[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3335 Placed on Calendar Senate (PCS)]
Calendar No. 898
110th CONGRESS
2d Session
S. 3335
To amend the Internal Revenue Code of 1986 to extend certain expiring
provisions, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 24 (legislative day, July 23), 2008
Mr. Baucus (for himself and Mr. Reid) introduced the following bill;
which was read the first time
July 25, 2008
Read the second time and placed on the calendar
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to extend certain expiring
provisions, 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 ``Jobs, Energy,
Families, and Disaster 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--ENERGY TAX INCENTIVES
Subtitle A--Energy Production Incentives
Part I--Renewable Energy Incentives
Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine
renewables.
Sec. 103. Energy credit.
Sec. 104. Credit for residential energy efficient property.
Sec. 105. Special rule to implement FERC and State electric
restructuring policy.
Sec. 106. New clean renewable energy bonds.
Part II--Carbon Mitigation Provisions
Sec. 111. Expansion and modification of advanced coal project
investment credit.
Sec. 112. Expansion and modification of coal gasification investment
credit.
Sec. 113. Temporary increase in coal excise tax.
Sec. 114. Special rules for refund of the coal excise tax to certain
coal producers and exporters.
Sec. 115. Carbon audit of the tax code.
Subtitle B--Transportation and Domestic Fuel Security Provisions
Sec. 121. Inclusion of cellulosic biofuel in bonus depreciation for
biomass ethanol plant property.
Sec. 122. Credits for biodiesel and renewable diesel.
Sec. 123. Clarification that credits for fuel are designed to provide
an incentive for United States production.
Sec. 124. Credit for new qualified plug-in electric drive motor
vehicles.
Sec. 125. Exclusion from heavy truck tax for idling reduction units and
advanced insulation.
Sec. 126. Transportation fringe benefit to bicycle commuters.
Sec. 127. Alternative fuel vehicle refueling property credit.
Sec. 128. Certain income and gains relating to alcohol fuels and
mixtures, biodiesel fuels and mixtures, and
alternative fuels and mixtures treated as
qualifying income for publicly traded
partnerships.
Subtitle C--Energy Conservation and Efficiency Provisions
Sec. 141. Qualified energy conservation bonds.
Sec. 142. Credit for nonbusiness energy property.
Sec. 143. Energy efficient commercial buildings deduction.
Sec. 144. Modifications of energy efficient appliance credit for
appliances produced after 2007.
Sec. 145. Accelerated recovery period for depreciation of smart meters
and smart grid systems.
Sec. 146. Qualified green building and sustainable design projects.
Sec. 147. Special depreciation allowance for certain reuse and
recycling property.
TITLE II--ONE-YEAR EXTENSION OF TEMPORARY PROVISIONS
Subtitle A--Alternative Minimum Tax
Sec. 201. Extension of alternative minimum tax relief for nonrefundable
personal credits.
Sec. 202. Extension of increased alternative minimum tax exemption
amount.
Sec. 203. Increase of AMT refundable credit amount for individuals with
long-term unused credits for prior year
minimum tax liability, etc.
Subtitle B--Extensions Primarily Affecting Individuals
Sec. 211. Deduction for State and local sales taxes.
Sec. 212. Deduction of qualified tuition and related expenses.
Sec. 213. Treatment of certain dividends of regulated investment
companies.
Sec. 214. Tax-free distributions from individual retirement plans for
charitable purposes.
Sec. 215. Deduction for certain expenses of elementary and secondary
school teachers.
Sec. 216. Stock in RIC for purposes of determining estates of
nonresidents not citizens.
Sec. 217. Qualified investment entities.
Sec. 218. Exclusion of amounts received under qualified group legal
services plans.
Subtitle C--Extensions Primarily Affecting Businesses
Sec. 221. Extension and modification of research credit.
Sec. 222. Indian employment credit.
Sec. 223. Extension and modification of new markets tax credit.
Sec. 224. Railroad track maintenance.
Sec. 225. Extension of mine rescue team training credit.
Sec. 226. Extension of 15-year straight-line cost recovery for
qualified leasehold improvements and
qualified restaurant improvements; 15-year
straight-line cost recovery for certain
improvements to retail space.
Sec. 227. Seven-year cost recovery period for motorsports racing track
facility.
Sec. 228. Accelerated depreciation for business property on Indian
reservation.
Sec. 229. Extension of election to expense advanced mine safety
equipment.
Sec. 230. Expensing of environmental remediation costs.
Sec. 231. Deduction allowable with respect to income attributable to
domestic production activities in Puerto
Rico.
Sec. 232. Modification of tax treatment of certain payments to
controlling exempt organizations.
Sec. 233. Qualified zone academy bonds.
Sec. 234. Tax incentives for investment in the District of Columbia.
Sec. 235. Economic development credit for American Samoa.
Sec. 236. Extension and expansion of charitable deduction for
contributions of food inventory.
Sec. 237. Enhanced charitable deduction for contributions of book
inventory to public schools.
Sec. 238. Enhanced deduction for qualified computer contributions.
Sec. 239. Basis adjustment to stock of S corporations making charitable
contributions of property.
Sec. 240. Work opportunity tax credit for Hurricane Katrina employees.
Sec. 241. Subpart F exception for active financing income.
Sec. 242. Look-thru rule for related controlled foreign corporations.
Sec. 243. Expensing for certain qualified film and television
productions.
Sec. 244. Extension and modification of duty suspension on wool
products; wool research fund; wool duty
refunds.
Subtitle D--Other Extensions
Sec. 251. Authority to disclose information related to terrorist
activities made permanent.
Sec. 252. Authority for undercover operations made permanent.
Sec. 253. Increase in limit on cover over of rum excise tax to Puerto
Rico and the Virgin Islands.
TITLE III--ADDITIONAL RELIEF
Subtitle A--Individual Tax Relief
Sec. 301. $8,500 income threshold used to calculate refundable portion
of child tax credit.
Sec. 302. Income averaging for amounts received in connection with the
Exxon Valdez litigation.
Subtitle B--Business Related Provisions
Sec. 311. Provisions related to film and television productions.
Sec. 312. Modification of rate of excise tax on certain wooden arrows
designed for use by children.
Sec. 313. Mental health parity.
Subtitle C--Modification of Penalty on Understatement of Taxpayer's
Liability by Tax Return Preparer
Sec. 321. Modification of penalty on understatement of taxpayer's
liability by tax return preparer.
Subtitle D--Other Provisions
Sec. 331. Secure rural schools and community self-determination
program.
Sec. 332. Clarification of uniform definition of child.
TITLE IV--TRANSPORTATION AND INFRASTRUCTURE
Sec. 401. Restoration of Highway Trust Fund balance.
TITLE V--DISASTER RELIEF
Subtitle A--Relief for Federally Declared Disasters
Sec. 501. Losses attributable to federally declared disasters.
Sec. 502. Expensing of Qualified Disaster Expenses.
Sec. 503. Net operating losses attributable to federally declared
disasters.
Sec. 504. Waiver of certain mortgage revenue bond requirements
following federally declared disasters.
Sec. 505. Other relief for federally declared disasters.
Sec. 506. Sunset.
Subtitle B--Other Disaster Relief Provisions
Sec. 511. Restructuring of New York Liberty Zone tax credits.
Sec. 512. Reporting requirements relating to disaster relief
contributions.
TITLE VI--REVENUE PROVISIONS
Sec. 601. Nonqualified deferred compensation from certain tax
indifferent parties.
Sec. 602. Delay in application of worldwide allocation of interest.
Sec. 603. Broker reporting of customer's basis in securities
transactions.
Sec. 604. Time for payment of corporate estimated taxes.
TITLE I--ENERGY TAX INCENTIVES
Subtitle A--Energy Production Incentives
PART I--RENEWABLE ENERGY INCENTIVES
SEC. 101. RENEWABLE ENERGY CREDIT.
(a) Extension of Credit.--
(1) 1-year extension for wind facilities.--Paragraph (1) of
section 45(d) is amended by striking ``January 1, 2009'' and
inserting ``January 1, 2010''.
(2) 3-year extension for certain other facilities.--Each of
the following provisions of section 45(d) is amended by
striking ``January 1, 2009'' and inserting ``January 1, 2012'':
(A) Clauses (i) and (ii) of paragraph (2)(A).
(B) Clauses (i)(I) and (ii) of paragraph (3)(A).
(C) Paragraph (4).
(D) Paragraph (5).
(E) Paragraph (6).
(F) Paragraph (7).
(G) Subparagraphs (A) and (B) of paragraph (9).
(b) Modification of Credit Phaseout.--
(1) Repeal of phaseout.--Subsection (b) of section 45 is
amended--
(A) by striking paragraph (1), and
(B) by striking ``the 8 cent amount in paragraph
(1),'' in paragraph (2) thereof.
(2) Limitation based on investment in facility.--Subsection
(b) of section 45 is amended by inserting before paragraph (2)
the following new paragraph:
``(1) Limitation based on investment in facility.--
``(A) In general.--In the case of any qualified
facility originally placed in service after December
31, 2009, the amount of the credit determined under
subsection (a) for any taxable year with respect to
electricity produced at such facility shall not exceed
the product of--
``(i) the applicable percentage with
respect to such facility, multiplied by
``(ii) the eligible basis of such facility.
``(B) Carryforward of unused limitation and excess
credit.--
``(i) Unused limitation.--If the limitation
imposed under subparagraph (A) with respect to
any facility for any taxable year exceeds the
prelimitation credit for such facility for such
taxable year, the limitation imposed under
subparagraph (A) with respect to such facility
for the succeeding taxable year shall be
increased by the amount of such excess.
``(ii) Excess credit.--If the prelimitation
credit with respect to any facility for any
taxable year exceeds the limitation imposed
under subparagraph (A) with respect to such
facility for such taxable year, the credit
determined under subsection (a) with respect to
such facility for the succeeding taxable year
(determined before the application of
subparagraph (A) for such succeeding taxable
year) shall be increased by the amount of such
excess. With respect to any facility, no amount
may be carried forward under this clause to any
taxable year beginning after the 10-year period
described in subsection (a)(2)(A)(ii) with
respect to such facility.
``(iii) Prelimitation credit.--The term
`prelimitation credit' with respect to any
facility for a taxable year means the credit
determined under subsection (a) with respect to
such facility for such taxable year, determined
without regard to subparagraph (A) and after
taking into account any increase for such
taxable year under clause (ii).
``(C) Applicable percentage.--For purposes of this
paragraph--
``(i) In general.--The term `applicable
percentage' means, with respect to any
facility, the appropriate percentage prescribed
by the Secretary for the month in which such
facility is originally placed in service.
``(ii) Method of prescribing applicable
percentages.--The applicable percentages
prescribed by the Secretary for any month under
clause (i) shall be percentages which yield
over a 10-year period amounts of limitation
under subparagraph (A) which have a present
value equal to 35 percent of the eligible basis
of the facility.
``(iii) Method of discounting.--The present
value under clause (ii) shall be determined--
``(I) as of the last day of the 1st
year of the 10-year period referred to
in clause (ii),
``(II) by using a discount rate
equal to the greater of 110 percent of
the Federal long-term rate as in effect
under section 1274(d) for the month
preceding the month for which the
applicable percentage is being
prescribed, or 4.5 percent, and
``(III) by taking into account the
limitation under subparagraph (A) for
any year on the last day of such year.
``(D) Eligible basis.--For purposes of this
paragraph--
``(i) In general.--The term `eligible
basis' means, with respect to any facility, the
sum of--
``(I) the basis of such facility
determined as of the time that such
facility is originally placed in
service, and
``(II) the portion of the basis of
any shared qualified property which is
properly allocable to such facility
under clause (ii).
``(ii) Rules for allocation.--For purposes
of subclause (II) of clause (i), the basis of
shared qualified property shall be allocated
among all qualified facilities which are
projected to be placed in service and which
require utilization of such property in
proportion to projected generation from such
facilities.
``(iii) Shared qualified property.--For
purposes of this paragraph, the term `shared
qualified property' means, with respect to any
facility, any property described in section
168(e)(3)(B)(vi)--
``(I) which a qualified facility
will require for utilization of such
facility, and
``(II) which is not a qualified
facility.
``(iv) Special rule relating to geothermal
facilities.--In the case of any qualified
facility using geothermal energy to produce
electricity, the basis of such facility for
purposes of this paragraph shall be determined
as though intangible drilling and development
costs described in section 263(c) were
capitalized rather than expensed.
``(E) Special rule for first and last year of
credit period.--In the case of any taxable year any
portion of which is not within the 10-year period
described in subsection (a)(2)(A)(ii) with respect to
any facility, the amount of the limitation under
subparagraph (A) with respect to such facility shall be
reduced by an amount which bears the same ratio to the
amount of such limitation (determined without regard to
this subparagraph) as such portion of the taxable year
which is not within such period bears to the entire
taxable year.
``(F) Election to treat all facilities placed in
service in a year as 1 facility.--At the election of
the taxpayer, all qualified facilities which are part
of the same project and which are placed in service
during the same calendar year shall be treated for
purposes of this section as 1 facility which is placed
in service at the mid-point of such year or the first
day of the following calendar year.''.
(c) Trash Facility Clarification.--Paragraph (7) of section 45(d)
is amended--
(1) by striking ``facility which burns'' and inserting
``facility (other than a facility described in paragraph (6))
which uses'', and
(2) by striking ``combustion''.
(d) Expansion of Biomass Facilities.--
(1) Open-loop biomass facilities.--Paragraph (3) of section
45(d) is amended by redesignating subparagraph (B) as
subparagraph (C) and by inserting after subparagraph (A) the
following new subparagraph:
``(B) Expansion of facility.--Such term shall
include a new unit placed in service after the date of
the enactment of this subparagraph in connection with a
facility described in subparagraph (A), but only to the
extent of the increased amount of electricity produced
at the facility by reason of such new unit.''.
(2) Closed-loop biomass facilities.--Paragraph (2) of
section 45(d) is amended by redesignating subparagraph (B) as
subparagraph (C) and inserting after subparagraph (A) the
following new subparagraph:
``(B) Expansion of facility.--Such term shall
include a new unit placed in service after the date of
the enactment of this subparagraph in connection with a
facility described in subparagraph (A)(i), but only to
the extent of the increased amount of electricity
produced at the facility by reason of such new unit.''.
(e) Sales of Net Electricity to Regulated Public Utilities Treated
as Sales to Unrelated Persons.--Paragraph (4) of section 45(e) is
amended by adding at the end the following new sentence: ``The net
amount of electricity sold by any taxpayer to a regulated public
utility (as defined in section 7701(a)(33)) shall be treated as sold to
an unrelated person.''.
(f) Modification of Rules for Hydropower Production.--Subparagraph
(C) of section 45(c)(8) is amended to read as follows:
``(C) Nonhydroelectric dam.--For purposes of
subparagraph (A), a facility is described in this
subparagraph if--
``(i) the hydroelectric project installed
on the nonhydroelectric dam is licensed by the
Federal Energy Regulatory Commission and meets
all other applicable environmental, licensing,
and regulatory requirements,
``(ii) the nonhydroelectric dam was placed
in service before the date of the enactment of
this paragraph and operated for flood control,
navigation, or water supply purposes and did
not produce hydroelectric power on the date of
the enactment of this paragraph, and
``(iii) the hydroelectric project is
operated so that the water surface elevation at
any given location and time that would have
occurred in the absence of the hydroelectric
project is maintained, subject to any license
requirements imposed under applicable law that
change the water surface elevation for the
purpose of improving environmental quality of
the affected waterway.
The Secretary, in consultation with the Federal Energy
Regulatory Commission, shall certify if a hydroelectric
project licensed at a nonhydroelectric dam meets the
criteria in clause (iii). Nothing in this section shall
affect the standards under which the Federal Energy
Regulatory Commission issues licenses for and regulates
hydropower projects under part I of the Federal Power
Act.''.
(g) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
property originally placed in service after December 31, 2008.
(2) Repeal of credit phaseout.--The amendments made by
subsection (b)(1) shall apply to taxable years ending after
December 31, 2008.
(3) Limitation based on investment in facility.--The
amendment made by subsection (b)(2) shall apply to property
originally placed in service after December 31, 2009.
(4) Trash facility clarification; sales to related
regulated public utilities.--The amendments made by subsections
(c) and (e) shall apply to electricity produced and sold after
the date of the enactment of this Act.
(5) Expansion of biomass facilities.--The amendments made
by subsection (d) shall apply to property placed in service
after the date of the enactment of this Act.
SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM MARINE
RENEWABLES.
(a) In General.--Paragraph (1) of section 45(c) is amended by
striking ``and'' at the end of subparagraph (G), by striking the period
at the end of subparagraph (H) and inserting ``, and'', and by adding
at the end the following new subparagraph:
``(I) marine and hydrokinetic renewable energy.''.
(b) Marine Renewables.--Subsection (c) of section 45 is amended by
adding at the end the following new paragraph:
``(10) Marine and hydrokinetic renewable energy.--
``(A) In general.--The term `marine and
hydrokinetic renewable energy' means energy derived
from--
``(i) waves, tides, and currents in oceans,
estuaries, and tidal areas,
``(ii) free flowing water in rivers, lakes,
and streams,
``(iii) free flowing water in an irrigation
system, canal, or other man-made channel,
including projects that utilize nonmechanical
structures to accelerate the flow of water for
electric power production purposes, or
``(iv) differentials in ocean temperature
(ocean thermal energy conversion).
``(B) Exceptions.--Such term shall not include any
energy which is derived from any source which utilizes
a dam, diversionary structure (except as provided in
subparagraph (A)(iii)), or impoundment for electric
power production purposes.''.
(c) Definition of Facility.--Subsection (d) of section 45 is
amended by adding at the end the following new paragraph:
``(11) Marine and hydrokinetic renewable energy
facilities.--In the case of a facility producing electricity
from marine and hydrokinetic renewable energy, the term
`qualified facility' means any facility owned by the taxpayer--
``(A) which has a nameplate capacity rating of at
least 150 kilowatts, and
``(B) which is originally placed in service on or
after the date of the enactment of this paragraph and
before January 1, 2012.''.
(d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is amended
by striking ``or (9)'' and inserting ``(9), or (11)''.
(e) Coordination With Small Irrigation Power.--Paragraph (5) of
section 45(d), as amended by section 101, is amended by striking
``January 1, 2012'' and inserting ``the date of the enactment of
paragraph (11)''.
(f) Effective Date.--The amendments made by this section shall
apply to electricity produced and sold after the date of the enactment
of this Act, in taxable years ending after such date.
SEC. 103. ENERGY CREDIT.
(a) Extension of Credit.--
(1) Solar energy property.--Paragraphs (2)(A)(i)(II) and
(3)(A)(ii) of section 48(a) are each amended by striking
``January 1, 2009'' and inserting ``January 1, 2017''.
(2) Fuel cell property.--Subparagraph (E) of section
48(c)(1) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2017''.
(3) Microturbine property.--Subparagraph (E) of section
48(c)(2) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2017''.
(b) Allowance of Energy Credit Against Alternative Minimum Tax.--
Subparagraph (B) of section 38(c)(4), as amended by the Housing
Assistance Tax Act of 2008, is amended by redesignating clauses (v) and
(vi) as clauses (vi) and (vii), respectively, and by inserting after
clause (iv) the following new clause:
``(v) the credit determined under section
46 to the extent that such credit is
attributable to the energy credit determined
under section 48, and''.
(c) Energy Credit for Combined Heat and Power System Property.--
(1) In general.--Section 48(a)(3)(A) is amended by striking
``or'' at the end of clause (iii), by inserting ``or'' at the
end of clause (iv), and by adding at the end the following new
clause:
``(v) combined heat and power system
property,''.
(2) Combined heat and power system property.--Section 48 is
amended by adding at the end the following new subsection:
``(d) Combined Heat and Power System Property.--For purposes of
subsection (a)(3)(A)(v)--
``(1) Combined heat and power system property.--The term
`combined heat and power system property' means property
comprising a system--
``(A) which uses the same energy source for the
simultaneous or sequential generation of electrical
power, mechanical shaft power, or both, in combination
with the generation of steam or other forms of useful
thermal energy (including heating and cooling
applications),
``(B) which produces--
``(i) at least 20 percent of its total
useful energy in the form of thermal energy
which is not used to produce electrical or
mechanical power (or combination thereof), and
``(ii) at least 20 percent of its total
useful energy in the form of electrical or
mechanical power (or combination thereof),
``(C) the energy efficiency percentage of which
exceeds 60 percent, and
``(D) which is placed in service before January 1,
2018.
``(2) Limitation.--
``(A) In general.--In the case of combined heat and
power system property with an electrical capacity in
excess of the applicable capacity placed in service
during the taxable year, the credit under subsection
(a)(1) (determined without regard to this paragraph)
for such year shall be equal to the amount which bears
the same ratio to such credit as the applicable
capacity bears to the capacity of such property.
``(B) Applicable capacity.--For purposes of
subparagraph (A), the term `applicable capacity' means
15 megawatts or a mechanical energy capacity of more
than 20,000 horsepower or an equivalent combination of
electrical and mechanical energy capacities.
``(C) Maximum capacity.--The term `combined heat
and power system property' shall not include any
property comprising a system if such system has a
capacity in excess of 50 megawatts or a mechanical
energy capacity in excess of 67,000 horsepower or an
equivalent combination of electrical and mechanical
energy capacities.
``(3) Special rules.--
``(A) Energy efficiency percentage.--For purposes
of this subsection, the energy efficiency percentage of
a system is the fraction--
``(i) the numerator of which is the total
useful electrical, thermal, and mechanical
power produced by the system at normal
operating rates, and expected to be consumed in
its normal application, and
``(ii) the denominator of which is the
lower heating value of the fuel sources for the
system.
``(B) Determinations made on btu basis.--The energy
efficiency percentage and the percentages under
paragraph (1)(B) shall be determined on a Btu basis.
``(C) Input and output property not included.--The
term `combined heat and power system property' does not
include property used to transport the energy source to
the facility or to distribute energy produced by the
facility.
``(4) Systems using biomass.--If a system is designed to
use biomass (within the meaning of paragraphs (2) and (3) of
section 45(c) without regard to the last sentence of paragraph
(3)(A)) for at least 90 percent of the energy source--
``(A) paragraph (1)(C) shall not apply, but
``(B) the amount of credit determined under
subsection (a) with respect to such system shall not
exceed the amount which bears the same ratio to such
amount of credit (determined without regard to this
paragraph) as the energy efficiency percentage of such
system bears to 60 percent.''.
(d) Increase of Credit Limitation for Fuel Cell Property.--
Subparagraph (B) of section 48(c)(1) is amended by striking ``$500''
and inserting ``$1,500''.
(e) Public Utility Property Taken Into Account.--
(1) In general.--Paragraph (3) of section 48(a) is amended
by striking the second sentence thereof.
(2) Conforming amendments.--
(A) Paragraph (1) of section 48(c) is amended by
striking subparagraph (D) and redesignating
subparagraph (E) as subparagraph (D).
(B) Paragraph (2) of section 48(c) is amended by
striking subparagraph (D) and redesignating
subparagraph (E) as subparagraph (D).
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on the date of the enactment of this Act.
(2) Allowance against alternative minimum tax.--The
amendments made by subsection (b) shall apply to credits
determined under section 46 of the Internal Revenue Code of
1986 in taxable years beginning after the date of the enactment
of this Act and to carrybacks of such credits.
(3) Combined heat and power and fuel cell property.--The
amendments made by subsections (c) and (d) shall apply to
periods after the date of the enactment of this Act, in taxable
years ending after such date, under rules similar to the rules
of section 48(m) of the Internal Revenue Code of 1986 (as in
effect on the day before the date of the enactment of the
Revenue Reconciliation Act of 1990).
(4) Public utility property.--The amendments made by
subsection (e) shall apply to periods after February 13, 2008,
in taxable years ending after such date, under rules similar to
the rules of section 48(m) of the Internal Revenue Code of 1986
(as in effect on the day before the date of the enactment of
the Revenue Reconciliation Act of 1990).
SEC. 104. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.
(a) Extension.--Section 25D(g) is amended by striking ``December
31, 2008'' and inserting ``December 31, 2016''.
(b) Maximum Credit for Solar Electric Property.--
(1) In general.--Section 25D(b)(1)(A) is amended by
striking ``$2,000'' and inserting ``$4,000''.
(2) Conforming amendment.--Section 25D(e)(4)(A)(i) is
amended by striking ``$6,667'' and inserting ``$13,333''.
(c) Credit for Residential Wind Property.--
(1) In general.--Section 25D(a) is amended by striking
``and'' at the end of paragraph (2), by striking the period at
the end of paragraph (3) and inserting ``, and'', and by adding
at the end the following new paragraph:
``(4) 30 percent of the qualified small wind energy
property expenditures made by the taxpayer during such year.''.
(2) Limitation.--Section 25D(b)(1) is amended by striking
``and'' at the end of subparagraph (B), by striking the period
at the end of subparagraph (C) and inserting ``, and'', and by
adding at the end the following new subparagraph:
``(D) $500 with respect to each half kilowatt of
capacity (not to exceed $4,000) of wind turbines for
which qualified small wind energy property expenditures
are made.''.
(3) Qualified small wind energy property expenditures.--
(A) In general.--Section 25D(d) is amended by
adding at the end the following new paragraph:
``(4) Qualified small wind energy property expenditure.--
The term `qualified small wind energy property expenditure'
means an expenditure for property which uses a wind turbine to
generate electricity for use in connection with a dwelling unit
located in the United States and used as a residence by the
taxpayer.''.
(B) No double benefit.--Section 45(d)(1) is amended
by adding at the end the following new sentence: ``Such
term shall not include any facility with respect to
which any qualified small wind energy property
expenditure (as defined in subsection (d)(4) of section
25D) is taken into account in determining the credit
under such section.''.
(4) Maximum expenditures in case of joint occupancy.--
Section 25D(e)(4)(A) 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) $1,667 in the case of each half
kilowatt of capacity (not to exceed $13,333) of
wind turbines for which qualified small wind
energy property expenditures are made.''.
(d) Credit for Geothermal Heat pump Systems.--
(1) In general.--Section 25D(a), as amended by subsection
(c), is amended by striking ``and'' at the end of paragraph
(3), by striking the period at the end of paragraph (4) and
inserting ``, and'', and by adding at the end the following new
paragraph:
``(5) 30 percent of the qualified geothermal heat pump
property expenditures made by the taxpayer during such year.''.
(2) Limitation.--Section 25D(b)(1), as amended by
subsection (c), is amended by striking ``and'' at the end of
subparagraph (C), by striking the period at the end of
subparagraph (D) and inserting ``, and'', and by adding at the
end the following new subparagraph:
``(E) $2,000 with respect to any qualified
geothermal heat pump property expenditures.''.
(3) Qualified geothermal heat pump property expenditure.--
Section 25D(d), as amended by subsection (c), is amended by
adding at the end the following new paragraph:
``(5) Qualified geothermal heat pump property
expenditure.--
``(A) In general.--The term `qualified geothermal
heat pump property expenditure' means an expenditure
for qualified geothermal heat pump property installed
on or in connection with a dwelling unit located in the
United States and used as a residence by the taxpayer.
``(B) Qualified geothermal heat pump property.--The
term `qualified geothermal heat pump property' means
any equipment which--
``(i) uses the ground or ground water as a
thermal energy source to heat the dwelling unit
referred to in subparagraph (A) or as a thermal
energy sink to cool such dwelling unit, and
``(ii) meets the requirements of the Energy
Star program which are in effect at the time
that the expenditure for such equipment is
made.''.
(4) Maximum expenditures in case of joint occupancy.--
Section 25D(e)(4)(A), as amended by subsection (c), is amended
by striking ``and'' at the end of clause (iii), by striking the
period at the end of clause (iv) and inserting ``, and'', and
by adding at the end the following new clause:
``(v) $6,667 in the case of any qualified
geothermal heat pump property expenditures.''.
(e) Credit Allowed Against Alternative Minimum Tax.--
(1) In general.--Subsection (c) of section 25D is amended
to read as follows:
``(c) Limitation Based on Amount of Tax; Carryforward of Unused
Credit.--
``(1) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for the taxable year shall
not exceed the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under this
subpart (other than this section) and section 27 for
the taxable year.
``(2) Carryforward of unused credit.--
``(A) Rule for years in which all personal credits
allowed against regular and alternative minimum tax.--
In the case of a taxable year to which section 26(a)(2)
applies, if the credit allowable under subsection (a)
exceeds the limitation imposed by section 26(a)(2) for
such taxable year reduced by the sum of the credits
allowable under this subpart (other than this section),
such excess shall be carried to the succeeding taxable
year and added to the credit allowable under subsection
(a) for such succeeding taxable year.
``(B) Rule for other years.--In the case of a
taxable year to which section 26(a)(2) does not apply,
if the credit allowable under subsection (a) exceeds
the limitation imposed by paragraph (1) for such
taxable year, such excess shall be carried to the
succeeding taxable year and added to the credit
allowable under subsection (a) for such succeeding
taxable year.''.
(2) Conforming amendments.--
(A) Section 23(b)(4)(B) is amended by inserting
``and section 25D'' after ``this section''.
(B) Section 24(b)(3)(B) is amended by striking
``and 25B'' and inserting ``, 25B, and 25D''.
(C) Section 25B(g)(2) is amended by striking
``section 23'' and inserting ``sections 23 and 25D''.
(D) Section 26(a)(1) is amended by striking ``and
25B'' and inserting ``25B, and 25D''.
(f) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
(2) Application of egtrra sunset.--The amendments made by
subparagraphs (A) and (B) of subsection (e)(2) shall be subject
to title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 in the same manner as the provisions
of such Act to which such amendments relate.
SEC. 105. SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC
RESTRUCTURING POLICY.
(a) Extension for Qualified Electric Utilities.--
(1) In general.--Paragraph (3) of section 451(i) is amended
by inserting ``(before January 1, 2010, in the case of a
qualified electric utility)'' after ``January 1, 2008''.
(2) Qualified electric utility.--Subsection (i) of section
451 is amended by redesignating paragraphs (6) through (10) as
paragraphs (7) through (11), respectively, and by inserting
after paragraph (5) the following new paragraph:
``(6) Qualified electric utility.--For purposes of this
subsection, the term `qualified electric utility' means a
person that, as of the date of the qualifying electric
transmission transaction, is vertically integrated, in that it
is both--
``(A) a transmitting utility (as defined in section
3(23) of the Federal Power Act (16 U.S.C. 796(23)))
with respect to the transmission facilities to which
the election under this subsection applies, and
``(B) an electric utility (as defined in section
3(22) of the Federal Power Act (16 U.S.C. 796(22))).''.
(b) Extension of Period for Transfer of Operational Control
Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is amended by
striking ``December 31, 2007'' and inserting ``the date which is 4
years after the close of the taxable year in which the transaction
occurs''.
(c) Property Located Outside the United States Not Treated as
Exempt Utility Property.--Paragraph (5) of section 451(i) is amended by
adding at the end the following new subparagraph:
``(C) Exception for property located outside the
united states.--The term `exempt utility property'
shall not include any property which is located outside
the United States.''.
(d) Effective Dates.--
(1) Extension.--The amendments made by subsection (a) shall
apply to transactions after December 31, 2007.
(2) Transfers of operational control.--The amendment made
by subsection (b) shall take effect as if included in section
909 of the American Jobs Creation Act of 2004.
(3) Exception for property located outside the united
states.--The amendment made by subsection (c) shall apply to
transactions after the date of the enactment of this Act.
SEC. 106. NEW CLEAN RENEWABLE ENERGY 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. NEW CLEAN RENEWABLE ENERGY BONDS.
``(a) New Clean Renewable Energy Bond.--For purposes of this
subpart, the term `new clean renewable energy 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 capital expenditures incurred by
governmental bodies, public power providers, or cooperative
electric companies for one or more qualified renewable energy
facilities,
``(2) the bond is issued by a qualified issuer, and
``(3) the issuer designates such bond for purposes of this
section.
``(b) Reduced Credit Amount.--The annual credit determined under
section 54A(b) with respect to any new clean renewable energy bond
shall be 70 percent of the amount so determined without regard to this
subsection.
``(c) Limitation on Amount of Bonds Designated.--
``(1) In general.--The maximum aggregate face amount of
bonds which may be designated under subsection (a) by any
issuer shall not exceed the limitation amount allocated under
this subsection to such issuer.
``(2) National limitation on amount of bonds designated.--
There is a national new clean renewable energy bond limitation
of $2,000,000,000 which shall be allocated by the Secretary as
provided in paragraph (3), except that--
``(A) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of public power
providers,
``(B) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of governmental bodies,
and
``(C) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of cooperative electric
companies.
``(3) Method of allocation.--
``(A) Allocation among public power providers.--
After the Secretary determines the qualified projects
of public power providers which are appropriate for
receiving an allocation of the national new clean
renewable energy bond limitation, the Secretary shall,
to the maximum extent practicable, make allocations
among such projects in such manner that the amount
allocated to each such project bears the same ratio to
the cost of such project as the limitation under
paragraph (2)(A) bears to the cost of all such
projects.
``(B) Allocation among governmental bodies and
cooperative electric companies.--The Secretary shall
make allocations of the amount of the national new
clean renewable energy bond limitation described in
paragraphs (2)(B) and (2)(C) among qualified projects
of governmental bodies and cooperative electric
companies, respectively, in such manner as the
Secretary determines appropriate.
``(d) Definitions.--For purposes of this section--
``(1) Qualified renewable energy facility.--The term
`qualified renewable energy facility' means a qualified
facility (as determined under section 45(d) without regard to
paragraphs (8) and (10) thereof and to any placed in service
date) owned by a public power provider, a governmental body, or
a cooperative electric company.
``(2) Public power provider.--The term `public power
provider' means a State utility with a service obligation, as
such terms are defined in section 217 of the Federal Power Act
(as in effect on the date of the enactment of this paragraph).
``(3) Governmental body.--The term `governmental body'
means any State or Indian tribal government, or any political
subdivision thereof.
``(4) Cooperative electric company.--The term `cooperative
electric company' means a mutual or cooperative electric
company described in section 501(c)(12) or section
1381(a)(2)(C).
``(5) Clean renewable energy bond lender.--The term `clean
renewable energy bond lender' means a lender which is a
cooperative which is owned by, or has outstanding loans to, 100
or more cooperative electric companies and is in existence on
February 1, 2002, and shall include any affiliated entity which
is controlled by such lender.
``(6) Qualified issuer.--The term `qualified issuer' means
a public power provider, a cooperative electric company, a
governmental body, a clean renewable energy bond lender, or a
not-for-profit electric utility which has received a loan or
loan guarantee under the Rural Electrification Act.''.
(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 new clean renewable energy bond,
which is part of an issue that meets 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 new clean renewable
energy bond, a purpose specified in section
54C(a)(1).''.
(3) 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 clean renewable energy bonds.''.
(c) Effective Date.--The amendments made by this section shall
apply to obligations issued after the date of the enactment of this
Act.
PART II--CARBON MITIGATION PROVISIONS
SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT
INVESTMENT CREDIT.
(a) Modification of Credit Amount.--Section 48A(a) is amended by
striking ``and'' at the end of paragraph (1), by striking the period at
the end of paragraph (2) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(3) 30 percent of the qualified investment for such
taxable year in the case of projects described in clause (iii)
of subsection (d)(3)(B).''.
(b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A) is
amended by striking ``$1,300,000,000'' and inserting
``$2,550,000,000''.
(c) Authorization of Additional Projects.--
(1) In general.--Subparagraph (B) of section 48A(d)(3) is
amended to read as follows:
``(B) Particular projects.--Of the dollar amount in
subparagraph (A), the Secretary is authorized to
certify--
``(i) $800,000,000 for integrated
gasification combined cycle projects the
application for which is submitted during the
period described in paragraph (2)(A)(i),
``(ii) $500,000,000 for projects which use
other advanced coal-based generation
technologies the application for which is
submitted during the period described in
paragraph (2)(A)(i), and
``(iii) $1,250,000,000 for advanced coal-
based generation technology projects the
application for which is submitted during the
period described in paragraph (2)(A)(ii).''.
(2) Application period for additional projects.--
Subparagraph (A) of section 48A(d)(2) is amended to read as
follows:
``(A) Application period.--Each applicant for
certification under this paragraph shall submit an
application meeting the requirements of subparagraph
(B). An applicant may only submit an application--
``(i) for an allocation from the dollar
amount specified in clause (i) or (ii) of
paragraph (3)(B) during the 3-year period
beginning on the date the Secretary establishes
the program under paragraph (1), and
``(ii) for an allocation from the dollar
amount specified in paragraph (3)(B)(iii)
during the 3-year period beginning at the
earlier of the termination of the period
described in clause (i) or the date prescribed
by the Secretary.''.
(3) Capture and sequestration of carbon dioxide emissions
requirement.--
(A) In general.--Section 48A(e)(1) is amended by
striking ``and'' at the end of subparagraph (E), by
striking the period at the end of subparagraph (F) and
inserting ``; and'', and by adding at the end the
following new subparagraph:
``(G) in the case of any project the application
for which is submitted during the period described in
subsection (d)(2)(A)(ii), the project includes
equipment which separates and sequesters at least 65
percent (70 percent in the case of an application for
reallocated credits under subsection (d)(4)) of such
project's total carbon dioxide emissions.''.
(B) Highest priority for projects which sequester
carbon dioxide emissions.--Section 48A(e)(3) is amended
by striking ``and'' at the end of subparagraph
(A)(iii), by striking the period at the end of
subparagraph (B)(iii) and inserting ``, and'', and by
adding at the end the following new subparagraph:
``(C) give highest priority to projects with the
greatest separation and sequestration percentage of
total carbon dioxide emissions.''.
(C) Recapture of credit for failure to sequester.--
Section 48A is amended by adding at the end the
following new subsection:
``(i) Recapture of Credit for Failure To Sequester.--The Secretary
shall provide for recapturing the benefit of any credit allowable under
subsection (a) with respect to any project which fails to attain or
maintain the separation and sequestration requirements of subsection
(e)(1)(G).''.
(4) Additional priority for research partnerships.--Section
48A(e)(3)(B), as amended by paragraph (3)(B), is amended--
(A) by striking ``and'' at the end of clause (ii),
(B) by redesignating clause (iii) as clause (iv),
and
(C) by inserting after clause (ii) the following
new clause:
``(iii) applicant participants who have a
research partnership with an eligible
educational institution (as defined in section
529(e)(5)), and''.
(5) Clerical amendment.--Section 48A(e)(3) is amended by
striking ``integrated gasification combined cycle'' in the
heading and inserting ``certain''.
(d) Disclosure of Allocations.--Section 48A(d) is amended by adding
at the end the following new paragraph:
``(5) Disclosure of allocations.--The Secretary shall, upon
making a certification under this subsection or section 48B(d),
publicly disclose the identity of the applicant and the amount
of the credit certified with respect to such applicant.''.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
credits the application for which is submitted during the
period described in section 48A(d)(2)(A)(ii) of the Internal
Revenue Code of 1986 and which are allocated or reallocated
after the date of the enactment of this Act.
(2) Disclosure of allocations.--The amendment made by
subsection (d) shall apply to certifications made after the
date of the enactment of this Act.
(3) Clerical amendment.--The amendment made by subsection
(c)(5) shall take effect as if included in the amendment made
by section 1307(b) of the Energy Tax Incentives Act of 2005.
SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION INVESTMENT
CREDIT.
(a) Modification of Credit Amount.--Section 48B(a) is amended by
inserting ``(30 percent in the case of credits allocated under
subsection (d)(1)(B))'' after ``20 percent''.
(b) Expansion of Aggregate Credits.--Section 48B(d)(1) is amended
by striking ``shall not exceed $350,000,000'' and all that follows and
inserting ``shall not exceed--
``(A) $350,000,000, plus
``(B) $250,000,000 for qualifying gasification
projects that include equipment which separates and
sequesters at least 75 percent of such project's total
carbon dioxide emissions.''.
(c) Recapture of Credit for Failure To Sequester.--Section 48B is
amended by adding at the end the following new subsection:
``(f) Recapture of Credit for Failure To Sequester.--The Secretary
shall provide for recapturing the benefit of any credit allowable under
subsection (a) with respect to any project which fails to attain or
maintain the separation and sequestration requirements for such project
under subsection (d)(1).''.
(d) Selection Priorities.--Section 48B(d) is amended by adding at
the end the following new paragraph:
``(4) Selection priorities.--In determining which
qualifying gasification projects to certify under this section,
the Secretary shall--
``(A) give highest priority to projects with the
greatest separation and sequestration percentage of
total carbon dioxide emissions, and
``(B) give high priority to applicant participants
who have a research partnership with an eligible
educational institution (as defined in section
529(e)(5)).''.
(e) Effective Date.--The amendments made by this section shall
apply to credits described in section 48B(d)(1)(B) of the Internal
Revenue Code of 1986 which are allocated or reallocated after the date
of the enactment of this Act.
SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX.
Paragraph (2) of section 4121(e) is amended--
(1) by striking ``January 1, 2014'' in subparagraph (A) and
inserting ``December 31, 2018'', and
(2) by striking ``January 1 after 1981'' in subparagraph
(B) and inserting ``December 31 after 2007''.
SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO CERTAIN
COAL PRODUCERS AND EXPORTERS.
(a) Refund.--
(1) Coal producers.--
(A) In general.--Notwithstanding subsections (a)(1)
and (c) of section 6416 and section 6511 of the
Internal Revenue Code of 1986, if--
(i) a coal producer establishes that such
coal producer, or a party related to such coal
producer, exported coal produced by such coal
producer to a foreign country or shipped coal
produced by such coal producer to a possession
of the United States, or caused such coal to be
exported or shipped, the export or shipment of
which was other than through an exporter who
meets the requirements of paragraph (2),
(ii) such coal producer filed an excise tax
return on or after October 1, 1990, and on or
before the date of the enactment of this Act,
and
(iii) such coal producer files a claim for
refund with the Secretary not later than the
close of the 30-day period beginning on the
date of the enactment of this Act,
then the Secretary shall pay to such coal producer an
amount equal to the tax paid under section 4121 of such
Code on such coal exported or shipped by the coal
producer or a party related to such coal producer, or
caused by the coal producer or a party related to such
coal producer to be exported or shipped.
(B) Special rules for certain taxpayers.--For
purposes of this section--
(i) In general.--If a coal producer or a
party related to a coal producer has received a
judgment described in clause (iii), such coal
producer shall be deemed to have established
the export of coal to a foreign country or
shipment of coal to a possession of the United
States under subparagraph (A)(i).
(ii) Amount of payment.--If a taxpayer
described in clause (i) is entitled to a
payment under subparagraph (A), the amount of
such payment shall be reduced by any amount
paid pursuant to the judgment described in
clause (iii).
(iii) Judgment described.--A judgment is
described in this subparagraph if such
judgment--
(I) is made by a court of competent
jurisdiction within the United States,
(II) relates to the
constitutionality of any tax paid on
exported coal under section 4121 of the
Internal Revenue Code of 1986, and
(III) is in favor of the coal
producer or the party related to the
coal producer.
(2) Exporters.--Notwithstanding subsections (a)(1) and (c)
of section 6416 and section 6511 of the Internal Revenue Code
of 1986, and a judgment described in paragraph (1)(B)(iii) of
this subsection, if--
(A) an exporter establishes that such exporter
exported coal to a foreign country or shipped coal to a
possession of the United States, or caused such coal to
be so exported or shipped,
(B) such exporter filed a tax return on or after
October 1, 1990, and on or before the date of the
enactment of this Act, and
(C) such exporter files a claim for refund with the
Secretary not later than the close of the 30-day period
beginning on the date of the enactment of this Act,
then the Secretary shall pay to such exporter an amount equal
to $0.825 per ton of such coal exported by the exporter or
caused to be exported or shipped, or caused to be exported or
shipped, by the exporter.
(b) Limitations.--Subsection (a) shall not apply with respect to
exported coal if a settlement with the Federal Government has been made
with and accepted by, the coal producer, a party related to such coal
producer, or the exporter, of such coal, as of the date that the claim
is filed under this section with respect to such exported coal. For
purposes of this subsection, the term ``settlement with the Federal
Government'' shall not include any settlement or stipulation entered
into as of the date of the enactment of this Act, the terms of which
contemplate a judgment concerning which any party has reserved the
right to file an appeal, or has filed an appeal.
(c) Subsequent Refund Prohibited.--No refund shall be made under
this section to the extent that a credit or refund of such tax on such
exported or shipped coal has been paid to any person.
(d) Definitions.--For purposes of this section--
(1) Coal producer.--The term ``coal producer'' means the
person in whom is vested ownership of the coal immediately
after the coal is severed from the ground, without regard to
the existence of any contractual arrangement for the sale or
other disposition of the coal or the payment of any royalties
between the producer and third parties. The term includes any
person who extracts coal from coal waste refuse piles or from
the silt waste product which results from the wet washing (or
similar processing) of coal.
(2) Exporter.--The term ``exporter'' means a person, other
than a coal producer, who does not have a contract, fee
arrangement, or any other agreement with a producer or seller
of such coal to export or ship such coal to a third party on
behalf of the producer or seller of such coal and--
(A) is indicated in the shipper's export
declaration or other documentation as the exporter of
record, or
(B) actually exported such coal to a foreign
country or shipped such coal to a possession of the
United States, or caused such coal to be so exported or
shipped.
(3) Related party.--The term ``a party related to such coal
producer'' means a person who--
(A) is related to such coal producer through any
degree of common management, stock ownership, or voting
control,
(B) is related (within the meaning of section
144(a)(3) of the Internal Revenue Code of 1986) to such
coal producer, or
(C) has a contract, fee arrangement, or any other
agreement with such coal producer to sell such coal to
a third party on behalf of such coal producer.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Treasury or the Secretary's designee.
(e) Timing of Refund.--With respect to any claim for refund filed
pursuant to this section, the Secretary shall determine whether the
requirements of this section are met not later than 180 days after such
claim is filed. If the Secretary determines that the requirements of
this section are met, the claim for refund shall be paid not later than
180 days after the Secretary makes such determination.
(f) Interest.--Any refund paid pursuant to this section shall be
paid by the Secretary with interest from the date of overpayment
determined by using the overpayment rate and method under section 6621
of the Internal Revenue Code of 1986.
(g) Denial of Double Benefit.--The payment under subsection (a)
with respect to any coal shall not exceed--
(1) in the case of a payment to a coal producer, the amount
of tax paid under section 4121 of the Internal Revenue Code of
1986 with respect to such coal by such coal producer or a party
related to such coal producer, and
(2) in the case of a payment to an exporter, an amount
equal to $0.825 per ton with respect to such coal exported by
the exporter or caused to be exported by the exporter.
(h) Application of Section.--This section applies only to claims on
coal exported or shipped on or after October 1, 1990, through the date
of the enactment of this Act.
(i) Standing Not Conferred.--
(1) Exporters.--With respect to exporters, this section
shall not confer standing upon an exporter to commence, or
intervene in, any judicial or administrative proceeding
concerning a claim for refund by a coal producer of any Federal
or State tax, fee, or royalty paid by the coal producer.
(2) Coal producers.--With respect to coal producers, this
section shall not confer standing upon a coal producer to
commence, or intervene in, any judicial or administrative
proceeding concerning a claim for refund by an exporter of any
Federal or State tax, fee, or royalty paid by the producer and
alleged to have been passed on to an exporter.
SEC. 115. CARBON AUDIT OF THE TAX CODE.
(a) Study.--The Secretary of the Treasury shall enter into an
agreement with the National Academy of Sciences to undertake a
comprehensive review of the Internal Revenue Code of 1986 to identify
the types of and specific tax provisions that have the largest effects
on carbon and other greenhouse gas emissions and to estimate the
magnitude of those effects.
(b) Report.--Not later than 2 years after the date of enactment of
this Act, the National Academy of Sciences shall submit to Congress a
report containing the results of study authorized under this section.
(c) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $1,500,000 for the period of
fiscal years 2008 and 2009.
Subtitle B--Transportation and Domestic Fuel Security Provisions
SEC. 121. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS DEPRECIATION FOR
BIOMASS ETHANOL PLANT PROPERTY.
(a) In General.--Paragraph (3) of section 168(l) is amended to read
as follows:
``(3) Cellulosic biofuel.--The term `cellulosic biofuel'
means any liquid fuel which is produced from any
lignocellulosic or hemicellulosic matter that is available on a
renewable or recurring basis.''.
(b) Conforming Amendments.--Subsection (l) of section 168 is
amended--
(1) by striking ``cellulosic biomass ethanol'' each place
it appears and inserting ``cellulosic biofuel'',
(2) by striking ``Cellulosic Biomass Ethanol'' in the
heading of such subsection and inserting ``Cellulosic
Biofuel'', and
(3) by striking ``cellulosic biomass ethanol'' in the
heading of paragraph (2) thereof and inserting ``cellulosic
biofuel''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, in taxable years ending after such date.
SEC. 122. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.
(a) In General.--Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) are
each amended by striking ``December 31, 2008'' and inserting ``December
31, 2009''.
(b) Increase in Rate of Credit.--
(1) Income tax credit.--Paragraphs (1)(A) and (2)(A) of
section 40A(b) are each amended by striking ``50 cents'' and
inserting ``$1.00''.
(2) Excise tax credit.--Paragraph (2) of section 6426(c) is
amended to read as follows:
``(2) Applicable amount.--For purposes of this subsection,
the applicable amount is $1.00.''.
(3) Conforming amendments.--
(A) Subsection (b) of section 40A is amended by
striking paragraph (3) and by redesignating paragraphs
(4) and (5) as paragraphs (3) and (4), respectively.
(B) Paragraph (2) of section 40A(f) is amended to
read as follows:
``(2) Exception.--Subsection (b)(4) shall not apply with
respect to renewable diesel.''.
(C) Paragraphs (2) and (3) of section 40A(e) are
each amended by striking ``subsection (b)(5)(C)'' and
inserting ``subsection (b)(4)(C)''.
(D) Clause (ii) of section 40A(d)(3)(C) is amended
by striking ``subsection (b)(5)(B)'' and inserting
``subsection (b)(4)(B)''.
(c) Uniform Treatment of Diesel Produced From Biomass.--Paragraph
(3) of section 40A(f) is amended--
(1) by striking ``diesel fuel'' and inserting ``liquid
fuel'',
(2) by striking ``using a thermal depolymerization
process'', and
(3) by striking ``or D396'' in subparagraph (B) and
inserting ``, D396, or other equivalent standard approved by
the Secretary''.
(d) Coproduction of Renewable Diesel With Petroleum Feedstock.--
(1) In general.--Paragraph (3) of section 40A(f) is amended
by adding at the end the following new sentence: ``Such term
does not include any fuel derived from coprocessing biomass
with a feedstock which is not biomass. For purposes of this
paragraph, the term `biomass' has the meaning given such term
by section 45K(c)(3).''.
(2) Conforming amendment.--Paragraph (3) of section 40A(f)
is amended by striking ``(as defined in section 45K(c)(3))''.
(e) Eligibility of Certain Aviation Fuel.--Paragraph (3) of section
40A(f) is amended by adding at the end the following: ``The term
`renewable diesel' also means fuel derived from biomass which meets the
requirements of a Department of Defense specification for military jet
fuel or an American Society of Testing and Materials specification for
aviation turbine fuel.''.
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
fuel produced, and sold or used, after December 31, 2008.
(2) Coproduction of renewable diesel with petroleum
feedstock.--The amendments made by subsection (d) shall apply
to fuel produced, and sold or used, after the date of the
enactment of this Act.
SEC. 123. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO PROVIDE
AN INCENTIVE FOR UNITED STATES PRODUCTION.
(a) Alcohol Fuels Credit.--Paragraph (6) of section 40(d) is
amended to read as follows:
``(6) Limitation to alcohol with connection to the united
states.--No credit shall be determined under this section with
respect to any alcohol which is produced outside the United
States for use as a fuel outside the United States. For
purposes of this paragraph, the term `United States' includes
any possession of the United States.''.
(b) Biodiesel Fuels Credit.--Subsection (d) of section 40A is
amended by adding at the end the following new paragraph:
``(5) Limitation to biodiesel with connection to the united
states.--No credit shall be determined under this section with
respect to any biodiesel which is produced outside the United
States for use as a fuel outside the United States. For
purposes of this paragraph, the term `United States' includes
any possession of the United States.''.
(c) Excise Tax Credit.--
(1) In general.--Section 6426 is amended by adding at the
end the following new subsection:
``(i) Limitation to Fuels With Connection to the United States.--
``(1) Alcohol.--No credit shall be determined under this
section with respect to any alcohol which is produced outside
the United States for use as a fuel outside the United States.
``(2) Biodiesel and alternative fuels.--No credit shall be
determined under this section with respect to any biodiesel or
alternative fuel which is produced outside the United States
for use as a fuel outside the United States.
For purposes of this subsection, the term `United States' includes any
possession of the United States.''.
(2) Conforming amendment.--Subsection (e) of section 6427
is amended by redesignating paragraph (5) as paragraph (6) and
by inserting after paragraph (4) the following new paragraph:
``(5) Limitation to fuels with connection to the united
states.--No amount shall be payable under paragraph (1) or (2)
with respect to any mixture or alternative fuel if credit is
not allowed with respect to such mixture or alternative fuel by
reason of section 6426(i).''.
(d) Effective Date.--The amendments made by this section shall
apply to claims for credit or payment made on or after May 15, 2008.
SEC. 124. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR
VEHICLES.
(a) In General.--Subpart B of part IV of subchapter A of chapter 1
is amended by adding at the end the following new section:
``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.
``(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an amount
equal to the sum of the credit amounts determined under subsection (b)
with respect to each new qualified plug-in electric drive motor vehicle
placed in service by the taxpayer during the taxable year.
``(b) Per Vehicle Dollar Limitation.--
``(1) In general.--The amount determined under this
subsection with respect to any new qualified plug-in electric
drive motor vehicle is the sum of the amounts determined under
paragraphs (2) and (3) with respect to such vehicle.
``(2) Base amount.--The amount determined under this
paragraph is $3,000.
``(3) Battery capacity.--In the case of a vehicle which
draws propulsion energy from a battery with not less than 5
kilowatt hours of capacity, the amount determined under this
paragraph is $200, plus $200 for each kilowatt hour of capacity
in excess of 5 kilowatt hours. The amount determined under this
paragraph shall not exceed $2,000.
``(c) Application With Other Credits.--
``(1) Business credit treated as part of general business
credit.--So much of the credit which would be allowed under
subsection (a) for any taxable year (determined without regard
to this subsection) that is attributable to property of a
character subject to an allowance for depreciation shall be
treated as a credit listed in section 38(b) for such taxable
year (and not allowed under subsection (a)).
``(2) Personal credit.--
``(A) In general.--For purposes of this title, the
credit allowed under subsection (a) for any taxable
year (determined after application of paragraph (1))
shall be treated as a credit allowable under subpart A
for such taxable year.
``(B) Limitation based on amount of tax.--In the
case of a taxable year to which section 26(a)(2) does
not apply, the credit allowed under subsection (a) for
any taxable year (determined after application of
paragraph (1)) shall not exceed the excess of--
``(i) the sum of the regular tax liability
(as defined in section 26(b)) plus the tax
imposed by section 55, over
``(ii) the sum of the credits allowable
under subpart A (other than this section and
sections 23 and 25D) and section 27 for the
taxable year.
``(d) New Qualified Plug-In Electric Drive Motor Vehicle.--For
purposes of this section--
``(1) In general.--The term `new qualified plug-in electric
drive motor vehicle' means a motor vehicle (as defined in
section 30(c)(2))--
``(A) the original use of which commences with the
taxpayer,
``(B) which is acquired for use or lease by the
taxpayer and not for resale,
``(C) which is made by a manufacturer,
``(D) which has a gross vehicle weight rating of
less than 14,000 pounds,
``(E) which has received a certificate of
conformity under the Clean Air Act and meets or exceeds
the Bin 5 Tier II emission standard established in
regulations prescribed by the Administrator of the
Environmental Protection Agency under section 202(i) of
the Clean Air Act for that make and model year vehicle,
and
``(F) which is propelled to a significant extent by
an electric motor which draws electricity from a
battery which--
``(i) has a capacity of not less than 4
kilowatt hours, and
``(ii) is capable of being recharged from
an external source of electricity.
``(2) Exception.--The term `new qualified plug-in electric
drive motor vehicle' shall not include any vehicle which is not
a passenger automobile or light truck if such vehicle has a
gross vehicle weight rating of less than 8,500 pounds.
``(3) Other terms.--The terms `passenger automobile',
`light truck', and `manufacturer' have the meanings given such
terms in regulations prescribed by the Administrator of the
Environmental Protection Agency for purposes of the
administration of title II of the Clean Air Act (42 U.S.C. 7521
et seq.).
``(4) Battery capacity.--The term `capacity' means, with
respect to any battery, the quantity of electricity which the
battery is capable of storing, expressed in kilowatt hours, as
measured from a 100 percent state of charge to a 0 percent
state of charge.
``(e) Limitation on Number of New Qualified Plug-In Electric Drive
Motor Vehicles Eligible for Credit.--
``(1) In general.--In the case of a new qualified plug-in
electric drive motor vehicle sold during the phaseout period,
only the applicable percentage of the credit otherwise
allowable under subsection (a) shall be allowed.
``(2) Phaseout period.--For purposes of this subsection,
the phaseout period is the period beginning with the second
calendar quarter following the calendar quarter which includes
the first date on which the number of new qualified plug-in
electric drive motor vehicles manufactured by the manufacturer
of the vehicle referred to in paragraph (1) sold for use in the
United States after the date of the enactment of this section,
is at least 60,000.
``(3) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage is--
``(A) 50 percent for the first 2 calendar quarters
of the phaseout period,
``(B) 25 percent for the 3d and 4th calendar
quarters of the phaseout period, and
``(C) 0 percent for each calendar quarter
thereafter.
``(4) Controlled groups.--Rules similar to the rules of
section 30B(f)(4) shall apply for purposes of this subsection.
``(f) Special Rules.--
``(1) Basis reduction.--The basis of any property for which
a credit is allowable under subsection (a) shall be reduced by
the amount of such credit (determined without regard to
subsection (c)).
``(2) Recapture.--The Secretary shall, by regulations,
provide for recapturing the benefit of any credit allowable
under subsection (a) with respect to any property which ceases
to be property eligible for such credit.
``(3) Property used outside united states, etc., not
qualified.--No credit shall be allowed under subsection (a)
with respect to any property referred to in section 50(b)(1) or
with respect to the portion of the cost of any property taken
into account under section 179.
``(4) Election not to take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects to not have this section apply to such vehicle.
``(5) Property used by tax-exempt entity; interaction with
air quality and motor vehicle safety standards.--Rules similar
to the rules of paragraphs (6) and (10) of section 30B(h) shall
apply for purposes of this section.''.
(b) Coordination With Alternative Motor Vehicle Credit.--Section
30B(d)(3) is amended by adding at the end the following new
subparagraph:
``(D) Exclusion of plug-in vehicles.--Any vehicle
with respect to which a credit is allowable under
section 30D (determined without regard to subsection
(c) thereof) shall not be taken into account under this
section.''.
(c) Credit Made Part of General Business Credit.--Section 38(b) is
amended--
(1) by striking ``plus'' at the end of paragraph (32),
(2) by striking the period at the end of paragraph (33) and
inserting ``, plus'', and
(3) by adding at the end the following new paragraph:
``(34) the portion of the new qualified plug-in electric
drive motor vehicle credit to which section 30D(c)(1)
applies.''.
(d) Conforming Amendments.--
(1)(A) Section 24(b)(3)(B), as amended by section 104, is
amended by striking ``and 25D'' and inserting ``25D, and 30D''.
(B) Section 25(e)(1)(C)(ii) is amended by inserting
``30D,'' after ``25D,''.
(C) Section 25B(g)(2), as amended by section 104, is
amended by striking ``and 25D'' and inserting ``, 25D, and
30D''.
(D) Section 26(a)(1), as amended by section 104, is amended
by striking ``and 25D'' and inserting ``25D, and 30D''.
(E) Section 1400C(d)(2) is amended by striking ``and 25D''
and inserting ``25D, and 30D''.
(2) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (35), by striking the period at the end of
paragraph (36) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(37) to the extent provided in section 30D(f)(1).''.
(3) Section 6501(m) is amended by inserting ``30D(f)(4),''
after ``30C(e)(5),''.
(4) The table of sections for subpart B of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:
``Sec. 30D. New qualified plug-in electric drive motor vehicles.''.
(e) Treatment of Alternative Motor Vehicle Credit as a Personal
Credit.--
(1) In general.--Paragraph (2) of section 30B(g) is amended
to read as follows:
``(2) Personal credit.--The credit allowed under subsection
(a) for any taxable year (after application of paragraph (1))
shall be treated as a credit allowable under subpart A for such
taxable year.''.
(2) Conforming amendments.--
(A) Subparagraph (A) of section 30C(d)(2) is
amended by striking ``sections 27, 30, and 30B'' and
inserting ``sections 27 and 30''.
(B) Paragraph (3) of section 55(c) is amended by
striking ``30B(g)(2),''.
(f) 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, 2008.
(2) Treatment of alternative motor vehicle credit as
personal credit.--The amendments made by subsection (e) shall
apply to taxable years beginning after December 31, 2007.
(g) Application of EGTRRA Sunset.--The amendment made by subsection
(d)(1)(A) shall be subject to title IX of the Economic Growth and Tax
Relief Reconciliation Act of 2001 in the same manner as the provision
of such Act to which such amendment relates.
SEC. 125. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION UNITS AND
ADVANCED INSULATION.
(a) In General.--Section 4053 is amended by adding at the end the
following new paragraphs:
``(9) Idling reduction device.--Any device or system of
devices which--
``(A) is designed to provide to a vehicle those
services (such as heat, air conditioning, or
electricity) that would otherwise require the operation
of the main drive engine while the vehicle is
temporarily parked or remains stationary using one or
more devices affixed to a tractor, and
``(B) is determined by the Administrator of the
Environmental Protection Agency, in consultation with
the Secretary of Energy and the Secretary of
Transportation, to reduce idling of such vehicle at a
motor vehicle rest stop or other location where such
vehicles are temporarily parked or remain stationary.
``(10) Advanced insulation.--Any insulation that has an R
value of not less than R35 per inch.''.
(b) Effective Date.--The amendment made by this section shall apply
to sales or installations after the date of the enactment of this Act.
SEC. 126. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.
(a) In General.--Paragraph (1) of section 132(f) is amended by
adding at the end the following:
``(D) Any qualified bicycle commuting
reimbursement.''.
(b) Limitation on Exclusion.--Paragraph (2) of section 132(f) is
amended by striking ``and'' at the end of subparagraph (A), by striking
the period at the end of subparagraph (B) and inserting ``, and'', and
by adding at the end the following new subparagraph:
``(C) the applicable annual limitation in the case
of any qualified bicycle commuting reimbursement.''.
(c) Definitions.--Paragraph (5) of section 132(f) is amended by
adding at the end the following:
``(F) Definitions related to bicycle commuting
reimbursement.--
``(i) Qualified bicycle commuting
reimbursement.--The term `qualified bicycle
commuting reimbursement' means, with respect to
any calendar year, any employer reimbursement
during the 15-month period beginning with the
first day of such calendar year for reasonable
expenses incurred by the employee during such
calendar year for the purchase of a bicycle and
bicycle improvements, repair, and storage, if
such bicycle is regularly used for travel
between the employee's residence and place of
employment.
``(ii) Applicable annual limitation.--The
term `applicable annual limitation' means, with
respect to any employee for any calendar year,
the product of $20 multiplied by the number of
qualified bicycle commuting months during such
year.
``(iii) Qualified bicycle commuting
month.--The term `qualified bicycle commuting
month' means, with respect to any employee, any
month during which such employee--
``(I) regularly uses the bicycle
for a substantial portion of the travel
between the employee's residence and
place of employment, and
``(II) does not receive any benefit
described in subparagraph (A), (B), or
(C) of paragraph (1).''.
(d) Constructive Receipt of Benefit.--Paragraph (4) of section
132(f) is amended by inserting ``(other than a qualified bicycle
commuting reimbursement)'' after ``qualified transportation fringe''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
SEC. 127. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.
(a) Increase in Credit Amount.--Section 30C is amended--
(1) by striking ``30 percent'' in subsection (a) and
inserting ``50 percent'', and
(2) by striking ``$30,000'' in subsection (b)(1) and
inserting ``$50,000''.
(b) Extension of Credit.--Paragraph (2) of section 30C(g) is
amended by striking ``December 31, 2009'' and inserting ``December 31,
2010''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, in taxable years ending after such date.
SEC. 128. CERTAIN INCOME AND GAINS RELATING TO ALCOHOL FUELS AND
MIXTURES, BIODIESEL FUELS AND MIXTURES, AND ALTERNATIVE
FUELS AND MIXTURES TREATED AS QUALIFYING INCOME FOR
PUBLICLY TRADED PARTNERSHIPS.
(a) In General.--Subparagraph (E) of section 7704(d)(1) is amended
by inserting ``, or the transportation, storage, or marketing of any
fuel described in subsection (b), (c), (d), or (e) of section 6426, or
any alcohol fuel defined in section 6426(b)(4)(A) or any biodiesel fuel
as defined in section 40A(d)(1)'' after ``timber)''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2011.
Subtitle C--Energy Conservation and Efficiency Provisions
SEC. 141. QUALIFIED ENERGY CONSERVATION BONDS.
(a) In General.--Subpart I of part IV of subchapter A of chapter 1,
as amended by section 106, is amended by adding at the end the
following new section:
``SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS.
``(a) Qualified Energy Conservation Bond.--For purposes of this
subchapter, the term `qualified energy conservation 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 one or more qualified conservation
purposes,
``(2) the bond is issued by a State or local government,
and
``(3) the issuer designates such bond for purposes of this
section.
``(b) Reduced Credit Amount.--The annual credit determined under
section 54A(b) with respect to any qualified energy conservation bond
shall be 70 percent of the amount so determined without regard to this
subsection.
``(c) Limitation on Amount of Bonds Designated.--The maximum
aggregate face amount of bonds which may be designated under subsection
(a) by any issuer shall not exceed the limitation amount allocated to
such issuer under subsection (e).
``(d) National Limitation on Amount of Bonds Designated.--There is
a national qualified energy conservation bond limitation of
$3,000,000,000.
``(e) Allocations.--
``(1) In general.--The limitation applicable under
subsection (d) shall be allocated by the Secretary among the
States in proportion to the population of the States.
``(2) Allocations to largest local governments.--
``(A) In general.--In the case of any State in
which there is a large local government, each such
local government shall be allocated a portion of such
State's allocation which bears the same ratio to the
State's allocation (determined without regard to this
subparagraph) as the population of such large local
government bears to the population of such State.
``(B) Allocation of unused limitation to state.--
The amount allocated under this subsection to a large
local government may be reallocated by such local
government to the State in which such local government
is located.
``(C) Large local government.--For purposes of this
section, the term `large local government' means any
municipality or county if such municipality or county
has a population of 100,000 or more.
``(3) Allocation to issuers; restriction on private
activity bonds.--Any allocation under this subsection to a
State or large local government shall be allocated by such
State or large local government to issuers within the State in
a manner that results in not less than 70 percent of the
allocation to such State or large local government being used
to designate bonds which are not private activity bonds.
``(f) Qualified Conservation Purpose.--For purposes of this
section--
``(1) In general.--The term `qualified conservation
purpose' means any of the following:
``(A) Capital expenditures incurred for purposes
of--
``(i) reducing energy consumption in
publicly-owned buildings by at least 20
percent,
``(ii) implementing green community
programs,
``(iii) rural development involving the
production of electricity from renewable energy
resources, or
``(iv) any qualified facility (as
determined under section 45(d) without regard
to paragraphs (8) and (10) thereof and without
regard to any placed in service date).
``(B) Expenditures with respect to research
facilities, and research grants, to support research
in--
``(i) development of cellulosic ethanol or
other nonfossil fuels,
``(ii) technologies for the capture and
sequestration of carbon dioxide produced
through the use of fossil fuels,
``(iii) increasing the efficiency of
existing technologies for producing nonfossil
fuels,
``(iv) automobile battery technologies and
other technologies to reduce fossil fuel
consumption in transportation, or
``(v) technologies to reduce energy use in
buildings.
``(C) Mass commuting facilities and related
facilities that reduce the consumption of energy,
including expenditures to reduce pollution from
vehicles used for mass commuting.
``(D) Demonstration projects designed to promote
the commercialization of--
``(i) green building technology,
``(ii) conversion of agricultural waste for
use in the production of fuel or otherwise,
``(iii) advanced battery manufacturing
technologies,
``(iv) technologies to reduce peak use of
electricity, or
``(v) technologies for the capture and
sequestration of carbon dioxide emitted from
combusting fossil fuels in order to produce
electricity.
``(E) Public education campaigns to promote energy
efficiency.
``(2) Special rules for private activity bonds.--For
purposes of this section, in the case of any private activity
bond, the term `qualified conservation purposes' shall not
include any expenditure which is not a capital expenditure.
``(g) Population.--
``(1) In general.--The population of any State or local
government shall be determined for purposes of this section as
provided in section 146(j) for the calendar year which includes
the date of the enactment of this section.
``(2) Special rule for counties.--In determining the
population of any county for purposes of this section, any
population of such county which is taken into account in
determining the population of any municipality which is a large
local government shall not be taken into account in determining
the population of such county.
``(h) Application to Indian Tribal Governments.--An Indian tribal
government shall be treated for purposes of this section in the same
manner as a large local government, except that--
``(1) an Indian tribal government shall be treated for
purposes of subsection (e) as located within a State to the
extent of so much of the population of such government as
resides within such State, and
``(2) any bond issued by an Indian tribal government shall
be treated as a qualified energy conservation bond only if
issued as part of an issue the available project proceeds of
which are used for purposes for which such Indian tribal
government could issue bonds to which section 103(a)
applies.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d), as amended by section
106, is amended to read as follows:
``(1) Qualified tax credit bond.--The term `qualified tax
credit bond' means--
``(A) a qualified forestry conservation bond,
``(B) a new clean renewable energy bond, or
``(C) a qualified energy conservation bond,
which is part of an issue that meets requirements of paragraphs
(2), (3), (4), (5), and (6).''.
(2) Subparagraph (C) of section 54A(d)(2), as amended by
section 106, 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),
``(ii) in the case of a new clean renewable
energy bond, a purpose specified in section
54C(a)(1), and
``(iii) in the case of a qualified energy
conservation bond, a purpose specified in
section 54D(a)(1).''.
(3) 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. 54D. Qualified energy conservation 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. 142. CREDIT FOR NONBUSINESS ENERGY PROPERTY.
(a) Extension of Credit.--Section 25C(g) is amended by striking
``December 31, 2007'' and inserting ``December 31, 2008''.
(b) Qualified Biomass Fuel Property.--
(1) In general.--Section 25C(d)(3) is amended--
(A) by striking ``and'' at the end of subparagraph
(D),
(B) by striking the period at the end of
subparagraph (E) and inserting ``, and'', and
(C) by adding at the end the following new
subparagraph:
``(F) a stove which uses the burning of biomass
fuel to heat a dwelling unit located in the United
States and used as a residence by the taxpayer, or to
heat water for use in such a dwelling unit, and which
has a thermal efficiency rating of at least 75
percent.''.
(2) Biomass fuel.--Section 25C(d) is amended by adding at
the end the following new paragraph:
``(6) Biomass fuel.--The term `biomass fuel' means any
plant-derived fuel available on a renewable or recurring basis,
including agricultural crops and trees, wood and wood waste and
residues (including wood pellets), plants (including aquatic
plants), grasses, residues, and fibers.''.
(c) Modification of Water Heater Requirements.--Section
25C(d)(3)(E) is amended by inserting ``or a thermal efficiency of at
least 90 percent'' after ``0.80''.
(d) Coordination With Credit for Qualified Geothermal Heat pump
Property Expenditures.--
(1) In general.--Paragraph (3) of section 25C(d), as
amended by subsections (b) and (c), is amended by striking
subparagraph (C) and by redesignating subparagraphs (D), (E),
and (F) as subparagraphs (C), (D), and (E), respectively.
(2) Conforming amendment.--Subparagraph (C) of section
25C(d)(2) is amended to read as follows:
``(C) Requirements and standards for air
conditioners and heat pumps.--The standards and
requirements prescribed by the Secretary under
subparagraph (B) with respect to the energy efficiency
ratio (EER) for central air conditioners and electric
heat pumps--
``(i) shall require measurements to be
based on published data which is tested by
manufacturers at 95 degrees Fahrenheit, and
``(ii) may be based on the certified data
of the Air Conditioning and Refrigeration
Institute that are prepared in partnership with
the Consortium for Energy Efficiency.''.
(e) Modification of Qualified Energy Efficiency Improvements.--
(1) In general.--Paragraph (1) of section 25C(c) is amended
by inserting ``, or an asphalt roof with appropriate cooling
granules,'' before ``which meet the Energy Star program
requirements''.
(2) Building envelope component.--Subparagraph (D) of
section 25C(c)(2) is amended--
(A) by inserting ``or asphalt roof'' after ``metal
roof'', and
(B) by inserting ``or cooling granules'' after
``pigmented coatings''.
(f) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made this section shall apply to expenditures made
after December 31, 2007.
(2) Modification of qualified energy efficiency
improvements.--The amendments made by subsection (e) shall
apply to property placed in service after the date of the
enactment of this Act.
SEC. 143. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
Subsection (h) of section 179D is amended by striking ``December
31, 2008'' and inserting ``December 31, 2013''.
SEC. 144. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT FOR
APPLIANCES PRODUCED AFTER 2007.
(a) In General.--Subsection (b) of section 45M is amended to read
as follows:
``(b) Applicable Amount.--For purposes of subsection (a)--
``(1) Dishwashers.--The applicable amount is--
``(A) $45 in the case of a dishwasher which is
manufactured in calendar year 2008 or 2009 and which
uses no more than 324 kilowatt hours per year and 5.8
gallons per cycle, and
``(B) $75 in the case of a dishwasher which is
manufactured in calendar year 2008, 2009, or 2010 and
which uses no more than 307 kilowatt hours per year and
5.0 gallons per cycle (5.5 gallons per cycle for
dishwashers designed for greater than 12 place
settings).
``(2) Clothes washers.--The applicable amount is--
``(A) $75 in the case of a residential top-loading
clothes washer manufactured in calendar year 2008 which
meets or exceeds a 1.72 modified energy factor and does
not exceed a 8.0 water consumption factor,
``(B) $125 in the case of a residential top-loading
clothes washer manufactured in calendar year 2008 or
2009 which meets or exceeds a 1.8 modified energy
factor and does not exceed a 7.5 water consumption
factor,
``(C) $150 in the case of a residential or
commercial clothes washer manufactured in calendar year
2008, 2009, or 2010 which meets or exceeds 2.0 modified
energy factor and does not exceed a 6.0 water
consumption factor, and
``(D) $250 in the case of a residential or
commercial clothes washer manufactured in calendar year
2008, 2009, or 2010 which meets or exceeds 2.2 modified
energy factor and does not exceed a 4.5 water
consumption factor.
``(3) Refrigerators.--The applicable amount is--
``(A) $50 in the case of a refrigerator which is
manufactured in calendar year 2008, and consumes at
least 20 percent but not more than 22.9 percent less
kilowatt hours per year than the 2001 energy
conservation standards,
``(B) $75 in the case of a refrigerator which is
manufactured in calendar year 2008 or 2009, and
consumes at least 23 percent but no more than 24.9
percent less kilowatt hours per year than the 2001
energy conservation standards,
``(C) $100 in the case of a refrigerator which is
manufactured in calendar year 2008, 2009, or 2010, and
consumes at least 25 percent but not more than 29.9
percent less kilowatt hours per year than the 2001
energy conservation standards, and
``(D) $200 in the case of a refrigerator
manufactured in calendar year 2008, 2009, or 2010 and
which consumes at least 30 percent less energy than the
2001 energy conservation standards.''.
(b) Eligible Production.--
(1) Similar treatment for all appliances.--Subsection (c)
of section 45M is amended--
(A) by striking paragraph (2),
(B) by striking ``(1) In general'' and all that
follows through ``the eligible'' and inserting ``The
eligible'',
(C) by moving the text of such subsection in line
with the subsection heading, and
(D) by redesignating subparagraphs (A) and (B) as
paragraphs (1) and (2), respectively, and by moving
such paragraphs 2 ems to the left.
(2) Modification of base period.--Paragraph (2) of section
45M(c), as amended by paragraph (1), is amended by striking
``3-calendar year'' and inserting ``2-calendar year''.
(c) Types of Energy Efficient Appliances.--Subsection (d) of
section 45M is amended to read as follows:
``(d) Types of Energy Efficient Appliance.--For purposes of this
section, the types of energy efficient appliances are--
``(1) dishwashers described in subsection (b)(1),
``(2) clothes washers described in subsection (b)(2), and
``(3) refrigerators described in subsection (b)(3).''.
(d) Aggregate Credit Amount Allowed.--
(1) Increase in limit.--Paragraph (1) of section 45M(e) is
amended to read as follows:
``(1) Aggregate credit amount allowed.--The aggregate
amount of credit allowed under subsection (a) with respect to a
taxpayer for any taxable year shall not exceed $75,000,000
reduced by the amount of the credit allowed under subsection
(a) to the taxpayer (or any predecessor) for all prior taxable
years beginning after December 31, 2007.''.
(2) Exception for certain refrigerator and clothes
washers.--Paragraph (2) of section 45M(e) is amended to read as
follows:
``(2) Amount allowed for certain refrigerators and clothes
washers.--Refrigerators described in subsection (b)(3)(D) and
clothes washers described in subsection (b)(2)(D) shall not be
taken into account under paragraph (1).''.
(e) Qualified Energy Efficient Appliances.--
(1) In general.--Paragraph (1) of section 45M(f) is amended
to read as follows:
``(1) Qualified energy efficient appliance.--The term
`qualified energy efficient appliance' means--
``(A) any dishwasher described in subsection
(b)(1),
``(B) any clothes washer described in subsection
(b)(2), and
``(C) any refrigerator described in subsection
(b)(3).''.
(2) Clothes washer.--Section 45M(f)(3) is amended by
inserting ``commercial'' before ``residential'' the second
place it appears.
(3) Top-loading clothes washer.--Subsection (f) of section
45M is amended by redesignating paragraphs (4), (5), (6), and
(7) as paragraphs (5), (6), (7), and (8), respectively, and by
inserting after paragraph (3) the following new paragraph:
``(4) Top-loading clothes washer.--The term `top-loading
clothes washer' means a clothes washer which has the clothes
container compartment access located on the top of the machine
and which operates on a vertical axis.''.
(4) Replacement of energy factor.--Section 45M(f)(6), as
redesignated by paragraph (3), is amended to read as follows:
``(6) Modified energy factor.--The term `modified energy
factor' means the modified energy factor established by the
Department of Energy for compliance with the Federal energy
conservation standard.''.
(5) Gallons per cycle; water consumption factor.--Section
45M(f), as amended by paragraph (3), is amended by adding at
the end the following:
``(9) Gallons per cycle.--The term `gallons per cycle'
means, with respect to a dishwasher, the amount of water,
expressed in gallons, required to complete a normal cycle of a
dishwasher.
``(10) Water consumption factor.--The term `water
consumption factor' means, with respect to a clothes washer,
the quotient of the total weighted per-cycle water consumption
divided by the cubic foot (or liter) capacity of the clothes
washer.''.
(f) Effective Date.--The amendments made by this section shall
apply to appliances produced after December 31, 2007.
SEC. 145. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF SMART METERS
AND SMART GRID SYSTEMS.
(a) In General.--Section 168(e)(3)(D) is amended by striking
``and'' at the end of clause (i), by striking the period at the end of
clause (ii) and inserting a comma, and by inserting after clause (ii)
the following new clauses:
``(iii) any qualified smart electric meter,
and
``(iv) any qualified smart electric grid
system.''.
(b) Definitions.--Section 168(i) is amended by inserting at the end
the following new paragraph:
``(18) Qualified smart electric meters.--
``(A) In general.--The term `qualified smart
electric meter' means any smart electric meter which is
placed in service by a taxpayer who is a supplier of
electric energy or a provider of electric energy
services.
``(B) Smart electric meter.--For purposes of
subparagraph (A), the term `smart electric meter' means
any time-based meter and related communication
equipment which is capable of being used by the
taxpayer as part of a system that--
``(i) measures and records electricity
usage data on a time-differentiated basis in at
least 24 separate time segments per day,
``(ii) provides for the exchange of
information between supplier or provider and
the customer's electric meter in support of
time-based rates or other forms of demand
response,
``(iii) provides data to such supplier or
provider so that the supplier or provider can
provide energy usage information to customers
electronically, and
``(iv) provides net metering.
``(19) Qualified smart electric grid systems.--
``(A) In general.--The term `qualified smart
electric grid system' means any smart grid property
used as part of a system for electric distribution grid
communications, monitoring, and management placed in
service by a taxpayer who is a supplier of electric
energy or a provider of electric energy services.
``(B) Smart grid property.--For the purposes of
subparagraph (A), the term `smart grid property' means
electronics and related equipment that is capable of--
``(i) sensing, collecting, and monitoring
data of or from all portions of a utility's
electric distribution grid,
``(ii) providing real-time, two-way
communications to monitor or manage such grid,
and
``(iii) providing real time analysis of and
event prediction based upon collected data that
can be used to improve electric distribution
system reliability, quality, and
performance.''.
(c) Continued Application of 150 Percent Declining Balance
Method.--Paragraph (2) of section 168(b) is amended by striking ``or''
at the end of subparagraph (B), by redesignating subparagraph (C) as
subparagraph (D), and by inserting after subparagraph (B) the following
new subparagraph:
``(C) any property (other than property described
in paragraph (3)) which is a qualified smart electric
meter or qualified smart electric grid system, or''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act.
SEC. 146. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN PROJECTS.
(a) In General.--Paragraph (8) of section 142(l) is amended by
striking ``September 30, 2009'' and inserting ``September 30, 2012''.
(b) Treatment of Current Refunding Bonds.--Paragraph (9) of section
142(l) is amended by striking ``October 1, 2009'' and inserting
``October 1, 2012''.
(c) Accountability.--The second sentence of section 701(d) of the
American Jobs Creation Act of 2004 is amended by striking ``issuance,''
and inserting ``issuance of the last issue with respect to such
project,''.
SEC. 147. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN REUSE AND
RECYCLING PROPERTY.
(a) In General.--Section 168 is amended by adding at the end the
following new subsection:
``(m) Special Allowance for Certain Reuse and Recycling Property.--
``(1) In general.--In the case of any qualified reuse and
recycling property--
``(A) the depreciation deduction provided by
section 167(a) for the taxable year in which such
property is placed in service shall include an
allowance equal to 50 percent of the adjusted basis of
the qualified reuse and recycling property, and
``(B) the adjusted basis of the qualified reuse and
recycling property shall be reduced by the amount of
such deduction before computing the amount otherwise
allowable as a depreciation deduction under this
chapter for such taxable year and any subsequent
taxable year.
``(2) Qualified reuse and recycling property.--For purposes
of this subsection--
``(A) In general.--The term `qualified reuse and
recycling property' means any reuse and recycling
property--
``(i) to which this section applies,
``(ii) which has a useful life of at least
5 years,
``(iii) the original use of which commences
with the taxpayer after December 31, 2007, and
``(iv) which is--
``(I) acquired by purchase (as
defined in section 179(d)(2)) by the
taxpayer after December 31, 2007, but
only if no written binding contract for
the acquisition was in effect before
January 1, 2008, or
``(II) acquired by the taxpayer
pursuant to a written binding contract
which was entered into after December
31, 2007.
``(B) Exceptions.--
``(i) Bonus depreciation property under
subsection (k).--The term `qualified reuse and
recycling property' shall not include any
property to which section 168(k) applies.
``(ii) Alternative depreciation property.--
The term `qualified reuse and recycling
property' shall not include any property to
which the alternative depreciation system under
subsection (g) applies, determined without
regard to paragraph (7) of subsection (g)
(relating to election to have system apply).
``(iii) Election out.--If a taxpayer makes
an election under this clause with respect to
any class of property for any taxable year,
this subsection shall not apply to all property
in such class placed in service during such
taxable year.
``(C) Special rule for self-constructed property.--
In the case of a taxpayer manufacturing, constructing,
or producing property for the taxpayer's own use, the
requirements of clause (iv) of subparagraph (A) shall
be treated as met if the taxpayer begins manufacturing,
constructing, or producing the property after December
31, 2007.
``(D) Deduction allowed in computing minimum tax.--
For purposes of determining alternative minimum taxable
income under section 55, the deduction under subsection
(a) for qualified reuse and recycling property shall be
determined under this section without regard to any
adjustment under section 56.
``(3) Definitions.--For purposes of this subsection--
``(A) Reuse and recycling property.--
``(i) In general.--The term `reuse and
recycling property' means any machinery and
equipment (not including buildings or real
estate), along with all appurtenances thereto,
including software necessary to operate such
equipment, which is used exclusively to
collect, distribute, or recycle qualified reuse
and recyclable materials.
``(ii) Exclusion.--Such term does not
include rolling stock or other equipment used
to transport reuse and recyclable materials.
``(B) Qualified reuse and recyclable materials.--
``(i) In general.--The term `qualified
reuse and recyclable materials' means scrap
plastic, scrap glass, scrap textiles, scrap
rubber, scrap packaging, recovered fiber, scrap
ferrous and nonferrous metals, or electronic
scrap generated by an individual or business.
``(ii) Electronic scrap.--For purposes of
clause (i), the term `electronic scrap' means--
``(I) any cathode ray tube, flat
panel screen, or similar video display
device with a screen size greater than
4 inches measured diagonally, or
``(II) any central processing unit.
``(C) Recycling or recycle.--The term `recycling'
or `recycle' means that process (including sorting) by
which worn or superfluous materials are manufactured or
processed into specification grade commodities that are
suitable for use as a replacement or substitute for
virgin materials in manufacturing tangible consumer and
commercial products, including packaging.''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2007.
TITLE II--ONE-YEAR EXTENSION OF TEMPORARY PROVISIONS
Subtitle A--Alternative Minimum Tax
SEC. 201. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR NONREFUNDABLE
PERSONAL CREDITS.
(a) In General.--Paragraph (2) of section 26(a) is amended--
(1) by striking ``or 2007'' and inserting ``2007, or
2008'', and
(2) by striking ``2007'' in the heading thereof and
inserting ``2008''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
SEC. 202. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX EXEMPTION
AMOUNT.
(a) In General.--Paragraph (1) of section 55(d) is amended--
(1) by striking ``($66,250 in the case of taxable years
beginning in 2007)'' in subparagraph (A) and inserting
``($69,950 in the case of taxable years beginning in 2008)'',
and
(2) by striking ``($44,350 in the case of taxable years
beginning in 2007)'' in subparagraph (B) and inserting
``($46,200 in the case of taxable years beginning in 2008)''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
SEC. 203. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT FOR INDIVIDUALS WITH
LONG-TERM UNUSED CREDITS FOR PRIOR YEAR MINIMUM TAX
LIABILITY, ETC.
(a) In General.--Paragraph (2) of section 53(e) is amended to read
as follows:
``(2) AMT refundable credit amount.--For purposes of
paragraph (1), the term `AMT refundable credit amount' means,
with respect to any taxable year, the amount (not in excess of
the long-term unused minimum tax credit for such taxable year)
equal to the greater of--
``(A) 50 percent of the long-term unused minimum
tax credit for such taxable year, or
``(B) the amount (if any) of the AMT refundable
credit amount for the taxpayer's preceding taxable year
(determined without regard to subsection (f)(2)).''.
(b) Treatment of Certain Underpayments, Interest, and Penalties
Attributable to the Treatment of Incentive Stock Options.--Section 53
is amended by adding at the end the following new subsection:
``(f) Treatment of Certain Underpayments, Interest, and Penalties
Attributable to the Treatment of Incentive Stock Options.--
``(1) Abatement.--Any underpayment of tax outstanding on
the date of the enactment of this subsection which is
attributable to the application of section 56(b)(3) for any
taxable year ending before January 1, 2008 (and any interest or
penalty with respect to such underpayment which is outstanding
on such date of enactment), is hereby abated. The amount
determined under subsection (b)(1) shall not include any tax
abated under the preceding sentence.
``(2) Increase in credit for certain interest and penalties
already paid.--The AMT refundable credit amount, and the
minimum tax credit determined under subsection (b), for the
taxpayer's first 2 taxable years beginning after December 31,
2007, shall each be increased by 50 percent of the aggregate
amount of the interest and penalties which were paid by the
taxpayer before the date of the enactment of this subsection
and which would (but for such payment) have been abated under
paragraph (1).''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendment made by this section shall apply to taxable years
beginning after December 31, 2007.
(2) Abatement.--Section 53(f)(1), as added by subsection
(b), shall take effect on the date of the enactment of this
Act.
Subtitle B--Extensions Primarily Affecting Individuals
SEC. 211. 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, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2007.
SEC. 212. 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, 2008''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2007.
SEC. 213. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED INVESTMENT
COMPANIES.
(a) Interest-Related Dividends.--Subparagraph (C) of section
871(k)(1) is amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Short-Term Capital Gain Dividends.--Subparagraph (C) of section
871(k)(2) is amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(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. 214. 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, 2008''.
(b) Effective Date.--The amendment made by this section shall apply
to distributions made in taxable years beginning after December 31,
2007.
SEC. 215. 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, or 2008''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 2007.
SEC. 216. 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, 2008''.
(b) Effective Date.--The amendment made by this section shall apply
to decedents dying after December 31, 2007.
SEC. 217. 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, 2008''.
(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. 218. EXCLUSION OF AMOUNTS RECEIVED UNDER QUALIFIED GROUP LEGAL
SERVICES PLANS.
(a) In General.--Subsection (e) of section 120 is amended by
striking ``shall not apply to taxable years beginning after June 30,
1992'' and inserting ``shall apply to taxable years beginning after
December 31, 2007, and before January 1, 2009''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
Subtitle C--Extensions Primarily Affecting Businesses
SEC. 221. EXTENSION AND MODIFICATION OF RESEARCH CREDIT.
(a) Extension.--Section 41(h)(1)(B) is amended by striking
``December 31, 2007'' and inserting ``December 31, 2008''.
(b) Termination of Alternative Incremental Credit.--Paragraph (4)
of section 41(c) is repealed.
(c) Modification of Alternative Simplified Credit.--Section
41(c)(5)(A) is amended by striking ``12 percent'' and inserting ``14
percent''.
(d) Conforming Amendment.--Subparagraph (D) of section 45C(b)(1) is
amended by striking ``December 31, 2007'' and inserting ``December 31,
2008''.
(e) Technical Correction.--Paragraph (3) of section 41(h) is
amended to read as follows:
``(2) Computation for taxable year in which credit
terminates.--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--
``(A) the amount determined under subsection
(c)(1)(B) with respect to such taxable year shall be
the amount which bears the same ratio to such 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, and
``(B) for purposes of subsection (c)(5), the
average qualified research expenses for the preceding 3
taxable years shall be the amount which bears the same
ratio to such average qualified research expenses
(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.''.
(f) Effective Dates.--
(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) Alternative incremental and simplified credits and
technical amendment.--The repeal made by subsection (b) and the
amendments made by subsections (c) and (e) shall apply to
taxable years beginning after December 31, 2007.
SEC. 222. INDIAN EMPLOYMENT CREDIT.
(a) In General.--Subsection (f) of section 45A is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2008''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2007.
SEC. 223. EXTENSION AND MODIFICATION OF NEW MARKETS TAX CREDIT.
(a) Extension.--Subparagraph (D) of section 45D(f)(1) is amended by
striking ``and 2008'' and inserting ``2008, and 2009''.
(b) Expansion of Definition of Low-Income Community for New Markets
Tax Credit.--
(1) In general.--Section 45D(e) is amended by adding at the
end the following new paragraph:
``(6) Certain counties treated as low-income communities.--
``(A) In general.--The term `low-income community'
shall include any county if such county--
``(i) has a decennial average annual wage
which is at or below 75 percent of the national
decennial average annual wage, and
``(ii) is located in a State the decennial
average annual wage of which is at or below 75
percent of the national decennial average
annual wage.
``(B) Decennial average annual wage.--For purposes
of subparagraph (A), the term `decennial average annual
wage' means the average wage, as determined based on
data from the Bureau of Labor Statistics, for the year
in which the most recent decennial census was taken.''.
(2) Effective date.--The amendment made by this subsection
shall apply to investments made after the date of the enactment
of this Act.
SEC. 224. RAILROAD TRACK MAINTENANCE.
(a) In General.--Subsection (f) of section 45G is amended by
striking ``January 1, 2008'' and inserting ``January 1, 2009''.
(b) Credit Allowed Against Alternative Minimum Tax.--Subparagraph
(B) of section 38(c)(4), as amended by the Housing Assistance Tax Act
of 2008 and by section 103, is amended--
(1) by redesignating clauses (v), (vi), and (vii) as
clauses (vi), (vii), and (viii), respectively, and
(2) by inserting after clause (iv) the following new
clause:
``(v) the credit determined under section
45G,''.
(c) Effective Dates.--
(1) The amendment made by subsection (a) shall apply to
expenditures paid or incurred during taxable years beginning
after December 31, 2007.
(2) The amendments made by subsection (b) shall apply to
credits determined under section 45G of the Internal Revenue
Code of 1986 in taxable years beginning after December 31,
2007, and to carrybacks of such credits.
SEC. 225. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT.
Section 45N(e) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2009''.
SEC. 226. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RECOVERY FOR
QUALIFIED LEASEHOLD IMPROVEMENTS AND QUALIFIED RESTAURANT
IMPROVEMENTS; 15-YEAR STRAIGHT-LINE COST RECOVERY FOR
CERTAIN IMPROVEMENTS TO RETAIL SPACE.
(a) Extension of Leasehold and Restaurant Improvements.--
(1) In general.--Clauses (iv) and (v) of section
168(e)(3)(E) are each amended by striking ``January 1, 2008''
and inserting ``January 1, 2009''.
(2) Effective date.--The amendments made by this subsection
shall apply to property placed in service after December 31,
2007.
(b) Treatment To Include New Construction.--
(1) In general.--Paragraph (7) of section 168(e) is amended
to read as follows:
``(7) Qualified restaurant property.--The term `qualified
restaurant property' means any section 1250 property which is a
building or an improvement to a building if more than 50
percent of the building's square footage is devoted to
preparation of, and seating for on-premises consumption of,
prepared meals.''.
(2) Effective date.--The amendments made by this subsection
shall apply to property placed in service after the date of the
enactment of this Act.
(c) Recovery Period for Depreciation of Certain Improvements to
Retail Space.--
(1) 15-year recovery period.--Section 168(e)(3)(E) is
amended by striking ``and'' at the end of clause (vii), by
striking the period at the end of clause (viii) and inserting
``, and'', and by adding at the end the following new clause:
``(ix) any qualified retail improvement
property placed in service before January 1,
2009.''.
(2) Qualified retail improvement property.--Section 168(e)
is amended by adding at the end the following new paragraph:
``(8) Qualified retail improvement property.--
``(A) In general.--The term `qualified retail
improvement property' means any improvement to an
interior portion of a building which is nonresidential
real property if--
``(i) such portion is open to the general
public and is used in the retail trade or
business of selling tangible personal property
to the general public, and
``(ii) such improvement is placed in
service more than 3 years after the date the
building was first placed in service.
``(B) Improvements made by owner.--In the case of
an improvement made by the owner of such improvement,
such improvement shall be qualified retail improvement
property (if at all) only so long as such improvement
is held by such owner. Rules similar to the rules under
paragraph (6)(B) shall apply for purposes of the
preceding sentence.
``(C) Certain improvements not included.--Such term
shall not include any improvement for which the
expenditure is attributable to--
``(i) the enlargement of the building,
``(ii) any elevator or escalator,
``(iii) any structural component
benefitting a common area, or
``(iv) the internal structural framework of
the building.''.
(3) Requirement to use straight line method.--Section
168(b)(3) is amended by adding at the end the following new
subparagraph:
``(I) Qualified retail improvement property
described in subsection (e)(8).''.
(4) Alternative system.--The table contained in section
168(g)(3)(B) is amended by inserting after the item relating to
subparagraph (E)(viii) the following new item:
``(E)(ix).................................................. 39''.
(5) Effective date.--The amendments made by this subsection
shall apply to property placed in service after the date of the
enactment of this Act.
SEC. 227. 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, 2008''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2007.
SEC. 228. 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, 2008''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2007.
SEC. 229. EXTENSION OF ELECTION TO EXPENSE ADVANCED MINE SAFETY
EQUIPMENT.
Section 179E(g) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2009''.
SEC. 230. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.
(a) In General.--Subsection (h) of section 198 is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2008''.
(b) Effective Date.--The amendment made by this section shall apply
to expenditures paid or incurred after December 31, 2007.
SEC. 231. 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 3 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2009''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
SEC. 232. 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, 2008''.
(b) Effective Date.--The amendment made by this section shall apply
to payments received or accrued after December 31, 2007.
SEC. 233. QUALIFIED ZONE ACADEMY BONDS.
(a) In General.--Subpart I of part IV of subchapter A of chapter 1,
as amended by sections 106 and 141, is amended by adding at the end the
following new section:
``SEC. 54E. 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, 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), as amended by sections
106 and 141, is amended by striking ``or'' at the end of
subparagraph (B), by inserting ``or'' at the end of
subparagraph (C), and by inserting after subparagraph (C) the
following new subparagraph:
``(D) a qualified zone academy bond,''.
(2) Subparagraph (C) of section 54A(d)(2), as amended by
sections 106 and 141, 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 a qualified zone
academy bond, a purpose specified in section
54E(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 Act.''.
(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. 54E. 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. 234. 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
``2008''.
(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 ``2008''.
(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
``2009''.
(2) Conforming amendments.--
(A) Section 1400B(e)(2) is amended--
(i) by striking ``2012'' and inserting
``2013'', and
(ii) by striking ``2012'' in the heading
thereof and inserting ``2013''.
(B) Section 1400B(g)(2) is amended by striking
``2012'' and inserting ``2013''.
(C) Section 1400F(d) is amended by striking
``2012'' and inserting ``2013''.
(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 ``2009''.
(2) Effective date.--The amendment made by this subsection
shall apply to property purchased after December 31, 2007.
SEC. 235. 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 3 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2007.
SEC. 236. EXTENSION AND EXPANSION OF CHARITABLE DEDUCTION FOR
CONTRIBUTIONS OF FOOD INVENTORY.
(a) In General.--Section 170(e)(3)(C) is amended--
(1) by striking ``December 31, 2007'' in clause (iv) and
inserting ``December 31, 2008'', and
(2) by redesignating clauses (iii) and (iv) as clauses (iv)
and (v), respectively, and by inserting after clause (ii) the
following new clause:
``(iii) Determination of basis.--If a
taxpayer--
``(I) does not account for
inventories under section 471, and
``(II) is not required to
capitalize indirect costs under section
263A,
the taxpayer may elect, solely for purposes of
subparagraph (B), to treat the basis of any
apparently wholesome food as being equal to 25
percent of the fair market value of such
food.''.
(b) Temporary Suspension of Limitations on Charitable
Contributions.--
(1) In general.--Section 170(b) is amended by adding at the
end the following new paragraph:
``(3) Temporary suspension of limitations on charitable
contributions.--In the case of a qualified farmer or rancher
(as defined in paragraph (1)(E)(v)), any charitable
contribution of food--
``(A) to which subsection (e)(3)(C) applies
(without regard to clause (ii) thereof), and
``(B) which is made during the period beginning on
the date of the enactment of this paragraph and before
January 1, 2009,
shall be treated for purposes of paragraph (1)(E) or (2)(B),
whichever is applicable, as if it were a qualified conservation
contribution which is made by a qualified farmer or rancher and
which otherwise meets the requirements of such paragraph.''.
(2) Effective date.--The amendment made by this subsection
shall apply to taxable years ending after the date of the
enactment of this Act.
(c) Effective Date.--The amendments made by subsection (a) shall
apply to contributions made after December 31, 2007.
SEC. 237. 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, 2008''.
(b) Clerical Amendment.--Clause (iii) of section 170(e)(3)(D) is
amended by inserting ``of books'' after ``to any contribution''.
(c) Effective Date.--The amendments made by this section shall
apply to contributions made after December 31, 2007.
SEC. 238. 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, 2008''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made during taxable years beginning after December 31,
2007.
SEC. 239. 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, 2008''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made in taxable years beginning after December 31,
2007.
SEC. 240. 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 ``3-year''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to individuals hired after August 27, 2007.
SEC. 241. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.
(a) Exempt Insurance Income.--Paragraph (10) of section 953(e) 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) is amended by striking
``January 1, 2009'' and inserting ``January 1, 2010''.
SEC. 242. LOOK-THRU RULE FOR RELATED CONTROLLED FOREIGN CORPORATIONS.
(a) In General.--Subparagraph (C) of section 954(c)(6) 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. 243. 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.
SEC. 244. EXTENSION AND MODIFICATION OF DUTY SUSPENSION ON WOOL
PRODUCTS; WOOL RESEARCH FUND; WOOL DUTY REFUNDS.
(a) Extension of Temporary Duty Reductions.--Each of the following
headings of the Harmonized Tariff Schedule of the United States is
amended by striking the date in the effective period column and
inserting ``12/31/2014'':
(1) Heading 9902.51.11 (relating to fabrics of worsted
wool).
(2) Heading 9902.51.13 (relating to yarn of combed wool).
(3) Heading 9902.51.14 (relating to wool fiber, waste,
garnetted stock, combed wool, or wool top).
(4) Heading 9902.51.15 (relating to fabrics of combed
wool).
(5) Heading 9902.51.16 (relating to fabrics of combed
wool).
(b) Extension of Duty Refunds and Wool Research Trust Fund.--
(1) In general.--Section 4002(c) of the Wool Suit and
Textile Trade Extension Act of 2004 (Public Law 108-429; 118
Stat. 2603) is amended--
(A) in paragraph (3)(C), by striking ``2010'' and
inserting ``2015''; and
(B) in paragraph (6)(A), by striking ``through
2009'' and inserting ``through 2014''.
(2) Sunset.--Section 506(f) of the Trade and Development
Act of 2000 (Public 106-200; 114 Stat. 303 (7 U.S.C. 7101
note)) is amended by striking ``2010'' and inserting ``2015''.
Subtitle D--Other Extensions
SEC. 251. 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. 252. 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. 253. 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, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to distilled spirits brought into the United States after December 31,
2007.
TITLE III--ADDITIONAL RELIEF
Subtitle A--Individual Tax Relief
SEC. 301. $8,500 INCOME THRESHOLD USED TO CALCULATE REFUNDABLE PORTION
OF CHILD TAX CREDIT.
(a) In General.--Section 24(d) is amended by adding at the end the
following new paragraph:
``(4) Special rule for 2008.--Notwithstanding paragraph
(3), in the case of any taxable year beginning in 2008, the
dollar amount in effect for such taxable year under paragraph
(1)(B)(i) shall be $8,500.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2007.
SEC. 302. INCOME AVERAGING FOR AMOUNTS RECEIVED IN CONNECTION WITH THE
EXXON VALDEZ LITIGATION.
(a) Income Averaging of Amounts Received From the Exxon Valdez
Litigation.--For purposes of section 1301 of the Internal Revenue Code
of 1986--
(1) any qualified taxpayer who receives any qualified
settlement income in any taxable year shall be treated as
engaged in a fishing business (determined without regard to the
commercial nature of the business), and
(2) such qualified settlement income shall be treated as
income attributable to such a fishing business for such taxable
year.
(b) Contributions of Amounts Received to Retirement Accounts.--
(1) In general.--Any qualified taxpayer who receives
qualified settlement income during the taxable year may, at any
time before the end of the taxable year in which such income
was received, make one or more contributions to an eligible
retirement plan of which such qualified taxpayer is a
beneficiary in an aggregate amount not to exceed the lesser
of--
(A) $100,000 (reduced by the amount of qualified
settlement income contributed to an eligible retirement
plan in prior taxable years pursuant to this
subsection), or
(B) the amount of qualified settlement income
received by the individual during the taxable year.
(2) Time when contributions deemed made.--For purposes of
paragraph (1), a qualified taxpayer shall be deemed to have
made a contribution to an eligible retirement plan on the last
day of the taxable year in which such income is received if the
contribution is made on account of such taxable year and is
made not later than the time prescribed by law for filing the
return for such taxable year (not including extensions
thereof).
(3) Treatment of contributions to eligible retirement
plans.--For purposes of the Internal Revenue Code of 1986, if a
contribution is made pursuant to paragraph (1) with respect to
qualified settlement income, then--
(A) except as provided in paragraph (4)--
(i) to the extent of such contribution, the
qualified settlement income shall not be
included in taxable income, and
(ii) for purposes of section 72 of such
Code, such contribution shall not be considered
to be investment in the contract,
(B) the qualified taxpayer shall, to the extent of
the amount of the contribution, be treated--
(i) as having received the qualified
settlement income--
(I) in the case of a contribution
to an individual retirement plan (as
defined under section 7701(a)(37) of
such Code), in a distribution described
in section 408(d)(3) of such Code, and
(II) in the case of any other
eligible retirement plan, in an
eligible rollover distribution (as
defined under section 402(f)(2) of such
Code), and
(ii) as having transferred the amount to
the eligible retirement plan in a direct
trustee to trustee transfer within 60 days of
the distribution,
(C) section 408(d)(3)(B) of the Internal Revenue
Code of 1986 shall not apply with respect to amounts
treated as a rollover under this paragraph, and
(D) section 408A(c)(3)(B) of the Internal Revenue
Code of 1986 shall not apply with respect to amounts
contributed to a Roth IRA (as defined under section
408A(b) of such Code) or a designated Roth contribution
to an applicable retirement plan (within the meaning of
section 402A of such Code) under this paragraph.
(4) Special rule for roth iras and roth 401(k)s.--For
purposes of the Internal Revenue Code of 1986, if a
contribution is made pursuant to paragraph (1) with respect to
qualified settlement income to a Roth IRA (as defined under
section 408A(b) of such Code) or as a designated Roth
contribution to an applicable retirement plan (within the
meaning of section 402A of such Code), then--
(A) the qualified settlement income shall be
includible in taxable income, and
(B) for purposes of section 72 of such Code, such
contribution shall be considered to be investment in
the contract.
(5) Eligible retirement plan.--For purpose of this
subsection, the term ``eligible retirement plan'' has the
meaning given such term under section 402(c)(8)(B) of the
Internal Revenue Code of 1986.
(c) Treatment of Qualified Settlement Income Under Employment
Taxes.--
(1) SECA.--For purposes of chapter 2 of the Internal
Revenue Code of 1986 and section 211 of the Social Security
Act, no portion of qualified settlement income received by a
qualified taxpayer shall be treated as self-employment income.
(2) FICA.--For purposes of chapter 21 of the Internal
Revenue Code of 1986 and section 209 of the Social Security
Act, no portion of qualified settlement income received by a
qualified taxpayer shall be treated as wages.
(d) Qualified Taxpayer.--For purposes of this section, the term
``qualified taxpayer'' means--
(1) any individual who is a plaintiff in the civil action
In re Exxon Valdez, No. 89-095-CV (HRH) (Consolidated) (D.
Alaska); or
(2) any individual who is a beneficiary of the estate of
such a plaintiff who--
(A) acquired the right to receive qualified
settlement income from that plaintiff; and
(B) was the spouse or an immediate relative of that
plaintiff.
(e) Qualified Settlement Income.--For purposes of this section, the
term ``qualified settlement income'' means any interest and punitive
damage awards which are--
(1) otherwise includible in taxable income, and
(2) received (whether as lump sums or periodic payments) in
connection with the civil action In re Exxon Valdez, No. 89-
095-CV (HRH) (Consolidated) (D. Alaska) (whether pre- or post-
judgment and whether related to a settlement or judgment).
Subtitle B--Business Related Provisions
SEC. 311. 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) 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. 312. MODIFICATION OF RATE OF EXCISE TAX ON CERTAIN WOODEN ARROWS
DESIGNED FOR USE BY CHILDREN.
(a) In General.--Paragraph (2) of section 4161(b) is amended by
redesignating subparagraph (B) as subparagraph (C) and by inserting
after subparagraph (A) the following new subparagraph:
``(B) Exemption for certain wooden arrow shafts.--
Subparagraph (A) shall not apply to any shaft
consisting of 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--
``(i) measures \5/16\ of an inch or less in
diameter, and
``(ii) 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. 313. 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 notify the Secretary, the
appropriate State agencies, and participants
and beneficiaries in the plan of such election
in a timely manner promptly following such
certification.
``(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 notify the Secretary, the
appropriate State agencies, and participants
and beneficiaries in the plan of such election
in a timely manner promptly following such
certification.
``(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 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 notify the
Secretary, the appropriate State agencies, and
participants and beneficiaries in the plan of
such election in a timely manner promptly
following such certification.
``(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 amendment by such effective date,
except that the amendments made by subsections (a)(5), (b)(5),
and (c)(5) 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 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 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).
Subtitle C--Modification of Penalty on Understatement of Taxpayer's
Liability by Tax Return Preparer
SEC. 321. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF TAXPAYER'S
LIABILITY BY TAX RETURN PREPARER.
(a) In General.--Subsection (a) of section 6694 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) Tax shelters and reportable transactions.--If
the position is with respect to a tax shelter (as
defined in section 6662(d)(2)(C)(ii)) or 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 ending
after the date of the enactment of this Act.
Subtitle D--Other Provisions
SEC. 331. 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--
``(A) $500,000,000 for fiscal year 2008; and
``(B) for fiscal year 2009 and each fiscal year
thereafter, the amount that is equal to 90 percent of
the full funding amount for the preceding fiscal year.
``(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 each of fiscal years 2008 through 2011,
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 each of fiscal years 2008 through 2011,
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 August 1 of each second fiscal year
thereafter, in accordance with paragraph (2), 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) Duration of election.--
``(A) In general.--A county election to receive a
share of the 25-percent payment or 50-percent payment,
as applicable, shall be effective for 2 fiscal years.
``(B) Full funding amount.--If a county elects to
receive a share of the State payment or the county
payment, the election shall be effective for all
subsequent fiscal years through fiscal year 2011.
``(3) 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), and September 30 of
each fiscal year thereafter.
``(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--
``(A) for fiscal year 2008, 90 percent of--
``(i) 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
``(ii) 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;
``(B) for fiscal year 2009, 76 percent of--
``(i) 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 2009; and
``(ii) 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 2009; and
``(C) for fiscal year 2010, 65 percent of--
``(i) 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 2010; and
``(ii) 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 2010.
``(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 each of fiscal years 2008 through
2010, 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 each of fiscal years 2008 through 2010 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), and each
September 30 thereafter for each succeeding fiscal year through
fiscal year 2011, 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 the following
percentage of all approved projects involving the sale
of merchantable timber are implemented using separate
contracts:
``(i) For fiscal year 2008, 35 percent.
``(ii) For fiscal year 2009, 45 percent.
``(iii) For each of fiscal years 2010 and
2011, 50 percent.
``(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), and each September 30 thereafter for each
succeeding fiscal year through fiscal year 2011, 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 through
2011.
``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 through 2012--
``(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.''.
(3) Budget scorekeeping.--
(A) In general.--Notwithstanding the Budget
Scorekeeping Guidelines and the accompanying list of
programs and accounts set forth in the joint
explanatory statement of the committee of conference
accompanying Conference Report 105-217, the section in
this title regarding Payments in Lieu of Taxes shall be
treated in the baseline for purposes of section 257 of
the Balanced Budget and Emergency Deficit Control Act
of 1985 (as in effect prior to September 30, 2002), and
by the Chairmen of the House and Senate Budget
Committees, as appropriate, for purposes of budget
enforcement in the House and Senate, and under the
Congressional Budget Act of 1974 as if Payment in Lieu
of Taxes (14-1114-0-1-806) were an account designated
as Appropriated Entitlements and Mandatories for Fiscal
Year 1997 in the joint explanatory statement of the
committee of conference accompanying Conference Report
105-217.
(B) Effective date.--This paragraph shall remain in
effect for the fiscal years to which the entitlement in
section 6906 of title 31, United States Code (as
amended by paragraph (1)), applies.
SEC. 332. CLARIFICATION OF UNIFORM DEFINITION OF CHILD.
(a) Child Must Be Younger Than Claimant.--Section 152(c)(3)(A) is
amended by inserting ``is younger than the taxpayer claiming such
individual as a qualifying child and'' after ``such individual''.
(b) Child Must Be Unmarried.--Section 152(c)(1) is amended by
striking ``and'' at the end of subparagraph (C), by striking the period
at the end of subparagraph (D) and inserting ``, and'', and by adding
at the end the following new subparagraph:
``(E) who has not filed a joint return (other than
only for a claim of refund) with the individual's
spouse under section 6013 for the taxable year
beginning in the calendar year in which the taxable
year of the taxpayer begins.''.
(c) Restrict Qualifying Child Tax Benefits to Child's Parent.--
(1) Child tax credit.--Subsection (a) of section 24 is
amended by inserting ``for which the taxpayer is allowed a
deduction under section 151'' after ``of the taxpayer''.
(2) Persons other than parents claiming qualifying child.--
(A) In general.--Paragraph (4) of section 152(c) is
amended by adding at the end the following new
subparagraph:
``(C) No parent claiming qualifying child.--If the
parents of an individual may claim such individual as a
qualifying child but no parent so claims the
individual, such individual may be claimed as the
qualifying child of another taxpayer but only if the
adjusted gross income of such taxpayer is higher than
the highest adjusted gross income of any parent of the
individual.''.
(B) Conforming amendments.--
(i) Subparagraph (A) of section 152(c)(4)
is amended by striking ``Except'' through ``2
or more taxpayers'' and inserting ``Except as
provided in subparagraphs (B) and (C), if (but
for this paragraph) an individual may be
claimed as a qualifying child by 2 or more
taxpayers''.
(ii) The heading for paragraph (4) of
section 152(c) is amended by striking
``claiming'' and inserting ``who can claim the
same''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
TITLE IV--TRANSPORTATION AND INFRASTRUCTURE
SEC. 401. RESTORATION OF HIGHWAY TRUST FUND BALANCE.
(a) In General.--Subsection (f) of section 9503 is amended--
(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and by moving such
subparagraphs 2 ems to the right,
(2) by striking ``For purposes'' and inserting the
following:
``(1) In general.--For purposes'',
(3) by moving the flush sentence at the end of paragraph
(1), as so amended, 2 ems to the right, and
(4) by adding at the end the following new paragraph:
``(2) Restoration of fund balance.--Out of money in the
Treasury not otherwise appropriated, there is hereby
appropriated to the Highway Trust Fund $8,017,000,000.''.
(b) Conforming Amendment.--The last sentence of section 9503(f)(1),
as amended by subsection (a), is amended by striking ``subsection'' and
inserting ``paragraph''.
(c) Effective Date.--The amendments made by this section shall take
effect on September 30, 2008.
TITLE V--DISASTER RELIEF
Subtitle A--Relief for Federally Declared Disasters
SEC. 501. LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED DISASTERS.
(a) Waiver of Adjusted Gross Income Limitation.--
(1) In general.--Subsection (h) of section 165 is amended
by redesignating paragraphs (3) and (4) as paragraphs (4) and
(5), respectively, and by inserting after paragraph (2) the
following new paragraph:
``(3) Special rule for losses in federally declared
disasters.--
``(A) In general.--If an individual has a net
disaster loss for any taxable year, the amount
determined under paragraph (2)(A)(ii) shall be the sum
of--
``(i) such net disaster loss, and
``(ii) so much of the excess referred to in
the matter preceding clause (i) of paragraph
(2)(A) (reduced by the amount in clause (i) of
this subparagraph) as exceeds 10 percent of the
adjusted gross income of the individual.
``(B) Net disaster loss.--For purposes of
subparagraph (A), the term `net disaster loss' means
the excess of--
``(i) the personal casualty losses--
``(I) attributable to a federally
declared disaster, and
``(II) occurring in a disaster
area, over
``(ii) personal casualty gains.
``(C) Federally declared disaster.--For purposes of
this paragraph--
``(i) Federally declared disaster.--The
term `federally declared disaster' means any
disaster subsequently determined by the
President of the United States to warrant
assistance by the Federal Government under the
Robert T. Stafford Disaster Relief and
Emergency Assistance Act.
``(ii) Disaster area.--The term `disaster
area' means the area so determined to warrant
such assistance.''.
(2) Conforming amendments.--
(A) Section 165(h)(4)(B) (as so redesignated) is
amended by striking ``paragraph (2)'' and inserting
``paragraphs (2) and (3)''.
(B) Section 165(i)(1) is amended by striking
``loss'' and all that follows through ``Act'' and
inserting ``loss occurring in a disaster area (as
defined by clause (ii) of subsection (h)(3)(C)) and
attributable to a federally declared disaster (as
defined by clause (i) of such subsection)''.
(C) Section 165(i)(4) is amended by striking
``Presidentially declared disaster (as defined by
section 1033(h)(3))'' and inserting ``federally
declared disaster (as defined by subsection
(h)(3)(C)(i)''.
(D)(i) So much of subsection (h) of section 1033 as
precedes subparagraph (A) of paragraph (1) thereof is
amended to read as follows:
``(h) Special Rules for Property Damaged by Federally Declared
Disasters.--
``(1) Principal residences.--If the taxpayer's principal
residence or any of its contents is located in a disaster area
and is compulsorily or involuntarily converted as a result of a
federally declared disaster--''.
(ii) Paragraph (2) of section 1033(h) is amended by
striking ``investment'' and all that follows through
``disaster'' and inserting ``investment located in a
disaster area and compulsorily or involuntarily
converted as a result of a federally declared
disaster''.
(iii) Paragraph (3) of section 1033(h) is amended
to read as follows:
``(3) Federally declared disaster; disaster area.--The
terms ``federally declared disaster'' and ``disaster area''
shall have the respective meaning given such terms by section
165(h)(3)(C).''.
(iv) Section 139(c)(2) is amended to read as
follows:
``(2) federally declared disaster (as defined by section
165(h)(3)(C)(i)),''.
(v) Subclause (II) of section 172(b)(1)(F)(ii) is
amended by striking ``Presidentially declared disasters
(as defined in section 1033(h)(3))'' and inserting
``federally declared disasters (as defined by
subsection (h)(3)(C)(i))''.
(vi) Subclause (III) of section 172(b)(1)(F)(ii) is
amended by striking ``Presidentially declared
disasters'' and inserting ``federally declared
disasters''.
(vii) Subsection (a) of section 7508A is amended by
striking ``Presidentially declared disaster (as defined
in section 1033(h)(3))'' and inserting ``federally
declared disaster (as defined by section
165(h)(3)(C)(i))''.
(b) Increase in Standard Deduction by Disaster Casualty Loss.--
(1) In general.--Paragraph (1) of section 63(c)is amended
by striking ``and'' at the end of subparagraph (B), by striking
the period at the end of subparagraph (C) and inserting ``,
and'', and by adding at the end the following new subparagraph:
``(D) the disaster loss deduction.''.
(2) Disaster loss deduction.--Subsection (c) of section 63
is amended by adding at the end the following new paragraph:
``(8) Disaster loss deduction.--For the purposes of
paragraph (1), the term `disaster loss deduction' means the net
disaster loss (as defined in section 165(h)(3)(B)).''.
(3) Allowance in computing alternative minimum taxable
income.--Subparagraph (E) of section 56(b)(1) is amended by
adding at the end the following new sentence: ``The preceding
sentence shall not apply to so much of the standard deduction
as is determined under section 63(c)(1)(D).''.
(c) Increase in Limitation on Individual Loss Per Casualty.--
Paragraph (1) of section 165(h) is amended by striking ``$100'' and
inserting ``$500''.
(d) Effective Dates.--
(1) In general.--Except as provided by paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2007.
(2) Increase in limitation on individual loss per
casualty.--The amendment made by subsection (c) shall apply to
taxable years beginning after December 31, 2008.
SEC. 502. EXPENSING OF QUALIFIED DISASTER EXPENSES.
(a) In General.--Part VI of subchapter B of chapter 1 is amended by
inserting after section 198 the following new section:
``SEC. 198A. EXPENSING OF QUALIFIED DISASTER EXPENSES.
``(a) In General.--A taxpayer may elect to treat any qualified
disaster expenses which are paid or incurred by the taxpayer as an
expense which is not chargeable to capital account. Any expense which
is so treated shall be allowed as a deduction for the taxable year in
which it is paid or incurred.
``(b) Qualified Disaster Expense.--For purposes of this section,
the term `qualified disaster expense' means any expenditure--
``(1) which is paid or incurred in connection with a trade
or business or with business-related property,
``(2) which is--
``(A) for the abatement or control of hazardous
substances that were released on account of a federally
declared disaster,
``(B) for the removal of debris from, or the
demolition of structures on, real property which is
business-related property damaged or destroyed as a
result of a federally declared disaster, or
``(C) for the repair of business-related property
damaged as a result of a federally declared disaster,
and
``(3) is otherwise chargeable to capital account.
``(c) Other Definitions.--For purposes of this section--
``(1) Business-related property.--The term `business-
related property' means property--
``(A) held by the taxpayer for use in a trade or
business or for the production of income, or
``(B) described in section 1221(a)(1) in the hands
of the taxpayer.
``(2) Federally declared disaster.--The term `federally
declared disaster' has the meaning given such term by section
165(h)(3)(C)(i).
``(d) Deduction Recaptured as Ordinary Income on Sale, etc.--Solely
for purposes of section 1245, in the case of property to which a
qualified disaster expense would have been capitalized but for this
section--
``(1) the deduction allowed by this section for such
expense shall be treated as a deduction for depreciation, and
``(2) such property (if not otherwise section 1245
property) shall be treated as section 1245 property solely for
purposes of applying section 1245 to such deduction.
``(e) Coordination With Other Provisions.--Sections 198, 280B, and
468 shall not apply to amounts which are treated as expenses under this
section.
``(f) Regulations.--The Secretary shall prescribe such regulations
as may be necessary or appropriate to carry out the purposes of this
section.''.
(b) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 is amended by inserting after the item
relating to section 198 the following new item:
``Sec. 198A. Expensing of Qualified Disaster Expenses.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after December 31, 2007.
SEC. 503. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED
DISASTERS.
(a) In General.--Paragraph (1) of section 172(b) is amended by
adding at the end the following new subparagraph:
``(J) Certain losses attributable federally
declared disasters.--In the case of a taxpayer who has
a qualified disaster loss (as defined in subsection
(j)), such loss shall be a net operating loss carryback
to each of the 5 taxable years preceding the taxable
year of such loss.''.
(b) Qualified Disaster Loss.--Section 172 is amended by
redesignating subsections (j) and (k) as subsections (k) and (l),
respectively, and by inserting after subsection (i) the following new
subsection:
``(j) Rules Relating to Qualified Disaster Losses.--For purposes of
this section--
``(1) In general.--The term `qualified disaster loss' means
the lesser of--
``(A) the sum of--
``(i) the losses allowable under section
165 for the taxable year--
``(I) attributable to a federally
declared disaster (as defined in
section 165(h)(3)(C)(i)), and
``(II) occurring in a disaster area
(as defined in section
165(h)(3)(C)(ii)), and
``(ii) the deduction for the taxable year
for qualified disaster expenses which is
allowable under section 198A(a) or which would
be so allowable if not otherwise treated as an
expense, or
``(B) the net operating loss for such taxable year.
``(2) Coordination with subsection (b)(2).--For purposes of
applying subsection (b)(2), a qualified disaster loss for any
taxable year shall be treated in a manner similar to the manner
in which a specified liability loss is treated.
``(3) Election.--Any taxpayer entitled to a 5-year
carryback under subsection (b)(1)(J) from any loss year may
elect to have the carryback period with respect to such loss
year determined without regard to subsection (b)(1)(J). Such
election shall be made in such manner as may be prescribed by
the Secretary and shall be made by the due date (including
extensions of time) for filing the taxpayer's return for the
taxable year of the net operating loss. Such election, once
made for any taxable year, shall be irrevocable for such
taxable year.''.
(c) Loss Deduction Allowed in Computing Alternative Minimum Taxable
Income.--Subsection (d) of section 55 is amended by adding at the end
the following new paragraph:
``(3) Net operating loss attributable to federally declared
disasters.--In the case of a taxpayer which has a qualified
disaster loss (as defined by section 172(b)(1)(J)) for the
taxable year, paragraph (1) shall be applied by increasing the
amount determined under subparagraph (A)(ii)(I) thereof by the
sum of the carrybacks and carryovers of such loss.''.
(d) Conforming Amendments.--
(1) Clause (ii) of section 172(b)(1)(F) is amended by
inserting ``or qualified disaster loss (as defined in
subsection (j))'' before the period at the end of the last
sentence.
(2) Paragraph (1) of section 172(i) is amended by adding at
the end the following new flush sentence:
``Such term shall not include any qualified disaster loss (as
defined in subsection (j)).''''.
(e) Effective Date.--The amendments made by this section shall
apply to losses arising in taxable years beginning after December 31,
2007.
SEC. 504. WAIVER OF CERTAIN MORTGAGE REVENUE BOND REQUIREMENTS
FOLLOWING FEDERALLY DECLARED DISASTERS.
(a) In General.--Paragraph (11) of section 143(k) is amended to
read as follows:
``(11) Special rules for federally declared disasters.--
``(A) Principal residence destroyed.--If the
principal residence (within the meaning of section 121)
of a taxpayer is--
``(i) rendered unsafe for use as a
residence by reason of a federally declared
disaster, or
``(ii) demolished or relocated by reason of
an order of the government of a State or
political subdivision thereof on account of a
federally declared disaster,
then for the 2-year period beginning on the date of the
disaster declaration, subsection (d)(1) shall not apply
with respect to such taxpayer and subsection (e) shall
be applied by substituting `110' for `90' in paragraph
(1) thereof.
``(B) Principle residence damaged.--
``(i) In general.--If the principal
residence (within the meaning of section 121)
of a taxpayer resulting from a federally
declared disaster was damaged, any owner-
financing provided in connection with the
repair or reconstruction of such residence
shall be treated as a qualified rehabilitation
loan.
``(ii) Limitation.--The aggregate owner-
financing to which clause (i) applies shall not
exceed the lesser of--
``(I) the cost of such repair or
reconstruction, or
``(II) $150,000.
``(C) Federally declared disaster.--For purposes of
this paragraph, the term `federally declared disaster'
has the meaning given such term by section
165(h)(3)(C)(i).''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to disasters occurring after December 31, 2007.
SEC. 505. OTHER RELIEF FOR FEDERALLY DECLARED DISASTERS.
(a) In General.--Chapter 1 is amended by adding at the end the
following new subchapter:
``Subchapter Z--Relief for Federally Declared Disasters
``Sec. 1400U. Tax benefits for federally declared disaster areas.
``SEC. 1400U. TAX BENEFITS FOR FEDERALLY DECLARED DISASTER AREAS.
``(a) Federally Declared Disaster.--For purposes of this section--
``(1) Federally declared disaster.--The term `federally
declared disaster' means any disaster subsequently determined
by the President of the United States to warrant assistance by
the Federal Government under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act.
``(2) Disaster area.--The term `disaster area' means the
area so determined to warrant such assistance.
``(b) Special Rules for Use of Retirement Funds.--
``(1) Tax-favored withdrawals from retirement plans.--
``(A) In general.--Section 72(t) shall not apply to
any qualified disaster distribution.
``(B) Aggregate dollar limitation.--
``(i) In general.--For purposes of this
paragraph, the aggregate amount of
distributions received by an individual which
may be treated as qualified disaster
distributions for any taxable year shall not
exceed the excess (if any) of--
``(I) $100,000, over
``(II) the aggregate amounts
treated as qualified disaster
distributions received by such
individual for all prior taxable years.
``(ii) Treatment of plan distributions.--If
a distribution to an individual would (without
regard to clause (i)) be a qualified disaster
distribution, a plan shall not be treated as
violating any requirement of this title merely
because the plan treats such distribution as a
qualified disaster distribution, unless the
aggregate amount of such distributions from all
plans maintained by the employer (and any
member of any controlled group which includes
the employer) to such individual exceeds
$100,000.
``(iii) Controlled group.--For purposes of
clause (ii), the term `controlled group' means
any group treated as a single employer under
subsection (b), (c), (m), or (o) of section
414.
``(C) Amount distributed may be repaid.--
``(i) In general.--Any individual who
receives a qualified disaster distribution may,
at any time during the 3-year period beginning
on the day after the date on which such
distribution was received, make one or more
contributions in an aggregate amount not to
exceed the amount of such distribution to an
eligible retirement plan of which such
individual is a beneficiary and to which a
rollover contribution of such distribution
could be made under section 402(c), 403(a)(4),
403(b)(8), 408(d)(3), or 457(e)(16), as the
case may be.
``(ii) Treatment of repayments of
distributions from eligible retirement plans
other than iras.--For purposes of this title,
if a contribution is made pursuant to clause
(i) with respect to a qualified disaster
distribution from an eligible retirement plan
other than an individual retirement plan, then
the taxpayer shall, to the extent of the amount
of the contribution, be treated as having
received the qualified disaster distribution in
an eligible rollover distribution (as defined
in section 402(c)(4)) and as having transferred
the amount to the eligible retirement plan in a
direct trustee to trustee transfer within 60
days of the distribution.
``(iii) Treatment of repayments for
distributions from iras.--For purposes of this
title, if a contribution is made pursuant to
clause (i) with respect to a qualified disaster
distribution from an individual retirement plan
(as defined by section 7701(a)(37)), then, to
the extent of the amount of the contribution,
the qualified disaster distribution shall be
treated as a distribution described in section
408(d)(3) and as having been transferred to the
eligible retirement plan in a direct trustee to
trustee transfer within 60 days of the
distribution.
``(D) Definitions.--For purposes of this
paragraph--
``(i) Qualified disaster distribution.--
Except as provided in subparagraph (B), the
term `qualified disaster distribution' means,
with respect to any federally declared
disaster, any distribution--
``(I) from an eligible retirement
plan made during the 15-month period
beginning on the date on which such
disaster occurred, and
``(II) to an individual whose
principal place of abode on the date on
which such disaster occurred is located
in the federally declared disaster area
and who has sustained an economic loss
attributable to the federally declared
disaster,
``(ii) Eligible retirement plan.--The term
`eligible retirement plan' shall have the
meaning given such term by section
402(c)(8)(B).
``(E) Income inclusion spread over 3-year period.--
``(i) In general.--In the case of any
qualified disaster distribution, unless the
taxpayer elects not to have this subparagraph
apply for any taxable year, any amount required
to be included in gross income for such taxable
year shall be so included ratably over the 3-
taxable year period beginning with such taxable
year.
``(ii) Special rule.--For purposes of
clause (i), rules similar to the rules of
subparagraph (E) of section 408A(d)(3) shall
apply.
``(F) Special rules.--
``(i) Exemption of distributions from
trustee to trustee transfer and withholding
rules.--For purposes of sections 401(a)(31),
402(f), and 3405, qualified disaster
distributions shall not be treated as eligible
rollover distributions.
``(ii) Qualified disaster distributions
treated as meeting plan distribution
requirements.--For purposes this title, a
qualified disaster distribution shall be
treated as meeting the requirements of sections
401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11),
and 457(d)(1)(A).
``(2) Recontributions of withdrawals for home purchases.--
``(A) Recontributions.--
``(i) In general.--Any individual who
received a qualified distribution may, during
the applicable period, make one or more
contributions in an aggregate amount not to
exceed the amount of such qualified
distribution to an eligible retirement plan (as
defined in section 402(c)(8)(B)) of which such
individual is a beneficiary and to which a
rollover contribution of such distribution
could be made under section 402(c), 403(a)(4),
403(b)(8), or 408(d)(3), as the case may be.
``(ii) Treatment of repayments.--Rules
similar to the rules of clauses (ii) and (iii)
of paragraph (1)(C) shall apply for purposes of
this paragraph.
``(B) Qualified distribution.--For purposes of this
paragraph, the term `qualified distribution' means,
with respect to any federally declared disaster, any
distribution--
``(i) described in section
401(k)(2)(B)(i)(IV), 403(b)(7)(A)(ii) (but only
to the extent such distribution relates to
financial hardship), 403(b)(11)(B), or
72(t)(2)(F),
``(ii) received during the 6-month period
ending on the date on which the disaster
occurred, and
``(iii) which was to be used to purchase or
construct a principal residence in the disaster
area, but which was not so purchased or
constructed on account of the federally
declared disaster.
``(C) Applicable period.--For purposes of this
paragraph, the term `applicable period' means, with
respect to any federally declared disaster, the 6-month
period beginning on the date on which the disaster
occurred.
``(3) Loans from qualified plans.--
``(A) Increase in limit on loans not treated as
distributions.--In the case of any loan from a
qualified employer plan (as defined under section
72(p)(4)) to a qualified individual with respect to a
federally declared disaster made during the 18-month
period beginning on the date on which such disaster
occurs--
``(i) clause (i) of section 72(p)(2)(A)
shall be applied by substituting `$100,000' for
`$50,000', and
``(ii) clause (ii) of such section shall be
applied by substituting `the present value of
the nonforfeitable accrued benefit of the
employee under the plan' for `one-half of the
present value of the nonforfeitable accrued
benefit of the employee under the plan'.
``(B) Delay of repayment.--In the case of a
qualified individual with an outstanding loan on or
after the date on which the federally declared disaster
occurs from a qualified employer plan (as defined in
section 72(p)(4))--
``(i) if the due date pursuant to
subparagraph (B) or (C) of section 72(p)(2) for
any repayment with respect to such loan occurs
during the 18-month period beginning on the
date on which the federally declared disaster
occurs, such due date shall be delayed for 1
year,
``(ii) any subsequent repayments with
respect to any such loan shall be appropriately
adjusted to reflect the delay in the due date
under clause (i) and any interest accruing
during such delay, and
``(iii) in determining the 5-year period
and the term of a loan under subparagraph (B)
or (C) of section 72(p)(2), the period
described in clause (i) shall be disregarded.
``(C) Qualified individual.--For purposes of this
subsection, the term `qualified individual' means, with
respect to any federally declared disaster, any
individual whose principal place of abode on the date
on which the federally declared disaster occurs is
located in the disaster area and who has sustained an
economic loss by reason of such disaster.
``(4) Provisions relating to plan amendments.--
``(A) In general.--If this paragraph applies to any
amendment to any plan or annuity contract, such plan or
contract shall be treated as being operated in
accordance with the terms of the plan during the period
described in subparagraph (B)(ii)(I).
``(B) Amendments to which paragraph applies.--
``(i) In general.--In the case of any
federally declared disaster, this paragraph
shall apply to any amendment to any plan or
annuity contract which is made--
``(I) pursuant to any provision of
this subsection, or pursuant to any
regulation issued by the Secretary or
the Secretary of Labor under any
provision of this subsection, and
``(II) on or before the last day of
the first plan year beginning on or
after the first day of the second
calendar year following the calendar
year in which the federally declared
disaster occurs, or such later date as
the Secretary may prescribe.
In the case of a governmental plan (as defined
in section 414(d)), subclause (II) shall be
applied by substituting the date which is 2
years after the date otherwise applied under
subclause (II).
``(ii) Conditions.--In the case of any
federally declared disaster, this paragraph
shall not apply to any amendment unless--
``(I) during the period beginning
on the date that this subsection or the
regulation described in clause (i)(I)
takes effect with respect to such
disaster (or in the case of a plan or
contract amendment not required by this
subsection or such regulation, the
effective date specified by the plan
with respect to such disaster) and
ending on the date described in clause
(i)(II) with respect to such disaster
(or, if earlier, the date the plan or
contract amendment is adopted), the
plan or contract is operated as if such
plan or contract amendment were in
effect, and
``(II) such plan or contract
amendment applies retroactively for
such period.
``(c) Additional Exemption for Individuals Displaced by Federally
Declared Disasters.--
``(1) In general.--In the case of taxable years of a
natural person beginning in the taxable year in which a
federally declared disaster occurs and the following taxable
year, for purposes of this title, taxable income shall be
reduced by $500 for each qualified displaced individual of the
taxpayer for the taxable year.
``(2) Limitations.--
``(A) Dollar limitation.--The reduction under
paragraph (1) with respect to any federally declared
disaster, shall not exceed $2,000, reduced by the
amount of the reduction under this subsection with
respect to such disaster for all prior taxable years.
``(B) Individuals taken into account only once.--An
individual shall not be taken into account under
paragraph (1) with respect to any federally declared
disaster if such individual was taken into account
under such paragraph with respect to such disaster by
the taxpayer for any prior taxable year.
``(C) Identifying information required.--An
individual shall not be taken into account under
paragraph (1) for a taxable year unless the taxpayer
identification number of such individual is included on
the return of the taxpayer for such taxable year.
``(3) Qualified displaced individual.--For purposes of this
section, in the case of any federally declared disaster, the
term `qualified displaced individual' means, with respect to
any taxpayer for any taxable year, any natural person if--
``(A) such person's principal place of abode on the
date on which the disaster occurred was in the disaster
area,
``(B)(i) in the case of such an abode located in
the portion of a disaster area with respect to which
the President has determined individual or individual
and public assistance is warranted from the Federal
government, such person is displaced from such abode,
or
``(ii) in the case of such an abode located in any
other portion of a disaster area, such person is
displaced from such abode, and
``(I) such abode was damaged by the
disaster, or
``(II) such person was evacuated from such
abode by reason of the disaster, and
``(C) such person is provided housing free of
charge by the taxpayer in the principal residence of
the taxpayer for a period of 60 consecutive days which
ends in such taxable year.
Such term shall not include the spouse or any dependent of the
taxpayer.
``(4) Compensation for housing.--No deduction shall be
allowed under this subsection if the taxpayer receives any rent
or other amount (from any source) in connection with the
providing of such housing.
``(d) Employee Retention Credit for Employers Affected by Federally
Declared Disaster.--
``(1) In general.--For purposes of section 38, in the case
of an eligible employer, the employee disaster retention credit
for any taxable year is an amount equal to 40 percent of the
qualified wages with respect to each eligible employee of such
employer for such taxable year. For purposes of the preceding
sentence, the amount of qualified wages which may be taken into
account with respect to any individual shall not exceed $6,000.
``(2) Definitions.--For purposes of this subsection--
``(A) Eligible employer.--The term `eligible
employer' means, with respect to any federally declared
disaster, any employer--
``(i) which conducted an active trade or
business on the date such disaster occurred in
the disaster area, and
``(ii) with respect to whom the trade or
business described in clause (i) is inoperable
on any day during the 4-month period beginning
on the date the disaster occurred, as a result
of damage sustained by reason of the disaster.
``(B) Eligible employee.--In the case of any
federally declared disaster, the term `eligible
employee' means, with respect to an eligible employer,
an employee whose principal place of employment on the
date on which such disaster occurred, with such
eligible employer was in the disaster area.
``(C) Qualified wages.--The term `qualified wages'
means wages (as defined in section 51(c)(1), but
without regard to section 3306(b)(2)(B)) paid or
incurred by an eligible employer with respect to an
eligible employee on any day during any portion of the
4-month period described in subparagraph (A)(ii) during
which the trade or business described in subparagraph
(A) is inoperable at the principal place of employment
by reason of the federally declared disaster. For
purposes of this subparagraph, a trade or business
shall be treated as inoperable if it is unable to
conduct significant operations. Such term shall include
wages paid without regard to whether the employee
performs no services, performs services at a different
place of employment than such principal place of
employment, or performs services at such principal
place of employment before significant operations have
resumed.
``(3) Certain rules to apply.--For purposes of this
subsection, rules similar to the rules of sections 51(i)(1) and
52 shall apply.
``(4) Employee not taken into account more than once.--An
employee shall not be treated as an eligible employee for
purposes of this subsection for any period with respect to any
employer if such employer is allowed a credit under section 51
with respect to such employee for such period.
``(e) Exclusions of Certain Cancellations of Indebtedness by Reason
of Federally Declared Disasters.--
``(1) In general.--For purposes of this title, gross income
shall not include any amount which (but for this subsection)
would be includible in gross income by reason of the discharge
(in whole or in part) of indebtedness of a natural person
described in paragraph (2) by an applicable entity (as defined
in section 6050P(c)(1) of such Code) during the 18-month period
beginning on the date on which the disaster described in
paragraph (2) occurs.
``(2) Persons described.--A natural person is described in
this paragraph with respect to any federally declared disaster
if the principal place of abode of such person on the date on
which the disaster occurred was located--
``(A) in any portion of the disaster area with
respect to which the President has determined
individual or individual and public assistance is
warranted from the Federal government, or
``(B) in the disaster area (but outside the portion
of the disaster area described in subparagraph (A)) and
such person suffered economic loss by reason of the
disaster.
``(3) Exceptions.--
``(A) Business indebtedness.--Paragraph (1) shall
not apply to any indebtedness incurred in connection
with a trade or business.
``(B) Real property outside core disaster area.--
Paragraph (1) shall not apply to any discharge of
indebtedness to the extent that real property
constituting security for such indebtedness is located
outside of the disaster area.
``(4) Denial of double benefit.--For purposes of this
title, the amount excluded from gross income under paragraph
(1) shall be treated in the same manner as an amount excluded
under section 108(a).
``(f) Extension of Replacement Period for Nonrecognition of Gain
for Property Located in Federally Declared Disaster Areas.--In the case
of any federally declared disaster area, clause (i) of section
1033(a)(2)(B) shall be applied by substituting `5 years' for `2 years'
with respect to property in the disaster area which is compulsorily or
involuntarily converted on or after the date on which such disaster
occurred, by reason of the disaster, but only if substantially all of
the use of the replacement property is in such area.
``(g) Temporary Suspension of Limitations on Charitable
Contributions.--
``(1) In general.--Except as otherwise provided in
paragraph (2), section 170(b) shall not apply to qualified
contributions and such contributions shall not be taken into
account for purposes of applying subsections (b) and (d) of
section 170 to other contributions.
``(2) Treatment of excess contributions.--For purposes of
section 170--
``(A) Individuals.--In the case of an individual--
``(i) Limitation.--Any qualified
contribution shall be allowed only to the
extent that the aggregate of such contributions
does not exceed the excess of the taxpayer's
contribution base (as defined in subparagraph
(G) of section 170(b)(1)) over the amount of
all other charitable contributions allowed
under section 170(b)(1).
``(ii) Carryover.--If the aggregate amount
of qualified contributions made in the
contribution year (within the meaning of
section 170(d)(1)) exceeds the limitation of
clause (i), such excess shall be added to the
excess described in the portion of subparagraph
(A) of such section which precedes clause (i)
thereof for purposes of applying such section.
``(B) Corporations.--In the case of a corporation--
``(i) Limitation.--Any qualified
contribution shall be allowed only to the
extent that the aggregate of such contributions
does not exceed the excess of the taxpayer's
taxable income (as determined under paragraph
(2) of section 170(b)) over the amount of all
other charitable contributions allowed under
such paragraph.
``(ii) Carryover.--Rules similar to the
rules of subparagraph (A)(ii) shall apply for
purposes of this subparagraph.
``(3) Exception to overall limitation on itemized
deductions.--So much of any deduction allowed under section 170
as does not exceed the qualified contributions paid during the
taxable year shall not be treated as an itemized deduction for
purposes of section 68.
``(4) Qualified contributions.--
``(A) In general.--For purposes of this subsection,
the term `qualified contribution' means, with respect
to an federally declared disaster, any charitable
contribution (as defined in section 170(c)) if--
``(i) such contribution--
``(I) is paid during the 18-month
period beginning on the date on which
the disaster occurs in cash to an
organization described in section
170(b)(1)(A), and
``(II) is made for relief efforts
in the disaster area,
``(ii) the taxpayer obtains from such
organization contemporaneous written
acknowledgment (within the meaning of section
170(f)(8)) that such contribution was used (or
is to be used) for relief efforts in the
disaster area, and
``(iii) the taxpayer has elected the
application of this subsection with respect to
such contribution.
``(B) Exception.--Such term shall not include a
contribution by a donor if the contribution is--
``(i) to an organization described in
section 509(a)(3), or
``(ii) for establishment of a new, or
maintenance of an existing, donor advised fund
(as defined in section 4966(d)(2)).
``(C) Application of election to partnerships and s
corporations.--In the case of a partnership or S
corporation, the election under subparagraph (A)(iii)
shall be made separately by each partner or
shareholder.
``(h) Increase in Standard Mileage Rate for Charitable Use of
Vehicles.--In the case of a federally declared disaster,
notwithstanding section 170(i), for purposes of computing the deduction
under section 170 for use of a vehicle described in subsection
(f)(12)(E)(i) of such section for provision of relief related to the
disaster during the 18-month period beginning on the date on which such
disaster occurred, the standard mileage rate shall be 70 percent of the
standard mileage rate in effect under section 162(a) at the time of
such use. Any increase under this subsection shall be rounded to the
next highest cent.
``(i) Mileage Reimbursements to Charitable Volunteers Excluded From
Gross Income.--
``(1) In general.--For purposes of this title, in the case
of a federally declared disaster, gross income of an individual
for taxable years ending on or after the date on which the
disaster occurs, does not include amounts received, from an
organization described in section 170(c), as reimbursement of
operating expenses with respect to use of a passenger
automobile for the benefit of such organization in connection
with providing relief relating to the disaster during the 18-
month period beginning on the date on which such disaster
occurred. The preceding sentence shall apply only to the extent
that the expenses which are reimbursed would be deductible
under this chapter if section 274(d) were applied--
``(A) by using the standard business mileage rate
in effect under section 162(a) at the time of such use,
and
``(B) as if the individual were an employee of an
organization not described in section 170(c).
``(2) Application to volunteer services only.--Paragraph
(1) shall not apply with respect to any expenses relating to
the performance of services for compensation.
``(3) No double benefit.--No deduction or credit shall be
allowed under any other provision of this title with respect to
the expenses excludable from gross income under paragraph
(1).''.
(b) Conforming Amendment.--Section 38(b) is amended by striking
``plus'' at the end of paragraph (32), by striking the period at the
end of paragraph (33) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(34) the employee disaster retention credit under section
1400U(d).''.
(c) Clerical Amendment.--The table of subchapters for chapter 1 is
amended by adding at the end the following new item:
``subchapter z--relief for federally declared disasters''.
(d) Effective Date.--The amendments made by this section shall
apply to disasters occurring after December 31, 2007.
SEC. 506. SUNSET.
The amendments made by this subtitle shall not apply to federally
declared disasters (as defined in section 165(h)(3)(C)(i) of the
Internal Revenue Code of 1986, as added by this subtitle) (casualties,
in the case of the amendment made by section 511(c)) occurring after
December 31, 2009. The Internal Revenue Code of 1986 shall be applied
and administered with respect to disasters and casualties described in
the preceding sentence as if the amendments so described had never been
enacted.
Subtitle B--Other Disaster Relief Provisions
SEC. 511. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.
(a) In General.--Part I of subchapter Y of chapter 1 is amended by
redesignating section 1400L as section 1400K and by adding at the end
the following new section:
``SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS.
``(a) In General.--In the case of a New York Liberty Zone
governmental unit, there shall be allowed as a credit against any taxes
imposed for any payroll period by section 3402 for which such
governmental unit is liable under section 3403 an amount equal to so
much of the portion of the qualifying project expenditure amount
allocated under subsection (b)(3) to such governmental unit for the
calendar year as is allocated by such governmental unit to such period
under subsection (b)(4).
``(b) Qualifying Project Expenditure Amount.--For purposes of this
section--
``(1) In general.--The term `qualifying project expenditure
amount' means, with respect to any calendar year, the sum of--
``(A) the total expenditures paid or incurred
during such calendar year by all New York Liberty Zone
governmental units and the Port Authority of New York
and New Jersey for any portion of qualifying projects
located wholly within the City of New York, New York,
and
``(B) any such expenditures--
``(i) paid or incurred in any preceding
calendar year which begins after the date of
enactment of this section, and
``(ii) not previously allocated under
paragraph (3).
``(2) Qualifying project.--The term `qualifying project'
means any transportation infrastructure project, including
highways, mass transit systems, railroads, airports, ports, and
waterways, in or connecting with the New York Liberty Zone (as
defined in section 1400K(h)), which is designated as a
qualifying project under this section jointly by the Governor
of the State of New York and the Mayor of the City of New York,
New York.
``(3) General allocation.--
``(A) In general.--The Governor of the State of New
York and the Mayor of the City of New York, New York,
shall jointly allocate to each New York Liberty Zone
governmental unit the portion of the qualifying project
expenditure amount which may be taken into account by
such governmental unit under subsection (a) for any
calendar year in the credit period.
``(B) Aggregate limit.--The aggregate amount which
may be allocated under subparagraph (A) for all
calendar years in the credit period shall not exceed
$2,000,000,000.
``(C) Annual limit.--The aggregate amount which may
be allocated under subparagraph (A) for any calendar
year in the credit period shall not exceed the sum of--
``(i) $115,000,000 ($425,000,000 in the
case of the last 2 years in the credit period),
plus
``(ii) the aggregate amount authorized to
be allocated under this paragraph for all
preceding calendar years in the credit period
which was not so allocated.
``(D) Unallocated amounts at end of credit
period.--If, as of the close of the credit period, the
amount under subparagraph (B) exceeds the aggregate
amount allocated under subparagraph (A) for all
calendar years in the credit period, the Governor of
the State of New York and the Mayor of the City of New
York, New York, may jointly allocate to New York
Liberty Zone governmental units for any calendar year
in the 5-year period following the credit period an
amount equal to--
``(i) the lesser of--
``(I) such excess, or
``(II) the qualifying project
expenditure amount for such calendar
year, reduced by
``(ii) the aggregate amount allocated under
this subparagraph for all preceding calendar
years.
``(4) Allocation to payroll periods.--Each New York Liberty
Zone governmental unit which has been allocated a portion of
the qualifying project expenditure amount under paragraph (3)
for a calendar year may allocate such portion to payroll
periods beginning in such calendar year as such governmental
unit determines appropriate.
``(c) Carryover of Unused Allocations.--
``(1) In general.--Except as provided in paragraph (2), if
the amount allocated under subsection (b)(3) to a New York
Liberty Zone governmental unit for any calendar year exceeds
the aggregate taxes imposed by section 3402 for which such
governmental unit is liable under section 3403 for periods
beginning in such year, such excess shall be carried to the
succeeding calendar year and added to the allocation of such
governmental unit for such succeeding calendar year.
``(2) Reallocation.--If a New York Liberty Zone
governmental unit does not use an amount allocated to it under
subsection (b)(3) within the time prescribed by the Governor of
the State of New York and the Mayor of the City of New York,
New York, then such amount shall after such time be treated for
purposes of subsection (b)(3) in the same manner as if it had
never been allocated.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Credit period.--The term `credit period' means the
12-year period beginning on January 1, 2009.
``(2) New york liberty zone governmental unit.--The term
`New York Liberty Zone governmental unit' means--
``(A) the State of New York,
``(B) the City of New York, New York, and
``(C) any agency or instrumentality of such State
or City.
``(3) Treatment of funds.--Any expenditure for a qualifying
project taken into account for purposes of the credit under
this section shall be considered State and local funds for the
purpose of any Federal program.
``(4) Treatment of credit amounts for purposes of
withholding taxes.--For purposes of this title, a New York
Liberty Zone governmental unit shall be treated as having paid
to the Secretary, on the day on which wages are paid to
employees, an amount equal to the amount of the credit allowed
to such entity under subsection (a) with respect to such wages,
but only if such governmental unit deducts and withholds wages
for such payroll period under section 3401 (relating to wage
withholding).
``(e) Reporting.--The Governor of the State of New York and the
Mayor of the City of New York, New York, shall jointly submit to the
Secretary an annual report--
``(1) which certifies--
``(A) the qualifying project expenditure amount for
the calendar year, and
``(B) the amount allocated to each New York Liberty
Zone governmental unit under subsection (b)(3) for the
calendar year, and
``(2) includes such other information as the Secretary may
require to carry out this section.
``(f) Guidance.--The Secretary may prescribe such guidance as may
be necessary or appropriate to ensure compliance with the purposes of
this section.''.
(b) Termination of Special Allowance and Expensing.--Subparagraph
(A) of section 1400K(b)(2), as redesignated by subsection (a), is
amended by striking the parenthetical therein and inserting ``(in the
case of nonresidential real property and residential rental property,
the date of the enactment of the Jobs, Energy, Families, and Disaster
Relief Act of 2008 or, if acquired pursuant to a binding contract in
effect on such enactment date, December 31, 2009)''.
(c) Conforming Amendments.--
(1) Section 38(c)(3)(B) is amended by striking ``section
1400L(a)'' and inserting ``section 1400K(a)''.
(2) Section 168(k)(2)(D)(ii) is amended by striking
``section 1400L(c)(2)'' and inserting ``section 1400K(c)(2)''.
(3) The table of sections for part I of subchapter Y of
chapter 1 is amended by redesignating the item relating to
section 1400L as an item relating to section 1400K and by
inserting after such item the following new item:
``Sec. 1400L. New York Liberty Zone tax credits.''.
(d) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 512. REPORTING REQUIREMENTS RELATING TO DISASTER RELIEF
CONTRIBUTIONS.
(a) In General.--Section 6033(b) is amended by striking ``and'' at
the end of paragraph (13), by redesignating paragraph (14) as paragraph
(15), and by adding after paragraph (13) the following new paragraph:
``(14) such information as the Secretary may require with
respect to disaster relief activities, including the amount and
use of qualified contributions to which sections 1400S(a) and
1400U(g) apply, and''.
(b) Effective Date.--The amendments made by this section shall
apply to returns the due date for which (determined without regard to
any extension) occurs after December 31, 2008.
TITLE VI--REVENUE PROVISIONS
SEC. 601. 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 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 allocated to persons other than--
``(A) foreign persons with respect to whom such
income is not subject to a comprehensive foreign income
tax, and
``(B) organizations which are exempt from tax under
this title.
``(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 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) Exception for certain compensation with respect to
effectively connected income.--In the case a foreign
corporation with income which is taxable under section 882,
this section shall not apply to compensation which, had such
compensation had 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.
``(5) 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 disregarding a substantial risk of
forfeiture in cases where necessary to carry out the purposes of this
section.
``(f) Termination.--This section shall not apply to amounts
deferred which are attributable to services performed after December
31, 2018.''.
(b) Conforming Amendment.--Section 26(b)(2), as amended by the
Housing Assistance Tax Act of 2008, 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) Charitable contributions of existing deferrals
permitted.--
(A) In general.--Subsection (b) of section 170 of
the Internal Revenue Code of 1986 shall not apply to
(and subsections (b) and (d) of such section shall be
applied without regard to) so much of the taxpayer's
qualified contributions made during the taxpayer's last
taxable year beginning before 2018 as does not exceed
the taxpayer's qualified inclusion amount. For purposes
of subsection (b) of section 170 of such Code, the
taxpayer's contribution base for such last taxable year
shall be reduced by the amount of the taxpayer's
qualified contributions to which such subsection does
not apply by reason the preceding sentence.
(B) Qualified contributions.--For purposes of this
paragraph, the term ``qualified contributions'' means
the aggregate charitable contributions (as defined in
section 170(c) of such Code) paid in cash by the
taxpayer to organizations described in section
170(b)(1)(A) of such Code (other than any organization
described in section 509(a)(3) of such Code or any fund
or account described in section 4966(d)(2) of such
Code).
(C) Qualified inclusion amount.--For purposes of
this paragraph, the term ``qualified inclusion amount''
means the amount includible in the taxpayer's gross
income for the last taxable year beginning before 2018
by reason of paragraph (2).
(4) 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.
(5) 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.
(6) 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.
SEC. 602. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.
(a) In General.--Paragraph (6) of section 864(f), as amended by the
Housing Assistance Tax Act of 2008, is amended by striking ``December
31, 2010'' and inserting ``December 31, 2018''.
(b) Conforming Amendment.--Paragraph (5)(D) of section 864(f) is
amended by striking ``December 31, 2008'' and inserting ``December 31,
2018''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
SEC. 603. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES
TRANSACTIONS.
(a) In General.--
(1) Broker reporting for securities transactions.--Section
6045 is amended by adding at the end the following new
subsection:
``(g) Additional Information Required in the Case of Securities
Transactions, etc.--
``(1) In general.--If a broker is otherwise required to
make a return under subsection (a) with respect to the gross
proceeds of the sale of a covered security, the broker shall
include in such return the information described in paragraph
(2).
``(2) Additional information required.--
``(A) In general.--The information required under
paragraph (1) to be shown on a return with respect to a
covered security of a customer shall include the
customer's adjusted basis in such security and whether
any gain or loss with respect to such security is long-
term or short-term (within the meaning of section
1222).
``(B) Determination of adjusted basis.--For
purposes of subparagraph (A)--
``(i) In general.--The customer's adjusted
basis shall be determined--
``(I) in the case of any security
(other than any stock for which an
average basis method is permissible
under section 1012), in accordance with
the first-in first-out method unless
the customer notifies the broker by
means of making an adequate
identification of the stock sold or
transferred, and
``(II) in the case of any stock for
which an average basis method is
permissible under section 1012, in
accordance with the broker's default
method unless the customer notifies the
broker that he elects another
acceptable method under section 1012
with respect to the account in which
such stock is held.
``(ii) Exception for wash sales.--Except as
otherwise provided by the Secretary, the
customer's adjusted basis shall be determined
without regard to section 1091 (relating to
loss from wash sales of stock or securities)
unless the transactions occur in the same
account with respect to identical securities.
``(3) Covered security.--For purposes of this subsection--
``(A) In general.--The term `covered security'
means any specified security acquired on or after the
applicable date if such security--
``(i) was acquired through a transaction in
the account in which such security is held, or
``(ii) was transferred to such account from
an account in which such security was a covered
security, but only if the broker received a
statement under section 6045A with respect to
the transfer.
``(B) Specified security.--The term `specified
security' means--
``(i) any share of stock in a corporation,
``(ii) any note, bond, debenture, or other
evidence of indebtedness,
``(iii) any commodity, or contract or
derivative with respect to such commodity, if
the Secretary determines that adjusted basis
reporting is appropriate for purposes of this
subsection, and
``(iv) any other financial instrument with
respect to which the Secretary determines that
adjusted basis reporting is appropriate for
purposes of this subsection.
``(C) Applicable date.--The term `applicable date'
means--
``(i) January 1, 2010, in the case of any
specified security which is stock in a
corporation (other than any stock described in
clause (ii)),
``(ii) January 1, 2011, in the case of any
stock for which an average basis method is
permissible under section 1012, and
``(iii) January 1, 2012, or such later date
determined by the Secretary in the case of any
other specified security.
``(4) Treatment of s corporations.--In the case of the sale
of a covered security acquired by an S corporation (other than
a financial institution) after December 31, 2011, such S
corporation shall be treated in the same manner as a
partnership for purposes of this section.
``(5) Special rules for short sales.--In the case of a
short sale, reporting under this section shall be made for the
year in which such sale is closed.''.
(2) Broker information required with respect to options.--
Section 6045, as amended by subsection (a), is amended by
adding at the end the following new subsection:
``(h) Application to Options on Securities.--
``(1) Exercise of option.--For purposes of this section, if
a covered security is acquired or disposed of pursuant to the
exercise of an option that was granted or acquired in the same
account as the covered security, the amount received with
respect to the grant or paid with respect to the acquisition of
such option shall be treated as an adjustment to gross proceeds
or as an adjustment to basis, as the case may be.
``(2) Lapse or closing transaction.--In the case of the
lapse (or closing transaction (as defined in section
1234(b)(2)(A))) of an option on a specified security or the
exercise of a cash-settled option on a specified security,
reporting under subsections (a) and (g) with respect to such
option shall be made for the calendar year which includes the
date of such lapse, closing transaction, or exercise.
``(3) Prospective application.--Paragraphs (1) and (2)
shall not apply to any option which is granted or acquired
before January 1, 2012.
``(4) Definitions.--For purposes of this subsection, the
terms `covered security' and `specified security' shall have
the meanings given such terms in subsection (g)(3).''.
(3) Extension of period for statements sent to customers.--
(A) In general.--Subsection (b) of section 6045 is
amended by striking ``January 31'' and inserting
``February 15''.
(B) Statements related to substitute payments.--
Subsection (d) of section 6045 is amended--
(i) by striking ``at such time and'', and
(ii) by inserting after ``other item.'' the
following new sentence: ``The written statement
required under the preceding sentence shall be
furnished on or before February 15 of the year
following the calendar year in which the
payment was made.''.
(C) Other statements.--Subsection (b) of section
6045 is amended by adding at the end the following:
``In the case of a consolidated reporting statement (as
defined in regulations) with respect to any account,
any statement which would otherwise be required to be
furnished on or before January 31 of a calendar year
with respect to any item reportable to the taxpayer
shall instead be required to be furnished on or before
February 15 of such calendar year if furnished with
such consolidated reporting statement.''.
(b) Determination of Basis of Certain Securities on Account by
Account or Average Basis Method.--Section 1012 is amended--
(1) by striking ``The basis of property'' and inserting the
following:
``(a) In General.--The basis of property'',
(2) by striking ``The cost of real property'' and inserting
the following:
``(b) Special Rule for Apportioned Real Estate Taxes.--The cost of
real property'', and
(3) by adding at the end the following new subsections:
``(c) Determinations by Account.--
``(1) In general.--In the case of the sale, exchange, or
other disposition of a specified security on or after the
applicable date, the conventions prescribed by regulations
under this section shall be applied on an account by account
basis.
``(2) Application to open-end funds.--
``(A) In general.--Except as provided in
subparagraph (B), any stock in an open-end fund
acquired before January 1, 2011, shall be treated as a
separate account from any such stock acquired on or
after such date.
``(B) Election by open-end fund for treatment as
single account.--If an open-end fund elects to have
this subparagraph apply with respect to one or more of
its stockholders--
``(i) subparagraph (A) shall not apply with
respect to any stock in such fund held by such
stockholders, and
``(ii) all stock in such fund which is held
by such stockholders shall be treated as
covered securities described in section
6045(g)(3) without regard to the date of the
acquisition of such stock.
A rule similar to the rule of the preceding sentence
shall apply with respect to a broker holding stock in
an open-end fund as a nominee.
``(3) Definitions.--For purposes of this section--
``(A) Open-end fund.--The term `open-end fund'
means a regulated investment company (as defined in
section 851) which is offering for sale or has
outstanding any redeemable security of which it is the
issuer. Any stock which is traded on an established
securities exchange shall not be treated as stock in an
open-end fund.
``(B) Specified security; applicable date.--The
terms `specified security' and `applicable date' shall
have the meaning given such terms in section 6045(g).
``(d) Average Basis for Stock Acquired Pursuant to a Dividend
Reinvestment Plan.--
``(1) In general.--In the case of any stock acquired after
December 31, 2010, in connection with a dividend reinvestment
plan, the basis of such stock while held as part of such plan
shall be determined using one of the methods which may be used
for determining the basis of stock in an open-end fund.
``(2) Treatment after transfer.--In the case of the
transfer to another account of stock to which paragraph (1)
applies, such stock shall have a cost basis in such other
account equal to its basis in the dividend reinvestment plan
immediately before such transfer (properly adjusted for any
fees or other charges taken into account in connection with
such transfer).
``(3) Separate accounts; election for treatment as single
account.--Rules similar to the rules of subsection (c)(2) shall
apply for purposes of this subsection.
``(4) Dividend reinvestment plan.--For purposes of this
subsection--
``(A) In general.--The term `dividend reinvestment
plan' means any arrangement under which dividends on
any stock are reinvested in stock identical to the
stock with respect to which the dividends are paid.
``(B) Initial stock acquisition treated as acquired
in connection with plan.--Stock shall be treated as
acquired in connection with a dividend reinvestment
plan if such stock is acquired pursuant to such plan or
if the dividends paid on such stock are subject to such
plan.''.
(c) Information by Transferors To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 is amended by inserting after section 6045 the
following new section:
``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH TRANSFERS OF
COVERED SECURITIES TO BROKERS.
``(a) Furnishing of Information.--Every applicable person which
transfers to a broker (as defined in section 6045(c)(1)) a security
which is a covered security (as defined in section 6045(g)(3)) in the
hands of such applicable person shall furnish to such broker a written
statement in such manner and setting forth such information as the
Secretary may by regulations prescribe for purposes of enabling such
broker to meet the requirements of section 6045(g).
``(b) Applicable Person.--For purposes of subsection (a), the term
`applicable person' means--
``(1) any broker (as defined in section 6045(c)(1)), and
``(2) any other person as provided by the Secretary in
regulations.
``(c) Time for Furnishing Statement.--Except as otherwise provided
by the Secretary, any statement required by subsection (a) shall be
furnished not later than 15 days after the date of the transfer
described in such subsection.''.
(2) Assessable penalties.--Paragraph (2) of section
6724(d), as amended by the Housing Assistance Tax Act of 2008,
is amended by redesignating subparagraphs (I) through (DD) as
subparagraphs (J) through (EE), respectively, and by inserting
after subparagraph (H) the following new subparagraph:
``(I) section 6045A (relating to information
required in connection with transfers of covered
securities to brokers),''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6045 the following
new item:
``Sec. 6045A. Information required in connection with transfers of
covered securities to brokers.''.
(d) Additional Issuer Information To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61, as amended by subsection (b), is amended by
inserting after section 6045A the following new section:
``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF SPECIFIED
SECURITIES.
``(a) In General.--According to the forms or regulations prescribed
by the Secretary, any issuer of a specified security shall make a
return setting forth--
``(1) a description of any organizational action which
affects the basis of such specified security of such issuer,
``(2) the quantitative effect on the basis of such
specified security resulting from such action, and
``(3) such other information as the Secretary may
prescribe.
``(b) Time for Filing Return.--Any return required by subsection
(a) shall be filed not later than the earlier of--
``(1) 45 days after the date of the action described in
subsection (a), or
``(2) January 15 of the year following the calendar year
during which such action occurred.
``(c) Statements To Be Furnished to Holders of Specified Securities
or Their Nominees.--According to the forms or regulations prescribed by
the Secretary, every person required to make a return under subsection
(a) with respect to a specified security shall furnish to the nominee
with respect to the specified security (or certificate holder if there
is no nominee) a written statement showing--
``(1) the name, address, and phone number of the
information contact of the person required to make such return,
``(2) the information required to be shown on such return
with respect to such security, and
``(3) such other information as the Secretary may
prescribe.
The written statement required under the preceding sentence shall be
furnished to the holder on or before January 15 of the year following
the calendar year during which the action described in subsection (a)
occurred.
``(d) Specified Security.--For purposes of this section, the term
`specified security' has the meaning given such term by section
6045(g)(3)(B). No return shall be required under this section with
respect to actions described in subsection (a) with respect to a
specified security which occur before the applicable date (as defined
in section 6045(g)(3)(C)) with respect to such security.
``(e) Public Reporting in Lieu of Return.--The Secretary may waive
the requirements under subsections (a) and (c) with respect to a
specified security, if the person required to make the return under
subsection (a) makes publicly available, in such form and manner as the
Secretary determines necessary to carry out the purposes of this
section--
``(1) the name, address, phone number, and email address of
the information contact of such person, and
``(2) the information described in paragraphs (1), (2), and
(3) of subsection (a).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1), as
amended by the Housing Assistance Tax Act of 2008, is
amended by redesignating clause (iv) and each of the
clauses which follow as clauses (v) through (xxiii),
respectively, and by inserting after clause (iii) the
following new clause:
``(iv) section 6045B(a) (relating to
returns relating to actions affecting basis of
specified securities),''.
(B) Paragraph (2) of section 6724(d), as amended by
the Housing Assistance Tax Act of 2008 and by
subsection (c)(2), is amended by redesignating
subparagraphs (J) through (EE) as subparagraphs (K)
through (FF), respectively, and by inserting after
subparagraph (I) the following new subparagraph:
``(J) subsections (c) and (e) of section 6045B
(relating to returns relating to actions affecting
basis of specified securities),''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61, as amended by
subsection (b)(3), is amended by inserting after the item
relating to section 6045A the following new item:
``Sec. 6045B. Returns relating to actions affecting basis of specified
securities.''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on January 1, 2010.
(2) Extension of period for statements sent to customers.--
The amendments made by subsection (a)(3) shall apply to
statements required to be furnished after December 31, 2008.
SEC. 604. 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 47.5 percentage
points.
Calendar No. 898
110th CONGRESS
2d Session
S. 3335
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to extend certain expiring
provisions, and for other purposes.
_______________________________________________________________________
July 25, 2008
Read the second time and placed on the calendar