(a) Short title.—This Act may be cited as the “Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021” or the “GET THE LEAD OUT Act of 2021”.

(b) Table of contents.—The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.

The purposes of this Act are as follows:

(1) to develop a national strategy to build the infrastructure necessary to eliminate lead-based pipe and tap hazards in housing;

(2) to reorient the national approach to the presence of lead-based pipe and taps in public and private homes to implement, on a priority basis, a program to evaluate and reduce lead-based pipe hazards in the Nation’s building stock;

(3) to encourage effective action to prevent childhood lead poisoning by establishing a workable framework for lead-based pipe and tap hazard evaluation and reduction and by ending the current confusion over reasonable standards of care;

(4) to ensure and implement the definitions of lead hazards in section 1417 of the Safe Drinking Water Act (42 U.S.C. 300g–6) and ensure that the existence of lead-based pipe and taps hazards is taken into account in the development of Federal Government housing policies and in the sale, rental and renovation of homes, and apartments;

(5) to mobilize national resources expeditiously, through a partnership among all levels of government and the private sector, to develop the most promising, cost-effective methods for evaluating and reducing lead-based pipe and tap hazards;

(6) to reduce the threat of childhood lead poisoning in housing owned, assisted, or transferred by the Federal Government; and

(7) to educate the public concerning the hazards and sources of lead-based pipes and taps poisoning and steps to reduce and eliminate such hazards.

For purposes of this Act, the following definitions shall apply:

(1) ABATEMENT.—The term “abatement” means any set of measures designed to permanently eliminate lead-based pipe hazards in accordance with standards established by appropriate Federal agencies. Such term includes—

(A) the removal of lead-based pipes and taps;

(B) all preparation, cleanup, disposal, and post-abatement clearance testing activities associated with such measures; and

(C) all repair to damages post-abatement.

(2) CERTIFIED CONTRACTOR.—The term “certified contractor” means—

(A) a contractor, inspector, or supervisor who has completed a training program certified by the appropriate Federal agency and has met any other requirements for certification or licensure established by such agency or who has been certified by any State through a program which has been found by such Federal agency to be at least as rigorous as the Federal certification program; and

(B) workers or designers who have fully met training requirements established by the appropriate Federal agency.

(3) CONTRACT FOR THE PURCHASE AND SALE OF RESIDENTIAL REAL PROPERTY.—The term “contract for the purchase and sale of residential real property” means any contract or agreement in which one party agrees to purchase an interest in real property on which there is situated or more residential dwellings used or occupied, or intended to be used or occupied, in whole or in part, as the home or residence of one or more persons.

(4) EVALUATION.—The term “evaluation” means risk assessment, inspection, or risk assessment and inspection.

(5) FEDERALLY ASSISTED HOUSING.—The term “federally assisted housing” means residential dwellings receiving project-based assistance under programs including—

(A) section 221(d)(3) or 236 of the National Housing Act (12 U.S.C. 1715l(d)(3); 1715z–1);

(B) section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s);

(C) section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f); and

(D) sections 502(a), 504, 514, 515, 516, and 533 of the Housing Act of 1949 (42 U.S.C. 1472(a); 1474; 1484; 1485; 1486; 1490m).

(6) FEDERALLY OWNED HOUSING.—The term “federally owned housing” means residential dwellings owned or managed by a Federal agency, or for which a Federal agency is a trustee or conservator. For the purpose of this paragraph, the term “Federal agency” includes the Department of Housing and Urban Development, the Rural Housing Service of the Department of Agriculture, the Federal Deposit Insurance Corporation, the General Services Administration, the Department of Defense, the Department of Veterans Affairs, the Department of the Interior, the Department of Transportation, and any other Federal agency.

(7) FEDERALLY SUPPORTED WORK.—The term “federally supported work” means any lead hazard evaluation or reduction activities conducted in federally owned or assisted housing or funded in whole or in part through any financial assistance program of the Department of Housing and Urban Development, the Rural Housing Service of the Department of Agriculture, or the Department of Veterans Affairs.

(8) INSPECTION.—The term “inspection” means an investigation to determine the presence of lead-based pipe or taps as provided in section 141.86 of the regulations of the Environmental Protection Agency (40 C.F.R. 181.46; relating to monitoring requirements for lead and copper in tap water) and the provision of a report explaining the results of the investigation.

(9) INTERIM CONTROLS.—The term “interim controls” means a set of measures designed to reduce temporarily human exposure or likely exposure to lead-based pipe hazards, including specialized cleaning, repairs, maintenance, ongoing monitoring of lead-based pipe or potential hazards, and the establishment and operation of management and resident education programs.

(10) LEAD-BASED PIPE.—The term “lead-based pipe” means any pipe, including fittings, taps, fixtures, solder, and flux that does not satisfy the definition of “lead-free” established under section 1417 of the Safe Drinking Water Act.

(11) LEAD-BASED PIPE HAZARDS.—The term “lead-based pipe hazards” means any condition that causes exposure to lead from lead-based pipe that would result in adverse human health effects, as established by the Environmental Protection Agency.

(12) MORTGAGE LOAN.—The term “mortgage loan” includes any loan (other than temporary financing such as a construction loan) that—

(A) is secured by a first lien on any interest in residential real property; and

(B) either—

(i) is insured, guaranteed, made, or assisted by the Department of Housing and Urban Development, the Department of Veterans Affairs, or the Rural Housing Service of the Department of Agriculture, or by any other agency of the Federal Government; or

(ii) is intended to be sold by each originating mortgage institution to any federally chartered secondary mortgage market institution.

(13) ORIGINATING MORTGAGE INSTITUTION.—The term “originating mortgage institution” means a lender that provides mortgage loans.

(14) PRIORITY HOUSING.—The term “priority housing” means housing that qualifies as affordable housing under section 215 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12745), including housing that receives assistance under subsection (b) or (o) of section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f).

(15) PUBLIC HOUSING.—The term “public housing” has the meaning given such term in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)).

(16) REDUCTION.—The term “reduction” means measures designed to reduce or eliminate human exposure to lead-based pipe hazards through methods including interim controls and abatement.

(17) RESIDENTIAL DWELLING.—The term “residential dwelling” means—

(A) a single-family dwelling, including attached structures such as porches and stoops; or

(B) a single-family dwelling unit in a structure that contains more than 1 separate residential dwelling unit, in which each such unit is used or occupied, or intended to be used or occupied, in whole or in part, as the home or residence of one or more persons.

(18) RESIDENTIAL REAL PROPERTY.—The term “residential real property” means real property on which there is situated one or more residential dwellings used or occupied, or intended to be used or occupied, in whole or in part, as the home or residence of one or more persons.

(19) RISK ASSESSMENT.—The term “risk assessment” means an on-site investigation to determine and report the existence, nature, severity, and location of lead-based pipe hazards in residential dwellings, including—

(A) information gathering regarding the age and history of the housing and occupancy by children under age 6;

(B) visual inspection;

(C) other activities as may be appropriate; and

(D) provision of a report explaining the results of the investigation.

(20) SECRETARY.—The term “Secretary” means the Secretary of Housing and Urban Development.

(a) General authority.—The Secretary of Housing and Urban Development is authorized to provide grants to eligible applicants to evaluate and reduce lead-based pipes hazards in priority housing that is not federally assisted housing, federally owned housing, or public housing, in accordance with the provisions of this section.

(b) Eligible applicants.—A State or unit of local government that has an approved comprehensive housing affordability strategy under section 105 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12705) is eligible to apply for a grant under this section.

(c) Form of application.—To receive a grant under this section, a State or unit of local government shall submit an application in such form and in such manner as the Secretary shall prescribe. An application shall contain—

(1) a copy of that portion of an applicant's comprehensive housing affordability strategy required by section 105(b)(16) of the Cranston-Gonzalez National Affordable Housing Act;

(2) a statement of the amount of assistance the applicant seeks under this section;

(3) a description of the planned activities to be undertaken with grants under this section, including an estimate of the amount to be allocated for each activity;

(4) a description of the forms of financial assistance to owners and occupants of priority housing that will be provided through grants under this section; and

(5) such assurances as the Secretary may require regarding the applicant's capacity to carry out the activities.

(d) Selection criteria.—The Secretary shall award grants under this section on the basis of the merit of the activities proposed to be carried out and on the basis of selection criteria, which shall include—

(1) the extent to which the proposed activities will reduce the risk of lead-based water poisoning to children under the age of 6 who reside in priority housing;

(2) the degree of severity and extent of lead-based pipe hazards in the jurisdiction to be served;

(3) the ability of the applicant to leverage State, local, and private funds to supplement the grant under this section;

(4) the ability of the applicant to carry out the proposed activities; and

(5) such other factors as the Secretary determines appropriate to ensure that grants made available under this section are used effectively and to promote the purposes of this Act.

(e) Eligible activities.—A grant under this section may be used to—

(1) perform risk assessments and inspections in priority housing;

(2) provide for the interim control of lead-based pipe hazards in priority housing;

(3) provide for the abatement of lead-based pipe hazards in priority housing;

(4) provide for the additional cost of reducing lead-based pipe hazards in units undergoing renovation funded by other sources;

(5) ensure that risk assessments, inspections, and abatements are carried out by certified contractors monitor the blood-lead levels of workers involved in lead hazard reduction activities funded under this section;

(6) assist in the temporary relocation of families forced to vacate priority housing while lead-based pipe hazard reduction measures are being conducted;

(7) educate the public on the nature and causes of lead poisoning and measures to reduce exposure to lead, including exposure due to residential lead-based pipe hazards;

(8) test the blood-lead levels of children under the age of 6 residing in priority housing after lead-based pipe hazard reduction activity has been conducted, to assure that such activity does not cause excessive exposures to lead; and

(9) carry out such other activities that the Secretary determines appropriate to promote the purposes of this Act.

(f) Forms of assistance.—A recipient of a grant under this section may provide the services described in this section through a variety of programs, including grants, loans, equity investments, revolving loan funds, loan funds, loan guarantees, interest write-downs, and other forms of assistance approved by the Secretary.

(g) Technical assistance and capacity buildings.—

(1) IN GENERAL.—The Secretary shall develop the capacity of eligible applicants to carry out the requirements of section 105(b)(18) of the Cranston-Gonzalez National Affordable Housing Act and to carry out activities under this section. In fiscal years 2022 and 2023, the Secretary may make grants of up to $200,000 for the purpose of establishing State training, certification, or accreditation programs that meet the requirements of section 201 of this Act (relating to lead-based pipe activities training and certification).

(2) SET-ASIDE.—Of the total amount approved in appropriation Acts under section 301, there shall be set aside to carry out this subsection $3,000,000 for each of fiscal years 2022 through 2031.

(h) Matching requirement.—The recipient of a grant under this section shall make contributions toward the cost of activities that receive assistance under this section in an amount not less than 10 percent of the total grant amount under this section.

(i) Prohibition of substitution of funds.—Grants under this section may not be used to replace other amounts made available or designated by State or local governments for use for the purposes under this title.

(j) Limitation on use.—A recipient of a grant under this section shall ensure that not more than 10 percent of the grant will be used for administrative expenses associated with the activities funded by the grant.

(k) Financial records.—A recipient of a grant under this section shall maintain and provide the Secretary with financial records sufficient, in the determination of the Secretary, to ensure proper accounting and disbursing of amounts received from a grant under this section.

(l) Report.—A recipient of a grant under this section shall submit to the Secretary, for any fiscal year in which the recipient expends grant funds under this section, a report that—

(1) describes the use of the amounts received;

(2) states the number of risk assessments and the number of inspections conducted in residential dwellings;

(3) states the number of residential dwellings in which lead-based pipe hazards have been reduced through interim controls;

(4) states the number of residential dwellings in which lead-based pipe hazards have been abated; and

(5) provides any other information that the Secretary determines to be appropriate.

(m) Notice of funding availability.—The Secretary shall publish a Notice of Funding Availability not later than 120 days after funds are appropriated to carry out this section.

(a) Requirements for federally assisted housing.—The Secretary shall provide for appropriate measures and procedures to conduct risk assessments, inspections, interim controls, and abatement of lead-based pipe hazards in federally assisted housing. At a minimum, such procedures shall require—

(1) the provision of lead hazard information pamphlets, developed pursuant to section 205 of this Act for purchasers and tenants of such housing;

(2) periodic risk assessments and interim controls for such housing in accordance with a schedule determined by the Secretary, which shall provide for the initial risk assessment to be performed—

(A) in not less than 50 percent of the dwelling units of such housing within 5 years after the date of the enactment of this Act; and

(B) in the remainder of the dwelling units of such housing within 10 years after such date of enactment;

(3) inspection for the presence of lead-based pipe in such housing prior to federally funded renovation or rehabilitation;

(4) reduction of lead-based pipe hazards in such housing in the course of rehabilitation projects receiving less than $25,000 per unit in Federal funds;

(5) abatement of lead-based pipe hazards in such housing in the course of substantial rehabilitation projects receiving more than $25,000 per unit in Federal funds;

(6) where risk assessment, inspection, or reduction activities have been undertaken in such housing, the provision of notice to occupants describing the nature and scope of such activities and the actual risk assessment or inspection reports (including available information on the location of any remaining lead-based pipe and lead-based pipe hazards); and

(7) such other measures for such housing as the Secretary deems appropriate.

(b) Public housing.—Section 9(d)(1) of the United States Housing Act of 1937 (42 U.S.C. 1437g(d)(1)) is amended—

(1) in subparagraph (K), by striking “and” at the end;

(2) in subparagraph (L), by striking the period at the end and inserting “; and”; and

(3) by adding at the end the following new subparagraph:

“(M) lead-based pipe hazard evaluation and reduction, as defined in section 3 of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021”..”.

(c) HOME Investment Partnerships.—Section 212(a) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12742(a)) is amended—

(1) by redesignating paragraph (5) (relating to lead-based paint hazards) as paragraph (4); and

(2) by adding at the end the following new paragraph:

“(5) LEAD-BASED PIPE HAZARDS.—A participating jurisdiction may use funds provided under this subtitle for the evaluation and reduction of lead-based pipe hazards.”.

(d) Community development block grants.—Section 105(a) of the Housing and Community Development Act of 1974 (42 U.S.C. 5305(a)) is amended—

(1) in paragraph (24)(D), by striking “and” at the end;

(2) in paragraph (25), by striking the period at the end and inserting “; and”; and

(3) by adding at the end the following:

“(26) lead-based pipe hazard evaluation and reduction, as defined in section 3 of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021”..”.

(e) Section 8 rental assistance.—Section 8(c)(2)(B) of the United States Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(B)) is amended by adding at the end the following: “The Secretary may (at the discretion of the Secretary and subject to the availability of appropriations for contract amendments), on a project-by-project basis for projects receiving project-based assistance, provide adjustments to the maximum monthly rents to cover the costs of evaluating and reducing lead-based pipe hazards, as defined in section 3 of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021.”.

(f) Hope for Public and Indian housing homeownership.—Title III of the United States Housing Act of 1937 is amended—

(1) in section 302(b) (42 U.S.C. 1437aaa–1(b))—

(A) by redesignating paragraphs (5) through (9) as paragraphs (6) through (10), respectively; and

(B) by inserting after paragraph (4) the following:

“(5) inspection for lead-based pipe hazards, as required by section 102(a) of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021;”; and

(2) in section 303(b) (42 U.S.C. 1437aaa–2(b))—

(A) by redesignating paragraphs (5) through (14) as paragraphs (6) through (15), respectively; and

(B) by inserting after paragraph (4) the following:

“(5) Abatement of lead-based pipe hazards, as required by section 102(a) of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021”..”.

(g) Hope for homeownership of multifamily units.—Title IV of the Cranston-Gonzalez National Affordable Housing Act is amended—

(1) in section 422(b) (42 U.S.C. 12872(b))—

(A) by redesignating paragraphs (5) through (9) as paragraphs (6) through (10), respectively; and

(B) by inserting after paragraph (4) the following:

“(5) inspection for lead-based pipe hazards, as required by section 102(a) of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021;”; and

(2) in section 423(b) (42 U.S.C. 12873(b))—

(A) by redesignating paragraphs (5) through (14) as paragraphs (6) through (15), respectively; and

(B) by inserting after paragraph (4) the following:

“(5) Abatement of lead-based pipe hazards, as required by section 102(a) of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021”..”.

(h) Hope for homeownership of single family homes.—Title IV of the Cranston-Gonzalez National Affordable Housing Act is amended—

(1) in section 442(b) (42 U.S.C. 12892(b))—

(A) by redesignating paragraphs (5) through (9) as paragraphs (6) through (10), respectively; and

(B) by inserting after paragraph (4) the following:

“(5) inspection for lead-based pipe hazards, as required by section 102(a) of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021;”; and

(2) in section 443(b) (42 U.S.C. 12893(b))—

(A) by redesignating paragraphs (5) through (11) as paragraphs (6) through (12), respectively; and

(B) by inserting after paragraph (4) the following:

“(5) Abatement of lead-based pipe hazards, as required by section 102(a) of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021”..”.

(i) FHA insurance for mortgages for single family homes.—

(1) HOME IMPROVEMENT.—The fourth undesignated paragraph of section 2(a) of the National Housing Act (12 U.S.C. 1703(a)) is amended—

(A) by inserting after the period at the end of the first sentence the following: “Alterations, repairs, and improvements upon or in connection with existing structures may also include the evaluation and reduction of lead-based pipes hazards.”; and

(B) in the last sentence—

(i) in paragraph (2), by striking “and” at the end;

(ii) in paragraph (3), by striking the period at the end and inserting “and”;

(iii) in paragraph (4)—

(I) by inserting “, when used with respect to lead-based paint hazards,” before “have”; and

(II) by striking the period at the end and inserting “and”; and

(iv) by adding at the end the following:

“(5) the terms ‘evaluation’, ‘reduction’, and ‘lead-based pipe hazard’, when used with respect to lead-based pipe hazards, have the meaning given such term in section 3 of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021”..”.

(2) REHABILITATION LOANS.—The last sentence of section 203(k)(2)(B) of the National Housing Act (12 U.S.C. 1709(k)(2)(B)) is amended by inserting before the period at the end the following: “, and measures to evaluate and reduce lead-based pipe hazards, as such terms are defined in section 3 of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021”.

(j) FHA insurance for mortgages for multifamily housing.—Section 221(d)(4)(iv) of the National Housing Act (12 U.S.C. 17151(d)(4)(iv)) is amended by inserting before the closing parentheses the following: “, and the cost of evaluating and reducing lead-based pipe hazards, as such terms are defined in section 3 of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021”.

(k) Rural housing.—Section 501(a)(5) of the Housing Act of 1949 (42 U.S.C. 1471) is amended by inserting before the period at the end the following: “, and measures to evaluate and reduce lead-based pipe hazards, as such terms are defined in section 3 of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021”.

Section 105 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12705) is amended—

(1) in subsection (b)—

(A) by redesignating paragraphs (18), (19), and (20) as paragraphs (19), (20), and (21), respectively; and

(B) by inserting after paragraph (17) the following new paragraph:

“(18) estimate the number of housing units within the jurisdiction that are occupied by low-income families or very low-income families and that contain lead-based pipe hazards, as defined in section 3 of the Grants for Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of 2021, outline the actions proposed or being taken to evaluate and reduce lead-based pipe hazards, and describe how lead-based pipe hazard reduction will be integrated into housing policies and programs;”; and

(2) in subsection (e)—

(A) in paragraph (2), by striking “paragraph (16)” and inserting “paragraph (17)”; and

(B) by adding at the end the following new paragraph:

“(3) LEAD-BASED PIPE HAZARDS.—When preparing the portion of a housing strategy required by subsection (b)(18), a jurisdiction shall consult with State or local health and child welfare agencies and examine existing data related to lead-based pipe hazards and poisonings, including health department data on the addresses of housing units in which children have been identified as lead poisoned.”.

(a) In general.—The Secretary, in consultation with the Administrator of the Environmental Protection Agency shall establish a task force to make recommendations on expanding resources and efforts to evaluate and reduce lead-based pipe hazards in private housing.

(b) Membership.—The task force shall include individuals representing the Department of Housing and Urban Development, the Rural Housing Service of the Department of Agriculture, the Department of Veterans Affairs, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Environmental Protection Agency, employee or organizations in the building and construction trades industry, landlords, tenants, primary lending institutions, private mortgage insurers, single family and multifamily real estate interests, nonprofit housing developers, property liability insurers, public housing agencies, low-income housing advocacy organizations, national, State and local lead-poisoning prevention advocates and experts, and community-based organizations located in areas with substantial rental housing.

(c) Responsibilities.—The task force shall make recommendations to the Secretary and the Administrator of the Environmental Protection Agency concerning—

(1) incorporating the need to finance lead-based pipe hazard reduction into underwriting standards;

(2) developing new loan products and procedures for financing lead-based pipe hazard evaluation and reduction activities;

(3) adjusting appraisal guidelines to address lead safety;

(4) incorporating risk assessments or inspections for lead-based pipe as a routine procedure in the origination of new residential mortgages;

(5) revising guidelines, regulations, and educational pamphlets issued by the Department of Housing and Urban Development and other Federal agencies relating to lead-based pipe poisoning prevention;

(6) reducing the current uncertainties of liability related to lead-based pipe in rental housing; clarifying standards of care for landlords and lenders, and exploring the “safe harbor” concept;

(7) increasing the availability of liability insurance for owners of rental housing and certified contractors and establishing alternative systems to compensate victims of lead-based pipe poisoning; and

(8) evaluating the utility and appropriateness of requiring risk assessments or inspections and notification to prospective leases of rental housing.

(d) Compensation.—The members of the task force shall not receive Federal compensation for their participation.

In carrying out this Act, the Secretary shall consult on an ongoing basis with the Administrator of the Environmental Protection Agency, the Director of the Centers for Disease Control, other Federal agencies concerned with lead poisoning prevention, and the task force established pursuant to section 104.

Not later than 12 months after the date of the enactment of this Act, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, the Secretary of Labor, and the Secretary of Health and Human Services (acting through the Director of the Centers for Disease Control), shall issue guidelines for the conduct of federally supported work involving risk assessments, regulations, inspections, interim controls, and abatement of lead-based pipe hazards. Such guidelines shall be based upon criteria that measure the condition of the housing (and the presence of children under age 6 for the purposes of risk assessments) and shall not be based upon criteria that measure the health of the residents of the housing.

(a) Disclosure in purchase and sale or lease of housing.—

(1) LEAD-BASED PIPE HAZARDS.—Not later than 2 years after the date of the enactment of this Act, the Secretary and the Administrator of the Environmental Protection Agency shall promulgate regulations under this section for the disclosure of lead-based pipe hazards in housing that is offered for sale or lease. The regulations shall require that, before the purchaser or lessee is obligated under any contract to purchase or lease the housing, the seller or lessor shall—

(A) provide the purchaser or lessee with a lead hazard information pamphlet, as prescribed by the Administrator of the Environmental Protection Agency under section 406 of the Toxic Substances Control Act;

(B) disclose to the purchaser or lessee the presence of any known lead-based pipe, or any known lead-based pipe hazards, in such housing and provide to the purchaser or lessee a lead hazard evaluation report available to the seller or lessor; and

(C) permit the purchaser a 10-day period (unless the parties mutually agree upon a different rid of time) to conduct a risk assessment or inspection or the presence of lead-based pipe hazards.

(2) CONTRACT FOR PURCHASE AND SALE.—The regulations promulgated under this section shall provide that every contract for the purchase and sale of any interest in housing shall contain a Lead Warning Statement and a statement signed by the purchaser that the purchaser has—

(A) read the Lead Warning Statement and understands its contents;

(B) received a lead hazard information pamphlet; and

(C) had a 10-day opportunity (unless the parties mutually agreed upon a different period of time) before becoming obligated under the contract to purchase the housing to conduct a risk assessment or inspection for the presence of lead-based pipe hazards.

(3) CONTENTS OF LEAD WARNING STATEMENT.—The Lead Warning Statement referred to in paragraph (2) shall contain the following text printed in large type on a separate sheet of paper attached to the contract: “Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1986 is notified that such property may present exposure to lead from lead-based pipes that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller interest in residential real property is required to provide the buyer with any information on lead-based pipe hazards from risk assessment or inspections in the seller's possession and notify the buyer of any known lead-based pipe hazards. A risk assessment or inspection for possible lead-based pipe hazards is recommended prior to purchase.”.

(4) COMPLIANCE ASSURANCE.—Whenever a seller or lessor has entered into a contract with an agent for the purpose of selling or leasing a unit of housing, the regulations promulgated under this section shall require the agent, on behalf of the seller or lessor, to ensure compliance with the requirements of this section.

(b) Promulgation.—A suit may be brought against the Secretary of Housing and Urban Development and the Administrator of the Environmental Protection Agency under section 20 of the Toxic Substances Control Act to compel promulgation of the regulations required under this section and the Federal district court shall have jurisdiction to order such promulgation.

(c) Penalties for violations.—

(1) MONETARY PENALTY.—Any person who knowingly violates any provision of this section shall be subject to civil money penalties in accordance with the provisions of section 102 of the Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3545).

(2) ACTION BY SECRETARY.—The Secretary is authorized to take such lawful action as may be necessary to enjoin any violation of this section.

(3) CIVIL LIABILITY.—Any person who knowingly violates the provisions of this section shall be jointly and severally liable to the purchaser or lessee in an amount equal to 3 times the amount of damages incurred by such individual.

(4) COSTS.—In any civil action brought for damages, the appropriate court may award court costs to the party commencing such action, together with reasonable attorney fees and any expert witness fees, if that party prevails.

(5) PROHIBITED ACT.—It shall be a prohibited act under section 409 of the Toxic Substances Control Act for any person to fail or refuse to comply with a provision of this section or with any rule or order issued under this section. For purposes of enforcing this section under the Toxic Substances Control Act, the penalty for each violation applicable under section 16 of that Act shall not be more than $10,000.

(d) Validity of contracts and liens.—Nothing in this section shall affect the validity or enforceability of any sale or contract for the purchase and sale or lease of any interest in residential real property or any loan, loan agreement, mortgage, or lien made or arising in connection with a mortgage loan, nor shall anything in this section create a defect in title.

(e) Effective date.—The regulations under this section shall take effect 3 years after the date of the enactment of this Act.

(a) Regulations.—

(1) IN GENERAL.—Not later than 18 months after the date of the enactment of this Act, the Administrator of the Environmental Protection Agency (in this title referred to as the “Administrator”) shall, in consultation with the Secretary of Labor, the Secretary of Housing and Urban Development, and the Secretary of Health and Human Services (acting through the Director of the National Institute for Occupational Safety and Health), promulgate final regulations governing lead-based pipe activities to ensure that individuals engaged in such activities are properly trained; that training programs are accredited; and that contractors are engaged in such activities are certified. Such regulations shall contain standards for performing lead-based pipe activities, taking into account reliability, effectiveness, and safety. Such regulations shall require that all risk assessment, inspection, and abatement activities performed in housing shall be performed by certified contractors.

(2) ACCREDITATION OF TRAINING PROGRAMS.—Final regulations shall contain specific requirements for the accreditation of lead-based pipe activities training programs for workers, supervisors, inspectors and planners, and other individuals involved in lead-based pipe activities, including, but not limited to, each of the following:

(A) Minimum requirements for the accreditation of training providers.

(B) Minimum training curriculum requirements.

(C) Minimum training hour requirements.

(D) Minimum hands-on training requirements.

(E) Minimum trainee competency and proficiency requirements.

(F) Minimum requirements for training program quality control.

(3) ACCREDITATION AND CERTIFICATION FEES.—The Administrator (or the State in the case of an authorized State program) shall impose a fee on—

(A) persons operating training programs accredited under this title; and

(B) lead-based pipe activities contractors certified in accordance accreditation with paragraph (1).

The fees shall be established at such level as is necessary to cover the costs of administering and enforcing the standards and regulations under this section which are applicable to such programs and contractors. The fee shall not be imposed on any State, local government, or nonprofit training program. The Administrator (or the State in the case of an authorized State program) may waive the fee for lead-based pipe activities contractors for the purpose of training their own employees.

(b) Lead-Based pipe activities.—For purposes of this title, the term “lead-based pipe activities” means—

(1) in the case of housing, risk assessment, inspection, and abatement; and

(2) in the case of any public building constructed before 1986, commercial building, or any other structure, evaluation and abatement of lead-based pipes and lead-based pipe hazards.

(c) Renovation and remodeling.—

(1) GUIDELINES.—In order to reduce the risk of exposure to lead in connection with renovation and remodeling of housing, public buildings, and commercial buildings, the Administrator shall, within 18 months after the enactment of this section, promulgate guidelines for the conduct of such renovation and remodeling activities which may create a risk of exposure to dangerous levels of lead. The Administrator shall disseminate such guidelines to persons engaged in such renovation and remodeling through hardware stores, employee organizations, trade groups, State and local agencies, and through other appropriate means.

(2) STUDY OF CERTIFICATION.—The Administrator shall conduct a study of the extent to which persons engaged in various types of renovation and remodeling activities in housing, public buildings, and commercial buildings are exposed to lead in the conduct of such activities or disturb lead and create a lead-based pipe hazard on a regular or occasional basis. The Administrator shall complete such study and publish the results thereof within 30 months after the enactment of this section.

(3) CERTIFICATION DETERMINATION.—Within 4 years after the enactment of this section, the Administrator shall revise the regulations to apply the regulations to renovation or remodeling activities in housing and commercial buildings that create lead-based pipe hazards. In determining which contractors are engaged in such activities, the Administrator shall utilize the results of the study and consult with the representatives of labor organizations, lead-based pipe activities contractors, persons engaged in remodeling and renovation, experts in lead health effects, and others. If the Administrator determines that a category of contractors engaged in renovation or remodeling does not require certification, the Administrator shall publish an explanation of the basis for that determination.

Within 18 months after the enactment of this Act, the Administrator shall promulgate regulations which shall identify for purposes of this title lead-based pipe hazards.

(a) Approval.—Any State which seeks to administer and enforce the standards, regulations, or other requirements established may, after notice and opportunity for public hearing, develop and submit to the Administrator an application, in such form as the Administrator shall require, for authorization of such a State program. Any such State may also certify to the Administrator at the time of submitting such program that the State program meets the requirements of paragraphs (1) and (2) of subsection (b). Upon submission of such certification, the State program shall be deemed to be authorized under this section, and shall apply in such State in lieu of the corresponding Federal program as the case may be, until such time as the Administrator disapproves the program or withdraws the authorization.

(b) Approval or disapproval.—Within 180 days following submission of an application, the Administrator shall approve or disapprove the application. The Administrator may approve the application only if after notice and after opportunity for public hearing, the Administrator finds that—

(1) the State program is at least as protective of human health and the environment as the Federal program as the case may be; and

(2) such State program provides adequate enforcement.

Upon authorization of a date program under this section, it shall be unlawful for any person to violate or fail or refuse to comply with any requirement of such program.

(c) Withdrawal of authorization.—If a State is not administering and enforcing a program authorized under this section in compliance with standards, regulations, and other requirements of this title, the Administrator shall so notify the State and, if corrective action is not completed within a reasonable time, not to exceed 180 days, the Administrator shall withdraw authorization of such program and establish a Federal program pursuant to this title.

(d) Model State program.—Within 18 months after the enactment of this title, the Administrator shall promulgate a model State program which may be adopted by any State which seeks to administer and enforce a State program under this title. Such model program shall, to the extent practicable, encourage States to utilize existing State and local certification and accreditation programs and procedures. Such program shall encourage reciprocity among the States with respect to the certification.

(e) Other State requirements.—Nothing in this title shall be construed to prohibit any State or political subdivision thereof from imposing any requirements which are more stringent than those imposed by this title.

(f) State and local certification.—The regulations under this title shall, to the extent appropriate, encourage States to seek program authorization and to use existing State and local certification and accreditation procedures, except that a State or local government shall not require more than 1 certification under this section for any lead-based pipe activities contractor to carry out lead-based pipe activities in the State or political subdivision thereof.

(g) Grants to States.—The Administrator is authorized to make grants to States to develop and carry out authorized State programs under this section. The grants shall be subject to such terms and conditions as the Administrator may establish to further the purposes of this title.

(h) Enforcement by Administrator.—If a State does not have a State program authorized under this section and in effect by the date which is 2 years after promulgation of the regulations the Administrator shall, by such date, establish a Federal program for such State.

(a) Program To promote lead exposure abatement.—The Administrator, in cooperation with other appropriate Federal departments and agencies, shall conduct a comprehensive program to promote safe, effective, and affordable monitoring, detection, and abatement of lead-based pipe and other lead exposure hazards.

(b) Standards for environmental sampling laboratories.—

(1) MINIMUM PERFORMANCE STANDARDS.—The Administrator shall establish protocols, criteria, and minimum performance standards for laboratory analysis of lead in paint pipes, taps, and water. Within 2 years after the enactment of this Act, the Administrator, in consultation with the Secretary of Health and Human Services, shall establish a program to certify laboratories as qualified to test substances for lead content unless the Administrator determines, by the date specified in this paragraph, that effective voluntary accreditation programs are in place and operating on a nationwide basis at the time of such determination. To be certified under such program, a laboratory shall, at a minimum, demonstrate an ability to test substances accurately for lead content.

(2) PUBLIC INFORMATION.—Not later than 24 months after the date of the enactment of this section, and annually thereafter, the Administrator shall publish and make available to the public a list of certified or accredited environmental sampling laboratories.

(3) CERTIFICATION PROGRAM.—If the Administrator determines that effective voluntary accreditation programs are in place for environmental sampling laboratories, the Administrator shall review the performance and effectiveness of such programs within 3 years after such determination. If, upon such review, the Administrator determines that the voluntary accreditation programs are not effective in assuring the quality and consistency of laboratory analyses, the Administrator shall, not more than 12 months thereafter, establish a certification program that meets the requirements of paragraph (1).

(c) Exposure studies.—

(1) CHILDREN.—The Secretary of Health and Human Services (in this subsection referred to as the “Secretary”), acting through the Director of the Centers for Disease Control (CDC), and the Director of the National Institute of Environmental Health Sciences, shall jointly conduct a study of the sources of lead exposure in children who have elevated blood lead levels (or other indicators of elevated lead body burden), as defined by the Director of the Centers for Disease Control.

(2) WATER.—The Secretary, in consultation with the Director of the National Institute for Occupational Safety and Health, shall conduct a comprehensive study of means to reduce hazardous occupational lead abatement exposures in water. This study shall include, at a minimum, each of the following:

(A) Surveillance and intention capability in the States to identify and prevent hazardous exposures to lead abatement workers.

(B) Demonstration of lead abatement control methods and devices and work practices to identify and prevent hazardous lead exposures in the workplace.

(C) Evaluation, in consultation with the National Institute of Environmental Health Sciences, of health effects of low and high levels of occupational lead exposures through fluids on reproductive, neurological, renal, and cardiovascular health.

(D) Identification of high-risk occupational settings to which prevention activities and resources should be targeted.

(E) A study assessing the potential exposures and risks from lead to janitorial and custodial workers.

(3) CONTRIBUTION TO ELEVATED LEAD BODY BURDEN.—The studies described in paragraphs (1) and (2) shall as appropriate, examine the relative contributions to elevated lead body burden from each of the following:

(A) Drinking water.

(B) Food.

(C) Occupational exposures, and other exposures that the Secretary determines to be appropriate.

(4) REPORT.—Not later than 30 months after the date of the enactment of this section, the Secretary shall submit a report to the Congress concerning the studies described in paragraphs (1) and (2).

(d) Public education.—

(1) IN GENERAL.—The Administrator, in conjunction with the Secretary of Health and Human Services, acting through the Director of the Agency for Toxic Substances and Disease Registry, and in conjunction with the Secretary of Housing and Urban Development, shall sponsor public education and outreach activities to increase public awareness of—

(A) the scope and severity of lead poisoning from household sources, particularly lead-based pipes;

(B) potential exposure to sources of lead in schools and childhood day care centers, particularly lead-based pipes;

(C) the implications of exposures for men and women, particularly those of childbearing age;

(D) the need for careful, quality, abatement and management actions;

(E) the need for universal screening of children;

(F) other components of a lead poisoning prevention program;

(G) the health consequences of lead exposure resulting from lead-based pipe hazards;

(H) risk assessment and inspection methods for lead-based pipe hazards; and

(I) measures to reduce the risk of lead exposure from lead-based pipes.

(2) TARGETED AUDIENCES.—The activities described in paragraph (1) shall be designed to provide educational services and information to—

(A) health professionals;

(B) the general public, with emphasis on parents of young children;

(C) homeowners, landlords, and tenants;

(D) consumers of home improvement products;

(E) the residential real estate industry; and

(F) the home renovation industry.

(e) Technical assistance.—

(1) CLEARINGHOUSE.—Not later than 6 months after the enactment of this Act, the Administrator shall establish, in consultation with the Secretary of Housing and Urban Development and the Director of the Centers for Disease Control, a National Clearinghouse on Childhood Lead Poisoning (in this section referred to as the “Clearinghouse”). The Clearinghouse shall—

(A) collect, evaluate, and disseminate current information on the assessment and reduction of lead-based pipe hazards, adverse health effects, sources of exposure, detection and risk assessment methods, environmental hazards abatement, and clean-up standards;

(B) maintain a rapid-alert system to inform certified lead-based pipe activities contractors of significant developments in research related to lead-based paint hazards; and

(C) perform any other duty that the Administration determines necessary to achieve the purposes of this Act.

(2) HOTLINE.—Not later than 6 months after the enactment of this subsection, the Administrator, in cooperation with other Federal agencies and with State and local governments, shall establish a single lead-based pipe hazard hotline to provide the public with answers to questions about lead poison in prevention and referrals to the Clearinghouse for technical information.

(a) In general.—Not later than 2 years after the enactment of this Act, after notice and opportunity for comment, the Administrator of the Environmental Protection Agency, in consultation with the Secretary of Housing and Urban Development and with the Secretary of Health and Human Services, shall publish, and from time to time revise, a lead hazard information pamphlet. The pamphlet shall—

(1) contain information regarding the health risks associated with exposure to lead;

(2) provide information on the presence of lead-based pipe hazards in federally assisted, federally owned, and other housing;

(3) describe the risks of lead exposure for children under 6 years of age, pregnant women, women of childbearing age, persons involved in home renovation, and others residing in a dwelling with lead-based pipe hazards;

(4) describe the risks of renovation in a dwelling with lead-based pipe hazards;

(5) provide information on approved methods for evaluating and reducing lead-based pipe hazards and their effectiveness in identifying, reducing, eliminating, or preventing exposure to lead-based pipe hazards;

(6) advise persons how to obtain a list of contractors certified pursuant to this title in lead-based pipe hazard evaluation and reduction in the area in which the pamphlet is to be used;

(7) state that a risk assessment or inspection for lead-based pipe is recommended prior to the purchase, lease, or renovation of housing;

(8) state that certain State and local laws impose additional requirements related to lead-based pipe in housing and provide a listing of Federal, State, and local agencies in each State, including address and telephone number, that can provide information about applicable laws and available govern-mental and private assistance and financing; and

(9) provide such other information about environmental hazards associated with residential real property as the Administrator deems appropriate.

(b) Renovation of housing.—Within 2 years after the enactment of this section, the Administrator shall promulgate regulations under this subsection to require each person who performs for compensation a renovation of housing to provide a lead hazard information pamphlet to the owner and occupant of such housing prior to commencing the renovation.

The regulations of the Administrator under this title shall include such recordkeeping and reporting requirements as may be necessary to insure the effective implementation of this title. The regulations may be amended from time to time as necessary.

Each department, agency, and instrumentality of executive, legislative, and judicial branches of the Federal Government (1) having jurisdiction over any property or facility, or (2) engaged in any activity resulting, or which may result, in a lead-based pipe hazard, and each officer, agent, or employee thereof, shall be subject to, and comply with, all Federal, State, interstate, and local requirements, both substantive and procedural (including any requirement for certification, licensing, recordkeeping, or reporting or any provisions for injunctive relief and such sanctions as may be imposed by a court to enforce such relief respecting lead-based pipe, lead-based pipe activities, and lead-based pipe hazards in the same manner, and to the same extent as any nongovernmental entity is subject to such requirements, including the payment of reasonable service charges). The Federal, State, interstate, and local substantive and procedural requirements referred to in this subsection include, but are not limited to, all administrative orders and all civil and administrative penalties and fines regardless of whether such penalties or fines are punitive or coercive in nature, or whether imposed for isolated, intermittent or continuing violations. The United States hereby expressly waives any immunity otherwise applicable to the United States with respect to any such substantive or procedural requirement (including, but not limited to, any injunctive relief, administrative order, or civil or administrative penalty referred to in the preceding sentence, or reasonable service charge). The reasonable service charges referred to in this section include, but are not limited to, fees or charges assessed for certification and licensing, as well as any other nondiscriminatory charges that are assessed in connection with a Federal, State, interstate, or local lead-based pipe, lead-based pipe activities, or lead-based pipe hazard activities program. No agent, employee, or officer of the United States shall be personally liable for any civil penalty under any Federal, State, interstate, or local law relating to lead-based pipe, lead-based pipe activities, or lead-based pipe hazards with respect to any act or omission within the scope of his official duties.

It shall be unlawful for any person to fail or refuse to comply with a provision of this title or with any rule or order issued under this title.

Nothing in this title shall affect the authority of other appropriate Federal agencies to establish or enforce any requirements which are at least as stringent as those established pursuant to this title.

(a) Applicability.—This section applies to the promulgation or revision of any regulation issued under this title.

(b) Rulemaking docket.—Not later than the date of proposal of an action to which this section applies, the Administrator shall establish a rulemaking docket for such action (in this subsection referred to as a “rule”). Whenever a rule applies only within a particular State, a second (identical) docket shall be established in the appropriate regional office of the Environmental Protection Agency.

(c) Inspection and copying.—

(1) PUBLIC AVAILABILITY.—The rulemaking docket required under subsection (b) shall be open for inspection by the public at reasonable times specified in the notice of proposed rulemaking. Any person may copy documents contained in the docket. The Administrator shall provide copying facilities which may be used at the expense of the person seeking copies, but the Administrator may waive or reduce such expenses in such instances as the public interest requires. Any person may request copies by mail if the person pays the expenses, including personnel costs to do the copying.

(2) DOCKET.—

(A) COMMENTS AND INFORMATION.—Promptly upon receipt by the agency, all written comments and documentary information on the proposed rule received from any person for inclusion in the docket during the comment period shall be placed in the docket. The transcript of public hearing if any, on the proposed rule shall also be included in the docket promptly upon receipt from the person who transcribed such hearings. All documents which become available after the proposed rule has been published and which the Administrator determines are of central relevance to the rulemaking shall be placed in the docket as soon as possible after their availability.

(B) DRAFTS OF RULES.—The drafts of proposed rules submitted by the Administrator to the Office of Management and Budget for any interagency review process prior to proposal of any such rule, all documents accompanying such drafts, and all written comments thereon by other agencies and all written responses to such written comments by the Administrator shall be placed in the docket no later than the date of proposal of the rule. The drafts of the final rule submitted for such review process prior to promulgation and all such written comments thereto all documents accompanying such drafts, and written responses thereto shall be placed in the docket no later than the date of promulgation.

(d) Explanation.—

(1) MAJOR CHANGES.—The promulgated rule shall be accompanied by an explanation of the reasons for any major changes in the promulgated rule from the proposed rule.

(2) RESPONSES.—The promulgated rule shall also be accompanied by a response to each of the significant comments, criticisms, and new data submitted in written or oral presentations during the comment period.

(3) LIMITATION.—The promulgated rule may not be based (in part or whole) on any information or data which has not been placed in the docket as of the date of such promulgation.

(e) Effective date.—The requirements of this section shall take effect with respect to any rule the proposal of which occurs after 90 days after the date of the enactment of this Act.

There is authorized to be appropriated for grants under section 101 of this Act and section 1011 of the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4852) $9,500,000,000 for each of fiscal years 2022 through 2031.

There is authorized to be appropriated such sums as may be necessary for each of fiscal years 2022 through 2031 to carry out—

(1) title II of this Act;

(2) title IV of the Toxic Substances Control Act (15 U.S.C. 2681 et seq.); and

(3) such other lead hazard reduction activities as the Administrator of the Environmental Protection Agency is authorized under law to undertake, including activities under the Safe Drinking Water Act (42 U.S.C. 300f et seq.).

(a) Modification to election To include partnership interest in gross income in year of transfer.—Subsection (c) of section 83 of the Internal Revenue Code of 1986 is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph:

“(4) PARTNERSHIP INTERESTS.—Except as provided by the Secretary—

“(A) IN GENERAL.—In the case of any transfer of an interest in a partnership in connection with the provision of services to (or for the benefit of) such partnership—

“(i) the fair market value of such interest shall be treated for purposes of this section as being equal to the amount of the distribution which the partner would receive if the partnership sold (at the time of the transfer) all of its assets at fair market value and distributed the proceeds of such sale (reduced by the liabilities of the partnership) to its partners in liquidation of the partnership, and

“(ii) the person receiving such interest shall be treated as having made the election under subsection (b)(1) unless such person makes an election under this paragraph to have such subsection not apply.

“(B) ELECTION.—The election under subparagraph (A)(ii) shall be made under rules similar to the rules of subsection (b)(2).”.

(b) Effective date.—The amendments made by this section shall apply to interests in partnerships transferred after the date of the enactment of this Act.

(a) In general.—Part I of subchapter K of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

(b) Application of section 751 to indirect dispositions of investment services partnership interests.—

(1) IN GENERAL.—Subsection (a) of section 751 is amended by striking “or” at the end of paragraph (1), by inserting “or” at the end of paragraph (2), and by inserting after paragraph (2) the following new paragraph:

“(3) investment services partnership interests held by the partnership,”.

(2) CERTAIN DISTRIBUTIONS TREATED AS SALES OR EXCHANGES.—Subparagraph (A) of section 751(b)(1) is amended by striking “or” at the end of clause (i), by inserting “or” at the end of clause (ii), and by inserting after clause (ii) the following new clause:

“(iii) investment services partnership interests held by the partnership,”.

(3) APPLICATION OF SPECIAL RULES IN THE CASE OF TIERED PARTNERSHIPS.—Subsection (f) of section 751 is amended—

(A) by striking “or” at the end of paragraph (1), by inserting “or” at the end of paragraph (2), and by inserting after paragraph (2) the following new paragraph:

“(3) an investment services partnership interest held by the partnership,”, and

(B) by striking “partner.” and inserting “partner (other than a partnership in which it holds an investment services partnership interest).”.

(4) INVESTMENT SERVICES PARTNERSHIP INTERESTS; QUALIFIED CAPITAL INTERESTS.—Section 751 is amended by adding at the end the following new subsection:

“(g) Investment services partnership interests.—For purposes of this section—

“(1) IN GENERAL.—The term ‘investment services partnership interest’ has the meaning given such term by section 710(c).

“(2) ADJUSTMENTS FOR QUALIFIED CAPITAL INTERESTS.—The amount to which subsection (a) applies by reason of paragraph (3) thereof shall not include so much of such amount as is attributable to any portion of the investment services partnership interest which is a qualified capital interest (determined under rules similar to the rules of section 710(d)).

“(3) EXCEPTION FOR PUBLICLY TRADED PARTNERSHIPS.—Except as otherwise provided by the Secretary, in the case of an exchange of an interest in a publicly traded partnership (as defined in section 7704) to which subsection (a) applies—

“(A) this section shall be applied without regard to subsections (a)(3), (b)(1)(A)(iii), and (f)(3), and

“(B) such partnership shall be treated as owning its proportionate share of the property of any other partnership in which it is a partner.

“(4) RECOGNITION OF GAINS.—Any gain with respect to which subsection (a) applies by reason of paragraph (3) thereof shall be recognized notwithstanding any other provision of this title.

“(5) COORDINATION WITH INVENTORY ITEMS.—An investment services partnership interest held by the partnership shall not be treated as an inventory item of the partnership.

“(6) PREVENTION OF DOUBLE COUNTING.—Under regulations or other guidance prescribed by the Secretary, subsection (a)(3) shall not apply with respect to any amount to which section 710 applies.

“(7) VALUATION METHODS.—The Secretary shall prescribe regulations or other guidance which provide the acceptable methods for valuing investment services partnership interests for purposes of this section.”.

(c) Treatment for purposes of section 7704.—Subsection (d) of section 7704 of such Code is amended by adding at the end the following new paragraph:

“(6) INCOME FROM CERTAIN CARRIED INTERESTS NOT QUALIFIED.—

“(A) IN GENERAL.—Specified carried interest income shall not be treated as qualifying income.

“(B) SPECIFIED CARRIED INTEREST INCOME.—For purposes of this paragraph—

“(i) IN GENERAL.—The term ‘specified carried interest income’ means—

“(I) any item of income or gain allocated to an investment services partnership interest (as defined in section 710(c)) held by the partnership,

“(II) any gain on the disposition of an investment services partnership interest (as so defined) or a partnership interest to which (in the hands of the partnership) section 751 applies, and

“(III) any income or gain taken into account by the partnership under subsection (b)(4) or (e) of section 710.

“(ii) EXCEPTION FOR QUALIFIED CAPITAL INTERESTS.—A rule similar to the rule of section 710(d) shall apply for purposes of clause (i).

“(C) COORDINATION WITH OTHER PROVISIONS.—Subparagraph (A) shall not apply to any item described in paragraph (1)(E) (or so much of paragraph (1)(F) as relates to paragraph (1)(E)).

“(D) SPECIAL RULES FOR CERTAIN PARTNERSHIPS.—

“(i) CERTAIN PARTNERSHIPS OWNED BY REAL ESTATE INVESTMENT TRUSTS.—Subparagraph (A) shall not apply in the case of a partnership which meets each of the following requirements:

“(I) Such partnership is treated as publicly traded under this section solely by reason of interests in such partnership being convertible into interests in a real estate investment trust which is publicly traded.

“(II) Fifty percent or more of the capital and profits interests of such partnership are owned, directly or indirectly, at all times during the taxable year by such real estate investment trust (determined with the application of section 267(c)).

“(III) Such partnership meets the requirements of paragraphs (2), (3), and (4) of section 856(c).

“(ii) CERTAIN PARTNERSHIPS OWNING OTHER PUBLICLY TRADED PARTNERSHIPS.—Subparagraph (A) shall not apply in the case of a partnership which meets each of the following requirements:

“(I) Substantially all of the assets of such partnership consist of interests in one or more publicly traded partnerships (determined without regard to subsection (b)(2)).

“(II) Substantially all of the income of such partnership is ordinary income or section 1231 gain (as defined in section 1231(a)(3)).

“(E) TRANSITIONAL RULE.—Subparagraph (A) shall not apply to any taxable year of the partnership beginning before the date which is 10 years after the date of the enactment of this paragraph.”.

(d) Imposition of penalty on underpayments.—

(1) IN GENERAL.—Subsection (b) of section 6662 of such Code is amended by inserting after paragraph (7) the following new paragraph:

“(8) The application of section 710(e) or the regulations or other guidance prescribed under section 710(g) to prevent the avoidance of the purposes of section 710.”.

(2) AMOUNT OF PENALTY.—

(A) IN GENERAL.—Section 6662 of such Code is amended by adding at the end the following new subsection:

“(k) Increase in penalty in case of property transferred for investment management services.—In the case of any portion of an underpayment to which this section applies by reason of subsection (b)(8), subsection (a) shall be applied with respect to such portion by substituting ‘40 percent’ for ‘20 percent’.”.

(B) CONFORMING AMENDMENT.—Subparagraph (B) of section 6662A(e)(2) of such Code is amended by striking “or (i)” and inserting “, (i), or (k)”.

(3) SPECIAL RULES FOR APPLICATION OF REASONABLE CAUSE EXCEPTION.—Subsection (c) of section 6664 is amended—

(A) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively;

(B) by striking “paragraph (3)” in paragraph (5)(A), as so redesignated, and inserting “paragraph (4)”; and

(C) by inserting after paragraph (2) the following new paragraph:

“(3) SPECIAL RULE FOR UNDERPAYMENTS ATTRIBUTABLE TO INVESTMENT MANAGEMENT SERVICES.—

“(A) IN GENERAL.—Paragraph (1) shall not apply to any portion of an underpayment to which section 6662 applies by reason of subsection (b)(8) unless—

“(i) the relevant facts affecting the tax treatment of the item are adequately disclosed,

“(ii) there is or was substantial authority for such treatment, and

“(iii) the taxpayer reasonably believed that such treatment was more likely than not the proper treatment.

“(B) RULES RELATING TO REASONABLE BELIEF.—Rules similar to the rules of subsection (d)(3) shall apply for purposes of subparagraph (A)(iii).”.

(e) Income and loss from investment services partnership interests taken into account in determining net earnings from self-Employment.—

(1) INTERNAL REVENUE CODE.—

(A) IN GENERAL.—Section 1402(a) of such Code is amended by striking “and” at the end of paragraph (16), by striking the period at the end of paragraph (17) and inserting “; and”, and by inserting after paragraph (17) the following new paragraph:

“(18) notwithstanding the preceding provisions of this subsection, in the case of any individual engaged in the trade or business of providing services described in section 710(c)(2) with respect to any entity, investment services partnership income or loss (as defined in subsection (m)) of such individual with respect to such entity shall be taken into account in determining the net earnings from self-employment of such individual.”.

(B) INVESTMENT SERVICES PARTNERSHIP INCOME OR LOSS.—Section 1402 of such Code is amended by adding at the end the following new subsection:

“(m) Investment services partnership income or loss.—For purposes of subsection (a)—

“(1) IN GENERAL.—The term ‘investment services partnership income or loss’ means, with respect to any investment services partnership interest (as defined in section 710(c)) or disqualified interest (as defined in section 710(e)), the net of—

“(A) the amounts treated as ordinary income or ordinary loss under subsections (b) and (e) of section 710 with respect to such interest,

“(B) all items of income, gain, loss, and deduction allocated to such interest, and

“(C) the amounts treated as realized from the sale or exchange of property other than a capital asset under section 751 with respect to such interest.

“(2) EXCEPTION FOR QUALIFIED CAPITAL INTERESTS.—A rule similar to the rule of section 710(d) shall apply for purposes of applying paragraph (1)(B).”.

(2) SOCIAL SECURITY ACT.—Section 211(a) of the Social Security Act is amended by striking “and” at the end of paragraph (15), by striking the period at the end of paragraph (16) and inserting “; and”, and by inserting after paragraph (16) the following new paragraph:

“(17) Notwithstanding the preceding provisions of this subsection, in the case of any individual engaged in the trade or business of providing services described in section 710(c)(2) of the Internal Revenue Code of 1986 with respect to any entity, investment services partnership income or loss (as defined in section 1402(m) of such Code) shall be taken into account in determining the net earnings from self-employment of such individual.”.

(f) Separate accounting by partner.—Section 702(a) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of paragraph (7), by striking the period at the end of paragraph (8) and inserting “, and”, and by inserting after paragraph (8) the following:

“(9) any amount treated as ordinary income or loss under subsection (a), (b), or (e) of section 710.”.

(g) Conforming amendments.—

(1) Subsection (d) of section 731 of such Code is amended by inserting “section 710(b)(4) (relating to distributions of partnership property),” after “to the extent otherwise provided by”.

(2) Section 741 of such Code is amended by inserting “or section 710 (relating to special rules for partners providing investment management services to partnerships)” before the period at the end.

(3) The table of sections for part I of subchapter K of chapter 1 of such Code is amended by adding at the end the following new item:

“Sec. 710. Special rules for partners providing investment management services to partnerships.”.

(4) Part IV of subchapter O of chapter 1 of such Code is amended by striking section 1061, and the table of sections for such part is amended by striking the item relating to section 1061.

(h) Effective date.—

(1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.

(2) PARTNERSHIP TAXABLE YEARS WHICH INCLUDE EFFECTIVE DATE.—In applying section 710(a) of the Internal Revenue Code of 1986 (as added by this section) in the case of any partnership taxable year which includes the date of the enactment of this Act, the amount of the net capital gain referred to in such section shall be treated as being the lesser of the net capital gain for the entire partnership taxable year or the net capital gain determined by only taking into account items attributable to the portion of the partnership taxable year which is after such date.

(3) DISPOSITIONS OF PARTNERSHIP INTERESTS.—

(A) IN GENERAL.—Section 710(b) of such Code (as added by this section) shall apply to dispositions and distributions after the date of the enactment of this Act.

(B) INDIRECT DISPOSITIONS.—The amendments made by subsection (b) shall apply to transactions after the date of the enactment of this Act.

(4) OTHER INCOME AND GAIN IN CONNECTION WITH INVESTMENT MANAGEMENT SERVICES.—Section 710(e) of such Code (as added by this section) shall take effect on the date of the enactment of this Act.

(a) In general.—Section 2010(c)(3) of the Internal Revenue Code of 1986 is amended by striking subparagraph (C).

(b) Effective date.—The amendments made by this section shall apply to estates of decedents dying and gifts made after the date of the enactment of this Act.