[110th Congress Public Law 343]
[From the U.S. Government Printing Office]
[[Page 122 STAT. 3765]]
Public Law 110-343
110th Congress
An Act
To provide authority for the Federal Government to purchase and insure
certain types of troubled assets for the purposes of providing stability
to and preventing disruption in the economy and financial system and
protecting taxpayers, to amend the Internal Revenue Code of 1986 to
provide incentives for energy production and conservation, to extend
certain expiring provisions, to provide individual income tax relief,
and for other purposes. <<NOTE: Oct. 3, 2008 - [H.R. 1424]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
DIVISION A--EMERGENCY <<NOTE: Emergency Economic Stabilization Act of
2008.>> ECONOMIC STABILIZATION
SECTION 1. <<NOTE: 12 USC 5201 note.>> SHORT TITLE AND TABLE OF
CONTENTS.
(a) Short Title.--This division may be cited as the ``Emergency
Economic Stabilization Act of 2008''.
(b) Table of Contents.--The table of contents for this division is
as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.
TITLE I--TROUBLED ASSETS RELIEF PROGRAM
Sec. 101. Purchases of troubled assets.
Sec. 102. Insurance of troubled assets.
Sec. 103. Considerations.
Sec. 104. Financial Stability Oversight Board.
Sec. 105. Reports.
Sec. 106. Rights; management; sale of troubled assets; revenues and sale
proceeds.
Sec. 107. Contracting procedures.
Sec. 108. Conflicts of interest.
Sec. 109. Foreclosure mitigation efforts.
Sec. 110. Assistance to homeowners.
Sec. 111. Executive compensation and corporate governance.
Sec. 112. Coordination with foreign authorities and central banks.
Sec. 113. Minimization of long-term costs and maximization of benefits
for taxpayers.
Sec. 114. Market transparency.
Sec. 115. Graduated authorization to purchase.
Sec. 116. Oversight and audits.
Sec. 117. Study and report on margin authority.
Sec. 118. Funding.
Sec. 119. Judicial review and related matters.
Sec. 120. Termination of authority.
Sec. 121. Special Inspector General for the Troubled Asset Relief
Program.
Sec. 122. Increase in statutory limit on the public debt.
Sec. 123. Credit reform.
Sec. 124. HOPE for Homeowners amendments.
Sec. 125. Congressional Oversight Panel.
[[Page 122 STAT. 3766]]
Sec. 126. FDIC authority.
Sec. 127. Cooperation with the FBI.
Sec. 128. Acceleration of effective date.
Sec. 129. Disclosures on exercise of loan authority.
Sec. 130. Technical corrections.
Sec. 131. Exchange Stabilization Fund reimbursement.
Sec. 132. Authority to suspend mark-to-market accounting.
Sec. 133. Study on mark-to-market accounting.
Sec. 134. Recoupment.
Sec. 135. Preservation of authority.
Sec. 136. Temporary increase in deposit and share insurance coverage.
TITLE II--BUDGET-RELATED PROVISIONS
Sec. 201. Information for congressional support agencies.
Sec. 202. Reports by the Office of Management and Budget and the
Congressional Budget Office.
Sec. 203. Analysis in President's Budget.
Sec. 204. Emergency treatment.
TITLE III--TAX PROVISIONS
Sec. 301. Gain or loss from sale or exchange of certain preferred stock.
Sec. 302. Special rules for tax treatment of executive compensation of
employers participating in the troubled assets relief
program.
Sec. 303. Extension of exclusion of income from discharge of qualified
principal residence indebtedness.
SEC. 2. <<NOTE: 12 USC 5201.>> PURPOSES.
The purposes of this Act are--
(1) to immediately provide authority and facilities that the
Secretary of the Treasury can use to restore liquidity and
stability to the financial system of the United States; and
(2) to ensure that such authority and such facilities are
used in a manner that--
(A) protects home values, college funds, retirement
accounts, and life savings;
(B) preserves homeownership and promotes jobs and
economic growth;
(C) maximizes overall returns to the taxpayers of
the United States; and
(D) provides public accountability for the exercise
of such authority.
SEC. 3. <<NOTE: 12 USC 5202.>> DEFINITIONS.
For purposes of this Act, the following definitions shall apply:
(1) Appropriate committees of congress.--The term
``appropriate committees of Congress'' means--
(A) the Committee on Banking, Housing, and Urban
Affairs, the Committee on Finance, the Committee on the
Budget, and the Committee on Appropriations of the
Senate; and
(B) the Committee on Financial Services, the
Committee on Ways and Means, the Committee on the
Budget, and the Committee on Appropriations of the House
of Representatives.
(2) Board.--The term ``Board'' means the Board of Governors
of the Federal Reserve System.
(3) Congressional support agencies.--The term
``congressional support agencies'' means the Congressional
Budget Office and the Joint Committee on Taxation.
(4) Corporation.--The term ``Corporation'' means the Federal
Deposit Insurance Corporation.
(5) Financial institution.--The term ``financial
institution'' means any institution, including, but not limited
to, any
[[Page 122 STAT. 3767]]
bank, savings association, credit union, security broker or
dealer, or insurance company, established and regulated under
the laws of the United States or any State, territory, or
possession of the United States, the District of Columbia,
Commonwealth of Puerto Rico, Commonwealth of Northern Mariana
Islands, Guam, American Samoa, or the United States Virgin
Islands, and having significant operations in the United States,
but excluding any central bank of, or institution owned by, a
foreign government.
(6) Fund.--The term ``Fund'' means the Troubled Assets
Insurance Financing Fund established under section 102.
(7) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(8) TARP.--The term ``TARP'' means the Troubled Asset Relief
Program established under section 101.
(9) Troubled assets.--The term ``troubled assets'' means--
(A) residential or commercial mortgages and any
securities, obligations, or other instruments that are
based on or related to such mortgages, that in each case
was originated or issued on or before March 14, 2008,
the purchase of which the Secretary determines promotes
financial market stability; and
(B) any other financial instrument that the
Secretary, after consultation with the Chairman of the
Board of Governors of the Federal Reserve System,
determines the purchase of which is necessary to promote
financial market stability, but only upon transmittal of
such determination, in writing, to the appropriate
committees of Congress.
TITLE I--TROUBLED ASSETS RELIEF PROGRAM
SEC. 101. <<NOTE: 12 USC 5211.>> PURCHASES OF TROUBLED ASSETS.
(a) Offices; Authority.--
(1) Authority.--The Secretary is authorized to establish the
Troubled Asset Relief Program (or ``TARP'') to purchase, and to
make and fund commitments to purchase, troubled assets from any
financial institution, on such terms and conditions as are
determined by the Secretary, and in accordance with this Act and
the policies and procedures developed and published by the
Secretary.
(2) Commencement of program.--Establishment of the policies
and procedures and other similar administrative requirements
imposed on the Secretary by this Act are not intended to delay
the commencement of the TARP.
(3) Establishment of treasury office.--
(A) In general.--The Secretary shall implement any
program under paragraph (1) through an Office of
Financial Stability, established for such purpose within
the Office of Domestic Finance of the Department of the
Treasury, which office shall be headed by an Assistant
Secretary of the Treasury, appointed by the President,
by and with the advice and consent of the Senate, except
that an interim Assistant Secretary may be appointed by
the Secretary.
(B) Clerical amendments.--
[[Page 122 STAT. 3768]]
(i) Title 5.--Section 5315 of title 5, United
States Code, is amended in the item relating to
Assistant Secretaries of the Treasury, by striking
``(9)'' and inserting ``(10)''.
(ii) Title 31.--Section 301(e) of title 31,
United States Code, is amended by striking ``9''
and inserting ``10''.
(b) Consultation.--In exercising the authority under this section,
the Secretary shall consult with the Board, the Corporation, the
Comptroller of the Currency, the Director of the Office of Thrift
Supervision, the Chairman of the National Credit Union Administration
Board, and the Secretary of Housing and Urban Development.
(c) Necessary Actions.--The Secretary is authorized to take such
actions as the Secretary deems necessary to carry out the authorities in
this Act, including, without limitation, the following:
(1) <<NOTE: Administration.>> The Secretary shall have
direct hiring authority with respect to the appointment of
employees to administer this Act.
(2) <<NOTE: Contracts.>> Entering into contracts, including
contracts for services authorized by section 3109 of title 5,
United States Code.
(3) <<NOTE: Financial agents.>> Designating financial
institutions as financial agents of the Federal Government, and
such institutions shall perform all such reasonable duties
related to this Act as financial agents of the Federal
Government as may be required.
(4) In order to provide the Secretary with the flexibility
to manage troubled assets in a manner designed to minimize cost
to the taxpayers, establishing vehicles that are authorized,
subject to supervision by the Secretary, to purchase, hold, and
sell troubled assets and issue obligations.
(5) <<NOTE: Regulations.>> Issuing such regulations and
other guidance as may be necessary or appropriate to define
terms or carry out the authorities or purposes of this Act.
(d) <<NOTE: Publication. Deadline.>> Program Guidelines.--Before
the earlier of the end of the 2-business-day period beginning on the
date of the first purchase of troubled assets pursuant to the authority
under this section or the end of the 45-day period beginning on the date
of enactment of this Act, the Secretary shall publish program
guidelines, including the following:
(1) Mechanisms for purchasing troubled assets.
(2) Methods for pricing and valuing troubled assets.
(3) Procedures for selecting asset managers.
(4) Criteria for identifying troubled assets for purchase.
(e) Preventing Unjust Enrichment.--In making purchases under the
authority of this Act, the Secretary shall take such steps as may be
necessary to prevent unjust enrichment of financial institutions
participating in a program established under this section, including by
preventing the sale of a troubled asset to the Secretary at a higher
price than what the seller paid to purchase the asset. This subsection
does not apply to troubled assets acquired in a merger or acquisition,
or a purchase of assets from a financial institution in conservatorship
or receivership, or that has initiated bankruptcy proceedings under
title 11, United States Code.
SEC. 102. <<NOTE: 12 USC 5212.>> INSURANCE OF TROUBLED ASSETS.
(a) Authority.--
[[Page 122 STAT. 3769]]
(1) In general.--If the Secretary establishes the program
authorized under section 101, then the Secretary shall establish
a program to guarantee troubled assets originated or issued
prior to March 14, 2008, including mortgage-backed securities.
(2) Guarantees.--In establishing any program under this
subsection, the Secretary may develop guarantees of troubled
assets and the associated premiums for such guarantees. Such
guarantees and premiums may be determined by category or class
of the troubled assets to be guaranteed.
(3) Extent of guarantee.--Upon request of a financial
institution, the Secretary may guarantee the timely payment of
principal of, and interest on, troubled assets in amounts not to
exceed 100 percent of such payments. Such guarantee may be on
such terms and conditions as are determined by the Secretary,
provided that such terms and conditions are consistent with the
purposes of this Act.
(b) Reports.--Not later than 90 days after the date of enactment of
this Act, the Secretary shall report to the appropriate committees of
Congress on the program established under subsection (a).
(c) Premiums.--
(1) In general.--The Secretary shall collect premiums from
any financial institution participating in the program
established under subsection (a). Such premiums shall be in an
amount that the Secretary determines necessary to meet the
purposes of this Act and to provide sufficient reserves pursuant
to paragraph (3).
(2) Authority to base premiums on product risk.--In
establishing any premium under paragraph (1), the Secretary may
provide for variations in such rates according to the credit
risk associated with the particular troubled asset that is being
guaranteed. <<NOTE: Methodology. Publication.>> The Secretary
shall publish the methodology for setting the premium for a
class of troubled assets together with an explanation of the
appropriateness of the class of assets for participation in the
program established under this section. The methodology shall
ensure that the premium is consistent with paragraph (3).
(3) Minimum level.--The premiums referred to in paragraph
(1) shall be set by the Secretary at a level necessary to create
reserves sufficient to meet anticipated claims, based on an
actuarial analysis, and to ensure that taxpayers are fully
protected.
(4) Adjustment to purchase authority.--The purchase
authority limit in section 115 shall be reduced by an amount
equal to the difference between the total of the outstanding
guaranteed obligations and the balance in the Troubled Assets
Insurance Financing Fund.
(d) Troubled Assets Insurance Financing Fund.--
(1) Deposits.--The Secretary shall deposit fees collected
under this section into the Fund established under paragraph
(2).
(2) Establishment.--There is established a Troubled Assets
Insurance Financing Fund that shall consist of the amounts
collected pursuant to paragraph (1), and any balance in such
fund shall be invested by the Secretary in United States
Treasury securities, or kept in cash on hand or on deposit, as
necessary.
[[Page 122 STAT. 3770]]
(3) Payments from fund.--The Secretary shall make payments
from amounts deposited in the Fund to fulfill obligations of the
guarantees provided to financial institutions under subsection
(a).
SEC. 103. <<NOTE: 12 USC 5213.>> CONSIDERATIONS.
In exercising the authorities granted in this Act, the Secretary
shall take into consideration--
(1) protecting the interests of taxpayers by maximizing
overall returns and minimizing the impact on the national debt;
(2) providing stability and preventing disruption to
financial markets in order to limit the impact on the economy
and protect American jobs, savings, and retirement security;
(3) the need to help families keep their homes and to
stabilize communities;
(4) in determining whether to engage in a direct purchase
from an individual financial institution, the long-term
viability of the financial institution in determining whether
the purchase represents the most efficient use of funds under
this Act;
(5) ensuring that all financial institutions are eligible to
participate in the program, without discrimination based on
size, geography, form of organization, or the size, type, and
number of assets eligible for purchase under this Act;
(6) providing financial assistance to financial
institutions, including those serving low- and moderate-income
populations and other underserved communities, and that have
assets less than $1,000,000,000, that were well or adequately
capitalized as of June 30, 2008, and that as a result of the
devaluation of the preferred government-sponsored enterprises
stock will drop one or more capital levels, in a manner
sufficient to restore the financial institutions to at least an
adequately capitalized level;
(7) the need to ensure stability for United States public
instrumentalities, such as counties and cities, that may have
suffered significant increased costs or losses in the current
market turmoil;
(8) protecting the retirement security of Americans by
purchasing troubled assets held by or on behalf of an eligible
retirement plan described in clause (iii), (iv), (v), or (vi) of
section 402(c)(8)(B) of the Internal Revenue Code of 1986,
except that such authority shall not extend to any compensation
arrangements subject to section 409A of such Code; and
(9) the utility of purchasing other real estate owned and
instruments backed by mortgages on multifamily properties.
SEC. 104. <<NOTE: 12 USC 5214.>> FINANCIAL STABILITY OVERSIGHT
BOARD.
(a) Establishment.--There is established the Financial Stability
Oversight Board, which shall be responsible for--
(1) reviewing the exercise of authority under a program
developed in accordance with this Act, including--
(A) policies implemented by the Secretary and the
Office of Financial Stability created under sections 101
and 102, including the appointment of financial agents,
the designation of asset classes to be purchased, and
plans for the structure of vehicles used to purchase
troubled assets; and
[[Page 122 STAT. 3771]]
(B) the effect of such actions in assisting American
families in preserving home ownership, stabilizing
financial markets, and protecting taxpayers;
(2) making recommendations, as appropriate, to the Secretary
regarding use of the authority under this Act; and
(3) <<NOTE: Reports. Fraud.>> reporting any suspected
fraud, misrepresentation, or malfeasance to the Special
Inspector General for the Troubled Assets Relief Program or the
Attorney General of the United States, consistent with section
535(b) of title 28, United States Code.
(b) Membership.--The Financial Stability Oversight Board shall be
comprised of--
(1) the Chairman of the Board of Governors of the Federal
Reserve System;
(2) the Secretary;
(3) the Director of the Federal Housing Finance Agency;
(4) the Chairman of the Securities Exchange Commission; and
(5) the Secretary of Housing and Urban Development.
(c) Chairperson.--The chairperson of the Financial Stability
Oversight Board shall be elected by the members of the Board from among
the members other than the Secretary.
(d) Meetings.--The Financial Stability Oversight Board shall meet 2
weeks after the first exercise of the purchase authority of the
Secretary under this Act, and monthly thereafter.
(e) Additional Authorities.--In addition to the responsibilities
described in subsection (a), the Financial Stability Oversight Board
shall have the authority to ensure that the policies implemented by the
Secretary are--
(1) in accordance with the purposes of this Act;
(2) in the economic interests of the United States; and
(3) consistent with protecting taxpayers, in accordance with
section 113(a).
(f) Credit Review Committee.--The Financial Stability Oversight
Board may appoint a credit review committee for the purpose of
evaluating the exercise of the purchase authority provided under this
Act and the assets acquired through the exercise of such authority, as
the Financial Stability Oversight Board determines appropriate.
(g) Reports.--The Financial Stability Oversight Board shall report
to the appropriate committees of Congress and the Congressional
Oversight Panel established under section 125, not less frequently than
quarterly, on the matters described under subsection (a)(1).
(h) Termination.--The Financial Stability Oversight Board, and its
authority under this section, shall terminate on the expiration of the
15-day period beginning upon the later of--
(1) the date that the last troubled asset acquired by the
Secretary under section 101 has been sold or transferred out of
the ownership or control of the Federal Government; or
(2) the date of expiration of the last insurance contract
issued under section 102.
SEC. 105. <<NOTE: 12 USC 5215.>> REPORTS.
(a) In General.--Before the expiration of the 60-day period
beginning on the date of the first exercise of the authority granted in
section 101(a), or of the first exercise of the authority granted
[[Page 122 STAT. 3772]]
in section 102, whichever occurs first, and every 30-day period
thereafter, the Secretary shall report to the appropriate committees of
Congress, with respect to each such period--
(1) an overview of actions taken by the Secretary, including
the considerations required by section 103 and the efforts under
section 109;
(2) the actual obligation and expenditure of the funds
provided for administrative expenses by section 118 during such
period and the expected expenditure of such funds in the
subsequent period; and
(3) a detailed financial statement with respect to the
exercise of authority under this Act, including--
(A) all agreements made or renewed;
(B) all insurance contracts entered into pursuant to
section 102;
(C) all transactions occurring during such period,
including the types of parties involved;
(D) the nature of the assets purchased;
(E) all projected costs and liabilities;
(F) operating expenses, including compensation for
financial agents;
(G) the valuation or pricing method used for each
transaction; and
(H) a description of the vehicles established to
exercise such authority.
(b) Tranche Reports to Congress.--
(1) Reports.--The Secretary shall provide to the appropriate
committees of Congress, at the times specified in paragraph (2),
a written report, including--
(A) a description of all of the transactions made
during the reporting period;
(B) a description of the pricing mechanism for the
transactions;
(C) a justification of the price paid for and other
financial terms associated with the transactions;
(D) a description of the impact of the exercise of
such authority on the financial system, supported, to
the extent possible, by specific data;
(E) a description of challenges that remain in the
financial system, including any benchmarks yet to be
achieved; and
(F) an estimate of additional actions under the
authority provided under this Act that may be necessary
to address such challenges.
(2) <<NOTE: Deadline.>> Timing.--The report required by
this subsection shall be submitted not later than 7 days after
the date on which commitments to purchase troubled assets under
the authorities provided in this Act first reach an aggregate of
$50,000,000,000 and not later than 7 days after each
$50,000,000,000 interval of such commitments is reached
thereafter.
(c) Regulatory Modernization Report.--The Secretary shall review the
current state of the financial markets and the regulatory system and
submit a written report to the appropriate committees of Congress not
later than April 30, 2009, analyzing the current state of the regulatory
system and its effectiveness at overseeing the participants in the
financial markets, including the over-the-
[[Page 122 STAT. 3773]]
counter swaps market and government-sponsored enterprises, and providing
recommendations for improvement, including--
(1) recommendations regarding--
(A) whether any participants in the financial
markets that are currently outside the regulatory system
should become subject to the regulatory system; and
(B) enhancement of the clearing and settlement of
over-the-counter swaps; and
(2) the rationale underlying such recommendations.
(d) Sharing of Information.--Any report required under this section
shall also be submitted to the Congressional Oversight Panel established
under section 125.
(e) Sunset.--The reporting requirements under this section shall
terminate on the later of--
(1) the date that the last troubled asset acquired by the
Secretary under section 101 has been sold or transferred out of
the ownership or control of the Federal Government; or
(2) the date of expiration of the last insurance contract
issued under section 102.
SEC. 106. <<NOTE: 12 USC 5216.>> RIGHTS; MANAGEMENT; SALE OF
TROUBLED ASSETS; REVENUES AND SALE
PROCEEDS.
(a) Exercise of Rights.--The Secretary may, at any time, exercise
any rights received in connection with troubled assets purchased under
this Act.
(b) Management of Troubled Assets.--The Secretary shall have
authority to manage troubled assets purchased under this Act, including
revenues and portfolio risks therefrom.
(c) Sale of Troubled Assets.--The Secretary may, at any time, upon
terms and conditions and at a price determined by the Secretary, sell,
or enter into securities loans, repurchase transactions, or other
financial transactions in regard to, any troubled asset purchased under
this Act.
(d) Transfer to Treasury.--Revenues of, and proceeds from the sale
of troubled assets purchased under this Act, or from the sale, exercise,
or surrender of warrants or senior debt instruments acquired under
section 113 shall be paid into the general fund of the Treasury for
reduction of the public debt.
(e) Application of Sunset to Troubled Assets.--The authority of the
Secretary to hold any troubled asset purchased under this Act before the
termination date in section 120, or to purchase or fund the purchase of
a troubled asset under a commitment entered into before the termination
date in section 120, is not subject to the provisions of section 120.
SEC. 107. <<NOTE: 12 USC 5217.>> CONTRACTING PROCEDURES.
(a) <<NOTE: Waiver authority.>> Streamlined Process.--For purposes
of this Act, the Secretary may waive specific provisions of the Federal
Acquisition Regulation upon a determination that urgent and compelling
circumstances make compliance with such provisions contrary to the
public interest. <<NOTE: Deadline.>> Any such determination, and the
justification for such determination, shall be submitted to the
Committees on Oversight and Government Reform and Financial Services of
the House of Representatives and the Committees on Homeland Security and
Governmental Affairs and Banking, Housing, and Urban Affairs of the
Senate within 7 days.
(b) <<NOTE: Minorities.>> Additional Contracting Requirements.--In
any solicitation or contract where the Secretary has, pursuant to
subsection
[[Page 122 STAT. 3774]]
(a), waived any provision of the Federal Acquisition Regulation
pertaining to minority contracting, the Secretary shall develop and
implement standards and procedures to ensure, to the maximum extent
practicable, the inclusion and utilization of minorities (as such term
is defined in section 1204(c) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note)) and women,
and minority- and women-owned businesses (as such terms are defined in
section 21A(r)(4) of the Federal Home Loan Bank Act (12 U.S.C.
1441a(r)(4)), in that solicitation or contract, including contracts to
asset managers, servicers, property managers, and other service
providers or expert consultants.
(c) Eligibility of FDIC.--Notwithstanding subsections (a) and (b),
the Corporation--
(1) shall be eligible for, and shall be considered in, the
selection of asset managers for residential mortgage loans and
residential mortgage-backed securities; and
(2) shall be reimbursed by the Secretary for any services
provided.
SEC. 108. <<NOTE: 12 USC 5218.>> CONFLICTS OF INTEREST.
(a) Standards Required.--The <<NOTE: Regulations.>> Secretary shall
issue regulations or guidelines necessary to address and manage or to
prohibit conflicts of interest that may arise in connection with the
administration and execution of the authorities provided under this Act,
including--
(1) conflicts arising in the selection or hiring of
contractors or advisors, including asset managers;
(2) the purchase of troubled assets;
(3) the management of the troubled assets held;
(4) post-employment restrictions on employees; and
(5) any other potential conflict of interest, as the
Secretary deems necessary or appropriate in the public interest.
(b) Timing.--Regulations or guidelines required by this section
shall be issued as soon as practicable after the date of enactment of
this Act.
SEC. 109. <<NOTE: 12 USC 5219.>> FORECLOSURE MITIGATION EFFORTS.
(a) Residential Mortgage Loan Servicing Standards.--To the extent
that the Secretary acquires mortgages, mortgage backed securities, and
other assets secured by residential real estate, including multifamily
housing, the Secretary shall implement a plan that seeks to maximize
assistance for homeowners and use the authority of the Secretary to
encourage the servicers of the underlying mortgages, considering net
present value to the taxpayer, to take advantage of the HOPE for
Homeowners Program under section 257 of the National Housing Act or
other available programs to minimize foreclosures. In addition, the
Secretary may use loan guarantees and credit enhancements to facilitate
loan modifications to prevent avoidable foreclosures.
(b) Coordination.--The Secretary shall coordinate with the
Corporation, the Board (with respect to any mortgage or mortgage-backed
securities or pool of securities held, owned, or controlled by or on
behalf of a Federal reserve bank, as provided in section 110(a)(1)(C)),
the Federal Housing Finance Agency, the Secretary of Housing and Urban
Development, and other Federal Government entities that hold troubled
assets to attempt to identify opportunities for the acquisition of
classes of troubled assets that will improve the ability of the
Secretary to improve the loan modification and
[[Page 122 STAT. 3775]]
restructuring process and, where permissible, to permit bona fide
tenants who are current on their rent to remain in their homes under the
terms of the lease. <<NOTE: Residential rental property.>> In the case
of a mortgage on a residential rental property, the plan required under
this section shall include protecting Federal, State, and local rental
subsidies and protections, and ensuring any modification takes into
account the need for operating funds to maintain decent and safe
conditions at the property.
(c) Consent to Reasonable Loan Modification Requests.--Upon any
request arising under existing investment contracts, the Secretary shall
consent, where appropriate, and considering net present value to the
taxpayer, to reasonable requests for loss mitigation measures, including
term extensions, rate reductions, principal write downs, increases in
the proportion of loans within a trust or other structure allowed to be
modified, or removal of other limitation on modifications.
SEC. 110. <<NOTE: 12 USC 5220.>> ASSISTANCE TO HOMEOWNERS.
(a) Definitions.--As used in this section--
(1) the term ``Federal property manager'' means--
(A) the Federal Housing Finance Agency, in its
capacity as conservator of the Federal National Mortgage
Association and the Federal Home Loan Mortgage
Corporation;
(B) the Corporation, with respect to residential
mortgage loans and mortgage-backed securities held by
any bridge depository institution pursuant to section
11(n) of the Federal Deposit Insurance Act; and
(C) the Board, with respect to any mortgage or
mortgage-backed securities or pool of securities held,
owned, or controlled by or on behalf of a Federal
reserve bank, other than mortgages or securities held,
owned, or controlled in connection with open market
operations under section 14 of the Federal Reserve Act
(12 U.S.C. 353), or as collateral for an advance or
discount that is not in default;
(2) the term ``consumer'' has the same meaning as in section
103 of the Truth in Lending Act (15 U.S.C. 1602);
(3) the term ``insured depository institution'' has the same
meaning as in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813); and
(4) the term ``servicer'' has the same meaning as in section
6(i)(2) of the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2605(i)(2)).
(b) Homeowner Assistance by Agencies.--
(1) In general.--To the extent that the Federal property
manager holds, owns, or controls mortgages, mortgage backed
securities, and other assets secured by residential real estate,
including multifamily housing, the Federal property manager
shall implement a plan that seeks to maximize assistance for
homeowners and use its authority to encourage the servicers of
the underlying mortgages, and considering net present value to
the taxpayer, to take advantage of the HOPE for Homeowners
Program under section 257 of the National Housing Act or other
available programs to minimize foreclosures.
(2) Modifications.--In the case of a residential mortgage
loan, modifications made under paragraph (1) may include--
(A) reduction in interest rates;
[[Page 122 STAT. 3776]]
(B) reduction of loan principal; and
(C) other similar modifications.
(3) Tenant protections.--In the case of mortgages on
residential rental properties, modifications made under
paragraph (1) shall ensure--
(A) the continuation of any existing Federal, State,
and local rental subsidies and protections; and
(B) that modifications take into account the need
for operating funds to maintain decent and safe
conditions at the property.
(4) Timing.--Each <<NOTE: Deadline.>> Federal property
manager shall develop and begin implementation of the plan
required by this subsection not later than 60 days after the
date of enactment of this Act.
(5) Reports to congress.--Each Federal property manager
shall, 60 days after the date of enactment of this Act and every
30 days thereafter, report to Congress specific information on
the number and types of loan modifications made and the number
of actual foreclosures occurring during the reporting period in
accordance with this section.
(6) Consultation.--In developing the plan required by this
subsection, the Federal property managers shall consult with one
another and, to the extent possible, utilize consistent
approaches to implement the requirements of this subsection.
(c) Actions With Respect to Servicers.--In any case in which a
Federal property manager is not the owner of a residential mortgage
loan, but holds an interest in obligations or pools of obligations
secured by residential mortgage loans, the Federal property manager
shall--
(1) encourage implementation by the loan servicers of loan
modifications developed under subsection (b); and
(2) assist in facilitating any such modifications, to the
extent possible.
(d) Limitation.--The requirements of this section shall not
supersede any other duty or requirement imposed on the Federal property
managers under otherwise applicable law.
SEC. 111. <<NOTE: 12 USC 5221.>> EXECUTIVE COMPENSATION AND
CORPORATE GOVERNANCE.
(a) Applicability.--Any financial institution that sells troubled
assets to the Secretary under this Act shall be subject to the executive
compensation requirements of subsections (b) and (c) and the provisions
under the Internal Revenue Code of 1986, as provided under the amendment
by section 302, as applicable.
(b) Direct Purchases.--
(1) In general.--Where <<NOTE: Standards.>> the Secretary
determines that the purposes of this Act are best met through
direct purchases of troubled assets from an individual financial
institution where no bidding process or market prices are
available, and the Secretary receives a meaningful equity or
debt position in the financial institution as a result of the
transaction, the Secretary shall require that the financial
institution meet appropriate standards for executive
compensation and corporate governance. The <<NOTE: Effective
date.>> standards required under this subsection shall be
effective for the duration of the period that the Secretary
holds an equity or debt position in the financial institution.
(2) Criteria.--The standards required under this subsection
shall include--
[[Page 122 STAT. 3777]]
(A) limits on compensation that exclude incentives
for senior executive officers of a financial institution
to take unnecessary and excessive risks that threaten
the value of the financial institution during the period
that the Secretary holds an equity or debt position in
the financial institution;
(B) a provision for the recovery by the financial
institution of any bonus or incentive compensation paid
to a senior executive officer based on statements of
earnings, gains, or other criteria that are later proven
to be materially inaccurate; and
(C) a prohibition on the financial institution
making any golden parachute payment to its senior
executive officer during the period that the Secretary
holds an equity or debt position in the financial
institution.
(3) Definition.--For purposes of this section, the term
``senior executive officer'' means an individual who is one of
the top 5 highly paid executives of a public company, whose
compensation is required to be disclosed pursuant to the
Securities Exchange Act of 1934, and any regulations issued
thereunder, and non-public company counterparts.
(c) Auction Purchases.--
Where <<NOTE: Employment. Contracts. Prohibition.>> the Secretary
determines that the purposes of this Act are best met through auction
purchases of troubled assets, and only where such purchases per
financial institution in the aggregate exceed $300,000,000 (including
direct purchases), the Secretary shall prohibit, for such financial
institution, any new employment contract with a senior executive officer
that provides a golden parachute in the event of an involuntary
termination, bankruptcy <<NOTE: Guidance. Deadline. Effective date.>>
filing, insolvency, or receivership. The Secretary shall issue guidance
to carry out this paragraph not later than 2 months after the date of
enactment of this Act, and such guidance shall be effective upon
issuance.
(d) Sunset.--The provisions of subsection (c) shall apply only to
arrangements entered into during the period during which the authorities
under section 101(a) are in effect, as determined under section 120.
SEC. 112. <<NOTE: 12 USC 5222.>> COORDINATION WITH FOREIGN
AUTHORITIES AND CENTRAL BANKS.
The Secretary shall coordinate, as appropriate, with foreign
financial authorities and central banks to work toward the establishment
of similar programs by such authorities and central banks. To the extent
that such foreign financial authorities or banks hold troubled assets as
a result of extending financing to financial institutions that have
failed or defaulted on such financing, such troubled assets qualify for
purchase under section 101.
SEC. 113. <<NOTE: 12 USC 5223.>> MINIMIZATION OF LONG-TERM COSTS
AND MAXIMIZATION OF BENEFITS FOR
TAXPAYERS.
(a) Long-Term Costs and Benefits.--
(1) Minimizing negative impact.--The Secretary shall use the
authority under this Act in a manner that will minimize any
potential long-term negative impact on the taxpayer, taking into
account the direct outlays, potential long-term returns on
assets purchased, and the overall economic benefits of the
program, including economic benefits due to improvements in
economic activity and the availability of credit, the impact
[[Page 122 STAT. 3778]]
on the savings and pensions of individuals, and reductions in
losses to the Federal Government.
(2) Authority.--In carrying out paragraph (1), the Secretary
shall--
(A) hold the assets to maturity or for resale for
and until such time as the Secretary determines that the
market is optimal for selling such assets, in order to
maximize the value for taxpayers; and
(B) sell such assets at a price that the Secretary
determines, based on available financial analysis, will
maximize return on investment for the Federal
Government.
(3) Private sector participation.--The Secretary shall
encourage the private sector to participate in purchases of
troubled assets, and to invest in financial institutions,
consistent with the provisions of this section.
(b) Use of Market Mechanisms.--In making purchases under this Act,
the Secretary shall--
(1) make such purchases at the lowest price that the
Secretary determines to be consistent with the purposes of this
Act; and
(2) maximize the efficiency of the use of taxpayer resources
by using market mechanisms, including auctions or reverse
auctions, where appropriate.
(c) Direct Purchases.--If the Secretary determines that use of a
market mechanism under subsection (b) is not feasible or appropriate,
and the purposes of the Act are best met through direct purchases from
an individual financial institution, the Secretary shall pursue
additional measures to ensure that prices paid for assets are reasonable
and reflect the underlying value of the asset.
(d) Conditions on Purchase Authority for Warrants and Debt
Instruments.--
(1) In general.--The Secretary may not purchase, or make any
commitment to purchase, any troubled asset under the authority
of this Act, unless the Secretary receives from the financial
institution from which such assets are to be purchased--
(A) in the case of a financial institution, the
securities of which are traded on a national securities
exchange, a warrant giving the right to the Secretary to
receive nonvoting common stock or preferred stock in
such financial institution, or voting stock with respect
to which, the Secretary agrees not to exercise voting
power, as the Secretary determines appropriate; or
(B) in the case of any financial institution other
than one described in subparagraph (A), a warrant for
common or preferred stock, or a senior debt instrument
from such financial institution, as described in
paragraph (2)(C).
(2) Terms and conditions.--The terms and conditions of any
warrant or senior debt instrument required under paragraph (1)
shall meet the following requirements:
(A) Purposes.--Such terms and conditions shall, at a
minimum, be designed--
(i) to provide for reasonable participation by
the Secretary, for the benefit of taxpayers, in
equity appreciation in the case of a warrant or
other equity security,
[[Page 122 STAT. 3779]]
or a reasonable interest rate premium, in the case
of a debt instrument; and
(ii) to provide additional protection for the
taxpayer against losses from sale of assets by the
Secretary under this Act and the administrative
expenses of the TARP.
(B) Authority to sell, exercise, or surrender.--The
Secretary may sell, exercise, or surrender a warrant or
any senior debt instrument received under this
subsection, based on the conditions established under
subparagraph (A).
(C) Conversion.--The warrant shall provide that if,
after the warrant is received by the Secretary under
this subsection, the financial institution that issued
the warrant is no longer listed or traded on a national
securities exchange or securities association, as
described in paragraph (1)(A), such warrants shall
convert to senior debt, or contain appropriate
protections for the Secretary to ensure that the
Treasury is appropriately compensated for the value of
the warrant, in an amount determined by the Secretary.
(D) <<NOTE: Anti-dilution provisions.>>
Protections.--Any warrant representing securities to be
received by the Secretary under this subsection shall
contain anti-dilution provisions of the type employed in
capital market transactions, as determined by the
Secretary. Such provisions shall protect the value of
the securities from market transactions such as stock
splits, stock distributions, dividends, and other
distributions, mergers, and other forms of
reorganization or recapitalization.
(E) Exercise price.--The exercise price for any
warrant issued pursuant to this subsection shall be set
by the Secretary, in the interest of the taxpayers.
(F) Sufficiency.--The financial institution shall
guarantee to the Secretary that it has authorized shares
of nonvoting stock available to fulfill its obligations
under this subsection. Should the financial institution
not have sufficient authorized shares, including
preferred shares that may carry dividend rights equal to
a multiple number of common shares, the Secretary may,
to the extent necessary, accept a senior debt note in an
amount, and on such terms as will compensate the
Secretary with equivalent value, in the event that a
sufficient shareholder vote to authorize the necessary
additional shares cannot be obtained.
(3) Exceptions.--
(A) De minimis.--The Secretary shall establish de
minimis exceptions to the requirements of this
subsection, based on the size of the cumulative
transactions of troubled assets purchased from any one
financial institution for the duration of the program,
at not more than $100,000,000.
(B) Other exceptions.--The Secretary shall establish
an exception to the requirements of this subsection and
appropriate alternative requirements for any
participating financial institution that is legally
prohibited from issuing securities and debt instruments,
so as not to allow circumvention of the requirements of
this section.
[[Page 122 STAT. 3780]]
SEC. 114. <<NOTE: 12 USC 5224.>> MARKET TRANSPARENCY.
(a) <<NOTE: Public information. Deadline.>> Pricing.--To facilitate
market transparency, the Secretary shall make available to the public,
in electronic form, a description, amounts, and pricing of assets
acquired under this Act, within 2 business days of purchase, trade, or
other disposition.
(b) Disclosure.--For each type of financial institutions that sells
troubled assets to the Secretary under this Act, the Secretary shall
determine whether the public disclosure required for such financial
institutions with respect to off-balance sheet transactions, derivatives
instruments, contingent liabilities, and similar sources of potential
exposure is adequate to provide to the public sufficient information as
to the true financial position of the institutions. If such disclosure
is not adequate for that purpose, the Secretary shall make
recommendations for additional disclosure requirements to the relevant
regulators.
SEC. 115. <<NOTE: 12 USC 5225.>> GRADUATED AUTHORIZATION TO
PURCHASE.
(a) <<NOTE: Effective dates.>> Authority.--The authority of the
Secretary to purchase troubled assets under this Act shall be limited as
follows:
(1) Effective upon the date of enactment of this Act, such
authority shall be limited to $250,000,000,000 outstanding at
any one time.
(2) If at any time, the President submits to the Congress a
written certification that the Secretary needs to exercise the
authority under this paragraph, effective upon such submission,
such authority shall be limited to $350,000,000,000 outstanding
at any one time.
(3) If, at any time after the certification in paragraph (2)
has been made, the President transmits to the Congress a written
report detailing the plan of the Secretary to exercise the
authority under this paragraph, unless there is enacted, within
15 calendar days of such transmission, a joint resolution
described in subsection (c), effective upon the expiration of
such 15-day period, such authority shall be limited to
$700,000,000,000 outstanding at any one time.
(b) Aggregation of Purchase Prices.--The amount of troubled assets
purchased by the Secretary outstanding at any one time shall be
determined for purposes of the dollar amount limitations under
subsection (a) by aggregating the purchase prices of all troubled assets
held.
(c) Joint Resolution of Disapproval.--
(1) In general.--Notwithstanding any other provision of this
section, the Secretary may not exercise any authority to make
purchases under this Act with regard to any amount in excess of
$350,000,000,000 previously obligated, as described in this
section if, within 15 calendar days after the date on which
Congress receives a report of the plan of the Secretary
described in subsection (a)(3), there is enacted into law a
joint resolution disapproving the plan of the Secretary with
respect to such additional amount.
(2) <<NOTE: Definition.>> Contents of joint resolution.--
For the purpose of this section, the term ``joint resolution''
means only a joint resolution--
(A) that is introduced not later than 3 calendar
days after the date on which the report of the plan of
the Secretary referred to in subsection (a)(3) is
received by Congress;
[[Page 122 STAT. 3781]]
(B) which does not have a preamble;
(C) the title of which is as follows: ``Joint
resolution relating to the disapproval of obligations
under the Emergency Economic Stabilization Act of
2008''; and
(D) the matter after the resolving clause of which
is as follows: ``That Congress disapproves the
obligation of any amount exceeding the amounts obligated
as described in paragraphs (1) and (2) of section 115(a)
of the Emergency Economic Stabilization Act of 2008.''.
(d) Fast Track Consideration in House of Representatives.--
(1) <<NOTE: Notification. Deadline.>> Reconvening.--Upon
receipt of a report under subsection (a)(3), the Speaker, if the
House would otherwise be adjourned, shall notify the Members of
the House that, pursuant to this section, the House shall
convene not later than the second calendar day after receipt of
such report;
(2) Reporting and discharge.--Any committee of the House of
Representatives to which a joint resolution is referred shall
report it to the House not later than 5 calendar days after the
date of receipt of the report described in subsection (a)(3). If
a committee fails to report the joint resolution within that
period, the committee shall be discharged from further
consideration of the joint resolution and the joint resolution
shall be referred to the appropriate calendar.
(3) Proceeding to consideration.--After <<NOTE: Deadline.>>
each committee authorized to consider a joint resolution reports
it to the House or has been discharged from its consideration,
it shall be in order, not later than the sixth day after
Congress receives the report described in subsection (a)(3), to
move to proceed to consider the joint resolution in the
House. <<NOTE: Waiver.>> All points of order against the motion
are waived. Such a motion shall not be in order after the House
has disposed of a motion to proceed on the joint resolution. The
previous question shall be considered as ordered on the motion
to its adoption without intervening motion. The motion shall not
be debatable. A motion to reconsider the vote by which the
motion is disposed of shall not be in order.
(4) Consideration.--The joint resolution shall be considered
as read. All points of order against the joint resolution and
against its consideration are waived. The previous question
shall be considered as ordered on the joint resolution to its
passage without intervening motion except two hours of debate
equally divided and controlled by the proponent and an opponent.
A motion to reconsider the vote on passage of the joint
resolution shall not be in order.
(e) Fast Track Consideration in Senate.--
(1) <<NOTE: Notification. Deadline.>> Reconvening.--Upon
receipt of a report under subsection (a)(3), if the Senate has
adjourned or recessed for more than 2 days, the majority leader
of the Senate, after consultation with the minority leader of
the Senate, shall notify the Members of the Senate that,
pursuant to this section, the Senate shall convene not later
than the second calendar day after receipt of such message.
(2) Placement on calendar.--Upon introduction in the Senate,
the joint resolution shall be placed immediately on the
calendar.
(3) Floor consideration.--
[[Page 122 STAT. 3782]]
(A) In general.--Notwithstanding Rule XXII of the
Standing Rules of the Senate, it is in order at any time
during the period beginning on the 4th day after the
date on which Congress receives a report of the plan of
the Secretary described in subsection (a)(3) and ending
on the 6th day after the date on which Congress receives
a report of the plan of the Secretary described in
subsection (a)(3) (even though a previous motion to the
same effect has been disagreed to) to move to proceed to
the consideration of the joint resolution, and all
points of order against the joint resolution (and
against consideration of the joint resolution) are
waived. The motion to proceed is not debatable. The
motion is not subject to a motion to postpone. A motion
to reconsider the vote by which the motion is agreed to
or disagreed to shall not be in order. If a motion to
proceed to the consideration of the resolution is agreed
to, the joint resolution shall remain the unfinished
business until disposed of.
(B) <<NOTE: Duration.>> Debate.--Debate on the
joint resolution, and on all debatable motions and
appeals in connection therewith, shall be limited to not
more than 10 hours, which shall be divided equally
between the majority and minority leaders or their
designees. A motion further to limit debate is in order
and not debatable. An amendment to, or a motion to
postpone, or a motion to proceed to the consideration of
other business, or a motion to recommit the joint
resolution is not in order.
(C) Vote on passage.--The vote on passage shall
occur immediately following the conclusion of the debate
on a joint resolution, and a single quorum call at the
conclusion of the debate if requested in accordance with
the rules of the Senate.
(D) Rulings of the chair on procedure.--Appeals from
the decisions of the Chair relating to the application
of the rules of the Senate, as the case may be, to the
procedure relating to a joint resolution shall be
decided without debate.
(f) Rules Relating to Senate and House of Representatives.--
(1) Coordination with action by other house.--If, before the
passage by one House of a joint resolution of that House, that
House receives from the other House a joint resolution, then the
following procedures shall apply:
(A) The joint resolution of the other House shall
not be referred to a committee.
(B) With respect to a joint resolution of the House
receiving the resolution--
(i) the procedure in that House shall be the
same as if no joint resolution had been received
from the other House; but
(ii) the vote on passage shall be on the joint
resolution of the other House.
(2) Treatment of joint resolution of other house.--If one
House fails to introduce or consider a joint resolution under
this section, the joint resolution of the other House shall be
entitled to expedited floor procedures under this section.
[[Page 122 STAT. 3783]]
(3) Treatment of companion measures.--If, following passage
of the joint resolution in the Senate, the Senate then receives
the companion measure from the House of Representatives, the
companion measure shall not be debatable.
(4) Consideration after passage.--
(A) In general.--If Congress passes a joint
resolution, the period beginning on the date the
President is presented with the joint resolution and
ending on the date the President takes action with
respect to the joint resolution shall be disregarded in
computing the 15-calendar day period described in
subsection (a)(3).
(B) Vetoes.--If the President vetoes the joint
resolution--
(i) the period beginning on the date the
President vetoes the joint resolution and ending
on the date the Congress receives the veto message
with respect to the joint resolution shall be
disregarded in computing the 15-calendar day
period described in subsection (a)(3), and
(ii) <<NOTE: Debate. Duration.>> debate on a
veto message in the Senate under this section
shall be 1 hour equally divided between the
majority and minority leaders or their designees.
(5) Rules of house of representatives and senate.--This
subsection and subsections (c), (d), and (e) are enacted by
Congress--
(A) as an exercise of the rulemaking power of the
Senate and House of Representatives, respectively, and
as such it is deemed a part of the rules of each House,
respectively, but applicable only with respect to the
procedure to be followed in that House in the case of a
joint resolution, and it supersedes other rules only to
the extent that it is inconsistent with such rules; and
(B) with full recognition of the constitutional
right of either House to change the rules (so far as
relating to the procedure of that House) at any time, in
the same manner, and to the same extent as in the case
of any other rule of that House.
SEC. 116. <<NOTE: 12 USC 5226.>> OVERSIGHT AND AUDITS.
(a) Comptroller General Oversight.--
(1) Scope of oversight.--The Comptroller General of the
United States shall, upon establishment of the troubled assets
relief program under this Act (in this section referred to as
the ``TARP''), commence ongoing oversight of the activities and
performance of the TARP and of any agents and representatives of
the TARP (as related to the agent or representative's activities
on behalf of or under the authority of the TARP), including
vehicles established by the Secretary under this Act. The
subjects of such oversight shall include the following:
(A) The performance of the TARP in meeting the
purposes of this Act, particularly those involving--
(i) foreclosure mitigation;
(ii) cost reduction;
(iii) whether it has provided stability or
prevented disruption to the financial markets or
the banking system; and
(iv) whether it has protected taxpayers.
[[Page 122 STAT. 3784]]
(B) The financial condition and internal controls of
the TARP, its representatives and agents.
(C) Characteristics of transactions and commitments
entered into, including transaction type, frequency,
size, prices paid, and all other relevant terms and
conditions, and the timing, duration and terms of any
future commitments to purchase assets.
(D) Characteristics and disposition of acquired
assets, including type, acquisition price, current
market value, sale prices and terms, and use of proceeds
from sales.
(E) Efficiency of the operations of the TARP in the
use of appropriated funds.
(F) Compliance with all applicable laws and
regulations by the TARP, its agents and representatives.
(G) The efforts of the TARP to prevent, identify,
and minimize conflicts of interest involving any agent
or representative performing activities on behalf of or
under the authority of the TARP.
(H) The efficacy of contracting procedures pursuant
to section 107(b), including, as applicable, the efforts
of the TARP in evaluating proposals for inclusion and
contracting to the maximum extent possible of minorities
(as such term is defined in 1204(c) of the Financial
Institutions Reform, Recovery, and Enhancement Act of
1989 (12 U.S.C. 1811 note), women, and minority- and
women-owned businesses, including ascertaining and
reporting the total amount of fees paid and other value
delivered by the TARP to all of its agents and
representatives, and such amounts paid or delivered to
such firms that are minority- and women-owned businesses
(as such terms are defined in section 21A of the Federal
Home Loan Bank Act (12 U.S.C. 1441a)).
(2) Conduct and administration of oversight.--
(A) GAO presence.--The <<NOTE: Federal buildings and
facilities.>> Secretary shall provide the Comptroller
General with appropriate space and facilities in the
Department of the Treasury as necessary to facilitate
oversight of the TARP until the termination date
established in section 120.
(B) Access to records.--To the extent otherwise
consistent with law, the Comptroller General shall have
access, upon request, to any information, data,
schedules, books, accounts, financial records, reports,
files, electronic communications, or other papers,
things, or property belonging to or in use by the TARP,
or any vehicles established by the Secretary under this
Act, and to the officers, directors, employees,
independent public accountants, financial advisors, and
other agents and representatives of the TARP (as related
to the agent or representative's activities on behalf of
or under the authority of the TARP) or any such vehicle
at such reasonable time as the Comptroller General may
request. The Comptroller General shall be afforded full
facilities for verifying transactions with the balances
or securities held by depositaries, fiscal agents, and
custodians. The Comptroller General may make and retain
copies of such books, accounts, and other records as the
Comptroller General deems appropriate.
[[Page 122 STAT. 3785]]
(C) Reimbursement of costs.--The Treasury shall
reimburse the Government Accountability Office for the
full cost of any such oversight activities as billed
therefor by the Comptroller General of the United
States. Such reimbursements shall be credited to the
appropriation account ``Salaries and Expenses,
Government Accountability Office'' current when the
payment is received and remain available until expended.
(3) Reporting.--The Comptroller General shall submit reports
of findings under this section, regularly and no less frequently
than once every 60 days, to the appropriate committees of
Congress, and the Special Inspector General for the Troubled
Asset Relief Program established under this Act on the
activities and performance of the TARP. The Comptroller may also
submit special reports under this subsection as warranted by the
findings of its oversight activities.
(b) Comptroller General Audits.--
(1) <<NOTE: Public information.>> Annual audit.--The TARP
shall annually prepare and issue to the appropriate committees
of Congress and the public audited financial statements prepared
in accordance with generally accepted accounting principles, and
the Comptroller General shall annually audit such statements in
accordance with generally accepted auditing standards. The
Treasury shall reimburse the Government Accountability Office
for the full cost of any such audit as billed therefor by the
Comptroller General. Such reimbursements shall be credited to
the appropriation account ``Salaries and Expenses, Government
Accountability Office'' current when the payment is received and
remain available until expended. The financial statements
prepared under this paragraph shall be on the fiscal year basis
prescribed under section 1102 of title 31, United States Code.
(2) Authority.--The Comptroller General may audit the
programs, activities, receipts, expenditures, and financial
transactions of the TARP and any agents and representatives of
the TARP (as related to the agent or representative's activities
on behalf of or under the authority of the TARP), including
vehicles established by the Secretary under this Act.
(3) Corrective responses to audit problems.--The TARP
shall--
(A) take action to address deficiencies identified
by the Comptroller General or other auditor engaged by
the TARP; or
(B) <<NOTE: Certification.>> certify to appropriate
committees of Congress that no action is necessary or
appropriate.
(c) Internal Control.--
(1) Establishment.--The TARP shall establish and maintain an
effective system of internal control, consistent with the
standards prescribed under section 3512(c) of title 31, United
States Code, that provides reasonable assurance of--
(A) the effectiveness and efficiency of operations,
including the use of the resources of the TARP;
(B) the reliability of financial reporting,
including financial statements and other reports for
internal and external use; and
(C) compliance with applicable laws and regulations.
(2) Reporting.--In conjunction with each annual financial
statement issued under this section, the TARP shall--
[[Page 122 STAT. 3786]]
(A) state the responsibility of management for
establishing and maintaining adequate internal control
over financial reporting; and
(B) state its assessment, as of the end of the most
recent year covered by such financial statement of the
TARP, of the effectiveness of the internal control over
financial reporting.
(d) <<NOTE: Reports. Audits.>> Sharing of Information.--Any report
or audit required under this section shall also be submitted to the
Congressional Oversight Panel established under section 125.
(e) Termination.--Any oversight, reporting, or audit requirement
under this section shall terminate on the later of--
(1) the date that the last troubled asset acquired by the
Secretary under section 101 has been sold or transferred out of
the ownership or control of the Federal Government; or
(2) the date of expiration of the last insurance contract
issued under section 102.
SEC. 117. <<NOTE: 12 USC 5227.>> STUDY AND REPORT ON MARGIN
AUTHORITY.
(a) Study.--The Comptroller General shall undertake a study to
determine the extent to which leverage and sudden deleveraging of
financial institutions was a factor behind the current financial crisis.
(b) Content.--The study required by this section shall include--
(1) an analysis of the roles and responsibilities of the
Board, the Securities and Exchange Commission, the Secretary,
and other Federal banking agencies with respect to monitoring
leverage and acting to curtail excessive leveraging;
(2) an analysis of the authority of the Board to regulate
leverage, including by setting margin requirements, and what
process the Board used to decide whether or not to use its
authority;
(3) an analysis of any usage of the margin authority by the
Board; and
(4) recommendations for the Board and appropriate committees
of Congress with respect to the existing authority of the Board.
(c) Report.--Not later than June 1, 2009, the Comptroller General
shall complete and submit a report on the study required by this section
to the Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of Representatives.
(d) Sharing of Information.--Any reports required under this section
shall also be submitted to the Congressional Oversight Panel established
under section 125.
SEC. 118. <<NOTE: 12 USC 5228.>> FUNDING.
For the purpose of the authorities granted in this Act, and for the
costs of administering those authorities, the Secretary may use the
proceeds of the sale of any securities issued under chapter 31 of title
31, United States Code, and the purposes for which securities may be
issued under chapter 31 of title 31, United States Code, are extended to
include actions authorized by this Act, including the payment of
administrative expenses. Any funds expended or obligated by the
Secretary for actions authorized by this Act, including the payment of
administrative expenses, shall
[[Page 122 STAT. 3787]]
be deemed appropriated at the time of such expenditure or obligation.
SEC. 119. <<NOTE: 12 USC 5229.>> JUDICIAL REVIEW AND RELATED
MATTERS.
(a) Judicial Review.--
(1) Standard.--Actions by the Secretary pursuant to the
authority of this Act shall be subject to chapter 7 of title 5,
United States Code, including that such final actions shall be
held unlawful and set aside if found to be arbitrary,
capricious, an abuse of discretion, or not in accordance with
law.
(2) Limitations on equitable relief.--
(A) Injunction.--No injunction or other form of
equitable relief shall be issued against the Secretary
for actions pursuant to section 101, 102, 106, and 109,
other than to remedy a violation of the Constitution.
(B) <<NOTE: Deadline.>> Temporary restraining
order.--Any request for a temporary restraining order
against the Secretary for actions pursuant to this Act
shall be considered and granted or denied by the court
within 3 days of the date of the request.
(C) Preliminary injunction.--Any request for a
preliminary injunction against the Secretary for actions
pursuant to this Act shall be considered and granted or
denied by the court on an expedited basis consistent
with the provisions of rule 65(b)(3) of the Federal
Rules of Civil Procedure, or any successor thereto.
(D) Permanent injunction.--Any request for a
permanent injunction against the Secretary for actions
pursuant to this Act shall be considered and granted or
denied by the court on an expedited basis. Whenever
possible, the court shall consolidate trial on the
merits with any hearing on a request for a preliminary
injunction, consistent with the provisions of rule
65(a)(2) of the Federal Rules of Civil Procedure, or any
successor thereto.
(3) <<NOTE: Contracts.>> Limitation on actions by
participating companies.--No action or claims may be brought
against the Secretary by any person that divests its assets with
respect to its participation in a program under this Act, except
as provided in paragraph (1), other than as expressly provided
in a written contract with the Secretary.
(4) Stays.--Any injunction or other form of equitable relief
issued against the Secretary for actions pursuant to section
101, 102, 106, and 109, <<NOTE: Deadline.>> shall be
automatically stayed. The stay shall be lifted unless the
Secretary seeks a stay from a higher court within 3 calendar
days after the date on which the relief is issued.
(b) Related Matters.--
(1) Treatment of homeowners' rights.--The terms of any
residential mortgage loan that is part of any purchase by the
Secretary under this Act shall remain subject to all claims and
defenses that would otherwise apply, notwithstanding the
exercise of authority by the Secretary under this Act.
(2) Savings clause.--Any exercise of the authority of the
Secretary pursuant to this Act shall not impair the claims or
defenses that would otherwise apply with respect to persons
other than the Secretary. Except as established in any contract,
[[Page 122 STAT. 3788]]
a servicer of pooled residential mortgages owes any duty to
determine whether the net present value of the payments on the
loan, as modified, is likely to be greater than the anticipated
net recovery that would result from foreclosure to all investors
and holders of beneficial interests in such investment, but not
to any individual or groups of investors or beneficial interest
holders, and shall be deemed to act in the best interests of all
such investors or holders of beneficial interests if the
servicer agrees to or implements a modification or workout plan
when the servicer takes reasonable loss mitigation actions,
including partial payments.
SEC. 120. <<NOTE: 12 USC 5230.>> TERMINATION OF AUTHORITY.
(a) Termination.--The authorities provided under sections 101(a),
excluding section 101(a)(3), and 102 shall terminate on December 31,
2009.
(b) Extension Upon Certification.--The Secretary, upon submission of
a written certification to Congress, may extend the authority provided
under this Act to expire not later than 2 years from the date of
enactment of this Act. Such certification shall include a justification
of why the extension is necessary to assist American families and
stabilize financial markets, as well as the expected cost to the
taxpayers for such an extension.
SEC. 121. <<NOTE: 12 USC 5231.>> SPECIAL INSPECTOR GENERAL FOR
THE TROUBLED ASSET RELIEF PROGRAM.
(a) Office of Inspector General.--There is hereby established the
Office of the Special Inspector General for the Troubled Asset Relief
Program.
(b) <<NOTE: President.>> Appointment of Inspector General;
Removal.--(1) The head of the Office of the Special Inspector General
for the Troubled Asset Relief Program is the Special Inspector General
for the Troubled Asset Relief Program (in this section referred to as
the ``Special Inspector General''), who shall be appointed by the
President, by and with the advice and consent of the Senate.
(2) The appointment of the Special Inspector General shall be made
on the basis of integrity and demonstrated ability in accounting,
auditing, financial analysis, law, management analysis, public
administration, or investigations.
(3) The nomination of an individual as Special Inspector General
shall be made as soon as practicable after the establishment of any
program under sections 101 and 102.
(4) The Special Inspector General shall be removable from office in
accordance with the provisions of section 3(b) of the Inspector General
Act of 1978 (5 U.S.C. App.).
(5) For purposes of section 7324 of title 5, United States Code, the
Special Inspector General shall not be considered an employee who
determines policies to be pursued by the United States in the nationwide
administration of Federal law.
(6) The annual rate of basic pay of the Special Inspector General
shall be the annual rate of basic pay for an Inspector General under
section 3(e) of the Inspector General Act of 1978 (5 U.S.C. App.).
(c) Duties.--(1) It shall be the duty of the Special Inspector
General to conduct, supervise, and coordinate audits and investigations
of the purchase, management, and sale of assets by the Secretary of the
Treasury under any program established by the Secretary under section
101, and the management by the Secretary
[[Page 122 STAT. 3789]]
of any program established under section 102, including by collecting
and summarizing the following information:
(A) A description of the categories of troubled assets
purchased or otherwise procured by the Secretary.
(B) A listing of the troubled assets purchased in each such
category described under subparagraph (A).
(C) An explanation of the reasons the Secretary deemed it
necessary to purchase each such troubled asset.
(D) A listing of each financial institution that such
troubled assets were purchased from.
(E) A listing of and detailed biographical information on
each person or entity hired to manage such troubled assets.
(F) A current estimate of the total amount of troubled
assets purchased pursuant to any program established under
section 101, the amount of troubled assets on the books of the
Treasury, the amount of troubled assets sold, and the profit and
loss incurred on each sale or disposition of each such troubled
asset.
(G) A listing of the insurance contracts issued under
section 102.
(2) The Special Inspector General shall establish, maintain, and
oversee such systems, procedures, and controls as the Special Inspector
General considers appropriate to discharge the duty under paragraph (1).
(3) In addition to the duties specified in paragraphs (1) and (2),
the Inspector General shall also have the duties and responsibilities of
inspectors general under the Inspector General Act of 1978.
(d) Powers and Authorities.--(1) In carrying out the duties
specified in subsection (c), the Special Inspector General shall have
the authorities provided in section 6 of the Inspector General Act of
1978.
(2) The Special Inspector General shall carry out the duties
specified in subsection (c)(1) in accordance with section 4(b)(1) of the
Inspector General Act of 1978.
(e) Personnel, Facilities, and Other Resources.--(1) The Special
Inspector General may select, appoint, and employ such officers and
employees as may be necessary for carrying out the duties of the Special
Inspector General, subject to the provisions of title 5, United States
Code, governing appointments in the competitive service, and the
provisions of chapter 51 and subchapter III of chapter 53 of such title,
relating to classification and General Schedule pay rates.
(2) The Special Inspector General may obtain services as authorized
by section 3109 of title 5, United States Code, at daily rates not to
exceed the equivalent rate prescribed for grade GS-15 of the General
Schedule by section 5332 of such title.
(3) The Special Inspector General may enter into contracts and other
arrangements for audits, studies, analyses, and other services with
public agencies and with private persons, and make such payments as may
be necessary to carry out the duties of the Inspector General.
(4)(A) Upon request of the Special Inspector General for information
or assistance from any department, agency, or other entity of the
Federal Government, the head of such entity shall, insofar as is
practicable and not in contravention of any existing law, furnish such
information or assistance to the Special Inspector General, or an
authorized designee.
[[Page 122 STAT. 3790]]
(B) <<NOTE: Reports.>> Whenever information or assistance requested
by the Special Inspector General is, in the judgment of the Special
Inspector General, unreasonably refused or not provided, the Special
Inspector General shall report the circumstances to the appropriate
committees of Congress without delay.
(f) Reports.--(1) Not later than 60 days after the confirmation of
the Special Inspector General, and every calendar quarter thereafter,
the Special Inspector General shall submit to the appropriate committees
of Congress a report summarizing the activities of the Special Inspector
General during the 120-day period ending on the date of such report.
Each report shall include, for the period covered by such report, a
detailed statement of all purchases, obligations, expenditures, and
revenues associated with any program established by the Secretary of the
Treasury under sections 101 and 102, as well as the information
collected under subsection (c)(1).
(2) Nothing in this subsection shall be construed to authorize the
public disclosure of information that is--
(A) specifically prohibited from disclosure by any other
provision of law;
(B) specifically required by Executive order to be protected
from disclosure in the interest of national defense or national
security or in the conduct of foreign affairs; or
(C) a part of an ongoing criminal investigation.
(3) <<NOTE: Reports.>> Any reports required under this section
shall also be submitted to the Congressional Oversight Panel established
under section 125.
(g) Funding.--(1) Of the amounts made available to the Secretary of
the Treasury under section 118, $50,000,000 shall be available to the
Special Inspector General to carry out this section.
(2) The amount available under paragraph (1) shall remain available
until expended.
(h) Termination.--The Office of the Special Inspector General shall
terminate on the later of--
(1) the date that the last troubled asset acquired by the
Secretary under section 101 has been sold or transferred out of
the ownership or control of the Federal Government; or
(2) the date of expiration of the last insurance contract
issued under section 102.
SEC. 122. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT.
Subsection (b) of section 3101 of title 31, United States Code, is
amended by striking out the dollar limitation contained in such
subsection and inserting ``$11,315,000,000,000''.
SEC. 123. <<NOTE: 12 USC 5232.>> CREDIT REFORM.
(a) In General.--Subject to subsection (b), the costs of purchases
of troubled assets made under section 101(a) and guarantees of troubled
assets under section 102, and any cash flows associated with the
activities authorized in section 102 and subsections (a), (b), and (c)
of section 106 shall be determined as provided under the Federal Credit
Reform Act of 1990 (2 U.S.C. 661 et. seq.).
(b) Costs.--For the purposes of section 502(5) of the Federal Credit
Reform Act of 1990 (2 U.S.C. 661a(5))--
(1) the cost of troubled assets and guarantees of troubled
assets shall be calculated by adjusting the discount rate in
section 502(5)(E) (2 U.S.C. 661a(5)(E)) for market risks; and
[[Page 122 STAT. 3791]]
(2) the cost of a modification of a troubled asset or
guarantee of a troubled asset shall be the difference between
the current estimate consistent with paragraph (1) under the
terms of the troubled asset or guarantee of the troubled asset
and the current estimate consistent with paragraph (1) under the
terms of the troubled asset or guarantee of the troubled asset,
as modified.
SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS.
Section 257 of the National Housing Act (12 U.S.C. 1715z-23) is
amended--
(1) in subsection (e)--
(A) in paragraph (1)(B), by inserting before ``a
ratio'' the following: ``, or thereafter is likely to
have, due to the terms of the mortgage being reset,'';
(B) in paragraph (2)(B), by inserting before the
period at the end ``(or such higher percentage as the
Board determines, in the discretion of the Board)'';
(C) in paragraph (4)(A)--
(i) in the first sentence, by inserting after
``insured loan'' the following: ``and any payments
made under this paragraph,''; and
(ii) by adding at the end the following:
``Such actions may include making payments, which
shall be accepted as payment in full of all
indebtedness under the eligible mortgage, to any
holder of an existing subordinate mortgage, in
lieu of any future appreciation payments
authorized under subparagraph (B).''; and
(2) in subsection (w), by inserting after ``administrative
costs'' the following: ``and payments pursuant to subsection
(e)(4)(A)''.
SEC. 125. <<NOTE: 12 USC 5233.>> CONGRESSIONAL OVERSIGHT PANEL.
(a) Establishment.--There is hereby established the Congressional
Oversight Panel (hereafter in this section referred to as the
``Oversight Panel'') as an establishment in the legislative branch.
(b) Duties.--The Oversight Panel shall review the current state of
the financial markets and the regulatory system and submit the following
reports to Congress:
(1) Regular reports.--
(A) In general.--Regular reports of the Oversight
Panel shall include the following:
(i) The use by the Secretary of authority
under this Act, including with respect to the use
of contracting authority and administration of the
program.
(ii) The impact of purchases made under the
Act on the financial markets and financial
institutions.
(iii) The extent to which the information made
available on transactions under the program has
contributed to market transparency.
(iv) The effectiveness of foreclosure
mitigation efforts, and the effectiveness of the
program from the standpoint of minimizing long-
term costs to the taxpayers and maximizing the
benefits for taxpayers.
(B) Timing.--The reports required under this
paragraph shall be submitted not later than 30 days
after
[[Page 122 STAT. 3792]]
the first exercise by the Secretary of the authority
under section 101(a) or 102, and every 30 days
thereafter.
(2) Special report on regulatory reform.--The Oversight
Panel shall submit a special report on regulatory reform not
later than January 20, 2009, analyzing the current state of the
regulatory system and its effectiveness at overseeing the
participants in the financial system and protecting consumers,
and providing recommendations for improvement, including
recommendations regarding whether any participants in the
financial markets that are currently outside the regulatory
system should become subject to the regulatory system, the
rationale underlying such recommendation, and whether there are
any gaps in existing consumer protections.
(c) Membership.--
(1) In general.--The Oversight Panel shall consist of 5
members, as follows:
(A) 1 member appointed by the Speaker of the House
of Representatives.
(B) 1 member appointed by the minority leader of the
House of Representatives.
(C) 1 member appointed by the majority leader of the
Senate.
(D) 1 member appointed by the minority leader of the
Senate.
(E) 1 member appointed by the Speaker of the House
of Representatives and the majority leader of the
Senate, after consultation with the minority leader of
the Senate and the minority leader of the House of
Representatives.
(2) Pay.--Each member of the Oversight Panel shall each be
paid at a rate equal to the daily equivalent of the annual rate
of basic pay for level I of the Executive Schedule for each day
(including travel time) during which such member is engaged in
the actual performance of duties vested in the Commission.
(3) Prohibition of compensation of federal employees.--
Members of the Oversight Panel who are full-time officers or
employees of the United States or Members of Congress may not
receive additional pay, allowances, or benefits by reason of
their service on the Oversight Panel.
(4) Travel expenses.--Each member shall receive travel
expenses, including per diem in lieu of subsistence, in
accordance with applicable provisions under subchapter I of
chapter 57 of title 5, United States Code.
(5) Quorum.--Four members of the Oversight Panel shall
constitute a quorum but a lesser number may hold hearings.
(6) Vacancies.--A vacancy on the Oversight Panel shall be
filled in the manner in which the original appointment was made.
(7) Meetings.--The Oversight Panel shall meet at the call of
the Chairperson or a majority of its members.
(d) Staff.--
(1) In general.--The Oversight Panel may appoint and fix the
pay of any personnel as the Commission considers appropriate.
(2) Experts and consultants.--The Oversight Panel may
procure temporary and intermittent services under section
3109(b) of title 5, United States Code.
[[Page 122 STAT. 3793]]
(3) Staff of agencies.--Upon request of the Oversight Panel,
the head of any Federal department or agency may detail, on a
reimbursable basis, any of the personnel of that department or
agency to the Oversight Panel to assist it in carrying out its
duties under this Act.
(e) Powers.--
(1) Hearings and sessions.--The Oversight Panel may, for the
purpose of carrying out this section, hold hearings, sit and act
at times and places, take testimony, and receive evidence as the
Panel considers appropriate and may administer oaths or
affirmations to witnesses appearing before it.
(2) Powers of members and agents.--Any member or agent of
the Oversight Panel may, if authorized by the Oversight Panel,
take any action which the Oversight Panel is authorized to take
by this section.
(3) Obtaining official data.--The Oversight Panel may secure
directly from any department or agency of the United States
information necessary to enable it to carry out this section.
Upon request of the Chairperson of the Oversight Panel, the head
of that department or agency shall furnish that information to
the Oversight Panel.
(4) Reports.--The Oversight Panel shall receive and consider
all reports required to be submitted to the Oversight Panel
under this Act.
(f) Termination.--The Oversight Panel shall terminate 6 months after
the termination date specified in section 120.
(g) Funding for Expenses.--
(1) Authorization of appropriations.--There is authorized to
be appropriated to the Oversight Panel such sums as may be
necessary for any fiscal year, half of which shall be derived
from the applicable account of the House of Representatives, and
half of which shall be derived from the contingent fund of the
Senate.
(2) Reimbursement of amounts.--An amount equal to the
expenses of the Oversight Panel shall be promptly transferred by
the Secretary, from time to time upon the presentment of a
statement of such expenses by the Chairperson of the Oversight
Panel, from funds made available to the Secretary under this Act
to the applicable fund of the House of Representatives and the
contingent fund of the Senate, as appropriate, as reimbursement
for amounts expended from such account and fund under paragraph
(1).
SEC. 126. FDIC AUTHORITY.
(a) In General.--Section 18(a) of the Federal Deposit Insurance Act
(12 U.S.C. 1828(a)) is amended by adding at the end the following new
paragraph:
``(4) False advertising, misuse of fdic names, and
misrepresentation to indicate insured status.--
``(A) Prohibition on false advertising and misuse of
fdic names.--No person may represent or imply that any
deposit liability, obligation, certificate, or share is
insured or guaranteed by the Corporation, if such
deposit liability, obligation, certificate, or share is
not insured or guaranteed by the Corporation--
[[Page 122 STAT. 3794]]
``(i) by using the terms `Federal Deposit',
`Federal Deposit Insurance', `Federal Deposit
Insurance Corporation', any combination of such
terms, or the abbreviation `FDIC' as part of the
business name or firm name of any person,
including any corporation, partnership, business
trust, association, or other business entity; or
``(ii) by using such terms or any other terms,
sign, or symbol as part of an advertisement,
solicitation, or other document.
``(B) Prohibition on misrepresentations of insured
status.--No person may knowingly misrepresent--
``(i) that any deposit liability, obligation,
certificate, or share is insured, under this Act,
if such deposit liability, obligation,
certificate, or share is not so insured; or
``(ii) the extent to which or the manner in
which any deposit liability, obligation,
certificate, or share is insured under this Act,
if such deposit liability, obligation,
certificate, or share is not so insured, to the
extent or in the manner represented.
``(C) Authority of the appropriate federal banking
agency.--The appropriate Federal banking agency shall
have enforcement authority in the case of a violation of
this paragraph by any person for which the agency is the
appropriate Federal banking agency, or any institution-
affiliated party thereof.
``(D) Corporation authority if the appropriate
federal banking agency fails to follow recommendation.--
``(i) Recommendation.--The Corporation may
recommend in writing to the appropriate Federal
banking agency that the agency take any
enforcement action authorized under section 8 for
purposes of enforcement of this paragraph with
respect to any person for which the agency is the
appropriate Federal banking agency or any
institution-affiliated party thereof.
``(ii) <<NOTE: Deadline.>> Agency response.--
If the appropriate Federal banking agency does
not, within 30 days of the date of receipt of a
recommendation under clause (i), take the
enforcement action with respect to this paragraph
recommended by the Corporation or provide a plan
acceptable to the Corporation for responding to
the situation presented, the Corporation may take
the recommended enforcement action against such
person or institution-affiliated party.
``(E) Additional authority.--In addition to its
authority under subparagraphs (C) and (D), for purposes
of this paragraph, the Corporation shall have, in the
same manner and to the same extent as with respect to a
State nonmember insured bank--
``(i) jurisdiction over--
``(I) any person other than a person
for which another agency is the
appropriate Federal banking agency or
any institution-affiliated party
thereof; and
[[Page 122 STAT. 3795]]
``(II) any person that aids or abets
a violation of this paragraph by a
person described in subclause (I); and
``(ii) for purposes of enforcing the
requirements of this paragraph, the authority of
the Corporation under--
``(I) section 10(c) to conduct
investigations; and
``(II) subsections (b), (c), (d) and
(i) of section 8 to conduct enforcement
actions.
``(F) Other actions preserved.--No provision of this
paragraph shall be construed as barring any action
otherwise available, under the laws of the United States
or any State, to any Federal or State agency or
individual.''.
(b) Enforcement Orders.--Section 8(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(c)) is amended by adding at the end the
following new paragraph:
``(4) False advertising or misuse of names to indicate
insured status.--
``(A) Temporary order.--
``(i) In general.--If a notice of charges
served under subsection (b)(1) specifies on the
basis of particular facts that any person engaged
or is engaging in conduct described in section
18(a)(4), the Corporation or other appropriate
Federal banking agency may issue a temporary order
requiring--
``(I) the immediate cessation of any
activity or practice described, which
gave rise to the notice of charges; and
``(II) affirmative action to prevent
any further, or to remedy any existing,
violation.
``(ii) Effect of order.--Any temporary order
issued under this subparagraph shall take effect
upon service.
``(B) Effective period of temporary order.--A
temporary order issued under subparagraph (A) shall
remain effective and enforceable, pending the completion
of an administrative proceeding pursuant to subsection
(b)(1) in connection with the notice of charges--
``(i) until such time as the Corporation or
other appropriate Federal banking agency dismisses
the charges specified in such notice; or
``(ii) if a cease-and-desist order is issued
against such person, until the effective date of
such order.
``(C) Civil money penalties.--Any violation of
section 18(a)(4) shall be subject to civil money
penalties, as set forth in subsection (i), except that
for any person other than an insured depository
institution or an institution-affiliated party that is
found to have violated this paragraph, the Corporation
or other appropriate Federal banking agency shall not be
required to demonstrate any loss to an insured
depository institution.''.
(c) Unenforceability of Certain Agreements.--Section 13(c) of the
Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is amended by adding
at the end the following new paragraph:
``(11) Unenforceability of certain agreements.--No provision
contained in any existing or future standstill, confidentiality,
or other agreement that, directly or indirectly--
[[Page 122 STAT. 3796]]
``(A) affects, restricts, or limits the ability of
any person to offer to acquire or acquire,
``(B) prohibits any person from offering to acquire
or acquiring, or
``(C) prohibits any person from using any previously
disclosed information in connection with any such offer
to acquire or acquisition of,
all or part of any insured depository institution, including any
liabilities, assets, or interest therein, in connection with any
transaction in which the Corporation exercises its authority
under section 11 or 13, shall be enforceable against or impose
any liability on such person, as such enforcement or liability
shall be contrary to public policy.''.
(d) Technical and Conforming Amendments.--Section 18 of the Federal
Deposit Insurance Act (12 U.S.C. 1828) is amended--
(1) in subsection (a)(3)--
(A) by striking ``this subsection'' the first place
that term appears and inserting ``paragraph (1)''; and
(B) by striking ``this subsection'' the second place
that term appears and inserting ``paragraph (2)''; and
(2) in the heading for subsection (a), by striking
``Insurance Logo.--'' and inserting ``Representations of Deposit
Insurance.--''.
SEC. 127. <<NOTE: 12 USC 5234.>> COOPERATION WITH THE FBI.
Any Federal financial regulatory agency shall cooperate with the
Federal Bureau of Investigation and other law enforcement agencies
investigating fraud, misrepresentation, and malfeasance with respect to
development, advertising, and sale of financial products.
SEC. 128. ACCELERATION OF EFFECTIVE DATE.
Section 203 of the Financial Services Regulatory Relief Act of 2006
(12 U.S.C. 461 note) is amended by striking ``October 1, 2011'' and
inserting ``October 1, 2008''.
SEC. 129. <<NOTE: 12 USC 5235.>> DISCLOSURES ON EXERCISE OF LOAN
AUTHORITY.
(a) In General.--Not <<NOTE: Reports. Deadline.>> later than 7 days
after the date on which the Board exercises its authority under the
third paragraph of section 13 of the Federal Reserve Act (12 U.S.C. 343;
relating to discounts for individuals, partnerships, and corporations)
the Board shall provide to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the
House of Representatives a report which includes--
(1) the justification for exercising the authority; and
(2) the specific terms of the actions of the Board,
including the size and duration of the lending, available
information concerning the value of any collateral held with
respect to such a loan, the recipient of warrants or any other
potential equity in exchange for the loan, and any expected cost
to the taxpayers for such exercise.
(b) Periodic Updates.--The Board shall provide updates to the
Committees specified in subsection (a) not less frequently than once
every 60 days while the subject loan is outstanding, including--
(1) the status of the loan;
(2) the value of the collateral held by the Federal reserve
bank which initiated the loan; and
(3) the projected cost to the taxpayers of the loan.
[[Page 122 STAT. 3797]]
(c) Confidentiality.--The information submitted to the Congress
under this section shall be kept confidential, upon the written request
of the Chairman of the Board, in which case it shall be made available
only to the Chairpersons and Ranking Members of the Committees described
in subsection (a).
(d) Applicability.--The <<NOTE: Effective date. Termination
date. Reports. Deadline.>> provisions of this section shall be in force
for all uses of the authority provided under section 13 of the Federal
Reserve Act occurring during the period beginning on March 1, 2008 and
ending on the after the date of enactment of this Act, and reports
described in subsection (a) shall be required beginning not later than
30 days after that date of enactment, with respect to any such exercise
of authority.
(e) Sharing of Information.--Any <<NOTE: Reports.>> reports
required under this section shall also be submitted to the Congressional
Oversight Panel established under section 125.
SEC. 130. TECHNICAL CORRECTIONS.
(a) In General.--Section 128(b)(2) of the Truth in Lending Act (15
U.S.C. 1638(b)(2)), as amended by section 2502 of the Mortgage
Disclosure Improvement Act of 2008 (Public Law 110-289), is amended--
(1) in subparagraph (A), by striking ``In the case'' and
inserting ``Except as provided in subparagraph (G), in the
case''; and
(2) by amending subparagraph (G) to read as follows:
``(G)(i) In the case of an extension of credit
relating to a plan described in section 101(53D) of
title 11, United States Code--
``(I) the requirements of subparagraphs (A)
through (E) shall not apply; and
``(II) <<NOTE: Good faith
estimate. Deadline.>> a good faith estimate of
the disclosures required under subsection (a)
shall be made in accordance with regulations of
the Board under section 121(c) before such credit
is extended, or shall be delivered or placed in
the mail not later than 3 business days after the
date on which the creditor receives the written
application of the consumer for such credit,
whichever is earlier.
``(ii) <<NOTE: Disclosure statement. Deadline.>> If
a disclosure statement furnished within 3 business days
of the written application (as provided under clause
(i)(II)) contains an annual percentage rate which is
subsequently rendered inaccurate, within the meaning of
section 107(c), the creditor shall furnish another
disclosure statement at the time of settlement or
consummation of the transaction.''.
(b) <<NOTE: 15 USC 1638 note.>> Effective Date.--The amendments
made by subsection (a) shall take effect as if included in the
amendments made by section 2502 of the Mortgage Disclosure Improvement
Act of 2008 (Public Law 110-289).
SEC. 131. <<NOTE: 12 USC 5236.>> EXCHANGE STABILIZATION FUND
REIMBURSEMENT.
(a) Reimbursement.--The Secretary shall reimburse the Exchange
Stabilization Fund established under section 5302 of title 31, United
States Code, for any funds that are used for the Treasury Money Market
Funds Guaranty Program for the United States money market mutual fund
industry, from funds under this Act.
(b) Limits on Use of Exchange Stabilization Fund.--The Secretary is
prohibited from using the Exchange Stabilization Fund
[[Page 122 STAT. 3798]]
for the establishment of any future guaranty programs for the United
States money market mutual fund industry.
SEC. 132. <<NOTE: 12 USC 5237.>> AUTHORITY TO SUSPEND MARK-TO-
MARKET ACCOUNTING.
(a) Authority.--The Securities and Exchange Commission shall have
the authority under the securities laws (as such term is defined in
section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)(47)) to suspend, by rule, regulation, or order, the application
of Statement Number 157 of the Financial Accounting Standards Board for
any issuer (as such term is defined in section 3(a)(8) of such Act) or
with respect to any class or category of transaction if the Commission
determines that is necessary or appropriate in the public interest and
is consistent with the protection of investors.
(b) Savings Provision.--Nothing in subsection (a) shall be construed
to restrict or limit any authority of the Securities and Exchange
Commission under securities laws as in effect on the date of enactment
of this Act.
SEC. 133. <<NOTE: 12 USC 5238.>> STUDY ON MARK-TO-MARKET
ACCOUNTING.
(a) Study.--The Securities and Exchange Commission, in consultation
with the Board and the Secretary, shall conduct a study on mark-to-
market accounting standards as provided in Statement Number 157 of the
Financial Accounting Standards Board, as such standards are applicable
to financial institutions, including depository institutions. Such a
study shall consider at a minimum--
(1) the effects of such accounting standards on a financial
institution's balance sheet;
(2) the impacts of such accounting on bank failures in 2008;
(3) the impact of such standards on the quality of financial
information available to investors;
(4) the process used by the Financial Accounting Standards
Board in developing accounting standards;
(5) the advisability and feasibility of modifications to
such standards; and
(6) alternative accounting standards to those provided in
such Statement Number 157.
(b) Report.--The Securities and Exchange Commission shall submit to
Congress a report of such study before the end of the 90-day period
beginning on the date of the enactment of this Act containing the
findings and determinations of the Commission, including such
administrative and legislative recommendations as the Commission
determines appropriate.
SEC. 134. <<NOTE: 12 USC 5239.>> RECOUPMENT.
Upon <<NOTE: Reports. Deadline.>> the expiration of the 5-year
period beginning upon the date of the enactment of this Act, the
Director of the Office of Management and Budget, in consultation with
the Director of the Congressional Budget Office, shall submit a report
to the Congress on the net amount within the Troubled Asset Relief
Program under this Act. <<NOTE: President. Legislation.>> In any case
where there is a shortfall, the President shall submit a legislative
proposal that recoups from the financial industry an amount equal to the
shortfall in order to ensure that the Troubled Asset Relief Program does
not add to the deficit or national debt.
[[Page 122 STAT. 3799]]
SEC. 135. <<NOTE: 12 USC 5240.>> PRESERVATION OF AUTHORITY.
With the exception of section 131, nothing in this Act may be
construed to limit the authority of the Secretary or the Board under any
other provision of law.
SEC. 136. <<NOTE: Effective dates. Termination dates. 12 USC
5241.>> TEMPORARY INCREASE IN DEPOSIT AND
SHARE INSURANCE COVERAGE.
(a) Federal Deposit Insurance Act; Temporary Increase in Deposit
Insurance.--
(1) Increased amount.--Effective only during the period
beginning on the date of enactment of this Act and ending on
December 31, 2009, section 11(a)(1)(E) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(a)(1)(E)) shall apply with
``$250,000'' substituted for ``$100,000''.
(2) Temporary increase not to be considered for setting
assessments.--The temporary increase in the standard maximum
deposit insurance amount made under paragraph (1) shall not be
taken into account by the Board of Directors of the Corporation
for purposes of setting assessments under section 7(b)(2) of the
Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)).
(3) Borrowing limits temporarily lifted.--During the period
beginning on the date of enactment of this Act and ending on
December 31, 2009, the Board of Directors of the Corporation may
request from the Secretary, and the Secretary shall approve, a
loan or loans in an amount or amounts necessary to carry out
this subsection, without regard to the limitations on such
borrowing under section 14(a) and 15(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1824(a), 1825(c)).
(b) Federal Credit Union Act; Temporary Increase in Share
Insurance.--
(1) Increased amount.--Effective only during the period
beginning on the date of enactment of this Act and ending on
December 31, 2009, section 207(k)(5) of the Federal Credit Union
Act (12 U.S.C. 1787(k)(5)) shall apply with ``$250,000''
substituted for ``$100,000''.
(2) Temporary increase not to be considered for setting
insurance premium charges and insurance deposit adjustments.--
The temporary increase in the standard maximum share insurance
amount made under paragraph (1) shall not be taken into account
by the National Credit Union Administration Board for purposes
of setting insurance premium charges and share insurance deposit
adjustments under section 202(c)(2) of the Federal Credit Union
Act (12 U.S.C. 1782(c)(2)).
(3) Borrowing limits temporarily lifted.--During the period
beginning on the date of enactment of this Act and ending on
December 31, 2009, the National Credit Union Administration
Board may request from the Secretary, and the Secretary shall
approve, a loan or loans in an amount or amounts necessary to
carry out this subsection, without regard to the limitations on
such borrowing under section 203(d)(1) of the Federal Credit
Union Act (12 U.S.C. 1783(d)(1)).
(c) Not for Use in Inflation Adjustments.--The temporary increase in
the standard maximum deposit insurance amount made under this section
shall not be used to make any inflation adjustment under section
11(a)(1)(F) of the Federal Deposit Insurance
[[Page 122 STAT. 3800]]
Act (12 U.S.C. 1821(a)(1)(F)) for purposes of that Act or the Federal
Credit Union Act.
TITLE II--BUDGET-RELATED PROVISIONS
SEC. 201. <<NOTE: 12 USC 5251.>> INFORMATION FOR CONGRESSIONAL
SUPPORT AGENCIES.
Upon request, and to the extent otherwise consistent with law, all
information used by the Secretary in connection with activities
authorized under this Act (including the records to which the
Comptroller General is entitled under this Act) shall be made available
to congressional support agencies (in accordance with their obligations
to support the Congress as set out in their authorizing statutes) for
the purposes of assisting the committees of Congress with conducting
oversight, monitoring, and analysis of the activities authorized under
this Act.
SEC. 202. <<NOTE: 12 USC 5252.>> REPORTS BY THE OFFICE OF
MANAGEMENT AND BUDGET AND THE
CONGRESSIONAL BUDGET OFFICE.
(a) Reports by the Office of Management and Budget.--Within 60 days
of the first exercise of the authority granted in section 101(a), but in
no case later than December 31, 2008, and semiannually thereafter, the
Office of Management and Budget shall report to the President and the
Congress--
(1) the estimate, notwithstanding section 502(5)(F) of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(F)), as of
the first business day that is at least 30 days prior to the
issuance of the report, of the cost of the troubled assets, and
guarantees of the troubled assets, determined in accordance with
section 123;
(2) the information used to derive the estimate, including
assets purchased or guaranteed, prices paid, revenues received,
the impact on the deficit and debt, and a description of any
outstanding commitments to purchase troubled assets; and
(3) a detailed analysis of how the estimate has changed from
the previous report.
Beginning with the second report under subsection (a), the Office of
Management and Budget shall explain the differences between the
Congressional Budget Office estimates delivered in accordance with
subsection (b) and prior Office of Management and Budget estimates.
(b) Reports by the Congressional Budget Office.--Within 45 days of
receipt by the Congress of each report from the Office of Management and
Budget under subsection (a), the Congressional Budget Office shall
report to the Congress the Congressional Budget Office's assessment of
the report submitted by the Office of Management and Budget, including--
(1) the cost of the troubled assets and guarantees of the
troubled assets,
(2) the information and valuation methods used to calculate
such cost, and
(3) the impact on the deficit and the debt.
(c) Financial Expertise.--In carrying out the duties in this
subsection or performing analyses of activities under this Act, the
Director of the Congressional Budget Office may employ personnel and
procure the services of experts and consultants.
[[Page 122 STAT. 3801]]
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to produce reports required
by this section.
SEC. 203. ANALYSIS IN PRESIDENT'S BUDGET.
(a) In General.--Section 1105(a) of title 31, United States Code, is
amended by adding at the end the following new paragraph:
``(35) as supplementary materials, a separate analysis of
the budgetary effects for all prior fiscal years, the current
fiscal year, the fiscal year for which the budget is submitted,
and ensuing fiscal years of the actions the Secretary of the
Treasury has taken or plans to take using any authority provided
in the Emergency Economic Stabilization Act of 2008, including--
``(A) an estimate of the current value of all assets
purchased, sold, and guaranteed under the authority
provided in the Emergency Economic Stabilization Act of
2008 using methodology required by the Federal Credit
Reform Act of 1990 (2 U.S.C. 661 et seq.) and section
123 of the Emergency Economic Stabilization Act of 2008;
``(B) an estimate of the deficit, the debt held by
the public, and the gross Federal debt using methodology
required by the Federal Credit Reform Act of 1990 and
section 123 of the Emergency Economic Stabilization Act
of 2008;
``(C) an estimate of the current value of all assets
purchased, sold, and guaranteed under the authority
provided in the Emergency Economic Stabilization Act of
2008 calculated on a cash basis;
``(D) a revised estimate of the deficit, the debt
held by the public, and the gross Federal debt,
substituting the cash-based estimates in subparagraph
(C) for the estimates calculated under subparagraph (A)
pursuant to the Federal Credit Reform Act of 1990 and
section 123 of the Emergency Economic Stabilization Act
of 2008; and
``(E) the portion of the deficit which can be
attributed to any action taken by the Secretary using
authority provided by the Emergency Economic
Stabilization Act of 2008 and the extent to which the
change in the deficit since the most recent estimate is
due to a reestimate using the methodology required by
the Federal Credit Reform Act of 1990 and section 123 of
the Emergency Economic Stabilization Act of 2008.''
(b) <<NOTE: 31 USC 1105 note.>> Consultation.--In implementing this
section, the Director of Office of Management and Budget shall consult
periodically, but at least annually, with the Committee on the Budget of
the House of Representatives, the Committee on the Budget of the Senate,
and the Director of the Congressional Budget Office.
(c) <<NOTE: 31 USC 1105 note.>> Effective Date.--This section and
the amendment made by this section shall apply beginning with respect to
the fiscal year 2010 budget submission of the President.
SEC. 204. <<NOTE: 12 USC 5253.>> EMERGENCY TREATMENT.
All provisions of this Act are designated as an emergency
requirement and necessary to meet emergency needs pursuant to section
204(a) of S. Con. Res 21 (110th Congress), the concurrent resolution on
the budget for fiscal year 2008 and rescissions of
[[Page 122 STAT. 3802]]
any amounts provided in this Act shall not be counted for purposes of
budget enforcement.
TITLE III--TAX PROVISIONS
SEC. 301. <<NOTE: 12 USC 5261.>> GAIN OR LOSS FROM SALE OR
EXCHANGE OF CERTAIN PREFERRED STOCK.
(a) In General.--For purposes of the Internal Revenue Code of 1986,
gain or loss from the sale or exchange of any applicable preferred stock
by any applicable financial institution shall be treated as ordinary
income or loss.
(b) <<NOTE: Definition.>> Applicable Preferred Stock.--For purposes
of this section, the term ``applicable preferred stock'' means any
stock--
(1) which is preferred stock in--
(A) the Federal National Mortgage Association,
established pursuant to the Federal National Mortgage
Association Charter Act (12 U.S.C. 1716 et seq.), or
(B) the Federal Home Loan Mortgage Corporation,
established pursuant to the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1451 et seq.), and
(2) which--
(A) was held by the applicable financial institution
on September 6, 2008, or
(B) was sold or exchanged by the applicable
financial institution on or after January 1, 2008, and
before September 7, 2008.
(c) Applicable Financial Institution.--For purposes of this section:
(1) <<NOTE: Definition.>> In general.--Except as provided
in paragraph (2), the term ``applicable financial institution''
means--
(A) a financial institution referred to in section
582(c)(2) of the Internal Revenue Code of 1986, or
(B) a depository institution holding company (as
defined in section 3(w)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(w)(1))).
(2) Special rules for certain sales.--In the case of--
(A) a sale or exchange described in subsection
(b)(2)(B), an entity shall be treated as an applicable
financial institution only if it was an entity described
in subparagraph (A) or (B) of paragraph (1) at the time
of the sale or exchange, and
(B) a sale or exchange after September 6, 2008, of
preferred stock described in subsection (b)(2)(A), an
entity shall be treated as an applicable financial
institution only if it was an entity described in
subparagraph (A) or (B) of paragraph (1) at all times
during the period beginning on September 6, 2008, and
ending on the date of the sale or exchange of the
preferred stock.
(d) Special Rule for Certain Property Not Held on September 6,
2008.--The Secretary of the Treasury or the Secretary's delegate may
extend the application of this section to all or a portion of the gain
or loss from a sale or exchange in any case where--
(1) an applicable financial institution sells or exchanges
applicable preferred stock after September 6, 2008, which the
applicable financial institution did not hold on such date, but
[[Page 122 STAT. 3803]]
the basis of which in the hands of the applicable financial
institution at the time of the sale or exchange is the same as
the basis in the hands of the person which held such stock on
such date, or
(2) the applicable financial institution is a partner in a
partnership which--
(A) held such stock on September 6, 2008, and later
sold or exchanged such stock, or
(B) sold or exchanged such stock during the period
described in subsection (b)(2)(B).
(e) Regulatory Authority.--The Secretary of the Treasury or the
Secretary's delegate may prescribe such guidance, rules, or regulations
as are necessary to carry out the purposes of this section.
(f) Effective Date.--This section shall apply to sales or exchanges
occurring after December 31, 2007, in taxable years ending after such
date.
SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECUTIVE
COMPENSATION OF EMPLOYERS PARTICIPATING IN
THE TROUBLED ASSETS RELIEF PROGRAM.
(a) Denial of Deduction.--Subsection (m) of section 162 of the
Internal Revenue Code of 1986 <<NOTE: 26 USC 162.>> is amended by
adding at the end the following new paragraph:
``(5) Special rule for application to employers
participating in the troubled assets relief program.--
``(A) In general.--In the case of an applicable
employer, no deduction shall be allowed under this
chapter--
``(i) in the case of executive remuneration
for any applicable taxable year which is
attributable to services performed by a covered
executive during such applicable taxable year, to
the extent that the amount of such remuneration
exceeds $500,000, or
``(ii) in the case of deferred deduction
executive remuneration for any taxable year for
services performed during any applicable taxable
year by a covered executive, to the extent that
the amount of such remuneration exceeds $500,000
reduced (but not below zero) by the sum of--
``(I) the executive remuneration for
such applicable taxable year, plus
``(II) the portion of the deferred
deduction executive remuneration for
such services which was taken into
account under this clause in a preceding
taxable year.
``(B) Applicable employer.--For purposes of this
paragraph--
``(i) <<NOTE: Definition.>> In general.--
Except as provided in clause (ii), the term
`applicable employer' means any employer from whom
1 or more troubled assets are acquired under a
program established by the Secretary under section
101(a) of the Emergency Economic Stabilization Act
of 2008 if the aggregate amount of the assets so
acquired for all taxable years exceeds
$300,000,000.
``(ii) Disregard of certain assets sold
through direct purchase.--If the only sales of
troubled assets
[[Page 122 STAT. 3804]]
by an employer under the program described in
clause (i) are through 1 or more direct purchases
(within the meaning of section 113(c) of the
Emergency Economic Stabilization Act of 2008),
such assets shall not be taken into account under
clause (i) in determining whether the employer is
an applicable employer for purposes of this
paragraph.
``(iii) Aggregation rules.--Two or more
persons who are treated as a single employer under
subsection (b) or (c) of section 414 shall be
treated as a single employer, except that in
applying section 1563(a) for purposes of either
such subsection, paragraphs (2) and (3) thereof
shall be disregarded.
``(C) Applicable taxable year.--For purposes of this
paragraph, the term `applicable taxable year' means,
with respect to any employer--
``(i) the first taxable year of the employer--
``(I) which includes any portion of
the period during which the authorities
under section 101(a) of the Emergency
Economic Stabilization Act of 2008 are
in effect (determined under section 120
thereof), and
``(II) in which the aggregate amount
of troubled assets acquired from the
employer during the taxable year
pursuant to such authorities (other than
assets to which subparagraph (B)(ii)
applies), when added to the aggregate
amount so acquired for all preceding
taxable years, exceeds $300,000,000, and
``(ii) any subsequent taxable year which
includes any portion of such period.
``(D) Covered executive.--For purposes of this
paragraph--
``(i) In general.--The term `covered
executive' means, with respect to any applicable
taxable year, any employee--
``(I) who, at any time during the
portion of the taxable year during which
the authorities under section 101(a) of
the Emergency Economic Stabilization Act
of 2008 are in effect (determined under
section 120 thereof), is the chief
executive officer of the applicable
employer or the chief financial officer
of the applicable employer, or an
individual acting in either such
capacity, or
``(II) who is described in clause
(ii).
``(ii) Highest compensated employees.--An
employee is described in this clause if the
employee is 1 of the 3 highest compensated
officers of the applicable employer for the
taxable year (other than an individual described
in clause (i)(I)), determined--
``(I) on the basis of the
shareholder disclosure rules for
compensation under the Securities
Exchange Act of 1934 (without regard to
whether those rules apply to the
employer), and
``(II) by only taking into account
employees employed during the portion of
the taxable year described in clause
(i)(I).
[[Page 122 STAT. 3805]]
``(iii) Employee remains covered executive.--
If an employee is a covered executive with respect
to an applicable employer for any applicable
taxable year, such employee shall be treated as a
covered executive with respect to such employer
for all subsequent applicable taxable years and
for all subsequent taxable years in which deferred
deduction executive remuneration with respect to
services performed in all such applicable taxable
years would (but for this paragraph) be
deductible.
``(E) Executive remuneration.--For purposes of this
paragraph, the term `executive remuneration' means the
applicable employee remuneration of the covered
executive, as determined under paragraph (4) without
regard to subparagraphs (B), (C), and (D) thereof. Such
term shall not include any deferred deduction executive
remuneration with respect to services performed in a
prior applicable taxable year.
``(F) Deferred deduction executive remuneration.--
For purposes of this paragraph, the term `deferred
deduction executive remuneration' means remuneration
which would be executive remuneration for services
performed in an applicable taxable year but for the fact
that the deduction under this chapter (determined
without regard to this paragraph) for such remuneration
is allowable in a subsequent taxable year.
``(G) Coordination.--Rules similar to the rules of
subparagraphs (F) and (G) of paragraph (4) shall apply
for purposes of this paragraph.
``(H) Regulatory authority.--The Secretary may
prescribe such guidance, rules, or regulations as are
necessary to carry out the purposes of this paragraph
and the Emergency Economic Stabilization Act of 2008,
including the extent to which this paragraph applies in
the case of any acquisition, merger, or reorganization
of an applicable employer.''.
(b) Golden Parachute Rule.--Section <<NOTE: 26 USC 280G.>> 280G of
the Internal Revenue Code of 1986 is amended--
(1) by redesignating subsection (e) as subsection (f), and
(2) by inserting after subsection (d) the following new
subsection:
``(e) Special Rule for Application to Employers Participating in the
Troubled Assets Relief Program.--
``(1) In general.--In the case of the severance from
employment of a covered executive of an applicable employer
during the period during which the authorities under section
101(a) of the Emergency Economic Stabilization Act of 2008 are
in effect (determined under section 120 of such Act), this
section shall be applied to payments to such executive with the
following modifications:
``(A) Any reference to a disqualified individual
(other than in subsection (c)) shall be treated as a
reference to a covered executive.
``(B) Any reference to a change described in
subsection (b)(2)(A)(i) shall be treated as a reference
to an applicable severance from employment of a covered
executive, and any reference to a payment contingent on
such a change
[[Page 122 STAT. 3806]]
shall be treated as a reference to any payment made
during an applicable taxable year of the employer on
account of such applicable severance from employment.
``(C) Any reference to a corporation shall be
treated as a reference to an applicable employer.
``(D) The provisions of subsections (b)(2)(C),
(b)(4), (b)(5), and (d)(5) shall not apply.
``(2) Definitions and special rules.--For purposes of this
subsection:
``(A) Definitions.--Any term used in this subsection
which is also used in section 162(m)(5) shall have the
meaning given such term by such section.
``(B) Applicable severance from employment.--The
term `applicable severance from employment' means any
severance from employment of a covered executive--
``(i) by reason of an involuntary termination
of the executive by the employer, or
``(ii) in connection with any bankruptcy,
liquidation, or receivership of the employer.
``(C) Coordination and other rules.--
``(i) In general.--If a payment which is
treated as a parachute payment by reason of this
subsection is also a parachute payment determined
without regard to this subsection, this subsection
shall not apply to such payment.
``(ii) Regulatory authority.--The Secretary
may prescribe such guidance, rules, or regulations
as are necessary--
``(I) to carry out the purposes of
this subsection and the Emergency
Economic Stabilization Act of 2008,
including the extent to which this
subsection applies in the case of any
acquisition, merger, or reorganization
of an applicable employer,
``(II) to apply this section and
section 4999 in cases where one or more
payments with respect to any individual
are treated as parachute payments by
reason of this subsection, and other
payments with respect to such individual
are treated as parachute payments under
this section without regard to this
subsection, and
``(III) to prevent the avoidance of
the application of this section through
the mischaracterization of a severance
from employment as other than an
applicable severance from employment.''.
(c) <<NOTE: 26 USC 162 note.>> Effective Dates.--
(1) In general.--The amendment made by subsection (a) shall
apply to taxable years ending on or after the date of the
enactment of this Act.
(2) <<NOTE: 26 USC 280G note.>> Golden parachute rule.--The
amendments made by subsection (b) shall apply to payments with
respect to severances occurring during the period during which
the authorities under section 101(a) of this Act are in effect
(determined under section 120 of this Act).
[[Page 122 STAT. 3807]]
SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM DISCHARGE OF
QUALIFIED PRINCIPAL RESIDENCE
INDEBTEDNESS.
(a) Extension.--Subparagraph (E) of section 108(a)(1) of the
Internal Revenue Code of 1986 <<NOTE: 26 USC 108.>> is amended by
striking ``January 1, 2010'' and inserting ``January 1, 2013''.
(b) <<NOTE: 26 USC 108 note.>> Effective Date.--The amendment made
by this section shall apply to discharges of indebtedness occurring on
or after January 1, 2010.
DIVISION B--ENERGY IMPROVEMENT AND EXTENSION ACT OF 2008
SEC. 1. SHORT TITLE, ETC.
(a) Short Title.--This division may be cited as the ``Energy
Improvement and Extension Act of 2008''.
(b) <<NOTE: 26 USC 1 et al.>> Reference.--Except as otherwise
expressly provided, whenever in this division 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 division is
as follows:
Sec. 1. Short title, etc.
TITLE I--ENERGY PRODUCTION INCENTIVES
Subtitle A--Renewable Energy Incentives
Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine
renewables.
Sec. 103. Energy credit.
Sec. 104. Energy credit for small wind property.
Sec. 105. Energy credit for geothermal heat pump systems.
Sec. 106. Credit for residential energy efficient property.
Sec. 107. New clean renewable energy bonds.
Sec. 108. Credit for steel industry fuel.
Sec. 109. Special rule to implement FERC and State electric
restructuring policy.
Subtitle B--Carbon Mitigation and Coal 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; funding of Black Lung
Disability Trust Fund.
Sec. 114. Special rules for refund of the coal excise tax to certain
coal producers and exporters.
Sec. 115. Tax credit for carbon dioxide sequestration.
Sec. 116. Certain income and gains relating to industrial source carbon
dioxide treated as qualifying income for publicly traded
partnerships.
Sec. 117. Carbon audit of the tax code.
TITLE II--TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS
Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for
biomass ethanol plant property.
Sec. 202. Credits for biodiesel and renewable diesel.
Sec. 203. Clarification that credits for fuel are designed to provide an
incentive for United States production.
Sec. 204. Extension and modification of alternative fuel credit.
Sec. 205. Credit for new qualified plug-in electric drive motor
vehicles.
Sec. 206. Exclusion from heavy truck tax for idling reduction units and
advanced insulation.
Sec. 207. Alternative fuel vehicle refueling property credit.
Sec. 208. 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.
[[Page 122 STAT. 3808]]
Sec. 209. Extension and modification of election to expense certain
refineries.
Sec. 210. Extension of suspension of taxable income limit on percentage
depletion for oil and natural gas produced from marginal
properties.
Sec. 211. Transportation fringe benefit to bicycle commuters.
TITLE III--ENERGY CONSERVATION AND EFFICIENCY PROVISIONS
Sec. 301. Qualified energy conservation bonds.
Sec. 302. Credit for nonbusiness energy property.
Sec. 303. Energy efficient commercial buildings deduction.
Sec. 304. New energy efficient home credit.
Sec. 305. Modifications of energy efficient appliance credit for
appliances produced after 2007.
Sec. 306. Accelerated recovery period for depreciation of smart meters
and smart grid systems.
Sec. 307. Qualified green building and sustainable design projects.
Sec. 308. Special depreciation allowance for certain reuse and recycling
property.
TITLE IV--REVENUE PROVISIONS
Sec. 401. Limitation of deduction for income attributable to domestic
production of oil, gas, or primary products thereof.
Sec. 402. Elimination of the different treatment of foreign oil and gas
extraction income and foreign oil related income for purposes
of the foreign tax credit.
Sec. 403. Broker reporting of customer's basis in securities
transactions.
Sec. 404. 0.2 percent FUTA surtax.
Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.
TITLE I--ENERGY PRODUCTION INCENTIVES
Subtitle A--Renewable Energy Incentives
SEC. 101. RENEWABLE ENERGY CREDIT.
(a) Extension of Credit.--
(1) 1-year extension for wind and refined coal facilities.--
Paragraphs (1) and (8) of section 45(d) <<NOTE: 26 USC 45.>>
are each amended by striking ``January 1, 2009'' and inserting
``January 1, 2010''.
(2) 2-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, 2011'':
(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 Refined Coal as a Qualified Energy Resource.--
(1) Elimination of increased market value test.--Section
45(c)(7)(A)(i) (defining refined coal), as amended by section
108, is amended--
(A) by striking subclause (IV),
(B) by adding ``and'' at the end of subclause (II),
and
(C) by striking ``, and'' at the end of subclause
(III) and inserting a period.
(2) Increase in required emission reduction.--Section
45(c)(7)(B) (defining qualified emission reduction) is amended
by inserting ``at least 40 percent of the emissions of'' after
``nitrogen oxide and''.
[[Page 122 STAT. 3809]]
(c) Trash Facility Clarification.--Paragraph (7) of section 45(d)
is <<NOTE: 26 USC 45.>> 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) 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, <<NOTE: Certification.>> 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.''.
[[Page 122 STAT. 3810]]
(f) <<NOTE: Applicability. 26 USC 45 note.>> 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) Refined coal.--The amendments made by subsection (b)
shall apply to coal produced and sold from facilities placed in
service after December 31, 2008.
(3) <<NOTE: Electricity.>> Trash facility clarification.--
The amendments made by subsection (c) shall apply to electricity
produced and sold after the date of the enactment of this Act.
(4) 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
[[Page 122 STAT. 3811]]
striking ``January 1, 2012'' and inserting ``the date of the enactment
of paragraph (11)''.
(f) <<NOTE: 26 USC 45 note.>> 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) <<NOTE: 26 USC 48.>> 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, 2016''.
(3) Microturbine property.--Subparagraph (E) of section
48(c)(2) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2016''.
(b) Allowance of Energy Credit Against Alternative Minimum Tax.--
(1) In general.--Subparagraph (B) of section 38(c)(4), as
amended by the Housing Assistance Tax Act of 2008, is amended by
redesignating clause (vi) as clause (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,''.
(2) Technical amendment.--Clause (vi) of section
38(c)(4)(B), as redesignated by paragraph (1), is amended by
striking ``section 47 to the extent attributable to'' and
inserting ``section 46 to the extent that such credit is
attributable to the rehabilitation credit under section 47, but
only with respect to''.
(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.--Subsection (c)
of section 48 is amended--
(A) by striking ``Qualified Fuel Cell Property;
Qualified Microturbine Property'' in the heading and
inserting ``Definitions'', and
(B) by adding at the end the following new
paragraph:
``(3) Combined heat and power system property.--
``(A) Combined heat and power system property.--The
term `combined heat and power system property' means
property comprising a system--
``(i) 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),
``(ii) which produces--
[[Page 122 STAT. 3812]]
``(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),
``(iii) the energy efficiency percentage of
which exceeds 60 percent, and
``(iv) which is placed in service before
January 1, 2017.
``(B) Limitation.--
``(i) 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.
``(ii) Applicable capacity.--For purposes of
clause (i), 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.
``(iii) <<NOTE: Definition.>> 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.
``(C) Special rules.--
``(i) Energy efficiency percentage.--For
purposes of this paragraph, 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.
``(ii) Determinations made on btu basis.--The
energy efficiency percentage and the percentages
under subparagraph (A)(ii) shall be determined on
a Btu basis.
``(iii) 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.
``(D) 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--
[[Page 122 STAT. 3813]]
``(i) subparagraph (A)(iii) shall not apply,
but
``(ii) 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 subparagraph) as the energy
efficiency percentage of such system bears to 60
percent.''.
(3) Conforming amendment.--Section 48(a)(1) is amended by
striking ``paragraphs (1)(B) and (2)(B)'' and inserting
``paragraphs (1)(B), (2)(B), and (3)(B)''.
(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) <<NOTE: 26 USC 48 note.>> 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. ENERGY CREDIT FOR SMALL WIND PROPERTY.
(a) In General.--Section 48(a)(3)(A), as amended by section 103, is
amended by striking ``or'' at the end of clause (iv), by adding ``or''
at the end of clause (v), and by inserting after clause (v) the
following new clause:
``(vi) qualified small wind energy
property,''.
(b) 30 Percent Credit.--Section 48(a)(2)(A)(i) is amended by
striking ``and'' at the end of subclause (II) and by inserting after
subclause (III) the following new subclause:
``(IV) qualified small wind energy
property, and''.
[[Page 122 STAT. 3814]]
(c) Qualified Small Wind Energy Property.--Section 48(c), as amended
by section 103, is amended by adding at the end the following new
paragraph:
``(4) Qualified small wind energy property.--
``(A) In general.--The term `qualified small wind
energy property' means property which uses a qualifying
small wind turbine to generate electricity.
``(B) Limitation.--In the case of qualified small
wind energy property placed in service during the
taxable year, the credit otherwise determined under
subsection (a)(1) for such year with respect to all such
property of the taxpayer shall not exceed $4,000.
``(C) Qualifying small wind turbine.--The term
`qualifying small wind turbine' means a wind turbine
which has a nameplate capacity of not more than 100
kilowatts.
``(D) Termination.--The term `qualified small wind
energy property' shall not include any property for any
period after December 31, 2016.''.
(d) Conforming Amendment.--Section 48(a)(1), as amended by section
103, is amended by striking ``paragraphs (1)(B), (2)(B), and (3)(B)''
and inserting ``paragraphs (1)(B), (2)(B), (3)(B), and (4)(B)''.
(e) <<NOTE: 26 USC 48 note.>> Effective Date.--The amendments made
by this section 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).
SEC. 105. ENERGY CREDIT FOR GEOTHERMAL HEAT PUMP SYSTEMS.
(a) In General.--Subparagraph (A) of section 48(a)(3), as amended by
this Act, is amended by striking ``or'' at the end of clause (v), by
inserting ``or'' at the end of clause (vi), and by adding at the end the
following new clause:
``(vii) equipment which uses the ground or
ground water as a thermal energy source to heat a
structure or as a thermal energy sink to cool a
structure, but only with respect to periods ending
before January 1, 2017,''.
(b) <<NOTE: 26 USC 48 note.>> Effective Date.--The amendments made
by this section 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).
SEC. 106. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.
(a) Extension.--Section 25D(g) is amended by striking ``December 31,
2008'' and inserting ``December 31, 2016''.
(b) Removal of Limitation for Solar Electric Property.--
(1) In general.--Section 25D(b)(1), as amended by
subsections (c) and (d), is amended--
(A) by striking subparagraph (A), and
(B) by redesignating subparagraphs (B) through (E)
as subparagraphs (A) through and (D), respectively.
(2) Conforming amendment.--Section 25D(e)(4)(A), as amended
by subsections (c) and (d), is amended--
(A) by striking clause (i), and
[[Page 122 STAT. 3815]]
(B) by redesignating clauses (ii) through (v) as
clauses (i) and (iv), respectively.
(c) Credit for Residential Wind Property.--
(1) In general.--Section 25D(a) <<NOTE: 26 USC 25D.>> 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.''.
[[Page 122 STAT. 3816]]
(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
[[Page 122 STAT. 3817]]
to the credit allowable under subsection (a) for such
succeeding taxable year.''.
(2) Conforming amendments.--
(A) Section 23(b)(4)(B) <<NOTE: 26 USC 23.>> 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) <<NOTE: 26 USC 23 note.>> Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2007.
(2) Solar electric property limitation.--The amendments made
by subsection (b) shall apply to taxable years beginning after
December 31, 2008.
(3) 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. 107. 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 $800,000,000 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
[[Page 122 STAT. 3818]]
``(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) <<NOTE: 26 USC 54A.>>
is amended to read as follows:
``(1) <<NOTE: Definition.>> 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).''.
[[Page 122 STAT. 3819]]
(2) Subparagraph (C) of section 54A(d)(2) <<NOTE: 26 USC
54A.>> 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) Extension for Clean Renewable Energy Bonds.--Subsection (m) of
section 54 is amended by striking ``December 31, 2008'' and inserting
``December 31, 2009''.
(d) <<NOTE: 26 USC 54 note.>> Effective Date.--The amendments made
by this section shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 108. CREDIT FOR STEEL INDUSTRY FUEL.
(a) Treatment as Refined Coal.--
(1) In general.--Subparagraph (A) of section 45(c)(7) of the
Internal Revenue Code of 1986 (relating to refined coal), as
amended by this Act, is amended to read as follows:
``(A) <<NOTE: Definition.>> In general.--The term
`refined coal' means a fuel--
``(i) which--
``(I) is a liquid, gaseous, or solid
fuel produced from coal (including
lignite) or high carbon fly ash,
including such fuel used as a feedstock,
``(II) is sold by the taxpayer with
the reasonable expectation that it will
be used for purpose of producing steam,
``(III) is certified by the taxpayer
as resulting (when used in the
production of steam) in a qualified
emission reduction, and
``(IV) is produced in such a manner
as to result in an increase of at least
50 percent in the market value of the
refined coal (excluding any increase
caused by materials combined or added
during the production process), as
compared to the value of the feedstock
coal, or
``(ii) which is steel industry fuel.''.
(2) Steel industry fuel defined.--Paragraph (7) of section
45(c) of such Code is amended by adding at the end the following
new subparagraph:
``(C) Steel industry fuel.--
``(i) In general.--The term `steel industry
fuel' means a fuel which--
``(I) is produced through a process
of liquifying coal waste sludge and
distributing it on coal, and
``(II) is used as a feedstock for
the manufacture of coke.
``(ii) Coal waste sludge.--The term `coal
waste sludge' means the tar decanter sludge and
related
[[Page 122 STAT. 3820]]
byproducts of the coking process, including such
materials that have been stored in ground, in
tanks and in lagoons, that have been treated as
hazardous wastes under applicable Federal
environmental rules absent liquefaction and
processing with coal into a feedstock for the
manufacture of coke.''.
(b) Credit Amount.--
(1) <<NOTE: Applicability. 26 USC 45.>> In general.--
Paragraph (8) of section 45(e) of the Internal Revenue Code of
1986 (relating to refined coal production facilities) is amended
by adding at the end the following new subparagraph
``(D) Special rule for steel industry fuel.--
``(i) In general.--In the case of a taxpayer
who produces steel industry fuel--
``(I) this paragraph shall be
applied separately with respect to steel
industry fuel and other refined coal,
and
``(II) in applying this paragraph to
steel industry fuel, the modifications
in clause (ii) shall apply.
``(ii) Modifications.--
``(I) Credit amount.--Subparagraph
(A) shall be applied by substituting `$2
per barrel-of-oil equivalent' for
`$4.375 per ton'.
``(II) Credit period.--In lieu of
the 10-year period referred to in
clauses (i) and (ii)(II) of subparagraph
(A), the credit period shall be the
period beginning on the later of the
date such facility was originally placed
in service, the date the modifications
described in clause (iii) were placed in
service, or October 1, 2008, and ending
on the later of December 31, 2009, or
the date which is 1 year after the date
such facility or the modifications
described in clause (iii) were placed in
service.
``(III) No phaseout.--Subparagraph
(B) shall not apply.
``(iii) Modifications.--The modifications
described in this clause are modifications to an
existing facility which allow such facility to
produce steel industry fuel.
``(iv) Barrel-of-oil equivalent.--For purposes
of this subparagraph, a barrel-of-oil equivalent
is the amount of steel industry fuel that has a
Btu content of 5,800,000 Btus.''.
(2) Inflation adjustment.--Paragraph (2) of section 45(b) of
such Code is amended by inserting ``the $3 amount in subsection
(e)(8)(D)(ii)(I),'' after ``subsection (e)(8)(A),''.
(c) Termination.--Paragraph (8) of section 45(d) of the Internal
Revenue Code of 1986 (relating to refined coal production facility), as
amended by this Act, is amended to read as follows:
``(8) Refined coal production facility.--In the case of a
facility that produces refined coal, the term `refined coal
production facility' means--
``(A) with respect to a facility producing steel
industry fuel, any facility (or any modification to a
facility) which is placed in service before January 1,
2010, and
[[Page 122 STAT. 3821]]
``(B) with respect to any other facility producing
refined coal, any facility placed in service after the
date of the enactment of the American Jobs Creation Act
of 2004 and before January 1, 2010.''.
(d) Coordination With Credit for Producing Fuel From a
Nonconventional Source.--
(1) In general.--Subparagraph (B) of section 45(e)(9) of the
Internal Revenue Code of 1986 <<NOTE: 26 USC 45.>> is amended--
(A) by striking ``The term'' and inserting the
following:
``(i) In general.--The term'', and
(B) by adding at the end the following new clause:
``(ii) Exception for steel industry coal.--In
the case of a facility producing steel industry
fuel, clause (i) shall not apply to so much of the
refined coal produced at such facility as is steel
industry fuel.''.
(2) No double benefit.--Section 45K(g)(2) of such Code is
amended by adding at the end the following new subparagraph:
``(E) Coordination with section 45.--No credit shall
be allowed with respect to any qualified fuel which is
steel industry fuel (as defined in section 45(c)(7)) if
a credit is allowed to the taxpayer for such fuel under
section 45.''.
(e) <<NOTE: 26 USC 45 note.>> Effective Date.--The amendments made
by this section shall apply to fuel produced and sold after September
30, 2008.
SEC. 109. 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
[[Page 122 STAT. 3822]]
not include any property which is located outside the
United States.''.
(d) <<NOTE: 26 USC 451 note.>> 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.
Subtitle B--Carbon Mitigation and Coal Provisions
SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT
INVESTMENT CREDIT.
(a) Modification of Credit Amount.--Section 48A(a) <<NOTE: 26 USC
48A.>> 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) <<NOTE: Certification.>> 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
[[Page 122 STAT. 3823]]
``(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) <<NOTE: 26 USC
48A.>> 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) <<NOTE: 26 USC 48A note.>> Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
[[Page 122 STAT. 3824]]
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) <<NOTE: 26 USC
48B.>> 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) Eligible Projects Include Transportation Grade Liquid Fuels.--
Section 48B(c)(7) (defining eligible entity) is amended by striking
``and'' at the end of subparagraph (F), by striking the period at the
end of subparagraph (G) and inserting ``, and'', and by adding at the
end the following new subparagraph:
``(H) transportation grade liquid fuels.''.
(f) <<NOTE: 26 USC 48B note.>> 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; FUNDING OF BLACK
LUNG DISABILITY TRUST FUND.
(a) Extension of Temporary Increase.--Paragraph (2) of section
4121(e) is amended--
[[Page 122 STAT. 3825]]
(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''.
(b) <<NOTE: 26 USC 9501 note.>> Restructuring of Trust Fund Debt.--
(1) Definitions.--For purposes of this subsection--
(A) Market value of the outstanding repayable
advances, plus accrued interest.--The term ``market
value of the outstanding repayable advances, plus
accrued interest'' means the present value (determined
by the Secretary of the Treasury as of the refinancing
date and using the Treasury rate as the discount rate)
of the stream of principal and interest payments derived
assuming that each repayable advance that is outstanding
on the refinancing date is due on the 30th anniversary
of the end of the fiscal year in which the advance was
made to the Trust Fund, and that all such principal and
interest payments are made on September 30 of the
applicable fiscal year.
(B) Refinancing date.--The term ``refinancing date''
means the date occurring 2 days after the enactment of
this Act.
(C) Repayable advance.--The term ``repayable
advance'' means an amount that has been appropriated to
the Trust Fund in order to make benefit payments and
other expenditures that are authorized under section
9501 of the Internal Revenue Code of 1986 and are
required to be repaid when the Secretary of the Treasury
determines that monies are available in the Trust Fund
for such purpose.
(D) Treasury rate.--The term ``Treasury rate'' means
a rate determined by the Secretary of the Treasury,
taking into consideration current market yields on
outstanding marketable obligations of the United States
of comparable maturities.
(E) Treasury 1-year rate.--The term ``Treasury 1-
year rate'' means a rate determined by the Secretary of
the Treasury, taking into consideration current market
yields on outstanding marketable obligations of the
United States with remaining periods to maturity of
approximately 1 year, to have been in effect as of the
close of business 1 business day prior to the date on
which the Trust Fund issues obligations to the Secretary
of the Treasury under paragraph (2)(B).
(2) Refinancing of outstanding principal of repayable
advances and unpaid interest on such advances.--
(A) Transfer to general fund.--On the refinancing
date, the Trust Fund shall repay the market value of the
outstanding repayable advances, plus accrued interest,
by transferring into the general fund of the Treasury
the following sums:
(i) The proceeds from obligations that the
Trust Fund shall issue to the Secretary of the
Treasury in such amounts as the Secretaries of
Labor and the Treasury shall determine and bearing
interest at the Treasury rate, and that shall be
in such forms and denominations and be subject to
such other terms and
[[Page 122 STAT. 3826]]
conditions, including maturity, as the Secretary
of the Treasury shall prescribe.
(ii) All, or that portion, of the
appropriation made to the Trust Fund pursuant to
paragraph (3) that is needed to cover the
difference defined in that paragraph.
(B) Repayment of obligations.--In the event that the
Trust Fund is unable to repay the obligations that it
has issued to the Secretary of the Treasury under
subparagraph (A)(i) and this subparagraph, or is unable
to make benefit payments and other authorized
expenditures, the Trust Fund shall issue obligations to
the Secretary of the Treasury in such amounts as may be
necessary to make such repayments, payments, and
expenditures, with a maturity of 1 year, and bearing
interest at the Treasury 1-year rate. These obligations
shall be in such forms and denominations and be subject
to such other terms and conditions as the Secretary of
the Treasury shall prescribe.
(C) Authority to issue obligations.--The Trust Fund
is authorized to issue obligations to the Secretary of
the Treasury under subparagraphs (A)(i) and (B). The
Secretary of the Treasury is authorized to purchase such
obligations of the Trust Fund. For the purposes of
making such purchases, the Secretary of the Treasury may
use as a public debt transaction the proceeds from the
sale of any securities issued under chapter 31 of title
31, United States Code, and the purposes for which
securities may be issued under such chapter are extended
to include any purchase of such Trust Fund obligations
under this subparagraph.
(3) One-time appropriation.--There is hereby appropriated to
the Trust Fund an amount sufficient to pay to the general fund
of the Treasury the difference between--
(A) the market value of the outstanding repayable
advances, plus accrued interest; and
(B) the proceeds from the obligations issued by the
Trust Fund to the Secretary of the Treasury under
paragraph (2)(A)(i).
(4) Prepayment of trust fund obligations.--The Trust Fund is
authorized to repay any obligation issued to the Secretary of
the Treasury under subparagraphs (A)(i) and (B) of paragraph (2)
prior to its maturity date by paying a prepayment price that
would, if the obligation being prepaid (including all unpaid
interest accrued thereon through the date of prepayment) were
purchased by a third party and held to the maturity date of such
obligation, produce a yield to the third-party purchaser for the
period from the date of purchase to the maturity date of such
obligation substantially equal to the Treasury yield on
outstanding marketable obligations of the United States having a
comparable maturity to this period.
SEC. 114. <<NOTE: 26 USC 4121 note.>> SPECIAL RULES FOR REFUND OF
THE COAL EXCISE TAX TO CERTAIN COAL
PRODUCERS AND EXPORTERS.
(a) Refund.--
(1) Coal producers.--
[[Page 122 STAT. 3827]]
(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) <<NOTE: Deadlines.>> 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) <<NOTE: Deadline.>> 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) <<NOTE: Deadlines.>> 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
[[Page 122 STAT. 3828]]
(C) <<NOTE: Deadline.>> 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
[[Page 122 STAT. 3829]]
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. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business credits) is amended by adding at the end the
following new section:
``SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION.
``(a) General Rule.--For purposes of section 38, the carbon dioxide
sequestration credit for any taxable year is an amount equal to the sum
of--
``(1) $20 per metric ton of qualified carbon dioxide which
is--
``(A) captured by the taxpayer at a qualified
facility, and
``(B) disposed of by the taxpayer in secure
geological storage, and
``(2) $10 per metric ton of qualified carbon dioxide which
is--
``(A) captured by the taxpayer at a qualified
facility, and
``(B) used by the taxpayer as a tertiary injectant
in a qualified enhanced oil or natural gas recovery
project.
``(b) Qualified Carbon Dioxide.--For purposes of this section--
``(1) <<NOTE: Definition.>> In general.--The term
`qualified carbon dioxide' means carbon dioxide captured from an
industrial source which--
[[Page 122 STAT. 3830]]
``(A) would otherwise be released into the
atmosphere as industrial emission of greenhouse gas, and
``(B) is measured at the source of capture and
verified at the point of disposal or injection.
``(2) Recycled carbon dioxide.--The term `qualified carbon
dioxide' includes the initial deposit of captured carbon dioxide
used as a tertiary injectant. Such term does not include carbon
dioxide that is re-captured, recycled, and re-injected as part
of the enhanced oil and natural gas recovery process.
``(c) Qualified Facility.--For purposes of this section, the term
`qualified facility' means any industrial facility--
``(1) which is owned by the taxpayer,
``(2) at which carbon capture equipment is placed in
service, and
``(3) which captures not less than 500,000 metric tons of
carbon dioxide during the taxable year.
``(d) Special Rules and Other Definitions.--For purposes of this
section--
``(1) Only carbon dioxide captured and disposed of or used
within the united states taken into account.--The credit under
this section shall apply only with respect to qualified carbon
dioxide the capture and disposal or use of which is within--
``(A) the United States (within the meaning of
section 638(1)), or
``(B) a possession of the United States (within the
meaning of section 638(2)).
``(2) <<NOTE: Regulations.>> Secure geological storage.--
The Secretary, in consultation with the Administrator of the
Environmental Protection Agency, shall establish regulations for
determining adequate security measures for the geological
storage of carbon dioxide under subsection (a)(1)(B) such that
the carbon dioxide does not escape into the atmosphere. Such
term shall include storage at deep saline formations and
unminable coal seems under such conditions as the Secretary may
determine under such regulations.
``(3) Tertiary injectant.--The term `tertiary injectant' has
the same meaning as when used within section 193(b)(1).
``(4) Qualified enhanced oil or natural gas recovery
project.--The term `qualified enhanced oil or natural gas
recovery project' has the meaning given the term `qualified
enhanced oil recovery project' by section 43(c)(2), by
substituting `crude oil or natural gas' for `crude oil' in
subparagraph (A)(i) thereof.
``(5) Credit attributable to taxpayer.--Any credit under
this section shall be attributable to the person that captures
and physically or contractually ensures the disposal of or the
use as a tertiary injectant of the qualified carbon dioxide,
except to the extent provided in regulations prescribed by the
Secretary.
``(6) <<NOTE: Regulations.>> Recapture.--The Secretary
shall, by regulations, provide for recapturing the benefit of
any credit allowable under subsection (a) with respect to any
qualified carbon dioxide which ceases to be captured, disposed
of, or used as a tertiary injectant in a manner consistent with
the requirements of this section.
[[Page 122 STAT. 3831]]
``(7) Inflation adjustment.--In the case of any taxable year
beginning in a calendar year after 2009, there shall be
substituted for each dollar amount contained in subsection (a)
an amount equal to the product of--
``(A) such dollar amount, multiplied by
``(B) the inflation adjustment factor for such
calendar year determined under section 43(b)(3)(B) for
such calendar year, determined by substituting `2008'
for `1990'.
``(e) Application of Section.--The credit under this section shall
apply with respect to qualified carbon dioxide before the end of the
calendar year in which the Secretary, in consultation with the
Administrator of the Environmental Protection Agency, certifies that
75,000,000 metric tons of qualified carbon dioxide have been captured
and disposed of or used as a tertiary injectant.''.
(b) Conforming Amendment.--Section 38(b) <<NOTE: 26 USC 38.>>
(relating to general business credit) 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 of
following new paragraph:
``(34) the carbon dioxide sequestration credit determined
under section 45Q(a).''.
(c) Clerical Amendment.--The table of sections for subpart B of part
IV of subchapter A of chapter 1 (relating to other credits) is amended
by adding at the end the following new section:
``Sec. 45Q. Credit for carbon dioxide sequestration.''.
(d) <<NOTE: 26 USC 38 note.>> Effective Date.--The amendments made
by this section shall apply to carbon dioxide captured after the date of
the enactment of this Act.
SEC. 116. CERTAIN INCOME AND GAINS RELATING TO INDUSTRIAL SOURCE
CARBON DIOXIDE TREATED AS QUALIFYING
INCOME FOR PUBLICLY TRADED PARTNERSHIPS.
(a) In General.--Subparagraph (E) of section 7704(d)(1) (defining
qualifying income) is amended by inserting ``or industrial source carbon
dioxide'' after ``timber)''.
(b) <<NOTE: 26 USC 7704 note.>> Effective Date.--The amendment made
by this section shall take effect on the date of the enactment of this
Act, in taxable years ending after such date.
SEC. 117. CARBON AUDIT OF THE TAX CODE.
(a) <<NOTE: Contracts.>> 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 2009 and 2010.
[[Page 122 STAT. 3832]]
TITLE II--TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS
SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS DEPRECIATION
FOR BIOMASS ETHANOL PLANT PROPERTY.
(a) In General.--Paragraph (3) of section 168(l) <<NOTE: 26 USC
168.>> 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) <<NOTE: Applicability. 26 USC 168 note.>> 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. 202. 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
[[Page 122 STAT. 3833]]
(3) by inserting ``, or other equivalent standard approved
by the Secretary'' after ``D396''.
(d) Coproduction of Renewable Diesel With Petroleum Feedstock.--
(1) In general.--Paragraph (3) <<NOTE: 26 USC 40A.>> of
section 40A(f) is amended by adding at the end the following new
sentences: ``Such term does not include any fuel derived from
coprocessing biomass with a feedstock which is not
biomass. <<NOTE: Definition.>> 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.--Subsection (f) of section
40A (relating to renewable diesel) is amended by adding at the end the
following new paragraph:
``(4) Certain aviation fuel.--
``(A) In general.--Except as provided in the last 3
sentences of paragraph (3), the term `renewable diesel'
shall include 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.
``(B) Application of mixture credits.--In the case
of fuel which is treated as renewable diesel solely by
reason of subparagraph (A), subsection (b)(1) and
section 6426(c) shall be applied with respect to such
fuel by treating kerosene as though it were diesel
fuel.''.
(f) Modification Relating to Definition of Agri-Biodiesel.--
Paragraph (2) of section 40A(d) (relating to agri-biodiesel) is amended
by striking ``and mustard seeds'' and inserting ``mustard seeds, and
camelina''.
(g) <<NOTE: Applicability. 26 USC 40A note.>> 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 amendment made by subsection (d) shall apply to
fuel produced, and sold or used, after the date of the enactment
of this Act.
SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO
PROVIDE AN INCENTIVE FOR UNITED STATES
PRODUCTION.
(a) Alcohol Fuels Credit.--Subsection (d) of section 40 is amended
by adding at the end the following new paragraph:
``(7) 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.
[[Page 122 STAT. 3834]]
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 <<NOTE: 26 USC 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) <<NOTE: Applicability. 26 USC 40 note.>> Effective Date.--The
amendments made by this section shall apply to claims for credit or
payment made on or after May 15, 2008.
SEC. 204. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL CREDIT.
(a) Extension.--
(1) Alternative fuel credit.--Paragraph (4) of section
6426(d) (relating to alternative fuel credit) is amended by
striking ``September 30, 2009'' and inserting ``December 31,
2009''.
(2) Alternative fuel mixture credit.--Paragraph (3) of
section 6426(e) (relating to alternative fuel mixture credit) is
amended by striking ``September 30, 2009'' and inserting
``December 31, 2009''.
(3) Payments.--Subparagraph (C) of section 6427(e)(5)
(relating to termination) is amended by striking ``September 30,
2009'' and inserting ``December 31, 2009''.
(b) Modifications.--
(1) Alternative fuel to include compressed or liquified
biomass gas.--Paragraph (2) of section 6426(d) (relating to
alternative fuel credit) is amended by striking ``and'' at the
end of subparagraph (E), by redesignating subparagraph (F) as
subparagraph (G), and by inserting after subparagraph (E) the
following new subparagraph:
``(F) compressed or liquefied gas derived from
biomass (as defined in section 45K(c)(3)), and''.
(2) Credit allowed for aviation use of fuel.--Paragraph (1)
of section 6426(d) is amended by inserting ``sold by the
taxpayer for use as a fuel in aviation,'' after ``motorboat,''.
(c) Carbon Capture Requirement for Certain Fuels.--
[[Page 122 STAT. 3835]]
(1) In general.--Subsection (d) of section 6426, as amended
by subsection (a), is amended by redesignating paragraph (4) as
paragraph (5) and by inserting after paragraph (3) the following
new paragraph:
``(4) Carbon capture requirement.--
``(A) <<NOTE: Certification.>> In general.--The
requirements of this paragraph are met if the fuel is
certified, under such procedures as required by the
Secretary, as having been derived from coal produced at
a gasification facility which separates and sequesters
not less than the applicable percentage of such
facility's total carbon dioxide emissions.
``(B) Applicable percentage.--For purposes of
subparagraph (A), the applicable percentage is--
``(i) 50 percent in the case of fuel produced
after September 30, 2009, and on or before
December 30, 2009, and
``(ii) 75 percent in the case of fuel produced
after December 30, 2009.''.
(2) Conforming amendment.--Subparagraph (E) of section
6426(d)(2) is <<NOTE: 26 USC 6426.>> amended by inserting
``which meets the requirements of paragraph (4) and which is''
after ``any liquid fuel''.
(d) <<NOTE: 26 USC 6426 note.>> Effective Date.--The amendments
made by this section shall apply to fuel sold or used after the date of
the enactment of this Act.
SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR
VEHICLES.
(a) Plug-in Electric Drive Motor Vehicle Credit.--Subpart B of part
IV of subchapter A of chapter 1 (relating to other credits) 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.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an
amount equal to the applicable amount with respect to each new
qualified plug-in electric drive motor vehicle placed in service
by the taxpayer during the taxable year.
``(2) Applicable amount.--For purposes of paragraph (1), the
applicable amount is sum of--
``(A) $2,500, plus
``(B) $417 for each kilowatt hour of traction
battery capacity in excess of 4 kilowatt hours.
``(b) Limitations.--
``(1) Limitation based on weight.--The amount of the credit
allowed under subsection (a) by reason of subsection (a)(2)
shall not exceed--
``(A) $7,500, in the case of any new qualified plug-
in electric drive motor vehicle with a gross vehicle
weight rating of not more than 10,000 pounds,
``(B) $10,000, in the case of any new qualified
plug-in electric drive motor vehicle with a gross
vehicle weight rating of more than 10,000 pounds but not
more than 14,000 pounds,
``(C) $12,500, in the case of any new qualified
plug-in electric drive motor vehicle with a gross
vehicle weight
[[Page 122 STAT. 3836]]
rating of more than 14,000 pounds but not more than
26,000 pounds, and
``(D) $15,000, in the case of any new qualified
plug-in electric drive motor vehicle with a gross
vehicle weight rating of more than 26,000 pounds.
``(2) Limitation on number of passenger vehicles and light
trucks eligible for credit.--
``(A) 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.
``(B) 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 total
number of such new qualified plug-in electric drive
motor vehicles sold for use in the United States after
December 31, 2008, is at least 250,000.
``(C) Applicable percentage.--For purposes of
subparagraph (A), the applicable percentage is--
``(i) 50 percent for the first 2 calendar
quarters of the phaseout period,
``(ii) 25 percent for the 3d and 4th calendar
quarters of the phaseout period, and
``(iii) 0 percent for each calendar quarter
thereafter.
``(D) Controlled groups.--Rules similar to the rules
of section 30B(f)(4) shall apply for purposes of this
subsection.
``(c) New Qualified Plug-in Electric Drive Motor Vehicle.--For
purposes of this section, the term `new qualified plug-in electric drive
motor vehicle' means a motor vehicle--
``(1) which draws propulsion using a traction battery with
at least 4 kilowatt hours of capacity,
``(2) which uses an offboard source of energy to recharge
such battery,
``(3) which, in the case of a passenger vehicle or light
truck which has a gross vehicle weight rating of not more than
8,500 pounds, has received a certificate of conformity under the
Clean Air Act and meets or exceeds the equivalent qualifying
California low emission vehicle standard under section 243(e)(2)
of the Clean Air Act for that make and model year, and
``(A) in the case of a vehicle having a gross
vehicle weight rating of 6,000 pounds or less, 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
``(B) in the case of a vehicle having a gross
vehicle weight rating of more than 6,000 pounds but not
more than 8,500 pounds, the Bin 8 Tier II emission
standard which is so established,
``(4) the original use of which commences with the taxpayer,
``(5) which is acquired for use or lease by the taxpayer and
not for resale, and
``(6) which is made by a manufacturer.
``(d) Application With Other Credits.--
[[Page 122 STAT. 3837]]
``(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.
``(e) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Motor vehicle.--The term `motor vehicle' has the
meaning given such term by section 30(c)(2).
``(2) 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.).
``(3) Traction battery capacity.--Traction battery capacity
shall be measured in kilowatt hours from a 100 percent state of
charge to a zero percent state of charge.
``(4) Reduction in basis.--For purposes of this subtitle,
the basis of any property for which a credit is allowable under
subsection (a) shall be reduced by the amount of such credit so
allowed.
``(5) No double benefit.--The amount of any deduction or
other credit allowable under this chapter for a new qualified
plug-in electric drive motor vehicle shall be reduced by the
amount of credit allowed under subsection (a) for such vehicle
for the taxable year.
``(6) Property used by tax-exempt entity.--In the case of a
vehicle the use of which is described in paragraph (3) or (4) of
section 50(b) and which is not subject to a lease, the person
who sold such vehicle to the person or entity using such vehicle
shall be treated as the taxpayer that placed such vehicle in
service, but only if such person clearly discloses to such
person or entity in a document the amount of any credit
allowable under subsection (a) with respect to such vehicle
(determined without regard to subsection (b)(2)).
``(7) Property used outside united states, etc., not
qualified.--No credit shall be allowable under subsection (a)
[[Page 122 STAT. 3838]]
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.
``(8) <<NOTE: Regulations.>> 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
(including recapture in the case of a lease period of less than
the economic life of a vehicle).
``(9) Election to not take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects not to have this section apply to such vehicle.
``(10) Interaction with air quality and motor vehicle safety
standards.--Unless otherwise provided in this section, a motor
vehicle shall not be considered eligible for a credit under this
section unless such vehicle is in compliance with--
``(A) the applicable provisions of the Clean Air Act
for the applicable make and model year of the vehicle
(or applicable air quality provisions of State law in
the case of a State which has adopted such provision
under a waiver under section 209(b) of the Clean Air
Act), and
``(B) the motor vehicle safety provisions of
sections 30101 through 30169 of title 49, United States
Code.
``(f) Regulations.--
``(1) In general.--Except as provided in paragraph (2), the
Secretary shall promulgate such regulations as necessary to
carry out the provisions of this section.
``(2) Coordination in prescription of certain regulations.--
The Secretary of the Treasury, in coordination with the
Secretary of Transportation and the Administrator of the
Environmental Protection Agency, shall prescribe such
regulations as necessary to determine whether a motor vehicle
meets the requirements to be eligible for a credit under this
section.
``(g) Termination.--This section shall not apply to property
purchased after December 31, 2014.''.
(b) Coordination With Alternative Motor Vehicle Credit.--Section
30B(d)(3) <<NOTE: 26 USC 30B.>> 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 (d)
thereof) shall not be taken into account under this
section.''.
(c) Credit Made Part of General Business Credit.--Section 38(b), as
amended by this Act, is amended by striking ``plus'' at the end of
paragraph (33), by striking the period at the end of paragraph (34) and
inserting ``plus'', and by adding at the end the following new
paragraph:
``(35) the portion of the new qualified plug-in electric
drive motor vehicle credit to which section 30D(d)(1)
applies.''.
(d) Conforming Amendments.--
(1)(A) Section 24(b)(3)(B), as amended by section 106, 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 106, is amended
by striking ``and 25D'' and inserting ``, 25D, and 30D''.
[[Page 122 STAT. 3839]]
(D) Section 26(a)(1), as amended by section 106, is amended
by striking ``and 25D'' and inserting ``25D, and 30D''.
(E) Section 1400C(d)(2) <<NOTE: 26 USC 1400C.>> 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(e)(4).''.
(3) Section 6501(m) is amended by inserting ``30D(e)(9),''
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) <<NOTE: Applicability. 26 USC 24 note.>> Effective Date.--The
amendments made by this section shall apply to taxable years beginning
after December 31, 2008.
(f) <<NOTE: 26 USC 24 note.>> 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. 206. 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) <<NOTE: Applicability. 26 USC 4053 note.>> Effective Date.--The
amendment made by this section shall apply to sales or installations
after the date of the enactment of this Act.
SEC. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.
(a) Extension of Credit.--Paragraph (2) of section 30C(g) is amended
by striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(b) Inclusion of Electricity as a Clean-Burning Fuel.--Section
30C(c)(2) is amended by adding at the end the following new
subparagraph:
``(C) Electricity.''.
[[Page 122 STAT. 3840]]
(c) <<NOTE: Applicability. 26 USC 30C note.>> 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. 208. 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) <<NOTE: 26 USC 7704.>> of section
7704(d)(1), as amended by this Act, is amended by striking ``or
industrial source carbon dioxide'' and inserting ``, industrial source
carbon dioxide, or the transportation or storage 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) <<NOTE: 26 USC 7704 note.>> Effective Date.--The amendment made
by this section shall take effect on the date of the enactment of this
Act, in taxable years ending after such date.
SEC. 209. EXTENSION AND MODIFICATION OF ELECTION TO EXPENSE
CERTAIN REFINERIES.
(a) Extension.--Paragraph (1) of section 179C(c) (relating to
qualified refinery property) is amended--
(1) by striking ``January 1, 2012'' in subparagraph (B) and
inserting ``January 1, 2014'', and
(2) by striking ``January 1, 2008'' each place it appears in
subparagraph (F) and inserting ``January 1, 2010''.
(b) Inclusion of Fuel Derived From Shale and Tar Sands.--
(1) In general.--Subsection (d) of section 179C is amended
by inserting ``, or directly from shale or tar sands'' after
``(as defined in section 45K(c))''.
(2) Conforming amendment.--Paragraph (2) of section 179C(e)
is amended by inserting ``shale, tar sands, or'' before
``qualified fuels''.
(c) <<NOTE: Applicability. 26 USC 179C note.>> 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. 210. EXTENSION OF SUSPENSION OF TAXABLE INCOME LIMIT ON
PERCENTAGE DEPLETION FOR OIL AND NATURAL
GAS PRODUCED FROM MARGINAL PROPERTIES.
Subparagraph (H) of section 613A(c)(6) (relating to oil and gas
produced from marginal properties) is amended by striking ``for any
taxable year'' and all that follows and inserting ``for any taxable
year--
``(i) beginning after December 31, 1997, and
before January 1, 2008, or
``(ii) beginning after December 31, 2008, and
before January 1, 2010.''.
SEC. 211. 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),
[[Page 122 STAT. 3841]]
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) <<NOTE: 26 USC
132.>> 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) <<NOTE: Applicability. 26 USC 132 note.>> Effective Date.--The
amendments made by this section shall apply to taxable years beginning
after December 31, 2008.
TITLE III--ENERGY CONSERVATION AND EFFICIENCY PROVISIONS
SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS.
(a) In General.--Subpart I of part IV of subchapter A of chapter 1,
as amended by section 107, 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
[[Page 122 STAT. 3842]]
``(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 $800,000,000.
``(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--
[[Page 122 STAT. 3843]]
``(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.--
[[Page 122 STAT. 3844]]
(1) Paragraph (1) of section 54A(d), as amended by this Act,
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
this Act, 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, as amended by this Act, is amended by
adding at the end the following new item:
``Sec. 54D. Qualified energy conservation bonds.''.
(c) <<NOTE: Applicability. 26 USC 54A note.>> Effective Date.--The
amendments made by this section shall apply to obligations issued after
the date of the enactment of this Act.
SEC. 302. CREDIT FOR NONBUSINESS ENERGY PROPERTY.
(a) Extension of Credit.--Section 25C(g) is amended by striking
``placed in service after December 31, 2007'' and inserting ``placed in
service--
``(1) after December 31, 2007, and before January 1, 2009,
or
``(2) after December 31, 2009.''.
(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''.
[[Page 122 STAT. 3845]]
(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) <<NOTE: Public information.>> 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) <<NOTE: 26 USC 25C.>> 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) <<NOTE: Applicability. 26 USC 25C note.>> Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made this section shall apply to expenditures made
after December 31, 2008.
(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. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
Subsection (h) of section 179D is amended by striking ``December 31,
2008'' and inserting ``December 31, 2013''.
SEC. 304. NEW ENERGY EFFICIENT HOME CREDIT.
Subsection (g) of section 45L (relating to termination) is amended
by striking ``December 31, 2008'' and inserting ``December 31, 2009''.
SEC. 305. 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
[[Page 122 STAT. 3846]]
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 <<NOTE: 26 USC 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''.
[[Page 122 STAT. 3847]]
(c) Types of Energy Efficient Appliances.--Subsection (d) of section
45M <<NOTE: 26 USC 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.
[[Page 122 STAT. 3848]]
``(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) <<NOTE: Applicability. 26 USC 45M note.>> Effective Date.--The
amendments made by this section shall apply to appliances produced after
December 31, 2007.
SEC. 306. 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--
``(i) is placed in service by a taxpayer who
is a supplier of electric energy or a provider of
electric energy services, and
``(ii) does not have a class life (determined
without regard to subsection (e)) of less than 10
years.
``(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
which--
``(i) is 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, and
``(ii) does not have a class life (determined
without regard to subsection (e)) of less than 10
years.
``(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,
[[Page 122 STAT. 3849]]
``(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) <<NOTE: 26 USC 168.>> 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) <<NOTE: Applicability. 26 USC 168 note.>> 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. 307. 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 <<NOTE: 26 USC 142 note.>> is
amended by striking ``issuance,'' and inserting ``issuance of the last
issue with respect to such project,''.
SEC. 308. 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) <<NOTE: Effective date.>> the
original use of which commences with the taxpayer
after August 31, 2008, and
[[Page 122 STAT. 3850]]
``(iv) which is--
``(I) <<NOTE: Effective dates.>>
acquired by purchase (as defined in
section 179(d)(2)) by the taxpayer after
August 31, 2008, but only if no written
binding contract for the acquisition was
in effect before September 1, 2008, or
``(II) <<NOTE: Effective date.>>
acquired by the taxpayer pursuant to a
written binding contract which was
entered into after August 31, 2008.
``(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 <<NOTE: Effective date.>> 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 August 31, 2008.
``(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--
[[Page 122 STAT. 3851]]
``(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) <<NOTE: Applicability. 26 USC 168 note.>> Effective Date.--The
amendment made by this section shall apply to property placed in service
after August 31, 2008.
TITLE IV--REVENUE PROVISIONS
SEC. 401. LIMITATION OF DEDUCTION FOR INCOME ATTRIBUTABLE TO
DOMESTIC PRODUCTION OF OIL, GAS, OR
PRIMARY PRODUCTS THEREOF.
(a) In General.--Section 199(d) <<NOTE: 26 USC 199.>> is amended by
redesignating paragraph (9) as paragraph (10) and by inserting after
paragraph (8) the following new paragraph:
``(9) Special rule for taxpayers with oil related qualified
production activities income.--
``(A) In general.--If a taxpayer has oil related
qualified production activities income for any taxable
year beginning after 2009, the amount otherwise
allowable as a deduction under subsection (a) shall be
reduced by 3 percent of the least of--
``(i) the oil related qualified production
activities income of the taxpayer for the taxable
year,
``(ii) the qualified production activities
income of the taxpayer for the taxable year, or
``(iii) taxable income (determined without
regard to this section).
``(B) Oil related qualified production activities
income.--For purposes of this paragraph, the term `oil
related qualified production activities income' means
for any taxable year the qualified production activities
income which is attributable to the production,
refining, processing, transportation, or distribution of
oil, gas, or any primary product thereof during such
taxable year.
``(C) Primary product.--For purposes of this
paragraph, the term `primary product' has the same
meaning as when used in section 927(a)(2)(C), as in
effect before its repeal.''.
(b) Conforming Amendment.--Section 199(d)(2) (relating to
application to individuals) is amended by striking ``subsection
(a)(1)(B)'' and inserting ``subsections (a)(1)(B) and (d)(9)(A)(iii)''.
(c) <<NOTE: Applicability. 26 USC 199 note.>> Effective Date.--The
amendments made by this section shall apply to taxable years beginning
after December 31, 2008.
[[Page 122 STAT. 3852]]
SEC. 402. ELIMINATION OF THE DIFFERENT TREATMENT OF FOREIGN OIL
AND GAS EXTRACTION INCOME AND FOREIGN OIL
RELATED INCOME FOR PURPOSES OF THE FOREIGN
TAX CREDIT.
(a) In General.--Subsections (a) and (b) of section 907 <<NOTE: 26
USC 907.>> (relating to special rules in case of foreign oil and gas
income) are amended to read as follows:
``(a) Reduction in Amount Allowed as Foreign Tax Under Section
901.--In applying section 901, the amount of any foreign oil and gas
taxes paid or accrued (or deemed to have been paid) during the taxable
year which would (but for this subsection) be taken into account for
purposes of section 901 shall be reduced by the amount (if any) by which
the amount of such taxes exceeds the product of--
``(1) the amount of the combined foreign oil and gas income
for the taxable year,
``(2) multiplied by--
``(A) in the case of a corporation, the percentage
which is equal to the highest rate of tax specified
under section 11(b), or
``(B) in the case of an individual, a fraction the
numerator of which is the tax against which the credit
under section 901(a) is taken and the denominator of
which is the taxpayer's entire taxable income.
``(b) Combined Foreign Oil and Gas Income; Foreign Oil and Gas
Taxes.--For purposes of this section--
``(1) Combined foreign oil and gas income.--The term
`combined foreign oil and gas income' means, with respect to any
taxable year, the sum of--
``(A) foreign oil and gas extraction income, and
``(B) foreign oil related income.
``(2) Foreign oil and gas taxes.--The term `foreign oil and
gas taxes' means, with respect to any taxable year, the sum of--
``(A) oil and gas extraction taxes, and
``(B) any income, war profits, and excess profits
taxes paid or accrued (or deemed to have been paid or
accrued under section 902 or 960) during the taxable
year with respect to foreign oil related income
(determined without regard to subsection (c)(4)) or loss
which would be taken into account for purposes of
section 901 without regard to this section.''.
(b) Recapture of Foreign Oil and Gas Losses.--Paragraph (4) of
section 907(c) (relating to recapture of foreign oil and gas extraction
losses by recharacterizing later extraction income) is amended to read
as follows:
``(4) Recapture of foreign oil and gas losses by
recharacterizing later combined foreign oil and gas income.--
``(A) In general.--The combined foreign oil and gas
income of a taxpayer for a taxable year (determined
without regard to this paragraph) shall be reduced--
``(i) first by the amount determined under
subparagraph (B), and
``(ii) then by the amount determined under
subparagraph (C).
[[Page 122 STAT. 3853]]
The aggregate amount of such reductions shall be treated
as income (from sources without the United States) which
is not combined foreign oil and gas income.
``(B) Reduction for pre-2009 foreign oil extraction
losses.--The reduction under this paragraph shall be
equal to the lesser of--
``(i) the foreign oil and gas extraction
income of the taxpayer for the taxable year
(determined without regard to this paragraph), or
``(ii) <<NOTE: Effective dates.>> the excess
of--
``(I) the aggregate amount of
foreign oil extraction losses for
preceding taxable years beginning after
December 31, 1982, and before January 1,
2009, over
``(II) so much of such aggregate
amount as was recharacterized under this
paragraph (as in effect before and after
the date of the enactment of the Energy
Improvement and Extension Act of 2008)
for preceding taxable years beginning
after December 31, 1982.
``(C) Reduction for post-2008 foreign oil and gas
losses.--The reduction under this paragraph shall be
equal to the lesser of--
``(i) the combined foreign oil and gas income
of the taxpayer for the taxable year (determined
without regard to this paragraph), reduced by an
amount equal to the reduction under subparagraph
(A) for the taxable year, or
``(ii) <<NOTE: Effective dates.>> the excess
of--
``(I) the aggregate amount of
foreign oil and gas losses for preceding
taxable years beginning after December
31, 2008, over
``(II) so much of such aggregate
amount as was recharacterized under this
paragraph for preceding taxable years
beginning after December 31, 2008.
``(D) Foreign oil and gas loss defined.--
``(i) In general.--For purposes of this
paragraph, the term `foreign oil and gas loss'
means the amount by which--
``(I) the gross income for the
taxable year from sources without the
United States and its possessions
(whether or not the taxpayer chooses the
benefits of this subpart for such
taxable year) taken into account in
determining the combined foreign oil and
gas income for such year, is exceeded by
``(II) the sum of the deductions
properly apportioned or allocated
thereto.
``(ii) Net operating loss deduction not taken
into account.--For purposes of clause (i), the net
operating loss deduction allowable for the taxable
year under section 172(a) shall not be taken into
account.
``(iii) Expropriation and casualty losses not
taken into account.--For purposes of clause (i),
there shall not be taken into account--
[[Page 122 STAT. 3854]]
``(I) any foreign expropriation loss
(as defined in section 172(h) (as in
effect on the day before the date of the
enactment of the Revenue Reconciliation
Act of 1990)) for the taxable year, or
``(II) any loss for the taxable year
which arises from fire, storm,
shipwreck, or other casualty, or from
theft,
to the extent such loss is not compensated for by
insurance or otherwise.
``(iv) <<NOTE: Effective date.>> Foreign oil
extraction loss.--For purposes of subparagraph
(B)(ii)(I), foreign oil extraction losses shall be
determined under this paragraph as in effect on
the day before the date of the enactment of the
Energy Improvement and Extension Act of 2008.''.
(c) Carryback and Carryover of Disallowed Credits.--Section
907(f) <<NOTE: 26 USC 907.>> (relating to carryback and carryover of
disallowed credits) is amended--
(1) by striking ``oil and gas extraction taxes'' each place
it appears and inserting ``foreign oil and gas taxes'', and
(2) by adding at the end the following new paragraph:
``(4) Transition rules for pre-2009 and 2009 disallowed
credits.--
``(A) Pre-2009 credits.--In the case of any unused
credit year beginning before January 1, 2009, this
subsection shall be applied to any unused oil and gas
extraction taxes carried from such unused credit year to
a year beginning after December 31, 2008--
``(i) by substituting `oil and gas extraction
taxes' for `foreign oil and gas taxes' each place
it appears in paragraphs (1), (2), and (3), and
``(ii) by computing, for purposes of paragraph
(2)(A), the limitation under subparagraph (A) for
the year to which such taxes are carried by
substituting `foreign oil and gas extraction
income' for `foreign oil and gas income' in
subsection (a).
``(B) <<NOTE: Effective date.>> 2009 credits.--In
the case of any unused credit year beginning in 2009,
the amendments made to this subsection by the Energy
Improvement and Extension Act of 2008 shall be treated
as being in effect for any preceding year beginning
before January 1, 2009, solely for purposes of
determining how much of the unused foreign oil and gas
taxes for such unused credit year may be deemed paid or
accrued in such preceding year.''.
(d) Conforming Amendment.--Section 6501(i) is amended by striking
``oil and gas extraction taxes'' and inserting ``foreign oil and gas
taxes''.
(e) <<NOTE: 26 USC 907 note.>> Effective Date.--The amendments made
by this section shall apply to taxable years beginning after December
31, 2008.
SEC. 403. 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.--
[[Page 122 STAT. 3855]]
``(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
[[Page 122 STAT. 3856]]
``(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, 2011, in the case of any
specified security which is stock in a corporation
(other than any stock described in clause (ii)),
``(ii) January 1, 2012, in the case of any
stock for which an average basis method is
permissible under section 1012, and
``(iii) January 1, 2013, 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, 2013.
``(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: <<NOTE: Deadline.>> ``The
written statement required under the preceding
sentence shall be furnished on or before
[[Page 122 STAT. 3857]]
February 15 of the year following the calendar
year in which the payment was made.''.
(C) Other statements.--Subsection (b) <<NOTE: 26 USC
6045.>> of section 6045 is amended by adding at the end
the following: <<NOTE: Deadline.>> ``In the case of a
consolidated reporting statement (as defined in
regulations) with respect to any customer, 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 certain funds.--
``(A) In general.--Except as provided in
subparagraph (B), any stock for which an average basis
method is permissible under section 1012 which is
acquired before January 1, 2012, shall be treated as a
separate account from any such stock acquired on or
after such date.
``(B) Election fund for treatment as single
account.--If a fund described in subparagraph (A) 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 such stock
as a nominee.
``(3) Definitions.--For purposes of this section, 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
[[Page 122 STAT. 3858]]
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 <<NOTE: Applicability.>> 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, <<NOTE: Ante, p. 2911.>> 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
[[Page 122 STAT. 3859]]
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 <<NOTE: Regulations.>> 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 <<NOTE: Deadline.>> 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).''.
[[Page 122 STAT. 3860]]
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1), as
amended by the Housing Assistance Tax Act of
2008, <<NOTE: 26 USC 6724.>> 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) <<NOTE: 26 USC 1012 note.>> Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on January 1, 2011.
(2) Extension of period for statements sent to customers.--
The amendments <<NOTE: Applicability.>> made by subsection
(a)(3) shall apply to statements required to be furnished after
December 31, 2008.
SEC. 404. 0.2 PERCENT FUTA SURTAX.
(a) In General.--Section 3301 <<NOTE: 26 USC 3301.>> (relating to
rate of tax) is amended--
(1) by striking ``through 2008'' in paragraph (1) and
inserting ``through 2009'', and
(2) by striking ``calendar year 2009'' in paragraph (2) and
inserting ``calendar year 2010''.
(b) <<NOTE: 26 USC 3301 note.>> Effective Date.--The amendments
made by this section shall apply to wages paid after December 31, 2008.
SEC. 405. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST FUND
TAX.
(a) Increase in Rate.--
(1) In general.--Section 4611(c)(2)(B) (relating to rates)
is amended by striking ``is 5 cents a barrel.'' and inserting
``is--
``(i) in the case of crude oil received or
petroleum products entered before January 1, 2017,
8 cents a barrel, and
``(ii) in the case of crude oil received or
petroleum products entered after December 31,
2016, 9 cents a barrel.''.
(2) <<NOTE: 26 USC 4611 note.>> Effective date.--The
amendment made by this subsection shall apply on and after the
first day of the first calendar quarter beginning more than 60
days after the date of the enactment of this Act.
[[Page 122 STAT. 3861]]
(b) Extension.--
(1) In general.--Section 4611(f) <<NOTE: 26 USC 4611.>>
(relating to application of Oil Spill Liability Trust Fund
financing rate) is amended by striking paragraphs (2) and (3)
and inserting the following new paragraph:
``(2) Termination.--The Oil Spill Liability Trust Fund
financing rate shall not apply after December 31, 2017.''.
(2) Conforming amendment.--Section 4611(f)(1) is amended by
striking ``paragraphs (2) and (3)'' and inserting ``paragraph
(2)''.
(3) <<NOTE: 26 USC 4611 note.>> Effective date.--The
amendments made by this subsection shall take effect on the date
of the enactment of this Act.
DIVISION C--TAX <<NOTE: Tax Extenders and Alternative Minimum Tax Relief
Act of 2008.>> EXTENDERS AND ALTERNATIVE MINIMUM TAX RELIEF
SEC. 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.
(a) <<NOTE: 26 USC 1 note.>> Short Title.--This division may be
cited as the ``Tax Extenders and Alternative Minimum Tax Relief Act of
2008''.
(b) Amendment of 1986 Code.--Except as otherwise expressly provided,
whenever in this division 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 of this division is as
follows:
Sec. 1. Short title; amendment of 1986 Code; table of contents.
TITLE I--ALTERNATIVE MINIMUM TAX RELIEF
Sec. 101. Extension of alternative minimum tax relief for nonrefundable
personal credits.
Sec. 102. Extension of increased alternative minimum tax exemption
amount.
Sec. 103. Increase of AMT refundable credit amount for individuals with
long-term unused credits for prior year minimum tax
liability, etc.
TITLE II--EXTENSION OF INDIVIDUAL TAX PROVISIONS
Sec. 201. Deduction for State and local sales taxes.
Sec. 202. Deduction of qualified tuition and related expenses.
Sec. 203. Deduction for certain expenses of elementary and secondary
school teachers.
Sec. 204. Additional standard deduction for real property taxes for
nonitemizers.
Sec. 205. Tax-free distributions from individual retirement plans for
charitable purposes.
Sec. 206. Treatment of certain dividends of regulated investment
companies.
Sec. 207. Stock in RIC for purposes of determining estates of
nonresidents not citizens.
Sec. 208. Qualified investment entities.
TITLE III--EXTENSION OF BUSINESS TAX PROVISIONS
Sec. 301. Extension and modification of research credit.
Sec. 302. New markets tax credit.
Sec. 303. Subpart F exception for active financing income.
Sec. 304. Extension of look-thru rule for related controlled foreign
corporations.
Sec. 305. 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. 306. Modification of tax treatment of certain payments to
controlling exempt organizations.
[[Page 122 STAT. 3862]]
Sec. 307. Basis adjustment to stock of S corporations making charitable
contributions of property.
Sec. 308. Increase in limit on cover over of rum excise tax to Puerto
Rico and the Virgin Islands.
Sec. 309. Extension of economic development credit for American Samoa.
Sec. 310. Extension of mine rescue team training credit.
Sec. 311. Extension of election to expense advanced mine safety
equipment.
Sec. 312. Deduction allowable with respect to income attributable to
domestic production activities in Puerto Rico.
Sec. 313. Qualified zone academy bonds.
Sec. 314. Indian employment credit.
Sec. 315. Accelerated depreciation for business property on Indian
reservations.
Sec. 316. Railroad track maintenance.
Sec. 317. Seven-year cost recovery period for motorsports racing track
facility.
Sec. 318. Expensing of environmental remediation costs.
Sec. 319. Extension of work opportunity tax credit for Hurricane Katrina
employees.
Sec. 320. Extension of increased rehabilitation credit for structures in
the Gulf Opportunity Zone.
Sec. 321. Enhanced deduction for qualified computer contributions.
Sec. 322. Tax incentives for investment in the District of Columbia.
Sec. 323. Enhanced charitable deductions for contributions of food
inventory.
Sec. 324. Extension of enhanced charitable deduction for contributions
of book inventory.
Sec. 325. Extension and modification of duty suspension on wool
products; wool research fund; wool duty refunds.
TITLE IV--EXTENSION OF TAX ADMINISTRATION PROVISIONS
Sec. 401. Permanent authority for undercover operations.
Sec. 402. Permanent authority for disclosure of information relating to
terrorist activities.
TITLE V--ADDITIONAL TAX RELIEF AND OTHER TAX PROVISIONS
Subtitle A--General Provisions
Sec. 501. $8,500 income threshold used to calculate refundable portion
of child tax credit.
Sec. 502. Provisions related to film and television productions.
Sec. 503. Exemption from excise tax for certain wooden arrows designed
for use by children.
Sec. 504. Income averaging for amounts received in connection with the
Exxon Valdez litigation.
Sec. 505. Certain farming business machinery and equipment treated as 5-
year property.
Sec. 506. Modification of penalty on understatement of taxpayer's
liability by tax return preparer.
Subtitle B--Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008
Sec. 511. Short title.
Sec. 512. Mental health parity.
TITLE VI--OTHER PROVISIONS
Sec. 601. Secure rural schools and community self-determination program.
Sec. 602. Transfer to abandoned mine reclamation fund.
TITLE VII--DISASTER RELIEF
Subtitle A--Heartland and Hurricane Ike Disaster Relief
Sec. 701. Short title.
Sec. 702. Temporary tax relief for areas damaged by 2008 Midwestern
severe storms, tornados, and flooding.
Sec. 703. Reporting requirements relating to disaster relief
contributions.
Sec. 704. Temporary tax-exempt bond financing and low-income housing tax
relief for areas damaged by Hurricane Ike.
Subtitle B--National Disaster Relief
Sec. 706. Losses attributable to federally declared disasters.
Sec. 707. Expensing of Qualified Disaster Expenses.
Sec. 708. Net operating losses attributable to federally declared
disasters.
[[Page 122 STAT. 3863]]
Sec. 709. Waiver of certain mortgage revenue bond requirements following
federally declared disasters.
Sec. 710. Special depreciation allowance for qualified disaster
property.
Sec. 711. Increased expensing for qualified disaster assistance
property.
Sec. 712. Coordination with Heartland disaster relief.
TITLE VIII--SPENDING REDUCTIONS AND APPROPRIATE REVENUE RAISERS FOR NEW
TAX RELIEF POLICY
Sec. 801. Nonqualified deferred compensation from certain tax
indifferent parties.
TITLE I--ALTERNATIVE MINIMUM TAX RELIEF
SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR
NONREFUNDABLE PERSONAL CREDITS.
(a) In General.--Paragraph (2) of section 26(a) <<NOTE: 26 USC
26.>> (relating to special rule for taxable years 2000 through 2007) 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) <<NOTE: 26 USC 26 note.>> Effective Date.--The amendments made
by this section shall apply to taxable years beginning after December
31, 2007.
SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX EXEMPTION
AMOUNT.
(a) In General.--Paragraph (1) of section 55(d) (relating to
exemption amount) 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) <<NOTE: 26 USC 55 note.>> Effective Date.--The amendments made
by this section shall apply to taxable years beginning after December
31, 2007.
SEC. 103. 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 determined under this paragraph 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:
[[Page 122 STAT. 3864]]
``(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) <<NOTE: 26 USC 53 note.>> Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments 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.
TITLE II--EXTENSION OF INDIVIDUAL TAX PROVISIONS
SEC. 201. DEDUCTION FOR STATE AND LOCAL SALES TAXES.
(a) In General.--Subparagraph (I) of section 164(b)(5) <<NOTE: 26
USC 164.>> is amended by striking ``January 1, 2008'' and inserting
``January 1, 2010''.
(b) <<NOTE: 26 USC 164 note.>> Effective Date.--The amendment made
by this section shall apply to taxable years beginning after December
31, 2007.
SEC. 202. DEDUCTION OF QUALIFIED TUITION AND RELATED EXPENSES.
(a) In General.--Subsection (e) of section 222 (relating to
termination) is amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(b) <<NOTE: 26 USC 222 note.>> Effective Date.--The amendment made
by this section shall apply to taxable years beginning after December
31, 2007.
SEC. 203. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND
SECONDARY SCHOOL TEACHERS.
(a) In General.--Subparagraph (D) of section 62(a)(2) (relating to
certain expenses of elementary and secondary school teachers) is amended
by striking ``or 2007'' and inserting ``2007, 2008, or 2009''.
(b) <<NOTE: 26 USC 62 note.>> Effective Date.--The amendment made
by subsection (a) shall apply to taxable years beginning after December
31, 2007.
[[Page 122 STAT. 3865]]
SEC. 204. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY TAXES
FOR NONITEMIZERS.
(a) In General.--Subparagraph (C) of section 63(c)(1), as added by
the Housing Assistance Tax Act of 2008, <<NOTE: 26 USC 63.>> is amended
by inserting ``or 2009'' after ``2008''.
(b) <<NOTE: 26 USC 63 note.>> Effective Date.--The amendment made
by this section shall apply to taxable years beginning after December
31, 2008.
SEC. 205. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS
FOR CHARITABLE PURPOSES.
(a) In General.--Subparagraph (F) of section 408(d)(8) (relating to
termination) is amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(b) <<NOTE: 26 USC 408 note.>> Effective Date.--The amendment made
by this section shall apply to distributions made in taxable years
beginning after December 31, 2007.
SEC. 206. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED INVESTMENT
COMPANIES.
(a) Interest-Related Dividends.--Subparagraph (C) of section
871(k)(1) (defining interest-related dividend) is amended by striking
``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Short-Term Capital Gain Dividends.--Subparagraph (C) of section
871(k)(2) (defining short-term capital gain dividend) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(c) <<NOTE: 26 USC 871 note.>> 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. 207. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF
NONRESIDENTS NOT CITIZENS.
(a) In General.--Paragraph (3) of section 2105(d) (relating to stock
in a RIC) is amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(b) <<NOTE: 26 USC 2105 note.>> Effective Date.--The amendment made
by this section shall apply to decedents dying after December 31, 2007.
SEC. 208. QUALIFIED INVESTMENT ENTITIES.
(a) In General.--Clause (ii) of section 897(h)(4)(A) (relating to
termination) is amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(b) <<NOTE: 26 USC 897 note.>> Effective Date.--The amendment made
by subsection (a) shall take effect on January 1, 2008.
TITLE III--EXTENSION OF BUSINESS TAX PROVISIONS
SEC. 301. EXTENSION AND MODIFICATION OF RESEARCH CREDIT.
(a) Extension.--
(1) In general.--Section 41(h) (relating to termination) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2009'' in paragraph (1)(B).
(2) Conforming amendment.--Subparagraph (D) of section
45C(b)(1) (relating to special rule) is amended by striking
[[Page 122 STAT. 3866]]
``after December 31, 2007'' and inserting ``after December 31,
2009''.
(b) Termination of Alternative Incremental Credit.--Section
41(h) <<NOTE: 26 USC 41.>> is amended by redesignating paragraph (2) as
paragraph (3), and by inserting after paragraph (1) the following new
paragraph:
``(2) Termination of alternative incremental credit.--No
election <<NOTE: Applicability.>> under subsection (c)(4) shall
apply to taxable years beginning after December 31, 2008.''.
(c) Modification of Alternative Simplified Credit.--Paragraph (5)(A)
of section 41(c) (relating to election of alternative simplified credit)
is amended by striking ``12 percent'' and inserting ``14 percent (12
percent in the case of taxable years ending before January 1, 2009)''.
(d) 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.''.
(e) <<NOTE: 26 USC 41 note.>> Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2007.
(2) Extension.--The amendments made by subsection (a) shall
apply to amounts paid or incurred after December 31, 2007.
SEC. 302. NEW MARKETS TAX CREDIT.
Subparagraph (D) of section 45D(f)(1) (relating to national
limitation on amount of investments designated) is amended by striking
``and 2008'' and inserting ``2008, and 2009''.
SEC. 303. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.
(a) Exempt Insurance Income.--Paragraph (10) of section 953(e)
(relating to application) is amended--
(1) by striking ``January 1, 2009'' and inserting ``January
1, 2010'', and
(2) by striking ``December 31, 2008'' and inserting
``December 31, 2009''.
(b) Exception to Treatment as Foreign Personal Holding Company
Income.--Paragraph (9) of section 954(h) (relating to application) is
amended by striking ``January 1, 2009'' and inserting ``January 1,
2010''.
[[Page 122 STAT. 3867]]
SEC. 304. EXTENSION OF LOOK-THRU RULE FOR RELATED CONTROLLED
FOREIGN CORPORATIONS.
(a) In General.--Subparagraph (C) of section <<NOTE: 26 USC 954.>>
954(c)(6) (relating to application) is amended by striking ``January 1,
2009'' and inserting ``January 1, 2010''.
(b) <<NOTE: 26 USC 954 note.>> Effective Date.--The amendment made
by this section shall apply to taxable years of foreign corporations
beginning after December 31, 2007, and to taxable years of United States
shareholders with or within which such taxable years of foreign
corporations end.
SEC. 305. 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) (relating to 15-year property) are each amended by
striking ``January 1, 2008'' and inserting ``January 1, 2010''.
(2) <<NOTE: 26 USC 168 note.>> 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) (relating
to classification of property) is amended to read as follows:
``(7) Qualified restaurant property.--
``(A) In general.--The term `qualified restaurant
property' means any section 1250 property which is--
``(i) a building, if such building is placed
in service after December 31, 2008, and before
January 1, 2010, or
``(ii) 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.
``(B) Exclusion from bonus depreciation.--Property
described in this paragraph shall not be considered
qualified property for purposes of subsection (k).''.
(2) <<NOTE: 26 USC 168 note.>> Effective date.--The
amendment made by this subsection shall apply to property placed
in service after December 31, 2008.
(c) Recovery Period for Depreciation of Certain Improvements to
Retail Space.--
(1) 15-year recovery period.--Section 168(e)(3)(E) (relating
to 15-year property) 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 after December 31,
2008, and before January 1, 2010.''.
(2) Qualified retail improvement property.--Section 168(e)
is amended by adding at the end the following new paragraph:
``(8) Qualified retail improvement property.--
[[Page 122 STAT. 3868]]
``(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.
``(D) Exclusion from bonus depreciation.--Property
described in this paragraph shall not be considered
qualified property for purposes of subsection (k).
``(E) Termination.--Such term shall not include any
improvement placed in service after December 31,
2009.''.
(3) Requirement to use straight line method.--Section
168(b)(3) is <<NOTE: 26 USC 168.>> 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) <<NOTE: 26 USC 168 note.>> Effective date.--The
amendments made by this subsection shall apply to property
placed in service after December 31, 2008.
SEC. 306. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS TO
CONTROLLING EXEMPT ORGANIZATIONS.
(a) In General.--Clause (iv) of section 512(b)(13)(E) (relating to
termination) is amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(b) <<NOTE: 26 USC 512 note.>> Effective Date.--The amendment made
by this section shall apply to payments received or accrued after
December 31, 2007.
[[Page 122 STAT. 3869]]
SEC. 307. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING
CHARITABLE CONTRIBUTIONS OF PROPERTY.
(a) In General.--The last sentence of section <<NOTE: 26 USC
1367.>> 1367(a)(2) (relating to decreases in basis) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made in taxable years beginning after December 31,
2007.
SEC. 308. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX TO
PUERTO RICO AND THE VIRGIN ISLANDS.
(a) In General.--Paragraph (1) of section 7652(f) is amended by
striking ``January 1, 2008'' and inserting ``January 1, 2010''.
(b) <<NOTE: 26 USC 7652 note.>> Effective Date.--The amendment made
by this section shall apply to distilled spirits brought into the United
States after December 31, 2007.
SEC. 309. EXTENSION OF 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 <<NOTE: 26 USC 30A note.>> is
amended--
(1) by striking ``first two taxable years'' and inserting
``first 4 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2010''.
(b) <<NOTE: 26 USC 30A note.>> Effective Date.--The amendments made
by this section shall apply to taxable years beginning after December
31, 2007.
SEC. 310. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT.
Section 45N(e) (relating to termination) is amended by striking
``December 31, 2008'' and inserting ``December 31, 2009''.
SEC. 311. EXTENSION OF ELECTION TO EXPENSE ADVANCED MINE SAFETY
EQUIPMENT.
Section 179E(g) (relating to termination) is amended by striking
``December 31, 2008'' and inserting ``December 31, 2009''.
SEC. 312. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME ATTRIBUTABLE
TO DOMESTIC PRODUCTION ACTIVITIES IN
PUERTO RICO.
(a) In General.--Subparagraph (C) of section 199(d)(8) (relating to
termination) is amended--
(1) by striking ``first 2 taxable years'' and inserting
``first 4 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2010''.
(b) <<NOTE: 26 USC 199 note.>> Effective Date.--The amendments made
by this section shall apply to taxable years beginning after December
31, 2007.
SEC. 313. QUALIFIED ZONE ACADEMY BONDS.
(a) In General.--Subpart I of part IV of subchapter A of chapter 1
is amended by adding at the end the following new section:
``SEC. 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--
[[Page 122 STAT. 3870]]
``(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) <<NOTE: Certification.>> the issuer--
``(A) designates such bond for purposes of this
section,
``(B) certifies that it has written assurances that
the private business contribution requirement of
subsection (b) will be met with respect to such academy,
and
``(C) certifies that it has the written approval of
the eligible local education agency for such bond
issuance.
``(b) Private Business Contribution Requirement.--For purposes of
subsection (a), the private business contribution requirement of this
subsection is met with respect to any issue if the eligible local
education agency that established the qualified zone academy has written
commitments from private entities to make qualified contributions having
a present value (as of the date of issuance of the issue) of not less
than 10 percent of the proceeds of the issue.
``(c) Limitation on Amount of Bonds Designated.--
``(1) National limitation.--There is a national zone academy
bond limitation for each calendar year. Such limitation is
$400,000,000 for 2008 and 2009, and, except as provided in
paragraph (4), zero thereafter.
``(2) Allocation of limitation.--The national zone academy
bond limitation for a calendar year shall be allocated by the
Secretary among the States on the basis of their respective
populations of individuals below the poverty line (as defined by
the Office of Management and Budget). The limitation amount
allocated to a State under the preceding sentence shall be
allocated by the State education agency to qualified zone
academies within such State.
``(3) Designation subject to limitation amount.--The maximum
aggregate face amount of bonds issued during any calendar year
which may be designated under subsection (a) with respect to any
qualified zone academy shall not exceed the limitation amount
allocated to such academy under paragraph (2) for such calendar
year.
``(4) Carryover of unused limitation.--
``(A) In general.--If for any calendar year--
``(i) the limitation amount for any State,
exceeds
``(ii) the amount of bonds issued during such
year which are designated under subsection (a)
with respect to qualified zone academies within
such State,
the limitation amount for such State for the following
calendar year shall be increased by the amount of such
excess.
``(B) Limitation on carryover.--Any carryforward of
a limitation amount may be carried only to the first 2
years following the unused limitation year. For purposes
of the preceding sentence, a limitation amount shall be
treated as used on a first-in first-out basis.
``(C) Coordination with section 1397e.--Any
carryover determined under section 1397E(e)(4) (relating
to carryover of unused limitation) with respect to any
State to calendar year 2008 or 2009 shall be treated for
purposes
[[Page 122 STAT. 3871]]
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,
[[Page 122 STAT. 3872]]
``(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 this Act,
is <<NOTE: 26 USC 54A.>> 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
this Act, 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 the Tax Extenders and
Alternative Minimum Tax Relief Act of 2008.''.
(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) <<NOTE: 26 USC 54A note.>> Effective Date.--The amendments made
by this section shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 314. INDIAN EMPLOYMENT CREDIT.
(a) In General.--Subsection (f) of section 45A (relating to
termination) is amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(b) <<NOTE: 26 USC 45A note.>> Effective Date.--The amendment made
by this section shall apply to taxable years beginning after December
31, 2007.
SEC. 315. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON INDIAN
RESERVATIONS.
(a) In General.--Paragraph (8) of section 168(j) (relating to
termination) is amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(b) <<NOTE: 26 USC 168 note.>> Effective Date.--The amendment made
by this section shall apply to property placed in service after December
31, 2007.
SEC. 316. RAILROAD TRACK MAINTENANCE.
(a) In General.--Subsection (f) of section 45G (relating to
application of section) is amended by striking ``January 1, 2008'' and
inserting ``January 1, 2010''.
(b) Credit Allowed Against Alternative Minimum Tax.--Subparagraph
(B) of section 38(c)(4), as amended by this Act, 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.--
[[Page 122 STAT. 3873]]
(1) <<NOTE: 26 USC 45G note.>> The amendment made by
subsection (a) shall apply to expenditures paid or incurred
during taxable years beginning after December 31, 2007.
(2) <<NOTE: 26 USC 38 note.>> 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. 317. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS RACING
TRACK FACILITY.
(a) In General.--Subparagraph (D) of section <<NOTE: 26 USC 168.>>
168(i)(15) (relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2009''.
(b) <<NOTE: 26 USC 168 note.>> Effective Date.--The amendment made
by this section shall apply to property placed in service after December
31, 2007.
SEC. 318. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.
(a) In General.--Subsection (h) of section 198 (relating to
termination) is amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(b) <<NOTE: 26 USC 198 note.>> Effective Date.--The amendment made
by this section shall apply to expenditures paid or incurred after
December 31, 2007.
SEC. 319. EXTENSION OF 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 <<NOTE: 119 Stat. 2020.>> is amended
by striking ``2-year'' and inserting ``4-year''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to individuals hired after August 27, 2007.
SEC. 320. EXTENSION OF INCREASED REHABILITATION CREDIT FOR
STRUCTURES IN THE GULF OPPORTUNITY ZONE.
(a) In General.--Subsection (h) of section 1400N is amended by
striking ``December 31, 2008'' and inserting ``December 31, 2009''.
(b) <<NOTE: 26 USC 1400N note.>> Effective Date.--The amendment
made by this section shall apply to expenditures paid or incurred after
the date of the enactment of this Act.
SEC. 321. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER CONTRIBUTIONS.
(a) In General.--Subparagraph (G) of section 170(e)(6) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
(b) <<NOTE: 26 USC 170 note.>> Effective Date.--The amendment made
by this section shall apply to contributions made during taxable years
beginning after December 31, 2007.
SEC. 322. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF
COLUMBIA.
(a) Designation of Zone.--
(1) In general.--Subsection (f) of section 1400 is amended
by striking ``2007'' both places it appears and inserting
``2009''.
(2) <<NOTE: 26 USC 1400 note.>> Effective date.--The
amendments made by this subsection shall apply to periods
beginning after December 31, 2007.
(b) Tax-Exempt Economic Development Bonds.--
[[Page 122 STAT. 3874]]
(1) In general.--Subsection (b) of section <<NOTE: 26 USC
1400A.>> 1400A is amended by striking ``2007'' and inserting
``2009''.
(2) Effective date.--The amendment made by this subsection
shall apply to bonds issued after December 31, 2007.
(c) Zero Percent Capital Gains Rate.--
(1) In general.--Subsection (b) of section 1400B is amended
by striking ``2008'' each place it appears and inserting
``2010''.
(2) Conforming amendments.--
(A) Section 1400B(e)(2) is amended--
(i) by striking ``2012'' and inserting
``2014'', and
(ii) by striking ``2012'' in the heading
thereof and inserting ``2014''.
(B) Section 1400B(g)(2) is amended by striking
``2012'' and inserting ``2014''.
(C) Section 1400F(d) is amended by striking ``2012''
and inserting ``2014''.
(3) <<NOTE: 26 USC 1400B note.>> Effective dates.--
(A) Extension.--The amendments made by paragraph (1)
shall apply to acquisitions after December 31, 2007.
(B) Conforming amendments.--The amendments made by
paragraph (2) shall take effect on the date of the
enactment of this Act.
(d) First-Time Homebuyer Credit.--
(1) In general.--Subsection (i) of section 1400C is amended
by striking ``2008'' and inserting ``2010''.
(2) <<NOTE: 26 USC 1400C note.>> Effective date.--The
amendment made by this subsection shall apply to property
purchased after December 31, 2007.
SEC. 323. ENHANCED CHARITABLE DEDUCTIONS FOR CONTRIBUTIONS OF FOOD
INVENTORY.
(a) Increased Amount of Deduction.--
(1) In general.--Clause (iv) of section 170(e)(3)(C)
(relating to termination) is amended by striking ``December 31,
2007'' and inserting ``December 31, 2009''.
(2) <<NOTE: 26 USC 170 note.>> Effective date.--The
amendment made by this subsection shall apply to contributions
made after December 31, 2007.
(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.''.
[[Page 122 STAT. 3875]]
(2) <<NOTE: 26 USC 170 note.>> Effective date.--The
amendment made by this subsection shall apply to taxable years
ending after the date of the enactment of this Act.
SEC. 324. EXTENSION OF ENHANCED CHARITABLE DEDUCTION FOR
CONTRIBUTIONS OF BOOK INVENTORY.
(a) Extension.--Clause (iv) of section 170(e)(3)(D) <<NOTE: 26 USC
170.>> (relating to termination) is amended by striking ``December 31,
2007'' and inserting ``December 31, 2009''.
(b) Clerical Amendment.--Clause (iii) of section 170(e)(3)(D)
(relating to certification by donee) is amended by inserting ``of
books'' after ``to any contribution''.
(c) <<NOTE: 26 USC 170 note.>> Effective Date.--The amendments made
by this section shall apply to contributions made after December 31,
2007.
SEC. 325. 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''.
TITLE IV--EXTENSION OF TAX ADMINISTRATION PROVISIONS
SEC. 401. PERMANENT AUTHORITY FOR UNDERCOVER OPERATIONS.
(a) In General.--Section 7608(c) (relating to rules relating to
undercover operations) is amended by striking paragraph (6).
(b) <<NOTE: 26 USC 7608 note.>> Effective Date.--The amendment made
by this section shall apply to operations conducted after the date of
the enactment of this Act.
SEC. 402. PERMANENT AUTHORITY FOR DISCLOSURE OF INFORMATION
RELATING TO TERRORIST ACTIVITIES.
(a) Disclosure of Return Information To Apprise Appropriate
Officials of Terrorist Activities.--Subparagraph (C) of section
6103(i)(3) is amended by striking clause (iv).
[[Page 122 STAT. 3876]]
(b) Disclosure Upon Request of Information Relating to Terrorist
Activities.--Paragraph (7) of section 6103(i) <<NOTE: 26 USC 6103.>> is
amended by striking subparagraph (E).
(c) <<NOTE: 26 USC 6103 note.>> Effective Date.--The amendments
made by this section shall apply to disclosures after the date of the
enactment of this Act.
TITLE V--ADDITIONAL TAX RELIEF AND OTHER TAX PROVISIONS
Subtitle A--General Provisions
SEC. 501. $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) <<NOTE: 26 USC 24 note.>> Effective Date.--The amendment made
by this section shall apply to taxable years beginning after December
31, 2007.
SEC. 502. PROVISIONS RELATED TO FILM AND TELEVISION PRODUCTIONS.
(a) Extension of Expensing Rules for Qualified Film and Television
Productions.--Section 181(f) (relating to termination) is amended by
striking ``December 31, 2008'' and inserting ``December 31, 2009''.
(b) 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.''.
(c) 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
[[Page 122 STAT. 3877]]
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.''.
(d) Conforming Amendment.--Section 181(d)(3)(A) <<NOTE: 26 USC
181.>> is amended by striking ``actors'' and all that follows and
inserting ``actors, production personnel, directors, and producers.''.
(e) <<NOTE: 26 USC 181 note.>> Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
qualified film and television productions commencing after
December 31, 2007.
(2) Deduction.--The amendments made by subsection (c) shall
apply to taxable years beginning after December 31, 2007.
SEC. 503. EXEMPTION FROM EXCISE TAX FOR 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) <<NOTE: 26 USC 4161 note.>> Effective Date.--The amendments
made by this section shall apply to shafts first sold after the date of
enactment of this Act.
SEC. 504. 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
[[Page 122 STAT. 3878]]
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--
[[Page 122 STAT. 3879]]
(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).
SEC. 505. CERTAIN FARMING BUSINESS MACHINERY AND EQUIPMENT TREATED
AS 5-YEAR PROPERTY.
(a) In General.--Section 168(e)(3)(B) <<NOTE: 26 USC 168.>>
(defining 5-year property) is amended by striking ``and'' at the end of
clause (v), by striking the period at the end of clause (vi)(III) and
inserting ``, and'', and by inserting after clause (vi) the following
new clause:
``(vii) any machinery or equipment (other than
any grain bin, cotton ginning asset, fence, or
other land improvement) which is used in a farming
business (as defined in section 263A(e)(4)), the
original use of which commences with the taxpayer
after December 31, 2008, and which is placed in
service before January 1, 2010.''.
(b) Alternative System.--The table contained in section 168(g)(3)(B)
(relating to special rule for certain property assigned to classes) is
amended by inserting after the item relating to subparagraph (B)(iii)
the following:
[[Page 122 STAT. 3880]]
(B)(vii)................................ 10''.
(c) <<NOTE: 26 USC 168 note.>> Effective Date.--The amendments made
by this section shall apply to property placed in service after December
31, 2008.
SEC. 506. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF TAXPAYER'S
LIABILITY BY TAX RETURN PREPARER.
(a) In General.--Subsection (a) of section 6694 <<NOTE: 26 USC
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) <<NOTE: 26 USC 6694 note.>> 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.
[[Page 122 STAT. 3881]]
Subtitle B--Paul <<NOTE: Paul Wellstone and Pete Domenici Mental Health
Parity and Addiction Equity Act of 2008.>> Wellstone and Pete Domenici
Mental Health Parity and Addiction Equity Act of 2008
SEC. 511. <<NOTE: 42 USC 201 note.>> SHORT TITLE.
This subtitle may be cited as the ``Paul Wellstone and Pete Domenici
Mental Health Parity and Addiction Equity Act of 2008''.
SEC. 512. 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
[[Page 122 STAT. 3882]]
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.
[[Page 122 STAT. 3883]]
``(B) Applicable percentage.--With respect to a plan
(or coverage), the applicable percentage described in
this subparagraph shall be--
``(i) 2 percent in the case of the first plan
year in which this section is applied; and
``(ii) 1 percent in the case of each
subsequent plan year.
``(C) Determinations by actuaries.--Determinations
as to increases in actual costs under a plan (or
coverage) for purposes of this section shall be made and
certified by a qualified and licensed actuary who is a
member in good standing of the American Academy of
Actuaries. All such determinations shall be in a written
report prepared by the actuary. The report, and all
underlying documentation relied upon by the actuary,
shall be maintained by the group health plan or health
insurance issuer for a period of 6 years following the
notification made under subparagraph (E).
``(D) 6-month determinations.--If a group health
plan (or a health insurance issuer offering coverage in
connection with a group health plan) seeks an exemption
under this paragraph, determinations under subparagraph
(A) shall be made after such plan (or coverage) has
complied with this section for the first 6 months of the
plan year involved.
``(E) Notification.--
``(i) In general.--A group health plan (or a
health insurance issuer offering coverage in
connection with a group health plan) that, based
upon a certification described under subparagraph
(C), qualifies for an exemption under this
paragraph, and elects to implement the exemption,
shall promptly notify the Secretary, the
appropriate State agencies, and participants and
beneficiaries in the plan of such election.
``(ii) Requirement.--A notification to the
Secretary under clause (i) shall include--
``(I) a description of the number of
covered lives under the plan (or
coverage) involved at the time of the
notification, and as applicable, at the
time of any prior election of the cost-
exemption under this paragraph by such
plan (or coverage);
``(II) for both the plan year upon
which a cost exemption is sought and the
year prior, a description of the actual
total costs of coverage with respect to
medical and surgical benefits and mental
health and substance use disorder
benefits under the plan; and
``(III) for both the plan year upon
which a cost exemption is sought and the
year prior, the actual total costs of
coverage with respect to mental health
and substance use disorder benefits
under the plan.
``(iii) Confidentiality.--A notification to
the Secretary under clause (i) shall be
confidential. The Secretary shall make available,
upon request and on not more than an annual basis,
an anonymous itemization of such notifications,
that includes--
[[Page 122 STAT. 3884]]
``(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) <<NOTE: Publication.>> 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).
[[Page 122 STAT. 3885]]
(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.
[[Page 122 STAT. 3886]]
``(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. <<NOTE: Reports.>> All such determinations
shall be in a written report prepared
[[Page 122 STAT. 3887]]
by the actuary. <<NOTE: Records.>> The report, and all
underlying documentation relied upon by the actuary,
shall be maintained by the group health plan or health
insurance issuer for a period of 6 years following the
notification made under subparagraph (E).
``(D) 6-month determinations.--If a group health
plan (or a health insurance issuer offering coverage in
connection with a group health plan) seeks an exemption
under this paragraph, determinations under subparagraph
(A) shall be made after such plan (or coverage) has
complied with this section for the first 6 months of the
plan year involved.
``(E) Notification.--
``(i) In general.--A group health plan (or a
health insurance issuer offering coverage in
connection with a group health plan) that, based
upon a certification described under subparagraph
(C), qualifies for an exemption under this
paragraph, and elects to implement the exemption,
shall promptly notify the Secretary, the
appropriate State agencies, and participants and
beneficiaries in the plan of such election.
``(ii) Requirement.--A notification to the
Secretary under clause (i) shall include--
``(I) a description of the number of
covered lives under the plan (or
coverage) involved at the time of the
notification, and as applicable, at the
time of any prior election of the cost-
exemption under this paragraph by such
plan (or coverage);
``(II) for both the plan year upon
which a cost exemption is sought and the
year prior, a description of the actual
total costs of coverage with respect to
medical and surgical benefits and mental
health and substance use disorder
benefits under the plan; and
``(III) for both the plan year upon
which a cost exemption is sought and the
year prior, the actual total costs of
coverage with respect to mental health
and substance use disorder benefits
under the plan.
``(iii) Confidentiality.--A notification to
the Secretary under clause (i) shall be
confidential. The Secretary shall make available,
upon request and on not more than an annual basis,
an anonymous itemization of such notifications,
that includes--
``(I) a breakdown of States by the
size and type of employers submitting
such notification; and
``(II) a summary of the data
received under clause (ii).
``(F) Audits by appropriate agencies.--To determine
compliance with this paragraph, the Secretary may audit
the books and records of a group health plan or health
insurance issuer relating to an exemption, including any
actuarial reports prepared pursuant to subparagraph (C),
during the 6 year period following the notification of
such exemption under subparagraph (E). A State agency
receiving a notification under subparagraph (E) may also
conduct such an audit with respect to an exemption
covered by such notification.'';
[[Page 122 STAT. 3888]]
(4) in subsection (e), by striking paragraph (4) and
inserting the following:
``(4) Mental health benefits.--The term `mental health
benefits' means benefits with respect to services for mental
health conditions, as defined under the terms of the plan and in
accordance with applicable Federal and State law.
``(5) Substance use disorder benefits.--The term `substance
use disorder benefits' means benefits with respect to services
for substance use disorders, as defined under the terms of the
plan and in accordance with applicable Federal and State law.'';
(5) by striking subsection (f);
(6) by striking ``mental health benefits'' and inserting
``mental health and substance use disorder benefits'' each place
it appears in subsections (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i),
and (a)(2)(C); and
(7) by striking ``mental health benefits'' and inserting
``mental health or substance use disorder benefits'' each place
it appears (other than in any provision amended by the previous
paragraph).
(c) Amendments to Internal Revenue Code.--Section 9812 of the
Internal Revenue Code of 1986 <<NOTE: 26 USC 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
[[Page 122 STAT. 3889]]
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. <<NOTE: Applicability.>> 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) <<NOTE: Applicability.>> 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
[[Page 122 STAT. 3890]]
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. <<NOTE: Reports.>> All such determinations
shall be in a written report prepared by the actuary.
The report, <<NOTE: Records.>> and all underlying
documentation relied upon by the actuary, shall be
maintained by the group health plan for a period of 6
years following the notification made under subparagraph
(E).
``(D) 6-month determinations.--If a group health
plan seeks an exemption under this paragraph,
determinations under subparagraph (A) shall be made
after such plan has complied with this section for the
first 6 months of the plan year involved.
``(E) Notification.--
``(i) In general.--A group health plan that,
based upon a certification described under
subparagraph (C), qualifies for an exemption under
this paragraph, and elects to implement the
exemption, shall promptly notify the Secretary,
the appropriate State agencies, and participants
and beneficiaries in the plan of such election.
``(ii) Requirement.--A notification to the
Secretary under clause (i) shall include--
``(I) a description of the number of
covered lives under the plan involved at
the time of the notification, and as
applicable, at the time of any prior
election of the cost-exemption under
this paragraph by such plan;
``(II) for both the plan year upon
which a cost exemption is sought and the
year prior, a description of the actual
total costs of coverage with respect to
medical and surgical benefits and mental
health and substance use disorder
benefits under the plan; and
``(III) for both the plan year upon
which a cost exemption is sought and the
year prior, the actual total costs of
coverage with respect to mental health
and substance use disorder benefits
under the plan.
``(iii) Confidentiality.--A notification to
the Secretary under clause (i) shall be
confidential. The Secretary shall make available,
upon request and on not
[[Page 122 STAT. 3891]]
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) <<NOTE: Deadline. 42 USC 300gg-5 note.>> 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) <<NOTE: 42 USC 300gg-5 note.>> Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to group health plans for plan years
beginning after the date that is 1 year after the date of
enactment of this Act, regardless of whether regulations have
been issued to carry out such amendments by such effective date,
except that the amendments made by subsections (a)(5), (b)(5),
and (c)(5), relating to striking of certain sunset provisions,
shall take effect on January 1, 2009.
(2) Special rule for collective bargaining agreements.--In
the case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by this
section shall not apply to plan years beginning before the later
of--
[[Page 122 STAT. 3892]]
(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) <<NOTE: 42 USC 300gg-5 note.>> 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 <<NOTE: 29 USC 1185a.>> 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 <<NOTE: 42 USC 300gg-5.>> is amended to read
as follows:
``SEC. 2705. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER
BENEFITS.''.
(3) IRC heading.--
(A) In general.--The heading of section 9812 of the
Internal Revenue Code of 1986 <<NOTE: 26 USC 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 of such Code is amended by
striking the item relating to section 9812 and inserting
the following new item:
``Sec. 9812. Parity in mental health and substance use disorder
benefits.''.
(h) GAO Study on Coverage and Exclusion of Mental Health and
Substance Use Disorder Diagnoses.--
[[Page 122 STAT. 3893]]
(1) In general.--The Comptroller General of the United
States shall conduct a study that analyzes the specific rates,
patterns, and trends in coverage and exclusion of specific
mental health and substance use disorder diagnoses by health
plans and health insurance. The study shall include an analysis
of--
(A) specific coverage rates for all mental health
conditions and substance use disorders;
(B) which diagnoses are most commonly covered or
excluded;
(C) whether implementation of this Act has affected
trends in coverage or exclusion of such diagnoses; and
(D) the impact of covering or excluding specific
diagnoses on participants' and enrollees' health, their
health care coverage, and the costs of delivering health
care.
(2) Reports.--Not later than 3 years after the date of the
enactment of this Act, and 2 years after the date of submission
the first report under this paragraph, the Comptroller General
shall submit to Congress a report on the results of the study
conducted under paragraph (1).
TITLE VI--OTHER PROVISIONS
SEC. 601. SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION
PROGRAM.
(a) <<NOTE: 16 USC 500 notes.>> 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:
``SEC. 1. <<NOTE: 16 USC 7101 note.>> SHORT TITLE.
``This Act may be cited as the `Secure Rural Schools and Community
Self-Determination Act of 2000'.
``SEC. 2. <<NOTE: 16 USC 7101.>> 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;
[[Page 122 STAT. 3894]]
``(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. <<NOTE: 16 USC 7102.>> 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
[[Page 122 STAT. 3895]]
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
[[Page 122 STAT. 3896]]
``(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. <<NOTE: 16 USC 7111.>> 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. <<NOTE: 16 USC 7112.>> 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--
[[Page 122 STAT. 3897]]
``(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
[[Page 122 STAT. 3898]]
``(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.--
[[Page 122 STAT. 3899]]
``(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 each September 30 thereafter
for each succeeding fiscal year.
``(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. <<NOTE: 16 USC 7113.>> 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, 81 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, 73 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
[[Page 122 STAT. 3900]]
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. <<NOTE: 16 USC 7121.>> 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--
[[Page 122 STAT. 3901]]
``(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. <<NOTE: 16 USC 7122.>> 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. <<NOTE: 16 USC 7123.>> SUBMISSION OF PROJECT
PROPOSALS.
``(a) Submission of Project Proposals to Secretary Concerned.--
``(1) <<NOTE: Deadlines.>> 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.
[[Page 122 STAT. 3902]]
``(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. <<NOTE: 16 USC 7124.>> 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,
[[Page 122 STAT. 3903]]
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) <<NOTE: Deadline. Notification.>> 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) <<NOTE: Federal Register, publication.>> 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
[[Page 122 STAT. 3904]]
``(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.
[[Page 122 STAT. 3905]]
``SEC. 205. <<NOTE: 16 USC 7125.>> 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
[[Page 122 STAT. 3906]]
``(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) <<NOTE: Deadline.>> 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;
[[Page 122 STAT. 3907]]
``(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. <<NOTE: 16 USC 7126.>> 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.
[[Page 122 STAT. 3908]]
``(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. <<NOTE: 16 USC 7127.>> 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
[[Page 122 STAT. 3909]]
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. <<NOTE: 16 USC 7128.>> 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. <<NOTE: 16 USC 7141.>> 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. <<NOTE: 16 USC 7142.>> 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.
[[Page 122 STAT. 3910]]
``(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) <<NOTE: Publication.>> 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. <<NOTE: 16 USC 7143.>> CERTIFICATION.
``(a) <<NOTE: Deadline.>> 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. <<NOTE: 16 USC 7144.>> 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. <<NOTE: 16 USC 7151.>> REGULATIONS.
``The Secretary of Agriculture and the Secretary of the Interior
shall issue regulations to carry out the purposes of this Act.
``SEC. 402. <<NOTE: 16 USC 7152.>> 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. <<NOTE: 16 USC 7153.>> 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
[[Page 122 STAT. 3911]]
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. 602. TRANSFER TO ABANDONED MINE RECLAMATION FUND.
Subparagraph (C) of section 402(i)(1) of the Surface Mining Control
and Reclamation Act of 1977 (30 U.S.C. 1232(i)(1)) is amended by
striking ``and $9,000,000 on October 1, 2009'' and
[[Page 122 STAT. 3912]]
inserting ``$9,000,000 on October 1, 2009, and $9,000,000 on October 1,
2010''.
TITLE VII--DISASTER RELIEF
Subtitle A--Heartland <<NOTE: Heartland Disaster Tax Relief Act of
2008.>> and Hurricane Ike Disaster Relief
SEC. 701. <<NOTE: 26 USC 1 note.>> SHORT TITLE.
This subtitle may be cited as the ``Heartland Disaster Tax Relief
Act of 2008''.
SEC. 702. TEMPORARY TAX RELIEF FOR AREAS DAMAGED BY 2008
MIDWESTERN SEVERE STORMS, TORNADOS, AND
FLOODING.
(a) <<NOTE: Applicability.>> In General.--Subject to the
modifications described in this section, the following provisions of or
relating to the Internal Revenue Code of 1986 shall apply to any
Midwestern disaster area in addition to the areas to which such
provisions otherwise apply:
(1) Go zone benefits.--
(A) Section 1400N (relating to tax benefits) other
than subsections (b), (d), (e), (i), (j), (m), and (o)
thereof.
(B) Section 1400O (relating to education tax
benefits).
(C) Section 1400P (relating to housing tax
benefits).
(D) Section 1400Q (relating to special rules for use
of retirement funds).
(E) Section 1400R(a) (relating to employee retention
credit for employers).
(F) Section 1400S (relating to additional tax
relief) other than subsection (d) thereof.
(G) Section 1400T (relating to special rules for
mortgage revenue bonds).
(2) Other benefits included in katrina emergency tax relief
act of 2005.--Sections 302, 303, 304, 401, and 405 of the
Katrina Emergency Tax Relief Act of 2005.
(b) Midwestern Disaster Area.--
(1) In general.--For purposes of this section and for
applying the substitutions described in subsections (d) and (e),
the term ``Midwestern disaster area'' means an area--
(A) with respect to which a major disaster has been
declared by the President on or after May 20, 2008, and
before August 1, 2008, under section 401 of the Robert
T. Stafford Disaster Relief and Emergency Assistance Act
by reason of severe storms, tornados, or flooding
occurring in any of the States of Arkansas, Illinois,
Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
Nebraska, and Wisconsin, and
(B) determined by the President to warrant
individual or individual and public assistance from the
Federal Government under such Act with respect to
damages attributable to such severe storms, tornados, or
flooding.
(2) Certain benefits available to areas eligible only for
public assistance.--For <<NOTE: Applicability.>> purposes of
applying this section to benefits under the following
provisions, paragraph (1) shall be applied without regard to
subparagraph (B):
[[Page 122 STAT. 3913]]
(A) Sections 1400Q, 1400S(b), and 1400S(d) of the
Internal Revenue Code of 1986.
(B) Sections 302, 401, and 405 of the Katrina
Emergency Tax Relief Act of 2005.
(c) References.--
(1) Area.--Any reference in such provisions to the Hurricane
Katrina disaster area or the Gulf Opportunity Zone shall be
treated as a reference to any Midwestern disaster area and any
reference to the Hurricane Katrina disaster area or the Gulf
Opportunity Zone within a State shall be treated as a reference
to all Midwestern disaster areas within the State.
(2) Items attributable to disaster.--Any reference in such
provisions to any loss, damage, or other item attributable to
Hurricane Katrina shall be treated as a reference to any loss,
damage, or other item attributable to the severe storms,
tornados, or flooding giving rise to any Presidential
declaration described in subsection (b)(1)(A).
(3) Applicable disaster date.--For purposes of applying the
substitutions described in subsections (d) and (e), the term
``applicable disaster date'' means, with respect to any
Midwestern disaster area, the date on which the severe storms,
tornados, or flooding giving rise to the Presidential
declaration described in subsection (b)(1)(A) occurred.
(d) <<NOTE: Applicability.>> Modifications to 1986 Code.--The
following provisions of the Internal Revenue Code of 1986 shall be
applied with the following modifications:
(1) Tax-exempt bond financing.--Section 1400N(a)--
(A) by substituting ``qualified Midwestern disaster
area bond'' for ``qualified Gulf Opportunity Zone Bond''
each place it appears, except that in determining
whether a bond is a qualified Midwestern disaster area
bond--
(i) paragraph (2)(A)(i) shall be applied by
only treating costs as qualified project costs
if--
(I) in the case of a project
involving a private business use (as
defined in section 141(b)(6)), either
the person using the property suffered a
loss in a trade or business attributable
to the severe storms, tornados, or
flooding giving rise to any Presidential
declaration described in subsection
(b)(1)(A) or is a person designated for
purposes of this section by the Governor
of the State in which the project is
located as a person carrying on a trade
or business replacing a trade or
business with respect to which another
person suffered such a loss, and
(II) in the case of a project
relating to public utility property, the
project involves repair or
reconstruction of public utility
property damaged by such severe storms,
tornados, or flooding, and
(ii) paragraph (2)(A)(ii) shall be applied by
treating an issue as a qualified mortgage issue
only if 95 percent or more of the net proceeds (as
defined in section 150(a)(3)) of the issue are to
be used to provide financing for mortgagors who
suffered damages to their principal residences
attributable to such severe storms, tornados, or
flooding.
[[Page 122 STAT. 3914]]
(B) by substituting ``any State in which a
Midwestern disaster area is located'' for ``the State of
Alabama, Louisiana, or Mississippi'' in paragraph
(2)(B),
(C) by substituting ``designated for purposes of
this section (on the basis of providing assistance to
areas in the order in which such assistance is most
needed)'' for ``designated for purposes of this
section'' in paragraph (2)(C),
(D) by substituting ``January 1, 2013'' for
``January 1, 2011'' in paragraph (2)(D),
(E) in paragraph (3)(A)--
(i) by substituting ``$1,000'' for ``$2,500'',
and
(ii) by substituting ``before the earliest
applicable disaster date for Midwestern disaster
areas within the State'' for ``before August 28,
2005'',
(F) by substituting ``qualified Midwestern disaster
area repair or construction'' for ``qualified GO Zone
repair or construction'' each place it appears,
(G) by substituting ``after the date of the
enactment of the Heartland Disaster Tax Relief Act of
2008 and before January 1, 2013'' for ``after the date
of the enactment of this paragraph and before January 1,
2011'' in paragraph (7)(C), and
(H) by disregarding paragraph (8) thereof.
(2) Low-income housing credit.--Section 1400N(c)--
(A) only with respect to calendar years 2008, 2009,
and 2010,
(B) by substituting ``Disaster Recovery Assistance
housing amount'' for ``Gulf Opportunity housing amount''
each place it appears,
(C) in paragraph (1)(B)--
(i) by substituting ``$8.00'' for ``$18.00'',
and
(ii) by substituting ``before the earliest
applicable disaster date for Midwestern disaster
areas within the State'' for ``before August 28,
2005'', and
(D) determined without regard to paragraphs (2),
(3), (4), (5), and (6) thereof.
(3) Expensing for certain demolition and clean-up costs.--
Section 1400N(f)--
(A) by substituting ``qualified Disaster Recovery
Assistance clean-up cost'' for ``qualified Gulf
Opportunity Zone clean-up cost'' each place it appears,
(B) by substituting ``beginning on the applicable
disaster date and ending on December 31, 2010'' for
``beginning on August 28, 2005, and ending on December
31, 2007'' in paragraph (2), and
(C) by treating costs as qualified Disaster Recovery
Assistance clean-up costs only if the removal of debris
or demolition of any structure was necessary due to
damage attributable to the severe storms, tornados, or
flooding giving rise to any Presidential declaration
described in subsection (b)(1)(A).
(4) Extension of expensing for environmental remediation
costs.--Section 1400N(g)--
(A) by substituting ``the applicable disaster date''
for ``August 28, 2005'' each place it appears,
[[Page 122 STAT. 3915]]
(B) by substituting ``January 1, 2011'' for
``January 1, 2008'' in paragraph (1),
(C) by substituting ``December 31, 2010'' for
``December 31, 2007'' in paragraph (1), and
(D) by treating a site as a qualified contaminated
site only if the release (or threat of release) or
disposal of a hazardous substance at the site was
attributable to the severe storms, tornados, or flooding
giving rise to any Presidential declaration described in
subsection (b)(1)(A).
(5) Increase in rehabilitation credit.--Section 1400N(h), as
amended by this Act--
(A) by substituting ``the applicable disaster date''
for ``August 28, 2005'',
(B) by substituting ``December 31, 2011'' for
``December 31, 2009'' in paragraph (1), and
(C) by only applying such subsection to qualified
rehabilitation expenditures with respect to any building
or structure which was damaged or destroyed as a result
of the severe storms, tornados, or flooding giving rise
to any Presidential declaration described in subsection
(b)(1)(A).
(6) Treatment of net operating losses attributable to
disaster losses.--Section 1400N(k)--
(A) by substituting ``qualified Disaster Recovery
Assistance loss'' for ``qualified Gulf Opportunity Zone
loss'' each place it appears,
(B) by substituting ``after the day before the
applicable disaster date, and before January 1, 2011''
for ``after August 27, 2005, and before January 1,
2008'' each place it appears,
(C) by substituting ``the applicable disaster date''
for ``August 28, 2005'' in paragraph (2)(B)(ii)(I),
(D) by substituting ``qualified Disaster Recovery
Assistance property'' for ``qualified Gulf Opportunity
Zone property'' in paragraph (2)(B)(iv), and
(E) by substituting ``qualified Disaster Recovery
Assistance casualty loss'' for ``qualified Gulf
Opportunity Zone casualty loss'' each place it appears.
(7) Credit to holders of tax credit bonds.--Section
1400N(l)--
(A) by substituting ``Midwestern tax credit bond''
for ``Gulf tax credit bond'' each place it appears,
(B) by substituting ``any State in which a
Midwestern disaster area is located or any
instrumentality of the State'' for ``the State of
Alabama, Louisiana, or Mississippi'' in paragraph
(4)(A)(i),
(C) by substituting ``after December 31, 2008 and
before January 1, 2010'' for ``after December 31, 2005,
and before January 1, 2007'',
(D) by substituting ``shall not exceed $100,000,000
for any State with an aggregate population located in
all Midwestern disaster areas within the State of at
least 2,000,000, $50,000,000 for any State with an
aggregate population located in all Midwestern disaster
areas within the State of at least 1,000,000 but less
than 2,000,000, and zero for any other State. The
population of a State within any area shall be
determined on the basis of the most recent census
estimate of resident population released
[[Page 122 STAT. 3916]]
by the Bureau of Census before the earliest applicable
disaster date for Midwestern disaster areas within the
State.'' for ``shall not exceed'' and all that follows
in paragraph (4)(C), and
(E) by substituting ``the earliest applicable
disaster date for Midwestern disaster areas within the
State'' for ``August 28, 2005'' in paragraph (5)(A).
(8) Education tax benefits.--Section 1400O, by substituting
``2008 or 2009'' for ``2005 or 2006''.
(9) Housing tax benefits.--Section 1400P, by substituting
``the applicable disaster date'' for ``August 28, 2005'' in
subsection (c)(1).
(10) Special rules for use of retirement funds.--Section
1400Q--
(A) by substituting ``qualified Disaster Recovery
Assistance distribution'' for ``qualified hurricane
distribution'' each place it appears,
(B) by substituting ``on or after the applicable
disaster date and before January 1, 2010'' for ``on or
after August 25, 2005, and before January 1, 2007'' in
subsection (a)(4)(A)(i),
(C) by substituting ``the applicable disaster date''
for ``August 28, 2005'' in subsections (a)(4)(A)(i) and
(c)(3)(B),
(D) by disregarding clauses (ii) and (iii) of
subsection (a)(4)(A) thereof,
(E) by substituting ``qualified storm damage
distribution'' for ``qualified Katrina distribution''
each place it appears,
(F) by substituting ``after the date which is 6
months before the applicable disaster date and before
the date which is the day after the applicable disaster
date'' for ``after February 28, 2005, and before August
29, 2005'' in subsection (b)(2)(B)(ii),
(G) by substituting ``the Midwestern disaster area,
but not so purchased or constructed on account of severe
storms, tornados, or flooding giving rise to the
designation of the area as a disaster area'' for ``the
Hurricane Katrina disaster area, but not so purchased or
constructed on account of Hurricane Katrina'' in
subsection (b)(2)(B)(iii),
(H) by substituting ``beginning on the applicable
disaster date and ending on the date which is 5 months
after the date of the enactment of the Heartland
Disaster Tax Relief Act of 2008'' for ``beginning on
August 25, 2005, and ending on February 28, 2006'' in
subsection (b)(3)(A),
(I) by substituting ``qualified storm damage
individual'' for ``qualified Hurricane Katrina
individual'' each place it appears,
(J) by substituting ``December 31, 2009'' for
``December 31, 2006'' in subsection (c)(2)(A),
(K) by disregarding subparagraphs (C) and (D) of
subsection (c)(3) thereof,
(L) by substituting ``beginning on the date of the
enactment of the Heartland Disaster Tax Relief Act of
2008 and ending on December 31, 2009'' for ``beginning
on September 24, 2005, and ending on December 31, 2006''
in subsection (c)(4)(A)(i),
[[Page 122 STAT. 3917]]
(M) by substituting ``the applicable disaster date''
for ``August 25, 2005'' in subsection (c)(4)(A)(ii), and
(N) by substituting ``January 1, 2010'' for
``January 1, 2007'' in subsection (d)(2)(A)(ii).
(11) Employee retention credit for employers affected by
severe storms, tornados, and flooding.--Section 1400R(a)--
(A) by substituting ``the applicable disaster date''
for ``August 28, 2005'' each place it appears,
(B) by substituting ``January 1, 2009'' for
``January 1, 2006'' both places it appears, and
(C) only with respect to eligible employers who
employed an average of not more than 200 employees on
business days during the taxable year before the
applicable disaster date.
(12) Temporary suspension of limitations on charitable
contributions.--Section 1400S(a), by substituting the following
paragraph for paragraph (4) thereof:
``(4) Qualified contributions.--
``(A) In general.--For purposes of this subsection,
the term `qualified contribution' means any charitable
contribution (as defined in section 170(c)) if--
``(i) such contribution--
``(I) is paid during the period
beginning on the earliest applicable
disaster date for all States and ending
on December 31, 2008, in cash to an
organization described in section
170(b)(1)(A), and
``(II) is made for relief efforts in
1 or more Midwestern disaster areas,
``(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 1 or more
Midwestern disaster areas, 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.''.
(13) Suspension of certain limitations on personal casualty
losses.--Section 1400S(b)(1), by substituting ``the applicable
disaster date'' for ``August 25, 2005''.
(14) Special rule for determining earned income.--Section
1400S(d)--
(A) by treating an individual as a qualified
individual if such individual's principal place of abode
on the applicable disaster date was located in a
Midwestern disaster area,
[[Page 122 STAT. 3918]]
(B) by treating the applicable disaster date with
respect to any such individual as the applicable date
for purposes of such subsection, and
(C) by treating an area as described in paragraph
(2)(B)(ii) thereof if the area is a Midwestern disaster
area only by reason of subsection (b)(2) of this section
(relating to areas eligible only for public assistance).
(15) Adjustments regarding taxpayer and dependency status.--
Section 1400S(e), by substituting ``2008 or 2009'' for ``2005 or
2006''.
(e) <<NOTE: Applicability.>> Modifications to Katrina Emergency Tax
Relief Act of 2005.--The following provisions of the Katrina Emergency
Tax Relief Act of 2005 shall be applied with the following
modifications:
(1) Additional exemption for housing displaced individual.--
Section 302--
(A) by substituting ``2008 or 2009'' for ``2005 or
2006'' in subsection (a) thereof,
(B) by substituting ``Midwestern displaced
individual'' for ``Hurricane Katrina displaced
individual'' each place it appears, and
(C) by treating an area as a core disaster area for
purposes of applying subsection (c) thereof if the area
is a Midwestern disaster area without regard to
subsection (b)(2) of this section (relating to areas
eligible only for public assistance).
(2) Increase in standard mileage rate.--Section 303, by
substituting ``beginning on the applicable disaster date and
ending on December 31, 2008'' for ``beginning on August 25,
2005, and ending on December 31, 2006''.
(3) Mileage reimbursements for charitable volunteers.--
Section 304--
(A) by substituting ``beginning on the applicable
disaster date and ending on December 31, 2008'' for
``beginning on August 25, 2005, and ending on December
31, 2006'' in subsection (a), and
(B) by substituting ``the applicable disaster date''
for ``August 25, 2005'' in subsection (a).
(4) Exclusion of certain cancellation of indebtedness
income.--Section 401--
(A) by treating an individual whose principal place
of abode on the applicable disaster date was in a
Midwestern disaster area (determined without regard to
subsection (b)(2) of this section) as an individual
described in subsection (b)(1) thereof, and by treating
an individual whose principal place of abode on the
applicable disaster date was in a Midwestern disaster
area solely by reason of subsection (b)(2) of this
section as an individual described in subsection (b)(2)
thereof,
(B) by substituting ``the applicable disaster date''
for ``August 28, 2005'' both places it appears, and
(C) by substituting ``January 1, 2010'' for
``January 1, 2007'' in subsection (e).
(5) Extension of replacement period for nonrecognition of
gain.--Section 405, by substituting ``on or after the applicable
disaster date'' for ``on or after August 25, 2005''.
[[Page 122 STAT. 3919]]
SEC. 703. REPORTING REQUIREMENTS RELATING TO DISASTER RELIEF
CONTRIBUTIONS.
(a) In General.--Section 6033(b) <<NOTE: 26 USC 6033.>> (relating
to returns of certain organizations described in section 501(c)(3)) 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 section 1400S(a)
applies, and''.
(b) <<NOTE: 26 USC 6033 note.>> 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.
SEC. 704. TEMPORARY TAX-EXEMPT BOND FINANCING AND LOW-INCOME
HOUSING TAX RELIEF FOR AREAS DAMAGED BY
HURRICANE IKE.
(a) <<NOTE: Applicability.>> Tax-Exempt Bond Financing.--Section
1400N(a) of the Internal Revenue Code of 1986 shall apply to any
Hurricane Ike disaster area in addition to any other area referenced in
such section, but with the following modifications:
(1) By substituting ``qualified Hurricane Ike disaster area
bond'' for ``qualified Gulf Opportunity Zone Bond'' each place
it appears, except that in determining whether a bond is a
qualified Hurricane Ike disaster area bond--
(A) paragraph (2)(A)(i) shall be applied by only
treating costs as qualified project costs if--
(i) in the case of a project involving a
private business use (as defined in section
141(b)(6)), either the person using the property
suffered a loss in a trade or business
attributable to Hurricane Ike or is a person
designated for purposes of this section by the
Governor of the State in which the project is
located as a person carrying on a trade or
business replacing a trade or business with
respect to which another person suffered such a
loss, and
(ii) in the case of a project relating to
public utility property, the project involves
repair or reconstruction of public utility
property damaged by Hurricane Ike, and
(B) paragraph (2)(A)(ii) shall be applied by
treating an issue as a qualified mortgage issue only if
95 percent or more of the net proceeds (as defined in
section 150(a)(3)) of the issue are to be used to
provide financing for mortgagors who suffered damages to
their principal residences attributable to Hurricane
Ike.
(2) By substituting ``any State in which any Hurricane Ike
disaster area is located'' for ``the State of Alabama,
Louisiana, or Mississippi'' in paragraph (2)(B).
(3) By substituting ``designated for purposes of this
section (on the basis of providing assistance to areas in the
order in which such assistance is most needed)'' for
``designated for purposes of this section'' in paragraph (2)(C).
(4) By substituting ``January 1, 2013'' for ``January 1,
2011'' in paragraph (2)(D).
[[Page 122 STAT. 3920]]
(5) By substituting the following for subparagraph (A) of
paragraph (3):
``(A) Aggregate amount designated.--The maximum
aggregate face amount of bonds which may be designated
under this subsection with respect to any State shall
not exceed the product of $2,000 multiplied by the
portion of the State population which is in--
``(i) <<NOTE: Texas.>> in the case of Texas,
the counties of Brazoria, Chambers, Galveston,
Jefferson, and Orange, and
``(ii) <<NOTE: Louisiana.>> in the case of
Louisiana, the parishes of Calcasieu and Cameron,
(as determined on the basis of the most recent census
estimate of resident population released by the Bureau
of Census before September 13, 2008).''.
(6) By substituting ``qualified Hurricane Ike disaster area
repair or construction'' for ``qualified GO Zone repair or
construction'' each place it appears.
(7) By substituting ``after the date of the enactment of the
Heartland Disaster Tax Relief Act of 2008 and before January 1,
2013'' for ``after the date of the enactment of this paragraph
and before January 1, 2011'' in paragraph (7)(C).
(8) By disregarding paragraph (8) thereof.
(9) By substituting ``any Hurricane Ike disaster area'' for
``the Gulf Opportunity Zone'' each place it appears.
(b) <<NOTE: Applicability.>> Low-Income Housing Credit.--Section
1400N(c) of the Internal Revenue Code of 1986 shall apply to any
Hurricane Ike disaster area in addition to any other area referenced in
such section, but with the following modifications:
(1) Only with respect to calendar years 2008, 2009, and
2010.
(2) By substituting ``any Hurricane Ike disaster area'' for
``the Gulf Opportunity Zone'' each place it appears.
(3) By substituting ``Hurricane Ike Recovery Assistance
housing amount'' for ``Gulf Opportunity housing amount'' each
place it appears.
(4) By substituting the following for subparagraph (B) of
paragraph (1):
``(B) Hurricane ike housing amount.--For purposes of
subparagraph (A), the term `Hurricane Ike housing
amount' means, for any calendar year, the amount equal
to the product of $16.00 multiplied by the portion of
the State population which is in--
``(i) <<NOTE: Texas.>> in the case of Texas,
the counties of Brazoria, Chambers, Galveston,
Jefferson, and Orange, and
``(ii) <<NOTE: Louisiana.>> in the case of
Louisiana, the parishes of Calcasieu and Cameron,
(as determined on the basis of the most recent census
estimate of resident population released by the Bureau
of Census before September 13, 2008).''.
(5) Determined without regard to paragraphs (2), (3), (4),
(5), and (6) thereof.
(c) Hurricane Ike Disaster Area.--For purposes of this section and
for applying the substitutions described in subsections (a) and (b), the
term ``Hurricane Ike disaster area'' means an area in the State of Texas
or Louisiana--
(1) with respect to which a major disaster has been declared
by the President on September 13, 2008, under section 401
[[Page 122 STAT. 3921]]
of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act by reason of Hurricane Ike, and
(2) determined by the President to warrant individual or
individual and public assistance from the Federal Government
under such Act with respect to damages attributable to Hurricane
Ike.
Subtitle B--National Disaster Relief
SEC. 706. LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED DISASTERS.
(a) Waiver of Adjusted Gross Income Limitation.--
(1) In general.--Subsection (h) of section 165 <<NOTE: 26
USC 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 occurring before
January 1, 2010, 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)''.
[[Page 122 STAT. 3922]]
(C) Section 165(i)(4) <<NOTE: 26 USC 165.>> 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), as amended
by the Housing Assistance Tax Act of 2008, 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,
as amended by the Housing Assistance Tax Act of 2008, 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
[[Page 122 STAT. 3923]]
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) <<NOTE: 26 USC 165.>> is amended by
striking ``$100'' and inserting ``$500 ($100 for taxable years beginning
after December 31, 2009)''.
(d) <<NOTE: 26 USC 56 note.>> Effective Dates.--
(1) In general.--Except as provided by paragraph (2), the
amendments made by this section shall apply to disasters
declared in 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. 707. 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 occurring before January 1, 2010,
``(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 occurring before
such date, or
``(C) for the repair of business-related property
damaged as a result of a federally declared disaster
occurring before such date, and
``(3) which 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
[[Page 122 STAT. 3924]]
``(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) <<NOTE: 26 USC 198A note.>> Effective Date.--The amendments
made by this section shall apply to amounts paid or incurred after
December 31, 2007 in connection with disaster declared after such date.
SEC. 708. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED
DISASTERS.
(a) In General.--Paragraph (1) of section 172(b) <<NOTE: 26 USC
172.>> 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)) occurring before
January 1, 2010, 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
[[Page 122 STAT. 3925]]
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.
``(4) Exclusion.--The term `qualified disaster loss' shall
not include any loss with respect to any property described in
section 1400N(p)(3).''.
(c) Loss Deduction Allowed in Computing Alternative Minimum Taxable
Income.--Subsection (d) of section 56 <<NOTE: 26 USC 56.>> is amended
by adding at the end the following new paragraph:
``(3) Net operating loss attributable to federally declared
disasters.--In the <<NOTE: Applicability.>> 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) <<NOTE: 26 USC 56 note.>> Effective Date.--The amendments made
by this section shall apply to losses arising in taxable years beginning
after December 31, 2007, in connection with disasters declared after
such date.
SEC. 709. WAIVER OF CERTAIN MORTGAGE REVENUE BOND REQUIREMENTS
FOLLOWING FEDERALLY DECLARED DISASTERS.
(a) In General.--Subsection (k) of section 143 is amended by adding
at the end the following new paragraph:
``(12) Special rules for residences destroyed in federally
declared disasters.--
``(A) Principal residence destroyed.--At the
election of the taxpayer, if the principal residence
(within the meaning of section 121) of such taxpayer
is--
``(i) rendered unsafe for use as a residence
by reason of a federally declared disaster
occurring before January 1, 2010, or
``(ii) <<NOTE: Applicability.>> 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 occurring
before such date,
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) Principal residence damaged.--
``(i) In general.--At the election of the
taxpayer, if the principal residence (within the
meaning of section 121) of such taxpayer was
damaged as the result of a federally declared
disaster occurring before January
[[Page 122 STAT. 3926]]
1, 2010, 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).
``(D) Election; denial of double benefit.--
``(i) Election.--An election under this
paragraph may not be revoked except with the
consent of the Secretary.
``(ii) Denial of double benefit.--If a
taxpayer elects the application of this paragraph,
paragraph (11) shall not apply with respect to the
purchase or financing of any residence by such
taxpayer.''.
(b) <<NOTE: 26 USC 143 note.>> Effective Date.--The amendment made
by subsection (a) shall apply to disasters occurring after December 31,
2007.
SEC. 710. SPECIAL DEPRECIATION ALLOWANCE FOR QUALIFIED DISASTER
PROPERTY.
(a) In General.--Section 168, as amended by this Act, <<NOTE: 26 USC
168.>> is amended by adding at the end the following new subsection:
``(n) Special Allowance for Qualified Disaster Assistance
Property.--
``(1) In general.--In the case of any qualified disaster
assistance 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 disaster
assistance property, and
``(B) the adjusted basis of the qualified disaster
assistance 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 disaster assistance property.--For purposes
of this subsection--
``(A) In general.--The term `qualified disaster
assistance property' means any property--
``(i)(I) which is described in subsection
(k)(2)(A)(i), or
``(II) which is nonresidential real property
or residential rental property,
``(ii) substantially all of the use of which
is--
``(I) in a disaster area with
respect to a federally declared disaster
occurring before January 1, 2010, and
``(II) in the active conduct of a
trade or business by the taxpayer in
such disaster area,
``(iii) which--
[[Page 122 STAT. 3927]]
``(I) rehabilitates property
damaged, or replaces property destroyed
or condemned, as a result of such
federally declared disaster, except
that, for purposes of this clause,
property shall be treated as replacing
property destroyed or condemned if, as
part of an integrated plan, such
property replaces property which is
included in a continuous area which
includes real property destroyed or
condemned, and
``(II) is similar in nature to, and
located in the same county as, the
property being rehabilitated or
replaced,
``(iv) the original use of which in such
disaster area commences with an eligible taxpayer
on or after the applicable disaster date,
``(v) which is acquired by such eligible
taxpayer by purchase (as defined in section
179(d)) on or after the applicable disaster date,
but only if no written binding contract for the
acquisition was in effect before such date, and
``(vi) which is placed in service by such
eligible taxpayer on or before the date which is
the last day of the third calendar year following
the applicable disaster date (the fourth calendar
year in the case of nonresidential real property
and residential rental property).
``(B) Exceptions.--
``(i) Other bonus depreciation property.--The
term `qualified disaster assistance property'
shall not include--
``(I) any property to which
subsection (k) (determined without
regard to paragraph (4)), (l), or (m)
applies,
``(II) any property to which section
1400N(d) applies, and
``(III) any property described in
section 1400N(p)(3).
``(ii) Alternative depreciation property.--The
term `qualified disaster assistance 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) Tax-exempt bond financed property.--
Such term shall not include any property any
portion of which is financed with the proceeds of
any obligation the interest on which is exempt
from tax under section 103.
``(iv) Qualified revitalization buildings.--
Such term shall not include any qualified
revitalization building with respect to which the
taxpayer has elected the application of paragraph
(1) or (2) of section 1400I(a).
``(v) 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
[[Page 122 STAT. 3928]]
not apply to all property in such class placed in
service during such taxable year.
``(C) <<NOTE: Applicability.>> Special rules.--For
purposes of this subsection, rules similar to the rules
of subparagraph (E) of subsection (k)(2) shall apply,
except that such subparagraph shall be applied--
``(i) by substituting `the applicable disaster
date' for `December 31, 2007' each place it
appears therein,
``(ii) without regard to `and before January
1, 2009' in clause (i) thereof, and
``(iii) by substituting `qualified disaster
assistance property' for `qualified property' in
clause (iv) thereof.
``(D) Allowance against alternative minimum tax.--
For purposes <<NOTE: Applicability.>> of this
subsection, rules similar to the rules of subsection
(k)(2)(G) shall apply.
``(3) Other definitions.--For purposes of this subsection--
``(A) Applicable disaster date.--The term
`applicable disaster date' means, with respect to any
federally declared disaster, the date on which such
federally declared disaster occurs.
``(B) Federally declared disaster.--The term
`federally declared disaster' has the meaning given such
term under section 165(h)(3)(C)(i).
``(C) Disaster area.--The term `disaster area' has
the meaning given such term under section
165(h)(3)(C)(ii).
``(D) Eligible taxpayer.--The term `eligible
taxpayer' means a taxpayer who has suffered an economic
loss attributable to a federally declared disaster.
``(4) Recapture.--For purposes of this subsection, rules
similar to the rules under section 179(d)(10) shall apply with
respect to any qualified disaster assistance property which
ceases to be qualified disaster assistance property.''.
(b) <<NOTE: 26 USC 168 note.>> Effective Date.--The amendment made
by this section shall apply to property placed in service after December
31, 2007, with respect disasters declared after such date.
SEC. 711. INCREASED EXPENSING FOR QUALIFIED DISASTER ASSISTANCE
PROPERTY.
(a) In General.--Section 179 <<NOTE: 26 USC 179.>> is amended by
adding at the end the following new subsection:
``(e) Special Rules for Qualified Disaster Assistance Property.--
``(1) In general.--For purposes of this section--
``(A) the dollar amount in effect under subsection
(b)(1) for the taxable year shall be increased by the
lesser of--
``(i) $100,000, or
``(ii) the cost of qualified section 179
disaster assistance property placed in service
during the taxable year, and
``(B) the dollar amount in effect under subsection
(b)(2) for the taxable year shall be increased by the
lesser of--
``(i) $600,000, or
``(ii) the cost of qualified section 179
disaster assistance property placed in service
during the taxable year.
[[Page 122 STAT. 3929]]
``(2) Qualified section 179 disaster assistance property.--
For purposes of this subsection, the term `qualified section 179
disaster assistance property' means section 179 property (as
defined in subsection (d)) which is qualified disaster
assistance property (as defined in section 168(n)(2)).
``(3) Coordination with empowerment zones and renewal
communities.--For purposes of sections 1397A and 1400J,
qualified section 179 disaster assistance property shall not be
treated as qualified zone property or qualified renewal
property, unless the taxpayer elects not to take such qualified
section 179 disaster assistance property into account for
purposes of this subsection.
``(4) <<NOTE: Applicability.>> Recapture.--For purposes of
this subsection, rules similar to the rules under subsection
(d)(10) shall apply with respect to any qualified section 179
disaster assistance property which ceases to be qualified
section 179 disaster assistance property.''.
(b) <<NOTE: 26 USC 179 note.>> Effective Date.--The amendment made
by this section shall apply to property placed in service after December
31, 2007, with respect disasters declared after such date.
SEC. 712. <<NOTE: 26 USC 56 note.>> COORDINATION WITH HEARTLAND
DISASTER RELIEF.
The amendments made by this subtitle, other than the amendments made
by sections 706(a)(2), 710, and 711, shall not apply to any disaster
described in section 702(c)(1)(A), or to any expenditure or loss
resulting from such disaster.
TITLE VIII--SPENDING REDUCTIONS AND APPROPRIATE REVENUE RAISERS FOR NEW
TAX RELIEF POLICY
SEC. 801. 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
[[Page 122 STAT. 3930]]
``(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) <<NOTE: Regulations.>> 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.
[[Page 122 STAT. 3931]]
``(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) <<NOTE: Deadline.>> 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.''.
(b) Conforming Amendment.--Section 26(b)(2), as amended by the
Housing Assistance Tax Act of 2008, <<NOTE: 26 USC 26.>> 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) <<NOTE: 26 USC 457A note.>> Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
[[Page 122 STAT. 3932]]
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) <<NOTE: Deadline. Guidance.>> Accelerated payments.--No
later than 120 days after the date of the enactment of this Act,
the Secretary shall issue guidance providing a limited period of
time during which a nonqualified deferred compensation
arrangement attributable to services performed on or before
December 31, 2008, may, without violating the requirements of
section 409A(a) of the Internal Revenue Code of 1986, be amended
to conform the date of distribution to the date the amounts are
required to be included in income.
(4) Certain back-to-back arrangements.--If the taxpayer is
also a service recipient and maintains one or more nonqualified
deferred compensation arrangements for its service providers
under which any amount is attributable to services performed on
or before December 31, 2008, the guidance issued under paragraph
(4) shall permit such arrangements to be amended to conform the
dates of distribution under such arrangement to the date amounts
are required to be included in the income of such taxpayer under
this subsection.
(5) Accelerated payment not treated as material
modification.--Any amendment to a nonqualified deferred
compensation arrangement made pursuant to paragraph (4) or (5)
shall not be treated as a material modification of the
[[Page 122 STAT. 3933]]
arrangement for purposes of section 409A of the Internal Revenue
Code of 1986.
Approved October 3, 2008.
LEGISLATIVE HISTORY--H.R. 1424:
---------------------------------------------------------------------------
HOUSE REPORTS: No. 110-374, Pt. 1 (Comm. on Education and Labor), Pt. 2
(Comm. on Ways and Means), and Pt. 3 (Comm. on Energy and Commerce).
CONGRESSIONAL RECORD, Vol. 154 (2008):
Mar. 5, considered and passed House.
Oct. 1, considered and passed Senate, amended.
Oct. 3, House concurred in Senate amendments.
<all>