59–008 

109TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 109–722 

RELATING TO CONSIDERATION OF H.R. 6111, TO AMEND THE INTERNAL 

REVENUE CODE OF 1986 TO PROVIDE THAT THE TAX COURT MAY REVIEW CLAIMS FOR EQUITABLE INNOCENT SPOUSE RELIEF AND TO SUSPEND THE RUNNING ON THE PERIOD OF LIMITATIONS WHILE SUCH 

CLAIMS ARE PENDING 

DECEMBER 7, 2006.—Referred to the House Calendar and ordered to be printed 

Mr. GINGREY, from the Committee on Rules, 

submitted the following 

R E P O R T 

[To accompany H. Res. 1099] 

The Committee on Rules, having had under consideration House 

Resolution 1099, by a nonrecord vote, report the same to the House 

with the recommendation that the resolution be adopted. 

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides for the disposition of the Senate amendment to the bill, H.R. 6111, to amend the Internal Revenue Code 

of 1986 to provide that the Tax Court may review claims for equitable innocent spouse relief and to suspend the running on the period of limitations while such claims are pending. 

The rule makes in order a motion by the chairman of the Committee on Ways and Means to concur in the Senate amendment 

with the amendment printed in this report. The rule waives all 

points of order against the motion. The rule provides one hour of 

debate on the motion equally divided and controlled by the chairman and ranking minority member of the Committee on Ways and 

Means. 

Finally, the rule provides one motion to amend, which shall be 

separately debatable for five minutes by the proponent and five 

minutes by an opponent. 

EXPLANATION OF WAIVERS

The Committee is not aware of any points of order against the 

motion. The waiver of all points of order against the motion is prophylactic in nature. 


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SUMMARY OF THE HOUSE AMENDMENT TO THE SENATE AMENDMENT

TO H.R. 6111 MADE IN ORDER UNDER THE RULE

Thomas (CA): The House amendment to H.R. 6111 adds the following: 

• The complete text of H.R. 6408, the Tax Relief and Health 

Care Act of 2006, which provides extension and modification of 

certain tax relief provisions through 2007, extension of certain 

expiring energy provisions and other energy provisions, health 

savings account (HSA) provisions, other tax relief provisions 

and miscellaneous provisions (Division A, Division B, Division 

C: Titles I and II, Title IV Sections 401 through 405). 

• Provisions with respect to White Pine County, Nevada wilderness conservation, recreation and development (Division C: 

Title III). 

• Temporary duty reductions for certain cotton shirting fabric and cotton trust fund provisions (Division C: Title IV, Sections 406 and 407). 

• A provision that allows Medicare beneficiaries who are enrolled in traditional fee-for-service but not enrolled in a prescription drug plan to enroll in a Medicare Advantage plan 

that does not offer drug coverage after their enrollment period 

ended. These beneficiaries would be allowed to make this 

change once during the year, after their enrollment period had 

ended. This amendment would sunset in two years. (Division 

B: Title II, Section 206). 

The text of H.R. 6111 as passed by the House is retained in the 

House amendment to H.R. 6111 (Division C: Title IV, Section 408). 

TEXT OF THE HOUSE AMENDMENT TO THE SENATE AMENDMENT TO

H.R. 6111 MADE IN ORDER UNDER THE RULE

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE, ETC. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Tax Relief and 

Health Care Act of 2006’’. 

(b) TABLE OF CONTENTS.—The table of contents for this Act is as 

follows: 

Sec. 1. Short title, etc. 

DIVISION A—EXTENSION AND EXPANSION OF CERTAIN TAX RELIEF 

PROVISIONS, AND OTHER TAX PROVISIONS 

Sec. 100. Reference. 

TITLE I—EXTENSION AND MODIFICATION OF CERTAIN PROVISIONS 

Sec. 101. Deduction for qualified tuition and related expenses. 

Sec. 102. Extension and modification of new markets tax credit. 

Sec. 103. Election to deduct State and local general sales taxes. 

Sec. 104. Extension and modification of research credit. 

Sec. 105. Work opportunity tax credit and welfare-to-work credit. 

Sec. 106. Election to include combat pay as earned income for purposes of earned 

income credit. 

Sec. 107. Extension and modification of qualified zone academy bonds. 

Sec. 108. Above-the-line deduction for certain expenses of elementary and secondary school teachers. 

Sec. 109. Extension and expansion of expensing of brownfields remediation costs. 

Sec. 110. Tax incentives for investment in the District of Columbia. 

Sec. 111. Indian employment tax credit. 

Sec. 112. Accelerated depreciation for business property on Indian reservations. 


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Sec. 113. Fifteen-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant property. 

Sec. 114. Cover over of tax on distilled spirits. 

Sec. 115. Parity in application of certain limits to mental health benefits. 

Sec. 116. Corporate donations of scientific property used for research and of computer technology and equipment. 

Sec. 117. Availability of medical savings accounts. 

Sec. 118. Taxable income limit on percentage depletion for oil and natural gas produced from marginal properties. 

Sec. 119. American Samoa economic development credit. 

Sec. 120. Extension of bonus depreciation for certain qualified Gulf Opportunity 

Zone property. 

Sec. 121. Authority for undercover operations. 

Sec. 122. Disclosures of certain tax return information. 

Sec. 123. Special rule for elections under expired provisions. 

TITLE II—ENERGY TAX PROVISIONS 

Sec. 201. Credit for electricity produced from certain renewable resources. 

Sec. 202. Credit to holders of clean renewable energy bonds. 

Sec. 203. Performance standards for sulfur dioxide removal in advanced coal-based 

generation technology units designed to use subbituminous coal. 

Sec. 204. Deduction for energy efficient commercial buildings. 

Sec. 205. Credit for new energy efficient homes. 

Sec. 206. Credit for residential energy efficient property. 

Sec. 207. Energy credit. 

Sec. 208. Special rule for qualified methanol or ethanol fuel. 

Sec. 209. Special depreciation allowance for cellulosic biomass ethanol plant property. 

Sec. 210. Expenditures permitted from the Leaking Underground Storage Tank 

Trust Fund. 

Sec. 211. Treatment of coke and coke gas. 

TITLE III—HEALTH SAVINGS ACCOUNTS 

Sec. 301. Short title. 

Sec. 302. FSA and HRA terminations to fund HSAs. 

Sec. 303. Repeal of annual deductible limitation on HSA contributions. 

Sec. 304. Modification of cost-of-living adjustment. 

Sec. 305. Contribution limitation not reduced for part-year coverage. 

Sec. 306. Exception to requirement for employers to make comparable health savings account contributions. 

Sec. 307. One-time distribution from individual retirement plans to fund HSAs. 

TITLE IV—OTHER PROVISIONS 

Sec. 401. Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico. 

Sec. 402. Credit for prior year minimum tax liability made refundable after period 

of years. 

Sec. 403. Returns required in connection with certain options. 

Sec. 404. Partial expensing for advanced mine safety equipment. 

Sec. 405. Mine rescue team training tax credit. 

Sec. 406. Whistleblower reforms. 

Sec. 407. Frivolous tax submissions. 

Sec. 408. Addition of meningococcal and human papillomavirus vaccines to list of 

taxable vaccines. 

Sec. 409. Clarification of taxation of certain settlement funds made permanent. 

Sec. 410. Modification of active business definition under section 355 made permanent. 

Sec. 411. Revision of State veterans limit made permanent. 

Sec. 412. Capital gains treatment for certain self-created musical works made permanent. 

Sec. 413. Reduction in minimum vessel tonnage which qualifies for tonnage tax 

made permanent. 

Sec. 414. Modification of special arbitrage rule for certain funds made permanent. 

Sec. 415. Great Lakes domestic shipping to not disqualify vessel from tonnage tax. 

Sec. 416. Use of qualified mortgage bonds to finance residences for veterans without regard to first-time homebuyer requirement. 

Sec. 417. Exclusion of gain from sale of a principal residence by certain employees 

of the intelligence community. 


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Sec. 418. Sale of property by judicial officers. 

Sec. 419. Premiums for mortgage insurance. 

Sec. 420. Modification of refunds for kerosene used in aviation. 

Sec. 421. Regional income tax agencies treated as States for purposes of confidentiality and disclosure requirements. 

Sec. 422. Designation of wines by semi-generic names. 

Sec. 423. Modification of railroad track maintenance credit. 

Sec. 424. Modification of excise tax on unrelated business taxable income of charitable remainder trusts. 

Sec. 425. Loans to qualified continuing care facilities made permanent. 

Sec. 426. Technical corrections. 

DIVISION B—MEDICARE AND OTHER HEALTH PROVISIONS 

Sec. 1. Short title of division. 

TITLE I—MEDICARE IMPROVED QUALITY AND PROVIDER PAYMENTS 

Sec. 101. Physician payment and quality improvement. 

Sec. 102. Extension of floor on Medicare work geographic adjustment. 

Sec. 103. Update to the composite rate component of the basic case-mix adjusted 

prospective payment system for dialysis services. 

Sec. 104. Extension of treatment of certain physician pathology services under 

Medicare. 

Sec. 105. Extension of Medicare reasonable costs payments for certain clinical diagnostic laboratory tests furnished to hospital patients in certain rural 

areas. 

Sec. 106. Hospital Medicare reports and clarifications. 

Sec. 107. Payment for brachytherapy. 

Sec. 108. Payment process under the competitive acquisition program (CAP). 

Sec. 109. Quality reporting for hospital outpatient services and ambulatory surgical 

center services. 

Sec. 110. Reporting of anemia quality indicators for Medicare part B cancer antianemia drugs. 

Sec. 111. Clarification of hospice satellite designation. 

TITLE II—MEDICARE BENEFICIARY PROTECTIONS 

Sec. 201. Extension of exceptions process for Medicare therapy caps. 

Sec. 202. Payment for administration of part D vaccines. 

Sec. 203. OIG study of never events. 

Sec. 204. Medicare medical home demonstration project. 

Sec. 205. Medicare DRA technical corrections. 

Sec. 206. Limited continuous open enrollment of original medicare fee-for-service 

enrollees into Medicare Advantage non-prescription drug plans. 

TITLE III—MEDICARE PROGRAM INTEGRITY EFFORTS 

Sec. 301. Offsetting adjustment in Medicare Advantage Stabilization Fund. 

Sec. 302. Extension and expansion of recovery audit contractor program under the 

Medicare Integrity Program. 

Sec. 303. Funding for the Health Care Fraud and Abuse Control Account. 

Sec. 304. Implementation funding. 

TITLE IV—MEDICAID AND OTHER HEALTH PROVISIONS 

Sec. 401. Extension of Transitional Medical Assistance (TMA) and abstinence education program. 

Sec. 402. Grants for research on vaccine against Valley Fever. 

Sec. 403. Change in threshold for Medicaid indirect hold harmless provision of 

broad-based health care taxes. 

Sec. 404. DSH allotments for fiscal year 2007 for Tennessee and Hawaii. 

Sec. 405. Certain Medicaid DRA technical corrections. 

DIVISION C—OTHER PROVISIONS 

TITLE I—GULF OF MEXICO ENERGY SECURITY 

Sec. 101. Short title. 

Sec. 102. Definitions. 

Sec. 103. Offshore oil and gas leasing in 181 Area and 181 south Area of Gulf of 

Mexico. 

Sec. 104. Moratorium on oil and gas leasing in certain areas of Gulf of Mexico. 


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Sec. 105. Disposition of qualified outer Continental Shelf revenues from 181 Area, 

181 south Area, and 2002–2007 planning areas of Gulf of Mexico. 

TITLE II—SURFACE MINING CONTROL AND RECLAMATION ACT 

AMENDMENTS OF 2006 

Sec. 200. Short title. 

Subtitle A—Mining Control and Reclamation 

Sec. 201. Abandoned Mine Reclamation Fund and purposes. 

Sec. 202. Reclamation fee. 

Sec. 203. Objectives of Fund. 

Sec. 204. Reclamation of rural land. 

Sec. 205. Liens. 

Sec. 206. Certification. 

Sec. 207. Remining incentives. 

Sec. 208. Extension of limitation on application of prohibition on issuance of permit. 

Sec. 209. Tribal regulation of surface coal mining and reclamation operations. 

Subtitle B—Coal Industry Retiree Health Benefit Act 

Sec. 211. Certain related persons and successors in interest relieved of liability if 

premiums prepaid. 

Sec. 212. Transfers to funds; premium relief. 

Sec. 213. Other provisions. 

TITLE III—WHITE PINE COUNTY CONSERVATION, RECREATION, AND 

DEVELOPMENT 

Sec. 301. Authorization of appropriations. 

Sec. 302. Short title. 

Sec. 303. Definitions. 

Subtitle A—Land Disposal 

Sec. 311. Conveyance of White Pine County, Nevada, land. 

Sec. 312. Disposition of proceeds. 

Subtitle B—Wilderness Areas 

Sec. 321. Short title. 

Sec. 322. Findings. 

Sec. 323. Additions to National Wilderness Preservation System. 

Sec. 324. Administration. 

Sec. 325. Adjacent management. 

Sec. 326. Military overflights. 

Sec. 327. Native American cultural and religious uses. 

Sec. 328. Release of wilderness study areas. 

Sec. 329. Wildlife management. 

Sec. 330. Wildfire, insect, and disease management. 

Sec. 331. Climatological data collection. 

Subtitle C—Transfers of Administrative Jurisdiction 

Sec. 341. Transfer to the United States Fish and Wildlife Service. 

Sec. 342. Transfer to the Bureau of Land Management. 

Sec. 343. Transfer to the Forest Service. 

Sec. 344. Availability of map and legal descriptions. 

Subtitle D—Public Conveyances 

Sec. 351. Conveyance to the State of Nevada. 

Sec. 352. Conveyance to White Pine County, Nevada. 

Subtitle E—Silver State Off-Highway Vehicle Trail 

Sec. 355. Silver State off-highway vehicle trail. 

Subtitle F—Transfer of Land to Be Held in Trust for the Ely Shoshone Tribe. 

Sec. 361. Transfer of land to be held in trust for the Ely Shoshone Tribe. 

Subtitle G—Eastern Nevada Landscape Restoration Project. 

Sec. 371. Findings; purposes. 


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Sec. 372. Definitions. 

Sec. 373. Restoration project. 

Subtitle H—Amendments to the Southern Nevada Public Land Management Act of 

1998 

Sec. 381. Findings. 

Sec. 382. Availability of special account. 

Subtitle I—Amendments to the Lincoln County Conservation, Recreation, and 

Development Act of 2004 

Sec. 391. Disposition of proceeds. 

Subtitle J—All American Canal Projects 

Sec. 395. All American Canal Lining Project. 

Sec. 396. Regulated storage water facility. 

Sec. 397. Application of law. 

TITLE IV—OTHER PROVISIONS 

Sec. 401. Tobacco personal use quantity exception to not apply to delivery sales. 

Sec. 402. Ethanol Tariff Schedule. 

Sec. 403. Withdrawal of certain Federal land and interests in certain Federal land 

from location, entry, and patent under the mining laws and disposition 

under the mineral and geothermal leasing laws. 

Sec. 404. Continuing eligibility for certain students under District of Columbia 

School Choice Program. 

Sec. 405. Study on Establishing Uniform National Database on Elder Abuse. 

Sec. 406. Temporary duty reductions for certain cotton shirting fabric. 

Sec. 407. Cotton Trust Fund. 

Sec. 408. Tax court review of requests for equitable relief from joint and several liability. 

DIVISION A—EXTENSION AND EXPANSION OF CERTAIN TAX RELIEF PROVISIONS, AND OTHER TAX PROVISIONS 

SEC. 100. 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. 

TITLE I—EXTENSION AND MODIFICATION OF CERTAIN PROVISIONS 

SEC. 101. DEDUCTION FOR QUALIFIED TUITION AND RELATED EXPENSES. 

(a) IN GENERAL.—Section 222(e) is amended by striking 

‘‘2005’’and inserting ‘‘2007’’. 

(b) CONFORMING AMENDMENTS.—Section 222(b)(2)(B) is amended—

(1) by striking ‘‘a taxable year beginning in 2004 or 2005’’

and inserting ‘‘any taxable year beginning after 2003’’, and 

(2) by striking ‘‘2004 AND 2005’’ in the heading and inserting 

‘‘AFTER 2003’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2005. 


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SEC. 102. EXTENSION AND MODIFICATION OF NEW MARKETS TAX 

CREDIT. 

(a) EXTENSION.—Section 45D(f)(1)(D) is amended by striking ‘‘and 

2007’’ and inserting ‘‘, 2007, and 2008’’. (b) REGULATIONS REGARDING NON-METROPOLITAN COUNTIES.— Section 45D(i) is amended by striking ‘‘and’’ at the end of paragraph (4), by striking the period at the end of paragraph (5) and 

inserting ‘‘, and’’, and by adding at the end the following new paragraph: ‘‘(6) which ensure that non-metropolitan counties receive a 

proportional allocation of qualified equity investments.’’. (c) EFFECTIVE DATE.—The amendments made by this section 

shall take effect on the date of the enactment of this Act. 

SEC. 103. ELECTION TO DEDUCT STATE AND LOCAL GENERAL SALES 

TAXES. 

(a) IN GENERAL.—Section 164(b)(5)(I) is amended by striking ‘‘2006’’ and inserting ‘‘2008’’. (b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2005. 

SEC. 104. EXTENSION AND MODIFICATION OF RESEARCH CREDIT. 

(a) EXTENSION.— (1) IN GENERAL.—Section 41(h)(1)(B) is amended by striking ‘‘2005’’ and inserting ‘‘2007’’. (2) CONFORMING AMENDMENT.—Section 45C(b)(1)(D) is 

amended by striking ‘‘2005’’ and inserting ‘‘2007’’. (3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to amounts paid or incurred after December 

31, 2005. 

(b) INCREASE IN RATES OF ALTERNATIVE INCREMENTAL CREDIT.— (1) IN GENERAL.—Subparagraph (A) of section 41(c)(4) (relating to election of alternative incremental credit) is amended— (A) by striking ‘‘2.65 percent’’ and inserting ‘‘3 percent’’, (B) by striking ‘‘3.2 percent’’ and inserting ‘‘4 percent’’, and 

(C) by striking ‘‘3.75 percent’’ and inserting ‘‘5 percent’’. 

(2) EFFECTIVE DATE.—Except as provided in paragraph (3), 

the amendments made by this subsection shall apply to taxable years ending after December 31, 2006. 

(3) TRANSITION RULE.—

(A) IN GENERAL.—In the case of a specified transitional 

taxable year for which an election under section 41(c)(4) of 

the Internal Revenue Code of 1986 applies, the credit determined under section 41(a)(1) of such Code shall be 

equal to the sum of—

(i) the applicable 2006 percentage multiplied by the 

amount determined under section 41(c)(4)(A) of such 

Code (as in effect for taxable years ending on December 31, 2006), plus 

(ii) the applicable 2007 percentage multiplied by the 

amount determined under section 41(c)(4)(A) of such 

Code (as in effect for taxable years ending on January 

1, 2007). 

(B) DEFINITIONS.—For purposes of subparagraph (A)—

(i) SPECIFIED TRANSITIONAL TAXABLE YEAR.—The 

term ‘‘specified transitional taxable year’’ means any 


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taxable year which ends after December 31, 2006, and 

which includes such date. 

(ii) APPLICABLE 2006 PERCENTAGE.—The term ‘‘applicable 2006 percentage’’ means the number of days in 

the specified transitional taxable year before January 

1, 2007, divided by the number of days in such taxable 

year. 

(iii) APPLICABLE 2007 PERCENTAGE.—The term ‘‘applicable 2007 percentage’’ means the number of days in 

the specified transitional taxable year after December 

31, 2006, divided by the number of days in such taxable year. 

(c) ALTERNATIVE SIMPLIFIED CREDIT FOR QUALIFIED RESEARCH

EXPENSES.—

(1) IN GENERAL.—Subsection (c) of section 41 (relating to 

base amount) is amended by redesignating paragraphs (5) and 

(6) as paragraphs (6) and (7), respectively, and by inserting 

after paragraph (4) the following new paragraph: 

‘‘(5) ELECTION OF ALTERNATIVE SIMPLIFIED CREDIT.—

‘‘(A) IN GENERAL.—At the election of the taxpayer, the 

credit determined under subsection (a)(1) shall be equal to 

12 percent of so much of the qualified research expenses 

for the taxable year as exceeds 50 percent of the average 

qualified research expenses for the 3 taxable years preceding the taxable year for which the credit is being determined. 

‘‘(B) SPECIAL RULE IN CASE OF NO QUALIFIED RESEARCH

EXPENSES IN ANY OF 3 PRECEDING TAXABLE YEARS.— ‘‘(i) TAXPAYERS TO WHICH SUBPARAGRAPH APPLIES.—

The credit under this paragraph shall be determined 

under this subparagraph if the taxpayer has no qualified research expenses in any one of the 3 taxable 

years preceding the taxable year for which the credit 

is being determined. ‘‘(ii) CREDIT RATE.—The credit determined under 

this subparagraph shall be equal to 6 percent of the 

qualified research expenses for the taxable year. ‘‘(C) ELECTION.—An election under this paragraph shall 

apply to the taxable year for which made and all succeeding taxable years unless revoked with the consent of 

the Secretary. An election under this paragraph may not 

be made for any taxable year to which an election under 

paragraph (4) applies.’’. (2) TRANSITION RULE FOR DEEMED REVOCATION OF ELECTION

OF ALTERNATIVE INCREMENTAL CREDIT.—In the case of an election under section 41(c)(4) of the Internal Revenue Code of 

1986 which applies to the taxable year which includes January 

1, 2007, such election shall be treated as revoked with the consent of the Secretary of the Treasury if the taxpayer makes an 

election under section 41(c)(5) of such Code (as added by this 

subsection) for such year. 

(3) EFFECTIVE DATE.—Except as provided in paragraph (4), 

the amendments made by this subsection shall apply to taxable years ending after December 31, 2006. 

(4) TRANSITION RULE FOR NONCALENDAR TAXABLE YEARS.—


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(A) IN GENERAL.—In the case of a specified transitional 

taxable year for which an election under section 41(c)(5) of 

the Internal Revenue Code of 1986 (as added by this subsection) applies, the credit determined under section 

41(a)(1) of such Code shall be equal to the sum of—

(i) the applicable 2006 percentage multiplied by the 

amount determined under section 41(a)(1) of such 

Code (as in effect for taxable years ending on December 31, 2006), plus 

(ii) the applicable 2007 percentage multiplied by the 

amount determined under section 41(c)(5) of such 

Code (as in effect for taxable years ending on January 

1, 2007). 

(B) DEFINITIONS AND SPECIAL RULES.—For purposes of 

subparagraph (A)—

(i) DEFINITIONS.—Terms used in this paragraph 

which are also used in subsection (b)(3) shall have the 

respective meanings given such terms in such subsection. 

(ii) DUAL ELECTIONS PERMITTED.—Elections under 

paragraphs (4) and (5) of section 41(c) of such Code 

may both apply for the specified transitional taxable 

year. 

(iii) DEFERRAL OF DEEMED ELECTION REVOCATION.—

Any election under section 41(c)(4) of the Internal Revenue Code of 1986 treated as revoked under paragraph (2) shall be treated as revoked for the taxable 

year after the specified transitional taxable year. 

SEC. 105. WORK OPPORTUNITY TAX CREDIT AND WELFARE-TO-WORK 

CREDIT. 

(a) IN GENERAL.—Sections 51(c)(4)(B) and 51A(f) are each 

amended by striking ‘‘2005’’ and inserting ‘‘2007’’. 

(b) ELIGIBILITY OF EX-FELONS DETERMINED WITHOUT REGARD TO

FAMILY INCOME.—Paragraph (4) of section 51(d) is amended by 

adding ‘‘and’’ at the end of subparagraph (A), by striking ‘‘, and’’

at the end of subparagraph (B) and inserting a period, and by 

striking all that follows subparagraph (B). 

(c) INCREASE IN MAXIMUM AGE FOR ELIGIBILITY OF FOOD STAMP

RECIPIENTS.—Clause (i) of section 51(d)(8)(A) is amended by striking ‘‘25’’ and inserting ‘‘40’’. 

(d) EXTENSION OF PAPERWORK FILING DEADLINE.—Section 

51(d)(12)(A)(ii)(II) is amended by striking ‘‘21st day’’ and inserting 

‘‘28th day’’. 

(e) CONSOLIDATION OF WORK OPPORTUNITY CREDIT WITH WELFARE-TO-WORK CREDIT.—

(1) IN GENERAL.—Paragraph (1) of section 51(d) is amended 

by striking ‘‘or’’ at the end of subparagraph (G), by striking the 

period at the end of subparagraph (H) and inserting ‘‘, or’’, and 

by adding at the end the following new subparagraph: 

‘‘(I) a long-term family assistance recipient.’’. 

(2) LONG-TERM FAMILY ASSISTANCE RECIPIENT.—Subsection 

(d) of section 51 is amended by redesignating paragraphs (10) 

through (12) as paragraphs (11) through (13), respectively, and 

by inserting after paragraph (9) the following new paragraph: 


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‘‘(10) LONG-TERM FAMILY ASSISTANCE RECIPIENT.—The term ‘long-term family assistance recipient’ means any individual 

who is certified by the designated local agency— ‘‘(A) as being a member of a family receiving assistance 

under a IV–A program (as defined in paragraph (2)(B)) for 

at least the 18-month period ending on the hiring date, ‘‘(B)(i) as being a member of a family receiving such assistance for 18 months beginning after August 5, 1997, and ‘‘(ii) as having a hiring date which is not more than 2 

years after the end of the earliest such 18-month period, 

or ‘‘(C)(i) as being a member of a family which ceased to be 

eligible for such assistance by reason of any limitation imposed by Federal or State law on the maximum period 

such assistance is payable to a family, and ‘‘(ii) as having a hiring date which is not more than 2 

years after the date of such cessation.’’. (3) INCREASED CREDIT FOR EMPLOYMENT OF LONG-TERM FAMILY ASSISTANCE RECIPIENTS.—Section 51 is amended by inserting after subsection (d) the following new subsection: 

‘‘(e) CREDIT FOR SECOND-YEAR WAGES FOR EMPLOYMENT OF

LONG-TERM FAMILY ASSISTANCE RECIPIENTS.— ‘‘(1) IN GENERAL.—With respect to the employment of a longterm family assistance recipient— ‘‘(A) the amount of the work opportunity credit determined under this section for the taxable year shall include 

50 percent of the qualified second-year wages for such 

year, and ‘‘(B) in lieu of applying subsection (b)(3), the amount of 

the qualified first-year wages, and the amount of qualified 

second-year wages, which may be taken into account with 

respect to such a recipient shall not exceed $10,000 per 

year. ‘‘(2) QUALIFIED SECOND-YEAR WAGES.—For purposes of this 

subsection, the term ‘qualified second-year wages’ means qualified wages—

‘‘(A) which are paid to a long-term family assistance recipient, and 

‘‘(B) which are attributable to service rendered during 

the 1-year period beginning on the day after the last day 

of the 1-year period with respect to such recipient determined under subsection (b)(2). 

‘‘(3) SPECIAL RULES FOR AGRICULTURAL AND RAILWAY

LABOR.—If such recipient is an employee to whom subparagraph (A) or (B) of subsection (h)(1) applies, rules similar to 

the rules of such subparagraphs shall apply except that—

‘‘(A) such subparagraph (A) shall be applied by substituting ‘$10,000’ for ‘$6,000’, and 

‘‘(B) such subparagraph (B) shall be applied by substituting ‘$833.33’ for ‘$500’.’’. (4) REPEAL OF SEPARATE WELFARE-TO-WORK CREDIT.— (A) IN GENERAL.—Section 51A is hereby repealed. 

(B) CLERICAL AMENDMENT.—The table of sections for 

subpart F of part IV of subchapter A of chapter 1 is 

amended by striking the item relating to section 51A. 


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(f) EFFECTIVE DATES.— (1) IN GENERAL.—Except as provided in paragraph (2), the 

amendments made by this section shall apply to individuals 

who begin work for the employer after December 31, 2005. 

(2) CONSOLIDATION.—The amendments made by subsections 

(b), (c), (d), and (e) shall apply to individuals who begin work 

for the employer after December 31, 2006. 

SEC. 106. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME 

FOR PURPOSES OF EARNED INCOME CREDIT. 

(a) IN GENERAL.—Section 32(c)(2)(B)(vi)(II) is amended by striking ‘‘2007’’ and inserting ‘‘2008’’. (b) EFFECTIVE DATE.—The amendment made by this section shall 

apply to taxable years beginning after December 31, 2006. 

SEC. 107. EXTENSION AND MODIFICATION OF QUALIFIED ZONE ACADEMY BONDS. 

(a) IN GENERAL.—Paragraph (1) of section 1397E(e) is amended 

by striking ‘‘and 2005’’ and inserting ‘‘2005, 2006, and 2007’’. (b) SPECIAL RULES RELATING TO EXPENDITURES, ARBITRAGE, AND

REPORTING.— (1) IN GENERAL.—Section 1397E is amended— (A) in subsection (d)(1), by striking ‘‘and’’ at the end of 

subparagraph (C)(iii), by striking the period at the end of 

subparagraph (D) and inserting ‘‘, and’’, and by adding at 

the end the following new subparagraph: ‘‘(E) the issue meets the requirements of subsections (f), 

(g), and (h).’’, and 

(B) by redesignating subsections (f), (g), (h), and (i) as 

subsection (i), (j), (k), and (l), respectively, and by inserting 

after subsection (e) the following new subsections: ‘‘(f) SPECIAL RULES RELATING TO EXPENDITURES.— ‘‘(1) IN GENERAL.—An issue shall be treated as meeting the 

requirements of this subsection if, as of the date of issuance, 

the issuer reasonably expects— ‘‘(A) at least 95 percent of the proceeds from the sale of 

the issue are to be spent for 1 or more qualified purposes 

with respect to qualified zone academies within the 5-year 

period beginning on the date of issuance of the qualified 

zone academy bond, ‘‘(B) a binding commitment with a third party to spend 

at least 10 percent of the proceeds from the sale of the 

issue will be incurred within the 6-month period beginning 

on the date of issuance of the qualified zone academy bond, 

and 

‘‘(C) such purposes will be completed with due diligence 

and the proceeds from the sale of the issue will be spent 

with due diligence. ‘‘(2) EXTENSION OF PERIOD.—Upon submission of a request 

prior to the expiration of the period described in paragraph 

(1)(A), the Secretary may extend such period if the issuer establishes that the failure to satisfy the 5-year requirement is 

due to reasonable cause and the related purposes will continue 

to proceed with due diligence. 

‘‘(3) FAILURE TO SPEND REQUIRED AMOUNT OF BOND PROCEEDS

WITHIN 5 YEARS.—To the extent that less than 95 percent of the 

proceeds of such issue are expended by the close of the 5-year 


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period beginning on the date of issuance (or if an extension has 

been obtained under paragraph (2), by the close of the extended period), the issuer shall redeem all of the nonqualified 

bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds 

required to be redeemed shall be determined in the same manner as under section 142. 

‘‘(g) SPECIAL RULES RELATING TO ARBITRAGE.—An issue shall be 

treated as meeting the requirements of this subsection if the issuer 

satisfies the arbitrage requirements of section 148 with respect to 

proceeds of the issue. 

‘‘(h) REPORTING.—Issuers of qualified academy zone bonds shall 

submit reports similar to the reports required under section 

149(e).’’. 

(2) CONFORMING AMENDMENTS.—Sections 54(l)(3)(B) and 

1400N(l)(7)(B)(ii) are each amended by striking ‘‘section 

1397E(i)’’ and inserting ‘‘section 1397E(l)’’. 

(c) EFFECTIVE DATES.—

(1) EXTENSION.—The amendment made by subsection (a) 

shall apply to obligations issued after December 31, 2005. 

(2) SPECIAL RULES.—The amendments made by subsection 

(b) shall apply to obligations issued after the date of the enactment of this Act pursuant to allocations of the national zone 

academy bond limitation for calendar years after 2005. 

SEC. 108. ABOVE-THE-LINE DEDUCTION FOR CERTAIN EXPENSES OF 

ELEMENTARY AND SECONDARY SCHOOL TEACHERS. 

(a) IN GENERAL.—Subparagraph (D) of section 62(a)(2) is amended by striking ‘‘or 2005’’ and inserting ‘‘2005, 2006, or 2007’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

apply to taxable years beginning after December 31, 2005. 

SEC. 109. EXTENSION AND EXPANSION OF EXPENSING OF 

BROWNFIELDS REMEDIATION COSTS. 

(a) EXTENSION.—Subsection (h) of section 198 is amended by 

striking ‘‘2005’’ and inserting ‘‘2007’’. 

(b) EXPANSION.—Section 198(d)(1) (defining hazardous substance) 

is amended by striking ‘‘and’’ at the end of subparagraph (A), by 

striking the period at the end of subparagraph (B) and inserting ‘‘, 

and’’, and by adding at the end the following new subparagraph: 

‘‘(C) any petroleum product (as defined in section 

4612(a)(3)).’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to expenditures paid or incurred after December 31, 

2005. 

SEC. 110. 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 ‘‘2005’’ both places it appears and inserting ‘‘2007’’. (2) EFFECTIVE DATE.—The amendments made by this subsection shall apply to periods beginning after December 31, 

2005. 

(b) TAX-EXEMPT ECONOMIC DEVELOPMENT BONDS.— (1) IN GENERAL.—Subsection (b) of section 1400A is amended 

by striking ‘‘2005’’ and inserting ‘‘2007’’. 


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(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to bonds issued after December 31, 2005. 

(c) ZERO PERCENT CAPITAL GAINS RATE.— (1) IN GENERAL.—Subsection (b) of section 1400B is amended 

by striking ‘‘2006’’ each place it appears and inserting ‘‘2008’’. (2) CONFORMING AMENDMENTS.— (A) Section 1400B(e)(2) is amended— (i) by striking ‘‘2010’’ and inserting ‘‘2012’’, and 

(ii) by striking ‘‘2010’’ in the heading thereof and inserting ‘‘2012’’. (B) Section 1400B(g)(2) is amended by striking ‘‘2010’’ and inserting ‘‘2012’’. (C) Section 1400F(d) is amended by striking ‘‘2010’’ and 

inserting ‘‘2012’’. (3) EFFECTIVE DATES.— (A) EXTENSION.—The amendments made by paragraph 

(1) shall apply to acquisitions after December 31, 2005. 

(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 ‘‘2006’’ and inserting ‘‘2008’’. 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to property purchased after December 31, 

2005. 

SEC. 111. INDIAN EMPLOYMENT TAX CREDIT. 

(a) IN GENERAL.—Section 45A(f) is amended by striking ‘‘2005’’

and inserting ‘‘2007’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

apply to taxable years beginning after December 31, 2005. 

SEC. 112. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY 

ON INDIAN RESERVATIONS. 

(a) IN GENERAL.—Section 168(j)(8) is amended by striking ‘‘2005’’

and inserting ‘‘2007’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

apply to property placed in service after December 31, 2005. 

SEC. 113. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED LEASEHOLD IMPROVEMENTS AND QUALIFIED RESTAURANT PROPERTY. 

(a) IN GENERAL.—Clauses (iv) and (v) of section 168(e)(3)(E) are 

each amended by striking ‘‘2006’’ and inserting ‘‘2008’’. 

(b) EFFECTIVE DATE.—The amendments made by subsection (a) 

shall apply to property placed in service after December 31, 2005. 

SEC. 114. COVER OVER OF TAX ON DISTILLED SPIRITS. 

(a) IN GENERAL.—Section 7652(f)(1) is amended by striking ‘‘2006’’ and inserting ‘‘2008’’. (b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall apply to articles brought into the United States after December 31, 2005. 

SEC. 115. PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL 

HEALTH BENEFITS. 

(a) AMENDMENT TO THE INTERNAL REVENUE CODE OF 1986.—Section 9812(f)(3) is amended by striking ‘‘2006’’ and inserting ‘‘2007’’. 


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(b) AMENDMENT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.—Section 712(f) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185a(f)) is amended by striking ‘‘2006’’ and inserting ‘‘2007’’. 

(c) AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.—Section 

2705(f) of the Public Health Service Act (42 U.S.C. 300gg–5(f)) is 

amended by striking ‘‘2006’’and inserting ‘‘2007’’. 

SEC. 116. CORPORATE DONATIONS OF SCIENTIFIC PROPERTY USED 

FOR RESEARCH AND OF COMPUTER TECHNOLOGY AND 

EQUIPMENT. 

(a) EXTENSION OF COMPUTER TECHNOLOGY AND EQUIPMENT DONATION.—

(1) IN GENERAL.—Section 170(e)(6)(G) is amended by striking 

‘‘2005’’ and inserting ‘‘2007’’. 

(2) EFFECTIVE DATE.—The amendment made by paragraph 

(1) shall apply to contributions made in taxable years beginning after December 31, 2005. 

(b) EXPANSION OF CHARITABLE CONTRIBUTION ALLOWED FOR SCIENTIFIC PROPERTY USED FOR RESEARCH AND FOR COMPUTER TECHNOLOGY AND EQUIPMENT USED FOR EDUCATIONAL PURPOSES.—

(1) SCIENTIFIC PROPERTY USED FOR RESEARCH.—

(A) IN GENERAL.—Clause (ii) of section 170(e)(4)(B) (defining qualified research contributions) is amended by inserting ‘‘or assembled’’ after ‘‘constructed’’. 

(B) CONFORMING AMENDMENT.—Clause (iii) of section 

170(e)(4)(B) is amended by inserting ‘‘or assembly’’ after 

‘‘construction’’. 

(2) COMPUTER TECHNOLOGY AND EQUIPMENT FOR EDUCATIONAL PURPOSES.—

(A) IN GENERAL.—Clause (ii) of section 170(e)(6)(B) is 

amended by inserting ‘‘or assembled’’ after ‘‘constructed’’

and ‘‘or assembling’’ after ‘‘construction’’. 

(B) CONFORMING AMENDMENT.—Subparagraph (D) of section 170(e)(6) is amended by inserting ‘‘or assembled’’ after 

‘‘constructed’’ and ‘‘or assembly’’ after ‘‘construction’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to taxable years beginning after December 

31, 2005. 

SEC. 117. AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS. 

(a) IN GENERAL.—Paragraphs (2) and (3)(B) of section 220(i) are 

each amended by striking ‘‘2005’’ each place it appears in the text 

and headings and inserting ‘‘2007’’. 

(b) CONFORMING AMENDMENTS.—

(1) Paragraph (2) of section 220(j) is amended—

(A) in the text by striking ‘‘or 2004’’ each place it appears and inserting ‘‘2004, 2005, or 2006’’, and 

(B) in the heading by striking ‘‘OR 2004’’ and inserting 

‘‘2004, 2005, OR 2006’’ . 

(2) Subparagraph (A) of section 220(j)(4) is amended by striking ‘‘and 2004’’ and inserting ‘‘2004, 2005, and 2006’’. 

(c) TIME FOR FILING REPORTS, ETC.—

(1) The report required by section 220(j)(4) of the Internal 

Revenue Code of 1986 to be made on August 1, 2005, or August 1, 2006, as the case may be, shall be treated as timely if 


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made before the close of the 90-day period beginning on the 

date of the enactment of this Act. 

(2) The determination and publication required by section 

220(j)(5) of such Code with respect to calendar year 2005 or 

calendar year 2006, as the case may be, shall be treated as 

timely if made before the close of the 120-day period beginning 

on the date of the enactment of this Act. If the determination 

under the preceding sentence is that 2005 or 2006 is a cut-off 

year under section 220(i) of such Code, the cut-off date under 

such section 220(i) shall be the last day of such 120-day period. 

SEC. 118. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR 

OIL AND NATURAL GAS PRODUCED FROM MARGINAL 

PROPERTIES. 

(a) IN GENERAL.—Section 613A(c)(6)(H) is amended by striking 

‘‘2006’’ and inserting ‘‘2008’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall apply to taxable years beginning after December 31, 2005. 

SEC. 119. AMERICAN SAMOA ECONOMIC DEVELOPMENT CREDIT. 

(a) IN GENERAL.—For purposes of section 30A of the Internal 

Revenue Code of 1986, a domestic corporation shall be treated as 

a qualified domestic corporation to which such section applies if 

such corporation—

(1) is an existing credit claimant with respect to American 

Samoa, and 

(2) elected the application of section 936 of the Internal Revenue Code of 1986 for its last taxable year beginning before 

January 1, 2006. 

(b) SPECIAL RULES FOR APPLICATION OF SECTION.—The following 

rules shall apply in applying section 30A of the Internal Revenue 

Code of 1986 for purposes of this section: 

(1) AMOUNT OF CREDIT.—Notwithstanding section 30A(a)(1) 

of such Code, the amount of the credit determined under section 30A(a)(1) of such Code for any taxable year shall be the 

amount determined under section 30A(d) of such Code, except 

that section 30A(d) shall be applied without regard to paragraph (3) thereof. 

(2) SEPARATE APPLICATION.—In applying section 30A(a)(3) of 

such Code in the case of a corporation treated as a qualified 

domestic corporation by reason of this section, section 30A of 

such Code (and so much of section 936 of such Code as relates 

to such section 30A) shall be applied separately with respect 

to American Samoa. 

(3) FOREIGN TAX CREDIT ALLOWED.—Notwithstanding section 

30A(e) of such Code, the provisions of section 936(c) of such 

Code shall not apply with respect to the credit allowed by reason of this section. 

(c) DEFINITIONS.—For purposes of this section, any term which is 

used in this section which is also used in section 30A or 936 of such 

Code shall have the same meaning given such term by such section 

30A or 936. 

(d) APPLICATION OF SECTION.—Notwithstanding section 30A(h) or 

section 936(j) of such Code, this section (and so much of section 

30A and section 936 of such Code as relates to this section) shall 

apply to the first two taxable years of a corporation to which subVerDate Aug 31 2005 06:17 Dec 08, 2006 Jkt 059008 PO 00000 Frm 00015 Fmt 6659 Sfmt 6602 E:\HR\OC\HR722.XXX HR722

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section (a) applies which begin after December 31, 2005, and before 

January 1, 2008. 

SEC. 120. EXTENSION OF BONUS DEPRECIATION FOR CERTAIN QUALIFIED GULF OPPORTUNITY ZONE PROPERTY. 

(a) IN GENERAL.—Subsection (d) of section 1400N is amended by 

adding at the end the following new paragraph: 

‘‘(6) EXTENSION FOR CERTAIN PROPERTY.—

‘‘(A) IN GENERAL.—In the case of any specified Gulf Opportunity Zone extension property, paragraph (2)(A) shall 

be applied without regard to clause (v) thereof. 

‘‘(B) SPECIFIED GULF OPPORTUNITY ZONE EXTENSION

PROPERTY.—For purposes of this paragraph, the term 

‘specified Gulf Opportunity Zone extension property’ means 

property—

‘‘(i) substantially all of the use of which is in one or 

more specified portions of the GO Zone, and 

‘‘(ii) which is—

‘‘(I) nonresidential real property or residential 

rental property which is placed in service by the 

taxpayer on or before December 31, 2010, or 

‘‘(II) in the case of a taxpayer who places a 

building described in subclause (I) in service on or 

before December 31, 2010, property described in 

section 168(k)(2)(A)(i) if substantially all of the 

use of such property is in such building and such 

property is placed in service by the taxpayer not 

later than 90 days after such building is placed in 

service. 

‘‘(C) SPECIFIED PORTIONS OF THE GO ZONE.—For purposes 

of this paragraph, the term ‘specified portions of the GO 

Zone’ means those portions of the GO Zone which are in 

any county or parish which is identified by the Secretary 

as being a county or parish in which hurricanes occurring 

during 2005 damaged (in the aggregate) more than 60 percent of the housing units in such county or parish which 

were occupied (determined according to the 2000 Census). 

‘‘(D) ONLY PRE-JANUARY 1, 2010, BASIS OF REAL PROPERTY

ELIGIBLE FOR ADDITIONAL ALLOWANCE.—In the case of 

property which is qualified Gulf Opportunity Zone property solely by reason of subparagraph (B)(ii)(I), paragraph 

(1) shall apply only to the extent of the adjusted basis 

thereof attributable to manufacture, construction, or production before January 1, 2010.’’. 

(b) EXTENSION NOT APPLICABLE TO INCREASED SECTION 179 EXPENSING.—Paragraph (2) of section 1400N(e) is amended by inserting ‘‘without regard to subsection (d)(6)’’ after ‘‘subsection (d)(2)’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall take effect as if included in section 101 of the Gulf Opportunity Zone Act of 2005. 

SEC. 121. AUTHORITY FOR UNDERCOVER OPERATIONS. 

Paragraph (6) of section 7608(c) (relating to application of section) is amended by striking ‘‘2007’’ both places it appears and inserting ‘‘2008’’. 


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SEC. 122. DISCLOSURES OF CERTAIN TAX RETURN INFORMATION. 

(a) DISCLOSURES TO FACILITATE COMBINED EMPLOYMENT TAX REPORTING.—

(1) IN GENERAL.—Subparagraph (B) of section 6103(d)(5) (relating to termination) is amended by striking ‘‘2006’’ and inserting ‘‘2007’’. 

(2) EFFECTIVE DATE.—The amendment made by paragraph 

(1) shall apply to disclosures after December 31, 2006. 

(b) DISCLOSURES RELATING TO TERRORIST ACTIVITIES.—

(1) IN GENERAL.—Clause (iv) of section 6103(i)(3)(C) and subparagraph (E) of section 6103(i)(7) are each amended by striking ‘‘2006’’ and inserting ‘‘2007’’. 

(2) EFFECTIVE DATE.—The amendments made by paragraph 

(1) shall apply to disclosures after December 31, 2006. 

(c) DISCLOSURES RELATING TO STUDENT LOANS.—

(1) IN GENERAL.—Subparagraph (D) of section 6103(l)(13) (relating to termination) is amended by striking ‘‘2006’’ and inserting ‘‘2007’’. 

(2) EFFECTIVE DATE.—The amendment made by paragraph 

(1) shall apply to requests made after December 31, 2006. 

SEC. 123. SPECIAL RULE FOR ELECTIONS UNDER EXPIRED PROVISIONS. 

(a) RESEARCH CREDIT ELECTIONS.—In the case of any taxable 

year ending after December 31, 2005, and before the date of the enactment of this Act, any election under section 41(c)(4) or section 

280C(c)(3)(C) of the Internal Revenue Code of 1986 shall be treated 

as having been timely made for such taxable year if such election 

is made not later than the later of April 15, 2007, or such time as 

the Secretary of the Treasury, or his designee, may specify. Such 

election shall be made in the manner prescribed by such Secretary 

or designee. 

(b) OTHER ELECTIONS.—Except as otherwise provided by such 

Secretary or designee, a rule similar to the rule of subsection (a) 

shall apply with respect to elections under any other expired provision of the Internal Revenue Code of 1986 the applicability of 

which is extended by reason of the amendments made by this title. 

TITLE II—ENERGY TAX PROVISIONS 

SEC. 201. CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE RESOURCES. 

Subsection (d) of section 45 is amended by striking ‘‘January 1, 

2008’’ each place it appears and inserting ‘‘January 1, 2009’’. 

SEC. 202. CREDIT TO HOLDERS OF CLEAN RENEWABLE ENERGY 

BONDS. 

(a) IN GENERAL.—Section 54 is amended—

(1) by striking ‘‘$800,000,000’’ in subsection (f)(1) and inserting ‘‘$1,200,000,000’’, 

(2) by striking ‘‘$500,000,000’’ in subsection (f)(2) and inserting ‘‘$750,000,000’’, and 

(3) by striking ‘‘December 31, 2007’’ in subsection (m) and inserting ‘‘December 31, 2008’’. 

(b) EFFECTIVE DATES.—


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(1) IN GENERAL.—The amendments made by paragraphs (1) 

and (3) of subsection (a) shall apply to bonds issued after December 31, 2006. 

(2) ALLOCATIONS.—The amendment made by subsection 

(a)(2) shall apply to allocations or reallocations after December 

31, 2006. 

SEC. 203. PERFORMANCE STANDARDS FOR SULFUR DIOXIDE REMOVAL IN ADVANCED COAL-BASED GENERATION TECHNOLOGY UNITS DESIGNED TO USE SUBBITUMINOUS 

COAL. 

(a) IN GENERAL.—Paragraph (1) of section 48A(f) (relating to advanced coal-based generation technology) is amended by adding at 

the end the following new flush sentence: 

‘‘For purposes of the performance requirement specified for the 

removal of SO2 in the table contained in subparagraph (B), the 

SO2 removal design level in the case of a unit designed for the 

use of feedstock substantially all of which is subbituminous 

coal shall be 99 percent SO2 removal or the achievement of an 

emission level of 0.04 pounds or less of SO2 per million Btu, 

determined on a 30-day average.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

take apply with respect to applications for certification under section 48A(d)(2) of the Internal Revenue Code of 1986 submitted 

after October 2, 2006. 

SEC. 204. DEDUCTION FOR ENERGY EFFICIENT COMMERCIAL BUILDINGS. 

Subsection (h) of section 179D is amended by striking ‘‘December 

31, 2007’’ and inserting ‘‘December 31, 2008’’. 

SEC. 205. CREDIT FOR NEW ENERGY EFFICIENT HOMES. 

Subsection (g) of section 45L is amended by striking ‘‘December 

31, 2007’’ and inserting ‘‘December 31, 2008’’. 

SEC. 206. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY. 

(a) EXTENSION.—Subsection (g) of section 25D is amended by 

striking ‘‘December 31, 2007’’ and inserting ‘‘December 31, 2008’’. 

(b) CLARIFICATION OF TERM.—

(1) Subsections (a)(1), (b)(1)(A), and (e)(4)(A)(i) of section 25D 

are each amended by striking ‘‘qualified photovoltaic property 

expenditures’’ and inserting ‘‘qualified solar electric property 

expenditures’’. 

(2) Section 25D(d)(2) is amended—

(A) by striking ‘‘qualified photovoltaic property expenditure’’ and inserting ‘‘qualified solar electric property expenditure’’, and 

(B) in the heading by striking ‘‘QUALIFIED PHOTOVOLTAIC

PROPERTY EXPENDITURE’’ and inserting ‘‘QUALIFIED SOLAR

ELECTRIC PROPERTY EXPENDITURE’’. 

SEC. 207. ENERGY CREDIT. 

Section 48 is amended—

(1) by striking ‘‘January 1, 2008’’ both places it appears and 

inserting ‘‘January 1, 2009’’, and 

(2) by striking ‘‘December 31, 2007’’ both places it appears 

and inserting ‘‘December 31, 2008’’. 


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SEC. 208. SPECIAL RULE FOR QUALIFIED METHANOL OR ETHANOL 

FUEL. 

(a) EXTENSION.—Subparagraph (D) of section 4041(b)(2) is 

amended by striking ‘‘October 1, 2007’’ and inserting ‘‘January 1, 

2009’’. 

(b) APPLICABLE BLENDER RATE.—Section 4041(b)(2)(C)(ii) is 

amended by striking ‘‘2007’’ and inserting ‘‘2008’’. 

(c) CLERICAL AMENDMENT.—The heading for section 4041(b)(2)(B) 

is amended to read as follows: ‘‘QUALIFIED METHANOL AND ETHANOL

FUEL PRODUCED FROM COAL’’. 

SEC. 209. SPECIAL DEPRECIATION ALLOWANCE FOR CELLULOSIC BIOMASS ETHANOL PLANT PROPERTY. 

(a) IN GENERAL.—Section 168 (relating to accelerated cost recovery system) is amended by adding at the end the following: ‘‘(l) SPECIAL ALLOWANCE FOR CELLULOSIC BIOMASS ETHANOL

PLANT PROPERTY.—

‘‘(1) ADDITIONAL ALLOWANCE.—In the case of any qualified 

cellulosic biomass ethanol plant 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 such property, and 

‘‘(B) the adjusted basis of such 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 CELLULOSIC BIOMASS ETHANOL PLANT PROPERTY.—The term ‘qualified cellulosic biomass ethanol plant 

property’ means property of a character subject to the allowance for depreciation—

‘‘(A) which is used in the United States solely to produce 

cellulosic biomass ethanol, 

‘‘(B) the original use of which commences with the taxpayer after the date of the enactment of this subsection, 

‘‘(C) which is acquired by the taxpayer by purchase (as 

defined in section 179(d)) after the date of the enactment 

of this subsection, but only if no written binding contract 

for the acquisition was in effect on or before the date of the 

enactment of this subsection, and 

‘‘(D) which is placed in service by the taxpayer before 

January 1, 2013. 

‘‘(3) CELLULOSIC BIOMASS ETHANOL.—For purposes of this 

subsection, the term ‘cellulosic biomass ethanol’ means ethanol 

produced by enzymatic hydrolysis of any lignocellulosic or 

hemicellulosic matter that is available on a renewable or recurring basis. 

‘‘(4) EXCEPTIONS.—

‘‘(A) ALTERNATIVE DEPRECIATION PROPERTY.—Such term 

shall not include any property described in section 

168(k)(2)(D)(i). 

‘‘(B) 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. 


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‘‘(C) ELECTION OUT.—If a taxpayer makes an election 

under this subparagraph 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. 

‘‘(5) SPECIAL RULES.—For purposes of this subsection, rules 

similar to the rules of subparagraph (E) of section 168(k)(2) 

shall apply, except that such subparagraph shall be applied—

‘‘(A) by substituting ‘the date of the enactment of subsection (l)’ for ‘September 10, 2001’ each place it appears 

therein, 

‘‘(B) by substituting ‘January 1, 2013’ for ‘January 1, 

2005’ in clause (i) thereof, and 

‘‘(C) by substituting ‘qualified cellulosic biomass ethanol 

plant property’ for ‘qualified property’ in clause (iv) thereof. 

‘‘(6) ALLOWANCE AGAINST ALTERNATIVE MINIMUM TAX.—For 

purposes of this subsection, rules similar to the rules of section 

168(k)(2)(G) shall apply. 

‘‘(7) RECAPTURE.—For purposes of this subsection, rules similar to the rules under section 179(d)(10) shall apply with respect to any qualified cellulosic biomass ethanol plant property 

which ceases to be qualified cellulosic biomass ethanol plant 

property. 

‘‘(8) DENIAL OF DOUBLE BENEFIT.—Paragraph (1) shall not 

apply to any qualified cellulosic biomass ethanol plant property 

with respect to which an election has been made under section 

179C (relating to election to expense certain refineries).’’. 

(b) EFFECTIVE DATE.—The amendment 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. 210. EXPENDITURES PERMITTED FROM THE LEAKING UNDERGROUND STORAGE TANK TRUST FUND. 

(a) IN GENERAL.—Subsection (c) of section 9508 is amended—

(1) by striking ‘‘section 9003(h)’’ and inserting ‘‘sections 

9003(h), 9003(i), 9003(j), 9004(f), 9005(c), 9010, 9011, 9012, and 

9013’’, and 

(2) by striking ‘‘Superfund Amendments and Reauthorization 

Act of 1986’’ and inserting ‘‘Public Law 109–168’’. 

(b) CONFORMING AMENDMENTS.—Section 9014(2) of the Solid 

Waste Disposal Act is amended by striking ‘‘Fund, notwithstanding 

section 9508(c)(1) of the Internal Revenue Code of 1986’’ and inserting ‘‘Fund’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall take effect on the date of the enactment of this Act. 

SEC. 211. TREATMENT OF COKE AND COKE GAS. 

(a) NONAPPLICATION OF PHASEOUT.—Section 45K(g)(2) is amended by adding at the end the following new subparagraph: 

‘‘(D) NONAPPLICATION OF PHASEOUT.—Subsection (b)(1) 

shall not apply.’’. 

(b) CLARIFICATION OF QUALIFYING FACILITY.—Section 45K(g)(1) is 

amended by inserting ‘‘(other than from petroleum based products)’’

after ‘‘coke or coke gas’’. 


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(c) EFFECTIVE DATE.—The amendments made by this section 

shall take effect as if included in section 1321 of the Energy Policy 

Act of 2005. 

TITLE III—HEALTH SAVINGS ACCOUNTS 

SEC. 301. SHORT TITLE. 

This title may be cited as the ‘‘Health Opportunity Patient Empowerment Act of 2006’’. 

SEC. 302. FSA AND HRA TERMINATIONS TO FUND HSAS. 

(a) IN GENERAL.—Section 106 (relating to contributions by employer to accident and health plans) is amended by adding at the 

end the following new subsection: 

‘‘(e) FSA AND HRA TERMINATIONS TO FUND HSAS.—

‘‘(1) IN GENERAL.—A plan shall not fail to be treated as a 

health flexible spending arrangement or health reimbursement 

arrangement under this section or section 105 merely because 

such plan provides for a qualified HSA distribution. 

‘‘(2) QUALIFIED HSA DISTRIBUTION.—The term ‘qualified HSA 

distribution’ means a distribution from a health flexible spending arrangement or health reimbursement arrangement to the 

extent that such distribution—

‘‘(A) does not exceed the lesser of the balance in such arrangement on September 21, 2006, or as of the date of 

such distribution, and 

‘‘(B) is contributed by the employer directly to the health 

savings account of the employee before January 1, 2012. 

Such term shall not include more than 1 distribution with respect to any arrangement. 

‘‘(3) ADDITIONAL TAX FOR FAILURE TO MAINTAIN HIGH DEDUCTIBLE HEALTH PLAN COVERAGE.—

‘‘(A) IN GENERAL.—If, at any time during the testing period, the employee is not an eligible individual, then the 

amount of the qualified HSA distribution—

‘‘(i) shall be includible in the gross income of the employee for the taxable year in which occurs the first 

month in the testing period for which such employee 

is not an eligible individual, and 

‘‘(ii) the tax imposed by this chapter for such taxable 

year on the employee shall be increased by 10 percent 

of the amount which is so includible. 

‘‘(B) EXCEPTION FOR DISABILITY OR DEATH.—Clauses (i) 

and (ii) of subparagraph (A) shall not apply if the employee ceases to be an eligible individual by reason of the 

death of the employee or the employee becoming disabled 

(within the meaning of section 72(m)(7)). 

‘‘(4) DEFINITIONS AND SPECIAL RULES.—For purposes of this 

subsection—

‘‘(A) TESTING PERIOD.—The term ‘testing period’ means 

the period beginning with the month in which the qualified HSA distribution is contributed to the health savings 

account and ending on the last day of the 12th month following such month. 


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‘‘(B) ELIGIBLE INDIVIDUAL.—The term ‘eligible individual’

has the meaning given such term by section 223(c)(1). 

‘‘(C) TREATMENT AS ROLLOVER CONTRIBUTION.—A qualified HSA distribution shall be treated as a rollover contribution described in section 223(f)(5). 

‘‘(5) TAX TREATMENT RELATING TO DISTRIBUTIONS.—For purposes of this title—

‘‘(A) IN GENERAL.—A qualified HSA distribution shall be 

treated as a payment described in subsection (d). 

‘‘(B) COMPARABILITY EXCISE TAX.—

‘‘(i) IN GENERAL.—Except as provided in clause (ii), 

section 4980G shall not apply to qualified HSA distributions. 

‘‘(ii) FAILURE TO OFFER TO ALL EMPLOYEES.—In the 

case of a qualified HSA distribution to any employee, 

the failure to offer such distribution to any eligible individual covered under a high deductible health plan 

of the employer shall (notwithstanding section 

4980G(d)) be treated for purposes of section 4980G as 

a failure to meet the requirements of section 

4980G(b).’’. 

(b) CERTAIN FSA COVERAGE DISREGARDED COVERAGE.—Subparagraph (B) of section 223(c)(1) (relating to certain coverage disregarded) is amended by striking ‘‘and’’ at the end of clause (i), by 

striking the period at the end of clause (ii) and inserting ‘‘, and’’, 

and by inserting after clause (ii) the following new clause: 

‘‘(iii) for taxable years beginning after December 31, 

2006, coverage under a health flexible spending arrangement during any period immediately following 

the end of a plan year of such arrangement during 

which unused benefits or contributions remaining at 

the end of such plan year may be paid or reimbursed 

to plan participants for qualified benefit expenses incurred during such period if—

‘‘(I) the balance in such arrangement at the end 

of such plan year is zero, or 

‘‘(II) the individual is making a qualified HSA 

distribution (as defined in section 106(e)) in an 

amount equal to the remaining balance in such 

arrangement as of the end of such plan year, in 

accordance with rules prescribed by the Secretary.’’. 

(c) APPLICATION OF SECTION.—

(1) SUBSECTION (a).—The amendment made by subsection (a) 

shall apply to distributions on or after the date of the enactment of this Act. 

(2) SUBSECTION (b).—The amendment made by subsection (b) 

shall take effect on the date of the enactment of this Act. 

SEC. 303. REPEAL OF ANNUAL DEDUCTIBLE LIMITATION ON HSA CONTRIBUTIONS. 

(a) IN GENERAL.—Paragraph (2) of section 223(b) (relating to 

monthly limitation) is amended—

(1) in subparagraph (A) by striking ‘‘the lesser of—’’ and all 

that follows and inserting ‘‘$2,250.’’, and 


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(2) in subparagraph (B) by striking ‘‘the lesser of—’’ and all 

that follows and inserting ‘‘$4,500.’’. 

(b) CONFORMING AMENDMENT.—Section 223(d)(1)(A)(ii)(I) is 

amended by striking ‘‘subsection (b)(2)(B)(ii)’’ and inserting ‘‘subsection (b)(2)(B)’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2006. 

SEC. 304. MODIFICATION OF COST-OF-LIVING ADJUSTMENT. 

Paragraph (1) of section 223(g) (relating to cost-of-living adjustment) is amended by adding at the end the following new flush 

sentence: 

‘‘In the case of adjustments made for any taxable year beginning after 2007, section 1(f)(4) shall be applied for purposes of 

this paragraph by substituting ‘March 31’ for ‘August 31’, and 

the Secretary shall publish the adjusted amounts under subsections (b)(2) and (c)(2)(A) for taxable years beginning in any 

calendar year no later than June 1 of the preceding calendar 

year.’’. 

SEC. 305. CONTRIBUTION LIMITATION NOT REDUCED FOR PART-YEAR 

COVERAGE. 

(a) INCREASE IN LIMIT FOR INDIVIDUALS BECOMING ELIGIBLE INDIVIDUALS AFTER BEGINNING OF THE YEAR.—Subsection (b) of section 223 (relating to limitations) is amended by adding at the end 

the following new paragraph: 

‘‘(8) INCREASE IN LIMIT FOR INDIVIDUALS BECOMING ELIGIBLE

INDIVIDUALS AFTER THE BEGINNING OF THE YEAR.—

‘‘(A) IN GENERAL.—For purposes of computing the limitation under paragraph (1) for any taxable year, an individual who is an eligible individual during the last month 

of such taxable year shall be treated—

‘‘(i) as having been an eligible individual during 

each of the months in such taxable year, and 

‘‘(ii) as having been enrolled, during each of the 

months such individual is treated as an eligible individual solely by reason of clause (i), in the same high 

deductible health plan in which the individual was enrolled for the last month of such taxable year. 

‘‘(B) FAILURE TO MAINTAIN HIGH DEDUCTIBLE HEALTH

PLAN COVERAGE.—

‘‘(i) IN GENERAL.—If, at any time during the testing 

period, the individual is not an eligible individual, 

then—

‘‘(I) gross income of the individual for the taxable year in which occurs the first month in the 

testing period for which such individual is not an 

eligible individual is increased by the aggregate 

amount of all contributions to the health savings 

account of the individual which could not have 

been made but for subparagraph (A), and ‘‘(II) the tax imposed by this chapter for any 

taxable year on the individual shall be increased 

by 10 percent of the amount of such increase. 

‘‘(ii) EXCEPTION FOR DISABILITY OR DEATH.—Subclauses (I) and (II) of clause (i) shall not apply if the 


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individual ceased to be an eligible individual by reason 

of the death of the individual or the individual becoming disabled (within the meaning of section 72(m)(7)). ‘‘(iii) TESTING PERIOD.—The term ‘testing period’ means the period beginning with the last month of the 

taxable year referred to in subparagraph (A) and ending on the last day of the 12th month following such 

month.’’. (b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2006. 

SEC. 306. EXCEPTION TO REQUIREMENT FOR EMPLOYERS TO MAKE 

COMPARABLE HEALTH SAVINGS ACCOUNT CONTRIBUTIONS. 

(a) IN GENERAL.—Section 4980G (relating to failure of employer 

to make comparable health savings account contributions) is 

amended by adding at the end the following new subsection: ‘‘(d) EXCEPTION.—For purposes of applying section 4980E to a 

contribution to a health savings account of an employee who is not 

a highly compensated employee (as defined in section 414(q)), highly compensated employees shall not be treated as comparable participating employees.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

apply to taxable years beginning after December 31, 2006. 

SEC. 307. ONE-TIME DISTRIBUTION FROM INDIVIDUAL RETIREMENT 

PLANS TO FUND HSAS. 

(a) IN GENERAL.—Subsection (d) of section 408 (relating to taxability of beneficiary of employees’ trust) is amended by adding at 

the end the following new paragraph: ‘‘(9) DISTRIBUTION FOR HEALTH SAVINGS ACCOUNT FUNDING.— ‘‘(A) IN GENERAL.—In the case of an individual who is an 

eligible individual (as defined in section 223(c)) and who 

elects the application of this paragraph for a taxable year, 

gross income of the individual for the taxable year does not 

include a qualified HSA funding distribution to the extent 

such distribution is otherwise includible in gross income. 

‘‘(B) QUALIFIED HSA FUNDING DISTRIBUTION.—For purposes of this paragraph, the term ‘qualified HSA funding 

distribution’ means a distribution from an individual retirement plan (other than a plan described in subsection 

(k) or (p)) of the employee to the extent that such distribution is contributed to the health savings account of the individual in a direct trustee-to-trustee transfer. 

‘‘(C) LIMITATIONS.—

‘‘(i) MAXIMUM DOLLAR LIMITATION.—The amount excluded from gross income by subparagraph (A) shall 

not exceed the excess of—

‘‘(I) the annual limitation under section 223(b) 

computed on the basis of the type of coverage 

under the high deductible health plan covering 

the individual at the time of the qualified HSA 

funding distribution, over 

‘‘(II) in the case of a distribution described in 

clause (ii)(II), the amount of the earlier qualified 

HSA funding distribution. 

‘‘(ii) ONE-TIME TRANSFER.—


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‘‘(I) IN GENERAL.—Except as provided in subclause (II), an individual may make an election 

under subparagraph (A) only for one qualified 

HSA funding distribution during the lifetime of 

the individual. Such an election, once made, shall 

be irrevocable. 

‘‘(II) CONVERSION FROM SELF-ONLY TO FAMILY

COVERAGE.—If a qualified HSA funding distribution is made during a month in a taxable year 

during which an individual has self-only coverage 

under a high deductible health plan as of the first 

day of the month, the individual may elect to 

make an additional qualified HSA funding distribution during a subsequent month in such taxable year during which the individual has family 

coverage under a high deductible health plan as of 

the first day of the subsequent month. 

‘‘(D) FAILURE TO MAINTAIN HIGH DEDUCTIBLE HEALTH

PLAN COVERAGE.—

‘‘(i) IN GENERAL.—If, at any time during the testing 

period, the individual is not an eligible individual, 

then the aggregate amount of all contributions to the 

health savings account of the individual made under 

subparagraph (A)—

‘‘(I) shall be includible in the gross income of the 

individual for the taxable year in which occurs the 

first month in the testing period for which such 

individual is not an eligible individual, and 

‘‘(II) the tax imposed by this chapter for any 

taxable year on the individual shall be increased 

by 10 percent of the amount which is so includible. 

‘‘(ii) EXCEPTION FOR DISABILITY OR DEATH.—Subclauses (I) and (II) of clause (i) shall not apply if the 

individual ceased to be an eligible individual by reason 

of the death of the individual or the individual becoming disabled (within the meaning of section 72(m)(7)). 

‘‘(iii) TESTING PERIOD.—The term ‘testing period’

means the period beginning with the month in which 

the qualified HSA funding distribution is contributed 

to a health savings account and ending on the last day 

of the 12th month following such month. 

‘‘(E) APPLICATION OF SECTION 72.—Notwithstanding section 72, in determining the extent to which an amount is 

treated as otherwise includible in gross income for purposes of subparagraph (A), the aggregate amount distributed from an individual retirement plan shall be treated 

as includible in gross income to the extent that such 

amount does not exceed the aggregate amount which 

would have been so includible if all amounts from all individual retirement plans were distributed. Proper adjustments shall be made in applying section 72 to other distributions in such taxable year and subsequent taxable 

years.’’. 


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(b) COORDINATION WITH LIMITATION ON CONTRIBUTIONS TO

HSAS.—Section 223(b)(4) (relating to coordination with other contributions) is amended by striking ‘‘and’’ at the end of subparagraph (A), by striking the period at the end of subparagraph (B) 

and inserting ‘‘, and’’, and by inserting after subparagraph (B) the 

following new subparagraph: 

‘‘(C) the aggregate amount contributed to health savings 

accounts of such individual for such taxable year under 

section 408(d)(9) (and such amount shall not be allowed as 

a deduction under subsection (a)).’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2006. 

TITLE IV—OTHER PROVISIONS 

SEC. 401. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES IN 

PUERTO RICO. 

(a) IN GENERAL.—Subsection (d) of section 199 (relating to definitions and special rules) is amended by redesignating paragraph (8) 

as paragraph (9) and by inserting after paragraph (7) the following 

new paragraph: 

‘‘(8) TREATMENT OF ACTIVITIES IN PUERTO RICO.—

‘‘(A) IN GENERAL.—In the case of any taxpayer with 

gross receipts for any taxable year from sources within the 

Commonwealth of Puerto Rico, if all of such receipts are 

taxable under section 1 or 11 for such taxable year, then 

for purposes of determining the domestic production gross 

receipts of such taxpayer for such taxable year under subsection (c)(4), the term ‘United States’ shall include the 

Commonwealth of Puerto Rico. 

‘‘(B) SPECIAL RULE FOR APPLYING WAGE LIMITATION.—In 

the case of any taxpayer described in subparagraph (A), for 

purposes of applying the limitation under subsection (b) 

for any taxable year, the determination of W–2 wages of 

such taxpayer shall be made without regard to any exclusion under section 3401(a)(8) for remuneration paid for 

services performed in Puerto Rico. 

‘‘(C) TERMINATION.—This paragraph shall apply only 

with respect to the first 2 taxable years of the taxpayer beginning after December 31, 2005, and before January 1, 

2008.’’. 

(b) EFFECTIVE DATE.—The amendments made by subsection (a) 

shall apply to taxable years beginning after December 31, 2005. 

SEC. 402. CREDIT FOR PRIOR YEAR MINIMUM TAX LIABILITY MADE 

REFUNDABLE AFTER PERIOD OF YEARS. 

(a) IN GENERAL.—Section 53 (relating to credit for prior year 

minimum tax liability) is amended by adding at the end the following new subsection: 

‘‘(e) SPECIAL RULE FOR INDIVIDUALS WITH LONG-TERM UNUSED

CREDITS.—

‘‘(1) IN GENERAL.—If an individual has a long-term unused 

minimum tax credit for any taxable year beginning before January 1, 2013, the amount determined under subsection (c) for 


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such taxable year shall not be less than the AMT refundable 

credit amount for such taxable year. ‘‘(2) AMT REFUNDABLE CREDIT AMOUNT.—For purposes of 

paragraph (1)— ‘‘(A) IN GENERAL.—The term ‘AMT refundable credit 

amount’ means, with respect to any taxable year, the 

amount equal to the greater of— ‘‘(i) the lesser of— ‘‘(I) $5,000, or 

‘‘(II) the amount of long-term unused minimum 

tax credit for such taxable year, or ‘‘(ii) 20 percent of the amount of such credit. ‘‘(B) PHASEOUT OF AMT REFUNDABLE CREDIT AMOUNT.— ‘‘(i) IN GENERAL.—In the case of an individual whose 

adjusted gross income for any taxable year exceeds the 

threshold amount (within the meaning of section 

151(d)(3)(C)), the AMT refundable credit amount determined under subparagraph (A) for such taxable 

year shall be reduced by the applicable percentage 

(within the meaning of section 151(d)(3)(B)). ‘‘(ii) ADJUSTED GROSS INCOME.—For purposes of 

clause (i), adjusted gross income shall be determined 

without regard to sections 911, 931, and 933. 

‘‘(3) LONG-TERM UNUSED MINIMUM TAX CREDIT.—

‘‘(A) IN GENERAL.—For purposes of this subsection, the 

term ‘long-term unused minimum tax credit’ means, with 

respect to any taxable year, the portion of the minimum 

tax credit determined under subsection (b) attributable to 

the adjusted net minimum tax for taxable years before the 

3rd taxable year immediately preceding such taxable year. 

‘‘(B) FIRST-IN, FIRST-OUT ORDERING RULE.—For purposes 

of subparagraph (A), credits shall be treated as allowed 

under subsection (a) on a first-in, first-out basis. ‘‘(4) CREDIT REFUNDABLE.—For purposes of this title (other 

than this section), the credit allowed by reason of this subsection shall be treated as if it were allowed under subpart C.’’. (b) CONFORMING AMENDMENTS.— (1) Section 6211(b)(4)(A) is amended by striking ‘‘and 34’’ and 

inserting ‘‘34, and 53(e)’’. (2) Paragraph (2) of section 1324(b) of title 31, United States 

Code, is amended by inserting ‘‘or 53(e)’’ after ‘‘section 35’’. (c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after the date of the enactment of this Act. 

SEC. 403. RETURNS REQUIRED IN CONNECTION WITH CERTAIN OPTIONS. 

(a) IN GENERAL.—So much of section 6039(a) as follows paragraph (2) is amended to read as follows: 

‘‘shall, for such calendar year, make a return at such time and in 

such manner, and setting forth such information, as the Secretary 

may by regulations prescribe.’’. 

(b) STATEMENTS TO PERSONS WITH RESPECT TO WHOM INFORMATION IS FURNISHED.—Section 6039 is amended by redesignating 

subsections (b) and (c) as subsection (c) and (d), respectively, and 

by inserting after subsection (a) the following new subsection: 


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‘‘(b) STATEMENTS TO BE FURNISHED TO PERSONS WITH RESPECT

TO WHOM INFORMATION IS REPORTED.—Every corporation making 

a return under subsection (a) shall furnish to each person whose 

name is set forth in such return a written statement setting forth 

such information as the Secretary may by regulations prescribe. 

The written statement required under the preceding sentence shall 

be furnished to such person on or before January 31 of the year following the calendar year for which the return under subsection (a) 

was made.’’. (c) CONFORMING AMENDMENTS.— (1) Section 6724(d)(1)(B) is amended by striking ‘‘or’’ at the 

end of clause (xvii), by striking ‘‘and’’ at the end of clause 

(xviii) and inserting ‘‘or’’, and by adding at the end the following new clause: ‘‘(xix) section 6039(a) (relating to returns required 

with respect to certain options), and’’. (2) Section 6724(d)(2)(B) is amended by striking ‘‘section 

6039(a)’’ and inserting ‘‘section 6039(b)’’. (3) The heading of section 6039 and the item relating to such 

section in the table of sections of subpart A of part III of subchapter A of chapter 61 of such Code are each amended by 

striking ‘‘Information’’ and inserting ‘‘Returns’’. (4) The heading of subsection (a) of section 6039 is amended 

by striking ‘‘FURNISHING OF INFORMATION’’ and inserting ‘‘RE- QUIREMENT OF REPORTING’’. (d) EFFECTIVE DATE.—The amendments made by this section 

shall apply to calendar years beginning after the date of the enactment of this Act. 

SEC. 404. PARTIAL EXPENSING FOR ADVANCED MINE SAFETY EQUIPMENT. 

(a) IN GENERAL.—Part VI of subchapter B of chapter 1 is amended by inserting after section 179D the following new section: 

‘‘SEC. 179E. ELECTION TO EXPENSE ADVANCED MINE SAFETY EQUIPMENT. 

‘‘(a) TREATMENT AS EXPENSES.—A taxpayer may elect to treat 50 

percent of the cost of any qualified advanced mine safety equipment property as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the 

taxable year in which the qualified advanced mine safety equipment property is placed in service. ‘‘(b) ELECTION.—

‘‘(1) IN GENERAL.—An election under this section for any taxable year shall be made on the taxpayer’s return of the tax imposed by this chapter for the taxable year. Such election shall 

specify the advanced mine safety equipment property to which 

the election applies and shall be made in such manner as the 

Secretary may by regulations prescribe. 

‘‘(2) ELECTION IRREVOCABLE.—Any election made under this 

section may not be revoked except with the consent of the Secretary. 

‘‘(c) QUALIFIED ADVANCED MINE SAFETY EQUIPMENT PROPERTY.—

For purposes of this section, the term ‘qualified advanced mine 

safety equipment property’ means any advanced mine safety equipment property for use in any underground mine located in the 

United States—


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‘‘(1) the original use of which commences with the taxpayer, 

and 

‘‘(2) which is placed in service by the taxpayer after the date 

of the enactment of this section. 

‘‘(d) ADVANCED MINE SAFETY EQUIPMENT PROPERTY.—For purposes of this section, the term ‘advanced mine safety equipment 

property’ means any of the following: 

‘‘(1) Emergency communication technology or device which is 

used to allow a miner to maintain constant communication 

with an individual who is not in the mine. 

‘‘(2) Electronic identification and location device which allows 

an individual who is not in the mine to track at all times the 

movements and location of miners working in or at the mine. 

‘‘(3) Emergency oxygen-generating, self-rescue device which 

provides oxygen for at least 90 minutes. 

‘‘(4) Pre-positioned supplies of oxygen which (in combination 

with self-rescue devices) can be used to provide each miner on 

a shift, in the event of an accident or other event which traps 

the miner in the mine or otherwise necessitates the use of such 

a self-rescue device, the ability to survive for at least 48 hours. 

‘‘(5) Comprehensive atmospheric monitoring system which 

monitors the levels of carbon monoxide, methane, and oxygen 

that are present in all areas of the mine and which can detect 

smoke in the case of a fire in a mine. 

‘‘(e) COORDINATION WITH SECTION 179.—No expenditures shall be 

taken into account under subsection (a) with respect to the portion 

of the cost of any property specified in an election under section 

179. 

‘‘(f) REPORTING.—No deduction shall be allowed under subsection 

(a) to any taxpayer for any taxable year unless such taxpayer files 

with the Secretary a report containing such information with respect to the operation of the mines of the taxpayer as the Secretary 

shall require. 

‘‘(g) TERMINATION.—This section shall not apply to property 

placed in service after December 31, 2008.’’. 

(b) CONFORMING AMENDMENTS.—

(1) Section 263(a)(1) is amended by striking ‘‘or’’ at the end 

of subparagraph (J), by striking the period at the end of subparagraph (K) and inserting ‘‘, or’’, and by inserting after subparagraph (K) the following new subparagraph: 

‘‘(L) expenditures for which a deduction is allowed under 

section 179E.’’. 

(2) Section 312(k)(3)(B) is amended by striking ‘‘or 179D’’

each place it appears in the heading and text thereof and inserting ‘‘179D, or 179E’’. 

(3) Paragraphs (2)(C) and (3)(C) of section 1245(a) are each 

amended by inserting ‘‘179E,’’ after ‘‘179D,’’. 

(4) The table of sections for part VI of subchapter B of chapter 1 is amended by inserting after the item relating to section 

179D the following new item: 

‘‘Sec. 179E. Election to expense advanced mine safety equipment.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to costs paid or incurred after the date of the enactment 

of this Act. 


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SEC. 405. MINE RESCUE TEAM TRAINING TAX CREDIT. 

(a) IN GENERAL.—Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits) is amended by adding at 

the end the following new section: 

‘‘SEC. 45N. MINE RESCUE TEAM TRAINING CREDIT. 

‘‘(a) AMOUNT OF CREDIT.—For purposes of section 38, the mine 

rescue team training credit determined under this section with respect to each qualified mine rescue team employee of an eligible 

employer for any taxable year is an amount equal to the lesser of— ‘‘(1) 20 percent of the amount paid or incurred by the taxpayer during the taxable year with respect to the training program costs of such qualified mine rescue team employee (including wages of such employee while attending such program), or ‘‘(2) $10,000. ‘‘(b) QUALIFIED MINE RESCUE TEAM EMPLOYEE.—For purposes of 

this section, the term ‘qualified mine rescue team employee’ means 

with respect to any taxable year any full-time employee of the taxpayer who is— ‘‘(1) a miner eligible for more than 6 months of such taxable 

year to serve as a mine rescue team member as a result of 

completing, at a minimum, an initial 20-hour course of instruction as prescribed by the Mine Safety and Health Administration’s Office of Educational Policy and Development, or ‘‘(2) a miner eligible for more than 6 months of such taxable 

year to serve as a mine rescue team member by virtue of receiving at least 40 hours of refresher training in such instruction. ‘‘(c) ELIGIBLE EMPLOYER.—For purposes of this section, the term ‘eligible employer’ means any taxpayer which employs individuals 

as miners in underground mines in the United States. ‘‘(d) WAGES.—For purposes of this section, the term ‘wages’ has 

the meaning given to such term by subsection (b) of section 3306 

(determined without regard to any dollar limitation contained in 

such section). 

‘‘(e) TERMINATION.—This section shall not apply to taxable years 

beginning after December 31, 2008.’’. 

(b) CREDIT MADE PART OF GENERAL BUSINESS CREDIT.—Section 

38(b) is amended by striking ‘‘and’’ at the end of paragraph (29), 

by striking the period at the end of paragraph (30) and inserting 

‘‘, plus’’, and by adding at the end the following new paragraph: 

‘‘(31) the mine rescue team training credit determined under 

section 45N(a).’’. 

(c) NO DOUBLE BENEFIT.—Section 280C is amended by adding at 

the end the following new subsection: 

‘‘(e) MINE RESCUE TEAM TRAINING CREDIT.—No deduction shall 

be allowed for that portion of the expenses otherwise allowable as 

a deduction for the taxable year which is equal to the amount of 

the credit determined for the taxable year under section 45N(a).’’. 

(d) CLERICAL AMENDMENT.—The table of sections for subpart D 

of part IV of subchapter A of chapter 1 is amended by adding at 

the end the following new item: 

‘‘Sec. 45N. Mine rescue team training credit.’’. 

(e) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2005. 


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SEC. 406. WHISTLEBLOWER REFORMS. 

(a) AWARDS TO WHISTLEBLOWERS.—

(1) IN GENERAL.—Section 7623 (relating to expenses of detection of underpayments and fraud, etc.) is amended—

(A) by striking ‘‘The Secretary’’ and inserting ‘‘(a) IN

GENERAL.—The Secretary’’, 

(B) by striking ‘‘and’’ at the end of paragraph (1) and inserting ‘‘or’’, 

(C) by striking ‘‘(other than interest)’’, and 

(D) by adding at the end the following new subsection: 

‘‘(b) AWARDS TO WHISTLEBLOWERS.— ‘‘(1) IN GENERAL.—If the Secretary proceeds with any administrative or judicial action described in subsection (a) based on 

information brought to the Secretary’s attention by an individual, such individual shall, subject to paragraph (2), receive 

as an award at least 15 percent but not more than 30 percent 

of the collected proceeds (including penalties, interest, additions to tax, and additional amounts) resulting from the action 

(including any related actions) or from any settlement in response to such action. The determination of the amount of such 

award by the Whistleblower Office shall depend upon the extent to which the individual substantially contributed to such 

action. ‘‘(2) AWARD IN CASE OF LESS SUBSTANTIAL CONTRIBUTION.—

‘‘(A) IN GENERAL.—In the event the action described in 

paragraph (1) is one which the Whistleblower Office determines to be based principally on disclosures of specific allegations (other than information provided by the individual 

described in paragraph (1)) resulting from a judicial or administrative hearing, from a governmental report, hearing, 

audit, or investigation, or from the news media, the Whistleblower Office may award such sums as it considers appropriate, but in no case more than 10 percent of the collected proceeds (including penalties, interest, additions to 

tax, and additional amounts) resulting from the action (including any related actions) or from any settlement in response to such action, taking into account the significance 

of the individual’s information and the role of such individual and any legal representative of such individual in 

contributing to such action. 

‘‘(B) NONAPPLICATION OF PARAGRAPH WHERE INDIVIDUAL

IS ORIGINAL SOURCE OF INFORMATION.—Subparagraph (A) 

shall not apply if the information resulting in the initiation of the action described in paragraph (1) was originally provided by the individual described in paragraph 

(1). 

‘‘(3) REDUCTION IN OR DENIAL OF AWARD.—If the Whistleblower Office determines that the claim for an award under 

paragraph (1) or (2) is brought by an individual who planned 

and initiated the actions that led to the underpayment of tax 

or actions described in subsection (a)(2), then the Whistleblower Office may appropriately reduce such award. If such individual is convicted of criminal conduct arising from the role 

described in the preceding sentence, the Whistleblower Office 

shall deny any award. 


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‘‘(4) APPEAL OF AWARD DETERMINATION.—Any determination 

regarding an award under paragraph (1), (2), or (3) may, within 30 days of such determination, be appealed to the Tax Court 

(and the Tax Court shall have jurisdiction with respect to such 

matter). 

‘‘(5) APPLICATION OF THIS SUBSECTION.—This subsection shall 

apply with respect to any action—

‘‘(A) against any taxpayer, but in the case of any individual, only if such individual’s gross income exceeds 

$200,000 for any taxable year subject to such action, and 

‘‘(B) if the tax, penalties, interest, additions to tax, and 

additional amounts in dispute exceed $2,000,000. 

‘‘(6) ADDITIONAL RULES.—

‘‘(A) NO CONTRACT NECESSARY.—No contract with the Internal Revenue Service is necessary for any individual to 

receive an award under this subsection. 

‘‘(B) REPRESENTATION.—Any individual described in 

paragraph (1) or (2) may be represented by counsel. 

‘‘(C) SUBMISSION OF INFORMATION.—No award may be 

made under this subsection based on information submitted to the Secretary unless such information is submitted under penalty of perjury.’’. 

(2) ASSIGNMENT TO SPECIAL TRIAL JUDGES.—

(A) IN GENERAL.—Section 7443A(b) (relating to proceedings which may be assigned to special trial judges) is 

amended by striking ‘‘and’’ at the end of paragraph (5), by 

redesignating paragraph (6) as paragraph (7), and by inserting after paragraph (5) the following new paragraph: 

‘‘(6) any proceeding under section 7623(b)(4), and’’. 

(B) CONFORMING AMENDMENT.—Section 7443A(c) is 

amended by striking ‘‘or (5)’’ and inserting ‘‘(5), or (6)’’. 

(3) DEDUCTION ALLOWED WHETHER OR NOT TAXPAYER

ITEMIZES.—Subsection (a) of section 62 (relating to general rule 

defining adjusted gross income) is amended by inserting after 

paragraph (20) the following new paragraph: 

‘‘(21) ATTORNEYS FEES RELATING TO AWARDS TO WHISTLEBLOWERS.—Any deduction allowable under this chapter for attorney fees and court costs paid by, or on behalf of, the taxpayer in connection with any award under section 7623(b) (relating to awards to whistleblowers). The preceding sentence 

shall not apply to any deduction in excess of the amount includible in the taxpayer’s gross income for the taxable year on 

account of such award.’’. 

(b) WHISTLEBLOWER OFFICE.—

(1) IN GENERAL.—Not later than the date which is 12 months 

after the date of the enactment of this Act, the Secretary of the 

Treasury shall issue guidance for the operation of a whistleblower program to be administered in the Internal Revenue 

Service by an office to be known as the ‘‘Whistleblower Office’’

which—

(A) shall at all times operate at the direction of the Commissioner of Internal Revenue and coordinate and consult 

with other divisions in the Internal Revenue Service as directed by the Commissioner of Internal Revenue, 


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(B) shall analyze information received from any individual described in section 7623(b) of the Internal Revenue 

Code of 1986 and either investigate the matter itself or assign it to the appropriate Internal Revenue Service office, 

and 

(C) in its sole discretion, may ask for additional assistance from such individual or any legal representative of 

such individual. 

(2) REQUEST FOR ASSISTANCE.—The guidance issued under 

paragraph (1) shall specify that any assistance requested 

under paragraph (1)(C) shall be under the direction and control 

of the Whistleblower Office or the office assigned to investigate 

the matter under paragraph (1)(A). No individual or legal representative whose assistance is so requested may by reason of 

such request represent himself or herself as an employee of the 

Federal Government. 

(c) REPORT BY SECRETARY.—The Secretary of the Treasury shall 

each year conduct a study and report to Congress on the use of section 7623 of the Internal Revenue Code of 1986, including—

(1) an analysis of the use of such section during the preceding year and the results of such use, and 

(2) any legislative or administrative recommendations regarding the provisions of such section and its application. 

(d) EFFECTIVE DATE.—The amendments made by subsection (a) 

shall apply to information provided on or after the date of the enactment of this Act. 

SEC. 407. FRIVOLOUS TAX SUBMISSIONS. 

(a) CIVIL PENALTIES.—Section 6702 is amended to read as follows: 

‘‘SEC. 6702. FRIVOLOUS TAX SUBMISSIONS. 

‘‘(a) CIVIL PENALTY FOR FRIVOLOUS TAX RETURNS.—A person 

shall pay a penalty of $5,000 if—

‘‘(1) such person files what purports to be a return of a tax 

imposed by this title but which—

‘‘(A) does not contain information on which the substantial correctness of the self-assessment may be judged, or 

‘‘(B) contains information that on its face indicates that 

the self-assessment is substantially incorrect, and 

‘‘(2) the conduct referred to in paragraph (1)—

‘‘(A) is based on a position which the Secretary has identified as frivolous under subsection (c), or 

‘‘(B) reflects a desire to delay or impede the administration of Federal tax laws. 

‘‘(b) CIVIL PENALTY FOR SPECIFIED FRIVOLOUS SUBMISSIONS.—

‘‘(1) IMPOSITION OF PENALTY.—Except as provided in paragraph (3), any person who submits a specified frivolous submission shall pay a penalty of $5,000. 

‘‘(2) SPECIFIED FRIVOLOUS SUBMISSION.—For purposes of this 

section—

‘‘(A) SPECIFIED FRIVOLOUS SUBMISSION.—The term ‘specified frivolous submission’ means a specified submission if 

any portion of such submission—

‘‘(i) is based on a position which the Secretary has 

identified as frivolous under subsection (c), or 


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34 

‘‘(ii) reflects a desire to delay or impede the administration of Federal tax laws. 

‘‘(B) SPECIFIED SUBMISSION.—The term ‘specified submission’ means—

‘‘(i) a request for a hearing under—

‘‘(I) section 6320 (relating to notice and opportunity for hearing upon filing of notice of lien), or 

‘‘(II) section 6330 (relating to notice and opportunity for hearing before levy), and 

‘‘(ii) an application under—

‘‘(I) section 6159 (relating to agreements for payment of tax liability in installments), 

‘‘(II) section 7122 (relating to compromises), or 

‘‘(III) section 7811 (relating to taxpayer assistance orders). 

‘‘(3) OPPORTUNITY TO WITHDRAW SUBMISSION.—If the Secretary provides a person with notice that a submission is a 

specified frivolous submission and such person withdraws such 

submission within 30 days after such notice, the penalty imposed under paragraph (1) shall not apply with respect to such 

submission. 

‘‘(c) LISTING OF FRIVOLOUS POSITIONS.—The Secretary shall prescribe (and periodically revise) a list of positions which the Secretary has identified as being frivolous for purposes of this subsection. The Secretary shall not include in such list any position 

that the Secretary determines meets the requirement of section 

6662(d)(2)(B)(ii)(II). 

‘‘(d) REDUCTION OF PENALTY.—The Secretary may reduce the 

amount of any penalty imposed under this section if the Secretary 

determines that such reduction would promote compliance with 

and administration of the Federal tax laws. 

‘‘(e) PENALTIES IN ADDITION TO OTHER PENALTIES.—The penalties 

imposed by this section shall be in addition to any other penalty 

provided by law.’’. 

(b) TREATMENT OF FRIVOLOUS REQUESTS FOR HEARINGS BEFORE

LEVY.—

(1) FRIVOLOUS REQUESTS DISREGARDED.—Section 6330 (relating to notice and opportunity for hearing before levy) is amended by adding at the end the following new subsection: 

‘‘(g) FRIVOLOUS REQUESTS FOR HEARING, ETC.—Notwithstanding 

any other provision of this section, if the Secretary determines that 

any portion of a request for a hearing under this section or section 

6320 meets the requirement of clause (i) or (ii) of section 

6702(b)(2)(A), then the Secretary may treat such portion as if it 

were never submitted and such portion shall not be subject to any 

further administrative or judicial review.’’. 

(2) PRECLUSION FROM RAISING FRIVOLOUS ISSUES AT HEARING.—Section 6330(c)(4) is amended—

(A) by striking ‘‘(A)’’ and inserting ‘‘(A)(i)’’; 

(B) by striking ‘‘(B)’’ and inserting ‘‘(ii)’’; 

(C) by striking the period at the end of the first sentence 

and inserting ‘‘; or’’; and 

(D) by inserting after subparagraph (A)(ii) (as so redesignated) the following: 


ccoleman on PROD1PC71 with HEARING
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‘‘(B) the issue meets the requirement of clause (i) or (ii) 

of section 6702(b)(2)(A).’’. 

(3) STATEMENT OF GROUNDS.—Section 6330(b)(1) is amended 

by striking ‘‘under subsection (a)(3)(B)’’ and inserting ‘‘in writing under subsection (a)(3)(B) and states the grounds for the 

requested hearing’’. 

(c) TREATMENT OF FRIVOLOUS REQUESTS FOR HEARINGS UPON

FILING OF NOTICE OF LIEN.—Section 6320 is amended—

(1) in subsection (b)(1), by striking ‘‘under subsection 

(a)(3)(B)’’ and inserting ‘‘in writing under subsection (a)(3)(B) 

and states the grounds for the requested hearing’’, and 

(2) in subsection (c), by striking ‘‘and (e)’’ and inserting ‘‘(e), 

and (g)’’. 

(d) TREATMENT OF FRIVOLOUS APPLICATIONS FOR OFFERS-IN-COMPROMISE AND INSTALLMENT AGREEMENTS.—Section 7122 is amended by adding at the end the following new subsection: 

‘‘(f) FRIVOLOUS SUBMISSIONS, ETC.—Notwithstanding any other 

provision of this section, if the Secretary determines that any portion of an application for an offer-in-compromise or installment 

agreement submitted under this section or section 6159 meets the 

requirement of clause (i) or (ii) of section 6702(b)(2)(A), then the 

Secretary may treat such portion as if it were never submitted and 

such portion shall not be subject to any further administrative or 

judicial review.’’. 

(e) CLERICAL AMENDMENT.—The table of sections for part I of 

subchapter B of chapter 68 is amended by striking the item relating to section 6702 and inserting the following new item: 

‘‘Sec. 6702. Frivolous tax submissions.’’. 

(f) EFFECTIVE DATE.—The amendments made by this section 

shall apply to submissions made and issues raised after the date 

on which the Secretary first prescribes a list under section 6702(c) 

of the Internal Revenue Code of 1986, as amended by subsection 

(a). 

SEC. 408. ADDITION OF MENINGOCOCCAL AND HUMAN 

PAPILLOMAVIRUS VACCINES TO LIST OF TAXABLE VACCINES. 

(a) MENINGOCOCCAL VACCINE.—Section 4132(a)(1) (defining taxable vaccine) is amended by adding at the end the following new 

subparagraph: 

‘‘(O) Any meningococcal vaccine.’’. 

(b) HUMAN PAPILLOMAVIRUS VACCINE.—Section 4132(a)(1), as 

amended by subsection (a), is amended by adding at the end the 

following new subparagraph: 

‘‘(P) Any vaccine against the human papillomavirus.’’. 

(c) EFFECTIVE DATE.—

(1) SALES, ETC.—The amendments made by this section shall 

apply to sales and uses on or after the first day of the first 

month which begins more than 4 weeks after the date of the 

enactment of this Act. 

(2) DELIVERIES.—For purposes of paragraph (1) and section 

4131 of the Internal Revenue Code of 1986, in the case of sales 

on or before the effective date described in such paragraph for 

which delivery is made after such date, the delivery date shall 

be considered the sale date. 


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SEC. 409. CLARIFICATION OF TAXATION OF CERTAIN SETTLEMENT 

FUNDS MADE PERMANENT. 

(a) IN GENERAL.—Subsection (g) of section 468B is amended by 

striking paragraph (3). 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

take effect as if included in section 201 of the Tax Increase Prevention and Reconciliation Act of 2005. 

SEC. 410. MODIFICATION OF ACTIVE BUSINESS DEFINITION UNDER 

SECTION 355 MADE PERMANENT. 

(a) IN GENERAL.—Subparagraphs (A) and (D) of section 355(b)(3) 

are each amended by striking ‘‘and on or before December 31, 

2010’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall take effect as if included in section 202 of the Tax Increase 

Prevention and Reconciliation Act of 2005. 

SEC. 411. REVISION OF STATE VETERANS LIMIT MADE PERMANENT. 

(a) IN GENERAL.—Subparagraph (B) of section 143(l)(3) is amended by striking clause (iv). 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

take effect as if included in section 203 of the Tax Increase Prevention and Reconciliation Act of 2005. 

SEC. 412. CAPITAL GAINS TREATMENT FOR CERTAIN SELF-CREATED 

MUSICAL WORKS MADE PERMANENT. 

(a) IN GENERAL.—Paragraph (3) of section 1221(b) is amended by 

striking ‘‘before January 1, 2011,’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

take effect as if included in section 204 of the Tax Increase Prevention and Reconciliation Act of 2005. 

SEC. 413. REDUCTION IN MINIMUM VESSEL TONNAGE WHICH QUALIFIES FOR TONNAGE TAX MADE PERMANENT. 

(a) IN GENERAL.—Paragraph (4) of section 1355(a) is amended by 

striking ‘‘10,000 (6,000, in the case of taxable years beginning after 

December 31, 2005, and ending before January 1, 2011)’’ and inserting ‘‘6,000’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

take effect as if included in section 205 of the Tax Increase Prevention and Reconciliation Act of 2005. 

SEC. 414. MODIFICATION OF SPECIAL ARBITRAGE RULE FOR CERTAIN 

FUNDS MADE PERMANENT. 

(a) IN GENERAL.—Section 206 of the Tax Increase Prevention and 

Reconciliation Act of 2005 is amended by striking ‘‘and before August 31, 2009’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

take effect as if included in section 206 of the Tax Increase Prevention and Reconciliation Act of 2005. 

SEC. 415. GREAT LAKES DOMESTIC SHIPPING TO NOT DISQUALIFY 

VESSEL FROM TONNAGE TAX. 

(a) IN GENERAL.—Section 1355 (relating to definitions and special rules) is amended by redesignating subsection (g) as subsection 

(h) and by inserting after subsection (f) the following new subsection: 

‘‘(g) GREAT LAKES DOMESTIC SHIPPING TO NOT DISQUALIFY VESSEL.—


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‘‘(1) IN GENERAL.—If the electing corporation elects (at such 

time and in such manner as the Secretary may require) to 

apply this subsection for any taxable year to any qualifying 

vessel which is used in qualified zone domestic trade during 

the taxable year— ‘‘(A) solely for purposes of subsection (a)(4), such use 

shall be treated as use in United States foreign trade (and 

not as use in United States domestic trade), and ‘‘(B) subsection (f) shall not apply with respect to such 

vessel for such taxable year. ‘‘(2) EFFECT OF TEMPORARILY OPERATING VESSEL IN UNITED

STATES DOMESTIC TRADE.—In the case of a qualifying vessel to 

which this subsection applies—

‘‘(A) IN GENERAL.—An electing corporation shall be treated as using such vessel in qualified zone domestic trade 

during any period of temporary use in the United States 

domestic trade (other than qualified zone domestic trade) 

if the electing corporation gives timely notice to the Secretary stating—

‘‘(i) that it temporarily operates or has operated in 

the United States domestic trade (other than qualified 

zone domestic trade) a qualifying vessel which had 

been used in the United States foreign trade or qualified zone domestic trade, and 

‘‘(ii) its intention to resume operation of the vessel 

in the United States foreign trade or qualified zone domestic trade. 

‘‘(B) NOTICE.—Notice shall be deemed timely if given not 

later than the due date (including extensions) for the corporation’s tax return for the taxable year in which the 

temporary cessation begins. ‘‘(C) PERIOD DISREGARD IN EFFECT.—The period of temporary use under subparagraph (A) continues until the 

earlier of the date of which— ‘‘(i) the electing corporation abandons its intention 

to resume operations of the vessel in the United States 

foreign trade or qualified zone domestic trade, or ‘‘(ii) the electing corporation resumes operation of 

the vessel in the United States foreign trade or qualified zone domestic trade. ‘‘(D) NO DISREGARD IF DOMESTIC TRADE USE EXCEEDS 30

DAYS.—Subparagraph (A) shall not apply to any qualifying 

vessel which is operated in the United States domestic 

trade (other than qualified zone domestic trade) for more 

than 30 days during the taxable year. 

‘‘(3) ALLOCATION OF INCOME AND DEDUCTIONS TO QUALIFYING

SHIPPING ACTIVITIES.—In the case of a qualifying vessel to 

which this subsection applies, the Secretary shall prescribe 

rules for the proper allocation of income, expenses, losses, and 

deductions between the qualified shipping activities and the 

other activities of such vessel. ‘‘(4) QUALIFIED ZONE DOMESTIC TRADE.—For purposes of this 

subsection— ‘‘(A) IN GENERAL.—The term ‘qualified zone domestic 

trade’ means the transportation of goods or passengers beVerDate Aug 31 2005 06:17 Dec 08, 2006 Jkt 059008 PO 00000 Frm 00037 Fmt 6659 Sfmt 6602 E:\HR\OC\HR722.XXX HR722

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tween places in the qualified zone if such transportation is 

in the United States domestic trade. 

‘‘(B) QUALIFIED ZONE.—The term ‘qualified zone’ means 

the Great Lakes Waterway and the St. Lawrence Seaway.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after the date of the enactment of this Act. 

SEC. 416. USE OF QUALIFIED MORTGAGE BONDS TO FINANCE RESIDENCES FOR VETERANS WITHOUT REGARD TO FIRSTTIME HOMEBUYER REQUIREMENT. 

(a) IN GENERAL.—Section 143(d)(2) (relating to exceptions to 3- 

year requirement) is amended by striking ‘‘and’’ at the end of subparagraph (B), by adding ‘‘and’’ at the end of subparagraph (C), 

and by inserting after subparagraph (C) the following new subparagraph: 

‘‘(D) in the case of bonds issued after the date of the enactment of this subparagraph and before January 1, 2008, 

financing of any residence for a veteran (as defined in section 101 of title 38, United States Code), if such veteran 

has not previously qualified for and received such financing by reason of this subparagraph,’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to bonds issued after the date of the enactment of this 

Act. 

SEC. 417. EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL RESIDENCE BY CERTAIN EMPLOYEES OF THE INTELLIGENCE 

COMMUNITY. 

(a) IN GENERAL.—Subparagraph (A) of section 121(d)(9) (relating 

to exclusion of gain from sale of principal residence) is amended by 

striking ‘‘duty’’ and all that follows and inserting ‘‘duty—

‘‘(i) as a member of the uniformed services, 

‘‘(ii) as a member of the Foreign Service of the 

United States, or 

‘‘(iii) as an employee of the intelligence community.’’. 

(b) EMPLOYEE OF INTELLIGENCE COMMUNITY DEFINED.—Subparagraph (C) of section 121(d)(9) is amended by redesignating clause 

(iv) as clause (v) and by inserting after clause (iii) the following 

new clause: 

‘‘(iv) EMPLOYEE OF INTELLIGENCE COMMUNITY.—The 

term ‘employee of the intelligence community’ means 

an employee (as defined by section 2105 of title 5, 

United States Code) of—

‘‘(I) the Office of the Director of National Intelligence, 

‘‘(II) the Central Intelligence Agency, 

‘‘(III) the National Security Agency, 

‘‘(IV) the Defense Intelligence Agency, 

‘‘(V) the National Geospatial-Intelligence Agency, 

‘‘(VI) the National Reconnaissance Office, 

‘‘(VII) any other office within the Department of 

Defense for the collection of specialized national 

intelligence through reconnaissance programs, 


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‘‘(VIII) any of the intelligence elements of the 

Army, the Navy, the Air Force, the Marine Corps, 

the Federal Bureau of Investigation, the Department of Treasury, the Department of Energy, and 

the Coast Guard, ‘‘(IX) the Bureau of Intelligence and Research of 

the Department of State, or ‘‘(X) any of the elements of the Department of 

Homeland Security concerned with the analyses of 

foreign intelligence information.’’. (c) SPECIAL RULE.—Subparagraph (C) of section 121(d)(9), as 

amended by subsection (b), is amended by adding at the end the 

following new clause: ‘‘(vi) SPECIAL RULE RELATING TO INTELLIGENCE COM- MUNITY.—An employee of the intelligence community 

shall not be treated as serving on qualified extended 

duty unless such duty is at a duty station located outside the United States.’’. (d) CONFORMING AMENDMENT.—The heading for section 121(d)(9) 

is amended to read as follows: ‘‘UNIFORMED SERVICES, FOREIGN

SERVICE, AND INTELLIGENCE COMMUNITY’’. (e) EFFECTIVE DATE.—The amendments made by this section 

shall apply to sales or exchanges after the date of the enactment 

of this Act and before January 1, 2011. 

SEC. 418. SALE OF PROPERTY BY JUDICIAL OFFICERS. 

(a) IN GENERAL.—Section 1043(b) (relating to the sale of property 

to comply with conflict-of-interest requirements) is amended— (1) in paragraph (1)— (A) in subparagraph (A), by inserting ‘‘, or a judicial officer,’’ after ‘‘an officer or employee of the executive branch’’; 

and 

(B) in subparagraph (B), by inserting ‘‘judicial canon,’’ after ‘‘any statute, regulation, rule,’’; 

(2) in paragraph (2)— (A) in subparagraph (A), by inserting ‘‘judicial canon,’’ after ‘‘any Federal conflict of interest statute, regulation, 

rule,’’; and 

(B) in subparagraph (B), by inserting after ‘‘the Director 

of the Office of Government Ethics,’’ the following: ‘‘in the 

case of executive branch officers or employees, or by the 

Judicial Conference of the United States (or its designee), 

in the case of judicial officers,’’; and 

(3) in paragraph (5)(B), by inserting ‘‘judicial canon,’’ after 

‘‘any statute, regulation, rule,’’. 

(b) JUDICIAL OFFICER DEFINED.—Section 1043(b) is amended by 

adding at the end the following new paragraph: 

‘‘(6) JUDICIAL OFFICER.—The term ‘judicial officer’ means the 

Chief Justice of the United States, the Associate Justices of the 

Supreme Court, and the judges of the United States courts of 

appeals, United States district courts, including the district 

courts in Guam, the Northern Mariana Islands, and the Virgin 

Islands, Court of Appeals for the Federal Circuit, Court of 

International Trade, Tax Court, Court of Federal Claims, 

Court of Appeals for Veterans Claims, United States Court of 

Appeals for the Armed Forces, and any court created by Act of 


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Congress, the judges of which are entitled to hold office during 

good behavior.’’. (c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to sales after the date of enactment of this Act. 

SEC. 419. PREMIUMS FOR MORTGAGE INSURANCE. 

(a) IN GENERAL.—Section 163(h)(3) (relating to qualified residence interest) is amended by adding at the end the following new 

subparagraph: ‘‘(E) MORTGAGE INSURANCE PREMIUMS TREATED AS INTER- EST.—‘‘(i) IN GENERAL.—Premiums paid or accrued for 

qualified mortgage insurance by a taxpayer during the 

taxable year in connection with acquisition indebtedness with respect to a qualified residence of the taxpayer shall be treated for purposes of this section as 

interest which is qualified residence interest. ‘‘(ii) PHASEOUT.—The amount otherwise treated as 

interest under clause (i) shall be reduced (but not 

below zero) by 10 percent of such amount for each 

$1,000 ($500 in the case of a married individual filing 

a separate return) (or fraction thereof) that the taxpayer’s adjusted gross income for the taxable year ex- ceeds $100,000 ($50,000 in the case of a married individual filing a separate return). ‘‘(iii) LIMITATION.—Clause (i) shall not apply with respect to any mortgage insurance contracts issued before January 1, 2007. ‘‘(iv) TERMINATION.—Clause (i) shall not apply to 

amounts—‘‘(I) paid or accrued after December 31, 2007, or 

‘‘(II) properly allocable to any period after such 

date.’’. (b) DEFINITION AND SPECIAL RULES.—Section 163(h)(4) (relating 

to other definitions and special rules) is amended by adding at the 

end the following new subparagraphs: ‘‘(E) QUALIFIED MORTGAGE INSURANCE.—The term ‘qualified mortgage insurance’ means— ‘‘(i) mortgage insurance provided by the Veterans 

Administration, the Federal Housing Administration, 

or the Rural Housing Administration, and ‘‘(ii) private mortgage insurance (as defined by section 2 of the Homeowners Protection Act of 1998 (12 

U.S.C. 4901), as in effect on the date of the enactment 

of this subparagraph). 

‘‘(F) SPECIAL RULES FOR PREPAID QUALIFIED MORTGAGE

INSURANCE.—Any amount paid by the taxpayer for qualified mortgage insurance that is properly allocable to any 

mortgage the payment of which extends to periods that are 

after the close of the taxable year in which such amount 

is paid shall be chargeable to capital account and shall be 

treated as paid in such periods to which so allocated. No 

deduction shall be allowed for the unamortized balance of 

such account if such mortgage is satisfied before the end 

of its term. The preceding sentences shall not apply to 

amounts paid for qualified mortgage insurance provided by 


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the Veterans Administration or the Rural Housing Administration.’’. (c) INFORMATION RETURNS RELATING TO MORTGAGE INSUR- ANCE.—Section 6050H (relating to returns relating to mortgage interest received in trade or business from individuals) is amended 

by adding at the end the following new subsection: ‘‘(h) RETURNS RELATING TO MORTGAGE INSURANCE PREMIUMS.— ‘‘(1) IN GENERAL.—The Secretary may prescribe, by regulations, that any person who, in the course of a trade or business, receives from any individual premiums for mortgage insurance aggregating $600 or more for any calendar year, shall 

make a return with respect to each such individual. Such return shall be in such form, shall be made at such time, and 

shall contain such information as the Secretary may prescribe. ‘‘(2) STATEMENT TO BE FURNISHED TO INDIVIDUALS WITH RE- SPECT TO WHOM INFORMATION IS REQUIRED.—Every person required to make a return under paragraph (1) shall furnish to 

each individual with respect to whom a return is made a written statement showing such information as the Secretary may 

prescribe. Such written statement shall be furnished on or before January 31 of the year following the calendar year for 

which the return under paragraph (1) was required to be 

made. 

‘‘(3) SPECIAL RULES.—For purposes of this subsection—

‘‘(A) rules similar to the rules of subsection (c) shall 

apply, and 

‘‘(B) the term ‘mortgage insurance’ means—

‘‘(i) mortgage insurance provided by the Veterans 

Administration, the Federal Housing Administration, 

or the Rural Housing Administration, and 

‘‘(ii) private mortgage insurance (as defined by section 2 of the Homeowners Protection Act of 1998 (12 

U.S.C. 4901), as in effect on the date of the enactment 

of this subsection).’’. (d) EFFECTIVE DATE.—The amendments made by this section 

shall apply to amounts paid or accrued after December 31, 2006. 

SEC. 420. MODIFICATION OF REFUNDS FOR KEROSENE USED IN AVIATION. 

(a) IN GENERAL.—Paragraph (4) of section 6427(l) (relating to 

nontaxable uses of diesel fuel and kerosene) is amended to read as 

follows: 

‘‘(4) REFUNDS FOR KEROSENE USED IN AVIATION.—

‘‘(A) KEROSENE USED IN COMMERCIAL AVIATION.—In the 

case of kerosene used in commercial aviation (as defined in 

section 4083(b)) (other than supplies for vessels or aircraft 

within the meaning of section 4221(d)(3)), paragraph (1) 

shall not apply to so much of the tax imposed by section 

4041 or 4081, as the case may be, as is attributable to—

‘‘(i) the Leaking Underground Storage Tank Trust 

Fund financing rate imposed by such section, and 

‘‘(ii) so much of the rate of tax specified in section 

4041(c) or 4081(a)(2)(A)(iii), as the case may be, as 

does not exceed 4.3 cents per gallon. 

‘‘(B) KEROSENE USED IN NONCOMMERCIAL AVIATION.—In 

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cial aviation (as so defined) (other than any use which is 

exempt from the tax imposed by section 4041(c) other than 

by reason of a prior imposition of tax), paragraph (1) shall 

not apply to— ‘‘(i) any tax imposed by subsection (c) or (d)(2) of section 4041, and ‘‘(ii) so much of the tax imposed by section 4081 as 

is attributable to— ‘‘(I) the Leaking Underground Storage Tank 

Trust Fund financing rate imposed by such section, and ‘‘(II) so much of the rate of tax specified in section 4081(a)(2)(A)(iii) as does not exceed the rate 

specified in section 4081(a)(2)(C)(ii). ‘‘(C) PAYMENTS TO ULTIMATE, REGISTERED VENDOR.—

‘‘(i) IN GENERAL.—With respect to any kerosene used 

in aviation (other than kerosene described in clause 

(ii) or kerosene to which paragraph (5) applies), if the 

ultimate purchaser of such kerosene waives (at such 

time and in such form and manner as the Secretary 

shall prescribe) the right to payment under paragraph 

(1) and assigns such right to the ultimate vendor, then 

the Secretary shall pay the amount which would be 

paid under paragraph (1) to such ultimate vendor, but 

only if such ultimate vendor—

‘‘(I) is registered under section 4101, and 

‘‘(II) meets the requirements of subparagraph 

(A), (B), or (D) of section 6416(a)(1). 

‘‘(ii) PAYMENTS FOR KEROSENE USED IN NONCOMMERCIAL AVIATION.—The amount which would be paid 

under paragraph (1) with respect to any kerosene to 

which subparagraph (B) applies shall be paid only to 

the ultimate vendor of such kerosene. A payment shall 

be made to such vendor if such vendor— ‘‘(I) is registered under section 4101, and 

‘‘(II) meets the requirements of subparagraph 

(A), (B), or (D) of section 6416(a)(1).’’. (b) CONFORMING AMENDMENTS.— (1) Section 6427(l) is amended by striking paragraph (5) and 

by redesignating paragraph (6) as paragraph (5). 

(2) Section 4082(d)(2)(B) is amended by striking ‘‘section 

6427(l)(6)(B)’’ and inserting ‘‘section 6427(l)(5)(B)’’. (3) Section 6427(i)(4)(A) is amended— (A) by striking ‘‘paragraph (4)(B), (5), or (6)’’ each place 

it appears and inserting ‘‘paragraph (4)(C) or (5)’’, and 

(B) by striking ‘‘(l)(5), and (l)(6)’’ and inserting ‘‘(l)(4)(C)(ii), and (l)(5)’’. (4) Section 6427(l)(1) is amended by striking ‘‘paragraph 

(4)(B)’’ and inserting ‘‘paragraph (4)(C)(i)’’. (5) Section 9502(d) is amended—

(A) in paragraph (2), by striking ‘‘and (l)(5)’’, and 

(B) in paragraph (3), by striking ‘‘or (5)’’. 

(6) Section 9503(c)(7) is amended—

(A) by amending subparagraphs (A) and (B) to read as 

follows: 


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‘‘(A) 4.3 cents per gallon of kerosene subject to section 

6427(l)(4)(A) with respect to which a payment has been 

made by the Secretary under section 6427(l), and 

‘‘(B) 21.8 cents per gallon of kerosene subject to section 

6427(l)(4)(B) with respect to which a payment has been 

made by the Secretary under section 6427(l).’’, and 

(B) in the matter following subparagraph (B), by striking 

‘‘or (5)’’. 

(c) EFFECTIVE DATE.—

(1) IN GENERAL.—The amendments made by this section 

shall apply to kerosene sold after September 30, 2005. 

(2) SPECIAL RULE FOR PENDING CLAIMS.—In the case of kerosene sold for use in aviation (other than kerosene to which 

section 6427(l)(4)(C)(ii) of the Internal Revenue Code of 1986 

(as added by subsection (a)) applies or kerosene to which section 6427(l)(5) of such Code (as redesignated by subsection (b)) 

applies) after September 30, 2005, and before the date of the 

enactment of this Act, the ultimate purchaser shall be treated 

as having waived the right to payment under section 6427(l)(1) 

of such Code and as having assigned such right to the ultimate 

vendor if such ultimate vendor has met the requirements of 

subparagraph (A), (B), or (D) of section 6416(a)(1) of such Code. 

(d) SPECIAL RULE FOR KEROSENE USED IN AVIATION ON A FARM

FOR FARMING PURPOSES.—

(1) REFUNDS FOR PURCHASES AFTER DECEMBER 31, 2004, AND

BEFORE OCTOBER 1, 2005.—The Secretary of the Treasury shall 

pay to the ultimate purchaser of any kerosene which is used 

in aviation on a farm for farming purposes and which was purchased after December 31, 2004, and before October 1, 2005, 

an amount equal to the aggregate amount of tax imposed on 

such fuel under section 4041 or 4081 of the Internal Revenue 

Code of 1986, as the case may be, reduced by any payment to 

the ultimate vendor under section 6427(l)(5)(C) of such Code 

(as in effect on the day before the date of the enactment of the 

Safe, Accountable, Flexible, Efficient Transportation Equity 

Act: a Legacy for Users). 

(2) USE ON A FARM FOR FARMING PURPOSES.—For purposes of 

paragraph (1), kerosene shall be treated as used on a farm for 

farming purposes if such kerosene is used for farming purposes 

(within the meaning of section 6420(c)(3) of the Internal Revenue Code of 1986) in carrying on a trade or business on a 

farm situated in the United States. For purposes of the preceding sentence, rules similar to the rules of section 6420(c)(4) 

of such Code shall apply. 

(3) TIME FOR FILING CLAIMS.—No claim shall be allowed 

under paragraph (1) unless the ultimate purchaser files such 

claim before the date that is 3 months after the date of the enactment of this Act. 

(4) NO DOUBLE BENEFIT.—No amount shall be paid under 

paragraph (1) or section 6427(l) of the Internal Revenue Code 

of 1986 with respect to any kerosene described in paragraph 

(1) to the extent that such amount is in excess of the tax imposed on such kerosene under section 4041 or 4081 of such 

Code, as the case may be. 


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(5) APPLICABLE LAWS.—For purposes of this subsection, rules 

similar to the rules of section 6427(j) of the Internal Revenue 

Code of 1986 shall apply. 

SEC. 421. REGIONAL INCOME TAX AGENCIES TREATED AS STATES FOR 

PURPOSES OF CONFIDENTIALITY AND DISCLOSURE REQUIREMENTS. 

(a) IN GENERAL.—Paragraph (5) of section 6103(b) is amended to 

read as follows: ‘‘(5) STATE.— ‘‘(A) IN GENERAL.—The term ‘State’ means— ‘‘(i) any of the 50 States, the District of Columbia, 

the Commonwealth of Puerto Rico, the Virgin Islands, 

the Canal Zone, Guam, American Samoa, and the 

Commonwealth of the Northern Mariana Islands, ‘‘(ii) for purposes of subsections (a)(2), (b)(4), (d)(1), 

(h)(4), and (p), any municipality— ‘‘(I) with a population in excess of 250,000 (as 

determined under the most recent decennial 

United States census data available), ‘‘(II) which imposes a tax on income or wages, 

and ‘‘(III) with which the Secretary (in his sole discretion) has entered into an agreement regarding 

disclosure, and ‘‘(iii) for purposes of subsections (a)(2), (b)(4), (d)(1), 

(h)(4), and (p), any governmental entity— ‘‘(I) which is formed and operated by a qualified 

group of municipalities, and ‘‘(II) with which the Secretary (in his sole discretion) has entered into an agreement regarding 

disclosure. ‘‘(B) REGIONAL INCOME TAX AGENCIES.—For purposes of 

subparagraph (A)(iii)—

‘‘(i) QUALIFIED GROUP OF MUNICIPALITIES.—The term 

‘qualified group of municipalities’ means, with respect 

to any governmental entity, 2 or more municipalities—

‘‘(I) each of which imposes a tax on income or 

wages, 

‘‘(II) each of which, under the authority of a 

State statute, administers the laws relating to the 

imposition of such taxes through such entity, and 

‘‘(III) which collectively have a population in excess of 250,000 (as determined under the most recent decennial United States census data available). 

‘‘(ii) REFERENCES TO STATE LAW, ETC.—For purposes 

of applying subparagraph (A)(iii) to the subsections referred to in such subparagraph, any reference in such 

subsections to State law, proceedings, or tax returns 

shall be treated as references to the law, proceedings, 

or tax returns, as the case may be, of the municipalities which form and operate the governmental entity 

referred to in such subparagraph. 

‘‘(iii) DISCLOSURE TO CONTRACTORS AND OTHER

AGENTS.—Notwithstanding any other provision of this 


ccoleman on PROD1PC71 with HEARING
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section, no return or return information shall be disclosed to any contractor or other agent of a governmental entity referred to in subparagraph (A)(iii) unless such entity, to the satisfaction of the Secretary—

‘‘(I) has requirements in effect which require 

each such contractor or other agent which would 

have access to returns or return information to 

provide safeguards (within the meaning of subsection (p)(4)) to protect the confidentiality of such 

returns or return information, 

‘‘(II) agrees to conduct an on-site review every 3 

years (or a mid-point review in the case of contracts or agreements of less than 3 years in duration) of each contractor or other agent to determine compliance with such requirements, 

‘‘(III) submits the findings of the most recent review conducted under subclause (II) to the Secretary as part of the report required by subsection 

(p)(4)(E), and 

‘‘(IV) certifies to the Secretary for the most recent annual period that such contractor or other 

agent is in compliance with all such requirements. 

The certification required by subclause (IV) shall include the name and address of each contractor and 

other agent, a description of the contract or agreement 

with such contractor or other agent, and the duration 

of such contract or agreement. The requirements of 

this clause shall not apply to disclosures pursuant to 

subsection (n) for purposes of Federal tax administration and a rule similar to the rule of subsection 

(p)(8)(B) shall apply for purposes of this clause.’’. 

(b) SPECIAL RULES FOR DISCLOSURE.—Subsection (d) of section 

6103 is amended by adding at the end the following new paragraph: 

‘‘(6) LIMITATION ON DISCLOSURE REGARDING REGIONAL INCOME TAX AGENCIES TREATED AS STATES.—For purposes of 

paragraph (1), inspection by or disclosure to an entity described in subsection (b)(5)(A)(iii) shall be for the purpose of, 

and only to the extent necessary in, the administration of the 

laws of the member municipalities in such entity relating to 

the imposition of a tax on income or wages. Such entity may 

not redisclose any return or return information received pursuant to paragraph (1) to any such member municipality.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to disclosures made after December 31, 2006. 

SEC. 422. DESIGNATION OF WINES BY SEMI-GENERIC NAMES. 

(a) IN GENERAL.—Subsection (c) of section 5388 (relating to use 

of semi-generic designations) is amended by adding at the end the 

following new paragraph: 

‘‘(3) SPECIAL RULE FOR USE OF CERTAIN SEMI-GENERIC DESIGNATIONS.—

‘‘(A) IN GENERAL.—In the case of any wine to which this 

paragraph applies—

‘‘(i) paragraph (1) shall not apply, 


ccoleman on PROD1PC71 with HEARING
46 

‘‘(ii) in the case of wine of the European Community, 

designations referred to in subparagraph (C)(i) may be 

used for such wine only if the requirement of subparagraph (B)(ii) is met, and 

‘‘(iii) in the case any other wine bearing a brand 

name, or brand name and fanciful name, semi-generic 

designations may be used for such wine only if the requirements of clauses (i), (ii), and (iii) of subparagraph 

(B) are met. 

‘‘(B) REQUIREMENTS.—

‘‘(i) The requirement of this clause is met if there 

appears in direct conjunction with the semi-generic 

designation an appropriate appellation of origin disclosing the origin of the wine. 

‘‘(ii) The requirement of this clause is met if the 

wine conforms to the standard of identity, if any, for 

such wine contained in the regulations under this section or, if there is no such standard, to the trade understanding of such class or type. 

‘‘(iii) The requirement of this clause is met if the 

person, or its successor in interest, using the semi-generic designation held a Certificate of Label Approval 

or Certificate of Exemption from Label Approval 

issued by the Secretary for a wine label bearing such 

brand name, or brand name and fanciful name, before 

March 10, 2006, on which such semi-generic designation appeared. 

‘‘(C) WINES TO WHICH PARAGRAPH APPLIES.—

‘‘(i) IN GENERAL.—Except as provided in clause (ii), 

this paragraph shall apply to any grape wine which is 

designated as Burgundy, Claret, Chablis, Champagne, 

Chianti, Malaga, Marsala, Madeira, Moselle, Port, 

Retsina, Rhine Wine or Hock, Sauterne, Haut Sauterne, Sherry, or Tokay. 

‘‘(ii) EXCEPTION.—This paragraph shall not apply to 

wine which—

‘‘(I) contains less than 7 percent or more than 

24 percent alcohol by volume, 

‘‘(II) is intended for sale outside the United 

States, or 

‘‘(III) does not bear a brand name.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to wine imported or bottled in the United States on or 

after the date of enactment of this Act. 

SEC. 423. MODIFICATION OF RAILROAD TRACK MAINTENANCE CREDIT. 

(a) IN GENERAL.—Section 45G(d) (defining qualified railroad 

track maintenance expenditures) is amended—

(1) by inserting ‘‘gross’’ after ‘‘means’’, and 

(2) by inserting ‘‘(determined without regard to any consideration for such expenditures given by the Class II or Class III 

railroad which made the assignment of such track)’’ after 

‘‘Class II or Class III railroad’’. 


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(b) EFFECTIVE DATE.—The amendment made by this section shall 

take effect as if included in the amendment made by section 245(a) 

of the American Jobs Creation Act of 2004. 

SEC. 424. MODIFICATION OF EXCISE TAX ON UNRELATED BUSINESS 

TAXABLE INCOME OF CHARITABLE REMAINDER TRUSTS. 

(a) IN GENERAL.—Subsection (c) of section 664 (relating to exemption from income taxes) is amended to read as follows: 

‘‘(c) TAXATION OF TRUSTS.—

‘‘(1) INCOME TAX.—A charitable remainder annuity trust and 

a charitable remainder unitrust shall, for any taxable year, not 

be subject to any tax imposed by this subtitle. 

‘‘(2) EXCISE TAX.—

‘‘(A) IN GENERAL.—In the case of a charitable remainder 

annuity trust or a charitable remainder unitrust which 

has unrelated business taxable income (within the meaning of section 512, determined as if part III of subchapter 

F applied to such trust) for a taxable year, there is hereby 

imposed on such trust or unitrust an excise tax equal to 

the amount of such unrelated business taxable income. 

‘‘(B) CERTAIN RULES TO APPLY.—The tax imposed by subparagraph (A) shall be treated as imposed by chapter 42 

for purposes of this title other than subchapter E of chapter 42. 

‘‘(C) TAX COURT PROCEEDINGS.—For purposes of this 

paragraph, the references in section 6212(c)(1) to section 

4940 shall be deemed to include references to this paragraph.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

apply to taxable years beginning after December 31, 2006. 

SEC. 425. LOANS TO QUALIFIED CONTINUING CARE FACILITIES MADE 

PERMANENT. 

(a) IN GENERAL.—Subsection (h) of section 7872 (relating to exception for loans to qualified continuing care facilities) is amended 

by striking paragraph (4). 

(b) EFFECTIVE DATE.—The amendment made by this section shall 

take effect as if included in section 209 of the Tax Increase Prevention and Reconciliation Act of 2005. 

SEC. 426. TECHNICAL CORRECTIONS. 

(a) TECHNICAL CORRECTION RELATING TO LOOK-THROUGH TREAT- MENT OF PAYMENTS BETWEEN RELATED CONTROLLED FOREIGN COR- PORATIONS UNDER THE FOREIGN PERSONAL HOLDING COMPANY

RULES.—

(1) IN GENERAL.— (A) The first sentence of section 954(c)(6)(A) is amended 

by striking ‘‘which is not subpart F income’’ and inserting 

‘‘which is neither subpart F income nor income treated as 

effectively connected with the conduct of a trade or business in the United States’’. 

(B) Section 954(c)(6)(A) is amended by striking the last 

sentence and inserting the following: ‘‘The Secretary shall 

prescribe such regulations as may be necessary or appropriate to carry out this paragraph, including such regulations as may be necessary or appropriate to prevent the 

abuse of the purposes of this paragraph.’’


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(2) EFFECTIVE DATE.—The amendments made by this subsection shall take effect as if included in section 103(b) of the 

Tax Increase Prevention and Reconciliation Act of 2005. 

(b) TECHNICAL CORRECTION REGARDING AUTHORITY TO EXERCISE

REASONABLE CAUSE AND GOOD FAITH EXCEPTION.— (1) IN GENERAL.—Section 903(d)(2)(B)(iii) of the American 

Jobs Creation Act of 2004, as amended by section 303(a) of the 

Gulf Opportunity Zone Act of 2005, is amended by inserting ‘‘or 

the Secretary’s delegate’’ after ‘‘the Secretary of the Treasury’’. (2) EFFECTIVE DATE.—The amendment made by this subsection shall take effect as if included in the provisions of the 

American Jobs Creation Act of 2004 to which it relates. 

DIVISION B—MEDICARE AND OTHER 

HEALTH PROVISIONS 

SEC. 1. SHORT TITLE OF DIVISION. 

This division may be cited as the ‘‘Medicare Improvements and 

Extension Act of 2006’’. 

TITLE I—MEDICARE IMPROVED 

QUALITY AND PROVIDER PAYMENTS 

SEC. 101. PHYSICIAN PAYMENT AND QUALITY IMPROVEMENT. 

(a) ONE-YEAR INCREASE IN MEDICARE PHYSICIAN FEE SCHEDULE

CONVERSION FACTOR.—Section 1848(d) of the Social Security Act 

(42 U.S.C. 1395w-4(d)) is amended by adding at the end the following new paragraph: ‘‘(7) CONVERSION FACTOR FOR 2007.— ‘‘(A) IN GENERAL.—The conversion factor that would otherwise be applicable under this subsection for 2007 shall 

be the amount of such conversion factor divided by the 

product of— ‘‘(i) 1 plus the Secretary’s estimate of the percentage 

increase in the MEI (as defined in section 1842(i)(3)) 

for 2007 (divided by 100); and ‘‘(ii) 1 plus the Secretary’s estimate of the update adjustment factor under paragraph (4)(B) for 2007. ‘‘(B) NO EFFECT ON COMPUTATION OF CONVERSION FACTOR FOR 2008.—The conversion factor under this subsection 

shall be computed under paragraph (1)(A) for 2008 as if 

subparagraph (A) had never applied.’’. 

(b) QUALITY REPORTING SYSTEM.—Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is amended by adding at the end the 

following new subsection: 

‘‘(k) QUALITY REPORTING SYSTEM.—

‘‘(1) IN GENERAL.—The Secretary shall implement a system 

for the reporting by eligible professionals of data on quality 

measures specified under paragraph (2). Such data shall be 

submitted in a form and manner specified by the Secretary (by 

program instruction or otherwise), which may include submission of such data on claims under this part. ‘‘(2) USE OF CONSENSUS-BASED QUALITY MEASURES.—


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‘‘(A) FOR 2007.— ‘‘(i) IN GENERAL.—For purposes of applying this subsection for the reporting of data on quality measures 

for covered professional services furnished during the 

period beginning July 1, 2007, and ending December 

31, 2007, the quality measures specified under this 

paragraph are the measures identified as 2007 physician quality measures under the Physician Voluntary 

Reporting Program as published on the public website 

of the Centers for Medicare & Medicaid Services as of 

the date of the enactment of this subsection, except as 

may be changed by the Secretary based on the results 

of a consensus-based process in January of 2007, if 

such change is published on such website by not later 

than April 1, 2007. ‘‘(ii) SUBSEQUENT REFINEMENTS IN APPLICATION PERMITTED.—The Secretary may, from time to time (but 

not later than July 1, 2007), publish on such website 

(without notice or opportunity for public comment) 

modifications or refinements (such as code additions, 

corrections, or revisions) for the application of quality 

measures previously published under clause (i), but 

may not, under this clause, change the quality measures under the reporting system. 

‘‘(iii) IMPLEMENTATION.—Notwithstanding any other 

provision of law, the Secretary may implement by program instruction or otherwise this subsection for 2007. ‘‘(B) FOR 2008.— ‘‘(i) IN GENERAL.—For purposes of reporting data on 

quality measures for covered professional services furnished during 2008, the quality measures specified 

under this paragraph for covered professional services 

shall be measures that have been adopted or endorsed 

by a consensus organization (such as the National 

Quality Forum or AQA), that include measures that 

have been submitted by a physician specialty, and 

that the Secretary identifies as having used a consensus-based process for developing such measures. 

Such measures shall include structural measures, 

such as the use of electronic health records and electronic prescribing technology. ‘‘(ii) PROPOSED SET OF MEASURES.—Not later than 

August 15, 2007, the Secretary shall publish in the 

Federal Register a proposed set of quality measures 

that the Secretary determines are described in clause 

(i) and would be appropriate for eligible professionals 

to use to submit data to the Secretary in 2008. The 

Secretary shall provide for a period of public comment 

on such set of measures. ‘‘(iii) FINAL SET OF MEASURES.—Not later than November 15, 2007, the Secretary shall publish in the 

Federal Register a final set of quality measures that 

the Secretary determines are described in clause (i) 

and would be appropriate for eligible professionals to 

use to submit data to the Secretary in 2008. 


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‘‘(3) COVERED PROFESSIONAL SERVICES AND ELIGIBLE PROFES- SIONALS DEFINED.—For purposes of this subsection: ‘‘(A) COVERED PROFESSIONAL SERVICES.—The term ‘covered professional services’ means services for which payment is made under, or is based on, the fee schedule established under this section and which are furnished by an eligible professional. ‘‘(B) ELIGIBLE PROFESSIONAL.—The term ‘eligible professional’ means any of the following: 

‘‘(i) A physician. 

‘‘(ii) A practitioner described in section 

1842(b)(18)(C). ‘‘(iii) A physical or occupational therapist or a qualified speech-language pathologist. ‘‘(4) USE OF REGISTRY-BASED REPORTING.—As part of the publication of proposed and final quality measures for 2008 under 

clauses (ii) and (iii) of paragraph (2)(B), the Secretary shall address a mechanism whereby an eligible professional may provide data on quality measures through an appropriate medical 

registry (such as the Society of Thoracic Surgeons National 

Database), as identified by the Secretary. 

‘‘(5) IDENTIFICATION UNITS.—For purposes of applying this 

subsection, the Secretary may identify eligible professionals 

through billing units, which may include the use of the Provider Identification Number, the unique physician identification number (described in section 1833(q)(1)), the taxpayer 

identification number, or the National Provider Identifier. For 

purposes of applying this subsection for 2007, the Secretary 

shall use the taxpayer identification number as the billing 

unit. ‘‘(6) EDUCATION AND OUTREACH.—The Secretary shall provide 

for education and outreach to eligible professionals on the operation of this subsection. ‘‘(7) LIMITATIONS ON REVIEW.—There shall be no administrative or judicial review under section 1869, section 1878, or otherwise, of the development and implementation of the reporting system under paragraph (1), including identification of 

quality measures under paragraph (2) and the application of 

paragraphs (4) and (5). 

‘‘(8) IMPLEMENTATION.—The Secretary shall carry out this 

subsection acting through the Administrator of the Centers for 

Medicare & Medicaid Services.’’. 

(c) TRANSITIONAL BONUS INCENTIVE PAYMENTS FOR QUALITY REPORTING IN 2007.—

(1) IN GENERAL.—With respect to covered professional services furnished during a reporting period (as defined in paragraph (6)(C)) by an eligible professional, if—

(A) there are any quality measures that have been established under the physician reporting system that are 

applicable to any such services furnished by such professional for such period, and 

(B) the eligible professional satisfactorily submits (as determined under paragraph (2)) to the Secretary data on 

such quality measures in accordance with such reporting 

system for such reporting period, 


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in addition to the amount otherwise paid under part B of title 

XVIII of the Social Security Act, subject to paragraph (3), there 

also shall be paid to the eligible professional (or to an employer 

or facility in the cases described in clause (A) of section 

1842(b)(6) of the Social Security Act (42 U.S.C. 1395u(b)(6))) 

from the Federal Supplementary Medical Insurance Trust 

Fund established under section 1841 of such Act (42 U.S.C. 

1395t) an amount equal to 1.5 percent of the Secretary’s estimate (based on claims submitted not later than two months 

after the end of the reporting period) of the allowed charges 

under such part for all such covered professional services furnished during the reporting period. 

(2) SATISFACTORY REPORTING DESCRIBED.—For purposes of 

paragraph (1), an eligible professional shall be treated as satisfactorily submitting data on quality measures for covered professional services for a reporting period if quality measures 

have been reported as follows: 

(A) THREE OR FEWER QUALITY MEASURES APPLICABLE.— If there are no more than 3 quality measures that are provided under the physician reporting system and that are 

applicable to such services of such professional furnished 

during the period, each such quality measure has been reported under such system in at least 80 percent of the 

cases in which such measure is reportable under the system. 

(B) FOUR OR MORE QUALITY MEASURES APPLICABLE.—If 

there are 4 or more quality measures that are provided 

under the physician reporting system and that are applicable to such services of such professional furnished during 

the period, at least 3 such quality measures have been reported under such system in at least 80 percent of the 

cases in which the respective measure is reportable under 

the system. 

(3) PAYMENT LIMITATION.—

(A) IN GENERAL.—In no case shall the total payment 

made under this subsection to an eligible professional (or 

to an employer or facility in the cases described in clause 

(A) of section 1842(b)(6) of the Social Security Act) exceed 

the product of— (i) the total number of quality measures for which 

data are submitted under the physician reporting system for covered professional services of such professional that are furnished during the reporting period; 

and 

(ii) 300 percent of the average per measure payment 

amount specified in subparagraph (B). 

(B) AVERAGE PER MEASURE PAYMENT AMOUNT SPECI- FIED.—The average per measure payment amount specified in this subparagraph is an amount, estimated by the 

Secretary (based on claims submitted not later than two 

months after the end of the reporting period), equal to—

(i) the total of the amount of allowed charges under 

part B of title XVIII of the Social Security Act for all 

covered professional services furnished during the reporting period on claims for which quality measures 


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are reported under the physician reporting system; divided by 

(ii) the total number of quality measures for which 

data are reported under such system for covered professional services furnished during the reporting period. 

(4) FORM OF PAYMENT.—The payment under this subsection 

shall be in the form of a single consolidated payment. 

(5) APPLICATION.— (A) PHYSICIAN REPORTING SYSTEM RULES.—Paragraphs 

(5), (6), and (8) of section 1848(k) of the Social Security 

Act, as added by subsection (b), shall apply for purposes of 

this subsection in the same manner as they apply for purposes of such section. 

(B) COORDINATION WITH OTHER BONUS PAYMENTS.—The 

provisions of this subsection shall not be taken into account in applying subsections (m) and (u) of section 1833 

of the Social Security Act (42 U.S.C. 1395l) and any payment under such subsections shall not be taken into account in computing allowable charges under this subsection. 

(C) IMPLEMENTATION.—Notwithstanding any other provision of law, the Secretary may implement by program instruction or otherwise this subsection. 

(D) VALIDATION.— (i) IN GENERAL.—Subject to the succeeding provisions of this subparagraph, for purposes of determining whether a measure is applicable to the covered 

professional services of an eligible professional under 

paragraph (2), the Secretary shall presume that if an 

eligible professional submits data for a measure, such 

measure is applicable to such professional. 

(ii) METHOD.— The Secretary shall validate (by sampling or other means as the Secretary determines to 

be appropriate) whether measures applicable to covered professional services of an eligible professional 

have been reported. 

(iii) DENIAL OF PAYMENT AUTHORITY.—If the Secretary determines that an eligible professional has not 

reported measures applicable to covered professional 

services of such professional, the Secretary shall not 

pay the bonus incentive payment. 

(E) LIMITATIONS ON REVIEW.—

(i) IN GENERAL.—There shall be no administrative or 

judicial review under section 1869 or 1878 of the Social Security Act or otherwise of—

(I) the determination of measures applicable to 

services furnished by eligible professionals under 

this subsection; 

(II) the determination of satisfactory reporting 

under paragraph (2); 

(III) the determination of the payment limitation under paragraph (3); and 

(IV) the determination of the bonus incentive 

payment under this subsection. 


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(ii) TREATMENT OF DETERMINATIONS.—A determination under this subsection shall not be treated as a determination for purposes of section 1869 of the Social 

Security Act. 

(6) DEFINITIONS.—For purposes of this subsection: 

(A) ELIGIBLE PROFESSIONAL; COVERED PROFESSIONAL

SERVICES.—The terms ‘‘eligible professional’’ and ‘‘covered 

professional services’’ have the meanings given such terms 

in section 1848(k)(3) of the Social Security Act, as added 

by subsection (b). 

(B) PHYSICIAN REPORTING SYSTEM.—The term ‘‘physician 

reporting system’’ means the system established under section 1848(k) of the Social Security Act, as added by subsection (b). 

(C) REPORTING PERIOD.—The term ‘‘reporting period’’

means the period beginning on July 1, 2007, and ending 

on December 31, 2007. 

(D) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Health and Human Services. 

(d) PHYSICIAN ASSISTANCE AND QUALITY INITIATIVE FUND.—Section 1848 of the Social Security Act, as amended by subsection (b), 

is further amended by adding at the end the following new subsection: 

‘‘(l) PHYSICIAN ASSISTANCE AND QUALITY INITIATIVE FUND.— ‘‘(1) ESTABLISHMENT.—The Secretary shall establish under 

this subsection a Physician Assistance and Quality Initiative 

Fund (in this subsection referred to as the ‘Fund’) which shall 

be available to the Secretary for physician payment and quality improvement initiatives, which may include application of 

an adjustment to the update of the conversion factor under 

subsection (d). ‘‘(2) FUNDING.—

‘‘(A) AMOUNT AVAILABLE.—There shall be available to 

the Fund for expenditures an amount equal to 

$1,350,000,000. ‘‘(B) TIMELY OBLIGATION OF ALL AVAILABLE FUNDS FOR

SERVICES FURNISHED DURING 2008.—The Secretary shall 

provide for expenditures from the Fund in a manner designed to provide (to the maximum extent feasible) for the 

obligation of the entire amount specified in subparagraph 

(A) for payment with respect to physicians’ services furnished during 2008. ‘‘(C) PAYMENT FROM TRUST FUND.—The amount specified 

in subparagraph (A) shall be available to the Fund, as expenditures are made from the Fund, from the Federal Supplementary Medical Insurance Trust Fund under section 

1841. 

‘‘(D) FUNDING LIMITATION.—Amounts in the Fund shall 

be available in advance of appropriations in accordance 

with subparagraph (B) but only if the total amount obligated from the Fund does not exceed the amount available 

to the Fund under subparagraph (A). The Secretary may 

obligate funds from the Fund only if the Secretary determines (and the Chief Actuary of the Centers for Medicare 

& Medicaid Services and the appropriate budget officer 


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certify) that there are available in the Fund sufficient 

amounts to cover all such obligations incurred consistent 

with the previous sentence. 

‘‘(E) CONSTRUCTION.—In the case that expenditures from 

the Fund are applied to, or otherwise affect, a conversion 

factor under subsection (d) for a year, the conversion factor 

under such subsection shall be computed for a subsequent 

year as if such application or effect had never occurred.’’. 

(e) IMPLEMENTATION.—For purposes of implementing the provisions of, and amendments made by, this section, the Secretary of 

Health and Human Services shall provide for the transfer, from the 

Federal Supplementary Medical Insurance Trust Fund established 

under section 1841 of the Social Security Act (42 U.S.C. 1395t), of 

$60,000,000 to the Centers for Medicare & Medicaid Services Program Management Account for the period of fiscal years 2007, 

2008, and 2009. 

SEC. 102. EXTENSION OF FLOOR ON MEDICARE WORK GEOGRAPHIC 

ADJUSTMENT. 

Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 

1395w–4(e)(1)(E)) is amended by striking ‘‘before January 1, 2007’’

and inserting ‘‘before January 1, 2008’’. 

SEC. 103. UPDATE TO THE COMPOSITE RATE COMPONENT OF THE 

BASIC CASE-MIX ADJUSTED PROSPECTIVE PAYMENT SYSTEM FOR DIALYSIS SERVICES. 

(a) IN GENERAL.—Section 1881(b)(12)(G) of the Social Security 

Act (42 U.S.C. 1395rr(b)(12)(G)) is amended to read as follows: 

‘‘(G) The Secretary shall increase the amount of the composite 

rate component of the basic case-mix adjusted system under subparagraph (B) for dialysis services—

‘‘(i) furnished on or after January 1, 2006, and before April 

1, 2007, by 1.6 percent above the amount of such composite 

rate component for such services furnished on December 31, 

2005; and 

‘‘(ii) furnished on or after April 1, 2007, by 1.6 percent above 

the amount of such composite rate component for such services 

furnished on March 31, 2007.’’. 

(b) GAO REPORT ON HOME DIALYSIS PAYMENT.—Not later than 

January 1, 2009, the Comptroller General of the United States 

shall submit to Congress a report on the costs for home hemodialysis treatment and patient training for both home hemodialysis 

and peritoneal dialysis. Such report shall also include recommendations for a payment methodology for payment under section 1881 

of the Social Security Act (42 U.S.C. 1395rr) that measures, and is 

based on, the costs of providing such services and takes into account the case mix of patients. 

SEC. 104. EXTENSION OF TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES UNDER MEDICARE. 

Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 

Improvement and Protection Act of 2000 (as enacted into law by 

section 1(a)(6) of Public Law 106–554), as amended by section 732 

of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173), is amended by striking ‘‘and 

2006’’ and inserting ‘‘, 2006, and 2007’’. 


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SEC. 105. EXTENSION OF MEDICARE REASONABLE COSTS PAYMENTS 

FOR CERTAIN CLINICAL DIAGNOSTIC LABORATORY 

TESTS FURNISHED TO HOSPITAL PATIENTS IN CERTAIN 

RURAL AREAS. 

Effective as if included in the enactment of section 416 of the 

Medicare Prescription Drug, Improvement, and Modernization Act 

of 2003 (42 U.S.C. 1395l–4), subsection (b) of such section is 

amended by striking ‘‘2-year period’’ and inserting ‘‘3-year period’’. 

SEC. 106. HOSPITAL MEDICARE REPORTS AND CLARIFICATIONS. 

(a) CORRECTION OF MID-YEAR RECLASSIFICATION EXPIRATION.—

Notwithstanding any other provision of law, in the case of a subsection (d) hospital (as defined for purposes of section 1886 of the 

Social Security Act (42 U.S.C. 1395ww)) with respect to which a reclassification of its wage index for purposes of such section would 

(but for this subsection) expire on March 31, 2007, such reclassification of such hospital shall be extended through September 30, 

2007. The previous sentence shall not be effected in a budget-neutral manner. 

(b) REVISION OF THE MEDICARE WAGE INDEX CLASSIFICATION

SYSTEM.—

(1) MEDPAC REPORT.—

(A) IN GENERAL.—The Medicare Payment Advisory Commission shall submit to Congress, by not later than June 

30, 2007, a report on its study of the wage index classification system applied under Medicare prospective payment 

systems, including under section 1886(d)(3)(E) of the Social 

Security Act (42 U.S.C. 1395ww(d)(3)(E)). Such report 

shall include any alternatives the Commission recommends to the method to compute the wage index under 

such section. 

(B) FUNDING.—Out of any funds in the Treasury not otherwise appropriated, there are appropriated to the Medicare Payment Advisory Commission, $2,000,000 for fiscal 

year 2007 to carry out this paragraph. 

(2) PROPOSAL TO REVISE THE HOSPITAL WAGE INDEX CLASSIFICATION SYSTEM.— The Secretary of Health and Human Services, taking into account the recommendations described in the 

report under paragraph (1), shall include in the proposed rule 

published under section 1886(e)(5)(A) of the Social Security Act 

(42 U.S.C. 1395ww(e)(5)(A)) for fiscal year 2009 one or more 

proposals to revise the wage index adjustment applied under 

section 1886(d)(3)(E) of such Act (42 U.S.C. 1395ww(d)(3)(E)) 

for purposes of the Medicare prospective payment system for 

inpatient hospital services. Such proposal (or proposals) shall 

consider each of the following: 

(A) Problems associated with the definition of labor markets for purposes of such wage index adjustment. 

(B) The modification or elimination of geographic reclassifications and other adjustments. 

(C) The use of Bureau of Labor Statistics data, or other 

data or methodologies, to calculate relative wages for each 

geographic area involved. 

(D) Minimizing variations in wage index adjustments between and within Metropolitan Statistical Areas and 

Statewide rural areas. 


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(E) The feasibility of applying all components of the proposal to other settings, including home health agencies 

and skilled nursing facilities. 

(F) Methods to minimize the volatility of wage index adjustments, while maintaining the principle of budget neutrality in applying such adjustments. 

(G) The effect that the implementation of the proposal 

would have on health care providers and on each region of 

the country. 

(H) Methods for implementing the proposal, including 

methods to phase-in such implementation. 

(I) Issues relating to occupational mix, such as staffing 

practices and any evidence on the effect on quality of care 

and patient safety and any recommendations for alternative calculations. 

(c) ELIMINATION OF UNNECESSARY REPORT.—Section 1886 of the 

Social Security Act (42 U.S.C. 1395ww) is amended—

(1) in subsection (d)(4)(C), by striking clause (iv); and 

(2) in subsection (e), by striking paragraph (3). 

SEC. 107. PAYMENT FOR BRACHYTHERAPY. 

(a) EXTENSION OF PAYMENT RULE.—Section 1833(t)(16)(C) of the 

Social Security Act (42 U.S.C. 1395l(t)(16)(C)) is amended by striking ‘‘January 1, 2007’’ and inserting ‘‘January 1, 2008’’. 

(b) ESTABLISHMENT OF SEPARATE PAYMENT GROUPS.—

(1) IN GENERAL.—Section 1833(t)(2)(H) of such Act (42 U.S.C. 

1395l(t)(2)(H)) is amended by inserting ‘‘and for stranded and 

non-stranded devices furnished on or after July 1, 2007’’ before 

the period at the end. 

(2) IMPLEMENTATION.—The Secretary of Health and Human 

Services may implement the amendment made by paragraph 

(1) by program instruction or otherwise. 

SEC. 108. PAYMENT PROCESS UNDER THE COMPETITIVE ACQUISITION 

PROGRAM (CAP). 

(a) IN GENERAL.—Section 1847B(a)(3) of the Social Security Act 

(42 U.S.C. 1395w-3b(a)(3)) is amended—

(1) in subparagraph (A)(iii), by striking ‘‘and biologicals’’ and 

all that follows and inserting ‘‘and biologicals shall be made 

only to such contractor upon receipt of a claim for a drug or 

biological supplied by the contractor for administration to a 

beneficiary.’’; and 

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

‘‘(D) POST-PAYMENT REVIEW PROCESS.—The Secretary 

shall establish (by program instruction or otherwise) a 

post-payment review process (which may include the use of 

statistical sampling) to assure that payment is made for a 

drug or biological under this section only if the drug or biological has been administered to a beneficiary. The Secretary shall recoup, offset, or collect any overpayments determined by the Secretary under such process.’’. (b) CONSTRUCTION.—Nothing in this section shall be construed 

as— (1) requiring the conduct of any additional competition under 

subsection (b)(1) of section 1847B of the Social Security Act (42 

U.S.C. 1395w-3b); or 


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(2) requiring any additional process for elections by physicians under subsection (a)(1)(A)(ii) of such section or additional 

selection by a selecting physician of a contractor under subsection (a)(5) of such section. 

(c) EFFECTIVE DATE.—The amendments made by subsection (a) 

shall apply to payment for drugs and biologicals supplied under 

section 1847B of the Social Security Act (42 U.S.C. 1395w-3b)—

(1) on or after April 1, 2007; and 

(2) on or after July 1, 2006, and before April 1, 2007, for 

claims that are unpaid as of April 1, 2007. 

SEC. 109. QUALITY REPORTING FOR HOSPITAL OUTPATIENT SERVICES AND AMBULATORY SURGICAL CENTER SERVICES. 

(a) OUTPATIENT HOSPITAL SERVICES.—

(1) IN GENERAL.—Section 1833(t) of the Social Security Act 

(42 U.S.C. 1395l(t)) is amended—

(A) in paragraph (3)(C)(iv), by inserting ‘‘subject to paragraph (17),’’ after ‘‘For purposes of this subparagraph,’’; 

and 

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

‘‘(17) QUALITY REPORTING.—

‘‘(A) REDUCTION IN UPDATE FOR FAILURE TO REPORT.—

‘‘(i) IN GENERAL.—For purposes of paragraph 

(3)(C)(iv) for 2009 and each subsequent year, in the 

case of a subsection (d) hospital (as defined in section 

1886(d)(1)(B)) that does not submit, to the Secretary in 

accordance with this paragraph, data required to be 

submitted on measures selected under this paragraph 

with respect to such a year, the OPD fee schedule increase factor under paragraph (3)(C)(iv) for such year 

shall be reduced by 2.0 percentage points. 

‘‘(ii) NON-CUMULATIVE APPLICATION.—A reduction 

under this subparagraph shall apply only with respect 

to the year involved and the Secretary shall not take 

into account such reduction in computing the OPD fee 

schedule increase factor for a subsequent year. 

‘‘(B) FORM AND MANNER OF SUBMISSION.—Each subsection (d) hospital shall submit data on measures selected 

under this paragraph to the Secretary in a form and manner, and at a time, specified by the Secretary for purposes 

of this paragraph. 

‘‘(C) DEVELOPMENT OF OUTPATIENT MEASURES.—

‘‘(i) IN GENERAL.—The Secretary shall develop measures that the Secretary determines to be appropriate 

for the measurement of the quality of care (including 

medication errors) furnished by hospitals in outpatient 

settings and that reflect consensus among affected 

parties and, to the extent feasible and practicable, 

shall include measures set forth by one or more national consensus building entities. 

‘‘(ii) CONSTRUCTION.—Nothing in this paragraph 

shall be construed as preventing the Secretary from 

selecting measures that are the same as (or a subset 

of) the measures for which data are required to be 

submitted under section 1886(b)(3)(B)(viii). 


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‘‘(D) REPLACEMENT OF MEASURES.—For purposes of this 

paragraph, the Secretary may replace any measures or indicators in appropriate cases, such as where all hospitals 

are effectively in compliance or the measures or indicators 

have been subsequently shown not to represent the best 

clinical practice. ‘‘(E) AVAILABILITY OF DATA.—The Secretary shall establish procedures for making data submitted under this 

paragraph available to the public. Such procedures shall 

ensure that a hospital has the opportunity to review the 

data that are to be made public with respect to the hospital prior to such data being made public. The Secretary 

shall report quality measures of process, structure, outcome, patients’ perspectives on care, efficiency, and costs of 

care that relate to services furnished in outpatient settings 

in hospitals on the Internet website of the Centers for 

Medicare & Medicaid Services.’’. (2) CONFORMING AMENDMENT.—Section 1886(b)(3)(B)(viii)(III) 

of such Act (42 U.S.C. 1395ww(b)(3)(B)(viii)(III)) is amended by 

inserting ‘‘(including medication errors)’’ after ‘‘quality of care’’. (b) APPLICATION TO AMBULATORY SURGICAL CENTERS.—Section 

1833(i) of such Act (42 U.S.C. 1935l(i)) is amended—

(1) in paragraph (2)(D), by redesignating clause (iv) as clause 

(v) and by inserting after clause (iii) the following new clause: 

‘‘(iv) The Secretary may implement such system in a manner so 

as to provide for a reduction in any annual update for failure to 

report on quality measures in accordance with paragraph (7).’’; and 

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

‘‘(7)(A) For purposes of paragraph (2)(D)(iv), the Secretary may 

provide, in the case of an ambulatory surgical center that does not 

submit, to the Secretary in accordance with this paragraph, data 

required to be submitted on measures selected under this paragraph with respect to a year, any annual increase provided under 

the system established under paragraph (2)(D) for such year shall 

be reduced by 2.0 percentage points. A reduction under this subparagraph shall apply only with respect to the year involved and 

the Secretary shall not take into account such reduction in computing any annual increase factor for a subsequent year. ‘‘(B) Except as the Secretary may otherwise provide, the provisions of subparagraphs (B), (C), (D), and (E) of paragraph (17) of 

section 1833(t) shall apply with respect to services of ambulatory 

surgical centers under this paragraph in a similar manner to the 

manner in which they apply under such paragraph and, for purposes of this subparagraph, any reference to a hospital, outpatient 

setting, or outpatient hospital services is deemed a reference to an 

ambulatory surgical center, the setting of such a center, or services 

of such a center, respectively.’’. (c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to payment for services furnished on or after January 

1, 2009. 

SEC. 110. REPORTING OF ANEMIA QUALITY INDICATORS FOR MEDICARE PART B CANCER ANTI-ANEMIA DRUGS. 

(a) IN GENERAL.—Section 1842 of the Social Security Act (42 

U.S.C. 1395u) is amended by adding at the end the following new 

subsection: 


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‘‘(u) Each request for payment, or bill submitted, for a drug furnished to an individual for the treatment of anemia in connection 

with the treatment of cancer shall include (in a form and manner 

specified by the Secretary) information on the hemoglobin or hematocrit levels for the individual.’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall apply to drugs furnished on or after January 1, 2008. The 

Secretary of Health and Human Services shall address the implementation of such amendment in the rulemaking process under 

section 1848 of the Social Security Act (42 U.S.C. 1395w-4) for payment for physicians’ services for 2008, consistent with the previous 

sentence. 

SEC. 111. CLARIFICATION OF HOSPICE SATELLITE DESIGNATION. 

Notwithstanding any other provision of law, for purposes of calculating the hospice aggregate payment cap for 2004, 2005, and 

2006 for a hospice program under section 1814(i)(2)(A) of the Social 

Security Act (42 U.S.C. 1395f(i)(2)(A)) for hospice care provided on 

or after November 1, 2003, and before December 27, 2005, Medicare provider number 29-1511 is deemed to be a multiple location 

of Medicare provider number 29-1500. 

TITLE II—MEDICARE BENEFICIARY 

PROTECTIONS 

SEC. 201. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE 

THERAPY CAPS. 

Section 1833(g)(5) of the Social Security Act (42 U.S.C. 

1395l(g)(5)) is amended by striking ‘‘2006’’ and inserting ‘‘the period 

beginning on January 1, 2006, and ending on December 31, 2007,’’. 

SEC. 202. PAYMENT FOR ADMINISTRATION OF PART D VACCINES. 

(a) TRANSITION FOR 2007.—Notwithstanding any other provision 

of law, in the case of a vaccine that is a covered part D drug under 

section 1860D-2(e) of the Social Security Act (42 U.S.C. 1395w102(e)) and that is administered during 2007, the administration of 

such vaccine shall be paid under part B of title XVIII of such Act 

as if it were the administration of a vaccine described in section 

1861(s)(10)(B) of such Act (42 U.S.C. 1395w(s)(10)(B)). 

(b) ADMINISTRATION INCLUDED IN COVERAGE OF COVERED PART D 

DRUGS BEGINNING IN 2008.—Section 1860D-2(e)(1) of the Social Security Act (42 U.S.C. 1395w-102(e)(1)) is amended, in the matter 

following subparagraph (B), by inserting ‘‘(and, for vaccines administered on or after January 1, 2008, its administration)’’ after ‘‘Public Health Service Act’’. 

SEC. 203. OIG STUDY OF NEVER EVENTS. 

(a) STUDY.—

(1) IN GENERAL.—The Inspector General in the Department 

of Health and Human Services shall conduct a study on—

(A) incidences of never events for Medicare beneficiaries, 

including types of such events and payments by any party 

for such events; 

(B) the extent to which the Medicare program paid, denied payment, or recouped payment for services furnished 


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in connection with such events and the extent to which 

beneficiaries paid for such services; and 

(C) the administrative processes of the Centers for Medicare & Medicaid Services to detect such events and to deny 

or recoup payments for services furnished in connection 

with such an event. 

(2) CONDUCT OF STUDY.—In conducting the study under 

paragraph (1), the Inspector General— (A) shall audit a representative sample of claims and 

medical records of Medicare beneficiaries to identify never 

events and any payment (or recoupment) for services furnished in connection with such events; 

(B) may request access to such claims and records from 

any Medicare contractor; and 

(C) shall not release individually identifiable information 

or facility-specific information. 

(b) REPORT.—Not later than 2 years after the date of the enactment of this Act, the Inspector General shall submit a report to 

Congress on the study conducted under this section. Such report 

shall include recommendations for such legislation and administrative action, such as a noncoverage policy or denial of payments, as 

the Inspector General determines appropriate, including— (1) recommendations on processes to identify never events 

and to deny or recoup payments for services furnished in connection with such events; and 

(2) a recommendation on a potential process (or processes) 

for public disclosure of never events which— (A) will ensure protection of patient privacy; and 

(B) will permit the use of the disclosed information for 

a root cause analysis to inform the public and the medical 

community about safety issues involved. 

(c) FUNDING.— Out of any funds in the Treasury not otherwise 

appropriated, there are appropriated to the Inspector General of 

the Department of Health and Human Services $3,000,000 to carry 

out this section, to be available until January 1, 2010. 

(d) NEVER EVENTS DEFINED.—For purposes of this section, the 

term ‘‘never event’’ means an event that is listed and endorsed as 

a serious reportable event by the National Quality Forum as of November 16, 2006. 

SEC. 204. MEDICARE MEDICAL HOME DEMONSTRATION PROJECT. 

(a) IN GENERAL.—The Secretary of Health and Human Services 

(in this section referred to as the ‘‘Secretary’’) shall establish under 

title XVIII of the Social Security Act a medical home demonstration 

project (in this section referred to as the ‘‘project’’) to redesign the 

health care delivery system to provide targeted, accessible, continuous and coordinated, family-centered care to high-need populations and under which—

(1) care management fees are paid to persons performing 

services as personal physicians; and 

(2) incentive payments are paid to physicians participating 

in practices that provide services as a medical home under subsection (d). 

For purposes of this subsection, the term ‘‘high-need population’’

means individuals with multiple chronic illnesses that require regular medical monitoring, advising, or treatment. 


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(b) DETAILS.— (1) DURATION; SCOPE.—The project shall operate during a period of three years and shall include urban, rural, and underserved areas in a total of no more than 8 States. 

(2) ENCOURAGING PARTICIPATION OF SMALL PHYSICIAN PRAC- TICES.—The project shall be designed to include the participation of physicians in practices with fewer than three full-time 

equivalent physicians, as well as physicians in larger practices 

particularly in rural and underserved areas. 

(c) PERSONAL PHYSICIAN DEFINED.— (1) IN GENERAL.—For purposes of this section, the term ‘‘personal physician’’ means a physician (as defined in section 

1861(r)(1) of the Social Security Act (42 U.S.C. 1395x(r)(1)) 

who—(A) meets the requirements described in paragraph (2); 

and 

(B) performs the services described in paragraph (3). 

Nothing in this paragraph shall be construed as preventing 

such a physician from being a specialist or subspecialist for an 

individual requiring ongoing care for a specific chronic condition or multiple chronic conditions (such as severe asthma, 

complex diabetes, cardiovascular disease, rheumatologic disorder) or for an individual with a prolonged illness. 

(2) REQUIREMENTS.—The requirements described in this 

paragraph for a personal physician are as follows: 

(A) The physician is a board certified physician who provides first contact and continuous care for individuals 

under the physician’s care. 

(B) The physician has the staff and resources to manage 

the comprehensive and coordinated health care of each 

such individual. 

(3) SERVICES PERFORMED.—A personal physician shall perform or provide for the performance of at least the following 

services: 

(A) Advocates for and provides ongoing support, oversight, and guidance to implement a plan of care that provides an integrated, coherent, cross-discipline plan for ongoing medical care developed in partnership with patients 

and including all other physicians furnishing care to the 

patient involved and other appropriate medical personnel 

or agencies (such as home health agencies). 

(B) Uses evidence-based medicine and clinical decision 

support tools to guide decision-making at the point-of-care 

based on patient-specific factors. 

(C) Uses health information technology, that may include remote monitoring and patient registries, to monitor 

and track the health status of patients and to provide patients with enhanced and convenient access to health care 

services. 

(D) Encourages patients to engage in the management of 

their own health through education and support systems. 

(d) MEDICAL HOME DEFINED.—For purposes of this section, the 

term ‘‘medical home’’ means a physician practice that— (1) is in charge of targeting beneficiaries for participation in 

the project; and 


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(2) is responsible for—

(A) providing safe and secure technology to promote patient access to personal health information; 

(B) developing a health assessment tool for the individuals targeted; and 

(C) providing training programs for personnel involved 

in the coordination of care. 

(e) PAYMENT MECHANISMS.—

(1) PERSONAL PHYSICIAN CARE MANAGEMENT FEE.—Under the 

project, the Secretary shall provide for payment under section 

1848 of the Social Security Act (42 U.S.C. 1395w-4) of a care 

management fee to personal physicians providing care management under the project. Under such section and using the relative value scale update committee (RUC) process under such 

section, the Secretary shall develop a care management fee 

code for such payments and a value for such code. 

(2) MEDICAL HOME SHARING IN SAVINGS.—The Secretary shall 

provide for payment under the project of a medical home based 

on the payment methodology applied to physician group practices under section 1866A of the Social Security Act (42 U.S.C. 

1395cc-1). Under such methodology, 80 percent of the reductions in expenditures under title XVIII of the Social Security 

Act resulting from participation of individuals that are attributable to the medical home (as reduced by the total care managements fees paid to the medical home under the project) 

shall be paid to the medical home. The amount of such reductions in expenditures shall be determined by using assumptions with respect to reductions in the occurrence of health 

complications, hospitalization rates, medical errors, and adverse drug reactions. 

(3) SOURCE.—Payments paid under the project shall be made 

from the Federal Supplementary Medical Insurance Trust 

Fund under section 1841 of the Social Security Act (42 U.S.C. 

1395t). 

(f) EVALUATIONS AND REPORTS.—

(1) ANNUAL INTERIM EVALUATIONS AND REPORTS.—For each 

year of the project, the Secretary shall provide for an evaluation of the project and shall submit to Congress, by a date 

specified by the Secretary, a report on the project and on the 

evaluation of the project for each such year. 

(2) FINAL EVALUATION AND REPORT.—The Secretary shall 

provide for an evaluation of the project and shall submit to 

Congress, not later than one year after completion of the 

project, a report on the project and on the evaluation of the 

project. 

SEC. 205. MEDICARE DRA TECHNICAL CORRECTIONS. 

(a) PACE CLARIFICATION.—Paragraph (7) of section 5302(c) of the 

Deficit Reduction Act of 2005 (42 U.S.C. 1395eee note) is amended 

to read as follows: 

‘‘(7) APPROPRIATION.—

‘‘(A) IN GENERAL.—Out of funds in the Treasury not otherwise appropriated, there are appropriated to the Secretary $10,000,000 to carry out this subsection for the period of fiscal years 2006 through 2010. 


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‘‘(B) AVAILABILITY.—Funds appropriated under subparagraph (A) shall remain available for obligation through fiscal year 2010.’’. (b) MISCELLANEOUS TECHNICAL CORRECTIONS.— (1) CORRECTION OF MARGIN (SECTION 5001).—Section 

1886(b)(3)(B) of the Social Security Act (42 U.S.C. 

1395ww(b)(3)(B)), as amended by section 5001(a) of the Deficit 

Reduction Act of 2005 (Public Law 109–171), is amended by 

moving clause (viii) (including subclauses (I) through (VII) of 

such clause) 6 ems to the left. 

(2) REFERENCE CORRECTION (SECTION 5114).—Section 

5114(a)(2) of the Deficit Reduction Act of 2005 (Public Law 

109–171), in the matter preceding subparagraph (A), is amended by striking ‘‘1842(b)(6)(F) of such Act (42 U.S.C. 

1395u(b)(6)(F))’’ and inserting ‘‘1842(b)(6) of such Act (42 

U.S.C. 1395u(b)(6))’’. (c) EFFECTIVE DATE.—The amendments made by this section 

shall take effect as if included in the enactment of the Deficit Reduction Act of 2005 (Public Law 109–171). 

SEC. 206. LIMITED CONTINUOUS OPEN ENROLLMENT OF ORIGINAL 

MEDICARE FEE-FOR-SERVICE ENROLLEES INTO MEDICARE ADVANTAGE NON-PRESCRIPTION DRUG PLANS. 

(a) IN GENERAL.—Section 1851(e)(2) of the Social Security Act (42 

U.S.C. 1395w–21(e)(2)) is amended by adding at the end the following new subparagraph: ‘‘(E) LIMITED CONTINUOUS OPEN ENROLLMENT OF ORIGI- NAL FEE-FOR-SERVICE ENROLLEES IN MEDICARE ADVANTAGE

NON-PRESCRIPTION DRUG PLANS.— ‘‘(i) IN GENERAL.—On any date during 2007 or 2008 

on which a Medicare Advantage eligible individual is 

an unenrolled fee-for-service individual (as defined in 

clause (ii)), the individual may elect under subsection 

(a)(1) to enroll in a Medicare Advantage plan that is 

not an MA–PD plan. 

‘‘(ii) UNENROLLED FEE-FOR-SERVICE INDIVIDUAL DEFINED.—In this subparagraph, the term ‘unenrolled 

fee-for-service individual’ means, with respect to a 

date, a Medicare Advantage eligible individual who—

‘‘(I) is receiving benefits under this title through 

enrollment in the original medicare fee-for-service 

program under parts A and B; 

‘‘(II) is not enrolled in an MA plan on such date; 

and 

‘‘(III) as of such date is not otherwise eligible to 

elect to enroll in an MA plan. 

‘‘(iii) LIMITATION OF ONE CHANGE DURING YEAR.—An 

individual may exercise the right under clause (i) only 

once during the year. 

‘‘(iv) NO EFFECT ON COVERAGE UNDER A PRESCRIPTION DRUG PLAN.—Nothing in this subparagraph shall 

be construed as permitting an individual exercising 

the right under clause (i)—

‘‘(I) who is enrolled in a prescription drug plan 

under part D, to disenroll from such plan or to enroll in a different prescription drug plan; or 


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‘‘(II) who is not enrolled in a prescription drug 

plan, to enroll in such a plan.’’. 

(b) CONFORMING AMENDMENT.—Section 1860D–1(b)(1)(B)(iii) of 

the Social Security Act (42 U.S.C. 1395w–101(b)(1)(B)(iii)) is 

amended by striking ‘‘subparagraphs (B) and (C)’’ and inserting 

‘‘subparagraphs (B), (C), and (E)’’. 

TITLE III—MEDICARE PROGRAM 

INTEGRITY EFFORTS 

SEC. 301. OFFSETTING ADJUSTMENT IN MEDICARE ADVANTAGE STABILIZATION FUND. 

Section 1858(e)(2)(A)(i) of the Social Security Act (42 U.S.C. 

1395w-27a(e)(2)(A)(i)) is amended by striking ‘‘2007,’’ and 

‘‘$10,000,000,000’’ and inserting ‘‘2012,’’ and ‘‘$3,500,000,000’’, respectively. 

SEC. 302. EXTENSION AND EXPANSION OF RECOVERY AUDIT CONTRACTOR PROGRAM UNDER THE MEDICARE INTEGRITY 

PROGRAM. 

(a) IN GENERAL.—Section 1893 of the Social Security Act (42 

U.S.C. 1395ddd) is amended by adding at the end the following 

new subsection: 

‘‘(h) USE OF RECOVERY AUDIT CONTRACTORS.—

‘‘(1) IN GENERAL.—Under the Program, the Secretary shall 

enter into contracts with recovery audit contractors in accordance with this subsection for the purpose of identifying underpayments and overpayments and recouping overpayments 

under this title with respect to all services for which payment 

is made under part A or B. Under the contracts—

‘‘(A) payment shall be made to such a contractor only 

from amounts recovered; 

‘‘(B) from such amounts recovered, payment—

‘‘(i) shall be made on a contingent basis for collecting 

overpayments; and 

‘‘(ii) may be made in such amounts as the Secretary 

may specify for identifying underpayments; and 

‘‘(C) the Secretary shall retain a portion of the amounts 

recovered which shall be available to the program management account of the Centers for Medicare & Medicaid 

Services for purposes of activities conducted under the recovery audit program under this subsection. 

‘‘(2) DISPOSITION OF REMAINING RECOVERIES.—The amounts 

recovered under such contracts that are not paid to the contractor under paragraph (1) or retained by the Secretary under 

paragraph (1)(C) shall be applied to reduce expenditures under 

parts A and B. 

‘‘(3) NATIONWIDE COVERAGE.—The Secretary shall enter into 

contracts under paragraph (1) in a manner so as to provide for 

activities in all States under such a contract by not later than 

January 1, 2010. 

‘‘(4) AUDIT AND RECOVERY PERIODS.—Each such contract 

shall provide that audit and recovery activities may be conducted during a fiscal year with respect to payments made 

under part A or B—


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‘‘(A) during such fiscal year; and 

‘‘(B) retrospectively (for a period of not more than 4 fiscal years prior to such fiscal year). ‘‘(5) WAIVER.—The Secretary shall waive such provisions of 

this title as may be necessary to provide for payment of recovery audit contractors under this subsection in accordance with 

paragraph (1). ‘‘(6) QUALIFICATIONS OF CONTRACTORS.— ‘‘(A) IN GENERAL.—The Secretary may not enter into a 

contract under paragraph (1) with a recovery audit contractor unless the contractor has staff that has the appropriate clinical knowledge of, and experience with, the payment rules and regulations under this title or the contractor has, or will contract with, another entity that has 

such knowledgeable and experienced staff. ‘‘(B) INELIGIBILITY OF CERTAIN CONTRACTORS.—The Secretary may not enter into a contract under paragraph (1) 

with a recovery audit contractor to the extent the contractor is a fiscal intermediary under section 1816, a carrier under section 1842, or a medicare administrative contractor under section 1874A. 

‘‘(C) PREFERENCE FOR ENTITIES WITH DEMONSTRATED

PROFICIENCY.—In awarding contracts to recovery audit 

contractors under paragraph (1), the Secretary shall give 

preference to those risk entities that the Secretary determines have demonstrated more than 3 years direct management experience and a proficiency for cost control or recovery audits with private insurers, health care providers, 

health plans, under the Medicaid program under title XIX, 

or under this title. ‘‘(7) CONSTRUCTION RELATING TO CONDUCT OF INVESTIGATION

OF FRAUD.—A recovery of an overpayment to a individual or 

entity by a recovery audit contractor under this subsection 

shall not be construed to prohibit the Secretary or the Attorney 

General from investigating and prosecuting, if appropriate, allegations of fraud or abuse arising from such overpayment. ‘‘(8) ANNUAL REPORT.—The Secretary shall annually submit 

to Congress a report on the use of recovery audit contractors 

under this subsection. Each such report shall include information on the performance of such contractors in identifying underpayments and overpayments and recouping overpayments, 

including an evaluation of the comparative performance of 

such contractors and savings to the program under this title.’’. (b) ACCESS TO COORDINATION OF BENEFITS CONTRACTOR DATABASE.—The Secretary of Health and Human Services shall provide 

for access by recovery audit contractors conducting audit and recovery activities under section 1893(h) of the Social Security Act, as 

added by subsection (a), to the database of the Coordination of Benefits Contractor of the Centers for Medicare & Medicaid Services 

with respect to the audit and recovery periods described in paragraph (4) of such section 1893(h). 

(c) CONFORMING AMENDMENTS TO CURRENT DEMONSTRATION

PROJECT.—Section 306 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173; 117 

Stat. 2256) is amended—


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(1) in subsection (b)(2), by striking ‘‘last for not longer than 

3 years’’ and inserting ‘‘continue until contracts are entered 

into under section 1893(h) of the Social Security Act’’; and 

(2) by striking subsection (f). 

SEC. 303. FUNDING FOR THE HEALTH CARE FRAUD AND ABUSE CONTROL ACCOUNT. 

(a) DEPARTMENTS OF HEALTH AND HUMAN SERVICES AND JUS- TICE.—

(1) IN GENERAL.—Section 1817(k)(3)(A)(i) of the Social Security Act (42 U.S.C. 1395i(k)(3)(A)(i)) is amended— (A) in the matter preceding subclause (I), by inserting ‘‘until expended’’ after ‘‘without further appropriation’’; 

(B) in subclause (II), by striking ‘‘and’’ at the end; 

(C) in subclause (III)— (i) by striking ‘‘for each fiscal year after fiscal year 

2003’’ and inserting ‘‘for each of fiscal years 2004, 

2005, and 2006’’; and 

(ii) by striking the period at the end and inserting 

a semicolon; and 

(D) by adding at the end the following new subclauses: ‘‘(IV) for each of fiscal years 2007, 2008, 2009, 

and 2010, the limit under this clause for the preceding fiscal year, increased by the percentage increase in the consumer price index for all urban 

consumers (all items; United States city average) 

over the previous year; and 

‘‘(V) for each fiscal year after fiscal year 2010, 

the limit under this clause for fiscal year 2010.’’. 

(2) OFFICE OF THE INSPECTOR GENERAL OF THE DEPARTMENT

OF HEALTH AND HUMAN SERVICES.—Section 1817(k)(3)(A)(ii) of 

such Act (42 U.S.C. 1395i(k)(3)(A)(ii)) is amended—

(A) in subclause (VI), by striking ‘‘and’’ at the end; 

(B) in subclause (VII)— (i) by striking ‘‘for each fiscal year after fiscal year 

2002’’ and inserting ‘‘for each of fiscal years 2003, 

2004, 2005, and 2006’’; and 

(ii) by striking the period at the end and inserting 

a semicolon; and 

(C) by adding at the end the following new subclauses: ‘‘(VIII) for fiscal year 2007, not less than $160,000,000, increased by the percentage increase in the consumer price index for all urban 

consumers (all items; United States city average) 

over the previous year; ‘‘(IX) for each of fiscal years 2008, 2009, and 

2010, not less than the amount required under 

this clause for the preceding fiscal year, increased 

by the percentage increase in the consumer price 

index for all urban consumers (all items; United 

States city average) over the previous year; and 

‘‘(X) for each fiscal year after fiscal year 2010, 

not less than the amount required under this 

clause for fiscal year 2010.’’. 

(b) FEDERAL BUREAU OF INVESTIGATION.—Section 1817(k)(3)(B) of 

the Social Security Act (42 U.S.C. 1395i(k)(3)(B)) is amended—


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(1) in the matter preceding clause (i), by inserting ‘‘until expended’’ after ‘‘without further appropriation’’; 

(2) in clause (vi), by striking ‘‘and’’ at the end; 

(3) in clause (vii)— (A) by striking ‘‘for each fiscal year after fiscal year 

2002’’ and inserting ‘‘for each of fiscal years 2003, 2004, 

2005, and 2006’’; and 

(B) by striking the period at the end and inserting a 

semicolon; and 

(4) by adding at the end the following new clauses: ‘‘(viii) for each of fiscal years 2007, 2008, 2009, and 

2010, the amount to be appropriated under this subparagraph for the preceding fiscal year, increased by 

the percentage increase in the consumer price index 

for all urban consumers (all items; United States city 

average) over the previous year; and ‘‘(ix) for each fiscal year after fiscal year 2010, the 

amount to be appropriated under this subparagraph 

for fiscal year 2010.’’. 

SEC. 304. IMPLEMENTATION FUNDING. 

For purposes of implementing the provisions of, and amendments 

made by, this title and titles I and II of this division, other than 

section 203, the Secretary of Health and Human Services shall provide for the transfer, in appropriate part from the Federal Hospital 

Insurance Trust Fund established under section 1817 of the Social 

Security Act (42 U.S.C. 1395i) and the Federal Supplementary 

Medical Insurance Trust Fund established under section 1841 of 

such Act (42 U.S.C. 1395t), of $45,000,000 to the Centers for Medicare & Medicaid Services Program Management Account for the 

period of fiscal years 2007 and 2008. 

TITLE IV—MEDICAID AND OTHER 

HEALTH PROVISIONS 

SEC. 401. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA) 

AND ABSTINENCE EDUCATION PROGRAM. 

Activities authorized by sections 510 and 1925 of the Social Security Act shall continue through June 30, 2007, in the manner authorized for fiscal year 2006, notwithstanding section 1902(e)(1)(A) 

of such Act, and out of any money in the Treasury of the United 

States not otherwise appropriated, there are hereby appropriated 

such sums as may be necessary for such purpose. Grants and payments may be made pursuant to this authority through the third 

quarter of fiscal year 2007 at the level provided for such activities 

through the third quarter of fiscal year 2006. 

SEC. 402. GRANTS FOR RESEARCH ON VACCINE AGAINST VALLEY 

FEVER. 

(a) IN GENERAL.—In supporting research on the development of 

vaccines against human diseases, the Secretary of Health and 

Human Services shall make grants for the purpose of conducting 

research toward the development of a vaccine against coccidioidomycosis (commonly known as Valley Fever). 

(b) SUNSET.—No grant may be made under subsection (a) on or 

after October 1, 2012. The preceding sentence does not have any 


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legal effect on payments under grants for which amounts appropriated under subsection (c) were obligated prior to such date. 

(c) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of making grants under subsection (a), there are authorized to be appropriated $40,000,000 for the period of fiscal years 2007 through 

2012. 

SEC. 403. CHANGE IN THRESHOLD FOR MEDICAID INDIRECT HOLD 

HARMLESS PROVISION OF BROAD-BASED HEALTH CARE 

TAXES. 

Section 1903(w)(4)(C) of the Social Security Act (42 U.S.C. 

1396b(w)(4)(C)) is amended— (1) by inserting ‘‘(i)’’ after ‘‘(C)’’; and 

(2) by adding at the end the following: 

‘‘(ii) For purposes of clause (i), a determination of the existence of an indirect guarantee shall be made under paragraph 

(3)(i) of section 433.68(f) of title 42, Code of Federal Regulations, as in effect on November 1, 2006, except that for portions 

of fiscal years beginning on or after January 1, 2008, and before October 1, 2011, ‘5.5 percent’ shall be substituted for ‘6 

percent’ each place it appears.’’. 

SEC. 404. DSH ALLOTMENTS FOR FISCAL YEAR 2007 FOR TENNESSEE 

AND HAWAII. 

Section 1923(f)(6) of the Social Security Act (42 U.S.C. 1396r– 4(f)(6)) is amended to read as follows: ‘‘(6) ALLOTMENT ADJUSTMENTS FOR FISCAL YEAR 2007.— ‘‘(A) TENNESSEE.— ‘‘(i) IN GENERAL.—Only with respect to fiscal year 

2007, the DSH allotment for Tennessee for such fiscal 

year, notwithstanding the table set forth in paragraph 

(2) or the terms of the TennCare Demonstration 

Project in effect for the State, shall be the greater of— ‘‘(I) the amount that the Secretary determines is 

equal to the Federal medical assistance percentage component attributable to disproportionate 

share hospital payment adjustments for the demonstration year ending in 2006 that is reflected in 

the budget neutrality provision of the TennCare 

Demonstration Project; and 

‘‘(II) $280,000,000. 

‘‘(ii) LIMITATION ON AMOUNT OF PAYMENT ADJUSTMENTS ELIGIBLE FOR FEDERAL FINANCIAL PARTICIPATION.—Payment under section 1903(a) shall not be 

made to Tennessee with respect to the aggregate 

amount of any payment adjustments made under this 

section for hospitals in the State for fiscal year 2007 

that is in excess of 30 percent of the DSH allotment 

for the State for such fiscal year determined pursuant 

to clause (i). 

‘‘(iii) STATE PLAN AMENDMENT.—The Secretary shall 

permit Tennessee to submit an amendment to its 

State plan under this title that describes the methodology to be used by the State to identify and make 

payments to disproportionate share hospitals, including children’s hospitals and institutions for mental diseases or other mental health facilities. The Secretary 


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may not approve such plan amendment unless the 

methodology described in the amendment is consistent 

with the requirements under this section for making 

payment adjustments to disproportionate share hospitals. For purposes of demonstrating budget neutrality under the TennCare Demonstration Project, 

payment adjustments made pursuant to a State plan 

amendment approved in accordance with this subparagraph shall be considered expenditures under such 

project. ‘‘(iv) OFFSET OF FEDERAL SHARE OF PAYMENT ADJUST- MENTS FOR FISCAL YEAR 2007 AGAINST ESSENTIAL AC- CESS HOSPITAL SUPPLEMENTAL POOL PAYMENTS UNDER

THE TENNCARE DEMONSTRATION PROJECT.— ‘‘(I) The total amount of Essential Access Hospital supplemental pool payments that may be 

made under the TennCare Demonstration Project 

for fiscal year 2007 shall be reduced on a dollar 

for dollar basis by the amount of any payments 

made under section 1903(a) to Tennessee with respect to payment adjustments made under this 

section for hospitals in the State for such fiscal 

year. ‘‘(II) The sum of the total amount of payments 

made under section 1903(a) to Tennessee with respect to payment adjustments made under this 

section for hospitals in the State for fiscal year 

2007 and the total amount of Essential Access 

Hospital supplemental pool payments made under 

the TennCare Demonstration Project for such fiscal year shall not exceed the State’s DSH allotment for such fiscal year established under clause 

(i). ‘‘(B) HAWAII.— ‘‘(i) IN GENERAL.—Only with respect to fiscal year 

2007, the DSH allotment for Hawaii for such fiscal 

year, notwithstanding the table set forth in paragraph 

(2), shall be $10,000,000. ‘‘(ii) STATE PLAN AMENDMENT.—The Secretary shall 

permit Hawaii to submit an amendment to its State 

plan under this title that describes the methodology to 

be used by the State to identify and make payments 

to disproportionate share hospitals, including children’s hospitals and institutions for mental diseases or 

other mental health facilities. The Secretary may not 

approve such plan amendment unless the methodology 

described in the amendment is consistent with the requirements under this section for making payment adjustments to disproportionate share hospitals.’’. 

SEC. 405. CERTAIN MEDICAID DRA TECHNICAL CORRECTIONS. 

(a) TECHNICAL CORRECTIONS RELATING TO STATE OPTION FOR AL- TERNATIVE PREMIUMS AND COST SHARING (SECTIONS 6041 THROUGH

6043).—

(1) CLARIFICATION OF CONTINUED APPLICATION OF REGULAR

COST SHARING RULES FOR INDIVIDUALS WITH FAMILY INCOME


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NOT EXCEEDING 100 PERCENT OF THE POVERTY LINE.—Section 

1916A of the Social Security Act, as inserted by section 6041(a) 

of the Deficit Reduction Act of 2005 and amended by sections 

6042 and 6043 of such Act, is amended— (A) in subsection (a)(1)— (i) by inserting ‘‘but subject to paragraph (2),’’ after ‘‘1902(a)(10)(B),’’; and 

(ii) by inserting ‘‘and non-emergency services furnished in a hospital emergency department for which 

cost sharing may be imposed under subsection (e)’’ after ‘‘(c)’’; 

(B) by redesignating paragraph (2) of subsection (a) as 

paragraph (3); 

(C) in subsection (a), by inserting after paragraph (1) the 

following: ‘‘(2) EXEMPTION FOR INDIVIDUALS WITH FAMILY INCOME NOT

EXCEEDING 100 PERCENT OF THE POVERTY LINE.—

‘‘(A) IN GENERAL.—Paragraph (1) and subsection (d) 

shall not apply, and sections 1916 and 1902(a)(10)(B) shall 

continue to apply, in the case of an individual whose family income does not exceed 100 percent of the poverty line 

applicable to a family of the size involved. ‘‘(B) LIMIT ON AGGREGATE COST SHARING.—To the extent 

cost sharing under subsection (c) and (e) or under section 

1916 is imposed against individuals described in subparagraph (A), the limitation under subsection (b)(1)(B)(ii) on 

the total aggregate amount of cost sharing shall apply to 

such cost sharing for all individuals in a family described 

in subparagraph (A) in the same manner as such limitations apply to cost sharing and families described in subsection (b)(1)(B)(ii).’’; 

(D) in subsections (c)(2)(C) and (e)(2)(C), by inserting ‘‘under subsection (a)(2)(B) or’’ after ‘‘cap on cost sharing 

applied’’; and 

(E) in subsection (e)(2)(A), by inserting ‘‘who is not described in subparagraph (B)’’ after ‘‘subsection (b)(1)’’. 

(2) CLARIFICATION OF TREATMENT OF NON-PREFERRED DRUG

AND NON-EMERGENCY COST-SHARING.—Such section is further 

amended— (A) in subsections (b)(1) and (b)(2), by striking ‘‘, subject 

to subsections (c)(2) and (e)(2)(A)’’; 

(B) in subsection (c)(1), in the matter preceding subparagraph (A), by striking ‘‘least (or less) costly effective’’ and 

inserting ‘‘most (or more) cost effective’’; 

(C) in subsection (c)(1)(B), by striking ‘‘otherwise be imposed under’’ and inserting ‘‘be imposed under subsection 

(a) due to the application of’’; 

(D) in subsection (c)(2)(B), by striking ‘‘otherwise not 

subject to cost sharing due to the application of subsection 

(b)(3)(B)’’ and inserting ‘‘not subject to cost sharing under 

subsection (a) due to the application of paragraph (1)(B)’’; 

(E) in subsection (e)(2)(A)—

(i) by amending the heading to read as follows: ‘‘INDIVIDUALS WITH FAMILY INCOME BETWEEN 100 AND 150

PERCENT OF THE POVERTY LINE.—’’; and 


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(ii) by striking ‘‘under subsection (b)(1)’’ and inserting ‘‘under subsection (b)(1)(B)(ii)’’; 

(F) in subsection (e)(2)(B), by striking ‘‘who is otherwise 

not subject to cost sharing under subsection (b)(3)’’ and inserting ‘‘described in subsection (a)(2)(A) or who is not subject to cost sharing under subsection (b)(3)(B) with respect 

to non-emergency services described in paragraph (1)’’ and 

(G) in subsection (e)(2)(C), by inserting ‘‘or section 1916’’ after ‘‘subsection (a)’’. (3) CLARIFICATION OF COST SHARING RULES APPLICABLE TO

DISABLED CHILDREN PROVIDED MEDICAL ASSISTANCE UNDER THE

ELIGIBILITY CATEGORY ADDED BY THE FAMILY OPPORTUNITY

ACT.—Such section is further amended—

(A) in subsection (a)(1), in the second sentence, by striking ‘‘section 1916(g)’’ and inserting ‘‘subsection (g) or (i) of 

section 1916’’; and 

(B) in subsection (b)(3)—

(i) in subparagraph (A), by adding at the end the following: 

‘‘(vi) Disabled children who are receiving medical assistance by virtue of the application of sections 

1902(a)(10)(A)(ii)(XIX) and 1902(cc).’’; and 

(ii) in subparagraph (B), by adding at the end the 

following: 

‘‘(ix) Services furnished to disabled children who are 

receiving medical assistance by virtue of the application of sections 1902(a)(10)(A)(ii)(XIX) and 1902(cc).’’. 

(4) CORRECTION OF IV–B REFERENCES.—Such section is further amended in subsection (b)(3)— (A) in subparagraph (A)(i), by striking ‘‘aid or assistance 

is made available under part B of title IV to children in 

foster care’’ and inserting ‘‘child welfare services are made 

available under part B of title IV on the basis of being a 

child in foster care’’; and 

(B) in subparagraph (B)(i), by striking ‘‘aid or assistance 

is made available under part B of title IV to children in 

foster care’’ and inserting ‘‘child welfare services are made 

available under part B of title IV on the basis of being a 

child in foster care or’’. 

(5) NON-EMERGENCY SERVICES.—Section 1916A(e)(4)(A) of the 

Social Security Act, as added by section 6043(a) of the Deficit 

Reduction Act of 2005, is amended by striking ‘‘the physician 

determines’’. 

(6) EFFECTIVE DATE.—The amendments made by this subsection shall take effect as if included in the amendments 

made by sections 6041(a) of the Deficit Reduction Act of 2005, 

except that insofar as such amendments are to, or relate to, 

subsection (c) or (e) of section 1916A of the Social Security Act, 

such amendments shall take effect as if included in the amendments made by section 6042 or 6043, respectively, of the Deficit Reduction Act of 2005. 

(b) CLARIFYING TREATMENT OF CERTAIN ANNUITIES (SECTION

6012).—

(1) IN GENERAL.—Section 1917(c)(1)(F)(i) of the Social Security Act (42 U.S.C. 1396p(c)(1)(F)(i)), as added by section 


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6012(b) of the Deficit Reduction Act of 2005, is amended by 

striking ‘‘annuitant’’ and inserting ‘‘institutionalized individual’’. (2) EFFECTIVE DATE.—The amendment made by paragraph 

(1) shall be effective as if included in the enactment of section 

6012 of the Deficit Reduction Act of 2005. 

(c) ADDITIONAL MISCELLANEOUS TECHNICAL CORRECTIONS.— (1) DOCUMENTATION (SECTION 6036).— (A) IN GENERAL.—Effective as if included in the amendment made by section 6036(a)(2) of the Deficit Reduction 

Act of 2005, section 1903(x) of the Social Security Act (42 

U.S.C. 1396b(x)), as inserted by such section 6036(a)(2), is 

amended— (i) in paragraph (1), by striking ‘‘(i)(23)’’ and inserting ‘‘(i)(22)’’; 

(ii) in paragraph (2)— (I) in the matter preceding subparagraph (A), by 

striking ‘‘alien’’ and inserting ‘‘individual declaring 

to be a citizen or national of the United States’’; 

(II) by striking subparagraph (B) and inserting 

the following: ‘‘(B) and is receiving— ‘‘(i) disability insurance benefits under section 223 

or monthly insurance benefits under section 202 based 

on such individual’s disability (as defined in section 

223(d)); or ‘‘(ii) supplemental security income benefits under 

title XVI;’’; 

(III) in subparagraph (C)— (aa) by striking ‘‘other’’; and 

(bb) by striking ‘‘had’’ and inserting ‘‘has’’; 

(IV) by redesignating subparagraph (C) as subparagraph (D); and 

(V) by inserting after subparagraph (B) the following new subparagraph: 

‘‘(C) and with respect to whom—

‘‘(i) child welfare services are made available under 

part B of title IV on the basis of being a child in foster 

care; or 

‘‘(ii) adoption or foster care assistance is made available under part E of title IV; or’’; and 

(iii) in paragraph (3)(C)(iii), by striking ‘‘I–97’’ and 

inserting ‘‘I–197’’. 

(B) ASSURANCE OF STATE FOSTER CARE AGENCY

VERIFICATION OF CITIZENSHIP OR LEGAL STATUS.—

(i) STATE PLAN AMENDMENT.—Section 471(a) of the 

Social Security Act (42 U.S.C. 671(a)) is amended—

(I) in paragraph (25), by striking ‘‘and’’ at the 

end; 

(II) in paragraph (26)(C), by striking the period 

at the end and inserting ‘‘; and’’; and 

(III) by adding at the end the following: ‘‘(27) provides that, with respect to any child in foster care 

under the responsibility of the State under this part or part B 

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ments are made under section 472 on behalf of the child, the 

State has in effect procedures for verifying the citizenship or 

immigration status of the child.’’. 

(ii) INCLUSION IN REVIEWS OF CHILD AND FAMILY

SERVICES PROGRAMS.—Section 1123A(b)(2) of the Social 

Security Act (42 U.S.C. 1320a-2a(b)(2)) is amended by 

inserting ‘‘(which shall include determining whether 

the State program is in conformity with the requirement of section 471(a)(27))’’ after ‘‘review’’. 

(iii) EFFECTIVE DATE.—The amendments made by 

this subparagraph shall take effect on the date that is 

6 months after the date of the enactment of this Act. 

(2) MISCELLANEOUS TECHNICAL CORRECTIONS.—

(A) Effective as if included in the enactment of the Deficit Reduction Act of 2005 (Public Law 109–171), the following sections of such Act are amended as follows: 

(i) Section 5114(a)(2) is amended by striking ‘‘section 

1842(b)(6)(F) of such Act (42 U.S.C. 1395u(b)(6)(F))’’

and inserting ‘‘section 1842(b)(6) of such Act (42 

U.S.C. 1395u(b)(6))’’. 

(ii) Section 6003(b)(2) is amended, by striking ‘‘subsection (k)’’ and inserting ‘‘subsection (k)(1)’’. 

(iii) Sections 6031(b), 6032(b), and 6035(c) are each 

amended by striking ‘‘section 6035(e)’’ and inserting 

‘‘section 6034(e)’’. 

(iv) Section 6034(b) is amended by striking ‘‘section 

6033(a)’’ and inserting ‘‘section 6032(a)’’. 

(v) Section 6036 is amended—

(I) in subsection (b), by striking ‘‘section 

1903(z)’’ and inserting ‘‘section 1903(x)’’; and 

(II) in subsection (c), by striking ‘‘(i)(23)’’ and inserting ‘‘(i)(22)’’. 

(B) Effective as if included in the amendment made by 

section 6015(a)(1) of the Deficit Reduction Act of 2005, section 1919(c)(5)(A)(i)(II) of the Social Security Act (42 

U.S.C. 1396r(c)(5)(A)(i)(II)) is amended by striking ‘‘clause 

(v)’’ and inserting ‘‘subparagraph (B)(v)’’. 

DIVISION C—OTHER PROVISIONS 

TITLE I—GULF OF MEXICO ENERGY 

SECURITY 

SEC. 101. SHORT TITLE. 

This title may be cited as the ‘‘Gulf of Mexico Energy Security 

Act of 2006’’. 

SEC. 102. DEFINITIONS. 

In this title: 

(1) 181 AREA.—The term ‘‘181 Area’’ means the area identified in map 15, page 58, of the Proposed Final Outer Continental Shelf Oil and Gas Leasing Program for 1997–2002, 

dated August 1996, of the Minerals Management Service, 

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ment Service, excluding the area offered in OCS Lease Sale 

181, held on December 5, 2001. 

(2) 181 SOUTH AREA.—The term ‘‘181 South Area’’ means any 

area—

(A) located—

(i) south of the 181 Area; 

(ii) west of the Military Mission Line; and 

(iii) in the Central Planning Area; 

(B) excluded from the Proposed Final Outer Continental 

Shelf Oil and Gas Leasing Program for 1997–2002, dated 

August 1996, of the Minerals Management Service; and 

(C) included in the areas considered for oil and gas leasing, as identified in map 8, page 37 of the document entitled ‘‘Draft Proposed Program Outer Continental Shelf Oil 

and Gas Leasing Program 2007–2012’’, dated February 

2006. 

(3) BONUS OR ROYALTY CREDIT.—The term ‘‘bonus or royalty 

credit’’ means a legal instrument or other written documentation, or an entry in an account managed by the Secretary, that 

may be used in lieu of any other monetary payment for—

(A) a bonus bid for a lease on the outer Continental 

Shelf; or 

(B) a royalty due on oil or gas production from any lease 

located on the outer Continental Shelf. 

(4) CENTRAL PLANNING AREA.—The term ‘‘Central Planning 

Area’’ means the Central Gulf of Mexico Planning Area of the 

outer Continental Shelf, as designated in the document entitled ‘‘Draft Proposed Program Outer Continental Shelf Oil and 

Gas Leasing Program 2007–2012’’, dated February 2006. 

(5) EASTERN PLANNING AREA.—The term ‘‘Eastern Planning 

Area’’ means the Eastern Gulf of Mexico Planning Area of the 

outer Continental Shelf, as designated in the document entitled ‘‘Draft Proposed Program Outer Continental Shelf Oil and 

Gas Leasing Program 2007–2012’’, dated February 2006. 

(6) 2002–2007 PLANNING AREA.—The term ‘‘2002–2007 planning area’’ means any area—

(A) located in—

(i) the Eastern Planning Area, as designated in the 

Proposed Final Outer Continental Shelf Oil and Gas 

Leasing Program 2002–2007, dated April 2002, of the 

Minerals Management Service; 

(ii) the Central Planning Area, as designated in the 

Proposed Final Outer Continental Shelf Oil and Gas 

Leasing Program 2002–2007, dated April 2002, of the 

Minerals Management Service; or 

(iii) the Western Planning Area, as designated in 

the Proposed Final Outer Continental Shelf Oil and 

Gas Leasing Program 2002–2007, dated April 2002, of 

the Minerals Management Service; and 

(B) not located in—

(i) an area in which no funds may be expended to 

conduct offshore preleasing, leasing, and related activities under sections 104 through 106 of the Department of the Interior, Environment, and Related AgenVerDate Aug 31 2005 06:17 Dec 08, 2006 Jkt 059008 PO 00000 Frm 00074 Fmt 6659 Sfmt 6602 E:\HR\OC\HR722.XXX HR722

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cies Appropriations Act, 2006 (Public Law 109–54; 119 

Stat. 521) (as in effect on August 2, 2005); 

(ii) an area withdrawn from leasing under the 

‘‘Memorandum on Withdrawal of Certain Areas of the 

United States Outer Continental Shelf from Leasing 

Disposition’’, from 34 Weekly Comp. Pres. Doc. 1111, 

dated June 12, 1998; or 

(iii) the 181 Area or 181 South Area. 

(7) GULF PRODUCING STATE.—The term ‘‘Gulf producing 

State’’ means each of the States of Alabama, Louisiana, Mississippi, and Texas. 

(8) MILITARY MISSION LINE.—The term ‘‘Military Mission 

Line’’ means the north-south line at 86°41′ W. longitude. 

(9) QUALIFIED OUTER CONTINENTAL SHELF REVENUES.—

(A) IN GENERAL.—The term ‘‘qualified outer Continental 

Shelf revenues’’ means—

(i) in the case of each of fiscal years 2007 through 

2016, all rentals, royalties, bonus bids, and other sums 

due and payable to the United States from leases entered into on or after the date of enactment of this Act 

for—

(I) areas in the 181 Area located in the Eastern 

Planning Area; and 

(II) the 181 South Area; and 

(ii) in the case of fiscal year 2017 and each fiscal 

year thereafter, all rentals, royalties, bonus bids, and 

other sums due and payable to the United States received on or after October 1, 2016, from leases entered 

into on or after the date of enactment of this Act for—

(I) the 181 Area; 

(II) the 181 South Area; and 

(III) the 2002–2007 planning area. 

(B) EXCLUSIONS.—The term ‘‘qualified outer Continental 

Shelf revenues’’ does not include—

(i) revenues from the forfeiture of a bond or other 

surety securing obligations other than royalties, civil 

penalties, or royalties taken by the Secretary in-kind 

and not sold; or 

(ii) revenues generated from leases subject to section 

8(g) of the Outer Continental Shelf Lands Act (43 

U.S.C. 1337(g)). 

(10) COASTAL POLITICAL SUBDIVISION.—The term ‘‘coastal political subdivision’’ means a political subdivision of a Gulf producing State any part of which political subdivision is—

(A) within the coastal zone (as defined in section 304 of 

the Coastal Zone Management Act of 1972 (16 U.S.C. 

1453)) of the Gulf producing State as of the date of enactment of this Act; and 

(B) not more than 200 nautical miles from the geographic center of any leased tract. 

(11) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of the Interior. 


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SEC. 103. OFFSHORE OIL AND GAS LEASING IN 181 AREA AND 181 

SOUTH AREA OF GULF OF MEXICO. 

(a) 181 AREA LEASE SALE.—Except as provided in section 104, 

the Secretary shall offer the 181 Area for oil and gas leasing pursuant to the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et 

seq.) as soon as practicable, but not later than 1 year, after the 

date of enactment of this Act. 

(b) 181 SOUTH AREA LEASE SALE.—The Secretary shall offer the 

181 South Area for oil and gas leasing pursuant to the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) as soon as practicable after the date of enactment of this Act. 

(c) LEASING PROGRAM.—The 181 Area and 181 South Area shall 

be offered for lease under this section notwithstanding the omission 

of the 181 Area or the 181 South Area from any outer Continental 

Shelf leasing program under section 18 of the Outer Continental 

Shelf Lands Act (43 U.S.C. 1344). 

(d) CONFORMING AMENDMENT.—Section 105 of the Department of 

the Interior, Environment, and Related Agencies Appropriations 

Act, 2006 (Public Law 109–54; 119 Stat. 522) is amended by inserting ‘‘(other than the 181 South Area (as defined in section 102 of 

the Gulf of Mexico Energy Security Act of 2006))’’ after ‘‘lands located outside Sale 181’’. 

SEC. 104. MORATORIUM ON OIL AND GAS LEASING IN CERTAIN AREAS 

OF GULF OF MEXICO. 

(a) IN GENERAL.—Effective during the period beginning on the 

date of enactment of this Act and ending on June 30, 2022, the Secretary shall not offer for leasing, preleasing, or any related activity—

(1) any area east of the Military Mission Line in the Gulf of 

Mexico; 

(2) any area in the Eastern Planning Area that is within 125 

miles of the coastline of the State of Florida; or 

(3) any area in the Central Planning Area that is—

(A) within—

(i) the 181 Area; and 

(ii) 100 miles of the coastline of the State of Florida; 

or 

(B)(i) outside the 181 Area; 

(ii) east of the western edge of the Pensacola Official 

Protraction Diagram (UTM X coordinate 1,393,920 (NAD 

27 feet)); and 

(iii) within 100 miles of the coastline of the State of Florida. 

(b) MILITARY MISSION LINE.—Notwithstanding subsection (a), the 

United States reserves the right to designate by and through the 

Secretary of Defense, with the approval of the President, national 

defense areas on the outer Continental Shelf pursuant to section 

12(d) of the Outer Continental Shelf Lands Act (43 U.S.C. 1341(d)). 

(c) EXCHANGE OF CERTAIN LEASES.—

(1) IN GENERAL.—The Secretary shall permit any person 

that, as of the date of enactment of this Act, has entered into 

an oil or gas lease with the Secretary in any area described in 

paragraph (2) or (3) of subsection (a) to exchange the lease for 

a bonus or royalty credit that may only be used in the Gulf of 

Mexico. 


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(2) VALUATION OF EXISTING LEASE.—The amount of the bonus 

or royalty credit for a lease to be exchanged shall be equal to— (A) the amount of the bonus bid; and 

(B) any rental paid for the lease as of the date the lessee 

notifies the Secretary of the decision to exchange the lease. 

(3) REVENUE DISTRIBUTION.—No bonus or royalty credit may 

be used under this subsection in lieu of any payment due 

under, or to acquire any interest in, a lease subject to the revenue distribution provisions of section 8(g) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(g)). 

(4) REGULATIONS.—Not later than 1 year after the date of 

enactment of this Act, the Secretary shall promulgate regulations that shall provide a process for— (A) notification to the Secretary of a decision to exchange 

an eligible lease; 

(B) issuance of bonus or royalty credits in exchange for 

relinquishment of the existing lease; 

(C) transfer of the bonus or royalty credit to any other 

person; and 

(D) determining the proper allocation of bonus or royalty 

credits to each lease interest owner. 

SEC. 105. DISPOSITION OF QUALIFIED OUTER CONTINENTAL SHELF 

REVENUES FROM 181 AREA, 181 SOUTH AREA, AND 2002–

2007 PLANNING AREAS OF GULF OF MEXICO. 

(a) IN GENERAL.—Notwithstanding section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338) and subject to the other 

provisions of this section, for each applicable fiscal year, the Secretary of the Treasury shall deposit— (1) 50 percent of qualified outer Continental Shelf revenues 

in the general fund of the Treasury; and 

(2) 50 percent of qualified outer Continental Shelf revenues 

in a special account in the Treasury from which the Secretary 

shall disburse— (A) 75 percent to Gulf producing States in accordance 

with subsection (b); and 

(B) 25 percent to provide financial assistance to States 

in accordance with section 6 of the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l–8), which shall 

be considered income to the Land and Water Conservation 

Fund for purposes of section 2 of that Act (16 U.S.C. 460l–

5). 

(b) ALLOCATION AMONG GULF PRODUCING STATES AND COASTAL

POLITICAL SUBDIVISIONS.—

(1) ALLOCATION AMONG GULF PRODUCING STATES FOR FISCAL

YEARS 2007 THROUGH 2016.—

(A) IN GENERAL.—Subject to subparagraph (B), effective 

for each of fiscal years 2007 through 2016, the amount 

made available under subsection (a)(2)(A) shall be allocated to each Gulf producing State in amounts (based on 

a formula established by the Secretary by regulation) that 

are inversely proportional to the respective distances between the point on the coastline of each Gulf producing 

State that is closest to the geographic center of the applicable leased tract and the geographic center of the leased 

tract. 


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(B) MINIMUM ALLOCATION.—The amount allocated to a 

Gulf producing State each fiscal year under subparagraph 

(A) shall be at least 10 percent of the amounts available 

under subsection (a)(2)(A). 

(2) ALLOCATION AMONG GULF PRODUCING STATES FOR FISCAL

YEAR 2017 AND THEREAFTER.—

(A) IN GENERAL.—Subject to subparagraphs (B) and (C), 

effective for fiscal year 2017 and each fiscal year thereafter—

(i) the amount made available under subsection 

(a)(2)(A) from any lease entered into within the 181 

Area or the 181 South Area shall be allocated to each 

Gulf producing State in amounts (based on a formula 

established by the Secretary by regulation) that are 

inversely proportional to the respective distances between the point on the coastline of each Gulf producing State that is closest to the geographic center of 

the applicable leased tract and the geographic center 

of the leased tract; and 

(ii) the amount made available under subsection 

(a)(2)(A) from any lease entered into within the 2002–

2007 planning area shall be allocated to each Gulf producing State in amounts that are inversely proportional to the respective distances between the point on 

the coastline of each Gulf producing State that is closest to the geographic center of each historical lease 

site and the geographic center of the historical lease 

site, as determined by the Secretary. 

(B) MINIMUM ALLOCATION.—The amount allocated to a 

Gulf producing State each fiscal year under subparagraph 

(A) shall be at least 10 percent of the amounts available 

under subsection (a)(2)(A). 

(C) HISTORICAL LEASE SITES.—

(i) IN GENERAL.—Subject to clause (ii), for purposes 

of subparagraph (A)(ii), the historical lease sites in the 

2002–2007 planning area shall include all leases entered into by the Secretary for an area in the Gulf of 

Mexico during the period beginning on October 1, 1982 

(or an earlier date if practicable, as determined by the 

Secretary), and ending on December 31, 2015. 

(ii) ADJUSTMENT.—Effective January 1, 2022, and 

every 5 years thereafter, the ending date described in 

clause (i) shall be extended for an additional 5 calendar years. 

(3) PAYMENTS TO COASTAL POLITICAL SUBDIVISIONS.—

(A) IN GENERAL.—The Secretary shall pay 20 percent of 

the allocable share of each Gulf producing State, as determined under paragraphs (1) and (2), to the coastal political 

subdivisions of the Gulf producing State. 

(B) ALLOCATION.—The amount paid by the Secretary to 

coastal political subdivisions shall be allocated to each 

coastal political subdivision in accordance with subparagraphs (B), (C), and (E) of section 31(b)(4) of the Outer 

Continental Shelf Lands Act (43 U.S.C. 1356a(b)(4)). 


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(c) TIMING.—The amounts required to be deposited under paragraph (2) of subsection (a) for the applicable fiscal year shall be 

made available in accordance with that paragraph during the fiscal 

year immediately following the applicable fiscal year. 

(d) AUTHORIZED USES.—

(1) IN GENERAL.—Subject to paragraph (2), each Gulf producing State and coastal political subdivision shall use all 

amounts received under subsection (b) in accordance with all 

applicable Federal and State laws, only for 1 or more of the following purposes: 

(A) Projects and activities for the purposes of coastal 

protection, including conservation, coastal restoration, hurricane protection, and infrastructure directly affected by 

coastal wetland losses. 

(B) Mitigation of damage to fish, wildlife, or natural resources. 

(C) Implementation of a federally-approved marine, 

coastal, or comprehensive conservation management plan. 

(D) Mitigation of the impact of outer Continental Shelf 

activities through the funding of onshore infrastructure 

projects. 

(E) Planning assistance and the administrative costs of 

complying with this section. 

(2) LIMITATION.—Not more than 3 percent of amounts received by a Gulf producing State or coastal political subdivision 

under subsection (b) may be used for the purposes described in 

paragraph (1)(E). 

(e) ADMINISTRATION.—Amounts made available under subsection 

(a)(2) shall—

(1) be made available, without further appropriation, in accordance with this section; 

(2) remain available until expended; and 

(3) be in addition to any amounts appropriated under—

(A) the Outer Continental Shelf Lands Act (43 U.S.C. 

1331 et seq.); 

(B) the Land and Water Conservation Fund Act of 1965 

(16 U.S.C. 460l–4 et seq.); or 

(C) any other provision of law. 

(f) LIMITATIONS ON AMOUNT OF DISTRIBUTED QUALIFIED OUTER

CONTINENTAL SHELF REVENUES.—

(1) IN GENERAL.—Subject to paragraph (2), the total amount 

of qualified outer Continental Shelf revenues made available 

under subsection (a)(2) shall not exceed $500,000,000 for each 

of fiscal years 2016 through 2055. 

(2) EXPENDITURES.—For the purpose of paragraph (1), for 

each of fiscal years 2016 through 2055, expenditures under 

subsection (a)(2) shall be net of receipts from that fiscal year 

from any area in the 181 Area in the Eastern Planning Area 

and the 181 South Area. 

(3) PRO RATA REDUCTIONS.—If paragraph (1) limits the 

amount of qualified outer Continental Shelf revenue that 

would be paid under subparagraphs (A) and (B) of subsection 

(a)(2)—


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(A) the Secretary shall reduce the amount of qualified 

outer Continental Shelf revenue provided to each recipient 

on a pro rata basis; and 

(B) any remainder of the qualified outer Continental 

Shelf revenues shall revert to the general fund of the 

Treasury. 

TITLE II—SURFACE MINING CONTROL 

AND RECLAMATION ACT AMENDMENTS OF 2006 

SEC. 200. SHORT TITLE. 

This title may be cited as the ‘‘Surface Mining Control and Reclamation Act Amendments of 2006’’. 

Subtitle A—Mining Control and 

Reclamation 

SEC. 201. ABANDONED MINE RECLAMATION FUND AND PURPOSES. 

(a) IN GENERAL.—Section 401 of the Surface Mining Control and 

Reclamation Act of 1977 (30 U.S.C. 1231) is amended—

(1) in subsection (c)—

(A) by striking paragraphs (2) and (6); and 

(B) by redesignating paragraphs (3), (4), and (5) and 

paragraphs (7) through (13) as paragraphs (2) through 

(11), respectively; 

(2) by striking subsection (d) and inserting the following: 

‘‘(d) AVAILABILITY OF MONEYS; NO FISCAL YEAR LIMITATION.—

‘‘(1) IN GENERAL.—Moneys from the fund for expenditures 

under subparagraphs (A) through (D) of section 402(g)(3) shall 

be available only when appropriated for those subparagraphs. 

‘‘(2) NO FISCAL YEAR LIMITATION.—Appropriations described 

in paragraph (1) shall be made without fiscal year limitation. 

‘‘(3) OTHER PURPOSES.—Moneys from the fund shall be available for all other purposes of this title without prior appropriation as provided in subsection (f).’’; 

(3) in subsection (e)—

(A) in the second sentence, by striking ‘‘the needs of such 

fund’’ and inserting ‘‘achieving the purposes of the transfers under section 402(h)’’; and 

(B) in the third sentence, by inserting before the period 

the following: ‘‘for the purpose of the transfers under section 402(h)’’; and 

(4) by adding at the end the following: 

‘‘(f) GENERAL LIMITATION ON OBLIGATION AUTHORITY.—

‘‘(1) IN GENERAL.—From amounts deposited into the fund 

under subsection (b), the Secretary shall distribute during each 

fiscal year beginning after September 30, 2007, an amount determined under paragraph (2). 

‘‘(2) AMOUNTS.—


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‘‘(A) FOR FISCAL YEARS 2008 THROUGH 2022.—For each of 

fiscal years 2008 through 2022, the amount distributed by 

the Secretary under this subsection shall be equal to— ‘‘(i) the amounts deposited into the fund under paragraphs (1), (2), and (4) of subsection (b) for the preceding fiscal year that were allocated under paragraphs (1) and (5) of section 402(g); plus ‘‘(ii) the amount needed for the adjustment under 

section 402(g)(8) for the current fiscal year. ‘‘(B) FISCAL YEARS 2023 AND THEREAFTER.—For fiscal 

year 2023 and each fiscal year thereafter, to the extent 

that funds are available, the Secretary shall distribute an 

amount equal to the amount distributed under subparagraph (A) during fiscal year 2022. ‘‘(3) DISTRIBUTION.— ‘‘(A) IN GENERAL.—Except as provided in subparagraph 

(B), for each fiscal year, of the amount to be distributed to 

States and Indian tribes pursuant to paragraph (2), the 

Secretary shall distribute— ‘‘(i) the amounts allocated under paragraph (1) of 

section 402(g), the amounts allocated under paragraph 

(5) of section 402(g), and any amount reallocated 

under section 411(h)(3) in accordance with section 

411(h)(2), for grants to States and Indian tribes under 

section 402(g)(5); and ‘‘(ii) the amounts allocated under section 402(g)(8). ‘‘(B) EXCLUSION.—Beginning on October 1, 2007, certified States shall be ineligible to receive amounts under 

section 402(g)(1). ‘‘(4) AVAILABILITY.—Amounts in the fund available to the 

Secretary for obligation under this subsection shall be available until expended. ‘‘(5) ADDITION.— ‘‘(A) IN GENERAL.—Subject to subparagraph (B), the 

amount distributed under this subsection for each fiscal 

year shall be in addition to the amount appropriated from 

the fund during the fiscal year. ‘‘(B) EXCEPTIONS.—Notwithstanding paragraph (3), the 

amount distributed under this subsection for the first 4 fiscal years beginning on and after October 1, 2007, shall be 

equal to the following percentage of the amount otherwise 

required to be distributed: 

‘‘(i) 50 percent in fiscal year 2008. 

‘‘(ii) 50 percent in fiscal year 2009. 

‘‘(iii) 75 percent in fiscal year 2010. 

‘‘(iv) 75 percent in fiscal year 2011.’’. 

(b) CONFORMING AMENDMENT.—Section 712(b) of the Surface 

Mining Control and Reclamation Act of 1977 (30 U.S.C. 1302(b)) is 

amended by striking ‘‘section 401(c)(11)’’ and inserting ‘‘section 

401(c)(9)’’. 

SEC. 202. RECLAMATION FEE. 

(a) AMOUNTS.—

(1) FISCAL YEARS 2008–2012.—Effective October 1, 2007, section 402(a) of the Surface Mining Control and Reclamation Act 

of 1977 (30 U.S.C. 1232(a)) is amended—


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(A) by striking ‘‘35’’ and inserting ‘‘31.5’’; 

(B) by striking ‘‘15’’ and inserting ‘‘13.5’’; and 

(C) by striking ‘‘10 cents’’ and inserting ‘‘9 cents’’. 

(2) FISCAL YEARS 2013–2021.—Effective October 1, 2012, section 402(a) of the Surface Mining Control and Reclamation Act 

of 1977 (30 U.S.C. 1232(a)) (as amended by paragraph (1)) is 

amended—

(A) by striking ‘‘31.5’’ and inserting ‘‘28’’; 

(B) by striking ‘‘13.5’’ and inserting ‘‘12’’; and 

(C) by striking ‘‘9 cents’’ and inserting ‘‘8 cents’’. 

(b) DURATION.—Effective September 30, 2007, section 402(b) of 

the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 

1232(b)) (as amended by section 7007 of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, 

and Hurricane Recovery, 2006 (Public Law 109–234; 120 Stat. 

484)) is amended by striking ‘‘September 30, 2007’’ and all that follows through the end of the sentence and inserting ‘‘September 30, 

2021.’’. 

(c) ALLOCATION OF FUNDS.—Section 402(g) of the Surface Mining 

Control and Reclamation Act of 1977 (30 U.S.C. 1232(g)) is amended—

(1) in paragraph (1)(D)—

(A) by inserting ‘‘(except for grants awarded during fiscal 

years 2008, 2009, and 2010 to the extent not expended 

within 5 years)’’ after ‘‘this paragraph’’; and 

(B) by striking ‘‘in any area under paragraph (2), (3), (4), 

or (5)’’ and inserting ‘‘under paragraph (5)’’; 

(2) by striking paragraph (2) and inserting: 

‘‘(2) In making the grants referred to in paragraph (1)(C) and the 

grants referred to in paragraph (5), the Secretary shall ensure 

strict compliance by the States and Indian tribes with the priorities 

described in section 403(a) until a certification is made under section 411(a).’’; 

(3) in paragraph (3)—

(A) in the matter preceding subparagraph (A), by striking ‘‘paragraphs (2) and’’ and inserting ‘‘paragraph’’; 

(B) in subparagraph (A), by striking ‘‘401(c)(11)’’ and inserting ‘‘401(c)(9)’’; and 

(C) by adding at the end the following: 

‘‘(E) For the purpose of paragraph (8).’’; 

(4) in paragraph (5)—

(A) by inserting ‘‘(A)’’ after ‘‘(5)’’; 

(B) in the first sentence, by striking ‘‘40’’ and inserting 

‘‘60’’; 

(C) in the last sentence, by striking ‘‘Funds allocated or 

expended by the Secretary under paragraphs (2), (3), or 

(4)’’ and inserting ‘‘Funds made available under paragraph 

(3) or (4)’’; and 

(D) by adding at the end the following: 

‘‘(B) Any amount that is reallocated and available under section 

411(h)(3) shall be in addition to amounts that are allocated under 

subparagraph (A).’’; and 

(5) by striking paragraphs (6) through (8) and inserting the 

following: 


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‘‘(6)(A) Any State with an approved abandoned mine reclamation 

program pursuant to section 405 may receive and retain, without 

regard to the 3-year limitation referred to in paragraph (1)(D), up 

to 30 percent of the total of the grants made annually to the State 

under paragraphs (1) and (5) if those amounts are deposited into 

an acid mine drainage abatement and treatment fund established 

under State law, from which amounts (together with all interest 

earned on the amounts) are expended by the State for the abatement of the causes and the treatment of the effects of acid mine 

drainage in a comprehensive manner within qualified hydrologic 

units affected by coal mining practices. ‘‘(B) In this paragraph, the term ‘qualified hydrologic unit’ means 

a hydrologic unit— ‘‘(i) in which the water quality has been significantly affected 

by acid mine drainage from coal mining practices in a manner 

that adversely impacts biological resources; and ‘‘(ii) that contains land and water that are— ‘‘(I) eligible pursuant to section 404 and include any of 

the priorities described in section 403(a); and ‘‘(II) the subject of expenditures by the State from the 

forfeiture of bonds required under section 509 or from 

other States sources to abate and treat acid mine drainage. ‘‘(7) In complying with the priorities described in section 403(a), 

any State or Indian tribe may use amounts available in grants 

made annually to the State or tribe under paragraphs (1) and (5) 

for the reclamation of eligible land and water described in section 

403(a)(3) before the completion of reclamation projects under paragraphs (1) and (2) of section 403(a) only if the expenditure of funds 

for the reclamation is done in conjunction with the expenditure before, on, or after the date of enactment of the Surface Mining Control and Reclamation Act Amendments of 2006 of funds for reclamation projects under paragraphs (1) and (2) of section 403(a). ‘‘(8)(A) In making funds available under this title, the Secretary shall ensure that the grant awards total not less than $3,000,000 

annually to each State and each Indian tribe having an approved 

abandoned mine reclamation program pursuant to section 405 and 

eligible land and water pursuant to section 404, so long as an allocation of funds to the State or tribe is necessary to achieve the priorities stated in paragraphs (1) and (2) of section 403(a). 

‘‘(B) Notwithstanding any other provision of law, this paragraph 

applies to the States of Tennessee and Missouri.’’. 

(d) TRANSFERS OF INTEREST EARNED BY ABANDONED MINE RECLAMATION FUND.—Section 402 of the Surface Mining Control and 

Reclamation Act of 1977 (30 U.S.C. 1232) is amended by striking 

subsection (h) and inserting the following: 

‘‘(h) TRANSFERS OF INTEREST EARNED BY FUND.—

‘‘(1) IN GENERAL.—

‘‘(A) TRANSFERS TO COMBINED BENEFIT FUND.—As soon 

as practicable after the beginning of fiscal year 2007 and 

each fiscal year thereafter, and before making any allocation with respect to the fiscal year under subsection (g), 

the Secretary shall use an amount not to exceed the 

amount of interest that the Secretary estimates will be 

earned and paid to the fund during the fiscal year to 

transfer to the Combined Benefit Fund such amounts as 


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are estimated by the trustees of such fund to offset the 

amount of any deficit in net assets in the Combined Benefit Fund as of October 1, 2006, and to make the transfer 

described in paragraph (2)(A). ‘‘(B) TRANSFERS TO 1992 AND 1993 PLANS.—As soon as 

practicable after the beginning of fiscal year 2008 and each 

fiscal year thereafter, and before making any allocation 

with respect to the fiscal year under subsection (g), the 

Secretary shall use an amount not to exceed the amount 

of interest that the Secretary estimates will be earned and 

paid to the fund during the fiscal year (reduced by the 

amount used under subparagraph (A)) to make the transfers described in paragraphs (2)(B) and (2)(C). ‘‘(2) TRANSFERS DESCRIBED.—The transfers referred to in 

paragraph (1) are the following: 

‘‘(A) UNITED MINE WORKERS OF AMERICA COMBINED BENEFIT FUND.—A transfer to the United Mine Workers of 

America Combined Benefit Fund equal to the amount that 

the trustees of the Combined Benefit Fund estimate will 

be expended from the fund for the fiscal year in which the 

transfer is made, reduced by—

‘‘(i) the amount the trustees of the Combined Benefit 

Fund estimate the Combined Benefit Fund will receive 

during the fiscal year in—

‘‘(I) required premiums; and 

‘‘(II) payments paid by Federal agencies in connection with benefits provided by the Combined 

Benefit Fund; and 

‘‘(ii) the amount the trustees of the Combined Benefit Fund estimate will be expended during the fiscal 

year to provide health benefits to beneficiaries who are 

unassigned beneficiaries solely as a result of the application of section 9706(h)(1) of the Internal Revenue 

Code of 1986, but only to the extent that such amount 

does not exceed the amounts described in subsection 

(i)(1)(A) that the Secretary estimates will be available 

to pay such estimated expenditures. ‘‘(B) UNITED MINE WORKERS OF AMERICA 1992 BENEFIT

PLAN.—A transfer to the United Mine Workers of America 

1992 Benefit Plan, in an amount equal to the difference 

between—

‘‘(i) the amount that the trustees of the 1992 UMWA 

Benefit Plan estimate will be expended from the 1992 

UMWA Benefit Plan during the next calendar year to 

provide the benefits required by the 1992 UMWA Benefit Plan on the date of enactment of this subparagraph; minus ‘‘(ii) the amount that the trustees of the 1992 

UMWA Benefit Plan estimate the 1992 UMWA Benefit Plan will receive during the next calendar year 

in—

‘‘(I) required monthly per beneficiary premiums, 

including the amount of any security provided to 

the 1992 UMWA Benefit Plan that is available for 

use in the provision of benefits; and 


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‘‘(II) payments paid by Federal agencies in connection with benefits provided by the 1992 UMWA 

benefit plan. 

‘‘(C) MULTIEMPLOYER HEALTH BENEFIT PLAN.—A transfer 

to the Multiemployer Health Benefit Plan established after 

July 20, 1992, by the parties that are the settlors of the 

1992 UMWA Benefit Plan referred to in subparagraph (B) 

(referred to in this subparagraph and subparagraph (D) as 

‘the Plan’), in an amount equal to the excess (if any) of—

‘‘(i) the amount that the trustees of the Plan estimate will be expended from the Plan during the next 

calendar year, to provide benefits no greater than 

those provided by the Plan as of December 31, 2006; 

over 

‘‘(ii) the amount that the trustees estimated the 

Plan will receive during the next calendar year in payments paid by Federal agencies in connection with 

benefits provided by the Plan. 

Such excess shall be calculated by taking into account only 

those beneficiaries actually enrolled in the Plan as of December 31, 2006, who are eligible to receive benefits under 

the Plan on the first day of the calendar year for which the 

transfer is made. 

‘‘(D) INDIVIDUALS CONSIDERED ENROLLED.—For purposes 

of subparagraph (C), any individual who was eligible to receive benefits from the Plan as of the date of enactment 

of this subsection, even though benefits were being provided to the individual pursuant to a settlement agreement approved by order of a bankruptcy court entered on 

or before September 30, 2004, will be considered to be actually enrolled in the Plan and shall receive benefits from 

the Plan beginning on December 31, 2006. 

‘‘(3) ADJUSTMENT.—If, for any fiscal year, the amount of a 

transfer under subparagraph (A), (B), or (C) of paragraph (2) 

is more or less than the amount required to be transferred 

under that subparagraph, the Secretary shall appropriately adjust the amount transferred under that subparagraph for the 

next fiscal year. 

‘‘(4) ADDITIONAL AMOUNTS.—

‘‘(A) PREVIOUSLY CREDITED INTEREST.—Notwithstanding 

any other provision of law, any interest credited to the 

fund that has not previously been transferred to the Combined Benefit Fund referred to in paragraph (2)(A) under 

this section—

‘‘(i) shall be held in reserve by the Secretary until 

such time as necessary to make the payments under 

subparagraphs (A) and (B) of subsection (i)(1), as described in clause (ii); and 

‘‘(ii) in the event that the amounts described in subsection (i)(1) are insufficient to make the maximum 

payments described in subparagraphs (A) and (B) of 

subsection (i)(1), shall be used by the Secretary to supplement the payments so that the maximum amount 

permitted under those paragraphs is paid. 


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‘‘(B) PREVIOUSLY ALLOCATED AMOUNTS.—All amounts allocated under subsection (g)(2) before the date of enactment of this subparagraph for the program described in 

section 406, but not appropriated before that date, shall be 

available to the Secretary to make the transfers described 

in paragraph (2). 

‘‘(C) ADEQUACY OF PREVIOUSLY CREDITED INTEREST.—The 

Secretary shall—

‘‘(i) consult with the trustees of the plans described 

in paragraph (2) at reasonable intervals; and 

‘‘(ii) notify Congress if a determination is made that 

the amounts held in reserve under subparagraph (A) 

are insufficient to meet future requirements under 

subparagraph (A)(ii). 

‘‘(D) ADDITIONAL RESERVE AMOUNTS.—In addition to 

amounts held in reserve under subparagraph (A), there is 

authorized to be appropriated such sums as may be necessary for transfer to the fund to carry out the purposes 

of subparagraph (A)(ii). 

‘‘(E) INAPPLICABILITY OF CAP.—The limitation described 

in subsection (i)(3)(A) shall not apply to payments made 

from the reserve fund under this paragraph. 

‘‘(5) LIMITATIONS.—

‘‘(A) AVAILABILITY OF FUNDS FOR NEXT FISCAL YEAR.—

The Secretary may make transfers under subparagraphs 

(B) and (C) of paragraph (2) for a calendar year only if the 

Secretary determines, using actuarial projections provided 

by the trustees of the Combined Benefit Fund referred to 

in paragraph (2)(A), that amounts will be available under 

paragraph (1), after the transfer, for the next fiscal year 

for making the transfer under paragraph (2)(A). 

‘‘(B) RATE OF CONTRIBUTIONS OF OBLIGORS.—

‘‘(i) IN GENERAL.—

‘‘(I) RATE.—A transfer under paragraph (2)(C) 

shall not be made for a calendar year unless the 

persons that are obligated to contribute to the 

plan referred to in paragraph (2)(C) on the date of 

the transfer are obligated to make the contributions at rates that are no less than those in effect 

on the date which is 30 days before the date of enactment of this subsection. 

‘‘(II) APPLICATION.—The contributions described 

in subclause (I) shall be applied first to the provision of benefits to those plan beneficiaries who are 

not described in paragraph (2)(C)(ii). 

‘‘(ii) INITIAL CONTRIBUTIONS.—

‘‘(I) IN GENERAL.—From the date of enactment 

of the Surface Mining Control and Reclamation 

Act Amendments of 2006 through December 31, 

2010, the persons that, on the date of enactment 

of that Act, are obligated to contribute to the plan 

referred to in paragraph (2)(C) shall be obligated, 

collectively, to make contributions equal to the 

amount described in paragraph (2)(C), less the 


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amount actually transferred due to the operation 

of subparagraph (C). ‘‘(II) FIRST CALENDAR YEAR.—Calendar year 

2006 is the first calendar year for which contributions are required under this clause. ‘‘(III) AMOUNT OF CONTRIBUTION FOR 2006.—Except as provided in subclause (IV), the amount described in paragraph (2)(C) for calendar year 2006 

shall be calculated as if paragraph (2)(C) had been 

in effect during 2005. ‘‘(IV) LIMITATION.—The contributions required 

under this clause for calendar year 2006 shall not 

exceed the amount necessary for solvency of the 

plan described in paragraph (2)(C), measured as of 

December 31, 2006 and taking into account all assets held by the plan as of that date. ‘‘(iii) DIVISION.—The collective annual contribution 

obligation required under clause (ii) shall be divided 

among the persons subject to the obligation, and applied uniformly, based on the hours worked for which 

contributions referred to in clause (i) would be owed. 

‘‘(C) PHASE-IN OF TRANSFERS.—For each of calendar 

years 2008 through 2010, the transfers required under 

subparagraphs (B) and (C) of paragraph (2) shall equal the 

following amounts: ‘‘(i) For calendar year 2008, the Secretary shall 

make transfers equal to 25 percent of the amounts 

that would otherwise be required under subparagraphs (B) and (C) of paragraph (2). ‘‘(ii) For calendar year 2009, the Secretary shall 

make transfers equal to 50 percent of the amounts 

that would otherwise be required under subparagraphs (B) and (C) of paragraph (2). ‘‘(iii) For calendar year 2010, the Secretary shall 

make transfers equal to 75 percent of the amounts 

that would otherwise be required under subparagraphs (B) and (C) of paragraph (2). 

‘‘(i) FUNDING.— ‘‘(1) IN GENERAL.—Subject to paragraph (3), out of any funds 

in the Treasury not otherwise appropriated, the Secretary of 

the Treasury shall transfer to the plans described in subsection 

(h)(2) such sums as are necessary to pay the following 

amounts: ‘‘(A) To the Combined Fund (as defined in section 

9701(a)(5) of the Internal Revenue Code of 1986 and referred to in this paragraph as the ‘Combined Fund’), the 

amount that the trustees of the Combined Fund estimate 

will be expended from premium accounts maintained by 

the Combined Fund for the fiscal year to provide benefits 

for beneficiaries who are unassigned beneficiaries solely as 

a result of the application of section 9706(h)(1) of the Internal Revenue Code of 1986, subject to the following limitations: 

‘‘(i) For fiscal year 2008, the amount paid under this 

subparagraph shall equal—


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‘‘(I) the amount described in subparagraph (A); 

minus ‘‘(II) the amounts required under section 

9706(h)(3)(A) of the Internal Revenue Code of 

1986. ‘‘(ii) For fiscal year 2009, the amount paid under 

this subparagraph shall equal— ‘‘(I) the amount described in subparagraph (A); 

minus ‘‘(II) the amounts required under section 

9706(h)(3)(B) of the Internal Revenue Code of 

1986. ‘‘(iii) For fiscal year 2010, the amount paid under 

this subparagraph shall equal— ‘‘(I) the amount described in subparagraph (A); 

minus ‘‘(II) the amounts required under section 

9706(h)(3)(C) of the Internal Revenue Code of 

1986. ‘‘(B) On certification by the trustees of any plan described in subsection (h)(2) that the amount available for 

transfer by the Secretary pursuant to this section (determined after application of any limitation under subsection 

(h)(5)) is less than the amount required to be transferred, 

to the plan the amount necessary to meet the requirement 

of subsection (h)(2). ‘‘(C) To the Combined Fund, $9,000,000 on October 1, 

2007, $9,000,000 on October 1, 2008, and $9,000,000 on 

October 1, 2009 (which amounts shall not be exceeded) to 

provide a refund of any premium (as described in section 

9704(a) of the Internal Revenue Code of 1986) paid on or 

before September 7, 2000, to the Combined Fund, plus interest on the premium calculated at the rate of 7.5 percent 

per year, on a proportional basis and to be paid not later 

than 60 days after the date on which each payment is received by the Combined Fund, to those signatory operators 

(to the extent that the Combined Fund has not previously 

returned the premium amounts to the operators), or any 

related persons to the operators (as defined in section 

9701(c) of the Internal Revenue Code of 1986), or their 

heirs, successors, or assigns who have been denied the refunds as the result of final judgments or settlements if—

‘‘(i) prior to the date of enactment of this paragraph, 

the signatory operator (or any related person to the 

operator)—

‘‘(I) had all of its beneficiary assignments made 

under section 9706 of the Internal Revenue Code 

of 1986 voided by the Commissioner of the Social 

Security Administration; and 

‘‘(II) was subject to a final judgment or final settlement of litigation adverse to a claim by the operator that the assignment of beneficiaries under 

section 9706 of the Internal Revenue Code of 1986 

was unconstitutional as applied to the operator; 

and 


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‘‘(ii) on or before September 7, 2000, the signatory 

operator (or any related person to the operator) had 

paid to the Combined Fund any premium amount that 

had not been refunded. 

‘‘(2) PAYMENTS TO STATES AND INDIAN TRIBES.—Subject to 

paragraph (3), out of any funds in the Treasury not otherwise 

appropriated, the Secretary of the Treasury shall transfer to 

the Secretary of the Interior for distribution to States and Indian tribes such sums as are necessary to pay amounts described in paragraphs (1)(A) and (2)(A) of section 411(h). 

‘‘(3) LIMITATIONS.—

‘‘(A) CAP.—The total amount transferred under this subsection for any fiscal year shall not exceed $490,000,000. 

‘‘(B) INSUFFICIENT AMOUNTS.—In a case in which the 

amount required to be transferred without regard to this 

paragraph exceeds the maximum annual limitation in subparagraph (A), the Secretary shall adjust the transfers of 

funds so that—

‘‘(i) each transfer for the fiscal year is a percentage 

of the amount described; 

‘‘(ii) the amount is determined without regard to 

subsection (h)(5)(A); and 

‘‘(iii) the percentage transferred is the same for all 

transfers made under this subsection for the fiscal 

year. 

‘‘(4) AVAILABILITY OF FUNDS.—Funds shall be transferred 

under paragraph (1) and (2) beginning in fiscal year 2008 and 

each fiscal year thereafter, and shall remain available until expended.’’. 

SEC. 203. OBJECTIVES OF FUND. 

Section 403 of the Surface Mining Control and Reclamation Act 

of 1977 (30 U.S.C. 1233) is amended—

(1) in subsection (a)—

(A) in paragraph (1)—

(i) by striking ‘‘(1) the protection’’ and inserting the 

following: 

‘‘(1)(A) the protection;’’; 

(ii) in subparagraph (A) (as designated by clause (i)), 

by striking ‘‘general welfare,’’; and 

(iii) by adding at the end the following: 

‘‘(B) the restoration of land and water resources and the environment that—

‘‘(i) have been degraded by the adverse effects of coal 

mining practices; and 

‘‘(ii) are adjacent to a site that has been or will be remediated under subparagraph (A);’’; 

(B) in paragraph (2)—

(i) by striking ‘‘(2) the protection’’ and inserting the 

following: 

‘‘(2)(A) the protection’’; 

(ii) in subparagraph (A) (as designated by clause (i), 

by striking ‘‘health, safety, and general welfare’’ and 

inserting ‘‘health and safety’’; and 

(iii) by adding at the end the following: 


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‘‘(B) the restoration of land and water resources and the environment that— ‘‘(i) have been degraded by the adverse effects of coal 

mining practices; and ‘‘(ii) are adjacent to a site that has been or will be remediated under subparagraph (A); and’’; 

(C) in paragraph (3), by striking the semicolon at the 

end and inserting a period; and 

(D) by striking paragraphs (4) and (5); 

(2) in subsection (b)— (A) by striking the subsection heading and inserting ‘‘WATER SUPPLY RESTORATION.—’’; and 

(B) in paragraph (1), by striking ‘‘up to 30 percent of 

the’’; and 

(3) in the second sentence of subsection (c), by inserting ‘‘, subject to the approval of the Secretary,’’ after ‘‘amendments’’. 

SEC. 204. RECLAMATION OF RURAL LAND. 

(a) ADMINISTRATION.—Section 406(h) of the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1236(h)) is amended 

by striking ‘‘Soil Conservation Service’’ and inserting ‘‘Natural Resources Conservation Service’’. 

(b) AUTHORIZATION OF APPROPRIATIONS FOR CARRYING OUT

RURAL LAND RECLAMATION.—Section 406 of the Surface Mining 

Control and Reclamation Act of 1977 (30 U.S.C. 1236) is amended 

by adding at the end the following: 

‘‘(i) There are authorized to be appropriated to the Secretary of 

Agriculture, from amounts in the Treasury other than amounts in 

the fund, such sums as may be necessary to carry out this section.’’. 

SEC. 205. LIENS. 

Section 408(a) of the Surface Mining Control and Reclamation 

Act of 1977 (30 U.S.C. 1238) is amended in the last sentence by 

striking ‘‘who owned the surface prior to May 2, 1977, and’’. 

SEC. 206. CERTIFICATION. 

Section 411 of the Surface Mining Control and Reclamation Act 

of 1977 (30 U.S.C. 1240a) is amended—

(1) in subsection (a)—

(A) by inserting ‘‘(1)’’ before the first sentence; and 

(B) by adding at the end the following: 

‘‘(2)(A) The Secretary may, on the initiative of the Secretary, 

make the certification referred to in paragraph (1) on behalf of any 

State or Indian tribe referred to in paragraph (1) if on the basis 

of the inventory referred to in section 403(c) all reclamation 

projects relating to the priorities described in section 403(a) for eligible land and water pursuant to section 404 in the State or tribe 

have been completed. 

‘‘(B) The Secretary shall only make the certification after notice 

in the Federal Register and opportunity for public comment.’’; and 

(2) by adding at the end the following: 

‘‘(h) PAYMENTS TO STATES AND INDIAN TRIBES.—

‘‘(1) IN GENERAL.—

‘‘(A) PAYMENTS.—

‘‘(i) IN GENERAL.—Notwithstanding section 

401(f)(3)(B), from funds referred to in section 402(i)(2), 

the Secretary shall make payments to States or Indian 


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tribes for the amount due for the aggregate unappropriated amount allocated to the State or Indian tribe 

under subparagraph (A) or (B) of section 402(g)(1). 

‘‘(ii) CONVERSION AS EQUIVALENT PAYMENTS.—

Amounts allocated under subparagraphs (A) or (B) of 

section 402(g)(1) shall be reallocated to the allocation 

established in section 402(g)(5) in amounts equivalent 

to payments made to States or Indian tribes under 

this paragraph. 

‘‘(B) AMOUNT DUE.—In this paragraph, the term ‘amount 

due’ means the unappropriated amount allocated to a 

State or Indian tribe before October 1, 2007, under subparagraph (A) or (B) of section 402(g)(1). 

‘‘(C) SCHEDULE.—Payments under subparagraph (A) 

shall be made in 7 equal annual installments, beginning 

with fiscal year 2008. 

‘‘(D) USE OF FUNDS.—

‘‘(i) CERTIFIED STATES AND INDIAN TRIBES.—A State 

or Indian tribe that makes a certification under subsection (a) in which the Secretary concurs shall use 

any amounts provided under this paragraph for the 

purposes established by the State legislature or tribal 

council of the Indian tribe, with priority given for addressing the impacts of mineral development. 

‘‘(ii) UNCERTIFIED STATES AND INDIAN TRIBES.—A 

State or Indian tribe that has not made a certification 

under subsection (a) in which the Secretary has concurred shall use any amounts provided under this 

paragraph for the purposes described in section 403. 

‘‘(2) SUBSEQUENT STATE AND INDIAN TRIBE SHARE FOR CERTIFIED STATES AND INDIAN TRIBES.—

‘‘(A) IN GENERAL.—Notwithstanding section 401(f)(3)(B), 

from funds referred to in section 402(i)(2), the Secretary 

shall pay to each certified State or Indian tribe an amount 

equal to the sum of the aggregate unappropriated amount 

allocated on or after October 1, 2007, to the certified State 

or Indian tribe under subparagraph (A) or (B) of section 

402(g)(1). 

‘‘(B) CERTIFIED STATE OR INDIAN TRIBE DEFINED.—In this 

paragraph the term ‘certified State or Indian tribe’ means 

a State or Indian tribe for which a certification is made 

under subsection (a) in which the Secretary concurs. 

‘‘(3) MANNER OF PAYMENT.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), payments to States or Indian tribes under this subsection 

shall be made without regard to any limitation in section 

401(d) and concurrently with payments to States under 

that section. 

‘‘(B) INITIAL PAYMENTS.—The first 3 payments made to 

any State or Indian tribe shall be reduced to 25 percent, 

50 percent, and 75 percent, respectively, of the amounts 

otherwise required under paragraph (2)(A). 

‘‘(C) INSTALLMENTS.—Amounts withheld from the first 3 

annual installments as provided under subparagraph (B) 


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shall be paid in 2 equal annual installments beginning 

with fiscal year 2018. ‘‘(4) REALLOCATION.— ‘‘(A) IN GENERAL.—The amount allocated to any State or 

Indian tribe under subparagraph (A) or (B) of section 

402(g)(1) that is paid to the State or Indian tribe as a result of a payment under paragraph (1) or (2) shall be reallocated and available for grants under section 402(g)(5). ‘‘(B) ALLOCATION.—The grants shall be allocated based 

on the amount of coal historically produced before August 

3, 1977, in the same manner as under section 402(g)(5).’’. 

SEC. 207. REMINING INCENTIVES. 

Title IV of the Surface Mining Control and Reclamation Act of 

1977 (30 U.S.C. 1231 et seq.) is amended by adding at the following: 

‘‘SEC. 415. REMINING INCENTIVES. 

‘‘(a) IN GENERAL.—Notwithstanding any other provision of this 

Act, the Secretary may, after opportunity for public comment, promulgate regulations that describe conditions under which amounts 

in the fund may be used to provide incentives to promote remining 

of eligible land under section 404 in a manner that leverages the 

use of amounts from the fund to achieve more reclamation with respect to the eligible land than would be achieved without the incentives. 

‘‘(b) REQUIREMENTS.—Any regulations promulgated under subsection (a) shall specify that the incentives shall apply only if the 

Secretary determines, with the concurrence of the State regulatory 

authority referred to in title V, that, without the incentives, the eligible land would not be likely to be remined and reclaimed. 

‘‘(c) INCENTIVES.—

‘‘(1) IN GENERAL.—Incentives that may be considered for inclusion in the regulations promulgated under subsection (a) include, but are not limited to— ‘‘(A) a rebate or waiver of the reclamation fees required 

under section 402(a); and ‘‘(B) the use of amounts in the fund to provide financial 

assurance for remining operations in lieu of all or a portion of the performance bonds required under section 509. ‘‘(2) LIMITATIONS.— ‘‘(A) USE.—A rebate or waiver under paragraph (1)(A) 

shall be used only for operations that— ‘‘(i) remove or reprocess abandoned coal mine waste; 

or ‘‘(ii) conduct remining activities that meet the priorities specified in paragraph (1) or (2) of section 403(a). ‘‘(B) AMOUNT.—The amount of a rebate or waiver provided as an incentive under paragraph (1)(A) to remine or 

reclaim eligible land shall not exceed the estimated cost of 

reclaiming the eligible land under this section.’’. 

SEC. 208. EXTENSION OF LIMITATION ON APPLICATION OF PROHIBITION ON ISSUANCE OF PERMIT. 

Section 510(e) of the Surface Mining Control and Reclamation 

Act of 1977 (30 U.S.C. 1260(e)) is amended by striking the last sentence. 


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SEC. 209. TRIBAL REGULATION OF SURFACE COAL MINING AND RECLAMATION OPERATIONS. 

(a) IN GENERAL.—Section 710 of the Surface Mining Control and 

Reclamation Act of 1977 (30 U.S.C. 1300) is amended by adding at 

the end the following: 

‘‘(j) TRIBAL REGULATORY AUTHORITY.—

‘‘(1) TRIBAL REGULATORY PROGRAMS.—

‘‘(A) IN GENERAL.—Notwithstanding any other provision 

of law, an Indian tribe may apply for, and obtain the approval of, a tribal program under section 503 regulating in 

whole or in part surface coal mining and reclamation operations on reservation land under the jurisdiction of the Indian tribe using the procedures of section 504(e). 

‘‘(B) REFERENCES TO STATE.—For purposes of this subsection and the implementation and administration of a 

tribal program under title V, any reference to a ‘State’ in 

this Act shall be considered to be a reference to a ‘tribe’. 

‘‘(2) CONFLICTS OF INTEREST.—

‘‘(A) IN GENERAL.—The fact that an individual is a member of an Indian tribe does not in itself constitute a violation of section 201(f). 

‘‘(B) EMPLOYEES OF TRIBAL REGULATORY AUTHORITY.—

Any employee of a tribal regulatory authority shall not be 

eligible for a per capita distribution of any proceeds from 

coal mining operations conducted on Indian reservation 

lands under this Act. 

‘‘(3) SOVEREIGN IMMUNITY.—To receive primary regulatory 

authority under section 504(e), an Indian tribe shall waive sovereign immunity for purposes of section 520 and paragraph (4). 

‘‘(4) JUDICIAL REVIEW.—

‘‘(A) CIVIL ACTIONS.—

‘‘(i) IN GENERAL.—After exhausting all tribal remedies with respect to a civil action arising under a 

tribal program approved under section 504(e), an interested party may file a petition for judicial review of 

the civil action in the United States circuit court for 

the circuit in which the surface coal mining operation 

named in the petition is located. 

‘‘(ii) SCOPE OF REVIEW.—

‘‘(I) QUESTIONS OF LAW.—The United States circuit court shall review de novo any questions of 

law under clause (i). 

‘‘(II) FINDINGS OF FACT.—The United States circuit court shall review findings of fact under 

clause (i) using a clearly erroneous standard. 

‘‘(B) CRIMINAL ACTIONS.—Any criminal action brought 

under section 518 with respect to surface coal mining or 

reclamation operations on Indian reservation lands shall 

be brought in—

‘‘(i) the United States District Court for the District 

of Columbia; or 

‘‘(ii) the United States district court in which the 

criminal activity is alleged to have occurred. 

‘‘(5) GRANTS.—


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‘‘(A) IN GENERAL.—Except as provided in subparagraph 

(B), grants for developing, administering, and enforcing 

tribal programs approved in accordance with section 504(e) 

shall be provided to an Indian tribe in accordance with section 705. 

‘‘(B) EXCEPTION.—Notwithstanding subparagraph (A), 

the Federal share of the costs of developing, administering, 

and enforcing an approved tribal program shall be 100 percent. 

‘‘(6) REPORT.—Not later than 18 months after the date on 

which a tribal program is approved under subsection (e) of section 504, the Secretary shall submit to the appropriate committees of Congress a report, developed in cooperation with the applicable Indian tribe, on the tribal program that includes a recommendation of the Secretary on whether primary regulatory 

authority under that subsection should be expanded to include 

additional Indian lands.’’. 

(b) CONFORMING AMENDMENT.—Section 710(i) of the Surface 

Mining Control and Reclamation Act of 1977 (30 U.S.C. 1300(i)) is 

amended in the first sentence by striking ‘‘, except’’ and all that follows through ‘‘section 503’’. 

Subtitle B—Coal Industry Retiree Health 

Benefit Act 

SEC. 211. CERTAIN RELATED PERSONS AND SUCCESSORS IN INTEREST RELIEVED OF LIABILITY IF PREMIUMS PREPAID. 

(a) COMBINED BENEFIT FUND.—Section 9704 of the Internal Revenue Code of 1986 (relating to liability of assigned operators) is 

amended by adding at the end the following new subsection: 

‘‘(j) PREPAYMENT OF PREMIUM LIABILITY.—

‘‘(1) IN GENERAL.—If—

‘‘(A) a payment meeting the requirements of paragraph 

(3) is made to the Combined Fund by or on behalf of—

‘‘(i) any assigned operator to which this subsection 

applies, or 

‘‘(ii) any related person to any assigned operator described in clause (i), and 

‘‘(B) the common parent of the controlled group of corporations described in paragraph (2)(B) is jointly and severally liable for any premium under this section which (but 

for this subsection) would be required to be paid by the assigned operator or related person, 

then such common parent (and no other person) shall be liable 

for such premium. 

‘‘(2) ASSIGNED OPERATORS TO WHICH SUBSECTION APPLIES.—

‘‘(A) IN GENERAL.—This subsection shall apply to any assigned operator if—

‘‘(i) the assigned operator (or a related person to the 

assigned operator)—

‘‘(I) made contributions to the 1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan for 

employment during the period covered by the 

1988 agreement; and 


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‘‘(II) is not a 1988 agreement operator, 

‘‘(ii) the assigned operator (and all related persons to 

the assigned operator) are not actively engaged in the 

production of coal as of July 1, 2005, and 

‘‘(iii) the assigned operator was, as of July 20, 1992, 

a member of a controlled group of corporations described in subparagraph (B). 

‘‘(B) CONTROLLED GROUP OF CORPORATIONS.—A controlled group of corporations is described in this subparagraph if the common parent of such group is a corporation 

the shares of which are publicly traded on a United States 

exchange. 

‘‘(C) COORDINATION WITH REPEAL OF ASSIGNMENTS.—A 

person shall not fail to be treated as an assigned operator 

to which this subsection applies solely because the person 

ceases to be an assigned operator by reason of section 

9706(h)(1) if the person otherwise meets the requirements 

of this subsection and is liable for the payment of premiums under section 9706(h)(3). 

‘‘(D) CONTROLLED GROUP.—For purposes of this subsection, the term ‘controlled group of corporations’ has the 

meaning given such term by section 52(a). 

‘‘(3) REQUIREMENTS.—A payment meets the requirements of 

this paragraph if—

‘‘(A) the amount of the payment is not less than the 

present value of the total premium liability under this 

chapter with respect to the Combined Fund of the assigned 

operators or related persons described in paragraph (1) or 

their assignees, as determined by the operator’s or related 

person’s enrolled actuary (as defined in section 

7701(a)(35)) using actuarial methods and assumptions 

each of which is reasonable and which are reasonable in 

the aggregate, as determined by such enrolled actuary; 

‘‘(B) such enrolled actuary files with the Secretary of 

Labor a signed actuarial report containing—

‘‘(i) the date of the actuarial valuation applicable to 

the report; and 

‘‘(ii) a statement by the enrolled actuary signing the 

report that, to the best of the actuary’s knowledge, the 

report is complete and accurate and that in the actuary’s opinion the actuarial assumptions used are in 

the aggregate reasonably related to the experience of 

the operator and to reasonable expectations; and 

‘‘(C) 90 calendar days have elapsed after the report required by subparagraph (B) is filed with the Secretary of 

Labor, and the Secretary of Labor has not notified the assigned operator in writing that the requirements of this 

paragraph have not been satisfied. 

‘‘(4) USE OF PREPAYMENT.—The Combined Fund shall—

‘‘(A) establish and maintain an account for each assigned 

operator or related person by, or on whose behalf, a payment described in paragraph (3) was made, 

‘‘(B) credit such account with such payment (and any 

earnings thereon), and 


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‘‘(C) use all amounts in such account exclusively to pay 

premiums that would (but for this subsection) be required 

to be paid by the assigned operator. 

Upon termination of the obligations for the premium liability 

of any assigned operator or related person for which such account is maintained, all funds remaining in such account (and 

earnings thereon) shall be refunded to such person as may be 

designated by the common parent described in paragraph 

(1)(B).’’. 

(b) INDIVIDUAL EMPLOYER PLANS.—Section 9711(c) of the Internal Revenue Code of 1986 (relating to joint and several liability) is 

amended to read as follows: 

‘‘(c) JOINT AND SEVERAL LIABILITY OF RELATED PERSONS.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), each 

related person of a last signatory operator to which subsection 

(a) or (b) applies shall be jointly and severally liable with the 

last signatory operator for the provision of health care coverage 

described in subsection (a) or (b). 

‘‘(2) LIABILITY LIMITED IF SECURITY PROVIDED.—If—

‘‘(A) security meeting the requirements of paragraph (3) 

is provided by or on behalf of—

‘‘(i) any last signatory operator which is an assigned 

operator described in section 9704(j)(2), or 

‘‘(ii) any related person to any last signatory operator described in clause (i), and 

‘‘(B) the common parent of the controlled group of corporations described in section 9704(j)(2)(B) is jointly and 

severally liable for the provision of health care under this 

section which, but for this paragraph, would be required to 

be provided by the last signatory operator or related person, 

then, as of the date the security is provided, such common parent (and no other person) shall be liable for the provision of 

health care under this section which the last signatory operator or related person would otherwise be required to provide. 

Security may be provided under this paragraph without regard 

to whether a payment was made under section 9704(j). 

‘‘(3) SECURITY.—Security meets the requirements of this 

paragraph if—

‘‘(A) the security—

‘‘(i) is in the form of a bond, letter of credit, or cash 

escrow, 

‘‘(ii) is provided to the trustees of the 1992 UMWA 

Benefit Plan solely for the purpose of paying premiums for beneficiaries who would be described in section 9712(b)(2)(B) if the requirements of this section 

were not met by the last signatory operator, and 

‘‘(iii) is in an amount equal to 1 year of liability of 

the last signatory operator under this section, determined by using the average cost of such operator’s liability during the prior 3 calendar years; 

‘‘(B) the security is in addition to any other security required under any other provision of this title; and 

‘‘(C) the security remains in place for 5 years. 


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‘‘(4) REFUNDS OF SECURITY.—The remaining amount of any 

security provided under this subsection (and earnings thereon) 

shall be refunded to the last signatory operator as of the earlier of—

‘‘(A) the termination of the obligations of the last signatory operator under this section, or 

‘‘(B) the end of the 5-year period described in paragraph 

(4)(C).’’. 

(c) 1992 UMWA BENEFIT PLAN.—Section 9712(d)(4) of the Internal Revenue Code of 1986 (relating to joint and several liability) is 

amended by adding at the end the following new sentence: ‘‘The 

provisions of section 9711(c)(2) shall apply to any last signatory operator described in such section (without regard to whether security is provided under such section, a payment is made under section 9704(j), or both) and if security meeting the requirements of 

section 9711(c)(3) is provided, the common parent described in section 9711(c)(2)(B) shall be exclusively responsible for any liability 

for premiums under this section which, but for this sentence, would 

be required to be paid by the last signatory operator or any related 

person.’’. 

(d) SUCCESSOR IN INTEREST.—Section 9701(c) of the Internal Revenue Code of 1986 (relating to terms relating to operators) is 

amended by adding at the end the following new paragraph: 

‘‘(8) SUCCESSOR IN INTEREST.—

‘‘(A) SAFE HARBOR.—The term ‘successor in interest’

shall not include any person who—

‘‘(i) is an unrelated person to an eligible seller described in subparagraph (C); and 

‘‘(ii) purchases for fair market value assets, or all of 

the stock, of a related person to such seller, in a bona 

fide, arm’s-length sale. 

‘‘(B) UNRELATED PERSON.—The term ‘unrelated person’

means a purchaser who does not bear a relationship to the 

eligible seller described in section 267(b). 

‘‘(C) ELIGIBLE SELLER.—For purposes of this paragraph, 

the term ‘eligible seller’ means an assigned operator described in section 9704(j)(2) or a related person to such assigned operator.’’. 

(e) EFFECTIVE DATE.—The amendments made by this section 

shall take effect on the date of the enactment of this Act, except 

that the amendment made by subsection (d) shall apply to transactions after the date of the enactment of this Act. 

SEC. 212. TRANSFERS TO FUNDS; PREMIUM RELIEF. 

(a) COMBINED FUND.—

(1) FEDERAL TRANSFERS.—Section 9705(b) of the Internal 

Revenue Code of 1986 (relating to transfers from Abandoned 

Mine Reclamation Fund) is amended—

(A) in paragraph (1), by striking ‘‘section 402(h)’’ and inserting ‘‘subsections (h) and (i) of section 402’’; 

(B) by striking paragraph (2) and inserting the following 

new paragraph: 

‘‘(2) USE OF FUNDS.—Any amount transferred under paragraph (1) for any fiscal year shall be used to pay benefits and 

administrative costs of beneficiaries of the Combined Fund or 


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for such other purposes as are specifically provided in the Acts 

described in paragraph (1).’’; and 

(C) by striking ‘‘FROM ABANDONED MINE RECLAMATION

FUND’’ in the heading thereof. 

(2) MODIFICATIONS OF PREMIUMS TO REFLECT FEDERAL TRANS- FERS.—

(A) ELIMINATION OF UNASSIGNED BENEFICIARIES PRE- MIUM.—Section 9704(d) of such Code (establishing unassigned beneficiaries premium) is amended to read as follows: ‘‘(d) UNASSIGNED BENEFICIARIES PREMIUM.— ‘‘(1) PLAN YEARS ENDING ON OR BEFORE SEPTEMBER 30, 2006.—

For plan years ending on or before September 30, 2006, the unassigned beneficiaries premium for any assigned operator shall 

be equal to the applicable percentage of the product of the per 

beneficiary premium for the plan year multiplied by the number of eligible beneficiaries who are not assigned under section 

9706 to any person for such plan year. 

‘‘(2) PLAN YEARS BEGINNING ON OR AFTER OCTOBER 1, 2006.—

‘‘(A) IN GENERAL.—For plan years beginning on or after 

October 1, 2006, subject to subparagraph (B), there shall 

be no unassigned beneficiaries premium, and benefit costs 

with respect to eligible beneficiaries who are not assigned 

under section 9706 to any person for any such plan year 

shall be paid from amounts transferred under section 

9705(b). 

‘‘(B) INADEQUATE TRANSFERS.—If, for any plan year beginning on or after October 1, 2006, the amounts transferred under section 9705(b) are less than the amounts required to be transferred to the Combined Fund under subsection (h)(2)(A) or (i) of section 402 of the Surface Mining 

Control and Reclamation Act of 1977 (30 U.S.C. 1232)), 

then the unassigned beneficiaries premium for any assigned operator shall be equal to the operator’s applicable 

percentage of the amount required to be so transferred 

which was not so transferred.’’. 

(B) PREMIUM ACCOUNTS.— (i) CREDITING OF ACCOUNTS.—Section 9704(e)(1) of 

such Code (relating to premium accounts; adjustments) is amended by inserting ‘‘and amounts transferred under section 9705(b)’’ after ‘‘premiums received’’. (ii) SURPLUSES ATTRIBUTABLE TO PUBLIC FUNDING.—

Section 9704(e)(3)(A) of such Code is amended by adding at the end the following new sentence: ‘‘Amounts 

credited to an account from amounts transferred 

under section 9705(b) shall not be taken into account 

in determining whether there is a surplus in the account for purposes of this paragraph.’’ (C) APPLICABLE PERCENTAGE.—Section 9704(f)(2) of such 

Code (relating to annual adjustments) is amended by adding at the end the following new subparagraph: ‘‘(C) In the case of plan years beginning on or after October 1, 2007, the total number of assigned eligible beneficiaries shall be reduced by the eligible beneficiaries 


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whose assignments have been revoked under section 

9706(h).’’. (3) ASSIGNMENTS AND REASSIGNMENT.—Section 9706 of the 

Internal Revenue Code of 1986 (relating to assignment of eligible beneficiaries) is amended by adding at the end the following: ‘‘(h) ASSIGNMENTS AS OF OCTOBER 1, 2007.— ‘‘(1) IN GENERAL.—Subject to the premium obligation set 

forth in paragraph (3), the Commissioner of Social Security 

shall—

‘‘(A) revoke all assignments to persons other than 1988 

agreement operators for purposes of assessing premiums 

for plan years beginning on and after October 1, 2007; and ‘‘(B) make no further assignments to persons other than 

1988 agreement operators, except that no individual who 

becomes an unassigned beneficiary by reason of subparagraph (A) may be assigned to a 1988 agreement operator. ‘‘(2) REASSIGNMENT UPON PURCHASE.—This subsection shall 

not be construed to prohibit the reassignment under subsection 

(b)(2) of an eligible beneficiary. ‘‘(3) LIABILITY OF PERSONS DURING THREE FISCAL YEARS BE- GINNING ON AND AFTER OCTOBER 1, 2007.—In the case of each 

of the fiscal years beginning on October 1, 2007, 2008, and 

2009, each person other than a 1988 agreement operator shall 

pay to the Combined Fund the following percentage of the 

amount of annual premiums that such person would otherwise 

be required to pay under section 9704(a), determined on the 

basis of assignments in effect without regard to the revocation 

of assignments under paragraph (1)(A): ‘‘(A) For the fiscal year beginning on October 1, 2007, 55 

percent. ‘‘(B) For the fiscal year beginning on October 1, 2008, 40 

percent. ‘‘(C) For the fiscal year beginning on October 1, 2009, 15 

percent.’’. 

(4) EFFECTIVE DATE.—The amendments made by this subsection shall apply to plan years of the Combined Fund beginning after September 30, 2006. 

(b) 1992 UMWA BENEFIT AND OTHER PLANS.— (1) TRANSFERS TO PLANS.—Section 9712(a) of the Internal 

Revenue Code of 1986 (relating to the establishment and coverage of the 1992 UMWA Benefit Plan) is amended by adding 

at the end the following: 

‘‘(3) TRANSFERS UNDER OTHER FEDERAL STATUTES.—

‘‘(A) IN GENERAL.—The 1992 UMWA Benefit Plan shall 

include any amount transferred to the plan under subsections (h) and (i) of section 402 of the Surface Mining 

Control and Reclamation Act of 1977 (30 U.S.C. 1232). 

‘‘(B) USE OF FUNDS.—Any amount transferred under subparagraph (A) for any fiscal year shall be used to provide 

the health benefits described in subsection (c) with respect 

to any beneficiary for whom no monthly per beneficiary 

premium is paid pursuant to paragraph (1)(A) or (3) of 

subsection (d). ‘‘(4) SPECIAL RULE FOR 1993 PLAN.—


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‘‘(A) IN GENERAL.—The plan described in section 

402(h)(2)(C) of the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1232(h)(2)(C)) shall include any 

amount transferred to the plan under subsections (h) and 

(i) of the Surface Mining Control and Reclamation Act of 

1977 (30 U.S.C. 1232). ‘‘(B) USE OF FUNDS.—Any amount transferred under subparagraph (A) for any fiscal year shall be used to provide 

the health benefits described in section 402(h)(2)(C)(i) of 

the Surface Mining Control and Reclamation Act of 1977 

(30 U.S.C. 1232(h)(2)(C)(i)) to individuals described in section 402(h)(2)(C) of such Act (30 U.S.C. 1232(h)(2)(C)).’’. (2) PREMIUM ADJUSTMENTS.— (A) IN GENERAL.—Section 9712(d)(1) of such Code (relating to guarantee of benefits) is amended to read as follows: ‘‘(1) IN GENERAL.—All 1988 last signatory operators shall be 

responsible for financing the benefits described in subsection 

(c) by meeting the following requirements in accordance with 

the contribution requirements established in the 1992 UMWA 

Benefit Plan: ‘‘(A) The payment of a monthly per beneficiary premium 

by each 1988 last signatory operator for each eligible beneficiary of such operator who is described in subsection 

(b)(2) and who is receiving benefits under the 1992 UMWA 

benefit plan. ‘‘(B) The provision of a security (in the form of a bond, 

letter of credit, or cash escrow) in an amount equal to a 

portion of the projected future cost to the 1992 UMWA 

Benefit Plan of providing health benefits for eligible and 

potentially eligible beneficiaries attributable to the 1988 

last signatory operator. ‘‘(C) If the amounts transferred under subsection (a)(3) 

are less than the amounts required to be transferred to the 

1992 UMWA Benefit Plan under subsections (h) and (i) of 

section 402 of the Surface Mining Control and Reclamation 

Act of 1977 (30 U.S.C. 1232), the payment of an additional 

backstop premium by each 1988 last signatory operator 

which is equal to such operator’s share of the amounts required to be so transferred but which were not so transferred, determined on the basis of the number of eligible 

and potentially eligible beneficiaries attributable to the operator.’’. (B) CONFORMING AMENDMENTS.—Section 9712(d) of such 

Code is amended—

(i) in paragraph (2)(B), by striking ‘‘prefunding’’ and 

inserting ‘‘backstop’’, and 

(ii) in paragraph (3), by striking ‘‘paragraph (1)(B)’’

and inserting ‘‘paragraph (1) (A)’’. 

(C) EFFECTIVE DATE.—The amendments made by this 

paragraph shall apply to fiscal years beginning on or after 

October 1, 2010. 

SEC. 213. OTHER PROVISIONS. 

(a) BOARD OF TRUSTEES.—Section 9702(b) of the Internal Revenue Code of 1986 (relating to board of trustees of the Combined 

Fund) is amended to read as follows: 


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‘‘(b) BOARD OF TRUSTEES.—

‘‘(1) IN GENERAL.—For purposes of subsection (a), the board 

of trustees for the Combined Fund shall be appointed as follows: 

‘‘(A) 2 individuals who represent employers in the coal 

mining industry shall be designated by the BCOA; 

‘‘(B) 2 individuals designated by the United Mine Workers of America; and 

‘‘(C) 3 individuals selected by the individuals appointed 

under subparagraphs (A) and (B). 

‘‘(2) SUCCESSOR TRUSTEES.—Any successor trustee shall be 

appointed in the same manner as the trustee being succeeded. 

The plan establishing the Combined Fund shall provide for the 

removal of trustees. 

‘‘(3) SPECIAL RULE.—If the BCOA ceases to exist, any trustee 

or successor under paragraph (1)(A) shall be designated by the 

3 employers who were members of the BCOA on the enactment 

date and who have been assigned the greatest number of eligible beneficiaries under section 9706.’’. 

(b) ENFORCEMENT OF OBLIGATIONS.—

(1) FAILURE TO PAY PREMIUMS.—Section 9707(a) of the Internal Revenue Code of 1986 is amended to read as follows: 

‘‘(a) FAILURES TO PAY.—

‘‘(1) PREMIUMS FOR ELIGIBLE BENEFICIARIES.—There is hereby imposed a penalty on the failure of any assigned operator 

to pay any premium required to be paid under section 9704 

with respect to any eligible beneficiary. 

‘‘(2) CONTRIBUTIONS REQUIRED UNDER THE MINING LAWS.—

There is hereby imposed a penalty on the failure of any person 

to make a contribution required under section 402(h)(5)(B)(ii) 

of the Surface Mining Control and Reclamation Act of 1977 to 

a plan referred to in section 402(h)(2)(C) of such Act. For purposes of applying this section, each such required monthly contribution for the hours worked of any individual shall be treated as if it were a premium required to be paid under section 

9704 with respect to an eligible beneficiary.’’. 

(2) CIVIL ENFORCEMENT.—Section 9721 of such Code is 

amended to read as follows: 

‘‘SEC. 9721. CIVIL ENFORCEMENT. 

‘‘The provisions of section 4301 of the Employee Retirement Income Security Act of 1974 shall apply, in the same manner as any 

claim arising out of an obligation to pay withdrawal liability under 

subtitle E of title IV of such Act, to any claim—

‘‘(1) arising out of an obligation to pay any amount required 

to be paid by this chapter; or 

‘‘(2) arising out of an obligation to pay any amount required 

by section 402(h)(5)(B)(ii) of the Surface Mining Control and 

Reclamation Act of 1977 (30 U.S.C. 1232(h)(5)(B)(ii)).’’. 


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TITLE III—WHITE PINE COUNTY CONSERVATION, RECREATION, AND DEVELOPMENT 

SEC. 301. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated such sums as are necessary to carry out this title. 

SEC. 302. SHORT TITLE. 

This title may be cited as the ‘‘White Pine County Conservation, 

Recreation, and Development Act of 2006’’. 

SEC. 303. DEFINITIONS. 

In this title: 

(1) COUNTY.—The term ‘‘County’’ means White Pine County, 

Nevada. 

(2) SECRETARY.—The term ‘‘Secretary’’ means—

(A) with respect to land in the National Forest System, 

the Secretary of Agriculture; and 

(B) with respect to other Federal land, the Secretary of 

the Interior. 

(3) STATE.—The term ‘‘State’’ means the State of Nevada. 

Subtitle A—Land Disposal 

SEC. 311. CONVEYANCE OF WHITE PINE COUNTY, NEVADA, LAND. 

(a) IN GENERAL.—Notwithstanding sections 202 and 203 of the 

Federal Land Policy and Management Act of 1976 (43 U.S.C. 1712, 

1713), the Secretary, in cooperation with the County, in accordance 

with that Act, this subtitle, and other applicable law and subject 

to valid existing rights, shall, at such time as the parcels of Federal 

land become available for disposal, conduct sales of the parcels of 

Federal land described in subsection (b) to qualified bidders. 

(b) DESCRIPTION OF LAND.—The parcels of Federal land referred 

to in subsection (a) consist of not more than 45,000 acres of Bureau 

of Land Management land in the County that—

(1) is not segregated or withdrawn on or after the date of enactment of this Act, unless the land is withdrawn in accordance with subsection (h); and 

(2) is identified for disposal by the Bureau of Land Management through—

(A) the Ely Resource Management Plan; or 

(B) a subsequent amendment to the management plan 

that is undertaken with full public involvement. 

(c) AVAILABILITY.—The map and any legal descriptions of the 

Federal land conveyed under this section shall be on file and available for public inspection in—

(1) the Office of the Director of the Bureau of Land Management; 

(2) the Office of the Nevada State Director of the Bureau of 

Land Management; and 

(3) the Ely Field Office of the Bureau of Land Management. 


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(d) JOINT SELECTION REQUIRED.—The Secretary and the County 

shall jointly select which parcels of Federal land described in subsection (b) to offer for sale under subsection (a). 

(e) COMPLIANCE WITH LOCAL PLANNING AND ZONING LAWS.—Before a sale of Federal land under subsection (a), the County shall 

submit to the Secretary a certification that qualified bidders have 

agreed to comply with— (1) County and city zoning ordinances; and 

(2) any master plan for the area approved by the County. 

(f) METHOD OF SALE; CONSIDERATION.—The sale of Federal land 

under subsection (a) shall be— (1) consistent with subsections (d) and (f) of section 203 of 

the Federal Land Management Policy Act of 1976 (43 U.S.C. 

1713); 

(2) unless otherwise determined by the Secretary, through a 

competitive bidding process; and 

(3) for not less than fair market value. 

(g) RECREATION AND PUBLIC PURPOSES ACT CONVEYANCES.— (1) IN GENERAL.—Not later than 30 days before land is offered for sale under subsection (a), the State or County may 

elect to obtain any of the land for local public purposes in accordance with the Act of June 14, 1926 (commonly known as 

the ‘‘Recreation and Public Purposes Act’’) (43 U.S.C. 869 et 

seq.). 

(2) RETENTION.—Pursuant to an election made under paragraph (1), the Secretary shall retain the elected land for conveyance to the State or County in accordance with the Act of 

June 14, 1926 (commonly known as the ‘‘Recreation and Public 

Purposes Act’’) (43 U.S.C. 869 et seq.). 

(h) WITHDRAWAL.—

(1) IN GENERAL.—Subject to valid existing rights and except 

as provided in paragraph (2), the Federal land described in 

subsection (b) is withdrawn from— (A) all forms of entry and appropriation under the public 

land laws and mining laws; 

(B) location and patent under the mining laws; and 

(C) operation of the mineral laws, geothermal leasing 

laws, and mineral material laws. 

(2) EXCEPTION.—Paragraph (1)(A) shall not apply to sales 

made consistent with this section or an election by the County 

or the State to obtain the land described in subsection (b) for 

public purposes under the Act of June 14, 1926 (commonly 

known as the ‘‘Recreation and Public Purposes Act’’)(43 U.S.C. 

869 et seq.). 

(i) DEADLINE FOR SALE.—

(1) IN GENERAL.—Except as provided in paragraph (2), not 

later than 1 year after the date of the signing of the record of 

decision authorizing the implementation of the Ely Resource 

Management Plan and annually thereafter until the Federal 

land described in subsection (b) is disposed of or the County requests a postponement under paragraph (2), the Secretary 

shall offer for sale the Federal land described in subsection (b). 

(2) POSTPONEMENT; EXCLUSION FROM SALE.—

(A) REQUEST BY COUNTY FOR POSTPONEMENT OR EXCLUSION.—At the request of the County, the Secretary shall 


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postpone or exclude from the sale all or a portion of the 

land described in subsection (b). 

(B) INDEFINITE POSTPONEMENT.—Unless specifically requested by the County, a postponement under subparagraph (A) shall not be indefinite. 

SEC. 312. DISPOSITION OF PROCEEDS. 

Of the proceeds from the sale of Federal land described in section l11(b)—

(1) 5 percent shall be paid directly to the State for use in the 

general education program of the State; 

(2) 10 percent shall be paid to the County for use for fire protection, law enforcement, education, public safety, housing, social services, transportation, and planning; and 

(3) the remainder shall be deposited in a special account in 

the Treasury of the United States, to be known as the ‘‘White 

Pine County Special Account’’ (referred to in this subtitle as 

the ‘‘special account’’), and shall be available without further 

appropriation to the Secretary until expended for— (A) the reimbursement of costs incurred by the Nevada 

State office and the Ely Field Office of the Bureau of Land 

Management for preparing for the sale of Federal land described in section l11(b), including the costs of surveys 

and appraisals and compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321) and sections 

202 and 203 of the Federal Land Policy and Management 

Act of 1976 (43 U.S.C. 1712, 1713); 

(B) the inventory, evaluation, protection, and management of unique archaeological resources (as defined in section 3 of the Archaeological Resources Protection Act of 

1979 (16 U.S.C. 470bb)) of the County; 

(C) the reimbursement of costs incurred by the Department of the Interior for preparing and carrying out the 

transfers of land to be held in trust by the United States 

under section l61; 

(D) conducting a study of routes for the Silver State OffHighway Vehicle Trail as required by section l55(a); 

(E) developing and implementing the Silver State OffHighway Vehicle Trail management plan described in section l55(c); 

(F) wilderness protection and processing wilderness designations, including the costs of appropriate fencing, signage, public education, and enforcement for the wilderness 

areas designated; 

(G) if the Secretary determines necessary, developing 

and implementing conservation plans for endangered or at 

risk species in the County; and 

(H) carrying out a study to assess non-motorized recreation opportunities on Federal land in the County. 

Subtitle B—Wilderness Areas 

SEC. 321. SHORT TITLE. 

This subtitle may be cited as the ‘‘Pam White Wilderness Act of 

2006’’. 


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SEC. 322. FINDINGS. 

Congress finds that— (1) public land in the County contains unique and spectacular natural resources, including— (A) priceless habitat for numerous species of plants and 

wildlife; and 

(B) thousands of acres of land that remain in a natural 

state; and 

(2) continued preservation of those areas would benefit the 

County and all of the United States by— (A) ensuring the conservation of ecologically diverse 

habitat; 

(B) protecting prehistoric cultural resources; 

(C) conserving primitive recreational resources; and 

(D) protecting air and water quality. 

SEC. 323. ADDITIONS TO NATIONAL WILDERNESS PRESERVATION SYSTEM. 

(a) ADDITIONS.—The following land in the State is designated as 

wilderness and as components of the National Wilderness Preservation System: 

(1) MT. MORIAH WILDERNESS ADDITION.—Certain Federal 

land managed by the Forest Service and the Bureau of Land 

Management, comprising approximately 11,261 acres, as generally depicted on the map entitled ‘‘Eastern White Pine County’’ and dated November 29, 2006, is incorporated in, and shall 

be managed as part of, the Mt. Moriah Wilderness, as designated by section 2(13) of the Nevada Wilderness Protection 

Act of 1989 (16 U.S.C. 1132 note; Public Law 101–195). 

(2) MOUNT GRAFTON WILDERNESS.—Certain Federal land 

managed by the Bureau of Land Management, comprising approximately 78,754 acres, as generally depicted on the map entitled ‘‘Southern White Pine County’’ and dated November 29, 

2006, which shall be known as the ‘‘Mount Grafton Wilderness’’. 

(3) SOUTH EGAN RANGE WILDERNESS.—Certain Federal land 

managed by the Bureau of Land Management, comprising approximately 67,214 acres, as generally depicted on the map entitled ‘‘Southern White Pine County’’ and dated November 29, 

2006, which shall be known as the ‘‘South Egan Range Wilderness’’. 

(4) HIGHLAND RIDGE WILDERNESS.—Certain Federal land 

managed by the Bureau of Land Management and the Forest 

Service, comprising approximately 68,627 acres, as generally 

depicted on the map entitled ‘‘Southern White Pine County’’

and dated November 29, 2006, which shall be known as the 

‘‘Highland Ridge Wilderness’’. 

(5) GOVERNMENT PEAK WILDERNESS.—Certain Federal land 

managed by the Bureau of Land Management, comprising approximately 6,313 acres, as generally depicted on the map entitled ‘‘Eastern White Pine County’’ and dated November 29, 

2006, which shall be known as the ‘‘Government Peak Wilderness’’. 

(6) CURRANT MOUNTAIN WILDERNESS ADDITION.—Certain Federal land managed by the Forest Service, comprising approximately 10,697 acres, as generally depicted on the map entitled 


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‘‘Western White Pine County’’ and dated November 29, 2006, 

is incorporated in, and shall be managed as part of, the ‘‘Currant Mountain Wilderness’’, as designated by section 2(4) of 

the Nevada Wilderness Protection Act of 1989 (16 U.S.C. 1132 

note; Public Law 101–195). 

(7) RED MOUNTAIN WILDERNESS.—Certain Federal land managed by the Forest Service, comprising approximately 20,490 

acres, as generally depicted on the map entitled ‘‘Western 

White Pine County’’ and dated November 29, 2006, which shall 

be known as the ‘‘Red Mountain Wilderness’’. (8) BALD MOUNTAIN WILDERNESS.—Certain Federal land 

managed by the Bureau of Land Management and the Forest 

Service, comprising approximately 22,366 acres, as generally 

depicted on the map entitled ‘‘Western White Pine County’’ and 

dated November 29, 2006, which shall be known as the ‘‘Bald 

Mountain Wilderness’’. (9) WHITE PINE RANGE WILDERNESS.—Certain Federal land 

managed by the Forest Service, comprising approximately 

40,013 acres, as generally depicted on the map entitled ‘‘Western White Pine County’’ and dated November 29, 2006, which 

shall be known as the ‘‘White Pine Range Wilderness’’. 

(10) SHELLBACK WILDERNESS.—Certain Federal land managed by the Forest Service, comprising approximately 36,143 

acres, as generally depicted on the map entitled ‘‘Western 

White Pine County’’ and dated November 29, 2006, which shall 

be known as the ‘‘Shellback Wilderness’’. (11) HIGH SCHELLS WILDERNESS.—Certain Federal land managed by the Forest Service, comprising approximately 121,497 

acres, as generally depicted on the map entitled ‘‘Eastern 

White Pine County’’ and dated November 29, 2006, which shall 

be known as the ‘‘High Schells Wilderness’’. (12) BECKY PEAK WILDERNESS.—Certain Federal land managed by the Bureau of Land Management, comprising approximately 18,119 acres, as generally depicted on the map entitled 

‘‘Northern White Pine County’’ and dated November 29, 2006, 

which shall be known as the ‘‘Becky Peak Wilderness’’. (13) GOSHUTE CANYON WILDERNESS.—Certain Federal land 

managed by the Bureau of Land Management, comprising approximately 42,544 acres, as generally depicted on the map entitled ‘‘Northern White Pine County’’ and dated November 29, 

2006, which shall be known as the ‘‘Goshute Canyon Wilderness’’. (14) BRISTLECONE WILDERNESS.—Certain Federal land managed by the Bureau of Land Management, comprising approximately 14,095 acres, as generally depicted on the map entitled 

‘‘Eastern White Pine County’’ and dated November 29, 2006, 

which shall be known as the ‘‘Bristlecone Wilderness’’. 

(b) BOUNDARY.—The boundary of any portion of a wilderness 

area designated by subsection (a) that is bordered by a road shall 

be at least 100 feet from the edge of the road to allow public access. 

(c) MAP AND LEGAL DESCRIPTION.— (1) IN GENERAL.—As soon as practicable after the date of enactment of this Act, the Secretary shall file a map and legal 

description of each wilderness area designated by subsection 

(a) with the Committee on Energy and Natural Resources of 


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the Senate and the Committee on Resources of the House of 

Representatives. 

(2) EFFECT.—Each map and legal description shall have the 

same force and effect as if included in this section, except that 

the Secretary may correct clerical and typographical errors in 

the map or legal description. 

(3) AVAILABILITY.—Each map and legal description shall be 

on file and available for public inspection in the appropriate offices of—

(A) the Bureau of Land Management; 

(B) the Forest Service; and 

(C) the National Park Service. 

(d) WITHDRAWAL.—Subject to valid existing rights, the wilderness 

areas designated by subsection (a) are withdrawn from— (1) all forms of entry, appropriation, and disposal under the 

public land laws; 

(2) location, entry, and patent under the mining laws; and 

(3) operation of the mineral leasing and geothermal leasing 

laws. 

(e) MT. MORIAH WILDERNESS BOUNDARY ADJUSTMENT.—The 

boundary of the Mt. Moriah Wilderness established under section 

2(13) of the Nevada Wilderness Protection Act of 1989 (16 U.S.C. 

1132 note; Public Law 101–195) is adjusted to include only the land 

identified as the ‘‘Mount Moriah Wilderness Area’’ and ‘‘Mount 

Moriah Additions’’ on the map entitled ‘‘Eastern White Pine County’’ and dated November 29, 2006. 

SEC. 324. ADMINISTRATION. 

(a) MANAGEMENT.—Subject to valid existing rights, each area 

designated as wilderness by this subtitle shall be administered by 

the Secretary in accordance with the Wilderness Act (16 U.S.C. 

1131 et seq.), except that— (1) any reference in that Act to the effective date shall be 

considered to be a reference to the date of enactment of this 

Act; and 

(2) any reference in that Act to the Secretary of Agriculture 

shall be considered to be a reference to the Secretary of Agriculture or the Secretary of the Interior, as appropriate. 

(b) LIVESTOCK.—Within the wilderness areas designated under 

this subtitle that are administered by the Bureau of Land Management and the Forest Service, the grazing of livestock in areas in 

which grazing is established as of the date of enactment of this Act 

shall be allowed to continue—

(1) subject to such reasonable regulations, policies, and practices that the Secretary considers necessary; and 

(2) consistent with section 4(d)(4) of the Wilderness Act (16 

U.S.C. 1133(d)(4)), including the guidelines set forth in Appendix A of House Report 101–405. 

(c) INCORPORATION OF ACQUIRED LAND AND INTERESTS.—Any 

land or interest in land within the boundaries of an area designated as wilderness by this subtitle that is acquired by the 

United States after the date of enactment of this Act shall be 

added to and administered as part of the wilderness area within 

which the acquired land or interest is located. 

(d) WATER RIGHTS.—

(1) FINDINGS.—Congress finds that—


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(A) the land designated as wilderness by this subtitle is 

located—

(i) in the semiarid region of the Great Basin; and 

(ii) at the headwaters of the streams and rivers on 

land with respect to which there are few if any— (I) actual or proposed water resource facilities 

located upstream; and 

(II) opportunities for diversion, storage, or other 

uses of water occurring outside the land that 

would adversely affect the wilderness values of 

the land; 

(B) the land designated as wilderness by this subtitle is 

generally not suitable for use or development of new water 

resource facilities; and 

(C) because of the unique nature of the land designated 

as wilderness by this subtitle, it is possible to provide for 

proper management and protection of the wilderness and 

other values of land in ways different from those used in 

other laws. 

(2) PURPOSE.—The purpose of this section is to protect the 

wilderness values of the land designated as wilderness by this 

subtitle by means other than a federally reserved water right. 

(3) STATUTORY CONSTRUCTION.—Nothing in this subtitle— (A) shall constitute or be construed to constitute either 

an express or implied reservation by the United States of 

any water or water rights with respect to a wilderness designated by this subtitle; 

(B) shall affect any water rights in the State (including 

any water rights held by the United States) in existence 

on the date of enactment of this Act; 

(C) shall be construed as establishing a precedent with 

regard to any future wilderness designations; 

(D) shall affect the interpretation of, or any designation 

made pursuant to, any other Act; or 

(E) shall be construed as limiting, altering, modifying, or 

amending any interstate compact or equitable apportionment decree that apportions water among and between the 

State and other States. 

(4) NEVADA WATER LAW.—The Secretary shall follow the procedural and substantive requirements of State law in order to 

obtain and hold any water rights not in existence on the date 

of enactment of this Act with respect to the wilderness areas 

designated by this subtitle. 

(5) NEW PROJECTS.—

(A) DEFINITION OF WATER RESOURCE FACILITY.—In this 

paragraph, the term ‘‘water resource facility’’—

(i) means irrigation and pumping facilities, reservoirs, water conservation works, aqueducts, canals, 

ditches, pipelines, wells, hydropower projects, transmission and other ancillary facilities, and other water 

diversion, storage, and carriage structures; and 

(ii) does not include wildlife guzzlers. 

(B) RESTRICTION ON NEW WATER RESOURCE FACILITIES.—

Except as otherwise provided in this title, on or after the 

date of enactment of this Act, neither the President nor 


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any other officer, employee, or agent of the United States 

shall fund, assist, authorize, or issue a license or permit 

for the development of any new water resource facility 

within a wilderness area that is wholly or partially within 

the County. 

SEC. 325. ADJACENT MANAGEMENT. 

(a) IN GENERAL.—Congress does not intend for the designation of 

wilderness in the State by this subtitle to lead to the creation of 

protective perimeters or buffer zones around any such wilderness 

area. 

(b) NONWILDERNESS ACTIVITIES.—The fact that nonwilderness activities or uses can be seen or heard from areas within a wilderness 

designated under this subtitle shall not preclude the conduct of 

those activities or uses outside the boundary of the wilderness 

area. 

SEC. 326. MILITARY OVERFLIGHTS. 

Nothing in this subtitle restricts or precludes—

(1) low-level overflights of military aircraft over the areas 

designated as wilderness by this subtitle, including military 

overflights that can be seen or heard within the wilderness 

areas; 

(2) flight testing and evaluation; or 

(3) the designation or creation of new units of special use airspace, or the establishment of military flight training routes, 

over the wilderness areas. 

SEC. 327. NATIVE AMERICAN CULTURAL AND RELIGIOUS USES. 

Nothing in this subtitle shall be construed to diminish—

(1) the rights of any Indian tribe; or 

(2) tribal rights regarding access to Federal land for tribal 

activities, including spiritual, cultural, and traditional foodgathering activities. 

SEC. 328. RELEASE OF WILDERNESS STUDY AREAS. 

(a) FINDING.—Congress finds that, for the purposes of section 603 

of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 

1782), the Bureau of Land Management land has been adequately 

studied for wilderness designation in any portion of the wilderness 

study areas or instant study areas—

(1) not designated as wilderness by section l23(a), excluding 

the portion of the Goshute Canyon Wilderness Study Area located outside of the County; and 

(2) depicted as released on the maps entitled—

(A) ‘‘Eastern White Pine County’’ and dated November 

29, 2006; 

(B) ‘‘Northern White Pine County’’ and dated November 

29, 2006; 

(C) ‘‘Southern White Pine County’’ and dated November 

29, 2006; and 

(D) ‘‘Western White Pine County’’ and dated November 

29, 2006. 

(b) RELEASE.—

(1) IN GENERAL.—Any public land described in subsection (a) 

that is not designated as wilderness by this subtitle—


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(A) is no longer subject to section 603(c) of the Federal 

Land Policy and Management Act of 1976 (43 U.S.C. 

1782(c)); 

(B) shall be managed in accordance with— (i) land management plans adopted under section 

202 of that Act (43 U.S.C. 1712); and 

(ii) cooperative conservation agreements in existence 

on the date of enactment of this Act; and 

(C) shall be subject to the Endangered Species Act of 

1973 (16 U.S.C. 1531 et seq.). 

(2) EXCEPTION.—The requirements described in paragraph 

(1) shall not apply to the portion of the Goshute Canyon Wilderness Study Area located outside of the County. 

SEC. 329. WILDLIFE MANAGEMENT. 

(a) IN GENERAL.—In accordance with section 4(d)(7) of the Wilderness Act (16 U.S.C. 1133(d)(7)), nothing in this subtitle affects 

the jurisdiction of the State with respect to fish and wildlife management, including the regulation of hunting, fishing, and trapping, 

in the wilderness areas designated by this subtitle. 

(b) MANAGEMENT ACTIVITIES.—In furtherance of the purposes 

and principles of the Wilderness Act (16 U.S.C. 1131 et seq.), the 

Secretary may conduct such management activities as are necessary to maintain or restore fish and wildlife populations and 

habitats in the wilderness areas designated by this subtitle if those 

activities are conducted— (1) consistent with relevant wilderness management plans; 

and 

(2) in accordance with— (A) the Wilderness Act (16 U.S.C. 1131 et seq.); and 

(B) appropriate policies such as those set forth in Appendix B of House Report 101–405, including the occasional 

and temporary use of motorized vehicles if the use, as determined by the Secretary, would promote healthy, viable, 

and more naturally distributed wildlife populations that 

would enhance wilderness values and accomplish those 

tasks with the minimal impact necessary to reasonably accomplish those tasks. 

(c) EXISTING ACTIVITIES.—Consistent with section 4(d)(1) of the 

Wilderness Act (16 U.S.C. 1133(d)(1)) and in accordance with appropriate policies such as those set forth in Appendix B of House 

Report 101–405, the State may continue to use aircraft, including 

helicopters, to survey, capture, transplant, monitor, and provide 

water for wildlife populations, including bighorn sheep, and feral 

stock, feral horses, and feral burros. 

(d) WILDLIFE WATER DEVELOPMENT PROJECTS.—Subject to subsection (f), the Secretary shall authorize structures and facilities, 

including existing structures and facilities, for wildlife water development projects, including guzzlers, in the wilderness areas designated by this subtitle if—

(1) the structures and facilities will, as determined by the 

Secretary, enhance wilderness values by promoting healthy, 

viable, and more naturally distributed wildlife populations; and 

(2) the visual impacts of the structures and facilities on the 

wilderness areas can reasonably be minimized. 

(e) HUNTING, FISHING, AND TRAPPING.—


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(1) IN GENERAL.—The Secretary may designate by regulation 

areas in which, and establish periods during which, for reasons 

of public safety, administration, or compliance with applicable 

laws, no hunting, fishing, or trapping will be permitted in the 

wilderness areas designated by this subtitle. 

(2) CONSULTATION.—Except in emergencies, the Secretary 

shall consult with the appropriate State agency before promulgating regulations under paragraph (1). 

(f) COOPERATIVE AGREEMENT.—

(1) IN GENERAL.—The State (including a designee of the 

State) may conduct wildlife management activities in the wilderness areas designated by this subtitle—

(A) in accordance with the terms and conditions specified 

in the cooperative agreement between the Secretary and 

the State, entitled ‘‘Memorandum of Understanding between the Bureau of Land Management and the Nevada 

Department of Wildlife Supplement No. 9,’’ and signed November and December 2003, including any amendments to 

the cooperative agreement agreed to by the Secretary and 

the State; and 

(B) subject to all applicable laws and regulations. 

(2) REFERENCES.—

(A) CLARK COUNTY.—For purposes of this subsection, any 

references to Clark County in the cooperative agreement 

described in paragraph (1)(A) shall be considered to be references to White Pine County, Nevada. 

(B) BUREAU OF LAND MANAGEMENT.—For purposes of 

this subsection, any references to the Bureau of Land 

Management in the cooperative agreement described in 

paragraph (1)(A) shall also be considered to be references 

to the Forest Service. 

SEC. 330. WILDFIRE, INSECT, AND DISEASE MANAGEMENT. 

Consistent with section 4(d)(1) of the Wilderness Act (16 U.S.C. 

1133(d)(1)), the Secretary may take such measures as may be necessary in the control of fire, insects, and diseases, including coordination with a State or local agency, as the Secretary deems appropriate. 

SEC. 331. CLIMATOLOGICAL DATA COLLECTION. 

If the Secretary determines that hydrologic, meteorologic, or climatological collection devices are appropriate to further the scientific, educational, and conservation purposes of the wilderness 

areas designated by this subtitle, nothing in this subtitle precludes 

the installation and maintenance of the collection devices within 

the wilderness areas. 

Subtitle C—Transfers of Administrative 

Jurisdiction 

SEC. 341. TRANSFER TO THE UNITED STATES FISH AND WILDLIFE 

SERVICE. 

(a) IN GENERAL.—Administrative jurisdiction over the land described in subsection (b) is transferred from the Bureau of Land 


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Management to the United States Fish and Wildlife Service for inclusion in the Ruby Lake National Wildlife Refuge. 

(b) DESCRIPTION OF LAND.—The parcel of land referred to in subsection (a) is approximately 645 acres of land administered by the 

Bureau of Land Management and identified on the map entitled 

‘‘Ruby Lake Land Transfer’’ and dated July 10, 2006, as ‘‘Lands to 

be transferred to the Fish and Wildlife Service’’. 

SEC. 342. TRANSFER TO THE BUREAU OF LAND MANAGEMENT. 

(a) IN GENERAL.—Subject to subsection (c), administrative jurisdiction over the parcels of land described in subsection (b) is transferred from the Forest Service to the Bureau of Land Management. 

(b) DESCRIPTION OF LAND.—The parcels of land referred to in 

subsection (a) are—

(1) the land administered by the Forest Service and identified on the map entitled ‘‘Southern White Pine County’’ and 

dated November 29, 2006, as ‘‘Withdrawal Area’’; 

(2) the land administered by the Forest Service and identified on the map entitled ‘‘Southern White Pine County’’ and 

dated November 29, 2006, as ‘‘Highland Ridge Wilderness’’; 

and 

(3) all other Federal land administered by the Forest Service 

that is located adjacent to the Highland Ridge Wilderness. 

(c) CONTINUATION OF COOPERATIVE AGREEMENTS.—Any existing 

Forest Service cooperative agreement or permit in effect on the 

date of enactment of this Act relating to a parcel of land to which 

administrative jurisdiction is transferred by subsection (a) shall be 

continued by the Bureau of Land Management unless there is reasonable cause to terminate the agreement or permit, as determined 

by the Secretary. 

(d) WITHDRAWAL.—Subject to valid existing rights, all Federal 

land within the Withdrawal Area is withdrawn from all forms of—

(1) entry, appropriation, or disposal under the public land 

laws; 

(2) location, entry, and patent under the mining laws; and 

(3) operation of the mineral laws, geothermal leasing laws, 

and mineral materials laws. 

(e) MOTORIZED AND MECHANICAL VEHICLES.—Use of motorized 

and mechanical vehicles in the withdrawal area designated by this 

subtitle shall be permitted only on roads and trails designated for 

their use, unless the use of those vehicles is needed—

(1) for administrative purposes; or 

(2) to respond to an emergency. 

SEC. 343. TRANSFER TO THE FOREST SERVICE. 

(a) IN GENERAL.—Subject to subsection (c), administrative jurisdiction over the parcels of land described in subsection (b) is transferred from the Bureau of Land Management to the Forest Service. 

(b) DESCRIPTION OF LAND.—The parcels of land referred to in 

subsection (a) are the approximately 5,799 acres of land administered by the Bureau of Land Management and identified on the 

map entitled ‘‘Western White Pine County’’, dated November 29, 

2006, as the BLM Public Land Transfer to the US Forest Service. 

(c) CONTINUATION OF COOPERATIVE AGREEMENTS.—Any existing 

Bureau of Land Management cooperative agreement or permit in 

effect on the date of enactment of this Act relating to a parcel of 


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land to which administrative jurisdiction is transferred by subsection (a) shall be continued by the Forest Service unless there is 

reasonable cause to terminate the agreement or permit, as determined by the Secretary. 

SEC. 344. AVAILABILITY OF MAP AND LEGAL DESCRIPTIONS. 

The maps of the land transferred by this subtitle shall be on file 

and available for public inspection in the appropriate offices of— (1) the Bureau of Land Management; 

(2) the Forest Service; 

(3) the National Park Service; and 

(4) the United States Fish and Wildlife Service. 

Subtitle D—Public Conveyances 

SEC. 351. CONVEYANCE TO THE STATE OF NEVADA. 

(a) CONVEYANCE.—Notwithstanding section 202 of the Federal 

Land Policy and Management Act of 1976 (43 U.S.C. 1712), the 

Secretary shall convey to the State, subject to valid existing rights, 

for no consideration, all right, title, and interest of the United 

States in and to the parcels of land described in subsection (b) if 

the State and the County enter into a written agreement supporting the conveyance. 

(b) DESCRIPTION OF LAND.—The parcels of land referred to in 

subsection (a) are— (1) the approximately 6,281 acres of Bureau of Land Management land identified as ‘‘Steptoe Valley Wildlife Management Area Expansion Proposal’’ on the map entitled ‘‘Ely, Nevada Area’’ and dated November 29, 2006; 

(2) the approximately 658 acres of Bureau of Land Management land identified as ‘‘Ward Charcoal Ovens Expansion’’ on 

the map entitled ‘‘Ely, Nevada Area’’ and dated November 29, 

2006; and 

(3) the approximately 2,960 acres of Forest Service identified 

as ‘‘Cave Lake State Park Expansion’’ on the map entitled ‘‘Ely, Nevada Area’’ and dated November 29, 2006. 

(c) COSTS.—Any costs relating to a conveyance under subsection 

(a), including costs for surveys and other administrative costs, shall 

be paid by the State. 

(d) USE OF LAND.— (1) IN GENERAL.—Any parcel of land conveyed to the State 

under subsection (a) shall be used only for— (A) the conservation of wildlife or natural resources; or 

(B) a public park. 

(2) FACILITIES.—Any facility on a parcel of land conveyed 

under subsection (a) shall be constructed and managed in a 

manner consistent with the uses described in paragraph (1). 

(e) REVERSION.—If a parcel of land conveyed under subsection (a) 

is used in a manner that is inconsistent with the uses described in 

subsection (d), the parcel of land shall, at the discretion of the Secretary, revert to the United States. 

SEC. 352. CONVEYANCE TO WHITE PINE COUNTY, NEVADA. 

(a) IN GENERAL.—Notwithstanding section 202 of the Federal 

Land Policy and Management Act of 1976 (43 U.S.C. 1712), the 

Secretary shall convey to the County, without consideration, all 


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right, title, and interest of the United States in and to the parcels 

of land described in subsection (b). 

(b) DESCRIPTION OF LAND.—The parcels of land referred to in 

subsection (a) are— (1) the approximately 1,551 acres of land identified on the 

map entitled ‘‘Ely, Nevada Area’’, dated November 29, 2006, as 

the Airport Expansion; and 

(2) the approximately 202 acres of land identified on the map 

entitled ‘‘Ely, Nevada Area’’, dated November 29, 2006, as the 

Industrial Park Expansion. 

(c) AUTHORIZED USES.—

(1) AIRPORT EXPANSION.—The parcel of land described in subsection (b)(1) shall be used by the County to expand the Ely 

Airport. 

(2) INDUSTRIAL PARK EXPANSION.—The parcel of land described in subsection (b)(2) shall be used by the County to expand the White Pine County Industrial Park. 

(3) USE OF CERTAIN LAND FOR NONRESIDENTIAL DEVELOPMENT.—

(A) IN GENERAL.—After conveyance to the County of the 

land described in subsection (b), the County may sell, 

lease, or otherwise convey any portion of the land conveyed 

for purposes of nonresidential development relating to the 

authorized uses described in paragraphs (1) and (2). 

(B) METHOD OF SALE.—The sale, lease, or conveyance of 

land under subparagraph (A) shall be—

(i) through a competitive bidding process; and 

(ii) for not less than fair market value. 

(C) DISPOSITION OF PROCEEDS.—The gross proceeds from 

the sale, lease, or conveyance of land under subparagraph 

(A) shall be distributed in accordance with section l12. 

(d) REVERSION.—If a parcel of land conveyed under subsection (a) 

is used in a manner that is inconsistent with the use described for 

the parcel in paragraph (1), (2), or (3) of subsection (c), the parcel 

of land shall, at the discretion of the Secretary, revert to the 

United States. 

Subtitle E—Silver State Off-Highway 

Vehicle Trail 

SEC. 355. SILVER STATE OFF-HIGHWAY VEHICLE TRAIL. 

(a) STUDY.—

(1) IN GENERAL.—Not later than 3 years after the date of enactment of this Act, the Secretary shall complete a study of 

routes (with emphasis on roads and trails in existence on the 

date of enactment of this Act) in accordance with the National 

Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) for 

the Silver State Off-Highway Vehicle Trail (referred to in this 

section as the ‘‘Trail’’). 

(2) PREFERRED ROUTE.—Based on the study conducted under 

paragraph (1), the Secretary, in consultation with the State, 

the County, and any interested persons, shall identify the preferred route for the Trail. 

(b) DESIGNATION OF TRAIL.—


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(1) IN GENERAL.—Subject to paragraph (2), not later than 90 

days after the date on which the study is completed under subsection (a), the Secretary shall designate the Trail. 

(2) LIMITATIONS.—The Secretary shall designate the Trail 

only if the Secretary— (A) determines that the route of the Trail would not 

have significant negative impacts on wildlife, natural or 

cultural resources, or traditional uses; and 

(B) ensures that the Trail designation— (i) is an effort to extend the Silver State Off-Highway Vehicle Trail designated under section 401(b) of 

the Lincoln County Conservation, Recreation, and Development Act of 2004 (16 U.S.C. 1244 note; Public 

Law 108–424); and 

(ii) is limited to— (I) 1 route that generally runs in a north-south 

direction; and 

(II) 1 potential spur running west. 

(c) MANAGEMENT.—

(1) IN GENERAL.—The Secretary shall manage the Trail in a 

manner that—

(A) is consistent with any motorized and mechanized 

uses of the Trail that are authorized on the date of enactment of this Act under applicable Federal and State laws 

(including regulations); 

(B) ensures the safety of the individuals who use the 

Trail; and 

(C) does not damage sensitive wildlife habitat, natural, 

or cultural resources. 

(2) MANAGEMENT PLAN.—

(A) IN GENERAL.—Not later than 2 years after the date 

of designation of the Trail, the Secretary, in consultation 

with the State, the County, and any other interested persons, shall complete a management plan for the Trail. 

(B) COMPONENTS.—The management plan shall— (i) describe the appropriate uses and management of 

the Trail; 

(ii) authorize the use of motorized and mechanized 

vehicles on the Trail; and 

(iii) describe actions carried out to periodically 

evaluate and manage the appropriate levels of use and 

location of the Trail to minimize environmental impacts and prevent damage to cultural resources from 

the use of the Trail. 

(3) MONITORING AND EVALUATION.—

(A) ANNUAL ASSESSMENT.—The Secretary shall annually 

assess—

(i) the effects of the use of off-highway vehicles on 

the Trail to minimize environmental impacts and prevent damage to cultural resources from the use of the 

Trail; and 

(ii) in consultation with the Nevada Department of 

Wildlife, the effects of the Trail on wildlife and wildlife 

habitat to minimize environmental impacts from the 

use of the Trail. 


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(B) CLOSURE.—The Secretary, in consultation with the 

State and the County and subject to subparagraph (C), 

may temporarily close or permanently reroute a portion of 

the Trail if the Secretary determines that—

(i) the Trail is having an adverse impact on—

(I) wildlife habitats; 

(II) natural resources; 

(III) cultural resources; or 

(IV) traditional uses; 

(ii) the Trail threatens public safety; 

(iii) closure of the Trail is necessary to repair damage to the Trail; or 

(iv) closure of the Trail is necessary to repair resource damage. 

(C) REROUTING.—Any portion of the Trail that is temporarily closed may be permanently rerouted along existing 

roads and trails on public land open to motorized use if the 

Secretary determines that rerouting the portion of the 

Trail would not significantly increase or decrease the 

length of the Trail. 

(D) NOTICE.—The Secretary shall provide information to 

the public with respect to any routes on the Trail that are 

closed under subparagraph (B), including through the provision of appropriate signage along the Trail. 

(4) NOTICE OF OPEN ROUTES.—The Secretary shall ensure 

that visitors to the Trail have access to adequate notice relating to the routes on the Trail that are open through—

(A) the provision of appropriate signage along the Trail; 

and 

(B) the distribution of maps, safety education materials, 

and any other information that the Secretary determines 

to be appropriate. 

(d) NO EFFECT ON NON-FEDERAL LAND AND INTERESTS IN

LAND.—Nothing in this section affects the ownership or management of, or other rights relating to, non-Federal land or interests 

in non-Federal land. 

Subtitle F—Transfer of Land to Be Held in 

Trust for the Ely Shoshone Tribe. 

SEC. 361. TRANSFER OF LAND TO BE HELD IN TRUST FOR THE ELY 

SHOSHONE TRIBE. 

(a) IN GENERAL.—Subject to valid existing rights, all right, title, 

and interest of the United States in and to the land described in 

subsection (b)—

(1) shall be held in trust by the United States for the benefit 

of the Ely Shoshone Tribe (referred to in this section as the 

‘‘Tribe’’); and 

(2) shall be part of the reservation of the Tribe. 

(b) DESCRIPTION OF LAND.—The land referred to in subsection (a) 

consists of parcels 1, 2, 3, and 4, totaling the approximately 3,526 

acres of land that are identified on—

(1) the Ely, Nevada Area map dated November 29, 2006; and 


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(2) the Eastern White Pine County map dated November 29, 

2006, as the ‘‘Ely Shoshone Expansion’’. (c) SURVEY.—Not later than 180 days after the date of enactment 

of this Act, the Bureau of Land Management shall complete a survey of the boundary lines to establish the boundaries of the trust 

land. 

(d) CONDITIONS.— (1) GAMING.—Land taken into trust under subsection (a) 

shall not be— (A) considered to have been taken into trust for gaming 

(as that term is used in the Indian Gaming Regulatory Act 

(25 U.S.C. 2701 et seq.)); and 

(B) used for gaming. 

(2) TRUST LAND FOR CEREMONIAL USE.—With respect to the 

use of the land identified on the map as ‘‘Ely Shoshone Expansion’’ and marked as ‘‘3’’, the Tribe—

(A) shall limit the use of the surface of the land to traditional and customary uses and stewardship conservation 

for the benefit of the Tribe; and 

(B) shall not permit any permanent residential or recreational development on, or commercial use of, the surface of the land, including commercial development or 

gaming. 

(3) THINNING; LANDSCAPE RESTORATION.—With respect to 

land taken into trust under subsection (a), the Forest Service 

and the Bureau of Land Management may, in consultation and 

coordination with the Tribe, carry out any thinning and other 

landscape restoration work on the trust land that is beneficial 

to the Tribe and the Forest Service or the Bureau of Land 

Management. 

Subtitle G—Eastern Nevada Landscape 

Restoration Project. 

SEC. 371. FINDINGS; PURPOSES. 

(a) FINDINGS.—Congress finds that—

(1) there is an increasing threat of wildfire in the Great 

Basin; 

(2) those wildfires—

(A) endanger homes and communities; 

(B) damage or destroy watersheds and soils; and 

(C) pose a serious threat to the habitat of threatened 

and endangered species; 

(3) forest land and rangeland in the Great Basin are degraded as a direct consequence of land management practices 

(including practices to control and prevent wildfires) that disrupt the occurrence of frequent low-intensity fires that have 

periodically removed flammable undergrowth; and 

(4) additional scientific information is needed in the Great 

Basin for—

(A) the design, implementation, and adaptation of landscape-scale restoration treatments; and 

(B) the improvement of wildfire management technology 

and practices. 


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(b) PURPOSES.—The purposes of this subtitle are to—

(1) support the Great Basin Restoration Initiative through 

the implementation of the Eastern Nevada Landscape Restoration Project; and 

(2) ensure resilient and healthy ecosystems in the Great 

Basin by restoring native plant communities and natural mosaics on the landscape that function within the parameters of 

natural fire regimes. 

SEC. 372. DEFINITIONS. 

In this subtitle: 

(1) INITIATIVE.—The term ‘‘Initiative’’ means the Great Basin 

Restoration Initiative. 

(2) PROJECT.—The term ‘‘Project’’ means the Eastern Nevada 

Landscape Restoration Project authorized under section 

l73(a). 

(3) SECRETARIES.—The term ‘‘Secretaries’’ means the Secretary of Agriculture and the Secretary of the Interior. 

(4) STATE.—The term ‘‘State’’ means the State of Nevada. 

SEC. 373. RESTORATION PROJECT. 

(a) IN GENERAL.—In accordance with all applicable Federal laws, 

the Secretaries shall carry out the Eastern Nevada Landscape Restoration Project to—

(1) implement the Initiative; and 

(2) restore native rangelands and native woodland (including 

riparian and aspen communities) in White Pine and Lincoln 

Counties in the State. 

(b) GRANTS; COOPERATIVE AGREEMENT.—In carrying out the 

Project—

(1) the Secretaries may make grants to the Eastern Nevada 

Landscape Coalition, the Great Basin Institute, and other entities for the study and restoration of rangeland and other land 

in the Great Basin—

(A) to assist in—

(i) reducing hazardous fuels; and 

(ii) restoring native rangeland and woodland; and 

(B) for other related purposes; and 

(2) notwithstanding sections 6301 through 6308, of title 31, 

United States Code, the Director of the Bureau of Land Management and the Chief of the Forest Service may enter into an 

agreement with the Eastern Nevada Landscape Coalition, the 

Great Basin Institute, and other entities to provide for the conduct of scientific analyses, hazardous fuels and mechanical 

treatments, and related work. 

(c) RESEARCH FACILITY.—The Secretaries may conduct a feasibility study on the potential establishment of an interagency 

science center, including a research facility and experimental 

rangeland in the eastern portion of the State. 

(d) FUNDING.—Section 4(e)(3)(A) of the Southern Nevada Public 

Land Management Act of 1998 (Public Law 105–263; 112 Stat. 

2346; 116 Stat. 2007; 118 Stat. 2414) is amended—

(1) by redesignating clause (viii) as clause (ix); and 

(2) by inserting after clause (vii) the following: 


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‘‘(viii) to carry out the Eastern Nevada Landscape 

Restoration Project in White Pine County, Nevada and 

Lincoln County, Nevada; and’’. 

Subtitle H—Amendments to the Southern 

Nevada Public Land Management Act of 

1998 

SEC. 381. FINDINGS. 

Section 2(a)(3) of the Southern Nevada Public Land Management 

Act of 1998 (Public Law 105–263; 112 Stat. 2343) is amended by 

inserting ‘‘the Sloan Canyon National Conservation Area,’’ before 

‘‘and the Spring Mountains’’. 

SEC. 382. AVAILABILITY OF SPECIAL ACCOUNT. 

Section 4(e) of the Southern Nevada Public Land Management 

Act of 1998 (Public Law 105–263; 112 Stat. 2346; 116 Stat. 2007; 

117 Stat. 1317; 118 Stat. 2414) is amended— (1) in paragraph (3)— (A) in subparagraph (A)— (i) by striking ‘‘may be expended’’ and inserting ‘‘shall be expended’’; 

(ii) in clause (ii)— (I) by inserting ‘‘, the Great Basin National 

Park,’’ after ‘‘the Red Rock Canyon National Conservation Area’’; 

(II) by inserting ‘‘and the Forest Service’’ after ‘‘the Bureau of Land Management’’; and 

(III) by striking ‘‘Clark and Lincoln Counties’’ and inserting ‘‘Clark, Lincoln, and White Pine 

Counties’’; 

(iii) in clause (iii), by inserting ‘‘and implementation’’ before ‘‘of a multispecies habitat’’; 

(iv) in clause (iv), by striking ‘‘Clark and Lincoln 

Counties,’’ and inserting ‘‘Clark, Lincoln, and White 

Pine Counties and Washoe County (subject to paragraph (4)),’’; 

(v) in clause (v), by striking ‘‘Clark and Lincoln 

Counties’’ and inserting ‘‘Clark, Lincoln, and White 

Pine Counties’’; 

(vi) in clause (vii)—

(I) by striking ‘‘for development’’ and inserting 

‘‘development’’; and 

(II) by striking ‘‘and’’ at the end; 

(vii) by redesignating clauses (viii) and (ix) (as 

amended by section l73(d)) as clauses (x) and (xi), respectively; and 

(viii) by inserting after clause (vii) the following: 

‘‘(viii) reimbursement of any costs incurred by the 

Bureau of Land Management to clear debris from and 

protect land that is—

‘‘(I) located in the disposal boundary described 

in subsection (a); and 

‘‘(II) reserved for affordable housing; 


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‘‘(ix) development and implementation of comprehensive, cost-effective, multijurisdictional hazardous fuels 

reduction and wildfire prevention plans (including sustainable biomass and biofuels energy development and 

production activities) for the Lake Tahoe Basin (to be 

developed in conjunction with the Tahoe Regional 

Planning Agency), the Carson Range in Douglas and 

Washoe Counties and Carson City in the State, and 

the Spring Mountains in the State, that are— ‘‘(I) subject to approval by the Secretary; and 

‘‘(II) not more than 10 years in duration;’’; and 

(B) by inserting after subparagraph (C) the following: 

‘‘(D) TRANSFER REQUIREMENT.—Subject to such terms 

and conditions as the Secretary may prescribe, and notwithstanding any other provision of law— ‘‘(i) for amounts that have been authorized for expenditure under subparagraph (A)(iv) but not transferred as of the date of enactment of this subparagraph, the Secretary shall, not later than 60 days after 

a request for funds from the applicable unit of local 

government or regional governmental entity, transfer 

to the applicable unit of local government or regional 

governmental entity the amount authorized for the expenditure; and 

‘‘(ii) for expenditures authorized under subparagraph (A)(iv) that are approved by the Secretary, the 

Secretary shall, not later than 60 days after a request 

for funds from the applicable unit of local government 

or regional governmental entity, transfer to the applicable unit of local government or regional governmental entity the amount approved for expenditure.’’; 

and 

(2) by adding at the end the following: 

‘‘(4) LIMITATION FOR WASHOE COUNTY.—Until December 31, 

2011, Washoe County shall be eligible to nominate for expenditure amounts to acquire land (not to exceed 250 acres) and develop 1 regional park and natural area.’’. 

Subtitle I—Amendments to the Lincoln 

County Conservation, Recreation, and 

Development Act of 2004 

SEC. 391. DISPOSITION OF PROCEEDS. 

Section 103(b)(2) of the Lincoln County Conservation, Recreation, 

and Development Act of 2004 (Public Law 108–424; 118 Stat. 2405) 

is amended by inserting ‘‘education, planning,’’ after ‘‘social services,’’. 

Subtitle J—All American Canal Projects 

SEC. 395. ALL AMERICAN CANAL LINING PROJECT. 

(a) DUTIES OF THE SECRETARY.—Notwithstanding any other provision of law, upon the date of enactment of this Act, the Secretary 


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shall, without delay, carry out the All American Canal Lining 

Project identified—

(1) as the preferred alternative in the record of decision for 

that project, dated July 29, 1994; and 

(2) in the allocation agreement allocating water from the All 

American Canal Lining Project, entered into as of October 10, 

2003. 

(b) DUTIES OF COMMISSIONER OF RECLAMATION.—

(1) IN GENERAL.—Subject to paragraph (2), if a State conducts a review or study of the implications of the All American 

Canal Lining Project as carried out under subsection (a), upon 

request from the Governor of the State, the Commissioner of 

Reclamation shall cooperate with the State, to the extent practicable, in carrying out the review or study. 

(2) RESTRICTION OF DELAY.—A review or study conducted by 

a State under paragraph (1) shall not delay the carrying out 

by the Secretary of the All American Canal Lining Project. 

SEC. 396. REGULATED STORAGE WATER FACILITY. 

(a) CONSTRUCTION, OPERATION, AND MAINTENANCE OF FACILITY.—Notwithstanding any other provision of law, upon the date of 

enactment of this Act, the Secretary shall, without delay, pursuant 

to the Act of January 1, 1927 (44 Stat. 1010, chapter 47) (commonly known as the ‘‘River and Harbor Act of 1927’’), as amended, 

design and provide for the construction, operation, and maintenance of a regulated water storage facility (including all incidental 

works that are reasonably necessary to operate the storage facility) 

to provide additional storage capacity to reduce nonstorable flows 

on the Colorado River below Parker Dam. 

(b) LOCATION OF FACILITY.—The storage facility (including all incidental works) described in subsection (a) shall be located at or 

near the All American Canal. 

SEC. 397. APPLICATION OF LAW. 

The Treaty between the United States of America and Mexico relating to the utilization of waters of the Colorado and Tijuana Rivers and of the Rio Grande, and supplementary protocol signed November 14, 1944, signed at Washington February 3, 1944 (59 Stat. 

1219) is the exclusive authority for identifying, considering, analyzing, or addressing impacts occurring outside the boundary of the 

United States of works constructed, acquired, or used within the 

territorial limits of the United States. 

TITLE IV—OTHER PROVISIONS 

SEC. 401. TOBACCO PERSONAL USE QUANTITY EXCEPTION TO NOT 

APPLY TO DELIVERY SALES. 

(a) DEFINITIONS.—Section 801 of the Tariff Act of 1930 (19 U.S.C. 

1681) is amended by adding at the end the following: 

‘‘(3) DELIVERY SALE.—The term ‘delivery sale’ means any sale 

of cigarettes or a smokeless tobacco product to a consumer if—

‘‘(A) the consumer submits the order for such sale by 

means of a telephone or other method of voice transmission, the mail, or the Internet or other online service, 

or the seller is otherwise not in the physical presence of 


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the buyer when the request for purchase or order is made; 

or ‘‘(B) the cigarettes or smokeless tobacco product is delivered by use of a common carrier, private delivery service, 

or the mail, or the seller is not in the physical presence of 

the buyer when the buyer obtains personal possession of 

the delivered cigarettes or smokeless tobacco product.’’. (b) INAPPLICABILITY OF EXEMPTIONS FROM REQUIREMENTS FOR

ENTRY OF CERTAIN CIGARETTES AND SMOKELESS TOBACCO PROD- UCTS.—Section 802(b)(1) of the Tariff Act of 1930 (19 U.S.C. 

1681a(b)(1)) is amended by adding at the end the following new 

sentence: ‘‘The preceding sentence shall not apply to any cigarettes 

or smokeless tobacco products sold in connection with a delivery 

sale.’’. (c) STATE ACCESS TO CUSTOMS CERTIFICATIONS.—Section 802 of 

the Tariff Act of 1930 (19 U.S.C. 1681a) is amended by adding at 

the end the following new subsection: 

‘‘(d) STATE ACCESS TO CUSTOMS CERTIFICATIONS.—A State, 

through its Attorney General, shall be entitled to obtain copies of 

any certification required under subsection (c) directly— ‘‘(1) upon request to the agency of the United States responsible for collecting such certification; or ‘‘(2) upon request to the importer, manufacturer, or authorized official of such importer or manufacturer.’’. (d) ENFORCEMENT PROVISIONS.—Section 803(b) of the Tariff Act 

of 1930 (19 U.S.C. 1681b(b)) is amended— (1) in the first sentence, by inserting before the period at the 

end the following: ‘‘, or to any State in which such tobacco 

product, cigarette papers, or tube is found’’; and 

(2) in the second sentence, by inserting ‘‘, or to any State,’’ after ‘‘the United States’’. (e) INCLUSION OF SMOKELESS TOBACCO.—

(1) Sections 802 and 803(a) of the Tariff Act of 1930 (19 

U.S.C. 1681a and 1681b(a)) (other than the last sentence of 

section 802(b)(1), as added by subsection (b) of this section) are 

further amended by inserting ‘‘or smokeless tobacco products’’ after ‘‘cigarettes’’ each place it appears. 

(2) Section 802 of such Act is further amended— (A) in subsection (a)— (i) in paragraph (1), by inserting ‘‘or section 4 of the 

Comprehensive Smokeless Tobacco Health Education 

Act of 1986 (15 U.S.C. 4403), as the case may be’’ after ‘‘section 7 of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1335a)’’; 

(ii) in paragraph (2), by inserting ‘‘or section 3 of the 

Comprehensive Smokeless Tobacco Health Education 

Act of 1986 (15 U.S.C. 4402), as the case may be,’’ after ‘‘section 4 of the Federal Cigarette Labeling and 

Advertising Act (15 U.S.C. 1333)’’; and 

(iii) in paragraph (3), by inserting ‘‘or section 3(d) of 

the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402(d)), as the case may 

be’’ after ‘‘section 4(c) of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1333(c))’’; 

(B) in subsection (b)—


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(i) in the heading of paragraph (1), by inserting ‘‘OR

SMOKELESS TOBACCO PRODUCTS’’ after ‘‘CIGARETTES’’; 

and 

(ii) in the heading of paragraphs (2) and (3), by inserting ‘‘OR SMOKELESS TOBACCO PRODUCTS’’ after ‘‘CIGARETTES’’; and 

(C) in subsection (c)— (i) in the heading, by inserting ‘‘OR SMOKELESS TO- BACCO PRODUCT’’ after ‘‘CIGARETTE’’; 

(ii) in paragraph (1), by inserting ‘‘or section 4 of the 

Comprehensive Smokeless Tobacco Health Education 

Act of 1986 (15 U.S.C. 4403), as the case may be’’ after ‘‘section 7 of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1335a)’’; 

(iii) in paragraph (2)(A), by inserting ‘‘or section 3 of 

the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402), as the case may 

be,’’ after ‘‘section 4 of the Federal Cigarette Labeling 

and Advertising Act (15 U.S.C. 1333)’’; and 

(iv) in paragraph (2)(B), by inserting ‘‘or section 3(d) 

of the Comprehensive Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402(d)), as the case may 

be’’ after ‘‘section 4(c) of the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1333(c))’’. (3) Section 803(b) of such Act, as amended by subsection 

(d)(1) of this section, is further amended by inserting ‘‘, or any 

smokeless tobacco product,’’ after ‘‘or tube’’ the first place it appears. 

(4)(A) The heading of title VIII of such Act is amended by inserting ‘‘AND SMOKELESS TOBACCO PRODUCTS’’ after ‘‘CIGARETTES’’. (B) The heading of section 802 of such Act is amended by inserting ‘‘and smokeless tobacco products’’ after ‘‘cigarettes’’. (f) APPLICATION OF CIVIL PENALTIES TO RELANDINGS OF TOBACCO

PRODUCTS SOLD IN A DELIVERY SALE.— (1) IN GENERAL.—Section 5761 of the Internal Revenue Code 

of 1986 (relating to civil penalties) is amended by redesignating subsections (d) and (e) as subsections (e) and (f), respectively, and inserting after subsection (c) the following new subsection: ‘‘(d) PERSONAL USE QUANTITIES.—

‘‘(1) IN GENERAL.—No quantity of tobacco products other 

than the quantity referred to in paragraph (2) may be relanded 

or received as a personal use quantity. 

‘‘(2) EXCEPTION FOR PERSONAL USE QUANTITY.—Subsection (c) 

and section 5754 shall not apply to any person who relands or 

receives tobacco products in the quantity allowed entry free of 

tax and duty under chapter 98 of the Harmonized Tariff Schedule of the United States, and such person may voluntarily relinquish to the Secretary at the time of entry any excess of 

such quantity without incurring the penalty under subsection 

(c). ‘‘(3) SPECIAL RULE FOR DELIVERY SALES.—

‘‘(A) IN GENERAL.—Paragraph (2) shall not apply to any 

tobacco product sold in connection with a delivery sale. 


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‘‘(B) DELIVERY SALE.—For purposes of subparagraph (A), 

the term ‘delivery sale’ means any sale of a tobacco product to a consumer if— ‘‘(i) the consumer submits the order for such sale by 

means of a telephone or other method of voice transmission, the mail, or the Internet or other online service, or the seller is otherwise not in the physical presence of the buyer when the request for purchase or 

order is made, or ‘‘(ii) the tobacco product is delivered by use of a common carrier, private delivery service, or the mail, or 

the seller is not in the physical presence of the buyer 

when the buyer obtains personal possession of the tobacco product.’’. (2) CONFORMING AMENDMENTS.—

(A) Subsection (c) of section 5761 of such Code is amended by striking the last two sentences. 

(B) Paragraph (1) of section 5754(c) of such Code is 

amended by striking ‘‘section 5761(c)’’ and inserting ‘‘section 5761(d)’’. 

(g) EFFECTIVE DATE.—The amendments made by this section 

shall apply with respect to goods entered, or withdrawn from warehouse for consumption, on or after the 15th day after the date of 

the enactment of this Act. 

SEC. 402. ETHANOL TARIFF SCHEDULE. 

Headings 9901.00.50 and 9901.00.52 of the Harmonized Tariff 

Schedule of the United States are each amended in the effective period column by striking ‘‘10/1/2007’’ each place it appears and inserting ‘‘1/1/2009’’. 

SEC. 403. WITHDRAWAL OF CERTAIN FEDERAL LAND AND INTERESTS 

IN CERTAIN FEDERAL LAND FROM LOCATION, ENTRY, 

AND PATENT UNDER THE MINING LAWS AND DISPOSITION UNDER THE MINERAL AND GEOTHERMAL LEASING 

LAWS. 

(a) DEFINITIONS.—In this section: 

(1) BUREAU OF LAND MANAGEMENT LAND.—The term ‘‘Bureau 

of Land Management land’’ means the Bureau of Land Management land and any federally-owned minerals located south 

of the Blackfeet Indian Reservation and east of the Lewis and 

Clark National Forest to the eastern edge of R. 8 W., beginning 

in T. 29 N. down to and including T. 19 N. and all of T. 18 

N., R. 7 W. 

(2) ELIGIBLE FEDERAL LAND.—The term ‘‘eligible Federal 

land’’ means the Bureau of Land Management land and the 

Forest Service land, as generally depicted on the map. 

(3) FOREST SERVICE LAND.—The term ‘‘Forest Service land’’

means—

(A) the Forest Service land and any federally-owned 

minerals located in the Rocky Mountain Division of the 

Lewis and Clark National Forest, including the approximately 356,111 acres of land made unavailable for leasing 

by the August 28, 1997, Record of Decision for the Lewis 

and Clark National Forest Oil and Gas Leasing Environmental Impact Statement and that is located from T. 31 N. 

to T. 16 N. and R. 13 W. to R. 7 W.; and 


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(B) the Forest Service land and any federally-owned 

minerals located within the Badger Two Medicine area of 

the Flathead National Forest, including—

(i) the land located in T. 29 N. from the western 

edge of R. 16 W. to the eastern edge of R. 13 W.; and 

(ii) the land located in T. 28 N., Rs. 13 and 14 W. 

(4) MAP.—The term ‘‘map’’ means the map entitled ‘‘Rocky 

Mountain Front Mineral Withdrawal Area’’ and dated December 31, 2006. 

(b) WITHDRAWAL.—

(1) IN GENERAL.—Subject to valid existing rights, the eligible 

Federal land (including any interest in the eligible Federal 

land) is withdrawn from—

(A) all forms of location, entry, and patent under the 

mining laws; and 

(B) disposition under all laws relating to mineral and 

geothermal leasing. 

(2) AVAILABILITY OF MAP.—The map shall be on file and 

available for inspection in the Office of the Chief of the Forest 

Service. 

(c) TAX INCENTIVE FOR SALE OF EXISTING MINERAL AND GEOTHERMAL RIGHTS TO TAX-EXEMPT ENTITIES.—

(1) EXCLUSION.—For purposes of the Internal Revenue Code 

of 1986, gross income shall not include 25 percent of the qualifying gain from a conservation sale of a qualifying mineral or 

geothermal interest. 

(2) QUALIFYING GAIN.—For purposes of this subsection, the 

term ‘‘qualifying gain’’ means any gain which would be recognized as long-term capital gain under such Code. 

(3) CONSERVATION SALE.—For purposes of this subsection, 

the term ‘‘conservation sale’’ means a sale which meets the following requirements: 

(A) TRANSFEREE IS AN ELIGIBLE ENTITY.—The transferee 

of the qualifying mineral or geothermal interest is an eligible entity. 

(B) QUALIFYING LETTER OF INTENT REQUIRED.—At the 

time of the sale, such transferee provides the taxpayer 

with a qualifying letter of intent. 

(C) NONAPPLICATION TO CERTAIN SALES.—The sale is not 

made pursuant to an order of condemnation or eminent domain. 

(4) QUALIFYING MINERAL OR GEOTHERMAL INTEREST.—For 

purposes of this subsection—

(A) IN GENERAL.—The term ‘‘qualifying mineral or geothermal interest’’ means an interest in any mineral or geothermal deposit located on eligible Federal land which constitutes a taxpayer’s entire interest in such deposit. 

(B) ENTIRE INTEREST.—For purposes of subparagraph 

(A)—

(i) an interest in any mineral or geothermal deposit 

is not a taxpayer’s entire interest if such interest in 

such mineral or geothermal deposit was divided in 

order to avoid the requirements of such subparagraph 

or section 170(f)(3)(A) of such Code, and 


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(ii) a taxpayer’s entire interest in such deposit does 

not fail to satisfy such subparagraph solely because 

the taxpayer has retained an interest in other deposits, even if the other deposits are contiguous with such 

certain deposit and were acquired by the taxpayer 

along with such certain deposit in a single conveyance. 

(5) OTHER DEFINITIONS.—For purposes of this subsection— (A) ELIGIBLE ENTITY.—The term ‘‘eligible entity’’ means—

(i) a governmental unit referred to in section 

170(c)(1) of such Code, or an agency or department 

thereof operated primarily for 1 or more of the conservation purposes specified in clause (i), (ii), or (iii) of 

section 170(h)(4)(A) of such Code, or 

(ii) an entity which is— (I) described in section 170(b)(1)(A)(vi) or section 

170(h)(3)(B) of such Code, and 

(II) organized and at all times operated primarily for 1 or more of the conservation purposes 

specified in clause (i), (ii), or (iii) of section 

170(h)(4)(A) of such Code. 

(B) QUALIFYING LETTER OF INTENT.—The term ‘‘qualifying letter of intent’’ means a written letter of intent 

which includes the following statement: ‘‘The transferee’s 

intent is that this acquisition will serve 1 or more of the 

conservation purposes specified in clause (i), (ii), or (iii) of 

section 170(h)(4)(A) of the Internal Revenue Code of 1986, 

that the transferee’s use of the deposits so acquired will be 

consistent with section 170(h)(5) of such Code, and that 

the use of the deposits will continue to be consistent with 

such section, even if ownership or possession of such deposits is subsequently transferred to another person.’’. (6) TAX ON SUBSEQUENT TRANSFERS.— (A) IN GENERAL.—A tax is hereby imposed on any subsequent transfer by an eligible entity of ownership or possession, whether by sale, exchange, or lease, of an interest acquired directly or indirectly in—

(i) a conservation sale described in paragraph (1), or 

(ii) a transfer described in clause (i), (ii), or (iii) of 

subparagraph (D). 

(B) AMOUNT OF TAX.—The amount of tax imposed by 

subparagraph (A) on any transfer shall be equal to the 

sum of—

(i) 20 percent of the fair market value (determined 

at the time of the transfer) of the interest the ownership or possession of which is transferred, plus 

(ii) the product of—

(I) the highest rate of tax specified in section 11 

of such Code, times 

(II) any gain or income realized by the transferor as a result of the transfer. 

(C) LIABILITY.—The tax imposed by subparagraph (A) 

shall be paid by the transferor. 

(D) RELIEF FROM LIABILITY.—The person (otherwise liable for any tax imposed by subparagraph (A)) shall be reVerDate Aug 31 2005 06:17 Dec 08, 2006 Jkt 059008 PO 00000 Frm 00126 Fmt 6659 Sfmt 6602 E:\HR\OC\HR722.XXX HR722

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lieved of liability for the tax imposed by subparagraph (A) 

with respect to any transfer if—

(i) the transferee is an eligible entity which provides 

such person, at the time of transfer, a qualifying letter 

of intent, 

(ii) in any case where the transferee is not an eligible entity, it is established to the satisfaction of the 

Secretary of the Treasury, that the transfer of ownership or possession, as the case may be, will be consistent with section 170(h)(5) of such Code, and the 

transferee provides such person, at the time of transfer, a qualifying letter of intent, or 

(iii) tax has previously been paid under this paragraph as a result of a prior transfer of ownership or 

possession of the same interest. 

(E) ADMINISTRATIVE PROVISIONS.—For purposes of subtitle F of such Code, the taxes imposed by this paragraph 

shall be treated as excise taxes with respect to which the 

deficiency procedures of such subtitle apply. 

(7) REPORTING.—The Secretary of the Treasury may require 

such reporting as may be necessary or appropriate to further 

the purpose under this subsection that any conservation use be 

in perpetuity. 

(d) EFFECTIVE DATES.—

(1) MORATORIUM.—Subsection (b) shall take effect on the 

date of the enactment of this Act. 

(2) TAX INCENTIVE.—Subsection (c) shall apply to sales occurring on or after the date of the enactment of this Act. 

SEC. 404. CONTINUING ELIGIBILITY FOR CERTAIN STUDENTS UNDER 

DISTRICT OF COLUMBIA SCHOOL CHOICE PROGRAM. 

(a) IN GENERAL.—Section 307(a)(4) of the DC School Choice Incentive Act of 2003 (sec. 38—1851.06(a)(4), D.C. Official Code) is 

amended by striking ‘‘200 percent’’ and inserting the following: 

‘‘200 percent (or, in the case of an eligible student whose first year 

of participation in the program is an academic year ending in June 

2005 or June 2006 and whose second or succeeding year is an academic year ending on or before June 2009, 300 percent)’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall take effect as if included in the enactment of the DC School 

Choice Incentive Act of 2003. 

SEC. 405. STUDY ON ESTABLISHING UNIFORM NATIONAL DATABASE 

ON ELDER ABUSE. 

(a) STUDY.—

(1) IN GENERAL.—The Secretary of Health and Human Services, in consultation with the Attorney General, shall conduct 

a study on establishing a uniform national database on elder 

abuse. 

(2) ISSUES STUDIED.—The study conducted under paragraph 

(1) may consider the following: 

(A) Current methodologies used for collecting data on 

elder abuse, including a determination of the shortcomings, strengths, and commonalities of existing data collection efforts and reporting forms, and how a uniform national database would capitalize on such efforts. 


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(B) The process by which uniform national standards for 

reporting on elder abuse could be implemented, including 

the identification and involvement of necessary stakeholders, financial resources needed, timelines, and the 

treatment of existing standards with respect to elder 

abuse. 

(C) Potential conflicts in Federal, State, and local laws, 

and enforcement and jurisdictional issues that could occur 

as a result of the creation of a uniform national database 

on elder abuse. 

(D) The scope, purpose, and variability of existing definitions used by Federal, State, and local agencies with respect to elder abuse. 

(3) DURATION.—The study conducted under paragraph (1) 

shall be conducted for a period not to exceed 2 years. 

(b) REPORT.—Not later than 180 days after the completion of the 

study conducted under subsection (a)(1), the Secretary of Health 

and Human Services shall submit a report to the Committee on Finance of the Senate and the Committee on Ways and Means of the 

House of Representatives containing the findings of the study, together with recommendations on how to implement a uniform national database on elder abuse. 

(c) AUTHORIZATION.—There are authorized to be appropriated to 

carry out this section, $500,000 for each of fiscal years 2007 and 

2008. 

SEC. 406. TEMPORARY DUTY REDUCTIONS FOR CERTAIN COTTON 

SHIRTING FABRIC. 

(a) CERTAIN COTTON SHIRTING FABRICS.—

(1) IN GENERAL.—Subchapter II of chapter 99 of the Harmonized Tariff Schedule of the United States is amended by inserting in numerical sequence the following new headings: 

‘‘ 9902.52.08 Woven fabrics of cotton, 

of a type described in 

subheading 5208.21, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

2009 


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9902.52.09 Woven fabrics of cotton, 

of a type described in 

subheading 5208.22, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.10 Woven fabrics of cotton, 2009 

of a type described in 

subheading 5208.29, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.11 Woven fabrics of cotton, 2009 

of a type described in 

subheading 5208.31, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

2009 


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9902.52.12 Woven fabrics of cotton, 

of a type described in 

subheading 5208.32, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.13 Woven fabrics of cotton, 2009 

of a type described in 

subheading 5208.39, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.14 Woven fabrics of cotton, 2009 

of a type described in 

subheading 5208.41, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

2009 


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131 

9902.52.15 Woven fabrics of cotton, 

of a type described in 

subheading 5208.42, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.16 Woven fabrics of cotton, 2009 

of a type described in 

subheading 5208.49, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.17 Woven fabrics of cotton, 2009 

of a type described in 

subheading 5208.51, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

2009 


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9902.52.18 Woven fabrics of cotton, 

of a type described in 

subheading 5208.52, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.19 Woven fabrics of cotton, 2009 

of a type described in 

subheading 5208.59, of 

average yarn number exceeding 135 metric, other 

than fabrics provided for 

in headings 9902.52.20 

through 9902.52.31, certified by the importer to 

be suitable for use in 

men’s and boys’ shirts, 

the foregoing imported by 

or for the benefit of a 

manufacturer of men’s 

and boys’ shirts under 

the terms of U.S. Notes 

18 and 19 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.20 Woven fabrics of cotton of 2009 

a type described in subheading 5208.21, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

2009 


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9902.52.21 Woven fabrics of cotton of 

a type described in subheading 5208.22, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.22 Woven fabrics of cotton of 2009 

a type described in subheading 5208.29, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.23 Woven fabrics of cotton of 2009 

a type described in subheading 5208.31, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

2009 


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134 

9902.52.24 Woven fabrics of cotton of 

a type described in subheading 5208.32, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.25 Woven fabrics of cotton of 2009 

a type described in subheading 5208.39, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.26 Woven fabrics of cotton of 2009 

a type described in subheading 5208.41, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

2009 


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135 

9902.52.27 Woven fabrics of cotton of 

a type described in subheading 5208.42, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.28 Woven fabrics of cotton of 2009 

a type described in subheading 5208.49, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.29 Woven fabrics of cotton of 2009 

a type described in subheading 5208.51, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

2009 


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136 

9902.52.30 Woven fabrics of cotton of 

a type described in subheading 5208.52, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

9902.52.31 Woven fabrics of cotton of 2009 

a type described in subheading 5208.59, of average yarn number exceeding 135 metric, certified 

by the importer to be 

wholly of pima cotton 

grown in the United 

States and to be suitable 

for use in men’s and 

boys’ shirts, the foregoing 

imported by or for the 

benefit of a manufacturer 

of men’s and boys’ shirts 

under the terms of U.S. 

Note 18 of this subchapter. ............................ Free No 

change 

No 

change 

On or before 12/31/ 

2009 

’’. 

(2) DEFINITIONS AND LIMITATION ON QUANTITY OF IMPORTS.—

The U.S. Notes to subchapter II of chapter 99 of the Harmonized Tariff Schedule of the United States are amended by 

adding at the end the following: 

‘‘18. For purposes of headings 9902.52.08 through 9902.52.31, the 

term ‘manufacturer’ means a person or entity that cuts and sews 

men’s and boys’ shirts in the United States. 

‘‘19. The aggregate quantity of fabrics entered under headings 

9902.52.08 through 9902.52.19 from January 1 to December 31 of 

each year, inclusive, by or on behalf of each manufacturer of men’s 

and boys’ shirts shall be limited to 85 percent of the total square 

meter equivalents of all imported woven fabrics of cotton containing 85 percent or more by weight of cotton used by such manufacturer in cutting and sewing men’s and boys’ cotton shirts in the 

United States and purchased by such manufacturer during calendar year 2000.’’. 

(b) DETERMINATION OF TARIFF-RATE QUOTAS.—

(1) AUTHORITY TO ISSUE LICENSES AND LICENSE USE.—In 

order to implement the limitation on the quantity of cotton 

woven fabrics that may be entered under headings 9902.52.08 


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137 

through 9902.52.19 of the Harmonized Tariff Schedule of the 

United States, as required by U.S. Note 19 to subchapter II of 

chapter 99 of such Schedule, the Secretary of Commerce shall 

issue licenses to eligible manufacturers under such headings 

9902.52.08 through 9902.52.19, specifying the restrictions 

under each such license on the quantity of cotton woven fabrics 

that may be entered each year by or on behalf of the manufacturer. A licensee may assign the authority (in whole or in part) 

under the license to import fabric under headings 9902.52.08 

through 9902.52.19 of such Schedule. 

(2) LICENSES UNDER U.S. NOTE 19.—For purposes of U.S. Note 

19 to subchapter II of chapter 99 of the Harmonized Tariff 

Schedule of the United States, the Secretary of Commerce 

shall issue a license to a manufacturer within 60 days after the 

manufacturer files with the Secretary of Commerce an application containing a notarized affidavit from an officer of the manufacturer that the manufacturer is eligible to receive a license 

and stating the quantity of imported woven fabrics of cotton 

containing 85 percent or more by weight of cotton purchased 

during calendar year 2000 for use in the cutting and sewing 

men’s and boys’ shirts in the United States. 

(3) AFFIDAVITS.—For purposes of an affidavit described in 

this subsection, the date of purchase shall be— (A) the invoice date if the manufacturer is not the importer of record; and 

(B) the date of entry if the manufacturer is the importer 

of record. 

SEC. 407. COTTON TRUST FUND. 

(a) ESTABLISHMENT OF TRUST FUND.—There is established in the 

Treasury of the United States a trust fund to be known as the 

‘‘Pima Cotton Trust Fund’’ (in this section referred to as the ‘‘Trust 

Fund’’), consisting of such amounts as may be transferred to the 

Trust Fund under subsection (b). 

(b) TRANSFER OF AMOUNTS.— (1) IN GENERAL.—Beginning October 1, 2006, the Secretary of 

the Treasury shall transfer to the Trust Fund, from the general fund of the Treasury, amounts determined by the Secretary of the Treasury to be equivalent to the amounts received 

in the general fund that are attributable to duties received 

since January 1, 1994, on articles under subheadings 

5208.21.60, 5208.22.80, 5208.29.80, 5208.31.80, 5208.32.50, 

5208.39.80, 5208.41.80, 5208.42.50, 5208.49.80, 5208.51.80, 

5208.52.50, and 5208.59.80 of the Harmonized Tariff Schedule 

of the United States, subject to the limitation in paragraph (2). 

(2) LIMITATION.—The Secretary may not transfer more than 

$16,000,000 to the Trust Fund in any fiscal year, and may not 

transfer any amount beginning on or after October 1, 2008. 

(c) DISTRIBUTION OF FUNDS.—From amounts in the Trust Fund, 

the Commissioner of the Bureau of Customs and Border Protection 

shall make the following payments annually beginning in fiscal 

year 2007: 

(1) 25 percent of the amounts in the Trust Fund shall be 

paid annually to a nationally recognized association established for the promotion of pima cotton grown in the United 

States for the use in textile and apparel goods. 


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138 

(2) 25 percent of the amounts in the Trust Fund shall be 

paid annually to yarn spinners of pima cotton grown in the 

United States, and shall be allocated to each spinner in an 

amount that bears the same ratio as—

(A) the spinner’s production of ring spun cotton yarns, 

measuring less than 83.33 decitex (exceeding 120 metric 

number) from pima cotton grown in the United States in 

single and plied form during the period January 1, 1998 

through December 31, 2003 (as evidenced by an affidavit 

provided by the spinner) bears to—

(B) the production of the yarns described in subparagraph (A) during the period January 1, 1998 through December 31, 2003 for all spinners who qualify under this 

paragraph. 

(3) 50 percent of the amounts in the Trust Fund shall be 

paid annually to those manufacturers who cut and sew cotton 

shirts in the United States who certify that they used imported 

cotton fabric during the period January 1, 1998, through July 

1, 2003, and shall be allocated to each such manufacturer in 

an amount that bears the same ratio as—

(A) the dollar value (excluding duty, shipping, and related costs) of imported woven cotton shirting fabric of 80s 

or higher count and 2-ply in warp purchased by the manufacturer during calendar year 2002 (as evidenced by an affidavit from the manufacturer that meets the requirements 

of subsection (d)) used in the manufacturing of men’s and 

boys’ cotton shirts, bears to—

(B) the dollar value (excluding duty, shipping, and related costs) of the fabric described in subparagraph (A) 

purchased during calendar year 2002 by all manufacturers 

who qualify under this paragraph. 

(d) AFFIDAVIT OF SHIRTING MANUFACTURERS.—The affidavit required by subsection (c)(3)(A) is a notarized affidavit provided by 

an officer of the manufacturer of men’s and boys’ shirts concerned 

that affirms—

(1) that the manufacturer used imported cotton fabric during 

the period January 1, 1998, through July 1, 2003, to cut and 

sew men’s and boys’ woven cotton shirts in the United States; 

(2) the dollar value of imported woven cotton shirting fabric 

of 80s or higher count and 2-ply in warp purchased during calendar year 2002; 

(3) that the manufacturer maintains invoices along with 

other supporting documentation (such as price lists and other 

technical descriptions of the fabric qualities) showing the dollar 

value of such fabric purchased, the date of purchase, and evidencing the fabric as woven cotton fabric of 80s or higher count 

and 2-ply in warp; and 

(4) that the fabric was suitable for use in the manufacturing 

of men’s and boys’ cotton shirts. 

(e) DATE OF PURCHASE.—For purposes of the affidavit under subsection (d), the date of purchase shall be the invoice date, and the 

dollar value shall be determined excluding duty, shipping, and related costs. 


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139 

(f) AFFIDAVIT OF YARN SPINNERS.—The affidavit required by subsection (c)(2)(A) is a notarized affidavit provided by an officer of the 

producer of ring spun yarns that affirms— (1) that the producer used pima cotton grown in the United 

States during the period January 1, 2002, through December 

31, 2002, to produce ring spun cotton yarns, measuring less 

than 83.33 decitex (exceeding 120 metric number), in single 

and plied form during 2002; 

(2) the quantity, measured in pounds, of ring spun cotton 

yarns, measuring less than 83.33 decitex (exceeding 120 metric 

number), in single and plied form during calendar year 2002; 

and 

(3) that the producer maintains supporting documentation 

showing the quantity of such yarns produced, and evidencing 

the yarns as ring spun cotton yarns, measuring less than 83.33 

decitex (exceeding 120 metric number), in single and plied form 

during calendar year 2002. 

(g) NO APPEAL.—Any amount paid by the Commissioner of the 

Bureau of Customs and Border Protection under this section shall 

be final and not subject to appeal or protest. 

SEC. 408. TAX COURT REVIEW OF REQUESTS FOR EQUITABLE RELIEF 

FROM JOINT AND SEVERAL LIABILITY. 

(a) IN GENERAL.—Paragraph (1) of section 6015(e) of the Internal 

Revenue Code of 1986 (relating to petition for tax court review) is 

amended by inserting ‘‘, or in the case of an individual who requests equitable relief under subsection (f)’’ after ‘‘who elects to 

have subsection (b) or (c) apply’’. (b) CONFORMING AMENDMENTS.— (1) Section 6015(e)(1)(A)(i)(II) of such Code is amended by inserting ‘‘or request is made’’ after ‘‘election is filed’’. (2) Section 6015(e)(1)(B)(i) of such Code is amended— (A) by inserting ‘‘or requesting equitable relief under 

subsection (f)’’ after ‘‘making an election under subsection 

(b) or (c)’’, and 

(B) by inserting ‘‘or request’’ after ‘‘to which such election’’. 

(3) Section 6015(e)(1)(B)(ii) of such Code is amended by inserting ‘‘or to which the request under subsection (f) relates’’

after ‘‘to which the election under subsection (b) or (c) relates’’. 

(4) Section 6015(e)(4) of such Code is amended by inserting 

‘‘or the request for equitable relief under subsection (f)’’ after 

‘‘the election under subsection (b) or (c)’’. 

(5) Section 6015(e)(5) of such Code is amended by inserting 

‘‘or who requests equitable relief under subsection (f)’’ after 

‘‘who elects the application of subsection (b) or (c)’’. 

(6) Section 6015(g)(2) of such Code is amended by inserting 

‘‘or of any request for equitable relief under subsection (f)’’

after ‘‘any election under subsection (b) or (c)’’. 

(7) Section 6015(h)(2) of such Code is amended by inserting 

‘‘or a request for equitable relief made under subsection (f)’’

after ‘‘with respect to an election made under subsection (b) or 

(c)’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply with respect to liability for taxes arising or remaining 

unpaid on or after the date of the enactment of this Act. 


ccoleman on PROD1PC71 with HEARING
140 

Amend the title to read as follows: ‘‘An Act to amend the Internal 

Revenue Code of 1986 to extend expiring provisions, and for other 

purposes.’’

Æ 


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