[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7202 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 7202
To amend the Internal Revenue Code of 1986 to extend certain expiring
provisions, to provide individual income tax relief, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 28, 2008
Mr. Rangel introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committees on
Agriculture, Natural Resources, Energy and Commerce, and Education and
Labor, 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 amend the Internal Revenue Code of 1986 to extend certain expiring
provisions, to provide individual income tax relief, 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, ETC.
(a) Short Title.--This Act may be cited as the ``Temporary Tax
Relief Act of 2008''.
(b) Reference.--Except as otherwise expressly provided, whenever in
this Act an amendment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference shall be
considered to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title, etc.
TITLE I--EXTENSION OF TEMPORARY PROVISIONS
Subtitle A--Extensions Primarily Affecting Individuals
Sec. 101. Deduction for State and local sales taxes.
Sec. 102. Deduction of qualified tuition and related expenses.
Sec. 103. Treatment of certain dividends of regulated investment
companies.
Sec. 104. Tax-free distributions from individual retirement plans for
charitable purposes.
Sec. 105. Deduction for certain expenses of elementary and secondary
school teachers.
Sec. 106. Stock in RIC for purposes of determining estates of
nonresidents not citizens.
Sec. 107. Qualified investment entities.
Sec. 108. Real property tax standard deduction.
Subtitle B--Extensions Primarily Affecting Businesses
Sec. 121. Research credit.
Sec. 122. Indian employment credit.
Sec. 123. New markets tax credit.
Sec. 124. Railroad track maintenance.
Sec. 125. Fifteen-year straight-line cost recovery for qualified
leasehold improvements and qualified
restaurant property.
Sec. 126. Seven-year cost recovery period for motorsports racing track
facility.
Sec. 127. Accelerated depreciation for business property on Indian
reservation.
Sec. 128. Expensing of environmental remediation costs.
Sec. 129. Deduction allowable with respect to income attributable to
domestic production activities in Puerto
Rico.
Sec. 130. Modification of tax treatment of certain payments to
controlling exempt organizations.
Sec. 131. Qualified zone academy bonds.
Sec. 132. Tax incentives for investment in the District of Columbia.
Sec. 133. Economic development credit for American Samoa.
Sec. 134. Enhanced charitable deduction for contributions of food
inventory.
Sec. 135. Enhanced charitable deduction for contributions of book
inventory to public schools.
Sec. 136. Enhanced deduction for qualified computer contributions.
Sec. 137. Basis adjustment to stock of S corporations making charitable
contributions of property.
Sec. 138. Work opportunity tax credit for Hurricane Katrina employees.
Sec. 139. Subpart F exception for active financing income.
Sec. 140. Look-thru rule for related controlled foreign corporations.
Sec. 141. Expensing for certain qualified film and television
productions.
Subtitle C--Other Extensions
Sec. 151. Authority to disclose information related to terrorist
activities made permanent.
Sec. 152. Authority for undercover operations made permanent.
Sec. 153. Increase in limit on cover over of rum excise tax to Puerto
Rico and the Virgin Islands.
TITLE II--ADDITIONAL TAX RELIEF AND OTHER PROVISIONS
Sec. 201. Refundable child credit.
Sec. 202. Provisions related to film and television productions.
Sec. 203. Exemption from excise tax for certain arrows designed for use
by children.
Sec. 204. Modification of penalty on understatement of taxpayer's
liability by tax return preparer.
TITLE III--SECURE RURAL SCHOOLS
Sec. 301. Secure rural schools and community self-determination
program.
TITLE IV--PAUL WELLSTONE AND PETE DOMENICI MENTAL HEALTH PARITY AND
ADDICTION EQUITY ACT OF 2008
Sec. 401. Short title.
Sec. 402. Mental health parity.
TITLE V--REVENUE PROVISIONS
Sec. 501. 0.2 percent FUTA surtax.
Sec. 502. Nonqualified deferred compensation from certain tax
indifferent parties.
Sec. 503. Increase and extension of Oil Spill Liability Trust Fund tax.
Sec. 504. Delay in application of worldwide allocation of interest.
Sec. 505. Time for payment of corporate estimated taxes.
TITLE I--EXTENSION OF TEMPORARY PROVISIONS
Subtitle A--Extensions Primarily Affecting Individuals
SEC. 101. DEDUCTION FOR STATE AND LOCAL SALES TAXES.
(a) In General.--Subparagraph (I) of section 164(b)(5) is amended
by striking ``January 1, 2008'' and inserting ``January 1, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2007.
SEC. 102. DEDUCTION OF QUALIFIED TUITION AND RELATED EXPENSES.
(a) In General.--Subsection (e) of section 222 is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2007.
(c) Temporary Coordination With Hope and Lifetime Learning
Credit.--In the case of any taxpayer for any taxable year beginning in
2008 or 2009, no deduction shall be allowed under section 222 of the
Internal Revenue Code of 1986 if--
(1) the taxpayer's net Federal income tax reduction which
would be attributable to such deduction for such taxable year,
is less than
(2) the credit which would be allowed to the taxpayer for
such taxable year under section 25A of such Code (determined
without regard to sections 25A(e) and 26 of such Code).
SEC. 103. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED INVESTMENT
COMPANIES.
(a) Interest-Related Dividends.--Subparagraph (C) of section
871(k)(1) (defining interest-related dividend) is amended by striking
``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Short-Term Capital Gain Dividends.--Subparagraph (C) of section
871(k)(2) (defining short-term capital gain dividend) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(c) Effective Date.--The amendments made by this section shall
apply to dividends with respect to taxable years of regulated
investment companies beginning after December 31, 2007.
SEC. 104. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS FOR
CHARITABLE PURPOSES.
(a) In General.--Subparagraph (F) of section 408(d)(8) is amended
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to distributions made in taxable years beginning after December 31,
2007.
SEC. 105. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND SECONDARY
SCHOOL TEACHERS.
(a) In General.--Subparagraph (D) of section 62(a)(2) is amended by
striking ``or 2007'' and inserting ``2007, 2008, or 2009''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 2007.
SEC. 106. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF
NONRESIDENTS NOT CITIZENS.
(a) In General.--Paragraph (3) of section 2105(d) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to decedents dying after December 31, 2007.
SEC. 107. QUALIFIED INVESTMENT ENTITIES.
(a) In General.--Clause (ii) of section 897(h)(4)(A) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on January 1, 2008, except that such amendment shall not
apply to the application of withholding requirements with respect to
any payment made on or before the date of the enactment of this Act.
SEC. 108. REAL PROPERTY TAX STANDARD DEDUCTION.
(a) In General.--Subparagraph (C) of section 63(c)(1) is amended by
inserting ``or 2009'' after ``2008''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2008.
Subtitle B--Extensions Primarily Affecting Businesses
SEC. 121. RESEARCH CREDIT.
(a) In General.--Subparagraph (B) of section 41(h)(1) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Computation of Credit for Taxable Year in Which Credit
Terminates.--Paragraph (2) of section 41(h) is amended to read as
follows:
``(2) Computation of credit for taxable year in which
credit terminates.--
``(A) In general.--In the case of any taxable year
with respect to which this section applies to a number
of days which is less than the total number of days in
such taxable year, the applicable base amount with
respect to such taxable year shall be the amount which
bears the same ratio to such applicable amount
(determined without regard to this paragraph) as the
number of days in such taxable year to which this
section applies bears to the total number of days in
such taxable year.
``(B) Applicable base amount.--For purposes of
subparagraph (A), the term `applicable base amount'
means, with respect to any taxable year--
``(i) except as otherwise provided in this
subparagraph, the base amount for the taxable
year,
``(ii) in the case of a taxable year with
respect to which an election under subsection
(c)(4) (relating to election of alternative
incremental credit) is in effect, the average
described in subsection (c)(1)(B) for the
taxable year, and
``(iii) in the case of a taxable year with
respect to which an election under subsection
(c)(5) (relating to election of alternative
simplified credit) is in effect, the average
qualified research expenses for the 3 taxable
years preceding the taxable year.''.
(c) Conforming Amendment.--Subparagraph (D) of section 45C(b)(1) is
amended by striking ``December 31, 2007'' and inserting ``December 31,
2009''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to amounts paid or
incurred after December 31, 2007.
(2) Computation of credit for taxable year in which credit
begins.--The amendment made by subsection (b) shall apply to
taxable years beginning after December 31, 2007.
SEC. 122. INDIAN EMPLOYMENT CREDIT.
(a) In General.--Subsection (f) of section 45A is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2007.
SEC. 123. NEW MARKETS TAX CREDIT.
Subparagraph (D) of section 45D(f)(1) is amended by striking ``and
2008'' and inserting ``2008, and 2009''.
SEC. 124. RAILROAD TRACK MAINTENANCE.
(a) In General.--Subsection (f) of section 45G is amended by
striking ``January 1, 2008'' and inserting ``January 1, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to expenditures paid or incurred during taxable years beginning after
December 31, 2007.
SEC. 125. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED
LEASEHOLD IMPROVEMENTS AND QUALIFIED RESTAURANT PROPERTY.
(a) In General.--Clauses (iv) and (v) of section 168(e)(3)(E) are
each amended by striking ``January 1, 2008'' and inserting ``January 1,
2010''.
(b) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2007.
SEC. 126. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS RACING TRACK
FACILITY.
(a) In General.--Subparagraph (D) of section 168(i)(15) is amended
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2007.
SEC. 127. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON INDIAN
RESERVATION.
(a) In General.--Paragraph (8) of section 168(j) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2007.
SEC. 128. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.
(a) In General.--Subsection (h) of section 198 is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to expenditures paid or incurred after December 31, 2007.
SEC. 129. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME ATTRIBUTABLE TO
DOMESTIC PRODUCTION ACTIVITIES IN PUERTO RICO.
(a) In General.--Subparagraph (C) of section 199(d)(8) is amended--
(1) by striking ``first 2 taxable years'' and inserting
``first 4 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2010''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
SEC. 130. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS TO
CONTROLLING EXEMPT ORGANIZATIONS.
(a) In General.--Clause (iv) of section 512(b)(13)(E) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to payments received or accrued after December 31, 2007.
SEC. 131. QUALIFIED ZONE ACADEMY BONDS.
(a) In General.--Subpart I of part IV of subchapter A of chapter 1
is amended by adding at the end the following new section:
``SEC. 54C. QUALIFIED ZONE ACADEMY BONDS.
``(a) Qualified Zone Academy Bonds.--For purposes of this
subchapter, the term `qualified zone academy bond' means any bond
issued as part of an issue if--
``(1) 100 percent of the available project proceeds of such
issue are to be used for a qualified purpose with respect to a
qualified zone academy established by an eligible local
education agency,
``(2) the bond is issued by a State or local government
within the jurisdiction of which such academy is located, and
``(3) the issuer--
``(A) designates such bond for purposes of this
section,
``(B) certifies that it has written assurances that
the private business contribution requirement of
subsection (b) will be met with respect to such
academy, and
``(C) certifies that it has the written approval of
the eligible local education agency for such bond
issuance.
``(b) Private Business Contribution Requirement.--For purposes of
subsection (a), the private business contribution requirement of this
subsection is met with respect to any issue if the eligible local
education agency that established the qualified zone academy has
written commitments from private entities to make qualified
contributions having a present value (as of the date of issuance of the
issue) of not less than 10 percent of the proceeds of the issue.
``(c) Limitation on Amount of Bonds Designated.--
``(1) National limitation.--There is a national zone
academy bond limitation for each calendar year. Such limitation
is $400,000,000 for 2008 and 2009, and, except as provided in
paragraph (4), zero thereafter.
``(2) Allocation of limitation.--The national zone academy
bond limitation for a calendar year shall be allocated by the
Secretary among the States on the basis of their respective
populations of individuals below the poverty line (as defined
by the Office of Management and Budget). The limitation amount
allocated to a State under the preceding sentence shall be
allocated by the State education agency to qualified zone
academies within such State.
``(3) Designation subject to limitation amount.--The
maximum aggregate face amount of bonds issued during any
calendar year which may be designated under subsection (a) with
respect to any qualified zone academy shall not exceed the
limitation amount allocated to such academy under paragraph (2)
for such calendar year.
``(4) Carryover of unused limitation.--
``(A) In general.--If for any calendar year--
``(i) the limitation amount for any State,
exceeds
``(ii) the amount of bonds issued during
such year which are designated under subsection
(a) with respect to qualified zone academies
within such State,
the limitation amount for such State for the following
calendar year shall be increased by the amount of such
excess.
``(B) Limitation on carryover.--Any carryforward of
a limitation amount may be carried only to the first 2
years following the unused limitation year. For
purposes of the preceding sentence, a limitation amount
shall be treated as used on a first-in first-out basis.
``(C) Coordination with section 1397e.--Any
carryover determined under section 1397E(e)(4)
(relating to carryover of unused limitation) with
respect to any State to calendar year 2008 shall be
treated for purposes of this section as a carryover
with respect to such State for such calendar year under
subparagraph (A), and the limitation of subparagraph
(B) shall apply to such carryover taking into account
the calendar years to which such carryover relates.
``(d) Definitions.--For purposes of this section--
``(1) Qualified zone academy.--The term `qualified zone
academy' means any public school (or academic program within a
public school) which is established by and operated under the
supervision of an eligible local education agency to provide
education or training below the postsecondary level if--
``(A) such public school or program (as the case
may be) is designed in cooperation with business to
enhance the academic curriculum, increase graduation
and employment rates, and better prepare students for
the rigors of college and the increasingly complex
workforce,
``(B) students in such public school or program (as
the case may be) will be subject to the same academic
standards and assessments as other students educated by
the eligible local education agency,
``(C) the comprehensive education plan of such
public school or program is approved by the eligible
local education agency, and
``(D)(i) such public school is located in an
empowerment zone or enterprise community (including any
such zone or community designated after the date of the
enactment of this section), or
``(ii) there is a reasonable expectation (as of the
date of issuance of the bonds) that at least 35 percent
of the students attending such school or participating
in such program (as the case may be) will be eligible
for free or reduced-cost lunches under the school lunch
program established under the National School Lunch
Act.
``(2) Eligible local education agency.--For purposes of
this section, the term `eligible local education agency' means
any local educational agency as defined in section 9101 of the
Elementary and Secondary Education Act of 1965.
``(3) Qualified purpose.--The term `qualified purpose'
means, with respect to any qualified zone academy--
``(A) rehabilitating or repairing the public school
facility in which the academy is established,
``(B) providing equipment for use at such academy,
``(C) developing course materials for education to
be provided at such academy, and
``(D) training teachers and other school personnel
in such academy.
``(4) Qualified contributions.--The term `qualified
contribution' means any contribution (of a type and quality
acceptable to the eligible local education agency) of--
``(A) equipment for use in the qualified zone
academy (including state-of-the-art technology and
vocational equipment),
``(B) technical assistance in developing curriculum
or in training teachers in order to promote appropriate
market driven technology in the classroom,
``(C) services of employees as volunteer mentors,
``(D) internships, field trips, or other
educational opportunities outside the academy for
students, or
``(E) any other property or service specified by
the eligible local education agency.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d) is amended to read as
follows:
``(1) Qualified tax credit bond.--The term `qualified tax
credit bond' means--
``(A) a qualified forestry conservation bond, or
``(B) a qualified zone academy bond,
which is part of an issue that meets the requirements of
paragraphs (2), (3), (4), (5), and (6).''.
(2) Subparagraph (C) of section 54A(d)(2) is amended to
read as follows:
``(C) Qualified purpose.--For purposes of this
paragraph, the term `qualified purpose' means--
``(i) in the case of a qualified forestry
conservation bond, a purpose specified in
section 54B(e), and
``(ii) in the case of a qualified zone
academy bond, a purpose specified in section
54C(a)(1).''.
(3) Section 1397E is amended by adding at the end the
following new subsection:
``(m) Termination.--This section shall not apply to any obligation
issued after the date of the enactment of this subsection.''.
(4) The table of sections for subpart I of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:
``Sec. 54C. Qualified zone academy bonds.''.
(c) Effective Date.--The amendments made by this section shall
apply to obligations issued after the date of the enactment of this
Act.
SEC. 132. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF COLUMBIA.
(a) Designation of Zone.--
(1) In general.--Subsection (f) of section 1400 is amended
by striking ``2007'' both places it appears and inserting
``2009''.
(2) Effective date.--The amendments made by this subsection
shall apply to periods beginning after December 31, 2007.
(b) Tax-Exempt Economic Development Bonds.--
(1) In general.--Subsection (b) of section 1400A is amended
by striking ``2007'' and inserting ``2009''.
(2) Effective date.--The amendment made by this subsection
shall apply to bonds issued after December 31, 2007.
(c) Zero Percent Capital Gains Rate.--
(1) In general.--Subsection (b) of section 1400B is amended
by striking ``2008'' each place it appears and inserting
``2010''.
(2) Conforming amendments.--
(A) Section 1400B(e)(2) is amended--
(i) by striking ``2012'' and inserting
``2014'', and
(ii) by striking ``2012'' in the heading
thereof and inserting ``2014''.
(B) Section 1400B(g)(2) is amended by striking
``2012'' and inserting ``2014''.
(C) Section 1400F(d) is amended by striking
``2012'' and inserting ``2014''.
(3) Effective dates.--
(A) Extension.--The amendments made by paragraph
(1) shall apply to acquisitions after December 31,
2007.
(B) Conforming amendments.--The amendments made by
paragraph (2) shall take effect on the date of the
enactment of this Act.
(d) First-Time Homebuyer Credit.--
(1) In general.--Subsection (i) of section 1400C is amended
by striking ``2008'' and inserting ``2010''.
(2) Effective date.--The amendment made by this subsection
shall apply to property purchased after December 31, 2007.
SEC. 133. ECONOMIC DEVELOPMENT CREDIT FOR AMERICAN SAMOA.
(a) In General.--Subsection (d) of section 119 of division A of the
Tax Relief and Health Care Act of 2006 is amended--
(1) by striking ``first two taxable years'' and inserting
``first 4 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2007.
SEC. 134. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD
INVENTORY.
(a) In General.--Clause (iv) of section 170(e)(3)(C) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after December 31, 2007.
SEC. 135. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF BOOK
INVENTORY TO PUBLIC SCHOOLS.
(a) In General.--Clause (iv) of section 170(e)(3)(D) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after December 31, 2007.
SEC. 136. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER CONTRIBUTIONS.
(a) In General.--Subparagraph (G) of section 170(e)(6) is amended
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made during taxable years beginning after December 31,
2007.
SEC. 137. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING CHARITABLE
CONTRIBUTIONS OF PROPERTY.
(a) In General.--The last sentence of section 1367(a)(2) is amended
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made in taxable years beginning after December 31,
2007.
SEC. 138. WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA EMPLOYEES.
(a) In General.--Paragraph (1) of section 201(b) of the Katrina
Emergency Tax Relief Act of 2005 is amended by striking ``2-year'' and
inserting ``4-year''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to individuals hired after August 27, 2007.
SEC. 139. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.
(a) Exempt Insurance Income.--Paragraph (10) of section 953(e)
(relating to application) is amended--
(1) by striking ``January 1, 2009'' and inserting ``January
1, 2010'', and
(2) by striking ``December 31, 2008'' and inserting
``December 31, 2009''.
(b) Exception to Treatment as Foreign Personal Holding Company
Income.--Paragraph (9) of section 954(h) (relating to application) is
amended by striking ``January 1, 2009'' and inserting ``January 1,
2010''.
SEC. 140. LOOK-THRU RULE FOR RELATED CONTROLLED FOREIGN CORPORATIONS.
(a) In General.--Subparagraph (C) of section 954(c)(6) (relating to
application) is amended by striking ``January 1, 2009'' and inserting
``January 1, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years of foreign corporations beginning after December 31,
2008, and to taxable years of United States shareholders with or within
which such taxable years of foreign corporations end.
SEC. 141. EXPENSING FOR CERTAIN QUALIFIED FILM AND TELEVISION
PRODUCTIONS.
(a) In General.--Subsection (f) of section 181 is amended by
striking ``December 31, 2008'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to productions commencing after December 31, 2008.
Subtitle C--Other Extensions
SEC. 151. AUTHORITY TO DISCLOSE INFORMATION RELATED TO TERRORIST
ACTIVITIES MADE PERMANENT.
(a) In General.--Subparagraph (C) of section 6103(i)(3) is amended
by striking clause (iv).
(b) Disclosure on Request.--Paragraph (7) of section 6103(i) is
amended by striking subparagraph (E).
(c) Effective Date.--The amendments made by this section shall
apply to disclosures after the date of the enactment of this Act.
SEC. 152. AUTHORITY FOR UNDERCOVER OPERATIONS MADE PERMANENT.
(a) In General.--Subsection (c) of section 7608 is amended by
striking paragraph (6).
(b) Effective Date.--The amendment made by this section shall take
effect on January 1, 2008.
SEC. 153. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX TO PUERTO
RICO AND THE VIRGIN ISLANDS.
(a) In General.--Paragraph (1) of section 7652(f) is amended by
striking ``January 1, 2008'' and inserting ``January 1, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to distilled spirits brought into the United States after December 31,
2007.
TITLE II--ADDITIONAL TAX RELIEF AND OTHER PROVISIONS
SEC. 201. REFUNDABLE CHILD CREDIT.
(a) Modification of Threshold Amount.--Clause (i) of section
24(d)(1)(B) is amended by inserting ``($8,500 in the case of taxable
years beginning in 2009)'' after ``$10,000''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 2008.
SEC. 202. PROVISIONS RELATED TO FILM AND TELEVISION PRODUCTIONS.
(a) Modification of Limitation on Expensing.--Subparagraph (A) of
section 181(a)(2) is amended to read as follows:
``(A) In general.--Paragraph (1) shall not apply to
so much of the aggregate cost of any qualified film or
television production as exceeds $15,000,000.''.
(b) Modifications to Deduction for Domestic Activities.--
(1) Determination of w-2 wages.--Paragraph (2) of section
199(b) is amended by adding at the end the following new
subparagraph:
``(D) Special rule for qualified film.--In the case
of a qualified film, such term shall include
compensation for services performed in the United
States by actors, production personnel, directors, and
producers.''.
(2) Definition of qualified film.--Paragraph (6) of section
199(c) is amended by adding at the end the following: ``A
qualified film shall include any copyrights, trademarks, or
other intangibles with respect to such film. The methods and
means of distributing a qualified film shall not affect the
availability of the deduction under this section.''.
(3) Partnerships.--Subparagraph (A) of section 199(d)(1) is
amended by striking ``and'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
``, and'', and by adding at the end the following new clause:
``(iv) in the case of each partner of a
partnership, or shareholder of an S
corporation, who owns (directly or indirectly)
at least 20 percent of the capital interests in
such partnership or of the stock of such S
corporation--
``(I) such partner or shareholder
shall be treated as having engaged
directly in any film produced by such
partnership or S corporation, and
``(II) such partnership or S
corporation shall be treated as having
engaged directly in any film produced
by such partner or shareholder.''.
(c) Conforming Amendment.--Section 181(d)(3)(A) is amended by
striking ``actors'' and all that follows and inserting ``actors,
production personnel, directors, and producers.''.
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
taxable years beginning after December 31, 2007.
(2) Expensing.--The amendments made by subsection (a) shall
apply to qualified film and television productions commencing
after December 31, 2007.
SEC. 203. EXEMPTION FROM EXCISE TAX FOR CERTAIN ARROWS DESIGNED FOR USE
BY CHILDREN.
(a) In General.--Paragraph (2) of section 4161(b) (relating to
arrows) is amended by redesignating subparagraph (B) as subparagraph
(C) and by inserting after subparagraph (A) the following new
subparagraph:
``(B) Exemption for certain arrow shafts.--
Subparagraph (A) shall not apply to any shaft measuring
\5/16\ of an inch or less in diameter and consisting of
either--
``(i) all fiberglass and hollow, or
``(ii) all natural wood,
with no laminations or artificial means of enhancing
the spine of such shaft (whether sold separately or
incorporated as part of a finished or unfinished
product) of a type used in the manufacture of any arrow
which after its assembly is not suitable for use with a
bow described in paragraph (1)(A).''.
(b) Effective Date.--The amendments made by this section shall
apply to shafts first sold after the date of enactment of this Act.
SEC. 204. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF TAXPAYER'S
LIABILITY BY TAX RETURN PREPARER.
(a) In General.--Subsection (a) of section 6694 (relating to
understatement due to unreasonable positions) is amended to read as
follows:
``(a) Understatement Due to Unreasonable Positions.--
``(1) In general.--If a tax return preparer--
``(A) prepares any return or claim of refund with
respect to which any part of an understatement of
liability is due to a position described in paragraph
(2), and
``(B) knew (or reasonably should have known) of the
position,
such tax return preparer shall pay a penalty with respect to
each such return or claim in an amount equal to the greater of
$1,000 or 50 percent of the income derived (or to be derived)
by the tax return preparer with respect to the return or claim.
``(2) Unreasonable position.--
``(A) In general.--Except as otherwise provided in
this paragraph, a position is described in this
paragraph unless there is or was substantial authority
for the position.
``(B) Disclosed positions.--If the position was
disclosed as provided in section 6662(d)(2)(B)(ii)(I)
and is not a position to which subparagraph (C)
applies, the position is described in this paragraph
unless there is a reasonable basis for the position.
``(C) Reportable transactions.--If the position is
with respect to a reportable transaction to which
section 6662A applies, the position is described in
this paragraph unless it is reasonable to believe that
the position would more likely than not be sustained on
its merits.
``(3) Reasonable cause exception.--No penalty shall be
imposed under this subsection if it is shown that there is
reasonable cause for the understatement and the tax return
preparer acted in good faith.''.
(b) Effective Date.--The amendment made by this section shall
apply--
(1) in the case of a position other than a position
described in subparagraph (C) of section 6694(a)(2) of the
Internal Revenue Code of 1986 (as amended by this section), to
returns prepared after May 25, 2007, and
(2) in the case of a position described in such
subparagraph (C), to returns prepared for taxable years
beginning after the date of the enactment of this Act.
TITLE III--SECURE RURAL SCHOOLS
SEC. 301. SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION
PROGRAM.
(a) Reauthorization of the Secure Rural Schools and Community Self-
Determination Act of 2000.--The Secure Rural Schools and Community
Self-Determination Act of 2000 (16 U.S.C. 500 note; Public Law 106-393)
is amended by striking sections 1 through 403 and inserting the
following:
``SECTION 1. SHORT TITLE.
``This Act may be cited as the `Secure Rural Schools and Community
Self-Determination Act of 2000'.
``SEC. 2. PURPOSES.
``The purposes of this Act are--
``(1) to stabilize and transition payments to counties to
provide funding for schools and roads that supplements other
available funds;
``(2) to make additional investments in, and create
additional employment opportunities through, projects that--
``(A)(i) improve the maintenance of existing
infrastructure;
``(ii) implement stewardship objectives that
enhance forest ecosystems; and
``(iii) restore and improve land health and water
quality;
``(B) enjoy broad-based support; and
``(C) have objectives that may include--
``(i) road, trail, and infrastructure
maintenance or obliteration;
``(ii) soil productivity improvement;
``(iii) improvements in forest ecosystem
health;
``(iv) watershed restoration and
maintenance;
``(v) the restoration, maintenance, and
improvement of wildlife and fish habitat;
``(vi) the control of noxious and exotic
weeds; and
``(vii) the reestablishment of native
species; and
``(3) to improve cooperative relationships among--
``(A) the people that use and care for Federal
land; and
``(B) the agencies that manage the Federal land.
``SEC. 3. DEFINITIONS.
``In this Act:
``(1) Adjusted share.--The term `adjusted share' means the
number equal to the quotient obtained by dividing--
``(A) the number equal to the quotient obtained by
dividing--
``(i) the base share for the eligible
county; by
``(ii) the income adjustment for the
eligible county; by
``(B) the number equal to the sum of the quotients
obtained under subparagraph (A) and paragraph (8)(A)
for all eligible counties.
``(2) Base share.--The term `base share' means the number
equal to the average of--
``(A) the quotient obtained by dividing--
``(i) the number of acres of Federal land
described in paragraph (7)(A) in each eligible
county; by
``(ii) the total number acres of Federal
land in all eligible counties in all eligible
States; and
``(B) the quotient obtained by dividing--
``(i) the amount equal to the average of
the 3 highest 25-percent payments and safety
net payments made to each eligible State for
each eligible county during the eligibility
period; by
``(ii) the amount equal to the sum of the
amounts calculated under clause (i) and
paragraph (9)(B)(i) for all eligible counties
in all eligible States during the eligibility
period.
``(3) County payment.--The term `county payment' means the
payment for an eligible county calculated under section 101(b).
``(4) Eligible county.--The term `eligible county' means
any county that--
``(A) contains Federal land (as defined in
paragraph (7)); and
``(B) elects to receive a share of the State
payment or the county payment under section 102(b).
``(5) Eligibility period.--The term `eligibility period'
means fiscal year 1986 through fiscal year 1999.
``(6) Eligible state.--The term `eligible State' means a
State or territory of the United States that received a 25-
percent payment for 1 or more fiscal years of the eligibility
period.
``(7) Federal land.--The term `Federal land' means--
``(A) land within the National Forest System, as
defined in section 11(a) of the Forest and Rangeland
Renewable Resources Planning Act of 1974 (16 U.S.C.
1609(a)) exclusive of the National Grasslands and land
utilization projects designated as National Grasslands
administered pursuant to the Act of July 22, 1937 (7
U.S.C. 1010-1012); and
``(B) such portions of the revested Oregon and
California Railroad and reconveyed Coos Bay Wagon Road
grant land as are or may hereafter come under the
jurisdiction of the Department of the Interior, which
have heretofore or may hereafter be classified as
timberlands, and power-site land valuable for timber,
that shall be managed, except as provided in the former
section 3 of the Act of August 28, 1937 (50 Stat. 875;
43 U.S.C. 1181c), for permanent forest production.
``(8) 50-percent adjusted share.--The term `50-percent
adjusted share' means the number equal to the quotient obtained
by dividing--
``(A) the number equal to the quotient obtained by
dividing--
``(i) the 50-percent base share for the
eligible county; by
``(ii) the income adjustment for the
eligible county; by
``(B) the number equal to the sum of the quotients
obtained under subparagraph (A) and paragraph (1)(A)
for all eligible counties.
``(9) 50-percent base share.--The term `50-percent base
share' means the number equal to the average of--
``(A) the quotient obtained by dividing--
``(i) the number of acres of Federal land
described in paragraph (7)(B) in each eligible
county; by
``(ii) the total number acres of Federal
land in all eligible counties in all eligible
States; and
``(B) the quotient obtained by dividing--
``(i) the amount equal to the average of
the 3 highest 50-percent payments made to each
eligible county during the eligibility period;
by
``(ii) the amount equal to the sum of the
amounts calculated under clause (i) and
paragraph (2)(B)(i) for all eligible counties
in all eligible States during the eligibility
period.
``(10) 50-percent payment.--The term `50-percent payment'
means the payment that is the sum of the 50-percent share
otherwise paid to a county pursuant to title II of the Act of
August 28, 1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 1181f),
and the payment made to a county pursuant to the Act of May 24,
1939 (chapter 144; 53 Stat. 753; 43 U.S.C. 1181f-1 et seq.).
``(11) Full funding amount.--The term `full funding amount'
means $500,000,000 for fiscal year 2008.
``(12) Income adjustment.--The term `income adjustment'
means the square of the quotient obtained by dividing--
``(A) the per capita personal income for each
eligible county; by
``(B) the median per capita personal income of all
eligible counties.
``(13) Per capita personal income.--The term `per capita
personal income' means the most recent per capita personal
income data, as determined by the Bureau of Economic Analysis.
``(14) Safety net payments.--The term `safety net payments'
means the special payment amounts paid to States and counties
required by section 13982 or 13983 of the Omnibus Budget
Reconciliation Act of 1993 (Public Law 103-66; 16 U.S.C. 500
note; 43 U.S.C. 1181f note).
``(15) Secretary concerned.--The term `Secretary concerned'
means--
``(A) the Secretary of Agriculture or the designee
of the Secretary of Agriculture with respect to the
Federal land described in paragraph (7)(A); and
``(B) the Secretary of the Interior or the designee
of the Secretary of the Interior with respect to the
Federal land described in paragraph (7)(B).
``(16) State payment.--The term `State payment' means the
payment for an eligible State calculated under section 101(a).
``(17) 25-percent payment.--The term `25-percent payment'
means the payment to States required by the sixth paragraph
under the heading of `FOREST SERVICE' in the Act of May 23,
1908 (35 Stat. 260; 16 U.S.C. 500), and section 13 of the Act
of March 1, 1911 (36 Stat. 963; 16 U.S.C. 500).
``TITLE I--SECURE PAYMENTS FOR STATES AND COUNTIES CONTAINING FEDERAL
LAND
``SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING FEDERAL LAND.
``(a) State Payment.--For fiscal year 2008, the Secretary of
Agriculture shall calculate for each eligible State an amount equal to
the sum of the products obtained by multiplying--
``(1) the adjusted share for each eligible county within
the eligible State; by
``(2) the full funding amount for the fiscal year.
``(b) County Payment.--For fiscal year 2008, the Secretary of the
Interior shall calculate for each eligible county that received a 50-
percent payment during the eligibility period an amount equal to the
product obtained by multiplying--
``(1) the 50-percent adjusted share for the eligible
county; by
``(2) the full funding amount for the fiscal year.
``SEC. 102. PAYMENTS TO STATES AND COUNTIES.
``(a) Payment Amounts.--Except as provided in section 103, the
Secretary of the Treasury shall pay to--
``(1) a State or territory of the United States an amount
equal to the sum of the amounts elected under subsection (b) by
each county within the State or territory for--
``(A) if the county is eligible for the 25-percent
payment, the share of the 25-percent payment; or
``(B) the share of the State payment of the
eligible county; and
``(2) a county an amount equal to the amount elected under
subsection (b) by each county for--
``(A) if the county is eligible for the 50-percent
payment, the 50-percent payment; or
``(B) the county payment for the eligible county.
``(b) Election To Receive Payment Amount.--
``(1) Election; submission of results.--
``(A) In general.--The election to receive a share
of the State payment, the county payment, a share of
the State payment and the county payment, a share of
the 25-percent payment, the 50-percent payment, or a
share of the 25-percent payment and the 50-percent
payment, as applicable, shall be made at the discretion
of each affected county by August 1, 2008 (or as soon
thereafter as the Secretary concerned determines is
practicable) and transmitted to the Secretary concerned
by the Governor of each eligible State.
``(B) Failure to transmit.--If an election for an
affected county is not transmitted to the Secretary
concerned by the date specified under subparagraph (A),
the affected county shall be considered to have elected
to receive a share of the State payment, the county
payment, or a share of the State payment and the county
payment, as applicable.
``(2) Source of payment amounts.--The payment to an
eligible State or eligible county under this section for a
fiscal year shall be derived from--
``(A) any amounts that are appropriated to carry
out this Act;
``(B) any revenues, fees, penalties, or
miscellaneous receipts, exclusive of deposits to any
relevant trust fund, special account, or permanent
operating funds, received by the Federal Government
from activities by the Bureau of Land Management or the
Forest Service on the applicable Federal land; and
``(C) to the extent of any shortfall, out of any
amounts in the Treasury of the United States not
otherwise appropriated.
``(c) Distribution and Expenditure of Payments.--
``(1) Distribution method.--A State that receives a payment
under subsection (a) for Federal land described in section
3(7)(A) shall distribute the appropriate payment amount among
the appropriate counties in the State in accordance with--
``(A) the Act of May 23, 1908 (16 U.S.C. 500); and
``(B) section 13 of the Act of March 1, 1911 (36
Stat. 963; 16 U.S.C. 500).
``(2) Expenditure purposes.--Subject to subsection (d),
payments received by a State under subsection (a) and
distributed to counties in accordance with paragraph (1) shall
be expended as required by the laws referred to in paragraph
(1).
``(d) Expenditure Rules for Eligible Counties.--
``(1) Allocations.--
``(A) Use of portion in same manner as 25-percent
payment or 50-percent payment, as applicable.--Except
as provided in paragraph (3)(B), if an eligible county
elects to receive its share of the State payment or the
county payment, not less than 80 percent, but not more
than 85 percent, of the funds shall be expended in the
same manner in which the 25-percent payments or 50-
percent payment, as applicable, are required to be
expended.
``(B) Election as to use of balance.--Except as
provided in subparagraph (C), an eligible county shall
elect to do 1 or more of the following with the balance
of any funds not expended pursuant to subparagraph (A):
``(i) Reserve any portion of the balance
for projects in accordance with title II.
``(ii) Reserve not more than 7 percent of
the total share for the eligible county of the
State payment or the county payment for
projects in accordance with title III.
``(iii) Return the portion of the balance
not reserved under clauses (i) and (ii) to the
Treasury of the United States.
``(C) Counties with modest distributions.--In the
case of each eligible county to which more than
$100,000, but less than $350,000, is distributed for
any fiscal year pursuant to either or both of
paragraphs (1)(B) and (2)(B) of subsection (a), the
eligible county, with respect to the balance of any
funds not expended pursuant to subparagraph (A) for
that fiscal year, shall--
``(i) reserve any portion of the balance
for--
``(I) carrying out projects under
title II;
``(II) carrying out projects under
title III; or
``(III) a combination of the
purposes described in subclauses (I)
and (II); or
``(ii) return the portion of the balance
not reserved under clause (i) to the Treasury
of the United States.
``(2) Distribution of funds.--
``(A) In general.--Funds reserved by an eligible
county under subparagraph (B)(i) or (C)(i) of paragraph
(1) for carrying out projects under title II shall be
deposited in a special account in the Treasury of the
United States.
``(B) Availability.--Amounts deposited under
subparagraph (A) shall--
``(i) be available for expenditure by the
Secretary concerned, without further
appropriation; and
``(ii) remain available until expended in
accordance with title II.
``(3) Election.--
``(A) Notification.--
``(i) In general.--An eligible county shall
notify the Secretary concerned of an election
by the eligible county under this subsection
not later than September 30, 2008 (or as soon
thereafter as the Secretary concerned
determines is practicable).
``(ii) Failure to elect.--Except as
provided in subparagraph (B), if the eligible
county fails to make an election by the date
specified in clause (i), the eligible county
shall--
``(I) be considered to have elected
to expend 85 percent of the funds in
accordance with paragraph (1)(A); and
``(II) return the balance to the
Treasury of the United States.
``(B) Counties with minor distributions.--In the
case of each eligible county to which less than
$100,000 is distributed for any fiscal year pursuant to
either or both of paragraphs (1)(B) and (2)(B) of
subsection (a), the eligible county may elect to expend
all the funds in the same manner in which the 25-
percent payments or 50-percent payments, as applicable,
are required to be expended.
``(e) Time for Payment.--The payments required under this section
for a fiscal year shall be made as soon as practicable after the end of
that fiscal year.
``SEC. 103. TRANSITION PAYMENTS TO STATES.
``(a) Definitions.--In this section:
``(1) Adjusted amount.--The term `adjusted amount' means,
with respect to a covered State for fiscal year 2008, 90
percent of--
``(A) the sum of the amounts paid for fiscal year
2006 under section 102(a)(2) (as in effect on September
29, 2006) for the eligible counties in the covered
State that have elected under section 102(b) to receive
a share of the State payment for fiscal year 2008; and
``(B) the sum of the amounts paid for fiscal year
2006 under section 103(a)(2) (as in effect on September
29, 2006) for the eligible counties in the State of
Oregon that have elected under section 102(b) to
receive the county payment for fiscal year 2008.
``(2) Covered state.--The term `covered State' means each
of the States of California, Louisiana, Oregon, Pennsylvania,
South Carolina, South Dakota, Texas, and Washington.
``(b) Transition Payments.--For fiscal year 2008, in lieu of the
payment amounts that otherwise would have been made under paragraphs
(1)(B) and (2)(B) of section 102(a), the Secretary of the Treasury
shall pay the adjusted amount to each covered State and the eligible
counties within the covered State, as applicable.
``(c) Distribution of Adjusted Amount.--Except as provided in
subsection (d), it is the intent of Congress that the method of
distributing the payments under subsection (b) among the counties in
the covered States for fiscal year 2008 be in the same proportion that
the payments were distributed to the eligible counties in fiscal year
2006.
``(d) Distribution of Payments in California.--The following
payments shall be distributed among the eligible counties in the State
of California in the same proportion that payments under section
102(a)(2) (as in effect on September 29, 2006) were distributed to the
eligible counties for fiscal year 2006:
``(1) Payments to the State of California under subsection
(b).
``(2) The shares of the eligible counties of the State
payment for California under section 102 for fiscal year 2011.
``(e) Treatment of Payments.--For purposes of this Act, any payment
made under subsection (b) shall be considered to be a payment made
under section 102(a).
``TITLE II--SPECIAL PROJECTS ON FEDERAL LAND
``SEC. 201. DEFINITIONS.
``In this title:
``(1) Participating county.--The term `participating
county' means an eligible county that elects under section
102(d) to expend a portion of the Federal funds received under
section 102 in accordance with this title.
``(2) Project funds.--The term `project funds' means all
funds an eligible county elects under section 102(d) to reserve
for expenditure in accordance with this title.
``(3) Resource advisory committee.--The term `resource
advisory committee' means--
``(A) an advisory committee established by the
Secretary concerned under section 205; or
``(B) an advisory committee determined by the
Secretary concerned to meet the requirements of section
205.
``(4) Resource management plan.--The term `resource
management plan' means--
``(A) a land use plan prepared by the Bureau of
Land Management for units of the Federal land described
in section 3(7)(B) pursuant to section 202 of the
Federal Land Policy and Management Act of 1976 (43
U.S.C. 1712); or
``(B) a land and resource management plan prepared
by the Forest Service for units of the National Forest
System pursuant to section 6 of the Forest and
Rangeland Renewable Resources Planning Act of 1974 (16
U.S.C. 1604).
``SEC. 202. GENERAL LIMITATION ON USE OF PROJECT FUNDS.
``(a) Limitation.--Project funds shall be expended solely on
projects that meet the requirements of this title.
``(b) Authorized Uses.--Project funds may be used by the Secretary
concerned for the purpose of entering into and implementing cooperative
agreements with willing Federal agencies, State and local governments,
private and nonprofit entities, and landowners for protection,
restoration, and enhancement of fish and wildlife habitat, and other
resource objectives consistent with the purposes of this Act on Federal
land and on non-Federal land where projects would benefit the resources
on Federal land.
``SEC. 203. SUBMISSION OF PROJECT PROPOSALS.
``(a) Submission of Project Proposals to Secretary Concerned.--
``(1) Projects funded using project funds.--Not later than
September 30 for fiscal year 2008 (or as soon thereafter as the
Secretary concerned determines is practicable) each resource
advisory committee shall submit to the Secretary concerned a
description of any projects that the resource advisory
committee proposes the Secretary undertake using any project
funds reserved by eligible counties in the area in which the
resource advisory committee has geographic jurisdiction.
``(2) Projects funded using other funds.--A resource
advisory committee may submit to the Secretary concerned a
description of any projects that the committee proposes the
Secretary undertake using funds from State or local
governments, or from the private sector, other than project
funds and funds appropriated and otherwise available to do
similar work.
``(3) Joint projects.--Participating counties or other
persons may propose to pool project funds or other funds,
described in paragraph (2), and jointly propose a project or
group of projects to a resource advisory committee established
under section 205.
``(b) Required Description of Projects.--In submitting proposed
projects to the Secretary concerned under subsection (a), a resource
advisory committee shall include in the description of each proposed
project the following information:
``(1) The purpose of the project and a description of how
the project will meet the purposes of this title.
``(2) The anticipated duration of the project.
``(3) The anticipated cost of the project.
``(4) The proposed source of funding for the project,
whether project funds or other funds.
``(5)(A) Expected outcomes, including how the project will
meet or exceed desired ecological conditions, maintenance
objectives, or stewardship objectives.
``(B) An estimate of the amount of any timber, forage, and
other commodities and other economic activity, including jobs
generated, if any, anticipated as part of the project.
``(6) A detailed monitoring plan, including funding needs
and sources, that--
``(A) tracks and identifies the positive or
negative impacts of the project, implementation, and
provides for validation monitoring; and
``(B) includes an assessment of the following:
``(i) Whether or not the project met or
exceeded desired ecological conditions; created
local employment or training opportunities,
including summer youth jobs programs such as
the Youth Conservation Corps where appropriate.
``(ii) Whether the project improved the use
of, or added value to, any products removed
from land consistent with the purposes of this
title.
``(7) An assessment that the project is to be in the public
interest.
``(c) Authorized Projects.--Projects proposed under subsection (a)
shall be consistent with section 2.
``SEC. 204. EVALUATION AND APPROVAL OF PROJECTS BY SECRETARY CONCERNED.
``(a) Conditions for Approval of Proposed Project.--The Secretary
concerned may make a decision to approve a project submitted by a
resource advisory committee under section 203 only if the proposed
project satisfies each of the following conditions:
``(1) The project complies with all applicable Federal laws
(including regulations).
``(2) The project is consistent with the applicable
resource management plan and with any watershed or subsequent
plan developed pursuant to the resource management plan and
approved by the Secretary concerned.
``(3) The project has been approved by the resource
advisory committee in accordance with section 205, including
the procedures issued under subsection (e) of that section.
``(4) A project description has been submitted by the
resource advisory committee to the Secretary concerned in
accordance with section 203.
``(5) The project will improve the maintenance of existing
infrastructure, implement stewardship objectives that enhance
forest ecosystems, and restore and improve land health and
water quality.
``(b) Environmental Reviews.--
``(1) Request for payment by county.--The Secretary
concerned may request the resource advisory committee
submitting a proposed project to agree to the use of project
funds to pay for any environmental review, consultation, or
compliance with applicable environmental laws required in
connection with the project.
``(2) Conduct of environmental review.--If a payment is
requested under paragraph (1) and the resource advisory
committee agrees to the expenditure of funds for this purpose,
the Secretary concerned shall conduct environmental review,
consultation, or other compliance responsibilities in
accordance with Federal laws (including regulations).
``(3) Effect of refusal to pay.--
``(A) In general.--If a resource advisory committee
does not agree to the expenditure of funds under
paragraph (1), the project shall be deemed withdrawn
from further consideration by the Secretary concerned
pursuant to this title.
``(B) Effect of withdrawal.--A withdrawal under
subparagraph (A) shall be deemed to be a rejection of
the project for purposes of section 207(c).
``(c) Decisions of Secretary Concerned.--
``(1) Rejection of projects.--
``(A) In general.--A decision by the Secretary
concerned to reject a proposed project shall be at the
sole discretion of the Secretary concerned.
``(B) No administrative appeal or judicial
review.--Notwithstanding any other provision of law, a
decision by the Secretary concerned to reject a
proposed project shall not be subject to administrative
appeal or judicial review.
``(C) Notice of rejection.--Not later than 30 days
after the date on which the Secretary concerned makes
the rejection decision, the Secretary concerned shall
notify in writing the resource advisory committee that
submitted the proposed project of the rejection and the
reasons for rejection.
``(2) Notice of project approval.--The Secretary concerned
shall publish in the Federal Register notice of each project
approved under subsection (a) if the notice would be required
had the project originated with the Secretary.
``(d) Source and Conduct of Project.--Once the Secretary concerned
accepts a project for review under section 203, the acceptance shall be
deemed a Federal action for all purposes.
``(e) Implementation of Approved Projects.--
``(1) Cooperation.--Notwithstanding chapter 63 of title 31,
United States Code, using project funds the Secretary concerned
may enter into contracts, grants, and cooperative agreements
with States and local governments, private and nonprofit
entities, and landowners and other persons to assist the
Secretary in carrying out an approved project.
``(2) Best value contracting.--
``(A) In general.--For any project involving a
contract authorized by paragraph (1) the Secretary
concerned may elect a source for performance of the
contract on a best value basis.
``(B) Factors.--The Secretary concerned shall
determine best value based on such factors as--
``(i) the technical demands and complexity
of the work to be done;
``(ii)(I) the ecological objectives of the
project; and
``(II) the sensitivity of the resources
being treated;
``(iii) the past experience by the
contractor with the type of work being done,
using the type of equipment proposed for the
project, and meeting or exceeding desired
ecological conditions; and
``(iv) the commitment of the contractor to
hiring highly qualified workers and local
residents.
``(3) Merchantable timber contracting pilot program.--
``(A) Establishment.--The Secretary concerned shall
establish a pilot program to implement a certain
percentage of approved projects involving the sale of
merchantable timber using separate contracts for--
``(i) the harvesting or collection of
merchantable timber; and
``(ii) the sale of the timber.
``(B) Annual percentages.--Under the pilot program,
the Secretary concerned shall ensure that, on a
nationwide basis, not less than 35 percent of all
approved projects involving the sale of merchantable
timber are implemented using separate contracts.
``(C) Inclusion in pilot program.--The decision
whether to use separate contracts to implement a
project involving the sale of merchantable timber shall
be made by the Secretary concerned after the approval
of the project under this title.
``(D) Assistance.--
``(i) In general.--The Secretary concerned
may use funds from any appropriated account
available to the Secretary for the Federal land
to assist in the administration of projects
conducted under the pilot program.
``(ii) Maximum amount of assistance.--The
total amount obligated under this subparagraph
may not exceed $1,000,000 for any fiscal year
during which the pilot program is in effect.
``(E) Review and report.--
``(i) Initial report.--Not later than
September 30, 2010, the Comptroller General
shall submit to the Committees on Agriculture,
Nutrition, and Forestry and Energy and Natural
Resources of the Senate and the Committees on
Agriculture and Natural Resources of the House
of Representatives a report assessing the pilot
program.
``(ii) Annual report.--The Secretary
concerned shall submit to the Committees on
Agriculture, Nutrition, and Forestry and Energy
and Natural Resources of the Senate and the
Committees on Agriculture and Natural Resources
of the House of Representatives an annual
report describing the results of the pilot
program.
``(f) Requirements for Project Funds.--The Secretary shall ensure
that at least 50 percent of all project funds be used for projects that
are primarily dedicated--
``(1) to road maintenance, decommissioning, or
obliteration; or
``(2) to restoration of streams and watersheds.
``SEC. 205. RESOURCE ADVISORY COMMITTEES.
``(a) Establishment and Purpose of Resource Advisory Committees.--
``(1) Establishment.--The Secretary concerned shall
establish and maintain resource advisory committees to perform
the duties in subsection (b), except as provided in paragraph
(4).
``(2) Purpose.--The purpose of a resource advisory
committee shall be--
``(A) to improve collaborative relationships; and
``(B) to provide advice and recommendations to the
land management agencies consistent with the purposes
of this title.
``(3) Access to resource advisory committees.--To ensure
that each unit of Federal land has access to a resource
advisory committee, and that there is sufficient interest in
participation on a committee to ensure that membership can be
balanced in terms of the points of view represented and the
functions to be performed, the Secretary concerned may,
establish resource advisory committees for part of, or 1 or
more, units of Federal land.
``(4) Existing advisory committees.--
``(A) In general.--An advisory committee that meets
the requirements of this section, a resource advisory
committee established before September 29, 2006, or an
advisory committee determined by the Secretary
concerned before September 29, 2006, to meet the
requirements of this section may be deemed by the
Secretary concerned to be a resource advisory committee
for the purposes of this title.
``(B) Charter.--A charter for a committee described
in subparagraph (A) that was filed on or before
September 29, 2006, shall be considered to be filed for
purposes of this Act.
``(C) Bureau of land management advisory
committees.--The Secretary of the Interior may deem a
resource advisory committee meeting the requirements of
subpart 1784 of part 1780 of title 43, Code of Federal
Regulations, as a resource advisory committee for the
purposes of this title.
``(b) Duties.--A resource advisory committee shall--
``(1) review projects proposed under this title by
participating counties and other persons;
``(2) propose projects and funding to the Secretary
concerned under section 203;
``(3) provide early and continuous coordination with
appropriate land management agency officials in recommending
projects consistent with purposes of this Act under this title;
``(4) provide frequent opportunities for citizens,
organizations, tribes, land management agencies, and other
interested parties to participate openly and meaningfully,
beginning at the early stages of the project development
process under this title;
``(5)(A) monitor projects that have been approved under
section 204; and
``(B) advise the designated Federal official on the
progress of the monitoring efforts under subparagraph (A); and
``(6) make recommendations to the Secretary concerned for
any appropriate changes or adjustments to the projects being
monitored by the resource advisory committee.
``(c) Appointment by the Secretary.--
``(1) Appointment and term.--
``(A) In general.--The Secretary concerned, shall
appoint the members of resource advisory committees for
a term of 4 years beginning on the date of appointment.
``(B) Reappointment.--The Secretary concerned may
reappoint members to subsequent 4-year terms.
``(2) Basic requirements.--The Secretary concerned shall
ensure that each resource advisory committee established meets
the requirements of subsection (d).
``(3) Initial appointment.--Not later than 180 days after
the date of the enactment of this Act, the Secretary concerned
shall make initial appointments to the resource advisory
committees.
``(4) Vacancies.--The Secretary concerned shall make
appointments to fill vacancies on any resource advisory
committee as soon as practicable after the vacancy has
occurred.
``(5) Compensation.--Members of the resource advisory
committees shall not receive any compensation.
``(d) Composition of Advisory Committee.--
``(1) Number.--Each resource advisory committee shall be
comprised of 15 members.
``(2) Community interests represented.--Committee members
shall be representative of the interests of the following 3
categories:
``(A) 5 persons that--
``(i) represent organized labor or non-
timber forest product harvester groups;
``(ii) represent developed outdoor
recreation, off highway vehicle users, or
commercial recreation activities;
``(iii) represent--
``(I) energy and mineral
development interests; or
``(II) commercial or recreational
fishing interests;
``(iv) represent the commercial timber
industry; or
``(v) hold Federal grazing or other land
use permits, or represent nonindustrial private
forest land owners, within the area for which
the committee is organized.
``(B) 5 persons that represent--
``(i) nationally recognized environmental
organizations;
``(ii) regionally or locally recognized
environmental organizations;
``(iii) dispersed recreational activities;
``(iv) archaeological and historical
interests; or
``(v) nationally or regionally recognized
wild horse and burro interest groups, wildlife
or hunting organizations, or watershed
associations.
``(C) 5 persons that--
``(i) hold State elected office (or a
designee);
``(ii) hold county or local elected office;
``(iii) represent American Indian tribes
within or adjacent to the area for which the
committee is organized;
``(iv) are school officials or teachers; or
``(v) represent the affected public at
large.
``(3) Balanced representation.--In appointing committee
members from the 3 categories in paragraph (2), the Secretary
concerned shall provide for balanced and broad representation
from within each category.
``(4) Geographic distribution.--The members of a resource
advisory committee shall reside within the State in which the
committee has jurisdiction and, to extent practicable, the
Secretary concerned shall ensure local representation in each
category in paragraph (2).
``(5) Chairperson.--A majority on each resource advisory
committee shall select the chairperson of the committee.
``(e) Approval Procedures.--
``(1) In general.--Subject to paragraph (3), each resource
advisory committee shall establish procedures for proposing
projects to the Secretary concerned under this title.
``(2) Quorum.--A quorum must be present to constitute an
official meeting of the committee.
``(3) Approval by majority of members.--A project may be
proposed by a resource advisory committee to the Secretary
concerned under section 203(a), if the project has been
approved by a majority of members of the committee from each of
the 3 categories in subsection (d)(2).
``(f) Other Committee Authorities and Requirements.--
``(1) Staff assistance.--A resource advisory committee may
submit to the Secretary concerned a request for periodic staff
assistance from Federal employees under the jurisdiction of the
Secretary.
``(2) Meetings.--All meetings of a resource advisory
committee shall be announced at least 1 week in advance in a
local newspaper of record and shall be open to the public.
``(3) Records.--A resource advisory committee shall
maintain records of the meetings of the committee and make the
records available for public inspection.
``SEC. 206. USE OF PROJECT FUNDS.
``(a) Agreement Regarding Schedule and Cost of Project.--
``(1) Agreement between parties.--The Secretary concerned
may carry out a project submitted by a resource advisory
committee under section 203(a) using project funds or other
funds described in section 203(a)(2), if, as soon as
practicable after the issuance of a decision document for the
project and the exhaustion of all administrative appeals and
judicial review of the project decision, the Secretary
concerned and the resource advisory committee enter into an
agreement addressing, at a minimum, the following:
``(A) The schedule for completing the project.
``(B) The total cost of the project, including the
level of agency overhead to be assessed against the
project.
``(C) For a multiyear project, the estimated cost
of the project for each of the fiscal years in which it
will be carried out.
``(D) The remedies for failure of the Secretary
concerned to comply with the terms of the agreement
consistent with current Federal law.
``(2) Limited use of federal funds.--The Secretary
concerned may decide, at the sole discretion of the Secretary
concerned, to cover the costs of a portion of an approved
project using Federal funds appropriated or otherwise available
to the Secretary for the same purposes as the project.
``(b) Transfer of Project Funds.--
``(1) Initial transfer required.--As soon as practicable
after the agreement is reached under subsection (a) with regard
to a project to be funded in whole or in part using project
funds, or other funds described in section 203(a)(2), the
Secretary concerned shall transfer to the applicable unit of
National Forest System land or Bureau of Land Management
District an amount of project funds equal to--
``(A) in the case of a project to be completed in a
single fiscal year, the total amount specified in the
agreement to be paid using project funds, or other
funds described in section 203(a)(2); or
``(B) in the case of a multiyear project, the
amount specified in the agreement to be paid using
project funds, or other funds described in section
203(a)(2) for the first fiscal year.
``(2) Condition on project commencement.--The unit of
National Forest System land or Bureau of Land Management
District concerned, shall not commence a project until the
project funds, or other funds described in section 203(a)(2)
required to be transferred under paragraph (1) for the project,
have been made available by the Secretary concerned.
``(3) Subsequent transfers for multiyear projects.--
``(A) In general.--For the second and subsequent
fiscal years of a multiyear project to be funded in
whole or in part using project funds, the unit of
National Forest System land or Bureau of Land
Management District concerned shall use the amount of
project funds required to continue the project in that
fiscal year according to the agreement entered into
under subsection (a).
``(B) Suspension of work.--The Secretary concerned
shall suspend work on the project if the project funds
required by the agreement in the second and subsequent
fiscal years are not available.
``SEC. 207. AVAILABILITY OF PROJECT FUNDS.
``(a) Submission of Proposed Projects To Obligate Funds.--By
September 30, 2008 (or as soon thereafter as the Secretary concerned
determines is practicable) a resource advisory committee shall submit
to the Secretary concerned pursuant to section 203(a)(1) a sufficient
number of project proposals that, if approved, would result in the
obligation of at least the full amount of the project funds reserved by
the participating county in the preceding fiscal year.
``(b) Use or Transfer of Unobligated Funds.--Subject to section
208, if a resource advisory committee fails to comply with subsection
(a) for a fiscal year, any project funds reserved by the participating
county in the preceding fiscal year and remaining unobligated shall be
available for use as part of the project submissions in the next fiscal
year.
``(c) Effect of Rejection of Projects.--Subject to section 208, any
project funds reserved by a participating county in the preceding
fiscal year that are unobligated at the end of a fiscal year because
the Secretary concerned has rejected one or more proposed projects
shall be available for use as part of the project submissions in the
next fiscal year.
``(d) Effect of Court Orders.--
``(1) In general.--If an approved project under this Act is
enjoined or prohibited by a Federal court, the Secretary
concerned shall return the unobligated project funds related to
the project to the participating county or counties that
reserved the funds.
``(2) Expenditure of funds.--The returned funds shall be
available for the county to expend in the same manner as the
funds reserved by the county under subparagraph (B) or (C)(i)
of section 102(d)(1).
``SEC. 208. TERMINATION OF AUTHORITY.
``(a) In General.--The authority to initiate projects under this
title shall terminate on September 30, 2011.
``(b) Deposits in Treasury.--Any project funds not obligated by
September 30, 2012, shall be deposited in the Treasury of the United
States.
``TITLE III--COUNTY FUNDS
``SEC. 301. DEFINITIONS.
``In this title:
``(1) County funds.--The term `county funds' means all
funds an eligible county elects under section 102(d) to reserve
for expenditure in accordance with this title.
``(2) Participating county.--The term `participating
county' means an eligible county that elects under section
102(d) to expend a portion of the Federal funds received under
section 102 in accordance with this title.
``SEC. 302. USE.
``(a) Authorized Uses.--A participating county, including any
applicable agencies of the participating county, shall use county
funds, in accordance with this title, only--
``(1) to carry out activities under the Firewise
Communities program to provide to homeowners in fire-sensitive
ecosystems education on, and assistance with implementing,
techniques in home siting, home construction, and home
landscaping that can increase the protection of people and
property from wildfires;
``(2) to reimburse the participating county for search and
rescue and other emergency services, including firefighting,
that are--
``(A) performed on Federal land after the date on
which the use was approved under subsection (b);
``(B) paid for by the participating county; and
``(3) to develop community wildfire protection plans in
coordination with the appropriate Secretary concerned.
``(b) Proposals.--A participating county shall use county funds for
a use described in subsection (a) only after a 45-day public comment
period, at the beginning of which the participating county shall--
``(1) publish in any publications of local record a
proposal that describes the proposed use of the county funds;
and
``(2) submit the proposal to any resource advisory
committee established under section 205 for the participating
county.
``SEC. 303. CERTIFICATION.
``(a) In General.--Not later than February 1 of the year after the
year in which any county funds were expended by a participating county,
the appropriate official of the participating county shall submit to
the Secretary concerned a certification that the county funds expended
in the applicable year have been used for the uses authorized under
section 302(a), including a description of the amounts expended and the
uses for which the amounts were expended.
``(b) Review.--The Secretary concerned shall review the
certifications submitted under subsection (a) as the Secretary
concerned determines to be appropriate.
``SEC. 304. TERMINATION OF AUTHORITY.
``(a) In General.--The authority to initiate projects under this
title terminates on September 30, 2011.
``(b) Availability.--Any county funds not obligated by September
30, 2012, shall be returned to the Treasury of the United States.
``TITLE IV--MISCELLANEOUS PROVISIONS
``SEC. 401. REGULATIONS.
``The Secretary of Agriculture and the Secretary of the Interior
shall issue regulations to carry out the purposes of this Act.
``SEC. 402. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated such sums as are
necessary to carry out this Act for each of fiscal years 2008 and 2009.
``SEC. 403. TREATMENT OF FUNDS AND REVENUES.
``(a) Relation to Other Appropriations.--Funds made available under
section 402 and funds made available to a Secretary concerned under
section 206 shall be in addition to any other annual appropriations for
the Forest Service and the Bureau of Land Management.
``(b) Deposit of Revenues and Other Funds.--All revenues generated
from projects pursuant to title II, including any interest accrued from
the revenues, shall be deposited in the Treasury of the United
States.''.
(b) Forest Receipt Payments to Eligible States and Counties.--
(1) Act of may 23, 1908.--The sixth paragraph under the
heading ``FOREST SERVICE'' in the Act of May 23, 1908 (16
U.S.C. 500) is amended in the first sentence by striking
``twenty-five percentum'' and all that follows through ``shall
be paid'' and inserting the following: ``an amount equal to the
annual average of 25 percent of all amounts received for the
applicable fiscal year and each of the preceding 6 fiscal years
from each national forest shall be paid''.
(2) Weeks law.--Section 13 of the Act of March 1, 1911
(commonly known as the ``Weeks Law'') (16 U.S.C. 500) is
amended in the first sentence by striking ``twenty-five
percentum'' and all that follows through ``shall be paid'' and
inserting the following: ``an amount equal to the annual
average of 25 percent of all amounts received for the
applicable fiscal year and each of the preceding 6 fiscal years
from each national forest shall be paid''.
(c) Payments in Lieu of Taxes.--
(1) In general.--Section 6906 of title 31, United States
Code, is amended to read as follows:
``Sec. 6906. Funding
``For each of fiscal years 2008 and 2009--
``(1) each county or other eligible unit of local
government shall be entitled to payment under this chapter; and
``(2) sums shall be made available to the Secretary of the
Interior for obligation or expenditure in accordance with this
chapter.''.
(2) Conforming amendment.--The table of sections for
chapter 69 of title 31, United States Code, is amended by
striking the item relating to section 6906 and inserting the
following:
``6906. Funding.''.
TITLE IV--PAUL WELLSTONE AND PETE DOMENICI MENTAL HEALTH PARITY AND
ADDICTION EQUITY ACT OF 2008
SEC. 401. SHORT TITLE.
This title may be cited as the ``Paul Wellstone and Pete Domenici
Mental Health Parity and Addiction Equity Act of 2008''.
SEC. 402. MENTAL HEALTH PARITY.
(a) Amendments to ERISA.--Section 712 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1185a) is amended--
(1) in subsection (a), by adding at the end the following:
``(3) Financial requirements and treatment limitations.--
``(A) In general.--In the case of a group health
plan (or health insurance coverage offered in
connection with such a plan) that provides both medical
and surgical benefits and mental health or substance
use disorder benefits, such plan or coverage shall
ensure that--
``(i) the financial requirements applicable
to such mental health or substance use disorder
benefits are no more restrictive than the
predominant financial requirements applied to
substantially all medical and surgical benefits
covered by the plan (or coverage), and there
are no separate cost sharing requirements that
are applicable only with respect to mental
health or substance use disorder benefits; and
``(ii) the treatment limitations applicable
to such mental health or substance use disorder
benefits are no more restrictive than the
predominant treatment limitations applied to
substantially all medical and surgical benefits
covered by the plan (or coverage) and there are
no separate treatment limitations that are
applicable only with respect to mental health
or substance use disorder benefits.
``(B) Definitions.--In this paragraph:
``(i) Financial requirement.--The term
`financial requirement' includes deductibles,
copayments, coinsurance, and out-of-pocket
expenses, but excludes an aggregate lifetime
limit and an annual limit subject to paragraphs
(1) and (2).
``(ii) Predominant.--A financial
requirement or treatment limit is considered to
be predominant if it is the most common or
frequent of such type of limit or requirement.
``(iii) Treatment limitation.--The term
`treatment limitation' includes limits on the
frequency of treatment, number of visits, days
of coverage, or other similar limits on the
scope or duration of treatment.
``(4) Availability of plan information.--The criteria for
medical necessity determinations made under the plan with
respect to mental health or substance use disorder benefits (or
the health insurance coverage offered in connection with the
plan with respect to such benefits) shall be made available by
the plan administrator (or the health insurance issuer offering
such coverage) in accordance with regulations to any current or
potential participant, beneficiary, or contracting provider
upon request. The reason for any denial under the plan (or
coverage) of reimbursement or payment for services with respect
to mental health or substance use disorder benefits in the case
of any participant or beneficiary shall, on request or as
otherwise required, be made available by the plan administrator
(or the health insurance issuer offering such coverage) to the
participant or beneficiary in accordance with regulations.
``(5) Out-of-network providers.--In the case of a plan or
coverage that provides both medical and surgical benefits and
mental health or substance use disorder benefits, if the plan
or coverage provides coverage for medical or surgical benefits
provided by out-of-network providers, the plan or coverage
shall provide coverage for mental health or substance use
disorder benefits provided by out-of-network providers in a
manner that is consistent with the requirements of this
section.'';
(2) in subsection (b), by amending paragraph (2) to read as
follows:
``(2) in the case of a group health plan (or health
insurance coverage offered in connection with such a plan) that
provides mental health or substance use disorder benefits, as
affecting the terms and conditions of the plan or coverage
relating to such benefits under the plan or coverage, except as
provided in subsection (a).'';
(3) in subsection (c)--
(A) in paragraph (1)(B)--
(i) by inserting ``(or 1 in the case of an
employer residing in a State that permits small
groups to include a single individual)'' after
``at least 2'' the first place that such
appears; and
(ii) by striking ``and who employs at least
2 employees on the first day of the plan
year''; and
(B) by striking paragraph (2) and inserting the
following:
``(2) Cost exemption.--
``(A) In general.--With respect to a group health
plan (or health insurance coverage offered in
connection with such a plan), if the application of
this section to such plan (or coverage) results in an
increase for the plan year involved of the actual total
costs of coverage with respect to medical and surgical
benefits and mental health and substance use disorder
benefits under the plan (as determined and certified
under subparagraph (C)) by an amount that exceeds the
applicable percentage described in subparagraph (B) of
the actual total plan costs, the provisions of this
section shall not apply to such plan (or coverage)
during the following plan year, and such exemption
shall apply to the plan (or coverage) for 1 plan year.
An employer may elect to continue to apply mental
health and substance use disorder parity pursuant to
this section with respect to the group health plan (or
coverage) involved regardless of any increase in total
costs.
``(B) Applicable percentage.--With respect to a
plan (or coverage), the applicable percentage described
in this subparagraph shall be--
``(i) 2 percent in the case of the first
plan year in which this section is applied; and
``(ii) 1 percent in the case of each
subsequent plan year.
``(C) Determinations by actuaries.--Determinations
as to increases in actual costs under a plan (or
coverage) for purposes of this section shall be made
and certified by a qualified and licensed actuary who
is a member in good standing of the American Academy of
Actuaries. All such determinations shall be in a
written report prepared by the actuary. The report, and
all underlying documentation relied upon by the
actuary, shall be maintained by the group health plan
or health insurance issuer for a period of 6 years
following the notification made under subparagraph (E).
``(D) 6-month determinations.--If a group health
plan (or a health insurance issuer offering coverage in
connection with a group health plan) seeks an exemption
under this paragraph, determinations under subparagraph
(A) shall be made after such plan (or coverage) has
complied with this section for the first 6 months of
the plan year involved.
``(E) Notification.--
``(i) In general.--A group health plan (or
a health insurance issuer offering coverage in
connection with a group health plan) that,
based upon a certification described under
subparagraph (C), qualifies for an exemption
under this paragraph, and elects to implement
the exemption, shall promptly notify the
Secretary, the appropriate State agencies, and
participants and beneficiaries in the plan of
such election.
``(ii) Requirement.--A notification to the
Secretary under clause (i) shall include--
``(I) a description of the number
of covered lives under the plan (or
coverage) involved at the time of the
notification, and as applicable, at the
time of any prior election of the cost-
exemption under this paragraph by such
plan (or coverage);
``(II) for both the plan year upon
which a cost exemption is sought and
the year prior, a description of the
actual total costs of coverage with
respect to medical and surgical
benefits and mental health and
substance use disorder benefits under
the plan; and
``(III) for both the plan year upon
which a cost exemption is sought and
the year prior, the actual total costs
of coverage with respect to mental
health and substance use disorder
benefits under the plan.
``(iii) Confidentiality.--A notification to
the Secretary under clause (i) shall be
confidential. The Secretary shall make
available, upon request and on not more than an
annual basis, an anonymous itemization of such
notifications, that includes--
``(I) a breakdown of States by the
size and type of employers submitting
such notification; and
``(II) a summary of the data
received under clause (ii).
``(F) Audits by appropriate agencies.--To determine
compliance with this paragraph, the Secretary may audit
the books and records of a group health plan or health
insurance issuer relating to an exemption, including
any actuarial reports prepared pursuant to subparagraph
(C), during the 6-year period following the
notification of such exemption under subparagraph (E).
A State agency receiving a notification under
subparagraph (E) may also conduct such an audit with
respect to an exemption covered by such
notification.'';
(4) in subsection (e), by striking paragraph (4) and
inserting the following:
``(4) Mental health benefits.--The term `mental health
benefits' means benefits with respect to services for mental
health conditions, as defined under the terms of the plan and
in accordance with applicable Federal and State law.
``(5) Substance use disorder benefits.--The term `substance
use disorder benefits' means benefits with respect to services
for substance use disorders, as defined under the terms of the
plan and in accordance with applicable Federal and State
law.'';
(5) by striking subsection (f);
(6) by inserting after subsection (e) the following:
``(f) Secretary Report.--The Secretary shall, by January 1, 2012,
and every two years thereafter, submit to the appropriate committees of
Congress a report on compliance of group health plans (and health
insurance coverage offered in connection with such plans) with the
requirements of this section. Such report shall include the results of
any surveys or audits on compliance of group health plans (and health
insurance coverage offered in connection with such plans) with such
requirements and an analysis of the reasons for any failures to comply.
``(g) Notice and Assistance.--The Secretary, in cooperation with
the Secretaries of Health and Human Services and Treasury, as
appropriate, shall publish and widely disseminate guidance and
information for group health plans, participants and beneficiaries,
applicable State and local regulatory bodies, and the National
Association of Insurance Commissioners concerning the requirements of
this section and shall provide assistance concerning such requirements
and the continued operation of applicable State law. Such guidance and
information shall inform participants and beneficiaries of how they may
obtain assistance under this section, including, where appropriate,
assistance from State consumer and insurance agencies.'';
(7) by striking ``mental health benefits'' and inserting
``mental health and substance use disorder benefits'' each
place it appears in subsections (a)(1)(B)(i), (a)(1)(C),
(a)(2)(B)(i), and (a)(2)(C); and
(8) by striking ``mental health benefits'' and inserting
``mental health or substance use disorder benefits'' each place
it appears (other than in any provision amended by the previous
paragraph).
(b) Amendments to Public Health Service Act.--Section 2705 of the
Public Health Service Act (42 U.S.C. 300gg-5) is amended--
(1) in subsection (a), by adding at the end the following:
``(3) Financial requirements and treatment limitations.--
``(A) In general.--In the case of a group health
plan (or health insurance coverage offered in
connection with such a plan) that provides both medical
and surgical benefits and mental health or substance
use disorder benefits, such plan or coverage shall
ensure that--
``(i) the financial requirements applicable
to such mental health or substance use disorder
benefits are no more restrictive than the
predominant financial requirements applied to
substantially all medical and surgical benefits
covered by the plan (or coverage), and there
are no separate cost sharing requirements that
are applicable only with respect to mental
health or substance use disorder benefits; and
``(ii) the treatment limitations applicable
to such mental health or substance use disorder
benefits are no more restrictive than the
predominant treatment limitations applied to
substantially all medical and surgical benefits
covered by the plan (or coverage) and there are
no separate treatment limitations that are
applicable only with respect to mental health
or substance use disorder benefits.
``(B) Definitions.--In this paragraph:
``(i) Financial requirement.--The term
`financial requirement' includes deductibles,
copayments, coinsurance, and out-of-pocket
expenses, but excludes an aggregate lifetime
limit and an annual limit subject to paragraphs
(1) and (2),
``(ii) Predominant.--A financial
requirement or treatment limit is considered to
be predominant if it is the most common or
frequent of such type of limit or requirement.
``(iii) Treatment limitation.--The term
`treatment limitation' includes limits on the
frequency of treatment, number of visits, days
of coverage, or other similar limits on the
scope or duration of treatment.
``(4) Availability of plan information.--The criteria for
medical necessity determinations made under the plan with
respect to mental health or substance use disorder benefits (or
the health insurance coverage offered in connection with the
plan with respect to such benefits) shall be made available by
the plan administrator (or the health insurance issuer offering
such coverage) in accordance with regulations to any current or
potential participant, beneficiary, or contracting provider
upon request. The reason for any denial under the plan (or
coverage) of reimbursement or payment for services with respect
to mental health or substance use disorder benefits in the case
of any participant or beneficiary shall, on request or as
otherwise required, be made available by the plan administrator
(or the health insurance issuer offering such coverage) to the
participant or beneficiary in accordance with regulations.
``(5) Out-of-network providers.--In the case of a plan or
coverage that provides both medical and surgical benefits and
mental health or substance use disorder benefits, if the plan
or coverage provides coverage for medical or surgical benefits
provided by out-of-network providers, the plan or coverage
shall provide coverage for mental health or substance use
disorder benefits provided by out-of-network providers in a
manner that is consistent with the requirements of this
section.'';
(2) in subsection (b), by amending paragraph (2) to read as
follows:
``(2) in the case of a group health plan (or health
insurance coverage offered in connection with such a plan) that
provides mental health or substance use disorder benefits, as
affecting the terms and conditions of the plan or coverage
relating to such benefits under the plan or coverage, except as
provided in subsection (a).'';
(3) in subsection (c)--
(A) in paragraph (1), by inserting before the
period the following: ``(as defined in section
2791(e)(4), except that for purposes of this paragraph
such term shall include employers with 1 employee in
the case of an employer residing in a State that
permits small groups to include a single individual)'';
and
(B) by striking paragraph (2) and inserting the
following:
``(2) Cost exemption.--
``(A) In general.--With respect to a group health
plan (or health insurance coverage offered in
connection with such a plan), if the application of
this section to such plan (or coverage) results in an
increase for the plan year involved of the actual total
costs of coverage with respect to medical and surgical
benefits and mental health and substance use disorder
benefits under the plan (as determined and certified
under subparagraph (C)) by an amount that exceeds the
applicable percentage described in subparagraph (B) of
the actual total plan costs, the provisions of this
section shall not apply to such plan (or coverage)
during the following plan year, and such exemption
shall apply to the plan (or coverage) for 1 plan year.
An employer may elect to continue to apply mental
health and substance use disorder parity pursuant to
this section with respect to the group health plan (or
coverage) involved regardless of any increase in total
costs.
``(B) Applicable percentage.--With respect to a
plan (or coverage), the applicable percentage described
in this subparagraph shall be--
``(i) 2 percent in the case of the first
plan year in which this section is applied; and
``(ii) 1 percent in the case of each
subsequent plan year.
``(C) Determinations by actuaries.--Determinations
as to increases in actual costs under a plan (or
coverage) for purposes of this section shall be made
and certified by a qualified and licensed actuary who
is a member in good standing of the American Academy of
Actuaries. All such determinations shall be in a
written report prepared by the actuary. The report, and
all underlying documentation relied upon by the
actuary, shall be maintained by the group health plan
or health insurance issuer for a period of 6 years
following the notification made under subparagraph (E).
``(D) 6-month determinations.--If a group health
plan (or a health insurance issuer offering coverage in
connection with a group health plan) seeks an exemption
under this paragraph, determinations under subparagraph
(A) shall be made after such plan (or coverage) has
complied with this section for the first 6 months of
the plan year involved.
``(E) Notification.--
``(i) In general.--A group health plan (or
a health insurance issuer offering coverage in
connection with a group health plan) that,
based upon a certification described under
subparagraph (C), qualifies for an exemption
under this paragraph, and elects to implement
the exemption, shall promptly notify the
Secretary, the appropriate State agencies, and
participants and beneficiaries in the plan of
such election.
``(ii) Requirement.--A notification to the
Secretary under clause (i) shall include--
``(I) a description of the number
of covered lives under the plan (or
coverage) involved at the time of the
notification, and as applicable, at the
time of any prior election of the cost-
exemption under this paragraph by such
plan (or coverage);
``(II) for both the plan year upon
which a cost exemption is sought and
the year prior, a description of the
actual total costs of coverage with
respect to medical and surgical
benefits and mental health and
substance use disorder benefits under
the plan; and
``(III) for both the plan year upon
which a cost exemption is sought and
the year prior, the actual total costs
of coverage with respect to mental
health and substance use disorder
benefits under the plan.
``(iii) Confidentiality.--A notification to
the Secretary under clause (i) shall be
confidential. The Secretary shall make
available, upon request and on not more than an
annual basis, an anonymous itemization of such
notifications, that includes--
``(I) a breakdown of States by the
size and type of employers submitting
such notification; and
``(II) a summary of the data
received under clause (ii).
``(F) Audits by appropriate agencies.--To determine
compliance with this paragraph, the Secretary may audit
the books and records of a group health plan or health
insurance issuer relating to an exemption, including
any actuarial reports prepared pursuant to subparagraph
(C), during the 6-year period following the
notification of such exemption under subparagraph (E).
A State agency receiving a notification under
subparagraph (E) may also conduct such an audit with
respect to an exemption covered by such
notification.'';
(4) in subsection (e), by striking paragraph (4) and
inserting the following:
``(4) Mental health benefits.--The term `mental health
benefits' means benefits with respect to services for mental
health conditions, as defined under the terms of the plan and
in accordance with applicable Federal and State law.
``(5) Substance use disorder benefits.--The term `substance
use disorder benefits' means benefits with respect to services
for substance use disorders, as defined under the terms of the
plan and in accordance with applicable Federal and State
law.'';
(5) by striking subsection (f);
(6) by striking ``mental health benefits'' and inserting
``mental health and substance use disorder benefits'' each
place it appears in subsections (a)(1)(B)(i), (a)(1)(C),
(a)(2)(B)(i), and (a)(2)(C); and
(7) by striking ``mental health benefits'' and inserting
``mental health or substance use disorder benefits'' each place
it appears (other than in any provision amended by the previous
paragraph).
(c) Amendments to Internal Revenue Code.--Section 9812 of the
Internal Revenue Code of 1986 is amended--
(1) in subsection (a), by adding at the end the following:
``(3) Financial requirements and treatment limitations.--
``(A) In general.--In the case of a group health
plan that provides both medical and surgical benefits
and mental health or substance use disorder benefits,
such plan shall ensure that--
``(i) the financial requirements applicable
to such mental health or substance use disorder
benefits are no more restrictive than the
predominant financial requirements applied to
substantially all medical and surgical benefits
covered by the plan, and there are no separate
cost sharing requirements that are applicable
only with respect to mental health or substance
use disorder benefits; and
``(ii) the treatment limitations applicable
to such mental health or substance use disorder
benefits are no more restrictive than the
predominant treatment limitations applied to
substantially all medical and surgical benefits
covered by the plan and there are no separate
treatment limitations that are applicable only
with respect to mental health or substance use
disorder benefits.
``(B) Definitions.--In this paragraph:
``(i) Financial requirement.--The term
`financial requirement' includes deductibles,
copayments, coinsurance, and out-of-pocket
expenses, but excludes an aggregate lifetime
limit and an annual limit subject to paragraphs
(1) and (2),
``(ii) Predominant.--A financial
requirement or treatment limit is considered to
be predominant if it is the most common or
frequent of such type of limit or requirement.
``(iii) Treatment limitation.--The term
`treatment limitation' includes limits on the
frequency of treatment, number of visits, days
of coverage, or other similar limits on the
scope or duration of treatment.
``(4) Availability of plan information.--The criteria for
medical necessity determinations made under the plan with
respect to mental health or substance use disorder benefits
shall be made available by the plan administrator in accordance
with regulations to any current or potential participant,
beneficiary, or contracting provider upon request. The reason
for any denial under the plan of reimbursement or payment for
services with respect to mental health or substance use
disorder benefits in the case of any participant or beneficiary
shall, on request or as otherwise required, be made available
by the plan administrator to the participant or beneficiary in
accordance with regulations.
``(5) Out-of-network providers.--In the case of a plan that
provides both medical and surgical benefits and mental health
or substance use disorder benefits, if the plan provides
coverage for medical or surgical benefits provided by out-of-
network providers, the plan shall provide coverage for mental
health or substance use disorder benefits provided by out-of-
network providers in a manner that is consistent with the
requirements of this section.'';
(2) in subsection (b), by amending paragraph (2) to read as
follows:
``(2) in the case of a group health plan that provides
mental health or substance use disorder benefits, as affecting
the terms and conditions of the plan relating to such benefits
under the plan, except as provided in subsection (a).'';
(3) in subsection (c)--
(A) by amending paragraph (1) to read as follows:
``(1) Small employer exemption.--
``(A) In general.--This section shall not apply to
any group health plan for any plan year of a small
employer.
``(B) Small employer.--For purposes of subparagraph
(A), the term `small employer' means, with respect to a
calendar year and a plan year, an employer who employed
an average of at least 2 (or 1 in the case of an
employer residing in a State that permits small groups
to include a single individual) but not more than 50
employees on business days during the preceding
calendar year. For purposes of the preceding sentence,
all persons treated as a single employer under
subsection (b), (c), (m), or (o) of section 414 shall
be treated as 1 employer and rules similar to rules of
subparagraphs (B) and (C) of section 4980D(d)(2) shall
apply.''; and
(B) by striking paragraph (2) and inserting the
following:
``(2) Cost exemption.--
``(A) In general.--With respect to a group health
plan, if the application of this section to such plan
results in an increase for the plan year involved of
the actual total costs of coverage with respect to
medical and surgical benefits and mental health and
substance use disorder benefits under the plan (as
determined and certified under subparagraph (C)) by an
amount that exceeds the applicable percentage described
in subparagraph (B) of the actual total plan costs, the
provisions of this section shall not apply to such plan
during the following plan year, and such exemption
shall apply to the plan for 1 plan year. An employer
may elect to continue to apply mental health and
substance use disorder parity pursuant to this section
with respect to the group health plan involved
regardless of any increase in total costs.
``(B) Applicable percentage.--With respect to a
plan, the applicable percentage described in this
subparagraph shall be--
``(i) 2 percent in the case of the first
plan year in which this section is applied; and
``(ii) 1 percent in the case of each
subsequent plan year.
``(C) Determinations by actuaries.--Determinations
as to increases in actual costs under a plan for
purposes of this section shall be made and certified by
a qualified and licensed actuary who is a member in
good standing of the American Academy of Actuaries. All
such determinations shall be in a written report
prepared by the actuary. The report, and all underlying
documentation relied upon by the actuary, shall be
maintained by the group health plan for a period of 6
years following the notification made under
subparagraph (E).
``(D) 6-month determinations.--If a group health
plan seeks an exemption under this paragraph,
determinations under subparagraph (A) shall be made
after such plan has complied with this section for the
first 6 months of the plan year involved.
``(E) Notification.--
``(i) In general.--A group health plan
that, based upon a certification described
under subparagraph (C), qualifies for an
exemption under this paragraph, and elects to
implement the exemption, shall promptly notify
the Secretary, the appropriate State agencies,
and participants and beneficiaries in the plan
of such election.
``(ii) Requirement.--A notification to the
Secretary under clause (i) shall include--
``(I) a description of the number
of covered lives under the plan
involved at the time of the
notification, and as applicable, at the
time of any prior election of the cost-
exemption under this paragraph by such
plan;
``(II) for both the plan year upon
which a cost exemption is sought and
the year prior, a description of the
actual total costs of coverage with
respect to medical and surgical
benefits and mental health and
substance use disorder benefits under
the plan; and
``(III) for both the plan year upon
which a cost exemption is sought and
the year prior, the actual total costs
of coverage with respect to mental
health and substance use disorder
benefits under the plan.
``(iii) Confidentiality.--A notification to
the Secretary under clause (i) shall be
confidential. The Secretary shall make
available, upon request and on not more than an
annual basis, an anonymous itemization of such
notifications, that includes--
``(I) a breakdown of States by the
size and type of employers submitting
such notification; and
``(II) a summary of the data
received under clause (ii).
``(F) Audits by appropriate agencies.--To determine
compliance with this paragraph, the Secretary may audit
the books and records of a group health plan relating
to an exemption, including any actuarial reports
prepared pursuant to subparagraph (C), during the 6-
year period following the notification of such
exemption under subparagraph (E). A State agency
receiving a notification under subparagraph (E) may
also conduct such an audit with respect to an exemption
covered by such notification.'';
(4) in subsection (e), by striking paragraph (4) and
inserting the following:
``(4) Mental health benefits.--The term `mental health
benefits' means benefits with respect to services for mental
health conditions, as defined under the terms of the plan and
in accordance with applicable Federal and State law.
``(5) Substance use disorder benefits.--The term `substance
use disorder benefits' means benefits with respect to services
for substance use disorders, as defined under the terms of the
plan and in accordance with applicable Federal and State
law.'';
(5) by striking subsection (f);
(6) by striking ``mental health benefits'' and inserting
``mental health and substance use disorder benefits'' each
place it appears in subsections (a)(1)(B)(i), (a)(1)(C),
(a)(2)(B)(i), and (a)(2)(C); and
(7) by striking ``mental health benefits'' and inserting
``mental health or substance use disorder benefits'' each place
it appears (other than in any provision amended by the previous
paragraph).
(d) Regulations.--Not later than 1 year after the date of enactment
of this Act, the Secretaries of Labor, Health and Human Services, and
the Treasury shall issue regulations to carry out the amendments made
by subsections (a), (b), and (c), respectively.
(e) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to group health plans for plan years
beginning after the date that is 1 year after the date of
enactment of this Act, regardless of whether regulations have
been issued to carry out such amendments by such effective
date, except that the amendments made by subsections (a)(5),
(b)(5), and (c)(5), relating to striking of certain sunset
provisions, shall take effect on January 1, 2009.
(2) Special rule for collective bargaining agreements.--In
the case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by this
section shall not apply to plan years beginning before the
later of--
(A) the date on which the last of the collective
bargaining agreements relating to the plan terminates
(determined without regard to any extension thereof
agreed to after the date of the enactment of this Act),
or
(B) January 1, 2009.
For purposes of subparagraph (A), any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any requirement
added by this section shall not be treated as a termination of
such collective bargaining agreement.
(f) Assuring Coordination.--The Secretary of Health and Human
Services, the Secretary of Labor, and the Secretary of the Treasury may
ensure, through the execution or revision of an interagency memorandum
of understanding among such Secretaries, that--
(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which two or
more such Secretaries have responsibility under this section
(and the amendments made by this section) are administered so
as to have the same effect at all times; and
(2) coordination of policies relating to enforcing the same
requirements through such Secretaries in order to have a
coordinated enforcement strategy that avoids duplication of
enforcement efforts and assigns priorities in enforcement.
(g) Conforming Clerical Amendments.--
(1) ERISA heading.--
(A) In general.--The heading of section 712 of the
Employee Retirement Income Security Act of 1974 is
amended to read as follows:
``SEC. 712. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER
BENEFITS.''.
(B) Clerical amendment.--The table of contents in
section 1 of such Act is amended by striking the item
relating to section 712 and inserting the following new
item:
``Sec. 712. Parity in mental health and substance use disorder
benefits.''.
(2) PHSA heading.--The heading of section 2705 of the
Public Health Service Act is amended to read as follows:
``SEC. 2705. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER
BENEFITS.''.
(3) IRC heading.--
(A) In general.--The heading of section 9812 of the
Internal Revenue Code of 1986 is amended to read as
follows:
``SEC. 9812. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER
BENEFITS.''.
(B) Clerical amendment.--The table of sections for
subchapter B of chapter 100 of such Code is amended by
striking the item relating to section 9812 and
inserting the following new item:
``Sec. 9812. Parity in mental health and substance use disorder
benefits.''.
(h) GAO Study on Coverage and Exclusion of Mental Health and
Substance Use Disorder Diagnoses.--
(1) In general.--The Comptroller General of the United
States shall conduct a study that analyzes the specific rates,
patterns, and trends in coverage and exclusion of specific
mental health and substance use disorder diagnoses by health
plans and health insurance. The study shall include an analysis
of--
(A) specific coverage rates for all mental health
conditions and substance use disorders;
(B) which diagnoses are most commonly covered or
excluded;
(C) whether implementation of this Act has affected
trends in coverage or exclusion of such diagnoses; and
(D) the impact of covering or excluding specific
diagnoses on participants' and enrollees' health, their
health care coverage, and the costs of delivering
health care.
(2) Reports.--Not later than 3 years after the date of the
enactment of this Act, and 2 years after the date of submission
the first report under this paragraph, the Comptroller General
shall submit to Congress a report on the results of the study
conducted under paragraph (1).
TITLE V--REVENUE PROVISIONS
SEC. 501. 0.2 PERCENT FUTA SURTAX.
(a) In General.--Section 3301 (relating to rate of tax) is
amended--
(1) by striking ``through 2008'' in paragraph (1) and
inserting ``through 2009'', and
(2) by striking ``calendar year 2009'' in paragraph (2) and
inserting ``calendar year 2010''.
(b) Effective Date.--The amendments made by this section shall
apply to wages paid after December 31, 2008.
SEC. 502. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX
INDIFFERENT PARTIES.
(a) In General.--Subpart B of part II of subchapter E of chapter 1
is amended by inserting after section 457 the following new section:
``SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX
INDIFFERENT PARTIES.
``(a) In General.--Any compensation of a service provider which is
deferred under a nonqualified deferred compensation plan of a
nonqualified entity shall be includible in gross income when there is
no substantial risk of forfeiture of the rights to such compensation.
``(b) Nonqualified Entity.--For purposes of this section, the term
`nonqualified entity' means--
``(1) any foreign corporation unless substantially all of
its income is--
``(A) effectively connected with the conduct of a
trade or business in the United States, or
``(B) subject to a comprehensive foreign income
tax, and
``(2) any partnership unless substantially all of its
income is, directly or indirectly, allocated to--
``(A) United States persons (other than persons
exempt from tax under this title),
``(B) foreign persons with respect to whom such
income is subject to a comprehensive foreign income
tax,
``(C) foreign persons with respect to whom--
``(i) such income is effectively connected
with the conduct of a trade or business within
the United States, and
``(ii) a withholding tax is paid under
section 1446 with respect to such income, or
``(D) organizations which are exempt from tax under
this title if such income is unrelated business taxable
income (as defined in section 512) with respect to such
organization.
``(c) Determinability of Amounts of Compensation.--
``(1) In general.--If the amount of any compensation is not
determinable at the time that such compensation is otherwise
includible in gross income under subsection (a)--
``(A) such amount shall be so includible in gross
income when determinable, and
``(B) the tax imposed under this chapter for the
taxable year in which such compensation is includible
in gross income shall be increased by the sum of--
``(i) the amount of interest determined
under paragraph (2), and
``(ii) an amount equal to 20 percent of the
amount of such compensation.
``(2) Interest.--For purposes of paragraph (1)(B)(i), the
interest determined under this paragraph for any taxable year
is the amount of interest at the underpayment rate under
section 6621 plus 1 percentage point on the underpayments that
would have occurred had the deferred compensation been
includible in gross income for the taxable year in which first
deferred or, if later, the first taxable year in which such
deferred compensation is not subject to a substantial risk of
forfeiture.
``(d) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Substantial risk of forfeiture.--
``(A) In general.--The rights of a person to
compensation shall be treated as subject to a
substantial risk of forfeiture only if such person's
rights to such compensation are conditioned upon the
future performance of substantial services by any
individual.
``(B) Exception for compensation based on gain
recognized on an investment asset.--
``(i) In general.--To the extent provided
in regulations prescribed by the Secretary, if
compensation of a service provider is
determined solely by reference to the amount of
gain recognized on the disposition of an
investment asset, such compensation shall be
treated as subject to a substantial risk of
forfeiture until the date of such disposition.
``(ii) Investment asset.--For purposes of
clause (i), the term `investment asset' means
any single asset (other than an investment fund
or similar entity)--
``(I) acquired directly by an
investment fund or similar entity,
``(II) with respect to which such
entity does not (nor does any person
related to such entity) participate in
the active management of such asset (or
if such asset is an interest in an
entity, in the active management of the
activities of such entity), and
``(III) substantially all of any
gain on the disposition of which (other
than such deferred compensation) is
allocated to investors in such entity.
``(iii) Coordination with special rule.--
Paragraph (3)(B) shall not apply to any
compensation to which clause (i) applies.
``(2) Comprehensive foreign income tax.--The term
`comprehensive foreign income tax' means, with respect to any
foreign person, the income tax of a foreign country if--
``(A) such person is eligible for the benefits of a
comprehensive income tax treaty between such foreign
country and the United States, or
``(B) such person demonstrates to the satisfaction
of the Secretary that such foreign country has a
comprehensive income tax.
``(3) Nonqualified deferred compensation plan.--
``(A) In general.--The term `nonqualified deferred
compensation plan' has the meaning given such term
under section 409A(d), except that such term shall
include any plan that provides a right to compensation
based on the appreciation in value of a specified
number of equity units of the service recipient.
``(B) Exception.--Compensation shall not be treated
as deferred for purposes of this section if the service
provider receives payment of such compensation not
later than 12 months after the end of the taxable year
of the service recipient during which the right to the
payment of such compensation is no longer subject to a
substantial risk of forfeiture.
``(4) Service provider.--The term `service provider' has
the meaning given such term in the regulations under section
409A, determined without regard to method of accounting.
``(5) Exception for certain compensation with respect to
effectively connected income.--In the case of a foreign
corporation with income which is taxable under section 882,
this section shall not apply to compensation payable by such
foreign corporation which, had such compensation been paid in
cash on the date that such compensation ceased to be subject to
a substantial risk of forfeiture, would have been deductible by
such foreign corporation against such income.
``(6) Exception with respect to employees of certain
subsidiaries.--This section shall not apply to compensation
deferred under a nonqualified deferred compensation plan of a
nonqualified entity if--
``(A) such compensation is payable to an employee
of a domestic subsidiary of such entity, and
``(B) such compensation is reasonably expected to
be deductible by such subsidiary under section
404(a)(5) when such compensation is includible in
income by such employee.
``(7) Application of rules.--Rules similar to the rules of
paragraphs (5) and (6) of section 409A(d) shall apply.
``(e) Regulations.--The Secretary shall prescribe such regulations
as may be necessary or appropriate to carry out the purposes of this
section, including regulations--
``(1) disregarding a substantial risk of forfeiture in
cases where necessary to carry out the purposes of this
section, and
``(2) providing appropriate treatment where an individual
who was employed by an employer which is not a nonqualified
entity is temporarily employed by a nonqualified entity which
is related to such employer.''.
(b) Conforming Amendment.--Section 26(b)(2) is amended by striking
``and'' at the end of subparagraph (V), by striking the period at the
end of subparagraph (W) and inserting ``, and'', and by adding at the
end the following new subparagraph:
``(X) section 457A(c)(1)(B) (relating to
determinability of amounts of compensation).''.
(c) Clerical Amendment.--The table of sections of subpart B of part
II of subchapter E of chapter 1 is amended by inserting after the item
relating to section 457 the following new item:
``Sec. 457A. Nonqualified deferred compensation from certain tax
indifferent parties.''.
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
amounts deferred which are attributable to services performed
after December 31, 2008.
(2) Application to existing deferrals.--In the case of any
amount deferred to which the amendments made by this section do
not apply solely by reason of the fact that the amount is
attributable to services performed before January 1, 2009, to
the extent such amount is not includible in gross income in a
taxable year beginning before 2018, such amounts shall be
includible in gross income in the later of--
(A) the last taxable year beginning before 2018, or
(B) the taxable year in which there is no
substantial risk of forfeiture of the rights to such
compensation (determined in the same manner as
determined for purposes of section 457A of the Internal
Revenue Code of 1986, as added by this section).
(3) Accelerated payments.--No later than 120 days after the
date of the enactment of this Act, the Secretary shall issue
guidance providing a limited period of time during which a
nonqualified deferred compensation arrangement attributable to
services performed on or before December 31, 2008, may, without
violating the requirements of section 409A(a) of the Internal
Revenue Code of 1986, be amended to conform the date of
distribution to the date the amounts are required to be
included in income.
(4) Certain back-to-back arrangements.--If the taxpayer is
also a service recipient and maintains one or more nonqualified
deferred compensation arrangements for its service providers
under which any amount is attributable to services performed on
or before December 31, 2008, the guidance issued under
paragraph (4) shall permit such arrangements to be amended to
conform the dates of distribution under such arrangement to the
date amounts are required to be included in the income of such
taxpayer under this subsection.
(5) Accelerated payment not treated as material
modification.--Any amendment to a nonqualified deferred
compensation arrangement made pursuant to paragraph (4) or (5)
shall not be treated as a material modification of the
arrangement for purposes of section 409A of the Internal
Revenue Code of 1986.
(6) Certain preexisting arrangements.--If, pursuant to a
written binding contract entered into on or before December 31,
2007, any portion of compensation payable under such contract
for a period is determined as a portion of the amount of gain
recognized on the disposition during such period of a specified
asset, the amendments made by this section shall not apply to
the portion of compensation attributable to such disposition
notwithstanding the fact that such portion of compensation may
be reduced by realized losses or depreciation in the value of
other assets during such period or a prior period or be
attributable in part to services performed after December 31,
2008, but only if--
(A) payment of such portion of compensation is
received by the service provider and included in its
gross income no later than the earlier of--
(i) 12 months after the end of the taxable
year of the service recipient during which the
disposition of the specified asset occurs, or
(ii) the last taxable year of the service
provider beginning before January 1, 2018; and
(B) the specified asset is held by the service
recipient on the date of the enactment of this section.
SEC. 503. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST FUND TAX.
(a) Increase in Rate.--
(1) Increase in rate.--Section 4611(c) is amended by adding
at the end the following new paragraph:
``(3) Increase in oil spill liability trust fund financing
rate.--For purposes of this subsection, the Oil Spill Liability
Trust Fund financing rate is increased (in addition to any
other increase under this subsection) by--
``(A) in the case of crude oil received or
petroleum products entered before October 1, 2014, 4
cents a barrel, and
``(B) in the case of crude oil received or
petroleum products entered after September 30, 2014, 5
cents a barrel.''.
(2) Effective date.--The amendment made by this subsection
shall apply on and after the first day of the first calendar
quarter beginning more than 60 days after the date of the
enactment of this Act.
(b) Extension.--
(1) In general.--Section 4611(f) (relating to application
of Oil Spill Liability Trust Fund financing rate) is amended by
striking paragraphs (2) and (3) and inserting the following new
paragraph:
``(2) Termination.--The Oil Spill Liability Trust Fund
financing rate shall not apply after December 31, 2017.''.
(2) Conforming amendment.--Section 4611(f)(1) is amended by
striking ``paragraphs (2) and (3)'' and inserting ``paragraph
(2)''.
(3) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act.
SEC. 504. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.
(a) In General.--Paragraphs (5)(D) and (6) of section 864(f) are
each amended by striking ``December 31, 2010'' and inserting ``December
31, 2018''.
(b) Transition.--Subsection (f) of section 864 is amended by
striking paragraph (7).
SEC. 505. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
The percentage under subparagraph (C) of section 401(1) of the Tax
Increase Prevention and Reconciliation Act of 2005 in effect on the
date of the enactment of this Act is increased by 49 percentage points.
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