court for
collection of such tax may be begun without assessment, at
any time within 6 years after the return was filed.''.
(2) Conforming amendments.--
(A) Subparagraph (B) of section 6501(e)(1), as redesignated
by paragraph (1), is amended by striking all that precedes
clause (i) and inserting the following:
``(B) Determination of gross income.--For purposes of
subparagraph (A)--''.
(B) Paragraph (2) of section 6229(c) is amended by striking
``which is in excess of 25 percent of the amount of gross
income stated in its return'' and inserting ``and such amount
is described in clause (i) or (ii) of section
6501(e)(1)(A)''.
(b) Additional Reports Subject to Extended Period.--
Paragraph (8) of section 6501(c) is amended--
(1) by inserting ``pursuant to an election under section
1295(b) or'' before ``under section 6038'',
(2) by inserting ``1298(f),'' before ``6038'', and
(3) by inserting ``6038D,'' after ``6038B,''.
(c) Clarifications Related to Failure To Disclose Foreign
Transfers.--Paragraph (8) of section 6501(c) is amended by
striking ``event'' and inserting ``tax return, event,''.
(d) Effective Date.--The amendments made by this section
shall apply to--
(1) returns filed after the date of the enactment of this
Act; and
(2) returns filed on or before such date if the period
specified in section 6501 of the Internal Revenue Code of
1986 (determined without regard to such amendments) for
assessment of such taxes has not expired as of such date.

PART III--OTHER DISCLOSURE PROVISIONS

SEC. 521. REPORTING OF ACTIVITIES WITH RESPECT TO PASSIVE
FOREIGN INVESTMENT COMPANIES.

(a) In General.--Section 1298 is amended by redesignating
subsection (f) as subsection (g) and by inserting after
subsection (e) the following new subsection:
``(f) Reporting Requirement.--Except as otherwise provided
by the Secretary, each United States person who is a
shareholder of a passive foreign investment company shall
file an annual report containing such information as the
Secretary may require.''.
(b) Conforming Amendment.--Subsection (e) of section 1291
is amended by striking ``, (d), and (f)'' and inserting ``and
(d)''.
(c) Effective Date.--The amendments made by this section
take effect on the date of the enactment of this Act.

SEC. 522. SECRETARY PERMITTED TO REQUIRE FINANCIAL
INSTITUTIONS TO FILE CERTAIN RETURNS RELATED TO
WITHHOLDING ON FOREIGN TRANSFERS
ELECTRONICALLY.

(a) In General.--Subsection (e) of section 6011 is amended
by adding at the end the following new paragraph:
``(4) Special rule for returns filed by financial
institutions with respect to withholding on foreign
transfers.--The numerical limitation under paragraph (2)(A)
shall not apply to any return filed by a financial
institution (as defined in section 1471(d)(5)) with respect
to tax for which such institution is made liable under
section 1461 or 1474(a).''.
(b) Conforming Amendment.--Subsection (c) of section 6724
is amended by inserting ``or with respect to a return
described in section 6011(e)(4)'' before the end period.
(c) Effective Date.--The amendment made by this section
shall apply to returns the due date for which (determined
without regard to extensions) is after the date of the
enactment of this Act.

PART IV--PROVISIONS RELATED TO FOREIGN TRUSTS

SEC. 531. CLARIFICATIONS WITH RESPECT TO FOREIGN TRUSTS WHICH
ARE TREATED AS HAVING A UNITED STATES
BENEFICIARY.

(a) In General.--Paragraph (1) of section 679(c) is amended
by adding at the end the following:

``For purposes of subparagraph (A), an amount shall be
treated as accumulated for the benefit of a United States
person even if the United States person's interest in the
trust is contingent on a future event.''.
(b) Clarification Regarding Discretion to Identify
Beneficiaries.--Subsection (c) of section 679 is amended by
adding at the end the following new paragraph:
``(4) Special rule in case of discretion to identify
beneficiaries.--For purposes of paragraph (1)(A), if any
person has the discretion (by authority given in the trust
agreement, by power of appointment, or otherwise) of making a
distribution from the trust to, or for the benefit of, any
person, such trust shall be treated as having a beneficiary
who is a United States person unless--
``(A) the terms of the trust specifically identify the
class of persons to whom such distributions may be made, and
``(B) none of those persons are United States persons
during the taxable year.''.
(c) Clarification That Certain Agreements and
Understandings Are Terms of the Trust.--Subsection (c) of
section 679, as amended by subsection (b), is amended by
adding at the end the following new paragraph:
``(5) Certain agreements and understandings treated as
terms of the trust.--For purposes of paragraph (1)(A), if any
United States person who directly or indirectly transfers
property to the trust is directly or indirectly involved in
any agreement or understanding (whether written, oral, or
otherwise) that may result in the income or corpus of the
trust being paid or accumulated to or for the benefit of a
United States person, such agreement or understanding shall
be treated as a term of the trust.''.

[[Page S586]]

SEC. 532. PRESUMPTION THAT FOREIGN TRUST HAS UNITED STATES
BENEFICIARY.

(a) In General.--Section 679 is amended by redesignating
subsection (d) as subsection (e) and inserting after
subsection (c) the following new subsection:
``(d) Presumption That Foreign Trust Has United States
Beneficiary.--If a United States person directly or
indirectly transfers property to a foreign trust (other than
a trust described in section 6048(a)(3)(B)(ii)), the
Secretary may treat such trust as having a United States
beneficiary for purposes of applying this section to such
transfer unless such person--
``(1) submits such information to the Secretary as the
Secretary may require with respect to such transfer, and
``(2) demonstrates to the satisfaction of the Secretary
that such trust satisfies the requirements of subparagraphs
(A) and (B) of subsection (c)(1).''.
(b) Effective Date.--The amendments made by this section
shall apply to transfers of property after the date of the
enactment of this Act.

SEC. 533. UNCOMPENSATED USE OF TRUST PROPERTY.

(a) In General.--Paragraph (1) of section 643(i) is
amended--
(1) by striking ``directly or indirectly to'' and inserting
``(or permits the use of any other trust property) directly
or indirectly to or by'', and
(2) by inserting ``(or the fair market value of the use of
such property)'' after ``the amount of such loan''.
(b) Exception for Compensated Use.--Paragraph (2) of
section 643(i) is amended by adding at the end the following
new subparagraph:
``(E) Exception for compensated use of property.--In the
case of the use of any trust property other than a loan of
cash or marketable securities, paragraph (1) shall not apply
to the extent that the trust is paid the fair market value of
such use within a reasonable period of time of such use.''.
(c) Application to Grantor Trusts.--Subsection (c) of
section 679, as amended by this Act, is amended by adding at
the end the following new paragraph:
``(6) Uncompensated use of trust property treated as a
payment.--For purposes of this subsection, a loan of cash or
marketable securities (or the use of any other trust
property) directly or indirectly to or by any United States
person (whether or not a beneficiary under the terms of the
trust) shall be treated as paid or accumulated for the
benefit of a United States person. The preceding sentence
shall not apply to the extent that the United States person
repays the loan at a market rate of interest (or pays the
fair market value of the use of such property) within a
reasonable period of time.''.
(d) Conforming Amendments.--Paragraph (3) of section 643(i)
is amended--
(1) by inserting ``(or use of property)'' after ``If any
loan'',
(2) by inserting ``or the return of such property'' before
``shall be disregarded'', and
(3) by striking ``regarding loan principal'' in the heading
thereof.
(e) Effective Date.--The amendments made by this section
shall apply to loans made, and uses of property, after the
date of the enactment of this Act.

SEC. 534. REPORTING REQUIREMENT OF UNITED STATES OWNERS OF
FOREIGN TRUSTS.

(a) In General.--Paragraph (1) of section 6048(b) is
amended by inserting ``shall submit such information as the
Secretary may prescribe with respect to such trust for such
year and'' before ``shall be responsible to ensure''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.

SEC. 535. MINIMUM PENALTY WITH RESPECT TO FAILURE TO REPORT
ON CERTAIN FOREIGN TRUSTS.

(a) In General.--Subsection (a) of section 6677 is
amended--
(1) by inserting ``the greater of $10,000 or'' before ``35
percent'', and
(2) by striking the last sentence and inserting the
following: ``At such time as the gross reportable amount with
respect to any failure can be determined by the Secretary,
any subsequent penalty imposed under this subsection with
respect to such failure shall be reduced as necessary to
assure that the aggregate amount of such penalties do not
exceed the gross reportable amount (and to the extent that
such aggregate amount already exceeds the gross reportable
amount the Secretary shall refund such excess to the
taxpayer).''
(b) Effective Date.--The amendments made by this section
shall apply to notices and returns required to be filed after
December 31, 2009.

PART V--SUBSTITUTE DIVIDENDS AND DIVIDEND EQUIVALENT PAYMENTS RECEIVED
BY FOREIGN PERSONS TREATED AS DIVIDENDS

SEC. 541. SUBSTITUTE DIVIDENDS AND DIVIDEND EQUIVALENT
PAYMENTS RECEIVED BY FOREIGN PERSONS TREATED AS
DIVIDENDS.

(a) In General.--Section 871 is amended by redesignating
subsection (l) as subsection (m) and by inserting after
subsection (k) the following new subsection:
``(l) Treatment of Dividend Equivalent Payments.--
``(1) In general.--For purposes of subsection (a), sections
881 and 4948(a), and chapters 3 and 4, a dividend equivalent
shall be treated as a dividend from sources within the United
States.
``(2) Dividend equivalent.--For purposes of this
subsection, the term `dividend equivalent' means--
``(A) any substitute dividend made pursuant to a securities
lending or a sale-repurchase transaction that (directly or
indirectly) is contingent upon, or determined by reference
to, the payment of a dividend from sources within the United
States,
``(B) any payment made pursuant to a specified notional
principal contract that (directly or indirectly) is
contingent upon, or determined by reference to, the payment
of a dividend from sources within the United States, and
``(C) any other payment determined by the Secretary to be
substantially similar to a payment described in subparagraph
(A) or (B).
``(3) Specified notional principal contract.--For purposes
of this subsection, the term `specified notional principal
contract' means--
``(A) any notional principal contract if--
``(i) in connection with entering into such contract, any
long party to the contract transfers the underlying security
to any short party to the contract,
``(ii) in connection with the termination of such contract,
any short party to the contract transfers the underlying
security to any long party to the contract,
``(iii) the underlying security is not readily tradable on
an established securities market,
``(iv) in connection with entering into such contract, the
underlying security is posted as collateral by any short
party to the contract with any long party to the contract, or
``(v) such contract is identified by the Secretary as a
specified notional principal contract,
``(B) in the case of payments made after the date which is
2 years after the date of the enactment of this subsection,
any notional principal contract unless the Secretary
determines that such contract is of a type which does not
have the potential for tax avoidance.
``(4) Definitions.--For purposes of paragraph (3)(A)--
``(A) Long party.--The term `long party' means, with
respect to any underlying security of any notional principal
contract, any party to the contract which is entitled to
receive any payment pursuant to such contract which is
contingent upon, or determined by reference to, the payment
of a dividend from sources within the United States with
respect to such underlying security.
``(B) Short party.--The term `short party' means, with
respect to any underlying security of any notional principal
contract, any party to the contract which is not a long party
with respect to such underlying security.
``(C) Underlying security.--The term `underlying security'
means, with respect to any notional principal contract, the
security with respect to which the dividend referred to in
paragraph (2)(B) is paid. For purposes of this paragraph, any
index or fixed basket of securities shall be treated as a
single security.
``(5) Payments determined on gross basis.--For purposes of
this subsection, the term `payment' includes any gross amount
which is used in computing any net amount which is
transferred to or from the taxpayer.
``(6) Prevention of over-withholding.--In the case of any
chain of dividend equivalents one or more of which is subject
to tax under subsection (a) or section 881, the Secretary may
reduce such tax, but only to the extent that the taxpayer can
establish that such tax has been paid with respect to another
dividend equivalent in such chain, or is not otherwise due,
or as the Secretary determines is appropriate to address the
role of financial intermediaries in such chain. For purposes
of this paragraph, a dividend shall be treated as a dividend
equivalent.
``(7) Coordination with chapters 3 and 4.--For purposes of
chapters 3 and 4, each person that is a party to any contract
or other arrangement that provides for the payment of a
dividend equivalent shall be treated as having control of
such payment.''.
(b) 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.

Subtitle B--Delay in Application of Worldwide Allocation of Interest

SEC. 551. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF
INTEREST.

(a) In General.--Paragraphs (5)(D) and (6) of section
864(f) are each amended by striking ``December 31, 2017'' and
inserting ``December 31, 2019''.
(b) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
______