HouseH.R. 9837119th Congress
GET THE LEAD OUT Act of 2026
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9837 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 9837
To eliminate lead-based pipe and tap hazards in housing, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 22, 2026
Ms. Brown (for herself and Ms. Tlaib) introduced the following bill;
which was referred to the Committee on Energy and Commerce, and in
addition to the Committees on Financial Services, and Ways and Means,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
_______________________________________________________________________
A BILL
To eliminate lead-based pipe and tap hazards in housing, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Grants for
Eliminating the Toxic Hazard of Environmental Lead in Our Towns Act of
2026'' or the ``GET THE LEAD OUT Act of 2026''.
(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.
TITLE I--LEAD-BASED PIPE HAZARD REDUCTION
Sec. 101. Grants for lead-based pipe hazard reduction in housing.
Sec. 102. Evaluation and reduction of lead-based pipe hazards in
federally assisted housing.
Sec. 103. Comprehensive housing affordability strategies.
Sec. 104. Task force on lead-based pipe hazard reduction and financing.
Sec. 105. National consultation on lead-based pipe hazard reduction.
Sec. 106. Guidelines for lead-based pipe hazard evaluation and
reduction activities.
Sec. 107. Disclosure of information concerning lead upon transfer of
residential property.
TITLE II--LEAD EXPOSURE REDUCTION
Sec. 201. Lead-based pipe activities training and certification.
Sec. 202. Identification of dangerous levels of lead.
Sec. 203. Authorized State programs.
Sec. 204. Lead abatement and measurement.
Sec. 205. Lead hazard information pamphlet.
Sec. 206. Regulations.
Sec. 207. Control of lead-based pipe hazards at Federal facilities.
Sec. 208. Prohibited Acts.
Sec. 209. Relationship to other Federal law.
Sec. 210. General provisions relating to administrative proceedings.
TITLE III--AUTHORIZATION OF APPROPRIATIONS FOR LEAD HAZARD REDUCTION
Sec. 301. HUD grants for lead hazards reduction in housing.
Sec. 302. EPA funding for lead exposure reduction.
TITLE IV--REVENUE PROVISIONS
Sec. 401. Partnership interests transferred in connection with
performance of services.
Sec. 402. Special rules for partners providing investment management
services to partnerships.
Sec. 403. Return to pre-2018 estate and gift tax basic exclusion
amount.
SEC. 2. PURPOSES.
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.
SEC. 3. DEFINITIONS.
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.
TITLE I--LEAD-BASED PIPE HAZARD REDUCTION
SEC. 101. GRANTS FOR LEAD-BASED PIPE HAZARD REDUCTION IN HOUSING.
(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 2026 and 2027, 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 2026 through 2035.
(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.
SEC. 102. EVALUATION AND REDUCTION OF LEAD-BASED PIPE HAZARDS IN
FEDERALLY ASSISTED HOUSING.
(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 2026.''.
(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 2026.''.
(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 2026.''.
(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 2026;''; 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 2026.''.
(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 2026;''; 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 2026.''.
(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 2026;''; 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 2026.''.
(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 2026.''.
(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 2026''.
(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 2026''.
(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
2026''.
SEC. 103. COMPREHENSIVE HOUSING AFFORDABILITY STRATEGIES.
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 2026, 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.''.
SEC. 104. TASK FORCE ON LEAD-BASED PIPE HAZARD REDUCTION AND FINANCING.
(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 a 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.
SEC. 105. NATIONAL CONSULTATION ON LEAD-BASED PIPE HAZARD REDUCTION.
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.
SEC. 106. GUIDELINES FOR LEAD-BASED PIPE HAZARD EVALUATION AND
REDUCTION ACTIVITIES.
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.
SEC. 107. DISCLOSURE OF INFORMATION CONCERNING LEAD UPON TRANSFER OF
RESIDENTIAL PROPERTY.
(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.
TITLE II--LEAD EXPOSURE REDUCTION
SEC. 201. LEAD-BASED PIPE ACTIVITIES TRAINING AND CERTIFICATION.
(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.
SEC. 202. IDENTIFICATION OF DANGEROUS LEVELS OF LEAD.
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.
SEC. 203. AUTHORIZED STATE PROGRAMS.
(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.
SEC. 204. LEAD ABATEMENT AND MEASUREMENT.
(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.
SEC. 205. LEAD HAZARD INFORMATION PAMPHLET.
(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.
SEC. 206. REGULATIONS.
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.
SEC. 207. CONTROL OF LEAD-BASED PIPE HAZARDS AT FEDERAL FACILITIES.
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.
SEC. 208. PROHIBITED ACTS.
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.
SEC. 209. RELATIONSHIP TO OTHER FEDERAL LAW.
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.
SEC. 210. GENERAL PROVISIONS RELATING TO ADMINISTRATIVE PROCEEDINGS.
(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.
TITLE III--AUTHORIZATION OF APPROPRIATIONS FOR LEAD HAZARD REDUCTION
SEC. 301. HUD GRANTS FOR LEAD HAZARDS REDUCTION IN HOUSING.
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 2026 through 2035.
SEC. 302. EPA FUNDING FOR LEAD EXPOSURE REDUCTION.
There is authorized to be appropriated such sums as may be
necessary for each of fiscal years 2026 through 2035 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.).
TITLE IV--REVENUE PROVISIONS
SEC. 401. PARTNERSHIP INTERESTS TRANSFERRED IN CONNECTION WITH
PERFORMANCE OF SERVICES.
(a) Modification to Election To Include Partnership Interest in
Gross Income in Year of Transfer.--Subsection (c) of section 83 is
amended by redesignating paragraph (4) as paragraph (5) and by
inserting after paragraph (3) the following new paragraph:
``(4) Partnership interests.--Except as provided by the
Secretary--
``(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.
SEC. 402. SPECIAL RULES FOR PARTNERS PROVIDING INVESTMENT MANAGEMENT
SERVICES TO PARTNERSHIPS.
(a) In General.--Part I of subchapter K of chapter 1 is amended by
adding at the end the following new section:
``SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING INVESTMENT MANAGEMENT
SERVICES TO PARTNERSHIPS.
``(a) Treatment of Distributive Share of Partnership Items.--For
purposes of this title, in the case of an investment services
partnership interest--
``(1) In general.--Notwithstanding section 702(b)--
``(A) an amount equal to the net capital gain with
respect to such interest for any partnership taxable
year shall be treated as ordinary income, and
``(B) subject to the limitation of paragraph (2),
an amount equal to the net capital loss with respect to
such interest for any partnership taxable year shall be
treated as an ordinary loss.
``(2) Recharacterization of losses limited to
recharacterized gains.--The amount treated as ordinary loss
under paragraph (1)(B) for any taxable year shall not exceed
the excess (if any) of--
``(A) the aggregate amount treated as ordinary
income under paragraph (1)(A) with respect to the
investment services partnership interest for all
preceding partnership taxable years to which this
section applies, over
``(B) the aggregate amount treated as ordinary loss
under paragraph (1)(B) with respect to such interest
for all preceding partnership taxable years to which
this section applies.
``(3) Allocation to items of gain and loss.--
``(A) Net capital gain.--The amount treated as
ordinary income under paragraph (1)(A) shall be
allocated ratably among the items of long-term capital
gain taken into account in determining such net capital
gain.
``(B) Net capital loss.--The amount treated as
ordinary loss under paragraph (1)(B) shall be allocated
ratably among the items of long-term capital loss and
short-term capital loss taken into account in
determining such net capital loss.
``(4) Terms relating to capital gains and losses.--For
purposes of this section--
``(A) In general.--Net capital gain, long-term
capital gain, and long-term capital loss, with respect
to any investment services partnership interest for any
taxable year, shall be determined under section 1222,
except that such section shall be applied--
``(i) without regard to the
recharacterization of any item as ordinary
income or ordinary loss under this section,
``(ii) by only taking into account items of
gain and loss taken into account by the holder
of such interest under section 702 (other than
subsection (a)(9) thereof) with respect to such
interest for such taxable year, and
``(iii) by treating property which is taken
into account in determining gains and losses to
which section 1231 applies as capital assets
held for more than 1 year.
``(B) Net capital loss.--The term `net capital
loss' means the excess of the losses from sales or
exchanges of capital assets over the gains from such
sales or exchanges. Rules similar to the rules of
clauses (i) through (iii) of subparagraph (A) shall
apply for purposes of the preceding sentence.
``(5) Special rule for dividends.--Any dividend allocated
with respect to any investment services partnership interest
shall not be treated as qualified dividend income for purposes
of section 1(h).
``(6) Special rule for qualified small business stock.--
Section 1202 shall not apply to any gain from the sale or
exchange of qualified small business stock (as defined in
section 1202(c)) allocated with respect to any investment
services partnership interest.
``(b) Dispositions of Partnership Interests.--
``(1) Gain.--
``(A) In general.--Any gain on the disposition of
an investment services partnership interest shall be--
``(i) treated as ordinary income, and
``(ii) recognized notwithstanding any other
provision of this subtitle.
``(B) Gift and transfers at death.--In the case of
a disposition of an investment services partnership
interest by gift or by reason of death of the
taxpayer--
``(i) subparagraph (A) shall not apply,
``(ii) such interest shall be treated as an
investment services partnership interest in the
hands of the person acquiring such interest,
and
``(iii) any amount that would have been
treated as ordinary income under this
subsection had the decedent sold such interest
immediately before death shall be treated as an
item of income in respect of a decedent under
section 691.
``(2) Loss.--Any loss on the disposition of an investment
services partnership interest shall be treated as an ordinary
loss to the extent of the excess (if any) of--
``(A) the aggregate amount treated as ordinary
income under subsection (a) with respect to such
interest for all partnership taxable years to which
this section applies, over
``(B) the aggregate amount treated as ordinary loss
under subsection (a) with respect to such interest for
all partnership taxable years to which this section
applies.
``(3) Election with respect to certain exchanges.--
Paragraph (1)(A)(ii) shall not apply to the contribution of an
investment services partnership interest to a partnership in
exchange for an interest in such partnership if--
``(A) the taxpayer makes an irrevocable election to
treat the partnership interest received in the exchange
as an investment services partnership interest, and
``(B) the taxpayer agrees to comply with such
reporting and recordkeeping requirements as the
Secretary may prescribe.
``(4) Distributions of partnership property.--
``(A) In general.--In the case of any distribution
of property by a partnership with respect to any
investment services partnership interest held by a
partner, the partner receiving such property shall
recognize gain equal to the excess (if any) of--
``(i) the fair market value of such
property at the time of such distribution, over
``(ii) the adjusted basis of such property
in the hands of such partner (determined
without regard to subparagraph (C)).
``(B) Treatment of gain as ordinary income.--Any
gain recognized by such partner under subparagraph (A)
shall be treated as ordinary income to the same extent
and in the same manner as the increase in such
partner's distributive share of the taxable income of
the partnership would be treated under subsection (a)
if, immediately prior to the distribution, the
partnership had sold the distributed property at fair
market value and all of the gain from such disposition
were allocated to such partner. For purposes of
applying subsection (a)(2), any gain treated as
ordinary income under this subparagraph shall be
treated as an amount treated as ordinary income under
subsection (a)(1)(A).
``(C) Adjustment of basis.--In the case a
distribution to which subparagraph (A) applies, the
basis of the distributed property in the hands of the
distributee partner shall be the fair market value of
such property.
``(D) Special rules with respect to mergers,
divisions, and technical terminations.--In the case of
a taxpayer which satisfies requirements similar to the
requirements of subparagraphs (A) and (B) of paragraph
(3), this paragraph and paragraph (1)(A)(ii) shall not
apply to the distribution of a partnership interest if
such distribution is in connection with a contribution
(or deemed contribution) of any property of the
partnership to which section 721 applies pursuant to a
transaction described in paragraph (1)(B) or (2) of
section 708(b).
``(c) Investment Services Partnership Interest.--For purposes of
this section--
``(1) In general.--The term `investment services
partnership interest' means any interest in an investment
partnership acquired or held by any person in connection with
the conduct of a trade or business described in paragraph (2)
by such person (or any person related to such person). An
interest in an investment partnership held by any person--
``(A) shall not be treated as an investment
services partnership interest for any period before the
first date on which it is so held in connection with
such a trade or business,
``(B) shall not cease to be an investment services
partnership interest merely because such person holds
such interest other than in connection with such a
trade or business, and
``(C) shall be treated as an investment services
partnership interest if acquired from a related person
in whose hands such interest was an investment services
partnership interest.
``(2) Businesses to which this section applies.--A trade or
business is described in this paragraph if such trade or
business primarily involves the performance of any of the
following services with respect to assets held (directly or
indirectly) by one or more investment partnerships referred to
in paragraph (1):
``(A) Advising as to the advisability of investing
in, purchasing, or selling any specified asset.
``(B) Managing, acquiring, or disposing of any
specified asset.
``(C) Arranging financing with respect to acquiring
specified assets.
``(D) Any activity in support of any service
described in subparagraphs (A) through (C).
``(3) Investment partnership.--
``(A) In general.--The term `investment
partnership' means any partnership if, at the end of
any two consecutive calendar quarters ending after the
date of enactment of this section--
``(i) substantially all of the assets of
the partnership are specified assets
(determined without regard to any section 197
intangible within the meaning of section
197(d)), and
``(ii) less than 75 percent of the capital
of the partnership is attributable to qualified
capital interests which constitute property
held in connection with a trade or business of
the owner of such interest.
``(B) Look-through of certain wholly owned entities
for purposes of determining assets of the
partnership.--
``(i) In general.--For purposes of
determining the assets of a partnership under
subparagraph (A)(i)--
``(I) any interest in a specified
entity shall not be treated as an asset
of such partnership, and
``(II) such partnership shall be
treated as holding its proportionate
share of each of the assets of such
specified entity.
``(ii) Specified entity.--For purposes of
clause (i), the term `specified entity' means,
with respect to any partnership (hereafter
referred to as the upper-tier partnership), any
person which engages in the same trade or
business as the upper-tier partnership and is--
``(I) a partnership all of the
capital and profits interests of which
are held directly or indirectly by the
upper-tier partnership, or
``(II) a foreign corporation which
does not engage in a trade or business
in the United States and all of the
stock of which is held directly or
indirectly by the upper-tier
partnership.
``(C) Special rules for determining if property
held in connection with trade or business.--
``(i) In general.--Except as otherwise
provided by the Secretary, solely for purposes
of determining whether any interest in a
partnership constitutes property held in
connection with a trade or business under
subparagraph (A)(ii)--
``(I) a trade or business of any
person closely related to the owner of
such interest shall be treated as a
trade or business of such owner,
``(II) such interest shall be
treated as held by a person in
connection with a trade or business
during any taxable year if such
interest was so held by such person
during any 3 taxable years preceding
such taxable year, and
``(III) paragraph (5)(B) shall not
apply.
``(ii) Closely related persons.--For
purposes of clause (i)(I), a person shall be
treated as closely related to another person
if, taking into account the rules of section
267(c), the relationship between such persons
is described in--
``(I) paragraph (1) or (9) of
section 267(b), or
``(II) section 267(b)(4), but
solely in the case of a trust with
respect to which each current
beneficiary is the grantor or a person
whose relationship to the grantor is
described in paragraph (1) or (9) of
section 267(b).
``(D) Antiabuse rules.--The Secretary may issue
regulations or other guidance which prevent the
avoidance of the purposes of subparagraph (A),
including regulations or other guidance which treat
convertible and contingent debt (and other debt having
the attributes of equity) as a capital interest in the
partnership.
``(E) Controlled groups of entities.--
``(i) In general.--In the case of a
controlled group of entities, if an interest in
the partnership received in exchange for a
contribution to the capital of the partnership
by any member of such controlled group would
(in the hands of such member) constitute
property held in connection with a trade or
business, then any interest in such partnership
held by any member of such group shall be
treated for purposes of subparagraph (A) as
constituting (in the hands of such member)
property held in connection with a trade or
business.
``(ii) Controlled group of entities.--For
purposes of clause (i), the term `controlled
group of entities' means a controlled group of
corporations as defined in section 1563(a)(1),
applied without regard to subsections (a)(4)
and (b)(2) of section 1563. A partnership or
any other entity (other than a corporation)
shall be treated as a member of a controlled
group of entities if such entity is controlled
(within the meaning of section 954(d)(3)) by
members of such group (including any entity
treated as a member of such group by reason of
this sentence).
``(F) Special rule for corporations.--For purposes
of this paragraph, in the case of a corporation, the
determination of whether property is held in connection
with a trade or business shall be determined as if the
taxpayer were an individual.
``(4) Specified asset.--The term `specified asset' means
securities (as defined in section 475(c)(2) without regard to
the last sentence thereof), real estate held for rental or
investment, interests in partnerships, commodities (as defined
in section 475(e)(2)), cash or cash equivalents, or options or
derivative contracts with respect to any of the foregoing.
``(5) Related persons.--
``(A) In general.--A person shall be treated as
related to another person if the relationship between
such persons is described in section 267(b) or 707(b).
``(B) Attribution of partner services.--Any service
described in paragraph (2) which is provided by a
partner of a partnership shall be treated as also
provided by such partnership.
``(d) Exception for Certain Capital Interests.--
``(1) In general.--In the case of any portion of an
investment services partnership interest which is a qualified
capital interest, all items of gain and loss (and any
dividends) which are allocated to such qualified capital
interest shall not be taken into account under subsection (a)
if--
``(A) allocations of items are made by the
partnership to such qualified capital interest in the
same manner as such allocations are made to other
qualified capital interests held by partners who do not
provide any services described in subsection (c)(2) and
who are not related to the partner holding the
qualified capital interest, and
``(B) the allocations made to such other interests
are significant compared to the allocations made to
such qualified capital interest.
``(2) Authority to provide exceptions to allocation
requirements.--To the extent provided by the Secretary in
regulations or other guidance--
``(A) Allocations to portion of qualified capital
interest.--Paragraph (1) may be applied separately with
respect to a portion of a qualified capital interest.
``(B) No or insignificant allocations to nonservice
providers.--In any case in which the requirements of
paragraph (1)(B) are not satisfied, items of gain and
loss (and any dividends) shall not be taken into
account under subsection (a) to the extent that such
items are properly allocable under such regulations or
other guidance to qualified capital interests.
``(C) Allocations to service providers' qualified
capital interests which are less than other
allocations.--Allocations shall not be treated as
failing to meet the requirement of paragraph (1)(A)
merely because the allocations to the qualified capital
interest represent a lower return than the allocations
made to the other qualified capital interests referred
to in such paragraph.
``(3) Special rule for changes in services and capital
contributions.--In the case of an interest in a partnership
which was not an investment services partnership interest and
which, by reason of a change in the services with respect to
assets held (directly or indirectly) by the partnership or by
reason of a change in the capital contributions to such
partnership, becomes an investment services partnership
interest, the qualified capital interest of the holder of such
partnership interest immediately after such change shall not,
for purposes of this subsection, be less than the fair market
value of such interest (determined immediately before such
change).
``(4) Special rule for tiered partnerships.--Except as
otherwise provided by the Secretary, in the case of tiered
partnerships, all items which are allocated in a manner which
meets the requirements of paragraph (1) to qualified capital
interests in a lower-tier partnership shall retain such
character to the extent allocated on the basis of qualified
capital interests in any upper-tier partnership.
``(5) Exception for no-self-charged carry and management
fee provisions.--Except as otherwise provided by the Secretary,
an interest shall not fail to be treated as satisfying the
requirement of paragraph (1)(A) merely because the allocations
made by the partnership to such interest do not reflect the
cost of services described in subsection (c)(2) which are
provided (directly or indirectly) to the partnership by the
holder of such interest (or a related person).
``(6) Special rule for dispositions.--In the case of any
investment services partnership interest any portion of which
is a qualified capital interest, subsection (b) shall not apply
to so much of any gain or loss as bears the same proportion to
the entire amount of such gain or loss as--
``(A) the distributive share of gain or loss that
would have been allocated to the qualified capital
interest (consistent with the requirements of paragraph
(1)) if the partnership had sold all of its assets at
fair market value immediately before the disposition,
bears to
``(B) the distributive share of gain or loss that
would have been so allocated to the investment services
partnership interest of which such qualified capital
interest is a part.
``(7) Qualified capital interest.--For purposes of this
section--
``(A) In general.--The term `qualified capital
interest' means so much of a partner's interest in the
capital of the partnership as is attributable to--
``(i) the fair market value of any money or
other property contributed to the partnership
in exchange for such interest (determined
without regard to section 752(a)),
``(ii) any amounts which have been included
in gross income under section 83 with respect
to the transfer of such interest, and
``(iii) the excess (if any) of--
``(I) any items of income and gain
taken into account under section 702
with respect to such interest, over
``(II) any items of deduction and
loss so taken into account.
``(B) Adjustment to qualified capital interest.--
``(i) Distributions and losses.--The
qualified capital interest shall be reduced by
distributions from the partnership with respect
to such interest and by the excess (if any) of
the amount described in subparagraph
(A)(iii)(II) over the amount described in
subparagraph (A)(iii)(I).
``(ii) Special rule for contributions of
property.--In the case of any contribution of
property described in subparagraph (A)(i) with
respect to which the fair market value of such
property is not equal to the adjusted basis of
such property immediately before such
contribution, proper adjustments shall be made
to the qualified capital interest to take into
account such difference consistent with such
regulations or other guidance as the Secretary
may provide.
``(C) Technical terminations, etc., disregarded.--
No increase or decrease in the qualified capital
interest of any partner shall result from a
termination, merger, consolidation, or division
described in section 708, or any similar transaction.
``(8) Treatment of certain loans.--
``(A) Proceeds of partnership loans not treated as
qualified capital interest of service providing
partners.--For purposes of this subsection, an
investment services partnership interest shall not be
treated as a qualified capital interest to the extent
that such interest is acquired in connection with the
proceeds of any loan or other advance made or
guaranteed, directly or indirectly, by any other
partner or the partnership (or any person related to
any such other partner or the partnership). The
preceding sentence shall not apply to the extent the
loan or other advance is repaid before the date of the
enactment of this section unless such repayment is made
with the proceeds of a loan or other advance described
in the preceding sentence.
``(B) Reduction in allocations to qualified capital
interests for loans from nonservice-providing partners
to the partnership.--For purposes of this subsection,
any loan or other advance to the partnership made or
guaranteed, directly or indirectly, by a partner not
providing services described in subsection (c)(2) to
the partnership (or any person related to such partner)
shall be taken into account in determining the
qualified capital interests of the partners in the
partnership.
``(9) Special rule for qualified family partnerships.--
``(A) In general.--In the case of any specified
family partnership interest, paragraph (1)(A) shall be
applied without regard to the phrase `and who are not
related to the partner holding the qualified capital
interest'.
``(B) Specified family partnership interest.--For
purposes of this paragraph, the term `specified family
partnership interest' means any investment services
partnership interest if--
``(i) such interest is an interest in a
qualified family partnership,
``(ii) such interest is held by a natural
person or by a trust with respect to which each
beneficiary is a grantor or a person whose
relationship to the grantor is described in
section 267(b)(1), and
``(iii) all other interests in such
qualified family partnership with respect to
which significant allocations are made (within
the meaning of paragraph (1)(B) and in
comparison to the allocations made to the
interest described in clause (ii)) are held by
persons who--
``(I) are related to the natural
person or trust referred to in clause
(ii), or
``(II) provide services described
in subsection (c)(2).
``(C) Qualified family partnership.--For purposes
of this paragraph, the term `qualified family
partnership' means any partnership if--
``(i) all of the capital and profits
interests of such partnership are held by--
``(I) specified family members,
``(II) any person closely related
(within the meaning of subsection
(c)(3)(C)(ii)) to a specified family
member, or
``(III) any other person (not
described in subclause (I) or (II)) if
such interest is an investment services
partnership interest with respect to
such person, and
``(ii) such partnership does not hold
itself out to the public as an investment
advisor.
``(D) Specified family members.--For purposes of
subparagraph (C), individuals shall be treated as
specified family members if such individuals would be
treated as one person under the rules of section
1361(c)(1) if the applicable date (within the meaning
of subparagraph (B)(iii) thereof) were the latest of--
``(i) the date of the establishment of the
partnership,
``(ii) the earliest date that the common
ancestor holds a capital or profits interest in
the partnership, or
``(iii) the date of the enactment of this
section.
``(e) Other Income and Gain in Connection With Investment
Management Services.--
``(1) In general.--If--
``(A) a person performs (directly or indirectly)
investment management services for any investment
entity,
``(B) such person holds (directly or indirectly) a
disqualified interest with respect to such entity, and
``(C) the value of such interest (or payments
thereunder) is substantially related to the amount of
income or gain (whether or not realized) from the
assets with respect to which the investment management
services are performed,
any income or gain with respect to such interest shall be
treated as ordinary income. Rules similar to the rules of
subsections (a)(5) and (d) shall apply for purposes of this
subsection.
``(2) Definitions.--For purposes of this subsection--
``(A) Disqualified interest.--
``(i) In general.--The term `disqualified
interest' means, with respect to any investment
entity--
``(I) any interest in such entity
other than indebtedness,
``(II) convertible or contingent
debt of such entity,
``(III) any option or other right
to acquire property described in
subclause (I) or (II), and
``(IV) any derivative instrument
entered into (directly or indirectly)
with such entity or any investor in
such entity.
``(ii) Exceptions.--Such term shall not
include--
``(I) a partnership interest,
``(II) except as provided by the
Secretary, any interest in a taxable
corporation, and
``(III) except as provided by the
Secretary, stock in an S corporation.
``(B) Taxable corporation.--The term `taxable
corporation' means--
``(i) a domestic C corporation, or
``(ii) a foreign corporation substantially
all of the income of which is--
``(I) effectively connected with
the conduct of a trade or business in
the United States, or
``(II) subject to a comprehensive
foreign income tax (as defined in
section 457A(d)(2)).
``(C) Investment management services.--The term
`investment management services' means a substantial
quantity of any of the services described in subsection
(c)(2).
``(D) Investment entity.--The term `investment
entity' means any entity which, if it were a
partnership, would be an investment partnership.
``(f) Exception for Domestic C Corporations.--Except as otherwise
provided by the Secretary, in the case of a domestic C corporation--
``(1) subsections (a) and (b) shall not apply to any item
allocated to such corporation with respect to any investment
services partnership interest (or to any gain or loss with
respect to the disposition of such an interest), and
``(2) subsection (e) shall not apply.
``(g) Regulations.--The Secretary shall prescribe such regulations
or other guidance as is necessary or appropriate to carry out the
purposes of this section, including regulations or other guidance to--
``(1) require such reporting and recordkeeping by any
person in such manner and at such time as the Secretary may
prescribe for purposes of enabling the partnership to meet the
requirements of section 6031 with respect to any item described
in section 702(a)(9),
``(2) provide modifications to the application of this
section (including treating related persons as not related to
one another) to the extent such modification is consistent with
the purposes of this section,
``(3) prevent the avoidance of the purposes of this section
(including through the use of qualified family partnerships),
and
``(4) coordinate this section with the other provisions of
this title.
``(h) Cross Reference.--For 40-percent penalty on certain
underpayments due to the avoidance of this section, see section
6662.''.
(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 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 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 is amended by adding
at the end the following new subsection:
``(k) Increase in Penalty in Case of Property Transferred for
Investment Management Services.--In the case of any portion of an
underpayment to which this section applies by reason of subsection
(b)(8), subsection (a) shall be applied with respect to such portion by
substituting `40 percent' for `20 percent'.''.
(B) Conforming amendment.--Subparagraph (B) of
section 6662A(e)(2) is amended by striking ``or (i)''
and inserting ``, (i), or (k)''.
(3) Special rules for application of reasonable cause
exception.--Subsection (c) of section 6664 is amended--
(A) by redesignating paragraphs (3) and (4) as
paragraphs (4) and (5), respectively;
(B) by striking ``paragraph (3)'' in paragraph
(5)(A), as so redesignated, and inserting ``paragraph
(4)''; and
(C) by inserting after paragraph (2) the following
new paragraph:
``(3) Special rule for underpayments attributable to
investment management services.--
``(A) In general.--Paragraph (1) shall not apply to
any portion of an underpayment to which section 6662
applies by reason of subsection (b)(8) unless--
``(i) the relevant facts affecting the tax
treatment of the item are adequately disclosed,
``(ii) there is or was substantial
authority for such treatment, and
``(iii) the taxpayer reasonably believed
that such treatment was more likely than not
the proper treatment.
``(B) Rules relating to reasonable belief.--Rules
similar to the rules of subsection (d)(3) shall apply
for purposes of subparagraph (A)(iii).''.
(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) 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 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) 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 is amended by inserting
``section 710(b)(4) (relating to distributions of partnership
property),'' after ``to the extent otherwise provided by''.
(2) Section 741 is amended by inserting ``or section 710
(relating to special rules for partners providing investment
management services to partnerships)'' before the period at the
end.
(3) The table of sections for part I of subchapter K of
chapter 1 is amended by adding at the end the following new
item:
``Sec. 710. Special rules for partners providing investment management
services to partnerships.''.
(4) Part IV of subchapter O of chapter 1 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.
SEC. 403. RETURN TO PRE-2018 ESTATE AND GIFT TAX BASIC EXCLUSION
AMOUNT.
(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.
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