In the nature of a substitute.

SA 4369. Mr. BAUCUS proposed an amendment to the bill H.R. 4213, to
amend the Internal Revenue Code of 1986 to extend certain expiring
provisions, and for other purposes; as follows:

In lieu of the matter proposed to be inserted, insert the
following:

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

(a) Short Title.--This Act may be cited as the ``American
Jobs and Closing Tax Loopholes Act of 2010''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in titles I, II, and IV of 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--INFRASTRUCTURE INCENTIVES

Sec. 101. Extension of Build America Bonds.

[[Page S4998]]

Sec. 102. Exempt-facility bonds for sewage and water supply facilities.
Sec. 103. Extension of exemption from alternative minimum tax treatment
for certain tax-exempt bonds.
Sec. 104. Extension and additional allocations of recovery zone bond
authority.
Sec. 105. Allowance of new markets tax credit against alternative
minimum tax.
Sec. 106. Extension of tax-exempt eligibility for loans guaranteed by
Federal home loan banks.
Sec. 107. Extension of temporary small issuer rules for allocation of
tax-exempt interest expense by financial institutions.

TITLE II--EXTENSION OF EXPIRING PROVISIONS

Subtitle A--Energy

Sec. 201. Alternative motor vehicle credit for new qualified hybrid
motor vehicles other than passenger automobiles and light
trucks.
Sec. 202. Incentives for biodiesel and renewable diesel.
Sec. 203. Credit for electricity produced at certain open-loop biomass
facilities.
Sec. 204. Extension and modification of credit for steel industry fuel.
Sec. 205. Credit for producing fuel from coke or coke gas.
Sec. 206. New energy efficient home credit.
Sec. 207. Excise tax credits and outlay payments for alternative fuel
and alternative fuel mixtures.
Sec. 208. Special rule for sales or dispositions to implement FERC or
State electric restructuring policy for qualified
electric utilities.
Sec. 209. Suspension of limitation on percentage depletion for oil and
gas from marginal wells.
Sec. 210. Direct payment of energy efficient appliances tax credit.
Sec. 211. Modification of standards for windows, doors, and skylights
with respect to the credit for nonbusiness energy
property.

Subtitle B--Individual Tax Relief

PART I--Miscellaneous Provisions

Sec. 221. Deduction for certain expenses of elementary and secondary
school teachers.
Sec. 222. Additional standard deduction for State and local real
property taxes.
Sec. 223. Deduction of State and local sales taxes.
Sec. 224. Contributions of capital gain real property made for
conservation purposes.
Sec. 225. Above-the-line deduction for qualified tuition and related
expenses.
Sec. 226. Tax-free distributions from individual retirement plans for
charitable purposes.
Sec. 227. Look-thru of certain regulated investment company stock in
determining gross estate of nonresidents.
Sec. 228. First-time homebuyer credit.

PART II--Low-income Housing Credits

Sec. 231. Election for direct payment of low-income housing credit for
2010.
Sec. 232. Low-income housing grant election.

Subtitle C--Business Tax Relief

Sec. 241. Research credit.
Sec. 242. Indian employment tax credit.
Sec. 243. New markets tax credit.
Sec. 244. Railroad track maintenance credit.
Sec. 245. Mine rescue team training credit.
Sec. 246. Employer wage credit for employees who are active duty
members of the uniformed services.
Sec. 247. 5-year depreciation for farming business machinery and
equipment.
Sec. 248. 15-year straight-line cost recovery for qualified leasehold
improvements, qualified restaurant buildings and
improvements, and qualified retail improvements.
Sec. 249. 7-year recovery period for motorsports entertainment
complexes.
Sec. 250. Accelerated depreciation for business property on an Indian
reservation.
Sec. 251. Enhanced charitable deduction for contributions of food
inventory.
Sec. 252. Enhanced charitable deduction for contributions of book
inventories to public schools.
Sec. 253. Enhanced charitable deduction for corporate contributions of
computer inventory for educational purposes.
Sec. 254. Election to expense mine safety equipment.
Sec. 255. Special expensing rules for certain film and television
productions.
Sec. 256. Expensing of environmental remediation costs.
Sec. 257. Deduction allowable with respect to income attributable to
domestic production activities in Puerto Rico.
Sec. 258. Modification of tax treatment of certain payments to
controlling exempt organizations.
Sec. 259. Exclusion of gain or loss on sale or exchange of certain
brownfield sites from unrelated business income.
Sec. 260. Timber REIT modernization.
Sec. 261. Treatment of certain dividends of regulated investment
companies.
Sec. 262. RIC qualified investment entity treatment under FIRPTA.
Sec. 263. Exceptions for active financing income.
Sec. 264. Look-thru treatment of payments between related controlled
foreign corporations under foreign personal holding
company rules.
Sec. 265. Basis adjustment to stock of S corps making charitable
contributions of property.
Sec. 266. Empowerment zone tax incentives.
Sec. 267. Tax incentives for investment in the District of Columbia.
Sec. 268. Renewal community tax incentives.
Sec. 269. Temporary increase in limit on cover over of rum excise taxes
to Puerto Rico and the Virgin Islands.
Sec. 270. Payment to American Samoa in lieu of extension of economic
development credit.
Sec. 271. Election to temporarily utilize unused AMT credits determined
by domestic investment.
Sec. 272. Study of extended tax expenditures.

Subtitle D--Temporary Disaster Relief Provisions

PART I--National Disaster Relief

Sec. 281. Waiver of certain mortgage revenue bond requirements.
Sec. 282. Losses attributable to federally declared disasters.
Sec. 283. Special depreciation allowance for qualified disaster
property.
Sec. 284. Net operating losses attributable to federally declared
disasters.
Sec. 285. Expensing of qualified disaster expenses.

PART II--Regional Provisions

subpart a--new york liberty zone

Sec. 291. Special depreciation allowance for nonresidential and
residential real property.
Sec. 292. Tax-exempt bond financing.

subpart b--go zone

Sec. 295. Increase in rehabilitation credit.
Sec. 296. Work opportunity tax credit with respect to certain
individuals affected by Hurricane Katrina for employers
inside disaster areas.
Sec. 297. Extension of low-income housing credit rules for buildings in
GO zones.

TITLE III--PENSION FUNDING RELIEF

Subtitle A--Single-Employer Plans

Sec. 301. Extended period for single-employer defined benefit plans to
amortize certain shortfall amortization bases.
Sec. 302. Application of extended amortization period to plans subject
to prior law funding rules.
Sec. 303. Suspension of certain funding level limitations.
Sec. 304. Lookback for credit balance rule.
Sec. 305. Information reporting.
Sec. 306. Rollover of amounts received in airline carrier bankruptcy.

Subtitle B--Multiemployer Plans

Sec. 311. Optional use of 30-year amortization periods.
Sec. 312. Optional longer recovery periods for multiemployer plans in
endangered or critical status.
Sec. 313. Modification of certain amortization extensions under prior
law.
Sec. 314. Alternative default schedule for plans in endangered or
critical status.
Sec. 315. Transition rule for certifications of plan status.

TITLE IV--REVENUE OFFSETS

Subtitle A--Foreign Provisions

Sec. 401. Rules to prevent splitting foreign tax credits from the
income to which they relate.
Sec. 402. Denial of foreign tax credit with respect to foreign income
not subject to United States taxation by reason of
covered asset acquisitions.
Sec. 403. Separate application of foreign tax credit limitation, etc.,
to items resourced under treaties.
Sec. 404. Limitation on the amount of foreign taxes deemed paid with
respect to section 956 inclusions.
Sec. 405. Special rule with respect to certain redemptions by foreign
subsidiaries.
Sec. 406. Modification of affiliation rules for purposes of rules
allocating interest expense.
Sec. 407. Termination of special rules for interest and dividends
received from persons meeting the 80-percent foreign
business requirements.
Sec. 408. Source rules for income on guarantees.
Sec. 409. Limitation on extension of statute of limitations for failure
to notify Secretary of certain foreign transfers.

Subtitle B--Personal Service Income Earned in Pass-thru Entities

Sec. 411. Partnership interests transferred in connection with
performance of services.

[[Page S4999]]

Sec. 413. Employment tax treatment of professional service businesses.

Subtitle C--Corporate Provisions

Sec. 421. Treatment of securities of a controlled corporation exchanged
for assets in certain reorganizations.
Sec. 422. Taxation of boot received in reorganizations.

Subtitle D--Other Provisions

Sec. 431. Modifications with respect to Oil Spill Liability Trust Fund.
Sec. 432. Time for payment of corporate estimated taxes.
Sec. 433. Denial of deduction for punitive damages.

TITLE V--UNEMPLOYMENT, HEALTH, AND OTHER ASSISTANCE

Subtitle A--Unemployment Insurance and Other Assistance

Sec. 501. Extension of unemployment insurance provisions.
Sec. 502. Coordination of emergency unemployment compensation with
regular compensation.
Sec. 503. Extension of the Emergency Contingency Fund.
Sec. 504. Requiring States to not reduce regular compensation in order
to be eligible for funds under the emergency unemployment
compensation program.

Subtitle B--Health Provisions

Sec. 511. Extension of section 508 reclassifications.
Sec. 512. Repeal of delay of RUG-IV.
Sec. 513. Limitation on reasonable costs payments for certain clinical
diagnostic laboratory tests furnished to hospital
patients in certain rural areas.
Sec. 514. Funding for claims reprocessing.
Sec. 515. Medicaid and CHIP technical corrections.
Sec. 516. Addition of inpatient drug discount program to 340B drug
discount program.
Sec. 517. Continued inclusion of orphan drugs in definition of covered
outpatient drugs with respect to children's hospitals
under the 340B drug discount program.
Sec. 518. Conforming amendment related to waiver of coinsurance for
preventive services.
Sec. 519. Establish a CMS-IRS data match to identify fraudulent
providers.
Sec. 520. Clarification of effective date of part B special enrollment
period for disabled TRICARE beneficiaries.
Sec. 521. Physician payment update.
Sec. 522. Adjustment to Medicare payment localities.
Sec. 523. Clarification of 3-day payment window.
Sec. 524. Extension of ARRA increase in FMAP.
Sec. 525. Clarification for affiliated hospitals for distribution of
additional residency positions.

TITLE VI--OTHER PROVISIONS

Sec. 601. Extension of national flood insurance program.
Sec. 602. Allocation of geothermal receipts.
Sec. 603. Small business loan guarantee enhancement extensions.
Sec. 604. Emergency agricultural disaster assistance.
Sec. 605. Summer employment for youth.
Sec. 606. Housing Trust Fund.
Sec. 607. The Individual Indian Money Account Litigation Settlement Act
of 2010.
Sec. 608. Appropriation of funds for final settlement of claims from In
re Black Farmers Discrimination Litigation.
Sec. 609. Expansion of eligibility for concurrent receipt of military
retired pay and veterans' disability compensation to
include all chapter 61 disability retirees regardless of
disability rating percentage or years of service.
Sec. 610. Extension of use of 2009 poverty guidelines.
Sec. 611. Refunds disregarded in the administration of Federal programs
and federally assisted programs.
Sec. 612. State court improvement program.
Sec. 613. Qualifying timber contract options.
Sec. 614. Extension and flexibility for certain allocated surface
transportation programs.
Sec. 615. Community College and Career Training Grant Program.
Sec. 616. Extensions of duty suspensions on cotton shirting fabrics and
related provisions.
Sec. 617. Modification of Wool Apparel Manufacturers Trust Fund.
Sec. 618. Department of Commerce Study.
Sec. 619. ARRA planning and reporting.
Sec. 620. Amendment of Travel Promotion Act of 2009.
Sec. 621. Limitation on penalty for failure to disclose reportable
transactions based on resulting tax benefits.
Sec. 622. Report on tax shelter penalties and certain other enforcement
actions.

TITLE VII--TRANSPARENCY REQUIREMENTS FOR FOREIGN-HELD DEBT

Sec. 701. Short title.
Sec. 702. Definitions.
Sec. 703. Sense of Congress.
Sec. 704. Quarterly report on risks posed by foreign holdings of debt
instruments of the United States.
Sec. 705. Annual report on risks posed by the Federal debt of the
United States.
Sec. 706. Corrective action to address unacceptable and unsustainable
risks to United States national security and economic
stability.

TITLE VIII--TRANSPARENCY REQUIREMENTS FOR FOREIGN-HELD DEBT

Sec. 801. Short title.
Sec. 802. Definitions.
Sec. 803. Sense of Congress.
Sec. 804. Annual report on risks posed by foreign holdings of debt
instruments of the United States.
Sec. 805. Annual report on risks posed by the Federal debt of the
United States.
Sec. 806. Corrective action to address unacceptable risks to United
States national security and economic stability.

TITLE IX--OFFICE OF THE HOMEOWNER ADVOCATE

Sec. 901. Office of the Homeowner Advocate.
Sec. 902. Functions of the Office.
Sec. 903. Relationship with existing entities.
Sec. 904. Rule of construction.
Sec. 905. Reports to Congress.
Sec. 906. Funding.
Sec. 907. Prohibition on participation in Making Home Affordable for
borrowers who strategically default.
Sec. 908. Public availability of information.

TITLE X--BUDGETARY PROVISIONS

Sec. 1001. Budgetary provisions.

TITLE I--INFRASTRUCTURE INCENTIVES

SEC. 101. EXTENSION OF BUILD AMERICA BONDS.

(a) In General.--Subparagraph (B) of section 54AA(d)(1) is
amended by striking ``January 1, 2011'' and inserting
``January 1, 2013''.
(b) Extension of Payments to Issuers.--
(1) In general.--Section 6431 is amended--
(A) by striking ``January 1, 2011'' in subsection (a) and
inserting ``January 1, 2013''; and
(B) by striking ``January 1, 2011'' in subsection (f)(1)(B)
and inserting ``a particular date''.
(2) Conforming amendments.--Subsection (g) of section 54AA
is amended--
(A) by striking ``January 1, 2011'' and inserting ``January
1, 2013''; and
(B) by striking ``Qualified Bonds Issued Before 2011'' in
the heading and inserting ``Certain Qualified Bonds''.
(c) Reduction in Percentage of Payments to Issuers.--
Subsection (b) of section 6431 is amended--
(1) by striking ``The Secretary'' and inserting the
following:
``(1) In general.--The Secretary'';
(2) by striking ``35 percent'' and inserting ``the
applicable percentage''; and
(3) by adding at the end the following new paragraph:
``(2) Applicable percentage.--For purposes of this
subsection, the term `applicable percentage' means the
percentage determined in accordance with the following table:

------------------------------------------------------------------------
``In the case of a qualified bond issued     The applicable percentage
during calendar year:                         is:
------------------------------------------------------------------------
2009 or 2010..............................  35 percent
2011......................................  32 percent
2012......................................  30 percent.''.
------------------------------------------------------------------------

(d) Current Refundings Permitted.--Subsection (g) of
section 54AA is amended by adding at the end the following
new paragraph:
``(3) Treatment of current refunding bonds.--
``(A) In general.--For purposes of this subsection, the
term `qualified bond' includes any bond (or series of bonds)
issued to refund a qualified bond if--
``(i) the average maturity date of the issue of which the
refunding bond is a part is not later than the average
maturity date of the bonds to be refunded by such issue,
``(ii) the amount of the refunding bond does not exceed the
outstanding amount of the refunded bond, and
``(iii) the refunded bond is redeemed not later than 90
days after the date of the issuance of the refunding bond.
``(B) Applicable percentage.--In the case of a refunding
bond referred to in subparagraph (A), the applicable
percentage with respect to such bond under section 6431(b)
shall be the lowest percentage specified in paragraph (2) of
such section.
``(C) Determination of average maturity.--For purposes of
subparagraph (A)(i), average maturity shall be determined in
accordance with section 147(b)(2)(A).''.
(e) Clarification Related to Levees and Flood Control
Projects.--Subparagraph (A) of section 54AA(g)(2) is amended
by inserting ``(including capital expenditures for levees and
other flood control projects)'' after ``capital
expenditures''.

SEC. 102. EXEMPT-FACILITY BONDS FOR SEWAGE AND WATER SUPPLY
FACILITIES.

(a) Bonds for Water and Sewage Facilities Exempt From
Volume Cap on Private Activity Bonds.--
(1) In general.--Paragraph (3) of section 146(g) is amended
by inserting ``(4), (5),'' after ``(2),''.

[[Page S5000]]

(2) Conforming amendment.--Paragraphs (2) and (3)(B) of
section 146(k) are both amended by striking ``(4), (5),
(6),'' and inserting ``(6)''.
(b) Tax-exempt Issuance by Indian Tribal Governments.--
(1) In general.--Subsection (c) of section 7871 is amended
by adding at the end the following new paragraph:
``(4) Exception for bonds for water and sewage
facilities.--Paragraph (2) shall not apply to an exempt
facility bond 95 percent or more of the net proceeds (as
defined in section 150(a)(3)) of which are to be used to
provide facilities described in paragraph (4) or (5) of
section 142(a).''.
(2) Conforming amendment.--Paragraph (2) of section 7871(c)
is amended by striking ``paragraph (3)'' and inserting
``paragraphs (3) and (4)''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.

SEC. 103. EXTENSION OF EXEMPTION FROM ALTERNATIVE MINIMUM TAX
TREATMENT FOR CERTAIN TAX-EXEMPT BONDS.

(a) In General.--Clause (vi) of section 57(a)(5)(C) is
amended--
(1) by striking ``January 1, 2011'' in subclause (I) and
inserting ``January 1, 2012''; and
(2) by striking ``and 2010'' in the heading and inserting
``, 2010, and 2011''.
(b) Adjusted Current Earnings.--Clause (iv) of section
56(g)(4)(B) is amended--
(1) by striking ``January 1, 2011'' in subclause (I) and
inserting ``January 1, 2012''; and
(2) by striking ``and 2010'' in the heading and inserting
``, 2010, and 2011''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after December 31, 2010.

SEC. 104. EXTENSION AND ADDITIONAL ALLOCATIONS OF RECOVERY
ZONE BOND AUTHORITY.

(a) Extension of Recovery Zone Bond Authority.--Section
1400U-2(b)(1) and section 1400U-3(b)(1)(B) are each amended
by striking ``January 1, 2011'' and inserting ``January 1,
2012''.
(b) Additional Allocations of Recovery Zone Bond Authority
Based on Unemployment.--Section 1400U-1 is amended by adding
at the end the following new subsection:
``(c) Allocation of 2010 Recovery Zone Bond Limitations
Based on Unemployment.--
``(1) In general.--The Secretary shall allocate the 2010
national recovery zone economic development bond limitation
and the 2010 national recovery zone facility bond limitation
among the States in the proportion that each such State's
2009 unemployment number bears to the aggregate of the 2009
unemployment numbers for all of the States.
``(2) Minimum allocation.--The Secretary shall adjust the
allocations under paragraph (1) for each State to the extent
necessary to ensure that no State (prior to any reduction
under paragraph (3)) receives less than 0.9 percent of the
2010 national recovery zone economic development bond
limitation and 0.9 percent of the 2010 national recovery zone
facility bond limitation.
``(3) Allocations by states.--
``(A) In general.--Each State with respect to which an
allocation is made under paragraph (1) shall reallocate such
allocation among the counties and large municipalities (as
defined in subsection (a)(3)(B)) in such State in the
proportion that each such county's or municipality's 2009
unemployment number bears to the aggregate of the 2009
unemployment numbers for all the counties and large
municipalities (as so defined) in such State.
``(B) 2010 allocation reduced by amount of previous
allocation.--Each State shall reduce (but not below zero)--
``(i) the amount of the 2010 national recovery zone
economic development bond limitation allocated to each county
or large municipality (as so defined) in such State by the
amount of the national recovery zone economic development
bond limitation allocated to such county or large
municipality under subsection (a)(3)(A) (determined without
regard to any waiver thereof), and
``(ii) the amount of the 2010 national recovery zone
facility bond limitation allocated to each county or large
municipality (as so defined) in such State by the amount of
the national recovery zone facility bond limitation allocated
to such county or large municipality under subsection
(a)(3)(A) (determined without regard to any waiver thereof).
``(C) Waiver of suballocations.--A county or municipality
may waive any portion of an allocation made under this
paragraph. A county or municipality shall be treated as
having waived any portion of an allocation made under this
paragraph which has not been allocated to a bond issued
before May 1, 2011. Any allocation waived (or treated as
waived) under this subparagraph may be used or reallocated by
the State.
``(D) Special rule for a municipality in a county.--In the
case of any large municipality any portion of which is in a
county, such portion shall be treated as part of such
municipality and not part of such county.
``(4) 2009 unemployment number.--For purposes of this
subsection, the term `2009 unemployment number' means, with
respect to any State, county or municipality, the number of
individuals in such State, county, or municipality who were
determined to be unemployed by the Bureau of Labor Statistics
for December 2009.
``(5) 2010 national limitations.--
``(A) Recovery zone economic development bonds.--The 2010
national recovery zone economic development bond limitation
is $10,000,000,000. Any allocation of such limitation under
this subsection shall be treated for purposes of section
1400U-2 in the same manner as an allocation of national
recovery zone economic development bond limitation.
``(B) Recovery zone facility bonds.--The 2010 national
recovery zone facility bond limitation is $15,000,000,000.
Any allocation of such limitation under this subsection shall
be treated for purposes of section 1400U-3 in the same manner
as an allocation of national recovery zone facility bond
limitation.''.
(c) Authority of State to Waive Certain 2009 Allocations.--
Subparagraph (A) of section 1400U-1(a)(3) is amended by
adding at the end the following: ``A county or municipality
shall be treated as having waived any portion of an
allocation made under this subparagraph which has not been
allocated to a bond issued before May 1, 2011. Any allocation
waived (or treated as waived) under this subparagraph may be
used or reallocated by the State.''.

SEC. 105. ALLOWANCE OF NEW MARKETS TAX CREDIT AGAINST
ALTERNATIVE MINIMUM TAX.

(a) In General.--Subparagraph (B) of section 38(c)(4), as
amended by the Patient Protection and Affordable Care Act, is
amended by redesignating clauses (v) through (ix) as clauses
(vi) through (x), respectively, and by inserting after clause
(iv) the following new clause:
``(v) the credit determined under section 45D, but only
with respect to credits determined with respect to qualified
equity investments (as defined in section 45D(b)) initially
made before January 1, 2012,''.
(b) Effective Date.--The amendments made by this section
shall apply to credits determined with respect to qualified
equity investments (as defined in section 45D(b) of the
Internal Revenue Code of 1986) initially made after March 15,
2010.

SEC. 106. EXTENSION OF TAX-EXEMPT ELIGIBILITY FOR LOANS
GUARANTEED BY FEDERAL HOME LOAN BANKS.

Clause (iv) of section 149(b)(3)(A) is amended by striking
``December 31, 2010'' and inserting ``December 31, 2011''.

SEC. 107. EXTENSION OF TEMPORARY SMALL ISSUER RULES FOR
ALLOCATION OF TAX-EXEMPT INTEREST EXPENSE BY
FINANCIAL INSTITUTIONS.

(a) In General.--Clauses (i), (ii), and (iii) of section
265(b)(3)(G) are each amended by striking ``or 2010'' and
inserting ``, 2010, or 2011''.
(b) Conforming Amendment.--Subparagraph (G) of section
265(b)(3) is amended by striking ``and 2010'' in the heading
and inserting ``, 2010, and 2011''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after December 31, 2010.

TITLE II--EXTENSION OF EXPIRING PROVISIONS

Subtitle A--Energy

SEC. 201. ALTERNATIVE MOTOR VEHICLE CREDIT FOR NEW QUALIFIED
HYBRID MOTOR VEHICLES OTHER THAN PASSENGER
AUTOMOBILES AND LIGHT TRUCKS.

(a) In General.--Paragraph (3) of section 30B(k) is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to property purchased after December 31, 2009.

SEC. 202. INCENTIVES FOR BIODIESEL AND RENEWABLE DIESEL.

(a) Credits for Biodiesel and Renewable Diesel Used as
Fuel.--Subsection (g) of section 40A is amended by striking
``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Excise Tax Credits and Outlay Payments for Biodiesel
and Renewable Diesel Fuel Mixtures.--
(1) Paragraph (6) of section 6426(c) is amended by striking
``December 31, 2009'' and inserting ``December 31, 2010''.
(2) Subparagraph (B) of section 6427(e)(6) is amended by
striking ``December 31, 2009'' and inserting ``December 31,
2010''.
(c) Effective Date.--The amendments made by this section
shall apply to fuel sold or used after December 31, 2009.

SEC. 203. CREDIT FOR ELECTRICITY PRODUCED AT CERTAIN OPEN-
LOOP BIOMASS FACILITIES.

(a) In General.--Clause (ii) of section 45(b)(4)(B) is
amended--
(1) by striking ``5-year period'' and inserting ``6-year
period''; and
(2) by adding at the end the following: ``In the case of
the last year of the 6-year period described in the preceding
sentence, the credit determined under subsection (a) with
respect to electricity produced during such year shall not
exceed 80 percent of such credit determined without regard to
this sentence.''.
(b) Effective Date.--The amendment made by this section
shall apply to electricity produced and sold after December
31, 2009.

SEC. 204. EXTENSION AND MODIFICATION OF CREDIT FOR STEEL
INDUSTRY FUEL.

(a) Credit Period.--
(1) In general.--Subclause (II) of section 45(e)(8)(D)(ii)
is amended to read as follows:

``(II) Credit period.--In lieu of the 10-year period
referred to in clauses (i) and (ii)(II) of subparagraph (A),
the credit period shall be the period beginning on the date
that the facility first produces steel industry fuel that

[[Page S5001]]

is sold to an unrelated person after September 30, 2008, and
ending 2 years after such date.''.

(2) Conforming amendment.--Section 45(e)(8)(D) is amended
by striking clause (iii) and by redesignating clause (iv) as
clause (iii).
(b) Extension of Placed-in-service Date.--Subparagraph (A)
of section 45(d)(8) is amended--
(1) by striking ``(or any modification to a facility)'';
and
(2) by striking ``2010'' and inserting ``2011''.
(c) Clarifications.--
(1) Steel industry fuel.--Subclause (I) of section
45(c)(7)(C)(i) is amended by inserting ``, a blend of coal
and petroleum coke, or other coke feedstock'' after ``on
coal''.
(2) Ownership interest.--Section 45(d)(8) is amended by
adding at the end the following new flush sentence:

``With respect to a facility producing steel industry fuel,
no person (including a ground lessor, customer, supplier, or
technology licensor) shall be treated as having an ownership
interest in the facility or as otherwise entitled to the
credit allowable under subsection (a) with respect to such
facility if such person's rent, license fee, or other
entitlement to net payments from the owner of such facility
is measured by a fixed dollar amount or a fixed amount per
ton, or otherwise determined without regard to the profit or
loss of such facility.''.
(3) Production and sale.--Subparagraph (D) of section
45(e)(8), as amended by subsection (a)(2), is amended by
redesignating clause (iii) as clause (iv) and by inserting
after clause (ii) the following new clause:
``(iii) Production and sale.--The owner of a facility
producing steel industry fuel shall be treated as producing
and selling steel industry fuel where that owner manufactures
such steel industry fuel from coal, a blend of coal and
petroleum coke, or other coke feedstock to which it has
title. The sale of such steel industry fuel by the owner of
the facility to a person who is not the owner of the facility
shall not fail to qualify as a sale to an unrelated person
solely because such purchaser may also be a ground lessor,
supplier, or customer.''.
(d) Specified Credit for Purposes of Alternative Minimum
Tax Exclusion.--Subclause (II) of section 38(c)(4)(B)(iii) is
amended by inserting ``(in the case of a refined coal
production facility producing steel industry fuel, during the
credit period set forth in section 45(e)(8)(D)(ii)(II))''
after ``service''.
(e) Effective Dates.--
(1) In general.--The amendments made by subsections (a),
(b), and (d) shall apply to fuel produced and sold after
September 30, 2008.
(2) Clarifications.--The amendments made by subsection (c)
shall take effect as if included in the amendments made by
the Energy Improvement and Extension Act of 2008.

SEC. 205. CREDIT FOR PRODUCING FUEL FROM COKE OR COKE GAS.

(a) In General.--Paragraph (1) of section 45K(g) is amended
by striking ``January 1, 2010'' and inserting ``January 1,
2011''.
(b) Effective Date.--The amendment made by this section
shall apply to facilities placed in service after December
31, 2009.

SEC. 206. NEW ENERGY EFFICIENT HOME CREDIT.

(a) In General.--Subsection (g) of section 45L is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to homes acquired after December 31, 2009.

SEC. 207. EXCISE TAX CREDITS AND OUTLAY PAYMENTS FOR
ALTERNATIVE FUEL AND ALTERNATIVE FUEL MIXTURES.

(a) Alternative Fuel Credit.--Paragraph (5) of section
6426(d) is amended by striking ``after December 31, 2009''
and all that follows and inserting ``after--
``(A) September 30, 2014, in the case of liquefied
hydrogen,
``(B) December 31, 2010, in the case of fuels described in
subparagraph (A), (C), (F), or (G) of paragraph (2), and
``(C) December 31, 2009, in any other case.''.
(b) Alternative Fuel Mixture Credit.--Paragraph (3) of
section 6426(e) is amended by striking ``after December 31,
2009'' and all that follows and inserting ``after--
``(A) September 30, 2014, in the case of liquefied
hydrogen,
``(B) December 31, 2010, in the case of fuels described in
subparagraph (A), (C), (F), or (G) of subsection (d)(2), and
``(C) December 31, 2009, in any other case.''.
(c) Payment Authority.--
(1) In general.--Paragraph (6) of section 6427(e) is
amended by striking ``and'' at the end of subparagraph (C),
by striking the period at the end of subparagraph (D) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(E) any alternative fuel or alternative fuel mixture (as
so defined) involving fuel described in subparagraph (A),
(C), (F), or (G) of section 6426(d)(2) sold or used after
December 31, 2010.''.
(2) Conforming amendment.--Subparagraph (C) of section
6427(e)(6) is amended by inserting ``or (E)'' after
``subparagraph (D)''.
(d) Exclusion of Black Liquor From Credit Eligibility.--The
last sentence of section 6426(d)(2) is amended by striking
``or biodiesel'' and inserting ``biodiesel, or any fuel
(including lignin, wood residues, or spent pulping liquors)
derived from the production of paper or pulp''.
(e) Effective Date.--The amendments made by this section
shall apply to fuel sold or used after December 31, 2009.

SEC. 208. SPECIAL RULE FOR SALES OR DISPOSITIONS TO IMPLEMENT
FERC OR STATE ELECTRIC RESTRUCTURING POLICY FOR
QUALIFIED ELECTRIC UTILITIES.

(a) In General.--Paragraph (3) of section 451(i) is amended
by striking ``January 1, 2010'' and inserting ``January 1,
2011''.
(b) Modification of Definition of Independent Transmission
Company.--
(1) In general.--Clause (i) of section 451(i)(4)(B) is
amended to read as follows:
``(i) who the Federal Energy Regulatory Commission
determines in its authorization of the transaction under
section 203 of the Federal Power Act (16 U.S.C. 824b) or by
declaratory order--

``(I) is not itself a market participant as determined by
the Commission, and also is not controlled by any such market
participant, or
``(II) to be independent from market participants or to be
an independent transmission company within the meaning of
such Commission's rules applicable to independent
transmission providers, and''.

(2) Related persons.--Paragraph (4) of section 451(i) is
amended by adding at the end the following flush sentence:

``For purposes of subparagraph (B)(i)(I), a person shall be
treated as controlled by another person if such persons would
be treated as a single employer under section 52.''.
(c) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
apply to dispositions after December 31, 2009.
(2) Modifications.--The amendments made by subsection (b)
shall apply to dispositions after the date of the enactment
of this Act.

SEC. 209. SUSPENSION OF LIMITATION ON PERCENTAGE DEPLETION
FOR OIL AND GAS FROM MARGINAL WELLS.

(a) In General.--Clause (ii) of section 613A(c)(6)(H) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 210. DIRECT PAYMENT OF ENERGY EFFICIENT APPLIANCES TAX
CREDIT.

In the case of any taxable year which includes the last day
of calendar year 2009 or calendar year 2010, a taxpayer who
elects to waive the credit which would otherwise be
determined with respect to the taxpayer under section 45M of
the Internal Revenue Code of 1986 for such taxable year shall
be treated as making a payment against the tax imposed under
subtitle A of such Code for such taxable year in an amount
equal to 85 percent of the amount of the credit which would
otherwise be so determined. Such payment shall be treated as
made on the later of the due date of the return of such tax
or the date on which such return is filed. Elections under
this section may be made separately for 2009 and 2010, but
once made shall be irrevocable. No amount shall be includible
in gross income or alternative minimum taxable income by
reason of this section.

SEC. 211. MODIFICATION OF STANDARDS FOR WINDOWS, DOORS, AND
SKYLIGHTS WITH RESPECT TO THE CREDIT FOR
NONBUSINESS ENERGY PROPERTY.

(a) In General.--Paragraph (4) of section 25C(c) is amended
by striking ``unless'' and all that follows and inserting
``unless--
``(A) in the case of any component placed in service after
the date which is 90 days after the date of the enactment of
the American Jobs and Closing Tax Loopholes Act of 2010, such
component meets the criteria for such components established
by the 2010 Energy Star Program Requirements for Residential
Windows, Doors, and Skylights, Version 5.0 (or any subsequent
version of such requirements which is in effect after January
4, 2010),
``(B) in the case of any component placed in service after
the date of the enactment of the American Jobs and Closing
Tax Loopholes Act of 2010 and on or before the date which is
90 days after such date, such component meets the criteria
described in subparagraph (A) or is equal to or below a U
factor of 0.30 and SHGC of 0.30, and
``(C) in the case of any component which is a garage door,
such component is equal to or below a U factor of 0.30 and
SHGC of 0.30.''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after the date of
the enactment of this Act.

Subtitle B--Individual Tax Relief

PART I--MISCELLANEOUS PROVISIONS

SEC. 221. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND
SECONDARY SCHOOL TEACHERS.

(a) In General.--Subparagraph (D) of section 62(a)(2) is
amended by striking ``or 2009'' and inserting ``2009, or
2010''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 222. ADDITIONAL STANDARD DEDUCTION FOR STATE AND LOCAL
REAL PROPERTY TAXES.

(a) In General.--Subparagraph (C) of section 63(c)(1) is
amended by striking ``or 2009'' and inserting ``2009, or
2010''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 223. DEDUCTION OF STATE AND LOCAL SALES TAXES.

(a) In General.--Subparagraph (I) of section 164(b)(5) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.

[[Page S5002]]

SEC. 224. CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY MADE
FOR CONSERVATION PURPOSES.

(a) In General.--Clause (vi) of section 170(b)(1)(E) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Contributions by Certain Corporate Farmers and
Ranchers.--Clause (iii) of section 170(b)(2)(B) is amended by
striking ``December 31, 2009'' and inserting ``December 31,
2010''.
(c) Effective Date.--The amendments made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2009.

SEC. 225. ABOVE-THE-LINE DEDUCTION FOR QUALIFIED TUITION AND
RELATED EXPENSES.

(a) In General.--Subsection (e) of section 222 is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.
(c) Temporary Coordination With Hope and Lifetime Learning
Credits.--In the case of any taxpayer for any taxable year
beginning in 2010, no deduction shall be allowed under
section 222 of the Internal Revenue Code of 1986 if--
(1) the taxpayer's net Federal income tax reduction which
would be attributable to such deduction for such taxable
year, is less than
(2) the credit which would be allowed to the taxpayer for
such taxable year under section 25A of such Code (determined
without regard to sections 25A(e) and 26 of such Code).

SEC. 226. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT
PLANS FOR CHARITABLE PURPOSES.

(a) In General.--Subparagraph (F) of section 408(d)(8) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to distributions made in taxable years beginning
after December 31, 2009.

SEC. 227. LOOK-THRU OF CERTAIN REGULATED INVESTMENT COMPANY
STOCK IN DETERMINING GROSS ESTATE OF
NONRESIDENTS.

(a) In General.--Paragraph (3) of section 2105(d) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to estates of decedents dying after December 31,
2009.

SEC. 228. FIRST-TIME HOMEBUYER CREDIT.

(a) In General.--Paragraph (2) of section 36(h) is amended
by striking ``paragraph (1) shall be applied by substituting
`July 1, 2010' '' and inserting ``and who purchases such
residence before October 1, 2010, paragraph (1) shall be
applied by substituting `October 1, 2010' ''.
(b) Conforming Amendment.--Subparagraph (B) of section
36(h)(3) is amended by inserting ``and for `October 1, 2010'
'' after ``for `July 1, 2010' ''.
(c) Effective Date.--The amendments made by subsections (a)
and (b) shall apply to residences purchased after June 30,
2010.

PART II--LOW-INCOME HOUSING CREDITS

SEC. 231. ELECTION FOR DIRECT PAYMENT OF LOW-INCOME HOUSING
CREDIT FOR 2010.

(a) In General.--Section 42 is amended by redesignating
subsection (n) as subsection (o) and by inserting after
subsection (m) the following new subsection:
``(n) Election for Direct Payment of Credit.--
``(1) In general.--The housing credit agency of each State
shall be allowed a credit in an amount equal to such State's
2010 low-income housing refundable credit election amount,
which shall be payable by the Secretary as provided in
paragraph (5).
``(2) 2010 low-income housing refundable credit election
amount.--For purposes of this subsection, the term `2010 low-
income housing refundable credit election amount' means, with
respect to any State, such amount as the State may elect
which does not exceed 85 percent of the product of--
``(A) the sum of--
``(i) 100 percent of the State housing credit ceiling for
2010 which is attributable to amounts described in clauses
(i) and (iii) of subsection (h)(3)(C), plus any credits
returned to the State attributable to section 1400N(c)
(including credits made available under such section as
applied by reason of sections 702(d)(2) and 704(b) of the Tax
Extenders and Alternative Minimum Tax Relief Act of 2008),
and
``(ii) 40 percent of the State housing credit ceiling for
2010 which is attributable to amounts described in clauses
(ii) and (iv) of such subsection, plus any credits for 2010
attributable to the application of such section 702(d)(2) and
704(b), multiplied by
``(B) 10.

For purposes of subparagraph (A)(ii), in the case of any area
to which section 702(d)(2) or 704(b) of the Tax Extenders and
Alternative Minimum Tax Relief Act of 2008 applies, section
1400N(c)(1)(A) shall be applied without regard to clause (i)
``(3) Coordination with non-refundable credit.--For
purposes of this section, the amounts described in clauses
(i) through (iv) of subsection (h)(3)(C) with respect to any
State for 2010 shall each be reduced by so much of such
amount as is taken into account in determining the amount of
the credit allowed with respect to such State under paragraph
(1).
``(4) Special rule for basis.--Basis of a qualified low-
income building shall not be reduced by the amount of any
payment made under this subsection.
``(5) Payment of credit; use to finance low-income
buildings.--The Secretary shall pay to the housing credit
agency of each State an amount equal to the credit allowed
under paragraph (1). Rules similar to the rules of
subsections (c) and (d) of section 1602 of the American
Recovery and Reinvestment Tax Act of 2009 shall apply with
respect to any payment made under this paragraph, except that
such subsection (d) shall be applied by substituting `January
1, 2012' for `January 1, 2011'.''.
(b) Conforming Amendment.--Section 1324(b)(2) of title 31,
United States Code, is amended by inserting ``42(n),'' after
``36C,''.

SEC. 232. LOW-INCOME HOUSING GRANT ELECTION.

(a) Clarification of Eligibility of Low-income Housing
Credits for Low-income Housing Grant Election.--Paragraph (1)
of section 1602(b) of the American Recovery and Reinvestment
Tax Act of 2009 is amended--
(1) by inserting ``, plus any increase for 2009 or 2010
attributable to section 1400N(c) of such Code (including
credits made available under such section as applied by
reason of sections 702(d)(2) and 704(b) of the Tax Extenders
and Alternative Minimum Tax Relief Act of 2008)'' after
``1986'' in subparagraph (A), and
(2) by inserting ``, plus any credits for 2009 attributable
to the application of such section 702(d)(2) and 704(b)''
after ``such section'' in subparagraph (B).
(b) Application of Additional Housing Credit Amount for
Purposes of 2009 Grant Election.--Subsection (b) of section
1602 of the American Recovery and Reinvestment Tax Act of
2009, as amended by subsection (a), is amended by adding at
the end the following flush sentence:

``For purposes of paragraph (1)(B), in the case of any area
to which section 702(d)(2) or 704(b) of the Tax Extenders and
Alternative Minimum Tax Relief Act of 2008 applies, section
1400N(c)(1)(A) of such Code shall be applied without regard
to clause (i).''.
(c) Effective Date.--The amendments made by this section
shall apply as if included in the enactment of section 1602
of the American Recovery and Reinvestment Tax Act of 2009.

Subtitle C--Business Tax Relief

SEC. 241. RESEARCH CREDIT.

(a) In General.--Subparagraph (B) of section 41(h)(1) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Conforming Amendment.--Subparagraph (D) of section
45C(b)(1) is amended by striking ``December 31, 2009'' and
inserting ``December 31, 2010''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after December 31,
2009.

SEC. 242. INDIAN EMPLOYMENT TAX CREDIT.

(a) In General.--Subsection (f) of section 45A is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 243. NEW MARKETS TAX CREDIT.

(a) In General.--Subparagraph (F) of section 45D(f)(1) is
amended by inserting ``and 2010'' after ``2009''.
(b) Conforming Amendment.--Paragraph (3) of section 45D(f)
is amended by striking ``2014'' and inserting ``2015''.
(c) Effective Date.--The amendments made by this section
shall apply to calendar years beginning after 2009.

SEC. 244. RAILROAD TRACK MAINTENANCE CREDIT.

(a) In General.--Subsection (f) of section 45G is amended
by striking ``January 1, 2010'' and inserting ``January 1,
2011''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred in taxable years
beginning after December 31, 2009.

SEC. 245. MINE RESCUE TEAM TRAINING CREDIT.

(a) In General.--Subsection (e) of section 45N is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Credit Allowable Against AMT.--Subparagraph (B) of
section 38(c)(4), as amended by section 105, is amended--
(1) by redesignating clauses (vii) through (x) as clauses
(viii) through (xi), respectively; and
(2) by inserting after clause (vi) the following new
clause:
``(vii) the credit determined under section 45N,''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2009.
(2) Allowance against amt.--The amendments made by
subsection (b) shall apply to credits determined for taxable
years beginning after December 31, 2009, and to carrybacks of
such credits.

SEC. 246. EMPLOYER WAGE CREDIT FOR EMPLOYEES WHO ARE ACTIVE
DUTY MEMBERS OF THE UNIFORMED SERVICES.

(a) In General.--Subsection (f) of section 45P is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to payments made after December 31, 2009.

[[Page S5003]]

SEC. 247. 5-YEAR DEPRECIATION FOR FARMING BUSINESS MACHINERY
AND EQUIPMENT.

(a) In General.--Clause (vii) of section 168(e)(3)(B) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 248. 15-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED
LEASEHOLD IMPROVEMENTS, QUALIFIED RESTAURANT
BUILDINGS AND IMPROVEMENTS, AND QUALIFIED
RETAIL IMPROVEMENTS.

(a) In General.--Clauses (iv), (v), and (ix) of section
168(e)(3)(E) are each amended by striking ``January 1, 2010''
and inserting ``January 1, 2011''.
(b) Conforming Amendments.--
(1) Clause (i) of section 168(e)(7)(A) is amended by
striking ``if such building is placed in service after
December 31, 2008, and before January 1, 2010,''.
(2) Paragraph (8) of section 168(e) is amended by striking
subparagraph (E).
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 249. 7-YEAR RECOVERY PERIOD FOR MOTORSPORTS
ENTERTAINMENT COMPLEXES.

(a) In General.--Subparagraph (D) of section 168(i)(15) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 250. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON
AN INDIAN RESERVATION.

(a) In General.--Paragraph (8) of section 168(j) is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 251. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
FOOD INVENTORY.

(a) In General.--Clause (iv) of section 170(e)(3)(C) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made after December 31, 2009.

SEC. 252. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
BOOK INVENTORIES TO PUBLIC SCHOOLS.

(a) In General.--Clause (iv) of section 170(e)(3)(D) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made after December 31, 2009.

SEC. 253. ENHANCED CHARITABLE DEDUCTION FOR CORPORATE
CONTRIBUTIONS OF COMPUTER INVENTORY FOR
EDUCATIONAL PURPOSES.

(a) In General.--Subparagraph (G) of section 170(e)(6) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2009.

SEC. 254. ELECTION TO EXPENSE MINE SAFETY EQUIPMENT.

(a) In General.--Subsection (g) of section 179E is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 255. SPECIAL EXPENSING RULES FOR CERTAIN FILM AND
TELEVISION PRODUCTIONS.

(a) In General.--Subsection (f) of section 181 is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to productions commencing after December 31,
2009.

SEC. 256. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

(a) In General.--Subsection (h) of section 198 is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred after December
31, 2009.

SEC. 257. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME
ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES
IN PUERTO RICO.

(a) In General.--Subparagraph (C) of section 199(d)(8) is
amended--
(1) by striking ``first 4 taxable years'' and inserting
``first 5 taxable years''; and
(2) by striking ``January 1, 2010'' and inserting ``January
1, 2011''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 258. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS
TO CONTROLLING EXEMPT ORGANIZATIONS.

(a) In General.--Clause (iv) of section 512(b)(13)(E) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to payments received or accrued after December
31, 2009.

SEC. 259. EXCLUSION OF GAIN OR LOSS ON SALE OR EXCHANGE OF
CERTAIN BROWNFIELD SITES FROM UNRELATED
BUSINESS INCOME.

(a) In General.--Subparagraph (K) of section 512(b)(19) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to property acquired after December 31, 2009.

SEC. 260. TIMBER REIT MODERNIZATION.

(a) In General.--Paragraph (8) of section 856(c) is amended
by striking ``means'' and all that follows and inserting
``means December 31, 2010.''.
(b) Conforming Amendments.--
(1) Subparagraph (I) of section 856(c)(2) is amended by
striking ``the first taxable year beginning after the date of
the enactment of this subparagraph'' and inserting ``a
taxable year beginning on or before the termination date''.
(2) Clause (iii) of section 856(c)(5)(H) is amended by
inserting ``in taxable years beginning'' after
``dispositions''.
(3) Clause (v) of section 857(b)(6)(D) is amended by
inserting ``in a taxable year beginning'' after ``sale''.
(4) Subparagraph (G) of section 857(b)(6) is amended by
inserting ``in a taxable year beginning'' after ``In the case
of a sale''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after May 22, 2009.

SEC. 261. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED
INVESTMENT COMPANIES.

(a) In General.--Paragraphs (1)(C) and (2)(C) of section
871(k) are each amended by striking ``December 31, 2009'' and
inserting ``December 31, 2010''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 262. RIC QUALIFIED INVESTMENT ENTITY TREATMENT UNDER
FIRPTA.

(a) In General.--Clause (ii) of section 897(h)(4)(A) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect on January 1, 2010. Notwithstanding the preceding
sentence, such amendment shall not apply with respect to the
withholding requirement under section 1445 of the Internal
Revenue Code of 1986 for any payment made before the date of
the enactment of this Act.
(2) Amounts withheld on or before date of enactment.--In
the case of a regulated investment company--
(A) which makes a distribution after December 31, 2009, and
before the date of the enactment of this Act; and
(B) which would (but for the second sentence of paragraph
(1)) have been required to withhold with respect to such
distribution under section 1445 of such Code,

such investment company shall not be liable to any person to
whom such distribution was made for any amount so withheld
and paid over to the Secretary of the Treasury.

SEC. 263. EXCEPTIONS FOR ACTIVE FINANCING INCOME.

(a) In General.--Sections 953(e)(10) and 954(h)(9) are each
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) Conforming Amendment.--Section 953(e)(10) is amended by
striking ``December 31, 2009'' and inserting ``December 31,
2010''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years of foreign corporations
beginning after December 31, 2009, and to taxable years of
United States shareholders with or within which any such
taxable year of such foreign corporation ends.

SEC. 264. LOOK-THRU TREATMENT OF PAYMENTS BETWEEN RELATED
CONTROLLED FOREIGN CORPORATIONS UNDER FOREIGN
PERSONAL HOLDING COMPANY RULES.

(a) In General.--Subparagraph (C) of section 954(c)(6) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years of foreign corporations
beginning after December 31, 2009, and to taxable years of
United States shareholders with or within which any such
taxable year of such foreign corporation ends.

SEC. 265. BASIS ADJUSTMENT TO STOCK OF S CORPS MAKING
CHARITABLE CONTRIBUTIONS OF PROPERTY.

(a) In General.--Paragraph (2) of section 1367(a) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2009.

SEC. 266. EMPOWERMENT ZONE TAX INCENTIVES.

(a) In General.--Section 1391 is amended--
(1) by striking ``December 31, 2009'' in subsection
(d)(1)(A)(i) and inserting ``December 31, 2010''; and
(2) by striking the last sentence of subsection (h)(2).
(b) Increased Exclusion of Gain on Stock of Empowerment
Zone Businesses.--Subparagraph (C) of section 1202(a)(2) is
amended--
(1) by striking ``December 31, 2014'' and inserting
``December 31, 2015''; and
(2) by striking ``2014'' in the heading and inserting
``2015''.
(c) Treatment of Certain Termination Dates Specified in
Nominations.--In the case of a designation of an empowerment
zone the nomination for which included a termination date
which is contemporaneous with the date specified in
subparagraph (A)(i) of section 1391(d)(1) of the Internal

[[Page S5004]]

Revenue Code of 1986 (as in effect before the enactment of
this Act), subparagraph (B) of such section shall not apply
with respect to such designation unless, after the date of
the enactment of this section, the entity which made such
nomination reconfirms such termination date, or amends the
nomination to provide for a new termination date, in such
manner as the Secretary of the Treasury (or the Secretary's
designee) may provide.
(d) Effective Date.--The amendments made by this section
shall apply to periods after December 31, 2009.

SEC. 267. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF
COLUMBIA.

(a) In General.--Subsection (f) of section 1400 is amended
by striking ``December 31, 2009'' each place it appears and
inserting ``December 31, 2010''.
(b) Tax-exempt DC Empowerment Zone Bonds.--Subsection (b)
of section 1400A is amended by striking ``December 31, 2009''
and inserting ``December 31, 2010''.
(c) Zero-percent Capital Gains Rate.--
(1) Acquisition date.--Paragraphs (2)(A)(i), (3)(A),
(4)(A)(i), and (4)(B)(i)(I) of section 1400B(b) are each
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(2) Limitation on period of gains.--
(A) In general.--Paragraph (2) of section 1400B(e) is
amended--
(i) by striking ``December 31, 2014'' and inserting
``December 31, 2015''; and
(ii) by striking ``2014'' in the heading and inserting
``2015''.
(B) Partnerships and s-corps.--Paragraph (2) of section
1400B(g) is amended by striking ``December 31, 2014'' and
inserting ``December 31, 2015''.
(d) First-time Homebuyer Credit.--Subsection (i) of section
1400C is amended by striking ``January 1, 2010'' and
inserting ``January 1, 2011''.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to periods after December 31, 2009.
(2) Tax-exempt dc empowerment zone bonds.--The amendment
made by subsection (b) shall apply to bonds issued after
December 31, 2009.
(3) Acquisition dates for zero-percent capital gains
rate.--The amendments made by subsection (c) shall apply to
property acquired or substantially improved after December
31, 2009.
(4) Homebuyer credit.--The amendment made by subsection (d)
shall apply to homes purchased after December 31, 2009.

SEC. 268. RENEWAL COMMUNITY TAX INCENTIVES.

(a) In General.--Subsection (b) of section 1400E is
amended--
(1) by striking ``December 31, 2009'' in paragraphs (1)(A)
and (3) and inserting ``December 31, 2010''; and
(2) by striking ``January 1, 2010'' in paragraph (3) and
inserting ``January 1, 2011''.
(b) Zero-percent Capital Gains Rate.--
(1) Acquisition date.--Paragraphs (2)(A)(i), (3)(A),
(4)(A)(i), and (4)(B)(i) of section 1400F(b) are each amended
by striking ``January 1, 2010'' and inserting ``January 1,
2011''.
(2) Limitation on period of gains.--Paragraph (2) of
section 1400F(c) is amended--
(A) by striking ``December 31, 2014'' and inserting
``December 31, 2015''; and
(B) by striking ``2014'' in the heading and inserting
``2015''.
(3) Clerical amendment.--Subsection (d) of section 1400F is
amended by striking ``and `December 31, 2014' for `December
31, 2014' ''.
(c) Commercial Revitalization Deduction.--
(1) In general.--Subsection (g) of section 1400I is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(2) Conforming amendment.--Subparagraph (A) of section
1400I(d)(2) is amended by striking ``after 2001 and before
2010'' and inserting ``which begins after 2001 and before the
date referred to in subsection (g)''.
(d) Increased Expensing Under Section 179.--Subparagraph
(A) of section 1400J(b)(1) is amended by striking ``January
1, 2010'' and inserting ``January 1, 2011''.
(e) Treatment of Certain Termination Dates Specified in
Nominations.--In the case of a designation of a renewal
community the nomination for which included a termination
date which is contemporaneous with the date specified in
subparagraph (A) of section 1400E(b)(1) of the Internal
Revenue Code of 1986 (as in effect before the enactment of
this Act), subparagraph (B) of such section shall not apply
with respect to such designation unless, after the date of
the enactment of this section, the entity which made such
nomination reconfirms such termination date, or amends the
nomination to provide for a new termination date, in such
manner as the Secretary of the Treasury (or the Secretary's
designee) may provide.
(f) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to periods after December 31, 2009.
(2) Acquisitions.--The amendments made by subsections
(b)(1) and (d) shall apply to acquisitions after December 31,
2009.
(3) Commercial revitalization deduction.--
(A) In general.--The amendment made by subsection (c)(1)
shall apply to buildings placed in service after December 31,
2009.
(B) Conforming amendment.--The amendment made by subsection
(c)(2) shall apply to calendar years beginning after December
31, 2009.

SEC. 269. TEMPORARY INCREASE IN LIMIT ON COVER OVER OF RUM
EXCISE TAXES TO PUERTO RICO AND THE VIRGIN
ISLANDS.

(a) In General.--Paragraph (1) of section 7652(f) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to distilled spirits brought into the United
States after December 31, 2009.

SEC. 270. PAYMENT TO AMERICAN SAMOA IN LIEU OF EXTENSION OF
ECONOMIC DEVELOPMENT CREDIT.

The Secretary of the Treasury (or his designee) shall pay
$18,000,000 to the Government of American Samoa for purposes
of economic development. The payment made under the preceding
sentence shall be treated for purposes of section 1324 of
title 31, United States Code, as a refund of internal revenue
collections to which such section applies.

SEC. 271. ELECTION TO TEMPORARILY UTILIZE UNUSED AMT CREDITS
DETERMINED BY DOMESTIC INVESTMENT.

(a) In General.--Section 53 is amended by adding at the end
the following new subsection:
``(g) Election for Corporations With New Domestic
Investments.--
``(1) In general.--If a corporation elects to have this
subsection apply for its first taxable year beginning after
December 31, 2009, the limitation imposed by subsection (c)
for such taxable year shall be increased by the AMT credit
adjustment amount.
``(2) AMT credit adjustment amount.--For purposes of
paragraph (1), the term `AMT credit adjustment amount' means,
the lesser of--
``(A) 50 percent of a corporation's minimum tax credit for
its first taxable year beginning after December 31, 2009,
determined under subsection (b), or
``(B) 10 percent of new domestic investments made during
such taxable year.
``(3) New domestic investments.--For purposes of this
subsection, the term `new domestic investments' means the
cost of qualified property (as defined in section
168(k)(2)(A)(i))--
``(A) the original use of which commences with the taxpayer
during the taxable year, and
``(B) which is placed in service in the United States by
the taxpayer during such taxable year.
``(4) Credit refundable.--For purposes of subsection (b) of
section 6401, the aggregate increase in the credits allowable
under this part for any taxable year resulting from the
application of this subsection shall be treated as allowed
under subpart C (and not under any other subpart). For
purposes of section 6425, any amount treated as so allowed
shall be treated as a payment of estimated income tax for the
taxable year.
``(5) Election.--An election under this subsection shall be
made at such time and in such manner as prescribed by the
Secretary, and once made, may be revoked only with the
consent of the Secretary. Not later than 90 days after the
date of the enactment of this subsection, the Secretary shall
issue guidance specifying such time and manner.
``(6) Treatment of certain partnership investments.--For
purposes of this subsection, a corporation shall take into
account its allocable share of any new domestic investments
by a partnership for any taxable year if, and only if, more
than 90 percent of the capital and profits interests in such
partnership are owned by such corporation (directly or
indirectly) at all times during such taxable year.
``(7) No double benefit.--
``(A) In general.--A corporation making an election under
this subsection may not make an election under subparagraph
(H) of section 172(b)(1).
``(B) Special rules with respect to taxpayers previously
electing applicable net operating losses.--In the case of a
corporation which made an election under subparagraph (H) of
section 172(b)(1) and elects the application of this
subsection--
``(i) Election of applicable net operating loss treated as
revoked.--The election under such subparagraph (H) shall
(notwithstanding clause (iii)(II) of such subparagraph) be
treated as having been revoked by the taxpayer.
``(ii) Coordination with provision for expedited refund.--
The amount otherwise treated as a payment of estimated income
tax under the last sentence of paragraph (4) shall be reduced
(but not below zero) by the aggregate increase in unpaid tax
liability determined under this chapter by reason of the
revocation of the election under clause (i).
``(iii) Application of statute of limitations.--With
respect to the revocation of an election under clause (i)--

``(I) the statutory period for the assessment of any
deficiency attributable to such revocation shall not expire
before the end of the 3-year period beginning on the date of
the election to have this subsection apply, and
``(II) such deficiency may be assessed before the
expiration of such 3-year period notwithstanding the
provisions of any other law or rule of law which would
otherwise prevent such assessment.

``(C) Exception for eligible small businesses.--
Subparagraphs (A) and (B) shall not apply to an eligible
small business as defined in section 172(b)(1)(H)(v)(II).
``(8) Regulations.--The Secretary may issue such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this subsection,
including to prevent fraud and abuse under this
subsection.''.

[[Page S5005]]

(b) Conforming Amendments.--
(1) Section 6211(b)(4)(A) is amended by inserting
``53(g),'' after ``53(e),''.
(2) Section 1324(b)(2) of title 31, United States Code, is
amended by inserting ``53(g),'' after ``53(e),''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 272. STUDY OF EXTENDED TAX EXPENDITURES.

(a) Findings.--Congress finds the following:
(1) Currently, the aggregate cost of Federal tax
expenditures rivals, or even exceeds, the amount of total
Federal discretionary spending.
(2) Given the escalating public debt, a critical
examination of this use of taxpayer dollars is essential.
(3) Additionally, tax expenditures can complicate the
Internal Revenue Code of 1986 for taxpayers and complicate
tax administration for the Internal Revenue Service.
(4) To facilitate a better understanding of tax
expenditures in the future, it is constructive for
legislation extending these provisions to include a study of
such provisions.
(b) Requirement to Report.--Not later than November 30,
2010, the Chief of Staff of the Joint Committee on Taxation,
in consultation with the Comptroller General of the United
States, shall submit to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate a report on each tax expenditure (as defined in
section 3(3) of the Congressional Budget Impoundment Control
Act of 1974 (2 U.S.C. 622(3)) extended by this title.
(c) Rolling Submission of Reports.--The Chief of Staff of
the Joint Committee on Taxation shall initially submit the
reports for each such tax expenditure enacted in this
subtitle (relating to business tax relief) and subtitle A
(relating to energy) in order of the tax expenditure
incurring the least aggregate cost to the greatest aggregate
cost (determined by reference to the cost estimate of this
Act by the Joint Committee on Taxation). Thereafter, such
reports may be submitted in such order as the Chief of Staff
determines appropriate.
(d) Contents of Report.--Such reports shall contain the
following:
(1) An explanation of the tax expenditure and any relevant
economic, social, or other context under which it was first
enacted.
(2) A description of the intended purpose of the tax
expenditure.
(3) An analysis of the overall success of the tax
expenditure in achieving such purpose, and evidence
supporting such analysis.
(4) An analysis of the extent to which further extending
the tax expenditure, or making it permanent, would contribute
to achieving such purpose.
(5) A description of the direct and indirect beneficiaries
of the tax expenditure, including identifying any unintended
beneficiaries.
(6) An analysis of whether the tax expenditure is the most
cost-effective method for achieving the purpose for which it
was intended, and a description of any more cost-effective
methods through which such purpose could be accomplished.
(7) A description of any unintended effects of the tax
expenditure that are useful in understanding the tax
expenditure's overall value.
(8) An analysis of how the tax expenditure could be
modified to better achieve its original purpose.
(9) A brief description of any interactions (actual or
potential) with other tax expenditures or direct spending
programs in the same or related budget function worthy of
further study.
(10) A description of any unavailable information the staff
of the Joint Committee on Taxation may need to complete a
more thorough examination and analysis of the tax
expenditure, and what must be done to make such information
available.
(e) Minimum Analysis by Deadline.--In the event the Chief
of Staff of the Joint Committee on Taxation concludes it will
not be feasible to complete all reports by the date specified
in subsection (a), at a minimum, the reports for each tax
expenditure enacted in this subtitle (relating to business
tax relief) and subtitle A (relating to energy) shall be
completed by such date.

Subtitle D--Temporary Disaster Relief Provisions

PART I--NATIONAL DISASTER RELIEF

SEC. 281. WAIVER OF CERTAIN MORTGAGE REVENUE BOND
REQUIREMENTS.

(a) In General.--Paragraph (11) of section 143(k) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) Special Rule for Residences Destroyed in Federally
Declared Disasters.--Paragraph (13) of section 143(k), as
redesignated by subsection (c), is amended by striking
``January 1, 2010'' in subparagraphs (A)(i) and (B)(i) and
inserting ``January 1, 2011''.
(c) Technical Amendment.--Subsection (k) of section 143 is
amended by redesignating the second paragraph (12) (relating
to special rules for residences destroyed in federally
declared disasters) as paragraph (13).
(d) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendment made by this section shall apply to
bonds issued after December 31, 2009.
(2) Residences destroyed in federally declared disasters.--
The amendments made by subsection (b) shall apply with
respect to disasters occurring after December 31, 2009.
(3) Technical amendment.--The amendment made by subsection
(c) shall take effect as if included in section 709 of the
Tax Extenders and Alternative Minimum Tax Relief Act of 2008.

SEC. 282. LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED
DISASTERS.

(a) In General.--Subclause (I) of section 165(h)(3)(B)(i)
is amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) $500 Limitation.--Paragraph (1) of section 165(h) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(c) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
apply to federally declared disasters occurring after
December 31, 2009.
(2) $500 limitation.--The amendment made by subsection (b)
shall apply to taxable years beginning after December 31,
2009.

SEC. 283. SPECIAL DEPRECIATION ALLOWANCE FOR QUALIFIED
DISASTER PROPERTY.

(a) In General.--Subclause (I) of section 168(n)(2)(A)(ii)
is amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to disasters occurring after December 31, 2009.

SEC. 284. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY
DECLARED DISASTERS.

(a) In General.--Subclause (I) of section 172(j)(1)(A)(i)
is amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to losses attributable to disasters occurring
after December 31, 2009.

SEC. 285. EXPENSING OF QUALIFIED DISASTER EXPENSES.

(a) In General.--Subparagraph (A) of section 198A(b)(2) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures on account of disasters occurring
after December 31, 2009.

PART II--REGIONAL PROVISIONS

Subpart A--New York Liberty Zone

SEC. 291. SPECIAL DEPRECIATION ALLOWANCE FOR NONRESIDENTIAL
AND RESIDENTIAL REAL PROPERTY.

(a) In General.--Subparagraph (A) of section 1400L(b)(2) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 292. TAX-EXEMPT BOND FINANCING.

(a) In General.--Subparagraph (D) of section 1400L(d)(2) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to bonds issued after December 31, 2009.

Subpart B--GO Zone

SEC. 295. INCREASE IN REHABILITATION CREDIT.

(a) In General.--Subsection (h) of section 1400N is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to amounts paid or incurred after December 31,
2009.

SEC. 296. WORK OPPORTUNITY TAX CREDIT WITH RESPECT TO CERTAIN
INDIVIDUALS AFFECTED BY HURRICANE KATRINA FOR
EMPLOYERS INSIDE DISASTER AREAS.

(a) In General.--Paragraph (1) of section 201(b) of the
Katrina Emergency Tax Relief Act of 2005 is amended by
striking ``4-year'' and inserting ``5-year''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to individuals hired after August 27, 2009.

SEC. 297. EXTENSION OF LOW-INCOME HOUSING CREDIT RULES FOR
BUILDINGS IN GO ZONES.

Section 1400N(c)(5) is amended by striking ``January 1,
2011'' and inserting ``January 1, 2013''.

TITLE III--PENSION FUNDING RELIEF

Subtitle A--Single-Employer Plans

SEC. 301. EXTENDED PERIOD FOR SINGLE-EMPLOYER DEFINED BENEFIT
PLANS TO AMORTIZE CERTAIN SHORTFALL
AMORTIZATION BASES.

(a) ERISA Amendments.--
(1) In general.--Section 303(c)(2) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1083(c)(2))
is amended by adding at the end the following subparagraphs:
``(D) Special rule.--
``(i) In general.--In the case of the shortfall
amortization base of a plan for any applicable plan year, the
shortfall amortization installments are the amounts described
in clause (ii) or (iii), if made applicable by an election
under clause (iv). In the absence of a timely election, such
installments shall be determined without regard to this
subparagraph.
``(ii) 2 plus 7 amortization schedule.--The shortfall
amortization installments described in this clause are--

``(I) in the case of the first 2 plan years in the 9-plan-
year period beginning with the applicable plan year, interest
on the shortfall amortization base (determined by using the
effective interest rate for the applicable plan year), and

[[Page S5006]]

``(II) in the case of the last 7 plan years in such 9-plan-
year period, the amounts necessary to amortize the balance of
such shortfall amortization base in level annual installments
over such last 7 plan years (determined using the segment
rates determined under subparagraph (C) of subsection (h)(2)
for the applicable plan year, applied under rules similar to
the rules of subparagraph (B) of subsection (h)(2)).

``(iii) 15-year amortization.--The shortfall amortization
installments described in this clause are the amounts under
subparagraphs (A) and (B) determined by substituting `15
plan-year period' for `7-plan-year period'.
``(iv) Election.--

``(I) In general.--The plan sponsor may, with respect to a
plan, elect, with respect to any of not more than 2
applicable plan years, to determine shortfall amortization
installments under this subparagraph. An election under
either clause (ii) or clause (iii) may be made with respect
to either of such applicable plan years.
``(II) Eligibility for election.--An election may be made
to determine shortfall amortization installments under this
subparagraph with respect to a plan only if, as of the date
of the election--

``(aa) the plan sponsor is not a debtor in a case under
title 11, United States Code, or similar Federal or State
law,
``(bb) there are no unpaid minimum required contributions
with respect to the plan for purposes of section 4971 of the
Internal Revenue Code of 1986,
``(cc) there is no lien in favor of the plan under
subsection (k) or under section 430(k) of such Code, and
``(dd) a distress termination has not been initiated for
the plan under section 4041(c).

``(III) Rules relating to election.--Such election shall be
made at such times, and in such form and manner, as shall be
prescribed by the Secretary of the Treasury and shall be
irrevocable, except under such limited circumstances, and
subject to such conditions, as such Secretary may prescribe.

``(E) Applicable plan year.--
``(i) In general.--For purposes of this paragraph, the term
`applicable plan year' means, subject to the election of the
plan sponsor under subparagraph (D)(iv), each of not more
than 2 of the plan years beginning in 2008, 2009, 2010, or
2011.
``(ii) Special rule relating to 2008.--A plan year may be
elected as an applicable plan year pursuant to this
subparagraph only if the due date under subsection (j)(1) for
the payment of the minimum required contribution for such
plan year occurs on or after March 10, 2010.
``(F) Increases in shortfall amortization installments in
cases of excess compensation or certain dividends or stock
redemptions.--
``(i) In general.--If, with respect to an election for an
applicable plan year under subparagraph (D), there is an
installment acceleration amount with respect to a plan for
any plan year in the restriction period (or if there is an
installment acceleration amount carried forward to a plan
year not in the restriction period), then the shortfall
amortization installment otherwise determined and payable
under this paragraph for such plan year shall be increased by
such amount.
``(ii) Back-end adjustment to amortization schedule.--
Subject to rules prescribed by the Secretary of the Treasury,
if a shortfall amortization installment with respect to any
shortfall amortization base for an applicable plan year is
required to be increased for any plan year under clause (i),
subsequent shortfall amortization installments with respect
to such base shall be reduced, in reverse order of the
otherwise required installments beginning with the final
scheduled installment, to the extent necessary to limit the
present value of such subsequent shortfall amortization
installments (after application of this subparagraph) to the
present value of the remaining unamortized shortfall
amortization base.
``(iii) Installment acceleration amount.--For purposes of
this subparagraph--

``(I) In general.--The term `installment acceleration
amount' means, with respect to any plan year in a restriction
period with respect to an applicable plan year, the sum of--

``(aa) the aggregate amount of excess employee compensation
determined under clause (iv) for the plan year, plus
``(bb) the dividend and redemption amount determined under
clause (v) for the plan year.

``(II) Cumulative limitation.--The installment acceleration
amount for any plan year shall not exceed the excess (if any)
of--

``(aa) the sum of the shortfall amortization installments
for the plan year and all preceding plan years in the
amortization period elected under subparagraph (D) with
respect to the shortfall amortization base with respect to an
applicable year, determined without regard to subparagraph
(D) and this subparagraph, over
``(bb) the sum of the shortfall amortization installments
for such plan year and all such preceding plan years,
determined after application of subparagraph (D) (and in the
case of any preceding plan year, after application of this
subparagraph).

``(III) Carryover of excess installment acceleration
amounts.--

``(aa) In general.--If the installment acceleration amount
for any plan year (determined without regard to subclause
(II)) exceeds the limitation under subclause (II), then,
subject to item (bb), such excess shall be treated as an
installment acceleration amount for the succeeding plan year.
``(bb) Cap to apply.--If any amount treated as an
installment acceleration amount under item (aa) or this item
with respect any succeeding plan year, when added to other
installment acceleration amounts (determined without regard
to subclause (II)) with respect to the plan year, exceeds the
limitation under subclause (II), the portion of such amount
representing such excess shall be treated as an installment
acceleration amount with respect to the next succeeding plan
year.
``(cc) Limitation on years to which amounts carried
forward.--No amount shall be carried forward under item (aa)
or (bb) to a plan year which begins after the last plan year
in the restriction period (or after the second plan year
following such last plan year in the case of an election year
with respect to which 15-year amortization was elected under
subparagraph (D)(iii)).
``(dd) Ordering rules.--For purposes of applying item (bb),
installment acceleration amounts for the plan year
(determined without regard to any carryover under this
clause) shall be applied first against the limitation under
subclause (II) and then carryovers to such plan year shall be
applied against such limitation on a first-in, first-out
basis.
``(iv) Excess employee compensation.--

``(I) In general.--For purposes of this paragraph, the term
`excess employee compensation' means the sum of--

``(aa) with respect to any employee, for any plan year, the
excess (if any) of--
``(AA) the aggregate amount includible in income under
chapter 1 of the Internal Revenue Code of 1986 for
remuneration during the calendar year in which such plan year
begins for services performed by the employee for the plan
sponsor (whether or not performed during such calendar year),
over
``(BB) $1,000,000, plus
``(bb) the amount of assets set aside or reserved (directly
or indirectly) in a trust (or other arrangement as determined
by the Secretary of the Treasury), or transferred to such a
trust or other arrangement, during the calendar year by a
plan sponsor for purposes of paying deferred compensation of
an employee under a nonqualified deferred compensation plan
(as defined in section 409A of such Code) of the plan
sponsor.

``(II) No double counting.--No amount shall be taken into
account under subclause (I) more than once.
``(III) Employee; remuneration.--For purposes of this
clause, the term `employee' includes, with respect to a
calendar year, a self-employed individual who is treated as
an employee under section 401(c) of the Internal Revenue Code
of 1986 for the taxable year ending during such calendar
year, and the term `remuneration' shall include earned income
of such an individual.
``(IV) Certain payments under existing contracts.--There
shall not be taken into account under subclause (I)(aa) any
remuneration consisting of nonqualified deferred
compensation, restricted stock (or restricted stock units),
stock options, or stock appreciation rights payable or
granted under a written binding contract that was in effect
on March 1, 2010, and which was not modified in any material
respect before such remuneration is paid.
``(V) Only remuneration for post-2009 services counted.--
Remuneration shall be taken into account under subclause
(I)(aa) only to the extent attributable to services performed
by the employee for the plan sponsor after December 31, 2009.
``(VI) Commissions.--

``(aa) In general.--There shall not be taken into account
under subclause (I)(aa) any remuneration payable on a
commission basis solely on account of income directly
generated by the individual performance of the individual to
whom such remuneration is payable.
``(bb) Specified employees.--Item (aa) shall not apply in
the case of any specified employee (within the meaning of
section 409A(a)(2)(B)(i) of the Internal Revenue Code of
1986) or any employee who would be such a specified employee
if the plan sponsor were a corporation described in such
section.

``(VII) Indexing of amount.--In the case of any calendar
year beginning after 2010, the dollar amount under subclause
(I)(aa)(BB) shall be increased by an amount equal to--

``(aa) such dollar amount, multiplied by
``(bb) the cost-of-living adjustment determined under
section 1(f)(3) of the Internal Revenue Code of 1986 for the
calendar year, determined by substituting `calendar year
2009' for `calendar year 1992' in subparagraph (B) thereof.

If the amount of any increase under clause (i) is not a
multiple of $20,000, such increase shall be rounded to the
next lowest multiple of $20,000.

``(v) Certain dividends and redemptions.--

``(I) In general.--The dividend and redemption amount
determined under this clause for any plan year is the lesser
of--

``(aa) the excess of--
``(AA) the sum of the dividends paid during the plan year
by the plan sponsor, plus the amounts paid for the redemption
of stock of the plan sponsor redeemed during the plan year,
over
``(BB) an amount equal to the average of adjusted annual
net income of the plan sponsor for the last 5 fiscal years of
the plan sponsor ending before such plan year, or
``(bb) the sum of--

[[Page S5007]]

``(AA) the amounts paid for the redemption of stock of the
plan sponsor redeemed during the plan year, plus
``(BB) the excess of dividends paid during the plan year by
the plan sponsor over the dividend base amount.

``(II) Definitions.--

``(aa) Adjusted annual net income.--For purposes of
subclause (I)(aa)(BB), the term `adjusted annual net income'
with respect to any fiscal year means annual net income,
determined in accordance with generally accepted accounting
principles (before after-tax gain or loss on any sale of
assets), but without regard to any reduction by reason of
depreciation or amortization, except that in no event shall
adjusted annual net income for any fiscal year be less than
zero.
``(bb) Dividend base amount.--For purposes of this clause,
the term `dividend base amount' means, with respect to a plan
year, an amount equal to the greater of--
``(AA) the median of the amounts of the dividends paid
during each of the last 5 fiscal years of the plan sponsor
ending before such plan year, or
``(BB) the amount of dividends paid during such plan year
on preferred stock that was issued on or before May 21, 2010,
or that is replacement stock for such preferred stock.

``(III) Only certain post-2009 dividends and redemptions
counted.--For purposes of subclause (I) (other than for
purposes of calculating the dividend base amount), there
shall only be taken into account dividends declared, and
redemptions occurring, after February 28, 2010.
``(IV) Exception for intra-group dividends.--Dividends paid
by one member of a controlled group (as defined in section
302(d)(3)) to another member of such group shall not be taken
into account under subclause (I).
``(V) Exception for stock dividends.--Any distribution by
the plan sponsor to its shareholders of stock issued by the
plan sponsor shall not be taken into account under subclause
(I).
``(VI) Exception for certain redemptions.--The following
shall not be taken into account under subclause (I):

``(aa) Redemptions of securities which, at the time of
redemption, are not listed on an established securities
market and--
``(AA) are made pursuant to a pension plan that is
qualified under section 401 of the Internal Revenue Code of
1986 or a shareholder-approved program, or
``(BB) are made on account of an employee's termination of
employment with the plan sponsor, or the death or disability
of a shareholder.
``(bb) Redemptions of securities which are not, immediately
after issuance, listed on an established securities market
and are, or had previously been--
``(AA) held, directly or indirectly, by, or for the benefit
of, the Federal Government or a Federal reserve bank, or
``(BB) held by a national government (or a government-
related entity of such a government) or an employee benefit
plan if such shares are substantially identical to shares
described in subitem (AA).
``(vi) Other definitions and rules.--For purposes of this
subparagraph--

``(I) Plan sponsor.--The term `plan sponsor' includes any
member of the plan sponsor's controlled group (as defined in
section 302(d)(3)).
``(II) Restriction period.--The term `restriction period'
means, with respect to any applicable plan year with respect
to which an election is made under subparagraph (D)--

``(aa) except as provided in item (bb), the 3-year period
beginning with the applicable plan year (or, if later, the
first plan year beginning after December 31, 2009), or
``(bb) if the plan sponsor elects 15-year amortization for
the shortfall amortization base for the applicable plan year,
the 5-year period beginning with such plan year (or, if
later, the first plan year beginning after December 31,
2009).

``(III) Elections for multiple plans.--If a plan sponsor
makes elections under subparagraph (D) with respect to 2 or
more plans, the Secretary of the Treasury shall provide rules
for the application of this subparagraph to such plans,
including rules for the ratable allocation of any installment
acceleration amount among such plans on the basis of each
plan's relative reduction in the plan's shortfall
amortization installment for the first plan year in the
amortization period described in clause (i) (determined
without regard to this subparagraph).

``(G) Mergers and acquisitions.--The Secretary of the
Treasury shall prescribe rules for the application of
subparagraphs (D) and (F) in any case where there is a merger
or acquisition involving a plan sponsor making the election
under subparagraph (D).
``(H) Regulations and guidance.--The Secretary of the
Treasury may prescribe such regulations and other guidance of
general applicability as such Secretary may determine
necessary to achieve the purposes of subparagraphs (D) and
(F).''.
(2) Notice requirement.--Section 204 of such Act (29 U.S.C.
1054) is amended--
(A) by redesignating subsection (k) as subsection (l); and
(B) by inserting after subsection (j) the following new
subsection:
``(k) Notice in Connection With Shortfall Amortization
Election.--
``(1) In general.--Not later 30 days after the date of an
election under clause (iv) of section 303(c)(2)(D) in
connection with a single-employer plan, the plan
administrator shall provide notice of such election in
accordance with this subsection to each plan participant and
beneficiary, each labor organization representing such
participants and beneficiaries, and the Pension Benefit
Guaranty Corporation.
``(2) Matters included in notice.--Each notice provided
pursuant to this subsection shall set forth--
``(A) a statement that recently enacted legislation permits
employers to delay pension funding;
``(B) with respect to required contributions--
``(i) the amount of contributions that would have been
required had the election not been made;
``(ii) the amount of the reduction in required
contributions for the applicable plan year that occurs on
account of the election; and
``(iii) the number of plan years to which such reduction
will apply;
``(C) with respect to a plan's funding status as of the end
of the plan year preceding the applicable plan year--
``(i) the liabilities determined under section
4010(d)(1)(A); and
``(ii) the market value of assets of the plan; and
``(D) with respect to installment acceleration amounts (as
defined in section 303(c)(2)(F)(iii)(I))--
``(i) an explanation of section 303(c)(2)(F) (relating to
increases in shortfall amortization installments in cases of
excess compensation or certain dividends or stock
redemptions); and
``(ii) a statement that increases in required contributions
may occur in the event of future payments of excess employee
compensation or certain share repurchasing or dividend
activity and that subsequent notices of any such payments or
activity will be provided in the annual funding notice
provided pursuant to section 101(f).
``(3) Other requirements.--
``(A) Form.--The notice required by paragraph (1) shall be
written in a manner calculated to be understood by the
average plan participant. The Secretary of the Treasury shall
prescribe a model notice that a plan administrator may use to
satisfy the requirements of paragraph (1).
``(B) Provision to designated persons.--Any notice under
paragraph (1) may be provided to a person designated, in
writing, by the person to which it would otherwise be
provided.
``(4) Effect of egregious failure.--
``(A) In general.--In the case of any egregious failure to
meet any requirement of this subsection with respect to any
election, such election shall be treated as having not been
made.
``(B) Egregious failure.--For purposes of subparagraph (A),
there is an egregious failure to meet the requirements of
this subsection if such failure is in the control of the plan
sponsor and is--
``(i) an intentional failure (including any failure to
promptly provide the required notice or information after the
plan administrator discovers an unintentional failure to meet
the requirements of this subsection),
``(ii) a failure to provide most of the participants and
beneficiaries with most of the information they are entitled
to receive under this subsection, or
``(iii) a failure which is determined to be egregious under
regulations prescribed by the Secretary of the Treasury.
``(5) Use of new technologies.--The Secretary of the
Treasury may, in consultation with the Secretary, by
regulations or other guidance of general applicability, allow
any notice under this subsection to be provided using new
technologies.''.
(C) Subsequent supplemental notices.--Section 101(f)(2)(C)
of such Act (29 U.S.C. 1021(f)(2)(C)) is amended--
(i) by striking ``and'' at the end of clause (i);
(ii) by redesignating clause (ii) as clause (iii); and
(iii) by inserting after clause (i) the following new
clause:
``(ii) any excess employee compensation amounts and any
dividends and redemptions amounts determined under section
303(c)(2)(F) for the preceding plan year with respect to the
plan, and''.
(3) Disregard of installment acceleration amounts in
determining quarterly contributions.--Section 303(j)(3) of
such Act (29 U.S.C. 1083(j)(3)) is amended by adding at the
end the following new subparagraph:
``(F) Disregard of installment acceleration amounts.--
Subparagraph (D) shall be applied without regard to any
increase under subsection (c)(2)(F).''.
(4) Conforming amendment.--Section 303(c)(1) of such Act
(29 U.S.C. 1083(c)(1)) is amended by striking ``the shortfall
amortization bases for such plan year and each of the 6
preceding plan years'' and inserting ``any shortfall
amortization base which has not been fully amortized under
this subsection''.
(b) IRC Amendments.--
(1) In general.--Section 430(c)(2) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
subparagraphs:
``(D) Special rule.--
``(i) In general.--In the case of the shortfall
amortization base of a plan for any applicable plan year, the
shortfall amortization installments are the amounts described
in clause (ii) or (iii), if made applicable by an election
under clause (iv). In the absence of a timely election, such
installments shall be

[[Page S5008]]

determined without regard to this subparagraph.
``(ii) 2 plus 7 amortization schedule.--The shortfall
amortization installments described in this clause are--

``(I) in the case of the first 2 plan years in the 9-plan-
year period beginning with the applicable plan year, interest
on the shortfall amortization base (determined by using the
effective interest rate for the applicable plan year), and
``(II) in the case of the last 7 plan years in such 9-plan-
year period, the amounts necessary to amortize the balance of
such shortfall amortization base in level annual installments
over such last 7 plan years (determined using the segment
rates determined under subparagraph (C) of subsection (h)(2)
for the applicable plan year, applied under rules similar to
the rules of subparagraph (B) of subsection (h)(2)).

``(iii) 15-year amortization.--The shortfall amortization
installments described in this clause are the amounts under
subparagraphs (A) and (B) determined by substituting `15
plan-year period' for `7-plan-year period'.
``(iv) Election.--

``(I) In general.--The plan sponsor may, with respect to a
plan, elect, with respect to any of not more than 2
applicable plan years, to determine shortfall amortization
installments under this subparagraph. An election under
either clause (ii) or clause (iii) may be made with respect
to either of such applicable plan years.
``(II) Eligibility for election.--An election may be made
to determine shortfall amortization installments under this
subparagraph with respect to a plan only if, as of the date
of the election--

``(aa) the plan sponsor is not a debtor in a case under
title 11, United States Code, or similar Federal or State
law,
``(bb) there are no unpaid minimum required contributions
with respect to the plan for purposes of section 4971,
``(cc) there is no lien in favor of the plan under
subsection (k) or under section 303(k) of the Employee
Retirement Income Security Act of 1974, and
``(dd) a distress termination has not been initiated for
the plan under section 4041(c) of such Act.

``(III) Rules relating to election.--Such election shall be
made at such times, and in such form and manner, as shall be
prescribed by the Secretary and shall be irrevocable, except
under such limited circumstances, and subject to such
conditions, as the Secretary may prescribe.

``(E) Applicable plan year.--
``(i) In general.--For purposes of this paragraph, the term
`applicable plan year' means, subject to the election of the
plan sponsor under subparagraph (D)(iv), each of not more
than 2 of the plan years beginning in 2008, 2009, 2010, or
2011.
``(ii) Special rule relating to 2008.--A plan year may be
elected as an applicable plan year pursuant to this
subparagraph only if the due date under subsection (j)(1) for
the payment of the minimum required contribution for such
plan year occurs on or after March 10, 2010.
``(F) Increases in shortfall amortization installments in
cases of excess compensation or certain dividends or stock
redemptions.--
``(i) In general.--If, with respect to an election for an
applicable plan year under subparagraph (D), there is an
installment acceleration amount with respect to a plan for
any plan year in the restriction period (or if there is an
installment acceleration amount carried forward to a plan
year not in the restriction period), then the shortfall
amortization installment otherwise determined and payable
under this paragraph for such plan year shall be increased by
such amount.
``(ii) Back-end adjustment to amortization schedule.--
Subject to rules prescribed by the Secretary, if a shortfall
amortization installment with respect to any shortfall
amortization base for an applicable plan year is required to
be increased for any plan year under clause (i), subsequent
shortfall amortization installments with respect to such base
shall be reduced, in reverse order of the otherwise required
installments beginning with the final scheduled installment,
to the extent necessary to limit the present value of such
subsequent shortfall amortization installments (after
application of this subparagraph) to the present value of the
remaining unamortized shortfall amortization base.
``(iii) Installment acceleration amount.--For purposes of
this subparagraph--

``(I) In general.--The term `installment acceleration
amount' means, with respect to any plan year in a restriction
period with respect to an applicable plan year, the sum of--

``(aa) the aggregate amount of excess employee compensation
determined under clause (iv) for the plan year, plus
``(bb) the dividend and redemption amount determined under
clause (v) for the plan year.

``(II) Cumulative limitation.--The installment acceleration
amount for any plan year shall not exceed the excess (if any)
of--

``(aa) the sum of the shortfall amortization installments
for the plan year and all preceding plan years in the
amortization period elected under subparagraph (D) with
respect to the shortfall amortization base with respect to an
applicable year, determined without regard to subparagraph
(D) and this subparagraph, over
``(bb) the sum of the shortfall amortization installments
for such plan year and all such preceding plan years,
determined after application of subparagraph (D) (and in the
case of any preceding plan year, after application of this
subparagraph).

``(III) Carryover of excess installment acceleration
amounts.--

``(aa) In general.--If the installment acceleration amount
for any plan year (determined without regard to subclause
(II)) exceeds the limitation under subclause (II), then,
subject to item (bb), such excess shall be treated as an
installment acceleration amount for the succeeding plan
year.
``(bb) Cap to apply.--If any amount treated as an
installment acceleration amount under item (aa) or this item
with respect any succeeding plan year, when added to other
installment acceleration amounts (determined without regard
to subclause (II)) with respect to the plan year, exceeds the
limitation under subclause (II), the portion of such amount
representing such excess shall be treated as an installment
acceleration amount with respect to the next succeeding plan
year.
``(cc) Limitation on years to which amounts carried
forward.--No amount shall be carried forward under item (aa)
or (bb) to a plan year which begins after the last plan year
in the restriction period (or after the second plan year
following such last plan year in the case of an election year
with respect to which 15-year amortization was elected under
subparagraph (D)(iii)).
``(dd) Ordering rules.--For purposes of applying item (bb),
installment acceleration amounts for the plan year
(determined without regard to any carryover under this
clause) shall be applied first against the limitation under
subclause (II) and then carryovers to such plan year shall be
applied against such limitation on a first-in, first-out
basis.
``(iv) Excess employee compensation.--

``(I) In general.--For purposes of this paragraph, the term
`excess employee compensation' means the sum of--

``(aa) with respect to any employee, for any plan year, the
excess (if any) of--
``(AA) the aggregate amount includible in income under
chapter 1 for remuneration during the calendar year in which
such plan year begins for services performed by the employee
for the plan sponsor (whether or not performed during such
calendar year), over
``(BB) $1,000,000, plus
``(bb) the amount of assets set aside or reserved (directly
or indirectly) in a trust (or other arrangement as determined
by the Secretary), or transferred to such a trust or other
arrangement, during the calendar year by a plan sponsor for
purposes of paying deferred compensation of an employee under
a nonqualified deferred compensation plan (as defined in
section 409A) of the plan sponsor.

``(II) No double counting.--No amount shall be taken into
account under subclause (I) more than once.
``(III) Employee; remuneration.--For purposes of this
clause, the term `employee' includes, with respect to a
calendar year, a self-employed individual who is treated as
an employee under section 401(c) for the taxable year ending
during such calendar year, and the term `remuneration' shall
include earned income of such an individual.
``(IV) Certain payments under existing contracts.--There
shall not be taken into account under subclause (I) any
remuneration consisting of nonqualified deferred
compensation, restricted stock (or restricted stock units),
stock options, or stock appreciation rights payable or
granted under a written binding contract that was in effect
on March 1, 2010, and which was not modified in any material
respect before such remuneration is paid.
``(V) Only remuneration for post-2009 services counted.--
Remuneration shall be taken into account under subclause
(I)(aa) only to the extent attributable to services performed
by the employee for the plan sponsor after December 31, 2009.
``(VI) Commissions.--

``(aa) In general.--There shall not be taken into account
under subclause (I)(aa) any remuneration payable on a
commission basis solely on account of income directly
generated by the individual performance of the individual to
whom such remuneration is payable.
``(bb) Specified employees.--Item (aa) shall not apply in
the case of any specified employee (within the meaning of
section 409A(a)(2)(B)(i)) or any employee who would be such a
specified employee if the plan sponsor were a corporation
described in such section.

``(VII) Indexing of amount.--In the case of any calendar
year beginning after 2010, the dollar amount under subclause
(I)(aa)(BB) shall be increased by an amount equal to--

``(aa) such dollar amount, multiplied by
``(bb) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year, determined by
substituting `calendar year 2009' for `calendar year 1992' in
subparagraph (B) thereof.

If the amount of any increase under clause (i) is not a
multiple of $20,000, such increase shall be rounded to the
next lowest multiple of $20,000.

``(v) Certain dividends and redemptions.--

``(I) In general.--The dividend and redemption amount
determined under this clause for any plan year is the lesser
of--

[[Page S5009]]

``(aa) the excess of--
``(AA) the sum of the dividends paid during the plan year
by the plan sponsor, plus the amounts paid for the redemption
of stock of the plan sponsor redeemed during the plan year,
over
``(BB) an amount equal to the average of adjusted annual
net income of the plan sponsor for the last 5 fiscal years of
the plan sponsor ending before such plan year, or
``(bb) the sum of--
``(AA) the amounts paid for the redemption of stock of the
plan sponsor redeemed during the plan year, plus
``(BB) the excess of dividends paid during the plan year by
the plan sponsor over the dividend base amount.

``(II) Definitions.--

``(aa) Adjusted annual net income.--For purposes of
subclause (I)(aa)(BB), the term `adjusted annual net income'
with respect to any fiscal year means annual net income,
determined in accordance with generally accepted accounting
principles (before after-tax gain or loss on any sale of
assets), but without regard to any reduction by reason of
depreciation or amortization, except that in no event shall
adjusted annual net income for any fiscal year be less than
zero.
``(bb) Dividend base amount.--For purposes of this clause,
the term `dividend base amount' means, with respect to a plan
year, an amount equal to the greater of--
``(AA) the median of the amounts of the dividends paid
during each of the last 5 fiscal years of the plan sponsor
ending before such plan year, or
``(BB) the amount of dividends paid during such plan year
on preferred stock that was issued on or before May 21, 2010,
or that is replacement stock for such preferred stock.

``(III) Only certain post-2009 dividends and redemptions
counted.--For purposes of subclause (I) (other than for
purposes of calculating the dividend base amount), there
shall only be taken into account dividends declared, and
redemptions occurring, after February 28, 2010.
``(IV) Exception for intra-group dividends.--Dividends paid
by one member of a controlled group (as defined in section
412(d)(3)) to another member of such group shall not be taken
into account under subclause (I).
``(V) Exception for stock dividends.--Any distribution by
the plan sponsor to its shareholders of stock issued by the
plan sponsor shall not be taken into account under subclause
(I).
``(VI) Exception for certain redemptions.--The following
shall not be taken into account under subclause (I):

``(aa) Redemptions of securities which, at the time of
redemption, are not listed on an established securities
market and--
``(AA) are made pursuant to a pension plan that is
qualified under section 401 or a shareholder-approved
program, or
``(BB) are made on account of an employee's termination of
employment with the plan sponsor, or the death or disability
of a shareholder.
``(bb) Redemptions of securities which are not, immediately
after issuance, listed on an established securities market
and are, or had previously been--
``(AA) held, directly or indirectly, by, or for the benefit
of, the Federal Government or a Federal reserve bank, or
``(BB) held by a national government (or a government-
related entity of such a government) or an employee benefit
plan if such shares are substantially identical to shares
described in subitem (AA).
``(vi) Other definitions and rules.--For purposes of this
subparagraph--

``(I) Plan sponsor.--The term `plan sponsor' includes any
group of which the plan sponsor is a member and which is
treated as a single employer under subsection (b), (c), (m),
or (o) of section 414.
``(II) Restriction period.--The term `restriction period'
means, with respect to any applicable plan year with respect
to which an election is made under subparagraph (D)--

``(aa) except as provided in item (bb), the 3-year period
beginning with the applicable plan year (or, if later, the
first plan year beginning after December 31, 2009), or
``(bb) if the plan sponsor elects 15-year amortization for
the shortfall amortization base for the applicable plan year,
the 5-year period beginning with such plan year (or, if
later, the first plan year beginning after December 31,
2009).

``(III) Elections for multiple plans.--If a plan sponsor
makes elections under subparagraph (D) with respect to 2 or
more plans, the Secretary shall provide rules for the
application of this subparagraph to such plans, including
rules for the ratable allocation of any installment
acceleration amount among such plans on the basis of each
plan's relative reduction in the plan's shortfall
amortization installment for the first plan year in the
amortization period described in clause (i) (determined
without regard to this subparagraph).

``(G) Mergers and acquisitions.--The Secretary shall
prescribe rules for the application of subparagraphs (D) and
(F) in any case where there is a merger or acquisition
involving a plan sponsor making the election under
subparagraph (D).
``(H) Regulations and guidance.--The Secretary may
prescribe such regulations and other guidance of general
applicability as the Secretary may determine necessary to
achieve the purposes of subparagraphs (D) and (F).''.
(2) Notice requirement.--
(A) In general.--Section 4980F of such Code is amended--
(i) by striking ``subsection (e)'' each place it appears in
subsection (a) and paragraphs (1) and (3) of subsection (c)
and inserting ``subsections (e) and (f)'';
(ii) by striking ``subsection (e)'' in subsection (c)(2)(A)
and inserting ``subsection (e), (f), or both, as the case may
be''; and
(iii) by redesignating subsection (f) as subsection (g) and
by inserting after subsection (e) the following new
subsection:
``(f) Notice in Connection With Shortfall Amortization
Election.--
``(1) In general.--Not later 30 days after the date of an
election under clause (iv) of section 430(c)(2)(D) in
connection with a plan, the plan administrator shall provide
notice of such election in accordance with this subsection to
each plan participant and beneficiary, each labor
organization representing such participants and
beneficiaries, and the Pension Benefit Guaranty Corporation.
``(2) Matters included in notice.--Each notice provided
pursuant to this subsection shall set forth--
``(A) a statement that recently enacted legislation permits
employers to delay pension funding;
``(B) with respect to required contributions--
``(i) the amount of contributions that would have been
required had the election not been made;
``(ii) the amount of the reduction in required
contributions for the applicable plan year that occurs on
account of the election; and
``(iii) the number of plan years to which such reduction
will apply;
``(C) with respect to a plan's funding status as of the end
of the plan year preceding the applicable plan year--
``(i) the liabilities determined under section
4010(d)(1)(A) of the Employee Retirement Income Security Act
of 1974; and
``(ii) the market value of assets of the plan; and
``(D) with respect to installment acceleration amounts (as
defined in section 430(c)(2)(F)(iii)(I))--
``(i) an explanation of section 430(c)(2)(F) (relating to
increases in shortfall amortization installments in cases of
excess compensation or certain dividends or stock
redemptions); and
``(ii) a statement that increases in required contributions
may occur in the event of future payments of excess employee
compensation or certain share repurchasing or dividend
activity and that subsequent notices of any such payments or
activity will be provided in the annual funding notice
provided pursuant to section 101(f) of the Employee
Retirement Income Security Act of 1974.
``(3) Other requirements.--
``(A) Form.--The notice required by paragraph (1) shall be
written in a manner calculated to be understood by the
average plan participant and shall provide sufficient
information (as determined in accordance with regulations or
other guidance of general applicability prescribed by the
Secretary) to allow plan participants and beneficiaries to
understand the effect of the election. The Secretary shall
prescribe a model notice that a plan administrator may use to
satisfy the requirements of paragraph (1).
``(B) Provision to designated persons.--Any notice under
paragraph (1) may be provided to a person designated, in
writing, by the person to which it would otherwise be
provided.''.
(B) Conforming amendment.--Subsection (g) of section 4980F
of such Code is amended by inserting ``or (f)'' after
``subsection (e)''.
(3) Disregard of installment acceleration amounts in
determining quarterly contributions.--Section 430(j)(3) of
such Code is amended by adding at the end the following new
subparagraph:
``(F) Disregard of installment acceleration amounts.--
Subparagraph (D) shall be applied without regard to any
increase under subsection (c)(2)(F).''.
(4) Conforming amendment.--Paragraph (1) of section 430(c)
of such Code is amended by striking ``the shortfall
amortization bases for such plan year and each of the 6
preceding plan years'' and inserting ``any shortfall
amortization base which has not been fully amortized under
this subsection''.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2007.

SEC. 302. APPLICATION OF EXTENDED AMORTIZATION PERIOD TO
PLANS SUBJECT TO PRIOR LAW FUNDING RULES.

(a) In General.--Title I of the Pension Protection Act of
2006 is amended by redesignating section 107 as section 108
and by inserting the following after section 106:

``SEC. 107. APPLICATION OF FUNDING RELIEF TO PLANS WITH
DELAYED EFFECTIVE DATE.

``(a) Alternative Elections.--
``(1) In general.--Subject to this section, a plan sponsor
of a plan to which section 104, 105, or 106 of this Act
applies may either elect the application of subsection (b)
with respect to the plan for not more than 2 applicable plan
years or elect the application of subsection (c) with respect
to the plan for 1 applicable plan year.
``(2) Eligibility for elections.--An election may be made
by a plan sponsor under paragraph (1) with respect to a plan
only if at the time of the election--
``(A) the plan sponsor is not a debtor in a case under
title 11, United States Code, or similar Federal or State
law,

[[Page S5010]]

``(B) there are no accumulated funding deficiencies (as
defined in section 302(a)(2) of the Employee Retirement
Income Security Act of 1974 (as in effect immediately before
the enactment of this Act) or in section 412(a) of the
Internal Revenue Code of 1986 (as so in effect)) with respect
to the plan,
``(C) there is no lien in favor of the plan under section
302(d) (as so in effect) or under section 412(n) of such Code
(as so in effect), and
``(D) a distress termination has not been initiated for the
plan under section 4041(c) of the Employee Retirement Income
Security Act of 1974.
``(b) Alternative Additional Funding Charge.--If the plan
sponsor elects the application of this subsection with
respect to the plan, for purposes of applying section 302(d)
of the Employee Retirement Income Security Act of 1974 (as in
effect before the amendments made by this subtitle and
subtitle B) and section 412(l) of the Internal Revenue Code
of 1986 (as so in effect)--
``(1) the deficit reduction contribution under paragraph
(2) of such section 302(d) and paragraph (2) of such section
412(l) for such plan for any applicable plan year, shall be
zero, and
``(2) the additional funding charge under paragraph (1) of
such section 302(d) and paragraph (1) of such section 412(l)
for such plan for any applicable plan year shall be increased
by an amount equal to the installment acceleration amount (as
defined in sections 303(c)(2)(F)(iii)(I) of such Act (as
amended by the American Jobs and Closing Tax Loopholes Act of
2010) and 430(c)(2)(F)(iii)(I) of such Code (as so amended))
with respect to the plan sponsor for such plan year,
determined by treating the later of such plan year or the
first plan year beginning after December 31, 2009, as the
restriction period.
``(c) Application of 15-year Amortization.--If the plan
sponsor elects the application of this subsection with
respect to the plan, for purposes of applying section 302(d)
of such Act (as in effect before the amendments made by this
subtitle and subtitle B) and section 412(l) of such Code (as
so in effect)--
``(1) in the case of the increased unfunded new liability
of the plan, the applicable percentage described in paragraph
(4)(C) of such section 302(d) and paragraph (4)(C) of such
section 412(l) for any pre-effective date plan year beginning
with or after the applicable plan year shall be the ratio
of--
``(A) the annual installments payable in each plan year if
the increased unfunded new liability for such plan year were
amortized in equal installments over the period beginning
with such plan year and ending with the last plan year in the
period of 15 plan years beginning with the applicable plan
year, using an interest rate equal to the third segment rate
described in sections 104(b), 105(b), and 106(b) of this Act,
to
``(B) the increased unfunded new liability for such plan
year,
``(2) in the case of the excess of the unfunded new
liability over the increased unfunded new liability, such
applicable percentage shall be determined without regard to
this section, and
``(3) the additional funding charge with respect to the
plan for a plan year shall be increased by an amount equal to
the installment acceleration amount (as defined in section
303(c)(2)(F)(iii) of such Act (as amended by the American
Jobs and Closing Tax Loopholes Act of 2010 and section
430(c)(2)(F)(iii) of such Code (as so amended)) with respect
to the plan sponsor for such plan year, determined without
regard to subclause (II) of such sections 303(c)(2)(F)(iii)
and 430(c)(2)(F)(iii).
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Applicable plan year.--
``(A) In general.--The term `applicable plan year' with
respect to a plan means, subject to the election of the plan
sponsor under subsection (a), a plan year beginning in 2009,
2010, or 2011.
``(B) Election.--
``(i) In general.--The election described in subsection (a)
shall be made at such times, and in such form and manner, as
shall be prescribed by the Secretary of the Treasury.
``(ii) Reduction in years which may be elected.--The number
of applicable plan years for which an election may be made
under section 303(c)(2)(D) of the Employee Retirement Income
Security Act of 1974 (as amended by the American Jobs and
Closing Tax Loopholes Act of 2010) or section 430(c)(2)(D) of
the Internal Revenue Code of 1986 (as so amended) shall be
reduced by the number of applicable plan years for which an
election under this section is made.
``(C) Allocation of installment acceleration amount for
multiple plan election.--In the case of an election under
this section with respect to 2 or more plans by the same plan
sponsor, the installment acceleration amount shall be
apportioned ratably with respect to such plans in proportion
to the deficit reduction contributions of the plans
determined without regard to subsection (b)(1).
``(2) Plan sponsor.--The term `plan sponsor' shall have the
meaning provided such term in section 303(c)(2)(F)(vi)(I) of
the Employee Retirement Income Security Act of 1974 (as
amended by the American Jobs and Closing Tax Loopholes Act of
2010) and section 430(c)(2)(F)(vi)(I) of the Internal Revenue
Code of 1986 (as so amended).
``(3) Pre-effective date plan year.--The term `pre-
effective date plan year' means, with respect to a plan, any
plan year prior to the first year in which the amendments
made by this subtitle and subtitle B apply to the plan.
``(4) Increased unfunded new liability.--The term
`increased unfunded new liability' means, with respect to a
year, the excess (if any) of the unfunded new liability over
the amount of unfunded new liability determined as if the
value of the plan's assets determined under subsection
302(c)(2) of such Act (as in effect before the amendments
made by this subtitle and subtitle B) and section 412(c)(2)
of such Code (as so in effect) equaled the product of the
current liability of the plan for the year multiplied by the
funded current liability percentage (as defined in section
302(d)(8)(B) of such Act (as so in effect) and 412(l)(8)(B)
of such Code (as so in effect)) of the plan for the second
plan year preceding the first applicable plan year of such
plan for which an election under this section is made.
``(5) Other definitions.--The terms `unfunded new
liability' and `current liability' shall have the meanings
set forth in section 302(d) of such Act (as so in effect) and
section 412(l) of such Code (as so in effect).
``(6) Additional funding charge increase not to exceed
relief.--
``(A) Election under subsection (b).--In the case of an
election under subsection (b), an increase resulting from the
application of subsection (b)(2) in the additional funding
charge with respect to a plan for a plan year shall not
exceed the excess (if any) of--
``(i) the deficit reduction contribution under section
302(d)(2) of such Act (as so in effect) and section 412(l)(2)
of such Code (as so in effect) for such plan year, determined
as if the election had not been made, over
``(ii) the deficit reduction contribution under such
sections for such plan (determined without regard to any
increase under subsection (b)(2)).
``(B) Election under subsection (c).--An increase resulting
from the application of subsection (c)(3) in the additional
funding charge with respect to a plan for a plan year shall
not exceed the excess (if any) of--
``(i) the sum of the deficit reduction contributions under
section 302(d)(2) of such Act (as so in effect) and section
412(l)(2) of such Code (as so in effect) for such plan for
such plan year and for all preceding plan years beginning
with or after the applicable plan year, determined as if the
election had not been made, over
``(ii) the sum of the deficit reduction contributions under
such sections for such plan years (determined without regard
to any increase under subsection (c)(3)).
``(e) Notice.--Not later 30 days after the date of an
election under subsection (a) in connection with a plan, the
plan administrator shall provide notice pursuant to, and
subject to, rules similar to the rules of sections 204(k) of
the Employee Retirement Income Security Act of 1974 (as
amended by the American Jobs and Closing Tax Loopholes Act of
2010) and 4980F(f) of the Internal Revenue Code of 1986 (as
so amended).''.
(b) Eligible Charity Plans.--Section 104 of such Act is
amended--
(1) by striking ``eligible cooperative plan'' wherever it
appears in subsections (a) and (b) and inserting ``eligible
cooperative plan or an eligible charity plan''; and
(2) by adding at the end the following new subsection:
``(d) Eligible Charity Plan Defined.--For purposes of this
section, a plan shall be treated as an eligible charity plan
for a plan year if--
``(1) the plan is maintained by one or more employers
employing employees who are accruing benefits based on
service for the plan year,
``(2) such employees are employed in at least 20 States,
``(3) each such employee (other than a de minimis number of
employees) is employed by an employer described in section
501(c)(3) of such Code and the primary exempt purpose of each
such employer is to provide services with respect to
children, and
``(4) the plan sponsor elects (at such time and in such
form and manner as shall be prescribed by the Secretary of
the Treasury) to be so treated.

Any election under this subsection may be revoked only with
the consent of the Secretary of the Treasury.''.
(c) Regulations.--The Secretary of the Treasury may
prescribe such regulations as may be necessary to carry out
the purposes of the amendments made by this section.
(d) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
apply to plan years beginning on or after January 1, 2009.
(2) Eligible charity plans.--The amendments made by
subsection (b) shall apply to plan years beginning after
December 31, 2009.

SEC. 303. SUSPENSION OF CERTAIN FUNDING LEVEL LIMITATIONS.

(a) Limitations on Benefit Accruals.--Section 203 of the
Worker, Retiree, and Employer Recovery Act of 2008 (Public
Law 110-458; 122 Stat. 5118) is amended--
(1) by striking ``the first plan year beginning during the
period beginning on October 1, 2008, and ending on September
30, 2009'' and inserting ``any plan year beginning during the
period beginning on October 1, 2008, and ending on December
31, 2011'';
(2) by striking ``substituting'' and all that follows
through ``for such plan year'' and inserting ``substituting
for such percentage the plan's adjusted funding target
attainment percentage for the last plan year ending before
September 30, 2009,''; and

[[Page S5011]]

(3) by striking ``for the preceding plan year is greater''
and inserting ``for such last plan year is greater''.
(b) Social Security Level-income Options.--
(1) ERISA amendment.--Section 206(g)(3)(E) of the Employee
Retirement Income Security Act of 1974 is amended by adding
at the end the following new sentence: ``For purposes of
applying clause (i) in the case of payments the annuity
starting date for which occurs on or before December 31,
2011, payments under a social security leveling option shall
be treated as not in excess of the monthly amount paid under
a single life annuity (plus an amount not in excess of a
social security supplement described in the last sentence of
section 204(b)(1)(G)).''.
(2) IRC amendment.--Section 436(d)(5) of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new sentence: ``For purposes of applying
subparagraph (A) in the case of payments the annuity starting
date for which occurs on or before December 31, 2011,
payments under a social security leveling option shall be
treated as not in excess of the monthly amount paid under a
single life annuity (plus an amount not in excess of a social
security supplement described in the last sentence of section
411(a)(9)).''.
(3) Effective date.--
(A) In general.--The amendments made by this subsection
shall apply to annuity payments the annuity starting date for
which occurs on or after January 1, 2011.
(B) Permitted application.--A plan shall not be treated as
failing to meet the requirements of sections 206(g) of the
Employee Retirement Income Security Act of 1974 (as amended
by this subsection) and section 436(d) of the Internal
Revenue Code of 1986 (as so amended) if the plan sponsor
elects to apply the amendments made by this subsection to
payments the annuity starting date for which occurs on or
after the date of the enactment of this Act and before
January 1, 2011.
(c) Application of Credit Balance With Respect to
Limitations on Shutdown Benefits and Unpredictable Contingent
Event Benefits.--With respect to plan years beginning on or
before December 31, 2011, in applying paragraph (5)(C) of
subsection (g) of section 206 of the Employee Retirement
Income Security Act of 1974 and subsection (f)(3) of section
436 of the Internal Revenue Code of 1986 in the case of
unpredictable contingent events (within the meaning of
section 206(g)(1)(C) of such Act and section 436(b)(3) of
such Code) occurring on or after January 1, 2010, the
references, in clause (i) of such paragraph (5)(C) and
subparagraph (A) of such subsection (f)(3), to paragraph
(1)(B) of such subsection (g) and subsection (b)(2) of such
section 436 shall be disregarded.

SEC. 304. LOOKBACK FOR CREDIT BALANCE RULE.

(a) Amendment to Erisa.--Paragraph (3) of section 303(f) of
the Employee Retirement Income Security Act of 1974 is
amended by adding the following at the end thereof:
``(D) Special rule for certain plan years.--
``(i) In general.--For purposes of applying subparagraph
(C) for plan years beginning after June 30, 2009, and on or
before December 31, 2011, the ratio determined under such
subparagraph for the preceding plan year shall be the greater
of--

``(I) such ratio, as determined without regard to this
subparagraph, or
``(II) the ratio for such plan for the plan year beginning
after June 30, 2007, and on or before June 30, 2008, as
determined under rules prescribed by the Secretary of the
Treasury.

``(ii) Special rule.--In the case of a plan for which the
valuation date is not the first day of the plan year--

``(I) clause (i) shall apply to plan years beginning after
December 31, 2008, and on or before December 31, 2010, and
``(II) clause (i)(II) shall apply based on the last plan
year beginning before July 1, 2007, as determined under rules
prescribed by the Secretary of the Treasury.''.

(b) Amendment to Internal Revenue Code of 1986.--Paragraph
(3) of section 430(f) of the Internal Revenue Code of 1986 is
amended by adding the following at the end thereof:
``(D) Special rule for certain plan years.--
``(i) In general.--For purposes of applying subparagraph
(C) for plan years beginning after June 30, 2009, and on or
before December 31, 2011, the ratio determined under such
subparagraph for the preceding plan year shall be the greater
of--

``(I) such ratio, as determined without regard to this
subparagraph, or
``(II) the ratio for such plan for the plan year beginning
after June 30, 2007, and on or before June 30, 2008, as
determined under rules prescribed by the Secretary.

``(ii) Special rule.--In the case of a plan for which the
valuation date is not the first day of the plan year--

``(I) clause (i) shall apply to plan years beginning after
December 31, 2008, and on or before December 31, 2010, and
``(II) clause (i)(II) shall apply based on the last plan
year beginning before July 1, 2007, as determined under rules
prescribed by the Secretary.''.

SEC. 305. INFORMATION REPORTING.

(a) In General.--Section 4010(b) of the Employee Retirement
Security Act of 1974 (29 U.S.C. 1310(b)) is amended by
striking paragraph (1) and inserting the following:
``(1) either of the following requirements are met:
``(A) the funding target attainment percentage (as defined
in subsection (d)(2)(B)) at the end of the preceding plan
year of a plan maintained by the contributing sponsor or any
member of its controlled group is less than 80 percent; or
``(B) the aggregate unfunded vested benefits (as determined
under section 4006(a)(3)(E)(iii)) of plans maintained by the
contributing sponsor and the members of its controlled group
exceed $75,000,000 (disregarding plans with no unfunded
vested benefits);''.
(b) Effective Date.--The amendment made by this section
shall apply to years beginning after 2009.

SEC. 306. ROLLOVER OF AMOUNTS RECEIVED IN AIRLINE CARRIER
BANKRUPTCY.

(a) General Rules.--
(1) Rollover of airline payment amount.--If a qualified
airline employee receives any airline payment amount and
transfers any portion of such amount to a traditional IRA
within 180 days of receipt of such amount (or, if later,
within 180 days of the date of the enactment of this Act),
then such amount (to the extent so transferred) shall be
treated as a rollover contribution described in section
402(c) of the Internal Revenue Code of 1986. A qualified
airline employee making such a transfer may exclude from
gross income the amount transferred, in the taxable year in
which the airline payment amount was paid to the qualified
airline employee by the commercial passenger airline carrier.
(2) Transfer of amounts attributable to airline payment
amount following rollover to roth ira.--A qualified airline
employee who has contributed an airline payment amount to a
Roth IRA that is treated as a qualified rollover contribution
pursuant to section 125 of the Worker, Retiree, and Employer
Recovery Act of 2008 may transfer to a traditional IRA, in a
trustee-to-trustee transfer, all or any part of the
contribution (together with any net income allocable to such
contribution), and the transfer to the traditional IRA will
be deemed to have been made at the time of the rollover to
the Roth IRA, if such transfer is made within 180 days of the
date of the enactment of this Act. A qualified airline
employee making such a transfer may exclude from gross income
the airline payment amount previously rolled over to the Roth
IRA, to the extent an amount attributable to the previous
rollover was transferred to a traditional IRA, in the taxable
year in which the airline payment amount was paid to the
qualified airline employee by the commercial passenger
airline carrier. No amount so transferred to a traditional
IRA may be treated as a qualified rollover contribution with
respect to a Roth IRA within the 5-taxable year period
beginning with the taxable year in which such transfer was
made.
(3) Extension of time to file claim for refund.--A
qualified airline employee who excludes an amount from gross
income in a prior taxable year under paragraph (1) or (2) may
reflect such exclusion in a claim for refund filed within the
period of limitation under section 6511(a) (or, if later,
April 15, 2011).
(b) Treatment of Airline Payment Amounts and Transfers for
Employment Taxes.--For purposes of chapter 21 of the Internal
Revenue Code of 1986 and section 209 of the Social Security
Act, an airline payment amount shall not fail to be treated
as a payment of wages by the commercial passenger airline
carrier to the qualified airline employee in the taxable year
of payment because such amount is excluded from the qualified
airline employee's gross income under subsection (a).
(c) Definitions and Special Rules.--For purposes of this
section--
(1) Airline payment amount.--
(A) In general.--The term ``airline payment amount'' means
any payment of any money or other property which is payable
by a commercial passenger airline carrier to a qualified
airline employee--
(i) under the approval of an order of a Federal bankruptcy
court in a case filed after September 11, 2001, and before
January 1, 2007; and
(ii) in respect of the qualified airline employee's
interest in a bankruptcy claim against the carrier, any note
of the carrier (or amount paid in lieu of a note being
issued), or any other fixed obligation of the carrier to pay
a lump sum amount.

The amount of such payment shall be determined without regard
to any requirement to deduct and withhold tax from such
payment under sections 3102(a) and 3402(a).
(B) Exception.--An airline payment amount shall not include
any amount payable on the basis of the carrier's future
earnings or profits.
(2) Qualified airline employee.--The term ``qualified
airline employee'' means an employee or former employee of a
commercial passenger airline carrier who was a participant in
a defined benefit plan maintained by the carrier which--
(A) is a plan described in section 401(a) of the Internal
Revenue Code of 1986 which includes a trust exempt from tax
under section 501(a) of such Code; and
(B) was terminated or became subject to the restrictions
contained in paragraphs (2) and (3) of section 402(b) of the
Pension Protection Act of 2006.
(3) Traditional ira.--The term ``traditional IRA'' means an
individual retirement

[[Page S5012]]

plan (as defined in section 7701(a)(37) of the Internal
Revenue Code of 1986) which is not a Roth IRA.
(4) Roth ira.--The term ``Roth IRA'' has the meaning given
such term by section 408A(b) of such Code.
(d) Surviving Spouse.--If a qualified airline employee died
after receiving an airline payment amount, or if an airline
payment amount was paid to the surviving spouse of a
qualified airline employee in respect of the qualified
airline employee, the surviving spouse of the qualified
airline employee may take all actions permitted under section
125 of the Worker, Retiree and Employer Recovery Act of 2008,
or under this section, to the same extent that the qualified
airline employee could have done had the qualified airline
employee survived.
(e) Effective Date.--This section shall apply to transfers
made after the date of the enactment of this Act with respect
to airline payment amounts paid before, on, or after such
date.

Subtitle B--Multiemployer Plans

SEC. 311. OPTIONAL USE OF 30-YEAR AMORTIZATION PERIODS.

(a) Elective Special Relief Rules.--
(1) ERISA amendment.--Section 304(b) of the Employee
Retirement Income Security Act of 1974 is amended by adding
at the end the following new paragraph:
``(8) Elective special relief rules.--Notwithstanding any
other provision of this subsection--
``(A) Amortization of net investment losses.--
``(i) In general.--The plan sponsor of a multiemployer plan
with respect to which the solvency test under subparagraph
(B) is met may elect to treat the portion of any experience
loss or gain for a plan year that is attributable to the
allocable portion of the net investment losses incurred in
either or both of the first two plan years ending on or after
June 30, 2008, as an experience loss separate from other
experience losses or gains to be amortized in equal annual
installments (until fully amortized) over the period--

``(I) beginning with the plan year for which the allocable
portion is determined, and
``(II) ending with the last plan year in the 30-plan year
period beginning with the plan year following the plan year
in which such net investment loss was incurred.

``(ii) Coordination with extensions.--If an election is
made under clause (i) for any plan year--

``(I) no extension of the amortization period under clause
(i) shall be allowed under subsection (d), and
``(II) if an extension was granted under subsection (d) for
any plan year before the plan year for which the election
under this subparagraph is made, such extension shall not
result in such amortization period exceeding 30 years.

``(iii) Definitions and rules.--For purposes of this
subparagraph--

``(I) Net investment losses.--

``(aa) In general.--The net investment loss incurred by a
plan in a plan year is equal to the excess of--
``(AA) the expected value of the assets as of the end of
the plan year, over
``(BB) the market value of the assets as of the end of the
plan year,

including any difference attributable to a criminally
fraudulent investment arrangement.
``(bb) Expected value.--For purposes of item (aa), the
expected value of the assets as of the end of a plan year is
the excess of--
``(AA) the market value of the assets at the beginning of
the plan year plus contributions made during the plan year,
over
``(BB) disbursements made during the plan year.

The amounts described in subitems (AA) and (BB) shall be
adjusted with interest at the valuation rate to the end of
the plan year.

``(II) Criminally fraudulent investment arrangements.--The
determination as to whether an arrangement is a criminally
fraudulent investment arrangement shall be made under rules
substantially similar to the rules prescribed by the
Secretary of the Treasury for purposes of section 165 of the
Internal Revenue Code of 1986.
``(III) Amount attributable to allocable portion of net
investment loss.--The amount attributable to the allocable
portion of the net investment loss for a plan year shall be
an amount equal to the allocable portion of net investment
loss for the plan year under subclauses (IV) and (V),
increased with interest at the valuation rate determined from
the plan year after the plan year in which the net investment
loss was incurred.
``(IV) Allocable portion of net investment losses.--Except
as provided in subclause (V), the net investment loss
incurred in a plan year shall be allocated among the 5 plan
years following the plan year in which the investment loss is
incurred in accordance with the following table:

``Plan year after the plan year in which the net investment loss was
incurred                     Allocable portion of net investment loss
1st.............................................................\1/2\
2nd.................................................................0
3rd.............................................................\1/6\
4th.............................................................\1/6\
5th.............................................................\1/6\

``(V) Special rule for plans that adopt longer smoother
period.--If a plan sponsor elects an extended smoothing
period for its asset valuation method under subsection
(c)(2)(B), then the allocable portion of net investment loss
for the first two plan years following the plan year the
investment loss is incurred is the same as determined under
subclause (IV), but the remaining \1/2\ of the net investment
loss is allocated ratably over the period beginning with the
third plan year following the plan year the net investment
loss is incurred and ending with the last plan year in the
extended smoothing period.
``(VI) Special rule for overstatement of loss.--If, for a
plan year, there is an experience loss for the plan and the
amount described in subclause (III) exceeds the total amount
of the experience loss for the plan year, then the excess
shall be treated as an experience gain.
``(VII) Special rule in years for which overall experience
is gain.--If, for a plan year, there is no experience loss
for the plan, then, in addition to amortization of net
investment losses under clause (i), the amount described in
subclause (III) shall be treated as an experience gain in
addition to any other experience gain.

``(B) Solvency test.--
``(i) In general.--An election may be made under this
paragraph if the election includes certification by the plan
actuary in connection with the election that the plan is
projected to have a funded percentage at the end of the first
15 plan years that is not less than 100 percent of the funded
percentage for the plan year of the election.
``(ii) Funded percentage.--For purposes of clause (i), the
term `funded percentage' has the meaning provided in section
305(i)(2), except that the value of the plan's assets
referred to in section 305(i)(2)(A) shall be the market value
of such assets.
``(iii) Actuarial assumptions.--In making any certification
under this subparagraph, the plan actuary shall use the same
actuarial estimates, assumptions, and methods as those
applicable for the most recent certification under section
305, except that the plan actuary may take into account
benefit reductions and increases in contribution rates, under
either funding improvement plans adopted under section 305(c)
or under section 432(c) of the Internal Revenue Code of 1986
or rehabilitation plans adopted under section 305(e) or under
section 432(e) of such Code, that the plan actuary reasonably
anticipates will occur without regard to any change in status
of the plan resulting from the election.
``(C) Additional restriction on benefit increases.--If an
election is made under subparagraph (A), then, in addition to
any other applicable restrictions on benefit increases, a
plan amendment which is adopted on or after March 10, 2010,
and which increases benefits may not go into effect during
the period beginning on such date and ending with the second
plan year beginning after such date unless--
``(i) the plan actuary certifies that--

``(I) any such increase is paid for out of additional
contributions not allocated to the plan immediately before
the election to have this paragraph apply to the plan, and
``(II) the plan's funded percentage and projected credit
balances for the first 3 plan years ending on or after such
date are reasonably expected to be at least as high as such
percentage and balances would have been if the benefit
increase had not been adopted, or

``(ii) the amendment is required as a condition of
qualification under part I of subchapter D of chapter 1 of
the Internal Revenue Code of 1986 or to comply with other
applicable law.
``(D) Time, form, and manner of election.--An election
under this paragraph shall be made not later than June 30,
2011, and shall be made in such form and manner as the
Secretary of the Treasury may prescribe.
``(E) Reporting.--A plan sponsor of a plan to which this
paragraph applies shall--
``(i) give notice of such election to participants and
beneficiaries of the plan, and
``(ii) inform the Pension Benefit Guaranty Corporation of
such election in such form and manner as the Pension Benefit
Guaranty Corporation may prescribe.''.
(2) IRC amendment.--Section 431(b) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new paragraph:
``(8) Elective special relief rules.--Notwithstanding any
other provision of this subsection--
``(A) Amortization of net investment losses.--
``(i) In general.--The plan sponsor of a multiemployer plan
with respect to which the solvency test under subparagraph
(B) is met may elect to treat the portion of any experience
loss or gain for a plan year that is attributable to the
allocable portion of the net investment losses incurred in
either or both of the first two plan years ending on or after
June 30, 2008, as an experience loss separate from other
experience losses and gains to be amortized in equal annual
installments (until fully amortized) over the period--

``(I) beginning with the plan year for which the allocable
portion is determined, and
``(II) ending with the last plan year in the 30-plan year
period beginning with the plan year following the plan year
in which such net investment loss was incurred.

``(ii) Coordination with extensions.--If an election is
made under clause (i) for any plan year--

``(I) no extension of the amortization period under clause
(i) shall be allowed under subsection (d), and
``(II) if an extension was granted under subsection (d) for
any plan year before the plan year for which the election
under this

[[Page S5013]]

subparagraph is made, such extension shall not result in such
amortization period exceeding 30 years.

``(iii) Definitions and rules.--For purposes of this
subparagraph--

``(I) Net investment losses.--

``(aa) In general.--The net investment loss incurred by a
plan in a plan year is equal to the excess of--
``(AA) the expected value of the assets as of the end of
the plan year, over
``(BB) the market value of the assets as of the end of the
plan year,

including any difference attributable to a criminally
fraudulent investment arrangement.
``(bb) Expected value.--For purposes of item (aa), the
expected value of the assets as of the end of a plan year is
the excess of--
``(AA) the market value of the assets at the beginning of
the plan year plus contributions made during the plan year,
over
``(BB) disbursements made during the plan year.

The amounts described in subitems (AA) and (BB) shall be
adjusted with interest at the valuation rate to the end of
the plan year.

``(II) Criminally fraudulent investment arrangements.--The
determination as to whether an arrangement is a criminally
fraudulent investment arrangement shall be made under rules
substantially similar to the rules prescribed by the
Secretary for purposes of section 165.
``(III) Amount attributable to allocable portion of net
investment loss.--The amount attributable to the allocable
portion of the net investment loss for a plan year shall be
an amount equal to the allocable portion of net investment
loss for the plan year under subclauses (IV) and (V),
increased with interest at the valuation rate determined from
the plan year after the plan year in which the net investment
loss was incurred.
``(IV) Allocable portion of net investment losses.--Except
as provided in subclause (V), the net investment loss
incurred in a plan year shall be allocated among the 5 plan
years following the plan year in which the investment loss is
incurred in accordance with the following table:

``Plan year after the plan year in which the net investment loss was
incurred                     Allocable portion of net investment loss
1st.............................................................\1/2\
2nd.................................................................0
3rd.............................................................\1/6\
4th.............................................................\1/6\
5th.............................................................\1/6\

``(V) Special rule for plans that adopt longer smoother
period.--If a plan sponsor elects an extended smoothing
period for its asset valuation method under subsection
(c)(2)(B), then the allocable portion of net investment loss
for the first two plan years following the plan year the
investment loss is incurred is the same as determined under
subclause (IV), but the remaining \1/2\ of the net investment
loss is allocated ratably over the period beginning with the
third plan year following the plan year the net investment
loss is incurred and ending with the last plan year in the
extended smoothing period.
``(VI) Special rule for overstatement of loss.--If, for a
plan year, there is an experience loss for the plan and the
amount described in subclause (III) exceeds the total amount
of the experience loss for the plan year, then the excess
shall be treated as an experience gain.
``(VII) Special rule in years for which overall experience
is gain.--If, for a plan year, there is no experience loss
for the plan, then, in addition to amortization of net
investment losses under clause (i), the amount described in
subclause (III) shall be treated as an experience gain in
addition to any other experience gain.

``(B) Solvency test.--
``(i) In general.--An election may be made under this
paragraph if the election includes certification by the plan
actuary in connection with the election that the plan is
projected to have a funded percentage at the end of the first
15 plan years that is not less than 100 percent of the funded
percentage for the plan year of the election.
``(ii) Funded percentage.--For purposes of clause (i), the
term `funded percentage' has the meaning provided in section
432(i)(2), except that the value of the plan's assets
referred to in section 432(i)(2)(A) shall be the market value
of such assets.
``(iii) Actuarial assumptions.--In making any certification
under this subparagraph, the plan actuary shall use the same
actuarial estimates, assumptions, and methods as those
applicable for the most recent certification under section
432, except that the plan actuary may take into account
benefit reductions and increases in contribution rates, under
either funding improvement plans adopted under section 432(c)
or under section 305(c) of the Employee Retirement Income
Security Act of 1974 or rehabilitation plans adopted under
section 432(e) or under section 305(e) of such Act, that the
plan actuary reasonably anticipates will occur without regard
to any change in status of the plan resulting from the
election.
``(C) Additional restriction on benefit increases.--If an
election is made under subparagraph (A), then, in addition to
any other applicable restrictions on benefit increases, a
plan amendment which is adopted on or after March 10, 2010,
and which increases benefits may not go into effect during
the period beginning on such date and ending with the second
plan year beginning after such date unless--
``(i) the plan actuary certifies that--

``(I) any such increase is paid for out of additional
contributions not allocated to the plan immediately before
the election to have this paragraph apply to the plan, and
``(II) the plan's funded percentage and projected credit
balances for the first 3 plan years ending on or after such
date are reasonably expected to be at least as high as such
percentage and balances would have been if the benefit
increase had not been adopted, or

``(ii) the amendment is required as a condition of
qualification under part I or to comply with other applicable
law.
``(D) Time, form, and manner of election.--An election
under this paragraph shall be made not later than June 30,
2011, and shall be made in such form and manner as the
Secretary may prescribe.
``(E) Reporting.--A plan sponsor of a plan to which this
paragraph applies shall--
``(i) give notice of such election to participants and
beneficiaries of the plan, and
``(ii) inform the Pension Benefit Guaranty Corporation of
such election in such form and manner as the Pension Benefit
Guaranty Corporation may prescribe.''.
(b) Asset Smoothing for Multiemployer Plans.--
(1) ERISA amendment.--Section 304(c)(2) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1084(c)(2))
is amended--
(A) by redesignating subparagraph (B) as subparagraph (C);
and
(B) by inserting after subparagraph (A) the following new
subparagraph:
``(B) Extended asset smoothing period for certain
investment losses.--The Secretary of the Treasury shall not
treat the asset valuation method of a multiemployer plan as
unreasonable solely because such method spreads the
difference between expected and actual returns for either or
both of the first 2 plan years ending on or after June 30,
2008, over a period of not more than 10 years. Any change in
valuation method to so spread such difference shall be
treated as approved, but only if, in the case that the plan
sponsor has made an election under subsection (b)(8), any
resulting change in asset value is treated for purposes of
amortization as a net experience loss or gain.''.
(2) IRC amendment.--Section 431(c)(2) of the Internal
Revenue Code of 1986 is amended--
(A) by redesignating subparagraph (B) as subparagraph (C);
and
(B) by inserting after subparagraph (A) the following new
subparagraph:
``(B) Extended asset smoothing period for certain
investment losses.--The Secretary shall not treat the asset
valuation method of a multiemployer plan as unreasonable
solely because such method spreads the difference between
expected and actual returns for either or both of the first 2
plan years ending on or after June 30, 2008, over a period of
not more than 10 years. Any change in valuation method to so
spread such difference shall be treated as approved, but only
if, in the case that the plan sponsor has made an election
under subsection (b)(8), any resulting change in asset value
is treated for purposes of amortization as a net experience
loss or gain.''.
(c) Effective Date and Special Rules.--
(1) Effective date.--The amendments made by this section
shall take effect as of the first day of the first plan year
beginning after June 30, 2008, except that any election a
plan sponsor makes pursuant to this section or the amendments
made thereby that affects the plan's funding standard account
for any plan year beginning before October 1, 2009, shall be
disregarded for purposes of applying the provisions of
section 305 of the Employee Retirement Income Security Act of
1974 and section 432 of the Internal Revenue Code of 1986 to
that plan year.
(2) Deemed approval for certain funding method changes.--In
the case of a multiemployer plan with respect to which an
election has been made under section 304(b)(8) of the
Employee Retirement Income Security Act of 1974 (as amended
by this section) or section 431(b)(8) of the Internal Revenue
Code of 1986 (as so amended)--
(A) any change in the plan's funding method for a plan year
beginning on or after July 1, 2008, and on or before December
31, 2010, from a method that does not establish a base for
experience gains and losses to one that does establish such a
base shall be treated as approved by the Secretary of the
Treasury; and
(B) any resulting funding method change base shall be
treated for purposes of amortization as a net experience loss
or gain.

SEC. 312. OPTIONAL LONGER RECOVERY PERIODS FOR MULTIEMPLOYER
PLANS IN ENDANGERED OR CRITICAL STATUS.

(a) ERISA Amendments.--
(1) Funding improvement period.--Section 305(c)(4) of the
Employee Retirement Income Security Act of 1974 is amended--
(A) by redesignating subparagraphs (C) and (D) as
subparagraphs (D) and (E), respectively; and
(B) by inserting after subparagraph (B) the following new
subparagraph:
``(C) Election to extend period.--The plan sponsor of an
endangered or seriously endangered plan may elect to extend
the applicable funding improvement period by up to 5 years,
reduced by any extension of the period previously elected
pursuant to section 205 of the Worker, Retiree and Employer
Relief Act of 2008. Such an election shall be made not later
than June 30, 2011, and in

[[Page S5014]]

such form and manner as the Secretary of the Treasury may
prescribe.''.
(2) Rehabilitation period.--Section 305(e)(4) of such Act
is amended--
(A) by redesignating subparagraph (B) as subparagraph (C);
(B) in last sentence of subparagraph (A), by striking
``subparagraph (B)'' each place it appears and inserting
``subparagraph (C)''; and
(C) by inserting after subparagraph (A) the following new
subparagraph:
``(B) Election to extend period.--The plan sponsor of a
plan in critical status may elect to extend the
rehabilitation period by up to five years, reduced by any
extension of the period previously elected pursuant to
section 205 of the Worker, Retiree and Employer Relief Act of
2008. Such an election shall be made not later than June 30,
2011, and in such form and manner as the Secretary of the
Treasury may prescribe.''.
(b) IRC Amendments.--
(1) Funding improvement period.--Section 432(c)(4) of the
Internal Revenue Code of 1986 is amended--
(A) by redesignating subparagraphs (C) and (D) as
subparagraphs (D) and (E), respectively; and
(B) by inserting after subparagraph (B) the following new
subparagraph:
``(C) Election to extend period.--The plan sponsor of an
endangered or seriously endangered plan may elect to extend
the applicable funding improvement period by up to 5 years,
reduced by any extension of the period previously elected
pursuant to section 205 of the Worker, Retiree and Employer
Relief Act of 2008. Such an election shall be made not later
than June 30, 2011, and in such form and manner as the
Secretary may prescribe.''.
(2) Rehabilitation period.--Section 432(e)(4) of such Code
is amended--
(A) by redesignating subparagraph (B) as subparagraph (C);
(B) in last sentence of subparagraph (A), by striking
``subparagraph (B)'' each place it appears and inserting
``subparagraph (C)''; and
(C) by inserting after subparagraph (A) the following new
subparagraph:
``(B) Election to extend period.--The plan sponsor of a
plan in critical status may elect to extend the
rehabilitation period by up to five years, reduced by any
extension of the period previously elected pursuant to
section 205 of the Worker, Retiree and Employer Relief Act of
2008. Such an election shall be made not later than June 30,
2011, and in such form and manner as the Secretary may
prescribe.''.
(c) Effective Date.--The amendments made by this section
shall apply with respect to funding improvement periods and
rehabilitation periods in connection with funding improvement
plans and rehabilitation plans adopted or updated on or after
the date of the enactment of this Act.

SEC. 313. MODIFICATION OF CERTAIN AMORTIZATION EXTENSIONS
UNDER PRIOR LAW.

(a) In General.--In the case of an amortization extension
that was granted to a multiemployer plan under the terms of
section 304 of the Employee Retirement Income Security Act of
1974 (as in effect immediately prior to enactment of the
Pension Protection Act of 2006) or section 412(e) of the
Internal Revenue Code (as so in effect), the determination of
whether any financial condition on the amortization extension
is satisfied shall be made by assuming that for any plan year
that contains some or all of the period beginning June 30,
2008, and ending October 31, 2008, the actual rate of return
on the plan assets was equal to the interest rate used for
purposes of charging or crediting the funding standard
account in such plan year, unless the plan sponsor elects
otherwise in such form and manner as shall be prescribed by
the Secretary of Treasury.
(b) Revocation of Amortization Extensions.--The plan
sponsor of a multiemployer plan may, in such form and manner
and after such notice as may be prescribed by the Secretary,
revoke any amortization extension described in subsection
(a), effective for plan years following the date of the
revocation.

SEC. 314. ALTERNATIVE DEFAULT SCHEDULE FOR PLANS IN
ENDANGERED OR CRITICAL STATUS.

(a) ERISA Amendments.--
(1) Endangered status.--Section 305(c)(7) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1085(c)(7))
is amended by adding at the end the following new
subparagraph:
``(D) Alternative default schedule.--
``(i) In general.--A plan sponsor may, for purposes of this
paragraph, designate an alternative schedule of contribution
rates and related benefit changes meeting the requirements of
clause (ii) as the default schedule, in lieu of the default
schedule referred to in subparagraph (A).
``(ii) Requirements.--An alternative schedule designated
pursuant to clause (i) meets the requirements of this clause
if such schedule has been adopted in collective bargaining
agreements covering at least 75 percent of the active
participants as of the date of the designation.''.
(2) Critical status.--Section 305(e)(3) of such Act (29
U.S.C. 1085(e)(3)) is amended by adding at the end the
following new subparagraph:
``(D) Alternative default schedule.--
``(i) In general.--A plan sponsor may, for purposes of
subparagraph (C), designate an alternative schedule of
contribution rates and related benefit changes meeting the
requirements of clause (ii) as the default schedule, in lieu
of the default schedule referred to in subparagraph (C)(i).
``(ii) Requirements.--An alternative schedule designated
pursuant to clause (i) meets the requirements of this clause
if such schedule has been adopted in collective bargaining
agreements covering at least 75 percent of the active
participants as of the date of the designation.''.
(b) Internal Revenue Code Amendments.--
(1) Endangered status.--Section 432(c)(7) of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new subparagraph:
``(C) Alternative default schedule.--
``(i) In general.--A plan sponsor may, for purposes of this
paragraph, designate an alternative schedule of contribution
rates and related benefit changes meeting the requirements of
clause (ii) as the default schedule, in lieu of the default
schedule referred to in subparagraph (A).
``(ii) Requirements.--An alternative schedule designated
pursuant to clause (i) meets the requirements of this clause
if such schedule has been adopted in collective bargaining
agreements covering at least 75 percent of the active
participants as of the date of the designation.''.
(2) Critical status.--Section 432(e)(3) of such Code is
amended by adding at the end the following new subparagraph:
``(D) Alternative default schedule.--
``(i) In general.--A plan sponsor may, for purposes of
subparagraph (C), designate an alternative schedule of
contribution rates and related benefit changes meeting the
requirements of clause (ii) as the default schedule, in lieu
of the default schedule referred to in subparagraph (C)(i).
``(ii) Requirements.--An alternative schedule designated
pursuant to clause (i) meets the requirements of this clause
if such schedule has been adopted in collective bargaining
agreements covering at least 75 percent of the active
participants as of the date of the designation.''.
(c) Effective Date.--The amendments made by this section
shall apply to designations of default schedules by plan
sponsors on or after the date of the enactment of this Act.
(d) Cross-reference.--For sunset of the amendments made by
this section, see section 221(c) of the Pension Protection
Act of 2006.

SEC. 315. TRANSITION RULE FOR CERTIFICATIONS OF PLAN STATUS.

(a) In General.--A plan actuary shall not be treated as
failing to meet the requirements of section 305(b)(3)(A) of
the Employee Retirement Income Security Act of 1974 and
section 432(b)(3)(A) of the Internal Revenue Code of 1986 in
connection with a certification required under such sections
the deadline for which is after the date of the enactment of
this Act if the plan actuary makes such certification at any
time earlier than 75 days after the date of the enactment of
this Act.
(b) Revision of Prior Certification.--
(1) In general.--If--
(A) a plan sponsor makes an election under section
304(b)(8) of the Employee Retirement Income Security Act of
1974 and section 431(b)(8) of the Internal Revenue Code of
1986, or under section 304(c)(2)(B) of such Act and section
432(c)(2)(B) such Code, with respect to a plan for a plan
year beginning on or after October 1, 2009; and
(B) the plan actuary's certification of the plan status for
such plan year (hereinafter in this subsection referred to as
``original certification'') did not take into account any
election so made,

then the plan sponsor may direct the plan actuary to make a
new certification with respect to the plan for the plan year
which takes into account such election (hereinafter in this
subsection referred to as ``new certification'') if the
plan's status under section 305 of such Act and section 432
of such Code would change as a result of such election. Any
such new certification shall be treated as the most recent
certification referred to in section 304(b)(3)(B)(iii) of
such Act and section 431(b)(8)(B)(iii) of such Code.
(2) Due date for new certification.--Any such new
certification shall be made pursuant to section 305(b)(3) of
such Act and section 432(b)(3) of such Code; except that any
such new certification shall be made not later than 75 days
after the date of the enactment of this Act.
(3) Notice.--
(A) In general.--Except as provided in subparagraph (B),
any such new certification shall be treated as the original
certification for purposes of section 305(b)(3)(D) of such
Act and section 432(b)(3)(D) of such Code.
(B) Notice already provided.--In any case in which notice
has been provided under such sections with respect to the
original certification, not later than 30 days after the new
certification is made, the plan sponsor shall provide notice
of any change in status under rules similar to the rules such
sections.
(4) Effect of change in status.--If a plan ceases to be in
critical status pursuant to the new certification, then the
plan shall, not later than 30 days after the due date
described in paragraph (2), cease any restriction of benefit
payments, and imposition of contribution surcharges, under
section 305 of such Act and section 432 of such Code by
reason of the original certification.

[[Page S5015]]

TITLE IV--REVENUE OFFSETS

Subtitle A--Foreign Provisions

SEC. 401. RULES TO PREVENT SPLITTING FOREIGN TAX CREDITS FROM
THE INCOME TO WHICH THEY RELATE.

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

``SEC. 909. SUSPENSION OF TAXES AND CREDITS UNTIL RELATED
INCOME TAKEN INTO ACCOUNT.

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

before the taxable year in which the related income is taken
into account under this chapter by such section 902
corporation or a domestic corporation which meets the
ownership requirements of subsection (a) or (b) of section
902 with respect to such section 902 corporation.
``(c) Special Rules.--For purposes of this section--
``(1) Application to partnerships, etc.--In the case of a
partnership, subsections (a) and (b) shall be applied at the
partner level. Except as otherwise provided by the Secretary,
a rule similar to the rule of the preceding sentence shall
apply in the case of any S corporation or trust.
``(2) Treatment of foreign taxes after suspension.--In the
case of any foreign income tax not taken into account by
reason of subsection (a) or (b), except as otherwise provided
by the Secretary, such tax shall be so taken into account in
the taxable year referred to in such subsection (other than
for purposes of section 986(a)) as a foreign income tax paid
or accrued in such taxable year.
``(d) Definitions.--For purposes of this section--
``(1) Foreign tax credit splitting event.--There is a
foreign tax credit splitting event with respect to a foreign
income tax if the related income is (or will be) taken into
account under this chapter by a covered person.
``(2) Foreign income tax.--The term `foreign income tax'
means any income, war profits, or excess profits tax paid or
accrued to any foreign country or to any possession of the
United States.
``(3) Related income.--The term `related income' means,
with respect to any portion of any foreign income tax, the
income (or, as appropriate, earnings and profits) to which
such portion of foreign income tax relates.
``(4) Covered person.--The term `covered person' means,
with respect to any person who pays or accrues a foreign
income tax (hereafter in this paragraph referred to as the
`payor')--
``(A) any entity in which the payor holds, directly or
indirectly, at least a 10 percent ownership interest
(determined by vote or value),
``(B) any person which holds, directly or indirectly, at
least a 10 percent ownership interest (determined by vote or
value) in the payor,
``(C) any person which bears a relationship to the payor
described in section 267(b) or 707(b), and
``(D) any other person specified by the Secretary for
purposes of this paragraph.
``(5) Section 902 corporation.--The term `section 902
corporation' means any foreign corporation with respect to
which one or more domestic corporations meets the ownership
requirements of subsection (a) or (b) of section 902.
``(e) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or appropriate
to carry out the purposes of this section, including
regulations or other guidance which provides--
``(1) appropriate exceptions from the provisions of this
section, and
``(2) for the proper application of this section with
respect to hybrid instruments.''.
(b) Clerical Amendment.--The table of sections for subpart
A of part III of subchapter N of chapter 1 is amended by
adding at the end the following new item:

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

(c) Effective Date.--The amendments made by this section
shall apply to--
(1) foreign income taxes (as defined in section 909(d) of
the Internal Revenue Code of 1986, as added by this section)
paid or accrued after May 20, 2010; and
(2) foreign income taxes (as so defined) paid or accrued by
a section 902 corporation (as so defined) on or before such
date (and not deemed paid under section 902(a) or 960 of such
Code on or before such date), but only for purposes of
applying sections 902 and 960 with respect to periods after
such date.

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

SEC. 402. DENIAL OF FOREIGN TAX CREDIT WITH RESPECT TO
FOREIGN INCOME NOT SUBJECT TO UNITED STATES
TAXATION BY REASON OF COVERED ASSET
ACQUISITIONS.

(a) In General.--Section 901 is amended by redesignating
subsection (m) as subsection (n) and by inserting after
subsection (l) the following new subsection:
``(m) Denial of Foreign Tax Credit With Respect to Foreign
Income Not Subject to United States Taxation by Reason of
Covered Asset Acquisitions.--
``(1) In general.--In the case of a covered asset
acquisition, the disqualified portion of any foreign income
tax determined with respect to the income or gain
attributable to the relevant foreign assets--
``(A) shall not be taken into account in determining the
credit allowed under subsection (a), and
``(B) in the case of a foreign income tax paid by a section
902 corporation (as defined in section 909(d)(5)), shall not
be taken into account for purposes of section 902 or 960.
``(2) Covered asset acquisition.--For purposes of this
section, the term `covered asset acquisition' means--
``(A) a qualified stock purchase (as defined in section
338(d)(3)) to which section 338(a) applies,
``(B) any transaction which--
``(i) is treated as an acquisition of assets for purposes
of this chapter, and
``(ii) is treated as the acquisition of stock of a
corporation (or is disregarded) for purposes of the foreign
income taxes of the relevant jurisdiction,
``(C) any acquisition of an interest in a partnership which
has an election in effect under section 754, and
``(D) to the extent provided by the Secretary, any other
similar transaction.
``(3) Disqualified portion.--For purposes of this section--
``(A) In general.--The term `disqualified portion' means,
with respect to any covered asset acquisition, for any
taxable year, the ratio (expressed as a percentage) of--
``(i) the aggregate basis differences (but not below zero)
allocable to such taxable year under subparagraph (B) with
respect to all relevant foreign assets, divided by
``(ii) the income on which the foreign income tax referred
to in paragraph (1) is determined (or, if the taxpayer fails
to substantiate such income to the satisfaction of the
Secretary, such income shall be determined by dividing the
amount of such foreign income tax by the highest marginal tax
rate applicable to such income in the relevant jurisdiction).
``(B) Allocation of basis difference.--For purposes of
subparagraph (A)(i)--
``(i) In general.--The basis difference with respect to any
relevant foreign asset shall be allocated to taxable years
using the applicable cost recovery method under this chapter.
``(ii) Special rule for disposition of assets.--Except as
otherwise provided by the Secretary, in the case of the
disposition of any relevant foreign asset--

``(I) the basis difference allocated to the taxable year
which includes the date of such disposition shall be the
excess of the basis difference with respect to such asset
over the aggregate basis difference with respect to such
asset which has been allocated under clause (i) to all prior
taxable years, and
``(II) no basis difference with respect to such asset shall
be allocated under clause (i) to any taxable year thereafter.

``(C) Basis difference.--
``(i) In general.--The term `basis difference' means, with
respect to any relevant foreign asset, the excess of--

``(I) the adjusted basis of such asset immediately after
the covered asset acquisition, over
``(II) the adjusted basis of such asset immediately before
the covered asset acquisition.

``(ii) Built-in loss assets.--In the case of a relevant
foreign asset with respect to which the amount described in
clause (i)(II) exceeds the amount described in clause (i)(I),
such excess shall be taken into account under this subsection
as a basis difference of a negative amount.
``(iii) Special rule for section 338 elections.--In the
case of a covered asset acquisition described in paragraph
(2)(A), the covered asset acquisition shall be treated for
purposes of this subparagraph as occurring at the close of
the acquisition date (as defined in section 338(h)(2)).
``(4) Relevant foreign assets.--For purposes of this
section, the term `relevant foreign asset' means, with
respect to any covered asset acquisition, any asset
(including any goodwill, going concern value, or other
intangible) with respect to such acquisition if income,
deduction, gain, or loss attributable to such asset is taken
into account in determining the foreign income tax referred
to in paragraph (1).
``(5) Foreign income tax.--For purposes of this section,
the term `foreign income tax' means any income, war profits,
or excess profits tax paid or accrued to any foreign country
or to any possession of the United States.
``(6) Taxes allowed as a deduction, etc.--Sections 275 and
78 shall not apply to any tax which is not allowable as a
credit under subsection (a) by reason of this subsection.
``(7) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or appropriate
to carry out the purposes of this subsection, including to
exempt from the application of this subsection certain
covered asset acquisitions, and relevant foreign assets with
respect to which the basis difference is de minimis.''.
(b) Effective Date.--

[[Page S5016]]

(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to covered asset
acquisitions (as defined in section 901(m)(2) of the Internal
Revenue Code of 1986, as added by this section) after--
(A) May 20, 2010, if the transferor and the transferee are
related; and
(B) the date of the enactment of this Act in any other
case.
(2) Transition rule.--The amendments made by this section
shall not apply to any covered asset acquisition (as so
defined) with respect to which the transferor and the
transferee are not related if such acquisition is--
(A) made pursuant to a written agreement which was binding
on May 20, 2010, and at all times thereafter,
(B) described in a ruling request submitted to the Internal
Revenue Service on or before such date; or
(C) described on or before such date in a public
announcement or in a filing with the Securities and Exchange
Commission.
(3) Related persons.--For purposes of this subsection, a
person shall be treated as related to another person if the
relationship between such persons is described in section 267
or 707(b) of the Internal Revenue Code of 1986.

SEC. 403. SEPARATE APPLICATION OF FOREIGN TAX CREDIT
LIMITATION, ETC., TO ITEMS RESOURCED UNDER
TREATIES.

(a) In General.--Subsection (d) of section 904 is amended
by redesignating paragraph (6) as paragraph (7) and by
inserting after paragraph (5) the following new paragraph:
``(6) Separate application to items resourced under
treaties.--
``(A) In general.--If--
``(i) without regard to any treaty obligation of the United
States, any item of income would be treated as derived from
sources within the United States,
``(ii) under a treaty obligation of the United States, such
item would be treated as arising from sources outside the
United States, and
``(iii) the taxpayer chooses the benefits of such treaty
obligation,

subsections (a), (b), and (c) of this section and sections
902, 907, and 960 shall be applied separately with respect to
each such item.
``(B) Coordination with other provisions.--This paragraph
shall not apply to any item of income to which subsection
(h)(10) or section 865(h) applies.
``(C) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or appropriate
to carry out the purposes of this paragraph, including
regulations or other guidance which provides that related
items of income may be aggregated for purposes of this
paragraph.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.

SEC. 404. LIMITATION ON THE AMOUNT OF FOREIGN TAXES DEEMED
PAID WITH RESPECT TO SECTION 956 INCLUSIONS.

(a) In General.--Section 960 is amended by adding at the
end the following new subsection:
``(c) Limitation With Respect to Section 956 Inclusions.--
``(1) In general.--If there is included under section
951(a)(1)(B) in the gross income of a domestic corporation
any amount attributable to the earnings and profits of a
foreign corporation which is a member of a qualified group
(as defined in section 902(b)) with respect to the domestic
corporation, the amount of any foreign income taxes deemed to
have been paid during the taxable year by such domestic
corporation under section 902 by reason of subsection (a)
with respect to such inclusion in gross income shall not
exceed the amount of the foreign income taxes which would
have been deemed to have been paid during the taxable year by
such domestic corporation if cash in an amount equal to the
amount of such inclusion in gross income were distributed as
a series of distributions (determined without regard to any
foreign taxes which would be imposed on an actual
distribution) through the chain of ownership which begins
with such foreign corporation and ends with such domestic
corporation.
``(2) Authority to prevent abuse.--The Secretary shall
issue such regulations or other guidance as is necessary or
appropriate to carry out the purposes of this subsection,
including regulations or other guidance which prevent the
inappropriate use of the foreign corporation's foreign income
taxes not deemed paid by reason of paragraph (1).''.
(b) Effective Date.--The amendment made by this section
shall apply to acquisitions of United States property (as
defined in section 956(c) of the Internal Revenue Code of
1986) after May 20, 2010.

SEC. 405. SPECIAL RULE WITH RESPECT TO CERTAIN REDEMPTIONS BY
FOREIGN SUBSIDIARIES.

(a) In General.--Paragraph (5) of section 304(b) is amended
by redesignating subparagraph (B) as subparagraph (C) and by
inserting after subparagraph (A) the following new
subparagraph:
``(B) Special rule in case of foreign acquiring
corporation.--In the case of any acquisition to which
subsection (a) applies in which the acquiring corporation is
a foreign corporation, no earnings and profits shall be taken
into account under paragraph (2)(A) (and subparagraph (A)
shall not apply) if more than 50 percent of the dividends
arising from such acquisition (determined without regard to
this subparagraph) would not--
``(i) be subject to tax under this chapter for the taxable
year in which the dividends arise, or
``(ii) be includible in the earnings and profits of a
controlled foreign corporation (as defined in section 957 and
without regard to section 953(c)).''.
(b) Effective Date.--The amendments made by this section
shall apply to acquisitions after May 20, 2010.

SEC. 406. MODIFICATION OF AFFILIATION RULES FOR PURPOSES OF
RULES ALLOCATING INTEREST EXPENSE.

(a) In General.--Subparagraph (A) of section 864(e)(5) is
amended by adding at the end the following: ``Notwithstanding
the preceding sentence, a foreign corporation shall be
treated as a member of the affiliated group if--
``(i) more than 50 percent of the gross income of such
foreign corporation for the taxable year is effectively
connected with the conduct of a trade or business within the
United States, and
``(ii) at least 80 percent of either the vote or value of
all outstanding stock of such foreign corporation is owned
directly or indirectly by members of the affiliated group
(determined with regard to this sentence).''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.

SEC. 407. TERMINATION OF SPECIAL RULES FOR INTEREST AND
DIVIDENDS RECEIVED FROM PERSONS MEETING THE 80-
PERCENT FOREIGN BUSINESS REQUIREMENTS.

(a) In General.--Paragraph (1) of section 861(a) is amended
by striking subparagraph (A) and by redesignating
subparagraphs (B) and (C) as subparagraphs (A) and (B),
respectively.
(b) Grandfather Rule With Respect to Withholding on
Interest and Dividends Received From Persons Meeting the 80-
percent Foreign Business Requirements.--
(1) In general.--Subparagraph (B) of section 871(i)(2) is
amended to read as follows:
``(B) The active foreign business percentage of--
``(i) any dividend paid by an existing 80/20 company, and
``(ii) any interest paid by an existing 80/20 company.''.
(2) Definitions and special rules.--Section 871 is amended
by redesignating subsections (l) and (m) as subsections (m)
and (n), respectively, and by inserting after subsection (k)
the following new subsection:
``(l) Rules Relating to Existing 80/20 Companies.--For
purposes of this subsection and subsection (i)(2)(B)--
``(1) Existing 80/20 company.--
``(A) In general.--The term `existing 80/20 company' means
any corporation if--
``(i) such corporation met the 80-percent foreign business
requirements of section 861(c)(1) (as in effect before the
enactment of this subsection) for such corporation's last
taxable year beginning before January 1, 2011,
``(ii) such corporation meets the 80-percent foreign
business requirements of subparagraph (B) with respect to
each taxable year after the taxable year referred to in
clause (i), and
``(iii) there has not been an addition of a substantial
line of business with respect to such corporation after the
date of the enactment of this subsection.
``(B) Foreign business requirements.--
``(i) In general.--A corporation meets the 80-percent
foreign business requirements of this subparagraph if it is
shown to the satisfaction of the Secretary that at least 80
percent of the gross income from all sources of such
corporation for the testing period is active foreign business
income.
``(ii) Active foreign business income.--For purposes of
clause (i), the term `active foreign business income' means
gross income which--

``(I) is derived from sources outside the United States (as
determined under this subchapter), and
``(II) is attributable to the active conduct of a trade or
business in a foreign country or possession of the United
States.

``(iii) Testing period.--For purposes of this subsection,
the term `testing period' means the 3-year period ending with
the close of the taxable year of the corporation preceding
the payment (or such part of such period as may be
applicable). If the corporation has no gross income for such
3-year period (or part thereof), the testing period shall be
the taxable year in which the payment is made.
``(iv) Transition rule.--In the case of a testing period
which includes a taxable year beginning before January 1,
2011, for purposes of determining whether a corporation meets
the 80 percent foreign business requirements of this
subparagraph for such taxable year, the requirements of
subparagraphs (A) and (B) of section 861(c)(1) (as in effect
before the enactment of this subsection) shall apply in lieu
of clause (i) to such taxable years .
``(2) Active foreign business percentage.--The term `active
foreign business percentage' means, with respect to any
existing 80/20 company, the percentage which--
``(A) the active foreign business income of such company
for the testing period, is of
``(B) the gross income of such company for the testing
period from all sources.

[[Page S5017]]

``(3) Aggregation rules.--For purposes of applying
paragraph (1) (other than subparagraphs (A)(i) and (B)(iv)
thereof) and paragraph (2)--
``(A) In general.--The corporation referred to in paragraph
(1)(A) and all of such corporation's subsidiaries shall be
treated as one corporation.
``(B) Subsidiaries.--For purposes of subparagraph (A), the
term `subsidiary' means any corporation in which the
corporation referred to in subparagraph (A) owns (directly or
indirectly) stock meeting the requirements of section
1504(a)(2) (determined by substituting `50 percent' for `80
percent' each place it appears and without regard to section
1504(b)(3)).
``(4) Regulations.--The Secretary may issue such
regulations or other guidance as is necessary or appropriate
to carry out the purposes of this section, including
regulations or other guidance which provide for the proper
application of the aggregation rules described in paragraph
(3).''.
(c) Conforming Amendments.--
(1) Section 861 is amended by striking subsection (c) and
by redesignating subsections (d), (e), and (f) as subsections
(c), (d), and (e), respectively.
(2) Paragraph (9) of section 904(h) is amended to read as
follows:
``(9) Treatment of certain domestic corporations.--In the
case of any dividend treated as not from sources within the
United States under section 861(a)(2)(A), the corporation
paying such dividend shall be treated for purposes of this
subsection as a United States-owned foreign corporation.''.
(3) Subsection (c) of section 2104 is amended in the last
sentence by striking ``or to a debt obligation of a domestic
corporation'' and all that follows and inserting a period.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2010.
(2) Grandfather rule for outstanding debt obligations.--
(A) In general.--The amendments made by this section shall
not apply to payments of interest on obligations issued
before the date of the enactment of this Act.
(B) Exception for related party debt.--Subparagraph (A)
shall not apply to any interest which is payable to a related
person (determined under rules similar to the rules of
section 954(d)(3)).
(C) Significant modifications treated as new issues.--For
purposes of subparagraph (A), a significant modification of
the terms of any obligation (including any extension of the
term of such obligation) shall be treated as a new issue.

SEC. 408. SOURCE RULES FOR INCOME ON GUARANTEES.

(a) Amounts Sourced Within the United States.--Subsection
(a) of section 861 is amended by adding at the end the
following new paragraph:
``(9) Guarantees.--Amounts received, directly or
indirectly, from--
``(A) a noncorporate resident or domestic corporation for
the provision of a guarantee of any indebtedness of such
resident or corporation, or
``(B) any foreign person for the provision of a guarantee
of any indebtedness of such person, if such amount is
connected with income which is effectively connected (or
treated as effectively connected) with the conduct of a trade
or business in the United States.''.
(b) Amounts Sourced Without the United States.--Subsection
(a) of section 862 is amended by striking ``and'' at the end
of paragraph (7), by striking the period at the end of
paragraph (8) and inserting ``; and'', and by adding at the
end the following new paragraph:
``(9) amounts received for the provision of a guarantee of
indebtedness other than amounts which are derived from
sources within the United States as provided in section
861(a)(9).''.
(c) Conforming Amendment.--Clause (ii) of section
864(c)(4)(B) is amended by striking ``dividends or interest''
and inserting ``dividends, interest, or amounts received for
the provision of guarantees of indebtedness''.
(d) Effective Date.--The amendments made by this section
shall apply to guarantees issued after the date of the
enactment of this Act.

SEC. 409. LIMITATION ON EXTENSION OF STATUTE OF LIMITATIONS
FOR FAILURE TO NOTIFY SECRETARY OF CERTAIN
FOREIGN TRANSFERS.

(a) In General.--Paragraph (8) of section 6501(c) is
amended--
(1) by striking ``In the case of any information'' and
inserting the following:
``(A) In general.--In the case of any information''; and
(2) by adding at the end the following:
``(B) Application to failures due to reasonable cause.--If
the failure to furnish the information referred to in
subparagraph (A) is due to reasonable cause and not willful
neglect, subparagraph (A) shall apply only to the item or
items related to such failure.''.
(b) Effective Date.--The amendments made by this section
shall take effect as if included in section 513 of the Hiring
Incentives to Restore Employment Act.

Subtitle B--Personal Service Income Earned in Pass-thru Entities

SEC. 411. PARTNERSHIP INTERESTS TRANSFERRED IN CONNECTION
WITH PERFORMANCE OF SERVICES.

(a) Modification to Election To Include Partnership
Interest in Gross Income in Year of Transfer.--Subsection (c)
of section 83 is amended by redesignating paragraph (4) as
paragraph (5) and by inserting after paragraph (3) the
following new paragraph:
``(4) Partnership interests.--Except as provided by the
Secretary, in the case of any transfer of an interest in a
partnership in connection with the provision of services to
(or for the benefit of) such partnership--
``(A) the fair market value of such interest shall be
treated for purposes of this section as being equal to the
amount of the distribution which the partner would receive if
the partnership sold (at the time of the transfer) all of its
assets at fair market value and distributed the proceeds of
such sale (reduced by the liabilities of the partnership) to
its partners in liquidation of the partnership, and
``(B) the person receiving such interest shall be treated
as having made the election under subsection (b)(1) unless
such person makes an election under this paragraph to have
such subsection not apply.''.
(b) Conforming Amendment.--Paragraph (2) of section 83(b)
is amended by inserting ``or subsection (c)(4)(B)'' after
``paragraph (1)''.
(c) Effective Date.--The amendments made by this section
shall apply to interests in partnerships transferred after
the date of the enactment of this Act.

SEC. 412. INCOME OF PARTNERS FOR PERFORMING INVESTMENT
MANAGEMENT SERVICES TREATED AS ORDINARY INCOME
RECEIVED FOR PERFORMANCE OF SERVICES.

(a) In General.--Part I of subchapter K of chapter 1 is
amended by adding at the end the following new section:

``SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING INVESTMENT
MANAGEMENT SERVICES TO PARTNERSHIP.

``(a) Treatment of Distributive Share of Partnership
Items.--For purposes of this title, in the case of an
investment services partnership interest--
``(1) In general.--Notwithstanding section 702(b)--
``(A) any net income with respect to such interest for any
partnership taxable year shall be treated as ordinary income,
and
``(B) any net loss with respect to such interest for such
year, to the extent not disallowed under paragraph (2) for
such year, shall be treated as an ordinary loss.

All items of income, gain, deduction, and loss which are
taken into account in computing net income or net loss shall
be treated as ordinary income or ordinary loss (as the case
may be).
``(2) Treatment of losses.--
``(A) Limitation.--Any net loss with respect to such
interest shall be allowed for any partnership taxable year
only to the extent that such loss does not exceed the excess
(if any) of--
``(i) the aggregate net income with respect to such
interest for all prior partnership taxable years, over
``(ii) the aggregate net loss with respect to such interest
not disallowed under this subparagraph for all prior
partnership taxable years.
``(B) Carryforward.--Any net loss for any partnership
taxable year which is not allowed by reason of subparagraph
(A) shall be treated as an item of loss with respect to such
partnership interest for the succeeding partnership taxable
year.
``(C) Basis adjustment.--No adjustment to the basis of a
partnership interest shall be made on account of any net loss
which is not allowed by reason of subparagraph (A).
``(D) Prior partnership years.--Any reference in this
paragraph to prior partnership taxable years shall only
include prior partnership taxable years to which this section
applies.
``(3) Net income and loss.--For purposes of this section--
``(A) Net income.--The term `net income' means, with
respect to any investment services partnership interest for
any partnership taxable year, the excess (if any) of--
``(i) all items of income and gain taken into account by
the holder of such interest under section 702 with respect to
such interest for such year, over
``(ii) all items of deduction and loss so taken into
account.
``(B) Net loss.--The term `net loss' means, with respect to
such interest for such year, the excess (if any) of the
amount described in subparagraph (A)(ii) over the amount
described in subparagraph (A)(i).
``(4) Special rule for dividends.--Any dividend taken into
account in determining net income or net loss for purposes of
paragraph (1) shall not be treated as qualified dividend
income for purposes of section 1(h).
``(b) Dispositions of Partnership Interests.--
``(1) Gain.--Any gain on the disposition of an investment
services partnership interest shall be--
``(A) treated as ordinary income, and
``(B) recognized notwithstanding any other provision of
this subtitle.
``(2) Loss.--Any loss on the disposition of an investment
services partnership interest shall be treated as an ordinary
loss to the extent of the excess (if any) of--
``(A) the aggregate net income with respect to such
interest for all partnership taxable years to which this
section applies, over
``(B) the aggregate net loss with respect to such interest
allowed under subsection (a)(2)

[[Page S5018]]

for all partnership taxable years to which this section
applies.
``(3) Election with respect to certain exchanges.--
Paragraph (1)(B) shall not apply to the contribution of an
investment services partnership interest to a partnership in
exchange for an interest in such partnership if--
``(A) the taxpayer makes an irrevocable election to treat
the partnership interest received in the exchange as an
investment services partnership interest, and
``(B) the taxpayer agrees to comply with such reporting and
recordkeeping requirements as the Secretary may prescribe.
``(4) Disposition of portion of interest.--In the case of
any disposition of an investment services partnership
interest, the amount of net loss which otherwise would have
(but for subsection (a)(2)(C)) applied to reduce the basis of
such interest shall be disregarded for purposes of this
section for all succeeding partnership taxable years.
``(5) Distributions of partnership property.--In the case
of any distribution of property by a partnership with respect
to any investment services partnership interest held by a
partner--
``(A) the excess (if any) of--
``(i) the fair market value of such property at the time of
such distribution, over
``(ii) the adjusted basis of such property in the hands of
the partnership,

shall be taken into account as an increase in such partner's
distributive share of the taxable income of the partnership
(except to the extent such excess is otherwise taken into
account in determining the taxable income of the
partnership),
``(B) such property shall be treated for purposes of
subpart B of part II as money distributed to such partner in
an amount equal to such fair market value, and
``(C) the basis of such property in the hands of such
partner shall be such fair market value.

Subsection (b) of section 734 shall be applied without regard
to the preceding sentence. In the case of a taxpayer which
satisfies requirements similar to the requirements of
subparagraphs (A) and (B) of paragraph (4), this paragraph
and paragraph (1)(B) shall not apply to the distribution of a
partnership interest if such distribution is in connection
with a contribution (or deemed contribution) of any property
of the partnership to which section 721 applies pursuant to a
transaction described in paragraph (1)(B) or (2) of section
708(b).
``(6) Application of section 751.--
``(A) In general.--In applying section 751, an investment
services partnership interest shall be treated as an
inventory item.
``(B) Exception for certain dispositions of interests in a
publicly traded partnership.--Except as provided by the
Secretary, this paragraph shall not apply in the case of any
disposition of an interest in a publicly traded partnership
(as defined in section 7704) which is not an investment
services partnership interest in the hands of the person
disposing of such interest.
``(c) Investment Services Partnership Interest.--For
purposes of this section--
``(1) In general.--The term `investment services
partnership interest' means any interest in a partnership
which is held (directly or indirectly) by any person if it
was reasonably expected (at the time that such person
acquired such interest) that such person (or any person
related to such person) would provide (directly or, to the
extent provided by the Secretary, indirectly) a substantial
quantity of any of the following services with respect to
assets held (directly or indirectly) by the partnership:
``(A) Advising as to the advisability of investing in,
purchasing, or selling any specified asset.
``(B) Managing, acquiring, or disposing of any specified
asset.
``(C) Arranging financing with respect to acquiring
specified assets.
``(D) Any activity in support of any service described in
subparagraphs (A) through (C).
``(2) Specified asset.--The term `specified asset' means
securities (as defined in section 475(c)(2) without regard to
the last sentence thereof), real estate held for rental or
investment, interests in partnerships, commodities (as
defined in section 475(e)(2)), or options or derivative
contracts with respect to any of the foregoing.
``(3) Exception for family farms.--The term `specified
asset' shall not include any farm used for farming purposes
if such farm is held by a partnership all of the interests in
which are held (directly or indirectly) by members of the
same family. Terms used in the preceding sentence which are
also used in section 2032A shall have the same meaning as
when used in such section.
``(4) Related persons.--A person shall be treated as
related to another person if the relationship between such
persons is described in section 267 or 707(b).
``(d) Exception for Certain Capital Interests.--
``(1) In general.--In the case of any portion of an
investment services partnership interest which is a qualified
capital interest, all items of income, gain, loss, and
deduction which are allocated to such qualified capital
interest shall not be taken into account under subsection (a)
if--
``(A) allocations of items are made by the partnership to
such qualified capital interest in the same manner as such
allocations are made to other qualified capital interests
held by partners who do not provide any services described in
subsection (c)(1) and who are not related to the partner
holding the qualified capital interest, and
``(B) the allocations made to such other interests are
significant compared to the allocations made to such
qualified capital interest.
``(2) Authority to provide exceptions to allocation
requirements.--To the extent provided by the Secretary in
regulations or other guidance--
``(A) Allocations to portion of qualified capital
interest.--Paragraph (1) may be applied separately with
respect to a portion of a qualified capital interest.
``(B) No or insignificant allocations to nonservice
providers.--In any case in which the requirements of
paragraph (1)(B) are not satisfied, items of income, gain,
loss, and deduction shall not be taken into account under
subsection (a) to the extent that such items are properly
allocable under such regulations or other guidance to
qualified capital interests.
``(C) Allocations to service providers' qualified capital
interests which are less than other allocations.--Allocations
shall not be treated as failing to meet the requirement of
paragraph (1)(A) merely because the allocations to the
qualified capital interest represent a lower return than the
allocations made to the other qualified capital interests
referred to in such paragraph.
``(3) Special rule for changes in services.--In the case of
an interest in a partnership which is not an investment
services partnership interest and which, by reason of a
change in the services with respect to assets held (directly
or indirectly) by the partnership, would (without regard to
the reasonable expectation exception of subsection (c)(1))
have become such an interest--
``(A) notwithstanding subsection (c)(1), such interest
shall be treated as an investment services partnership
interest as of the time of such change, and
``(B) for purposes of this subsection, the qualified
capital interest of the holder of such partnership interest
immediately after such change shall not be less than the fair
market value of such interest (determined immediately before
such change).
``(4) Special rule for tiered partnerships.--Except as
otherwise provided by the Secretary, in the case of tiered
partnerships, all items which are allocated in a manner which
meets the requirements of paragraph (1) to qualified capital
interests in a lower-tier partnership shall retain such
character to the extent allocated on the basis of qualified
capital interests in any upper-tier partnership.
``(5) Exception for no-self-charged carry and management
fee provisions.--Except as otherwise provided by the
Secretary, an interest shall not fail to be treated as
satisfying the requirement of paragraph (1)(A) merely because
the allocations made by the partnership to such interest do
not reflect the cost of services described in subsection
(c)(1) which are provided (directly or indirectly) to the
partnership by the holder of such interest (or a related
person).
``(6) Special rule for dispositions.--In the case of any
investment services partnership interest any portion of which
is a qualified capital interest, subsection (b) shall not
apply to so much of any gain or loss as bears the same
proportion to the entire amount of such gain or loss as--
``(A) the distributive share of gain or loss that would
have been allocated to the qualified capital interest
(consistent with the requirements of paragraph (1)) if the
partnership had sold all of its assets at fair market value
immediately before the disposition, bears to
``(B) the distributive share of gain or loss that would
have been so allocated to the investment services partnership
interest of which such qualified capital interest is a part.
``(7) Qualified capital interest.--For purposes of this
subsection--
``(A) In general.--The term `qualified capital interest'
means so much of a partner's interest in the capital of the
partnership as is attributable to--
``(i) the fair market value of any money or other property
contributed to the partnership in exchange for such interest
(determined without regard to section 752(a)),
``(ii) any amounts which have been included in gross income
under section 83 with respect to the transfer of such
interest, and
``(iii) the excess (if any) of--

``(I) any items of income and gain taken into account under
section 702 with respect to such interest, over
``(II) any items of deduction and loss so taken into
account.

``(B) Adjustment to qualified capital interest.--
``(i) Distributions and losses.--The qualified capital
interest shall be reduced by distributions from the
partnership with respect to such interest and by the excess
(if any) of the amount described in subparagraph (A)(iii)(II)
over the amount described in subparagraph (A)(iii)(I).
``(ii) Special rule for contributions of property.--In the
case of any contribution of property described in
subparagraph (A)(i) with respect to which the fair market
value of such property is not equal to the adjusted basis of
such property immediately before such contribution, proper
adjustments shall be made to the qualified capital interest
to take into account such difference consistent with such
regulations or other guidance as the Secretary may provide.
``(8) Treatment of certain loans.--

[[Page S5019]]

``(A) Proceeds of partnership loans not treated as
qualified capital interest of service providing partners.--
For purposes of this subsection, an investment services
partnership interest shall not be treated as a qualified
capital interest to the extent that such interest is acquired
in connection with the proceeds of any loan or other advance
made or guaranteed, directly or indirectly, by any other
partner or the partnership (or any person related to any such
other partner or the partnership).
``(B) Reduction in allocations to qualified capital
interests for loans from nonservice- providing partners to
the partnership.--For purposes of this subsection, any loan
or other advance to the partnership made or guaranteed,
directly or indirectly, by a partner not providing services
described in subsection (c)(1) to the partnership (or any
person related to such partner) shall be taken into account
in determining the qualified capital interests of the
partners in the partnership.
``(e) Other Income and Gain in Connection With Investment
Management Services.--
``(1) In general.--If--
``(A) a person performs (directly or indirectly) investment
management services for any entity,
``(B) such person holds (directly or indirectly) a
disqualified interest with respect to such entity, and
``(C) the value of such interest (or payments thereunder)
is substantially related to the amount of income or gain
(whether or not realized) from the assets with respect to
which the investment management services are performed,

any income or gain with respect to such interest shall be
treated as ordinary income. Rules similar to the rules of
subsections (a)(4) and (d) shall apply for purposes of this
subsection.
``(2) Definitions.--For purposes of this subsection--
``(A) Disqualified interest.--
``(i) In general.--The term `disqualified interest' means,
with respect to any entity--

``(I) any interest in such entity other than indebtedness,
``(II) convertible or contingent debt of such entity,
``(III) any option or other right to acquire property
described in subclause (I) or (II), and
``(IV) any derivative instrument entered into (directly or
indirectly) with such entity or any investor in such entity.

``(ii) Exceptions.--Such term shall not include--

``(I) a partnership interest,
``(II) except as provided by the Secretary, any interest in
a taxable corporation, and
``(III) except as provided by the Secretary, stock in an S
corporation.

``(B) Taxable corporation.--The term `taxable corporation'
means--
``(i) a domestic C corporation, or
``(ii) a foreign corporation substantially all of the
income of which is--

``(I) effectively connected with the conduct of a trade or
business in the United States, or
``(II) subject to a comprehensive foreign income tax (as
defined in section 457A(d)(2)).

``(C) Investment management services.--The term `investment
management services' means a substantial quantity of any of
the services described in subsection (c)(1).
``(f) Regulations.--The Secretary shall prescribe such
regulations or other guidance as is necessary or appropriate
to carry out the purposes of this section, including
regulations or other guidance to--
``(1) provide modifications to the application of this
section (including treating related persons as not related to
one another) to the extent such modification is consistent
with the purposes of this section,
``(2) prevent the avoidance of the purposes of this
section, and
``(3) coordinate this section with the other provisions of
this title.
``(g) Special Rules for Individuals.--In the case of an
individual--
``(1) In general.--Subsection (a)(1) shall apply only to
the applicable percentage of the net income or net loss
referred to in such subsection.
``(2) Dispositions, etc.--The amount which (but for this
paragraph) would be treated as ordinary income by reason of
subsection (b) or (e) shall be the applicable percentage of
such amount.
``(3) Pro rata allocation to items.--For purposes of
applying subsections (a) and (e), the aggregate amount
treated as ordinary income for any such taxable year shall be
allocated ratably among the items of income, gain, loss, and
deduction taken into account in determining such amount.
``(4) Special rule for recognition of gain.--Gain which
(but for this section) would not be recognized shall be
recognized by reason of subsection (b) only to the extent
that such gain is treated as ordinary income after
application of paragraph (2).
``(5) Coordination with limitation on losses.--For purposes
of applying paragraph (2) of subsection (a) with respect to
any net loss for any taxable year--
``(A) such paragraph shall only apply with respect to the
applicable percentage of such net loss for such taxable year,
``(B) in the case of a prior partnership taxable year
referred to in clause (i) or (ii) of subparagraph (A) of such
paragraph, only the applicable percentage (as in effect for
such prior taxable year) of net income or net loss for such
prior partnership taxable year shall be taken into account,
and
``(C) any net loss carried forward to the succeeding
partnership taxable year under subparagraph (B) of such
paragraph shall--
``(i) be taken into account in such succeeding year without
reduction under this subsection, and
``(ii) in lieu of being taken into account as an item of
loss in such succeeding year, shall be taken into account--

``(I) as an increase in net loss or as a reduction in net
income (including below zero), as the case may be, and
``(II) after any reduction in the amount of such net loss
or net income under this subsection.

A rule similar to the rule of the preceding sentence shall
apply for purposes of subsection (b)(2)(A).
``(6) Coordination with treatment of dividends.--Subsection
(a)(4) shall only apply to the applicable percentage of
dividends described therein.
``(7) Applicable percentage.--For purposes of this
subsection--
``(A) In general.--Except as provided in subparagraph (B),
the term `applicable percentage' means 75 percent.
``(B) Exceptions for sales of interests and assets held at
least 5 years.--
``(i) In general.--The applicable percentage shall be 50
percent with respect to--

``(I) any net income or net loss under subsection (a)(1),
or any income or gain under subsection (e) which is properly
allocable to gain or loss from the sale or exchange of any
asset which has been held at least 5 years, and
``(II) to the extent provided under clause (ii), gain or
loss under subsection (b) on the disposition of an investment
services partnership interest or gain under subsection (e)
with respect to a disqualified interest, but only if such
interest has been held for at least 5 years.

``(ii) Look through in the case of disposition of
interest.--Except as provided by the Secretary, in the case
of a disposition of an interest in an entity described in
clause (i)(II), clause (i) shall be applied only to the
portion of the gain or loss attributable to the assets of
such entity which have been held for at least 5 years, unless
substantially all of such assets have been held for at least
5 years. In the case of tiered entities, the preceding
sentence shall be applied by reference to the assets of such
entities rather than to an interest in such entities.
``(iii) Special rule for section 197 intangible gain of
management entities.--

``(I) In general.--In the case of the disposition of an
investment services partnership interest in a management
entity which has been held for at least 5 years, any section
197 intangible gain with respect to such interest shall be
treated as gain from an asset held for at least 5 years. In
the case of tiered management entities, the holding period
requirement under the preceding sentence shall apply with
respect to interests in each such management entity.
``(II) Valuation burden on the taxpayer.--This clause shall
not apply to any gain from the disposition of an investment
services partnership interest unless the taxpayer establishes
(in such manner as the Secretary shall provide) the amount of
the section 197 intangible gain with respect to such
disposition.

``(C) Management entity.--For purposes of this paragraph,
the term `management entity' means a partnership the
principal activity of which is providing the services
described in subsection (c) with respect to assets held
(directly or indirectly) by such partnership.
``(D) Section 197 intangible gain.--For purposes of this
paragraph--
``(i) In general.--The term `section 197 intangible gain'
means, with respect to any management entity, gain recognized
on the disposition of an investment services partnership
interest in such entity which is attributable to any section
197 intangible (within the meaning of section 197(d)).
``(ii) Value of investment services partnership interest
disregarded.--Except as provided by the Secretary, no portion
of the value of an investment services partnership interest
(other than the interest being disposed of) shall be taken
into account in determining section 197 intangible gain.
``(iii) Limitation.--For purposes of clause (i), gain from
the disposition of an investment services partnership
interest shall in no event be treated as attributable to a
section 197 intangible (within the meaning of section 197(d))
if such gain would be included in the amount of the
distribution which the partner disposing of such interest
would receive if the partnership sold (at the time of the
disposition) all of its assets at fair market value and
distributed the proceeds of such sale (reduced by the
liabilities of the partnership) to its partners in
liquidation of the partnership.
``(iv) Regulations.--The Secretary shall prescribe
regulations or guidance which provide--

``(I) the acceptable valuation methods for purposes of this
subparagraph, except that such methods shall not include any
valuation method which is inconsistent with the method used
by the taxpayer for other purposes (including reporting asset
valuations to partners or marketing the partnership or any
lower-tier partnership to prospective partners) if such
inconsistent valuation method would result in a greater
amount of section 197 intangible gain than would result

[[Page S5020]]

under the valuation method used by the taxpayer for such
other purposes,
``(II) circumstances under which valuations are
sufficiently independent to provide an accurate determination
of fair market value, and
``(III) any information required to be furnished to the
Secretary by the parties to the disposition with respect to
such valuation.

``(h) Cross Reference.--For 40 percent penalty on certain
underpayments due to the avoidance of this section, see
section 6662.''.
(b) Treatment for Purposes of Section 7704.--Subsection (d)
of section 7704 is amended by adding at the end the following
new paragraph:
``(6) Income from investment services partnership interests
not qualified.--
``(A) In general.--Items of income and gain shall not be
treated as qualifying income if such items are treated as
ordinary income by reason of the application of section 710
(relating to special rules for partners providing investment
management services to partnership). The preceding sentence
shall not apply to any item described in paragraph (1)(E) (or
so much of paragraph (1)(F) as relates to paragraph (1)(E)).
``(B) Special rules for certain partnerships.--
``(i) Certain partnerships owned by real estate investment
trusts.--Subparagraph (A) shall not apply in the case of a
partnership which meets each of the following requirements:

``(I) Such partnership is treated as publicly traded under
this section solely by reason of interests in such
partnership being convertible into interests in a real estate
investment trust which is publicly traded.
``(II) 50 percent or more of the capital and profits
interests of such partnership are owned, directly or
indirectly, at all times during the taxable year by such real
estate investment trust (determined with the application of
section 267(c)).
``(III) Such partnership meets the requirements of
paragraphs (2), (3), and (4) of section 856(c).

``(ii) Certain partnerships owning other publicly traded
partnerships.--Subparagraph (A) shall not apply in the case
of a partnership which meets each of the following
requirements:

``(I) Substantially all of the assets of such partnership
consist of interests in one or more publicly traded
partnerships (determined without regard to subsection
(b)(2)).
``(II) Substantially all of the income of such partnership
is ordinary income or section 1231 gain (as defined in
section 1231(a)(3)).

``(C) Transitional rule.--Subparagraph (A) shall not apply
to any taxable year of the partnership beginning before the
date which is 10 years after the date of the enactment of
this paragraph.''.
(c) Imposition of Penalty on Underpayments.--
(1) In general.--Subsection (b) of section 6662 is amended
by inserting after paragraph (7) the following new paragraph:
``(8) The application of subsection (e) of section 710, the
regulations or other guidance prescribed under section 710(f)
to prevent the avoidance of the purposes of section 710, or
the regulations or other guidance prescribed under section
710(g)(7)(D)(iv).''.
(2) Amount of penalty.--
(A) In general.--Section 6662 is amended by adding at the
end the following new subsection:
``(k) Increase in Penalty in Case of Property Transferred
for Investment Management Services.--In the case of any
portion of an underpayment to which this section applies by
reason of subsection (b)(8), subsection (a) shall be applied
with respect to such portion by substituting `40 percent' for
`20 percent'.''.
(B) Conforming amendment.--Subparagraph (B) of section
6662A(e)(2) is amended by striking ``or (i)'' and inserting
``, (i), or (k)''.
(3) Special rules for application of reasonable cause
exception.--Subsection (c) of section 6664 is amended--
(A) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively;
(B) by striking ``paragraph (3)'' in paragraph (5)(A), as
so redesignated, and inserting ``paragraph (4)''; and
(C) by inserting after paragraph (2) the following new
paragraph:
``(3) Special rule for underpayments attributable to
investment management services.--
``(A) In general.--Paragraph (1) shall not apply to any
portion of an underpayment to which section 6662 applies by
reason of subsection (b)(8) unless--
``(i) the relevant facts affecting the tax treatment of the
item are adequately disclosed,
``(ii) there is or was substantial authority for such
treatment, and
``(iii) the taxpayer reasonably believed that such
treatment was more likely than not the proper treatment.
``(B) Rules relating to reasonable belief.--Rules similar
to the rules of subsection (d)(3) shall apply for purposes of
subparagraph (A)(iii).''.
(d) Income and Loss From Investment Services Partnership
Interests Taken Into Account in Determining Net Earnings From
Self-Employment.--
(1) Internal revenue code.--Section 1402(a) is amended by
striking ``and'' at the end of paragraph (16), by striking
the period at the end of paragraph (17) and inserting ``;
and'', and by inserting after paragraph (17) the following
new paragraph:
``(18) notwithstanding the preceding provisions of this
subsection, in the case of any individual engaged in the
trade or business of providing services described in section
710(c)(1) with respect to any entity, any amount treated as
ordinary income or ordinary loss of such individual under
section 710 with respect to such entity shall be taken into
account in determining the net earnings from self-employment
of such individual.''.
(2) Social security act.--Section 211(a) of the Social
Security Act is amended by striking ``and'' at the end of
paragraph (15), by striking the period at the end of
paragraph (16) and inserting ``; and'', and by inserting
after paragraph (16) the following new paragraph:
``(17) Notwithstanding the preceding provisions of this
subsection, in the case of any individual engaged in the
trade or business of providing services described in section
710(c)(1) of the Internal Revenue Code of 1986 with respect
to any entity, any amount treated as ordinary income or
ordinary loss of such individual under section 710 of such
Code with respect to such entity shall be taken into account
in determining the net earnings from self-employment of such
individual.''.
(e) Conforming Amendments.--
(1) Subsection (d) of section 731 is amended by inserting
``section 710(b)(4) (relating to distributions of partnership
property),'' after ``to the extent otherwise provided by''.
(2) Section 741 is amended by inserting ``or section 710
(relating to special rules for partners providing investment
management services to partnership)'' before the period at
the end.
(3) The table of sections for part I of subchapter K of
chapter 1 is amended by adding at the end the following new
item:

``Sec. 710. Special rules for partners providing investment management
services to partnership.''.

(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to taxable years ending after December 31, 2010.
(2) Partnership taxable years which include effective
date.--In applying section 710(a) of the Internal Revenue
Code of 1986 (as added by this section) in the case of any
partnership taxable year which includes December 31, 2010,
the amount of the net income referred to in such section
shall be treated as being the lesser of the net income for
the entire partnership taxable year or the net income
determined by only taking into account items attributable to
the portion of the partnership taxable year which is after
such date.
(3) Dispositions of partnership interests.--Section 710(b)
of the Internal Revenue Code of 1986 (as added by this
section) shall apply to dispositions and distributions after
December 31, 2010.
(4) Other income and gain in connection with investment
management services.--Section 710(e) of such Code (as added
by this section) shall take effect on December 31, 2010.

SEC. 413. EMPLOYMENT TAX TREATMENT OF PROFESSIONAL SERVICE
BUSINESSES.

(a) In General.--Section 1402 is amended by adding at the
end the following new subsection:
``(m) Special Rules for Professional Service Businesses.--
``(1) Shareholders providing services to disqualified s
corporations.--
``(A) In general.--In the case of any disqualified S
corporation, each shareholder of such disqualified S
corporation who provides substantial services with respect to
the professional service business referred to in subparagraph
(C) shall take into account such shareholder's pro rata share
of all items of income or loss described in section 1366
which are attributable to such business in determining the
shareholder's net earnings from self-employment.
``(B) Treatment of family members.--Except as otherwise
provided by the Secretary, the shareholder's pro rata share
of items referred to in subparagraph (A) shall be increased
by the pro rata share of such items of each member of such
shareholder's family (within the meaning of section
318(a)(1)) who does not provide substantial services with
respect to such professional service business.
``(C) Disqualified s corporation.--For purposes of this
subsection, the term `disqualified S corporation' means--
``(i) any S corporation which is a partner in a partnership
which is engaged in a professional service business if
substantially all of the activities of such S corporation are
performed in connection with such partnership, and
``(ii) any other S corporation which is engaged in a
professional service business if 80 percent or more of the
gross income of such business is attributable to service of 3
or fewer shareholders of such corporation.
``(2) Partners.--In the case of any partnership which is
engaged in a professional service business, subsection
(a)(13) shall not apply to any partner who provides
substantial services with respect to such professional
service business.
``(3) Professional service business.--For purposes of this
subsection, the term `professional service business' means
any trade or business (or portion thereof) providing services
in the fields of health, law, lobbying, engineering,
architecture, accounting, actuarial science, performing arts,
consulting,

[[Page S5021]]

athletics, investment advice or management, or brokerage
services.
``(4) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this subsection, including regulations which
prevent the avoidance of the purposes of this subsection
through tiered entities or otherwise.
``(5) Cross reference.--For employment tax treatment of
wages paid to shareholders of S corporations, see subtitle
C.''.
(b) Conforming Amendment.--Section 211 of the Social
Security Act is amended by adding at the end the following
new subsection:
``(l) Special Rules for Professional Service Businesses.--
``(1) Shareholders providing services to disqualified s
corporations.--
``(A) In general.--In the case of any disqualified S
corporation, each shareholder of such disqualified S
corporation who provides substantial services with respect to
the professional service business referred to in subparagraph
(C) shall take into account such shareholder's pro rata share
of all items of income or loss described in section 1366 of
the Internal Revenue Code of 1986 which are attributable to
such business in determining the shareholder's net earnings
from self-employment.
``(B) Treatment of family members.--Except as otherwise
provided by the Secretary of the Treasury, the shareholder's
pro rata share of items referred to in subparagraph (A) shall
be increased by the pro rata share of such items of each
member of such shareholder's family (within the meaning of
section 318(a)(1) of the Internal Revenue Code of 1986) who
does not provide substantial services with respect to such
professional service business.
``(C) Disqualified s corporation.--For purposes of this
subsection, the term `disqualified S corporation' means--
``(i) any S corporation which is a partner in a partnership
which is engaged in a professional service business if
substantially all of the activities of such S corporation are
performed in connection with such partnership, and
``(ii) any other S corporation which is engaged in a
professional service business if 80 percent or more of the
gross income of such business is attributable to service of 3
or fewer shareholders of such corporation.
``(2) Partners.--In the case of any partnership which is
engaged in a professional service business, subsection
(a)(12) shall not apply to any partner who provides
substantial services with respect to such professional
service business.
``(3) Professional service business.--For purposes of this
subsection, the term `professional service business' means
any trade or business (or portion thereof) providing services
in the fields of health, law, lobbying, engineering,
architecture, accounting, actuarial science, performing arts,
consulting, athletics, investment advice or management, or
brokerage services.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2010.

Subtitle C--Corporate Provisions

SEC. 421. TREATMENT OF SECURITIES OF A CONTROLLED CORPORATION
EXCHANGED FOR ASSETS IN CERTAIN
REORGANIZATIONS.

(a) In General.--Section 361 (relating to nonrecognition of
gain or loss to corporations; treatment of distributions) is
amended by adding at the end the following new subsection:
``(d) Special Rules for Transactions Involving Section 355
Distributions.--In the case of a reorganization described in
section 368(a)(1)(D) with respect to which stock or
securities of the corporation to which the assets are
transferred are distributed in a transaction which qualifies
under section 355--
``(1) this section shall be applied by substituting `stock
other than nonqualified preferred stock (as defined in
section 351(g)(2))' for `stock or securities' in subsections
(a) and (b)(1), and
``(2) the first sentence of subsection (b)(3) shall apply
only to the extent that the sum of the money and the fair
market value of the other property transferred to such
creditors does not exceed the adjusted bases of such assets
transferred (reduced by the amount of the liabilities assumed
(within the meaning of section 357(c))).''.
(b) Conforming Amendment.--Paragraph (3) of section 361(b)
is amended by striking the last sentence.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to exchanges
after the date of the enactment of this Act.
(2) Transition rule.--The amendments made by this section
shall not apply to any exchange pursuant to a transaction
which is--
(A) made pursuant to a written agreement which was binding
on March 15, 2010, and at all times thereafter;
(B) described in a ruling request submitted to the Internal
Revenue Service on or before such date; or
(C) described on or before such date in a public
announcement or in a filing with the Securities and Exchange
Commission.

SEC. 422. TAXATION OF BOOT RECEIVED IN REORGANIZATIONS.

(a) In General.--Paragraph (2) of section 356(a) is
amended--
(1) by striking ``If an exchange'' and inserting ``Except
as otherwise provided by the Secretary--
``(A) In general.--If an exchange'';
(2) by striking ``then there shall be'' and all that
follows through ``February 28, 1913'' and inserting ``then
the amount of other property or money shall be treated as a
dividend to the extent of the earnings and profits of the
corporation''; and
(3) by adding at the end the following new subparagraph:
``(B) Certain reorganizations.--In the case of a
reorganization described in section 368(a)(1)(D) to which
section 354(b)(1) applies or any other reorganization
specified by the Secretary, in applying subparagraph (A)--
``(i) the earnings and profits of each corporation which is
a party to the reorganization shall be taken into account,
and
``(ii) the amount which is a dividend (and source thereof)
shall be determined under rules similar to the rules of
paragraphs (2) and (5) of section 304(b).''.
(b) Earnings and Profits.--Paragraph (7) of section 312(n)
is amended by adding at the end the following: ``A similar
rule shall apply to an exchange to which section 356(a)(1)
applies.''.
(c) Conforming Amendment.--Paragraph (1) of section 356(a)
is amended by striking ``then the gain'' and inserting ``then
(except as provided in paragraph (2)) the gain''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to exchanges
after the date of the enactment of this Act.
(2) Transition rule.--The amendments made by this section
shall not apply to any exchange between unrelated persons
pursuant to a transaction which is--
(A) made pursuant to a written agreement which was binding
on May 20, 2010, and at all times thereafter;
(B) described in a ruling request submitted to the Internal
Revenue Service on or before such date; or
(C) described in a public announcement or filing with the
Securities and Exchange Commission on or before such date.
(3) Related persons.--For purposes of this subsection, a
person shall be treated as related to another person if the
relationship between such persons is described in section 267
or 707(b) of the Internal Revenue Code of 1986.

Subtitle D--Other Provisions

SEC. 431. MODIFICATIONS WITH RESPECT TO OIL SPILL LIABILITY
TRUST FUND.

(a) Extension of Application of Oil Spill Liability Trust
Fund Financing Rate.--Paragraph (2) of section 4611(f) is
amended by striking ``December 31, 2017'' and inserting
``December 31, 2020''.
(b) Increase in Oil Spill Liability Trust Fund Financing
Rate.--Subparagraph (B) of section 4611(c)(2) is amended to
read as follows:
``(B) the Oil Spill Liability Trust Fund financing rate is
49 cents a barrel.''.
(c) Increase in Per Incident Limitations on Expenditures.--
Subparagraph (A) of section 9509(c)(2) is amended--
(1) by striking ``$1,000,000,000'' in clause (i) and
inserting ``$5,000,000,000'';
(2) by striking ``$500,000,000'' in clause (ii) and
inserting ``$2,500,000,000''; and
(3) by striking ``$1,000,000,000 per incident, etc'' in the
heading and inserting ``Per incident limitations''.
(d) Effective Date.--
(1) Extension of financing rate.--Except as provided in
paragraph (2), the amendments made by this section shall take
effect on the date of the enactment of this Act.
(2) Increase in financing rate.--The amendment made by
subsection (b) shall apply to crude oil received and
petroleum products entered during calendar quarters beginning
more than 60 days after the date of the enactment of this
Act.

SEC. 432. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

The percentage under paragraph (2) of section 561 of the
Hiring Incentives to Restore Employment Act in effect on the
date of the enactment of this Act is increased by 36
percentage points.

SEC. 433. DENIAL OF DEDUCTION FOR PUNITIVE DAMAGES.

(a) Disallowance of Deduction for Punitive Damages.--
(1) In general.--Section 162(g) (relating to treble damage
payments under the antitrust laws) is amended--
(A) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively,
(B) by striking ``If'' and inserting:
``(1) Treble damages.--If'', and
(C) by adding at the end the following new paragraph:
``(2) Punitive damages.--No deduction shall be allowed
under this chapter for any amount paid or incurred for
punitive damages in connection with any judgment in, or
settlement of, any action. This paragraph shall not apply to
punitive damages described in section 104(c).''.
(2) Conforming amendment.--The heading for section 162(g)
is amended by inserting ``Or Punitive Damages'' after
``Laws''.
(b) Inclusion in Income of Punitive Damages Paid by Insurer
or Otherwise.--
(1) In general.--Part II of subchapter B of chapter 1
(relating to items specifically included in gross income) is
amended by adding at the end the following new section:

``SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR
OTHERWISE.

``Gross income shall include any amount paid to or on
behalf of a taxpayer as insurance or otherwise by reason of
the taxpayer's

[[Page S5022]]

liability (or agreement) to pay punitive damages.''.
(2) Reporting requirements.--Section 6041 (relating to
information at source) is amended by adding at the end the
following new subsection:
``(h) Section To Apply to Punitive Damages Compensation.--
This section shall apply to payments by a person to or on
behalf of another person as insurance or otherwise by reason
of the other person's liability (or agreement) to pay
punitive damages.''.
(3) Conforming amendment.--The table of sections for part
II of subchapter B of chapter 1 is amended by adding at the
end the following new item:

``Sec. 91. Punitive damages compensated by insurance or otherwise.''.

(c) Effective Date.--The amendments made by this section
shall apply to damages paid or incurred after December 31,
2011.

TITLE V--UNEMPLOYMENT, HEALTH, AND OTHER ASSISTANCE

Subtitle A--Unemployment Insurance and Other Assistance

SEC. 501. EXTENSION OF UNEMPLOYMENT INSURANCE PROVISIONS.

(a) In General.--(1) Section 4007 of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304
note) is amended--
(A) by striking ``June 2, 2010'' each place it appears and
inserting ``November 30, 2010'';
(B) in the heading for subsection (b)(2), by striking
``june 2, 2010'' and inserting ``november 30, 2010''; and
(C) in subsection (b)(3), by striking ``November 6, 2010''
and inserting ``April 30, 2011''.
(2) Section 2005 of the Assistance for Unemployed Workers
and Struggling Families Act, as contained in Public Law 111-5
(26 U.S.C. 3304 note; 123 Stat. 444), is amended--
(A) by striking ``June 2, 2010'' each place it appears and
inserting ``December 1, 2010''; and
(B) in subsection (c), by striking ``November 6, 2010'' and
inserting ``May 1, 2011''.
(3) Section 5 of the Unemployment Compensation Extension
Act of 2008 (Public Law 110-449; 26 U.S.C. 3304 note) is
amended by striking ``November 6, 2010'' and inserting
``April 30, 2011''.
(b) Funding.--Section 4004(e)(1) of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304
note) is amended--
(1) in subparagraph (D), by striking ``and'' at the end;
and
(2) by inserting after subparagraph (E) the following:
``(F) the amendments made by section 501(a)(1) of the
American Jobs and Closing Tax Loopholes Act of 2010; and''.
(c) Conditions for Receiving Emergency Unemployment
Compensation.--Section 4001(d)(2) of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304
note) is amended, in the matter preceding subparagraph (A),
by inserting before ``shall apply'' the following:
``(including terms and conditions relating to availability
for work, active search for work, and refusal to accept
work)''.
(d) Effective Date.--The amendments made by this section
shall take effect as if included in the enactment of the
Continuing Extension Act of 2010 (Public Law 111-157).

SEC. 502. COORDINATION OF EMERGENCY UNEMPLOYMENT COMPENSATION
WITH REGULAR COMPENSATION.

(a) Certain Individuals Not Ineligible by Reason of New
Entitlement to Regular Benefits.--Section 4002 of the
Supplemental Appropriations Act, 2008 (Public Law 110-252; 26
U.S.C. 3304 note) is amended by adding at the end the
following:
``(g) Coordination of Emergency Unemployment Compensation
With Regular Compensation.--
``(1) If--
``(A) an individual has been determined to be entitled to
emergency unemployment compensation with respect to a benefit
year,
``(B) that benefit year has expired,
``(C) that individual has remaining entitlement to
emergency unemployment compensation with respect to that
benefit year, and
``(D) that individual would qualify for a new benefit year
in which the weekly benefit amount of regular compensation is
at least either $100 or 25 percent less than the individual's
weekly benefit amount in the benefit year referred to in
subparagraph (A),

then the State shall determine eligibility for compensation
as provided in paragraph (2).
``(2) For individuals described in paragraph (1), the State
shall determine whether the individual is to be paid
emergency unemployment compensation or regular compensation
for a week of unemployment using one of the following
methods:
``(A) The State shall, if permitted by State law, establish
a new benefit year, but defer the payment of regular
compensation with respect to that new benefit year until
exhaustion of all emergency unemployment compensation payable
with respect to the benefit year referred to in paragraph
(1)(A);
``(B) The State shall, if permitted by State law, defer the
establishment of a new benefit year (which uses all the wages
and employment which would have been used to establish a
benefit year but for the application of this paragraph),
until exhaustion of all emergency unemployment compensation
payable with respect to the benefit year referred to in
paragraph(1)(A);
``(C) The State shall pay, if permitted by State law--
``(i) regular compensation equal to the weekly benefit
amount established under the new benefit year, and
``(ii) emergency unemployment compensation equal to the
difference between that weekly benefit amount and the weekly
benefit amount for the expired benefit year; or
``(D) The State shall determine rights to emergency
unemployment compensation without regard to any rights to
regular compensation if the individual elects to not file a
claim for regular compensation under the new benefit year.''.
(b) Effective Date.--The amendment made by this section
shall apply to individuals whose benefit years, as described
in section 4002(g)(1)(B) the Supplemental Appropriations Act,
2008 (Public Law 110-252; 26 U.S.C. 3304 note), as amended by
this section, expire after the date of enactment of this Act.

SEC. 503. EXTENSION OF THE EMERGENCY CONTINGENCY FUND.

(a) In General.--Section 403(c) of the Social Security Act
(42 U.S.C. 603(c)) is amended--
(1) in paragraph (2)(A), by inserting ``, and for fiscal
year 2011, $2,500,000,000'' before ``for payment'';
(2) by striking paragraph (2)(B) and inserting the
following:
``(B) Availability and use of funds.--
``(i) Fiscal years 2009 and 2010.--The amounts appropriated
to the Emergency Fund under subparagraph (A) for fiscal year
2009 shall remain available through fiscal year 2010 and
shall be used to make grants to States in each of fiscal
years 2009 and 2010 in accordance with paragraph (3), except
that the amounts shall remain available through fiscal year
2011 to make grants and payments to States in accordance with
paragraph (3)(C) to cover expenditures to subsidize
employment positions held by individuals placed in the
positions before fiscal year 2011.
``(ii) Fiscal year 2011.--Subject to clause (iii), the
amounts appropriated to the Emergency Fund under subparagraph
(A) for fiscal year 2011 shall remain available through
fiscal year 2012 and shall be used to make grants to States
based on expenditures in fiscal year 2011 for benefits and
services provided in fiscal year 2011 in accordance with the
requirements of paragraph (3).
``(iii) Reservation of funds.--Of the amounts appropriated
to the Emergency Fund under subparagraph (A) for fiscal year
2011, $500,000 shall be placed in reserve for use in fiscal
year 2012, and shall be used to award grants for any
expenditures described in this subsection incurred by States
after September 30, 2011.'';
(3) in paragraph (2)(C), by striking ``2010'' and inserting
``2012'';
(4) in paragraph (3)--
(A) in clause (i) of each of subparagraphs (A), (B), and
(C)--
(i) by striking ``year 2009 or 2010'' and inserting ``years
2009 through 2011'';
(ii) by striking ``and'' at the end of subclause (I);
(iii) by striking the period at the end of subclause (II)
and inserting ``; and''; and
(iv) by adding at the end the following:

``(III) if the quarter is in fiscal year 2011, has provided
the Secretary with such information as the Secretary may find
necessary in order to make the determinations, or take any
other action, described in paragraph (5)(C).''; and

(B) in subparagraph (C), by adding at the end the
following:
``(iv) Limitation on expenditures for subsidized
employment.--An expenditure for subsidized employment shall
be taken into account under clause (ii) only if the
expenditure is used to subsidize employment for--

``(I) a member of a needy family (without regard to whether
the family is receiving assistance under the State program
funded under this part); or
``(II) an individual who has exhausted (or, within 60 days,
will exhaust) all rights to receive unemployment compensation
under Federal and State law, and who is a member of a needy
family.'';

(5) by striking paragraph (5) and inserting the following:
``(5) Limitations on payments; adjustment authority.--
``(A) Fiscal years 2009 and 2010.--The total amount payable
to a single State under subsection (b) and this subsection
for fiscal years 2009 and 2010 combined shall not exceed 50
percent of the annual State family assistance grant.
``(B) Fiscal year 2011.--Subject to subparagraph (C), the
total amount payable to a single State under subsection (b)
and this subsection for fiscal year 2011 shall not exceed 30
percent of the annual State family assistance grant.
``(C) Adjustment authority.--If the Secretary determines
that the Emergency Fund is at risk of being depleted before
September 30, 2011, or that funds are available to
accommodate additional State requests under this subsection,
the Secretary may, through program instructions issued
without regard to the requirements of section 553 of title 5,
United States Code--
``(i) specify priority criteria for awarding grants to
States during fiscal year 2011; and
``(ii) adjust the percentage limitation applicable under
subparagraph (B) with respect to the total amount payable to
a single State for fiscal year 2011.''; and
(6) in paragraph (6), by inserting ``or for expenditures
described in paragraph (3)(C)(iv)'' before the period.

[[Page S5023]]

(b) Conforming Amendments.--Section 2101 of division B of
the American Recovery and Reinvestment Act of 2009 (Public
Law 111-5) is amended--
(1) in subsection (a)(2)--
(A) by striking ``2010'' and inserting ``2011''; and
(B) by striking all that follows ``repealed'' and inserting
a period; and
(2) in subsection (d)(1), by striking ``2010'' and
inserting ``2011''.
(c) Program Guidance.--The Secretary of Health and Human
Services shall issue program guidance, without regard to the
requirements of section 553 of title 5, United States Code,
which ensures that the funds provided under the amendments
made by this section to a jurisdiction for subsidized
employment do not support any subsidized employment position
the annual salary of which is greater than, at State option--
(1) 200 percent of the poverty line (within the meaning of
section 673(2) of the Omnibus Budget Reconciliation Act of
1981, including any revision required by such section 673(2))
for a family of 4; or
(2) the median wage in the jurisdiction.

SEC. 504. REQUIRING STATES TO NOT REDUCE REGULAR COMPENSATION
IN ORDER TO BE ELIGIBLE FOR FUNDS UNDER THE
EMERGENCY UNEMPLOYMENT COMPENSATION PROGRAM.

Section 4001 of the Supplemental Appropriations Act, 2008
(Public Law 110-252; 26 U.S.C. 3304 note) is amended by
adding at the end the following new subsection:
``(g) Nonreduction Rule.--An agreement under this section
shall not apply (or shall cease to apply) with respect to a
State upon a determination by the Secretary that the method
governing the computation of regular compensation under the
State law of that State has been modified in a manner such
that--
``(1) the average weekly benefit amount of regular
compensation which will be payable during the period of the
agreement occurring on or after June 2, 2010 (determined
disregarding any additional amounts attributable to the
modification described in section 2002(b)(1) of the
Assistance for Unemployed Workers and Struggling Families
Act, as contained in Public Law 111-5 (26 U.S.C. 3304 note;
123 Stat. 438)), will be less than
``(2) the average weekly benefit amount of regular
compensation which would otherwise have been payable during
such period under the State law, as in effect on June 2,
2010.''.

Subtitle B--Health Provisions

SEC. 511. EXTENSION OF SECTION 508 RECLASSIFICATIONS.

(a) In General.--Section 106(a) of division B of the Tax
Relief and Health Care Act of 2006 (42 U.S.C. 1395 note), as
amended by section 117 of the Medicare, Medicaid, and SCHIP
Extension Act of 2007 (Public Law 110-173), section 124 of
the Medicare Improvements for Patients and Providers Act of
2008 (Public Law 110-275), and sections 3137(a) and 10317 of
Public Law 111-148, is amended by striking ``September 30,
2010'' and inserting ``September 30, 2011''.
(b) Conforming Amendment.--Section 117(a)(3) of the
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public
Law 110-173)), is amended by inserting ``in fiscal years 2008
and 2009'' after ``For purposes of implementation of this
subsection''.

SEC. 512. REPEAL OF DELAY OF RUG-IV.

Effective as if included in the enactment of Public Law
111-148, section 10325 of such Act is repealed.

SEC. 513. LIMITATION ON REASONABLE COSTS PAYMENTS FOR CERTAIN
CLINICAL DIAGNOSTIC LABORATORY TESTS FURNISHED
TO HOSPITAL PATIENTS IN CERTAIN RURAL AREAS.

Section 3122 of Public Law 111-148 is repealed and the
provision of law amended by such section is restored as if
such section had not been enacted.

SEC. 514. FUNDING FOR CLAIMS REPROCESSING.

For purposes of carrying out the provisions of, and
amendments made by, this Act that relate to title XVIII of
the Social Security Act, and other provisions of such title
that involve reprocessing of claims, there are appropriated
to the Secretary of Health and Human Services for the Centers
for Medicare & Medicaid Services Program Management Account,
from amounts in the general fund of the Treasury not
otherwise appropriated, $175,000,000. Amounts appropriated
under the preceding sentence shall remain available until
expended.

SEC. 515. MEDICAID AND CHIP TECHNICAL CORRECTIONS.

(a) Repeal of Exclusion of Certain Individuals and Entities
From Medicaid.--Section 6502 of Public Law 111-148 is
repealed and the provisions of law amended by such section
are restored as if such section had never been enacted.
Nothing in the previous sentence shall affect the execution
or placement of the insertion made by section 6503 of such
Act.
(b) Income Level for Certain Children Under Medicaid.--
Effective as if included in the enactment of Public Law 111-
148, section 2001(a)(5)(B) of such Act is amended by striking
all that follows ``is amended'' and inserting the following:
``by inserting after `100 percent' the following: `(or,
beginning January 1, 2014, 133 percent)'.''.
(c) Calculation and Publication of Payment Error Rate
Measurement for Certain Years.--Section 601(b) of the
Children's Health Insurance Program Reauthorization Act of
2009 (Public Law 111-3) is amended by adding at the end the
following: ``The Secretary is not required under this
subsection to calculate or publish a national or a State-
specific error rate for fiscal year 2009 or fiscal year
2010.''.
(d) Corrections to Exceptions to Exclusion of Children of
Certain Employees.--Section 2110(b)(6) of the Social Security
Act (42 U.S.C. 1397jj(b)(6)) is amended--
(1) in subparagraph (B)--
(A) by striking ``per person'' in the heading; and
(B) by striking ``each employee'' and inserting
``employees''; and
(2) in subparagraph (C), by striking ``, on a case-by-case
basis,''.
(e) Electronic Health Records.--Effective as if included in
the enactment of section 4201(a)(2) of the American Recovery
and Reinvestment Act of 2009 (Public Law 111-5), section
1903(t) of the Social Security Act (42 U.S.C. 1396b(t)) is
amended--
(1) in paragraph (3)(E), by striking ``reduced by any
payment that is made to such Medicaid provider from any other
source (other than under this subsection or by a State or
local government)'' and inserting ``reduced by the average
payment the Secretary estimates will be made to such Medicaid
providers (determined on a percentage or other basis for such
classes or types of providers as the Secretary may specify)
from other sources (other than under this subsection, or by
the Federal government or a State or local government)''; and
(2) in paragraph (6)(B), by inserting before the period the
following: ``and shall be determined to have met such
responsibility to the extent that the payment to the Medicaid
provider is not in excess of 85 percent of the net average
allowable cost''.
(f) Corrections of Designations.--
(1) Section 1902 of the Social Security Act (42 U.S.C.
1396a) is amended--
(A) in subsection (a)(10), in the matter following
subparagraph (G), by striking ``and'' before ``(XVI) the
medical'' and by striking ``(XVI) if'' and inserting ``(XVII)
if''; and
(B) in subsection (ii)(2), by striking ``(XV)'' and
inserting ``(XVI)''.
(2) Section 2107(e)(1) of the Social Security Act (42
U.S.C. 1397gg(e)(1)) is amended by redesignating the
subparagraph (N) of that section added by 2101(e) of Public
Law 111-148 as subparagraph (O).

SEC. 516. ADDITION OF INPATIENT DRUG DISCOUNT PROGRAM TO 340B
DRUG DISCOUNT PROGRAM.

(a) Addition of Inpatient Drug Discount.--Title III of the
Public Health Service Act is amended by inserting after
section 340B (42 U.S.C. 256b) the following:

``SEC. 340B-1. DISCOUNT INPATIENT DRUGS FOR INDIVIDUALS
WITHOUT PRESCRIPTION DRUG COVERAGE.

``(a) Requirements for Agreements With the Secretary.--
``(1) In general.--
``(A) Agreement.--The Secretary shall enter into an
agreement with each manufacturer of covered inpatient drugs
under which the amount required to be paid (taking into
account any rebate or discount, as provided by the Secretary)
to the manufacturer for covered inpatient drugs (other than
drugs described in paragraph (3)) purchased by a covered
entity on or after January 1, 2011, does not exceed an amount
equal to the average manufacturer price for the drug under
title XIX of the Social Security Act in the preceding
calendar quarter, reduced by the rebate percentage described
in paragraph (2). For a covered inpatient drug that also is a
covered outpatient drug under section 340B, the amount
required to be paid under the preceding sentence shall be
equal to the amount required to be paid under section
340B(a)(1) for such drug. The agreement with a manufacturer
under this subparagraph may, at the discretion of the
Secretary, be included in the agreement with the same
manufacturer under section 340B.
``(B) Ceiling price.--Each such agreement shall require
that the manufacturer furnish the Secretary with reports, on
a quarterly basis, of the price for each covered inpatient
drug subject to the agreement that, according to the
manufacturer, represents the maximum price that covered
entities may permissibly be required to pay for the drug
(referred to in this section as the `ceiling price'), and
shall require that the manufacturer offer each covered entity
covered inpatient drugs for purchase at or below the
applicable ceiling price if such drug is made available to
any other purchaser at any price.
``(C) Allocation method.--Each such agreement shall require
that, if the supply of a covered inpatient drug is
insufficient to meet demand, then the manufacturer may use an
allocation method that is reported in writing to, and
approved by, the Secretary and does not discriminate on the
basis of the price paid by covered entities or on any other
basis related to the participation of an entity in the
program under this section.
``(2) Rebate percentage defined.--
``(A) In general.--For a covered inpatient drug purchased
in a calendar quarter, the `rebate percentage' is the amount
(expressed as a percentage) equal to--
``(i) the average total rebate required under section
1927(c) of the Social Security Act (or the average total
rebate that would be required if the drug were a covered
outpatient drug under such section) with respect to the drug
(for a unit of the dosage

[[Page S5024]]

form and strength involved) during the preceding calendar
quarter; divided by
``(ii) the average manufacturer price for such a unit of
the drug during such quarter.
``(B) Over the counter drugs.--
``(i) In general.--For purposes of subparagraph (A), in the
case of over the counter drugs, the `rebate percentage' shall
be determined as if the rebate required under section 1927(c)
of the Social Security Act is based on the applicable
percentage provided under section 1927(c)(3) of such Act.
``(ii) Definition.--The term `over the counter drug' means
a drug that may be sold without a prescription and which is
prescribed by a physician (or other persons authorized to
prescribe such drug under State law).
``(3) Drugs provided under state medicaid plans.--Drugs
described in this paragraph are drugs purchased by the entity
for which payment is made by the State under the State plan
for medical assistance under title XIX of the Social Security
Act.
``(4) Requirements for covered entities.--
``(A) Prohibiting duplicate discounts or rebates.--
``(i) In general.--A covered entity shall not request
payment under title XIX of the Social Security Act for
medical assistance described in section 1905(a)(12) of such
Act with respect to a drug that is subject to an agreement
under this section if the drug is subject to the payment of a
rebate to the State under section 1927 of such Act.
``(ii) Establishment of mechanism.--The Secretary shall
establish a mechanism to ensure that covered entities comply
with clause (i). If the Secretary does not establish a
mechanism under the previous sentence within 12 months of the
enactment of this section, the requirements of section
1927(a)(5)(C) of the Social Security Act shall apply.
``(iii) Prohibiting disclosure to group purchasing
organizations.--In the event that a covered entity is a
member of a group purchasing organization, such entity shall
not disclose the price or any other information pertaining to
any purchases under this section directly or indirectly to
such group purchasing organization.
``(B) Prohibiting resale, dispensing, or administration of
drugs except to certain patients.--With respect to any
covered inpatient drug that is subject to an agreement under
this subsection, a covered entity shall not dispense,
administer, resell, or otherwise transfer the covered
inpatient drug to a person unless--
``(i) such person is a patient of the entity; and
``(ii) such person does not have health plan coverage (as
defined in subsection (c)(3)) that provides prescription drug
coverage in the inpatient setting with respect to such
covered inpatient drug.

For purposes of clause (ii), a person shall be treated as
having health plan coverage (as defined in subsection (c)(3))
with respect to a covered inpatient drug if benefits are not
payable under such coverage with respect to such drug for
reasons such as the application of a deductible or cost
sharing or the use of utilization management.
``(C) Auditing.--A covered entity shall permit the
Secretary and the manufacturer of a covered inpatient drug
that is subject to an agreement under this subsection with
the entity (acting in accordance with procedures established
by the Secretary relating to the number, duration, and scope
of audits) to audit at the Secretary's or the manufacturer's
expense the records of the entity that directly pertain to
the entity's compliance with the requirements described in
subparagraph (A) or (B) with respect to drugs of the
manufacturer. The use or disclosure of information for
performance of such an audit shall be treated as a use or
disclosure required by law for purposes of section 164.512(a)
of title 45, Code of Federal Regulations.
``(D) Additional sanction for noncompliance.--If the
Secretary finds, after notice and hearing, that a covered
entity is in violation of a requirement described in
subparagraph (A) or (B), the covered entity shall be liable
to the manufacturer of the covered inpatient drug that is the
subject of the violation in an amount equal to the reduction
in the price of the drug (as described in subparagraph (A))
provided under the agreement between the Secretary and the
manufacturer under this subsection.
``(E) Maintenance of records.--
``(i) In general.--A covered entity shall establish and
maintain an effective recordkeeping system to comply with
this section and shall certify to the Secretary that such
entity is in compliance with subparagraphs (A) and (B). The
Secretary shall require that hospitals that purchase covered
inpatient drugs for inpatient dispensing or administration
under this subsection appropriately segregate inventory of
such covered inpatient drugs, either physically or
electronically, from drugs for outpatient use, as well as
from drugs for inpatient dispensing or administration to
individuals who have (for purposes of subparagraph (B))
health plan coverage described in clause (ii) of such
subparagraph.
``(ii) Certification of no third-party payer.--A covered
entity shall maintain records that contain certification by
the covered entity that no third party payment was received
for any covered inpatient drug that is subject to an
agreement under this subsection and that was dispensed to an
inpatient.
``(5) Treatment of distinct units of hospitals.--In the
case of a covered entity that is a distinct part of a
hospital, the distinct part of the hospital shall not be
considered a covered entity under this subsection unless the
hospital is otherwise a covered entity under this subsection.
``(6) Notice to manufacturers.--The Secretary shall notify
manufacturers of covered inpatient drugs and single State
agencies under section 1902(a)(5) of the Social Security Act
of the identities of covered entities under this subsection,
and of entities that no longer meet the requirements of
paragraph (4), by means of timely updates of the Internet
website supported by the Department of Health and Human
Services relating to this section.
``(7) No prohibition on larger discount.--Nothing in this
subsection shall prohibit a manufacturer from charging a
price for a drug that is lower than the maximum price that
may be charged under paragraph (1).
``(b) Covered Entity Defined.--In this section, the term
`covered entity' means an entity that meets the requirements
described in subsection (a)(4) and is one of the following:
``(1) A subsection (d) hospital (as defined in section
1886(d)(1)(B) of the Social Security Act) that--
``(A) is owned or operated by a unit of State or local
government, is a public or private non-profit corporation
which is formally granted governmental powers by a unit of
State or local government, or is a private nonprofit hospital
which has a contract with a State or local government to
provide health care services to low income individuals who
are not entitled to benefits under title XVIII of the Social
Security Act or eligible for assistance under the State plan
for medical assistance under title XIX of such Act; and
``(B) for the most recent cost reporting period that ended
before the calendar quarter involved, had a disproportionate
share adjustment percentage (as determined using the
methodology under section 1886(d)(5)(F) of the Social
Security Act as in effect on the date of enactment of this
section) greater than 20.20 percent or was described in
section 1886(d)(5)(F)(i)(II) of such Act (as so in effect on
the date of enactment of this section).
``(2) A children's hospital excluded from the Medicare
prospective payment system pursuant to section
1886(d)(1)(B)(iii) of the Social Security Act that would meet
the requirements of paragraph (1), including the
disproportionate share adjustment percentage requirement
under subparagraph (B) of such paragraph, if the hospital
were a subsection (d) hospital as defined by section
1886(d)(1)(B) of the Social Security Act.
``(3) A free-standing cancer hospital excluded from the
Medicare prospective payment system pursuant to section
1886(d)(1)(B)(v) of the Social Security Act that would meet
the requirements of paragraph (1), including the
disproportionate share adjustment percentage requirement
under subparagraph (B) of such paragraph, if the hospital
were a subsection (d) hospital as defined by section
1886(d)(1)(B) of the Social Security Act.
``(4) An entity that is a critical access hospital (as
determined under section 1820(c)(2) of the Social Security
Act), and that meets the requirements of paragraph (1)(A).
``(5) An entity that is a rural referral center, as defined
by section 1886(d)(5)(C)(i) of the Social Security Act, or a
sole community hospital, as defined by section
1886(d)(5)(C)(iii) of such Act, and that both meets the
requirements of paragraph (1)(A) and has a disproportionate
share adjustment percentage equal to or greater than 8
percent.
``(c) Other Definitions.--In this section:
``(1) Average manufacturer price.--
``(A) In general.--The term `average manufacturer price'--
``(i) has the meaning given such term in section 1927(k) of
the Social Security Act, except that such term shall be
applied under this section with respect to covered inpatient
drugs in the same manner (as applicable) as such term is
applied under such section 1927(k) with respect to covered
outpatient drugs (as defined in such section); and
``(ii) with respect to a covered inpatient drug for which
there is no average manufacturer price (as defined in clause
(i)), shall be the amount determined under regulations
promulgated by the Secretary under subparagraph (B).
``(B) Rulemaking.--The Secretary shall by regulation, in
consultation with the Administrator of the Centers for
Medicare & Medicaid Services, establish a method for
determining the average manufacturer price for covered
inpatient drugs for which there is no average manufacturer
price (as defined in subparagraph (A)(i)). Regulations
promulgated with respect to covered inpatient drugs under the
preceding sentence shall provide for the application of
methods for determining the average manufacturer price that
are the same as the methods used to determine such price in
calculating rebates required for such drugs under an
agreement between a manufacturer and a State that satisfies
the requirements of section 1927(b) of the Social Security
Act, as applicable.
``(2) Covered inpatient drug.--The term `covered inpatient
drug' means a drug--
``(A) that is described in section 1927(k)(2) of the Social
Security Act;

[[Page S5025]]

``(B) that, notwithstanding paragraph (3)(A) of section
1927(k) of such Act, is used in connection with an inpatient
service provided by a covered entity that is enrolled to
participate in the drug discount program under this section;
and
``(C) that is not purchased by the covered entity through
or under contract with a group purchasing organization.
``(3) Health plan coverage.--The term `health plan
coverage' means--
``(A) health insurance coverage (as defined in section
2791, and including coverage under a State health benefits
risk pool);
``(B) coverage under a group health plan (as defined in
such section, and including coverage under a church plan, a
governmental plan, or a collectively bargained plan);
``(C) coverage under a Federal health care program (as
defined by section 1128B(f) of the Social Security Act); or
``(D) such other health benefits coverage as the Secretary
recognizes for purposes of this section.
``(4) Manufacturer.--The term `manufacturer' has the
meaning given such term in section 1927(k) of the Social
Security Act.
``(d) Program Integrity.--
``(1) Manufacturer compliance.--
``(A) In general.--From amounts appropriated under
subsection (f), the Secretary shall provide for improvements
in compliance by manufacturers with the requirements of this
section in order to prevent overcharges and other violations
of the discounted pricing requirements specified in this
section.
``(B) Improvements.--The improvements described in
subparagraph (A) shall include the following:
``(i) The establishment of a process to enable the
Secretary to verify the accuracy of ceiling prices calculated
by manufacturers under subsection (a)(1) and charged to
covered entities, which shall include the following:

``(I) Developing and publishing through an appropriate
policy or regulatory issuance, precisely defined standards
and methodology for the calculation of ceiling prices under
such subsection.
``(II) Comparing regularly the ceiling prices calculated by
the Secretary with the quarterly pricing data that is
reported by manufacturers to the Secretary.
``(III) Conducting periodic monitoring of sales
transactions by covered entities.
``(IV) Inquiring into any discrepancies between ceiling
prices and manufacturer pricing data that may be identified
and taking, or requiring manufacturers to take, corrective
action in response to such discrepancies, including the
issuance of refunds pursuant to the procedures set forth in
clause (ii).

``(ii) The establishment of procedures for manufacturers to
issue refunds to covered entities in the event that there is
an overcharge by the manufacturers, including the following:

``(I) Providing the Secretary with an explanation of why
and how the overcharge occurred, how the refunds will be
calculated, and to whom the refunds will be issued.
``(II) Oversight by the Secretary to ensure that the
refunds are issued accurately and within a reasonable period
of time.

``(iii) The provision of access through the Internet
website supported by the Department of Health and Human
Services to the applicable ceiling prices for covered
inpatient drugs as calculated and verified by the Secretary
in accordance with this section, in a manner (such as through
the use of password protection) that limits such access to
covered entities and adequately assures security and
protection of privileged pricing data from unauthorized re-
disclosure.
``(iv) The development of a mechanism by which--

``(I) rebates, discounts, or other price concessions
provided by manufacturers to other purchasers subsequent to
the sale of covered inpatient drugs to covered entities are
reported to the Secretary; and
``(II) appropriate credits and refunds are issued to
covered entities if such discounts, rebates, or other price
concessions have the effect of lowering the applicable
ceiling price for the relevant quarter for the drugs
involved.

``(v) Selective auditing of manufacturers and wholesalers
to ensure the integrity of the drug discount program under
this section.
``(vi) The establishment of a requirement that
manufacturers and wholesalers use the identification system
developed by the Secretary for purposes of facilitating the
ordering, purchasing, and delivery of covered inpatient drugs
under this section, including the processing of chargebacks
for such drugs.
``(vii) The imposition of sanctions in the form of civil
monetary penalties, which--

``(I) shall be assessed according to standards and
procedures established in regulations to be promulgated by
the Secretary not later than January 1, 2011;
``(II) shall not exceed $10,000 per single dosage form of a
covered inpatient drug purchased by a covered entity where a
manufacturer knowingly charges such covered entity a price
for such drug that exceeds the ceiling price under subsection
(a)(1); and
``(III) shall not exceed $100,000 for each instance where a
manufacturer withholds or provides materially false
information to the Secretary or to covered entities under
this section or knowingly violates any provision of this
section (other than subsection (a)(1)).

``(2) Covered entity compliance.--
``(A) In general.--From amounts appropriated under
subsection (f), the Secretary shall provide for improvements
in compliance by covered entities with the requirements of
this section in order to prevent diversion and violations of
the duplicate discount provision and other requirements
specified under subsection (a)(4).
``(B) Improvements.--The improvements described in
subparagraph (A) shall include the following:
``(i) The development of procedures to enable and require
covered entities to update at least annually the information
on the Internet website supported by the Department of Health
and Human Services relating to this section.
``(ii) The development of procedures for the Secretary to
verify the accuracy of information regarding covered entities
that is listed on the website described in clause (i).
``(iii) The development of more detailed guidance
describing methodologies and options available to covered
entities for billing covered inpatient drugs to State
Medicaid agencies in a manner that avoids duplicate discounts
pursuant to subsection (a)(4)(A).
``(iv) The establishment of a single, universal, and
standardized identification system by which each covered
entity site and each covered entity's purchasing status under
sections 340B and this section can be identified by
manufacturers, distributors, covered entities, and the
Secretary for purposes of facilitating the ordering,
purchasing, and delivery of covered inpatient drugs under
this section, including the processing of chargebacks for
such drugs.
``(v) The imposition of sanctions in the form of civil
monetary penalties, which--

``(I) shall be assessed according to standards and
procedures established in regulations promulgated by the
Secretary; and
``(II) shall not exceed $10,000 for each instance where a
covered entity knowingly violates subsection (a)(4)(B) or
knowingly violates any other provision of this section.

``(vi) The termination of a covered entity's participation
in the program under this section, for a period of time to be
determined by the Secretary, in cases in which the Secretary
determines, in accordance with standards and procedures
established by regulation, that--

``(I) the violation by a covered entity of a requirement of
this section was repeated and knowing; and
``(II) imposition of a monetary penalty would be
insufficient to reasonably ensure compliance with the
requirements of this section.

``(vii) The referral of matters, as appropriate, to the
Food and Drug Administration, the Office of the Inspector
General of the Department of Health and Human Services, or
other Federal or State agencies.
``(3) Administrative dispute resolution process.--From
amounts appropriated under subsection (f), the Secretary may
establish and implement an administrative process for the
resolution of the following:
``(A) Claims by covered entities that manufacturers have
violated the terms of their agreement with the Secretary
under subsection (a)(1).
``(B) Claims by manufacturers that covered entities have
violated subsection (a)(4)(A) or (a)(4)(B).
``(e) Audit and Sanctions.--
``(1) Audit.--From amounts appropriated under subsection
(f), the Inspector General of the Department of Health and
Human Services (referred to in this subsection as the
`Inspector General') shall audit covered entities under this
section to verify compliance with criteria for eligibility
and participation under this section, including the
antidiversion prohibitions under subsection (a)(4)(B), and
take enforcement action or provide information to the
Secretary who shall take action to ensure program compliance,
as appropriate. A covered entity shall provide to the
Inspector General, upon request, records relevant to such
audits.
``(2) Report.--For each audit conducted under paragraph
(1), the Inspector General shall prepare and publish in a
timely manner a report which shall include findings and
recommendations regarding--
``(A) the appropriateness of covered entity eligibility
determinations and, as applicable, certifications;
``(B) the effectiveness of antidiversion prohibitions; and
``(C) the effectiveness of restrictions on inpatient
dispensing and administration.
``(f) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section such
sums as may be necessary for fiscal year 2011 and each
succeeding fiscal year.''.
(b) Rulemaking.--Not later than January 1, 2011, the
Secretary shall promulgate regulations implementing section
340B-1 of the Public Health Service Act (as added by
subsection (a)).
(c) Conforming Amendment to Section 340B.--Paragraph (1) of
section 340B(a) of the Public Health Service Act (42 U.S.C.
256b(a)) is amended by adding at the end the following:
``Such agreement shall further require that, if the supply of
a covered outpatient drug is insufficient to meet demand,
then the manufacturer may use an allocation method that is
reported in writing to, and approved by, the Secretary and
does not discriminate on the basis of the price paid by
covered entities or on any other basis related to the
participation of an entity in the program under this section.
The agreement with a manufacturer under this paragraph may,
at the discretion of the Secretary, be included in the
agreement with the same manufacturer under section 340B-1.''.

[[Page S5026]]

(d) Conforming Amendments to Medicaid.--Section 1927 of the
Social Security Act (42 U.S.C. 1396r-8) is amended--
(1) in subsection (a)--
(A) in paragraph (1), in the first sentence, by striking
``and paragraph (6)'' and inserting ``, paragraph (6), and
paragraph (8)''; and
(B) by adding at the end the following new paragraph:
``(8) Limitation on prices of drugs purchased by 340b-1-
covered entities.--
``(A) Agreement with secretary.--A manufacturer meets the
requirements of this paragraph if the manufacturer has
entered into an agreement with the Secretary that meets the
requirements of section 340B-1 of the Public Health Service
Act with respect to covered inpatient drugs (as defined in
such section) purchased by a 340B-1-covered entity on or
after January 1, 2011.
``(B) 340B-1-covered entity defined.--In this subsection,
the term `340B-1-covered entity' means an entity described in
section 340B-1(b) of the Public Health Service Act.''; and
(2) in subsection (c)(1)(C)(i)(I)--
(A) by striking ``or'' before ``a covered entity''; and
(B) by inserting before the semicolon the following: ``, or
a covered entity for a covered inpatient drug (as such terms
are defined in section 340B-1of the Public Health Service
Act)''.

SEC. 517. CONTINUED INCLUSION OF ORPHAN DRUGS IN DEFINITION
OF COVERED OUTPATIENT DRUGS WITH RESPECT TO
CHILDREN'S HOSPITALS UNDER THE 340B DRUG
DISCOUNT PROGRAM.

(a) Definition of Covered Outpatient Drug.--
(1) Amendment.--Subsection (e) of section 340B of the
Public Health Service Act (42 U.S.C. 256b) is amended by
striking ``covered entities described in subparagraph
(M)''and inserting ``covered entities described in
subparagraph (M) (other than a children's hospital described
in subparagraph (M))''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect as if included in the enactment of section
2302 of the Health Care and Education Reconciliation Act of
2010 (Public Law 111-152).
(b) Technical Amendment.--Subparagraph (B) of section
1927(a)(5) of the Social Security Act (42 U.S.C. 1396r-
8(a)(5)) is amended by striking ``and a children's hospital''
and all that follows through the end of the subparagraph and
inserting a period.

SEC. 518. CONFORMING AMENDMENT RELATED TO WAIVER OF
COINSURANCE FOR PREVENTIVE SERVICES.

Effective as if included in section 10501(i)(2)(A) of
Public Law 111-148, section 1833(a)(3)(A) of the Social
Security Act (42 U.S.C. 1395l(a)(3)(A)) is amended by
striking ``section 1861(s)(10)(A)'' and inserting ``section
1861(ddd)(3)''.

SEC. 519. ESTABLISH A CMS-IRS DATA MATCH TO IDENTIFY
FRAUDULENT PROVIDERS.

(a) Authority to Disclose Return Information Concerning
Outstanding Tax Debts for Purposes of Enhancing Medicare
Program Integrity.--
(1) In general.--Section 6103(l) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new paragraph:
``(22) Disclosure of return information to department of
health and human services for purposes of enhancing medicare
program integrity.--
``(A) In general.--The Secretary shall, upon written
request from the Secretary of Health and Human Services,
disclose to officers and employees of the Department of
Health and Human Services return information with respect to
a taxpayer who has applied to enroll, or reenroll, as a
provider of services or supplier under the Medicare program
under title XVIII of the Social Security Act. Such return
information shall be limited to--
``(i) the taxpayer identity information with respect to
such taxpayer;
``(ii) the amount of the delinquent tax debt owed by that
taxpayer; and
``(iii) the taxable year to which the delinquent tax debt
pertains.
``(B) Restriction on disclosure.--Return information
disclosed under subparagraph (A) may be used by officers and
employees of the Department of Health and Human Services for
the purposes of, and to the extent necessary in, establishing
the taxpayer's eligibility for enrollment or reenrollment in
the Medicare program, or in any administrative or judicial
proceeding relating to, or arising from, a denial of such
enrollment or reenrollment, or in determining the level of
enhanced oversight to be applied with respect to such
taxpayer pursuant to section 1866(j)(3) of the Social
Security Act.
``(C) Delinquent tax debt.--For purposes of this paragraph,
the term `delinquent tax debt' means an outstanding debt
under this title for which a notice of lien has been filed
pursuant to section 6323, but the term does not include a
debt that is being paid in a timely manner pursuant to an
agreement under section 6159 or 7122, or a debt with respect
to which a collection due process hearing under section 6330
is requested, pending, or completed and no payment is
required.''.
(2) Conforming amendments.--Section 6103(p)(4) of such
Code, as amended by sections 1414 and 3308 of Public Law 111-
148, in the matter preceding subparagraph (A) and in
subparagraph (F)(ii), is amended by striking ``or (17)'' and
inserting ``(17), or (22)'' each place it appears.
(b) Secretary's Authority to Use Information From the
Department of Treasury in Medicare Enrollments and
Reenrollments.--Section 1866(j)(2) of the Social Security Act
(42 U.S.C. 1395cc(j)), as inserted by section 6401(a) of
Public Law 111-148, is further amended--
(1) by redesignating subparagraph (E) as subparagraph (F);
and
(2) by inserting after subparagraph (D) the following new
subparagraph:
``(E) Use of information from the department of treasury
concerning tax debts.--In reviewing the application of a
provider of services or supplier to enroll or reenroll under
the program under this title, the Secretary shall take into
account the information supplied by the Secretary of the
Treasury pursuant to section 6103(l)(22) of the Internal
Revenue Code of 1986, in determining whether to deny such
application or to apply enhanced oversight to such provider
of services or supplier pursuant to paragraph (3) if the
Secretary determines such provider of services or supplier
owes such a debt.''.
(c) Authority to Adjust Payments of Providers of Services
and Suppliers With the Same Tax Identification Number for
Medicare Obligations.--Section 1866(j)(6) of the Social
Security Act (42 U.S.C. 1395cc(j)(6)), as inserted by section
6401(a) of Public Law 111-148 and as redesignated by section
1304 of Public Law 111-152, is amended--
(1) in the paragraph heading, by striking ``past-due'' and
inserting ``medicare'';
(2) in subparagraph (A), by striking ``past-due obligations
described in subparagraph (B)(ii) of an'' and inserting
``amount described in subparagraph (B)(ii) due from such'';
and
(3) in subparagraph (B)(ii), by striking ``a past-due
obligation'' and inserting ``an amount that is more than the
amount required to be paid''.

SEC. 520. CLARIFICATION OF EFFECTIVE DATE OF PART B SPECIAL
ENROLLMENT PERIOD FOR DISABLED TRICARE
BENEFICIARIES.

Effective as if included in the enactment of Public Law
111-148, section 3110(a)(2) of such Act is amended to read as
follows:
``(2) Effective date.--The amendment made by paragraph (1)
shall apply to elections made after the date of the enactment
of this Act.''.

SEC. 521. PHYSICIAN PAYMENT UPDATE.

(a) In General.--Section 1848(d) of the Social Security Act
(42 U.S.C. 1395w-4(d)) is amended--
(1) in paragraph (10), in the heading, by striking
``portion'' and inserting ``January through may ''; and
(2) by adding at the end the following new paragraph:
``(11) Update for june through november of 2010.--
``(A) In general.--Subject to paragraphs (7)(B), (8)(B),
(9)(B), and (10)(B), in lieu of the update to the single
conversion factor established in paragraph (1)(C) that would
otherwise apply for 2010 for the period beginning on June 1,
2010, and ending on November 30, 2010, the update to the
single conversion factor shall be 2.2 percent.
``(B) No effect on computation of conversion factor for
remaining portion of 2010 and subsequent years.--The
conversion factor under this subsection shall be computed
under paragraph (1)(A) for the period beginning on December
1, 2010, and ending on December 31, 2010, and for 2011 and
subsequent years as if subparagraph (A) had never applied.''.
(b) Statutory Paygo.--The budgetary effects of this Act,
for the purpose of complying with the Statutory Pay-As-You-Go
Act of 2010, shall be determined by reference to the latest
statement titled ``Budgetary Effects of PAYGO Legislation''
for this Act, jointly submitted for printing in the
Congressional Record by the Chairmen of the House and Senate
Budget Committees, provided that such statement has been
submitted prior to the vote on passage in the House acting
first on this conference report or amendment between the
Houses.

SEC. 522. ADJUSTMENT TO MEDICARE PAYMENT LOCALITIES.

(a) In General.--Section 1848(e) of the Social Security Act
(42 U.S.C.1395w-4(e)) is amended by adding at the end the
following new paragraph:
``(6) Transition to use of msas as fee schedule areas in
california.--
``(A) In general.--
``(i) Revision.--Subject to clause (ii) and notwithstanding
the previous provisions of this subsection, for services
furnished on or after January 1, 2012, the Secretary shall
revise the fee schedule areas used for payment under this
section applicable to the State of California using the
Metropolitan Statistical Area (MSA) iterative Geographic
Adjustment Factor methodology as follows:

``(I) The Secretary shall configure the physician fee
schedule areas using the Metropolitan Statistical Areas (each
in this paragraph referred to as an `MSA'), as defined by the
Director of the Office of Management and Budget as of the
date of the enactment of this paragraph, as the basis for the
fee schedule areas.
``(II) For purposes of this clause, the Secretary shall
treat all areas not included in an MSA as a single rest-of-
State MSA and any reference in this paragraph to an MSA shall
be deemed to include a reference to such rest-of-State MSA.
``(III) The Secretary shall list all MSAs within the State
by Geographic Adjustment Factor described in paragraph (2)
(in this paragraph referred to as a `GAF') in descending
order.

[[Page S5027]]

``(IV) In the first iteration, the Secretary shall compare
the GAF of the highest cost MSA in the State to the weighted-
average GAF of all the remaining MSAs in the State. If the
ratio of the GAF of the highest cost MSA to the weighted-
average of the GAF of remaining lower cost MSAs is 1.05 or
greater, the highest cost MSA shall be a separate fee
schedule area.
``(V) In the next iteration, the Secretary shall compare
the GAF of the MSA with the second-highest GAF to the
weighted-average GAF of the all the remaining MSAs (excluding
MSAs that become separate fee schedule areas). If the ratio
of the second-highest MSA's GAF to the weighted-average of
the remaining lower cost MSAs is 1.05 or greater, the second-
highest MSA shall be a separate fee schedule area.
``(VI) The iterative process shall continue until the ratio
of the GAF of the MSA with highest remaining GAF to the
weighted-average of the remaining MSAs with lower GAFs is
less than 1.05, and the remaining group of MSAs with lower
GAFs shall be treated as a single rest-of-State fee schedule
area.
``(VII) For purposes of the iterative process described in
this clause, if two MSAs have identical GAFs, they shall be
combined.

``(ii) Transition.--For services furnished on or after
January 1, 2012, and before January 1, 2017, in the State of
California, after calculating the work, practice expense, and
malpractice geographic indices that would otherwise be
determined under clauses (i), (ii), and (iii) of paragraph
(1)(A) for a fee schedule area determined under clause (i),
if the index for a county within a fee schedule area is less
than the index that would otherwise be in effect for such
county, the Secretary shall instead apply the index that
would otherwise be in effect for such county.
``(B) Subsequent revisions.--After the transition described
in subparagraph (A)(ii), not less than every 3 years the
Secretary shall review and update the fee schedule areas
using the methodology described in subparagraph (A)(i) and
any updated MSAs as defined by the Director of the Office of
Management and Budget. The Secretary shall review and make
any changes pursuant to such reviews concurrent with the
application of the periodic review of the adjustment factors
required under paragraph (1)(C) for California.
``(C) References to fee schedule areas.--Effective for
services furnished on or after January 1, 2012, for the State
of California, any reference in this section to a fee
schedule area shall be deemed a reference to a fee schedule
area established in accordance with this paragraph.''.
(b) Conforming Amendment to Definition of Fee Schedule
Area.--Section 1848(j)(2) of the Social Security Act (42
U.S.C. 1395w(j)(2)) is amended by striking ``The term'' and
inserting ``Except as provided in subsection (e)(6)(C), the
term''.

SEC. 523. CLARIFICATION OF 3-DAY PAYMENT WINDOW.

(a) In General.--Section 1886 of the Social Security Act
(42 U.S.C. 1395ww) is amended--
(1) by adding at the end of subsection (a)(4) the following
new sentence: ``In applying the first sentence of this
paragraph, the term `other services related to the admission'
includes all services that are not diagnostic services (other
than ambulance and maintenance renal dialysis services) for
which payment may be made under this title that are provided
by a hospital (or an entity wholly owned or operated by the
hospital) to a patient--
``(A) on the date of the patient's inpatient admission; or
``(B) during the 3 days (or, in the case of a hospital that
is not a subsection (d) hospital, during the 1 day)
immediately preceding the date of such admission unless the
hospital demonstrates (in a form and manner, and at a time,
specified by the Secretary) that such services are not
related (as determined by the Secretary) to such
admission.''; and
(2) in subsection (d)(7)--
(A) in subparagraph (A), by striking ``and'' at the end;
(B) in subparagraph (B), by striking the period and
inserting ``, and''; and
(C) by adding at the end the following new subparagraph:
``(C) the determination of whether services provided prior
to a patient's inpatient admission are related to the
admission (as described in subsection (a)(4)).''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to services furnished on or after the date of the
enactment of this Act.
(c) No Reopening of Previously Bundled Claims.--
(1) In general.--The Secretary of Health and Human Services
may not reopen a claim, adjust a claim, or make a payment
pursuant to any request for payment under title XVIII of the
Social Security Act, submitted by an entity (including a
hospital or an entity wholly owned or operated by the
hospital) for services described in paragraph (2) for
purposes of treating, as unrelated to a patient's inpatient
admission, services provided during the 3 days (or, in the
case of a hospital that is not a subsection (d) hospital,
during the 1 day) immediately preceding the date of the
patient's inpatient admission.
(2) Services described.--For purposes of paragraph (1), the
services described in this paragraph are other services
related to the admission (as described in section 1886(a)(4)
of the Social Security Act (42 U.S.C. 1395ww(a)(4)), as
amended by subsection (a)) which were previously included on
a claim or request for payment submitted under part A of
title XVIII of such Act for which a reopening, adjustment, or
request for payment under part B of such title, was not
submitted prior to the date of the enactment of this Act.
(d) Implementation.--Notwithstanding any other provision of
law, the Secretary of Health and Human Services may implement
the provisions of this section (and amendments made by this
section) by program instruction or otherwise.
(e) Rule of Construction.--Nothing in the amendments made
by this section shall be construed as changing the policy
described in section 1886(a)(4) of the Social Security Act
(42 U.S.C. 1395ww(a)(4)), as applied by the Secretary of
Health and Human Services before the date of the enactment of
this Act, with respect to diagnostic services.

SEC. 524. EXTENSION OF ARRA INCREASE IN FMAP.

Section 5001 of the American Recovery and Reinvestment Act
of 2009 (Public Law 111-5) is amended--
(1) in subsection (a)(3), by striking ``first calendar
quarter'' and inserting ``first 3 calendar quarters'';
(2) in subsection (c)--
(A) in paragraph (2)(B), by striking ``July 1, 2010'' and
inserting ``January 1, 2011'';
(B) in paragraph (3)(B)(i), by striking ``July 1, 2010''
and inserting ``January 1, 2011'' each place it appears; and
(C) in paragraph (4)(C)(ii), by striking ``the 3-
consecutive-month period beginning with January 2010'' and
inserting ``any 3-consecutive-month period that begins after
December 2009 and ends before January 2011'';
(3) in subsection (e), by adding at the end the following:

``Notwithstanding paragraph (5), effective for payments made
on or after January 1, 2010, the increases in the FMAP for a
State under this section shall apply to payments under title
XIX of such Act that are attributable to expenditures for
medical assistance provided to nonpregnant childless adults
made eligible under a State plan under such title (including
under any waiver under such title or under section 1115 of
such Act (42 U.S.C. 1315)) who would have been eligible for
child health assistance or other health benefits under
eligibility standards in effect as of December 31, 2009, of a
waiver of the State child health plan under the title XXI of
such Act.'';
(4) in subsection (g)--
(A) in paragraph (1), by striking ``September 30, 2011''
and inserting ``March 31, 2012'';
(B) in paragraph (2), by inserting ``of such Act'' after
``1923''; and
(C) by adding at the end the following:
``(3) Certification by chief executive officer.--No
additional Federal funds shall be paid to a State as a result
of this section with respect to a calendar quarter occurring
during the period beginning on January 1, 2011, and ending on
June 30, 2011, unless, not later than 45 days after the date
of enactment of this paragraph, the chief executive officer
of the State certifies that the State will request and use
such additional Federal funds.''; and
(5) in subsection (h)(3), by striking ``December 31, 2010''
and inserting ``June 30, 2011''.

SEC. 525. CLARIFICATION FOR AFFILIATED HOSPITALS FOR
DISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS.

Effective as if included in the enactment of section
5503(a) of Public Law 111-148, section 1886(h)(8) of the
Social Security Act (42 U.S.C. 1395ww(h)(8)), as added by
such section 5503(a), is amended by adding at the end the
following new subparagraph:
``(I) Affiliation.--The provisions of this paragraph shall
be applied to hospitals which are members of the same
affiliated group (as defined by the Secretary under paragraph
(4)(H)(ii)) and the reference resident level for each such
hospital shall be the reference resident level with respect
to the cost reporting period that results in the smallest
difference between the reference resident level and the
otherwise applicable resident limit.''.

TITLE VI--OTHER PROVISIONS

SEC. 601. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.

(a) Extension.--Section 129 of the Continuing
Appropriations Resolution, 2010 (Public Law 111-68), as
amended by section 7(a) of Public Law 111-157, is amended by
striking ``by substituting'' and all that follows through the
period at the end, and inserting ``by substituting December
31, 2010, for the date specified in each such section.''.
(b) Effective Date.--The amendments made by subsection (a)
shall be considered to have taken effect on May 31, 2010.

SEC. 602. ALLOCATION OF GEOTHERMAL RECEIPTS.

Notwithstanding any other provision of law, for fiscal year
2010 only, all funds received from sales, bonuses, royalties,
and rentals under the Geothermal Steam Act of 1970 (30 U.S.C.
1001 et seq.) shall be deposited in the Treasury, of which--
(1) 50 percent shall be used by the Secretary of the
Treasury to make payments to States within the boundaries of
which the leased land and geothermal resources are located;
(2) 25 percent shall be used by the Secretary of the
Treasury to make payments to the counties within the
boundaries of which the leased land or geothermal resources
are located; and

[[Page S5028]]

(3) 25 percent shall be deposited in miscellaneous
receipts.

SEC. 603. SMALL BUSINESS LOAN GUARANTEE ENHANCEMENT
EXTENSIONS.

(a) Appropriation.--There is appropriated, out of any funds
in the Treasury not otherwise appropriated, for an additional
amount for ``Small Business Administration--Business Loans
Program Account'', $505,000,000, to remain available through
December 31, 2010, for the cost of--
(1) fee reductions and eliminations under section 501 of
division A of the American Recovery and Reinvestment Act of
2009 (Public Law 111-5; 123 Stat. 151), as amended by this
section; and
(2) loan guarantees under section 502 of division A of the
American Recovery and Reinvestment Act of 2009 (Public Law
111-5; 123 Stat. 152), as amended by this section.

Such costs, including the cost of modifying such loans, shall
be as defined in section 502 of the Congressional Budget Act
of 1974.
(b) Extension of Programs.--
(1) Fees.--Section 501 of division A of the American
Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123
Stat. 151) is amended by striking ``September 30, 2010'' each
place it appears and inserting ``December 31, 2010''.
(2) Loan guarantees.--Section 502(f) of division A of the
American Recovery and Reinvestment Act of 2009 (Public Law
111-5; 123 Stat. 153) is amended by striking ``May 31, 2010''
and inserting ``December 31, 2010''.
(c) Appropriation.--There is appropriated for an additional
amount, out of any funds in the Treasury not otherwise
appropriated, for administrative expenses to carry out
sections 501 and 502 of division A of the American Recovery
and Reinvestment Act of 2009 (Public Law 111-5), $5,000,000,
to remain available until expended, which may be transferred
and merged with the appropriation for ``Small Business
Administration--Salaries and Expenses''.

SEC. 604. EMERGENCY AGRICULTURAL DISASTER ASSISTANCE.

(a) Definitions.--Except as otherwise provided in this
section, in this section:
(1) Disaster county.--
(A) In general.--The term ``disaster county'' means a
county included in the geographic area covered by a
qualifying natural disaster declaration for the 2009 crop
year.
(B) Exclusion.--The term ``disaster county'' does not
include a contiguous county.
(2) Eligible aquaculture producer.--The term ``eligible
aquaculture producer'' means an aquaculture producer that
during the 2009 calendar year, as determined by the
Secretary--
(A) produced an aquaculture species for which feed costs
represented a substantial percentage of the input costs of
the aquaculture operation; and
(B) experienced a substantial price increase of feed costs
above the previous 5-year average.
(3) Eligible producer.--The term ``eligible producer''
means an agricultural producer in a disaster county.
(4) Eligible specialty crop producer.--The term ``eligible
specialty crop producer'' means an agricultural producer
that, for the 2009 crop year, as determined by the
Secretary--
(A) produced, or was prevented from planting, a specialty
crop; and
(B) experienced specialty crop losses in a disaster county
due to drought, excessive rainfall, or a related condition.
(5) Qualifying natural disaster declaration.--The term
``qualifying natural disaster declaration'' means a natural
disaster declared by the Secretary for production losses
under section 321(a) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1961(a)).
(6) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture.
(7) Specialty crop.--The term ``specialty crop'' has the
meaning given the term in section 3 of the Specialty Crops
Competitiveness Act of 2004 (Public Law 108-465; 7 U.S.C.
1621 note).
(b) Supplemental Direct Payment.--
(1) In general.--Of the funds of the Commodity Credit
Corporation, the Secretary shall use such sums as are
necessary to make supplemental payments under sections 1103
and 1303 of the Food, Conservation, and Energy Act of 2008 (7
U.S.C. 8713, 8753) to eligible producers on farms located in
disaster counties that had at least 1 crop of economic
significance (other than specialty crops or crops intended
for grazing) suffer at least a 5-percent crop loss on a farm
due to a natural disaster, including quality losses, as
determined by the Secretary, in an amount equal to 90 percent
of the direct payment the eligible producers received for the
2009 crop year on the farm.
(2) ACRE program.--Eligible producers that received direct
payments under section 1105 of the Food, Conservation, and
Energy Act of 2008 (7 U.S.C. 8715) for the 2009 crop year and
that otherwise meet the requirements of paragraph (1) shall
be eligible to receive supplemental payments under that
paragraph in an amount equal to 112.5 percent of the reduced
direct payment the eligible producers received for the 2009
crop year under section 1103 or 1303 of the Food,
Conservation, and Energy Act of 2008 (7 U.S.C. 8713, 8753).
(3) Relationship to other law.--Assistance received under
this subsection shall be included in the calculation of farm
revenue for the 2009 crop year under section 531(b)(4)(A) of
the Federal Crop Insurance Act (7 U.S.C. 1531(b)(4)(A)) and
section 901(b)(4)(A) of the Trade Act of 1974 (19 U.S.C.
2497(b)(4)(A)).
(c) Specialty Crop Assistance.--
(1) In general.--Of the funds of the Commodity Credit
Corporation, the Secretary shall use not more than
$300,000,000, to remain available until September 30, 2011,
to carry out a program of grants to States to assist eligible
specialty crop producers for losses due to a natural disaster
affecting the 2009 crops, of which not more than--
(A) $150,000,000 shall be used to assist eligible specialty
crop producers in counties that have been declared a disaster
as the result of drought; and
(B) $150,000,000 shall be used to assist eligible specialty
crop producers in counties that have been declared a disaster
as the result of excessive rainfall or a related condition.
(2) Notification.--Not later than 45 days after the date of
enactment of this Act, the Secretary shall notify the State
department of agriculture (or similar entity) in each State
of the availability of funds to assist eligible specialty
crop producers, including such terms as are determined by the
Secretary to be necessary for the equitable treatment of
eligible specialty crop producers.
(3) Provision of grants.--
(A) In general.--The Secretary shall make grants to States
for disaster counties on a pro rata basis based on the value
of specialty crop losses in those counties during the 2009
calendar year, as determined by the Secretary.
(B) Administrative costs.--State Secretary of Agriculture
may not use more than five percent of the funds provided for
costs associated with the administration of the grants
provided in paragraph (1).
(C) Administration of grants.--State Secretary of
Agriculture may enter into a contract with the Department of
Agriculture to administer the grants provided in paragraph
(1).
(D) Timing.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall make grants to
States to provide assistance under this subsection.
(E) Maximum grant.--The maximum amount of a grant made to a
State for counties described in paragraph (1)(B) may not
exceed $40,000,000.
(4) Requirements.--The Secretary shall make grants under
this subsection only to States that demonstrate to the
satisfaction of the Secretary that the State will--
(A) use grant funds to issue payments to eligible specialty
crop producers;
(B) provide assistance to eligible specialty crop producers
not later than 60 days after the date on which the State
receives grant funds; and
(C) not later than 30 days after the date on which the
State provides assistance to eligible specialty crop
producers, submit to the Secretary a report that describes--
(i) the manner in which the State provided assistance;
(ii) the amounts of assistance provided by type of
specialty crop; and
(iii) the process by which the State determined the levels
of assistance to eligible specialty crop producers.
(D) Relation to other law.--Assistance received under this
subsection shall be included in the calculation of farm
revenue for the 2009 crop year under section 531(b)(4)(A) of
the Federal Crop Insurance Act (7 U.S.C. 1531(b)(4)(A)) and
section 901(b)(4)(A) of the Trade Act of 1974 (19 U.S.C.
2497(b)(4)(A)).
(d) Cottonseed Assistance.--
(1) In general.--Of the funds of the Commodity Credit
Corporation, the Secretary shall use not more than
$42,000,000 to provide supplemental assistance to eligible
producers and first-handlers of the 2009 crop of cottonseed
in a disaster county.
(2) General terms.--Except as otherwise provided in this
subsection, the Secretary shall provide disaster assistance
under this subsection under the same terms and conditions as
assistance provided under section 3015 of the Emergency
Agricultural Disaster Assistance Act of 2006 (title III of
Public Law 109-234; 120 Stat. 477).
(3) Distribution of assistance.--The Secretary shall
distribute assistance to first handlers for the benefit of
eligible producers in a disaster county in an amount equal to
the product obtained by multiplying--
(A) the payment rate, as determined under paragraph (4);
and
(B) the county-eligible production, as determined under
paragraph (5).
(4) Payment rate.--The payment rate shall be equal to the
quotient obtained by dividing--
(A) the total funds made available to carry out this
subsection; by
(B) the sum of the county-eligible production, as
determined under paragraph (5).
(5) County-eligible production.--The county-eligible
production shall be equal to the product obtained by
multiplying--
(A) the number of acres planted to cotton in the disaster
county, as reported to the Secretary by first handlers;
(B) the expected cotton lint yield for the disaster county,
as determined by the Secretary based on the best available
information; and
(C) the national average seed-to-lint ratio, as determined
by the Secretary based on the best available information for
the 5 crop years immediately preceding the 2009 crop,
excluding the year in which the average ratio was the highest
and the year in which the average ratio was the lowest in
such period.

[[Page S5029]]

(e) Aquaculture Assistance.--
(1) In general.--Of the funds of the Commodity Credit
Corporation, the Secretary shall use not more than
$25,000,000, to remain available until September 30, 2011, to
carry out a program of grants to States to assist eligible
aquaculture producers for losses associated with high feed
input costs during the 2009 calendar year.
(2) Notification.--Not later than 45 days after the date of
enactment of this Act, the Secretary shall notify the State
department of agriculture (or similar entity) in each State
of the availability of funds to assist eligible aquaculture
producers, including such terms as are determined by the
Secretary to be necessary for the equitable treatment of
eligible aquaculture producers.
(3) Provision of grants.--
(A) In general.--The Secretary shall make grants to States
under this subsection on a pro rata basis based on the amount
of aquaculture feed used in each State during the 2009
calendar year, as determined by the Secretary.
(B) Timing.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall make grants to
States to provide assistance under this subsection.
(4) Requirements.--The Secretary shall make grants under
this subsection only to States that demonstrate to the
satisfaction of the Secretary that the State will--
(A) use grant funds to assist eligible aquaculture
producers;
(B) provide assistance to eligible aquaculture producers
not later than 60 days after the date on which the State
receives grant funds; and
(C) not later than 30 days after the date on which the
State provides assistance to eligible aquaculture producers,
submit to the Secretary a report that describes--
(i) the manner in which the State provided assistance;
(ii) the amounts of assistance provided per species of
aquaculture; and
(iii) the process by which the State determined the levels
of assistance to eligible aquaculture producers.
(5) Reduction in payments.--An eligible aquaculture
producer that receives assistance under this subsection shall
not be eligible to receive any other assistance under the
supplemental agricultural disaster assistance program
established under section 531 of the Federal Crop Insurance
Act (7 U.S.C. 1531) and section 901 of the Trade Act of 1974
(19 U.S.C. 2497) for any losses in 2009 relating to the same
species of aquaculture.
(6) Report to congress.--Not later than 240 days after the
date of enactment of this Act, the Secretary shall submit to
the appropriate committees of Congress a report that--
(A) describes in detail the manner in which this subsection
has been carried out; and
(B) includes the information reported to the Secretary
under paragraph (4)(C).
(f) Hawaii Transportation Cooperative.--Notwithstanding any
other provision of law, the Secretary shall use $21,000,000
of funds of the Commodity Credit Corporation to make a
payment to an agricultural transportation cooperative in the
State of Hawaii, the members of which are eligible to
participate in the commodity loan program of the Farm Service
Agency, for assistance to maintain and develop employment.
(g) Livestock Forage Disaster Program.--
(1) Definition of disaster county.--In this subsection:
(A) In general.--The term ``disaster county'' means a
county included in the geographic area covered by a
qualifying natural disaster declaration announced by the
Secretary in calendar year 2009.
(B) Inclusion.--The term ``disaster county'' includes a
contiguous county.
(2) Payments.--Of the funds of the Commodity Credit
Corporation, the Secretary shall use not more than
$50,000,000 to carry out a program to make payments to
eligible producers that had grazing losses in disaster
counties in calendar year 2009.
(3) Criteria.--
(A) In general.--Except as provided in subparagraph (B),
assistance under this subsection shall be determined under
the same criteria as are used to carry out the programs under
section 531(d) of the Federal Crop Insurance Act (7 U.S.C.
1531(d)) and section 901(d) of the Trade Act of 1974 (19
U.S.C. 2497(d)).
(B) Drought intensity.--For purposes of this subsection, an
eligible producer shall not be required to meet the drought
intensity requirements of section 531(d)(3)(D)(ii) of the
Federal Crop Insurance Act (7 U.S.C. 1531(d)(3)(D)(ii)) and
section 901(d)(3)(D)(ii) of the Trade Act of 1974 (19 U.S.C.
2497(d)(3)(D)(ii)).
(4) Amount.--Assistance under this subsection shall be in
an amount equal to 1 monthly payment using the monthly
payment rate under section 531(d)(3)(B) of the Federal Crop
Insurance Act (7 U.S.C. 1531(d)(3)(B)) and section
901(d)(3)(B) of the Trade Act of 1974 (19 U.S.C.
2497(d)(3)(B)).
(5) Relation to other law.--An eligible producer that
receives assistance under this subsection shall be ineligible
to receive assistance for 2009 grazing losses under the
program carried out under section 531(d) of the Federal Crop
Insurance Act (7 U.S.C. 1531(d)) and section 901(d) of the
Trade Act of 1974 (19 U.S.C. 2497(d)).
(h) Emergency Loans for Poultry Producers.--
(1) Definitions.--In this subsection:
(A) Announcement date.--The term ``announcement date''
means the date on which the Secretary announces the emergency
loan program under this subsection.
(B) Poultry integrator.--The term ``poultry integrator''
means a poultry integrator that filed proceedings under
chapter 11 of title 11, United States Code, in United States
Bankruptcy Court during the 30-day period beginning on
December 1, 2008.
(2) Loan program.--
(A) In general.--Of the funds of the Commodity Credit
Corporation, the Secretary shall use not more than
$75,000,000, to remain available until expended, for the cost
of making no-interest emergency loans available to poultry
producers that meet the requirements of this subsection.
(B) Terms and conditions.--Except as otherwise provided in
this subsection, emergency loans under this subsection shall
be subject to such terms and conditions as are determined by
the Secretary.
(3) Loans.--
(A) In general.--An emergency loan made to a poultry
producer under this subsection shall be for the purpose of
providing financing to the poultry producer in response to
financial losses associated with the termination or
nonrenewal of any contract between the poultry producer and a
poultry integrator.
(B) Eligibility.--
(i) In general.--To be eligible for an emergency loan under
this subsection, not later than 90 days after the
announcement date, a poultry producer shall submit to the
Secretary evidence that--

(I) the contract of the poultry producer described in
subparagraph (A) was not continued; and
(II) no similar contract has been awarded subsequently to
the poultry producer.

(ii) Requirement to offer loans.--Notwithstanding any other
provision of law, if a poultry producer meets the eligibility
requirements described in clause (i), subject to the
availability of funds under paragraph (2)(A), the Secretary
shall offer to make a loan under this subsection to the
poultry producer with a minimum term of 2 years.
(4) Additional requirements.--
(A) In general.--A poultry producer that receives an
emergency loan under this subsection may use the emergency
loan proceeds only to repay the amount that the poultry
producer owes to any lender for the purchase, improvement, or
operation of the poultry farm.
(B) Conversion of the loan.--A poultry producer that
receives an emergency loan under this subsection shall be
eligible to have the balance of the emergency loan converted,
but not refinanced, to a loan that has the same terms and
conditions as an operating loan under subtitle B of the
Consolidated Farm and Rural Development Act (7 U.S.C. 1941 et
seq.).
(i) State and Local Governments.--Section 1001(f)(6)(A) of
the Food Security Act of 1985 (7 U.S.C. 1308(f)(6)(A)) is
amended by inserting ``(other than the conservation reserve
program established under subchapter B of chapter 1 of
subtitle D of title XII of this Act)'' before the period at
the end.
(j) Administration.--
(1) Regulations.--
(A) In general.--As soon as practicable after the date of
enactment of this Act, the Secretary shall promulgate such
regulations as are necessary to implement this section and
the amendment made by this section.
(B) Procedure.--The promulgation of the regulations and
administration of this section and the amendment made by this
section shall be made without regard to--
(i) the notice and comment provisions of section 553 of
title 5, United States Code;
(ii) the Statement of Policy of the Secretary of
Agriculture effective July 24, 1971 (36 Fed. Reg. 13804),
relating to notices of proposed rulemaking and public
participation in rulemaking; and
(iii) chapter 35 of title 44, United States Code (commonly
known as the ``Paperwork Reduction Act'').
(C) Congressional review of agency rulemaking.--In carrying
out this paragraph, the Secretary shall use the authority
provided under section 808 of title 5, United States Code.
(2) Administrative costs.--Of the funds of the Commodity
Credit Corporation, the Secretary may use up to $10,000,000
to pay administrative costs incurred by the Secretary that
are directly related to carrying out this Act.
(3) Prohibition.--None of the funds of the Agricultural
Disaster Relief Trust Fund established under section 902 of
the Trade Act of 1974 (19 U.S.C. 2497a) may be used to carry
out this Act.

SEC. 605. SUMMER EMPLOYMENT FOR YOUTH.

There is appropriated, out of any funds in the Treasury not
otherwise appropriated, for an additional amount for
``Department of Labor--Employment and Training
Administration--Training and Employment Services'' for
activities under the Workforce Investment Act of 1998
(``WIA''), $1,000,000,000 shall be available for obligation
on the date of enactment of this Act for grants to States for
youth activities, including summer employment for youth:
Provided, That no portion of such funds shall be reserved to
carry out section 127(b)(1)(A) of the WIA: Provided further,
That for purposes of section 127(b)(1)(C)(iv) of the WIA,
funds available for youth activities shall be allotted as if
the total amount available for youth activities in the fiscal
year does not exceed $1,000,000,000: Provided further, That
with respect to the youth activities provided with

[[Page S5030]]

such funds, section 101(13)(A) of the WIA shall be applied by
substituting ``age 24'' for ``age 21'': Provided further,
That the work readiness performance indicator described in
section 136(b)(2)(A)(ii)(I) of the WIA shall be the only
measure of performance used to assess the effectiveness of
summer employment for youth provided with such funds:
Provided further, That an amount that is not more than 1
percent of such amount may be used for the administration,
management, and oversight of the programs, activities, and
grants carried out with such funds, including the evaluation
of the use of such funds: Provided further, That funds
available under the preceding proviso, together with funds
described in section 801(a) of division A of the American
Recovery and reinvestment Act of 2009 (Public Law 111-5), and
funds provided in such Act under the heading ``Department of
Labor-Departmental Management-Salaries and Expenses'', shall
remain available for obligation through September 30, 2011.

SEC. 606. HOUSING TRUST FUND.

(a) Funding.--There is hereby appropriated for the Housing
Trust Fund established pursuant to section 1338 of the
Federal Housing Enterprises Financial Safety and Soundness
Act of 1992 (12 U.S.C. 4568), $1,065,000,000, for use under
such section: Provided, That of the total amount provided
under this heading, $65,000,000 shall be available to the
Secretary of Housing and Urban Development only for
incremental project-based voucher assistance to be allocated
to States to be used solely in conjunction with grant funds
awarded under such section 1338, pursuant to the formula
established under section 1338 and taking into account
different per unit subsidy needs among states, as determined
by the Secretary.
(b) Amendments.--Section 1338 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4568) is amended--
(1) in subsection (c)--
(A) in paragraph (4)(A) by inserting after the period at
the end the following: ``Notwithstanding any other provision
of law, for the fiscal year following enactment of this
sentence and thereafter, the Secretary may make such notice
available only on the Internet at the appropriate government
website or websites or through other electronic media, as
determined by the Secretary.'';
(B) in paragraph (5)(C), by striking ``(8)'' and inserting
``(9)''; and
(C) in paragraph (7)(A)--
(i) by striking ``section 1335(a)(2)(B)'' and inserting
``section 1335(a)(1)(B)''; and
(ii) by inserting ``the units funded under'' after ``75
percent of''; and
(2) by adding at the end the following new subsection:
``(k) Environmental Review.--For the purpose of
environmental compliance review, funds awarded under this
section shall be subject to section 288 of the HOME
Investment Partnerships Act (12 U.S.C. 12838) and shall be
treated as funds under the program established by such
Act.''.

SEC. 607. THE INDIVIDUAL INDIAN MONEY ACCOUNT LITIGATION
SETTLEMENT ACT OF 2010.

(a) Short Title.--This section may be cited as the
``Individual Indian Money Account Litigation Settlement Act
of 2010''.
(b) Definitions.--In this section:
(1) Amended complaint.--The term ``Amended Complaint''
means the Amended Complaint attached to the Settlement.
(2) Land consolidation program.--The term ``Land
Consolidation Program'' means a program conducted in
accordance with the Settlement and the Indian Land
Consolidation Act (25 U.S.C. 2201 et seq.) under which the
Secretary may purchase fractional interests in trust or
restricted land.
(3) Litigation.--The term ``Litigation'' means the case
entitled Elouise Cobell et al. v. Ken Salazar et al., United
States District Court, District of Columbia, Civil Action No.
96-1285 (JR).
(4) Plaintiff.--The term ``Plaintiff'' means a member of
any class certified in the Litigation.
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(6) Settlement.--The term ``Settlement'' means the Class
Action Settlement Agreement dated December 7, 2009, in the
Litigation, as modified by the parties to the Litigation.
(7) Trust administration class.--The term ``Trust
Administration Class'' means the Trust Administration Class
as defined in the Settlement.
(c) Purpose.--The purpose of this section is to authorize
the Settlement.
(d) Authorization.--The Settlement is authorized, ratified,
and confirmed.
(e) Jurisdictional Provisions.--
(1) In general.--Notwithstanding the limitation of
jurisdiction of district courts contained in section
1346(a)(2) of title 28, United States Code, the United States
District Court for the District of Columbia shall have
jurisdiction over the claims asserted in the Amended
Complaint for purposes of the Settlement.
(2) Certification of trust administration class.--
(A) In general.--Notwithstanding the requirements of the
Federal Rules of Civil Procedure, the court overseeing the
Litigation may certify the Trust Administration Class.
(B) Treatment.--On certification under subparagraph (A),
the Trust Administration Class shall be treated as a class
under Federal Rule of Civil Procedure 23(b)(3) for purposes
of the Settlement.
(f) Trust Land Consolidation.--
(1) Trust land consolidation fund.--
(A) Establishment.--On final approval (as defined in the
Settlement) of the Settlement, there shall be established in
the Treasury of the United States a fund, to be known as the
``Trust Land Consolidation Fund''.
(B) Availability of amounts.--Amounts in the Trust Land
Consolidation Fund shall be made available to the Secretary
during the 10-year period beginning on the date of final
approval of the Settlement--
(i) to conduct the Land Consolidation Program; and
(ii) for other costs specified in the Settlement.
(C) Deposits.--
(i) In general.--On final approval (as defined in the
Settlement) of the Settlement, the Secretary of the Treasury
shall deposit in the Trust Land Consolidation Fund
$2,000,000,000 of the amounts appropriated by section 1304 of
title 31, United States Code.
(ii) Conditions met.--The conditions described in section
1304 of title 31, United States Code, shall be considered to
be met for purposes of clause (i).
(D) Transfers.--In a manner designed to encourage
participation in the Land Consolidation Program, the
Secretary may transfer, at the discretion of the Secretary,
not more than $60,000,000 of amounts in the Trust Land
Consolidation Fund to the Indian Education Scholarship
Holding Fund established under paragraph 2.
(2) Indian education scholarship holding fund.--
(A) Establishment.--On the final approval (as defined in
the Settlement) of the Settlement, there shall be established
in the Treasury of the United States a fund, to be known as
the ``Indian Education Scholarship Holding Fund''.
(B) Availability.--Notwithstanding any other provision of
law governing competition, public notification, or Federal
procurement or assistance, amounts in the Indian Education
Scholarship Holding Fund shall be made available, without
further appropriation, to the Secretary to contribute to an
Indian Education Scholarship Fund, as described in the
Settlement, to provide scholarships for Native Americans.
(3) Acquisition of trust or restricted land.--The Secretary
may acquire, at the discretion of the Secretary and in
accordance with the Land Consolidation Program, any
fractional interest in trust or restricted land.
(4) Treatment of unlocatable plaintiffs.--A Plaintiff the
whereabouts of whom are unknown and who, after reasonable
efforts by the Secretary, cannot be located during the 5 year
period beginning on the date of final approval (as defined in
the Settlement) of the Settlement shall be considered to have
accepted an offer made pursuant to the Land Consolidation
Program.
(g) Taxation and Other Benefits.--
(1) Internal revenue code.--For purposes of the Internal
Revenue Code of 1986, amounts received by an individual
Indian as a lump sum or a periodic payment pursuant to the
Settlement--
(A) shall not be included in gross income; and
(B) shall not be taken into consideration for purposes of
applying any provision of the Internal Revenue Code of 1986
that takes into account excludable income in computing
adjusted gross income or modified adjusted gross income,
including section 86 of that Code (relating to Social
Security and tier 1 railroad retirement benefits).
(2) Other benefits.--Notwithstanding any other provision of
law, for purposes of determining initial eligibility, ongoing
eligibility, or level of benefits under any Federal or
federally assisted program, amounts received by an individual
Indian as a lump sum or a periodic payment pursuant to the
Settlement shall not be treated for any household member,
during the 1-year period beginning on the date of receipt--
(A) as income for the month during which the amounts were
received; or
(B) as a resource.

SEC. 608. APPROPRIATION OF FUNDS FOR FINAL SETTLEMENT OF
CLAIMS FROM IN RE BLACK FARMERS DISCRIMINATION
LITIGATION.

(a) Definitions.--In this section:
(1) Settlement agreement.--The term ``Settlement
Agreement'' means the settlement agreement dated February 18,
2010 (including any modifications agreed to by the parties
and approved by the court under that agreement) between
certain plaintiffs, by and through their counsel, and the
Secretary of Agriculture to resolve, fully and forever, the
claims raised or that could have been raised in the cases
consolidated in In re Black Farmers Discrimination
Litigation, No. 08-511 (D.D.C.), including Pigford claims
asserted under section 14012 of the Food, Conservation, and
Energy Act of 2008 (Public Law 110-246; 122 Stat. 2209).
(2) Pigford claim.--The term ``Pigford claim'' has the
meaning given that term in section 14012(a)(3) of the Food,
Conservation, and Energy Act of 2008 (Public Law 110-246; 122
Stat. 2210).
(b) Appropriation of Funds.--There is hereby appropriated
to the Secretary of Agriculture $1,150,000,000, to remain
available until expended, to carry out the terms of the
Settlement Agreement if the Settlement Agreement is approved
by a court order that is or becomes final and nonappealable.
The

[[Page S5031]]

funds appropriated by this subsection are in addition to the
$100,000,000 of funds of the Commodity Credit Corporation
made available by section 14012(i) of the Food, Conservation,
and Energy Act of 2008 (Public Law 110-246; 122 Stat. 2212)
and shall be available for obligation only after those
Commodity Credit Corporation funds are fully obligated. If
the Settlement Agreement is not approved as provided in this
subsection, the $100,000,000 of funds of the Commodity Credit
Corporation made available by section 14012(i) of the Food,
Conservation, and Energy Act of 2008 shall be the sole
funding available for Pigford claims.
(c) Use of Funds.--The use of the funds appropriated by
subsection (b) shall be subject to the express terms of the
Settlement Agreement.
(d) Treatment of Remaining Funds.--If any of the funds
appropriated by subsection (b) are not obligated and expended
to carry out the Settlement Agreement, the Secretary of
Agriculture shall return the unused funds to the Treasury and
may not make the unused funds available for any purpose
related to section 14012 of the Food, Conservation, and
Energy Act of 2008, for any other settlement agreement
executed in In re Black Farmers Discrimination Litigation,
No. 08-511 (D.D.C.), or for any other purpose.
(e) Rules of Construction.--Nothing in this section shall
be construed as requiring the United States, any of its
officers or agencies, or any other party to enter into the
Settlement Agreement or any other settlement agreement.
Nothing in this section shall be construed as creating the
basis for a Pigford claim.
(f) Conforming Amendments.--Section 14012 of the Food,
Conservation, and Energy Act of 2008 (Public Law 110-246; 122
Stat. 2209) is amended--
(1) in subsection (c)(1)--
(A) by striking ``subsection (h)'' and inserting
``subsection (g)''; and
(B) by striking ``subsection (i)'' and inserting
``subsection (h)'';
(2) by striking subsection (e);
(3) in subsection (g), by striking ``subsection (f)'' and
inserting ``subsection (e)'';
(4) in subsection (i)--
(A) by striking ``(1) In general.--Of the funds'' and
inserting ``Of the funds''; and
(B) by striking paragraph (2);
(5) by striking subsection (j); and
(6) by redesignating subsections (f), (g), (h), (i), and
(k) as subsections (e), (f), (g), (h), and (i), respectively.

SEC. 609. EXPANSION OF ELIGIBILITY FOR CONCURRENT RECEIPT OF
MILITARY RETIRED PAY AND VETERANS' DISABILITY
COMPENSATION TO INCLUDE ALL CHAPTER 61
DISABILITY RETIREES REGARDLESS OF DISABILITY
RATING PERCENTAGE OR YEARS OF SERVICE.

(a) Phased Expansion Concurrent Receipt.--Subsection (a) of
section 1414 of title 10, United States Code, is amended to
read as follows:
``(a) Payment of Both Retired Pay and Disability
Compensation.--
``(1) Payment of both required.--
``(A) In general.--Subject to subsection (b), a member or
former member of the uniformed services who is entitled for
any month to retired pay and who is also entitled for that
month to veterans' disability compensation for a qualifying
service-connected disability (in this section referred to as
a `qualified retiree') is entitled to be paid both for that
month without regard to sections 5304 and 5305 of title 38.
``(B) Applicability of full concurrent receipt phase-in
requirement.--During the period beginning on January 1, 2004,
and ending on December 31, 2013, payment of retired pay to a
qualified retiree is subject to subsection (c).
``(C) Phase-in exception for 100 percent disabled
retirees.--The payment of retired pay is subject to
subsection (c) only during the period beginning on January 1,
2004, and ending on December 31, 2004, in the case of the
following qualified retirees:
``(i) A qualified retiree receiving veterans' disability
compensation for a disability rated as 100 percent.
``(ii) A qualified retiree receiving veterans' disability
compensation at the rate payable for a 100 percent disability
by reason of a determination of individual unemployability.
``(D) Temporary phase-in exception for certain chapter 61
disability retirees; termination.--Subject to subsection (b),
during the period beginning on January 1, 2011, and ending on
September 30, 2012, subsection (c) shall not apply to a
qualified retiree described in subparagraph (B) or (C) of
paragraph (2).
``(2) Qualifying service-connected disability defined.--In
this section:
``(A) 50 percent rating threshold.--In the case of a member
or former member receiving retired pay under any provision of
law other than chapter 61 of this title, or under chapter 61
with 20 years or more of service otherwise creditable under
section 1405 or computed under section 12732 of this title,
the term `qualifying service-connected disability' means a
service-connected disability or combination of service-
connected disabilities that is rated as not less than 50
percent disabling by the Secretary of Veterans Affairs.
However, during the period specified in paragraph (1)(D),
members or former members receiving retired pay under chapter
61 with 20 years or more of creditable service computed under
section 12732 of this title, but not otherwise entitled to
retired pay under any other provision of this title, shall
qualify in accordance with subparagraphs (B) and (C).
``(B) Inclusion of members not otherwise entitled to
retired pay.--In the case of a member or former member
receiving retired pay under chapter 61 of this title, but who
is not otherwise entitled to retired pay under any other
provision of this title, the term `qualifying service-
connected disability' means a service-connected disability or
combination of service-connected disabilities that is rated
by the Secretary of Veterans Affairs at the disabling level
specified in one of the following clauses (which, subject to
paragraph (3), is effective on or after the date specified in
the applicable clause):
``(i) January 1, 2011, rated 100 percent, or a rate payable
at 100 percent by reason of individual unemployability or
rated 90 percent.
``(ii) January 1, 2012, rated 80 percent or 70 percent.
``(iii) January 1, 2013, rated 60 percent or 50 percent.
``(C) Elimination of rating threshold.--In the case of a
member or former member receiving retired pay under chapter
61 regardless of being otherwise eligible for retirement, the
term `qualifying service-connected disability' means a
service-connected disability or combination of service-
connected disabilities that is rated by the Secretary of
Veterans Affairs at the disabling level specified in one of
the following clauses (which, subject to paragraph (3), is
effective on or after the date specified in the applicable
clause):
``(i) January 1, 2014, rated 40 percent or 30 percent.
``(ii) January 1, 2015, any rating.
``(3) Limited duration.--Notwithstanding the effective date
specified in each clause of subparagraphs (B) and (C) of
paragraph (2), the clause--
``(A) shall apply only if the termination date specified in
paragraph (1)(D) would occur during or after the calendar
year specified in the clause; and
``(B) shall not apply beyond the termination date specified
in paragraph (1)(D).''.
(b) Conforming Amendment to Special Rules for Chapter 61
Disability Retirees.--Subsection (b) of such section is
amended to read as follows:
``(b) Special Rules for Chapter 61 Disability Retirees When
Eligibility Has Been Established for Such Retirees.--
``(1) General reduction rule.--The retired pay of a member
retired under chapter 61 of this title is subject to
reduction under sections 5304 and 5305 of title 38, but only
to the extent that the amount of the members retired pay
under chapter 61 of this title exceeds the amount of retired
pay to which the member would have been entitled under any
other provision of law based upon the member's service in the
uniformed services if the member had not been retired under
chapter 61 of this title.
``(2) Chapter 61 retirees not otherwise entitled to retired
pay.--
``(A) Before termination date.--If a member with a
qualifying service-connected disability (as defined in
subsection (a)(2)) is retired under chapter 61 of this title,
but is not otherwise entitled to retired pay under any other
provision of this title, and the termination date specified
in subsection (a)(1)(D) has not occurred, the retired pay of
the member is subject to reduction under sections 5304 and
5305 of title 38, but only to the extent that the amount of
the member's retired pay under chapter 61 of this title
exceeds the amount equal to 2\1/2\ percent of the member's
years of creditable service multiplied by the member's
retired pay base under section 1406(b)(1) or 1407 of this
title, whichever is applicable to the member.
``(B) After termination date.--Subsection (a) does not
apply to a member described in subparagraph (A) if the
termination date specified in subsection (a)(1)(D) has
occurred.''.
(c) Conforming Amendment to Full Concurrent Receipt Phase-
in.--Subsection (c) of such section is amended by striking
``the second sentence of''.
(d) Clerical Amendments.--
(1) Section heading.--The heading of such section is
amended to read as follows:

``Sec. 1414. Concurrent receipt of retired pay and veterans'
disability compensation''.

(2) Table of sections.--The table of sections at the
beginning of chapter 71 of such title is amended by striking
the item related to section 1414 and inserting the following
new item:

``1414. Concurrent receipt of retired pay and veterans' disability
compensation.''.

(e) Effective Date.--The amendments made by this section
shall take effect on January 1, 2011.

SEC. 610. EXTENSION OF USE OF 2009 POVERTY GUIDELINES.

Section 1012 of the Department of Defense Appropriations
Act, 2010 (Public Law 111-118), as amended by section 6 of
the Continuing Extension Act of 2010 (Public Law 111-157), is
amended--
(1) by striking ``before May 31, 2010''; and
(2) by inserting ``for 2011'' after ``until updated poverty
guidelines''.

SEC. 611. REFUNDS DISREGARDED IN THE ADMINISTRATION OF
FEDERAL PROGRAMS AND FEDERALLY ASSISTED
PROGRAMS.

(a) In General.--Subchapter A of chapter 65 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new section:

[[Page S5032]]

``SEC. 6409. REFUNDS DISREGARDED IN THE ADMINISTRATION OF
FEDERAL PROGRAMS AND FEDERALLY ASSISTED
PROGRAMS.

``(a) In General.--Notwithstanding any other provision of
law, any refund (or advance payment with respect to a
refundable credit) made to any individual under this title
shall not be taken into account as income, and shall not be
taken into account as resources for a period of 12 months
from receipt, for purposes of determining the eligibility of
such individual (or any other individual) for benefits or
assistance (or the amount or extent of benefits or
assistance) under any Federal program or under any State or
local program financed in whole or in part with Federal
funds.
``(b) Termination.--Subsection (a) shall not apply to any
amount received after December 31, 2010.''.
(b) Clerical Amendment.--The table of sections for such
subchapter is amended by adding at the end the following new
item:

``Sec. 6409. Refunds disregarded in the administration of Federal
programs and federally assisted programs.''.

(c) Effective Date.--The amendments made by this section
shall apply to amounts received after December 31, 2009.

SEC. 612. STATE COURT IMPROVEMENT PROGRAM.

Section 438 of the Social Security Act (42 U.S.C. 629h) is
amended--
(1) in subsection (c)(2)(A), by striking ``2010'' and
inserting ``2011''; and
(2) in subsection (e), by striking ``2010'' and inserting
``2011''.

SEC. 613. QUALIFYING TIMBER CONTRACT OPTIONS.

(a) Definitions.--In this section:
(1) Qualifying contract.--The term ``qualifying contract''
means a contract that has not been terminated by the Bureau
of Land Management for the sale of timber on lands
administered by the Bureau of Land Management that meets all
of the following criteria:
(A) The contract was awarded during the period beginning on
January 1, 2005, and ending on December 31, 2008.
(B) There is unharvested volume remaining for the contract.
(C) The contract is not a salvage sale.
(D) The Secretary determined there is not an urgent need to
harvest under the contract due to deteriorating timber
conditions that developed after the award of the contract.
(2) Secretary.--The term ``Secretary'' means the Secretary
of the Interior, acting through the Director of Bureau of
Land Management.
(3) Timber purchaser.--The term ``timber purchaser'' means
the party to the qualifying contract for the sale of timber
from lands administered by the Bureau of Land Management.
(b) Market-related Contract Extension Option.--Upon a
timber purchaser's written request, the Secretary may make a
one-time modification to the qualifying contract to add 3
years to the contract expiration date if the written
request--
(1) is received by the Secretary not later than 90 days
after the date of enactment of this Act; and
(2) contains a provision releasing the United States from
all liability, including further consideration or
compensation, resulting from the modification under this
subsection of the term of a qualifying contract.
(c) Reporting.--Not later than 6 months after the date of
the enactment of this Act, the Secretary shall submit to
Congress a report detailing a plan and timeline to promulgate
new regulations authorizing the Bureau of Land Management to
extend timber contracts due to changes in market conditions.
(d) Regulations.--Not later than 2 years after the date of
the enactment of this Act, the Secretary shall promulgate new
regulations authorizing the Bureau of Land Management to
extend timber contracts due to changes in market conditions.
(e) No Surrender of Claims.--This section shall not have
the effect of surrendering any claim by the United States
against any timber purchaser that arose under a timber sale
contract, including a qualifying contract, before the date on
which the Secretary adjusts the contract term under
subsection (b).

SEC. 614. EXTENSION AND FLEXIBILITY FOR CERTAIN ALLOCATED
SURFACE TRANSPORTATION PROGRAMS.

(a) Modification of Allocation Rules.--Section 411(d) of
the Surface Transportation Extension Act of 2010 (Public Law
111-147; 124 Stat. 80) is amended--
(1) in paragraph (1)--
(A) in the matter preceding subparagraph (A)--
(i) by striking ``1301, 1302,''; and
(ii) by striking ``1198, 1204,''; and
(B) in subparagraph (A)--
(i) in the matter preceding clause (i) by striking
``apportioned under sections 104(b) and 144 of title 23,
United States Code,'' and inserting ``specified in section
105(a)(2) of title 23, United States Code (except the high
priority projects program),''; and
(ii) in clause (ii) by striking ``apportioned under such
sections of such Code'' and inserting ``specified in such
section 105(a)(2) (except the high priority projects
program)'';
(2) in paragraph (2)--
(A) in the matter preceding subparagraph (A)--
(i) by striking ``1301, 1302,''; and
(ii) by striking ``1198, 1204,''; and
(B) in subparagraph (A)--
(i) in the matter preceding clause (i) by striking
``apportioned under sections 104(b) and 144 of title 23,
United States Code,'' and inserting ``specified in section
105(a)(2) of title 23, United States Code (except the high
priority projects program),''; and
(ii) in clause (ii) by striking ``apportioned under such
sections of such Code'' and inserting ``specified in such
section 105(a)(2) (except the high priority projects
program)''; and
(3) by adding at the end the following:
``(5) Projects of national and regional significance and
national corridor infrastructure improvement programs.--
``(A) Redistribution among states.--Notwithstanding
sections 1301(m) and 1302(e) of SAFETEA-LU (119 Stat. 1202
and 1205), the Secretary shall apportion funds authorized to
be appropriated under subsection (b) for the projects of
national and regional significance program and the national
corridor infrastructure improvement program among all States
such that each State's share of the funds so apportioned is
equal to the State's share for fiscal year 2009 of funds
apportioned or allocated for the programs specified in
section 105(a)(2) of title 23, United States Code.
``(B) Distribution among programs.--Funds apportioned to a
State pursuant to subparagraph (A) shall be--
``(i) made available to the State for the programs
specified in section 105(a)(2) of title 23, United States
Code (except the high priority projects program), 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 such programs; and

``(ii) administered in the same manner and with the same
period of availability as funding is administered under
programs identified in clause (i).''.
(b) Expenditure Authority From Highway Trust Fund.--
Paragraph (1) of section 9503(c) of the Internal Revenue Code
of 1986 is amended by striking ``Surface Transportation
Extension Act of 2010'' and inserting ``American Jobs and
Closing Tax Loopholes Act of 2010''.
(c) Effective Date.--The amendments made by this section
shall take effect upon the date of enactment of the Surface
Transportation Extension Act of 2010 (Public Law 111-147; 124
Stat. 78 et seq.) and shall be treated as being included in
that Act at the time of the enactment of that Act.
(d) Savings Clause.--
(1) In general.--For fiscal year 2010 and for the period
beginning on October 1, 2010, and ending on December 31,
2010, the amount of funds apportioned to each State under
section 411(d) of the Surface Transportation Extension Act of
2010 (Public Law 111-147) that is determined by the amount
that the State received or was authorized to receive for
fiscal year 2009 to carry out the projects of national and
regional significance program and national corridor
infrastructure improvement program shall be the greater of--
(A) the amount that the State was authorized to receive
under section 411(d) of the Surface Transportation Extension
Act of 2010 with respect to each such program according to
the provisions of that Act, as in effect on the day before
the date of enactment of this Act; or
(B) the amount that the State is authorized to receive
under section 411(d) of the Surface Transportation Extension
Act of 2010 with respect to each such program pursuant to the
provisions of that Act, as amended by the amendments made by
this section.
(2) Obligation authority.--For fiscal year 2010, the amount
of obligation authority distributed to each State shall be
the greater of--
(A) the amount that the State was authorized to receive
pursuant to section 120(a)(4)(A) (as it pertains to the
Appalachian Development Highway System program) of title I of
division A of the Consolidated Appropriations Act, 2010
(Public Law 111-117) and sections 120(a)(4)(B) and 120(a)(6)
of such title, as of the day before the date of enactment of
this Act; or
(B) the amount that the State is authorized to receive
pursuant to section 120(a)(4)(A) (as it pertains to the
Appalachian Development Highway System program) of title I of
division A of the Consolidated Appropriations Act, 2010
(Public Law 111-117) and sections 120(a)(4)(B) and 120(a)(6)
of such title, as of the date of enactment of this Act.
(3) Authorization of appropriations.--There is authorized
to be appropriated out of the Highway Trust Fund (other than
the Mass Transit Account) such sums as may be necessary to
carry out this subsection.
(4) Increase in obligation limitation.--The limitation
under the heading ``Federal-aid Highways (Limitation on
Obligations) (Highway Trust Fund)'' in Public Law 111-117 is
increased by such sums as may be necessary to carry out this
subsection.
(5) Contract authority.--Funds made available to carry out
this subsection shall be available for obligation and
administered in the same manner as if such funds were
apportioned under chapter 1 of title 23, United States Code.
(6) Amounts.--The dollar amount specified in section
105(d)(1) of title 23, United States Code, the dollar amount
specified in section 120(a)(4)(B) of title I of division A of
the Consolidated Appropriations Act, 2010 (Public Law 111-
117), and the dollar amount specified in section 120(b)(10)
of such title shall each

[[Page S5033]]

be increased as necessary to carry out this subsection.

SEC. 615. COMMUNITY COLLEGE AND CAREER TRAINING GRANT
PROGRAM.

(a) In General.--Section 278(a) of the Trade Act of 1974
(19 U.S.C. 2372(a)) is amended by adding at the end the
following:
``(3) Rule of construction.--For purposes of this section,
any reference to `workers', `workers eligible for training
under section 236', or any other reference to workers under
this section shall be deemed to include individuals who are,
or are likely to become, eligible for unemployment
compensation as defined in section 85(b) of the Internal
Revenue Code of 1986, or who remain unemployed after
exhausting all rights to such compensation.''.
(b) Definition of Eligible Institution.--Section 278(b)(1)
of the Trade Act of 1974 (19 U.S.C. 2372(b)(1)) is amended--
(1) by striking ``section 102'' and inserting ``section
101(a)''; and
(2) by striking ``1002'' and inserting ``1001(a)''.
(c) Authorization of Appropriations.--Section 279 of the
Trade Act of 1974 (19 U.S.C. 2372a) is amended--
(1) in subsection (a), by striking the last sentence; and
(2) by adding at the end the following:
``(c) Administrative and Related Costs.--The Secretary may
retain not more than 5 percent of the funds appropriated
under subsection (b) for each fiscal year to administer,
evaluate, and establish reporting systems for the Community
College and Career Training Grant program under section 278.
``(d) Supplement Not Supplant.--Funds appropriated under
subsection (b) shall be used to supplement and not supplant
other Federal, State, and local public funds expended to
support community college and career training programs.
``(e) Availability.--Funds appropriated under subsection
(b) shall remain available for the fiscal year for which the
funds are appropriated and the subsequent fiscal year.''.

SEC. 616. EXTENSIONS OF DUTY SUSPENSIONS ON COTTON SHIRTING
FABRICS AND RELATED PROVISIONS.

(a) Extensions.--Each of the following headings of the
Harmonized Tariff Schedule of the United States is amended by
striking the date in the effective date column and inserting
``12/31/2013'':
(1) Heading 9902.52.08 (relating to woven fabrics of
cotton).
(2) Heading 9902.52.09 (relating to woven fabrics of
cotton).
(3) Heading 9902.52.10 (relating to woven fabrics of
cotton).
(4) Heading 9902.52.11 (relating to woven fabrics of
cotton).
(5) Heading 9902.52.12 (relating to woven fabrics of
cotton).
(6) Heading 9902.52.13 (relating to woven fabrics of
cotton).
(7) Heading 9902.52.14 (relating to woven fabrics of
cotton).
(8) Heading 9902.52.15 (relating to woven fabrics of
cotton).
(9) Heading 9902.52.16 (relating to woven fabrics of
cotton).
(10) Heading 9902.52.17 (relating to woven fabrics of
cotton).
(11) Heading 9902.52.18 (relating to woven fabrics of
cotton).
(12) Heading 9902.52.19 (relating to woven fabrics of
cotton).
(13) Heading 9902.52.20 (relating to woven fabrics of
cotton).
(14) Heading 9902.52.21 (relating to woven fabrics of
cotton).
(15) Heading 9902.52.22 (relating to woven fabrics of
cotton).
(16) Heading 9902.52.23 (relating to woven fabrics of
cotton).
(17) Heading 9902.52.24 (relating to woven fabrics of
cotton).
(18) Heading 9902.52.25 (relating to woven fabrics of
cotton).
(19) Heading 9902.52.26 (relating to woven fabrics of
cotton).
(20) Heading 9902.52.27 (relating to woven fabrics of
cotton).
(21) Heading 9902.52.28 (relating to woven fabrics of
cotton).
(22) Heading 9902.52.29 (relating to woven fabrics of
cotton).
(23) Heading 9902.52.30 (relating to woven fabrics of
cotton).
(24) Heading 9902.52.31 (relating to woven fabrics of
cotton).
(b) Extension of Duty Refunds and Pima Cotton Trust Fund;
Modification of Affidavit Requirements.--Section 407 of title
IV of division C of the Tax Relief and Health Care Act of
2006 (Public Law 109-432; 120 Stat. 3060) is amended--
(1) in subsection (b)--
(A) in paragraph (1), by striking ``amounts determined by
the Secretary'' and all that follows through ``5208.59.80''
and inserting ``amounts received in the general fund that are
attributable to duties received since January 1, 2004, on
articles classified under heading 5208''; and
(B) in paragraph (2), by striking ``October 1, 2008'' and
inserting ``December 31, 2013'';
(2) in subsection (d)--
(A) in the matter preceding paragraph (1), by inserting
``annually'' after ``provided''; and
(B) in paragraph (1), by inserting ``during the year in
which the affidavit is filed and'' after ``imported cotton
fabric''; and
(3) in subsection (f)--
(A) in the matter preceding paragraph (1), by inserting
``annually'' after ``provided''; and
(B) in paragraph (1), by inserting ``during the year in
which the affidavit is filed and'' after ``United States''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act
and apply with respect to affidavits filed on or after such
date of enactment.

SEC. 617. MODIFICATION OF WOOL APPAREL MANUFACTURERS TRUST
FUND.

(a) In General.--Section 4002(c)(2)(A) of the Miscellaneous
Trade and Technical Corrections Act of 2004 (Public Law 108-
429; 118 Stat. 2600) is amended by striking ``chapter 51''
and inserting ``chapter 62''.
(b) Full Restoration of Payment Levels in Fiscal Year
2010.--
(1) Transfer of amounts.--
(A) In general.--Not later than 30 days after the date of
the enactment of this Act, the Secretary of the Treasury
shall transfer to the Wool Apparel Manufacturers Trust Fund,
out of the general fund of the Treasury of the United States,
amounts determined by the Secretary of the Treasury to be
equivalent to amounts received in the general fund that are
attributable to the duty received on articles classified
under chapter 62 of the Harmonized Tariff Schedule of the
United States, subject to the limitation in subparagraph (B).
(B) Limitation.--The Secretary of the Treasury shall not
transfer more than the amount determined by the Secretary to
be necessary for--
(i) U.S. Customs and Border Protection to make payments to
eligible manufacturers under section 4002(c)(3) of the
Miscellaneous Trade and Technical Corrections Act of 2004 so
that the amount of such payments, when added to any other
payments made to eligible manufacturers under section
4002(c)(3) of such Act for calendar year 2010, equal the
total amount of payments authorized to be provided to
eligible manufacturers under section 4002(c)(3) of such Act
for calendar year 2010; and
(ii) the Secretary of Commerce to provide grants to
eligible manufacturers under section 4002(c)(6) of the
Miscellaneous Trade and Technical Corrections Act of 2004 so
that the amounts of such grants, when added to any other
grants made to eligible manufacturers under section
4002(c)(6) of such Act for calendar year 2010, equal the
total amount of grants authorized to be provided to eligible
manufacturers under section 4002(c)(6) of such Act for
calendar year 2010.
(2) Payment of amounts.--U.S. Customs and Border Protection
shall make payments described in paragraph (1) to eligible
manufacturers not later than 30 days after such transfer of
amounts from the general fund of the Treasury of the United
States to the Wool Apparel Manufacturers Trust Fund. The
Secretary of Commerce shall promptly provide grants described
in paragraph (1) to eligible manufacturers after such
transfer of amounts from the general fund of the Treasury of
the United States to the Wool Apparel Manufacturers Trust
Fund.
(c) Rule of Construction.--The amendment made by subsection
(a) shall not be construed to affect the availability of
amounts transferred to the Wool Apparel Manufacturers Trust
Fund before the date of the enactment of this Act.

SEC. 618. DEPARTMENT OF COMMERCE STUDY.

Not later than 180 days after the date of enactment of this
Act, the Secretary of Commerce shall report to Congress
detailing--
(1) the pattern of job loss in the New England, Mid-
Atlantic, and Midwest States over the past 20 years;
(2) the role of the off-shoring of manufacturing jobs in
overall job loss in the regions; and
(3) recommendations to attract industries and bring jobs to
the region.

SEC. 619. ARRA PLANNING AND REPORTING.

Section 1512 of the American Recovery and Reinvestment Act
of 2009 (Public Law 111-5; 123 Stat. 287) is amended--
(1) in subsection (d)--
(A) in the subsection heading, by inserting ``Plans and''
after ``Agency'';
(B) by striking ``Not later than'' and inserting the
following:
``(1) Definition.--In this subsection, the term `covered
program' means a program for which funds are appropriated
under this division--
``(A) in an amount that is--
``(i) more than $2,000,000,000; and
``(ii) more than 150 percent of the funds appropriated for
the program for fiscal year 2008; or
``(B) that did not exist before the date of enactment of
this Act.
``(2) Plans.--Not later than July 1, 2010, the head of each
agency that distributes recovery funds shall submit to
Congress and make available on the website of the agency a
plan for each covered program, which shall, at a minimum,
contain--
``(A) a description of the goals for the covered program
using recovery funds;
``(B) a discussion of how the goals described in
subparagraph (A) relate to the goals for ongoing activities
of the covered program, if applicable;
``(C) a description of the activities that the agency will
undertake to achieve the goals described in subparagraph (A);
``(D) a description of the total recovery funding for the
covered program and the recovery funding for each activity
under the covered program, including identifying whether the
activity will be carried out using grants, contracts, or
other types of funding mechanisms;

[[Page S5034]]

``(E) a schedule of milestones for major phases of the
activities under the covered program, with planned delivery
dates;
``(F) performance measures the agency will use to track the
progress of each of the activities under the covered program
in meeting the goals described in subparagraph (A), including
performance targets, the frequency of measurement, and a
description of the methodology for each measure;
``(G) a description of the process of the agency for the
periodic review of the progress of the covered program
towards meeting the goals described in subparagraph (A); and
``(H) a description of how the agency will hold program
managers accountable for achieving the goals described in
subparagraph (A).
``(3) Reports.--
``(A) In general.--Not later than''; and
(C) by adding at the end the following:
``(B) Reports on plans.--Not later than 30 days after the
end of the calendar quarter ending September 30, 2010, and
every calendar quarter thereafter during which the agency
obligates or expends recovery funds, the head of each agency
that developed a plan for a covered program under paragraph
(2) shall submit to Congress and make available on a website
of the agency a report for each covered program that--
``(i) discusses the progress of the agency in implementing
the plan;
``(ii) describes the progress towards achieving the goals
described in paragraph (2)(A) for the covered program;
``(iii) discusses the status of each activity carried out
under the covered program, including whether the activity is
completed;
``(iv) details the unobligated and unexpired balances and
total obligations and outlays under the covered program;
``(v) discusses--

``(I) whether the covered program has met the milestones
for the covered program described in paragraph (2)(E);
``(II) if the covered program has failed to meet the
milestones, the reasons why; and
``(III) any changes in the milestones for the covered
program, including the reasons for the change;

``(vi) discusses the performance of the covered program,
including--

``(I) whether the covered program has met the performance
measures for the covered program described in paragraph
(2)(F);
``(II) if the covered program has failed to meet the
performance measures, the reasons why; and
``(III) any trends in information relating to the
performance of the covered program; and

``(vii) evaluates the ability of the covered program to
meet the goals of the covered program given the performance
of the covered program.'';
(2) in subsection (f)--
(A) by striking ``Within 180 days'' and inserting the
following:
``(1) In general.--Within 180 days''; and
(B) by adding at the end the following:
``(2) Penalties.--
``(A) In general.--Subject to subparagraphs (B), (C), and
(D), the Attorney General may bring a civil action in an
appropriate United States district court against a recipient
of recovery funds from an agency that does not provide the
information required under subsection (c) or knowingly
provides information under subsection (c) that contains a
material omission or misstatement. In a civil action under
this paragraph, the court may impose a civil penalty on a
recipient of recovery funds in an amount not more than
$250,000. Any amounts received from a civil penalty under
this paragraph shall be deposited in the general fund of the
Treasury.
``(B) Notification.--
``(i) In general.--The head of an agency shall provide a
written notification to a recipient of recovery funds from
the agency that fails to provide the information required
under subsection (c). A notification under this subparagraph
shall provide the recipient with information on how to comply
with the necessary reporting requirements and notice of the
penalties for failing to do so.
``(ii) Limitation.--A court may not impose a civil penalty
under subparagraph (A) relating to the failure to provide
information required under subsection (c) if, not later than
31 days after the date of the notification under clause (i),
the recipient of the recovery funds provides the information.
``(C) Considerations.--In determining the amount of a
penalty under this paragraph for a recipient of recovery
funds, a court shall consider--
``(i) the number of times the recipient has failed to
provide the information required under subsection (c);
``(ii) the amount of recovery funds provided to the
recipient;
``(iii) whether the recipient is a government, nonprofit
entity, or educational institution; and
``(iv) whether the recipient is a small business concern
(as defined under section 3 of the Small Business Act (15
U.S.C. 632)), with particular consideration given to
businesses with not more than 50 employees.
``(D) Applicability.--This paragraph shall apply to any
report required to be submitted on or after the date of
enactment of this paragraph.
``(E) Nonexclusivity.--The imposition of a civil penalty
under this subsection shall not preclude any other criminal,
civil, or administrative remedy available to the United
States or any other person under Federal or State law.
``(3) Technical assistance.--Each agency distributing
recovery funds shall provide technical assistance, as
necessary, to assist recipients of recovery funds in
complying with the requirements to provide information under
subsection (c), which shall include providing recipients with
a reminder regarding each reporting requirement.
``(4) Public listing.--
``(A) In general.--Not later than 45 days after the end of
each calendar quarter, and subject to the notification
requirements under paragraph (2)(B), the Board shall make
available on the website established under section 1526 a
list of all recipients of recovery funds that did not provide
the information required under subsection (c) for the
calendar quarter.
``(B) Contents.--A list made available under subparagraph
(A) shall, for each recipient of recovery funds on the list,
include the name and address of the recipient, the
identification number for the award, the amount of recovery
funds awarded to the recipient, a description of the activity
for which the recovery funds were provided, and, to the
extent known by the Board, the reason for noncompliance.
``(5) Regulations and reporting.--
``(A) Regulations.--Not later than 90 days after the date
of enactment of this paragraph, the Attorney General, in
consultation with the Director of the Office of Management
and Budget and the Chairperson, shall promulgate regulations
regarding implementation of this section.
``(B) Reporting.--
``(i) In general.--Not later than July 1, 2010, and every 3
months thereafter, the Director of the Office of Management
and Budget, in consultation with the Chairperson, shall
submit to Congress a report on the extent of noncompliance by
recipients of recovery funds with the reporting requirements
under this section.
``(ii) Contents.--Each report submitted under clause (i)
shall include--

``(I) information, for the quarter and in total, regarding
the number and amount of civil penalties imposed and
collected under this subsection, sorted by agency and
program;
``(II) information on the steps taken by the Federal
Government to reduce the level of noncompliance; and
``(III) any other information determined appropriate by the
Director.''; and

(3) by adding at the end the following:
``(i) Termination.--The reporting requirements under this
section shall terminate on September 30, 2013.''.

SEC. 620. AMENDMENT OF TRAVEL PROMOTION ACT OF 2009.

(a) Travel Promotion Fund Fees.--Section 217(h)(3)(B) of
the Immigration and Nationality Act (8 U.S.C. 1187(h)(3)(B))
is amended--
(1) by striking ``subsection (d) of section 11 of the
Travel Promotion Act of 2009.'' in clause (ii) and inserting
``subsection (d) of the Travel Promotion Act of 2009 (22
U.S.C. 2131(d)).''; and
(2) by striking ``September 30, 2014.'' in clause (iii) and
inserting ``September 30, 2015.''.
(b) Implementation Beginning in Fiscal Year 2011.--
Subsection (d) of the Travel Promotion Act of 2009 (22 U.S.C.
2131(d)) is amended--
(1) by striking ``For fiscal year 2010, the'' in paragraph
(2)(A) and inserting ``The'';
(2) by striking ``quarterly, beginning on January 1,
2010,'' in paragraph (2)(A) and inserting ``monthly,
immediately following the collection of fees under section
217(h)(3)(B)(i)(I) of the Immigration and Nationality Act (8
U.S.C. 1187(h)(3)(B)(i)(I),'';
(3) by striking ``fiscal years 2011 through 2014,'' in
paragraph (2)(B) and inserting ``fiscal years 2012 through
2015,'';
(4) by striking ``fiscal year 2010,'' in paragraph (3)(A)
and inserting ``fiscal year 2011,'';
(5) by striking ``fiscal year 2011,'' each place it appears
in paragraph (3)(A) and inserting ``fiscal year 2012,''; and
(6) by striking ``fiscal year 2010, 2011, 2012, 2013, or
2014'' in paragraph (4)(B) and inserting ``fiscal year 2011,
2012, 2013, 2014, or 2015''.

SEC. 621. LIMITATION ON PENALTY FOR FAILURE TO DISCLOSE
REPORTABLE TRANSACTIONS BASED ON RESULTING TAX
BENEFITS.

(a) In General.--Subsection (b) of section 6707A of the
Internal Revenue Code of 1986 is amended to read as follows:
``(b) Amount of Penalty.--
``(1) In general.--Except as otherwise provided in this
subsection, the amount of the penalty under subsection (a)
with respect to any reportable transaction shall be 75
percent of the decrease in tax shown on the return as a
result of such transaction (or which would have resulted from
such transaction if such transaction were respected for
Federal tax purposes).
``(2) Maximum penalty.--The amount of the penalty under
subsection (a) with respect to any reportable transaction
shall not exceed--
``(A) in the case of a listed transaction, $200,000
($100,000 in the case of a natural person), or
``(B) in the case of any other reportable transaction,
$50,000 ($10,000 in the case of a natural person).
``(3) Minimum penalty.--The amount of the penalty under
subsection (a) with respect to any transaction shall not be
less than $10,000 ($5,000 in the case of a natural
person).''.
(b) Effective Date.--The amendment made by this section
shall apply to penalties assessed after December 31, 2006.

[[Page S5035]]

SEC. 622. REPORT ON TAX SHELTER PENALTIES AND CERTAIN OTHER
ENFORCEMENT ACTIONS.

(a) In General.--The Commissioner of Internal Revenue, in
consultation with the Secretary of the Treasury, shall submit
to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate an
annual report on the penalties assessed by the Internal
Revenue Service during the preceding year under each of the
following provisions of the Internal Revenue Code of 1986:
(1) Section 6662A (relating to accuracy-related penalty on
understatements with respect to reportable transactions).
(2) Section 6700(a) (relating to promoting abusive tax
shelters).
(3) Section 6707 (relating to failure to furnish
information regarding reportable transactions).
(4) Section 6707A (relating to failure to include
reportable transaction information with return).
(5) Section 6708 (relating to failure to maintain lists of
advisees with respect to reportable transactions).
(b) Additional Information.--The report required under
subsection (a) shall also include information on the
following with respect to each year:
(1) Any action taken under section 330(b) of title 31,
United States Code, with respect to any reportable
transaction (as defined in section 6707A(c) of the Internal
Revenue Code of 1986).
(2) Any extension of the time for assessment of tax
enforced, or assessment of any amount under such an
extension, under paragraph (10) of section 6501(c) of the
Internal Revenue Code of 1986.
(c) Date of Report.--The first report required under
subsection (a) shall be submitted not later than December 31,
2010.

TITLE VII--TRANSPARENCY REQUIREMENTS FOR FOREIGN-HELD DEBT

SEC. 701. SHORT TITLE.

This title may be cited as the ``Foreign-Held Debt
Transparency and Threat Assessment Act''.

SEC. 702. DEFINITIONS.

In this title:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the following:
(A) The Committee on Armed Services, the Committee on
Foreign Relations, the Committee on Finance, and the
Committee on the Budget of the Senate.
(B) The Committee on Armed Services, the Committee on
Foreign Affairs, the Committee on Ways and Means, and the
Committee on the Budget of the House of Representatives.
(2) Debt instruments of the united states.--The term ``debt
instruments of the United States'' means all bills, notes,
and bonds issued or guaranteed by the United States or by an
entity of the United States Government, including any
Government-sponsored enterprise.

SEC. 703. SENSE OF CONGRESS.

It is the sense of Congress that--
(1) the growing Federal debt of the United States has the
potential to jeopardize the national security and economic
stability of the United States;
(2) the increasing dependence of the United States on
foreign creditors has the potential to make the United States
vulnerable to undue influence by certain foreign creditors in
national security and economic policymaking;
(3) the People's Republic of China is the largest foreign
creditor of the United States, in terms of its overall
holdings of debt instruments of the United States;
(4) the current level of transparency in the scope and
extent of foreign holdings of debt instruments of the United
States is inadequate and needs to be improved, particularly
regarding the holdings of the People's Republic of China;
(5) through the People's Republic of China's large holdings
of debt instruments of the United States, China has become a
super creditor of the United States;
(6) under certain circumstances, the holdings of the
People's Republic of China could give China a tool with which
China can try to manipulate the domestic and foreign
policymaking of the United States, including the United
States relationship with Taiwan;
(7) under certain circumstances, if the People's Republic
of China were to be displeased with a given United States
policy or action, China could attempt to destabilize the
United States economy by rapidly divesting large portions of
China's holdings of debt instruments of the United States;
and
(8) the People's Republic of China's expansive holdings of
such debt instruments of the United States could potentially
pose a direct threat to the United States economy and to
United States national security. This potential threat is a
significant issue that warrants further analysis and
evaluation.

SEC. 704. QUARTERLY REPORT ON RISKS POSED BY FOREIGN HOLDINGS
OF DEBT INSTRUMENTS OF THE UNITED STATES.

(a) Quarterly Report.--Not later than March 31, June 30,
September 30, and December 31 of each year, the President
shall submit to the appropriate congressional committees a
report on the risks posed by foreign holdings of debt
instruments of the United States, in both classified and
unclassified form.
(b) Matters To Be Included.--Each report submitted under
this section shall include the following:
(1) The most recent data available on foreign holdings of
debt instruments of the United States, which data shall not
be older than the date that is 7 months preceding the date of
the report.
(2) The country of domicile of all foreign creditors who
hold debt instruments of the United States.
(3) The total amount of debt instruments of the United
States that are held by the foreign creditors, broken out by
the creditors' country of domicile and by public, quasi-
public, and private creditors.
(4) For each foreign country listed in paragraph (3)--
(A) an analysis of the country's purpose in holding debt
instruments of the United States and long-term intentions
with regard to such debt instruments;
(B) an analysis of the current and foreseeable risks to the
long-term national security and economic stability of the
United States posed by each country's holdings of debt
instruments of the United States; and
(C) a specific determination of whether the level of risk
identified under subparagraph (B) is acceptable or
unacceptable.
(c) Public Availability.--The President shall make each
report required by subsection (a) available, in its
unclassified form, to the public by posting it on the
Internet in a conspicuous manner and location.

SEC. 705. ANNUAL REPORT ON RISKS POSED BY THE FEDERAL DEBT OF
THE UNITED STATES.

(a) In General.--Not later than December 31 of each year,
the Comptroller General of the United States shall submit to
the appropriate congressional committees a report on the
risks to the United States posed by the Federal debt of the
United States.
(b) Content of Report.--Each report submitted under this
section shall include the following:
(1) An analysis of the current and foreseeable risks to the
long-term national security and economic stability of the
United States posed by the Federal debt of the United States.
(2) A specific determination of whether the levels of risk
identified under paragraph (1) are sustainable.
(3) If the determination under paragraph (2) is that the
levels of risk are unsustainable, specific recommendations
for reducing the levels of risk to sustainable levels, in a
manner that results in a reduction in Federal spending.

SEC. 706. CORRECTIVE ACTION TO ADDRESS UNACCEPTABLE AND
UNSUSTAINABLE RISKS TO UNITED STATES NATIONAL
SECURITY AND ECONOMIC STABILITY.

In any case in which the President determines under section
704(b)(4)(C) that a foreign country's holdings of debt
instruments of the United States pose an unacceptable risk to
the long-term national security or economic stability of the
United States, the President shall, within 30 days of the
determination--
(1) formulate a plan of action to reduce the risk level to
an acceptable and sustainable level, in a manner that results
in a reduction in Federal spending;
(2) submit to the appropriate congressional committees a
report on the plan of action that includes a timeline for the
implementation of the plan and recommendations for any
legislative action that would be required to fully implement
the plan; and
(3) move expeditiously to implement the plan in order to
protect the long-term national security and economic
stability of the United States.

TITLE VIII--TRANSPARENCY REQUIREMENTS FOR FOREIGN-HELD DEBT

SEC. 801. SHORT TITLE.

This title may be cited as the ``Foreign-Held Debt
Transparency and Threat Assessment Act''.

SEC. 802. DEFINITIONS.

In this title:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the following:
(A) The Committee on Armed Services, the Committee on
Foreign Relations, the Committee on Finance, the Committee on
Banking, Housing, and Urban Affairs, and the Committee on the
Budget of the Senate.
(B) The Committee on Armed Services, the Committee on
Foreign Affairs, the Committee on Ways and Means, the
Committee on Financial Services, and the Committee on the
Budget of the House of Representatives.
(2) Debt instruments of the united states.--The term ``debt
instruments of the United States'' means all bills, notes,
and bonds held by the public and issued or guaranteed by the
United States or by an entity of the United States
Government.

SEC. 803. SENSE OF CONGRESS.

It is the sense of Congress that--
(1) the growing Federal debt of the United States has the
potential to jeopardize the national security and economic
stability of the United States;
(2) large foreign holdings of debt instruments of the
United States have the potential to make the United States
vulnerable to undue influence by foreign creditors in
national security and economic policymaking;
(3) the People's Republic of China, Japan, and the United
Kingdom are the 3 largest foreign holders of debt instruments
of the United States; and
(4) the current level of transparency in the scope and
extent of foreign holdings of debt instruments of the United
States is inadequate and needs to be improved.

[[Page S5036]]

SEC. 804. ANNUAL REPORT ON RISKS POSED BY FOREIGN HOLDINGS OF
DEBT INSTRUMENTS OF THE UNITED STATES.

(a) Annual Report.--Not later than March 31 of each year,
the Secretary of the Treasury shall submit to the appropriate
congressional committees a report on the risks posed by
foreign holdings of debt instruments of the United States, in
both classified and unclassified form.
(b) Matters To Be Included.--Each report submitted under
this section shall include the following:
(1) The most recent data available on foreign holdings of
debt instruments of the United States, which data shall not
be older than the date that is 9 months preceding the date of
the report.
(2) The total amount of debt instruments of the United
States that are held by foreign residents, broken out by the
residents' country of domicile and by public and private
residents.
(3) An analysis of the current and foreseeable risks to the
long-term national security and economic stability of the
United States posed by foreign holdings of debt instruments
of the United States.
(c) Public Availability.--The Secretary of the Treasury
shall make each report required by subsection (a) available,
in its unclassified form, to the public by posting it on the
Internet in a conspicuous manner and location.

SEC. 805. ANNUAL REPORT ON RISKS POSED BY THE FEDERAL DEBT OF
THE UNITED STATES.

(a) In General.--Not later than March 31 of each year, the
Comptroller General of the United States shall submit to the
appropriate congressional committees a report on the risks to
the United States posed by the Federal debt of the United
States.
(b) Content of Report.--Each report submitted under this
section shall include the following:
(1) An analysis of the current and foreseeable risks to the
long-term national security and economic stability of the
United States posed by the Federal debt of the United States.
(2) Specific recommendations for reducing the levels of
risk resulting from the Federal debt.

SEC. 806. CORRECTIVE ACTION TO ADDRESS UNACCEPTABLE RISKS TO
UNITED STATES NATIONAL SECURITY AND ECONOMIC
STABILITY.

If the President determines that foreign holdings of debt
instruments of the United States pose an unacceptable risk to
the long-term national security or economic stability of the
United States, the President shall, within 30 days of the
determination--
(1) formulate a plan of action to reduce such risk;
(2) submit to the appropriate congressional committees a
report on the plan of action that includes a timeline for the
implementation of the plan and recommendations for any
legislative action that would be required to fully implement
the plan; and
(3) move expeditiously to implement the plan in order to
protect the long-term national security and economic
stability of the United States.

TITLE IX--OFFICE OF THE HOMEOWNER ADVOCATE

SEC. 901. OFFICE OF THE HOMEOWNER ADVOCATE.

(a) Establishment.--There is established in the Department
of the Treasury an office to be known as the ``Office of the
Homeowner Advocate'' (in this title referred to as the
``Office'').
(b) Director.--
(1) In general.--The Director of the Office of the
Homeowner Advocate (in this title referred to as the
``Director'') shall report directly to the Assistant
Secretary of the Treasury for Financial Stability, and shall
be entitled to compensation at the same rate as the highest
rate of basic pay established for the Senior Executive
Service under section 5382 of title 5, United States Code.
(2) Appointment.--The Director shall be appointed by the
Secretary, after consultation with the Secretary of the
Department of Housing and Urban Development, and without
regard to the provisions of title 5, United States Code,
relating to appointments in the competitive service or the
Senior Executive Service.
(3) Qualifications.--An individual appointed under
paragraph (2) shall have--
(A) experience as an advocate for homeowners; and
(B) experience dealing with mortgage servicers.
(4) Restriction on employment.--An individual may be
appointed as Director only if such individual was not an
officer or employee of either a mortgage servicer or the
Department of the Treasury during the 4-year period preceding
the date of such appointment.
(5) Hiring authority.--The Director shall have the
authority to hire staff, obtain support by contract, and
manage the budget of the Office of the Homeowner Advocate.

SEC. 902. FUNCTIONS OF THE OFFICE.

(a) In General.--It shall be the function of the Office--
(1) to assist homeowners, housing counselors, and housing
lawyers in resolving problems with the Home Affordable
Modification Program of the Making Home Affordable initiative
of the Secretary, authorized under the Emergency Economic
Stabilization Act of 2008 (in this title referred to as the
``Home Affordable Modification Program'')
(2) to identify areas, both individual and systematic, in
which homeowners, housing counselors, and housing lawyers
have problems in dealings with the Home Affordable
Modification Program;
(3) to the extent possible, to propose changes in the
administrative practices of the Home Affordable Modification
Program, to mitigate problems identified under paragraph (2);
(4) to identify potential legislative changes which may be
appropriate to mitigate such problems; and
(5) to implement other programs and initiatives that the
Director deems important to assisting homeowners, housing
counselors, and housing lawyers in resolving problems with
the Home Affordable Modification Program, which may include--
(A) running a triage hotline for homeowners at risk of
foreclosure;
(B) providing homeowners with access to housing counseling
programs of the Department of Housing and Urban Development
at no cost to the homeowner;
(C) developing Internet tools related to the Home
Affordable Modification Program; and
(D) developing training and educational materials.
(b) Authority.--
(1) In general.--Staff designated by the Director shall
have the authority to implement servicer remedies, on a case-
by-case basis, subject to the approval of the Assistant
Secretary of the Treasury for Financial Stability.
(2) Resolution of homeowner concerns.--The Office shall, to
the extent possible, resolve all homeowner concerns not later
than 30 days after the opening of a case with such homeowner.
(c) Commencement of Operations.--The Office shall commence
its operations, as required by this title, not later than 3
months after the date of enactment of this Act.
(d) Sunset.--The Office shall cease operations as of the
date on which the Home Affordable Modification Program ceases
to operate.

SEC. 903. RELATIONSHIP WITH EXISTING ENTITIES.

(a) Transfer.--The Office shall coordinate and centralize
all complaint escalations relating to the Home Affordable
Modification Program.
(b) Hotline.--The HOPE hotline (or any successor triage
hotline) shall reroute all complaints relating to the Home
Affordable Modification Program to the Office.
(c) Coordination.--The Office shall coordinate with the
compliance office of the Office of Financial Stability of the
Department of the Treasury and the Homeownership Preservation
Office of the Department of the Treasury.

SEC. 904. RULE OF CONSTRUCTION.

Nothing in this section shall prohibit a mortgage servicer
from evaluating a homeowner for eligibility under the Home
Affordable Foreclosure Alternatives Program while a case is
still open with the Office of the Homeowner Advocate. Nothing
in this section may be construed to relieve any loan services
from otherwise applicable rules, directives, or similar
guidance under the Home Affordable Modification Program
relating to the continuation or completion of foreclosure
proceedings.

SEC. 905. REPORTS TO CONGRESS.

(a) Testimony.--The Director shall be available to testify
before the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the
House of Representatives, not less frequently than 4 times a
year, or at any time at the request of the Chairs of either
committee.
(b) Reports.--Once annually, the Director shall provide a
detailed report to Congress on the Home Affordable
Modification Program. Such report shall contain full and
substantive analysis, in addition to statistical information,
including, at a minimum--
(1) data and analysis of the types and volume of complaints
received from homeowners, housing counselors, and housing
lawyers, broken down by category of servicer, except that
servicers may not be identified by name in the report;
(2) a summary of not fewer than 20 of the most serious
problems encountered by Home Affordable Modification Program
participants, including a description of the nature of such
problems;
(3) to the extent known, identification of the 10 most
litigated issues for Home Affordable Modification Program
participants, including recommendations for mitigating such
disputes;
(4) data and analysis on the resolutions of the complaints
received from homeowners, housing counselors, and housing
lawyers;
(5) identification of any programs or initiatives that the
Office has taken to improve the Home Affordable Modification
Program;
(6) recommendations for such administrative and legislative
action as may be appropriate to resolve problems encountered
by Home Affordable Modification Program participants; and
(7) such other information as the Director may deem
advisable.

SEC. 906. FUNDING.

Amounts made available for the costs of administration of
the Home Affordable Modification Program that are not
otherwise obligated shall be available to carry out the
duties of the Office. Funding shall be maintained at levels
adequate to reasonably carry out the functions of the Office.

[[Page S5037]]

SEC. 907. PROHIBITION ON PARTICIPATION IN MAKING HOME
AFFORDABLE FOR BORROWERS WHO STRATEGICALLY
DEFAULT.

No mortgage may be modified under the Making Home
Affordable Program, or with any funds from the Troubled Asset
Relief Program, unless the servicer of the mortgage loan has
determined, in accordance with standards and requirements
established by the Secretary of the Treasury, that the
mortgagor cannot afford to make payments under the terms of
the existing mortgage loan. The Secretary of the Treasury, in
consultation with the Secretary of Housing and Urban
Development, shall issue rules to carry out this section not
later than 90 days after the date of enactment of this Act.

SEC. 908. PUBLIC AVAILABILITY OF INFORMATION.

(a) Public Availability of Data.--The Secretary of the
Treasury shall revise the guidelines for the Home Affordable
Modification Program of the Making Home Affordable initiative
of the Secretary of the Treasury, authorized under the
Emergency Economic Stabilization Act of 2008 (Public Law 110-
343), to establish that the data collected by the Secretary
of the Treasury from each mortgage servicer and lender
participating in the Program is made public in accordance
with subsection (b).
(b) Content.--Not more than 60 days after each monthly
deadline for submission of data by mortgage servicers and
lender participating in the program, the Treasury shall make
all data tables available to the public at the individual
record level. This data shall include but not be limited to--
(1) higher risk loans, including loans made in connection
with any program to provide expanded loan approvals, shall be
reported separately;
(2) disclose--
(A) the rate or pace at which such mortgages are becoming
seriously delinquent;
(B) whether such rate or pace is increasing or decreasing;
(C) if there are certain subsets within the loans covered
by this section that have greater or lesser rates or paces of
delinquency; and
(D) if such subsets exist, the characteristics of such
subset of mortgages;
(3) with respect to the loss mitigation efforts of the
loan--
(A) the processes and practices that the reporter has in
effect to minimize losses on mortgages covered by this
section; and
(B) the manner and methods by which such processes and
practices are being monitored for effectiveness;
(4) disclose, with respect to loans that are or become 60
or more days past due, (provided that for purposes of
disclosure under this paragraph that each loan should have a
unique number that is not the same as any loan number the
borrower, originator, or servicer uses), the following
attributes--
(A) the original loan amount;
(B) the current loan amount;
(C) the loan-to-value ratio and combined loan-to-value
ratio, both at origination and currently, and the number of
liens on the property;
(D) the property valuation at the time of origination of
the loan, and all subsequent property valuations and the date
of each valuation;
(E) each relevant credit score of each borrower obtained at
any time in connection with the loan, with the date of the
credit score, to the extent allowed by existing law;
(F) whether the loan has any mortgage or other credit
insurance or guarantee;
(G) the current interest rate on such loan;
(H) any rate caps and floors if the loan is an adjustable
rate mortgage loan;
(I) the adjustable rate mortgage index or indices for such
loan;
(J) whether the loan is currently past due, and if so how
many days such loan is past due;
(K) the total number of days the loan has been past due at
any time;
(L) whether the loan is subject to a balloon payment;
(M) the date of each modification of the loan;
(N) whether any amounts of loan principal has been deferred
or written off, and if so, the date and amount of each
deferral and the date and amount of each writedown;
(O) whether the interest rate was changed from a rate that
could adjust to a fixed rate, and if so, the period of time
for which the rate will be fixed;
(P) the amount by which the interest rate on the loan was
reduced, and for what period of time it was reduced;
(Q) if the interest rate was reduced or fixed for a period
of time less than the remaining loan term, on what dates, and
to what rates, could the rate potentially increase in the
future;
(R) whether the loan term was modified, and if so, whether
it was extended or shortened, and by what amount of time;
(S) whether the loan is in the process of foreclosure or
similar procedure, whether judicial or otherwise; and
(T) whether a foreclosure or similar procedure, whether
judicial or otherwise, has been completed.
(c) Guidelines and Regulations.--The Secretary of the
Treasury shall establish guidelines and regulations
necessary--
(1) to ensure that the privacy of individual consumers is
appropriately protected in the reports under this section;
(2) to make the data reported under this subsection
available on a public website with no cost to access the
data, in a consistent format;
(3) to update the data no less frequently than monthly;
(4) to establish procedures for disclosing such data to the
public on a public website with no cost to access the data;
and
(5) to allow the Secretary to make such deletions as the
Secretary may determine to be appropriate to protect any
privacy interest of any loan modification applicant,
including the deletion or alteration of the applicant's name
and identification number.
(d) Exception.--No data shall have to be disclosed if it
voids or violates existing contracts between the Secretary of
Treasury and mortgage servicers as part of the Making Home
Affordable Program.

TITLE X--BUDGETARY PROVISIONS

SEC. 1001. BUDGETARY PROVISIONS.

(a) Statutory Paygo.--The budgetary effects of this Act,
for the purpose of complying with the Statutory Pay-As-You-Go
Act of 2010, shall be determined by reference to the latest
statement titled `Budgetary Effects of PAYGO Legislation' for
this Act, jointly submitted for printing in the Congressional
Record by the Chairmen of the House and Senate Budget
Committees, provided that such statement has been submitted
prior to the vote on passage in the House acting first on
this conference report or amendment between the Houses.
(b) Emergency Designations.--Sections 501 and 524--
(1) are designated as an emergency requirement pursuant to
section 4(g) of the Statutory Pay-As-You-Go Act of 2010
(Public Law 111-139; 2 U.S.C. 933(g));
(2) in the House of Representatives, are designated as an
emergency for purposes of pay-as-you-go principles; and
(3) in the Senate, are designated as an emergency
requirement pursuant to section 403(a) of S. Con. Res. 13
(111th Congress), the concurrent resolution on the budget for
fiscal year 2010.
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