Datasets:

hyperdemocracy

/

usc-chunks-s4096-o512

like 0

Follow

hyperdemocracy 3

113-hr-1-ih-dtd-228

113-hr-1-ih-dtd

113-hr-1

subsection (s) as subsection (t) and inserting after subsection (r) the following new subsection: (s) Extension of withholding to payments to certain persons classified as not employees (1) In general For purposes of this chapter and so much of subtitle F as relates to this chapter, compensation paid pursuant to a contract described in section 7707(d) shall be treated as if it were a payment of wages by an employer to an employee. (2) Amount withheld Except as otherwise provided under subsection (i), the amount to be deducted and withheld pursuant to paragraph (1) with respect to compensation paid pursuant to any such contract during any calendar year shall be an amount equal to 5 percent of so much of the amount of such compensation as does not exceed $10,000. . (c) Reporting Section 6041A is amended by adding at the end the following new subsection: (g) Special rules for certain persons classified as not employees In the case of any service recipient required to make a return under subsection (a) with respect to compensation to which section 7707(a) applies— (1) such return shall include— (A) the aggregate amount of such compensation paid to each person whose name is required to be included on such return, (B) the aggregate amount deducted and withheld under section 3402(s) with respect to such compensation, and (C) an indication of whether a copy of the contract described in section 7707(d) is on file with the service recipient or payor, and (2) the statement required to be furnished under subsection (e) shall include the information described in paragraph (1) with respect to the service provider to whom such statement is furnished. Terms used in this subsection which are also used in section 7707 shall have the same meaning as when used in such section. . (d) Clerical amendment The table of sections for chapter 79, as amended by the preceding provisions of this Act, is amended by adding at the end the following new item: Sec. 7707. Determination of worker classification. . (e) Effective date The amendments made by this section shall apply to services performed after December 31, 2014 (and to payments made for such services after such date). J Zones and Short-Term Regional Benefits 3821. Repeal of provisions relating to Empowerment Zones and Enterprise Communities (a) In general Chapter 1 is amended by striking subchapter U (and by striking the item relating to such subchapter in the table of subchapters for such chapter). (b) Conforming amendments (1) (A) Section 38(b) is amended by striking paragraph (9). (B) Section 280C(a) is amended by striking 1396(a), . (2) Section 179(e) is amended by striking paragraph (3) and by redesignating paragraph (4) as paragraph (3). (3) Section 1202(a)(2)(A) is amended by inserting (as in effect before its repeal by the Tax Reform Act of 2014 ) after section 1397C(b) . (c) Effective date (1) In general Except as otherwise provided in this subsection, the amendment made by this section shall take effect on the date of the enactment of this Act. (2) Rollovers So much of subsection (a) as relates to the repeal of section 1397B of the Internal Revenue Code of 1986 shall apply to sales after the date of the enactment of this Act. (3) Savings provision The amendments made by this section shall not apply to obligations described in section 1394 of the Internal Revenue Code of 1986 (as in effect before its repeal) which were issued before January 1, 2014. 3822. Repeal of DC Zone provisions (a) In general Chapter 1 is amended by striking subchapter W (and by striking the item relating to such subchapter in the table of subchapters for such chapter). (b) Conforming amendments (1) (A) Section 1202(a)(2)(B) is amended by inserting (as in effect before its repeal by the Tax Reform Act of 2014 ) after 1400B(b) . (2) Section 25(e)(1)(C) is amended by striking sections 23, 25D, and 1400C and inserting section 23 . (3) Section 1016(a) is amended by striking paragraph (27). (c) Effective date (1) In general Except as otherwise provided in paragraph (2), the amendments made by this section shall take

113-hr-1-ih-dtd-229

113-hr-1-ih-dtd

113-hr-1

subchapter in the table of subchapters for such chapter). (b) Conforming amendments (1) (A) Section 1202(a)(2)(B) is amended by inserting (as in effect before its repeal by the Tax Reform Act of 2014 ) after 1400B(b) . (2) Section 25(e)(1)(C) is amended by striking sections 23, 25D, and 1400C and inserting section 23 . (3) Section 1016(a) is amended by striking paragraph (27). (c) Effective date (1) In general Except as otherwise provided in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act. (2) Savings provision The amendments made by this section shall not apply to— (A) in the case of the repeal of section 1400A of the Internal Revenue Code of 1986, obligations described in section 1394 of such Code (as in effect before its repeal) which were issued before January 1, 2012, (B) in the case of the repeal of section 1400B of such Code, DC Zone assets (as defined in such section, as in effect before its repeal) which were acquired by the taxpayer before January 1, 2012, and (C) in the case of the repeal of section 1400C of such Code, principal residences acquired before January 1, 2012. 3823. Repeal of provisions relating to renewal communities (a) In general Chapter 1 is amended by striking subchapter X (and by striking the item relating to such subchapter in the table of subchapters for such chapter). (b) Conforming amendments (1) (A) Section 469(i)(3), as amended by the preceding provisions of this Act, is amended by striking subparagraph (C) and by redesignating subparagraphs (D), (E), and (F) as subparagraphs (B), (C), and (D). (B) Section 469(i)(3)(C), as so redesignated, is amended to read as follows: (C) Ordering rule If subparagraph (B) applies for a taxable year, paragraph (1) shall be applied— (i) first to the portion of the passive activity loss to which such subparagraph does not apply, and (ii) then to the portion of such loss to which such subparagraph does apply. . (C) Section 469(i)(6)(B), as amended by the preceding provisions of this Act, is amended— (i) by striking commercial revitalization deduction in the heading, (ii) by striking in the case of— and all that follows through any credit in clause (i), (iii) by striking year, or in clause (i) and inserting year. , and (iv) by striking clause (iii). (c) Effective date (1) In general Except as provided in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act. (2) Savings provision The amendments made by this section shall not apply to— (A) in the case of the repeal of section 1400F of the Internal Revenue Code of 1986, qualified community assets (as defined in such section, as in effect before its repeal) which were acquired by the taxpayer before January 1, 2010, (B) in the case of the repeal section 1400H of such Code, wages paid or incurred before January 1, 2010, (C) in the case of the repeal of section 1400I of such Code, qualified revitalization buildings (as defined in such section, as in effect before its repeal) which were placed in service before January 1, 2010, and (D) in the case of the repeal of section 1400J of such Code, property acquired before January 1, 2010. 3824. Repeal of various short-term regional benefits (a) In general Chapter 1 is amended by striking subchapter Y (and by striking the item relating to such subchapter in the table of subchapters for such chapter). (b) Conforming amendments Section 38(b) is amended by striking paragraphs (27), (28), (29) and (30). (c) Effective dates (1) In general Except as provided in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act. (2) Savings provision The amendments made by this section shall not apply to— (A) in the case of the repeal of section 1400L(a) of the Internal Revenue Code of 1986, qualified wages (as defined in such section, as in effect before its repeal) which were paid or incurred before January 1, 2004, (B) in the case of the repeal of subsections (b) and (f) of section 1400L of such Code, qualified

113-hr-1-ih-dtd-230

113-hr-1-ih-dtd

113-hr-1

in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act. (2) Savings provision The amendments made by this section shall not apply to— (A) in the case of the repeal of section 1400L(a) of the Internal Revenue Code of 1986, qualified wages (as defined in such section, as in effect before its repeal) which were paid or incurred before January 1, 2004, (B) in the case of the repeal of subsections (b) and (f) of section 1400L of such Code, qualified New York Liberty Zone property (as defined in section 1400L(b) of such Code, as in effect before its repeal) placed in service before January 1, 2010, (C) in the case of the repeal of section 1400L(c) of such Code, qualified New York Liberty Zone leasehold improvement property (as defined in such section, as in effect before its repeal) placed in service before January 1, 2007, (D) in the case of the repeal of section 1400L(d) of such Code, qualified New York Liberty bonds (as defined in such section, as in effect before its repeal) issued before January 1, 2014, (E) in the case of the repeal of section 1400L(e) of such Code, advanced refundings before January 1, 2006, (F) in the case of the repeal of section 1400L(g) of such Code, property which is compulsorily or involuntarily converted as a result of the terrorist attacks on September 11, 2001, (G) in the case of the repeal of section 1400N(a) of such Code, obligations issued before January 1, 2012, (H) in the case of the repeal of section 1400N(b) of such Code, advanced refundings before January 1, 2011, (I) in the case of the repeal of section 1400N(d) of such Code, property placed in service before January 1, 2012, (J) in the case of the repeal of section 1400N(e) of such Code, property placed in service before January 1, 2009, (K) in the case of the repeal of subsections (f) and (g) of section 1400N of such Code, amounts paid or incurred before January 1, 2008, (L) in the case of the repeal of section 1400N(h) of such Code, amounts paid or incurred before January 1, 2012, (M) in the case of the repeal of section 1400N(l) of such Code, bonds issued before January 1, 2007, (N) in the case of the repeal of section 1400Q(a) of such Code, distributions before January 1, 2007, (O) in the case of the repeal of section 1400Q(b) of such Code, contributions before March 1, 2006, (P) in the case of the repeal of section 1400Q(c) of such Code, loans made before January 1, 2007, (Q) in the case of the repeal of section 1400R of such Code, wages paid or incurred before January 1, 2006, (R) in the case of the repeal of section 1400S(a) of such Code, contributions paid before January 1, 2006, (S) in the case of the repeal of section 1400T of such Code, financing provided before January 1, 2011, and (T) in the case of the repeal of part III of subchapter Y of chapter 1 of such Code, obligations issued before January 1, 2011. IV Participation exemption system for the taxation of foreign income A Establishment of exemption system 4001. Deduction for dividends received by domestic corporations from certain foreign corporations (a) In general Part VIII of subchapter B of chapter 1 is amended by inserting after section 245 the following new section: 245A. Dividends received by domestic corporations from certain foreign corporations (a) In general In the case of any dividend received from a specified 10-percent owned foreign corporation by a domestic corporation which is a United States shareholder with respect to such foreign corporation, there shall be allowed as a deduction an amount equal to 95 percent of the foreign-source portion of such dividend. (b) Specified 10-Percent owned foreign corporation For purposes of this section, the term specified 10-percent owned foreign corporation means any foreign corporation if any domestic corporation owns directly, or indirectly through a chain of ownership described under section 958(a), 10 percent or more of the voting stock of such foreign corporation. (c) Foreign-Source portion For purposes of this section— (1) In general The foreign-source

113-hr-1-ih-dtd-231

113-hr-1-ih-dtd

113-hr-1

equal to 95 percent of the foreign-source portion of such dividend. (b) Specified 10-Percent owned foreign corporation For purposes of this section, the term specified 10-percent owned foreign corporation means any foreign corporation if any domestic corporation owns directly, or indirectly through a chain of ownership described under section 958(a), 10 percent or more of the voting stock of such foreign corporation. (c) Foreign-Source portion For purposes of this section— (1) In general The foreign-source portion of any dividend is an amount which bears the same ratio to such dividends as— (A) the post-1986 undistributed foreign earnings, bears to (B) the total post-1986 undistributed earnings. (2) Post-1986 undistributed earnings The term post-1986 undistributed earnings means the amount of the earnings and profits of the specified 10-percent owned foreign corporation (computed in accordance with sections 964(a) and 986) accumulated in taxable years beginning after December 31, 1986— (A) as of the close of the taxable year of the specified 10-percent owned foreign corporation in which the dividend is distributed, and (B) without diminution by reason of dividends distributed during such taxable year. (3) Post-1986 undistributed foreign earnings The term post-1986 undistributed foreign earnings means the portion of the post-1986 undistributed earnings which is attributable to neither— (A) income described in subparagraph (A) of section 245(a)(5), nor (B) dividends described in subparagraph (B) of such section (determined without regard to section 245(a)(12)). (4) Treatment of distributions from earnings before 1987 (A) In general In the case of any dividend paid out of earnings and profits of the specified 10-percent owned foreign corporation (computed in accordance with sections 964(a) and 986) accumulated in taxable years beginning before January 1, 1987— (i) paragraphs (1), (2), and (3) shall be applied without regard to the phrase post-1986 each place it appears, and (ii) paragraph (2) shall be applied without regard to the phrase in taxable years beginning after December 31, 1986 . (B) Dividends paid first out of post-1986 earnings Dividends shall be treated as paid out of post-1986 undistributed earnings to the extent thereof. (d) Disallowance of foreign tax credit, etc (1) In general No credit shall be allowed under section 901 for any taxes paid or accrued (or treated as paid or accrued) with respect to any dividend for which a deduction is allowed under this section. (2) Denial of deduction No deduction shall be allowed under this chapter for any tax for which credit is not allowable under section 901 by reason of paragraph (1) (determined by treating the taxpayer as having elected the benefits of subpart A of part III of subchapter N). (e) Regulations The Secretary may prescribe such regulations or other guidance as may be necessary or appropriate to carry out the provisions of this section. . (b) Application of holding period requirement Subsection (c) of section 246 is amended— (1) by striking or 245 in paragraph (1) and inserting 245, or 245A , and (2) by adding at the end the following new paragraph: (5) Special rules for foreign source portion of dividends received from specified 10-percent owned foreign corporations (A) 6-month holding period requirement For purposes of section 245A— (i) paragraph (1)(A) shall be applied— (I) by substituting 180 days for 45 days each place it appears, and (II) by substituting 361-day period for 91-day period , and (ii) paragraph (2) shall not apply. (B) Status must be maintained during holding period For purposes of section 245A, the holding period requirement of this subsection shall be treated as met only if— (i) the specified 10-percent owned corporation referred to in section 245A(a) is a specified 10-percent owned corporation at all times during such period, and (ii) the taxpayer is a United States shareholder with respect to such specified 10-percent owned corporation at all times during such period. . (c) Application of rules generally applicable to deductions for

113-hr-1-ih-dtd-232

113-hr-1-ih-dtd

113-hr-1

during holding period For purposes of section 245A, the holding period requirement of this subsection shall be treated as met only if— (i) the specified 10-percent owned corporation referred to in section 245A(a) is a specified 10-percent owned corporation at all times during such period, and (ii) the taxpayer is a United States shareholder with respect to such specified 10-percent owned corporation at all times during such period. . (c) Application of rules generally applicable to deductions for dividends received (1) Treatment of dividends from certain corporations Paragraph (1) of section 246(a) is amended by striking and 245 and inserting 245, and 245A . (2) Assets generating tax-exempt portion of dividend not taken into account in allocating and apportioning deductible expenses Paragraph (3) of section 864(e) is amended by striking or 245(a) and inserting , 245(a), or 245A . (3) Coordination with section 1059 Subparagraph (B) of section 1059(b)(2) is amended by striking or 245 and inserting 245, or 245A . (d) Coordination with foreign tax credit limitation Subsection (b) of section 904, as amended by the preceding provisions of this Act, is amended by redesignating paragraph (2) as paragraph (1) and by adding at the end the following new paragraph: (2) Treatment of dividends for which deduction is allowed under section 245A For purposes of subsection (a), in the case of a domestic corporation which is a United States shareholder with respect to a specified 10-percent owned foreign corporation, such domestic corporation’s taxable income from sources without the United States shall be determined without regard to— (A) the foreign-source portion of any dividend received from such foreign corporation, and (B) any deductions properly allocable to such portion. Any term which is used in section 245A and in this paragraph shall have the same meaning for purposes of this paragraph as when used in such section. . (e) Conforming amendments (1) Paragraph (4) of section 245(a) is amended by striking section 902(c)(1) and inserting section 245A(c)(2) . (2) Subsection (b) of section 951 is amended by striking subpart and inserting title . (3) Subsection (a) of section 957 is amended by striking subpart in the matter preceding paragraph (1) and inserting title . (4) The table of sections for part VIII of subchapter B of chapter 1 is amended by inserting after the item relating to section 245 the following new item: Sec. 245A. Dividends received by domestic corporations from certain foreign corporations. . (f) Effective date The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. 4002. Limitation on losses with respect to specified 10-percent owned foreign corporations (a) Basis in specified 10-Percent owned foreign corporation reduced by nontaxed portion of dividend for purposes of determining loss (1) In general Section 961 is amended by adding at the end the following new subsection: (d) Basis in specified 10-Percent owned foreign corporation reduced by nontaxed portion of dividend for purposes of determining loss If a domestic corporation received a dividend from a specified 10-percent owned foreign corporation (as defined in section 245A) in any taxable year, solely for purposes of determining loss on any disposition in such taxable year or any subsequent taxable year, the basis of such domestic corporation in the stock of such foreign corporation shall be reduced by the amount of any deduction allowable to such domestic corporation under section 245A with respect to such stock. . (2) Effective date The amendments made by this subsection shall apply to dividends received in taxable years beginning after December 31, 2014. (b) Treatment of foreign branch losses transferred to specified 10-Percent owned foreign corporations (1) In general Part II of subchapter B of chapter 1, as amended by the preceding provisions of this Act, is amended by

113-hr-1-ih-dtd-233

113-hr-1-ih-dtd

113-hr-1

shall be reduced by the amount of any deduction allowable to such domestic corporation under section 245A with respect to such stock. . (2) Effective date The amendments made by this subsection shall apply to dividends received in taxable years beginning after December 31, 2014. (b) Treatment of foreign branch losses transferred to specified 10-Percent owned foreign corporations (1) In general Part II of subchapter B of chapter 1, as amended by the preceding provisions of this Act, is amended by adding at the end the following new section: 92. Certain foreign branch losses transferred to specified 10-percent owned foreign corporations (a) In general If a domestic corporation transfers substantially all of the assets of a foreign branch (within the meaning of section 367(a)(3)(C)) to a specified 10-percent owned foreign corporation (as defined in section 245A) with respect to which it is a United States shareholder after such transfer, such domestic corporation shall include in gross income for the taxable year which includes such transfer an amount equal to the transferred loss amount with respect to such transfer. (b) Limitation and carryforward based on foreign-Source dividends received (1) In general The amount included in the gross income of the taxpayer under subsection (a) for any taxable year shall not exceed the amount allowed as a deduction under section 245A for such taxable year (taking into account dividends received from all specified 10-percent owned foreign corporations with respect to which the taxpayer is a United States shareholder). (2) Amounts not included carried forward Any amount not included in gross income for any taxable year by reason of paragraph (1) shall, subject to the application of paragraph (1) to the succeeding taxable year, be included in gross income for the succeeding taxable year. (c) Transferred loss amount For purposes of this section, the term transferred loss amount means, with respect to any transfer of substantially all of the assets of a foreign branch, the excess (if any) of— (1) the sum of losses— (A) which were incurred by the foreign branch after December 31, 2014, and before the transfer, and (B) with respect to which a deduction was allowed to the taxpayer, over (2) the sum of— (A) any taxable income of such branch for a taxable year after the taxable year in which the loss was incurred and through the close of the taxable year of the transfer, and (B) any amount which is recognized under section 904(f)(3) on account of the transfer. (d) Reduction for recognized gains (1) In general In the case of a transfer not described in section 367(a)(3)(C), the transferred loss amount shall be reduced (but not below zero) by the amount of gain recognized by the taxpayer on account of the transfer (other than amounts taken into account under subsection (c)(2)(B)). (2) Coordination with recognition under section 367 In the case of a transfer described in section 367(a)(3)(C), the transferred loss amount shall not exceed the excess (if any) of— (A) the excess of the amount described in section 367(a)(3)(C)(i) over the amount described in section 367(a)(3)(C)(ii) with respect to such transfer, over (B) the amount of gain recognized under section 367(a)(3)(C) with respect to such transfer. (e) Source of income Amounts included in gross income under this section shall be treated as derived from sources within the United States. (f) Basis adjustments Consistent with such regulations or other guidance as the Secretary may prescribe, proper adjustments shall be made in the adjusted basis of the taxpayer’s stock in the specified 10-percent owned foreign corporation to which the transfer is made, and in the transferee’s adjusted basis in the property transferred, to reflect amounts included in gross income under this section. . (2) Amounts recognized under section 367 on transfer of foreign branch with previously deducted losses treated as United States source Subparagraph (C) of section 367(a)(3) is amended by striking outside in the last sentence and inserting within . (3) Clerical

113-hr-1-ih-dtd-234

113-hr-1-ih-dtd

113-hr-1

basis of the taxpayer’s stock in the specified 10-percent owned foreign corporation to which the transfer is made, and in the transferee’s adjusted basis in the property transferred, to reflect amounts included in gross income under this section. . (2) Amounts recognized under section 367 on transfer of foreign branch with previously deducted losses treated as United States source Subparagraph (C) of section 367(a)(3) is amended by striking outside in the last sentence and inserting within . (3) Clerical amendment The table of subparts for such part, as amended by the preceding provisions of this Act, is amended by adding at the end the following new item: Sec. 92. Certain foreign branch losses transferred to specified 10-percent owned foreign corporations. . (4) Effective date The amendments made by this subsection shall apply to transfers after December 31, 2014. 4003. Treatment of deferred foreign income upon transition to participation exemption system of taxation (a) In general Section 965 is amended to read as follows: 965. Treatment of deferred foreign income upon transition to participation exemption system of taxation (a) Treatment of deferred foreign income as subpart F income In the case of the last taxable year of a deferred foreign income corporation which begins before January 1, 2015, the subpart F income of such foreign corporation (as otherwise determined for such taxable year under section 952) shall be increased by the accumulated post-1986 deferred foreign income of such corporation determined as of the close of such taxable year. (b) Reduction in amounts included in gross income of United States shareholders of specified foreign corporations with deficits in earnings and profits (1) In general In the case of a taxpayer which is a United States shareholder with respect to at least one deferred foreign income corporation and at least one E&P deficit foreign corporation, the amount which would (but for this subsection) be taken into account under section 951(a)(1) by reason of subsection (a) as such United States shareholder’s pro rata share of the subpart F income of each deferred foreign income corporation shall be reduced (but not below zero) by the amount of such United States shareholder’s aggregate foreign E&P deficit which is allocated under paragraph (2) to such deferred foreign income corporation. (2) Allocation of aggregate foreign E&P deficit The aggregate foreign E&P deficit of any United States shareholder shall be allocated among the deferred foreign income corporations of such United States shareholder in an amount which bears the same proportion to such aggregate as— (A) such United States shareholder’s pro rata share of the accumulated post-1986 deferred foreign income of each such deferred foreign income corporation, bears to (B) the aggregate of such United States shareholder’s pro rata share of the accumulated post-1986 deferred foreign income of all deferred foreign income corporations of such United States shareholder. (3) Definitions related to E&P deficits For purposes of this subsection— (A) Aggregate foreign E&P deficit The term aggregate foreign E&P deficit means, with respect to any United States shareholder, the aggregate of such shareholder’s pro rata shares of the specified E&P deficits of the E&P deficit foreign corporations of such shareholder. (B) E&P deficit foreign corporation The term E&P deficit foreign corporation means, with respect to any taxpayer, any specified foreign corporation with respect to which such taxpayer is a United States shareholder, if— (i) such specified foreign corporation has a deficit in post-1986 earnings and profits, and (ii) as of February 26, 2014— (I) such corporation was a specified foreign corporation, and (II) such taxpayer was a United States shareholder of such corporation. (C) Specified E&P deficit The term specified E&P deficit means, with respect to any E&P deficit foreign corporation, the amount of the deficit referred to in subparagraph (B). (c) Application of participation exemption to included income (1) In general In the

113-hr-1-ih-dtd-235

113-hr-1-ih-dtd

113-hr-1

such specified foreign corporation has a deficit in post-1986 earnings and profits, and (ii) as of February 26, 2014— (I) such corporation was a specified foreign corporation, and (II) such taxpayer was a United States shareholder of such corporation. (C) Specified E&P deficit The term specified E&P deficit means, with respect to any E&P deficit foreign corporation, the amount of the deficit referred to in subparagraph (B). (c) Application of participation exemption to included income (1) In general In the case of a United States shareholder of a deferred foreign income corporation, there shall be allowed as a deduction for the taxable year in which an amount is included in the gross income of such United States shareholder under section 951(a)(1) by reason of this section an amount equal to the sum of— (A) 90 percent of the excess (if any) of— (i) the amount so included as gross income, over (ii) the amount of such United States shareholder’s aggregate foreign cash position, plus (B) 75 percent of so much of the amount described in subparagraph (A)(ii) as does not exceed the amount described in subparagraph (A)(i). (2) Aggregate foreign cash position For purposes of this subsection— (A) In general The term aggregate foreign cash position means, with respect to any United States shareholder, the greater of— (i) the aggregate of such United States shareholder’s pro rata share of the cash position of each specified foreign corporation of such United States shareholder determined as of the close of the last taxable year of such specified foreign corporation which begins before January 1, 2015, or (ii) one half of the sum of— (I) the aggregate described in clause (i) determined as of the close of the last taxable year of each such specified foreign corporation which ends before February 26, 2014, plus (II) the aggregate described in clause (i) determined as of the close of the taxable year of each such specified foreign corporation which precedes the taxable year referred to in subclause (I). (B) Cash position For purposes of this paragraph, the cash position of any specified foreign corporation is the sum of— (i) cash and foreign currency held by such foreign corporation, (ii) the net accounts receivable of such foreign corporation, plus (iii) the fair market value of the following assets held by such corporation: (I) Actively traded personal property for which there is an established financial market. (II) Commercial paper, certificates of deposit, the securities of the Federal government and of any State or foreign government (III) Any obligation with a term of less than one year. (IV) Any asset which the Secretary identifies as being economically equivalent to any asset described in this subparagraph. (C) Net accounts receivable For purposes of this paragraph, the term net accounts receivable means, with respect to any specified foreign corporation, the excess (if any) of— (i) such corporation’s accounts receivable, over (ii) such corporation’s accounts payable (determined consistent with the rules of section 461). (D) Prevention of double counting Cash positions of a specified foreign corporation described in clause (ii) or (iii)(III) of subparagraph (B) shall not be taken into account by a United States shareholder under subparagraph (A) to the extent that such United States shareholder demonstrates to the satisfaction of the Secretary that such amount is so taken into account by such United States shareholder with respect to another specified foreign corporation. (E) Cash positions of foreign pass-thru entities taken into account Any foreign entity which would be a specified foreign corporation of a United States shareholder if such entity were a corporation shall be treated as a specified foreign corporation of such United States shareholder for purposes of determining such United States shareholder’s aggregate foreign cash position. (F) Anti-abuse If the Secretary determines that the principal purpose of any transaction was to reduce the aggregate foreign cash position taken into account under this subsection, such

113-hr-1-ih-dtd-236

113-hr-1-ih-dtd

113-hr-1

into account Any foreign entity which would be a specified foreign corporation of a United States shareholder if such entity were a corporation shall be treated as a specified foreign corporation of such United States shareholder for purposes of determining such United States shareholder’s aggregate foreign cash position. (F) Anti-abuse If the Secretary determines that the principal purpose of any transaction was to reduce the aggregate foreign cash position taken into account under this subsection, such transaction shall be disregarded for purposes of this subsection. (d) Deferred foreign income corporation

113-hr-1-ih-dtd-237

113-hr-1-ih-dtd

113-hr-1

; accumulated post-1986 deferred foreign income For purposes of this section— (1) Deferred foreign income corporation The term deferred foreign income corporation means, with respect to any United States shareholder, any specified foreign corporation of such United States shareholder which has accumulated post-1986 deferred foreign income (as of the close of the taxable year referred to in subsection (a)) greater than zero. (2) Accumulated post-1986 deferred foreign income The term accumulated post-1986 deferred foreign income means the post-1986 earnings and profits except to the extent such earnings— (A) are attributable to income of the specified foreign corporation which is effectively connected with the conduct of a trade or business within the United States and subject to tax under this chapter, (B) if distributed, would— (i) in the case of a controlled foreign corporation, be excluded from the gross income of a United States shareholder under section 959, or (ii) in the case of any passive foreign investment company (as defined in section 1297) other than a controlled foreign corporation, be treated as a distribution which is not a dividend, or (C) in the case of any passive foreign investment company (as so defined), is properly attributable to an unreversed inclusion of a United States person under section 1296. To the extent provided in regulations or other guidance prescribed by the Secretary, in the case of any controlled foreign corporation which has shareholders which are not United States shareholders, accumulated post-1986 deferred foreign income shall be appropriately reduced by amounts which would be described in subparagraph (B)(i) is such shareholders were United States shareholders. Such regulations or other guidance may provide a similar rule for purposes of subparagraph (B)(ii) and (C). (3) Post-1986 earnings and profits The term post-1986 earnings and profits means the earnings and profits of the foreign corporation (computed in accordance with sections 964(a) and 986) accumulated in taxable years beginning after December 31, 1986, and determined— (A) as of the close the taxable year referred to in subsection (a), and (B) without diminution by reason of dividends distributed during such taxable year. (e) Specified foreign corporation (1) In general For purposes of this section, the term specified foreign corporation means— (A) any controlled foreign corporation, and (B) any section 902 corporation (as defined in section 909(d)(5) as in effect before the date of the enactment of the Tax Reform Act of 2014 ). (2) Application to section 902 corporations For purposes of section 951, a section 902 corporation (as so defined) shall be treated as a controlled foreign corporation solely for purposes of taking into account the subpart F income of such corporation under subsection (a) (and for purposes of applying subsection (f)). (f) Determinations of pro rata share For purposes of this section, the determination of any United States shareholder’s pro rata share of any amount with respect to any specified foreign corporation shall be determined under rules similar to the rules of section 951(a)(2) by treating such amount in the same manner as subpart F income (and by treating such specified foreign corporation as a controlled foreign corporation). (g) Disallowance of foreign tax credit, etc (1) In general No credit shall be allowed under section 901 for the applicable percentage of any taxes paid or accrued (or treated as paid or accrued) with respect to any amount for which a deduction is allowed under this section. (2) Applicable percentage For purposes of this subsection, the term applicable percentage means the amount (expressed as a percentage) equal to the sum of— (A) 0.9 multiplied by the ratio of— (i) the excess to which subsection (c)(1)(A) applies, divided by (ii) the sum of such excess plus the amount to which subsection (c)(1)(B) applies, plus (B) 0.75 multiplied by the ratio of— (i) the amount to which subsection (c)(1)(B) applies, divided by (ii) the sum described in subparagraph (A)(ii). (3)

113-hr-1-ih-dtd-238

113-hr-1-ih-dtd

113-hr-1

section. (2) Applicable percentage For purposes of this subsection, the term applicable percentage means the amount (expressed as a percentage) equal to the sum of— (A) 0.9 multiplied by the ratio of— (i) the excess to which subsection (c)(1)(A) applies, divided by (ii) the sum of such excess plus the amount to which subsection (c)(1)(B) applies, plus (B) 0.75 multiplied by the ratio of— (i) the amount to which subsection (c)(1)(B) applies, divided by (ii) the sum described in subparagraph (A)(ii). (3) Denial of deduction No deduction shall be allowed under this chapter for any tax for which credit is not allowable under section 901 by reason of paragraph (1) (determined by treating the taxpayer as having elected the benefits of subpart A of part III of subchapter N). (4) Coordination with section 78 Section 78 shall not apply to any tax for which credit is not allowable under section 901 by reason of paragraph (1). (h) Election To pay liability in installments (1) In general In the case of a United States shareholder of a deferred foreign income corporation, such United States shareholder may elect to pay the net tax liability under this section in 8 installments of the following amounts: (A) 8 percent of the net tax liability in the case of each of the first 5 of such installments, (B) 15 percent of the net tax liability in the case of the 6th such installment, (C) 20 percent of the net tax liability in the case of the 7th such installment, and (D) 25 percent of the net tax liability in the case of the 8th such installment. (2) Date for payment of installments If an election is made under paragraph (1), the first installment shall be paid on the due date (determined without regard to any extension of time for filing the return) for the return of tax for the taxable year described in subsection (b) and each succeeding installment shall be paid on the due date (as so determined) for the return of tax for the taxable year following the taxable year with respect to which the preceding installment was made. (3) Acceleration of payment If there is an addition to tax for failure to pay timely assessed with respect to any installment required under this subsection, a liquidation or sale of substantially all the assets of the taxpayer (including in a title 11 or similar case), a cessation of business by the taxpayer, or any similar circumstance, then the unpaid portion of all remaining installments shall be due on the date of such event (or in the case of a title 11 or similar case, the day before the petition is filed). The preceding sentence shall not apply to the sale of substantially all the assets of a taxpayer to a buyer if such buyer enters into an agreement with the Secretary under which such buyer is liable for the remaining installments due under this subsection in the same manner as if such buyer were the taxpayer. (4) Proration of deficiency to installments If an election is made under paragraph (1) to pay the net tax liability under this section in installments and a deficiency has been assessed with respect to such net tax liability, the deficiency shall be prorated to the installments payable under paragraph (1). The part of the deficiency so prorated to any installment the date for payment of which has not arrived shall be collected at the same time as, and as a part of, such installment. The part of the deficiency so prorated to any installment the date for payment of which has arrived shall be paid upon notice and demand from the Secretary. This subsection shall not apply if the deficiency is due to negligence, to intentional disregard of rules and regulations, or to fraud with intent to evade tax. (5) Election Any election under paragraph (1) shall be made not later than the due date for the return of tax for the taxable year described in subsection (a) and shall be made in such manner as the Secretary may provide. (6) Net tax liability under this section For purposes of this subsection— (A) In general The net tax liability under this section with respect to any United States shareholder is the excess (if

113-hr-1-ih-dtd-239

113-hr-1-ih-dtd

113-hr-1

to intentional disregard of rules and regulations, or to fraud with intent to evade tax. (5) Election Any election under paragraph (1) shall be made not later than the due date for the return of tax for the taxable year described in subsection (a) and shall be made in such manner as the Secretary may provide. (6) Net tax liability under this section For purposes of this subsection— (A) In general The net tax liability under this section with respect to any United States shareholder is the excess (if any) of— (i) such taxpayer’s net income tax for the taxable year described in subsection (a), over (ii) such taxpayer’s net income tax for such taxable year determined without regard to this section. (B) Net income tax The term net income tax means the regular tax liability reduced by the credits allowed under subparts A, B, and D of part IV of subchapter A. (i) Special rules for S corporation shareholders (1) In general In the case of any S corporation which is a United States shareholder of a deferred foreign income corporation, each shareholder of such S corporation may elect to defer payment of such shareholder’s net tax liability under this section with respect to such S corporation until the shareholder’s taxable year which includes the triggering event with respect to such liability. (2) Triggering event (A) In general In the case of any shareholder’s net tax liability under this section with respect to any S corporation, the triggering event with respect to such liability is whichever of the following occurs first: (i) Such corporation ceases to be an S corporation (determined as of the first day of the first taxable year that such corporation is not an S corporation). (ii) A liquidation or sale of substantially all the assets of such S corporation (including in a title 11 or similar case), a cessation of business by such S corporation, such S corporation ceases to exist, or any similar circumstance. (iii) A transfer of any share of stock in such S corporation by the taxpayer (including by reason of death, or otherwise). (B) Partial transfers of stock In the case of a transfer of less than all of the taxpayer’s shares of stock in the S corporation, such transfer shall only be a triggering event with respect to so much of the taxpayer’s net tax liability under this section with respect to such S corporation as is properly allocable to such stock. (C) Transfer of liability A transfer described in clause (iii) shall not be treated as a triggering event if the transferee enters into an agreement with the Secretary under which such transferee is liable for net tax liability with respect to such stock in the same manner as if such transferee were the taxpayer. (3) Net tax liability A shareholder’s net tax liability under this section with respect to any S corporation is the net tax liability under this section which would be determined under subsection (h)(6) if the only subpart F income taken into account by such shareholder by reason of this section were allocations from such S corporation. (4) Election to pay deferred liability in installments In the case of a taxpayer which elects to defer payment under paragraph (1), subsection (h) shall be applied— (A) separately with respect to the liability to which such election applies, (B) an election under subsection (h) with respect to such liability shall be treated as timely made if made not later than the due date for the return of tax for the taxable year in which the triggering event with respect to such liability occurs, (C) the first installment under subsection (h) with respect to such liability shall be paid not later than such due date (but determined without regard to any extension of time for filing the return), and (D) if the triggering event with respect to any net tax liability is described in paragraph (2)(A)(ii), an election under subsection (h) with respect to such liability may be made only with the consent of the Secretary. (5) Joint and several liability of S corporation If any shareholder of an S corporation elects to defer payment under paragraph (1),

113-hr-1-ih-dtd-240

113-hr-1-ih-dtd

113-hr-1

with respect to such liability shall be paid not later than such due date (but determined without regard to any extension of time for filing the return), and (D) if the triggering event with respect to any net tax liability is described in paragraph (2)(A)(ii), an election under subsection (h) with respect to such liability may be made only with the consent of the Secretary. (5) Joint and several liability of S corporation If any shareholder of an S corporation elects to defer payment under paragraph (1), such S corporation shall be jointly and severally liable for such payment and any penalty, addition to tax, or additional amount attributable thereto. (6) Extension of limitation on collection Notwithstanding any other provision of law, any limitation on the time period for the collection of a liability deferred under this subsection shall not be treated as beginning before the date of the triggering event with respect to such liability. (7) Election Any election under paragraph (1) shall be made not later than the due date for the return of tax for the taxable year described in subsection (a) and shall be made in such manner as the Secretary may provide. (j) Inclusion of deferred foreign income under this section not To trigger recapture of overall foreign loss For purposes of section 904(f)(1), in the case of a United States shareholder of a deferred foreign income corporation, such United States shareholder’s taxable income from sources without the United States shall be determined without regard to this section. (k) Regulations The Secretary may prescribe such regulations or other guidance as may be necessary or appropriate to carry out the provisions of this section. . (b) Dedication of revenues to highway trust fund (1) In general Section 9503(f) is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph: (5) Appropriation to trust fund of net tax liabilities received under section 965 (A) In general Out of money in the Treasury not otherwise appropriated, there are hereby appropriated to the Highway Trust Fund amounts equivalent to the aggregate net tax liabilities under section 965 (as defined in such section) received in the Treasury. (B) Monthly transfers based on estimates For rule providing for the monthly transfer of amounts appropriated under subparagraph (A) based on estimates of the Secretary, see section 9601. . (2) Transfers to Mass Transit Account Section 9503(e)(2) is amended by striking the mass transit portion and inserting , 20 percent of the amounts appropriated to the Highway Trust Fund under subsection (f)(5), and the mass transit portion . (c) Clerical amendment The table of section for subpart F of part III of subchapter N of chapter 1 is amended by striking the item relating to section 965 and inserting the following: Sec. 965. Treatment of deferred foreign income upon transition to participation exemption system of taxation. . 4004. Look-thru rule for related controlled foreign corporations made permanent (a) In general Paragraph (6) of section 954(c) is amended by striking subparagraph (C). (b) Effective date The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2013, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. B Modifications related to foreign tax credit system 4101. Repeal of section 902 indirect foreign tax credits

113-hr-1-ih-dtd-241

113-hr-1-ih-dtd

113-hr-1

; determination of section 960 credit on current year basis (a) Repeal of section 902 indirect foreign tax credits Subpart A of part III of subchapter N of chapter 1 is amended by striking section 902. (b) Determination of section 960 credit on current year basis Section 960 is amended— (1) by striking subsection (c), by redesignating subsection (b) as subsection (c), by striking all that precedes subsection (c) (as so redesignated) and inserting the following: 960. Deemed paid credit for subpart F inclusions (a) In general For purposes of this subpart, if there is included in the gross income of a domestic corporation any item of income under section 951(a)(1) with respect to any controlled foreign corporation with respect to which such domestic corporation is a United States shareholder, such domestic corporation shall be deemed to have paid so much of such foreign corporation’s foreign income taxes as are properly attributable to the item of income so included. (b) Special rules for distributions from previously taxed earnings and profits For purposes of this subpart— (1) In general If any portion of a distribution from a controlled foreign corporation to a domestic corporation which is a United States shareholder with respect to such controlled foreign corporation is excluded from gross income under section 959(a), such domestic corporation shall be deemed to have paid so much of such foreign corporation’s foreign income taxes as— (A) are properly attributable to such portion, and (B) have not been deemed to have to been paid by such domestic corporation under this section for any prior taxable year. (2) Tiered controlled foreign corporations If section 959(b) applies to any portion of a distribution from a controlled foreign corporation to another controlled foreign corporation, such controlled foreign corporation shall be deemed to have paid so much of such other controlled foreign corporation’s foreign income taxes as— (A) are properly attributable to such portion, and (B) have not been deemed to have been paid by a domestic corporation under this section for any prior taxable year. , (2) and by adding after subsection (c) (as so redesignated) the following new subsections: (d) Foreign income taxes The term foreign income taxes means any income, war profits, or excess profits taxes paid or accrued to any foreign country or possession of the United States. (e) Regulations The Secretary shall provide such regulations as may be necessary or appropriate to carry out the provisions of this section. . (c) Conforming amendments (1) Section 78 is amended to read as follows: 78. Gross up for deemed paid foreign tax credit If a domestic corporation chooses to have the benefits of subpart A of part III of subchapter N (relating to foreign tax credit) for any taxable year, an amount equal to the taxes deemed to be paid by such corporation under section 960 (relating to deemed paid credit for subpart F inclusions) for such taxable year shall be treated for purposes of this title (other than section 960) as an item of income required to be included in the gross income of such domestic corporation under section 951(a). . (2) Section 245(a)(10) is amended by striking 902, . (3) Sections 535(b)(1) and 545(b)(1) are each amended by striking section 902(a) or 960(a)(1) and inserting section 960 . (4) Paragraph (1) of section 814(f) is amended— (A) by striking subparagraph (B), and (B) by striking all that precedes No income and inserting the following: (1) Treatment of foreign taxes . (5) Subparagraph (B) of section 864(h)(1) is amended by striking 902, . (6) Subsection (a) of section 901 is amended by striking sections 902 and 960 and inserting section 960 . (7) Paragraph (2) of section 901(e) is amended by striking but is not limited to— and all that follows through that portion and inserting but is not limited to that portion . (8) Subsection (f) of section 901 is amended by striking sections 902 and 960 and inserting section 960 . (9) Subparagraph (A) of section 901(j)(1) is amended by striking 902 or . (10) Subparagraph (B) of

113-hr-1-ih-dtd-242

113-hr-1-ih-dtd

113-hr-1

by striking 902, . (6) Subsection (a) of section 901 is amended by striking sections 902 and 960 and inserting section 960 . (7) Paragraph (2) of section 901(e) is amended by striking but is not limited to— and all that follows through that portion and inserting but is not limited to that portion . (8) Subsection (f) of section 901 is amended by striking sections 902 and 960 and inserting section 960 . (9) Subparagraph (A) of section 901(j)(1) is amended by striking 902 or . (10) Subparagraph (B) of section 901(j)(1) is amended by striking sections 902 and 960 and inserting section 960 . (11) Paragraph (2) of section 901(k) is amended by striking 902, . (12) Paragraph (6) of section 901(k) is amended by striking 902 or . (13) Subparagraph (A) of section 904(h)(10) is amended by striking sections 902, 907, and 960 and inserting sections 907 and 960 . (14) Section 904 is amended by striking subsection (k). (15) Paragraph (1) of section 905(c) is amended by striking the last sentence. (16) Subclause (I) of section 905(c)(2)(B)(i) is amended by striking section 902 or . (17) Subsection (a) of section 906 is amended by striking (or deemed, under section 902, paid or accrued during the taxable year) . (18) Subsection (b) of section 906 is amended by striking paragraphs (4) and (5). (19) Subparagraph (B) of section 907(b)(2) is amended by striking 902 or . (20) Paragraph (3) of section 907(c) is amended— (A) by striking subparagraph (A) and redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively, and (B) by striking section 960(a) in subparagraph (A) (as so redesignated) and inserting section 960 . (21) Paragraph (5) of section 907(c) is amended by striking 902 or . (22) Clause (i) of section 907(f)(2)(B) is amended by striking 902 or . (23) Subsection (a) of section 908 is amended by striking 902 or . (24) Subsection (b) of section 909 is amended— (A) by striking section 902 corporation in the matter preceding paragraph (1) and inserting specified 10-percent owned foreign corporation , (B) by striking 902 or in paragraph (1), (C) by striking by such section 902 corporation and all that follows in the matter following paragraph (2) and inserting by such specified 10-percent owned foreign corporation or a domestic corporation which is a United States shareholder with respect to such specified 10-percent owned foreign corporation. , and (D) by striking section 902 corporations in the heading thereof and inserting specified 10-percent owned foreign corporations . (25) Subsection (d) of section 909 is amended by striking paragraph (5). (26) Paragraph (1) of section 958(a) is amended by striking 960(a)(1) and inserting 960 . (27) Subsection (d) of section 959 is amended by striking Except as provided in section 960(a)(3), any and inserting Any . (28) Subsection (e) of section 959 is amended by striking and section 960(b) . (29) Subparagraph (A) of section 1291(g)(2) is amended by striking any distribution— and all that follows through but only if and inserting any distribution, any withholding tax imposed with respect to such distribution, but only if . (30) Section 1293 is amended by striking subsection (f). (31) Subparagraph (B) of section 6038(c)(1) is amended by striking sections 902 (relating to foreign tax credit for corporate stockholder in foreign corporation) and 960 (relating to special rules for foreign tax credit) and inserting section 960 . (32) Paragraph (4) of section 6038(c) is amended by striking subparagraph (C). (33) The table of sections for subpart A of part III of subchapter N of chapter 1 is amended by striking the item relating to section 902. (34) The table of sections for subpart F of part III of subchapter N of chapter 1 is amended by striking the item relating to section 960 and inserting the following: Sec. 960. Deemed paid credit for subpart F inclusions. . (d) Effective date The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such

113-hr-1-ih-dtd-243

113-hr-1-ih-dtd

113-hr-1

1 is amended by striking the item relating to section 902. (34) The table of sections for subpart F of part III of subchapter N of chapter 1 is amended by striking the item relating to section 960 and inserting the following: Sec. 960. Deemed paid credit for subpart F inclusions. . (d) Effective date The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. 4102. Foreign tax credit limitation applied by allocating only directly allocable deductions to foreign source income (a) In general Subsection (b) of section 904, as amended by the preceding provisions of this Act, is amended by adding at the end the following new paragraph: (3) Deductions allocable to foreign source income only if directly allocable For purposes of subsection (a), the taxpayer’s taxable income from sources without the United States shall be determined by allocating deductions to such income only if such deductions are directly allocable to such income. . (b) Effective date The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. 4103. Passive category income expanded to include other mobile income (a) Treatment of foreign base company intangible income and foreign base company sales income as mobile category income Clause (i) of section 904(d)(2)(A) is amended by striking and specified passive category income and inserting specified passive category income, foreign base company sales income (as defined in section 954(d)), and foreign base company intangible income (as defined in section 954(f)) . (b) Repeal of special rules treating financial services income as general category income Paragraph (2) of section 904(d) is amended by striking subparagraphs (C) and (D) and by redesignating subparagraphs (E) through (K) as subparagraphs (C) through (I), respectively. (c) Conforming amendments (1) Relating to references to passive income (A) Section 904(d)(1)(A) is amended by striking passive category income and inserting mobile category income . (B) Section 904(d)(2)(A)(i), as amended by subsection (a), is amended— (i) by striking Passive category income in the heading thereof and inserting Mobile category income , (ii) by striking passive category income and inserting mobile category income , (iii) by striking passive income and inserting mobile income , and (iv) by striking specified passive category income and inserting specified mobile category income . (C) Section 904(d)(2)(A)(ii) is amended by striking passive category income and inserting mobile category income . (D) Section 904(d)(2)(B) is amended— (i) by striking Passive income in the heading thereof and inserting Mobile income , (ii) by striking passive income in clauses (i), (ii), and (iii) and inserting mobile income , (iii) by striking Specified passive category income in the heading of clause (iv) and inserting Specified mobile category income , and (iv) by striking specified passive category income in clause (iv) and inserting specified mobile category income . (E) Section 904(d)(2)(D), as redesignated by subsection (b), is amended by striking passive income and inserting mobile income . (F) Section 904(d)(3)(A) is amended by striking passive category income and inserting mobile category income . (G) Section 904(d)(3)(B) is amended by striking passive category income both places it appears and inserting mobile category income . (H) Section 904(d)(3)(C) is amended by striking passive category income both places it appears and inserting mobile category income . (I) Section 904(d)(3)(D) is amended by striking passive category income both places it appears and inserting mobile category income . (J) Section 904(d)(3)(E) is amended— (i) by striking passive category income both places it appears and inserting mobile category

113-hr-1-ih-dtd-244

113-hr-1-ih-dtd

113-hr-1

is amended by striking passive category income both places it appears and inserting mobile category income . (H) Section 904(d)(3)(C) is amended by striking passive category income both places it appears and inserting mobile category income . (I) Section 904(d)(3)(D) is amended by striking passive category income both places it appears and inserting mobile category income . (J) Section 904(d)(3)(E) is amended— (i) by striking passive category income both places it appears and inserting mobile category income , and (ii) by striking passive income and inserting mobile income . (K) Section 904(d)(3)(F) is amended by striking passive category income both places it appears and inserting mobile category income . (2) Other conforming amendments (A) Subparagraph (B) of section 864(f)(5) is amended by inserting (as in effect before its repeal) after section 904(d)(2)(D)(ii) . (B) Subparagraph (B) of section 954(c)(2) is amended by striking section 904(d)(2)(G) and inserting section 904(d)(2)(E) . (d) Effective date (1) In general The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. (2) Treatment of carryforwards and carrybacks For purposes of section 904 of the Internal Revenue Code of 1986— (A) the amendments made by this section shall apply to any taxes carried from any taxable year beginning before January 1, 2015, to any taxable year beginning on or after such date, and (B) the Secretary of the Treasury, or his designee, may by regulations provide for the allocation of any carryback of taxes with respect to income from a taxable year beginning on or after January 1, 2015, to a taxable year beginning before such date for purposes of allocating such income among the separate categories in effect under section 904(d) for the taxable year to which carried. 4104. Source of income from sales of inventory determined solely on basis of production activities (a) In general Subsection (b) of section 863 is amended by adding at the end the following: Gains, profits, and income from the sale or exchange of inventory property described in paragraph (2) shall be allocated and apportioned between sources within and without the United States solely on the basis of the production activities with respect to the property. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2014. C Rules related to passive and mobile income 1 Modification of subpart F provisions 4201. Subpart F income to only include low-taxed foreign income (a) In general Subsection (a) of section 954 is amended— (1) by redesignating paragraphs (1), (2), (3), and (5) as subparagraphs (A) through (D), respectively, (2) by striking For purposes of and inserting the following: (1) In general For purposes of , and (3) by adding at the end the following new paragraph: (2) Application only to foreign base company income subject to a low foreign effective rate of tax (A) In general Foreign base company income shall only include items of income received by a controlled foreign corporation which are subject to an effective rate of income tax imposed by a foreign country which is less than 100 percent of the maximum rate of tax specified in section 11. (B) Application to foreign base company income subject to reduced domestic rate of tax (i) Foreign base company sales income In the case of foreign base company sales income, subparagraph (A) shall be applied by substituting 50 percent for 100 percent . (ii) Foreign base company intangible income In the case of foreign base company intangible income, subparagraph (A) shall be applied— (I) by substituting the applicable percentage of the foreign percentage (determined under section 250(c) with respect to the controlled foreign corporation) for 100 percent , and (II) by treating the foreign base company intangible income as a single item of income. (iii) Applicable percentage For purposes

113-hr-1-ih-dtd-245

113-hr-1-ih-dtd

113-hr-1

(A) shall be applied by substituting 50 percent for 100 percent . (ii) Foreign base company intangible income In the case of foreign base company intangible income, subparagraph (A) shall be applied— (I) by substituting the applicable percentage of the foreign percentage (determined under section 250(c) with respect to the controlled foreign corporation) for 100 percent , and (II) by treating the foreign base company intangible income as a single item of income. (iii) Applicable percentage For purposes of clause (ii)(I), the term applicable percentage means, with respect to any taxable year of a controlled foreign corporation, the percentage determined in accordance with the following table: In the case of any taxable year beginning in: The applicable percentage is: 2015 45 percent 2016 48 percent 2017 52 percent 2018 56 percent 2019 or thereafter 60 percent. . (b) Insurance income Subsection (a) of section 953 is amended by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following new paragraph: (2) Application only to insurance income subject to a low foreign effective rate of tax Insurance income shall only include items of income received by a controlled foreign corporation which are subject to an effective rate of income tax imposed by a foreign country which is less than the maximum rate of tax specified in section 11. . (c) Conforming amendments (1) Section 954(b)(3)(B) is amended by striking paragraphs (4) and (5) and inserting subsection (a)(2), section 953(a)(2), and paragraph (5) (2) Section 954(b) is amended by striking paragraph (4). (3) Section 954(c)(1) is amended by striking subsection (a)(1) and inserting this section . (4) Section 954(d)(1) is amended by striking subsection (a)(2) and inserting this section . (5) Section 954(e)(1) is amended by striking subsection (a)(3) and inserting this section . (d) Effective date The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. 4202. Foreign base company sales income (a) 50-Percent exclusion for low-Taxed foreign base company sales income (1) In general Subparagraph (B) of section 954(a)(1), as amended by the preceding provisions of this Act, is amended by inserting 50 percent of before the foreign base company sales income . (2) Preservation of deemed paid foreign tax credit on low-taxed foreign base company income Section 960, as amended by this Act, is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection: (c) Deemed paid credit determined without regard to certain exclusions from subpart F income Solely for purposes of subsection (a), section 954(a)(1)(B) shall be applied by substituting 100 percent for 50 percent in determining amounts included under section 951(a)(1). . (b) Exception from foreign base company sales income for foreign corporations eligible for benefits under comprehensive income tax treaties Section 954(d) is amended by adding at the end the following new paragraph: (5) Exception for foreign corporations eligible for benefits under comprehensive income tax treaties No portion of the gross income of a controlled foreign corporation shall be treated as foreign base company sales income if such controlled foreign corporation is eligible as a qualified resident for all of the benefits provided under a comprehensive income tax treaty with the United States. . (c) Effective date The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. 4203. Inflation adjustment of de minimis exception for foreign base company income (a) In general Paragraph (3) of section 954(b) is amended by adding at the end the following new subparagraph: (D) Inflation adjustment In the case

113-hr-1-ih-dtd-246

113-hr-1-ih-dtd

113-hr-1

States. . (c) Effective date The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. 4203. Inflation adjustment of de minimis exception for foreign base company income (a) In general Paragraph (3) of section 954(b) is amended by adding at the end the following new subparagraph: (D) Inflation adjustment In the case of any taxable year beginning after 2015, the dollar amount in subparagraph (A)(ii) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(c)(2)(A) for the calendar year in which the taxable year begins, determined by substituting calendar year 2014 for calendar year 2012 in clause (ii) thereof. Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $50,000. . (b) Effective date The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. 4204. Active financing exception extended with limitation for low-taxed foreign income (a) Extension of active financing exception (1) In general Paragraph (9) of section 954(h) is amended by striking January 1, 2014 and inserting January 1, 2019 . (2) Exempt insurance income Paragraph (10) of section 953(e) is amended— (A) by striking January 1, 2014 and inserting January 1, 2019 , and (B) by striking December 31, 2013 and inserting December 31, 2018 . (b) Limitation for low-Taxed foreign income (1) In general Paragraph (1) of section 954(h) is amended to read as follows: (1) In general For purposes of subsection (c)(1), in the case of an eligible controlled foreign corporation, foreign personal holding company income shall not include— (A) qualified banking or financing income which is subject to an effective rate of income tax imposed by a foreign country which is at least 50 percent of the maximum rate of tax specified in section 11, and (B) 50 percent of any other qualified banking or financing income of such eligible controlled foreign corporation. . (2) Insurance business income Paragraph (1) of section 954(i) is amended to read as follows: (1) In general For purposes of subsection (c)(1), in the case of a qualifying insurance company, foreign personal holding company income shall not include— (A) any qualified insurance income which is subject to an effective rate of income tax imposed by a foreign country which is at least 50 percent of the maximum rate of tax specified in section 11, and (B) 50 percent of any other qualified insurance income of such qualifying insurance company. . (3) Preservation of deemed paid foreign tax credit on high-taxed foreign income Subsection (c) of section 960, as amended by the preceding provisions of this Act, is amended by striking Solely for purposes of subsection (a) and all that following and inserting the following: Solely for purposes of subsection (a)— (1) section 954(a)(1)(B) shall be applied by substituting 100 percent for 50 percent , and (2) the exclusions under subsections (h)(1)(B) and (i)(1)(B) of section 954 shall not apply, in determining amounts included under section 951(a)(1). . (c) Effective date The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2013, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. 4205. Repeal of inclusion based on withdrawal of previously excluded subpart F income from qualified investment (a) In general Subpart F of part III of subchapter N of chapter 1 is amended by striking section 955. (b) Conforming amendments (1) (A) Subparagraph (A) of section 951(a)(1), as amended by this Act, is amended to read as follows: (A) his pro rata share (determined under

113-hr-1-ih-dtd-247

113-hr-1-ih-dtd

113-hr-1

2013, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. 4205. Repeal of inclusion based on withdrawal of previously excluded subpart F income from qualified investment (a) In general Subpart F of part III of subchapter N of chapter 1 is amended by striking section 955. (b) Conforming amendments (1) (A) Subparagraph (A) of section 951(a)(1), as amended by this Act, is amended to read as follows: (A) his pro rata share (determined under paragraph (2)) of the corporation’s subpart F income for such year, and . (B) Paragraph (3) of section 851(b) is amended by striking section 951(a)(1)(A)(i) in the flush language at the end and inserting section 951(a)(1)(A) . (C) Clause (i) of section 952(c)(1)(B) is amended by striking section 951(a)(1)(A)(i) and inserting section 951(a)(1)(A) . (D) Subparagraph (C) of section 953(c)(1) is amended by striking section 951(a)(1)(A)(i) and inserting section 951(a)(1)(A) . (2) Subsection (a) of section 951 is amended by striking paragraph (3). (3) Subclause (II) of section 953(d)(4)(B)(iv) is amended by striking or amounts referred to in clause (ii) or (iii) of section 951(a)(1)(A) . (4) Subsection (b) of section 964 is amended by striking , 955, . (5) Section 970 is amended by striking subsection (b). (6) The table of sections for subpart F of part III of subchapter N of chapter 1 is amended by striking the item relating to section 955. (c) Effective date The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. 2 Prevention of base erosion 4211. Foreign intangible income subject to taxation at reduced rate

113-hr-1-ih-dtd-248

113-hr-1-ih-dtd

113-hr-1

; intangible income treated as subpart F income (a) Foreign base company intangible income treated as subpart F income (1) Treatment as subpart F income Paragraph (1) of section 954(a), as amended by the preceding provisions of this Act, is amended by redesignating subparagraph (D) as subparagraph (E) and by inserting after subparagraph (C) the following new subparagraph: (D) the foreign base company intangible income for the taxable year (determined under subsection (f) and reduced as provided in subsection (b)(5)), and . (2) Foreign base company intangible income defined Section 954 of such Code is amended by inserting after subsection (e) the following new subsection: (f) Foreign base company intangible income For purposes of this section— (1) In general The term foreign base company intangible income means, with respect to any corporation for any taxable year, the excess of— (A) so much of the adjusted gross income of the corporation as exceeds 10 percent of the corporation’s qualified business asset investment, over (B) the applicable percentage of such corporation’s foreign personal holding company income, foreign base company sales income, foreign base company services income, and foreign base company oil related income. (2) Applicable percentage For purposes of paragraph (1), the term applicable percentage means, with respect to any corporation for any taxable year, the ratio (expressed as a percentage) of— (A) the excess described in paragraph (1)(A), divided by (B) the adjusted gross income of the corporation. (3) Qualified business asset investment (A) In general The term qualified business asset investment means, with respect to any corporation for any taxable year, the aggregate of the corporation’s adjusted bases (determined as of the close of such taxable year and after any adjustments with respect to such taxable year) in specified tangible property— (i) used in a trade or business of the corporation, and (ii) of a type with respect to which a deduction is allowable under section 168. (B) Determination of adjusted basis For purposes of subparagraph (A), the adjusted basis in any property shall be determined without regard to any provision of this title (or any other provision of law) which is enacted after the date of the enactment of this section. (C) Regulations The Secretary shall issue such regulations or other guidance as the Secretary determines appropriate to prevent the avoidance of the purposes of this paragraph, including regulations or other guidance which provide for the treatment of property if— (i) such property is transferred, or held, temporarily, or (ii) the avoidance of the purposes of this paragraph is a factor in the transfer or holding of such property. (4) Adjusted gross income

113-hr-1-ih-dtd-249

113-hr-1-ih-dtd

113-hr-1

; specified tangible property For purposes of this subsection— (A) Adjusted gross income (i) In general The term adjusted gross income means, with respect to any corporation, the gross income of such corporation reduced by such corporation’s commodities gross income. (ii) Commodities gross income The term commodities gross income means, with respect to any corporation, the gross income of such corporation which is derived from commodities which are produced or extracted by such corporation. (B) Specified tangible property The term specified tangible property means any tangible property unless such property is used in the production of commodities gross income. In the case of property which is used in the production of commodities gross income and other gross income, such property shall be treated as specified tangible property in the same proportion that the adjusted gross income produced with respect to such property bears to the total gross income produced with respect to such property. (C) Commodity The term commodity means any commodity described in section 475(e)(2). . (3) Application only to foreign base company intangible income subject to a low foreign effective rate of tax Paragraph (2) of section 954(a), as amended by preceding provisions of this Act, is amended by inserting or foreign base company intangible income after foreign base company sales income . (4) Conforming amendment Paragraph (5) of section 954(b) is amended by inserting the foreign base company intangible income, before and the foreign base company oil related income . (b) Deduction for foreign intangible income (1) In general Part VIII of subchapter B of chapter 1 is amended by adding at the end the following new section: 250. Foreign intangible income (a) In general In the case of a domestic corporation for any taxable year, there shall be allowed as a deduction an amount equal to the applicable percentage of the lesser of— (1) the sum of— (A) the foreign percentage multiplied by the net imputed intangible income of such domestic corporation for such taxable year, plus (B) in the case of a domestic corporation which is a United States shareholder with respect to any controlled foreign corporation, the foreign percentage (determined with respect to such controlled foreign corporation) multiplied by any foreign base company intangible income (as defined in section 954(f)) of such controlled foreign corporation which is included in the gross income of such domestic corporation under section 951 for such taxable year, or (2) taxable income of such domestic corporation (determined without regard to this section) for the taxable year. (b) Net imputed intangible income For purposes of this subsection, the term net imputed intangible income means the excess of— (1) the excess described in section 954(f)(1)(A), over (2) the deductions properly allocable to the amount described in paragraph (1). (c) Foreign percentage For purposes of this section— (1) In general The term foreign percentage means, with respect to any corporation for any taxable year, the ratio (expressed as a percentage) of— (A) the foreign-derived adjusted gross income of such corporation for such taxable year, over (B) the adjusted gross income of such corporation for such taxable year. (2) Foreign-derived adjusted gross income (A) In general The term foreign-derived adjusted gross income means, with respect to any corporation for any taxable year, any adjusted gross income of such corporation which is derived in connection with— (i) property which is sold for use, consumption, or disposition outside the United States, or (ii) services provided with respect to persons or property located outside the United States. (B) Special rules (i) Ultimate disposition Property shall not be treated as sold for use, consumption, or disposition outside the United States if the taxpayer knew, or had reason to know, that such property would be ultimately sold for use, consumption, or disposition in the United States. (ii) Sales to related parties If property is sold to a related party, such sale shall

113-hr-1-ih-dtd-250

113-hr-1-ih-dtd

113-hr-1

outside the United States, or (ii) services provided with respect to persons or property located outside the United States. (B) Special rules (i) Ultimate disposition Property shall not be treated as sold for use, consumption, or disposition outside the United States if the taxpayer knew, or had reason to know, that such property would be ultimately sold for use, consumption, or disposition in the United States. (ii) Sales to related parties If property is sold to a related party, such sale shall not be treated as for use, consumption or disposition outside the United States unless— (I) such property is ultimately sold for use, consumption or disposition outside the United States, or (II) such property is resold to an unrelated party outside the United States and no related party knew or had reason to know that such property would be ultimately sold for use, consumption, or disposition in the United States. (iii) Application to services Rules similar to the rules of clauses (i) and (ii) shall apply with respect to services described in subparagraph (A)(ii). (C) Related party For purposes of this paragraph, the term related party means any member of an affiliated group as defined in section 1504(a), determined— (i) by substituting more than 50 percent for at least 80 percent each place it appears, and (ii) without regard to paragraphs (2) and (3) of section 1504(b). Any person (other than a corporation) shall be treated as a member of such group if such person is controlled by members of such group (including any entity treated as a member of such group by reason of this sentence) or controls any such member. For purposes of the preceding sentence, control shall be determined under the rules of section 954(d)(3). (3) Adjusted gross income The term adjusted gross income has the meaning given such term by section 954(f)(4). (d) Applicable percentage For purposes of this section, the term applicable percentage means, with respect to any taxable year of the domestic corporation referred to in subsection (a), the percentage determined in accordance with the following table: In the case of any taxable year beginning in: The applicable percentage is: 2015 55 percent 2016 52 percent 2017 48 percent 2018 44 percent 2019 or thereafter 40 percent. (e) Regulations The Secretary may prescribe such regulations or other guidance as may be necessary or appropriate to carry out the provisions of this section. . (2) Conforming amendments (A) Clause (i) of section 163(j)(6)(A), as amended by the preceding provisions of this Act, is amended by striking and at the end of subclause (II) and by adding at the end the following new subclause: (IV) any deduction allowable under section 250, and . (B) Subparagraph (C) of section 170(b)(2) is amended by striking and at the end of clause (iv), by redesignating clause (v) as clause (vi), and by inserting after clause (iv) the following new clause: (v) section 250, and . (C) Subsection (d) of section 172, as amended by the preceding provisions of this Act, is amended by adding at the end the following new paragraph: (7) Deduction for foreign intangible income The deduction under section 250 shall not be allowed. . (D) Paragraph (1) of section 246(b) is amended by striking and 247 and inserting 247, and 250 . (E) Clause (iii) of section 469(i)(3)(D), as amended by the preceding provisions of this Act, is amended by striking and 222 and inserting 222, and 250 . (c) Effective date (1) Treatment as subpart F income The amendments made by subsection (a) shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. (2) Deduction for foreign intangible income The amendments made by subsection (b) shall apply to taxable years beginning after December 31, 2014. 4212. Denial of deduction for interest expense of United States shareholders which are members of worldwide affiliated groups with excess domestic indebtedness (a) In general Section 163 is amended by

113-hr-1-ih-dtd-251

113-hr-1-ih-dtd

113-hr-1

beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. (2) Deduction for foreign intangible income The amendments made by subsection (b) shall apply to taxable years beginning after December 31, 2014. 4212. Denial of deduction for interest expense of United States shareholders which are members of worldwide affiliated groups with excess domestic indebtedness (a) In general Section 163 is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection: (n) Disallowance of deduction for interest expense of United States shareholders which are members of worldwide affiliated groups with excess domestic indebtedness (1) In general In the case of any domestic corporation which is a United States shareholder (as defined in section 951(b)) with respect to any foreign corporation both of which are members of the same worldwide affiliated group, the deduction allowed under this chapter for interest paid or accrued by such domestic corporation during the taxable year shall be reduced by the lesser of— (A) the product of— (i) the net interest expense of such domestic corporation, multiplied by (ii) the debt-to-equity differential percentage of such worldwide affiliated group, or (B) the excess (if any) of— (i) such net interest expense, over (ii) 40 percent of the adjusted taxable income (as defined in subsection (j)(6)(A)) of such domestic corporation. (2) Carryforward Any amount disallowed under paragraph (1) for any taxable year shall be treated as interest paid or accrued in the succeeding taxable year (and shall not be treated as disqualified interest for purposes of applying subsection (j)). (3) Debt-to-equity differential percentage (A) In general For purposes of this subsection, the term debt-to-equity differential percentage means, with respect to any worldwide affiliated group, the percentage which the excess domestic indebtedness of such group bears to the total indebtedness of the domestic corporations which are members of such group. (B) Excess domestic indebtedness For purposes of subparagraph (A), the term excess domestic indebtedness means, with respect to any worldwide affiliated group, the excess (if any) of— (i) the total indebtedness of the domestic corporations which are members of such group, over (ii) 110 percent of the amount which the total indebtedness of such domestic corporations would be if the ratio of such indebtedness to the total equity of such domestic corporations equaled the ratio which— (I) the total indebtedness of such group, bears to (II) the total equity of such group. (C) Total equity For purposes of subparagraph (B), the term total equity means, with respect to one or more corporations, the excess (if any) of— (i) the money and all other assets of such corporations, over (ii) the total indebtedness of such corporations. (D) Special rules for determining debt and equity For purposes of this paragraph— (i) Application of certain general rules Rules similar to the rules of clauses (i), (ii), and (iii) of subsection (j)(2)(C) shall apply. (ii) Intragroup debt and equity interests disregarded The total indebtedness, and the assets, of any group of corporations shall be determined by treating all members of such group as one corporation. (iii) Determination of assets of domestic group The assets of the domestic corporations which are members of any worldwide affiliated group shall be determined by disregarding any interest held by any such domestic corporation in any foreign corporation which is a member of such group. (4) Other definitions For purposes of this subsection— (A) Worldwide affiliated group The term worldwide affiliated group has the meaning which would be given such term by section 864(f)(1)(C) if section 1504(a) were applied by substituting more than 50 percent for at least 80 percent each place it appears. (B) Net interest expense The term net interest expense has the meaning given such term by subsection (j)(6)(B).

113-hr-1-ih-dtd-252

113-hr-1-ih-dtd

113-hr-1

any such domestic corporation in any foreign corporation which is a member of such group. (4) Other definitions For purposes of this subsection— (A) Worldwide affiliated group The term worldwide affiliated group has the meaning which would be given such term by section 864(f)(1)(C) if section 1504(a) were applied by substituting more than 50 percent for at least 80 percent each place it appears. (B) Net interest expense The term net interest expense has the meaning given such term by subsection (j)(6)(B). (5) Treatment of affiliated group For purposes of this subsection, all members of the same affiliated group (within the meaning of section 1504(a) applied by substituting more than 50 percent for at least 80 percent each place it appears) shall be treated as 1 taxpayer. (6) Regulations The Secretary shall prescribe such regulations or other guidance as may be appropriate to carry out the purposes of this subsection, including regulations or other guidance— (A) to prevent the avoidance of the purposes of this subsection, (B) providing such adjustments in the case of corporations which are members of an affiliated group as may be appropriate to carry out the purposes of this subsection, (C) providing for the coordination of this subsection with section 884, and (D) providing for the reallocation of shares of partnership indebtedness, or distributive shares of the partnership’s interest income or interest expense. . (b) Coordination with limitation on related party indebtedness Paragraph (1) of section 163(j) is amended by adding at the end the following new subparagraph: (C) Coordination with limitation on excess domestic indebtedness The amount disallowed under subparagraph (A) with respect to any corporation for any taxable year shall be reduced by any amount disallowed under subsection (n)(1) with respect to such corporation for such taxable year. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. V Tax Exempt Entities A Unrelated Business Income Tax 5001. Clarification of unrelated business income tax treatment of entities treated as exempt from taxation under section 501(a) (a) In general Subparagraph (A) of section 511(a)(2) is amended by adding at the end the following: For purposes of the preceding sentence, an organization shall not fail to be treated as exempt from taxation under this subtitle by reason of section 501(a) solely because such organization is also so exempt, or excludes amounts from gross income, by reason of any other provision of this title. . (b) Clerical amendment The heading for subparagraph (A) of section 511(a)(2) is amended to read as follows: Organizations exempt from taxation by reason of section 501(a). (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 5002. Name and logo royalties treated as unrelated business taxable income (a) In general Section 513 is amended by adding at the end the following new subsection: (k) Name and logo royalties Any sale or licensing by an organization of any name or logo of the organization (including any trademark or copyright relating to such name or logo) shall be treated as an unrelated trade or business regularly carried on by such organization. . (b) Calculation of unrelated business taxable income Subsection (b) of section 512 is amended by adding at the end the following new paragraph: (20) Special rule for name and logo royalties Notwithstanding paragraph (1), (2), (3), or (5), any income derived from any sale or licensing described in section 513(k) shall be included as an item of gross income derived from an unrelated trade or business. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 5003. Unrelated business taxable income separately computed for each trade or business activity (a) In general Subsection (a) of section 512 is amended by adding at the end the following new paragraph: (6) Special rule for organization with more than 1

113-hr-1-ih-dtd-253

113-hr-1-ih-dtd

113-hr-1

sale or licensing described in section 513(k) shall be included as an item of gross income derived from an unrelated trade or business. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 5003. Unrelated business taxable income separately computed for each trade or business activity (a) In general Subsection (a) of section 512 is amended by adding at the end the following new paragraph: (6) Special rule for organization with more than 1 unrelated trade or business In the case of any organization with more than 1 unrelated trade or business— (A) unrelated business taxable income shall be computed separately with respect to each such trade or business and without regard to subsection (b)(12), (B) the unrelated business taxable income of such organization shall be the sum of the unrelated business taxable income so computed with respect to each such trade or business, less a specific deduction under subsection (b)(12), and (C) for purposes of subparagraph (B), unrelated business taxable income with respect to any such trade or business shall not be less than zero, and (D) the net operating loss deduction shall only be allowed with respect to the trade or business from which the net operating loss arose. . (b) Effective date (1) In general Except to the extent provided in paragraph (2), the amendment made by this section shall apply to taxable years beginning after December 31, 2014. (2) Net operating losses (A) Certain carryovers In the case of any net operating loss arising in a taxable year beginning before January 1, 2015, that is carried over to a taxable year beginning on or after such date, section 512(a)(6)(D) of the Internal Revenue Code of 1986, as added by this Act, shall not apply. (B) Certain carrybacks In the case of any net operating loss arising in a taxable year beginning after December 31, 2014, and carried back to any taxable year beginning on or before such date, in computing unrelated business taxable income of an organization under section 512(a) of such Code for the taxable year, the net operating loss deduction shall be allowed only with respect to the trade or business from which the net operating loss arose. 5004. Exclusion of research income limited to publicly available research (a) In general Paragraph (9) of section 512(b) is amended by striking from research and inserting from such research . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 5005. Parity of charitable contribution limitation between trusts and corporations (a) In general Paragraph (11) of section 512(b) is amended by striking the second sentence and inserting the following: The deduction allowed by this paragraph shall not exceed 10 percent of the unrelated business taxable income computed without the benefit of this paragraph. (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2014. 5006. Increased specific deduction (a) In general Paragraph (12) of section 512(b) is amended by striking $1,000 each place it appears and inserting $10,000 . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 5007. Repeal of exclusion of gain or loss from disposition of distressed property (a) In general Subsection (b) of section 512 is amended by striking paragraph (16). (b) Effective date The amendment made by this section shall apply to property acquired after December 31, 2014. 5008. Qualified sponsorship payments (a) Repeal of use or acknowledgment of product lines for qualified sponsorship payments Subparagraphs (A) and (B)(ii)(I) of section 513(i)(2) are each amended by striking (or product lines) . (b) Use or acknowledgment limited in case of certain events Subparagraph (B) of section 513(i)(2) is amended by adding at the end the following new clause: (iii) Use or acknowledgment limited in case of certain events In the case of an event with respect to which an organization

113-hr-1-ih-dtd-254

113-hr-1-ih-dtd

113-hr-1

5008. Qualified sponsorship payments (a) Repeal of use or acknowledgment of product lines for qualified sponsorship payments Subparagraphs (A) and (B)(ii)(I) of section 513(i)(2) are each amended by striking (or product lines) . (b) Use or acknowledgment limited in case of certain events Subparagraph (B) of section 513(i)(2) is amended by adding at the end the following new clause: (iii) Use or acknowledgment limited in case of certain events In the case of an event with respect to which an organization receives an aggregate amount of qualified sponsorship payments greater than $25,000, a payment shall not be treated as a qualified sponsorship payment for purposes of paragraph (1) unless the use or acknowledgment of the sponsor’s name or logo appears with, and in substantially the same manner as, the names of a significant portion of other donors to the organization. For purposes of the preceding sentence, whether a number of donors is a significant portion shall be determined based on the total number of donors and the total contributed with respect to the event, but in no event shall fewer than 2 other donors be treated as a significant portion of other donors. . (c) Clerical amendment The heading for clause (ii) of section 513(i)(2)(B) is amended to read as follows: Periodicals and qualified convention and trade show activities. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. B Penalties 5101. Increase in information return penalties (a) Failure To file return (1) Organization Subparagraph (A) of section 6652(c)(1) is amended— (A) by striking $20 each place it appears and inserting $40 , and (B) by striking $100 and inserting $200 . (2) Managers Clause (ii) of section 6652(c)(1)(B) is amended by striking $10 and inserting $20 . (b) Failure To make returns, reports, and applications available for public inspection Subparagraphs (C) and (D) of section 6652(c)(1) are each amended by striking $20 and inserting $40 . (c) Failure To file returns under section 6034 or 6043 Paragraph (2) of section 6652(c) is amended— (1) by striking $10 each place it appears in subparagraphs (A) and (B) and inserting $20 , and (2) by striking substituting $100 for $20 , in subparagraph (C)(ii) and inserting substituting $200 for $40 , . (d) Failure To file disclosure under section 6033(a)(2) (1) Organization Subparagraph (A) of section 6652(c)(3) is amended by striking $100 and inserting $200 . (2) Managers Subparagraph (B) of section 6652(c)(3) is amended by striking $100 and inserting $200 . (e) Effective date The amendments made by this section shall apply with respect to information returns required to be filed on or after January 1, 2015. 5102. Manager-level accuracy-related penalty on underpayment of unrelated business income tax (a) In general Section 6662 is amended by adding at the end the following new subsection: (k) Manager-Level penalty for substantial underpayment of unrelated business income tax (1) In general In the case of any substantial underpayment of income tax which is attributable to the tax imposed by section 511 on the unrelated business taxable income of an organization for the taxable year, there is hereby imposed a tax with respect to such organization an amount equal to 5 percent of such underpayment to which the underpayment relates. Such tax shall be paid by any manager of the organization. (2) Manager For purposes of this subsection, the term manager means any officer, director, trustee, employee, or other individual who is under a duty to perform an act in respect of which the underpayment relates. (3) Joint and several liability If more than one person is liable under paragraph (1) with respect to an underpayment, all such persons shall be jointly and severally liable under such paragraph with respect to such underpayment (4) Limit With respect to any substantial underpayment of income tax for a taxable year, the maximum amount of the tax added by paragraph (1) shall not exceed $20,000. . (b) Reportable transactions Section 6662A is

113-hr-1-ih-dtd-255

113-hr-1-ih-dtd

113-hr-1

to perform an act in respect of which the underpayment relates. (3) Joint and several liability If more than one person is liable under paragraph (1) with respect to an underpayment, all such persons shall be jointly and severally liable under such paragraph with respect to such underpayment (4) Limit With respect to any substantial underpayment of income tax for a taxable year, the maximum amount of the tax added by paragraph (1) shall not exceed $20,000. . (b) Reportable transactions Section 6662A is amended by adding at the end the following new subsection: (f) Manager-Level penalty in case of unrelated business income tax (1) In general In the case of any portion of a reportable transaction understatement of the tax imposed by section 511 to which this section applies, there is hereby imposed a tax in an amount equal to 10 percent of such portion of the underpayment to which the reportable transaction understatement occurs. Such tax shall be paid by any manager of the organization. (2) Manager For purposes of this subsection, the term manager means any officer, director, trustee, employee, or other individual who is under a duty to perform an act in respect of which such understatement occurs. (3) Joint and several liability If more than one person is liable under paragraph (1) with respect to an understatement, all such persons shall be jointly and severally liable under such paragraph with respect to such understatement. (4) Limit With respect to any understatement of tax to which this section applies, the maximum amount of the tax added by paragraph (1) shall not exceed $40,000 . (c) Coordination Section 6662 is amended— (1) by striking the flush matter at the end of subsection (b), and (2) by adding at the end the following new subsection: (l) Coordination with other penalties This section shall not apply to any portion of an underpayment on which a penalty is imposed under section 6663. Except as provided in paragraph (1) or (2)(B) of section 6662A(e), this section shall not apply to the portion of any underpayment which is attributable to a reportable transaction understatement on which a penalty is imposed under section 6662A. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. C Excise Taxes 5201. Modification of intermediate sanctions (a) Organization level tax Subsection (a) of section 4958 is amended by adding at the end the following new paragraph: (3) On the organization In any case in which a tax is imposed by paragraph (1), there is hereby imposed on the organization a tax equal to 10 percent of the excess benefit. . (b) Minimum standards of organization due diligence Subsection (d) of section 4958 is amended by adding at the end the following new paragraph: (3) Minimum standards of organization due diligence (A) In general Subsection (a)(3) shall not apply to a transaction, if— (i) the organization establishes that the minimum standards of due diligence described in subparagraph (B) were met with respect to the transaction, or (ii) the organization establishes to the satisfaction of the Secretary that such other reasonable procedures were used to ensure that no excess benefit was provided. (B) Minimum standards An organization shall be treated as satisfying the minimum standards of due diligence described in this subparagraph with respect to any transaction, if— (i) the transaction was approved in advance by an authorized body of the organization composed entirely of individuals who did not have a conflict of interest with respect to the transaction, (ii) the authorized body obtained and relied upon appropriate data as to comparability prior to approval of the transaction, and (iii) the authorizing body adequately and concurrently documented the basis for approving the transaction. (C) No presumption as to reasonableness Meeting the requirements of clause (i) or (ii) of subparagraph (A) with respect to a transaction shall not give rise to a presumption of reasonableness for purposes of the taxes imposed by paragraphs (1) or (2) of

113-hr-1-ih-dtd-256

113-hr-1-ih-dtd

113-hr-1

to the transaction, (ii) the authorized body obtained and relied upon appropriate data as to comparability prior to approval of the transaction, and (iii) the authorizing body adequately and concurrently documented the basis for approving the transaction. (C) No presumption as to reasonableness Meeting the requirements of clause (i) or (ii) of subparagraph (A) with respect to a transaction shall not give rise to a presumption of reasonableness for purposes of the taxes imposed by paragraphs (1) or (2) of subsection (a) and shall not, by itself, support a conclusion that a manager did not act knowingly for purposes of subsection (a)(2). . (c) Repeal of exception for manager reliance on professional advice Section 4958 is amended by adding at the end the following new subsection: (g) No safe harbor for reliance on professional advice An organization manager’s reliance on a written opinion of a professional with respect to elements of a transaction within the professional’s expertise shall not, by itself, preclude the manager from being treated as participating in the transaction knowingly. . (d) Athletic coaches and investment managers treated as disqualified persons (1) Athletic coaches (A) In general Paragraph (1) of section 4958(f) is amended by striking and at the end of subparagraph (E), by striking the period at the end of subparagraph (F) and inserting , and , and by adding at the end the following new subparagraph: (G) any person who performs services as an athletic coach for the organization. . (B) Family members Subparagraph (B) of section 4958(f)(1) is amended by inserting or (G) after subparagraph (A) . (2) Investment advisors (A) In general Subparagraph (F) of section 4958(f)(1) is amended— (i) by striking which involves a sponsoring organization (as defined in section 4966(d)(1)), , and (ii) by striking such sponsoring organization (as so defined) and inserting the organization . (B) Investment advisor definition Subparagraph (B) of section 4958(f)(8) is amended to read as follows: (B) Investment advisor defined For purposes of subparagraph (A), the term investment advisor means— (i) with respect to any organization, any person who is compensated by such organization and is primarily responsible for managing the investment of, or providing investment advice with respect to, assets of such organization, and (ii) with respect to any sponsoring organization (as defined in section 4966(d)(1)), any person (other than an employee of such organization) compensated by such organization for managing the investment of, or providing investment advice with respect to, assets maintained in donor advised funds (as defined in section 4966(d)(2)) owned by such organization. . (e) Application to unions and trade associations Paragraph (1) of section 4958(e) is amended by inserting (5), (6), after (4), . (f) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 5202. Modification of taxes on self-dealing (a) Organization level tax Subsection (a) of section 4941 is amended by adding at the end the following new paragraph: (3) On the foundation In any case in which a tax is imposed by paragraph (1), there is hereby imposed on the foundation a tax equal to 2.5 percent (10 percent in the case payment of compensation) of the amount involved with respect to the act of self-dealing for each year (or part thereof) in the taxable period. . (b) Repeal of exception for manager reliance on advice from counsel Section 4941 is amended by adding at the end the following new subsection: (f) No safe harbor for reliance on advice of counsel A foundation manager’s reliance on a written legal opinion by legal counsel that an act is not an act of self-dealing shall not, by itself, preclude the manager from being treated as participating in the act knowingly. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 5203. Excise tax on failure to distribute within 5 years contribution to donor advised fund (a) In general

113-hr-1-ih-dtd-257

113-hr-1-ih-dtd

113-hr-1

subsection: (f) No safe harbor for reliance on advice of counsel A foundation manager’s reliance on a written legal opinion by legal counsel that an act is not an act of self-dealing shall not, by itself, preclude the manager from being treated as participating in the act knowingly. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 5203. Excise tax on failure to distribute within 5 years contribution to donor advised fund (a) In general Subchapter G of chapter 42 is amended by adding at the end the following new section: 4968. Failure to distribute contributions within 5 years (a) In general In the case of a contribution which is held in a donor advised fund, there is hereby imposed a tax equal to 20 percent of so much of the portion of such contribution as has not been distributed by the sponsoring organization in an eligible distribution before the beginning of the 6th (or succeeding) taxable year beginning after the taxable year during which such contribution was made. The tax imposed by this subsection shall be paid by such sponsoring organization. (b) Treatment of distributions For purposes of this section— (1) Eligible distribution The term eligible distribution means any distribution to an organization described in section 170(b)(1)(A) (other than an organization described in section 509(a)(3) or any fund or account described in section 4966(d)(2). (2) Accounting Distributions shall be treated as made from contributions (and any earnings attributable thereto) on a first-in, first-out basis. . (b) Conforming amendment The table of sections for subchapter G of chapter 42 is amended by adding at the end the following new item: Sec. 4968. Failure to distribute contributions within 5 years. . (c) Effective date (1) In general Except as provided in paragraph (2), the amendments made by this section shall apply to contributions made after December 31, 2014. (2) Transition rule In the case of any contribution— (A) which was made before January 1, 2015, and (B) any portion of which (including any earnings attributable thereto) is held in a donor advised fund on such date, such portion shall be treated as contributed on such date. 5204. Simplification of excise tax on private foundation investment income (a) Rate reduction Subsection (a) of section 4940 is amended by striking 2 percent and inserting 1 percent . (b) Repeal of special rules for certain private foundations Section 4940 is amended by striking subsections (d) and (e). (c) Conforming amendment Section 4945(d)(4)(A) is amended by striking clause (iii) and by inserting or at the end of clause (i). (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 5205. Repeal of exception for private operating foundation failure to distribute income (a) In general Subsection (a) of section 4942 is amended— (1) by striking a private foundation— and all that follows through (2) to the extent and inserting a private foundation to the extent , and (2) by redesignating subparagraphs (A), (B), (C), and (D) as paragraphs (1), (2), (3), and (4), respectively, and by moving such paragraphs, as so redesignated, two ems to the left. (b) Conforming amendments (1) Section 4942(j) is amended by striking paragraphs (3), (4), and (5). (2) Section 170(b)(1)(F)(i) is amended by striking (as defined in section 4942(j)(3)) , (3) Section 170(b)(1) is amended by adding at the end the following new subparagraphs: (H) Private operating foundation For purposes of this paragraph, the term private operating foundation means any organization— (i) which makes qualifying distributions (within the meaning of paragraph (1) or (2) of section 4942(g)) directly for the active conduct of the activities constituting the purpose or function for which it is organized and operated equal to substantially all of the lesser of— (I) its adjusted net income (as defined in subsection section 4942(f)), or (II) its minimum investment return, and (ii) (I) substantially more than half of the

113-hr-1-ih-dtd-258

113-hr-1-ih-dtd

113-hr-1

paragraph, the term private operating foundation means any organization— (i) which makes qualifying distributions (within the meaning of paragraph (1) or (2) of section 4942(g)) directly for the active conduct of the activities constituting the purpose or function for which it is organized and operated equal to substantially all of the lesser of— (I) its adjusted net income (as defined in subsection section 4942(f)), or (II) its minimum investment return, and (ii) (I) substantially more than half of the assets of which are devoted directly to such activities or to functionally related businesses, or to both, or are stock of a corporation which is controlled by the foundation and substantially all of the assets of which are so devoted, (II) which normally makes qualifying distributions (within the meaning of paragraph (1) or (2) of section 4942(g)) directly for the active conduct of the activities constituting the purpose or function for which it is organized and operated in an amount not less than two-thirds of its minimum investment return (as defined in section 4942(e)), or (III) substantially all of the support (other than gross investment income as defined in section 509(e)) of which is normally received from the general public and from 5 or more exempt organizations which are not described in section 4946(a)(1)(H) with respect to each other or the recipient foundation

113-hr-1-ih-dtd-259

113-hr-1-ih-dtd

113-hr-1

; not more than 25 percent of the support (other than gross investment income) of which is normally received from any one such exempt organization

113-hr-1-ih-dtd-260

113-hr-1-ih-dtd

113-hr-1

; and not more than half of the support of which is normally received from gross investment income. Notwithstanding the provisions of clause (i), if the qualifying distributions (within the meaning of paragraph (1) or (2) of section 4942(g)) of an organization for the taxable year exceed the minimum investment return for the taxable year, subclause (II) of clause (i) shall not apply unless substantially all of such qualifying distributions are made directly for the active conduct of the activities constituting the purpose or function for which it is organized and operated. (I) Functionally related business For purposes of subparagraph (H), the term functionally related business means— (i) a trade or business which is not an unrelated trade or business (as defined in section 513), or (ii) an activity which is carried on within a larger aggregate of similar activities or within a larger complex of other endeavors which is related (aside from the need of the organization for income or funds or the use it makes of the profits derived) to the exempt purposes of the organization. . (4) Section 170(e)(3)(A) is amended by striking as defined in section 4942(j)(3) and inserting as defined in subsection (b)(1)(H) . (5) Section 150(b)(3)(F), as redesignated by this Act, is amended— (A) by striking 4942 (relating to the excise tax on a failure to distribute income) and , (B) by striking section 4942(j)(4) and inserting section 170(b)(1)(I) . (6) Section 2055(e)(4)(D) is amended by striking section 4942(j)(3) and inserting section 170(b)(1)(H) . (7) Section 2503(g)(2)(B) is amended by striking section 4942(j)(3) and inserting section 170(b)(1)(H) . (8) Section 4942(g)(1)(A) is amended by striking which is not an operating foundation (as defined in subsection (j)(3)) . (9) Section 4942(g)(3)(A) is amended by striking which is not an operating foundation . (10) Section 4942(g)(4)(A) is amended by striking which is not an operating foundation . (11) Section 4943(d)(3)(A) is amended by striking section 4942(j)(4) and inserting section 170(b)(1)(I) . (12) Section 6110(l)(2)(A) is amended by striking section 4942(j)(3) and inserting section 170(b)(1)(H) . (13) Section 7428(a)(1)(C) is amended by striking section 4942(j)(3) and inserting section 170(b)(1)(H) . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 5206. Excise tax based on investment income of private colleges and universities (a) In general Chapter 42 is amended by adding at the end the following new subchapter: H Excise tax based on investment income of private colleges and universities Sec. 4969. Excise tax based on investment income of private colleges and universities. 4969. Excise tax based on investment income of private colleges and universities (a) Tax imposed There is hereby imposed on each applicable educational institution for the taxable year a tax equal to 1 percent of the net investment income of such institution for the taxable year. (b) Applicable educational institution For purposes of this subchapter— (1) In general The term applicable educational institution means an eligible educational institution (as defined in section 25A(e)(3))— (A) which is not described in the first sentence of section 511(a)(2)(B) (relating to State colleges and universities), and (B) the aggregate fair market value of the assets of which at the end of the preceding taxable year (other than those assets which are used (or held for use) directly in carrying out the institution’s exempt purpose) is at least $100,000 per student of the institution. (2) Students For purposes of paragraph (1)(B), the number of students of an institution shall be based on the daily average number of full-time students attending such institution (with part-time students taken into account on a full-time student equivalent basis). (c) Net investment income For purposes of this section, net investment income shall be determined under rules similar to the rules of section 4940(c). . (b) Clerical amendment The table of subchapters for chapter

113-hr-1-ih-dtd-261

113-hr-1-ih-dtd

113-hr-1

per student of the institution. (2) Students For purposes of paragraph (1)(B), the number of students of an institution shall be based on the daily average number of full-time students attending such institution (with part-time students taken into account on a full-time student equivalent basis). (c) Net investment income For purposes of this section, net investment income shall be determined under rules similar to the rules of section 4940(c). . (b) Clerical amendment The table of subchapters for chapter 42 is amended by adding at the end the following new item: Subchapter H—Excise tax based on investment income of private colleges and universities . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. D Requirements for Organizations Exempt From Tax 5301. Repeal of tax-exempt status for professional sports leagues (a) In general Paragraph (6) of section 501(c) is amended— (1) by striking , boards of trade, or professional and all that follows through players) and inserting , or boards of trade , and (2) by adding at the end the following: This paragraph shall not apply to any professional sports league (whether or not administering a pension fund for players). . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 5302. Repeal of exemption from tax for certain insurance companies and co-op health insurance issuers (a) In general Section 501(c) is amended by striking paragraphs (15) and (29). (b) Conforming amendments (1) Section 831(d), as amended by the preceding provisions of this Act, is amended to read as follows: (d) Cross reference For taxation of foreign corporations carrying on an insurance business within the United States, see section 842. . (2) Section 4958(e)(1) is amended by striking (4), or (29) and inserting or (4) . (3) Section 6033 is amended by striking subsection (m) and redesignating subsection (n) as subsection (m). (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. (d) Transition rules In the case of any organization described in paragraph (15) or (29) of section 501(c) of the Internal Revenue Code of 1986 (as in effect immediately before the enactment of this Act)— (1) no adjustment shall be made under section 481 (or any other provision) of the Internal Revenue Code of 1986 on account of a change in its method of accounting for its 1st taxable year beginning after December 31, 2014, and (2) for purposes of determining gain or loss, the adjusted basis of any asset held on the 1st day of such taxable year shall be treated as equal to its fair market value as of such day. 5303. In-State requirement for workmen’s compensation insurance organization (a) In general Clause (ii) of section 501(c)(27)(B) is amended by inserting before the comma at the end the following: , and must not offer any other insurance . (b) Effective date The amendment made by this section shall apply to insurance policies issued, and renewals, after December 31, 2014. 5304. Repeal of Type II and Type III supporting organizations (a) In general Subparagraph (B) of section 509(a)(3) is amended— (1) by inserting and at the end of clause (i), (2) by striking clauses (ii) and (iii), and (3) by striking is— and all that follows through operated, supervised, or controlled and inserting is operated, supervised, or controlled . (b) Conforming amendments (1) Section 170(f)(18)(A) is amended by striking is not— and all that follows through , and and inserting the following: is not described in paragraph (3), (4), or (5) of subsection (c), and . (2) (A) (i) Section 509(f) is amended by striking paragraph (1) and by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively. (ii) Section 4942(g)(4)(A)(ii)(I) is amended by striking section 509(f)(3) and inserting section 509(f)(2) . (iii) Section 4958(c)(3)(C)(ii)(II) is amended by striking section 509(f)(3) and inserting section 509(f)(2) . (iv) Section 4966(d)(4)(A)(ii)(I)

113-hr-1-ih-dtd-262

113-hr-1-ih-dtd

113-hr-1

, and and inserting the following: is not described in paragraph (3), (4), or (5) of subsection (c), and . (2) (A) (i) Section 509(f) is amended by striking paragraph (1) and by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively. (ii) Section 4942(g)(4)(A)(ii)(I) is amended by striking section 509(f)(3) and inserting section 509(f)(2) . (iii) Section 4958(c)(3)(C)(ii)(II) is amended by striking section 509(f)(3) and inserting section 509(f)(2) . (iv) Section 4966(d)(4)(A)(ii)(I) is amended by striking section 509(f)(3) and inserting section 509(f)(2) . (B) Section 509(f)(1)(A), as so redesignated, is amended by striking shall not be considered to be— and all that follows through if such organization and inserting the following: shall not be considered to be operated, supervised, or controlled by any organization described in paragraph (1) or (2) of subsection (a), if such organization . (3) Section 2055(e)(5)(A) is amended by striking is not— and all that follows through , and and inserting the following: is not described in paragraph (3) or (4) of subsection (a), and . (4) Section 2522(c)(5)(A) is amended by striking is not— and all that follows through , and and inserting the following: is not described in paragraph (3) or (4) of subsection (a), and . (5) (A) Section 4942(g)(4)(A), as amended by the preceding provision of this Act, is amended— (i) by redesignating subclauses (I) and (II) of clause (ii) as clauses (i) and (ii), respectively, and moving such redesignated clauses 2 ems to the left, (ii) by striking paid by a private foundation to— and all that follows through any organization which and inserting the following: paid by a private foundation to any organization which , and (iii) by striking subparagraph (B) or (C) and inserting subparagraph (B) . (B) Section 4942(g)(4)(B) is amended— (i) by striking clause (ii), (ii) by striking section 509(a), or and inserting section 509(a). , (iii) by striking and is— and all that follows through operated, supervised, or controlled by and inserting the following: and is operated, supervised, or controlled by , and (iv) by striking Type I and type II in the heading thereof. (C) Section 4942(g)(4) is amended by striking subparagraph (C). (D) Section 4945(d)(4)(A)(ii) is amended by striking clause (i) or (ii) of section 4942(g)(4)(A) and inserting section 4942(g)(4)(A) . (6) Section 4943 is amended by striking subsection (f). (7) (A) Section 4966(d)(4)(A), as amended by this Act, is amended— (i) by redesignating subclauses (I) and (II) of clause (ii) as clauses (i) and (ii), respectively, and moving such redesignated clauses 2 ems to the left, (ii) by striking with respect to any distribution— and all that follows through any organization which and inserting the following: with respect to any distribution, any organization which , and (iii) by striking subparagraph (B) or (C) and inserting subparagraph (B) . (B) Section 4966(d)(4)(B) is amended— (i) by striking clause (ii), (ii) by striking section 509(a), or and inserting section 509(a). , (iii) by striking and is— and all that follows through operated, supervised, or controlled by and inserting the following: and is operated, supervised, or controlled by , and (iv) by striking Type I and type II in the heading thereof. (C) Section 4966(d)(4) is amended by striking subparagraph (C). (8) Section 6033(l) is amended by inserting and at the end of paragraph (1), by striking paragraph (2), and by redesignating paragraph (3) as paragraph (2). (c) Effective date (1) In general Except as provided in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act. (2) Delay for current supporting organizations In the case of an organization which, as of the date of the enactment of this Act, meets the requirements of subparagraphs (A) and (C) of section 509(a)(3) of the Internal Revenue Code of 1986 and is— (A) supervised or controlled in connection with one or more organizations described in paragraph (1) or (2) of section 509(a) of such Code, or (B) is

113-hr-1-ih-dtd-263

113-hr-1-ih-dtd

113-hr-1

in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act. (2) Delay for current supporting organizations In the case of an organization which, as of the date of the enactment of this Act, meets the requirements of subparagraphs (A) and (C) of section 509(a)(3) of the Internal Revenue Code of 1986 and is— (A) supervised or controlled in connection with one or more organizations described in paragraph (1) or (2) of section 509(a) of such Code, or (B) is operated in connection with one or more such organizations, the amendments made by this section shall apply to taxable years beginning after December 31, 2015. VI Tax administration and compliance A IRS Investigation-Related Reforms 6001. Organizations required to notify Secretary of intent to operate as 501(c)(4) (a) In general Part I of subchapter F of chapter 1 is amended by adding at the end the following new section: 506. Organizations required to notify Secretary of intent to operate as 501(c)(4) (a) In general An organization described in section 501(c)(4) shall, not later than 60 days after the organization is established, notify the Secretary (in such manner as the Secretary shall by regulation prescribe) that it is operating as such. (b) Contents of notice The notice required under subsection (a) shall include the following information: (1) The name, address, and taxpayer identification number of the organization. (2) The date on which, and the State under the laws of which, the organization was organized. (3) A statement of the purpose of the organization. (c) Acknowledgment of receipt Not later than 60 days after receipt of such a notice, the Secretary shall send to the organization an acknowledgment of such receipt. (d) Extension for reasonable cause The Secretary may, for reasonable cause, extend the 60-day period described in subsection (a). (e) User fee The Secretary shall impose a reasonable user fee for submission of the notice under subsection (a). (f) Request for determination Upon request by an organization to be treated as an organization described in section 501(c)(4), the Secretary may issue a determination with respect to such treatment. Such request shall be treated for purposes of section 6104 as an application for exemption from taxation under section 501(a). . (b) Supporting information with first return Paragraph (1) of section 6033(f) is amended— (1) by striking the period at the end and inserting , and , (2) by striking include on the return required under subsection (a) the information and inserting the following: include on the return required under subsection (a)— (1) the information , and (3) by adding at the end the following new paragraph: (2) in the case of the first such return filed by such an organization after submitting a notice to the Secretary under section 506(a), such information as the Secretary shall by regulation require in support of the organization’s treatment as an organization described in section 501(c)(4). . (c) Failure To file initial notification Subsection (c) of section 6652 is amended by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively, and by inserting after paragraph (3) the following new paragraph: (4) Notices under section 506 (A) Penalty on organization In the case of a failure to submit a notice required under section 506(a) (relating to organizations required to notify Secretary of intent to operate as 501(c)(4)) on the date and in the manner prescribed therefor, there shall be paid by the organization failing to so submit $20 for each day during which such failure continues, but the total amount imposed under this subparagraph on any organization for failure to submit any one notice shall not exceed $5,000. (B) Managers The Secretary may make written demand on an organization subject to penalty under subparagraph (A) specifying in such demand a reasonable future date by which the notice shall be submitted for purposes of this subparagraph. If such notice is not submitted on or before such date, there shall be paid by the

113-hr-1-ih-dtd-264

113-hr-1-ih-dtd

113-hr-1

$20 for each day during which such failure continues, but the total amount imposed under this subparagraph on any organization for failure to submit any one notice shall not exceed $5,000. (B) Managers The Secretary may make written demand on an organization subject to penalty under subparagraph (A) specifying in such demand a reasonable future date by which the notice shall be submitted for purposes of this subparagraph. If such notice is not submitted on or before such date, there shall be paid by the person failing to so submit $20 for each day after the expiration of the time specified in the written demand during which such failure continues, but the total amount imposed under this subparagraph on all persons for failure to submit any one notice shall not exceed $5,000. . (d) Clerical amendment The table of sections for part I of subchapter F of chapter 1 is amended by adding at the end the following new item: Sec. 506. Organizations required to notify Secretary of intent to operate as 501(c)(4) . . (e) Effective date (1) In general The amendments made by this section shall apply to organizations which are described in section 501(c)(4) of the Internal Revenue Code of 1986 and organized after December 31, 2014. (2) Certain existing organizations In the case of any other organization described in section 501(c)(4) of such Code, the amendments made by this section shall apply to such organization only if, on or before the date of the enactment of this Act— (A) such organization has not applied for a written determination of recognition as an organization described in section 501(c)(4) of such Code, and (B) such organization has not filed at least one annual return or notice required under subsection (a)(1) or (i) (as the case may be) of section 6033 of such Code. In the case of any organization to which the amendments made by this section apply by reason of the preceding sentence, such organization shall submit the notice required by section 506(a) of such Code, as added by this Act, not later than 180 days after the date of the enactment of this Act. 6002. Declaratory judgments for 501(c)(4) organizations (a) In general Paragraph (1) of section 7428(a) is amended by striking or at the end of subparagraph (C) and by inserting after subparagraph (D) the following new subparagraph: (E) with respect to the initial classification or continuing classification of an organization described in section 501(c)(4) which is exempt from tax under section 501(a), or . (b) Effective date The amendments made by this section shall apply to pleadings filed after the date of the enactment of this Act. 6003. Restriction on donation reporting for certain 501(c)(4) organizations (a) In general Subsection (f) of section 6033, as amended by this Act, is amended— (1) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and by moving such subparagraphs 2 ems to the right, (2) by striking in section 501(c)(4).— Every organization and inserting the following: in section 501(c)(4).— (1) In general Every organization , and (3) by adding at the end the following new paragraph: (2) Restriction on donation reporting In the case of any such organization, information relating to contributions and gifts may only be required to be included on a return required under subsection (a) if the contribution or gift is made by an officer or director of the organization (or an individual having powers or responsibilities similar to those of officers or directors) or any covered employee (as defined in section 4960(c)(2)) of the organization. . (b) Effective date The amendments made by this section shall apply to returns for taxable years beginning after December 31, 2013. 6004. Mandatory electronic filing for annual returns of exempt organizations (a) In general Section 6033, as amended by the preceding provisions of this Act, is amended by redesignating subsection (m) as subsection (n) and by inserting after subsection (l) the following new subsection: (m) Mandatory electronic filing Any organization required to file a return

113-hr-1-ih-dtd-265

113-hr-1-ih-dtd

113-hr-1

organization. . (b) Effective date The amendments made by this section shall apply to returns for taxable years beginning after December 31, 2013. 6004. Mandatory electronic filing for annual returns of exempt organizations (a) In general Section 6033, as amended by the preceding provisions of this Act, is amended by redesignating subsection (m) as subsection (n) and by inserting after subsection (l) the following new subsection: (m) Mandatory electronic filing Any organization required to file a return under this section shall file such return in electronic form. . (b) Inspection of electronically filed annual returns Subsection (b) of section 6104 is amended by adding at the end the following: Any annual return required to be filed electronically under section 6033(m) shall be made available by the Secretary to the public in machine readable format as soon as practicable. . (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 the date of the enactment of this Act. (2) Transitional relief (A) Small organizations (i) In general In the case of any small organizations, or any other organizations for which the Secretary determines the application of the amendments made by subsection (a) would cause undue burden without a delay, the Secretary may delay the application of such amendments, but not later than taxable years beginning 2 years after the date of the enactment of this Act. (ii) Small organization For purposes of clause (i), the term small organization means any organization— (I) the gross receipts of which for the taxable year are less than $200,000, and (II) the aggregate gross assets of which at the end of the taxable year are less than $500,000. (B) Organizations filing form 990–T In the case of any organization described in section 511(a)(2) of the Internal Revenue Code of 1986 which is subject to the tax imposed by section 511(a)(1) of such Code on its unrelated business taxable income, or any organization required to file a return under section 6033 of such Code and include information under subsection (e) thereof, the Secretary may delay the application of the amendments made by this section, but not later than taxable years beginning 2 years after the date of the enactment of this Act. 6005. Duty to ensure that IRS employees are familiar with and act in accord with certain taxpayer rights Section 7803(a) is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph: (3) Execution of Duties in Accord with Taxpayer Rights In discharging his duties, the Commissioner shall ensure that employees of the Internal Revenue Service are familiar with and act in accord with taxpayer rights as afforded by other provisions of this title, including— (A) the right to be informed, (B) the right to be assisted, (C) the right to be heard, (D) the right to pay no more than the correct amount of tax, (E) the right of appeal, (F) the right to certainty, (G) the right to privacy, (H) the right to confidentiality, (I) the right to representation, and (J) the right to a fair and just tax system. . 6006. Termination of employment of IRS employees for taking official actions for political purposes Paragraph (10) of section 1203(b) of the Internal Revenue Service Restructuring and Reform Act of 1998 is amended to read as follows: (10) performing, delaying, or failing to perform (or threatening to perform, delay, or fail to perform) any official action (including any audit) with respect to a taxpayer for purpose of extracting personal gain or benefit or for a political purpose. . 6007. Release of information regarding the status of certain investigations (a) In general Subsection (e) of section 6103 is amended by adding at the end the following new paragraph: (11) Disclosure of information regarding status of investigation of violation of this section In the case of a person who provides to the Secretary information indicating a violation of section 7213, 7213A, or 7214 with

113-hr-1-ih-dtd-266

113-hr-1-ih-dtd

113-hr-1

with respect to a taxpayer for purpose of extracting personal gain or benefit or for a political purpose. . 6007. Release of information regarding the status of certain investigations (a) In general Subsection (e) of section 6103 is amended by adding at the end the following new paragraph: (11) Disclosure of information regarding status of investigation of violation of this section In the case of a person who provides to the Secretary information indicating a violation of section 7213, 7213A, or 7214 with respect to any return or return information of such person, the Secretary may disclose to such person (or such person’s designee)— (A) whether an investigation based on the person’s provision of such information has been initiated and whether it is open or closed, (B) whether any such investigation substantiated such a violation by any individual, and (C) whether any action has been taken with respect to such individual (including whether a referral has been made for prosecution of such individual). . (b) Effective date The amendment made by this section shall take effect on the date of the enactment of this Act. 6008. Review of IRS examination selection procedures (a) In general The Comptroller General of the United States shall conduct a study of each Internal Revenue Service operating division to assess the process used for determining how enforcement cases are selected and processed. Such study shall include a review of the following: (1) The standards each such operating division has established for enforcement case selection (including any automated or discretionary selection processes) and case work, and whether such standards meet the objectives of impartiality, objectivity, compliance, and minimizing taxpayer burden. (2) The extent to which any cases are initiated by referrals or complaints from inside or outside of the operating division (including from outside of the Internal Revenue Service). (3) The Internal Revenue Service controls (including management reviews and regular updates) for assuring that its standards for enforcement cases (and handling of referrals and complaints) in each operating division are sufficient for achieving the objectives described in paragraph (1). (4) The Internal Revenue Service controls (including training, monitoring, and quality assessments) for assuring that its standards are adhered to by all division personnel and the effectiveness of such controls. (5) Whether the existing standards and controls provide reasonable assurance that each division’s enforcement processes meet the Internal Revenue Service objectives of impartiality, objectivity, compliance, and minimizing taxpayer burden. (b) Initial report Not later than 1 year after the date of the enactment of this section, the Comptroller General shall submit to the Committee on Ways and Means of the House of Representatives, the Committee on Finance of the Senate, and the Secretary of the Treasury a report on the results of such study. Such report shall include such recommendations as the Comptroller General may deem advisable. (c) Follow-Up on recommendations Not later than 180 days after a report is submitted with respect to an operating division under subsection (b), the Comptroller General shall conduct a follow-up study, and submit to the Committee on Ways and Means of the House of Representatives, the Committee on Finance of the Senate, and the Secretary of the Treasury a report, on whether any recommendations to improve case selection and case work processes have been implemented and are working as intended. (d) Continuing case management studies and reports (1) In general After a report is submitted under subsection (b), the Comptroller General shall conduct follow-up studies and reports in the same manner as provided in subsections (a) and (b) with respect to each operating division of the Internal Revenue Service and shall include in such study and report a review of whether any previous recommendations to improve case selection and case work processes have been implemented and are working as intended. (2)

113-hr-1-ih-dtd-267

113-hr-1-ih-dtd

113-hr-1

(d) Continuing case management studies and reports (1) In general After a report is submitted under subsection (b), the Comptroller General shall conduct follow-up studies and reports in the same manner as provided in subsections (a) and (b) with respect to each operating division of the Internal Revenue Service and shall include in such study and report a review of whether any previous recommendations to improve case selection and case work processes have been implemented and are working as intended. (2) Frequency Each such report with respect to an operating division shall be submitted not later than 4 years after the date the most recent report was submitted with respect to such operating division under subsection (b) or this subsection. The Comptroller General shall submit no fewer than 1 such report each year. 6009. IRS employees prohibited from using personal email accounts for official business No officer or employee of the Internal Revenue Service may use a personal email account to conduct any official business of the Government. 6010. Moratorium on IRS conferences The Internal Revenue Service shall not hold any conference until the Treasury Inspector General for Tax Administration submits a report to Congress— (1) certifying that the Internal Revenue Service has implemented all of the recommendations set out in such Inspector General’s report titled Review of the August 2010 Small Business/Self-Employed Division’s Conference in Anaheim, California , and (2) describing such implementation. 6011. Applicable standard for determinations of whether an organization is operated exclusively for the promotion of social welfare (a) In general The standard and definitions as in effect on January 1, 2010, which are used to determine whether an organization is operated exclusively for the promotion of social welfare for purposes of section 501(c)(4) of the Internal Revenue Code of 1986 shall apply for purposes of determining the status of organizations under section 501(c)(4) of the Internal Revenue Code of 1986 after the date of the enactment of this Act. (b) Prohibition on modification of standard The Secretary of the Treasury may not (nor may any delegate of such Secretary) issue, revise, or finalize any regulation (including the proposed regulations published at 78 Fed. Reg. 71535 (November 29, 2013)), revenue ruling, or other guidance not limited to a particular taxpayer relating to the standard and definitions specified in subsection (a). (c) Application to organizations Except as provided in subsection (d), this section shall apply with respect to any organization claiming tax exempt status under section 501(c)(4) of the Internal Revenue Code of 1986 which was created on, before, or after the date of the enactment of this Act. (d) Sunset This section shall not apply after the one-year period beginning on the date of the enactment of this Act. B Taxpayer Protection and Service Reforms 6101. Extension of IRS authority to require truncated Social Security numbers on Form W–2 (a) In general Paragraph (2) of section 6051(a) is amended by striking his social security number and inserting an identifying number for the employee . (b) Effective date The amendment made by this section shall take effect on the date of the enactment of this Act. 6102. Free electronic filing (a) In general The Secretary of the Treasury shall, in cooperation with the private sector technology industry, maintain a program that provides free individual income tax preparation and electronic filing services to low-income taxpayers and elderly taxpayers. (b) Requirements of program The Secretary shall by regulation or other guidance prescribe with respect to the program— (1) the qualifications, selection process, and contract term for businesses participating in the program, (2) a process for periodic review of businesses participating in the program, (3) procedures for terminating business participation in the program for failure to comply with any program requirements, and (4) such other procedures as the Secretary determines are necessary or

113-hr-1-ih-dtd-268

113-hr-1-ih-dtd

113-hr-1

taxpayers. (b) Requirements of program The Secretary shall by regulation or other guidance prescribe with respect to the program— (1) the qualifications, selection process, and contract term for businesses participating in the program, (2) a process for periodic review of businesses participating in the program, (3) procedures for terminating business participation in the program for failure to comply with any program requirements, and (4) such other procedures as the Secretary determines are necessary or appropriate to carry out the purposes of the program. (c) Free File program The Internal Revenue Service Free File program, as set forth in the notice published in the Federal Register on November 4, 2002 (67 Fed. Reg. 67247), shall be treated as meeting the requirements of subsection (a). 6103. Pre-populated returns prohibited Except to the extent provided in section 6014, 6020, or 6201(d) of the Internal Revenue Code of 1986, the Secretary of the Treasury shall not provide to any person a proposed final return or statement for use by such person to satisfy a filing or reporting requirement under such Code. 6104. Form 1040SR for seniors (a) In general The Secretary of the Treasury (or the Secretary’s delegate) shall make available a form, to be known as Form 1040SR , for use by individuals to file the return of tax imposed by chapter 1 of the Internal Revenue Code of 1986. Such form shall be as similar as practicable to Form 1040EZ, except that— (1) the form shall be available to individuals who have attained age 65 as of the close of the taxable year, (2) the form may be used even if income for the taxable year includes— (A) social security benefits (as defined in section 86(d) of the Internal Revenue Code of 1986), (B) distributions from qualified retirement plans (as defined in section 4974(c) of such Code), annuities or other such deferred payment arrangements, (C) interest and dividends, or (D) capital gains and losses taken into account in determining the deduction for adjusted net capital gain under section 169 of such Code, and (3) the form shall be available without regard to the amount of any item of taxable income or the total amount of taxable income for the taxable year. (b) Effective date The form required by subsection (a) shall be made available for taxable years beginning after December 31, 2014. 6105. Increased refund and credit threshold for Joint Committee on Taxation review of C corporation return (a) In general Subsections (a) and (b) of section 6405 are each amended by inserting ($5,000,000 in the case of a C corporation) after $2,000,000 . (b) Effective date The amendment made by this section shall take effect on the date of the enactment of this Act, except that such amendment shall not apply with respect to any refund or credit with respect to a report that has been made before such date under section 6405 of the Internal Revenue Code of 1986. C Tax return due date simplification 6201. Due dates for returns of partnerships, S corporations, and C corporations (a) Partnerships and S corporations (1) In general So much of subsection (b) of 6072 as precedes the second sentence thereof is amended to read as follows: (b) Returns of partnerships and S corporations Returns of partnerships under section 6031 and returns of S corporations under sections 6012 and 6037 made on the basis of the calendar year shall be filed on or before the 15th day of March following the close of the calendar year, and such returns made on the basis of a fiscal year shall be filed on or before the 15th day of the third month following the close of the fiscal year. . (2) Conforming amendment Section 6072(a) is amended by striking 6017, or 6031 and inserting or 6017 . (b) Conforming amendments relating to C corporation due date of 15th day of fourth month following taxable year (1) Section 170(a)(3)(B), as redesignated by the preceding provisions of this Act, is amended by striking third month and inserting fourth month . (2) Section 563 is amended by striking third month each place it appears and inserting fourth month .

113-hr-1-ih-dtd-269

113-hr-1-ih-dtd

113-hr-1

month following the close of the fiscal year. . (2) Conforming amendment Section 6072(a) is amended by striking 6017, or 6031 and inserting or 6017 . (b) Conforming amendments relating to C corporation due date of 15th day of fourth month following taxable year (1) Section 170(a)(3)(B), as redesignated by the preceding provisions of this Act, is amended by striking third month and inserting fourth month . (2) Section 563 is amended by striking third month each place it appears and inserting fourth month . (3) Section 1354(d)(1)(B)(i) is amended by striking 3d month and inserting 4th month . (4) Subsection (a) and (c) of section 6167 are each amended by striking third month and inserting fourth month . (5) Section 6425(a)(1) is amended by striking third month and inserting fourth month . (6) Subsections (b)(2)(A), (g)(3), and (h)(1) of section 6655 are each amended by striking 3rd month and inserting 4th month . (c) Effective dates (1) In general Except as provided in paragraph (2), the amendments made by this section shall apply to returns for taxable years beginning after December 31, 2014. (2) Special rule for c corporations with fiscal years ending on June 30 In the case of any C corporation with a fiscal year ending on June 30, the amendments made by this section shall not apply to any taxable year beginning in 2022. 6202. Modification of due dates by regulation In the case of returns for taxable years beginning after December 31, 2014, the Secretary of the Treasury, or the Secretary's designee, shall modify appropriate regulations to provide as follows: (1) The maximum extension for the returns of partnerships filing Form 1065 shall be a 6-month period ending on September 15 for calendar year taxpayers. (2) The maximum extension for the returns of trusts filing Form 1041 shall be a 5½-month period ending on September 30 for calendar year taxpayers. (3) The maximum extension for the returns of employee benefit plans filing Form 5500 shall be an automatic 3½-month period ending on November 15 for calendar year plans. (4) The maximum extension for the returns of organizations exempt from income tax filing Form 990 shall be an automatic 6-month period ending on November 15 for calendar year filers. (5) The due date of Form 3520–A (relating to the Annual Information Return of Foreign Trust with a United States Owner) for calendar year filers shall be April 15 with a maximum extension for a 6-month period ending on October 15. (6) The due date of Form TD F 90–22.1 (relating to Report of Foreign Bank and Financial Accounts) shall be April 15 with a maximum extension for a 6-month period ending on October 15 and with provision for an extension under rules similar to the rules in Treas. Reg. section 1.6081–5. For any taxpayer required to file such Form for the first time, any penalty for failure to timely request for, or file, an extension, may be waived by the Secretary. 6203. Corporations permitted statutory automatic 6-month extension of income tax returns (a) In general Section 6081(b) is amended by striking 3 months and inserting 6 months . (b) Effective date The amendments made by this section shall apply to returns for taxable years beginning after December 31, 2014. D Compliance Reforms 6301. Penalty for failure to file (a) In general Section 6651(a) is amended by striking $135 in the flush material at the end and inserting $400 . (b) Effective date The amendments made by this section shall apply to returns the due date for the filing of which (including extension) is after December 31, 2014. 6302. Penalty for failure to file correct information returns and provide payee statements (a) In general Section 6721(a)(1) is amended— (1) by striking $100 and inserting $250 , and (2) by striking $1,500,000 and inserting $3,000,000 . (b) Reduction where correction in specified period (1) Correction within 30 days Section 6721(b)(1) is amended— (A) by striking $30 and inserting $50 , (B) by striking $100 and inserting $250 , and (C) by striking $250,000 and inserting $500,000 . (2) Failures corrected on or before August 1

113-hr-1-ih-dtd-270

113-hr-1-ih-dtd

113-hr-1

failure to file correct information returns and provide payee statements (a) In general Section 6721(a)(1) is amended— (1) by striking $100 and inserting $250 , and (2) by striking $1,500,000 and inserting $3,000,000 . (b) Reduction where correction in specified period (1) Correction within 30 days Section 6721(b)(1) is amended— (A) by striking $30 and inserting $50 , (B) by striking $100 and inserting $250 , and (C) by striking $250,000 and inserting $500,000 . (2) Failures corrected on or before August 1 Section 6721(b)(2) is amended— (A) by striking $60 and inserting $100 , (B) by striking $100 (prior to amendment by subparagraph (A)) and inserting $250 , and (C) by striking $500,000 and inserting $1,500,000 . (c) Lower limitation for persons with gross receipts of not more than $5,000,000 Section 6721(d)(1) is amended— (1) in subparagraph (A)— (A) by striking $500,000 and inserting $1,000,000 , and (B) by striking $1,500,000 and inserting $3,000,000 , (2) in subparagraph (B)— (A) by striking $75,000 and inserting $175,000 , and (B) by striking $250,000 and inserting $500,000 , and (3) in subparagraph (C)— (A) by striking $200,000 and inserting $500,000 , and (B) by striking $500,000 (prior to amendment by subparagraph (A)) and inserting $1,500,000 . (d) Penalty in case of intentional disregard Section 6721(e) is amended— (1) by striking $250 in paragraph (2) and inserting $500 , and (2) by striking $1,500,000 in paragraph (3)(A) and inserting $3,000,000 . (e) Failure To furnish correct payee statements (1) In general Section 6722(a)(1) is amended— (A) by striking $100 and inserting $250 , and (B) by striking $1,500,000 and inserting $3,000,000 . (2) Reduction where correction in specified period (A) Correction within 30 days Section 6722(b)(1) is amended— (i) by striking $30 and inserting $50 , (ii) by striking $100 and inserting $250 , and (iii) by striking $250,000 and inserting $500,000 . (B) Failures corrected on or before August 1 Section 6722(b)(2) is amended— (i) by striking $60 and inserting $100 , (ii) by striking $100 (prior to amendment by clause (i)) and inserting $250 , and (iii) by striking $500,000 and inserting $1,500,000 . (3) Lower limitation for persons with gross receipts of not more than $5,000,000 Section 6722(d)(1) is amended— (A) in subparagraph (A)— (i) by striking $500,000 and inserting $1,000,000 , and (ii) by striking $1,500,000 and inserting $3,000,000 , (B) in subparagraph (B)— (i) by striking $75,000 and inserting $175,000 , and (ii) by striking $250,000 and inserting $500,000 , and (C) in subparagraph (C)— (i) by striking $200,000 and inserting $500,000 , and (ii) by striking $500,000 (prior to amendment by subparagraph (A)) and inserting $1,500,000 . (4) Penalty in case of intentional disregard Section 6722(e) is amended— (A) by striking $250 in paragraph (2) and inserting $500 , and (B) by striking $1,500,000 in paragraph (3)(A) and inserting $3,000,000 . (f) Effective date The amendments made by this section shall apply with respect to returns and statements required to be filed after December 31, 2014. 6303. Clarification of 6-year statute of limitations in case of overstatement of basis (a) In general Subparagraph (B) of section 6501(e)(1) is amended— (1) by striking and at the end of clause (i), by redesignating clause (ii) as clause (iii), and by inserting after clause (i) the following new clause: (ii) An understatement of gross income by reason of an overstatement of unrecovered cost or other basis is an omission from gross income

113-hr-1-ih-dtd-271

113-hr-1-ih-dtd

113-hr-1

; and , and (2) by inserting (other than in the case of an overstatement of unrecovered cost or other basis) in clause (iii) (as so redesignated) after In determining the amount omitted from gross income . (b) Effective date The amendments made by this section shall apply to— (1) returns filed after the date of the enactment of this Act, and (2) returns filed on or before such date if the period specified in section 6501 of the Internal Revenue Code of 1986 (determined without regard to such amendments) for assessment of the taxes with respect to which such return relates has not expired as of such date. 6304. Reform of rules related to qualified tax collection contracts (a) Requirement To collect certain inactive tax receivables under qualified tax collection contracts Section 6306 is amended by redesignating subsections (c) through (f) as subsections (d) through (g), respectively, and by inserting after subsection (b) the following new subsection: (c) Collection of inactive tax receivables (1) In general Notwithstanding any other provision of law, the Secretary shall enter into one or more qualified tax collection contracts for the collection of all outstanding inactive tax receivables. (2) Inactive tax receivables For purposes of this section— (A) In general The term inactive tax receivable means any tax receivable if— (i) at any time after assessment, the Internal Revenue Service removes such receivable from the active inventory for lack of resources or inability to locate the taxpayer, (ii) more than 1/3 of the period of the applicable statute of limitation has lapsed and no employee of the Internal Revenue Service has been assigned such receivable for collection, or (iii) in the case of a receivable which has been assigned for collection, more than 365 days have passed without interaction with the taxpayer or a third party for purposes of furthering the collection of such receivable. (B) Tax receivable The term tax receivable means any outstanding assessment which the Internal Revenue Service includes in potentially collectible inventory. . (b) Certain tax receivables not eligible for collection under qualified tax collection contracts Section 6306, as amended by subsection (a), is amended by redesignating subsections (d) through (g) as subsections (e) through (h), respectively, and by inserting after subsection (c) the following new subsection: (d) Certain tax receivables not eligible for collection under qualified tax collections contracts A tax receivable shall not be eligible for collection pursuant to a qualified tax collection contract if such receivable— (1) is subject to a pending or active offer-in-compromise or installment agreement, (2) is classified as an innocent spouse case, (3) involves a taxpayer identified by the Secretary as being— (A) deceased, (B) under the age of 18, (C) in a designated combat zone, or (D) a victim of identity theft, (4) is currently under examination, litigation, criminal investigation, or levy, or (5) is currently subject to a proper exercise of a right of appeal under this title. . (c) Contracting priority Section 6306, as amended by the preceding provisions of this section, is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection: (h) Contracting priority In contracting for the services of any person under this section, the Secretary shall give priority to private collection contractors and debt collection centers on the schedule required under section 3711(g) of title 31, United States Code, to the extent such private collection contractors and debt collection centers are appropriate to carry out the purposes of this section. . (d) Disclosure of return information Section 6103(k) is amended by adding at the end the following new paragraph: (11) Qualified tax collection contractors Persons providing services pursuant to a qualified tax collection contract under section 6306 may, if speaking to a person who has identified himself or herself as having the name of the taxpayer to which a tax receivable

113-hr-1-ih-dtd-272

113-hr-1-ih-dtd

113-hr-1

extent such private collection contractors and debt collection centers are appropriate to carry out the purposes of this section. . (d) Disclosure of return information Section 6103(k) is amended by adding at the end the following new paragraph: (11) Qualified tax collection contractors Persons providing services pursuant to a qualified tax collection contract under section 6306 may, if speaking to a person who has identified himself or herself as having the name of the taxpayer to which a tax receivable (within the meaning of such section) relates, identify themselves as contractors of the Internal Revenue Service and disclose the business name of the contractor, and the nature, subject, and reason for the contact. Disclosures under this paragraph shall be made only in such situations and under such conditions as have been approved by the Secretary. . (e) Taxpayers affected by federally declared disasters Section 6306, as amended by the preceding provisions of this section, is amended by redesignating subsection (i) as subsection (j) and by inserting after subsection (h) the following new subsection: (i) Taxpayers in Presidentially declared disaster areas The Secretary may prescribe procedures under which a taxpayer determined to be affected by a federally declared disaster (as defined by section 165(i)(5)) may request— (1) relief from immediate collection measures by contractors under this section, and (2) a return of the inactive tax receivable to the Internal Revenue Service for collection. . (f) Report to Congress (1) In general Section 6306, as amended by the preceding provisions of this section, is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection: (j) Report to Congress Not later than 90 days after each fiscal year ending on September 30, the Secretary shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report with respect to qualified tax collection contracts under this section which shall include— (1) annually (with respect to each such fiscal year beginning with the first such fiscal year ending after the date of the enactment of this subsection)— (A) the total number and amount of tax receivables provided to each contractor for collection under this section, (B) the total amounts collected (and amounts of installment agreements entered into under subsection (b)(1)(B)) with respect to each contractor and the collection costs incurred (directly and indirectly) by the Internal Revenue Service with respect to such amounts, (C) the impact of such contracts on the total number and amount of unpaid assessments, and on the number and amount of assessments collected by Internal Revenue Service personnel after initial contact by a contractor, (D) the amount of fees retained by the Secretary under subsection (e) and a description of the use of such funds, and (E) a disclosure safeguard report in a form similar to that required under section 6103(p)(5), and (2) biannually (beginning with the second report submitted under this subsection)— (A) an independent evaluation of contractor performance

113-hr-1-ih-dtd-273

113-hr-1-ih-dtd

113-hr-1

; and (B) a measurement plan that includes a comparison of the best practices used by the private collectors to the collection techniques used by the Internal Revenue Service and mechanisms to identify and capture information on successful collection techniques used by the contractors that could be adopted by the Internal Revenue Service. . (2) Repeal of existing reporting requirements with respect to qualified tax collection contracts Section 881 of the American Jobs Creation Act of 2004 is amended by striking subsection (e). (g) Effective dates (1) In general The amendments made by subsections (a) and (b) shall apply to tax receivables identified by the Secretary after the date of the enactment of this Act. (2) Contracting priority The amendments made by subsection (c) shall apply to contracts and agreements entered into after the date of the enactment of this Act. (3) Disclosures The amendments made by subsection (d) shall apply to disclosures made after the date of the enactment of this Act. (4) Procedures

113-hr-1-ih-dtd-274

113-hr-1-ih-dtd

113-hr-1

; Report to Congress The amendments made by subsections (e) and (f) shall take effect on the date of the enactment of this Act. 6305. 100 percent continuous levy on payments to Medicare providers and suppliers (a) In general Paragraph (3) of section 6331(h) is amended by striking the period at the end and inserting , or to a Medicare provider or supplier under title XVIII of the Social Security Act. . (b) Effective date The amendment made by this section shall apply to levies issued after the date of the enactment of this Act. 6306. Treatment of refundable credits for purposes of certain penalties (a) Application of underpayment penalties Section 6664(a) is amended by adding at the end the following: A rule similar to the rule of section 6211(b)(4) shall apply for purposes of this subsection. . (b) Penalty for erroneous claim of credit made applicable to earned income credit Section 6676(a) is amended by striking (other than a claim for a refund or credit relating to the earned income credit under section 32) . (c) Effective dates (1) Underpayment penalties The amendment made by subsection (a) shall apply to— (A) returns filed after February 26, 2014, and (B) returns filed on or before such date if the period specified in section 6501 of the Internal Revenue Code of 1986 for assessment of the taxes with respect to which such return relates has not expired as of such date. (2) Penalty for erroneous claim of credit The amendment made by subsection (b) shall apply to claims filed after February 26, 2014. VII Excise taxes 7001. Repeal of medical device excise tax (a) In general Chapter 32 is amended by striking subchapter E. (b) Conforming amendments (1) Subsection (a) of section 4221 is amended by striking the last sentence. (2) Paragraph (2) of section 6416(b) is amended by striking the last sentence. (c) Clerical amendment The table of subchapters for chapter 32 is amended by striking the item relating to subchapter E. (d) Effective date The amendments made by this section shall apply to sales after the date of the enactment of this Act. 7002. Modifications relating to oil spill liability trust fund (a) Extension 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, 2023 . (b) Application with respect to bitumen and bituminous mixtures and shale oil Paragraph (1) of section 4612(a) is amended to read as follows: (1) Crude oil The term crude oil includes crude oil condensates, natural gasoline, any bitumen or bituminous mixture, any oil derived from a bitumen or bituminous mixture, shale oil, and any oil derived from kerogen-bearing sources. . (c) Conforming amendment Paragraph (2) of section 4612(a) is amended by striking from a well located . (d) Effective date The amendments made by this section shall apply to oil and petroleum products received or entered during calendar quarters beginning more than 60 days after the date of the enactment of this Act. 7003. Modification relating to inland waterways trust fund financing rate (a) In general Section 4042(b)(2)(A) is amended to read as follows: (A) The Inland Waterways Trust Fund financing rate is 26 cents per gallon. . (b) Effective date The amendment made by this section shall apply to fuel used after December 31, 2014. 7004. Excise tax on systemically important financial institutions (a) In general Chapter 36 is amended by adding at the end the following new subchapter: E Tax on systemically important financial institutions Sec. 4491. Tax on systemically important financial institutions. 4491. Tax on systemically important financial institutions (a) In general There is hereby imposed a tax on the excess total consolidated assets of any systemically important financial institution on the close of each calendar quarter. (b) Amount of tax The rate of tax imposed by subsection (a) is 0.035 percent of such excess total consolidated assets. (c) By whom paid The tax imposed by subsection (a) shall be paid by the systemically important financial institution. (d) Due date The tax

113-hr-1-ih-dtd-275

113-hr-1-ih-dtd

113-hr-1

institutions. 4491. Tax on systemically important financial institutions (a) In general There is hereby imposed a tax on the excess total consolidated assets of any systemically important financial institution on the close of each calendar quarter. (b) Amount of tax The rate of tax imposed by subsection (a) is 0.035 percent of such excess total consolidated assets. (c) By whom paid The tax imposed by subsection (a) shall be paid by the systemically important financial institution. (d) Due date The tax imposed by subsection (a) for a calendar quarter shall be due on the first day of the third month beginning after the close of such quarter. (e) Systemically important financial institution For purposes of this section, the term systemically important financial institution means any person subject to section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. (f) Excess total consolidated assets For purposes of this section, the term excess total consolidated assets means the excess of— (1) total consolidated assets (within the meaning of section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act), over (2) $500,000,000,000. (g) Adjustment of dollar amount (1) In general In the case of any calendar year beginning after 2015, there shall be substituted for the dollar amount in subsection (f)(2) a dollar amount which bears the same ratio to such amount (determined without regard to this subsection) as— (A) the GDP for the preceding calendar year, bears to (B) the GDP for 2014. Any dollar amount determined under this paragraph for substitution in subsection (f)(2) which is not a multiple of $1,000,000,000 shall be rounded to the nearest multiple of $1,000,000,000. (2) GDP For purposes of this subsection, the GDP for any calendar year means the latest estimate of the gross domestic product published by the Department of Commerce for the preceding calendar year. (h) Treatment of certain references Any reference in this section to any provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act shall be treated as a reference to such provision as in effect on the date of the enactment of this section. . (b) Clerical amendment The table of subchapters for chapter 36 is amended by adding at the end the following new item: Subchapter E. Tax on systemically important financial institutions. . (c) Effective date The amendments made by this section shall apply to calendar quarters beginning after December 31, 2014. 7005. Clarification of orphan drug exception to annual fee on branded prescription pharmaceutical manufacturers and importers (a) In general Paragraph (3) of section 9008(e) of the Patient Protection and Affordable Care Act (Public Law 111–148) is amended to read as follows: (3) Exclusion of orphan drug sales (A) In general The term branded prescription drug sales shall not include sales of any drug or biological product— (i) with respect to which a credit was allowed for any taxable year under section 45C of the Internal Revenue Code of 1986 (as in effect before its repeal by the Tax Reform Act of 2014 )

113-hr-1-ih-dtd-276

113-hr-1-ih-dtd

113-hr-1

; or (ii) which is approved or licensed by the Food and Drug Administration for marketing solely for one or more rare diseases or conditions. (B) Limitation Subparagraph (A) shall not apply with respect to any drug or biological product after the date on which the drug or biological product is approved or licensed by the Food and Drug Administration for marketing for any indication other than the treatment of a rare disease or condition. (C) Rare disease or condition (i) In general For purposes of this paragraph, the term rare disease or condition means any disease or condition which— (I) affects less than 200,000 persons in the United States, or (II) affects more than 200,000 persons in the United States but for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biological product for such disease or condition will be recovered from sales in the United States of such drug or biological product. (ii) Time of determination Determinations under the preceding sentence with respect to any drug or biological product shall be made on the basis of the facts and circumstances as of— (I) in the case a drug or biological product that has been designated under section 526 of the Federal Food, Drug, and Cosmetic Act for a particular indication, the date of such designation, and (II) in any other case, the date such drug or biological product is approved or licensed by the Food and Drug Administration for marketing for the treatment of the disease or condition referred to in clause (i). . (b) Effective date The amendment made by this section shall apply to fees imposed under section 9008(a)(1) of the Patient Protection and Affordable Care Act with annual payment dates after 2013. VIII Deadwood and technical provisions A Repeal of Deadwood 8001. Repeal of Puerto Rico economic activity credit Subpart B of part IV of subchapter A of chapter 1 is amended by striking section 30A (and by striking the item relating to such section in the table of sections of such subpart). 8002. Repeal of making work pay credit (a) In general Subpart C of part IV of subchapter A of chapter 1 is amended by striking section 36A (and by striking the item relating to such section in the table of sections of such subpart). (b) Conforming amendments (1) Section 6211(b)(4)(A) is amended by striking 36A, . (2) Section 6213(g)(2) is amended by striking subparagraph (N). 8003. General business credit Subsection (d) of section 38 is amended by striking paragraph (3). 8004. Environmental tax (a) In general Subchapter A of chapter 1 is amended by striking part VII (and the table of parts for such chapter is amended by striking the item relating to part VII). (b) Conforming amendments (1) Section 26(b)(2) is amended by striking subparagraph (B). (2) Section 164(a) is amended by striking paragraph (5). (3) Section 275(a) is amended by striking the last sentence. (4) Section 882(a)(1) is amended by striking 59A, . (5) Section 6425(c)(1)(A), as amended by the preceding provisions of this Act, is amended to read as follows: (A) the tax imposed by section 11 or 1201(a), or subchapter L of chapter 1, whichever is applicable, over . (6) Section 6655(g)(1)(A), as amended by the preceding provisions of this Act, is amended by adding plus at the end of clause (i) and by striking clause (ii). 8005. Annuities; certain proceeds of endowment and life insurance contracts Section 72 is amended— (1) in subsection (c)(4) by striking

113-hr-1-ih-dtd-277

113-hr-1-ih-dtd

113-hr-1

; certain proceeds of endowment and life insurance contracts Section 72 is amended— (1) in subsection (c)(4) by striking ; except that if such date was before January 1, 1954, then the annuity starting date is January 1, 1954 , and (2) in subsection (g)(3) by striking January 1, 1954, or and , whichever is later . 8006. Unemployment compensation Section 85 is amended by striking subsection (c). 8007. Flexible spending arrangements Section 106(c)(1) is amended by striking Effective on and after January 1, 1997, gross and inserting Gross . 8008. Certain combat zone compensation of members of the armed forces Subsection (c) of section 112 is amended— (1) by striking (after June 24, 1950) in paragraph (2), and (2) striking such zone

113-hr-1-ih-dtd-278

113-hr-1-ih-dtd

113-hr-1

; and all that follows in paragraph (3) and inserting such zone. . 8009. Qualified group legal services plans (a) In general Part III of subchapter B of chapter 1 is amended by striking section 120 (and by striking the item relating to such section in the table of sections for such part). (b) Tax-Exemption of group legal services plans Section 501(c) is amended by striking paragraph (20). (c) Conforming amendments (1) Section 414(n)(3)(C) is amended by striking 120, . (2) Section 414(t)(2) is amended by striking 120, . (3) Section 3121(a) is amended by striking paragraph (17). (4) Section 3231(e) is amended by striking paragraph (7). (5) Section 3306(b) is amended by striking paragraph (12). (6) Section 6039D(d)(1) is amended by striking 120, . (7) Section 209(a)(14) of the Social Security Act is amended— (A) by striking subparagraph (B), and (B) by striking (14)(A) and inserting (14) . 8010. Certain reduced uniformed services retirement pay Section 122(b)(1) is amended by striking after December 31, 1965, . 8011. Great plains conservation program Section 126(a) is amended by striking paragraph (6) and by redesignating paragraphs (7),(8), (9), and (10) as paragraphs (6), (7), (8), and (9), respectively. 8012. State legislators’ travel expenses away from home Paragraph (4) of section 162(h) is amended by striking For taxable years beginning after December 31, 1980, this and inserting This . 8013. Treble damage payments under the antitrust law Section 162(g) is amended by striking the last sentence. 8014. Phase-in of limitation on investment interest Section 163(d) is amended by striking paragraph (6). 8015. Charitable, etc., contributions and gifts Section 170 is amended by striking subsection (k). 8016. Amortizable bond premium (a) In general Subparagraph (B) of section 171(b)(1) is amended to read as follows: (B) (i) with reference to the amount payable on maturity (or if it results in a smaller amortizable bond premium attributable to the period before the call date, with reference to the amount payable on the earlier call date), in the case of a bond described in subsection (a)(1), and (ii) with reference to the amount payable on maturity or on an earlier call date, in the case of a bond described in subsection (a)(2). . (b) Conforming amendments Paragraphs (2)(B) and (3)(B) of section 171(b) are each amended by striking paragraph (1)(B)(ii) and inserting paragraph (1)(B)(i) . 8017. Repeal of deduction for clean-fuel vehicles and certain refueling property (a) In general Part VI of subchapter B of chapter 1 is amended by striking section 179A (and by striking the item relating to such section in the table of sections for such part). (b) Conforming amendment (1) Section 62(a) is amended by striking paragraph (14). (2) Section 280F(a)(1) is amended by striking subparagraph (C). (3) Section 312(k)(3), as amended by this Act, is amended by striking , 179A each place it appears. (4) Section 1016(a) is amended by striking paragraph (24). (c) Effective date The amendments made by this section shall apply to property placed in service after December 31, 2005. 8018. Repeal of deduction for capital costs incurred in complying with environmental protection agency sulfur regulations (a) In general Part VI of subchapter B of chapter 1 is amended by striking section 179B (and by striking the item relating to such section in the table of sections for such part). (b) Conforming amendments (1) Section 312(k)(3), as amended by this Act, is amended by striking , 179B each place it appears. (2) Section 1016(a) is amended by striking paragraph (30). (c) Effective date The amendments made by this section shall apply to amounts paid or incurred after December 31, 2009. 8019. Activities not engaged in for profit Section 183(e)(1) is amended by striking the last sentence. 8020. Dividends received on certain preferred stock

113-hr-1-ih-dtd-279

113-hr-1-ih-dtd

113-hr-1

; and dividends paid on certain preferred stock of public utilities (a) In general Sections 244 and 247 are hereby repealed, and the table of sections for part VIII of subchapter B of chapter 1 is amended by striking the items relating to sections 244 and 247. (b) Conforming amendments (1) Paragraph (5) of section 172(d) is amended to read as follows: (5) Computation of deduction for dividends received The deductions allowed by section 243 (relating to dividends received by corporations) and 245 (relating to dividends received from certain foreign corporations) shall be computed without regard to section 246(b) (relating to limitation on aggregate amount of deductions). . (2) Paragraph (1) of section 243(c) is amended to read as follows: (1) In general In the case of any dividend received from a 20-percent owned corporation, subsection (a)(1) shall be applied by substituting 80 percent for 70 percent .’’. (3) Section 243(d) is amended by striking paragraph (4). (4) Section 246 is amended— (A) by striking , 244, in subsection (a)(1), (B) in subsection (b)(1)— (i) by striking sections 243(a)(1), 244(a), the first place it appears and inserting section 243(a)(1) , (ii) by striking 244(a), the second place it appears, and (iii) by striking subsection (a) or (b) of section 245, and 247, and inserting and subsection (a) or (b) of section 245, , and (C) by striking , 244, in subsection (c)(1). (5) Section 246A is amended by striking , 244, both places it appears in subsections (a) and (e). (6) Sections 263(g)(2)(B)(iii), 277(a), 301(e)(2), 469(e)(4), 512(a)(3)(A), 805(a)(4)(A), (C), and (D), 805(b)(4) (as redesignated by this Act), 832(b)(5)(B)(ii), (D)(i), and (D)(ii)(I), 833(b)(3)(E), and 1059(b)(2)(B) are each amended by striking , 244, each place it appears. (7) Section 805(a)(4)(B) is amended by striking , 244(a), each place it appears. (8) Section 810(c)(2)(B) is amended by striking 244 (relating to dividends on certain preferred stock of public utilities), . (9) Section 1244(c)(2)(C) is amended by striking 244, . 8021. Acquisitions made to evade or avoid income tax Paragraphs (1) and (2) of section 269(a) are each amended by striking or acquired on or after October 8, 1940, . 8022. Distributions of property Paragraph (3) of section 301(c) is amended to read as follows: (3) Amounts in excess of basis That portion of the distribution which is not a dividend, to the extent that it exceeds the adjusted basis of the stock, shall be treated as gain from the sale or exchange of property. . 8023. Effect on earnings and profits Subsection (d) of section 312 is amended by striking paragraph (2) and redesignating paragraph (3) as paragraph (2). 8024. Basis to corporations Section 362(a) is amended by striking on or after June 22, 1954, . 8025. Tax credit employee stock ownership plans Section 409 is amended by striking subsection (q). 8026. Employee stock purchase plans Section 423(a) is amended by striking after December 31, 1963 . 8027. Transition rules (a) Paragraph (5) of section 430(c) is amended by striking subparagraph (B) and by striking (A) In general.— . (b) Paragraph (2) of section 430(h) is amended by striking subparagraph (G). (c) Paragraph (3) of section 436(j) is amended by striking subparagraphs (B) and (C) and by striking (A) In general.— (d) Section 436 is amended by striking subsection (m). 8028. Limitation on deductions for certain farming (a) In general Section 464 is amended by striking any farming syndicate (as defined in subsection (c)) both places it appears in subsections (a) and (b) and inserting any taxpayer to whom subsection (d) applies . (b) Farming syndicate (1) Subsection (c) of section 464 is hereby moved to the end of section 461 and redesignated as subsection (j). (2) Such subsection (j) is amended— (A) by striking For purposes of this section in paragraph (1) and inserting For purposes of subsection (i)(4) , and (B) by adding at the end the following new paragraphs: (3) Farming For purposes of this subsection, the term farming has the meaning given to such term by section 464(e). (4) Limited

113-hr-1-ih-dtd-280

113-hr-1-ih-dtd

113-hr-1

taxpayer to whom subsection (d) applies . (b) Farming syndicate (1) Subsection (c) of section 464 is hereby moved to the end of section 461 and redesignated as subsection (j). (2) Such subsection (j) is amended— (A) by striking For purposes of this section in paragraph (1) and inserting For purposes of subsection (i)(4) , and (B) by adding at the end the following new paragraphs: (3) Farming For purposes of this subsection, the term farming has the meaning given to such term by section 464(e). (4) Limited entrepreneur For purposes of this subsection, the term limited entrepreneur means a person who— (A) has an interest in an enterprise other than as a limited partner, and (B) does not actively participate in the management of such enterprise. . (C) Paragraph (4) of section 461(i) is amended by striking section 464(c) and inserting subsection (j) . (c) Section 464 is amended— (1) by striking subsections (e) and (g) and redesignating subsections (d) and (f) as subsections (c) and (d), respectively, and (2) by inserting after subsection (d) the following new subsection: (e) Farming For purposes of this section, the term farming means the cultivation of land or the raising or harvesting of any agricultural or horticultural commodity including the raising, shearing, feeding, caring for, training, and management of animals. For purposes of the preceding sentence, trees (other than trees bearing fruit or nuts) shall not be treated as an agricultural or horticultural commodity. . (d) Subsection (d) of section 464 of such Code, as redesignated by subsection (c), is amended— (1) by striking paragraph (1) and redesignating paragraphs (2), (3), and (4) as paragraphs (1), (2), and (3), respectively, and (2) by striking SUBSECTIONS (a) AND (b) TO APPLY TO in the subsection heading. (e) Subparagraph (A) of section 58(a)(2) is amended by striking section 464(c) and inserting section 461(j) . 8029. Deductions limited to amount at risk Paragraph (3) of section 465(c) is amended by striking In the case of taxable years beginning after December 31, 1978, this and inserting This . 8030. Passive activity losses and credits limited Section 469 is amended by striking subsection (m). 8031. Adjustments required by changes in method of accounting Section 481(b)(3) is amended by striking subparagraph (C). 8032. Exemption from tax on corporations, certain trusts, etc Section 501 is amended by striking subsection (s). 8033. Requirements for exemption (a) Section 503(a)(1) is amended to read as follows: (1) General rule An organization described in paragraph (17) or (18) of section 501(c) or described in section 401(a) and referred to in section 4975(g)(2) or (3) shall not be exempt from taxation under section 501(a) if it has engaged in a prohibited transaction. . (b) Paragraph (2) of section 503(a) is amended by striking described in section 501(c)(17) or (18) or paragraph (a)(1)(B) and inserting described in paragraph (1) . (c) Subsection (c) of section 503 is amended by striking described in section 501(c)(17) or (18) or subsection (a)(1)(B) and inserting described in subsection (a)(1) . 8034. Repeal of special treatment for religious broadcasting company (a) In general Subsection (b) of section 512 is amended by striking paragraph (15). (b) Effective date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 8035. Repeal of exclusion of gain or loss from disposition of brownfield property (a) In general Subsection (b) of section 512 is amended by striking paragraph (19). (b) Effective date The amendment made by this section shall apply to property acquired after December 31, 2009. 8036. Accumulated taxable income Paragraph (1) of section 535(b) and paragraph (1) of section 545(b) are each amended by striking section 531 and all that follows and inserting section 531 or the personal holding company tax imposed by section 541. . 8037. Certain provisions related to depletion (a) Section 614(b)(3) (before being redesignated by title III) is amended by striking subparagraph (C). (b)

113-hr-1-ih-dtd-281

113-hr-1-ih-dtd

113-hr-1

date The amendment made by this section shall apply to property acquired after December 31, 2009. 8036. Accumulated taxable income Paragraph (1) of section 535(b) and paragraph (1) of section 545(b) are each amended by striking section 531 and all that follows and inserting section 531 or the personal holding company tax imposed by section 541. . 8037. Certain provisions related to depletion (a) Section 614(b)(3) (before being redesignated by title III) is amended by striking subparagraph (C). (b) Section 614(b)(4) (before being redesignated by title III) is amended by striking whichever of the following taxable years is the later: The first taxable year beginning after December 31, 1963, or . (c) Section 614(b) (before being redesignated by title III) is amended by striking paragraph (5). 8038. Amounts received by surviving annuitant under joint and survivor annuity contract Subparagraph (A) of section 691(d)(1) is amended by striking after December 31, 1953, and . 8039. Income taxes of members of armed forces on death Section 692(a)(1) is amended by striking after June 24, 1950 . 8040. Special rules for computing reserves Paragraph (7) of section 807(e) is amended by striking subparagraph (B) and redesignating subparagraph (C) as subparagraph (B). 8041. Insurance company taxable income (a) Section 832(e) is amended by striking of taxable years beginning after December 31, 1966, . (b) Section 832(e)(6) is amended by striking In the case of any taxable year beginning after December 31, 1970, the and inserting The . 8042. Capitalization of certain policy acquisition expenses Section 848 (as amended by title II) is amended by striking subsection (i). 8043. Repeal of provision on expatriation to avoid tax (a) In general Subpart A of part II of subchapter N of chapter 1 is amended by striking section 877 (and by striking the item relating to such section in the table of sections for such subpart). (b) Conforming amendments (1) Section 2(d) is amended by striking or 877 . (2) Section 121 is amended by striking subsection (e). (3) Section 865(j)(3) is amended by inserting as in effect before its repeal after section 877 . (4) Paragraph (2) of section 871(o) (as amended by this Act) is amended to read as follows: (2) For taxation of covered expatriates, see section 877A. . (5) (A) Section 877A(g)(1)(A) is amended to read as follows: (A) In general The term covered expatriate means any expatriate if— (i) the average annual net income tax of such individual for the period of 5 taxable years ending before the date of the loss of United States citizenship is greater than $124,000, (ii) the net worth of the individual as of such date is $2,000,000 or more, or (iii) such individual fails to certify under penalty of perjury that he has met the requirements of this title for the 5 preceding taxable years or fails to submit such evidence of such compliance as the Secretary may require. . (B) Section 877A(g)(1)(B) is amended by striking shall not be treated as meeting the requirements of subparagraph (A) or (B) of section 877(a)(2) and inserting shall not be treated as described in clause (i) or (ii) of subparagraph (A) . (C) Section 877A(g)(1) is amended by redesignating subparagraph (C) as subparagraph (D) and inserting after subparagraph (B) the following new subparagraph: (C) Net income tax For purposes of subparagraph (A), the term net income tax means the regular tax liability reduced by the credits allowed under subparts A, B, and D of part IV of subchapter A. . (D) Section 877A(g)(1), as amended by subparagraph (C), is amended by adding at the end the following new subparagraph: (E) Inflation adjustment In the case of the loss of United States citizenship in any calendar year after 2007, the dollar amount in subparagraph (A)(i) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(c)(2)(A) for the calendar year in which such loss of United States citizenship occurs determined by substituting calendar year 2003 for calendar year 2012 in clause

113-hr-1-ih-dtd-282

113-hr-1-ih-dtd

113-hr-1

by adding at the end the following new subparagraph: (E) Inflation adjustment In the case of the loss of United States citizenship in any calendar year after 2007, the dollar amount in subparagraph (A)(i) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(c)(2)(A) for the calendar year in which such loss of United States citizenship occurs determined by substituting calendar year 2003 for calendar year 2012 in clause (ii) thereof. Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $1,000. . (E) Section 877A(g)(5) is amended to read as follows: (5) Long-term resident The term long-term resident means any individual (other than a citizen of the United States) who is a lawful permanent resident of the United States in at least 8 taxable years during the period of 15 taxable years ending with the taxable year during which the event described in subparagraph (A) or (B) of paragraph (2) occurs. For purposes of the preceding sentence, an individual shall not be treated as a lawful permanent resident for any taxable year if such individual is treated as a resident of a foreign country for the taxable year under the provisions of a tax treaty between the United States and the foreign country and does not waive the benefits of such treaty applicable to residents of the foreign country. . (6) Section 894(b) is amended by striking the last sentence. (7) Section 2107 is amended by striking subsection (e). (8) Section 2501(a) is amended by striking paragraphs (3) and (5) and by redesignating paragraph (4) as paragraph (3). (9) Section 3405(e)(13)(B) is amended by striking that such person is not— and all that follows and inserting that such person is not a United States citizen or a resident alien of the United States. . (10) Section 6039G(a) is amended by striking section 877(b) or 877A and inserting section 877A . (11) Section 6039G(d) is amended by striking section 877(a) or 877A and inserting section 877A . (12) Section 7701(b) is amended by striking paragraph (10) and by redesignating paragraph (11) as paragraph (10). (c) Effective date The amendments made by this subsection shall apply to individuals whose expatriation date (as defined in section 877A(g)(3) of the Internal Revenue Code of 1986) is on or after June 17, 2008. 8044. Repeal of certain transition rules on income from sources without United States (a) Limitation on credit Paragraph (2) of section 904(d) is amended by striking subparagraph (J). (b) Foreign earned income Clause (i) of section 911(b)(2)(D) is amended to read as follows: (i) In general The exclusion amount for any calendar year is $80,000. . 8045. Repeal of Puerto Rico and possession tax credit (a) In general Subpart D of part III of subchapter N of chapter 1 is amended by striking section 936 (and by striking the item relating to such section in the table of sections of such subpart). (b) Conforming amendments (1) (A) Section 27 is amended to read as follows: 27. Taxes of foreign countries and possessions of the United States The amount of taxes imposed by foreign countries and possessions of the United States shall be allowed as a credit against the tax imposed by this chapter to the extent provided in section 901. . (B) The item relating to section 27 in the table of sections for subpart B of part IV of subchapter A of chapter 1 is amended to read as follows: Sec. 27. Taxes of foreign countries and possessions of the United States. . (2) Section 243(b)(1)(B) is amended to read as follows: (B) if such dividend is distributed out of the earnings and profits of a taxable year of the distributing corporation which ends after December 31, 1963, and on each day of which the distributing corporation and the corporation receiving the dividend were members of such affiliated group. . (3) Section 246 is amended by striking subsection (e). (4) Section 338(h)(6)(B)(i) is amended by striking , a DISC, or a corporation to which an election under section 936 applies and inserting

113-hr-1-ih-dtd-283

113-hr-1-ih-dtd

113-hr-1

to read as follows: (B) if such dividend is distributed out of the earnings and profits of a taxable year of the distributing corporation which ends after December 31, 1963, and on each day of which the distributing corporation and the corporation receiving the dividend were members of such affiliated group. . (3) Section 246 is amended by striking subsection (e). (4) Section 338(h)(6)(B)(i) is amended by striking , a DISC, or a corporation to which an election under section 936 applies and inserting or a DISC . (5) Section 861(a)(2) is amended— (A) by striking subparagraph (A) and by redesignating subparagraphs (B), (C), and (D) as subparagraphs (A), (B), and (C), respectively, and (B) by striking subparagraph (B) each place it appears and inserting subparagraph (A) . (6) Section 864(d)(5) is amended to read as follows: (5) Certain provisions not to apply The following provisions shall not apply to any amount treated as interest under paragraph (1) or (6): (A) Section 904(d)(2)(B)(iii)(I) (relating to exceptions for export financing interest). (B) Subparagraph (A) of section 954(b)(3) (relating to exception where foreign base company income is less than 5 percent or $1,000,000). (C) Subparagraph (B) of section 954(c)(2) (relating to certain export financing). (D) Clause (i) of section 954(c)(3)(A) (relating to certain income received from related persons). . (7) Section 865(j)(3) is amended by striking , 933, and 936 and inserting and 933 . (8) Section 901(g)(2) is amended by inserting (as in effect before its repeal) after 936 . (9) Section 904(b) is amended by striking paragraph (4). (10) Section 1202(e)(4) is amended by striking subparagraph (B) and by redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively. (11) Section 1361(b)(2) is amended by adding or at the end of subparagraph (B), by striking subparagraph (C), and by redesignating subparagraph (D) as subparagraph (C). (12) Section 1504(b) is amended by striking paragraph (4). (13) Section 6091(b)(2)(B) is amended by striking clause (ii) and by redesignating clauses (iii) and (iv) as clauses (ii) and (iii), respectively. (14) Section 6654(d)(2)(D) is amended— (A) by striking 936(h) or in clause (i), and (B) by striking “ and section 936 ” in the heading. (15) Section 6655(e)(4) is amended— (A) by striking 936(h) or in subparagraph (A), and (B) by striking “ and section 936 ” in the heading. (16) (A) Section 367(d) is amended by adding at the end the following new paragraph: (4) Intangible property For purposes of this subsection, the term intangible property means any— (A) patent, invention, formula, process, design, pattern, or know-how, (B) copyright, literary, musical, or artistic composition, (C) trademark, trade name, or brand name, (D) franchise, license, or contract, (E) method, program, system, procedure, campaign, survey, study, forecast, estimate, customer list, or technical data, or (F) any similar item, which has substantial value independent of the services of any individual. . (B) Section 367(a)(3)(B)(iv) is amended by striking section 936(h)(3)(B) and inserting subsection (d)(4) . (C) Sections 482 and 1298(e)(2)(A) are each amended by striking section 936(h)(4)(B) and inserting section 367(d)(4) . 8046. Basis of property acquired from decedent Section 1014 is amended— (1) by striking either and by striking or section 811(j) of the Internal Revenue Code of 1939 where the decedent died after October 21, 1942 in subsection (a)(2), and (2) by striking paragraphs (7) and (8) of subsection (b). 8047. Property on which lessee has made improvements Section 1019 is amended by striking the last sentence. 8048. Involuntary conversion Section 1033 is amended by striking subsection (j) and by redesignating subsection (k) as subsection (j). 8049. Property acquired during affiliation Section 1051 is hereby repealed, and the table of sections for part IV of subchapter O of chapter 1 is amended by striking the item relating to section 1051. 8050. Repeal of special holding period rules for certain commodity futures transactions Section

113-hr-1-ih-dtd-284

113-hr-1-ih-dtd

113-hr-1

has made improvements Section 1019 is amended by striking the last sentence. 8048. Involuntary conversion Section 1033 is amended by striking subsection (j) and by redesignating subsection (k) as subsection (j). 8049. Property acquired during affiliation Section 1051 is hereby repealed, and the table of sections for part IV of subchapter O of chapter 1 is amended by striking the item relating to section 1051. 8050. Repeal of special holding period rules for certain commodity futures transactions Section 1222 is amended by striking the last sentence. 8051. Holding period of property (a) Paragraph (1) of section 1223 is amended by striking , in the case of such exchanges after March 1, 1954, . (b) Paragraph (4) of section 1223 is amended by striking (or under so much of section 1052(c) as refers to section 113(a)(23) of the Internal Revenue Code of 1939) . (c) Paragraph (6) of section 1223 is repealed. (d) Paragraph (8) of section 1223 is repealed. 8052. Property used in the trade or business and involuntary conversions Subparagraph (A) of section 1231(c)(2) is amended by striking beginning after December 31, 1981 . 8053. Sale of patents Subsection (a) of section 1249 is amended by striking after December 31, 1962, . 8054. Gain from disposition of farmland (a) Paragraph (1) of section 1252(a), as amended by the preceding provisions of this Act, is amended— (1) by striking beginning after December 31, 1969 in the matter preceding subparagraph (A), and (2) by amending subparagraph (A) to read as follows: (A) the applicable percentage of the aggregate deductions allowed under section 175 (as in effect before its repeal by the Tax Reform Act of 2014 ) with respect to the farmland, or . (b) Paragraph (2) of section 1252(a) is amended by striking sections 175 and all that follows and inserting section 175 (as in effect before its repeal by the Tax Reform Act of 2014 ). . 8055. Transition rules related to the treatment of amounts received on retirement or sale or exchange of debt instruments (a) Section 1271 is amended by striking subsection (c). (b) Section 1271(a)(2)(B) is amended by striking (and paragraph (2) of subsection (c)) . 8056. Certain rules with respect to debt instruments issued before July 2, 1982 (a) Section 1272 is amended by striking subsection (b). (b) Section 163(j)(2)(C)(ii) is amended by striking or (b)(4) . (c) Section 1271(a)(2)(A)(ii) is amended by striking subsection (a)(7) or (b)(4) of section 1272 and inserting section 1272(a)(7) . (d) Section 1271(b)(1) is amended to read as follows: (1) In general This section shall not apply to any obligation issued by a natural person before June 9, 1997. . (e) Section 1279(a)(4)(A)(ii), as amended by the preceding provisions of this Act, is amended by striking or (b)(4) . (f) The amendments made by this section shall apply to debt instruments issued after July 1, 1982. 8057. Certain rules with respect to stripped bonds purchased before July 2, 1982 (a) Section 1286 is amended by striking subsection (c). (b) Section 1286(e)(5) is amended by striking the last sentence. (c) Subsections (a) and (b) of section 1286 are each amended by striking after July 1, 1982, . (d) The amendments made by this section shall apply to bonds and coupons purchased after July 1, 1982. 8058. Amount and method of adjustment Section 1314 is amended by striking subsection (d) and by redesignating subsection (e) as subsection (d). 8059. Old-age, survivors, and disability insurance Subsection (a) of section 1401 is amended by striking the following percent and all that follows and inserting 12.4 percent of the amount of the self-employment income for such taxable year. . 8060. Hospital insurance Paragraph (1) of section 1401(b) is amended by striking the following percent and all that follows and inserting 2.9 percent of the amount of the self-employment income for such taxable year. . 8061. Ministers, members of religious orders, and christian science practitioners Paragraph (3) of section 1402(e) is amended by striking whichever of the following dates is later: (A) and by striking

113-hr-1-ih-dtd-285

113-hr-1-ih-dtd

113-hr-1

; or (B) and all that follows and inserting a period. 8062. Affiliated group defined Subparagraph (A) of section 1504(a)(3) is amended by striking for a taxable year which includes any period after December 31, 1984 in clause (i) and by striking in a taxable year beginning after December 31, 1984 in clause (ii). 8063. Credit for state death taxes (a) Part II of subchapter A of chapter 11 is amended by striking section 2011 (and by striking the item relating to such section in the table of sections for such subpart). (b) Subchapter A of chapter 13 is amended by striking section 2604 (and by striking the item relating to such section in the table of sections for such subpart). 8064. Family-owned business interest Part IV of subchapter A of chapter 11 is amended by striking section 2057 (and by striking the item relating to such section in the table of sections for such part). 8065. Property within the united states Subsection (c) of section 2104 is amended by striking With respect to estates of decedents dying after December 31, 1969, deposits and inserting Deposits . 8066. Repeal of deadwood provisions relating to employment taxes (a) Tax on employees Subsection (a) of section 3101 is amended by striking the following percentages and all that follows and inserting 6.2 percent of the wages (as defined in section 3121(a)) received by him with respect to employment (as defined in section 3121(b)). . (b) Tax on employers (1) Subsection (a) of section 3111 is amended by striking the following percentages and all that follows and inserting 6.2 percent of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b)). (2) Subsection (b) of section 3111 is amended by striking the following percentages and all that follows and inserting 1.45 percent of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b)). (3) Section 3111 is amended by striking subsection (d) and redesignating subsection (e) as subsection (d). (c) Tier 2 tax on employees Subsection (b) of section 3201 is amended to read as follows: (b) Tier 2 tax In addition to other taxes, there is hereby imposed on the income of each employee a tax equal to the percentage determined under section 3241 for any calendar year of the compensation received during such calendar year by such employee for services rendered by such employee. . (d) Rate of Tier 2 tax on employee representatives Subsection (b) of section 3211 is amended to read as follows: (b) Tier 2 tax In addition to other taxes, there is hereby imposed on the income of each employee representative a tax equal to the percentage determined under section 3241 for any calendar year of the compensation received during such calendar year by such employee representative for services rendered by such employee representative. . (e) Tier 2 tax on employers (1) Subsection (b) of section 3221 is amended to read as follows: (b) Tier 2 tax In addition to other taxes, there is hereby imposed on the income of each employer a tax equal to the percentage determined under section 3241 for any calendar year of the compensation paid during such calendar year by such employer for services rendered for such employer. . (2) Section 3221 is amended by striking subsection (d) and redesignating subsection (e) as subsection (d). (f) Employee under Railroad Retirement System Subsection (b) of section 3231 is amended by is amended by striking

113-hr-1-ih-dtd-286

113-hr-1-ih-dtd

113-hr-1

; except and all that follows and inserting a period. (g) Definition of wages (1) Section 3121(b) is amended by striking paragraph (17). (2) Section 210(a) of the Social Security Act is amended by striking paragraph (17). (h) Credits against unemployment tax (1) Paragraph (4) of section 3302(f) is amended— (A) by striking subsection— and all that follows through (A) in general—The and inserting subsection, the , (B) by striking subparagraph (B), (C) by redesignating clauses (i) and(ii) as subparagraphs (A) and (B), respectively, and (D) by moving the text of such subparagraphs (as so redesignated) 2 ems to the left. (2) Paragraph (5) of section 3302(f) is amended by striking subparagraph (D) and by redesignating subparagraph (E) as subparagraph (D). (i) Domestic service employment taxes Section 3510(b) is amended by striking paragraph (4). 8067. Luxury passenger automobiles (a) In general Chapter 31 is amended by striking subchapter A (and by striking the item relating to such subchapter in the table of sections for such chapter). (b) Conforming amendments (1) Section 4293 is amended by striking subchapter A of chapter 31, . (2) Section 4221 is amended— (A) in subsections (a) and (d)(1), by striking subchapter A or and inserting subchapter , (B) in subsection (a), by striking In the case of taxes imposed by subchapter A of chapter 31, paragraphs (1), (3), (4), and (5) shall not apply. , and (C) in subsection (c), by striking 4001(c), 4001(d) . (3) Section 4222 is amended by striking 4001(c), 4001(d), . 8068. Transportation by air Section 4261(e) is amended— (1) in paragraph (1) by striking subparagraph (C), and (2) by striking paragraph (5). 8069. Taxes on failure to distribute income (a) Paragraph (2) of section 4942(f) is amended by striking the semicolon at the end of subparagraph (B) and inserting , and , by striking

113-hr-1-ih-dtd-287

113-hr-1-ih-dtd

113-hr-1

; and at the end of subparagraph (C) and inserting a period, and by striking subparagraph (D). (b) Subsection (g) of section 4942 (as amended by this Act) is amended— (1) by striking For all taxable years beginning on or after January 1, 1975, subject in paragraph (2)(A) and inserting Subject , and (2) by striking paragraph (4). (c) Section 4942(i)(2) is amended by striking beginning after December 31, 1969, and . 8070. Taxes on taxable expenditures Section 4945(f) is amended by striking (excluding therefrom any preceding taxable year which begins before January 1, 1970) . 8071. Definitions and special rules Section 4682 is amended by striking subsection (h). 8072. Returns Subsection (a) of section 6039D is amended by striking beginning after December 31, 1984, . 8073. Information returns Subsection (c) of section 6060 is amended by striking year and all that follows and inserting year. . 8074. Abatements Section 6404(f) is amended by striking paragraph (3). 8075. Failure by corporation to pay estimated income tax Clause (i) of section 6655(g)(4)(A) is amended by striking (or the corresponding provisions of prior law) . 8076. Repeal of 2008 recovery rebates (a) In general Subchapter B of chapter 65 is amended by striking section 6428 (and by striking the item relating to such section in the table of sections for such subchapter). (b) Conforming amendments (1) Section 6211(b)(4)(A) is amended by striking 6428, . (2) Section 6213(g)(2)(L) is amended by striking 32, or 6428 and inserting or 32 . (3) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by striking or 6428 . 8077. Repeal of advance payment of portion of increased child credit for 2003 Subchapter B of chapter 65 is amended by striking section 6429 (and by striking the item relating to such section in the table of sections for such subchapter). 8078. Repeal of provisions related to COBRA premium assistance (a) In general Subchapter B of chapter 65 is amended by striking section 6432 (and by striking the item relating to such section in the table of sections for such subchapter). (b) Notification requirement Part I of subchapter B of chapter 68 is amended by striking section 6720C (and by striking the item relating to such section in the table of sections for such part). (c) Exclusion from gross income Part III of subchapter B of chapter 1 is amended by striking section 139C (and by striking the item relating to such section in the table of sections for such part). 8079. Retirement Section 7447(i)(3)(B)(ii) is amended by striking at 4 percent per annum to December 31, 1947, and at 3 percent per annum thereafter , and inserting at 3 percent per annum . 8080. Annuities to surviving spouses and dependent children of judges (a) Paragraph (2) of section 7448(a) is amended by striking or under section 1106 of the Internal Revenue Code of 1939 and by striking or pursuant to section 1106(d) of the Internal Revenue Code of 1939 . (b) Subsection (g) of section 7448 is amended by striking or other than pursuant to section 1106 of the Internal Revenue Code of 1939 . (c) Subsections (g), (j)(1), and (j)(2) of section 7448 are each amended by striking at 4 percent per annum to December 31, 1947, and at 3 percent per annum thereafter and inserting at 3 percent per annum . 8081. Merchant marine capital construction funds Paragraph (4) of section 7518(g) is amended by striking any nonqualified withdrawal and all that follows through shall be determined and inserting any nonqualified withdrawal shall be determined . 8082. Valuation tables (a) Subsection (c) of section 7520 is amended by striking paragraph (2) and by redesignating paragraph (3) as paragraph (2). (b) Paragraph (2) of section 7520(c) of such Code, as so redesignated, is amended— (1) by striking Not later than December 31, 1989, the and inserting The , and (2) by striking thereafter in the last sentence thereof. 8083. Definition of employee Section 7701(a)(20) is amended by striking chapter 21 and all that follows and inserting chapter 21. . 8084. Effective date (a) General Rule Except as

113-hr-1-ih-dtd-288

113-hr-1-ih-dtd

113-hr-1

(c) of section 7520 is amended by striking paragraph (2) and by redesignating paragraph (3) as paragraph (2). (b) Paragraph (2) of section 7520(c) of such Code, as so redesignated, is amended— (1) by striking Not later than December 31, 1989, the and inserting The , and (2) by striking thereafter in the last sentence thereof. 8083. Definition of employee Section 7701(a)(20) is amended by striking chapter 21 and all that follows and inserting chapter 21. . 8084. Effective date (a) General Rule Except as otherwise provided in subsection (b) of this section and the preceding sections of this subtitle, the amendments made by this subtitle shall take effect on the date of enactment of this Act. (b) Savings provision If— (1) any provision amended or repealed by the amendments made by this subtitle applied to— (A) any transaction occurring before the date of the enactment of this Act, (B) any property acquired before such date of enactment, or (C) any item of income, loss, deduction, or credit taken into account before such date of enactment, and (2) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by this subtitle) affect the liability for tax for periods ending after such date of enactment, nothing in the amendments or repeals made by this subtitle shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment. B Conforming Amendments Related to Multiple Sections 8101. Conforming amendments related to multiple sections (a) General business credit Section 38(b), as amended by the preceding provisions of this Act, is amended— (1) by redesignating paragraphs (4), (5), (7), (8), (13), (20), and (33) as paragraphs (3), (4), (5), (6), (7), (8), and (9), respectively, (2) by adding plus at the end of paragraph (8) (as so redesignated), and (3) by striking the comma at the end of paragraph (9) (as so redesignated) and inserting a period. (b) Adjustments to basis Section 1016(a), as amended by the preceding provisions of this Act, is amended— (1) by striking the last two sentences of paragraph (2), (2) in paragraph (4) by striking (not including and all that follows through 1921) , (3) by striking paragraph (12), (4) by redesignating paragraphs (11), (14), (16), (17), (18), (21), (23), (26), (38), and (39) as paragraphs (9), (10), (11), (12), (13), (14), (15), (16), (17), and (18), respectively, and (5) by adding and at the end of paragraph (17) (as so redesignated). (c) Holding period of property Section 1223, as amended by the preceding provisions of this Act, is amended by redesignating paragraphs (9), (10), (11), (12), and (15) as paragraphs (6), (7), (8), (9) and (10), respectively. (d) Corporate preference items (1) In general Subchapter B of chapter 1, as amended by this Act, is amended by striking part XI (and by striking the item relating to such part from the table of parts for such subchapter). (2) Preservation of special rule for treatment of intangible drilling costs Section 263(c) is amended— (A) by striking all that precedes and except as provided in subsection (i) and inserting the following: (c) Intangible drilling and development costs in the case of oil and gas wells and geothermal wells (1) In general Notwithstanding subsection (a), , and (B) by adding at the end the following new paragraph: (2) Reduction for integrated oil companies (A) In general In the case of a corporation which is an integrated oil company, the amount allowable as a deduction for any taxable year (determined without regard to this paragraph) under paragraph (1) shall be reduced by 30 percent. (B) Amortization of disallowed amounts The amount not allowable as a deduction under paragraph (1) for any taxable year by reason of subparagraph (A) shall be allowable as a deduction ratably over the 60-month period beginning with the month in which the costs are paid or incurred. (C) Dispositions For purposes of section 1254, any deduction under subparagraph (B)

113-hr-1-ih-dtd-289

113-hr-1-ih-dtd

113-hr-1

allowable as a deduction for any taxable year (determined without regard to this paragraph) under paragraph (1) shall be reduced by 30 percent. (B) Amortization of disallowed amounts The amount not allowable as a deduction under paragraph (1) for any taxable year by reason of subparagraph (A) shall be allowable as a deduction ratably over the 60-month period beginning with the month in which the costs are paid or incurred. (C) Dispositions For purposes of section 1254, any deduction under subparagraph (B) shall be treated as a deduction allowable under paragraph (1). (D) Integrated oil company For purposes of this paragraph, the term integrated oil company means, with respect to any taxable year, any producer of crude oil to whom subsection (c) of section 613A does not apply by reason of paragraph (2) or (4) of section 613A(d) (as such provisions were in effect before their repeal by the Tax Reform Act of 2014 ). (E) Coordination with cost depletion The portion of the adjusted basis of any property which is attributable to amounts to which subparagraph (A) applied shall not be taken into account for purposes of determining depletion under section 611. . (3) Preservation of limitation on certain interest on indebtedness of financial institutions (A) In general Section 163 is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection: (n) Limitation on certain interest on indebtedness of financial institutions (1) In general For purposes of this subtitle, in the case of a corporation, the amount allowable as a deduction under this chapter (determined without regard to this subsection) with respect to the amount described in paragraph (2) shall be reduced by 20 percent. (2) Interest on debt to carry tax-exempt obligations acquired after December 31, 1982, and before August 8, 1986 (A) In general In the case of a financial institution which is a bank (as defined in section 585(a)(2)), the amount described in this paragraph is the amount of interest on indebtedness incurred or continued to purchase or carry obligations acquired after December 31, 1982, and before August 8, 1986, the interest on which is exempt from taxes for the taxable year, to the extent that a deduction would (but for this paragraph or section 265(b)) be allowable with respect to such interest for such taxable year. (B) Determination of interest allocable to indebtedness on tax-exempt obligations Unless the taxpayer (under regulations prescribed by the Secretary) establishes otherwise, the amount determined under subparagraph (A) shall be an amount which bears the same ratio to the aggregate amount allowable (determined without regard to this section and section 265(b)) to the taxpayer as a deduction for interest for the taxable year as— (i) the taxpayer’s average adjusted basis (within the meaning of section 1016) of obligations described in subparagraph (A), bears to (ii) such average adjusted basis for all assets of the taxpayer. (C) Interest For purposes of this paragraph, the term interest includes amounts (whether or not designated as interest) paid in respect of deposits, investment certificates, or withdrawable or repurchasable shares. (D) Application of subparagraph to certain obligations issued after August 7, 1986 For application of this subparagraph to certain obligations issued after August 7, 1986, see section 265(b)(3) (as in effect before the enactment of the Tax Reform Act of 2014 ). That portion of any obligation not taken into account under paragraph (2)(A) of section 265(b) (as so in effect) by reason of paragraph (7) of such section shall be treated for purposes of this section as having been acquired on August 7, 1986. . (B) Conforming amendments (i) Section 1277(c) is amended by striking section 291(e)(1)(B)(ii) and inserting section 163(n)(2)(B) . (ii) Section 1363(b)(3), as amended by the preceding provisions of this Act, is amended by striking section 291 and inserting section 163(n) . (4) Effective date Except as otherwise provided in this Act with respect to

113-hr-1-ih-dtd-290

113-hr-1-ih-dtd

113-hr-1

265(b) (as so in effect) by reason of paragraph (7) of such section shall be treated for purposes of this section as having been acquired on August 7, 1986. . (B) Conforming amendments (i) Section 1277(c) is amended by striking section 291(e)(1)(B)(ii) and inserting section 163(n)(2)(B) . (ii) Section 1363(b)(3), as amended by the preceding provisions of this Act, is amended by striking section 291 and inserting section 163(n) . (4) Effective date Except as otherwise provided in this Act with respect to amendments made to section 291 of the Internal Revenue Code of 1986, the amendments made this subsection shall apply to taxable years beginning after December 31, 2014.

113-hr-2-eh-dtd-0

113-hr-2-eh-dtd

113-hr-2

I 113th CONGRESS 2d Session H. R. 2 IN THE HOUSE OF REPRESENTATIVES AN ACT To remove Federal Government obstacles to the production of more domestic energy; to ensure transport of that energy reliably to businesses, consumers, and other end users; to lower the cost of energy to consumers; to enable manufacturers and other businesses to access domestically produced energy affordably and reliably in order to create and sustain more secure and well-paying American jobs; and for other purposes.

113-hr-2-eh-dtd-1

113-hr-2-eh-dtd

113-hr-2

1. Short title; table of contents (a) Short title This Act may be cited as the American Energy Solutions for Lower Costs and More American Jobs Act . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Division A—Energy and Commerce Title I—Modernizing Infrastructure Subtitle A—Northern Route Approval Sec. 101. Short title. Sec. 102. Findings. Sec. 103. Keystone XL permit approval. Sec. 104. Judicial review. Sec. 105. American burying beetle. Sec. 106. Right-of-way and temporary use permit. Sec. 107. Permits for activities in navigable waters. Sec. 108. Migratory Bird Treaty Act permit. Sec. 109. Oil spill response plan disclosure. Subtitle B—Natural Gas Pipeline Permitting Reform Sec. 121. Short title. Sec. 122. Regulatory approval of natural gas pipeline projects. Subtitle C—North American Energy Infrastructure Sec. 131. Short title. Sec. 132. Finding. Sec. 133. Authorization of certain energy infrastructure projects at the national boundary of the United States. Sec. 134. Importation or exportation of natural gas to Canada and Mexico. Sec. 135. Transmission of electric energy to Canada and Mexico. Sec. 136. No Presidential permit required. Sec. 137. Modifications to existing projects. Sec. 138. Effective date

113-hr-2-eh-dtd-2

113-hr-2-eh-dtd

113-hr-2

; rulemaking deadlines. Sec. 139. Definitions. Title II—Maintaining Diverse Electricity Generation and Affordability Subtitle A—Energy Consumers Relief Sec. 201. Short title. Sec. 202. Prohibition against finalizing certain energy-related rules that will cause significant adverse effects to the economy. Sec. 203. Reports and determinations prior to promulgating as final certain energy-related rules. Sec. 204. Definitions. Sec. 205. Prohibition on use of social cost of carbon in analysis. Subtitle B—Electricity Security and Affordability Sec. 211. Short title. Sec. 212. Standards of performance for new fossil fuel-fired electric utility generating units. Sec. 213. Congress To set effective date for standards of performance for existing, modified, and reconstructed fossil fuel-fired electric utility generating units. Sec. 214. Repeal of earlier rules and guidelines. Sec. 215. Definitions. Subtitle C—Report on Energy and Water Savings Potential From Thermal Insulation Sec. 221. Report on energy and water savings potential from thermal insulation. Title III—Unleashing Energy Diplomacy Sec. 301. Short title. Sec. 302. Action on applications. Sec. 303. Public disclosure of export destinations. Division B—Natural Resources Committee Sec. 201. References. Subdivision A—Lowering Gasoline Prices to Fuel an America That Works Act of 2014 Sec. 1. Short title. Title I—Offshore Energy and Jobs Subtitle A—Outer Continental Shelf Leasing Program Reforms Sec. 10101. Outer Continental Shelf leasing program reforms. Sec. 10102. Domestic oil and natural gas production goal. Sec. 10103. Development and submittal of new 5-year oil and gas leasing program. Sec. 10104. Rule of construction. Sec. 10105. Addition of lease sales after finalization of 5-year plan. Subtitle B—Directing the President To Conduct New OCS Sales Sec. 10201. Requirement to conduct proposed oil and gas Lease Sale 220 on the Outer Continental Shelf offshore Virginia. Sec. 10202. South Carolina lease sale. Sec. 10203. Southern California existing infrastructure lease sale. Sec. 10204. Environmental impact statement requirement. Sec. 10205. National defense. Sec. 10206. Eastern Gulf of Mexico not included. Subtitle C—Equitable Sharing of Outer Continental Shelf Revenues Sec. 10301. Disposition of Outer Continental Shelf revenues to coastal States. Subtitle D—Reorganization of Minerals Management Agencies of the Department of the Interior Sec. 10401. Establishment of Under Secretary for Energy, Lands, and Minerals and Assistant Secretary of Ocean Energy and Safety. Sec. 10402. Bureau of Ocean Energy. Sec. 10403. Ocean Energy Safety Service. Sec. 10404. Office of Natural Resources revenue. Sec. 10405. Ethics and drug testing. Sec. 10406. Abolishment of Minerals Management Service. Sec. 10407. Conforming amendments to Executive Schedule pay rates. Sec. 10408. Outer Continental Shelf Energy Safety Advisory Board. Sec. 10409. Outer Continental Shelf inspection fees. Sec. 10410. Prohibition on action based on National Ocean Policy developed under Executive Order No. 13547. Subtitle E—United States Territories Sec. 10501. Application of Outer Continental Shelf Lands Act with respect to territories of the United States. Subtitle F—Miscellaneous Provisions Sec. 10601. Rules regarding distribution of revenues under Gulf of Mexico Energy Security Act of 2006. Sec. 10602. Amount of distributed qualified outer Continental Shelf revenues. Sec. 10603. South Atlantic Outer Continental Shelf Planning Area defined. Sec. 10604. Enhancing geological and geophysical information for America’s energy future. Subtitle G—Judicial Review Sec. 10701. Time for filing complaint. Sec. 10702. District court deadline. Sec. 10703. Ability to seek appellate review. Sec. 10704. Limitation on scope of review and relief. Sec. 10705. Legal fees. Sec. 10706. Exclusion. Sec. 10707. Definitions. Title II—Onshore Federal Lands and Energy Security Subtitle A—Federal Lands Jobs and Energy Security Sec. 21001. Short title. Sec. 21002. Policies regarding buying, building, and working for America. Chapter 1—Onshore oil

113-hr-2-eh-dtd-3

113-hr-2-eh-dtd

113-hr-2

energy future. Subtitle G—Judicial Review Sec. 10701. Time for filing complaint. Sec. 10702. District court deadline. Sec. 10703. Ability to seek appellate review. Sec. 10704. Limitation on scope of review and relief. Sec. 10705. Legal fees. Sec. 10706. Exclusion. Sec. 10707. Definitions. Title II—Onshore Federal Lands and Energy Security Subtitle A—Federal Lands Jobs and Energy Security Sec. 21001. Short title. Sec. 21002. Policies regarding buying, building, and working for America. Chapter 1—Onshore oil and gas permit streamlining Sec. 21101. Short title. Subchapter A—Application for Permits to Drill Process Reform Sec. 21111. Permit to drill application timeline. Subchapter B—Administrative Protest Documentation Reform Sec. 21121. Administrative protest documentation reform. Subchapter C—Permit Streamlining Sec. 21131. Making pilot offices permanent to improve energy permitting on Federal lands. Sec. 21132. Administration of current law. Subchapter D—Judicial Review Sec. 21141. Definitions. Sec. 21142. Exclusive venue for certain civil actions relating to covered energy projects. Sec. 21143. Timely filing. Sec. 21144. Expedition in hearing and determining the action. Sec. 21145. Standard of review. Sec. 21146. Limitation on injunction and prospective relief. Sec. 21147. Limitation on attorneys’ fees. Sec. 21148. Legal standing. Subchapter E—Knowing America’s Oil and Gas Resources Sec. 21151. Funding oil and gas resource assessments. Chapter 2—Oil and gas leasing certainty Sec. 21201. Short title. Sec. 21202. Minimum acreage requirement for onshore lease sales. Sec. 21203. Leasing certainty. Sec. 21204. Leasing consistency. Sec. 21205. Reduce redundant policies. Sec. 21206. Streamlined congressional notification. Chapter 3—Oil shale Sec. 21301. Short title. Sec. 21302. Effectiveness of oil shale regulations, amendments to resource management plans, and record of decision. Sec. 21303. Oil shale leasing. Chapter 4—Miscellaneous provisions Sec. 21401. Rule of construction. Subtitle B—Planning for American Energy Sec. 22001. Short title. Sec. 22002. Onshore domestic energy production strategic plan. Subtitle C—National Petroleum Reserve in Alaska access Sec. 23001. Short title. Sec. 23002. Sense of Congress and reaffirming national policy for the National Petroleum Reserve in Alaska. Sec. 23003. National Petroleum Reserve in Alaska: lease sales. Sec. 23004. National Petroleum Reserve in Alaska: planning and permitting pipeline and road construction. Sec. 23005. Issuance of a new integrated activity plan and environmental impact statement. Sec. 23006. Departmental accountability for development. Sec. 23007. Deadlines under new proposed integrated activity plan. Sec. 23008. Updated resource assessment. Subtitle D—BLM Live Internet Auctions Sec. 24001. Short title. Sec. 24002. Internet-based onshore oil and gas lease sales. Subtitle E—Native American Energy Sec. 25001. Short title. Sec. 25002. Appraisals. Sec. 25003. Standardization. Sec. 25004. Environmental reviews of major Federal actions on Indian lands. Sec. 25005. Judicial review. Sec. 25006. Tribal biomass demonstration project. Sec. 25007. Tribal resource management plans. Sec. 25008. Leases of restricted lands for the Navajo Nation. Sec. 25009. Nonapplicability of certain rules. Title III—Miscellaneous provisions Sec. 30101. Establishment of Office of Energy Employment and Training. Subdivision B—Bureau of Reclamation Conduit Hydropower Development Equity and Jobs Act Sec. 1. Short title. Sec. 2. Amendment. Subdivision C—Central Oregon Jobs and Water Security Act Sec. 1. Short title. Sec. 2. Wild and Scenic River

113-hr-2-eh-dtd-4

113-hr-2-eh-dtd

113-hr-2

; Crooked, Oregon. Sec. 3. City of Prineville Water Supply. Sec. 4. First fill protection. Sec. 5. Ochoco Irrigation District. Subdivision D—State Authority For Hydraulic Fracturing Regulation

113-hr-2-eh-dtd-5

113-hr-2-eh-dtd

113-hr-2

; EPA Hydraulic Fracturing Research Title I—State Authority For Hydraulic Fracturing Regulation Sec. 101. Short title. Sec. 102. State authority for hydraulic fracturing regulation. Sec. 103. Government Accountability Office study. Sec. 104. Tribal authority on trust land. Title II—EPA HYDRAULIC FRACTURING RESEARCH Sec. 201. Short title. Sec. 202. EPA hydraulic fracturing research. Title III—Miscellaneous provisions Sec. 301. Review of State activities. Subdivision E—Preventing Government Waste and Protecting Coal Mining Jobs in America Sec. 1. Short title. Sec. 2. Incorporation of surface mining stream buffer zone rule into State programs. Division C—Judiciary Sec. 1. Short title. Sec. 2. Coordination of agency administrative operations for efficient decisionmaking. A Energy and Commerce I Modernizing Infrastructure A Northern Route Approval 101. Short title This subtitle may be cited as the Northern Route Approval Act . 102. Findings The Congress finds the following: (1) To maintain our Nation’s competitive edge and ensure an economy built to last, the United States must have fast, reliable, resilient, and environmentally sound means of moving energy. In a global economy, we will compete for the world’s investments based in significant part on the quality of our infrastructure. Investing in the Nation’s infrastructure provides immediate and long-term economic benefits for local communities and the Nation as a whole. (2) The delivery of oil from Canada, a close ally not only in proximity but in shared values and ideals, to domestic markets is in the national interest because of the need to lessen dependence upon insecure foreign sources. (3) The Keystone XL pipeline would provide both short-term and long-term employment opportunities and related labor income benefits, such as government revenues associated with taxes. (4) The State of Nebraska has thoroughly reviewed and approved the proposed Keystone XL pipeline reroute, concluding that the concerns of Nebraskans have had a major influence on the pipeline reroute and that the reroute will have minimal environmental impacts. (5) The Keystone XL is in much the same position today as the Alaska Pipeline in 1973 prior to congressional action. Once again, the Federal regulatory process remains an insurmountable obstacle to a project that is likely to reduce oil imports from insecure foreign sources. 103. Keystone XL permit approval Notwithstanding Executive Order No. 13337 ( 3 U.S.C. 301 note), Executive Order No. 11423 ( 3 U.S.C. 301 note), section 301 of title 3, United States Code, and any other Executive order or provision of law, no Presidential permit shall be required for the pipeline described in the application filed on May 4, 2012, by TransCanada Keystone Pipeline, L.P. to the Department of State for the Keystone XL pipeline, as supplemented to include the Nebraska reroute evaluated in the Final Evaluation Report issued by the Nebraska Department of Environmental Quality in January 2013 and approved by the Nebraska governor. The final environmental impact statement issued by the Secretary of State on January 31, 2014, coupled with the Final Evaluation Report described in the previous sentence, shall be considered to satisfy all requirements of the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq. ) and of the National Historic Preservation Act ( 16 U.S.C. 470 et seq. ). 104. Judicial review (a) Exclusive jurisdiction Except for review by the Supreme Court on writ of certiorari, the United States Court of Appeals for the District of Columbia Circuit shall have original and exclusive jurisdiction to determine— (1) the validity of any final order or action (including a failure to act) of any Federal agency or officer with respect to issuance of a permit relating to the construction or maintenance of the Keystone XL pipeline, including any final order or action deemed to be taken, made, granted, or issued

113-hr-2-eh-dtd-6

113-hr-2-eh-dtd

113-hr-2

; (2) the constitutionality of any provision of this subtitle, or any decision or action taken, made, granted, or issued, or deemed to be taken, made, granted, or issued under this subtitle; or (3) the adequacy of any environmental impact statement prepared under the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq. ), or of any analysis under any other Act, with respect to any action taken, made, granted, or issued, or deemed to be taken, made, granted, or issued under this subtitle. (b) Deadline for filing claim A claim arising under this subtitle may be brought not later than 60 days after the date of the decision or action giving rise to the claim. (c) Expedited consideration The United States Court of Appeals for the District of Columbia Circuit shall set any action brought under subsection (a) for expedited consideration, taking into account the national interest of enhancing national energy security by providing access to the significant oil reserves in Canada that are needed to meet the demand for oil. 105. American burying beetle (a) Findings The Congress finds that— (1) environmental reviews performed for the Keystone XL pipeline project satisfy the requirements of section 7 of the Endangered Species Act of 1973 ( 16 U.S.C. 1536(a)(2) ) in its entirety; and (2) for purposes of that Act, the Keystone XL pipeline project will not jeopardize the continued existence of the American burying beetle or destroy or adversely modify American burying beetle critical habitat. (b) Biological opinion The Secretary of the Interior is deemed to have issued a written statement setting forth the Secretary’s opinion containing such findings under section 7(b)(1)(A) of the Endangered Species Act of 1973 ( 16 U.S.C. 1536(b)(1)(A) ) and any taking of the American burying beetle that is incidental to the construction or operation and maintenance of the Keystone XL pipeline as it may be ultimately defined in its entirety, shall not be considered a prohibited taking of such species under such Act. 106. Right-of-way and temporary use permit The Secretary of the Interior is deemed to have granted or issued a grant of right-of-way and temporary use permit under section 28 of the Mineral Leasing Act ( 30 U.S.C. 185 ) and the Federal Land Policy and Management Act of 1976 ( 43 U.S.C. 1701 et seq. ), as set forth in the application tendered to the Bureau of Land Management for the Keystone XL pipeline. 107. Permits for activities in navigable waters (a) Issuance of permits The Secretary of the Army, not later than 90 days after receipt of an application therefor, shall issue all permits under section 404 of the Federal Water Pollution Control Act ( 33 U.S.C. 1344 ) and section 10 of the Act of March 3, 1899 ( 33 U.S.C. 403

113-hr-2-eh-dtd-7

113-hr-2-eh-dtd

113-hr-2

; commonly known as the Rivers and Harbors Appropriations Act of 1899), necessary for the construction, operation, and maintenance of the pipeline described in the May 4, 2012, application referred to in section 103, as supplemented by the Nebraska reroute. The application shall be based on the administrative record for the pipeline as of the date of enactment of this Act, which shall be considered complete. (b) Waiver of procedural requirements The Secretary may waive any procedural requirement of law or regulation that the Secretary considers desirable to waive in order to accomplish the purposes of this section. (c) Issuance in absence of action by the Secretary If the Secretary has not issued a permit described in subsection (a) on or before the last day of the 90-day period referred to in subsection (a), the permit shall be deemed issued under section 404 of the Federal Water Pollution Control Act ( 33 U.S.C. 1344 ) or section 10 of the Act of March 3, 1899 ( 33 U.S.C. 403 ), as appropriate, on the day following such last day. (d) Limitation The Administrator of the Environmental Protection Agency may not prohibit or restrict an activity or use of an area that is authorized under this section. 108. Migratory Bird Treaty Act permit The Secretary of the Interior is deemed to have issued a special purpose permit under the Migratory Bird Treaty Act ( 16 U.S.C. 703 et seq. ), as described in the application filed with the United States Fish and Wildlife Service for the Keystone XL pipeline on January 11, 2013. 109. Oil spill response plan disclosure (a) In general Any pipeline owner or operator required under Federal law to develop an oil spill response plan for the Keystone XL pipeline shall make such plan available to the Governor of each State in which such pipeline operates to assist with emergency response preparedness. (b) Updates A pipeline owner or operator required to make available to a Governor a plan under subsection (a) shall make available to such Governor any update of such plan not later than 7 days after the date on which such update is made. B Natural Gas Pipeline Permitting Reform 121. Short title This subtitle may be cited as the Natural Gas Pipeline Permitting Reform Act . 122. Regulatory approval of natural gas pipeline projects Section 7 of the Natural Gas Act ( 15 U.S.C. 717f ) is amended by adding at the end the following new subsection: (i) (1) The Commission shall approve or deny an application for a certificate of public convenience and necessity for a prefiled project not later than 12 months after receiving a complete application that is ready to be processed, as defined by the Commission by regulation. (2) The agency responsible for issuing any license, permit, or approval required under Federal law in connection with a prefiled project for which a certificate of public convenience and necessity is sought under this Act shall approve or deny the issuance of the license, permit, or approval not later than 90 days after the Commission issues its final environmental document relating to the project. (3) The Commission may extend the time period under paragraph (2) by 30 days if an agency demonstrates that it cannot otherwise complete the process required to approve or deny the license, permit, or approval, and therefor will be compelled to deny the license, permit, or approval. In granting an extension under this paragraph, the Commission may offer technical assistance to the agency as necessary to address conditions preventing the completion of the review of the application for the license, permit, or approval. (4) If an agency described in paragraph (2) does not approve or deny the issuance of the license, permit, or approval within the time period specified under paragraph (2) or (3), as applicable, such license, permit, or approval shall take effect upon the expiration of 30 days after the end of such period. The Commission shall incorporate into the terms of such license, permit, or approval any conditions proffered by the agency described in paragraph (2) that the Commission does not

113-hr-2-eh-dtd-8

113-hr-2-eh-dtd

113-hr-2

permit, or approval. (4) If an agency described in paragraph (2) does not approve or deny the issuance of the license, permit, or approval within the time period specified under paragraph (2) or (3), as applicable, such license, permit, or approval shall take effect upon the expiration of 30 days after the end of such period. The Commission shall incorporate into the terms of such license, permit, or approval any conditions proffered by the agency described in paragraph (2) that the Commission does not find are inconsistent with the final environmental document. (5) For purposes of this subsection, the term prefiled project means a project for the siting, construction, expansion, or operation of a natural gas pipeline with respect to which a prefiling docket number has been assigned by the Commission pursuant to a prefiling process established by the Commission for the purpose of facilitating the formal application process for obtaining a certificate of public convenience and necessity. . C North American Energy Infrastructure 131. Short title This subtitle may be cited as the North American Energy Infrastructure Act . 132. Finding Congress finds that the United States should establish a more uniform, transparent, and modern process for the construction, connection, operation, and maintenance of oil and natural gas pipelines and electric transmission facilities for the import and export of oil and natural gas and the transmission of electricity to and from Canada and Mexico, in pursuit of a more secure and efficient North American energy market. 133. Authorization of certain energy infrastructure projects at the national boundary of the United States (a) Authorization Except as provided in subsection (c) and section 137, no person may construct, connect, operate, or maintain a cross-border segment of an oil pipeline or electric transmission facility for the import or export of oil or the transmission of electricity to or from Canada or Mexico without obtaining a certificate of crossing for the construction, connection, operation, or maintenance of the cross-border segment under this section. (b) Certificate of crossing (1) Requirement Not later than 120 days after final action is taken under the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq. ) with respect to a cross-border segment for which a request is received under this section, the relevant official identified under paragraph (2), in consultation with appropriate Federal agencies, shall issue a certificate of crossing for the cross-border segment unless the relevant official finds that the construction, connection, operation, or maintenance of the cross-border segment is not in the public interest of the United States. (2) Relevant official The relevant official referred to in paragraph (1) is— (A) the Secretary of State with respect to oil pipelines

113-hr-2-eh-dtd-9

113-hr-2-eh-dtd

113-hr-2

; and (B) the Secretary of Energy with respect to electric transmission facilities. (3) Additional requirement for electric transmission facilities In the case of a request for a certificate of crossing for the construction, connection, operation, or maintenance of a cross-border segment of an electric transmission facility, the Secretary of Energy shall require, as a condition of issuing the certificate of crossing for the request under paragraph (1), that the cross-border segment of the electric transmission facility be constructed, connected, operated, or maintained consistent with all applicable policies and standards of— (A) the Electric Reliability Organization and the applicable regional entity; and (B) any Regional Transmission Organization or Independent System Operator with operational or functional control over the cross-border segment of the electric transmission facility. (c) Exclusions This section shall not apply to any construction, connection, operation, or maintenance of a cross-border segment of an oil pipeline or electric transmission facility for the import or export of oil or the transmission of electricity to or from Canada or Mexico— (1) if the cross-border segment is operating for such import, export, or transmission as of the date of enactment of this Act; (2) if a permit described in section 136 for such construction, connection, operation, or maintenance has been issued; (3) if a certificate of crossing for such construction, connection, operation, or maintenance has previously been issued under this section; or (4) if an application for a permit described in section 136 for such construction, connection, operation, or maintenance is pending on the date of enactment of this Act, until the earlier of— (A) the date on which such application is denied

113-hr-2-eh-dtd-10

113-hr-2-eh-dtd

113-hr-2

; (2) if a permit described in section 136 for such construction, connection, operation, or maintenance has been issued; (3) if a certificate of crossing for such construction, connection, operation, or maintenance has previously been issued under this section; or (4) if an application for a permit described in section 136 for such construction, connection, operation, or maintenance is pending on the date of enactment of this Act, until the earlier of— (A) the date on which such application is denied; or (B) July 1, 2016. (d) Effect of other laws (1) Application to projects Nothing in this section or section 137 shall affect the application of any other Federal statute to a project for which a certificate of crossing for the construction, connection, operation, or maintenance of a cross-border segment is sought under this section. (2) Natural Gas Act Nothing in this section or section 137 shall affect the requirement to obtain approval or authorization under sections 3 and 7 of the Natural Gas Act for the siting, construction, or operation of any facility to import or export natural gas. (3) Energy Policy and Conservation Act Nothing in this section or section 137 shall affect the authority of the President under section 103(a) of the Energy Policy and Conservation Act. 134. Importation or exportation of natural gas to Canada and Mexico Section 3(c) of the Natural Gas Act ( 15 U.S.C. 717b(c) ) is amended by adding at the end the following: No order is required under subsection (a) to authorize the export or import of any natural gas to or from Canada or Mexico. . 135. Transmission of electric energy to Canada and Mexico (a) Repeal of requirement To secure order Section 202(e) of the Federal Power Act ( 16 U.S.C. 824a(e) ) is repealed. (b) Conforming amendments (1) State regulations Section 202(f) of the Federal Power Act ( 16 U.S.C. 824a(f) ) is amended by striking insofar as such State regulation does not conflict with the exercise of the Commission’s powers under or relating to subsection 202(e) . (2) Seasonal diversity electricity exchange Section 602(b) of the Public Utility Regulatory Policies Act of 1978 ( 16 U.S.C. 824a–4(b) ) is amended by striking the Commission has conducted hearings and made the findings required under section 202(e) of the Federal Power Act and all that follows through the period at the end and inserting the Secretary has conducted hearings and finds that the proposed transmission facilities would not impair the sufficiency of electric supply within the United States or would not impede or tend to impede the coordination in the public interest of facilities subject to the jurisdiction of the Secretary. . 136. No Presidential permit required No Presidential permit (or similar permit) required under Executive Order No. 13337 ( 3 U.S.C. 301 note), Executive Order No. 11423 ( 3 U.S.C. 301 note), section 301 of title 3, United States Code, Executive Order No. 12038, Executive Order No. 10485, or any other Executive order shall be necessary for the construction, connection, operation, or maintenance of an oil or natural gas pipeline or electric transmission facility, or any cross-border segment thereof. 137. Modifications to existing projects No certificate of crossing under section 133, or permit described in section 136, shall be required for a modification to the construction, connection, operation, or maintenance of an oil or natural gas pipeline or electric transmission facility— (1) that is operating for the import or export of oil or natural gas or the transmission of electricity to or from Canada or Mexico as of the date of enactment of the Act; (2) for which a permit described in section 136 for such construction, connection, operation, or maintenance has been issued; or (3) for which a certificate of crossing for the cross-border segment of the pipeline or facility has previously been issued under section 133. 138. Effective date

113-hr-2-eh-dtd-11

113-hr-2-eh-dtd

113-hr-2

; (2) for which a permit described in section 136 for such construction, connection, operation, or maintenance has been issued; or (3) for which a certificate of crossing for the cross-border segment of the pipeline or facility has previously been issued under section 133. 138. Effective date; rulemaking deadlines (a) Effective date Sections 133 through 137, and the amendments made by such sections, shall take effect on July 1, 2015. (b) Rulemaking deadlines Each relevant official described in section 133(b)(2) shall— (1) not later than 180 days after the date of enactment of this Act, publish in the Federal Register notice of a proposed rulemaking to carry out the applicable requirements of section 133; and (2) not later than 1 year after the date of enactment of this Act, publish in the Federal Register a final rule to carry out the applicable requirements of section 133. 139. Definitions In this subtitle— (1) the term cross-border segment means the portion of an oil or natural gas pipeline or electric transmission facility that is located at the national boundary of the United States with either Canada or Mexico; (2) the term modification includes a reversal of flow direction, change in ownership, volume expansion, downstream or upstream interconnection, or adjustment to maintain flow (such as a reduction or increase in the number of pump or compressor stations); (3) the term natural gas has the meaning given that term in section 2 of the Natural Gas Act ( 15 U.S.C. 717a ); (4) the term oil means petroleum or a petroleum product; (5) the terms Electric Reliability Organization and regional entity have the meanings given those terms in section 215 of the Federal Power Act ( 16 U.S.C. 824o ); and (6) the terms Independent System Operator and Regional Transmission Organization have the meanings given those terms in section 3 of the Federal Power Act ( 16 U.S.C. 796 ). II Maintaining Diverse Electricity Generation and Affordability A Energy Consumers Relief 201. Short title This subtitle may be cited as the Energy Consumers Relief Act of 2014 . 202. Prohibition against finalizing certain energy-related rules that will cause significant adverse effects to the economy Notwithstanding any other provision of law, the Administrator of the Environmental Protection Agency may not promulgate as final an energy-related rule that is estimated to cost more than $1 billion if the Secretary of Energy determines under section 203(3) that the rule will cause significant adverse effects to the economy. 203. Reports and determinations prior to promulgating as final certain energy-related rules Before promulgating as final any energy-related rule that is estimated to cost more than $1 billion: (1) Report to Congress The Administrator of the Environmental Protection Agency shall submit to Congress a report (and transmit a copy to the Secretary of Energy) containing— (A) a copy of the rule; (B) a concise general statement relating to the rule; (C) an estimate of the total costs of the rule, including the direct costs and indirect costs of the rule; (D) (i) an estimate of the total benefits of the rule and when such benefits are expected to be realized; (ii) a description of the modeling, the calculations, the assumptions, and the limitations due to uncertainty, speculation, or lack of information associated with the estimates under this subparagraph; and (iii) a certification that all data and documents relied upon by the Agency in developing such estimates— (I) have been preserved; and (II) are available for review by the public on the Agency’s Web site, except to the extent to which publication of such data and documents would constitute disclosure of confidential information in violation of applicable Federal law; (E) an estimate of the increases in energy prices, including potential increases in gasoline or electricity prices for consumers, that may result from implementation or enforcement of the rule

113-hr-2-eh-dtd-12

113-hr-2-eh-dtd

113-hr-2

; and (II) are available for review by the public on the Agency’s Web site, except to the extent to which publication of such data and documents would constitute disclosure of confidential information in violation of applicable Federal law; (E) an estimate of the increases in energy prices, including potential increases in gasoline or electricity prices for consumers, that may result from implementation or enforcement of the rule; and (F) a detailed description of the employment effects, including potential job losses and shifts in employment, that may result from implementation or enforcement of the rule. (2) Initial determination on increases and impacts The Secretary of Energy, in consultation with the Federal Energy Regulatory Commission and the Administrator of the Energy Information Administration, shall prepare an independent analysis to determine whether the rule will cause— (A) any increase in energy prices for consumers, including low-income households, small businesses, and manufacturers; (B) any impact on fuel diversity of the Nation’s electricity generation portfolio or on national, regional, or local electric reliability; (C) any adverse effect on energy supply, distribution, or use due to the economic or technical infeasibility of implementing the rule; or (D) any other adverse effect on energy supply, distribution, or use (including a shortfall in supply and increased use of foreign supplies). (3) Subsequent determination on adverse effects to the economy If the Secretary of Energy determines, under paragraph (2), that the rule will cause an increase, impact, or effect described in such paragraph, then the Secretary, in consultation with the Administrator of the Environmental Protection Agency, the Secretary of Commerce, the Secretary of Labor, and the Administrator of the Small Business Administration, shall— (A) determine whether the rule will cause significant adverse effects to the economy, taking into consideration— (i) the costs and benefits of the rule and limitations in calculating such costs and benefits due to uncertainty, speculation, or lack of information; and (ii) the positive and negative impacts of the rule on economic indicators, including those related to gross domestic product, unemployment, wages, consumer prices, and business and manufacturing activity; and (B) publish the results of such determination in the Federal Register. 204. Definitions In this subtitle: (1) The terms direct costs and indirect costs have the meanings given such terms in chapter 8 of the Environmental Protection Agency’s Guidelines for Preparing Economic Analyses dated December 17, 2010. (2) The term energy-related rule that is estimated to cost more than $1 billion means a rule of the Environmental Protection Agency that— (A) regulates any aspect of the production, supply, distribution, or use of energy or provides for such regulation by States or other governmental entities

113-hr-2-eh-dtd-13

113-hr-2-eh-dtd

113-hr-2

; and (B) is estimated by the Administrator of the Environmental Protection Agency or the Director of the Office of Management and Budget to impose direct costs and indirect costs, in the aggregate, of more than $1,000,000,000. (3) The term rule has the meaning given to such term in section 551 of title 5, United States Code. 205. Prohibition on use of social cost of carbon in analysis (a) In general Notwithstanding any other provision of law or any executive order, the Administrator of the Environmental Protection Agency may not use the social cost of carbon in order to incorporate social benefits of reducing carbon dioxide emissions, or for any other reason, in any cost-benefit analysis relating to an energy-related rule that is estimated to cost more than $1 billion unless and until a Federal law is enacted authorizing such use. (b) Definition In this section, the term social cost of carbon means the social cost of carbon as described in the technical support document entitled Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 , published by the Interagency Working Group on Social Cost of Carbon, United States Government, in May 2013, or any successor or substantially related document, or any other estimate of the monetized damages associated with an incremental increase in carbon dioxide emissions in a given year. B Electricity Security and Affordability 211. Short title This subtitle may be cited as the Electricity Security and Affordability Act . 212. Standards of performance for new fossil fuel-fired electric utility generating units (a) Limitation The Administrator of the Environmental Protection Agency may not issue, implement, or enforce any proposed or final rule under section 111 of the Clean Air Act ( 42 U.S.C. 7411 ) that establishes a standard of performance for emissions of any greenhouse gas from any new source that is a fossil fuel-fired electric utility generating unit unless such rule meets the requirements under subsections (b) and (c). (b) Requirements In issuing any rule under section 111 of the Clean Air Act ( 42 U.S.C. 7411 ) establishing standards of performance for emissions of any greenhouse gas from new sources that are fossil fuel-fired electric utility generating units, the Administrator of the Environmental Protection Agency (for purposes of establishing such standards)— (1) shall separate sources fueled with coal and natural gas into separate categories; and (2) shall not set a standard based on the best system of emission reduction for new sources within a fossil-fuel category unless— (A) such standard has been achieved on average for at least one continuous 12-month period (excluding planned outages) by each of at least 6 units within such category— (i) each of which is located at a different electric generating station in the United States; (ii) which, collectively, are representative of the operating characteristics of electric generation at different locations in the United States; and (iii) each of which is operated for the entire 12-month period on a full commercial basis

113-hr-2-eh-dtd-14

113-hr-2-eh-dtd

113-hr-2

; (ii) which, collectively, are representative of the operating characteristics of electric generation at different locations in the United States; and (iii) each of which is operated for the entire 12-month period on a full commercial basis; and (B) no results obtained from any demonstration project are used in setting such standard. (c) Coal having a heat content of 8300 or less British Thermal Units per pound (1) Separate subcategory In carrying out subsection (b)(1), the Administrator of the Environmental Protection Agency shall establish a separate subcategory for new sources that are fossil fuel-fired electric utility generating units using coal with an average heat content of 8300 or less British Thermal Units per pound. (2) Standard Notwithstanding subsection (b)(2), in issuing any rule under section 111 of the Clean Air Act ( 42 U.S.C. 7411 ) establishing standards of performance for emissions of any greenhouse gas from new sources in such subcategory, the Administrator of the Environmental Protection Agency shall not set a standard based on the best system of emission reduction unless— (A) such standard has been achieved on average for at least one continuous 12-month period (excluding planned outages) by each of at least 3 units within such subcategory— (i) each of which is located at a different electric generating station in the United States; (ii) which, collectively, are representative of the operating characteristics of electric generation at different locations in the United States; and (iii) each of which is operated for the entire 12-month period on a full commercial basis; and (B) no results obtained from any demonstration project are used in setting such standard. (d) Technologies Nothing in this section shall be construed to preclude the issuance, implementation, or enforcement of a standard of performance that— (1) is based on the use of one or more technologies that are developed in a foreign country, but has been demonstrated to be achievable at fossil fuel-fired electric utility generating units in the United States; and (2) meets the requirements of subsection (b) and (c), as applicable. 213. Congress To set effective date for standards of performance for existing, modified, and reconstructed fossil fuel-fired electric utility generating units (a) Applicability This section applies with respect to any rule or guidelines issued by the Administrator of the Environmental Protection Agency under section 111 of the Clean Air Act ( 42 U.S.C. 7411 ) that— (1) establish any standard of performance for emissions of any greenhouse gas from any modified or reconstructed source that is a fossil fuel-fired electric utility generating unit; or (2) apply to the emissions of any greenhouse gas from an existing source that is a fossil fuel-fired electric utility generating unit. (b) Congress To set effective date A rule or guidelines described in subsection (a) shall not take effect unless a Federal law is enacted specifying such rule’s or guidelines’ effective date. (c) Reporting A rule or guidelines described in subsection (a) shall not take effect unless the Administrator of the Environmental Protection Agency has submitted to Congress a report containing each of the following: (1) The text of such rule or guidelines. (2) The economic impacts of such rule or guidelines, including the potential effects on— (A) economic growth, competitiveness, and jobs in the United States; (B) electricity ratepayers, including low-income ratepayers in affected States; (C) required capital investments and projected costs for operation and maintenance of new equipment required to be installed

113-hr-2-eh-dtd-15

113-hr-2-eh-dtd

113-hr-2

; (B) electricity ratepayers, including low-income ratepayers in affected States; (C) required capital investments and projected costs for operation and maintenance of new equipment required to be installed; and (D) the global economic competitiveness of the United States. (3) The amount of greenhouse gas emissions that such rule or guidelines are projected to reduce as compared to overall global greenhouse gas emissions. (d) Consultation In carrying out subsection (c), the Administrator of the Environmental Protection Agency shall consult with the Administrator of the Energy Information Administration, the Comptroller General of the United States, the Director of the National Energy Technology Laboratory, and the Under Secretary of Commerce for Standards and Technology. 214. Repeal of earlier rules and guidelines The following rules and guidelines shall be of no force or effect, and shall be treated as though such rules and guidelines had never been issued: (1) The proposed rule— (A) entitled Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units , published at 77 Fed. Reg. 22392 (April 13, 2012); and (B) withdrawn pursuant to the notice entitled Withdrawal of Proposed Standards of Performance for Greenhouse Gas Emissions From New Stationary Sources: Electric Utility Generating Units , published at 79 Fed. Reg. 1352 (January 8, 2014). (2) The proposed rule entitled Standards of Performance for Greenhouse Gas Emissions From New Stationary Sources: Electric Utility Generating Units , published at 79 Fed. Reg. 1430 (January 8, 2014). (3) With respect to the proposed rules described in paragraphs (1) and (2), any successor or substantially similar proposed or final rule that— (A) is issued prior to the date of the enactment of this Act; (B) is applicable to any new source that is a fossil fuel-fired electric utility generating unit; and (C) does not meet the requirements under subsections (b) and (c) of section 212. (4) The proposed rule entitled Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units , published at 79 Fed. Reg. 34830 (June 18, 2014). (5) The proposed rule entitled Carbon Pollution Standards for Modified and Reconstructed Stationary Sources: Electric Utility Generating Units , published at 79 Fed. Reg. 34960 (June 18, 2014). (6) With respect to the proposed rules described in paragraphs (4) and (5), any successor or substantially similar proposed or final rule that— (A) is issued prior to the date of the enactment of this Act

113-hr-2-eh-dtd-16

113-hr-2-eh-dtd

113-hr-2

; and (B) is applicable to any existing, modified, or reconstructed source that is a fossil fuel-fired electric utility generating unit. 215. Definitions In this subtitle: (1) Demonstration project The term demonstration project means a project to test or demonstrate the feasibility of carbon capture and storage technologies that has received Federal Government funding or financial assistance. (2) Existing source The term existing source has the meaning given such term in section 111(a) of the Clean Air Act ( 42 U.S.C. 7411(a) ), except such term shall not include any modified source. (3) Greenhouse gas The term greenhouse gas means any of the following: (A) Carbon dioxide. (B) Methane. (C) Nitrous oxide. (D) Sulfur hexafluoride. (E) Hydrofluorocarbons. (F) Perfluorocarbons. (4) Modification The term modification has the meaning given such term in section 111(a) of the Clean Air Act ( 42 U.S.C. 7411(a) ). (5) Modified source The term modified source means any stationary source, the modification of which is commenced after the date of the enactment of this Act. (6) New source The term new source has the meaning given such term in section 111(a) of the Clean Air Act ( 42 U.S.C. 7411(a) ), except that such term shall not include any modified source. C Report on Energy and Water Savings Potential From Thermal Insulation 221. Report on energy and water savings potential from thermal insulation (a) Report Not later than 1 year after the date of enactment of this Act, the Secretary of Energy, in consultation with appropriate Federal agencies and relevant stakeholders, shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives a report on the impact of thermal insulation on both energy and water use systems for potable hot and chilled water in Federal buildings, and the return on investment of installing such insulation. (b) Contents The report shall include— (1) an analysis based on the cost of municipal or regional water for delivered water and the avoided cost of new water; and (2) a summary of energy and water savings, including short term and long term (20 years) projections of such savings. III Unleashing Energy Diplomacy 301. Short title This title may be cited as the Domestic Prosperity and Global Freedom Act . 302. Action on applications (a) Decision deadline For proposals that must also obtain authorization from the Federal Energy Regulatory Commission or the United States Maritime Administration to site, construct, expand, or operate LNG export facilities, the Department of Energy shall issue a final decision on any application for the authorization to export natural gas under section 3 of the Natural Gas Act ( 15 U.S.C. 717b ) not later than 30 days after the later of— (1) the conclusion of the review to site, construct, expand, or operate the LNG facilities required by the National Environmental Policy Act of 1969 (42 U.S. C. 4321 et seq.); or (2) the date of enactment of this Act. (b) Conclusion of review For purposes of subsection (a), review required by the National Environmental Policy Act of 1969 shall be considered concluded— (1) for a project requiring an Environmental Impact Statement, 30 days after publication of a Final Environmental Impact Statement; (2) for a project for which an Environmental Assessment has been prepared, 30 days after publication by the Department of Energy of a Finding of No Significant Impact; and (3) upon a determination by the lead agency that an application is eligible for a categorical exclusion pursuant National Environmental Policy Act of 1969 implementing regulations. (c) Judicial action (1) The United States Court of Appeals for the circuit in which the export facility will be located pursuant to an application described in subsection (a) shall have original and exclusive jurisdiction over any civil action for the review of— (A) an order issued by the Department of Energy with respect to such application

113-hr-2-eh-dtd-17

113-hr-2-eh-dtd

113-hr-2

; or (B) the Department of Energy’s failure to issue a final decision on such application. (2) If the Court in a civil action described in paragraph (1) finds that the Department of Energy has failed to issue a final decision on the application as required under subsection (a), the Court shall order the Department of Energy to issue such final decision not later than 30 days after the Court’s order. (3) The Court shall set any civil action brought under this subsection for expedited consideration and shall set the matter on the docket as soon as practical after the filing date of the initial pleading. 303. Public disclosure of export destinations Section 3 of the Natural Gas Act ( 15 U.S.C. 717b ) is amended by adding at the end the following: (g) Public Disclosure of LNG Export Destinations As a condition for approval of any authorization to export LNG, the Secretary of Energy shall require the applicant to publicly disclose the specific destination or destinations of any such authorized LNG exports. . B Natural Resources Committee 201. References Except as expressly provided otherwise, any reference to this Act in any subdivision of this division shall be treated as referring only to the provisions of that subdivision. A Lowering Gasoline Prices to Fuel an America That Works Act of 2014 1. Short title This subdivision may be cited as the Lowering Gasoline Prices to Fuel an America That Works Act of 2014 . I Offshore Energy and Jobs A Outer Continental Shelf Leasing Program Reforms 10101. Outer Continental Shelf leasing program reforms Section 18(a) of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1344(a) ) is amended by adding at the end the following: (5) (A) In each oil and gas leasing program under this section, the Secretary shall make available for leasing and conduct lease sales including at least 50 percent of the available unleased acreage within each outer Continental Shelf planning area considered to have the largest undiscovered, technically recoverable oil and gas resources (on a total btu basis) based upon the most recent national geologic assessment of the outer Continental Shelf, with an emphasis on offering the most geologically prospective parts of the planning area. (B) The Secretary shall include in each proposed oil and gas leasing program under this section any State subdivision of an outer Continental Shelf planning area that the Governor of the State that represents that subdivision requests be made available for leasing. The Secretary may not remove such a subdivision from the program until publication of the final program, and shall include and consider all such subdivisions in any environmental review conducted and statement prepared for such program under section 102(2) of the National Environmental Policy Act of 1969 ( 42 U.S.C. 4332(2) ). (C) In this paragraph the term available unleased acreage means that portion of the outer Continental Shelf that is not under lease at the time of a proposed lease sale, and that has not otherwise been made unavailable for leasing by law. (6) (A) In the 5-year oil and gas leasing program, the Secretary shall make available for leasing any outer Continental Shelf planning areas that— (i) are estimated to contain more than 2,500,000,000 barrels of oil

113-hr-2-eh-dtd-18

113-hr-2-eh-dtd

113-hr-2

; or (ii) are estimated to contain more than 7,500,000,000,000 cubic feet of natural gas. (B) To determine the planning areas described in subparagraph (A), the Secretary shall use the document entitled Minerals Management Service Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of the Nation’s Outer Continental Shelf, 2006 . . 10102. Domestic oil and natural gas production goal Section 18(b) of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1344(b) ) is amended to read as follows: (b) Domestic oil and natural gas production goal – (1) In general In developing a 5-year oil and gas leasing program, and subject to paragraph (2), the Secretary shall determine a domestic strategic production goal for the development of oil and natural gas as a result of that program. Such goal shall be— (A) the best estimate of the possible increase in domestic production of oil and natural gas from the outer Continental Shelf; (B) focused on meeting domestic demand for oil and natural gas and reducing the dependence of the United States on foreign energy; and (C) focused on the production increases achieved by the leasing program at the end of the 15-year period beginning on the effective date of the program. (2) Program goal For purposes of the 5-year oil and gas leasing program, the production goal referred to in paragraph (1) shall be an increase by 2032 of— (A) no less than 3,000,000 barrels in the amount of oil produced per day; and (B) no less than 10,000,000,000 cubic feet in the amount of natural gas produced per day. (3) Reporting The Secretary shall report annually, beginning at the end of the 5-year period for which the program applies, to the Committee on Natural Resources of the House of Representatives and the Committee on Energy and Natural Resources of the Senate on the progress of the program in meeting the production goal. The Secretary shall identify in the report projections for production and any problems with leasing, permitting, or production that will prevent meeting the goal. . 10103. Development and submittal of new 5-year oil and gas leasing program (a) In general The Secretary of the Interior shall— (1) by not later than July 15, 2015, publish and submit to Congress a new proposed oil and gas leasing program under section 18 of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1344 ) for the 5-year period beginning on such date and ending July 15, 2021; and (2) by not later than July 15, 2016, approve a final oil and gas leasing program under such section for such period. (b) Consideration of all areas In preparing such program the Secretary shall include consideration of areas of the Continental Shelf off the coasts of all States (as such term is defined in section 2 of that Act, as amended by this title), that are subject to leasing under this title. (c) Technical correction Section 18(d)(3) of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1344(d)(3) ) is amended by striking or after eighteen months following the date of enactment of this section, whichever first occurs, . 10104. Rule of construction Nothing in this title shall be construed to authorize the issuance of a lease under the Outer Continental Shelf Lands Act ( 43 U.S.C. 1331 et seq. ) to any person designated for the imposition of sanctions pursuant to— (1) the Iran Sanctions Act of 1996 ( 50 U.S.C. 1701 note), the Comprehensive Iran Sanctions, Accountability and Divestiture Act of 2010 ( 22 U.S.C. 8501 et seq. ), the Iran Threat Reduction and Syria Human Rights Act of 2012 ( 22 U.S.C. 8701 et seq. ), section 1245 of the National Defense Authorization Act for Fiscal Year 2012 ( 22 U.S.C. 8513a ), or the Iran Freedom and Counter-Proliferation Act of 2012 ( 22 U.S.C. 8801 et seq. ); (2) Executive Order No. 13622 (July 30, 2012), Executive Order No. 13628 (October 9, 2012), or Executive Order No. 13645 (June 3, 2013); (3) Executive Order No. 13224 (September 23, 2001) or Executive Order No. 13338 (May 11, 2004)

113-hr-2-eh-dtd-19

113-hr-2-eh-dtd

113-hr-2

; (2) Executive Order No. 13622 (July 30, 2012), Executive Order No. 13628 (October 9, 2012), or Executive Order No. 13645 (June 3, 2013); (3) Executive Order No. 13224 (September 23, 2001) or Executive Order No. 13338 (May 11, 2004); or (4) the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 ( 22 U.S.C. 2151 note). 10105. Addition of lease sales after finalization of 5-year plan Section 18(d) of the Outer Continental Shelf Lands Act (43 U.S.C.1344(d)) is amended— (1) in paragraph (3), by striking After and inserting Except as provided in paragraph (4), after ; and (2) by adding at the end the following: (4) The Secretary may add to the areas included in an approved leasing program additional areas to be made available for leasing under the program, if all review and documents required under section 102 of the National Environmental Policy Act of 1969 ( 42 U.S.C. 4332 ) have been completed with respect to leasing of each such additional area within the 5-year period preceding such addition. . B Directing the President To Conduct New OCS Sales 10201. Requirement to conduct proposed oil and gas Lease Sale 220 on the Outer Continental Shelf offshore Virginia (a) In general Notwithstanding the exclusion of Lease Sale 220 in the Final Outer Continental Shelf Oil & Gas Leasing Program 2012–2017, the Secretary of the Interior shall conduct offshore oil and gas Lease Sale 220 under section 8 of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1337 ) as soon as practicable, but not later than one year after the date of enactment of this Act. (b) Requirement To make replacement lease blocks available For each lease block in a proposed lease sale under this section for which the Secretary of Defense, in consultation with the Secretary of the Interior, under the Memorandum of Agreement referred to in section 10205(b), issues a statement proposing deferral from a lease offering due to defense-related activities that are irreconcilable with mineral exploration and development, the Secretary of the Interior, in consultation with the Secretary of Defense, shall make available in the same lease sale one other lease block in the Virginia lease sale planning area that is acceptable for oil and gas exploration and production in order to mitigate conflict. (c) Balancing military and energy production goals In recognition that the Outer Continental Shelf oil and gas leasing program and the domestic energy resources produced therefrom are integral to national security, the Secretary of the Interior and the Secretary of Defense shall work jointly in implementing this section in order to ensure achievement of the following common goals: (1) Preserving the ability of the Armed Forces of the United States to maintain an optimum state of readiness through their continued use of the Outer Continental Shelf. (2) Allowing effective exploration, development, and production of our Nation’s oil, gas, and renewable energy resources. (d) Definitions In this section: (1) Lease sale 220 The term Lease Sale 220 means such lease sale referred to in the Request for Comments on the Draft Proposed 5-Year Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2010–2015 and Notice of Intent To Prepare an Environmental Impact Statement (EIS) for the Proposed 5-Year Program published January 21, 2009 (74 Fed. Reg. 3631). (2) Virginia lease sale planning area The term Virginia lease sale planning area means the area of the outer Continental Shelf (as that term is defined in the Outer Continental Shelf Lands Act ( 33 U.S.C. 1331 et seq. )) that is bounded by— (A) a northern boundary consisting of a straight line extending from the northernmost point of Virginia’s seaward boundary to the point on the seaward boundary of the United States exclusive economic zone located at 37 degrees 17 minutes 1 second North latitude, 71 degrees 5 minutes 16 seconds West longitude

113-hr-2-eh-dtd-20

113-hr-2-eh-dtd

113-hr-2

; and (B) a southern boundary consisting of a straight line extending from the southernmost point of Virginia’s seaward boundary to the point on the seaward boundary of the United States exclusive economic zone located at 36 degrees 31 minutes 58 seconds North latitude, 71 degrees 30 minutes 1 second West longitude. 10202. South Carolina lease sale Notwithstanding exclusion of the South Atlantic Outer Continental Shelf Planning Area from the Final Outer Continental Shelf Oil & Gas Leasing Program 2012–2017, the Secretary of the Interior shall conduct a lease sale not later than 2 years after the date of the enactment of this Act for areas off the coast of South Carolina determined by the Secretary to have the most geologically promising hydrocarbon resources and constituting not less than 25 percent of the leasable area within the South Carolina offshore administrative boundaries depicted in the notice entitled Federal Outer Continental Shelf (OCS) Administrative Boundaries Extending from the Submerged Lands Act Boundary seaward to the Limit of the United States Outer Continental Shelf , published January 3, 2006 (71 Fed. Reg. 127). 10203. Southern California existing infrastructure lease sale (a) In general The Secretary of the Interior shall offer for sale leases of tracts in the Santa Maria and Santa Barbara/Ventura Basins of the Southern California OCS Planning Area as soon as practicable, but not later than December 31, 2015. (b) Use of Existing Structures or Onshore-Based Drilling The Secretary of the Interior shall include in leases offered for sale under this lease sale such terms and conditions as are necessary to require that development and production may occur only from offshore infrastructure in existence on the date of the enactment of this Act or from onshore-based, extended-reach drilling. 10204. Environmental impact statement requirement (a) In General For the purposes of this title, the Secretary of the Interior shall prepare a multisale environmental impact statement under section 102 of the National Environmental Policy Act of 1969 ( 42 U.S.C. 4332 ) for all lease sales required under this subtitle. (b) Actions To be considered Notwithstanding section 102 of the National Environmental Policy Act of 1969 ( 42 U.S.C. 4332 ), in such statement— (1) the Secretary is not required to identify nonleasing alternative courses of action or to analyze the environmental effects of such alternative courses of action; and (2) the Secretary shall only— (A) identify a preferred action for leasing and not more than one alternative leasing proposal; and (B) analyze the environmental effects and potential mitigation measures for such preferred action and such alternative leasing proposal. 10205. National defense (a) National Defense Areas This title does not affect the existing authority of the Secretary of Defense, with the approval of the President, to designate national defense areas on the Outer Continental Shelf pursuant to section 12(d) of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1341(d) ). (b) Prohibition on Conflicts With Military Operations No person may engage in any exploration, development, or production of oil or natural gas on the Outer Continental Shelf under a lease issued under this title that would conflict with any military operation, as determined in accordance with the Memorandum of Agreement between the Department of Defense and the Department of the Interior on Mutual Concerns on the Outer Continental Shelf signed July 20, 1983, and any revision or replacement for that agreement that is agreed to by the Secretary of Defense and the Secretary of the Interior after that date but before the date of issuance of the lease under which such exploration, development, or production is conducted. 10206. Eastern Gulf of Mexico not included Nothing in this title affects restrictions on oil and gas leasing under the Gulf of Mexico Energy Security Act of 2006 (title I of division C of Public Law 109–432

113-hr-2-eh-dtd-21

113-hr-2-eh-dtd

113-hr-2

; 43 U.S.C. 1331 note). C Equitable Sharing of Outer Continental Shelf Revenues 10301. Disposition of Outer Continental Shelf revenues to coastal States (a) In general Section 9 of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1338 ) is amended— (1) in the existing text— (A) in the first sentence, by striking All rentals, and inserting the following: (c) Disposition of revenue under old leases All rentals, ; and (B) in subsection (c) (as designated by the amendment made by subparagraph (A) of this paragraph), by striking for the period from June 5, 1950, to date, and thereafter and inserting in the period beginning June 5, 1950, and ending on the date of enactment of the Lowering Gasoline Prices to Fuel an America That Works Act of 2014 ; (2) by adding after subsection (c) (as so designated) the following: (d) Definitions In this section: (1) Coastal State The term coastal State includes a territory of the United States. (2) New leasing revenues The term new leasing revenues — (A) means amounts received by the United States as bonuses, rents, and royalties under leases for oil and gas, wind, tidal, or other energy exploration, development, and production on new areas of the outer Continental Shelf that are authorized to be made available for leasing as a result of enactment of the Lowering Gasoline Prices to Fuel an America That Works Act of 2014 and leasing under that Act; and (B) does not include amounts received by the United States under any lease of an area located in the boundaries of the Central Gulf of Mexico and Western Gulf of Mexico Outer Continental Shelf Planning Areas on the date of enactment of the Lowering Gasoline Prices to Fuel an America That Works Act of 2014 , including a lease issued before, on, or after such date of enactment. ; and (3) by inserting before subsection (c) (as so designated) the following: (a) Payment of new leasing revenues to coastal States (1) In general Except as provided in paragraph (2), of the amount of new leasing revenues received by the United States each fiscal year, 37.5 percent shall be allocated and paid in accordance with subsection (b) to coastal States that are affected States with respect to the leases under which those revenues are received by the United States. (2) Phase-in (A) In general Except as provided in subparagraph (B), paragraph (1) shall be applied— (i) with respect to new leasing revenues under leases awarded under the first leasing program under section 18(a) that takes effect after the date of enactment of the Lowering Gasoline Prices to Fuel an America That Works Act of 2014 , by substituting 12.5 percent for 37.5 percent ; and (ii) with respect to new leasing revenues under leases awarded under the second leasing program under section 18(a) that takes effect after the date of enactment of the Lowering Gasoline Prices to Fuel an America That Works Act of 2014 , by substituting 25 percent for 37.5 percent . (B) Exempted lease sales This paragraph shall not apply with respect to any lease issued under subtitle B of the Lowering Gasoline Prices to Fuel an America That Works Act of 2014 . (b) Allocation of payments (1) In general The amount of new leasing revenues received by the United States with respect to a leased tract that are required to be paid to coastal States in accordance with this subsection each fiscal year shall be allocated among and paid to coastal States that are within 200 miles of the leased tract, in amounts that are inversely proportional to the respective distances between the point on the coastline of each such State that is closest to the geographic center of the lease tract, as determined by the Secretary. (2) Minimum and maximum allocation The amount allocated to a coastal State under paragraph (1) each fiscal year with respect to a leased tract shall be— (A) in the case of a coastal State that is the nearest State to the geographic center of the leased tract, not less than 25 percent of the total amounts allocated with respect to the leased tract

113-hr-2-eh-dtd-22

113-hr-2-eh-dtd

113-hr-2

; (B) in the case of any other coastal State, not less than 10 percent, and not more than 15 percent, of the total amounts allocated with respect to the leased tract; and (C) in the case of a coastal State that is the only coastal State within 200 miles of a leased tract, 100 percent of the total amounts allocated with respect to the leased tract. (3) Administration Amounts allocated to a coastal State under this subsection— (A) shall be available to the coastal State without further appropriation; (B) shall remain available until expended; (C) shall be in addition to any other amounts available to the coastal State under this Act; and (D) shall be distributed in the fiscal year following receipt. (4) Use of funds (A) In general Except as provided in subparagraph (B), a coastal State may use funds allocated and paid to it under this subsection for any purpose as determined by the laws of that State. (B) Restriction on use for matching Funds allocated and paid to a coastal State under this subsection may not be used as matching funds for any other Federal program. . (b) Limitation on application This section and the amendment made by this section shall not affect the application of section 105 of the Gulf of Mexico Energy Security Act of 2006 (title I of division C of Public Law 109–432 ; ( 43 U.S.C. 1331 note)), as in effect before the enactment of this Act, with respect to revenues received by the United States under oil and gas leases issued for tracts located in the Western and Central Gulf of Mexico Outer Continental Shelf Planning Areas, including such leases issued on or after the date of the enactment of this Act. D Reorganization of Minerals Management Agencies of the Department of the Interior 10401. Establishment of Under Secretary for Energy, Lands, and Minerals and Assistant Secretary of Ocean Energy and Safety There shall be in the Department of the Interior— (1) an Under Secretary for Energy, Lands, and Minerals, who shall— (A) be appointed by the President, by and with the advise and consent of the Senate; (B) report to the Secretary of the Interior or, if directed by the Secretary, to the Deputy Secretary of the Interior; (C) be paid at the rate payable for level III of the Executive Schedule; and (D) be responsible for— (i) the safe and responsible development of our energy and mineral resources on Federal lands in appropriate accordance with United States energy demands; and (ii) ensuring multiple-use missions of the Department of the Interior that promote the safe and sustained development of energy and minerals resources on public lands (as that term is defined in the Federal Land Policy and Management Act of 1976 ( 43 U.S.C. 1701 et seq. )); (2) an Assistant Secretary of Ocean Energy and Safety, who shall— (A) be appointed by the President, by and with the advise and consent of the Senate; (B) report to the Under Secretary for Energy, Lands, and Minerals; (C) be paid at the rate payable for level IV of the Executive Schedule; and (D) be responsible for ensuring safe and efficient development of energy and minerals on the Outer Continental Shelf of the United States; and (3) an Assistant Secretary of Land and Minerals Management, who shall— (A) be appointed by the President, by and with the advise and consent of the Senate; (B) report to the Under Secretary for Energy, Lands, and Minerals; (C) be paid at the rate payable for level IV of the Executive Schedule

113-hr-2-eh-dtd-23

113-hr-2-eh-dtd

113-hr-2

; and (D) be responsible for ensuring safe and efficient development of energy and minerals on the Outer Continental Shelf of the United States; and (3) an Assistant Secretary of Land and Minerals Management, who shall— (A) be appointed by the President, by and with the advise and consent of the Senate; (B) report to the Under Secretary for Energy, Lands, and Minerals; (C) be paid at the rate payable for level IV of the Executive Schedule; and (D) be responsible for ensuring safe and efficient development of energy and minerals on public lands and other Federal onshore lands under the jurisdiction of the Department of the Interior, including implementation of the Mineral Leasing Act ( 30 U.S.C. 181 et seq. ) and the Surface Mining Control and Reclamation Act ( 30 U.S.C. 1201 et seq. ) and administration of the Office of Surface Mining. 10402. Bureau of Ocean Energy (a) Establishment There is established in the Department of the Interior a Bureau of Ocean Energy (referred to in this section as the Bureau ), which shall— (1) be headed by a Director of Ocean Energy (referred to in this section as the Director ); and (2) be administered under the direction of the Assistant Secretary of Ocean Energy and Safety. (b) Director (1) Appointment The Director shall be appointed by the Secretary of the Interior. (2) Compensation The Director shall be compensated at the rate provided for level V of the Executive Schedule under section 5316 of title 5, United States Code. (c) Duties (1) In general The Secretary of the Interior shall carry out through the Bureau all functions, powers, and duties vested in the Secretary relating to the administration of a comprehensive program of offshore mineral and renewable energy resources management. (2) Specific authorities The Director shall promulgate and implement regulations— (A) for the proper issuance of leases for the exploration, development, and production of nonrenewable and renewable energy and mineral resources on the Outer Continental Shelf; (B) relating to resource identification, access, evaluation, and utilization; (C) for development of leasing plans, lease sales, and issuance of leases for such resources; and (D) regarding issuance of environmental impact statements related to leasing and post leasing activities including exploration, development, and production, and the use of third party contracting for necessary environmental analysis for the development of such resources. (3) Limitation The Secretary shall not carry out through the Bureau any function, power, or duty that is— (A) required by section 10403 to be carried out through the Ocean Energy Safety Service; or (B) required by section 10404 to be carried out through the Office of Natural Resources Revenue. (d) Responsibilities of land management agencies Nothing in this section shall affect the authorities of the Bureau of Land Management under the Federal Land Policy and Management Act of 1976 ( 43 U.S.C. 1701 et seq. ) or of the Forest Service under the National Forest Management Act of 1976 ( Public Law 94–588 ). 10403. Ocean Energy Safety Service (a) Establishment There is established in the Department of the Interior an Ocean Energy Safety Service (referred to in this section as the Service ), which shall— (1) be headed by a Director of Energy Safety (referred to in this section as the Director )

113-hr-2-eh-dtd-24

113-hr-2-eh-dtd

113-hr-2

; and (2) be administered under the direction of the Assistant Secretary of Ocean Energy and Safety. (b) Director (1) Appointment The Director shall be appointed by the Secretary of the Interior. (2) Compensation The Director shall be compensated at the rate provided for level V of the Executive Schedule under section 5316 of title 5, United States Code. (c) Duties (1) In general The Secretary of the Interior shall carry out through the Service all functions, powers, and duties vested in the Secretary relating to the administration of safety and environmental enforcement activities related to offshore mineral and renewable energy resources on the Outer Continental Shelf pursuant to the Outer Continental Shelf Lands Act ( 43 U.S.C. 1331 et seq. ) including the authority to develop, promulgate, and enforce regulations to ensure the safe and sound exploration, development, and production of mineral and renewable energy resources on the Outer Continental Shelf in a timely fashion. (2) Specific authorities The Director shall be responsible for all safety activities related to exploration and development of renewable and mineral resources on the Outer Continental Shelf, including— (A) exploration, development, production, and ongoing inspections of infrastructure; (B) the suspending or prohibiting, on a temporary basis, any operation or activity, including production under leases held on the Outer Continental Shelf, in accordance with section 5(a)(1) of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1334(a)(1) ); (C) cancelling any lease, permit, or right-of-way on the Outer Continental Shelf, in accordance with section 5(a)(2) of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1334(a)(2) ); (D) compelling compliance with applicable Federal laws and regulations relating to worker safety and other matters; (E) requiring comprehensive safety and environmental management programs for persons engaged in activities connected with the exploration, development, and production of mineral or renewable energy resources; (F) developing and implementing regulations for Federal employees to carry out any inspection or investigation to ascertain compliance with applicable regulations, including health, safety, or environmental regulations; (G) implementing the Offshore Technology Research and Risk Assessment Program under section 21 of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1347 ); (H) summoning witnesses and directing the production of evidence; (I) levying fines and penalties and disqualifying operators; (J) carrying out any safety, response, and removal preparedness functions; and (K) the processing of permits, exploration plans, development plans. (d) Employees (1) In general The Secretary shall ensure that the inspection force of the Bureau consists of qualified, trained employees who meet qualification requirements and adhere to the highest professional and ethical standards. (2) Qualifications The qualification requirements referred to in paragraph (1)— (A) shall be determined by the Secretary, subject to subparagraph (B); and (B) shall include— (i) 3 years of practical experience in oil and gas exploration, development, or production; or (ii) a degree in an appropriate field of engineering from an accredited institution of higher learning. (3) Assignment In assigning oil and gas inspectors to the inspection and investigation of individual operations, the Secretary shall give due consideration to the extent possible to their previous experience in the particular type of oil and gas operation in which such inspections are to be made. (4) Background checks The Director shall require that an individual to be hired as an inspection officer undergo an employment investigation (including a criminal history record check). (5) Language requirements Individuals hired as inspectors must be able to read, speak, and write English well enough to— (A) carry out written and oral instructions regarding the proper performance of inspection duties

113-hr-2-eh-dtd-25

113-hr-2-eh-dtd

113-hr-2

; and (B) write inspection reports and statements and log entries in the English language. (6) Veterans preference The Director shall provide a preference for the hiring of an individual as a inspection officer if the individual is a member or former member of the Armed Forces and is entitled, under statute, to retired, retirement, or retainer pay on account of service as a member of the Armed Forces. (7) Annual proficiency review (A) Annual proficiency review The Director shall provide that an annual evaluation of each individual assigned inspection duties is conducted and documented. (B) Continuation of employment An individual employed as an inspector may not continue to be employed in that capacity unless the evaluation demonstrates that the individual— (i) continues to meet all qualifications and standards; (ii) has a satisfactory record of performance and attention to duty based on the standards and requirements in the inspection program; and (iii) demonstrates the current knowledge and skills necessary to courteously, vigilantly, and effectively perform inspection functions. (8) Limitation on right to strike Any individual that conducts permitting or inspections under this section may not participate in a strike, or assert the right to strike. (9) Personnel authority Notwithstanding any other provision of law, the Director may employ, appoint, discipline and terminate for cause, and fix the compensation, terms, and conditions of employment of Federal service for individuals as the employees of the Service in order to restore and maintain the trust of the people of the United States in the accountability of the management of our Nation’s energy safety program. (10) Training Academy (A) In general The Secretary shall establish and maintain a National Offshore Energy Safety Academy (referred to in this paragraph as the Academy ) as an agency of the Ocean Energy Safety Service. (B) Functions of Academy The Secretary, through the Academy, shall be responsible for— (i) the initial and continued training of both newly hired and experienced offshore oil and gas inspectors in all aspects of health, safety, environmental, and operational inspections; (ii) the training of technical support personnel of the Bureau; (iii) any other training programs for offshore oil and gas inspectors, Bureau personnel, Department personnel, or other persons as the Secretary shall designate; and (iv) certification of the successful completion of training programs for newly hired and experienced offshore oil and gas inspectors. (C) Cooperative agreements (i) In general In performing functions under this paragraph, and subject to clause (ii), the Secretary may enter into cooperative educational and training agreements with educational institutions, related Federal academies, other Federal agencies, State governments, safety training firms, and oil and gas operators and related industries. (ii) Training requirement Such training shall be conducted by the Academy in accordance with curriculum needs and assignment of instructional personnel established by the Secretary. (11) Use of Department personnel In performing functions under this subsection, the Secretary shall use, to the extent practicable, the facilities and personnel of the Department of the Interior. The Secretary may appoint or assign to the Academy such officers and employees as the Secretary considers necessary for the performance of the duties and functions of the Academy. (12) Additional training programs (A) In general The Secretary shall work with appropriate educational institutions, operators, and representatives of oil and gas workers to develop and maintain adequate programs with educational institutions and oil and gas operators that are designed— (i) to enable persons to qualify for positions in the administration of this title

113-hr-2-eh-dtd-26

113-hr-2-eh-dtd

113-hr-2

; and (ii) to provide for the continuing education of inspectors or other appropriate Department of the Interior personnel. (B) Financial and technical assistance The Secretary may provide financial and technical assistance to educational institutions in carrying out this paragraph. (e) Limitation The Secretary shall not carry out through the Service any function, power, or duty that is— (1) required by section 10402 to be carried out through Bureau of Ocean Energy; or (2) required by section 10404 to be carried out through the Office of Natural Resources Revenue. 10404. Office of Natural Resources revenue (a) Establishment There is established in the Department of the Interior an Office of Natural Resources Revenue (referred to in this section as the Office ) to be headed by a Director of Natural Resources Revenue (referred to in this section as the Director ). (b) Appointment and compensation (1) In general The Director shall be appointed by the Secretary of the Interior. (2) Compensation The Director shall be compensated at the rate provided for Level V of the Executive Schedule under section 5316 of title 5, United States Code. (c) Duties (1) In general The Secretary of the Interior shall carry out, through the Office, all functions, powers, and duties vested in the Secretary and relating to the administration of offshore royalty and revenue management functions. (2) Specific authorities The Secretary shall carry out, through the Office, all functions, powers, and duties previously assigned to the Minerals Management Service (including the authority to develop, promulgate, and enforce regulations) regarding offshore royalty and revenue collection; royalty and revenue distribution; auditing and compliance; investigation and enforcement of royalty and revenue regulations; and asset management for onshore and offshore activities. (d) Limitation The Secretary shall not carry out through the Office any function, power, or duty that is— (1) required by section 10402 to be carried out through Bureau of Ocean Energy

113-hr-2-eh-dtd-27

113-hr-2-eh-dtd

113-hr-2

; royalty and revenue distribution; auditing and compliance; investigation and enforcement of royalty and revenue regulations; and asset management for onshore and offshore activities. (d) Limitation The Secretary shall not carry out through the Office any function, power, or duty that is— (1) required by section 10402 to be carried out through Bureau of Ocean Energy; or (2) required by section 10403 to be carried out through the Ocean Energy Safety Service. 10405. Ethics and drug testing (a) Certification The Secretary of the Interior shall certify annually that all Department of the Interior officers and employees having regular, direct contact with lessees, contractors, concessionaires, and other businesses interested before the Government as a function of their official duties, or conducting investigations, issuing permits, or responsible for oversight of energy programs, are in full compliance with all Federal employee ethics laws and regulations under the Ethics in Government Act of 1978 (5 U.S.C. App.) and part 2635 of title 5, Code of Federal Regulations, and all guidance issued under subsection (c). (b) Drug Testing The Secretary shall conduct a random drug testing program of all Department of the Interior personnel referred to in subsection (a). (c) Guidance Not later than 90 days after the date of enactment of this Act, the Secretary shall issue supplementary ethics and drug testing guidance for the employees for which certification is required under subsection (a). The Secretary shall update the supplementary ethics guidance not less than once every 3 years thereafter. 10406. Abolishment of Minerals Management Service (a) Abolishment The Minerals Management Service is abolished. (b) Completed administrative actions (1) In general Completed administrative actions of the Minerals Management Service shall not be affected by the enactment of this Act, but shall continue in effect according to their terms until amended, modified, superseded, terminated, set aside, or revoked in accordance with law by an officer of the United States or a court of competent jurisdiction, or by operation of law. (2) Completed administrative action defined For purposes of paragraph (1), the term completed administrative action includes orders, determinations, memoranda of understanding, memoranda of agreements, rules, regulations, personnel actions, permits, agreements, grants, contracts, certificates, licenses, registrations, and privileges. (c) Pending Proceedings Subject to the authority of the Secretary of the Interior and the officers of the Department of the Interior under this title— (1) pending proceedings in the Minerals Management Service, including notices of proposed rulemaking, and applications for licenses, permits, certificates, grants, and financial assistance, shall continue, notwithstanding the enactment of this Act or the vesting of functions of the Service in another agency, unless discontinued or modified under the same terms and conditions and to the same extent that such discontinuance or modification could have occurred if this title had not been enacted

113-hr-2-eh-dtd-28

113-hr-2-eh-dtd

113-hr-2

; and (2) orders issued in such proceedings, and appeals therefrom, and payments made pursuant to such orders, shall issue in the same manner and on the same terms as if this title had not been enacted, and any such orders shall continue in effect until amended, modified, superseded, terminated, set aside, or revoked by an officer of the United States or a court of competent jurisdiction, or by operation of law. (d) Pending Civil Actions Subject to the authority of the Secretary of the Interior or any officer of the Department of the Interior under this title, pending civil actions shall continue notwithstanding the enactment of this Act, and in such civil actions, proceedings shall be had, appeals taken, and judgments rendered and enforced in the same manner and with the same effect as if such enactment had not occurred. (e) References References relating to the Minerals Management Service in statutes, Executive orders, rules, regulations, directives, or delegations of authority that precede the effective date of this Act are deemed to refer, as appropriate, to the Department, to its officers, employees, or agents, or to its corresponding organizational units or functions. Statutory reporting requirements that applied in relation to the Minerals Management Service immediately before the effective date of this title shall continue to apply. 10407. Conforming amendments to Executive Schedule pay rates (a) Under Secretary for Energy, Lands, and Minerals Section 5314 of title 5, United States Code, is amended by inserting after the item relating to Under Secretaries of the Treasury (3). the following: Under Secretary for Energy, Lands, and Minerals, Department of the Interior. . (b) Assistant Secretaries Section 5315 of title 5, United States Code, is amended by striking Assistant Secretaries of the Interior (6). and inserting the following: Assistant Secretaries, Department of the Interior (7). . (c) Directors Section 5316 of title 5, United States Code, is amended by striking Director, Bureau of Mines, Department of the Interior. and inserting the following new items: Director, Bureau of Ocean Energy, Department of the Interior. Director, Ocean Energy Safety Service, Department of the Interior. Director, Office of Natural Resources Revenue, Department of the Interior. . 10408. Outer Continental Shelf Energy Safety Advisory Board (a) Establishment The Secretary of the Interior shall establish, under the Federal Advisory Committee Act, an Outer Continental Shelf Energy Safety Advisory Board (referred to in this section as the Board )— (1) to provide the Secretary and the Directors established by this title with independent scientific and technical advice on safe, responsible, and timely mineral and renewable energy exploration, development, and production activities; and (2) to review operations of the National Offshore Energy Health and Safety Academy established under section 10403(d), including submitting to the Secretary recommendations of curriculum to ensure training scientific and technical advancements. (b) Membership (1) Size The Board shall consist of not more than 11 members, who— (A) shall be appointed by the Secretary based on their expertise in oil and gas drilling, well design, operations, well containment and oil spill response

113-hr-2-eh-dtd-29

113-hr-2-eh-dtd

113-hr-2

; and (2) to review operations of the National Offshore Energy Health and Safety Academy established under section 10403(d), including submitting to the Secretary recommendations of curriculum to ensure training scientific and technical advancements. (b) Membership (1) Size The Board shall consist of not more than 11 members, who— (A) shall be appointed by the Secretary based on their expertise in oil and gas drilling, well design, operations, well containment and oil spill response; and (B) must have significant scientific, engineering, management, and other credentials and a history of working in the field related to safe energy exploration, development, and production activities. (2) Consultation and nominations The Secretary shall consult with the National Academy of Sciences and the National Academy of Engineering to identify potential candidates for the Board and shall take nominations from the public. (3) Term The Secretary shall appoint Board members to staggered terms of not more than 4 years, and shall not appoint a member for more than 2 consecutive terms. (4) Balance In appointing members to the Board, the Secretary shall ensure a balanced representation of industry and research interests. (c) Chair The Secretary shall appoint the Chair for the Board from among its members. (d) Meetings The Board shall meet not less than 3 times per year and shall host, at least once per year, a public forum to review and assess the overall energy safety performance of Outer Continental Shelf mineral and renewable energy resource activities. (e) Offshore drilling safety assessments and recommendations As part of its duties under this section, the Board shall, by not later than 180 days after the date of enactment of this section and every 5 years thereafter, submit to the Secretary a report that— (1) assesses offshore oil and gas well control technologies, practices, voluntary standards, and regulations in the United States and elsewhere; and (2) as appropriate, recommends modifications to the regulations issued under this title to ensure adequate protection of safety and the environment, including recommendations on how to reduce regulations and administrative actions that are duplicative or unnecessary. (f) Reports Reports of the Board shall be submitted by the Board to the Committee on Natural Resources of the House or Representatives and the Committee on Energy and Natural Resources of the Senate and made available to the public in electronically accessible form. (g) Travel expenses Members of the Board, other than full-time employees of the Federal Government, while attending meeting of the Board or while otherwise serving at the request of the Secretary or the Director while serving away from their homes or regular places of business, may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States Code, for individuals in the Government serving without pay. 10409. Outer Continental Shelf inspection fees Section 22 of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1348 ) is amended by adding at the end of the section the following: (g) Inspection fees (1) Establishment The Secretary of the Interior shall collect from the operators of facilities subject to inspection under subsection (c) non-refundable fees for such inspections— (A) at an aggregate level equal to the amount necessary to offset the annual expenses of inspections of outer Continental Shelf facilities (including mobile offshore drilling units) by the Department of the Interior

113-hr-2-eh-dtd-30

113-hr-2-eh-dtd

113-hr-2

; and (B) using a schedule that reflects the differences in complexity among the classes of facilities to be inspected. (2) Ocean energy safety fund There is established in the Treasury a fund, to be known as the Ocean Energy Enforcement Fund (referred to in this subsection as the Fund ), into which shall be deposited all amounts collected as fees under paragraph (1) and which shall be available as provided under paragraph (3). (3) Availability of fees (A) In general Notwithstanding section 3302 of title 31, United States Code, all amounts deposited in the Fund— (i) shall be credited as offsetting collections; (ii) shall be available for expenditure for purposes of carrying out inspections of outer Continental Shelf facilities (including mobile offshore drilling units) and the administration of the inspection program under this section; (iii) shall be available only to the extent provided for in advance in an appropriations Act; and (iv) shall remain available until expended. (B) Use for field offices Not less than 75 percent of amounts in the Fund may be appropriated for use only for the respective Department of the Interior field offices where the amounts were originally assessed as fees. (4) Initial fees Fees shall be established under this subsection for the fiscal year in which this subsection takes effect and the subsequent 10 years, and shall not be raised without advise and consent of the Congress, except as determined by the Secretary to be appropriate as an adjustment equal to the percentage by which the Consumer Price Index for the month of June of the calendar year preceding the adjustment exceeds the Consumer Price Index for the month of June of the calendar year in which the claim was determined or last adjusted. (5) Annual fees Annual fees shall be collected under this subsection for facilities that are above the waterline, excluding drilling rigs, and are in place at the start of the fiscal year. Fees for fiscal year 2013 shall be— (A) $10,500 for facilities with no wells, but with processing equipment or gathering lines; (B) $17,000 for facilities with 1 to 10 wells, with any combination of active or inactive wells; and (C) $31,500 for facilities with more than 10 wells, with any combination of active or inactive wells. (6) Fees for drilling rigs Fees for drilling rigs shall be assessed under this subsection for all inspections completed in fiscal years 2015 through 2024. Fees for fiscal year 2015 shall be— (A) $30,500 per inspection for rigs operating in water depths of 1,000 feet or more

113-hr-2-eh-dtd-31

113-hr-2-eh-dtd

113-hr-2

; (B) $17,000 for facilities with 1 to 10 wells, with any combination of active or inactive wells; and (C) $31,500 for facilities with more than 10 wells, with any combination of active or inactive wells. (6) Fees for drilling rigs Fees for drilling rigs shall be assessed under this subsection for all inspections completed in fiscal years 2015 through 2024. Fees for fiscal year 2015 shall be— (A) $30,500 per inspection for rigs operating in water depths of 1,000 feet or more; and (B) $16,700 per inspection for rigs operating in water depths of less than 1,000 feet. (7) Billing The Secretary shall bill designated operators under paragraph (5) within 60 days after the date of the inspection, with payment required within 30 days of billing. The Secretary shall bill designated operators under paragraph (6) within 30 days of the end of the month in which the inspection occurred, with payment required within 30 days after billing. (8) Sunset No fee may be collected under this subsection for any fiscal year after fiscal year 2024. (9) Annual reports (A) In general Not later than 60 days after the end of each fiscal year beginning with fiscal year 2015, the Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Natural Resources of the House of Representatives a report on the operation of the Fund during the fiscal year. (B) Contents Each report shall include, for the fiscal year covered by the report, the following: (i) A statement of the amounts deposited into the Fund. (ii) A description of the expenditures made from the Fund for the fiscal year, including the purpose of the expenditures and the additional hiring of personnel. (iii) A statement of the balance remaining in the Fund at the end of the fiscal year. (iv) An accounting of pace of permit approvals. (v) If fee increases are proposed after the initial 10-year period referred to in paragraph (5), a proper accounting of the potential adverse economic impacts such fee increases will have on offshore economic activity and overall production, conducted by the Secretary. (vi) Recommendations to increase the efficacy and efficiency of offshore inspections. (vii) Any corrective actions levied upon offshore inspectors as a result of any form of misconduct. . 10410. Prohibition on action based on National Ocean Policy developed under Executive Order No. 13547 (a) Prohibition The Bureau of Ocean Energy and the Ocean Energy Safety Service may not develop, propose, finalize, administer, or implement, any limitation on activities under their jurisdiction as a result of the coastal and marine spatial planning component of the National Ocean Policy developed under Executive Order No. 13547. (b) Report on expenditures Not later than 60 days after the date of enactment of this Act, the President shall submit a report to the Committee on Natural Resources of the House of Representatives and the Committee on Energy and Natural Resources of the Senate identifying all Federal expenditures in fiscal years 2011, 2012, 2013, and 2014 by the Bureau of Ocean Energy and the Ocean Energy Safety Service and their predecessor agencies, by agency, account, and any pertinent subaccounts, for the development, administration, or implementation of the coastal and marine spatial planning component of the National Ocean Policy developed under Executive Order No. 13547, including staff time, travel, and other related expenses. E United States Territories 10501. Application of Outer Continental Shelf Lands Act with respect to territories of the United States Section 2 of the Outer Continental Shelf Lands Act ( 43 U.S.C. 1331 ) is amended— (1) in paragraph (a), by inserting after control the following: or lying within the United States exclusive economic zone and the Continental Shelf adjacent to any territory of the United States ; (2) in paragraph (p), by striking and after the semicolon at the end; (3) in paragraph (q), by striking the period at the end and inserting ; and

113-hr-2-eh-dtd-32

113-hr-2-eh-dtd

113-hr-2

; (2) in paragraph (p), by striking and after the semicolon at the end; (3) in paragraph (q), by striking the period at the end and inserting ; and ; and (4) by adding at the end the following: (r) The term State includes each territory of the United States. . F Miscellaneous Provisions 10601. Rules regarding distribution of revenues under Gulf of Mexico Energy Security Act of 2006 (a) In general Not later than 60 days after the date of enactment of this Act, the Secretary of the Interior shall issue rules to provide more clarity, certainty, and stability to the revenue streams contemplated by the Gulf of Mexico Energy Security Act of 2006 ( 43 U.S.C. 1331 note). (b) Contents The rules shall include clarification of the timing and methods of disbursements of funds under section 105(b)(2) of such Act. 10602. Amount of distributed qualified outer Continental Shelf revenues Section 105(f)(1) of the Gulf of Mexico Energy Security Act of 2006 (title I of division C of Public Law 109–432 ; 43 U.S.C. 1331 note) shall be applied by substituting 2024, and shall not exceed $999,999,999 for each of fiscal years 2025 through 2055 for 2055 . 10603. South Atlantic Outer Continental Shelf Planning Area defined For the purposes of this Act, the Outer Continental Shelf Lands Act ( 43 U.S.C. 1331 et seq. ), and any regulations or 5-year plan issued under that Act, the term South Atlantic Outer Continental Shelf Planning Area means the area of the outer Continental Shelf (as defined in section 2 of that Act ( 43 U.S.C. 1331 )) that is located between the northern lateral seaward administrative boundary of the State of Virginia and the southernmost lateral seaward administrative boundary of the State of Georgia. 10604. Enhancing geological and geophysical information for America’s energy future Section 11 of the Outer Continental Shelf lands Act ( 43 U.S.C. 1340 ) is amended by adding at the end the following: (i) Enhancing Geological and Geophysical Information for America’s Energy Future (1) The Secretary, acting through the Director of the Bureau of Ocean Energy Management, shall facilitate and support the practical study of geology and geophysics to better understand the oil, gas, and other hydrocarbon potential in the South Atlantic Outer Continental Shelf Planning Area by entering into partnerships to conduct geological and geophysical activities on the outer Continental Shelf. (2) (A) No later than 180 days after the date of enactment of the Lowering Gasoline Prices to Fuel an America That Works Act of 2014, the Governors of the States of Georgia, South Carolina, North Carolina, and Virginia may each nominate for participation in the partnerships— (i) one institution of higher education located within the Governor’s State

113-hr-2-eh-dtd-33

113-hr-2-eh-dtd

113-hr-2

; and (ii) one institution of higher education within the Governor’s State that is a historically black college or university, as defined in section 631(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1132(a) ). (B) In making nominations, the Governors shall give preference to those institutions of higher education that demonstrate a vigorous rate of admission of veterans of the Armed Forces of the United States. (3) The Secretary shall only select as a partner a nominee that the Secretary determines demonstrates excellence in geophysical sciences curriculum, engineering curriculum, or information technology or other technical studies relating to seismic research (including data processing). (4) Notwithstanding subsection (d), nominees selected as partners by the Secretary may conduct geological and geophysical activities under this section after filing a notice with the Secretary 30-days prior to commencement of the activity without any further authorization by the Secretary except those activities that use solid or liquid explosives shall require a permit. The Secretary may not charge any fee for the provision of data or other information collected under this authority, other than the cost of duplicating any data or information provided. Nominees selected as partners under this section shall provide to the Secretary any data or other information collected under this subsection within 60 days after completion of an initial analysis of the data or other information collected, if so requested by the Secretary. (5) Data or other information produced as a result of activities conducted by nominees selected as partners under this subsection shall not be used or shared for commercial purposes by the nominee, may not be produced for proprietary use or sale, and shall be made available by the Secretary to the public. (6) The Secretary shall submit to the Committee on Natural Resources of the House of Representatives and the Committee on Energy and Natural Resources of the Senate reports on the data or other information produced under the partnerships under this section. Such reports shall be made no less frequently than every 180 days following the conduct of the first geological and geophysical activities under this section. (7) In this subsection the term geological and geophysical activities means any oil- or gas-related investigation conducted on the outer Continental Shelf, including geophysical surveys where magnetic, gravity, seismic, or other systems are used to detect or imply the presence of oil or gas. . G Judicial Review 10701. Time for filing complaint (a) In general Any cause of action that arises from a covered energy decision must be filed not later than the end of the 60-day period beginning on the date of the covered energy decision. Any cause of action not filed within this time period shall be barred. (b) Exception Subsection (a) shall not apply to a cause of action brought by a party to a covered energy lease. 10702. District court deadline (a) In general All proceedings that are subject to section 10701— (1) shall be brought in the United States district court for the district in which the Federal property for which a covered energy lease is issued is located or the United States District Court of the District of Columbia; (2) shall be resolved as expeditiously as possible, and in any event not more than 180 days after such cause or claim is filed

113-hr-2-eh-dtd-34

113-hr-2-eh-dtd

113-hr-2

; (2) shall be resolved as expeditiously as possible, and in any event not more than 180 days after such cause or claim is filed; and (3) shall take precedence over all other pending matters before the district court. (b) Failure To comply with deadline If an interlocutory or final judgment, decree, or order has not been issued by the district court by the deadline described under this section, the cause or claim shall be dismissed with prejudice and all rights relating to such cause or claim shall be terminated. 10703. Ability to seek appellate review An interlocutory or final judgment, decree, or order of the district court in a proceeding that is subject to section 10701 may be reviewed by the U.S. Court of Appeals for the District of Columbia Circuit. The D.C. Circuit shall resolve any such appeal as expeditiously as possible and, in any event, not more than 180 days after such interlocutory or final judgment, decree, or order of the district court was issued. 10704. Limitation on scope of review and relief (a) Administrative findings and conclusions In any judicial review of any Federal action under this subtitle, any administrative findings and conclusions relating to the challenged Federal action shall be presumed to be correct unless shown otherwise by clear and convincing evidence contained in the administrative record. (b) Limitation on prospective relief In any judicial review of any action, or failure to act, under this subtitle, the Court shall not grant or approve any prospective relief unless the Court finds that such relief is narrowly drawn, extends no further than necessary to correct the violation of a Federal law requirement, and is the least intrusive means necessary to correct the violation concerned. 10705. Legal fees Any person filing a petition seeking judicial review of any action, or failure to act, under this subtitle who is not a prevailing party shall pay to the prevailing parties (including intervening parties), other than the United States, fees and other expenses incurred by that party in connection with the judicial review, unless the Court finds that the position of the person was substantially justified or that special circumstances make an award unjust. 10706. Exclusion This subtitle shall not apply with respect to disputes between the parties to a lease issued pursuant to an authorizing leasing statute regarding the obligations of such lease or the alleged breach thereof. 10707. Definitions In this subtitle, the following definitions apply: (1) Covered energy decision The term covered energy decision means any action or decision by a Federal official regarding the issuance of a covered energy lease. (2) Covered energy lease The term covered energy lease means any lease under this title or under an oil and gas leasing program under this title. II Onshore Federal Lands and Energy Security A Federal Lands Jobs and Energy Security 21001. Short title This subtitle may be cited as the Federal Lands Jobs and Energy Security Act . 21002. Policies regarding buying, building, and working for America (a) Congressional intent It is the intent of the Congress that— (1) this subtitle will support a healthy and growing United States domestic energy sector that, in turn, helps to reinvigorate American manufacturing, transportation, and service sectors by employing the vast talents of United States workers to assist in the development of energy from domestic sources; (2) to ensure a robust onshore energy production industry and ensure that the benefits of development support local communities, under this subtitle, the Secretary shall make every effort to promote the development of onshore American energy, and shall take into consideration the socioeconomic impacts, infrastructure requirements, and fiscal stability for local communities located within areas containing onshore energy resources

113-hr-2-eh-dtd-35

113-hr-2-eh-dtd

113-hr-2

; (2) to ensure a robust onshore energy production industry and ensure that the benefits of development support local communities, under this subtitle, the Secretary shall make every effort to promote the development of onshore American energy, and shall take into consideration the socioeconomic impacts, infrastructure requirements, and fiscal stability for local communities located within areas containing onshore energy resources; and (3) the Congress will monitor the deployment of personnel and material onshore to encourage the development of American manufacturing to enable United States workers to benefit from this subtitle through good jobs and careers, as well as the establishment of important industrial facilities to support expanded access to American resources. (b) Requirement The Secretary of the Interior shall when possible, and practicable, encourage the use of United States workers and equipment manufactured in the United States in all construction related to mineral resource development under this subtitle. 1 Onshore oil and gas permit streamlining 21101. Short title This chapter may be cited as the Streamlining Permitting of American Energy Act of 2014 . A Application for Permits to Drill Process Reform 21111. Permit to drill application timeline Section 17(p)(2) of the Mineral Leasing Act ( 30 U.S.C. 226(p)(2) ) is amended to read as follows: (2) Applications for permits to drill reform and process (A) Timeline The Secretary shall decide whether to issue a permit to drill within 30 days after receiving an application for the permit. The Secretary may extend such period for up to 2 periods of 15 days each, if the Secretary has given written notice of the delay to the applicant. The notice shall be in the form of a letter from the Secretary or a designee of the Secretary, and shall include the names and titles of the persons processing the application, the specific reasons for the delay, and a specific date a final decision on the application is expected. (B) Notice of reasons for denial If the application is denied, the Secretary shall provide the applicant— (i) in writing, clear and comprehensive reasons why the application was not accepted and detailed information concerning any deficiencies; and (ii) an opportunity to remedy any deficiencies. (C) Application deemed approved If the Secretary has not made a decision on the application by the end of the 60-day period beginning on the date the application is received by the Secretary, the application is deemed approved, except in cases in which existing reviews under the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq. ) or Endangered Species Act of 1973 ( 16 U.S.C. 1531 et seq. ) are incomplete. (D) Denial of permit If the Secretary decides not to issue a permit to drill in accordance with subparagraph (A), the Secretary shall— (i) provide to the applicant a description of the reasons for the denial of the permit; (ii) allow the applicant to resubmit an application for a permit to drill during the 10-day period beginning on the date the applicant receives the description of the denial from the Secretary

113-hr-2-eh-dtd-36

113-hr-2-eh-dtd

113-hr-2

; (ii) allow the applicant to resubmit an application for a permit to drill during the 10-day period beginning on the date the applicant receives the description of the denial from the Secretary; and (iii) issue or deny any resubmitted application not later than 10 days after the date the application is submitted to the Secretary. (E) Fee (i) In general Notwithstanding any other law, the Secretary shall collect a single $6,500 permit processing fee per application from each applicant at the time the final decision is made whether to issue a permit under subparagraph (A). This fee shall not apply to any resubmitted application. (ii) Treatment of permit processing fee Of all fees collected under this paragraph, 50 percent shall be transferred to the field office where they are collected and used to process protests, leases, and permits under this Act subject to appropriation. . B Administrative Protest Documentation Reform 21121. Administrative protest documentation reform Section 17(p) of the Mineral Leasing Act ( 30 U.S.C. 226(p) ) is further amended by adding at the end the following: (4) Protest fee (A) In general The Secretary shall collect a $5,000 documentation fee to accompany each protest for a lease, right of way, or application for permit to drill. (B) Treatment of fees Of all fees collected under this paragraph, 50 percent shall remain in the field office where they are collected and used to process protests subject to appropriation. . C Permit Streamlining 21131. Making pilot offices permanent to improve energy permitting on Federal lands (a) Establishment The Secretary of the Interior (referred to in this section as the Secretary ) shall establish a Federal Permit Streamlining Project (referred to in this section as the Project ) in every Bureau of Land Management field office with responsibility for permitting energy projects on Federal land. (b) Memorandum of understanding (1) In general Not later than 90 days after the date of enactment of this Act, the Secretary shall enter into a memorandum of understanding for purposes of this section with— (A) the Secretary of Agriculture; (B) the Administrator of the Environmental Protection Agency; and (C) the Chief of the Army Corps of Engineers. (2) State participation The Secretary may request that the Governor of any State with energy projects on Federal lands to be a signatory to the memorandum of understanding. (c) Designation of qualified staff (1) In general Not later than 30 days after the date of the signing of the memorandum of understanding under subsection (b), all Federal signatory parties shall, if appropriate, assign to each of the Bureau of Land Management field offices an employee who has expertise in the regulatory issues relating to the office in which the employee is employed, including, as applicable, particular expertise in— (A) the consultations and the preparation of biological opinions under section 7 of the Endangered Species Act of 1973 ( 16 U.S.C. 1536 ); (B) permits under section 404 of Federal Water Pollution Control Act ( 33 U.S.C. 1344 ); (C) regulatory matters under the Clean Air Act ( 42 U.S.C. 7401 et seq. ); (D) planning under the National Forest Management Act of 1976 ( 16 U.S.C. 472a et seq. ); and (E) the preparation of analyses under the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq. ). (2) Duties Each employee assigned under paragraph (1) shall— (A) not later than 90 days after the date of assignment, report to the Bureau of Land Management Field Managers in the office to which the employee is assigned; (B) be responsible for all issues relating to the energy projects that arise under the authorities of the employee’s home agency