PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3765 

Public Law 110–343 

110th Congress 

An Act 

To provide authority for the Federal Government to purchase and insure certain 

types of troubled assets for the purposes of providing stability to and preventing 

disruption in the economy and financial system and protecting taxpayers, to 

amend the Internal Revenue Code of 1986 to provide incentives for energy production and conservation, to extend certain expiring provisions, to provide individual 

income tax relief, and for other purposes. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

DIVISION A—EMERGENCY ECONOMIC 

STABILIZATION 

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This division may be cited as the ‘‘Emergency 

Economic Stabilization Act of 2008’’. 

(b) TABLE OF CONTENTS.—The table of contents for this division 

is as follows: 

Sec. 1. Short title and table of contents. 

Sec. 2. Purposes. 

Sec. 3. Definitions. 

TITLE I—TROUBLED ASSETS RELIEF PROGRAM 

Sec. 101. Purchases of troubled assets. 

Sec. 102. Insurance of troubled assets. 

Sec. 103. Considerations. 

Sec. 104. Financial Stability Oversight Board. 

Sec. 105. Reports. 

Sec. 106. Rights; management; sale of troubled assets; revenues and sale proceeds. 

Sec. 107. Contracting procedures. 

Sec. 108. Conflicts of interest. 

Sec. 109. Foreclosure mitigation efforts. 

Sec. 110. Assistance to homeowners. 

Sec. 111. Executive compensation and corporate governance. 

Sec. 112. Coordination with foreign authorities and central banks. 

Sec. 113. Minimization of long-term costs and maximization of benefits for taxpayers. 

Sec. 114. Market transparency. 

Sec. 115. Graduated authorization to purchase. 

Sec. 116. Oversight and audits. 

Sec. 117. Study and report on margin authority. 

Sec. 118. Funding. 

Sec. 119. Judicial review and related matters. 

Sec. 120. Termination of authority. 

Sec. 121. Special Inspector General for the Troubled Asset Relief Program. 

Sec. 122. Increase in statutory limit on the public debt. 

Sec. 123. Credit reform. 

Sec. 124. HOPE for Homeowners amendments. 

Sec. 125. Congressional Oversight Panel. 

12 USC 5201 

note. 

Emergency 

Economic 

Stabilization Act 

of 2008. 

Oct. 3, 2008 

[H.R. 1424] 


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Sec. 126. FDIC authority. 

Sec. 127. Cooperation with the FBI. 

Sec. 128. Acceleration of effective date. 

Sec. 129. Disclosures on exercise of loan authority. 

Sec. 130. Technical corrections. 

Sec. 131. Exchange Stabilization Fund reimbursement. 

Sec. 132. Authority to suspend mark-to-market accounting. 

Sec. 133. Study on mark-to-market accounting. 

Sec. 134. Recoupment. 

Sec. 135. Preservation of authority. 

Sec. 136. Temporary increase in deposit and share insurance coverage. 

TITLE II—BUDGET-RELATED PROVISIONS 

Sec. 201. Information for congressional support agencies. 

Sec. 202. Reports by the Office of Management and Budget and the Congressional 

Budget Office. Sec. 203. Analysis in President’s Budget. 

Sec. 204. Emergency treatment. 

TITLE III—TAX PROVISIONS 

Sec. 301. Gain or loss from sale or exchange of certain preferred stock. 

Sec. 302. Special rules for tax treatment of executive compensation of employers 

participating in the troubled assets relief program. 

Sec. 303. Extension of exclusion of income from discharge of qualified principal residence indebtedness. 

SEC. 2. PURPOSES. 

The purposes of this Act are— 

(1) to immediately provide authority and facilities that 

the Secretary of the Treasury can use to restore liquidity and 

stability to the financial system of the United States; and 

(2) to ensure that such authority and such facilities are 

used in a manner that— 

(A) protects home values, college funds, retirement 

accounts, and life savings; 

(B) preserves homeownership and promotes jobs and 

economic growth; 

(C) maximizes overall returns to the taxpayers of the 

United States; and 

(D) provides public accountability for the exercise of 

such authority. 

SEC. 3. DEFINITIONS. 

For purposes of this Act, the following definitions shall apply: 

(1) APPROPRIATE COMMITTEES OF CONGRESS.—The term 

‘‘appropriate committees of Congress’’ means— 

(A) the Committee on Banking, Housing, and Urban 

Affairs, the Committee on Finance, the Committee on the 

Budget, and the Committee on Appropriations of the 

Senate; and 

(B) the Committee on Financial Services, the Committee on Ways and Means, the Committee on the Budget, 

and the Committee on Appropriations of the House of Representatives. 

(2) BOARD.—The term ‘‘Board’’ means the Board of Governors of the Federal Reserve System. 

(3) CONGRESSIONAL SUPPORT AGENCIES.—The term 

‘‘congressional support agencies’’ means the Congressional 

Budget Office and the Joint Committee on Taxation. 

(4) CORPORATION.—The term ‘‘Corporation’’ means the Federal Deposit Insurance Corporation. 

(5) FINANCIAL INSTITUTION.—The term ‘‘financial institution’’ means any institution, including, but not limited to, any 

12 USC 5202. 

12 USC 5201. 


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bank, savings association, credit union, security broker or 

dealer, or insurance company, established and regulated under 

the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana 

Islands, Guam, American Samoa, or the United States Virgin 

Islands, and having significant operations in the United States, 

but excluding any central bank of, or institution owned by, 

a foreign government. 

(6) FUND.—The term ‘‘Fund’’ means the Troubled Assets 

Insurance Financing Fund established under section 102. 

(7) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of the Treasury. 

(8) TARP.—The term ‘‘TARP’’ means the Troubled Asset 

Relief Program established under section 101. 

(9) TROUBLED ASSETS.—The term ‘‘troubled assets’’ means— 

(A) residential or commercial mortgages and any securities, obligations, or other instruments that are based 

on or related to such mortgages, that in each case was 

originated or issued on or before March 14, 2008, the 

purchase of which the Secretary determines promotes 

financial market stability; and 

(B) any other financial instrument that the Secretary, 

after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market 

stability, but only upon transmittal of such determination, 

in writing, to the appropriate committees of Congress. 

TITLE I—TROUBLED ASSETS RELIEF 

PROGRAM 

SEC. 101. PURCHASES OF TROUBLED ASSETS. 

(a) OFFICES; AUTHORITY.— 

(1) AUTHORITY.—The Secretary is authorized to establish 

the Troubled Asset Relief Program (or ‘‘TARP’’) to purchase, 

and to make and fund commitments to purchase, troubled 

assets from any financial institution, on such terms and conditions as are determined by the Secretary, and in accordance 

with this Act and the policies and procedures developed and 

published by the Secretary. 

(2) COMMENCEMENT OF PROGRAM.—Establishment of the 

policies and procedures and other similar administrative 

requirements imposed on the Secretary by this Act are not 

intended to delay the commencement of the TARP. 

(3) ESTABLISHMENT OF TREASURY OFFICE.— 

(A) IN GENERAL.—The Secretary shall implement any 

program under paragraph (1) through an Office of Financial 

Stability, established for such purpose within the Office 

of Domestic Finance of the Department of the Treasury, 

which office shall be headed by an Assistant Secretary 

of the Treasury, appointed by the President, by and with 

the advice and consent of the Senate, except that an interim 

Assistant Secretary may be appointed by the Secretary. 

(B) CLERICAL AMENDMENTS.— 

12 USC 5211. 


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122 STAT. 3768 PUBLIC LAW 110–343—OCT. 3, 2008 

(i) TITLE 5.—Section 5315 of title 5, United States 

Code, is amended in the item relating to Assistant 

Secretaries of the Treasury, by striking ‘‘(9)’’ and 

inserting ‘‘(10)’’. 

(ii) TITLE 31.—Section 301(e) of title 31, United 

States Code, is amended by striking ‘‘9’’ and inserting 

‘‘10’’. 

(b) CONSULTATION.—In exercising the authority under this section, the Secretary shall consult with the Board, the Corporation, 

the Comptroller of the Currency, the Director of the Office of Thrift 

Supervision, the Chairman of the National Credit Union Administration Board, and the Secretary of Housing and Urban Development. 

(c) NECESSARY ACTIONS.—The Secretary is authorized to take 

such actions as the Secretary deems necessary to carry out the 

authorities in this Act, including, without limitation, the following: 

(1) The Secretary shall have direct hiring authority with 

respect to the appointment of employees to administer this 

Act. 

(2) Entering into contracts, including contracts for services 

authorized by section 3109 of title 5, United States Code. 

(3) Designating financial institutions as financial agents 

of the Federal Government, and such institutions shall perform 

all such reasonable duties related to this Act as financial agents 

of the Federal Government as may be required. 

(4) In order to provide the Secretary with the flexibility 

to manage troubled assets in a manner designed to minimize 

cost to the taxpayers, establishing vehicles that are authorized, 

subject to supervision by the Secretary, to purchase, hold, and 

sell troubled assets and issue obligations. 

(5) Issuing such regulations and other guidance as may 

be necessary or appropriate to define terms or carry out the 

authorities or purposes of this Act. 

(d) PROGRAM GUIDELINES.—Before the earlier of the end of 

the 2-business-day period beginning on the date of the first purchase 

of troubled assets pursuant to the authority under this section 

or the end of the 45-day period beginning on the date of enactment 

of this Act, the Secretary shall publish program guidelines, 

including the following: 

(1) Mechanisms for purchasing troubled assets. 

(2) Methods for pricing and valuing troubled assets. 

(3) Procedures for selecting asset managers. 

(4) Criteria for identifying troubled assets for purchase. 

(e) PREVENTING UNJUST ENRICHMENT.—In making purchases 

under the authority of this Act, the Secretary shall take such 

steps as may be necessary to prevent unjust enrichment of financial 

institutions participating in a program established under this section, including by preventing the sale of a troubled asset to the 

Secretary at a higher price than what the seller paid to purchase 

the asset. This subsection does not apply to troubled assets acquired 

in a merger or acquisition, or a purchase of assets from a financial 

institution in conservatorship or receivership, or that has initiated 

bankruptcy proceedings under title 11, United States Code. 

SEC. 102. INSURANCE OF TROUBLED ASSETS. 

(a) AUTHORITY.— 

12 USC 5212. 

Publication. 

Deadline. 

Regulations. 

Financial agents. 

Contracts. 

Administration. 


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(1) IN GENERAL.—If the Secretary establishes the program 

authorized under section 101, then the Secretary shall establish 

a program to guarantee troubled assets originated or issued 

prior to March 14, 2008, including mortgage-backed securities. 

(2) GUARANTEES.—In establishing any program under this 

subsection, the Secretary may develop guarantees of troubled 

assets and the associated premiums for such guarantees. Such 

guarantees and premiums may be determined by category or 

class of the troubled assets to be guaranteed. 

(3) EXTENT OF GUARANTEE.—Upon request of a financial 

institution, the Secretary may guarantee the timely payment 

of principal of, and interest on, troubled assets in amounts 

not to exceed 100 percent of such payments. Such guarantee 

may be on such terms and conditions as are determined by 

the Secretary, provided that such terms and conditions are 

consistent with the purposes of this Act. 

(b) REPORTS.—Not later than 90 days after the date of enactment of this Act, the Secretary shall report to the appropriate 

committees of Congress on the program established under subsection (a). 

(c) PREMIUMS.— 

(1) IN GENERAL.—The Secretary shall collect premiums 

from any financial institution participating in the program 

established under subsection (a). Such premiums shall be in 

an amount that the Secretary determines necessary to meet 

the purposes of this Act and to provide sufficient reserves 

pursuant to paragraph (3). 

(2) AUTHORITY TO BASE PREMIUMS ON PRODUCT RISK.— 

In establishing any premium under paragraph (1), the Secretary may provide for variations in such rates according to 

the credit risk associated with the particular troubled asset 

that is being guaranteed. The Secretary shall publish the methodology for setting the premium for a class of troubled assets 

together with an explanation of the appropriateness of the 

class of assets for participation in the program established 

under this section. The methodology shall ensure that the premium is consistent with paragraph (3). 

(3) MINIMUM LEVEL.—The premiums referred to in paragraph (1) shall be set by the Secretary at a level necessary 

to create reserves sufficient to meet anticipated claims, based 

on an actuarial analysis, and to ensure that taxpayers are 

fully protected. 

(4) ADJUSTMENT TO PURCHASE AUTHORITY.—The purchase 

authority limit in section 115 shall be reduced by an amount 

equal to the difference between the total of the outstanding 

guaranteed obligations and the balance in the Troubled Assets 

Insurance Financing Fund. 

(d) TROUBLED ASSETS INSURANCE FINANCING FUND.— 

(1) DEPOSITS.—The Secretary shall deposit fees collected 

under this section into the Fund established under paragraph 

(2). 

(2) ESTABLISHMENT.—There is established a Troubled 

Assets Insurance Financing Fund that shall consist of the 

amounts collected pursuant to paragraph (1), and any balance 

in such fund shall be invested by the Secretary in United 

States Treasury securities, or kept in cash on hand or on 

deposit, as necessary. 

Methodology. 

Publication. 


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(3) PAYMENTS FROM FUND.—The Secretary shall make payments from amounts deposited in the Fund to fulfill obligations 

of the guarantees provided to financial institutions under subsection (a). 

SEC. 103. CONSIDERATIONS. 

In exercising the authorities granted in this Act, the Secretary 

shall take into consideration— 

(1) protecting the interests of taxpayers by maximizing 

overall returns and minimizing the impact on the national 

debt; 

(2) providing stability and preventing disruption to financial markets in order to limit the impact on the economy 

and protect American jobs, savings, and retirement security; 

(3) the need to help families keep their homes and to 

stabilize communities; 

(4) in determining whether to engage in a direct purchase 

from an individual financial institution, the long-term viability 

of the financial institution in determining whether the purchase 

represents the most efficient use of funds under this Act; 

(5) ensuring that all financial institutions are eligible to 

participate in the program, without discrimination based on 

size, geography, form of organization, or the size, type, and 

number of assets eligible for purchase under this Act; 

(6) providing financial assistance to financial institutions, 

including those serving low- and moderate-income populations 

and other underserved communities, and that have assets less 

than $1,000,000,000, that were well or adequately capitalized 

as of June 30, 2008, and that as a result of the devaluation 

of the preferred government-sponsored enterprises stock will 

drop one or more capital levels, in a manner sufficient to 

restore the financial institutions to at least an adequately 

capitalized level; 

(7) the need to ensure stability for United States public 

instrumentalities, such as counties and cities, that may have 

suffered significant increased costs or losses in the current 

market turmoil; 

(8) protecting the retirement security of Americans by purchasing troubled assets held by or on behalf of an eligible 

retirement plan described in clause (iii), (iv), (v), or (vi) of 

section 402(c)(8)(B) of the Internal Revenue Code of 1986, except 

that such authority shall not extend to any compensation 

arrangements subject to section 409A of such Code; and 

(9) the utility of purchasing other real estate owned and 

instruments backed by mortgages on multifamily properties. 

SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD. 

(a) ESTABLISHMENT.—There is established the Financial Stability Oversight Board, which shall be responsible for— 

(1) reviewing the exercise of authority under a program 

developed in accordance with this Act, including— 

(A) policies implemented by the Secretary and the 

Office of Financial Stability created under sections 101 

and 102, including the appointment of financial agents, 

the designation of asset classes to be purchased, and plans 

for the structure of vehicles used to purchase troubled 

assets; and 

12 USC 5214. 

12 USC 5213. 


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(B) the effect of such actions in assisting American 

families in preserving home ownership, stabilizing financial 

markets, and protecting taxpayers; 

(2) making recommendations, as appropriate, to the Secretary regarding use of the authority under this Act; and 

(3) reporting any suspected fraud, misrepresentation, or 

malfeasance to the Special Inspector General for the Troubled 

Assets Relief Program or the Attorney General of the United 

States, consistent with section 535(b) of title 28, United States 

Code. 

(b) MEMBERSHIP.—The Financial Stability Oversight Board 

shall be comprised of— 

(1) the Chairman of the Board of Governors of the Federal 

Reserve System; 

(2) the Secretary; 

(3) the Director of the Federal Housing Finance Agency; 

(4) the Chairman of the Securities Exchange Commission; 

and 

(5) the Secretary of Housing and Urban Development. 

(c) CHAIRPERSON.—The chairperson of the Financial Stability 

Oversight Board shall be elected by the members of the Board 

from among the members other than the Secretary. 

(d) MEETINGS.—The Financial Stability Oversight Board shall 

meet 2 weeks after the first exercise of the purchase authority 

of the Secretary under this Act, and monthly thereafter. 

(e) ADDITIONAL AUTHORITIES.—In addition to the responsibilities described in subsection (a), the Financial Stability Oversight 

Board shall have the authority to ensure that the policies implemented by the Secretary are— 

(1) in accordance with the purposes of this Act; 

(2) in the economic interests of the United States; and 

(3) consistent with protecting taxpayers, in accordance with 

section 113(a). 

(f) CREDIT REVIEW COMMITTEE.—The Financial Stability Oversight Board may appoint a credit review committee for the purpose 

of evaluating the exercise of the purchase authority provided under 

this Act and the assets acquired through the exercise of such 

authority, as the Financial Stability Oversight Board determines 

appropriate. 

(g) REPORTS.—The Financial Stability Oversight Board shall 

report to the appropriate committees of Congress and the Congressional Oversight Panel established under section 125, not less frequently than quarterly, on the matters described under subsection 

(a)(1). 

(h) TERMINATION.—The Financial Stability Oversight Board, 

and its authority under this section, shall terminate on the expiration of the 15-day period beginning upon the later of— 

(1) the date that the last troubled asset acquired by the 

Secretary under section 101 has been sold or transferred out 

of the ownership or control of the Federal Government; or 

(2) the date of expiration of the last insurance contract 

issued under section 102. 

SEC. 105. REPORTS. 

(a) IN GENERAL.—Before the expiration of the 60-day period 

beginning on the date of the first exercise of the authority granted 

in section 101(a), or of the first exercise of the authority granted 

12 USC 5215. 

Reports. 

Fraud. 


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122 STAT. 3772 PUBLIC LAW 110–343—OCT. 3, 2008 

in section 102, whichever occurs first, and every 30-day period 

thereafter, the Secretary shall report to the appropriate committees 

of Congress, with respect to each such period— 

(1) an overview of actions taken by the Secretary, including 

the considerations required by section 103 and the efforts under 

section 109; 

(2) the actual obligation and expenditure of the funds provided for administrative expenses by section 118 during such 

period and the expected expenditure of such funds in the subsequent period; and 

(3) a detailed financial statement with respect to the exercise of authority under this Act, including— 

(A) all agreements made or renewed; 

(B) all insurance contracts entered into pursuant to 

section 102; 

(C) all transactions occurring during such period, 

including the types of parties involved; 

(D) the nature of the assets purchased; 

(E) all projected costs and liabilities; 

(F) operating expenses, including compensation for 

financial agents; 

(G) the valuation or pricing method used for each transaction; and 

(H) a description of the vehicles established to exercise 

such authority. 

(b) TRANCHE REPORTS TO CONGRESS.— 

(1) REPORTS.—The Secretary shall provide to the appropriate committees of Congress, at the times specified in paragraph (2), a written report, including— 

(A) a description of all of the transactions made during 

the reporting period; 

(B) a description of the pricing mechanism for the 

transactions; 

(C) a justification of the price paid for and other financial terms associated with the transactions; 

(D) a description of the impact of the exercise of such 

authority on the financial system, supported, to the extent 

possible, by specific data; 

(E) a description of challenges that remain in the financial system, including any benchmarks yet to be achieved; 

and 

(F) an estimate of additional actions under the 

authority provided under this Act that may be necessary 

to address such challenges. 

(2) TIMING.—The report required by this subsection shall 

be submitted not later than 7 days after the date on which 

commitments to purchase troubled assets under the authorities 

provided in this Act first reach an aggregate of $50,000,000,000 

and not later than 7 days after each $50,000,000,000 interval 

of such commitments is reached thereafter. 

(c) REGULATORY MODERNIZATION REPORT.—The Secretary shall 

review the current state of the financial markets and the regulatory 

system and submit a written report to the appropriate committees 

of Congress not later than April 30, 2009, analyzing the current 

state of the regulatory system and its effectiveness at overseeing 

the participants in the financial markets, including the over-theDeadline. 


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counter swaps market and government-sponsored enterprises, and 

providing recommendations for improvement, including— 

(1) recommendations regarding— 

(A) whether any participants in the financial markets 

that are currently outside the regulatory system should 

become subject to the regulatory system; and 

(B) enhancement of the clearing and settlement of 

over-the-counter swaps; and 

(2) the rationale underlying such recommendations. 

(d) SHARING OF INFORMATION.—Any report required under this 

section shall also be submitted to the Congressional Oversight 

Panel established under section 125. 

(e) SUNSET.—The reporting requirements under this section 

shall terminate on the later of— 

(1) the date that the last troubled asset acquired by the 

Secretary under section 101 has been sold or transferred out 

of the ownership or control of the Federal Government; or 

(2) the date of expiration of the last insurance contract 

issued under section 102. 

SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED ASSETS; REVENUES AND SALE PROCEEDS. 

(a) EXERCISE OF RIGHTS.—The Secretary may, at any time, 

exercise any rights received in connection with troubled assets 

purchased under this Act. 

(b) MANAGEMENT OF TROUBLED ASSETS.—The Secretary shall 

have authority to manage troubled assets purchased under this 

Act, including revenues and portfolio risks therefrom. 

(c) SALE OF TROUBLED ASSETS.—The Secretary may, at any 

time, upon terms and conditions and at a price determined by 

the Secretary, sell, or enter into securities loans, repurchase transactions, or other financial transactions in regard to, any troubled 

asset purchased under this Act. 

(d) TRANSFER TO TREASURY.—Revenues of, and proceeds from 

the sale of troubled assets purchased under this Act, or from the 

sale, exercise, or surrender of warrants or senior debt instruments 

acquired under section 113 shall be paid into the general fund 

of the Treasury for reduction of the public debt. 

(e) APPLICATION OF SUNSET TO TROUBLED ASSETS.—The 

authority of the Secretary to hold any troubled asset purchased 

under this Act before the termination date in section 120, or to 

purchase or fund the purchase of a troubled asset under a commitment entered into before the termination date in section 120, is 

not subject to the provisions of section 120. 

SEC. 107. CONTRACTING PROCEDURES. 

(a) STREAMLINED PROCESS.—For purposes of this Act, the Secretary may waive specific provisions of the Federal Acquisition 

Regulation upon a determination that urgent and compelling circumstances make compliance with such provisions contrary to the 

public interest. Any such determination, and the justification for 

such determination, shall be submitted to the Committees on Oversight and Government Reform and Financial Services of the House 

of Representatives and the Committees on Homeland Security and 

Governmental Affairs and Banking, Housing, and Urban Affairs 

of the Senate within 7 days. 

(b) ADDITIONAL CONTRACTING REQUIREMENTS.—In any solicitation or contract where the Secretary has, pursuant to subsection 

Minorities. 

Deadline. 

Waiver authority. 

12 USC 5217. 

12 USC 5216. 


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(a), waived any provision of the Federal Acquisition Regulation 

pertaining to minority contracting, the Secretary shall develop and 

implement standards and procedures to ensure, to the maximum 

extent practicable, the inclusion and utilization of minorities (as 

such term is defined in section 1204(c) of the Financial Institutions 

Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 

note)) and women, and minority- and women-owned businesses 

(as such terms are defined in section 21A(r)(4) of the Federal 

Home Loan Bank Act (12 U.S.C. 1441a(r)(4)), in that solicitation 

or contract, including contracts to asset managers, servicers, property managers, and other service providers or expert consultants. 

(c) ELIGIBILITY OF FDIC.—Notwithstanding subsections (a) and 

(b), the Corporation— 

(1) shall be eligible for, and shall be considered in, the 

selection of asset managers for residential mortgage loans and 

residential mortgage-backed securities; and 

(2) shall be reimbursed by the Secretary for any services 

provided. 

SEC. 108. CONFLICTS OF INTEREST. 

(a) STANDARDS REQUIRED.—The Secretary shall issue regulations or guidelines necessary to address and manage or to prohibit 

conflicts of interest that may arise in connection with the administration and execution of the authorities provided under this Act, 

including— 

(1) conflicts arising in the selection or hiring of contractors 

or advisors, including asset managers; 

(2) the purchase of troubled assets; 

(3) the management of the troubled assets held; 

(4) post-employment restrictions on employees; and 

(5) any other potential conflict of interest, as the Secretary 

deems necessary or appropriate in the public interest. 

(b) TIMING.—Regulations or guidelines required by this section 

shall be issued as soon as practicable after the date of enactment 

of this Act. 

SEC. 109. FORECLOSURE MITIGATION EFFORTS. 

(a) RESIDENTIAL MORTGAGE LOAN SERVICING STANDARDS.—To 

the extent that the Secretary acquires mortgages, mortgage backed 

securities, and other assets secured by residential real estate, 

including multifamily housing, the Secretary shall implement a 

plan that seeks to maximize assistance for homeowners and use 

the authority of the Secretary to encourage the servicers of the 

underlying mortgages, considering net present value to the taxpayer, to take advantage of the HOPE for Homeowners Program 

under section 257 of the National Housing Act or other available 

programs to minimize foreclosures. In addition, the Secretary may 

use loan guarantees and credit enhancements to facilitate loan 

modifications to prevent avoidable foreclosures. 

(b) COORDINATION.—The Secretary shall coordinate with the 

Corporation, the Board (with respect to any mortgage or mortgagebacked securities or pool of securities held, owned, or controlled 

by or on behalf of a Federal reserve bank, as provided in section 

110(a)(1)(C)), the Federal Housing Finance Agency, the Secretary 

of Housing and Urban Development, and other Federal Government 

entities that hold troubled assets to attempt to identify opportunities for the acquisition of classes of troubled assets that will improve 

the ability of the Secretary to improve the loan modification and 

12 USC 5219. 

Regulations. 

12 USC 5218. 


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restructuring process and, where permissible, to permit bona fide 

tenants who are current on their rent to remain in their homes 

under the terms of the lease. In the case of a mortgage on a 

residential rental property, the plan required under this section 

shall include protecting Federal, State, and local rental subsidies 

and protections, and ensuring any modification takes into account 

the need for operating funds to maintain decent and safe conditions 

at the property. 

(c) CONSENT TO REASONABLE LOAN MODIFICATION REQUESTS.— Upon any request arising under existing investment contracts, the 

Secretary shall consent, where appropriate, and considering net 

present value to the taxpayer, to reasonable requests for loss mitigation measures, including term extensions, rate reductions, principal 

write downs, increases in the proportion of loans within a trust 

or other structure allowed to be modified, or removal of other 

limitation on modifications. 

SEC. 110. ASSISTANCE TO HOMEOWNERS. 

(a) DEFINITIONS.—As used in this section— 

(1) the term ‘‘Federal property manager’’ means— 

(A) the Federal Housing Finance Agency, in its capacity 

as conservator of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation; 

(B) the Corporation, with respect to residential mortgage loans and mortgage-backed securities held by any 

bridge depository institution pursuant to section 11(n) of 

the Federal Deposit Insurance Act; and 

(C) the Board, with respect to any mortgage or mortgage-backed securities or pool of securities held, owned, 

or controlled by or on behalf of a Federal reserve bank, 

other than mortgages or securities held, owned, or controlled in connection with open market operations under 

section 14 of the Federal Reserve Act (12 U.S.C. 353), 

or as collateral for an advance or discount that is not 

in default; 

(2) the term ‘‘consumer’’ has the same meaning as in section 

103 of the Truth in Lending Act (15 U.S.C. 1602); 

(3) the term ‘‘insured depository institution’’ has the same 

meaning as in section 3 of the Federal Deposit Insurance Act 

(12 U.S.C. 1813); and 

(4) the term ‘‘servicer’’ has the same meaning as in section 

6(i)(2) of the Real Estate Settlement Procedures Act of 1974 

(12 U.S.C. 2605(i)(2)). 

(b) HOMEOWNER ASSISTANCE BY AGENCIES.— 

(1) IN GENERAL.—To the extent that the Federal property 

manager holds, owns, or controls mortgages, mortgage backed 

securities, and other assets secured by residential real estate, 

including multifamily housing, the Federal property manager 

shall implement a plan that seeks to maximize assistance for 

homeowners and use its authority to encourage the servicers 

of the underlying mortgages, and considering net present value 

to the taxpayer, to take advantage of the HOPE for Homeowners Program under section 257 of the National Housing 

Act or other available programs to minimize foreclosures. 

(2) MODIFICATIONS.—In the case of a residential mortgage 

loan, modifications made under paragraph (1) may include— 

(A) reduction in interest rates; 

12 USC 5220. 

Residential 

rental property. 


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(B) reduction of loan principal; and 

(C) other similar modifications. 

(3) TENANT PROTECTIONS.—In the case of mortgages on 

residential rental properties, modifications made under paragraph (1) shall ensure— 

(A) the continuation of any existing Federal, State, 

and local rental subsidies and protections; and 

(B) that modifications take into account the need for 

operating funds to maintain decent and safe conditions 

at the property. 

(4) TIMING.—Each Federal property manager shall develop 

and begin implementation of the plan required by this subsection not later than 60 days after the date of enactment 

of this Act. 

(5) REPORTS TO CONGRESS.—Each Federal property manager shall, 60 days after the date of enactment of this Act 

and every 30 days thereafter, report to Congress specific 

information on the number and types of loan modifications 

made and the number of actual foreclosures occurring during 

the reporting period in accordance with this section. 

(6) CONSULTATION.—In developing the plan required by 

this subsection, the Federal property managers shall consult 

with one another and, to the extent possible, utilize consistent 

approaches to implement the requirements of this subsection. 

(c) ACTIONS WITH RESPECT TO SERVICERS.—In any case in 

which a Federal property manager is not the owner of a residential 

mortgage loan, but holds an interest in obligations or pools of 

obligations secured by residential mortgage loans, the Federal property manager shall— 

(1) encourage implementation by the loan servicers of loan 

modifications developed under subsection (b); and 

(2) assist in facilitating any such modifications, to the 

extent possible. 

(d) LIMITATION.—The requirements of this section shall not 

supersede any other duty or requirement imposed on the Federal 

property managers under otherwise applicable law. 

SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE. 

(a) APPLICABILITY.—Any financial institution that sells troubled 

assets to the Secretary under this Act shall be subject to the 

executive compensation requirements of subsections (b) and (c) and 

the provisions under the Internal Revenue Code of 1986, as provided 

under the amendment by section 302, as applicable. 

(b) DIRECT PURCHASES.— 

(1) IN GENERAL.—Where the Secretary determines that the 

purposes of this Act are best met through direct purchases 

of troubled assets from an individual financial institution where 

no bidding process or market prices are available, and the 

Secretary receives a meaningful equity or debt position in the 

financial institution as a result of the transaction, the Secretary 

shall require that the financial institution meet appropriate 

standards for executive compensation and corporate governance. The standards required under this subsection shall be 

effective for the duration of the period that the Secretary holds 

an equity or debt position in the financial institution. 

(2) CRITERIA.—The standards required under this subsection shall include— 

Effective date. 

Standards. 

12 USC 5221. 

Deadline. 


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(A) limits on compensation that exclude incentives for 

senior executive officers of a financial institution to take 

unnecessary and excessive risks that threaten the value 

of the financial institution during the period that the Secretary holds an equity or debt position in the financial 

institution; 

(B) a provision for the recovery by the financial institution of any bonus or incentive compensation paid to a 

senior executive officer based on statements of earnings, 

gains, or other criteria that are later proven to be materially inaccurate; and 

(C) a prohibition on the financial institution making 

any golden parachute payment to its senior executive officer 

during the period that the Secretary holds an equity or 

debt position in the financial institution. 

(3) DEFINITION.—For purposes of this section, the term 

‘‘senior executive officer’’ means an individual who is one of 

the top 5 highly paid executives of a public company, whose 

compensation is required to be disclosed pursuant to the Securities Exchange Act of 1934, and any regulations issued thereunder, and non-public company counterparts. 

(c) AUCTION PURCHASES.—Where the Secretary determines that 

the purposes of this Act are best met through auction purchases 

of troubled assets, and only where such purchases per financial 

institution in the aggregate exceed $300,000,000 (including direct 

purchases), the Secretary shall prohibit, for such financial institution, any new employment contract with a senior executive officer 

that provides a golden parachute in the event of an involuntary 

termination, bankruptcy filing, insolvency, or receivership. The Secretary shall issue guidance to carry out this paragraph not later 

than 2 months after the date of enactment of this Act, and such 

guidance shall be effective upon issuance. 

(d) SUNSET.—The provisions of subsection (c) shall apply only 

to arrangements entered into during the period during which the 

authorities under section 101(a) are in effect, as determined under 

section 120. 

SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL 

BANKS. 

The Secretary shall coordinate, as appropriate, with foreign 

financial authorities and central banks to work toward the 

establishment of similar programs by such authorities and central 

banks. To the extent that such foreign financial authorities or 

banks hold troubled assets as a result of extending financing to 

financial institutions that have failed or defaulted on such financing, 

such troubled assets qualify for purchase under section 101. 

SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXIMIZATION 

OF BENEFITS FOR TAXPAYERS. 

(a) LONG-TERM COSTS AND BENEFITS.— 

(1) MINIMIZING NEGATIVE IMPACT.—The Secretary shall use 

the authority under this Act in a manner that will minimize 

any potential long-term negative impact on the taxpayer, taking 

into account the direct outlays, potential long-term returns 

on assets purchased, and the overall economic benefits of the 

program, including economic benefits due to improvements in 

economic activity and the availability of credit, the impact 

12 USC 5223. 

12 USC 5222. 

Guidance. 

Deadline. 

Effective date. 

Employment. 

Contracts. 

Prohibition. 


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on the savings and pensions of individuals, and reductions 

in losses to the Federal Government. 

(2) AUTHORITY.—In carrying out paragraph (1), the Secretary shall— 

(A) hold the assets to maturity or for resale for and 

until such time as the Secretary determines that the 

market is optimal for selling such assets, in order to maximize the value for taxpayers; and 

(B) sell such assets at a price that the Secretary determines, based on available financial analysis, will maximize 

return on investment for the Federal Government. 

(3) PRIVATE SECTOR PARTICIPATION.—The Secretary shall 

encourage the private sector to participate in purchases of 

troubled assets, and to invest in financial institutions, consistent with the provisions of this section. 

(b) USE OF MARKET MECHANISMS.—In making purchases under 

this Act, the Secretary shall— 

(1) make such purchases at the lowest price that the Secretary determines to be consistent with the purposes of this 

Act; and 

(2) maximize the efficiency of the use of taxpayer resources 

by using market mechanisms, including auctions or reverse 

auctions, where appropriate. 

(c) DIRECT PURCHASES.—If the Secretary determines that use 

of a market mechanism under subsection (b) is not feasible or 

appropriate, and the purposes of the Act are best met through 

direct purchases from an individual financial institution, the Secretary shall pursue additional measures to ensure that prices paid 

for assets are reasonable and reflect the underlying value of the 

asset. 

(d) CONDITIONS ON PURCHASE AUTHORITY FOR WARRANTS AND

DEBT INSTRUMENTS.— 

(1) IN GENERAL.—The Secretary may not purchase, or make 

any commitment to purchase, any troubled asset under the 

authority of this Act, unless the Secretary receives from the 

financial institution from which such assets are to be purchased— 

(A) in the case of a financial institution, the securities 

of which are traded on a national securities exchange, 

a warrant giving the right to the Secretary to receive 

nonvoting common stock or preferred stock in such financial 

institution, or voting stock with respect to which, the Secretary agrees not to exercise voting power, as the Secretary 

determines appropriate; or 

(B) in the case of any financial institution other than 

one described in subparagraph (A), a warrant for common 

or preferred stock, or a senior debt instrument from such 

financial institution, as described in paragraph (2)(C). 

(2) TERMS AND CONDITIONS.—The terms and conditions of 

any warrant or senior debt instrument required under paragraph (1) shall meet the following requirements: 

(A) PURPOSES.—Such terms and conditions shall, at 

a minimum, be designed— 

(i) to provide for reasonable participation by the 

Secretary, for the benefit of taxpayers, in equity appreciation in the case of a warrant or other equity security, 


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or a reasonable interest rate premium, in the case 

of a debt instrument; and 

(ii) to provide additional protection for the taxpayer 

against losses from sale of assets by the Secretary 

under this Act and the administrative expenses of the 

TARP. 

(B) AUTHORITY TO SELL, EXERCISE, OR SURRENDER.— The Secretary may sell, exercise, or surrender a warrant 

or any senior debt instrument received under this subsection, based on the conditions established under subparagraph (A). 

(C) CONVERSION.—The warrant shall provide that if, 

after the warrant is received by the Secretary under this 

subsection, the financial institution that issued the warrant 

is no longer listed or traded on a national securities 

exchange or securities association, as described in paragraph (1)(A), such warrants shall convert to senior debt, 

or contain appropriate protections for the Secretary to 

ensure that the Treasury is appropriately compensated 

for the value of the warrant, in an amount determined 

by the Secretary. 

(D) PROTECTIONS.—Any warrant representing securities to be received by the Secretary under this subsection 

shall contain anti-dilution provisions of the type employed 

in capital market transactions, as determined by the Secretary. Such provisions shall protect the value of the securities from market transactions such as stock splits, stock 

distributions, dividends, and other distributions, mergers, 

and other forms of reorganization or recapitalization. 

(E) EXERCISE PRICE.—The exercise price for any warrant issued pursuant to this subsection shall be set by 

the Secretary, in the interest of the taxpayers. 

(F) SUFFICIENCY.—The financial institution shall guarantee to the Secretary that it has authorized shares of 

nonvoting stock available to fulfill its obligations under 

this subsection. Should the financial institution not have 

sufficient authorized shares, including preferred shares 

that may carry dividend rights equal to a multiple number 

of common shares, the Secretary may, to the extent necessary, accept a senior debt note in an amount, and on 

such terms as will compensate the Secretary with equivalent value, in the event that a sufficient shareholder vote 

to authorize the necessary additional shares cannot be 

obtained. 

(3) EXCEPTIONS.— 

(A) DE MINIMIS.—The Secretary shall establish de 

minimis exceptions to the requirements of this subsection, 

based on the size of the cumulative transactions of troubled 

assets purchased from any one financial institution for 

the duration of the program, at not more than 

$100,000,000. 

(B) OTHER EXCEPTIONS.—The Secretary shall establish 

an exception to the requirements of this subsection and 

appropriate alternative requirements for any participating 

financial institution that is legally prohibited from issuing 

securities and debt instruments, so as not to allow circumvention of the requirements of this section. 

Anti-dilution 

provisions. 


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SEC. 114. MARKET TRANSPARENCY. 

(a) PRICING.—To facilitate market transparency, the Secretary 

shall make available to the public, in electronic form, a description, 

amounts, and pricing of assets acquired under this Act, within 

2 business days of purchase, trade, or other disposition. 

(b) DISCLOSURE.—For each type of financial institutions that 

sells troubled assets to the Secretary under this Act, the Secretary 

shall determine whether the public disclosure required for such 

financial institutions with respect to off-balance sheet transactions, 

derivatives instruments, contingent liabilities, and similar sources 

of potential exposure is adequate to provide to the public sufficient 

information as to the true financial position of the institutions. 

If such disclosure is not adequate for that purpose, the Secretary 

shall make recommendations for additional disclosure requirements 

to the relevant regulators. 

SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE. 

(a) AUTHORITY.—The authority of the Secretary to purchase 

troubled assets under this Act shall be limited as follows: 

(1) Effective upon the date of enactment of this Act, such 

authority shall be limited to $250,000,000,000 outstanding at 

any one time. 

(2) If at any time, the President submits to the Congress 

a written certification that the Secretary needs to exercise 

the authority under this paragraph, effective upon such submission, such authority shall be limited to $350,000,000,000 outstanding at any one time. 

(3) If, at any time after the certification in paragraph 

(2) has been made, the President transmits to the Congress 

a written report detailing the plan of the Secretary to exercise 

the authority under this paragraph, unless there is enacted, 

within 15 calendar days of such transmission, a joint resolution 

described in subsection (c), effective upon the expiration of 

such 15-day period, such authority shall be limited to 

$700,000,000,000 outstanding at any one time. 

(b) AGGREGATION OF PURCHASE PRICES.—The amount of troubled assets purchased by the Secretary outstanding at any one 

time shall be determined for purposes of the dollar amount limitations under subsection (a) by aggregating the purchase prices of 

all troubled assets held. 

(c) JOINT RESOLUTION OF DISAPPROVAL.— 

(1) IN GENERAL.—Notwithstanding any other provision of 

this section, the Secretary may not exercise any authority to 

make purchases under this Act with regard to any amount 

in excess of $350,000,000,000 previously obligated, as described 

in this section if, within 15 calendar days after the date on 

which Congress receives a report of the plan of the Secretary 

described in subsection (a)(3), there is enacted into law a joint 

resolution disapproving the plan of the Secretary with respect 

to such additional amount. 

(2) CONTENTS OF JOINT RESOLUTION.—For the purpose of 

this section, the term ‘‘joint resolution’’ means only a joint 

resolution— 

(A) that is introduced not later than 3 calendar days 

after the date on which the report of the plan of the 

Secretary referred to in subsection (a)(3) is received by 

Congress; 

Definition. 

Effective dates. 

12 USC 5225. 

Public 

information. 

Deadline. 

12 USC 5224. 


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(B) which does not have a preamble; 

(C) the title of which is as follows: ‘‘Joint resolution 

relating to the disapproval of obligations under the Emergency Economic Stabilization Act of 2008’’; and 

(D) the matter after the resolving clause of which 

is as follows: ‘‘That Congress disapproves the obligation 

of any amount exceeding the amounts obligated as 

described in paragraphs (1) and (2) of section 115(a) of 

the Emergency Economic Stabilization Act of 2008.’’. 

(d) FAST TRACK CONSIDERATION IN HOUSE OF REPRESENTA- TIVES.— (1) RECONVENING.—Upon receipt of a report under subsection (a)(3), the Speaker, if the House would otherwise be 

adjourned, shall notify the Members of the House that, pursuant to this section, the House shall convene not later than 

the second calendar day after receipt of such report; 

(2) REPORTING AND DISCHARGE.—Any committee of the 

House of Representatives to which a joint resolution is referred 

shall report it to the House not later than 5 calendar days 

after the date of receipt of the report described in subsection 

(a)(3). If a committee fails to report the joint resolution within 

that period, the committee shall be discharged from further 

consideration of the joint resolution and the joint resolution 

shall be referred to the appropriate calendar. 

(3) PROCEEDING TO CONSIDERATION.—After each committee 

authorized to consider a joint resolution reports it to the House 

or has been discharged from its consideration, it shall be in 

order, not later than the sixth day after Congress receives 

the report described in subsection (a)(3), to move to proceed 

to consider the joint resolution in the House. All points of 

order against the motion are waived. Such a motion shall 

not be in order after the House has disposed of a motion 

to proceed on the joint resolution. The previous question shall 

be considered as ordered on the motion to its adoption without 

intervening motion. The motion shall not be debatable. A 

motion to reconsider the vote by which the motion is disposed 

of shall not be in order. 

(4) CONSIDERATION.—The joint resolution shall be considered as read. All points of order against the joint resolution 

and against its consideration are waived. The previous question 

shall be considered as ordered on the joint resolution to its 

passage without intervening motion except two hours of debate 

equally divided and controlled by the proponent and an opponent. A motion to reconsider the vote on passage of the joint 

resolution shall not be in order. 

(e) FAST TRACK CONSIDERATION IN SENATE.— 

(1) RECONVENING.—Upon receipt of a report under subsection (a)(3), if the Senate has adjourned or recessed for more 

than 2 days, the majority leader of the Senate, after consultation with the minority leader of the Senate, shall notify the 

Members of the Senate that, pursuant to this section, the 

Senate shall convene not later than the second calendar day 

after receipt of such message. 

(2) PLACEMENT ON CALENDAR.—Upon introduction in the 

Senate, the joint resolution shall be placed immediately on 

the calendar. 

(3) FLOOR CONSIDERATION.— 

Notification. 

Deadline. 

Waiver. 

Deadline. 

Notification. 

Deadline. 


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122 STAT. 3782 PUBLIC LAW 110–343—OCT. 3, 2008 

(A) IN GENERAL.—Notwithstanding Rule XXII of the 

Standing Rules of the Senate, it is in order at any time 

during the period beginning on the 4th day after the date 

on which Congress receives a report of the plan of the 

Secretary described in subsection (a)(3) and ending on the 

6th day after the date on which Congress receives a report 

of the plan of the Secretary described in subsection (a)(3) 

(even though a previous motion to the same effect has 

been disagreed to) to move to proceed to the consideration 

of the joint resolution, and all points of order against 

the joint resolution (and against consideration of the joint 

resolution) are waived. The motion to proceed is not debatable. The motion is not subject to a motion to postpone. 

A motion to reconsider the vote by which the motion is 

agreed to or disagreed to shall not be in order. If a motion 

to proceed to the consideration of the resolution is agreed 

to, the joint resolution shall remain the unfinished business 

until disposed of. 

(B) DEBATE.—Debate on the joint resolution, and on 

all debatable motions and appeals in connection therewith, 

shall be limited to not more than 10 hours, which shall 

be divided equally between the majority and minority 

leaders or their designees. A motion further to limit debate 

is in order and not debatable. An amendment to, or a 

motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the joint 

resolution is not in order. 

(C) VOTE ON PASSAGE.—The vote on passage shall occur 

immediately following the conclusion of the debate on a 

joint resolution, and a single quorum call at the conclusion 

of the debate if requested in accordance with the rules 

of the Senate. 

(D) RULINGS OF THE CHAIR ON PROCEDURE.—Appeals 

from the decisions of the Chair relating to the application 

of the rules of the Senate, as the case may be, to the 

procedure relating to a joint resolution shall be decided 

without debate. 

(f) RULES RELATING TO SENATE AND HOUSE OF REPRESENTATIVES.— 

(1) COORDINATION WITH ACTION BY OTHER HOUSE.—If, 

before the passage by one House of a joint resolution of that 

House, that House receives from the other House a joint resolution, then the following procedures shall apply: 

(A) The joint resolution of the other House shall not 

be referred to a committee. 

(B) With respect to a joint resolution of the House 

receiving the resolution— 

(i) the procedure in that House shall be the same 

as if no joint resolution had been received from the 

other House; but 

(ii) the vote on passage shall be on the joint resolution of the other House. 

(2) TREATMENT OF JOINT RESOLUTION OF OTHER HOUSE.— 

If one House fails to introduce or consider a joint resolution 

under this section, the joint resolution of the other House 

shall be entitled to expedited floor procedures under this section. 

Duration. 


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(3) TREATMENT OF COMPANION MEASURES.—If, following 

passage of the joint resolution in the Senate, the Senate then 

receives the companion measure from the House of Representatives, the companion measure shall not be debatable. 

(4) CONSIDERATION AFTER PASSAGE.— (A) IN GENERAL.—If Congress passes a joint resolution, 

the period beginning on the date the President is presented 

with the joint resolution and ending on the date the President takes action with respect to the joint resolution shall 

be disregarded in computing the 15-calendar day period 

described in subsection (a)(3). 

(B) VETOES.—If the President vetoes the joint resolution— 

(i) the period beginning on the date the President 

vetoes the joint resolution and ending on the date 

the Congress receives the veto message with respect 

to the joint resolution shall be disregarded in computing the 15-calendar day period described in subsection (a)(3), and 

(ii) debate on a veto message in the Senate under 

this section shall be 1 hour equally divided between 

the majority and minority leaders or their designees. 

(5) RULES OF HOUSE OF REPRESENTATIVES AND SENATE.— 

This subsection and subsections (c), (d), and (e) are enacted 

by Congress— 

(A) as an exercise of the rulemaking power of the 

Senate and House of Representatives, respectively, and 

as such it is deemed a part of the rules of each House, 

respectively, but applicable only with respect to the procedure to be followed in that House in the case of a joint 

resolution, and it supersedes other rules only to the extent 

that it is inconsistent with such rules; and 

(B) with full recognition of the constitutional right 

of either House to change the rules (so far as relating 

to the procedure of that House) at any time, in the same 

manner, and to the same extent as in the case of any 

other rule of that House. 

SEC. 116. OVERSIGHT AND AUDITS. 

(a) COMPTROLLER GENERAL OVERSIGHT.— 

(1) SCOPE OF OVERSIGHT.—The Comptroller General of the 

United States shall, upon establishment of the troubled assets 

relief program under this Act (in this section referred to as 

the ‘‘TARP’’), commence ongoing oversight of the activities and 

performance of the TARP and of any agents and representatives 

of the TARP (as related to the agent or representative’s activities on behalf of or under the authority of the TARP), including 

vehicles established by the Secretary under this Act. The subjects of such oversight shall include the following: 

(A) The performance of the TARP in meeting the purposes of this Act, particularly those involving— 

(i) foreclosure mitigation; 

(ii) cost reduction; 

(iii) whether it has provided stability or prevented 

disruption to the financial markets or the banking 

system; and 

(iv) whether it has protected taxpayers. 

12 USC 5226. 

Debate. 

Duration. 


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(B) The financial condition and internal controls of 

the TARP, its representatives and agents. 

(C) Characteristics of transactions and commitments 

entered into, including transaction type, frequency, size, 

prices paid, and all other relevant terms and conditions, 

and the timing, duration and terms of any future commitments to purchase assets. 

(D) Characteristics and disposition of acquired assets, 

including type, acquisition price, current market value, 

sale prices and terms, and use of proceeds from sales. 

(E) Efficiency of the operations of the TARP in the 

use of appropriated funds. 

(F) Compliance with all applicable laws and regulations 

by the TARP, its agents and representatives. 

(G) The efforts of the TARP to prevent, identify, and 

minimize conflicts of interest involving any agent or representative performing activities on behalf of or under the 

authority of the TARP. 

(H) The efficacy of contracting procedures pursuant 

to section 107(b), including, as applicable, the efforts of 

the TARP in evaluating proposals for inclusion and contracting to the maximum extent possible of minorities (as 

such term is defined in 1204(c) of the Financial Institutions 

Reform, Recovery, and Enhancement Act of 1989 (12 U.S.C. 

1811 note), women, and minority- and women-owned 

businesses, including ascertaining and reporting the total 

amount of fees paid and other value delivered by the TARP 

to all of its agents and representatives, and such amounts 

paid or delivered to such firms that are minority- and 

women-owned businesses (as such terms are defined in 

section 21A of the Federal Home Loan Bank Act (12 U.S.C. 

1441a)). 

(2) CONDUCT AND ADMINISTRATION OF OVERSIGHT.— 

(A) GAO PRESENCE.—The Secretary shall provide the 

Comptroller General with appropriate space and facilities 

in the Department of the Treasury as necessary to facilitate 

oversight of the TARP until the termination date established in section 120. 

(B) ACCESS TO RECORDS.—To the extent otherwise consistent with law, the Comptroller General shall have access, 

upon request, to any information, data, schedules, books, 

accounts, financial records, reports, files, electronic communications, or other papers, things, or property belonging 

to or in use by the TARP, or any vehicles established 

by the Secretary under this Act, and to the officers, directors, employees, independent public accountants, financial 

advisors, and other agents and representatives of the TARP 

(as related to the agent or representative’s activities on 

behalf of or under the authority of the TARP) or any 

such vehicle at such reasonable time as the Comptroller 

General may request. The Comptroller General shall be 

afforded full facilities for verifying transactions with the 

balances or securities held by depositaries, fiscal agents, 

and custodians. The Comptroller General may make and 

retain copies of such books, accounts, and other records 

as the Comptroller General deems appropriate. 

Federal buildings 

and facilities. 


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(C) REIMBURSEMENT OF COSTS.—The Treasury shall 

reimburse the Government Accountability Office for the 

full cost of any such oversight activities as billed therefor 

by the Comptroller General of the United States. Such 

reimbursements shall be credited to the appropriation 

account ‘‘Salaries and Expenses, Government Accountability Office’’ current when the payment is received and 

remain available until expended. 

(3) REPORTING.—The Comptroller General shall submit 

reports of findings under this section, regularly and no less 

frequently than once every 60 days, to the appropriate committees of Congress, and the Special Inspector General for the 

Troubled Asset Relief Program established under this Act on 

the activities and performance of the TARP. The Comptroller 

may also submit special reports under this subsection as warranted by the findings of its oversight activities. 

(b) COMPTROLLER GENERAL AUDITS.— 

(1) ANNUAL AUDIT.—The TARP shall annually prepare and 

issue to the appropriate committees of Congress and the public 

audited financial statements prepared in accordance with generally accepted accounting principles, and the Comptroller General shall annually audit such statements in accordance with 

generally accepted auditing standards. The Treasury shall 

reimburse the Government Accountability Office for the full 

cost of any such audit as billed therefor by the Comptroller 

General. Such reimbursements shall be credited to the appropriation account ‘‘Salaries and Expenses, Government Accountability Office’’ current when the payment is received and remain 

available until expended. The financial statements prepared 

under this paragraph shall be on the fiscal year basis prescribed 

under section 1102 of title 31, United States Code. 

(2) AUTHORITY.—The Comptroller General may audit the 

programs, activities, receipts, expenditures, and financial transactions of the TARP and any agents and representatives of 

the TARP (as related to the agent or representative’s activities 

on behalf of or under the authority of the TARP), including 

vehicles established by the Secretary under this Act. 

(3) CORRECTIVE RESPONSES TO AUDIT PROBLEMS.—The 

TARP shall— 

(A) take action to address deficiencies identified by 

the Comptroller General or other auditor engaged by the 

TARP; or 

(B) certify to appropriate committees of Congress that 

no action is necessary or appropriate. 

(c) INTERNAL CONTROL.— 

(1) ESTABLISHMENT.—The TARP shall establish and maintain an effective system of internal control, consistent with 

the standards prescribed under section 3512(c) of title 31, 

United States Code, that provides reasonable assurance of— 

(A) the effectiveness and efficiency of operations, 

including the use of the resources of the TARP; 

(B) the reliability of financial reporting, including 

financial statements and other reports for internal and 

external use; and 

(C) compliance with applicable laws and regulations. 

(2) REPORTING.—In conjunction with each annual financial 

statement issued under this section, the TARP shall— 

Certification. 

Public 

information. 


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(A) state the responsibility of management for establishing and maintaining adequate internal control over 

financial reporting; and 

(B) state its assessment, as of the end of the most 

recent year covered by such financial statement of the 

TARP, of the effectiveness of the internal control over 

financial reporting. 

(d) SHARING OF INFORMATION.—Any report or audit required 

under this section shall also be submitted to the Congressional 

Oversight Panel established under section 125. 

(e) TERMINATION.—Any oversight, reporting, or audit requirement under this section shall terminate on the later of— 

(1) the date that the last troubled asset acquired by the 

Secretary under section 101 has been sold or transferred out 

of the ownership or control of the Federal Government; or 

(2) the date of expiration of the last insurance contract 

issued under section 102. 

SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY. 

(a) STUDY.—The Comptroller General shall undertake a study 

to determine the extent to which leverage and sudden deleveraging 

of financial institutions was a factor behind the current financial 

crisis. 

(b) CONTENT.—The study required by this section shall 

include— 

(1) an analysis of the roles and responsibilities of the 

Board, the Securities and Exchange Commission, the Secretary, 

and other Federal banking agencies with respect to monitoring 

leverage and acting to curtail excessive leveraging; 

(2) an analysis of the authority of the Board to regulate 

leverage, including by setting margin requirements, and what 

process the Board used to decide whether or not to use its 

authority; 

(3) an analysis of any usage of the margin authority by 

the Board; and 

(4) recommendations for the Board and appropriate 

committees of Congress with respect to the existing authority 

of the Board. 

(c) REPORT.—Not later than June 1, 2009, the Comptroller 

General shall complete and submit a report on the study required 

by this section to the Committee on Banking, Housing, and Urban 

Affairs of the Senate and the Committee on Financial Services 

of the House of Representatives. 

(d) SHARING OF INFORMATION.—Any reports required under 

this section shall also be submitted to the Congressional Oversight 

Panel established under section 125. 

SEC. 118. FUNDING. 

For the purpose of the authorities granted in this Act, and 

for the costs of administering those authorities, the Secretary may 

use the proceeds of the sale of any securities issued under chapter 

31 of title 31, United States Code, and the purposes for which 

securities may be issued under chapter 31 of title 31, United States 

Code, are extended to include actions authorized by this Act, 

including the payment of administrative expenses. Any funds 

expended or obligated by the Secretary for actions authorized by 

this Act, including the payment of administrative expenses, shall 

12 USC 5228. 

12 USC 5227. 

Reports. 

Audits. 


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be deemed appropriated at the time of such expenditure or obligation. 

SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS. 

(a) JUDICIAL REVIEW.— (1) STANDARD.—Actions by the Secretary pursuant to the 

authority of this Act shall be subject to chapter 7 of title 

5, United States Code, including that such final actions shall 

be held unlawful and set aside if found to be arbitrary, capricious, an abuse of discretion, or not in accordance with law. 

(2) LIMITATIONS ON EQUITABLE RELIEF.— (A) INJUNCTION.—No injunction or other form of equitable relief shall be issued against the Secretary for actions 

pursuant to section 101, 102, 106, and 109, other than 

to remedy a violation of the Constitution. 

(B) TEMPORARY RESTRAINING ORDER.—Any request for 

a temporary restraining order against the Secretary for 

actions pursuant to this Act shall be considered and 

granted or denied by the court within 3 days of the date 

of the request. 

(C) PRELIMINARY INJUNCTION.—Any request for a 

preliminary injunction against the Secretary for actions 

pursuant to this Act shall be considered and granted or 

denied by the court on an expedited basis consistent with 

the provisions of rule 65(b)(3) of the Federal Rules of Civil 

Procedure, or any successor thereto. 

(D) PERMANENT INJUNCTION.—Any request for a 

permanent injunction against the Secretary for actions 

pursuant to this Act shall be considered and granted or 

denied by the court on an expedited basis. Whenever possible, the court shall consolidate trial on the merits with 

any hearing on a request for a preliminary injunction, 

consistent with the provisions of rule 65(a)(2) of the Federal 

Rules of Civil Procedure, or any successor thereto. 

(3) LIMITATION ON ACTIONS BY PARTICIPATING COMPANIES.— No action or claims may be brought against the Secretary 

by any person that divests its assets with respect to its participation in a program under this Act, except as provided in 

paragraph (1), other than as expressly provided in a written 

contract with the Secretary. 

(4) STAYS.—Any injunction or other form of equitable relief 

issued against the Secretary for actions pursuant to section 

101, 102, 106, and 109, shall be automatically stayed. The 

stay shall be lifted unless the Secretary seeks a stay from 

a higher court within 3 calendar days after the date on which 

the relief is issued. 

(b) RELATED MATTERS.— 

(1) TREATMENT OF HOMEOWNERS’ RIGHTS.—The terms of 

any residential mortgage loan that is part of any purchase 

by the Secretary under this Act shall remain subject to all 

claims and defenses that would otherwise apply, notwithstanding the exercise of authority by the Secretary under this 

Act. 

(2) SAVINGS CLAUSE.—Any exercise of the authority of the 

Secretary pursuant to this Act shall not impair the claims 

or defenses that would otherwise apply with respect to persons 

other than the Secretary. Except as established in any contract, 

Deadline. 

Contracts. 

Deadline. 

12 USC 5229. 


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a servicer of pooled residential mortgages owes any duty to 

determine whether the net present value of the payments on 

the loan, as modified, is likely to be greater than the anticipated 

net recovery that would result from foreclosure to all investors 

and holders of beneficial interests in such investment, but 

not to any individual or groups of investors or beneficial interest 

holders, and shall be deemed to act in the best interests of 

all such investors or holders of beneficial interests if the servicer 

agrees to or implements a modification or workout plan when 

the servicer takes reasonable loss mitigation actions, including 

partial payments. 

SEC. 120. TERMINATION OF AUTHORITY. 

(a) TERMINATION.—The authorities provided under sections 

101(a), excluding section 101(a)(3), and 102 shall terminate on 

December 31, 2009. 

(b) EXTENSION UPON CERTIFICATION.—The Secretary, upon 

submission of a written certification to Congress, may extend the 

authority provided under this Act to expire not later than 2 years 

from the date of enactment of this Act. Such certification shall 

include a justification of why the extension is necessary to assist 

American families and stabilize financial markets, as well as the 

expected cost to the taxpayers for such an extension. 

SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE TROUBLED ASSET 

RELIEF PROGRAM. 

(a) OFFICE OF INSPECTOR GENERAL.—There is hereby established the Office of the Special Inspector General for the Troubled 

Asset Relief Program. 

(b) APPOINTMENT OF INSPECTOR GENERAL; REMOVAL.—(1) The 

head of the Office of the Special Inspector General for the Troubled 

Asset Relief Program is the Special Inspector General for the Troubled Asset Relief Program (in this section referred to as the ‘‘Special 

Inspector General’’), who shall be appointed by the President, by 

and with the advice and consent of the Senate. 

(2) The appointment of the Special Inspector General shall 

be made on the basis of integrity and demonstrated ability in 

accounting, auditing, financial analysis, law, management analysis, 

public administration, or investigations. 

(3) The nomination of an individual as Special Inspector General shall be made as soon as practicable after the establishment 

of any program under sections 101 and 102. 

(4) The Special Inspector General shall be removable from 

office in accordance with the provisions of section 3(b) of the 

Inspector General Act of 1978 (5 U.S.C. App.). 

(5) For purposes of section 7324 of title 5, United States Code, 

the Special Inspector General shall not be considered an employee 

who determines policies to be pursued by the United States in 

the nationwide administration of Federal law. 

(6) The annual rate of basic pay of the Special Inspector General 

shall be the annual rate of basic pay for an Inspector General 

under section 3(e) of the Inspector General Act of 1978 (5 U.S.C. 

App.). 

(c) DUTIES.—(1) It shall be the duty of the Special Inspector 

General to conduct, supervise, and coordinate audits and investigations of the purchase, management, and sale of assets by the 

Secretary of the Treasury under any program established by the 

Secretary under section 101, and the management by the Secretary 

President. 

12 USC 5231. 

12 USC 5230. 


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of any program established under section 102, including by collecting and summarizing the following information: 

(A) A description of the categories of troubled assets purchased or otherwise procured by the Secretary. 

(B) A listing of the troubled assets purchased in each 

such category described under subparagraph (A). 

(C) An explanation of the reasons the Secretary deemed 

it necessary to purchase each such troubled asset. 

(D) A listing of each financial institution that such troubled 

assets were purchased from. 

(E) A listing of and detailed biographical information on 

each person or entity hired to manage such troubled assets. 

(F) A current estimate of the total amount of troubled 

assets purchased pursuant to any program established under 

section 101, the amount of troubled assets on the books of 

the Treasury, the amount of troubled assets sold, and the 

profit and loss incurred on each sale or disposition of each 

such troubled asset. 

(G) A listing of the insurance contracts issued under section 

102. 

(2) The Special Inspector General shall establish, maintain, 

and oversee such systems, procedures, and controls as the Special 

Inspector General considers appropriate to discharge the duty under 

paragraph (1). 

(3) In addition to the duties specified in paragraphs (1) and 

(2), the Inspector General shall also have the duties and responsibilities of inspectors general under the Inspector General Act of 1978. 

(d) POWERS AND AUTHORITIES.—(1) In carrying out the duties 

specified in subsection (c), the Special Inspector General shall have 

the authorities provided in section 6 of the Inspector General Act 

of 1978. 

(2) The Special Inspector General shall carry out the duties 

specified in subsection (c)(1) in accordance with section 4(b)(1) of 

the Inspector General Act of 1978. 

(e) PERSONNEL, FACILITIES, AND OTHER RESOURCES.—(1) The 

Special Inspector General may select, appoint, and employ such 

officers and employees as may be necessary for carrying out the 

duties of the Special Inspector General, subject to the provisions 

of title 5, United States Code, governing appointments in the 

competitive service, and the provisions of chapter 51 and subchapter 

III of chapter 53 of such title, relating to classification and General 

Schedule pay rates. 

(2) The Special Inspector General may obtain services as 

authorized by section 3109 of title 5, United States Code, at daily 

rates not to exceed the equivalent rate prescribed for grade GS– 

15 of the General Schedule by section 5332 of such title. 

(3) The Special Inspector General may enter into contracts 

and other arrangements for audits, studies, analyses, and other 

services with public agencies and with private persons, and make 

such payments as may be necessary to carry out the duties of 

the Inspector General. 

(4)(A) Upon request of the Special Inspector General for 

information or assistance from any department, agency, or other 

entity of the Federal Government, the head of such entity shall, 

insofar as is practicable and not in contravention of any existing 

law, furnish such information or assistance to the Special Inspector 

General, or an authorized designee. 


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(B) Whenever information or assistance requested by the Special Inspector General is, in the judgment of the Special Inspector 

General, unreasonably refused or not provided, the Special Inspector 

General shall report the circumstances to the appropriate committees of Congress without delay. 

(f) REPORTS.—(1) Not later than 60 days after the confirmation 

of the Special Inspector General, and every calendar quarter thereafter, the Special Inspector General shall submit to the appropriate 

committees of Congress a report summarizing the activities of the 

Special Inspector General during the 120-day period ending on 

the date of such report. Each report shall include, for the period 

covered by such report, a detailed statement of all purchases, obligations, expenditures, and revenues associated with any program 

established by the Secretary of the Treasury under sections 101 

and 102, as well as the information collected under subsection 

(c)(1). 

(2) Nothing in this subsection shall be construed to authorize 

the public disclosure of information that is— 

(A) specifically prohibited from disclosure by any other 

provision of law; 

(B) specifically required by Executive order to be protected 

from disclosure in the interest of national defense or national 

security or in the conduct of foreign affairs; or 

(C) a part of an ongoing criminal investigation. 

(3) Any reports required under this section shall also be submitted to the Congressional Oversight Panel established under 

section 125. 

(g) FUNDING.—(1) Of the amounts made available to the Secretary of the Treasury under section 118, $50,000,000 shall be 

available to the Special Inspector General to carry out this section. 

(2) The amount available under paragraph (1) shall remain 

available until expended. 

(h) TERMINATION.—The Office of the Special Inspector General 

shall terminate on the later of— 

(1) the date that the last troubled asset acquired by the 

Secretary under section 101 has been sold or transferred out 

of the ownership or control of the Federal Government; or 

(2) the date of expiration of the last insurance contract 

issued under section 102. 

SEC. 122. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT. 

Subsection (b) of section 3101 of title 31, United States Code, 

is amended by striking out the dollar limitation contained in such 

subsection and inserting ‘‘$11,315,000,000,000’’. 

SEC. 123. CREDIT REFORM. 

(a) IN GENERAL.—Subject to subsection (b), the costs of purchases of troubled assets made under section 101(a) and guarantees 

of troubled assets under section 102, and any cash flows associated 

with the activities authorized in section 102 and subsections (a), 

(b), and (c) of section 106 shall be determined as provided under 

the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et. seq.). 

(b) COSTS.—For the purposes of section 502(5) of the Federal 

Credit Reform Act of 1990 (2 U.S.C. 661a(5))— 

(1) the cost of troubled assets and guarantees of troubled 

assets shall be calculated by adjusting the discount rate in 

section 502(5)(E) (2 U.S.C. 661a(5)(E)) for market risks; and 

12 USC 5232. 

Reports. 

Reports. 


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(2) the cost of a modification of a troubled asset or guarantee of a troubled asset shall be the difference between the 

current estimate consistent with paragraph (1) under the terms 

of the troubled asset or guarantee of the troubled asset and 

the current estimate consistent with paragraph (1) under the 

terms of the troubled asset or guarantee of the troubled asset, 

as modified. 

SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS. 

Section 257 of the National Housing Act (12 U.S.C. 1715z– 

23) is amended— 

(1) in subsection (e)— 

(A) in paragraph (1)(B), by inserting before ‘‘a ratio’’ 

the following: ‘‘, or thereafter is likely to have, due to 

the terms of the mortgage being reset,’’; 

(B) in paragraph (2)(B), by inserting before the period 

at the end ‘‘(or such higher percentage as the Board determines, in the discretion of the Board)’’; 

(C) in paragraph (4)(A)— 

(i) in the first sentence, by inserting after ‘‘insured 

loan’’ the following: ‘‘and any payments made under 

this paragraph,’’; and 

(ii) by adding at the end the following: ‘‘Such 

actions may include making payments, which shall 

be accepted as payment in full of all indebtedness 

under the eligible mortgage, to any holder of an 

existing subordinate mortgage, in lieu of any future 

appreciation payments authorized under subparagraph 

(B).’’; and 

(2) in subsection (w), by inserting after ‘‘administrative 

costs’’ the following: ‘‘and payments pursuant to subsection 

(e)(4)(A)’’. 

SEC. 125. CONGRESSIONAL OVERSIGHT PANEL. 

(a) ESTABLISHMENT.—There is hereby established the Congressional Oversight Panel (hereafter in this section referred to as 

the ‘‘Oversight Panel’’) as an establishment in the legislative branch. 

(b) DUTIES.—The Oversight Panel shall review the current state 

of the financial markets and the regulatory system and submit 

the following reports to Congress: 

(1) REGULAR REPORTS.— 

(A) IN GENERAL.—Regular reports of the Oversight 

Panel shall include the following: 

(i) The use by the Secretary of authority under 

this Act, including with respect to the use of contracting authority and administration of the program. 

(ii) The impact of purchases made under the Act 

on the financial markets and financial institutions. 

(iii) The extent to which the information made 

available on transactions under the program has 

contributed to market transparency. 

(iv) The effectiveness of foreclosure mitigation 

efforts, and the effectiveness of the program from the 

standpoint of minimizing long-term costs to the taxpayers and maximizing the benefits for taxpayers. 

(B) TIMING.—The reports required under this paragraph shall be submitted not later than 30 days after 

12 USC 5233. 


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the first exercise by the Secretary of the authority under 

section 101(a) or 102, and every 30 days thereafter. 

(2) SPECIAL REPORT ON REGULATORY REFORM.—The Oversight Panel shall submit a special report on regulatory reform 

not later than January 20, 2009, analyzing the current state 

of the regulatory system and its effectiveness at overseeing 

the participants in the financial system and protecting consumers, and providing recommendations for improvement, 

including recommendations regarding whether any participants 

in the financial markets that are currently outside the regulatory system should become subject to the regulatory system, 

the rationale underlying such recommendation, and whether 

there are any gaps in existing consumer protections. 

(c) MEMBERSHIP.— (1) IN GENERAL.—The Oversight Panel shall consist of 5 

members, as follows: 

(A) 1 member appointed by the Speaker of the House 

of Representatives. 

(B) 1 member appointed by the minority leader of 

the House of Representatives. 

(C) 1 member appointed by the majority leader of 

the Senate. 

(D) 1 member appointed by the minority leader of 

the Senate. 

(E) 1 member appointed by the Speaker of the House 

of Representatives and the majority leader of the Senate, 

after consultation with the minority leader of the Senate 

and the minority leader of the House of Representatives. 

(2) PAY.—Each member of the Oversight Panel shall each 

be paid at a rate equal to the daily equivalent of the annual 

rate of basic pay for level I of the Executive Schedule for 

each day (including travel time) during which such member 

is engaged in the actual performance of duties vested in the 

Commission. 

(3) PROHIBITION OF COMPENSATION OF FEDERAL

EMPLOYEES.—Members of the Oversight Panel who are fulltime officers or employees of the United States or Members 

of Congress may not receive additional pay, allowances, or 

benefits by reason of their service on the Oversight Panel. 

(4) TRAVEL EXPENSES.—Each member shall receive travel 

expenses, including per diem in lieu of subsistence, in accordance with applicable provisions under subchapter I of chapter 

57 of title 5, United States Code. 

(5) QUORUM.—Four members of the Oversight Panel shall 

constitute a quorum but a lesser number may hold hearings. 

(6) VACANCIES.—A vacancy on the Oversight Panel shall 

be filled in the manner in which the original appointment 

was made. 

(7) MEETINGS.—The Oversight Panel shall meet at the 

call of the Chairperson or a majority of its members. 

(d) STAFF.— (1) IN GENERAL.—The Oversight Panel may appoint and 

fix the pay of any personnel as the Commission considers 

appropriate. 

(2) EXPERTS AND CONSULTANTS.—The Oversight Panel may 

procure temporary and intermittent services under section 

3109(b) of title 5, United States Code. 


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(3) STAFF OF AGENCIES.—Upon request of the Oversight 

Panel, the head of any Federal department or agency may 

detail, on a reimbursable basis, any of the personnel of that 

department or agency to the Oversight Panel to assist it in 

carrying out its duties under this Act. 

(e) POWERS.— 

(1) HEARINGS AND SESSIONS.—The Oversight Panel may, 

for the purpose of carrying out this section, hold hearings, 

sit and act at times and places, take testimony, and receive 

evidence as the Panel considers appropriate and may administer oaths or affirmations to witnesses appearing before it. 

(2) POWERS OF MEMBERS AND AGENTS.—Any member or 

agent of the Oversight Panel may, if authorized by the Oversight Panel, take any action which the Oversight Panel is 

authorized to take by this section. 

(3) OBTAINING OFFICIAL DATA.—The Oversight Panel may 

secure directly from any department or agency of the United 

States information necessary to enable it to carry out this 

section. Upon request of the Chairperson of the Oversight 

Panel, the head of that department or agency shall furnish 

that information to the Oversight Panel. 

(4) REPORTS.—The Oversight Panel shall receive and consider all reports required to be submitted to the Oversight 

Panel under this Act. 

(f) TERMINATION.—The Oversight Panel shall terminate 6 

months after the termination date specified in section 120. 

(g) FUNDING FOR EXPENSES.— 

(1) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to the Oversight Panel such sums 

as may be necessary for any fiscal year, half of which shall 

be derived from the applicable account of the House of Representatives, and half of which shall be derived from the contingent fund of the Senate. 

(2) REIMBURSEMENT OF AMOUNTS.—An amount equal to 

the expenses of the Oversight Panel shall be promptly transferred by the Secretary, from time to time upon the presentment 

of a statement of such expenses by the Chairperson of the 

Oversight Panel, from funds made available to the Secretary 

under this Act to the applicable fund of the House of Representatives and the contingent fund of the Senate, as appropriate, 

as reimbursement for amounts expended from such account 

and fund under paragraph (1). 

SEC. 126. FDIC AUTHORITY. 

(a) IN GENERAL.—Section 18(a) of the Federal Deposit Insurance 

Act (12 U.S.C. 1828(a)) is amended by adding at the end the 

following new paragraph: 

‘‘(4) FALSE ADVERTISING, MISUSE OF FDIC NAMES, AND MISREPRESENTATION TO INDICATE INSURED STATUS.— 

‘‘(A) PROHIBITION ON FALSE ADVERTISING AND MISUSE

OF FDIC NAMES.—No person may represent or imply that 

any deposit liability, obligation, certificate, or share is 

insured or guaranteed by the Corporation, if such deposit 

liability, obligation, certificate, or share is not insured or 

guaranteed by the Corporation— 


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‘‘(i) by using the terms ‘Federal Deposit’, ‘Federal 

Deposit Insurance’, ‘Federal Deposit Insurance Corporation’, any combination of such terms, or the abbreviation ‘FDIC’ as part of the business name or firm 

name of any person, including any corporation, partnership, business trust, association, or other business 

entity; or 

‘‘(ii) by using such terms or any other terms, sign, 

or symbol as part of an advertisement, solicitation, 

or other document. 

‘‘(B) PROHIBITION ON MISREPRESENTATIONS OF INSURED

STATUS.—No person may knowingly misrepresent— 

‘‘(i) that any deposit liability, obligation, certificate, 

or share is insured, under this Act, if such deposit 

liability, obligation, certificate, or share is not so 

insured; or 

‘‘(ii) the extent to which or the manner in which 

any deposit liability, obligation, certificate, or share 

is insured under this Act, if such deposit liability, 

obligation, certificate, or share is not so insured, to 

the extent or in the manner represented. 

‘‘(C) AUTHORITY OF THE APPROPRIATE FEDERAL BANKING

AGENCY.—The appropriate Federal banking agency shall 

have enforcement authority in the case of a violation of 

this paragraph by any person for which the agency is 

the appropriate Federal banking agency, or any institutionaffiliated party thereof. 

‘‘(D) CORPORATION AUTHORITY IF THE APPROPRIATE FEDERAL BANKING AGENCY FAILS TO FOLLOW RECOMMENDATION.— 

‘‘(i) RECOMMENDATION.—The Corporation may recommend in writing to the appropriate Federal banking 

agency that the agency take any enforcement action 

authorized under section 8 for purposes of enforcement 

of this paragraph with respect to any person for which 

the agency is the appropriate Federal banking agency 

or any institution-affiliated party thereof. 

‘‘(ii) AGENCY RESPONSE.—If the appropriate Federal banking agency does not, within 30 days of the 

date of receipt of a recommendation under clause (i), 

take the enforcement action with respect to this paragraph recommended by the Corporation or provide a 

plan acceptable to the Corporation for responding to 

the situation presented, the Corporation may take the 

recommended enforcement action against such person 

or institution-affiliated party. 

‘‘(E) ADDITIONAL AUTHORITY.—In addition to its 

authority under subparagraphs (C) and (D), for purposes 

of this paragraph, the Corporation shall have, in the same 

manner and to the same extent as with respect to a State 

nonmember insured bank— 

‘‘(i) jurisdiction over— 

‘‘(I) any person other than a person for which 

another agency is the appropriate Federal banking 

agency or any institution-affiliated party thereof; 

and 

Deadline. 


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‘‘(II) any person that aids or abets a violation 

of this paragraph by a person described in subclause (I); and 

‘‘(ii) for purposes of enforcing the requirements 

of this paragraph, the authority of the Corporation 

under— 

‘‘(I) section 10(c) to conduct investigations; and 

‘‘(II) subsections (b), (c), (d) and (i) of section 

8 to conduct enforcement actions. 

‘‘(F) OTHER ACTIONS PRESERVED.—No provision of this 

paragraph shall be construed as barring any action otherwise available, under the laws of the United States or 

any State, to any Federal or State agency or individual.’’. 

(b) ENFORCEMENT ORDERS.—Section 8(c) of the Federal Deposit 

Insurance Act (12 U.S.C. 1818(c)) is amended by adding at the 

end the following new paragraph: 

‘‘(4) FALSE ADVERTISING OR MISUSE OF NAMES TO INDICATE

INSURED STATUS.— 

‘‘(A) TEMPORARY ORDER.— 

‘‘(i) IN GENERAL.—If a notice of charges served 

under subsection (b)(1) specifies on the basis of particular facts that any person engaged or is engaging 

in conduct described in section 18(a)(4), the Corporation or other appropriate Federal banking agency may 

issue a temporary order requiring— 

‘‘(I) the immediate cessation of any activity 

or practice described, which gave rise to the notice 

of charges; and 

‘‘(II) affirmative action to prevent any further, 

or to remedy any existing, violation. 

‘‘(ii) EFFECT OF ORDER.—Any temporary order 

issued under this subparagraph shall take effect upon 

service. 

‘‘(B) EFFECTIVE PERIOD OF TEMPORARY ORDER.—A temporary order issued under subparagraph (A) shall remain 

effective and enforceable, pending the completion of an 

administrative proceeding pursuant to subsection (b)(1) in 

connection with the notice of charges— 

‘‘(i) until such time as the Corporation or other 

appropriate Federal banking agency dismisses the 

charges specified in such notice; or 

‘‘(ii) if a cease-and-desist order is issued against 

such person, until the effective date of such order. 

‘‘(C) CIVIL MONEY PENALTIES.—Any violation of section 

18(a)(4) shall be subject to civil money penalties, as set 

forth in subsection (i), except that for any person other 

than an insured depository institution or an institutionaffiliated party that is found to have violated this paragraph, the Corporation or other appropriate Federal 

banking agency shall not be required to demonstrate any 

loss to an insured depository institution.’’. 

(c) UNENFORCEABILITY OF CERTAIN AGREEMENTS.—Section 13(c) 

of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is amended 

by adding at the end the following new paragraph: 

‘‘(11) UNENFORCEABILITY OF CERTAIN AGREEMENTS.—No 

provision contained in any existing or future standstill, confidentiality, or other agreement that, directly or indirectly— 


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‘‘(A) affects, restricts, or limits the ability of any person 

to offer to acquire or acquire, 

‘‘(B) prohibits any person from offering to acquire or 

acquiring, or 

‘‘(C) prohibits any person from using any previously 

disclosed information in connection with any such offer 

to acquire or acquisition of, 

all or part of any insured depository institution, including any 

liabilities, assets, or interest therein, in connection with any 

transaction in which the Corporation exercises its authority 

under section 11 or 13, shall be enforceable against or impose 

any liability on such person, as such enforcement or liability 

shall be contrary to public policy.’’. 

(d) TECHNICAL AND CONFORMING AMENDMENTS.—Section 18 of 

the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended— 

(1) in subsection (a)(3)— 

(A) by striking ‘‘this subsection’’ the first place that 

term appears and inserting ‘‘paragraph (1)’’; and 

(B) by striking ‘‘this subsection’’ the second place that 

term appears and inserting ‘‘paragraph (2)’’; and 

(2) in the heading for subsection (a), by striking ‘‘INSURANCE

LOGO.—’’ and inserting ‘‘REPRESENTATIONS OF DEPOSIT INSUR- ANCE.—’’. 

SEC. 127. COOPERATION WITH THE FBI. 

Any Federal financial regulatory agency shall cooperate with 

the Federal Bureau of Investigation and other law enforcement 

agencies investigating fraud, misrepresentation, and malfeasance 

with respect to development, advertising, and sale of financial products. 

SEC. 128. ACCELERATION OF EFFECTIVE DATE. 

Section 203 of the Financial Services Regulatory Relief Act 

of 2006 (12 U.S.C. 461 note) is amended by striking ‘‘October 

1, 2011’’ and inserting ‘‘October 1, 2008’’. 

SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHORITY. 

(a) IN GENERAL.—Not later than 7 days after the date on 

which the Board exercises its authority under the third paragraph 

of section 13 of the Federal Reserve Act (12 U.S.C. 343; relating 

to discounts for individuals, partnerships, and corporations) the 

Board shall provide to the Committee on Banking, Housing, and 

Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report which includes— 

(1) the justification for exercising the authority; and 

(2) the specific terms of the actions of the Board, including 

the size and duration of the lending, available information 

concerning the value of any collateral held with respect to 

such a loan, the recipient of warrants or any other potential 

equity in exchange for the loan, and any expected cost to 

the taxpayers for such exercise. 

(b) PERIODIC UPDATES.—The Board shall provide updates to 

the Committees specified in subsection (a) not less frequently than 

once every 60 days while the subject loan is outstanding, including— 

(1) the status of the loan; 

(2) the value of the collateral held by the Federal reserve 

bank which initiated the loan; and 

(3) the projected cost to the taxpayers of the loan. 

Reports. 

Deadline. 

12 USC 5235. 

12 USC 5234. 


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(c) CONFIDENTIALITY.—The information submitted to the Congress under this section shall be kept confidential, upon the written 

request of the Chairman of the Board, in which case it shall be 

made available only to the Chairpersons and Ranking Members 

of the Committees described in subsection (a). 

(d) APPLICABILITY.—The provisions of this section shall be in 

force for all uses of the authority provided under section 13 of 

the Federal Reserve Act occurring during the period beginning 

on March 1, 2008 and ending on the after the date of enactment 

of this Act, and reports described in subsection (a) shall be required 

beginning not later than 30 days after that date of enactment, 

with respect to any such exercise of authority. 

(e) SHARING OF INFORMATION.—Any reports required under this 

section shall also be submitted to the Congressional Oversight 

Panel established under section 125. 

SEC. 130. TECHNICAL CORRECTIONS. 

(a) IN GENERAL.—Section 128(b)(2) of the Truth in Lending 

Act (15 U.S.C. 1638(b)(2)), as amended by section 2502 of the 

Mortgage Disclosure Improvement Act of 2008 (Public Law 110– 

289), is amended— 

(1) in subparagraph (A), by striking ‘‘In the case’’ and 

inserting ‘‘Except as provided in subparagraph (G), in the case’’; 

and 

(2) by amending subparagraph (G) to read as follows: 

‘‘(G)(i) In the case of an extension of credit relating 

to a plan described in section 101(53D) of title 11, United 

States Code— 

‘‘(I) the requirements of subparagraphs (A) through 

(E) shall not apply; and 

‘‘(II) a good faith estimate of the disclosures 

required under subsection (a) shall be made in accordance with regulations of the Board under section 121(c) 

before such credit is extended, or shall be delivered 

or placed in the mail not later than 3 business days 

after the date on which the creditor receives the written application of the consumer for such credit, whichever is earlier. 

‘‘(ii) If a disclosure statement furnished within 3 business days of the written application (as provided under 

clause (i)(II)) contains an annual percentage rate which 

is subsequently rendered inaccurate, within the meaning 

of section 107(c), the creditor shall furnish another disclosure statement at the time of settlement or consummation 

of the transaction.’’. 

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

(a) shall take effect as if included in the amendments made by 

section 2502 of the Mortgage Disclosure Improvement Act of 2008 

(Public Law 110–289). 

SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSEMENT. 

(a) REIMBURSEMENT.—The Secretary shall reimburse the 

Exchange Stabilization Fund established under section 5302 of title 

31, United States Code, for any funds that are used for the Treasury 

Money Market Funds Guaranty Program for the United States 

money market mutual fund industry, from funds under this Act. 

(b) LIMITS ON USE OF EXCHANGE STABILIZATION FUND.—The 

Secretary is prohibited from using the Exchange Stabilization Fund 

12 USC 5236. 

15 USC 1638 

note. 

Disclosure 

statement. 

Deadline. 

Good faith 

estimate. 

Deadline. 

Reports. 

Effective date. 

Termination 

date. 

Reports. 

Deadline. 


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for the establishment of any future guaranty programs for the 

United States money market mutual fund industry. 

SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET ACCOUNTING. 

(a) AUTHORITY.—The Securities and Exchange Commission 

shall have the authority under the securities laws (as such term 

is defined in section 3(a)(47) of the Securities Exchange Act of 

1934 (15 U.S.C. 78c(a)(47)) to suspend, by rule, regulation, or order, 

the application of Statement Number 157 of the Financial 

Accounting Standards Board for any issuer (as such term is defined 

in section 3(a)(8) of such Act) or with respect to any class or 

category of transaction if the Commission determines that is necessary or appropriate in the public interest and is consistent with 

the protection of investors. 

(b) SAVINGS PROVISION.—Nothing in subsection (a) shall be 

construed to restrict or limit any authority of the Securities and 

Exchange Commission under securities laws as in effect on the 

date of enactment of this Act. 

SEC. 133. STUDY ON MARK-TO-MARKET ACCOUNTING. 

(a) STUDY.—The Securities and Exchange Commission, in consultation with the Board and the Secretary, shall conduct a study 

on mark-to-market accounting standards as provided in Statement 

Number 157 of the Financial Accounting Standards Board, as such 

standards are applicable to financial institutions, including depository institutions. Such a study shall consider at a minimum— 

(1) the effects of such accounting standards on a financial 

institution’s balance sheet; 

(2) the impacts of such accounting on bank failures in 

2008; 

(3) the impact of such standards on the quality of financial 

information available to investors; 

(4) the process used by the Financial Accounting Standards 

Board in developing accounting standards; 

(5) the advisability and feasibility of modifications to such 

standards; and 

(6) alternative accounting standards to those provided in 

such Statement Number 157. 

(b) REPORT.—The Securities and Exchange Commission shall 

submit to Congress a report of such study before the end of the 

90-day period beginning on the date of the enactment of this Act 

containing the findings and determinations of the Commission, 

including such administrative and legislative recommendations as 

the Commission determines appropriate. 

SEC. 134. RECOUPMENT. 

Upon the expiration of the 5-year period beginning upon the 

date of the enactment of this Act, the Director of the Office of 

Management and Budget, in consultation with the Director of the 

Congressional Budget Office, shall submit a report to the Congress 

on the net amount within the Troubled Asset Relief Program under 

this Act. In any case where there is a shortfall, the President 

shall submit a legislative proposal that recoups from the financial 

industry an amount equal to the shortfall in order to ensure that 

the Troubled Asset Relief Program does not add to the deficit 

or national debt. 

President. 

Legislation. 

Reports. 

Deadline. 

12 USC 5239. 

12 USC 5238. 

12 USC 5237. 


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SEC. 135. PRESERVATION OF AUTHORITY. 

With the exception of section 131, nothing in this Act may 

be construed to limit the authority of the Secretary or the Board 

under any other provision of law. 

SEC. 136. TEMPORARY INCREASE IN DEPOSIT AND SHARE INSURANCE 

COVERAGE. 

(a) FEDERAL DEPOSIT INSURANCE ACT; TEMPORARY INCREASE

IN DEPOSIT INSURANCE.— (1) INCREASED AMOUNT.—Effective only during the period 

beginning on the date of enactment of this Act and ending 

on December 31, 2009, section 11(a)(1)(E) of the Federal Deposit 

Insurance Act (12 U.S.C. 1821(a)(1)(E)) shall apply with 

‘‘$250,000’’ substituted for ‘‘$100,000’’. 

(2) TEMPORARY INCREASE NOT TO BE CONSIDERED FOR SET- TING ASSESSMENTS.—The temporary increase in the standard 

maximum deposit insurance amount made under paragraph 

(1) shall not be taken into account by the Board of Directors 

of the Corporation for purposes of setting assessments under 

section 7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 

1817(b)(2)). 

(3) BORROWING LIMITS TEMPORARILY LIFTED.—During the 

period beginning on the date of enactment of this Act and 

ending on December 31, 2009, the Board of Directors of the 

Corporation may request from the Secretary, and the Secretary 

shall approve, a loan or loans in an amount or amounts necessary to carry out this subsection, without regard to the limitations on such borrowing under section 14(a) and 15(c) of the 

Federal Deposit Insurance Act (12 U.S.C. 1824(a), 1825(c)). 

(b) FEDERAL CREDIT UNION ACT; TEMPORARY INCREASE IN

SHARE INSURANCE.— 

(1) INCREASED AMOUNT.—Effective only during the period 

beginning on the date of enactment of this Act and ending 

on December 31, 2009, section 207(k)(5) of the Federal Credit 

Union Act (12 U.S.C. 1787(k)(5)) shall apply with ‘‘$250,000’’ 

substituted for ‘‘$100,000’’. 

(2) TEMPORARY INCREASE NOT TO BE CONSIDERED FOR SETTING INSURANCE PREMIUM CHARGES AND INSURANCE DEPOSIT

ADJUSTMENTS.—The temporary increase in the standard maximum share insurance amount made under paragraph (1) shall 

not be taken into account by the National Credit Union 

Administration Board for purposes of setting insurance premium charges and share insurance deposit adjustments under 

section 202(c)(2) of the Federal Credit Union Act (12 U.S.C. 

1782(c)(2)). 

(3) BORROWING LIMITS TEMPORARILY LIFTED.—During the 

period beginning on the date of enactment of this Act and 

ending on December 31, 2009, the National Credit Union 

Administration Board may request from the Secretary, and 

the Secretary shall approve, a loan or loans in an amount 

or amounts necessary to carry out this subsection, without 

regard to the limitations on such borrowing under section 

203(d)(1) of the Federal Credit Union Act (12 U.S.C. 1783(d)(1)). 

(c) NOT FOR USE IN INFLATION ADJUSTMENTS.—The temporary 

increase in the standard maximum deposit insurance amount made 

under this section shall not be used to make any inflation adjustment under section 11(a)(1)(F) of the Federal Deposit Insurance 

Effective dates. 

Termination 

dates. 

12 USC 5241. 

12 USC 5240. 


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Act (12 U.S.C. 1821(a)(1)(F)) for purposes of that Act or the Federal 

Credit Union Act. 

TITLE II—BUDGET-RELATED 

PROVISIONS 

SEC. 201. INFORMATION FOR CONGRESSIONAL SUPPORT AGENCIES. 

Upon request, and to the extent otherwise consistent with 

law, all information used by the Secretary in connection with activities authorized under this Act (including the records to which 

the Comptroller General is entitled under this Act) shall be made 

available to congressional support agencies (in accordance with 

their obligations to support the Congress as set out in their authorizing statutes) for the purposes of assisting the committees of Congress with conducting oversight, monitoring, and analysis of the 

activities authorized under this Act. 

SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND BUDGET 

AND THE CONGRESSIONAL BUDGET OFFICE. 

(a) REPORTS BY THE OFFICE OF MANAGEMENT AND BUDGET.— Within 60 days of the first exercise of the authority granted in 

section 101(a), but in no case later than December 31, 2008, and 

semiannually thereafter, the Office of Management and Budget 

shall report to the President and the Congress— 

(1) the estimate, notwithstanding section 502(5)(F) of the 

Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(F)), as 

of the first business day that is at least 30 days prior to 

the issuance of the report, of the cost of the troubled assets, 

and guarantees of the troubled assets, determined in accordance 

with section 123; 

(2) the information used to derive the estimate, including 

assets purchased or guaranteed, prices paid, revenues received, 

the impact on the deficit and debt, and a description of any 

outstanding commitments to purchase troubled assets; and 

(3) a detailed analysis of how the estimate has changed 

from the previous report. 

Beginning with the second report under subsection (a), the Office 

of Management and Budget shall explain the differences between 

the Congressional Budget Office estimates delivered in accordance 

with subsection (b) and prior Office of Management and Budget 

estimates. 

(b) REPORTS BY THE CONGRESSIONAL BUDGET OFFICE.—Within 

45 days of receipt by the Congress of each report from the Office 

of Management and Budget under subsection (a), the Congressional 

Budget Office shall report to the Congress the Congressional Budget 

Office’s assessment of the report submitted by the Office of Management and Budget, including— 

(1) the cost of the troubled assets and guarantees of the 

troubled assets, 

(2) the information and valuation methods used to calculate 

such cost, and 

(3) the impact on the deficit and the debt. 

(c) FINANCIAL EXPERTISE.—In carrying out the duties in this 

subsection or performing analyses of activities under this Act, the 

Director of the Congressional Budget Office may employ personnel 

and procure the services of experts and consultants. 

12 USC 5252. 

12 USC 5251. 


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(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as may be necessary to produce 

reports required by this section. 

SEC. 203. ANALYSIS IN PRESIDENT’S BUDGET. 

(a) IN GENERAL.—Section 1105(a) of title 31, United States 

Code, is amended by adding at the end the following new paragraph: 

‘‘(35) as supplementary materials, a separate analysis of 

the budgetary effects for all prior fiscal years, the current 

fiscal year, the fiscal year for which the budget is submitted, 

and ensuing fiscal years of the actions the Secretary of the 

Treasury has taken or plans to take using any authority provided in the Emergency Economic Stabilization Act of 2008, 

including— 

‘‘(A) an estimate of the current value of all assets 

purchased, sold, and guaranteed under the authority provided in the Emergency Economic Stabilization Act of 2008 

using methodology required by the Federal Credit Reform 

Act of 1990 (2 U.S.C. 661 et seq.) and section 123 of 

the Emergency Economic Stabilization Act of 2008; 

‘‘(B) an estimate of the deficit, the debt held by the 

public, and the gross Federal debt using methodology 

required by the Federal Credit Reform Act of 1990 and 

section 123 of the Emergency Economic Stabilization Act 

of 2008; 

‘‘(C) an estimate of the current value of all assets 

purchased, sold, and guaranteed under the authority provided in the Emergency Economic Stabilization Act of 2008 

calculated on a cash basis; 

‘‘(D) a revised estimate of the deficit, the debt held 

by the public, and the gross Federal debt, substituting 

the cash-based estimates in subparagraph (C) for the estimates calculated under subparagraph (A) pursuant to the 

Federal Credit Reform Act of 1990 and section 123 of 

the Emergency Economic Stabilization Act of 2008; and 

‘‘(E) the portion of the deficit which can be attributed 

to any action taken by the Secretary using authority provided by the Emergency Economic Stabilization Act of 2008 

and the extent to which the change in the deficit since 

the most recent estimate is due to a reestimate using 

the methodology required by the Federal Credit Reform 

Act of 1990 and section 123 of the Emergency Economic 

Stabilization Act of 2008.’’ 

(b) CONSULTATION.—In implementing this section, the Director 

of Office of Management and Budget shall consult periodically, 

but at least annually, with the Committee on the Budget of the 

House of Representatives, the Committee on the Budget of the 

Senate, and the Director of the Congressional Budget Office. 

(c) EFFECTIVE DATE.—This section and the amendment made 

by this section shall apply beginning with respect to the fiscal 

year 2010 budget submission of the President. 

SEC. 204. EMERGENCY TREATMENT. 

All provisions of this Act are designated as an emergency 

requirement and necessary to meet emergency needs pursuant to 

section 204(a) of S. Con. Res 21 (110th Congress), the concurrent 

resolution on the budget for fiscal year 2008 and rescissions of 

12 USC 5253. 

31 USC 1105 

note. 

31 USC 1105 

note. 


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any amounts provided in this Act shall not be counted for purposes 

of budget enforcement. 

TITLE III—TAX PROVISIONS 

SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF CERTAIN PREFERRED STOCK. 

(a) IN GENERAL.—For purposes of the Internal Revenue Code 

of 1986, gain or loss from the sale or exchange of any applicable 

preferred stock by any applicable financial institution shall be 

treated as ordinary income or loss. 

(b) APPLICABLE PREFERRED STOCK.—For purposes of this section, the term ‘‘applicable preferred stock’’ means any stock— 

(1) which is preferred stock in— 

(A) the Federal National Mortgage Association, established pursuant to the Federal National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.), or 

(B) the Federal Home Loan Mortgage Corporation, 

established pursuant to the Federal Home Loan Mortgage 

Corporation Act (12 U.S.C. 1451 et seq.), and 

(2) which— 

(A) was held by the applicable financial institution 

on September 6, 2008, or 

(B) was sold or exchanged by the applicable financial 

institution on or after January 1, 2008, and before September 7, 2008. 

(c) APPLICABLE FINANCIAL INSTITUTION.—For purposes of this 

section: 

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

term ‘‘applicable financial institution’’ means— 

(A) a financial institution referred to in section 

582(c)(2) of the Internal Revenue Code of 1986, or 

(B) a depository institution holding company (as 

defined in section 3(w)(1) of the Federal Deposit Insurance 

Act (12 U.S.C. 1813(w)(1))). 

(2) SPECIAL RULES FOR CERTAIN SALES.—In the case of— 

(A) a sale or exchange described in subsection (b)(2)(B), 

an entity shall be treated as an applicable financial institution only if it was an entity described in subparagraph 

(A) or (B) of paragraph (1) at the time of the sale or 

exchange, and 

(B) a sale or exchange after September 6, 2008, of 

preferred stock described in subsection (b)(2)(A), an entity 

shall be treated as an applicable financial institution only 

if it was an entity described in subparagraph (A) or (B) 

of paragraph (1) at all times during the period beginning 

on September 6, 2008, and ending on the date of the 

sale or exchange of the preferred stock. 

(d) SPECIAL RULE FOR CERTAIN PROPERTY NOT HELD ON SEP- TEMBER 6, 2008.—The Secretary of the Treasury or the Secretary’s 

delegate may extend the application of this section to all or a 

portion of the gain or loss from a sale or exchange in any case 

where— 

(1) an applicable financial institution sells or exchanges 

applicable preferred stock after September 6, 2008, which the 

applicable financial institution did not hold on such date, but 

Definition. 

Definition. 

12 USC 5261. 


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the basis of which in the hands of the applicable financial 

institution at the time of the sale or exchange is the same 

as the basis in the hands of the person which held such stock 

on such date, or 

(2) the applicable financial institution is a partner in a 

partnership which— 

(A) held such stock on September 6, 2008, and later 

sold or exchanged such stock, or 

(B) sold or exchanged such stock during the period 

described in subsection (b)(2)(B). 

(e) REGULATORY AUTHORITY.—The Secretary of the Treasury 

or the Secretary’s delegate may prescribe such guidance, rules, 

or regulations as are necessary to carry out the purposes of this 

section. 

(f) EFFECTIVE DATE.—This section shall apply to sales or 

exchanges occurring after December 31, 2007, in taxable years 

ending after such date. 

SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECUTIVE COMPENSATION OF EMPLOYERS PARTICIPATING IN THE TROUBLED ASSETS RELIEF PROGRAM. 

(a) DENIAL OF DEDUCTION.—Subsection (m) of section 162 of 

the Internal Revenue Code of 1986 is amended by adding at the 

end the following new paragraph: 

‘‘(5) SPECIAL RULE FOR APPLICATION TO EMPLOYERS PARTICIPATING IN THE TROUBLED ASSETS RELIEF PROGRAM.— 

‘‘(A) IN GENERAL.—In the case of an applicable 

employer, no deduction shall be allowed under this 

chapter— 

‘‘(i) in the case of executive remuneration for any 

applicable taxable year which is attributable to services 

performed by a covered executive during such 

applicable taxable year, to the extent that the amount 

of such remuneration exceeds $500,000, or 

‘‘(ii) in the case of deferred deduction executive 

remuneration for any taxable year for services performed during any applicable taxable year by a covered 

executive, to the extent that the amount of such remuneration exceeds $500,000 reduced (but not below zero) 

by the sum of— 

‘‘(I) the executive remuneration for such 

applicable taxable year, plus 

‘‘(II) the portion of the deferred deduction 

executive remuneration for such services which 

was taken into account under this clause in a 

preceding taxable year. 

‘‘(B) APPLICABLE EMPLOYER.—For purposes of this paragraph— 

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

(ii), the term ‘applicable employer’ means any employer 

from whom 1 or more troubled assets are acquired 

under a program established by the Secretary under 

section 101(a) of the Emergency Economic Stabilization 

Act of 2008 if the aggregate amount of the assets 

so acquired for all taxable years exceeds $300,000,000. 

‘‘(ii) DISREGARD OF CERTAIN ASSETS SOLD THROUGH

DIRECT PURCHASE.—If the only sales of troubled assets 

Definition. 

26 USC 162. 


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by an employer under the program described in clause 

(i) are through 1 or more direct purchases (within 

the meaning of section 113(c) of the Emergency Economic Stabilization Act of 2008), such assets shall not 

be taken into account under clause (i) in determining 

whether the employer is an applicable employer for 

purposes of this paragraph. 

‘‘(iii) AGGREGATION RULES.—Two or more persons 

who are treated as a single employer under subsection 

(b) or (c) of section 414 shall be treated as a single 

employer, except that in applying section 1563(a) for 

purposes of either such subsection, paragraphs (2) and 

(3) thereof shall be disregarded. 

‘‘(C) APPLICABLE TAXABLE YEAR.—For purposes of this 

paragraph, the term ‘applicable taxable year’ means, with 

respect to any employer— 

‘‘(i) the first taxable year of the employer— 

‘‘(I) which includes any portion of the period 

during which the authorities under section 101(a) 

of the Emergency Economic Stabilization Act of 

2008 are in effect (determined under section 120 

thereof), and 

‘‘(II) in which the aggregate amount of troubled assets acquired from the employer during the 

taxable year pursuant to such authorities (other 

than assets to which subparagraph (B)(ii) applies), 

when added to the aggregate amount so acquired 

for all preceding taxable years, exceeds 

$300,000,000, and 

‘‘(ii) any subsequent taxable year which includes 

any portion of such period. 

‘‘(D) COVERED EXECUTIVE.—For purposes of this paragraph— 

‘‘(i) IN GENERAL.—The term ‘covered executive’ 

means, with respect to any applicable taxable year, 

any employee— 

‘‘(I) who, at any time during the portion of 

the taxable year during which the authorities 

under section 101(a) of the Emergency Economic 

Stabilization Act of 2008 are in effect (determined 

under section 120 thereof), is the chief executive 

officer of the applicable employer or the chief financial officer of the applicable employer, or an individual acting in either such capacity, or 

‘‘(II) who is described in clause (ii). 

‘‘(ii) HIGHEST COMPENSATED EMPLOYEES.—An 

employee is described in this clause if the employee 

is 1 of the 3 highest compensated officers of the 

applicable employer for the taxable year (other than 

an individual described in clause (i)(I)), determined— 

‘‘(I) on the basis of the shareholder disclosure 

rules for compensation under the Securities 

Exchange Act of 1934 (without regard to whether 

those rules apply to the employer), and 

‘‘(II) by only taking into account employees 

employed during the portion of the taxable year 

described in clause (i)(I). 


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‘‘(iii) EMPLOYEE REMAINS COVERED EXECUTIVE.— If an employee is a covered executive with respect 

to an applicable employer for any applicable taxable 

year, such employee shall be treated as a covered 

executive with respect to such employer for all subsequent applicable taxable years and for all subsequent 

taxable years in which deferred deduction executive 

remuneration with respect to services performed in 

all such applicable taxable years would (but for this 

paragraph) be deductible. 

‘‘(E) EXECUTIVE REMUNERATION.—For purposes of this 

paragraph, the term ‘executive remuneration’ means the 

applicable employee remuneration of the covered executive, 

as determined under paragraph (4) without regard to subparagraphs (B), (C), and (D) thereof. Such term shall not 

include any deferred deduction executive remuneration 

with respect to services performed in a prior applicable 

taxable year. 

‘‘(F) DEFERRED DEDUCTION EXECUTIVE REMUNERATION.—For purposes of this paragraph, the term ‘deferred 

deduction executive remuneration’ means remuneration 

which would be executive remuneration for services performed in an applicable taxable year but for the fact that 

the deduction under this chapter (determined without 

regard to this paragraph) for such remuneration is allowable in a subsequent taxable year. 

‘‘(G) COORDINATION.—Rules similar to the rules of subparagraphs (F) and (G) of paragraph (4) shall apply for 

purposes of this paragraph. 

‘‘(H) REGULATORY AUTHORITY.—The Secretary may prescribe such guidance, rules, or regulations as are necessary 

to carry out the purposes of this paragraph and the Emergency Economic Stabilization Act of 2008, including the 

extent to which this paragraph applies in the case of any 

acquisition, merger, or reorganization of an applicable 

employer.’’. 

(b) GOLDEN PARACHUTE RULE.—Section 280G of the Internal 

Revenue Code of 1986 is amended— 

(1) by redesignating subsection (e) as subsection (f), and 

(2) by inserting after subsection (d) the following new subsection: 

‘‘(e) SPECIAL RULE FOR APPLICATION TO EMPLOYERS PARTICIPATING IN THE TROUBLED ASSETS RELIEF PROGRAM.— 

‘‘(1) IN GENERAL.—In the case of the severance from employment of a covered executive of an applicable employer during 

the period during which the authorities under section 101(a) 

of the Emergency Economic Stabilization Act of 2008 are in 

effect (determined under section 120 of such Act), this section 

shall be applied to payments to such executive with the following modifications: 

‘‘(A) Any reference to a disqualified individual (other 

than in subsection (c)) shall be treated as a reference 

to a covered executive. 

‘‘(B) Any reference to a change described in subsection 

(b)(2)(A)(i) shall be treated as a reference to an applicable 

severance from employment of a covered executive, and 

any reference to a payment contingent on such a change 

26 USC 280G. 


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shall be treated as a reference to any payment made during 

an applicable taxable year of the employer on account 

of such applicable severance from employment. 

‘‘(C) Any reference to a corporation shall be treated 

as a reference to an applicable employer. 

‘‘(D) The provisions of subsections (b)(2)(C), (b)(4), 

(b)(5), and (d)(5) shall not apply. 

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

subsection: 

‘‘(A) DEFINITIONS.—Any term used in this subsection 

which is also used in section 162(m)(5) shall have the 

meaning given such term by such section. 

‘‘(B) APPLICABLE SEVERANCE FROM EMPLOYMENT.—The 

term ‘applicable severance from employment’ means any 

severance from employment of a covered executive— 

‘‘(i) by reason of an involuntary termination of 

the executive by the employer, or 

‘‘(ii) in connection with any bankruptcy, liquidation, or receivership of the employer. 

‘‘(C) COORDINATION AND OTHER RULES.— 

‘‘(i) IN GENERAL.—If a payment which is treated 

as a parachute payment by reason of this subsection 

is also a parachute payment determined without regard 

to this subsection, this subsection shall not apply to 

such payment. 

‘‘(ii) REGULATORY AUTHORITY.—The Secretary may 

prescribe such guidance, rules, or regulations as are 

necessary— 

‘‘(I) to carry out the purposes of this subsection 

and the Emergency Economic Stabilization Act of 

2008, including the extent to which this subsection 

applies in the case of any acquisition, merger, or 

reorganization of an applicable employer, 

‘‘(II) to apply this section and section 4999 

in cases where one or more payments with respect 

to any individual are treated as parachute payments by reason of this subsection, and other payments with respect to such individual are treated 

as parachute payments under this section without 

regard to this subsection, and 

‘‘(III) to prevent the avoidance of the application of this section through the mischaracterization 

of a severance from employment as other than 

an applicable severance from employment.’’. 

(c) EFFECTIVE DATES.— 

(1) IN GENERAL.—The amendment made by subsection (a) 

shall apply to taxable years ending on or after the date of 

the enactment of this Act. 

(2) GOLDEN PARACHUTE RULE.—The amendments made by 

subsection (b) shall apply to payments with respect to 

severances occurring during the period during which the 

authorities under section 101(a) of this Act are in effect (determined under section 120 of this Act). 

26 USC 280G 

note. 

26 USC 162 note. 


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SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM DISCHARGE 

OF QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS. 

(a) EXTENSION.—Subparagraph (E) of section 108(a)(1) of the 

Internal Revenue Code of 1986 is amended by striking ‘‘January 

1, 2010’’ and inserting ‘‘January 1, 2013’’. 

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

shall apply to discharges of indebtedness occurring on or after 

January 1, 2010. 

DIVISION B—ENERGY IMPROVEMENT 

AND EXTENSION ACT OF 2008 

SEC. 1. SHORT TITLE, ETC. 

(a) SHORT TITLE.—This division may be cited as the ‘‘Energy 

Improvement and Extension Act of 2008’’. 

(b) REFERENCE.—Except as otherwise expressly provided, whenever in this division an amendment or repeal is expressed in terms 

of an amendment to, or repeal of, a section or other provision, 

the reference shall be considered to be made to a section or other 

provision of the Internal Revenue Code of 1986. 

(c) TABLE OF CONTENTS.—The table of contents for this division 

is as follows: 

Sec. 1. Short title, etc. 

TITLE I—ENERGY PRODUCTION INCENTIVES 

Subtitle A—Renewable Energy Incentives 

Sec. 101. Renewable energy credit. 

Sec. 102. Production credit for electricity produced from marine renewables. 

Sec. 103. Energy credit. 

Sec. 104. Energy credit for small wind property. 

Sec. 105. Energy credit for geothermal heat pump systems. 

Sec. 106. Credit for residential energy efficient property. 

Sec. 107. New clean renewable energy bonds. 

Sec. 108. Credit for steel industry fuel. 

Sec. 109. Special rule to implement FERC and State electric restructuring policy. 

Subtitle B—Carbon Mitigation and Coal Provisions 

Sec. 111. Expansion and modification of advanced coal project investment credit. 

Sec. 112. Expansion and modification of coal gasification investment credit. 

Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Disability 

Trust Fund. 

Sec. 114. Special rules for refund of the coal excise tax to certain coal producers 

and exporters. 

Sec. 115. Tax credit for carbon dioxide sequestration. 

Sec. 116. Certain income and gains relating to industrial source carbon dioxide 

treated as qualifying income for publicly traded partnerships. 

Sec. 117. Carbon audit of the tax code. 

TITLE II—TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS 

Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol 

plant property. 

Sec. 202. Credits for biodiesel and renewable diesel. 

Sec. 203. Clarification that credits for fuel are designed to provide an incentive for 

United States production. 

Sec. 204. Extension and modification of alternative fuel credit. 

Sec. 205. Credit for new qualified plug-in electric drive motor vehicles. 

Sec. 206. Exclusion from heavy truck tax for idling reduction units and advanced 

insulation. 

Sec. 207. Alternative fuel vehicle refueling property credit. 

Sec. 208. Certain income and gains relating to alcohol fuels and mixtures, biodiesel 

fuels and mixtures, and alternative fuels and mixtures treated as qualifying income for publicly traded partnerships. 

26 USC 1 et al. 

26 USC 108 note. 

26 USC 108. 


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Sec. 209. Extension and modification of election to expense certain refineries. 

Sec. 210. Extension of suspension of taxable income limit on percentage depletion 

for oil and natural gas produced from marginal properties. 

Sec. 211. Transportation fringe benefit to bicycle commuters. 

TITLE III—ENERGY CONSERVATION AND EFFICIENCY PROVISIONS 

Sec. 301. Qualified energy conservation bonds. 

Sec. 302. Credit for nonbusiness energy property. 

Sec. 303. Energy efficient commercial buildings deduction. 

Sec. 304. New energy efficient home credit. 

Sec. 305. Modifications of energy efficient appliance credit for appliances produced 

after 2007. 

Sec. 306. Accelerated recovery period for depreciation of smart meters and smart 

grid systems. 

Sec. 307. Qualified green building and sustainable design projects. 

Sec. 308. Special depreciation allowance for certain reuse and recycling property. 

TITLE IV—REVENUE PROVISIONS 

Sec. 401. Limitation of deduction for income attributable to domestic production of 

oil, gas, or primary products thereof. 

Sec. 402. Elimination of the different treatment of foreign oil and gas extraction income and foreign oil related income for purposes of the foreign tax credit. 

Sec. 403. Broker reporting of customer’s basis in securities transactions. 

Sec. 404. 0.2 percent FUTA surtax. 

Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax. 

TITLE I—ENERGY PRODUCTION 

INCENTIVES 

Subtitle A—Renewable Energy Incentives 

SEC. 101. RENEWABLE ENERGY CREDIT. 

(a) EXTENSION OF CREDIT.— 

(1) 1-YEAR EXTENSION FOR WIND AND REFINED COAL FACILITIES.—Paragraphs (1) and (8) of section 45(d) are each amended 

by striking ‘‘January 1, 2009’’ and inserting ‘‘January 1, 2010’’. 

(2) 2-YEAR EXTENSION FOR CERTAIN OTHER FACILITIES.— Each of the following provisions of section 45(d) is amended 

by striking ‘‘January 1, 2009’’ and inserting ‘‘January 1, 2011’’: 

(A) Clauses (i) and (ii) of paragraph (2)(A). 

(B) Clauses (i)(I) and (ii) of paragraph (3)(A). 

(C) Paragraph (4). 

(D) Paragraph (5). 

(E) Paragraph (6). 

(F) Paragraph (7). 

(G) Subparagraphs (A) and (B) of paragraph (9). 

(b) MODIFICATION OF REFINED COAL AS A QUALIFIED ENERGY

RESOURCE.— 

(1) ELIMINATION OF INCREASED MARKET VALUE TEST.—Section 45(c)(7)(A)(i) (defining refined coal), as amended by section 

108, is amended— 

(A) by striking subclause (IV), 

(B) by adding ‘‘and’’ at the end of subclause (II), and 

(C) by striking ‘‘, and’’ at the end of subclause (III) 

and inserting a period. 

(2) INCREASE IN REQUIRED EMISSION REDUCTION.—Section 

45(c)(7)(B) (defining qualified emission reduction) is amended 

by inserting ‘‘at least 40 percent of the emissions of’’ after 

‘‘nitrogen oxide and’’. 

26 USC 45. 


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(c) TRASH FACILITY CLARIFICATION.—Paragraph (7) of section 

45(d) is amended— 

(1) by striking ‘‘facility which burns’’ and inserting ‘‘facility 

(other than a facility described in paragraph (6)) which uses’’, 

and 

(2) by striking ‘‘COMBUSTION’’. 

(d) EXPANSION OF BIOMASS FACILITIES.— (1) OPEN-LOOP BIOMASS FACILITIES.—Paragraph (3) of section 45(d) is amended by redesignating subparagraph (B) as 

subparagraph (C) and by inserting after subparagraph (A) the 

following new subparagraph: 

‘‘(B) EXPANSION OF FACILITY.—Such term shall include 

a new unit placed in service after the date of the enactment 

of this subparagraph in connection with a facility described 

in subparagraph (A), but only to the extent of the increased 

amount of electricity produced at the facility by reason 

of such new unit.’’. 

(2) CLOSED-LOOP BIOMASS FACILITIES.—Paragraph (2) of section 45(d) is amended by redesignating subparagraph (B) as 

subparagraph (C) and inserting after subparagraph (A) the 

following new subparagraph: 

‘‘(B) EXPANSION OF FACILITY.—Such term shall include 

a new unit placed in service after the date of the enactment 

of this subparagraph in connection with a facility described 

in subparagraph (A)(i), but only to the extent of the 

increased amount of electricity produced at the facility 

by reason of such new unit.’’. 

(e) MODIFICATION OF RULES FOR HYDROPOWER PRODUCTION.— 

Subparagraph (C) of section 45(c)(8) is amended to read as follows: 

‘‘(C) NONHYDROELECTRIC DAM.—For purposes of 

subparagraph (A), a facility is described in this subparagraph if— 

‘‘(i) the hydroelectric project installed on the nonhydroelectric dam is licensed by the Federal Energy 

Regulatory Commission and meets all other applicable 

environmental, licensing, and regulatory requirements, 

‘‘(ii) the nonhydroelectric dam was placed in service 

before the date of the enactment of this paragraph 

and operated for flood control, navigation, or water 

supply purposes and did not produce hydroelectric 

power on the date of the enactment of this paragraph, 

and 

‘‘(iii) the hydroelectric project is operated so that 

the water surface elevation at any given location and 

time that would have occurred in the absence of the 

hydroelectric project is maintained, subject to any 

license requirements imposed under applicable law 

that change the water surface elevation for the purpose 

of improving environmental quality of the affected 

waterway. 

The Secretary, in consultation with the Federal Energy 

Regulatory Commission, shall certify if a hydroelectric 

project licensed at a nonhydroelectric dam meets the criteria in clause (iii). Nothing in this section shall affect 

the standards under which the Federal Energy Regulatory 

Commission issues licenses for and regulates hydropower 

projects under part I of the Federal Power Act.’’. 

Certification. 

26 USC 45. 


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122 STAT. 3810 PUBLIC LAW 110–343—OCT. 3, 2008 

(f) EFFECTIVE DATE.— (1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to 

property originally placed in service after December 31, 2008. 

(2) REFINED COAL.—The amendments made by subsection 

(b) shall apply to coal produced and sold from facilities placed 

in service after December 31, 2008. 

(3) TRASH FACILITY CLARIFICATION.—The amendments 

made by subsection (c) shall apply to electricity produced and 

sold after the date of the enactment of this Act. 

(4) EXPANSION OF BIOMASS FACILITIES.—The amendments 

made by subsection (d) shall apply to property placed in service 

after the date of the enactment of this Act. 

SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM 

MARINE RENEWABLES. 

(a) IN GENERAL.—Paragraph (1) of section 45(c) is amended 

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

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

and by adding at the end the following new subparagraph: 

‘‘(I) marine and hydrokinetic renewable energy.’’. 

(b) MARINE RENEWABLES.—Subsection (c) of section 45 is 

amended by adding at the end the following new paragraph: 

‘‘(10) MARINE AND HYDROKINETIC RENEWABLE ENERGY.— 

‘‘(A) IN GENERAL.—The term ‘marine and hydrokinetic 

renewable energy’ means energy derived from— 

‘‘(i) waves, tides, and currents in oceans, estuaries, 

and tidal areas, 

‘‘(ii) free flowing water in rivers, lakes, and 

streams, 

‘‘(iii) free flowing water in an irrigation system, 

canal, or other man-made channel, including projects 

that utilize nonmechanical structures to accelerate the 

flow of water for electric power production purposes, 

or 

‘‘(iv) differentials in ocean temperature (ocean 

thermal energy conversion). 

‘‘(B) EXCEPTIONS.—Such term shall not include any 

energy which is derived from any source which utilizes 

a dam, diversionary structure (except as provided in 

subparagraph (A)(iii)), or impoundment for electric power 

production purposes.’’. 

(c) DEFINITION OF FACILITY.—Subsection (d) of section 45 is 

amended by adding at the end the following new paragraph: 

‘‘(11) MARINE AND HYDROKINETIC RENEWABLE ENERGY

FACILITIES.—In the case of a facility producing electricity from 

marine and hydrokinetic renewable energy, the term ‘qualified 

facility’ means any facility owned by the taxpayer— 

‘‘(A) which has a nameplate capacity rating of at least 

150 kilowatts, and 

‘‘(B) which is originally placed in service on or after 

the date of the enactment of this paragraph and before 

January 1, 2012.’’. 

(d) CREDIT RATE.—Subparagraph (A) of section 45(b)(4) is 

amended by striking ‘‘or (9)’’ and inserting ‘‘(9), or (11)’’. 

(e) COORDINATION WITH SMALL IRRIGATION POWER.—Paragraph 

(5) of section 45(d), as amended by section 101, is amended by 

Electricity. 

Applicability. 

26 USC 45 note. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3811 

striking ‘‘January 1, 2012’’ and inserting ‘‘the date of the enactment 

of paragraph (11)’’. 

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

shall apply to electricity produced and sold after the date of the 

enactment of this Act, in taxable years ending after such date. 

SEC. 103. ENERGY CREDIT. 

(a) EXTENSION OF CREDIT.— (1) SOLAR ENERGY PROPERTY.—Paragraphs (2)(A)(i)(II) and 

(3)(A)(ii) of section 48(a) are each amended by striking ‘‘January 

1, 2009’’ and inserting ‘‘January 1, 2017’’. 

(2) FUEL CELL PROPERTY.—Subparagraph (E) of section 

48(c)(1) is amended by striking ‘‘December 31, 2008’’ and 

inserting ‘‘December 31, 2016’’. 

(3) MICROTURBINE PROPERTY.—Subparagraph (E) of section 

48(c)(2) is amended by striking ‘‘December 31, 2008’’ and 

inserting ‘‘December 31, 2016’’. 

(b) ALLOWANCE OF ENERGY CREDIT AGAINST ALTERNATIVE MINIMUM TAX.— 

(1) IN GENERAL.—Subparagraph (B) of section 38(c)(4), as 

amended by the Housing Assistance Tax Act of 2008, is 

amended by redesignating clause (vi) as clause (vi) and (vii), 

respectively, and by inserting after clause (iv) the following 

new clause: 

‘‘(v) the credit determined under section 46 to the 

extent that such credit is attributable to the energy 

credit determined under section 48,’’. 

(2) TECHNICAL AMENDMENT.—Clause (vi) of section 

38(c)(4)(B), as redesignated by paragraph (1), is amended by 

striking ‘‘section 47 to the extent attributable to’’ and inserting 

‘‘section 46 to the extent that such credit is attributable to 

the rehabilitation credit under section 47, but only with respect 

to’’. 

(c) ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM

PROPERTY.— 

(1) IN GENERAL.—Section 48(a)(3)(A) is amended by striking 

‘‘or’’ at the end of clause (iii), by inserting ‘‘or’’ at the end 

of clause (iv), and by adding at the end the following new 

clause: 

‘‘(v) combined heat and power system property,’’. 

(2) COMBINED HEAT AND POWER SYSTEM PROPERTY.—Subsection (c) of section 48 is amended— 

(A) by striking ‘‘QUALIFIED FUEL CELL PROPERTY; 

QUALIFIED MICROTURBINE PROPERTY’’ in the heading and 

inserting ‘‘DEFINITIONS’’, and 

(B) by adding at the end the following new paragraph: 

‘‘(3) COMBINED HEAT AND POWER SYSTEM PROPERTY.— 

‘‘(A) COMBINED HEAT AND POWER SYSTEM PROPERTY.— 

The term ‘combined heat and power system property’ means 

property comprising a system— 

‘‘(i) which uses the same energy source for the 

simultaneous or sequential generation of electrical 

power, mechanical shaft power, or both, in combination 

with the generation of steam or other forms of useful 

thermal energy (including heating and cooling applications), 

‘‘(ii) which produces— 

26 USC 48. 

26 USC 45 note. 


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122 STAT. 3812 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(I) at least 20 percent of its total useful energy 

in the form of thermal energy which is not used 

to produce electrical or mechanical power (or combination thereof), and 

‘‘(II) at least 20 percent of its total useful 

energy in the form of electrical or mechanical 

power (or combination thereof), 

‘‘(iii) the energy efficiency percentage of which 

exceeds 60 percent, and 

‘‘(iv) which is placed in service before January 

1, 2017. 

‘‘(B) LIMITATION.— ‘‘(i) IN GENERAL.—In the case of combined heat 

and power system property with an electrical capacity 

in excess of the applicable capacity placed in service 

during the taxable year, the credit under subsection 

(a)(1) (determined without regard to this paragraph) 

for such year shall be equal to the amount which 

bears the same ratio to such credit as the applicable 

capacity bears to the capacity of such property. 

‘‘(ii) APPLICABLE CAPACITY.—For purposes of clause 

(i), the term ‘applicable capacity’ means 15 megawatts 

or a mechanical energy capacity of more than 20,000 

horsepower or an equivalent combination of electrical 

and mechanical energy capacities. 

‘‘(iii) MAXIMUM CAPACITY.—The term ‘combined 

heat and power system property’ shall not include any 

property comprising a system if such system has a 

capacity in excess of 50 megawatts or a mechanical 

energy capacity in excess of 67,000 horsepower or an 

equivalent combination of electrical and mechanical 

energy capacities. 

‘‘(C) SPECIAL RULES.— 

‘‘(i) ENERGY EFFICIENCY PERCENTAGE.—For purposes of this paragraph, the energy efficiency percentage of a system is the fraction— 

‘‘(I) the numerator of which is the total useful 

electrical, thermal, and mechanical power produced by the system at normal operating rates, 

and expected to be consumed in its normal application, and 

‘‘(II) the denominator of which is the lower 

heating value of the fuel sources for the system. 

‘‘(ii) DETERMINATIONS MADE ON BTU BASIS.—The 

energy efficiency percentage and the percentages under 

subparagraph (A)(ii) shall be determined on a Btu 

basis. 

‘‘(iii) INPUT AND OUTPUT PROPERTY NOT

INCLUDED.—The term ‘combined heat and power 

system property’ does not include property used to 

transport the energy source to the facility or to distribute energy produced by the facility. 

‘‘(D) SYSTEMS USING BIOMASS.—If a system is designed 

to use biomass (within the meaning of paragraphs (2) and 

(3) of section 45(c) without regard to the last sentence 

of paragraph (3)(A)) for at least 90 percent of the energy 

source— 

Definition. 


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‘‘(i) subparagraph (A)(iii) shall not apply, but 

‘‘(ii) the amount of credit determined under subsection (a) with respect to such system shall not exceed 

the amount which bears the same ratio to such amount 

of credit (determined without regard to this subparagraph) as the energy efficiency percentage of such 

system bears to 60 percent.’’. 

(3) CONFORMING AMENDMENT.—Section 48(a)(1) is amended 

by striking ‘‘paragraphs (1)(B) and (2)(B)’’ and inserting ‘‘paragraphs (1)(B), (2)(B), and (3)(B)’’. 

(d) INCREASE OF CREDIT LIMITATION FOR FUEL CELL PROP- ERTY.—Subparagraph (B) of section 48(c)(1) is amended by striking ‘‘$500’’ and inserting ‘‘$1,500’’. 

(e) PUBLIC UTILITY PROPERTY TAKEN INTO ACCOUNT.— (1) IN GENERAL.—Paragraph (3) of section 48(a) is amended 

by striking the second sentence thereof. 

(2) CONFORMING AMENDMENTS.— 

(A) Paragraph (1) of section 48(c) is amended by 

striking subparagraph (D) and redesignating subparagraph 

(E) as subparagraph (D). 

(B) Paragraph (2) of section 48(c) is amended by 

striking subparagraph (D) and redesignating subparagraph 

(E) as subparagraph (D). 

(f) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall take effect 

on the date of the enactment of this Act. 

(2) ALLOWANCE AGAINST ALTERNATIVE MINIMUM TAX.—The 

amendments made by subsection (b) shall apply to credits determined under section 46 of the Internal Revenue Code of 1986 

in taxable years beginning after the date of the enactment 

of this Act and to carrybacks of such credits. 

(3) COMBINED HEAT AND POWER AND FUEL CELL PROPERTY.— 

The amendments made by subsections (c) and (d) shall apply 

to periods after the date of the enactment of this Act, in 

taxable years ending after such date, under rules similar to 

the rules of section 48(m) of the Internal Revenue Code of 

1986 (as in effect on the day before the date of the enactment 

of the Revenue Reconciliation Act of 1990). 

(4) PUBLIC UTILITY PROPERTY.—The amendments made by 

subsection (e) shall apply to periods after February 13, 2008, 

in taxable years ending after such date, under rules similar 

to the rules of section 48(m) of the Internal Revenue Code 

of 1986 (as in effect on the day before the date of the enactment 

of the Revenue Reconciliation Act of 1990). 

SEC. 104. ENERGY CREDIT FOR SMALL WIND PROPERTY. 

(a) IN GENERAL.—Section 48(a)(3)(A), as amended by section 

103, is amended by striking ‘‘or’’ at the end of clause (iv), by 

adding ‘‘or’’ at the end of clause (v), and by inserting after clause 

(v) the following new clause: 

‘‘(vi) qualified small wind energy property,’’. 

(b) 30 PERCENT CREDIT.—Section 48(a)(2)(A)(i) is amended by 

striking ‘‘and’’ at the end of subclause (II) and by inserting after 

subclause (III) the following new subclause: 

‘‘(IV) qualified small wind energy property, 

and’’. 

26 USC 48 note. 


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122 STAT. 3814 PUBLIC LAW 110–343—OCT. 3, 2008 

(c) QUALIFIED SMALL WIND ENERGY PROPERTY.—Section 48(c), 

as amended by section 103, is amended by adding at the end 

the following new paragraph: 

‘‘(4) QUALIFIED SMALL WIND ENERGY PROPERTY.— ‘‘(A) IN GENERAL.—The term ‘qualified small wind 

energy property’ means property which uses a qualifying 

small wind turbine to generate electricity. 

‘‘(B) LIMITATION.—In the case of qualified small wind 

energy property placed in service during the taxable year, 

the credit otherwise determined under subsection (a)(1) 

for such year with respect to all such property of the 

taxpayer shall not exceed $4,000. 

‘‘(C) QUALIFYING SMALL WIND TURBINE.—The term 

‘qualifying small wind turbine’ means a wind turbine which 

has a nameplate capacity of not more than 100 kilowatts. 

‘‘(D) TERMINATION.—The term ‘qualified small wind 

energy property’ shall not include any property for any 

period after December 31, 2016.’’. 

(d) CONFORMING AMENDMENT.—Section 48(a)(1), as amended 

by section 103, is amended by striking ‘‘paragraphs (1)(B), (2)(B), 

and (3)(B)’’ and inserting ‘‘paragraphs (1)(B), (2)(B), (3)(B), and 

(4)(B)’’. 

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

shall apply to periods after the date of the enactment of this 

Act, in taxable years ending after such date, under rules similar 

to the rules of section 48(m) of the Internal Revenue Code of 

1986 (as in effect on the day before the date of the enactment 

of the Revenue Reconciliation Act of 1990). 

SEC. 105. ENERGY CREDIT FOR GEOTHERMAL HEAT PUMP SYSTEMS. 

(a) IN GENERAL.—Subparagraph (A) of section 48(a)(3), as 

amended by this Act, is amended by striking ‘‘or’’ at the end of 

clause (v), by inserting ‘‘or’’ at the end of clause (vi), and by 

adding at the end the following new clause: 

‘‘(vii) equipment which uses the ground or ground 

water as a thermal energy source to heat a structure 

or as a thermal energy sink to cool a structure, but 

only with respect to periods ending before January 

1, 2017,’’. 

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

shall apply to periods after the date of the enactment of this 

Act, in taxable years ending after such date, under rules similar 

to the rules of section 48(m) of the Internal Revenue Code of 

1986 (as in effect on the day before the date of the enactment 

of the Revenue Reconciliation Act of 1990). 

SEC. 106. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY. 

(a) EXTENSION.—Section 25D(g) is amended by striking 

‘‘December 31, 2008’’ and inserting ‘‘December 31, 2016’’. 

(b) REMOVAL OF LIMITATION FOR SOLAR ELECTRIC PROPERTY.— 

(1) IN GENERAL.—Section 25D(b)(1), as amended by subsections (c) and (d), is amended— 

(A) by striking subparagraph (A), and 

(B) by redesignating subparagraphs (B) through (E) 

as subparagraphs (A) through and (D), respectively. 

(2) CONFORMING AMENDMENT.—Section 25D(e)(4)(A), as 

amended by subsections (c) and (d), is amended— 

(A) by striking clause (i), and 

26 USC 48 note. 

26 USC 48 note. 


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(B) by redesignating clauses (ii) through (v) as clauses 

(i) and (iv), respectively. 

(c) CREDIT FOR RESIDENTIAL WIND PROPERTY.— 

(1) IN GENERAL.—Section 25D(a) is amended by striking 

‘‘and’’ at the end of paragraph (2), by striking the period at 

the end of paragraph (3) and inserting ‘‘, and’’, and by adding 

at the end the following new paragraph: 

‘‘(4) 30 percent of the qualified small wind energy property 

expenditures made by the taxpayer during such year.’’. 

(2) LIMITATION.—Section 25D(b)(1) is amended by striking 

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

at the end of subparagraph (C) and inserting ‘‘, and’’, and 

by adding at the end the following new subparagraph: 

‘‘(D) $500 with respect to each half kilowatt of capacity 

(not to exceed $4,000) of wind turbines for which qualified 

small wind energy property expenditures are made.’’. 

(3) QUALIFIED SMALL WIND ENERGY PROPERTY EXPENDITURES.— 

(A) IN GENERAL.—Section 25D(d) is amended by adding 

at the end the following new paragraph: 

‘‘(4) QUALIFIED SMALL WIND ENERGY PROPERTY EXPENDITURE.—The term ‘qualified small wind energy property expenditure’ means an expenditure for property which uses a wind 

turbine to generate electricity for use in connection with a 

dwelling unit located in the United States and used as a residence by the taxpayer.’’. 

(B) NO DOUBLE BENEFIT.—Section 45(d)(1) is amended 

by adding at the end the following new sentence: ‘‘Such 

term shall not include any facility with respect to which 

any qualified small wind energy property expenditure (as 

defined in subsection (d)(4) of section 25D) is taken into 

account in determining the credit under such section.’’. 

(4) MAXIMUM EXPENDITURES IN CASE OF JOINT OCCUPANCY.—Section 25D(e)(4)(A) is amended by striking ‘‘and’’ at 

the end of clause (ii), by striking the period at the end of 

clause (iii) and inserting ‘‘, and’’, and by adding at the end 

the following new clause: 

‘‘(iv) $1,667 in the case of each half kilowatt of 

capacity (not to exceed $13,333) of wind turbines for 

which qualified small wind energy property expenditures are made.’’. 

(d) CREDIT FOR GEOTHERMAL HEAT PUMP SYSTEMS.— 

(1) IN GENERAL.—Section 25D(a), as amended by subsection 

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

(3), by striking the period at the end of paragraph (4) and 

inserting ‘‘, and’’, and by adding at the end the following new 

paragraph: 

‘‘(5) 30 percent of the qualified geothermal heat pump 

property expenditures made by the taxpayer during such year.’’. 

(2) LIMITATION.—Section 25D(b)(1), as amended by subsection (c), is amended by striking ‘‘and’’ at the end of subparagraph (C), by striking the period at the end of subparagraph 

(D) and inserting ‘‘, and’’, and by adding at the end the following 

new subparagraph: 

‘‘(E) $2,000 with respect to any qualified geothermal 

heat pump property expenditures.’’. 

26 USC 25D. 


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122 STAT. 3816 PUBLIC LAW 110–343—OCT. 3, 2008 

(3) QUALIFIED GEOTHERMAL HEAT PUMP PROPERTY EXPENDI- TURE.—Section 25D(d), as amended by subsection (c), is 

amended by adding at the end the following new paragraph: 

‘‘(5) QUALIFIED GEOTHERMAL HEAT PUMP PROPERTY EXPENDI- TURE.— ‘‘(A) IN GENERAL.—The term ‘qualified geothermal heat 

pump property expenditure’ means an expenditure for 

qualified geothermal heat pump property installed on or 

in connection with a dwelling unit located in the United 

States and used as a residence by the taxpayer. 

‘‘(B) QUALIFIED GEOTHERMAL HEAT PUMP PROPERTY.— The term ‘qualified geothermal heat pump property’ means 

any equipment which— 

‘‘(i) uses the ground or ground water as a thermal 

energy source to heat the dwelling unit referred to 

in subparagraph (A) or as a thermal energy sink to 

cool such dwelling unit, and 

‘‘(ii) meets the requirements of the Energy Star 

program which are in effect at the time that the 

expenditure for such equipment is made.’’. 

(4) MAXIMUM EXPENDITURES IN CASE OF JOINT OCCUPANCY.—Section 25D(e)(4)(A), as amended by subsection (c), 

is amended by striking ‘‘and’’ at the end of clause (iii), by 

striking the period at the end of clause (iv) and inserting 

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

‘‘(v) $6,667 in the case of any qualified geothermal 

heat pump property expenditures.’’. 

(e) CREDIT ALLOWED AGAINST ALTERNATIVE MINIMUM TAX.— 

(1) IN GENERAL.—Subsection (c) of section 25D is amended 

to read as follows: 

‘‘(c) LIMITATION BASED ON AMOUNT OF TAX; CARRYFORWARD

OF UNUSED CREDIT.— 

‘‘(1) LIMITATION BASED ON AMOUNT OF TAX.—In the case 

of a taxable year to which section 26(a)(2) does not apply, 

the credit allowed under subsection (a) for the taxable year 

shall not exceed the excess of— 

‘‘(A) the sum of the regular tax liability (as defined 

in section 26(b)) plus the tax imposed by section 55, over 

‘‘(B) the sum of the credits allowable under this subpart 

(other than this section) and section 27 for the taxable 

year. 

‘‘(2) CARRYFORWARD OF UNUSED CREDIT.— 

‘‘(A) RULE FOR YEARS IN WHICH ALL PERSONAL CREDITS

ALLOWED AGAINST REGULAR AND ALTERNATIVE MINIMUM

TAX.—In the case of a taxable year to which section 26(a)(2) 

applies, if the credit allowable under subsection (a) exceeds 

the limitation imposed by section 26(a)(2) for such taxable 

year reduced by the sum of the credits allowable under 

this subpart (other than this section), such excess shall 

be carried to the succeeding taxable year and added to 

the credit allowable under subsection (a) for such succeeding taxable year. 

‘‘(B) RULE FOR OTHER YEARS.—In the case of a taxable 

year to which section 26(a)(2) does not apply, if the credit 

allowable under subsection (a) exceeds the limitation 

imposed by paragraph (1) for such taxable year, such excess 

shall be carried to the succeeding taxable year and added 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3817 

to the credit allowable under subsection (a) for such succeeding taxable year.’’. 

(2) CONFORMING AMENDMENTS.— 

(A) Section 23(b)(4)(B) is amended by inserting ‘‘and 

section 25D’’ after ‘‘this section’’. 

(B) Section 24(b)(3)(B) is amended by striking ‘‘and 

25B’’ and inserting ‘‘, 25B, and 25D’’. 

(C) Section 25B(g)(2) is amended by striking ‘‘section 

23’’ and inserting ‘‘sections 23 and 25D’’. 

(D) Section 26(a)(1) is amended by striking ‘‘and 25B’’ 

and inserting ‘‘25B, and 25D’’. 

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

amendments made by this section shall apply to taxable years 

beginning after December 31, 2007. 

(2) SOLAR ELECTRIC PROPERTY LIMITATION.—The amendments made by subsection (b) shall apply to taxable years 

beginning after December 31, 2008. 

(3) APPLICATION OF EGTRRA SUNSET.—The amendments 

made by subparagraphs (A) and (B) of subsection (e)(2) shall 

be subject to title IX of the Economic Growth and Tax Relief 

Reconciliation Act of 2001 in the same manner as the provisions 

of such Act to which such amendments relate. 

SEC. 107. NEW CLEAN RENEWABLE ENERGY BONDS. 

(a) IN GENERAL.—Subpart I of part IV of subchapter A of 

chapter 1 is amended by adding at the end the following new 

section: 

‘‘SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS. 

‘‘(a) NEW CLEAN RENEWABLE ENERGY BOND.—For purposes of 

this subpart, the term ‘new clean renewable energy bond’ means 

any bond issued as part of an issue if— 

‘‘(1) 100 percent of the available project proceeds of such 

issue are to be used for capital expenditures incurred by governmental bodies, public power providers, or cooperative electric 

companies for one or more qualified renewable energy facilities, 

‘‘(2) the bond is issued by a qualified issuer, and 

‘‘(3) the issuer designates such bond for purposes of this 

section. 

‘‘(b) REDUCED CREDIT AMOUNT.—The annual credit determined 

under section 54A(b) with respect to any new clean renewable 

energy bond shall be 70 percent of the amount so determined 

without regard to this subsection. 

‘‘(c) LIMITATION ON AMOUNT OF BONDS DESIGNATED.— 

‘‘(1) IN GENERAL.—The maximum aggregate face amount 

of bonds which may be designated under subsection (a) by 

any issuer shall not exceed the limitation amount allocated 

under this subsection to such issuer. 

‘‘(2) NATIONAL LIMITATION ON AMOUNT OF BONDS DES- IGNATED.—There is a national new clean renewable energy bond limitation of $800,000,000 which shall be allocated by 

the Secretary as provided in paragraph (3), except that— 

‘‘(A) not more than 331⁄3 percent thereof may be allocated to qualified projects of public power providers, 

‘‘(B) not more than 331⁄3 percent thereof may be allocated to qualified projects of governmental bodies, and 

26 USC 23 note. 

26 USC 23. 


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122 STAT. 3818 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(C) not more than 331⁄3 percent thereof may be allocated to qualified projects of cooperative electric companies. 

‘‘(3) METHOD OF ALLOCATION.— 

‘‘(A) ALLOCATION AMONG PUBLIC POWER PROVIDERS.— After the Secretary determines the qualified projects of 

public power providers which are appropriate for receiving 

an allocation of the national new clean renewable energy 

bond limitation, the Secretary shall, to the maximum extent 

practicable, make allocations among such projects in such 

manner that the amount allocated to each such project 

bears the same ratio to the cost of such project as the 

limitation under paragraph (2)(A) bears to the cost of all 

such projects. 

‘‘(B) ALLOCATION AMONG GOVERNMENTAL BODIES AND

COOPERATIVE ELECTRIC COMPANIES.—The Secretary shall 

make allocations of the amount of the national new clean 

renewable energy bond limitation described in paragraphs 

(2)(B) and (2)(C) among qualified projects of governmental 

bodies and cooperative electric companies, respectively, in 

such manner as the Secretary determines appropriate. 

‘‘(d) DEFINITIONS.—For purposes of this section— 

‘‘(1) QUALIFIED RENEWABLE ENERGY FACILITY.—The term 

‘qualified renewable energy facility’ means a qualified facility 

(as determined under section 45(d) without regard to paragraphs (8) and (10) thereof and to any placed in service date) 

owned by a public power provider, a governmental body, or 

a cooperative electric company. 

‘‘(2) PUBLIC POWER PROVIDER.—The term ‘public power provider’ means a State utility with a service obligation, as such 

terms are defined in section 217 of the Federal Power Act 

(as in effect on the date of the enactment of this paragraph). 

‘‘(3) GOVERNMENTAL BODY.—The term ‘governmental body’ 

means any State or Indian tribal government, or any political 

subdivision thereof. 

‘‘(4) COOPERATIVE ELECTRIC COMPANY.—The term ‘cooperative electric company’ means a mutual or cooperative electric 

company described in section 501(c)(12) or section 1381(a)(2)(C). 

‘‘(5) CLEAN RENEWABLE ENERGY BOND LENDER.—The term 

‘clean renewable energy bond lender’ means a lender which 

is a cooperative which is owned by, or has outstanding loans 

to, 100 or more cooperative electric companies and is in existence on February 1, 2002, and shall include any affiliated 

entity which is controlled by such lender. 

‘‘(6) QUALIFIED ISSUER.—The term ‘qualified issuer’ means 

a public power provider, a cooperative electric company, a 

governmental body, a clean renewable energy bond lender, or 

a not-for-profit electric utility which has received a loan or 

loan guarantee under the Rural Electrification Act.’’. 

(b) CONFORMING AMENDMENTS.— 

(1) Paragraph (1) of section 54A(d) is amended to read 

as follows: 

‘‘(1) QUALIFIED TAX CREDIT BOND.—The term ‘qualified tax 

credit bond’ means— 

‘‘(A) a qualified forestry conservation bond, or 

‘‘(B) a new clean renewable energy bond, 

which is part of an issue that meets requirements of paragraphs 

(2), (3), (4), (5), and (6).’’. 

Definition. 

26 USC 54A. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3819 

(2) Subparagraph (C) of section 54A(d)(2) is amended to 

read as follows: 

‘‘(C) QUALIFIED PURPOSE.—For purposes of this paragraph, the term ‘qualified purpose’ means— 

‘‘(i) in the case of a qualified forestry conservation 

bond, a purpose specified in section 54B(e), and 

‘‘(ii) in the case of a new clean renewable energy 

bond, a purpose specified in section 54C(a)(1).’’. 

(3) The table of sections for subpart I of part IV of subchapter A of chapter 1 is amended by adding at the end the 

following new item: 

‘‘Sec. 54C. Qualified clean renewable energy bonds.’’. 

(c) EXTENSION FOR CLEAN RENEWABLE ENERGY BONDS.—Subsection (m) of section 54 is amended by striking ‘‘December 31, 

2008’’ and inserting ‘‘December 31, 2009’’. 

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

shall apply to obligations issued after the date of the enactment 

of this Act. 

SEC. 108. CREDIT FOR STEEL INDUSTRY FUEL. 

(a) TREATMENT AS REFINED COAL.— 

(1) IN GENERAL.—Subparagraph (A) of section 45(c)(7) of 

the Internal Revenue Code of 1986 (relating to refined coal), 

as amended by this Act, is amended to read as follows: 

‘‘(A) IN GENERAL.—The term ‘refined coal’ means a 

fuel— 

‘‘(i) which— 

‘‘(I) is a liquid, gaseous, or solid fuel produced 

from coal (including lignite) or high carbon fly 

ash, including such fuel used as a feedstock, 

‘‘(II) is sold by the taxpayer with the reasonable expectation that it will be used for purpose 

of producing steam, 

‘‘(III) is certified by the taxpayer as resulting 

(when used in the production of steam) in a qualified emission reduction, and 

‘‘(IV) is produced in such a manner as to result 

in an increase of at least 50 percent in the market 

value of the refined coal (excluding any increase 

caused by materials combined or added during 

the production process), as compared to the value 

of the feedstock coal, or 

‘‘(ii) which is steel industry fuel.’’. 

(2) STEEL INDUSTRY FUEL DEFINED.—Paragraph (7) of section 45(c) of such Code is amended by adding at the end 

the following new subparagraph: 

‘‘(C) STEEL INDUSTRY FUEL.— 

‘‘(i) IN GENERAL.—The term ‘steel industry fuel’ 

means a fuel which— 

‘‘(I) is produced through a process of liquifying 

coal waste sludge and distributing it on coal, and 

‘‘(II) is used as a feedstock for the manufacture 

of coke. 

‘‘(ii) COAL WASTE SLUDGE.—The term ‘coal waste 

sludge’ means the tar decanter sludge and related 

Definition. 

26 USC 54 note. 

26 USC 54A. 


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122 STAT. 3820 PUBLIC LAW 110–343—OCT. 3, 2008 

byproducts of the coking process, including such materials that have been stored in ground, in tanks and 

in lagoons, that have been treated as hazardous wastes 

under applicable Federal environmental rules absent 

liquefaction and processing with coal into a feedstock 

for the manufacture of coke.’’. 

(b) CREDIT AMOUNT.— (1) IN GENERAL.—Paragraph (8) of section 45(e) of the 

Internal Revenue Code of 1986 (relating to refined coal production facilities) is amended by adding at the end the following 

new subparagraph 

‘‘(D) SPECIAL RULE FOR STEEL INDUSTRY FUEL.— ‘‘(i) IN GENERAL.—In the case of a taxpayer who 

produces steel industry fuel— 

‘‘(I) this paragraph shall be applied separately 

with respect to steel industry fuel and other 

refined coal, and 

‘‘(II) in applying this paragraph to steel 

industry fuel, the modifications in clause (ii) shall 

apply. 

‘‘(ii) MODIFICATIONS.— 

‘‘(I) CREDIT AMOUNT.—Subparagraph (A) shall 

be applied by substituting ‘$2 per barrel-of-oil 

equivalent’ for ‘$4.375 per ton’. 

‘‘(II) CREDIT PERIOD.—In lieu of the 10-year 

period referred to in clauses (i) and (ii)(II) of 

subparagraph (A), the credit period shall be the 

period beginning on the later of the date such 

facility was originally placed in service, the date 

the modifications described in clause (iii) were 

placed in service, or October 1, 2008, and ending 

on the later of December 31, 2009, or the date 

which is 1 year after the date such facility or 

the modifications described in clause (iii) were 

placed in service. 

‘‘(III) NO PHASEOUT.—Subparagraph (B) shall 

not apply. 

‘‘(iii) MODIFICATIONS.—The modifications described 

in this clause are modifications to an existing facility 

which allow such facility to produce steel industry 

fuel. 

‘‘(iv) BARREL-OF-OIL EQUIVALENT.—For purposes of 

this subparagraph, a barrel-of-oil equivalent is the 

amount of steel industry fuel that has a Btu content 

of 5,800,000 Btus.’’. 

(2) INFLATION ADJUSTMENT.—Paragraph (2) of section 45(b) 

of such Code is amended by inserting ‘‘the $3 amount in subsection (e)(8)(D)(ii)(I),’’ after ‘‘subsection (e)(8)(A),’’. 

(c) TERMINATION.—Paragraph (8) of section 45(d) of the Internal 

Revenue Code of 1986 (relating to refined coal production facility), 

as amended by this Act, is amended to read as follows: 

‘‘(8) REFINED COAL PRODUCTION FACILITY.—In the case of 

a facility that produces refined coal, the term ‘refined coal 

production facility’ means— 

‘‘(A) with respect to a facility producing steel industry 

fuel, any facility (or any modification to a facility) which 

is placed in service before January 1, 2010, and 

Applicability. 

26 USC 45. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3821 

‘‘(B) with respect to any other facility producing refined 

coal, any facility placed in service after the date of the 

enactment of the American Jobs Creation Act of 2004 and 

before January 1, 2010.’’. 

(d) COORDINATION WITH CREDIT FOR PRODUCING FUEL FROM

A NONCONVENTIONAL SOURCE.— (1) IN GENERAL.—Subparagraph (B) of section 45(e)(9) of 

the Internal Revenue Code of 1986 is amended— 

(A) by striking ‘‘The term’’ and inserting the following: 

‘‘(i) IN GENERAL.—The term’’, and 

(B) by adding at the end the following new clause: 

‘‘(ii) EXCEPTION FOR STEEL INDUSTRY COAL.—In the 

case of a facility producing steel industry fuel, clause 

(i) shall not apply to so much of the refined coal produced at such facility as is steel industry fuel.’’. 

(2) NO DOUBLE BENEFIT.—Section 45K(g)(2) of such Code 

is amended by adding at the end the following new subparagraph: 

‘‘(E) COORDINATION WITH SECTION 45.—No credit shall 

be allowed with respect to any qualified fuel which is 

steel industry fuel (as defined in section 45(c)(7)) if a credit 

is allowed to the taxpayer for such fuel under section 

45.’’. 

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

shall apply to fuel produced and sold after September 30, 2008. 

SEC. 109. SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC 

RESTRUCTURING POLICY. 

(a) EXTENSION FOR QUALIFIED ELECTRIC UTILITIES.— 

(1) IN GENERAL.—Paragraph (3) of section 451(i) is amended 

by inserting ‘‘(before January 1, 2010, in the case of a qualified 

electric utility)’’ after ‘‘January 1, 2008’’. 

(2) QUALIFIED ELECTRIC UTILITY.—Subsection (i) of section 

451 is amended by redesignating paragraphs (6) through (10) 

as paragraphs (7) through (11), respectively, and by inserting 

after paragraph (5) the following new paragraph: 

‘‘(6) QUALIFIED ELECTRIC UTILITY.—For purposes of this 

subsection, the term ‘qualified electric utility’ means a person 

that, as of the date of the qualifying electric transmission 

transaction, is vertically integrated, in that it is both— 

‘‘(A) a transmitting utility (as defined in section 3(23) 

of the Federal Power Act (16 U.S.C. 796(23))) with respect 

to the transmission facilities to which the election under 

this subsection applies, and 

‘‘(B) an electric utility (as defined in section 3(22) of 

the Federal Power Act (16 U.S.C. 796(22))).’’. 

(b) EXTENSION OF PERIOD FOR TRANSFER OF OPERATIONAL CONTROL AUTHORIZED BY FERC.—Clause (ii) of section 451(i)(4)(B) is 

amended by striking ‘‘December 31, 2007’’ and inserting ‘‘the date 

which is 4 years after the close of the taxable year in which 

the transaction occurs’’. 

(c) PROPERTY LOCATED OUTSIDE THE UNITED STATES NOT

TREATED AS EXEMPT UTILITY PROPERTY.—Paragraph (5) of section 

451(i) is amended by adding at the end the following new subparagraph: 

‘‘(C) EXCEPTION FOR PROPERTY LOCATED OUTSIDE THE

UNITED STATES.—The term ‘exempt utility property’ shall 

26 USC 45 note. 

26 USC 45. 


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122 STAT. 3822 PUBLIC LAW 110–343—OCT. 3, 2008 

not include any property which is located outside the 

United States.’’. 

(d) EFFECTIVE DATES.— 

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

shall apply to transactions after December 31, 2007. 

(2) TRANSFERS OF OPERATIONAL CONTROL.—The amendment 

made by subsection (b) shall take effect as if included in section 

909 of the American Jobs Creation Act of 2004. 

(3) EXCEPTION FOR PROPERTY LOCATED OUTSIDE THE UNITED

STATES.—The amendment made by subsection (c) shall apply 

to transactions after the date of the enactment of this Act. 

Subtitle B—Carbon Mitigation and Coal 

Provisions 

SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL 

PROJECT INVESTMENT CREDIT. 

(a) MODIFICATION OF CREDIT AMOUNT.—Section 48A(a) is 

amended by striking ‘‘and’’ at the end of paragraph (1), by striking 

the period at the end of paragraph (2) and inserting ‘‘, and’’, and 

by adding at the end the following new paragraph: 

‘‘(3) 30 percent of the qualified investment for such taxable 

year in the case of projects described in clause (iii) of subsection 

(d)(3)(B).’’. 

(b) EXPANSION OF AGGREGATE CREDITS.—Section 48A(d)(3)(A) 

is amended by striking ‘‘$1,300,000,000’’ and inserting 

‘‘$2,550,000,000’’. 

(c) AUTHORIZATION OF ADDITIONAL PROJECTS.— 

(1) IN GENERAL.—Subparagraph (B) of section 48A(d)(3) 

is amended to read as follows: 

‘‘(B) PARTICULAR PROJECTS.—Of the dollar amount in 

subparagraph (A), the Secretary is authorized to certify— 

‘‘(i) $800,000,000 for integrated gasification combined cycle projects the application for which is submitted during the period described in paragraph 

(2)(A)(i), 

‘‘(ii) $500,000,000 for projects which use other 

advanced coal-based generation technologies the 

application for which is submitted during the period 

described in paragraph (2)(A)(i), and 

‘‘(iii) $1,250,000,000 for advanced coal-based 

generation technology projects the application for 

which is submitted during the period described in paragraph (2)(A)(ii).’’. 

(2) APPLICATION PERIOD FOR ADDITIONAL PROJECTS.— 

Subparagraph (A) of section 48A(d)(2) is amended to read as 

follows: 

‘‘(A) APPLICATION PERIOD.—Each applicant for certification under this paragraph shall submit an application 

meeting the requirements of subparagraph (B). An 

applicant may only submit an application— 

‘‘(i) for an allocation from the dollar amount specified in clause (i) or (ii) of paragraph (3)(B) during 

the 3-year period beginning on the date the Secretary 

establishes the program under paragraph (1), and 

Certification. 

26 USC 48A. 

26 USC 451 note. 


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‘‘(ii) for an allocation from the dollar amount specified in paragraph (3)(B)(iii) during the 3-year period 

beginning at the earlier of the termination of the period 

described in clause (i) or the date prescribed by the 

Secretary.’’. 

(3) CAPTURE AND SEQUESTRATION OF CARBON DIOXIDE EMIS- SIONS REQUIREMENT.— (A) IN GENERAL.—Section 48A(e)(1) is amended by 

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

the period at the end of subparagraph (F) and inserting 

‘‘; and’’, and by adding at the end the following new 

subparagraph: 

‘‘(G) in the case of any project the application for which 

is submitted during the period described in subsection 

(d)(2)(A)(ii), the project includes equipment which separates 

and sequesters at least 65 percent (70 percent in the case 

of an application for reallocated credits under subsection 

(d)(4)) of such project’s total carbon dioxide emissions.’’. 

(B) HIGHEST PRIORITY FOR PROJECTS WHICH SEQUESTER

CARBON DIOXIDE EMISSIONS.—Section 48A(e)(3) is amended 

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

striking the period at the end of subparagraph (B)(iii) and 

inserting ‘‘, and’’, and by adding at the end the following 

new subparagraph: 

‘‘(C) give highest priority to projects with the greatest 

separation and sequestration percentage of total carbon 

dioxide emissions.’’. 

(C) RECAPTURE OF CREDIT FOR FAILURE TO

SEQUESTER.—Section 48A is amended by adding at the 

end the following new subsection: 

‘‘(i) RECAPTURE OF CREDIT FOR FAILURE TO SEQUESTER.—The 

Secretary shall provide for recapturing the benefit of any credit 

allowable under subsection (a) with respect to any project which 

fails to attain or maintain the separation and sequestration requirements of subsection (e)(1)(G).’’. 

(4) ADDITIONAL PRIORITY FOR RESEARCH PARTNERSHIPS.— 

Section 48A(e)(3)(B), as amended by paragraph (3)(B), is 

amended— 

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

(B) by redesignating clause (iii) as clause (iv), and 

(C) by inserting after clause (ii) the following new 

clause: 

‘‘(iii) applicant participants who have a research 

partnership with an eligible educational institution (as 

defined in section 529(e)(5)), and’’. 

(5) CLERICAL AMENDMENT.—Section 48A(e)(3) is amended 

by striking ‘‘INTEGRATED GASIFICATION COMBINED CYCLE’’ in the 

heading and inserting ‘‘CERTAIN’’. 

(d) DISCLOSURE OF ALLOCATIONS.—Section 48A(d) is amended 

by adding at the end the following new paragraph: 

‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Secretary shall, 

upon making a certification under this subsection or section 

48B(d), publicly disclose the identity of the applicant and the 

amount of the credit certified with respect to such applicant.’’. 

(e) EFFECTIVE DATES.— (1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to 

26 USC 48A note. 

26 USC 48A. 


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122 STAT. 3824 PUBLIC LAW 110–343—OCT. 3, 2008 

credits the application for which is submitted during the period 

described in section 48A(d)(2)(A)(ii) of the Internal Revenue 

Code of 1986 and which are allocated or reallocated after the 

date of the enactment of this Act. 

(2) DISCLOSURE OF ALLOCATIONS.—The amendment made 

by subsection (d) shall apply to certifications made after the 

date of the enactment of this Act. 

(3) CLERICAL AMENDMENT.—The amendment made by subsection (c)(5) shall take effect as if included in the amendment 

made by section 1307(b) of the Energy Tax Incentives Act 

of 2005. 

SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION 

INVESTMENT CREDIT. 

(a) MODIFICATION OF CREDIT AMOUNT.—Section 48B(a) is 

amended by inserting ‘‘(30 percent in the case of credits allocated 

under subsection (d)(1)(B))’’ after ‘‘20 percent’’. 

(b) EXPANSION OF AGGREGATE CREDITS.—Section 48B(d)(1) is 

amended by striking ‘‘shall not exceed $350,000,000’’ and all that 

follows and inserting ‘‘shall not exceed— ‘‘(A) $350,000,000, plus 

‘‘(B) $250,000,000 for qualifying gasification projects 

that include equipment which separates and sequesters 

at least 75 percent of such project’s total carbon dioxide 

emissions.’’. 

(c) RECAPTURE OF CREDIT FOR FAILURE TO SEQUESTER.—Section 

48B is amended by adding at the end the following new subsection: 

‘‘(f) RECAPTURE OF CREDIT FOR FAILURE TO SEQUESTER.—The 

Secretary shall provide for recapturing the benefit of any credit 

allowable under subsection (a) with respect to any project which 

fails to attain or maintain the separation and sequestration requirements for such project under subsection (d)(1).’’. 

(d) SELECTION PRIORITIES.—Section 48B(d) is amended by 

adding at the end the following new paragraph: 

‘‘(4) SELECTION PRIORITIES.—In determining which qualifying gasification projects to certify under this section, the 

Secretary shall— 

‘‘(A) give highest priority to projects with the greatest 

separation and sequestration percentage of total carbon 

dioxide emissions, and 

‘‘(B) give high priority to applicant participants who 

have a research partnership with an eligible educational 

institution (as defined in section 529(e)(5)).’’. 

(e) ELIGIBLE PROJECTS INCLUDE TRANSPORTATION GRADE

LIQUID FUELS.—Section 48B(c)(7) (defining eligible entity) is 

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

striking the period at the end of subparagraph (G) and inserting 

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

‘‘(H) transportation grade liquid fuels.’’. 

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

shall apply to credits described in section 48B(d)(1)(B) of the 

Internal Revenue Code of 1986 which are allocated or reallocated 

after the date of the enactment of this Act. 

SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX; FUNDING OF 

BLACK LUNG DISABILITY TRUST FUND. 

(a) EXTENSION OF TEMPORARY INCREASE.—Paragraph (2) of section 4121(e) is amended— 

26 USC 48B note. 

26 USC 48B. 


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(1) by striking ‘‘January 1, 2014’’ in subparagraph (A) 

and inserting ‘‘December 31, 2018’’, and 

(2) by striking ‘‘January 1 after 1981’’ in subparagraph 

(B) and inserting ‘‘December 31 after 2007’’. 

(b) RESTRUCTURING OF TRUST FUND DEBT.— (1) DEFINITIONS.—For purposes of this subsection— 

(A) MARKET VALUE OF THE OUTSTANDING REPAYABLE

ADVANCES, PLUS ACCRUED INTEREST.—The term ‘‘market 

value of the outstanding repayable advances, plus accrued 

interest’’ means the present value (determined by the Secretary of the Treasury as of the refinancing date and using 

the Treasury rate as the discount rate) of the stream of 

principal and interest payments derived assuming that 

each repayable advance that is outstanding on the refinancing date is due on the 30th anniversary of the end 

of the fiscal year in which the advance was made to the 

Trust Fund, and that all such principal and interest payments are made on September 30 of the applicable fiscal 

year. 

(B) REFINANCING DATE.—The term ‘‘refinancing date’’ 

means the date occurring 2 days after the enactment of 

this Act. 

(C) REPAYABLE ADVANCE.—The term ‘‘repayable 

advance’’ means an amount that has been appropriated 

to the Trust Fund in order to make benefit payments 

and other expenditures that are authorized under section 

9501 of the Internal Revenue Code of 1986 and are required 

to be repaid when the Secretary of the Treasury determines 

that monies are available in the Trust Fund for such purpose. 

(D) TREASURY RATE.—The term ‘‘Treasury rate’’ means 

a rate determined by the Secretary of the Treasury, taking 

into consideration current market yields on outstanding 

marketable obligations of the United States of comparable 

maturities. 

(E) TREASURY 1-YEAR RATE.—The term ‘‘Treasury 1- 

year rate’’ means a rate determined by the Secretary of 

the Treasury, taking into consideration current market 

yields on outstanding marketable obligations of the United 

States with remaining periods to maturity of approximately 

1 year, to have been in effect as of the close of business 

1 business day prior to the date on which the Trust Fund 

issues obligations to the Secretary of the Treasury under 

paragraph (2)(B). 

(2) REFINANCING OF OUTSTANDING PRINCIPAL OF REPAYABLE

ADVANCES AND UNPAID INTEREST ON SUCH ADVANCES.— 

(A) TRANSFER TO GENERAL FUND.—On the refinancing 

date, the Trust Fund shall repay the market value of 

the outstanding repayable advances, plus accrued interest, 

by transferring into the general fund of the Treasury the 

following sums: 

(i) The proceeds from obligations that the Trust 

Fund shall issue to the Secretary of the Treasury in 

such amounts as the Secretaries of Labor and the 

Treasury shall determine and bearing interest at the 

Treasury rate, and that shall be in such forms and 

denominations and be subject to such other terms and 

26 USC 9501 

note. 


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122 STAT. 3826 PUBLIC LAW 110–343—OCT. 3, 2008 

conditions, including maturity, as the Secretary of the 

Treasury shall prescribe. 

(ii) All, or that portion, of the appropriation made 

to the Trust Fund pursuant to paragraph (3) that 

is needed to cover the difference defined in that paragraph. 

(B) REPAYMENT OF OBLIGATIONS.—In the event that 

the Trust Fund is unable to repay the obligations that 

it has issued to the Secretary of the Treasury under 

subparagraph (A)(i) and this subparagraph, or is unable 

to make benefit payments and other authorized expenditures, the Trust Fund shall issue obligations to the Secretary of the Treasury in such amounts as may be necessary to make such repayments, payments, and expenditures, with a maturity of 1 year, and bearing interest 

at the Treasury 1-year rate. These obligations shall be 

in such forms and denominations and be subject to such 

other terms and conditions as the Secretary of the Treasury 

shall prescribe. 

(C) AUTHORITY TO ISSUE OBLIGATIONS.—The Trust 

Fund is authorized to issue obligations to the Secretary 

of the Treasury under subparagraphs (A)(i) and (B). The 

Secretary of the Treasury is authorized to purchase such 

obligations of the Trust Fund. For the purposes of making 

such purchases, the Secretary of the Treasury may use 

as a public debt transaction the proceeds from the sale 

of any securities issued under chapter 31 of title 31, United 

States Code, and the purposes for which securities may 

be issued under such chapter are extended to include any 

purchase of such Trust Fund obligations under this 

subparagraph. 

(3) ONE-TIME APPROPRIATION.—There is hereby appropriated to the Trust Fund an amount sufficient to pay to 

the general fund of the Treasury the difference between— 

(A) the market value of the outstanding repayable 

advances, plus accrued interest; and 

(B) the proceeds from the obligations issued by the 

Trust Fund to the Secretary of the Treasury under paragraph (2)(A)(i). 

(4) PREPAYMENT OF TRUST FUND OBLIGATIONS.—The Trust 

Fund is authorized to repay any obligation issued to the Secretary of the Treasury under subparagraphs (A)(i) and (B) 

of paragraph (2) prior to its maturity date by paying a prepayment price that would, if the obligation being prepaid (including 

all unpaid interest accrued thereon through the date of prepayment) were purchased by a third party and held to the maturity 

date of such obligation, produce a yield to the third-party purchaser for the period from the date of purchase to the maturity 

date of such obligation substantially equal to the Treasury 

yield on outstanding marketable obligations of the United 

States having a comparable maturity to this period. 

SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX 

TO CERTAIN COAL PRODUCERS AND EXPORTERS. 

(a) REFUND.— 

(1) COAL PRODUCERS.— 

26 USC 4121 

note. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3827 

(A) IN GENERAL.—Notwithstanding subsections (a)(1) 

and (c) of section 6416 and section 6511 of the Internal 

Revenue Code of 1986, if— 

(i) a coal producer establishes that such coal producer, or a party related to such coal producer, 

exported coal produced by such coal producer to a 

foreign country or shipped coal produced by such coal 

producer to a possession of the United States, or caused 

such coal to be exported or shipped, the export or 

shipment of which was other than through an exporter 

who meets the requirements of paragraph (2), 

(ii) such coal producer filed an excise tax return 

on or after October 1, 1990, and on or before the 

date of the enactment of this Act, and 

(iii) such coal producer files a claim for refund 

with the Secretary not later than the close of the 

30-day period beginning on the date of the enactment 

of this Act, 

then the Secretary shall pay to such coal producer an 

amount equal to the tax paid under section 4121 of such 

Code on such coal exported or shipped by the coal producer 

or a party related to such coal producer, or caused by 

the coal producer or a party related to such coal producer 

to be exported or shipped. 

(B) SPECIAL RULES FOR CERTAIN TAXPAYERS.—For purposes of this section— 

(i) IN GENERAL.—If a coal producer or a party 

related to a coal producer has received a judgment 

described in clause (iii), such coal producer shall be 

deemed to have established the export of coal to a 

foreign country or shipment of coal to a possession 

of the United States under subparagraph (A)(i). 

(ii) AMOUNT OF PAYMENT.—If a taxpayer described 

in clause (i) is entitled to a payment under subparagraph (A), the amount of such payment shall be 

reduced by any amount paid pursuant to the judgment 

described in clause (iii). 

(iii) JUDGMENT DESCRIBED.—A judgment is 

described in this subparagraph if such judgment— 

(I) is made by a court of competent jurisdiction 

within the United States, 

(II) relates to the constitutionality of any tax 

paid on exported coal under section 4121 of the 

Internal Revenue Code of 1986, and 

(III) is in favor of the coal producer or the 

party related to the coal producer. 

(2) EXPORTERS.—Notwithstanding subsections (a)(1) and (c) 

of section 6416 and section 6511 of the Internal Revenue Code 

of 1986, and a judgment described in paragraph (1)(B)(iii) of 

this subsection, if— 

(A) an exporter establishes that such exporter exported 

coal to a foreign country or shipped coal to a possession 

of the United States, or caused such coal to be so exported 

or shipped, 

(B) such exporter filed a tax return on or after October 

1, 1990, and on or before the date of the enactment of 

this Act, and 

Deadlines. 

Deadline. 

Deadlines. 


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122 STAT. 3828 PUBLIC LAW 110–343—OCT. 3, 2008 

(C) such exporter files a claim for refund with the 

Secretary not later than the close of the 30-day period 

beginning on the date of the enactment of this Act, 

then the Secretary shall pay to such exporter an amount equal 

to $0.825 per ton of such coal exported by the exporter or 

caused to be exported or shipped, or caused to be exported 

or shipped, by the exporter. 

(b) LIMITATIONS.—Subsection (a) shall not apply with respect 

to exported coal if a settlement with the Federal Government has 

been made with and accepted by, the coal producer, a party related 

to such coal producer, or the exporter, of such coal, as of the 

date that the claim is filed under this section with respect to 

such exported coal. For purposes of this subsection, the term ‘‘settlement with the Federal Government’’ shall not include any settlement or stipulation entered into as of the date of the enactment 

of this Act, the terms of which contemplate a judgment concerning 

which any party has reserved the right to file an appeal, or has 

filed an appeal. 

(c) SUBSEQUENT REFUND PROHIBITED.—No refund shall be made 

under this section to the extent that a credit or refund of such 

tax on such exported or shipped coal has been paid to any person. 

(d) DEFINITIONS.—For purposes of this section— 

(1) COAL PRODUCER.—The term ‘‘coal producer’’ means the 

person in whom is vested ownership of the coal immediately 

after the coal is severed from the ground, without regard to 

the existence of any contractual arrangement for the sale or 

other disposition of the coal or the payment of any royalties 

between the producer and third parties. The term includes 

any person who extracts coal from coal waste refuse piles 

or from the silt waste product which results from the wet 

washing (or similar processing) of coal. 

(2) EXPORTER.—The term ‘‘exporter’’ means a person, other 

than a coal producer, who does not have a contract, fee arrangement, or any other agreement with a producer or seller of 

such coal to export or ship such coal to a third party on 

behalf of the producer or seller of such coal and— 

(A) is indicated in the shipper’s export declaration or 

other documentation as the exporter of record, or 

(B) actually exported such coal to a foreign country 

or shipped such coal to a possession of the United States, 

or caused such coal to be so exported or shipped. 

(3) RELATED PARTY.—The term ‘‘a party related to such 

coal producer’’ means a person who— 

(A) is related to such coal producer through any degree 

of common management, stock ownership, or voting control, 

(B) is related (within the meaning of section 144(a)(3) 

of the Internal Revenue Code of 1986) to such coal producer, 

or 

(C) has a contract, fee arrangement, or any other agreement with such coal producer to sell such coal to a third 

party on behalf of such coal producer. 

(4) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Treasury or the Secretary’s designee. 

(e) TIMING OF REFUND.—With respect to any claim for refund 

filed pursuant to this section, the Secretary shall determine whether 

the requirements of this section are met not later than 180 days 

after such claim is filed. If the Secretary determines that the 

Deadline. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3829 

requirements of this section are met, the claim for refund shall 

be paid not later than 180 days after the Secretary makes such 

determination. 

(f) INTEREST.—Any refund paid pursuant to this section shall 

be paid by the Secretary with interest from the date of overpayment 

determined by using the overpayment rate and method under section 6621 of the Internal Revenue Code of 1986. 

(g) DENIAL OF DOUBLE BENEFIT.—The payment under subsection (a) with respect to any coal shall not exceed— 

(1) in the case of a payment to a coal producer, the amount 

of tax paid under section 4121 of the Internal Revenue Code 

of 1986 with respect to such coal by such coal producer or 

a party related to such coal producer, and 

(2) in the case of a payment to an exporter, an amount equal to $0.825 per ton with respect to such coal exported 

by the exporter or caused to be exported by the exporter. 

(h) APPLICATION OF SECTION.—This section applies only to 

claims on coal exported or shipped on or after October 1, 1990, 

through the date of the enactment of this Act. 

(i) STANDING NOT CONFERRED.— (1) EXPORTERS.—With respect to exporters, this section 

shall not confer standing upon an exporter to commence, or 

intervene in, any judicial or administrative proceeding concerning a claim for refund by a coal producer of any Federal 

or State tax, fee, or royalty paid by the coal producer. 

(2) COAL PRODUCERS.—With respect to coal producers, this 

section shall not confer standing upon a coal producer to commence, or intervene in, any judicial or administrative proceeding concerning a claim for refund by an exporter of any 

Federal or State tax, fee, or royalty paid by the producer 

and alleged to have been passed on to an exporter. 

SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION. 

(a) IN GENERAL.—Subpart D of part IV of subchapter A of 

chapter 1 (relating to business credits) is amended by adding at 

the end the following new section: 

‘‘SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION. 

‘‘(a) GENERAL RULE.—For purposes of section 38, the carbon 

dioxide sequestration credit for any taxable year is an amount 

equal to the sum of— ‘‘(1) $20 per metric ton of qualified carbon dioxide which 

is— 

‘‘(A) captured by the taxpayer at a qualified facility, 

and 

‘‘(B) disposed of by the taxpayer in secure geological 

storage, and 

‘‘(2) $10 per metric ton of qualified carbon dioxide which 

is— 

‘‘(A) captured by the taxpayer at a qualified facility, 

and 

‘‘(B) used by the taxpayer as a tertiary injectant in 

a qualified enhanced oil or natural gas recovery project. 

‘‘(b) QUALIFIED CARBON DIOXIDE.—For purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘qualified carbon dioxide’ 

means carbon dioxide captured from an industrial source 

which— 

Definition. 


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122 STAT. 3830 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(A) would otherwise be released into the atmosphere 

as industrial emission of greenhouse gas, and 

‘‘(B) is measured at the source of capture and verified 

at the point of disposal or injection. 

‘‘(2) RECYCLED CARBON DIOXIDE.—The term ‘qualified 

carbon dioxide’ includes the initial deposit of captured carbon 

dioxide used as a tertiary injectant. Such term does not include 

carbon dioxide that is re-captured, recycled, and re-injected 

as part of the enhanced oil and natural gas recovery process. 

‘‘(c) QUALIFIED FACILITY.—For purposes of this section, the term 

‘qualified facility’ means any industrial facility— 

‘‘(1) which is owned by the taxpayer, 

‘‘(2) at which carbon capture equipment is placed in service, 

and 

‘‘(3) which captures not less than 500,000 metric tons of 

carbon dioxide during the taxable year. 

‘‘(d) SPECIAL RULES AND OTHER DEFINITIONS.—For purposes 

of this section— 

‘‘(1) ONLY CARBON DIOXIDE CAPTURED AND DISPOSED OF

OR USED WITHIN THE UNITED STATES TAKEN INTO ACCOUNT.— 

The credit under this section shall apply only with respect 

to qualified carbon dioxide the capture and disposal or use 

of which is within— 

‘‘(A) the United States (within the meaning of section 

638(1)), or 

‘‘(B) a possession of the United States (within the 

meaning of section 638(2)). 

‘‘(2) SECURE GEOLOGICAL STORAGE.—The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall establish regulations for determining adequate security measures for the geological storage of carbon 

dioxide under subsection (a)(1)(B) such that the carbon dioxide 

does not escape into the atmosphere. Such term shall include 

storage at deep saline formations and unminable coal seems 

under such conditions as the Secretary may determine under 

such regulations. 

‘‘(3) TERTIARY INJECTANT.—The term ‘tertiary injectant’ has 

the same meaning as when used within section 193(b)(1). 

‘‘(4) QUALIFIED ENHANCED OIL OR NATURAL GAS RECOVERY

PROJECT.—The term ‘qualified enhanced oil or natural gas 

recovery project’ has the meaning given the term ‘qualified 

enhanced oil recovery project’ by section 43(c)(2), by substituting 

‘crude oil or natural gas’ for ‘crude oil’ in subparagraph (A)(i) 

thereof. 

‘‘(5) CREDIT ATTRIBUTABLE TO TAXPAYER.—Any credit under 

this section shall be attributable to the person that captures 

and physically or contractually ensures the disposal of or the 

use as a tertiary injectant of the qualified carbon dioxide, 

except to the extent provided in regulations prescribed by the 

Secretary. 

‘‘(6) RECAPTURE.—The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under 

subsection (a) with respect to any qualified carbon dioxide 

which ceases to be captured, disposed of, or used as a tertiary 

injectant in a manner consistent with the requirements of 

this section. 

Regulations. 

Regulations. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3831 

‘‘(7) INFLATION ADJUSTMENT.—In the case of any taxable 

year beginning in a calendar year after 2009, there shall be 

substituted for each dollar amount contained in subsection 

(a) an amount equal to the product of— 

‘‘(A) such dollar amount, multiplied by 

‘‘(B) the inflation adjustment factor for such calendar 

year determined under section 43(b)(3)(B) for such calendar 

year, determined by substituting ‘2008’ for ‘1990’. 

‘‘(e) APPLICATION OF SECTION.—The credit under this section 

shall apply with respect to qualified carbon dioxide before the 

end of the calendar year in which the Secretary, in consultation 

with the Administrator of the Environmental Protection Agency, 

certifies that 75,000,000 metric tons of qualified carbon dioxide 

have been captured and disposed of or used as a tertiary injectant.’’. 

(b) CONFORMING AMENDMENT.—Section 38(b) (relating to general business credit) is amended by striking ‘‘plus’’ at the end 

of paragraph (32), by striking the period at the end of paragraph 

(33) and inserting ‘‘, plus’’, and by adding at the end of following 

new paragraph: 

‘‘(34) the carbon dioxide sequestration credit determined 

under section 45Q(a).’’. 

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

B of part IV of subchapter A of chapter 1 (relating to other credits) 

is amended by adding at the end the following new section: 

‘‘Sec. 45Q. Credit for carbon dioxide sequestration.’’. 

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

shall apply to carbon dioxide captured after the date of the enactment of this Act. 

SEC. 116. CERTAIN INCOME AND GAINS RELATING TO INDUSTRIAL 

SOURCE CARBON DIOXIDE TREATED AS QUALIFYING 

INCOME FOR PUBLICLY TRADED PARTNERSHIPS. 

(a) IN GENERAL.—Subparagraph (E) of section 7704(d)(1) 

(defining qualifying income) is amended by inserting ‘‘or industrial 

source carbon dioxide’’ after ‘‘timber)’’. 

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

shall take effect on the date of the enactment of this Act, in 

taxable years ending after such date. 

SEC. 117. CARBON AUDIT OF THE TAX CODE. 

(a) STUDY.—The Secretary of the Treasury shall enter into 

an agreement with the National Academy of Sciences to undertake 

a comprehensive review of the Internal Revenue Code of 1986 

to identify the types of and specific tax provisions that have the 

largest effects on carbon and other greenhouse gas emissions and 

to estimate the magnitude of those effects. 

(b) REPORT.—Not later than 2 years after the date of enactment 

of this Act, the National Academy of Sciences shall submit to 

Congress a report containing the results of study authorized under 

this section. 

(c) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this section $1,500,000 for the 

period of fiscal years 2009 and 2010. 

Contracts. 

26 USC 7704 

note. 

26 USC 38 note. 

26 USC 38. 


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122 STAT. 3832 PUBLIC LAW 110–343—OCT. 3, 2008 

TITLE II—TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS 

SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS DEPRECIATION FOR BIOMASS ETHANOL PLANT PROPERTY. 

(a) IN GENERAL.—Paragraph (3) of section 168(l) is amended 

to read as follows: 

‘‘(3) CELLULOSIC BIOFUEL.—The term ‘cellulosic biofuel’ 

means any liquid fuel which is produced from any lignocellulosic 

or hemicellulosic matter that is available on a renewable or 

recurring basis.’’. 

(b) CONFORMING AMENDMENTS.—Subsection (l) of section 168 

is amended— 

(1) by striking ‘‘cellulosic biomass ethanol’’ each place it 

appears and inserting ‘‘cellulosic biofuel’’, 

(2) by striking ‘‘CELLULOSIC BIOMASS ETHANOL’’ in the 

heading of such subsection and inserting ‘‘CELLULOSIC

BIOFUEL’’, and 

(3) by striking ‘‘CELLULOSIC BIOMASS ETHANOL’’ in the 

heading of paragraph (2) thereof and inserting ‘‘CELLULOSIC

BIOFUEL’’. 

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

shall apply to property placed in service after the date of the 

enactment of this Act, in taxable years ending after such date. 

SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL. 

(a) IN GENERAL.—Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) 

are each amended by striking ‘‘December 31, 2008’’ and inserting 

‘‘December 31, 2009’’. 

(b) INCREASE IN RATE OF CREDIT.— 

(1) INCOME TAX CREDIT.—Paragraphs (1)(A) and (2)(A) of 

section 40A(b) are each amended by striking ‘‘50 cents’’ and 

inserting ‘‘$1.00’’. 

(2) EXCISE TAX CREDIT.—Paragraph (2) of section 6426(c) 

is amended to read as follows: 

‘‘(2) APPLICABLE AMOUNT.—For purposes of this subsection, 

the applicable amount is $1.00.’’. 

(3) CONFORMING AMENDMENTS.— 

(A) Subsection (b) of section 40A is amended by striking 

paragraph (3) and by redesignating paragraphs (4) and 

(5) as paragraphs (3) and (4), respectively. 

(B) Paragraph (2) of section 40A(f) is amended to read 

as follows: 

‘‘(2) EXCEPTION.—Subsection (b)(4) shall not apply with 

respect to renewable diesel.’’. 

(C) Paragraphs (2) and (3) of section 40A(e) are each 

amended by striking ‘‘subsection (b)(5)(C)’’ and inserting 

‘‘subsection (b)(4)(C)’’. 

(D) Clause (ii) of section 40A(d)(3)(C) is amended by 

striking ‘‘subsection (b)(5)(B)’’ and inserting ‘‘subsection 

(b)(4)(B)’’. 

(c) UNIFORM TREATMENT OF DIESEL PRODUCED FROM BIO- MASS.—Paragraph (3) of section 40A(f) is amended— 

(1) by striking ‘‘diesel fuel’’ and inserting ‘‘liquid fuel’’, 

(2) by striking ‘‘using a thermal depolymerization process’’, 

and 

Applicability. 

26 USC 168 note. 

26 USC 168. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3833 

(3) by inserting ‘‘, or other equivalent standard approved 

by the Secretary’’ after ‘‘D396’’. 

(d) COPRODUCTION OF RENEWABLE DIESEL WITH PETROLEUM

FEEDSTOCK.— (1) IN GENERAL.—Paragraph (3) of section 40A(f) is 

amended by adding at the end the following new sentences: 

‘‘Such term does not include any fuel derived from coprocessing 

biomass with a feedstock which is not biomass. For purposes 

of this paragraph, the term ‘biomass’ has the meaning given 

such term by section 45K(c)(3).’’. 

(2) CONFORMING AMENDMENT.—Paragraph (3) of section 

40A(f) is amended by striking ‘‘(as defined in section 45K(c)(3))’’. 

(e) ELIGIBILITY OF CERTAIN AVIATION FUEL.—Subsection (f) of 

section 40A (relating to renewable diesel) is amended by adding 

at the end the following new paragraph: 

‘‘(4) CERTAIN AVIATION FUEL.— ‘‘(A) IN GENERAL.—Except as provided in the last 3 

sentences of paragraph (3), the term ‘renewable diesel’ 

shall include fuel derived from biomass which meets the 

requirements of a Department of Defense specification for 

military jet fuel or an American Society of Testing and 

Materials specification for aviation turbine fuel. 

‘‘(B) APPLICATION OF MIXTURE CREDITS.—In the case 

of fuel which is treated as renewable diesel solely by reason 

of subparagraph (A), subsection (b)(1) and section 6426(c) 

shall be applied with respect to such fuel by treating kerosene as though it were diesel fuel.’’. 

(f) MODIFICATION RELATING TO DEFINITION OF AGRI-BIODIESEL.—Paragraph (2) of section 40A(d) (relating to agri-biodiesel) 

is amended by striking ‘‘and mustard seeds’’ and inserting ‘‘mustard 

seeds, and camelina’’. 

(g) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to 

fuel produced, and sold or used, after December 31, 2008. 

(2) COPRODUCTION OF RENEWABLE DIESEL WITH PETROLEUM

FEEDSTOCK.—The amendment made by subsection (d) shall 

apply to fuel produced, and sold or used, after the date of 

the enactment of this Act. 

SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED 

TO PROVIDE AN INCENTIVE FOR UNITED STATES PRODUCTION. 

(a) ALCOHOL FUELS CREDIT.—Subsection (d) of section 40 is 

amended by adding at the end the following new paragraph: 

‘‘(7) LIMITATION TO ALCOHOL WITH CONNECTION TO THE

UNITED STATES.—No credit shall be determined under this section with respect to any alcohol which is produced outside 

the United States for use as a fuel outside the United States. 

For purposes of this paragraph, the term ‘United States’ 

includes any possession of the United States.’’. 

(b) BIODIESEL FUELS CREDIT.—Subsection (d) of section 40A 

is amended by adding at the end the following new paragraph: 

‘‘(5) LIMITATION TO BIODIESEL WITH CONNECTION TO THE

UNITED STATES.—No credit shall be determined under this section with respect to any biodiesel which is produced outside 

the United States for use as a fuel outside the United States. 

Applicability. 

26 USC 40A note. 

Definition. 

26 USC 40A. 


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122 STAT. 3834 PUBLIC LAW 110–343—OCT. 3, 2008 

For purposes of this paragraph, the term ‘United States’ 

includes any possession of the United States.’’. 

(c) EXCISE TAX CREDIT.— 

(1) IN GENERAL.—Section 6426 is amended by adding at 

the end the following new subsection: 

‘‘(i) LIMITATION TO FUELS WITH CONNECTION TO THE UNITED

STATES.— 

‘‘(1) ALCOHOL.—No credit shall be determined under this 

section with respect to any alcohol which is produced outside 

the United States for use as a fuel outside the United States. 

‘‘(2) BIODIESEL AND ALTERNATIVE FUELS.—No credit shall 

be determined under this section with respect to any biodiesel 

or alternative fuel which is produced outside the United States 

for use as a fuel outside the United States. 

For purposes of this subsection, the term ‘United States’ includes 

any possession of the United States.’’. 

(2) CONFORMING AMENDMENT.—Subsection (e) of section 

6427 is amended by redesignating paragraph (5) as paragraph 

(6) and by inserting after paragraph (4) the following new 

paragraph: 

‘‘(5) LIMITATION TO FUELS WITH CONNECTION TO THE UNITED

STATES.—No amount shall be payable under paragraph (1) or 

(2) with respect to any mixture or alternative fuel if credit 

is not allowed with respect to such mixture or alternative 

fuel by reason of section 6426(i).’’. 

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

shall apply to claims for credit or payment made on or after May 

15, 2008. 

SEC. 204. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL 

CREDIT. 

(a) EXTENSION.— 

(1) ALTERNATIVE FUEL CREDIT.—Paragraph (4) of section 

6426(d) (relating to alternative fuel credit) is amended by 

striking ‘‘September 30, 2009’’ and inserting ‘‘December 31, 

2009’’. 

(2) ALTERNATIVE FUEL MIXTURE CREDIT.—Paragraph (3) of 

section 6426(e) (relating to alternative fuel mixture credit) is 

amended by striking ‘‘September 30, 2009’’ and inserting 

‘‘December 31, 2009’’. 

(3) PAYMENTS.—Subparagraph (C) of section 6427(e)(5) 

(relating to termination) is amended by striking ‘‘September 

30, 2009’’ and inserting ‘‘December 31, 2009’’. 

(b) MODIFICATIONS.— 

(1) ALTERNATIVE FUEL TO INCLUDE COMPRESSED OR

LIQUIFIED BIOMASS GAS.—Paragraph (2) of section 6426(d) 

(relating to alternative fuel credit) is amended by striking ‘‘and’’ 

at the end of subparagraph (E), by redesignating subparagraph 

(F) as subparagraph (G), and by inserting after subparagraph 

(E) the following new subparagraph: 

‘‘(F) compressed or liquefied gas derived from biomass 

(as defined in section 45K(c)(3)), and’’. 

(2) CREDIT ALLOWED FOR AVIATION USE OF FUEL.—Paragraph (1) of section 6426(d) is amended by inserting ‘‘sold 

by the taxpayer for use as a fuel in aviation,’’ after ‘‘motorboat,’’. 

(c) CARBON CAPTURE REQUIREMENT FOR CERTAIN FUELS.— 

Applicability. 

26 USC 40 note. 

26 USC 6426. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3835 

(1) IN GENERAL.—Subsection (d) of section 6426, as 

amended by subsection (a), is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph 

(3) the following new paragraph: 

‘‘(4) CARBON CAPTURE REQUIREMENT.— ‘‘(A) IN GENERAL.—The requirements of this paragraph 

are met if the fuel is certified, under such procedures 

as required by the Secretary, as having been derived from 

coal produced at a gasification facility which separates 

and sequesters not less than the applicable percentage 

of such facility’s total carbon dioxide emissions. 

‘‘(B) APPLICABLE PERCENTAGE.—For purposes of 

subparagraph (A), the applicable percentage is— 

‘‘(i) 50 percent in the case of fuel produced after 

September 30, 2009, and on or before December 30, 

2009, and 

‘‘(ii) 75 percent in the case of fuel produced after 

December 30, 2009.’’. 

(2) CONFORMING AMENDMENT.—Subparagraph (E) of section 

6426(d)(2) is amended by inserting ‘‘which meets the requirements of paragraph (4) and which is’’ after ‘‘any liquid fuel’’. 

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

shall apply to fuel sold or used after the date of the enactment 

of this Act. 

SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 

MOTOR VEHICLES. 

(a) PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CREDIT.—Subpart 

B of part IV of subchapter A of chapter 1 (relating to other credits) 

is amended by adding at the end the following new section: 

‘‘SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR 

VEHICLES. 

‘‘(a) ALLOWANCE OF CREDIT.— 

‘‘(1) IN GENERAL.—There shall be allowed as a credit against 

the tax imposed by this chapter for the taxable year an amount 

equal to the applicable amount with respect to each new qualified plug-in electric drive motor vehicle placed in service by 

the taxpayer during the taxable year. 

‘‘(2) APPLICABLE AMOUNT.—For purposes of paragraph (1), 

the applicable amount is sum of— 

‘‘(A) $2,500, plus 

‘‘(B) $417 for each kilowatt hour of traction battery 

capacity in excess of 4 kilowatt hours. 

‘‘(b) LIMITATIONS.— 

‘‘(1) LIMITATION BASED ON WEIGHT.—The amount of the 

credit allowed under subsection (a) by reason of subsection 

(a)(2) shall not exceed— 

‘‘(A) $7,500, in the case of any new qualified plugin electric drive motor vehicle with a gross vehicle weight 

rating of not more than 10,000 pounds, 

‘‘(B) $10,000, in the case of any new qualified plugin electric drive motor vehicle with a gross vehicle weight 

rating of more than 10,000 pounds but not more than 

14,000 pounds, 

‘‘(C) $12,500, in the case of any new qualified plugin electric drive motor vehicle with a gross vehicle weight 

26 USC 6426 

note. 

26 USC 6426. 

Certification. 


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122 STAT. 3836 PUBLIC LAW 110–343—OCT. 3, 2008 

rating of more than 14,000 pounds but not more than 

26,000 pounds, and ‘‘(D) $15,000, in the case of any new qualified plugin electric drive motor vehicle with a gross vehicle weight 

rating of more than 26,000 pounds. 

‘‘(2) LIMITATION ON NUMBER OF PASSENGER VEHICLES AND

LIGHT TRUCKS ELIGIBLE FOR CREDIT.— ‘‘(A) IN GENERAL.—In the case of a new qualified plugin electric drive motor vehicle sold during the phaseout 

period, only the applicable percentage of the credit otherwise allowable under subsection (a) shall be allowed. 

‘‘(B) PHASEOUT PERIOD.—For purposes of this subsection, the phaseout period is the period beginning with 

the second calendar quarter following the calendar quarter 

which includes the first date on which the total number 

of such new qualified plug-in electric drive motor vehicles 

sold for use in the United States after December 31, 2008, 

is at least 250,000. 

‘‘(C) APPLICABLE PERCENTAGE.—For purposes of 

subparagraph (A), the applicable percentage is— 

‘‘(i) 50 percent for the first 2 calendar quarters 

of the phaseout period, 

‘‘(ii) 25 percent for the 3d and 4th calendar quarters of the phaseout period, and 

‘‘(iii) 0 percent for each calendar quarter thereafter. 

‘‘(D) CONTROLLED GROUPS.—Rules similar to the rules 

of section 30B(f)(4) shall apply for purposes of this subsection. 

‘‘(c) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR

VEHICLE.—For purposes of this section, the term ‘new qualified 

plug-in electric drive motor vehicle’ means a motor vehicle— 

‘‘(1) which draws propulsion using a traction battery with 

at least 4 kilowatt hours of capacity, 

‘‘(2) which uses an offboard source of energy to recharge 

such battery, 

‘‘(3) which, in the case of a passenger vehicle or light 

truck which has a gross vehicle weight rating of not more 

than 8,500 pounds, has received a certificate of conformity 

under the Clean Air Act and meets or exceeds the equivalent 

qualifying California low emission vehicle standard under section 243(e)(2) of the Clean Air Act for that make and model 

year, and 

‘‘(A) in the case of a vehicle having a gross vehicle 

weight rating of 6,000 pounds or less, the Bin 5 Tier 

II emission standard established in regulations prescribed 

by the Administrator of the Environmental Protection 

Agency under section 202(i) of the Clean Air Act for that 

make and model year vehicle, and 

‘‘(B) in the case of a vehicle having a gross vehicle 

weight rating of more than 6,000 pounds but not more 

than 8,500 pounds, the Bin 8 Tier II emission standard 

which is so established, 

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

‘‘(5) which is acquired for use or lease by the taxpayer 

and not for resale, and 

‘‘(6) which is made by a manufacturer. 

‘‘(d) APPLICATION WITH OTHER CREDITS.— 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3837 

‘‘(1) BUSINESS CREDIT TREATED AS PART OF GENERAL BUSI- NESS CREDIT.—So much of the credit which would be allowed 

under subsection (a) for any taxable year (determined without 

regard to this subsection) that is attributable to property of 

a character subject to an allowance for depreciation shall be 

treated as a credit listed in section 38(b) for such taxable 

year (and not allowed under subsection (a)). 

‘‘(2) PERSONAL CREDIT.— ‘‘(A) IN GENERAL.—For purposes of this title, the credit 

allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated 

as a credit allowable under subpart A for such taxable 

year. 

‘‘(B) LIMITATION BASED ON AMOUNT OF TAX.—In the 

case of a taxable year to which section 26(a)(2) does not 

apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) 

shall not exceed the excess of— 

‘‘(i) the sum of the regular tax liability (as defined 

in section 26(b)) plus the tax imposed by section 55, 

over 

‘‘(ii) the sum of the credits allowable under subpart 

A (other than this section and sections 23 and 25D) 

and section 27 for the taxable year. 

‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.—For purposes 

of this section— 

‘‘(1) MOTOR VEHICLE.—The term ‘motor vehicle’ has the 

meaning given such term by section 30(c)(2). 

‘‘(2) OTHER TERMS.—The terms ‘passenger automobile’, 

‘light truck’, and ‘manufacturer’ have the meanings given such 

terms in regulations prescribed by the Administrator of the 

Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et 

seq.). 

‘‘(3) TRACTION BATTERY CAPACITY.—Traction battery 

capacity shall be measured in kilowatt hours from a 100 percent 

state of charge to a zero percent state of charge. 

‘‘(4) REDUCTION IN BASIS.—For purposes of this subtitle, 

the basis of any property for which a credit is allowable under 

subsection (a) shall be reduced by the amount of such credit 

so allowed. 

‘‘(5) NO DOUBLE BENEFIT.—The amount of any deduction 

or other credit allowable under this chapter for a new qualified 

plug-in electric drive motor vehicle shall be reduced by the 

amount of credit allowed under subsection (a) for such vehicle 

for the taxable year. 

‘‘(6) PROPERTY USED BY TAX-EXEMPT ENTITY.—In the case 

of a vehicle the use of which is described in paragraph (3) 

or (4) of section 50(b) and which is not subject to a lease, 

the person who sold such vehicle to the person or entity using 

such vehicle shall be treated as the taxpayer that placed such 

vehicle in service, but only if such person clearly discloses 

to such person or entity in a document the amount of any 

credit allowable under subsection (a) with respect to such 

vehicle (determined without regard to subsection (b)(2)). 

‘‘(7) PROPERTY USED OUTSIDE UNITED STATES, ETC., NOT

QUALIFIED.—No credit shall be allowable under subsection (a) 


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122 STAT. 3838 PUBLIC LAW 110–343—OCT. 3, 2008 

with respect to any property referred to in section 50(b)(1) 

or with respect to the portion of the cost of any property 

taken into account under section 179. 

‘‘(8) RECAPTURE.—The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under 

subsection (a) with respect to any property which ceases to 

be property eligible for such credit (including recapture in the 

case of a lease period of less than the economic life of a 

vehicle). 

‘‘(9) ELECTION TO NOT TAKE CREDIT.—No credit shall be 

allowed under subsection (a) for any vehicle if the taxpayer 

elects not to have this section apply to such vehicle. 

‘‘(10) INTERACTION WITH AIR QUALITY AND MOTOR VEHICLE

SAFETY STANDARDS.—Unless otherwise provided in this section, 

a motor vehicle shall not be considered eligible for a credit 

under this section unless such vehicle is in compliance with— 

‘‘(A) the applicable provisions of the Clean Air Act 

for the applicable make and model year of the vehicle 

(or applicable air quality provisions of State law in the 

case of a State which has adopted such provision under 

a waiver under section 209(b) of the Clean Air Act), and 

‘‘(B) the motor vehicle safety provisions of sections 

30101 through 30169 of title 49, United States Code. 

‘‘(f) REGULATIONS.— 

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), 

the Secretary shall promulgate such regulations as necessary 

to carry out the provisions of this section. 

‘‘(2) COORDINATION IN PRESCRIPTION OF CERTAIN REGULATIONS.—The Secretary of the Treasury, in coordination with 

the Secretary of Transportation and the Administrator of the 

Environmental Protection Agency, shall prescribe such regulations as necessary to determine whether a motor vehicle meets 

the requirements to be eligible for a credit under this section. 

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

purchased after December 31, 2014.’’. 

(b) COORDINATION WITH ALTERNATIVE MOTOR VEHICLE

CREDIT.—Section 30B(d)(3) is amended by adding at the end the 

following new subparagraph: 

‘‘(D) EXCLUSION OF PLUG-IN VEHICLES.—Any vehicle 

with respect to which a credit is allowable under section 

30D (determined without regard to subsection (d) thereof) 

shall not be taken into account under this section.’’. 

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

38(b), as amended by this Act, is amended by striking ‘‘plus’’ at 

the end of paragraph (33), by striking the period at the end of 

paragraph (34) and inserting ‘‘plus’’, and by adding at the end 

the following new paragraph: 

‘‘(35) the portion of the new qualified plug-in electric drive 

motor vehicle credit to which section 30D(d)(1) applies.’’. 

(d) CONFORMING AMENDMENTS.— 

(1)(A) Section 24(b)(3)(B), as amended by section 106, is 

amended by striking ‘‘and 25D’’ and inserting ‘‘25D, and 30D’’. 

(B) Section 25(e)(1)(C)(ii) is amended by inserting ‘‘30D,’’ 

after ‘‘25D,’’. 

(C) Section 25B(g)(2), as amended by section 106, is 

amended by striking ‘‘and 25D’’ and inserting ‘‘, 25D, and 

30D’’. 

26 USC 30B. 

Regulations. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3839 

(D) Section 26(a)(1), as amended by section 106, is amended 

by striking ‘‘and 25D’’ and inserting ‘‘25D, and 30D’’. 

(E) Section 1400C(d)(2) is amended by striking ‘‘and 25D’’ 

and inserting ‘‘25D, and 30D’’. 

(2) Section 1016(a) is amended by striking ‘‘and’’ at the 

end of paragraph (35), by striking the period at the end of 

paragraph (36) and inserting ‘‘, and’’, and by adding at the 

end the following new paragraph: 

‘‘(37) to the extent provided in section 30D(e)(4).’’. 

(3) Section 6501(m) is amended by inserting ‘‘30D(e)(9),’’ 

after ‘‘30C(e)(5),’’. 

(4) The table of sections for subpart B of part IV of subchapter A of chapter 1 is amended by adding at the end the 

following new item: 

‘‘Sec. 30D. New qualified plug-in electric drive motor vehicles.’’. 

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

shall apply to taxable years beginning after December 31, 2008. 

(f) APPLICATION OF EGTRRA SUNSET.—The amendment made 

by subsection (d)(1)(A) shall be subject to title IX of the Economic 

Growth and Tax Relief Reconciliation Act of 2001 in the same 

manner as the provision of such Act to which such amendment 

relates. 

SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION UNITS AND ADVANCED INSULATION. 

(a) IN GENERAL.—Section 4053 is amended by adding at the 

end the following new paragraphs: 

‘‘(9) IDLING REDUCTION DEVICE.—Any device or system of 

devices which— 

‘‘(A) is designed to provide to a vehicle those services 

(such as heat, air conditioning, or electricity) that would 

otherwise require the operation of the main drive engine 

while the vehicle is temporarily parked or remains stationary using one or more devices affixed to a tractor, 

and 

‘‘(B) is determined by the Administrator of the Environmental Protection Agency, in consultation with the Secretary of Energy and the Secretary of Transportation, to 

reduce idling of such vehicle at a motor vehicle rest stop 

or other location where such vehicles are temporarily 

parked or remain stationary. 

‘‘(10) ADVANCED INSULATION.—Any insulation that has an 

R value of not less than R35 per inch.’’. 

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

shall apply to sales or installations after the date of the enactment 

of this Act. 

SEC. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 

CREDIT. 

(a) EXTENSION OF CREDIT.—Paragraph (2) of section 30C(g) 

is amended by striking ‘‘December 31, 2009’’ and inserting 

‘‘December 31, 2010’’. 

(b) INCLUSION OF ELECTRICITY AS A CLEAN-BURNING FUEL.— 

Section 30C(c)(2) is amended by adding at the end the following 

new subparagraph: 

‘‘(C) Electricity.’’. 

Applicability. 

26 USC 4053 

note. 

26 USC 24 note. 

Applicability. 

26 USC 24 note. 

26 USC 1400C. 


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122 STAT. 3840 PUBLIC LAW 110–343—OCT. 3, 2008 

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

shall apply to property placed in service after the date of the 

enactment of this Act, in taxable years ending after such date. 

SEC. 208. CERTAIN INCOME AND GAINS RELATING TO ALCOHOL FUELS 

AND MIXTURES, BIODIESEL FUELS AND MIXTURES, AND 

ALTERNATIVE FUELS AND MIXTURES TREATED AS QUALIFYING INCOME FOR PUBLICLY TRADED PARTNERSHIPS. 

(a) IN GENERAL.—Subparagraph (E) of section 7704(d)(1), as 

amended by this Act, is amended by striking ‘‘or industrial source 

carbon dioxide’’ and inserting ‘‘, industrial source carbon dioxide, 

or the transportation or storage of any fuel described in subsection 

(b), (c), (d), or (e) of section 6426, or any alcohol fuel defined 

in section 6426(b)(4)(A) or any biodiesel fuel as defined in section 

40A(d)(1)’’ after ‘‘timber)’’. 

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

shall take effect on the date of the enactment of this Act, in 

taxable years ending after such date. 

SEC. 209. EXTENSION AND MODIFICATION OF ELECTION TO EXPENSE 

CERTAIN REFINERIES. 

(a) EXTENSION.—Paragraph (1) of section 179C(c) (relating to 

qualified refinery property) is amended— 

(1) by striking ‘‘January 1, 2012’’ in subparagraph (B) 

and inserting ‘‘January 1, 2014’’, and 

(2) by striking ‘‘January 1, 2008’’ each place it appears 

in subparagraph (F) and inserting ‘‘January 1, 2010’’. 

(b) INCLUSION OF FUEL DERIVED FROM SHALE AND TAR SANDS.— 

(1) IN GENERAL.—Subsection (d) of section 179C is amended 

by inserting ‘‘, or directly from shale or tar sands’’ after ‘‘(as 

defined in section 45K(c))’’. 

(2) CONFORMING AMENDMENT.—Paragraph (2) of section 

179C(e) is amended by inserting ‘‘shale, tar sands, or’’ before 

‘‘qualified fuels’’. 

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

shall apply to property placed in service after the date of the 

enactment of this Act. 

SEC. 210. EXTENSION OF SUSPENSION OF TAXABLE INCOME LIMIT 

ON PERCENTAGE DEPLETION FOR OIL AND NATURAL GAS 

PRODUCED FROM MARGINAL PROPERTIES. 

Subparagraph (H) of section 613A(c)(6) (relating to oil and 

gas produced from marginal properties) is amended by striking 

‘‘for any taxable year’’ and all that follows and inserting ‘‘for any 

taxable year— 

‘‘(i) beginning after December 31, 1997, and before 

January 1, 2008, or 

‘‘(ii) beginning after December 31, 2008, and before 

January 1, 2010.’’. 

SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS. 

(a) IN GENERAL.—Paragraph (1) of section 132(f) is amended 

by adding at the end the following: 

‘‘(D) Any qualified bicycle commuting reimbursement.’’. 

(b) LIMITATION ON EXCLUSION.—Paragraph (2) of section 132(f) 

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

Applicability. 

26 USC 179C 

note. 

26 USC 7704 

note. 

26 USC 7704. 

Applicability. 

26 USC 30C note. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3841 

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

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

‘‘(C) the applicable annual limitation in the case of 

any qualified bicycle commuting reimbursement.’’. 

(c) DEFINITIONS.—Paragraph (5) of section 132(f) is amended 

by adding at the end the following: 

‘‘(F) DEFINITIONS RELATED TO BICYCLE COMMUTING

REIMBURSEMENT.— ‘‘(i) QUALIFIED BICYCLE COMMUTING REIMBURSE- MENT.—The term ‘qualified bicycle commuting 

reimbursement’ means, with respect to any calendar 

year, any employer reimbursement during the 15- 

month period beginning with the first day of such 

calendar year for reasonable expenses incurred by the 

employee during such calendar year for the purchase 

of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between 

the employee’s residence and place of employment. 

‘‘(ii) APPLICABLE ANNUAL LIMITATION.—The term 

‘applicable annual limitation’ means, with respect to 

any employee for any calendar year, the product of 

$20 multiplied by the number of qualified bicycle commuting months during such year. 

‘‘(iii) QUALIFIED BICYCLE COMMUTING MONTH.—The 

term ‘qualified bicycle commuting month’ means, with 

respect to any employee, any month during which such 

employee— 

‘‘(I) regularly uses the bicycle for a substantial 

portion of the travel between the employee’s residence and place of employment, and 

‘‘(II) does not receive any benefit described 

in subparagraph (A), (B), or (C) of paragraph (1).’’. 

(d) CONSTRUCTIVE RECEIPT OF BENEFIT.—Paragraph (4) of section 132(f) is amended by inserting ‘‘(other than a qualified bicycle 

commuting reimbursement)’’ after ‘‘qualified transportation fringe’’. 

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

shall apply to taxable years beginning after December 31, 2008. 

TITLE III—ENERGY CONSERVATION 

AND EFFICIENCY PROVISIONS 

SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS. 

(a) IN GENERAL.—Subpart I of part IV of subchapter A of 

chapter 1, as amended by section 107, is amended by adding at 

the end the following new section: 

‘‘SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS. 

‘‘(a) QUALIFIED ENERGY CONSERVATION BOND.—For purposes 

of this subchapter, the term ‘qualified energy conservation bond’ 

means any bond issued as part of an issue if— 

‘‘(1) 100 percent of the available project proceeds of such 

issue are to be used for one or more qualified conservation 

purposes, 

‘‘(2) the bond is issued by a State or local government, 

and 

Applicability. 

26 USC 132 note. 

26 USC 132. 


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122 STAT. 3842 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(3) the issuer designates such bond for purposes of this 

section. 

‘‘(b) REDUCED CREDIT AMOUNT.—The annual credit determined 

under section 54A(b) with respect to any qualified energy conservation bond shall be 70 percent of the amount so determined without 

regard to this subsection. 

‘‘(c) LIMITATION ON AMOUNT OF BONDS DESIGNATED.—The maximum aggregate face amount of bonds which may be designated 

under subsection (a) by any issuer shall not exceed the limitation 

amount allocated to such issuer under subsection (e). 

‘‘(d) NATIONAL LIMITATION ON AMOUNT OF BONDS DESIGNATED.—There is a national qualified energy conservation bond 

limitation of $800,000,000. 

‘‘(e) ALLOCATIONS.— 

‘‘(1) IN GENERAL.—The limitation applicable under subsection (d) shall be allocated by the Secretary among the States 

in proportion to the population of the States. 

‘‘(2) ALLOCATIONS TO LARGEST LOCAL GOVERNMENTS.— 

‘‘(A) IN GENERAL.—In the case of any State in which 

there is a large local government, each such local government shall be allocated a portion of such State’s allocation 

which bears the same ratio to the State’s allocation (determined without regard to this subparagraph) as the population of such large local government bears to the population of such State. 

‘‘(B) ALLOCATION OF UNUSED LIMITATION TO STATE.— 

The amount allocated under this subsection to a large 

local government may be reallocated by such local government to the State in which such local government is located. 

‘‘(C) LARGE LOCAL GOVERNMENT.—For purposes of this 

section, the term ‘large local government’ means any 

municipality or county if such municipality or county has 

a population of 100,000 or more. 

‘‘(3) ALLOCATION TO ISSUERS; RESTRICTION ON PRIVATE

ACTIVITY BONDS.—Any allocation under this subsection to a 

State or large local government shall be allocated by such 

State or large local government to issuers within the State 

in a manner that results in not less than 70 percent of the 

allocation to such State or large local government being used 

to designate bonds which are not private activity bonds. 

‘‘(f) QUALIFIED CONSERVATION PURPOSE.—For purposes of this 

section— 

‘‘(1) IN GENERAL.—The term ‘qualified conservation purpose’ 

means any of the following: 

‘‘(A) Capital expenditures incurred for purposes of— 

‘‘(i) reducing energy consumption in publicly-owned 

buildings by at least 20 percent, 

‘‘(ii) implementing green community programs, 

‘‘(iii) rural development involving the production 

of electricity from renewable energy resources, or 

‘‘(iv) any qualified facility (as determined under 

section 45(d) without regard to paragraphs (8) and 

(10) thereof and without regard to any placed in service 

date). 

‘‘(B) Expenditures with respect to research facilities, 

and research grants, to support research in— 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3843 

‘‘(i) development of cellulosic ethanol or other nonfossil fuels, 

‘‘(ii) technologies for the capture and sequestration 

of carbon dioxide produced through the use of fossil 

fuels, 

‘‘(iii) increasing the efficiency of existing technologies for producing nonfossil fuels, 

‘‘(iv) automobile battery technologies and other 

technologies to reduce fossil fuel consumption in 

transportation, or 

‘‘(v) technologies to reduce energy use in buildings. 

‘‘(C) Mass commuting facilities and related facilities 

that reduce the consumption of energy, including expenditures to reduce pollution from vehicles used for mass commuting. 

‘‘(D) Demonstration projects designed to promote the 

commercialization of— 

‘‘(i) green building technology, 

‘‘(ii) conversion of agricultural waste for use in 

the production of fuel or otherwise, 

‘‘(iii) advanced battery manufacturing technologies, 

‘‘(iv) technologies to reduce peak use of electricity, 

or 

‘‘(v) technologies for the capture and sequestration 

of carbon dioxide emitted from combusting fossil fuels 

in order to produce electricity. 

‘‘(E) Public education campaigns to promote energy 

efficiency. 

‘‘(2) SPECIAL RULES FOR PRIVATE ACTIVITY BONDS.—For purposes of this section, in the case of any private activity bond, 

the term ‘qualified conservation purposes’ shall not include 

any expenditure which is not a capital expenditure. 

‘‘(g) POPULATION.— 

‘‘(1) IN GENERAL.—The population of any State or local 

government shall be determined for purposes of this section 

as provided in section 146(j) for the calendar year which 

includes the date of the enactment of this section. 

‘‘(2) SPECIAL RULE FOR COUNTIES.—In determining the 

population of any county for purposes of this section, any population of such county which is taken into account in determining 

the population of any municipality which is a large local government shall not be taken into account in determining the population of such county. 

‘‘(h) APPLICATION TO INDIAN TRIBAL GOVERNMENTS.—An Indian 

tribal government shall be treated for purposes of this section 

in the same manner as a large local government, except that— 

‘‘(1) an Indian tribal government shall be treated for purposes of subsection (e) as located within a State to the extent 

of so much of the population of such government as resides 

within such State, and 

‘‘(2) any bond issued by an Indian tribal government shall 

be treated as a qualified energy conservation bond only if 

issued as part of an issue the available project proceeds of 

which are used for purposes for which such Indian tribal 

government could issue bonds to which section 103(a) applies.’’. 

(b) CONFORMING AMENDMENTS.— 


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122 STAT. 3844 PUBLIC LAW 110–343—OCT. 3, 2008 

(1) Paragraph (1) of section 54A(d), as amended by this 

Act, is amended to read as follows: 

‘‘(1) QUALIFIED TAX CREDIT BOND.—The term ‘qualified tax 

credit bond’ means— 

‘‘(A) a qualified forestry conservation bond, 

‘‘(B) a new clean renewable energy bond, or 

‘‘(C) a qualified energy conservation bond, 

which is part of an issue that meets requirements of paragraphs 

(2), (3), (4), (5), and (6).’’. 

(2) Subparagraph (C) of section 54A(d)(2), as amended by 

this Act, is amended to read as follows: 

‘‘(C) QUALIFIED PURPOSE.—For purposes of this paragraph, the term ‘qualified purpose’ means— 

‘‘(i) in the case of a qualified forestry conservation 

bond, a purpose specified in section 54B(e), 

‘‘(ii) in the case of a new clean renewable energy 

bond, a purpose specified in section 54C(a)(1), and 

‘‘(iii) in the case of a qualified energy conservation 

bond, a purpose specified in section 54D(a)(1).’’. 

(3) The table of sections for subpart I of part IV of subchapter A of chapter 1, as amended by this Act, is amended 

by adding at the end the following new item: 

‘‘Sec. 54D. Qualified energy conservation bonds.’’. 

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

shall apply to obligations issued after the date of the enactment 

of this Act. 

SEC. 302. CREDIT FOR NONBUSINESS ENERGY PROPERTY. 

(a) EXTENSION OF CREDIT.—Section 25C(g) is amended by 

striking ‘‘placed in service after December 31, 2007’’ and inserting 

‘‘placed in service— 

‘‘(1) after December 31, 2007, and before January 1, 2009, 

or 

‘‘(2) after December 31, 2009.’’. 

(b) QUALIFIED BIOMASS FUEL PROPERTY.— 

(1) IN GENERAL.—Section 25C(d)(3) is amended— 

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

(B) by striking the period at the end of subparagraph 

(E) and inserting ‘‘, and’’, and 

(C) by adding at the end the following new subparagraph: 

‘‘(F) a stove which uses the burning of biomass fuel 

to heat a dwelling unit located in the United States and 

used as a residence by the taxpayer, or to heat water 

for use in such a dwelling unit, and which has a thermal 

efficiency rating of at least 75 percent.’’. 

(2) BIOMASS FUEL.—Section 25C(d) is amended by adding 

at the end the following new paragraph: 

‘‘(6) BIOMASS FUEL.—The term ‘biomass fuel’ means any 

plant-derived fuel available on a renewable or recurring basis, 

including agricultural crops and trees, wood and wood waste 

and residues (including wood pellets), plants (including aquatic 

plants), grasses, residues, and fibers.’’. 

(c) MODIFICATION OF WATER HEATER REQUIREMENTS.—Section 

25C(d)(3)(E) is amended by inserting ‘‘or a thermal efficiency of 

at least 90 percent’’ after ‘‘0.80’’. 

Applicability. 

26 USC 54A note. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3845 

(d) COORDINATION WITH CREDIT FOR QUALIFIED GEOTHERMAL

HEAT PUMP PROPERTY EXPENDITURES.— (1) IN GENERAL.—Paragraph (3) of section 25C(d), as 

amended by subsections (b) and (c), is amended by striking 

subparagraph (C) and by redesignating subparagraphs (D), (E), 

and (F) as subparagraphs (C), (D), and (E), respectively. 

(2) CONFORMING AMENDMENT.—Subparagraph (C) of section 

25C(d)(2) is amended to read as follows: 

‘‘(C) REQUIREMENTS AND STANDARDS FOR AIR CONDI- TIONERS AND HEAT PUMPS.—The standards and requirements prescribed by the Secretary under subparagraph 

(B) with respect to the energy efficiency ratio (EER) for 

central air conditioners and electric heat pumps— 

‘‘(i) shall require measurements to be based on 

published data which is tested by manufacturers at 

95 degrees Fahrenheit, and 

‘‘(ii) may be based on the certified data of the 

Air Conditioning and Refrigeration Institute that are 

prepared in partnership with the Consortium for 

Energy Efficiency.’’. 

(e) MODIFICATION OF QUALIFIED ENERGY EFFICIENCY IMPROVE- MENTS.— 

(1) IN GENERAL.—Paragraph (1) of section 25C(c) is 

amended by inserting ‘‘, or an asphalt roof with appropriate 

cooling granules,’’ before ‘‘which meet the Energy Star program 

requirements’’. 

(2) BUILDING ENVELOPE COMPONENT.—Subparagraph (D) 

of section 25C(c)(2) is amended— 

(A) by inserting ‘‘or asphalt roof’’ after ‘‘metal roof’’, 

and 

(B) by inserting ‘‘or cooling granules’’ after ‘‘pigmented 

coatings’’. 

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

amendments made this section shall apply to expenditures 

made after December 31, 2008. 

(2) MODIFICATION OF QUALIFIED ENERGY EFFICIENCY

IMPROVEMENTS.—The amendments made by subsection (e) shall 

apply to property placed in service after the date of the enactment of this Act. 

SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION. 

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

‘‘December 31, 2008’’ and inserting ‘‘December 31, 2013’’. 

SEC. 304. NEW ENERGY EFFICIENT HOME CREDIT. 

Subsection (g) of section 45L (relating to termination) is 

amended by striking ‘‘December 31, 2008’’ and inserting ‘‘December 

31, 2009’’. 

SEC. 305. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT 

FOR APPLIANCES PRODUCED AFTER 2007. 

(a) IN GENERAL.—Subsection (b) of section 45M is amended 

to read as follows: 

‘‘(b) APPLICABLE AMOUNT.—For purposes of subsection (a)— 

‘‘(1) DISHWASHERS.—The applicable amount is— ‘‘(A) $45 in the case of a dishwasher which is manufactured in calendar year 2008 or 2009 and which uses no 

Applicability. 

26 USC 25C note. 

26 USC 25C. 

Public 

information. 


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122 STAT. 3846 PUBLIC LAW 110–343—OCT. 3, 2008 

more than 324 kilowatt hours per year and 5.8 gallons 

per cycle, and ‘‘(B) $75 in the case of a dishwasher which is manufactured in calendar year 2008, 2009, or 2010 and which 

uses no more than 307 kilowatt hours per year and 5.0 

gallons per cycle (5.5 gallons per cycle for dishwashers 

designed for greater than 12 place settings). 

‘‘(2) CLOTHES WASHERS.—The applicable amount is— ‘‘(A) $75 in the case of a residential top-loading clothes 

washer manufactured in calendar year 2008 which meets 

or exceeds a 1.72 modified energy factor and does not 

exceed a 8.0 water consumption factor, ‘‘(B) $125 in the case of a residential top-loading clothes 

washer manufactured in calendar year 2008 or 2009 which 

meets or exceeds a 1.8 modified energy factor and does 

not exceed a 7.5 water consumption factor, ‘‘(C) $150 in the case of a residential or commercial 

clothes washer manufactured in calendar year 2008, 2009, 

or 2010 which meets or exceeds 2.0 modified energy factor 

and does not exceed a 6.0 water consumption factor, and ‘‘(D) $250 in the case of a residential or commercial 

clothes washer manufactured in calendar year 2008, 2009, 

or 2010 which meets or exceeds 2.2 modified energy factor 

and does not exceed a 4.5 water consumption factor. 

‘‘(3) REFRIGERATORS.—The applicable amount is— 

‘‘(A) $50 in the case of a refrigerator which is manufactured in calendar year 2008, and consumes at least 20 

percent but not more than 22.9 percent less kilowatt hours 

per year than the 2001 energy conservation standards, 

‘‘(B) $75 in the case of a refrigerator which is manufactured in calendar year 2008 or 2009, and consumes at 

least 23 percent but no more than 24.9 percent less kilowatt 

hours per year than the 2001 energy conservation standards, 

‘‘(C) $100 in the case of a refrigerator which is manufactured in calendar year 2008, 2009, or 2010, and consumes at least 25 percent but not more than 29.9 percent 

less kilowatt hours per year than the 2001 energy conservation standards, and 

‘‘(D) $200 in the case of a refrigerator manufactured 

in calendar year 2008, 2009, or 2010 and which consumes 

at least 30 percent less energy than the 2001 energy conservation standards.’’. 

(b) ELIGIBLE PRODUCTION.— 

(1) SIMILAR TREATMENT FOR ALL APPLIANCES.—Subsection 

(c) of section 45M is amended— 

(A) by striking paragraph (2), 

(B) by striking ‘‘(1) IN GENERAL’’ and all that follows 

through ‘‘the eligible’’ and inserting ‘‘The eligible’’, 

(C) by moving the text of such subsection in line with 

the subsection heading, and 

(D) by redesignating subparagraphs (A) and (B) as 

paragraphs (1) and (2), respectively, and by moving such 

paragraphs 2 ems to the left. 

(2) MODIFICATION OF BASE PERIOD.—Paragraph (2) of section 45M(c), as amended by paragraph (1), is amended by 

striking ‘‘3-calendar year’’ and inserting ‘‘2-calendar year’’. 

26 USC 45M. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3847 

(c) TYPES OF ENERGY EFFICIENT APPLIANCES.—Subsection (d) 

of section 45M is amended to read as follows: 

‘‘(d) TYPES OF ENERGY EFFICIENT APPLIANCE.—For purposes 

of this section, the types of energy efficient appliances are— 

‘‘(1) dishwashers described in subsection (b)(1), 

‘‘(2) clothes washers described in subsection (b)(2), and 

‘‘(3) refrigerators described in subsection (b)(3).’’. 

(d) AGGREGATE CREDIT AMOUNT ALLOWED.— (1) INCREASE IN LIMIT.—Paragraph (1) of section 45M(e) 

is amended to read as follows: 

‘‘(1) AGGREGATE CREDIT AMOUNT ALLOWED.—The aggregate 

amount of credit allowed under subsection (a) with respect 

to a taxpayer for any taxable year shall not exceed $75,000,000 

reduced by the amount of the credit allowed under subsection 

(a) to the taxpayer (or any predecessor) for all prior taxable 

years beginning after December 31, 2007.’’. 

(2) EXCEPTION FOR CERTAIN REFRIGERATOR AND CLOTHES

WASHERS.—Paragraph (2) of section 45M(e) is amended to read 

as follows: 

‘‘(2) AMOUNT ALLOWED FOR CERTAIN REFRIGERATORS AND

CLOTHES WASHERS.—Refrigerators described in subsection 

(b)(3)(D) and clothes washers described in subsection (b)(2)(D) 

shall not be taken into account under paragraph (1).’’. 

(e) QUALIFIED ENERGY EFFICIENT APPLIANCES.— 

(1) IN GENERAL.—Paragraph (1) of section 45M(f) is 

amended to read as follows: 

‘‘(1) QUALIFIED ENERGY EFFICIENT APPLIANCE.—The term 

‘qualified energy efficient appliance’ means— 

‘‘(A) any dishwasher described in subsection (b)(1), 

‘‘(B) any clothes washer described in subsection (b)(2), 

and 

‘‘(C) any refrigerator described in subsection (b)(3).’’. 

(2) CLOTHES WASHER.—Section 45M(f)(3) is amended by 

inserting ‘‘commercial’’ before ‘‘residential’’ the second place 

it appears. 

(3) TOP-LOADING CLOTHES WASHER.—Subsection (f) of section 45M is amended by redesignating paragraphs (4), (5), 

(6), and (7) as paragraphs (5), (6), (7), and (8), respectively, 

and by inserting after paragraph (3) the following new paragraph: 

‘‘(4) TOP-LOADING CLOTHES WASHER.—The term ‘top-loading 

clothes washer’ means a clothes washer which has the clothes 

container compartment access located on the top of the machine 

and which operates on a vertical axis.’’. 

(4) REPLACEMENT OF ENERGY FACTOR.—Section 45M(f)(6), 

as redesignated by paragraph (3), is amended to read as follows: 

‘‘(6) MODIFIED ENERGY FACTOR.—The term ‘modified energy 

factor’ means the modified energy factor established by the 

Department of Energy for compliance with the Federal energy 

conservation standard.’’. 

(5) GALLONS PER CYCLE; WATER CONSUMPTION FACTOR.— Section 45M(f), as amended by paragraph (3), is amended by 

adding at the end the following: 

‘‘(9) GALLONS PER CYCLE.—The term ‘gallons per cycle’ 

means, with respect to a dishwasher, the amount of water, 

expressed in gallons, required to complete a normal cycle of 

a dishwasher. 

26 USC 45M. 


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122 STAT. 3848 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(10) WATER CONSUMPTION FACTOR.—The term ‘water 

consumption factor’ means, with respect to a clothes washer, 

the quotient of the total weighted per-cycle water consumption 

divided by the cubic foot (or liter) capacity of the clothes 

washer.’’. 

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

shall apply to appliances produced after December 31, 2007. 

SEC. 306. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF 

SMART METERS AND SMART GRID SYSTEMS. 

(a) IN GENERAL.—Section 168(e)(3)(D) is amended by striking 

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

of clause (ii) and inserting a comma, and by inserting after clause 

(ii) the following new clauses: 

‘‘(iii) any qualified smart electric meter, and 

‘‘(iv) any qualified smart electric grid system.’’. 

(b) DEFINITIONS.—Section 168(i) is amended by inserting at 

the end the following new paragraph: 

‘‘(18) QUALIFIED SMART ELECTRIC METERS.— 

‘‘(A) IN GENERAL.—The term ‘qualified smart electric 

meter’ means any smart electric meter which— 

‘‘(i) is placed in service by a taxpayer who is a 

supplier of electric energy or a provider of electric 

energy services, and 

‘‘(ii) does not have a class life (determined without 

regard to subsection (e)) of less than 10 years. 

‘‘(B) SMART ELECTRIC METER.—For purposes of subparagraph (A), the term ‘smart electric meter’ means any timebased meter and related communication equipment which 

is capable of being used by the taxpayer as part of a 

system that— 

‘‘(i) measures and records electricity usage data 

on a time-differentiated basis in at least 24 separate 

time segments per day, 

‘‘(ii) provides for the exchange of information 

between supplier or provider and the customer’s electric meter in support of time-based rates or other forms 

of demand response, 

‘‘(iii) provides data to such supplier or provider 

so that the supplier or provider can provide energy 

usage information to customers electronically, and 

‘‘(iv) provides net metering. 

‘‘(19) QUALIFIED SMART ELECTRIC GRID SYSTEMS.— 

‘‘(A) IN GENERAL.—The term ‘qualified smart electric 

grid system’ means any smart grid property which— 

‘‘(i) is used as part of a system for electric distribution grid communications, monitoring, and management placed in service by a taxpayer who is a supplier 

of electric energy or a provider of electric energy services, and 

‘‘(ii) does not have a class life (determined without 

regard to subsection (e)) of less than 10 years. 

‘‘(B) SMART GRID PROPERTY.—For the purposes of 

subparagraph (A), the term ‘smart grid property’ means 

electronics and related equipment that is capable of— 

‘‘(i) sensing, collecting, and monitoring data of or 

from all portions of a utility’s electric distribution grid, 

Applicability. 

26 USC 45M 

note. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3849 

‘‘(ii) providing real-time, two-way communications 

to monitor or manage such grid, and 

‘‘(iii) providing real time analysis of and event 

prediction based upon collected data that can be used 

to improve electric distribution system reliability, 

quality, and performance.’’. 

(c) CONTINUED APPLICATION OF 150 PERCENT DECLINING BAL- ANCE METHOD.—Paragraph (2) of section 168(b) is amended by 

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

subparagraph (C) as subparagraph (D), and by inserting after 

subparagraph (B) the following new subparagraph: 

‘‘(C) any property (other than property described in 

paragraph (3)) which is a qualified smart electric meter 

or qualified smart electric grid system, or’’. 

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

shall apply to property placed in service after the date of the 

enactment of this Act. 

SEC. 307. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN 

PROJECTS. 

(a) IN GENERAL.—Paragraph (8) of section 142(l) is amended 

by striking ‘‘September 30, 2009’’ and inserting ‘‘September 30, 

2012’’. 

(b) TREATMENT OF CURRENT REFUNDING BONDS.—Paragraph 

(9) of section 142(l) is amended by striking ‘‘October 1, 2009’’ and 

inserting ‘‘October 1, 2012’’. 

(c) ACCOUNTABILITY.—The second sentence of section 701(d) 

of the American Jobs Creation Act of 2004 is amended by striking 

‘‘issuance,’’ and inserting ‘‘issuance of the last issue with respect 

to such project,’’. 

SEC. 308. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN REUSE 

AND RECYCLING PROPERTY. 

(a) IN GENERAL.—Section 168 is amended by adding at the 

end the following new subsection: 

‘‘(m) SPECIAL ALLOWANCE FOR CERTAIN REUSE AND RECYCLING

PROPERTY.— 

‘‘(1) IN GENERAL.—In the case of any qualified reuse and 

recycling property— 

‘‘(A) the depreciation deduction provided by section 

167(a) for the taxable year in which such property is placed 

in service shall include an allowance equal to 50 percent 

of the adjusted basis of the qualified reuse and recycling 

property, and 

‘‘(B) the adjusted basis of the qualified reuse and 

recycling property shall be reduced by the amount of such 

deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for 

such taxable year and any subsequent taxable year. 

‘‘(2) QUALIFIED REUSE AND RECYCLING PROPERTY.—For purposes of this subsection— 

‘‘(A) IN GENERAL.—The term ‘qualified reuse and 

recycling property’ means any reuse and recycling property— 

‘‘(i) to which this section applies, 

‘‘(ii) which has a useful life of at least 5 years, 

‘‘(iii) the original use of which commences with 

the taxpayer after August 31, 2008, and 

Effective date. 

26 USC 142 note. 

Applicability. 

26 USC 168 note. 

26 USC 168. 


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122 STAT. 3850 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(iv) which is— 

‘‘(I) acquired by purchase (as defined in section 

179(d)(2)) by the taxpayer after August 31, 2008, 

but only if no written binding contract for the 

acquisition was in effect before September 1, 2008, 

or 

‘‘(II) acquired by the taxpayer pursuant to a 

written binding contract which was entered into 

after August 31, 2008. 

‘‘(B) EXCEPTIONS.— ‘‘(i) BONUS DEPRECIATION PROPERTY UNDER SUB- SECTION (k).—The term ‘qualified reuse and recycling 

property’ shall not include any property to which section 168(k) applies. 

‘‘(ii) ALTERNATIVE DEPRECIATION PROPERTY.—The 

term ‘qualified reuse and recycling property’ shall not 

include any property to which the alternative depreciation system under subsection (g) applies, determined 

without regard to paragraph (7) of subsection (g) 

(relating to election to have system apply). 

‘‘(iii) ELECTION OUT.—If a taxpayer makes an election under this clause with respect to any class of 

property for any taxable year, this subsection shall 

not apply to all property in such class placed in service 

during such taxable year. 

‘‘(C) SPECIAL RULE FOR SELF-CONSTRUCTED PROPERTY.— 

In the case of a taxpayer manufacturing, constructing, 

or producing property for the taxpayer’s own use, the 

requirements of clause (iv) of subparagraph (A) shall be 

treated as met if the taxpayer begins manufacturing, constructing, or producing the property after August 31, 2008. 

‘‘(D) DEDUCTION ALLOWED IN COMPUTING MINIMUM

TAX.—For purposes of determining alternative minimum 

taxable income under section 55, the deduction under subsection (a) for qualified reuse and recycling property shall 

be determined under this section without regard to any 

adjustment under section 56. 

‘‘(3) DEFINITIONS.—For purposes of this subsection— 

‘‘(A) REUSE AND RECYCLING PROPERTY.— 

‘‘(i) IN GENERAL.—The term ‘reuse and recycling 

property’ means any machinery and equipment (not 

including buildings or real estate), along with all 

appurtenances thereto, including software necessary 

to operate such equipment, which is used exclusively 

to collect, distribute, or recycle qualified reuse and 

recyclable materials. 

‘‘(ii) EXCLUSION.—Such term does not include 

rolling stock or other equipment used to transport 

reuse and recyclable materials. 

‘‘(B) QUALIFIED REUSE AND RECYCLABLE MATERIALS.— 

‘‘(i) IN GENERAL.—The term ‘qualified reuse and 

recyclable materials’ means scrap plastic, scrap glass, 

scrap textiles, scrap rubber, scrap packaging, recovered 

fiber, scrap ferrous and nonferrous metals, or electronic 

scrap generated by an individual or business. 

‘‘(ii) ELECTRONIC SCRAP.—For purposes of clause 

(i), the term ‘electronic scrap’ means— 

Effective date. 

Effective date. 

Effective dates. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3851 

‘‘(I) any cathode ray tube, flat panel screen, 

or similar video display device with a screen size 

greater than 4 inches measured diagonally, or 

‘‘(II) any central processing unit. 

‘‘(C) RECYCLING OR RECYCLE.—The term ‘recycling’ or 

‘recycle’ means that process (including sorting) by which 

worn or superfluous materials are manufactured or processed into specification grade commodities that are suitable 

for use as a replacement or substitute for virgin materials 

in manufacturing tangible consumer and commercial products, including packaging.’’. 

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

shall apply to property placed in service after August 31, 2008. 

TITLE IV—REVENUE PROVISIONS 

SEC. 401. LIMITATION OF DEDUCTION FOR INCOME ATTRIBUTABLE 

TO DOMESTIC PRODUCTION OF OIL, GAS, OR PRIMARY 

PRODUCTS THEREOF. 

(a) IN GENERAL.—Section 199(d) is amended by redesignating 

paragraph (9) as paragraph (10) and by inserting after paragraph 

(8) the following new paragraph: 

‘‘(9) SPECIAL RULE FOR TAXPAYERS WITH OIL RELATED QUALIFIED PRODUCTION ACTIVITIES INCOME.— 

‘‘(A) IN GENERAL.—If a taxpayer has oil related qualified production activities income for any taxable year beginning after 2009, the amount otherwise allowable as a 

deduction under subsection (a) shall be reduced by 3 percent of the least of— 

‘‘(i) the oil related qualified production activities 

income of the taxpayer for the taxable year, 

‘‘(ii) the qualified production activities income of 

the taxpayer for the taxable year, or 

‘‘(iii) taxable income (determined without regard 

to this section). 

‘‘(B) OIL RELATED QUALIFIED PRODUCTION ACTIVITIES

INCOME.—For purposes of this paragraph, the term ‘oil 

related qualified production activities income’ means for 

any taxable year the qualified production activities income 

which is attributable to the production, refining, processing, 

transportation, or distribution of oil, gas, or any primary 

product thereof during such taxable year. 

‘‘(C) PRIMARY PRODUCT.—For purposes of this paragraph, the term ‘primary product’ has the same meaning 

as when used in section 927(a)(2)(C), as in effect before 

its repeal.’’. 

(b) CONFORMING AMENDMENT.—Section 199(d)(2) (relating to 

application to individuals) is amended by striking ‘‘subsection 

(a)(1)(B)’’ and inserting ‘‘subsections (a)(1)(B) and (d)(9)(A)(iii)’’. 

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

shall apply to taxable years beginning after December 31, 2008. 

Applicability. 

26 USC 199 note. 

26 USC 199. 

Applicability. 

26 USC 168 note. 


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122 STAT. 3852 PUBLIC LAW 110–343—OCT. 3, 2008 

SEC. 402. ELIMINATION OF THE DIFFERENT TREATMENT OF FOREIGN 

OIL AND GAS EXTRACTION INCOME AND FOREIGN OIL 

RELATED INCOME FOR PURPOSES OF THE FOREIGN TAX 

CREDIT. 

(a) IN GENERAL.—Subsections (a) and (b) of section 907 (relating 

to special rules in case of foreign oil and gas income) are amended 

to read as follows: 

‘‘(a) REDUCTION IN AMOUNT ALLOWED AS FOREIGN TAX UNDER

SECTION 901.—In applying section 901, the amount of any foreign 

oil and gas taxes paid or accrued (or deemed to have been paid) 

during the taxable year which would (but for this subsection) be 

taken into account for purposes of section 901 shall be reduced 

by the amount (if any) by which the amount of such taxes exceeds 

the product of— 

‘‘(1) the amount of the combined foreign oil and gas income 

for the taxable year, 

‘‘(2) multiplied by— 

‘‘(A) in the case of a corporation, the percentage which 

is equal to the highest rate of tax specified under section 

11(b), or 

‘‘(B) in the case of an individual, a fraction the numerator of which is the tax against which the credit under 

section 901(a) is taken and the denominator of which is 

the taxpayer’s entire taxable income. 

‘‘(b) COMBINED FOREIGN OIL AND GAS INCOME; FOREIGN OIL

AND GAS TAXES.—For purposes of this section— 

‘‘(1) COMBINED FOREIGN OIL AND GAS INCOME.—The term 

‘combined foreign oil and gas income’ means, with respect to 

any taxable year, the sum of— 

‘‘(A) foreign oil and gas extraction income, and 

‘‘(B) foreign oil related income. 

‘‘(2) FOREIGN OIL AND GAS TAXES.—The term ‘foreign oil 

and gas taxes’ means, with respect to any taxable year, the 

sum of— 

‘‘(A) oil and gas extraction taxes, and 

‘‘(B) any income, war profits, and excess profits taxes 

paid or accrued (or deemed to have been paid or accrued 

under section 902 or 960) during the taxable year with 

respect to foreign oil related income (determined without 

regard to subsection (c)(4)) or loss which would be taken 

into account for purposes of section 901 without regard 

to this section.’’. 

(b) RECAPTURE OF FOREIGN OIL AND GAS LOSSES.—Paragraph 

(4) of section 907(c) (relating to recapture of foreign oil and gas 

extraction losses by recharacterizing later extraction income) is 

amended to read as follows: 

‘‘(4) RECAPTURE OF FOREIGN OIL AND GAS LOSSES BY RECHARACTERIZING LATER COMBINED FOREIGN OIL AND GAS

INCOME.— 

‘‘(A) IN GENERAL.—The combined foreign oil and gas 

income of a taxpayer for a taxable year (determined without 

regard to this paragraph) shall be reduced— 

‘‘(i) first by the amount determined under subparagraph (B), and 

‘‘(ii) then by the amount determined under 

subparagraph (C). 

26 USC 907. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3853 

The aggregate amount of such reductions shall be treated 

as income (from sources without the United States) which 

is not combined foreign oil and gas income. 

‘‘(B) REDUCTION FOR PRE-2009 FOREIGN OIL EXTRACTION

LOSSES.—The reduction under this paragraph shall be 

equal to the lesser of— 

‘‘(i) the foreign oil and gas extraction income of 

the taxpayer for the taxable year (determined without 

regard to this paragraph), or 

‘‘(ii) the excess of— 

‘‘(I) the aggregate amount of foreign oil extraction losses for preceding taxable years beginning 

after December 31, 1982, and before January 1, 

2009, over 

‘‘(II) so much of such aggregate amount as 

was recharacterized under this paragraph (as in 

effect before and after the date of the enactment 

of the Energy Improvement and Extension Act 

of 2008) for preceding taxable years beginning 

after December 31, 1982. 

‘‘(C) REDUCTION FOR POST-2008 FOREIGN OIL AND GAS

LOSSES.—The reduction under this paragraph shall be 

equal to the lesser of— 

‘‘(i) the combined foreign oil and gas income of 

the taxpayer for the taxable year (determined without 

regard to this paragraph), reduced by an amount equal 

to the reduction under subparagraph (A) for the taxable 

year, or 

‘‘(ii) the excess of— 

‘‘(I) the aggregate amount of foreign oil and 

gas losses for preceding taxable years beginning 

after December 31, 2008, over 

‘‘(II) so much of such aggregate amount as 

was recharacterized under this paragraph for preceding taxable years beginning after December 31, 

2008. 

‘‘(D) FOREIGN OIL AND GAS LOSS DEFINED.— 

‘‘(i) IN GENERAL.—For purposes of this paragraph, 

the term ‘foreign oil and gas loss’ means the amount 

by which— 

‘‘(I) the gross income for the taxable year from 

sources without the United States and its possessions (whether or not the taxpayer chooses the 

benefits of this subpart for such taxable year) 

taken into account in determining the combined 

foreign oil and gas income for such year, is 

exceeded by 

‘‘(II) the sum of the deductions properly apportioned or allocated thereto. 

‘‘(ii) NET OPERATING LOSS DEDUCTION NOT TAKEN

INTO ACCOUNT.—For purposes of clause (i), the net 

operating loss deduction allowable for the taxable year 

under section 172(a) shall not be taken into account. 

‘‘(iii) EXPROPRIATION AND CASUALTY LOSSES NOT

TAKEN INTO ACCOUNT.—For purposes of clause (i), there 

shall not be taken into account— 

Effective dates. 

Effective dates. 


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122 STAT. 3854 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(I) any foreign expropriation loss (as defined 

in section 172(h) (as in effect on the day before 

the date of the enactment of the Revenue Reconciliation Act of 1990)) for the taxable year, or 

‘‘(II) any loss for the taxable year which arises 

from fire, storm, shipwreck, or other casualty, or 

from theft, 

to the extent such loss is not compensated for by insurance or otherwise. 

‘‘(iv) FOREIGN OIL EXTRACTION LOSS.—For purposes 

of subparagraph (B)(ii)(I), foreign oil extraction losses 

shall be determined under this paragraph as in effect 

on the day before the date of the enactment of the 

Energy Improvement and Extension Act of 2008.’’. 

(c) CARRYBACK AND CARRYOVER OF DISALLOWED CREDITS.— Section 907(f) (relating to carryback and carryover of disallowed 

credits) is amended— 

(1) by striking ‘‘oil and gas extraction taxes’’ each place 

it appears and inserting ‘‘foreign oil and gas taxes’’, and 

(2) by adding at the end the following new paragraph: 

‘‘(4) TRANSITION RULES FOR PRE-2009 AND 2009 DISALLOWED

CREDITS.— 

‘‘(A) PRE-2009 CREDITS.—In the case of any unused 

credit year beginning before January 1, 2009, this subsection shall be applied to any unused oil and gas extraction 

taxes carried from such unused credit year to a year beginning after December 31, 2008— 

‘‘(i) by substituting ‘oil and gas extraction taxes’ 

for ‘foreign oil and gas taxes’ each place it appears 

in paragraphs (1), (2), and (3), and 

‘‘(ii) by computing, for purposes of paragraph 

(2)(A), the limitation under subparagraph (A) for the 

year to which such taxes are carried by substituting 

‘foreign oil and gas extraction income’ for ‘foreign oil 

and gas income’ in subsection (a). 

‘‘(B) 2009 CREDITS.—In the case of any unused credit 

year beginning in 2009, the amendments made to this 

subsection by the Energy Improvement and Extension Act 

of 2008 shall be treated as being in effect for any preceding 

year beginning before January 1, 2009, solely for purposes 

of determining how much of the unused foreign oil and 

gas taxes for such unused credit year may be deemed 

paid or accrued in such preceding year.’’. 

(d) CONFORMING AMENDMENT.—Section 6501(i) is amended by 

striking ‘‘oil and gas extraction taxes’’ and inserting ‘‘foreign oil 

and gas taxes’’. 

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

shall apply to taxable years beginning after December 31, 2008. 

SEC. 403. BROKER REPORTING OF CUSTOMER’S BASIS IN SECURITIES 

TRANSACTIONS. 

(a) IN GENERAL.— 

(1) BROKER REPORTING FOR SECURITIES TRANSACTIONS.— 

Section 6045 is amended by adding at the end the following 

new subsection: 

‘‘(g) ADDITIONAL INFORMATION REQUIRED IN THE CASE OF SECU- RITIES TRANSACTIONS, ETC.— 

26 USC 907 note. 

Effective date. 

26 USC 907. 

Effective date. 


dkrause on GSDDPC44 with PUBLIC LAWS
PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3855 

‘‘(1) IN GENERAL.—If a broker is otherwise required to 

make a return under subsection (a) with respect to the gross 

proceeds of the sale of a covered security, the broker shall 

include in such return the information described in paragraph 

(2). 

‘‘(2) ADDITIONAL INFORMATION REQUIRED.— 

‘‘(A) IN GENERAL.—The information required under 

paragraph (1) to be shown on a return with respect to 

a covered security of a customer shall include the customer’s adjusted basis in such security and whether any 

gain or loss with respect to such security is long-term 

or short-term (within the meaning of section 1222). 

‘‘(B) DETERMINATION OF ADJUSTED BASIS.—For purposes of subparagraph (A)— 

‘‘(i) IN GENERAL.—The customer’s adjusted basis 

shall be determined— 

‘‘(I) in the case of any security (other than 

any stock for which an average basis method is 

permissible under section 1012), in accordance 

with the first-in first-out method unless the customer notifies the broker by means of making an 

adequate identification of the stock sold or transferred, and 

‘‘(II) in the case of any stock for which an 

average basis method is permissible under section 

1012, in accordance with the broker’s default 

method unless the customer notifies the broker 

that he elects another acceptable method under 

section 1012 with respect to the account in which 

such stock is held. 

‘‘(ii) EXCEPTION FOR WASH SALES.—Except as otherwise provided by the Secretary, the customer’s adjusted 

basis shall be determined without regard to section 

1091 (relating to loss from wash sales of stock or 

securities) unless the transactions occur in the same 

account with respect to identical securities. 

‘‘(3) COVERED SECURITY.—For purposes of this subsection— 

‘‘(A) IN GENERAL.—The term ‘covered security’ means 

any specified security acquired on or after the applicable 

date if such security— 

‘‘(i) was acquired through a transaction in the 

account in which such security is held, or 

‘‘(ii) was transferred to such account from an 

account in which such security was a covered security, 

but only if the broker received a statement under section 6045A with respect to the transfer. 

‘‘(B) SPECIFIED SECURITY.—The term ‘specified security’ 

means— 

‘‘(i) any share of stock in a corporation, 

‘‘(ii) any note, bond, debenture, or other evidence 

of indebtedness, 

‘‘(iii) any commodity, or contract or derivative with 

respect to such commodity, if the Secretary determines 

that adjusted basis reporting is appropriate for purposes of this subsection, and 


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‘‘(iv) any other financial instrument with respect 

to which the Secretary determines that adjusted basis 

reporting is appropriate for purposes of this subsection. 

‘‘(C) APPLICABLE DATE.—The term ‘applicable date’ 

means— 

‘‘(i) January 1, 2011, in the case of any specified 

security which is stock in a corporation (other than 

any stock described in clause (ii)), 

‘‘(ii) January 1, 2012, in the case of any stock 

for which an average basis method is permissible under 

section 1012, and 

‘‘(iii) January 1, 2013, or such later date determined by the Secretary in the case of any other specified security. 

‘‘(4) TREATMENT OF S CORPORATIONS.—In the case of the 

sale of a covered security acquired by an S corporation (other 

than a financial institution) after December 31, 2011, such 

S corporation shall be treated in the same manner as a partnership for purposes of this section. 

‘‘(5) SPECIAL RULES FOR SHORT SALES.—In the case of a 

short sale, reporting under this section shall be made for the 

year in which such sale is closed.’’. 

(2) BROKER INFORMATION REQUIRED WITH RESPECT TO

OPTIONS.—Section 6045, as amended by subsection (a), is 

amended by adding at the end the following new subsection: 

‘‘(h) APPLICATION TO OPTIONS ON SECURITIES.— 

‘‘(1) EXERCISE OF OPTION.—For purposes of this section, 

if a covered security is acquired or disposed of pursuant to 

the exercise of an option that was granted or acquired in 

the same account as the covered security, the amount received 

with respect to the grant or paid with respect to the acquisition 

of such option shall be treated as an adjustment to gross 

proceeds or as an adjustment to basis, as the case may be. 

‘‘(2) LAPSE OR CLOSING TRANSACTION.—In the case of the 

lapse (or closing transaction (as defined in section 

1234(b)(2)(A))) of an option on a specified security or the exercise of a cash-settled option on a specified security, reporting 

under subsections (a) and (g) with respect to such option shall 

be made for the calendar year which includes the date of 

such lapse, closing transaction, or exercise. 

‘‘(3) PROSPECTIVE APPLICATION.—Paragraphs (1) and (2) 

shall not apply to any option which is granted or acquired 

before January 1, 2013. 

‘‘(4) DEFINITIONS.—For purposes of this subsection, the 

terms ‘covered security’ and ‘specified security’ shall have the 

meanings given such terms in subsection (g)(3).’’. 

(3) EXTENSION OF PERIOD FOR STATEMENTS SENT TO CUSTOMERS.— 

(A) IN GENERAL.—Subsection (b) of section 6045 is 

amended by striking ‘‘January 31’’ and inserting ‘‘February 

15’’. 

(B) STATEMENTS RELATED TO SUBSTITUTE PAYMENTS.— 

Subsection (d) of section 6045 is amended— 

(i) by striking ‘‘at such time and’’, and 

(ii) by inserting after ‘‘other item.’’ the following 

new sentence: ‘‘The written statement required under 

the preceding sentence shall be furnished on or before 

Deadline. 


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February 15 of the year following the calendar year 

in which the payment was made.’’. 

(C) OTHER STATEMENTS.—Subsection (b) of section 6045 

is amended by adding at the end the following: ‘‘In the 

case of a consolidated reporting statement (as defined in 

regulations) with respect to any customer, any statement 

which would otherwise be required to be furnished on 

or before January 31 of a calendar year with respect to 

any item reportable to the taxpayer shall instead be 

required to be furnished on or before February 15 of such 

calendar year if furnished with such consolidated reporting 

statement.’’. 

(b) DETERMINATION OF BASIS OF CERTAIN SECURITIES ON

ACCOUNT BY ACCOUNT OR AVERAGE BASIS METHOD.—Section 1012 

is amended— 

(1) by striking ‘‘The basis of property’’ and inserting the 

following: 

‘‘(a) IN GENERAL.—The basis of property’’, 

(2) by striking ‘‘The cost of real property’’ and inserting 

the following: 

‘‘(b) SPECIAL RULE FOR APPORTIONED REAL ESTATE TAXES.— 

The cost of real property’’, and 

(3) by adding at the end the following new subsections: 

‘‘(c) DETERMINATIONS BY ACCOUNT.— 

‘‘(1) IN GENERAL.—In the case of the sale, exchange, or 

other disposition of a specified security on or after the applicable 

date, the conventions prescribed by regulations under this section shall be applied on an account by account basis. 

‘‘(2) APPLICATION TO CERTAIN FUNDS.— 

‘‘(A) IN GENERAL.—Except as provided in subparagraph 

(B), any stock for which an average basis method is permissible under section 1012 which is acquired before January 

1, 2012, shall be treated as a separate account from any 

such stock acquired on or after such date. 

‘‘(B) ELECTION FUND FOR TREATMENT AS SINGLE

ACCOUNT.—If a fund described in subparagraph (A) elects 

to have this subparagraph apply with respect to one or 

more of its stockholders— 

‘‘(i) subparagraph (A) shall not apply with respect 

to any stock in such fund held by such stockholders, 

and 

‘‘(ii) all stock in such fund which is held by such 

stockholders shall be treated as covered securities 

described in section 6045(g)(3) without regard to the 

date of the acquisition of such stock. 

A rule similar to the rule of the preceding sentence shall 

apply with respect to a broker holding such stock as a 

nominee. 

‘‘(3) DEFINITIONS.—For purposes of this section, the terms 

‘specified security’ and ‘applicable date’ shall have the meaning 

given such terms in section 6045(g). 

‘‘(d) AVERAGE BASIS FOR STOCK ACQUIRED PURSUANT TO A DIVIDEND REINVESTMENT PLAN.— 

‘‘(1) IN GENERAL.—In the case of any stock acquired after 

December 31, 2010, in connection with a dividend reinvestment 

plan, the basis of such stock while held as part of such plan 

Deadline. 

26 USC 6045. 


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122 STAT. 3858 PUBLIC LAW 110–343—OCT. 3, 2008 

shall be determined using one of the methods which may be 

used for determining the basis of stock in an open-end fund. 

‘‘(2) TREATMENT AFTER TRANSFER.—In the case of the 

transfer to another account of stock to which paragraph (1) 

applies, such stock shall have a cost basis in such other account 

equal to its basis in the dividend reinvestment plan immediately before such transfer (properly adjusted for any fees 

or other charges taken into account in connection with such 

transfer). 

‘‘(3) SEPARATE ACCOUNTS; ELECTION FOR TREATMENT AS

SINGLE ACCOUNT.—Rules similar to the rules of subsection (c)(2) 

shall apply for purposes of this subsection. 

‘‘(4) DIVIDEND REINVESTMENT PLAN.—For purposes of this 

subsection— 

‘‘(A) IN GENERAL.—The term ‘dividend reinvestment 

plan’ means any arrangement under which dividends on 

any stock are reinvested in stock identical to the stock 

with respect to which the dividends are paid. 

‘‘(B) INITIAL STOCK ACQUISITION TREATED AS ACQUIRED

IN CONNECTION WITH PLAN.—Stock shall be treated as 

acquired in connection with a dividend reinvestment plan 

if such stock is acquired pursuant to such plan or if the 

dividends paid on such stock are subject to such plan.’’. 

(c) INFORMATION BY TRANSFERORS TO AID BROKERS.— 

(1) IN GENERAL.—Subpart B of part III of subchapter A 

of chapter 61 is amended by inserting after section 6045 the 

following new section: 

‘‘SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH TRANSFERS OF COVERED SECURITIES TO BROKERS. 

‘‘(a) FURNISHING OF INFORMATION.—Every applicable person 

which transfers to a broker (as defined in section 6045(c)(1)) a 

security which is a covered security (as defined in section 6045(g)(3)) 

in the hands of such applicable person shall furnish to such broker 

a written statement in such manner and setting forth such information as the Secretary may by regulations prescribe for purposes 

of enabling such broker to meet the requirements of section 6045(g). 

‘‘(b) APPLICABLE PERSON.—For purposes of subsection (a), the 

term ‘applicable person’ means— 

‘‘(1) any broker (as defined in section 6045(c)(1)), and 

‘‘(2) any other person as provided by the Secretary in 

regulations. 

‘‘(c) TIME FOR FURNISHING STATEMENT.—Except as otherwise 

provided by the Secretary, any statement required by subsection 

(a) shall be furnished not later than 15 days after the date of 

the transfer described in such subsection.’’. 

(2) ASSESSABLE PENALTIES.—Paragraph (2) of section 

6724(d), as amended by the Housing Assistance Tax Act of 

2008, is amended by redesignating subparagraphs (I) through 

(DD) as subparagraphs (J) through (EE), respectively, and by 

inserting after subparagraph (H) the following new subparagraph: 

‘‘(I) section 6045A (relating to information required 

in connection with transfers of covered securities to brokers),’’. 

(3) CLERICAL AMENDMENT.—The table of sections for subpart B of part III of subchapter A of chapter 61 is amended 

Ante, p. 2911. 

Applicability. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3859 

by inserting after the item relating to section 6045 the following 

new item: 

‘‘Sec. 6045A. Information required in connection with transfers of covered securities 

to brokers.’’. 

(d) ADDITIONAL ISSUER INFORMATION TO AID BROKERS.— (1) IN GENERAL.—Subpart B of part III of subchapter A 

of chapter 61, as amended by subsection (b), is amended by 

inserting after section 6045A the following new section: 

‘‘SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF 

SPECIFIED SECURITIES. 

‘‘(a) IN GENERAL.—According to the forms or regulations prescribed by the Secretary, any issuer of a specified security shall 

make a return setting forth— 

‘‘(1) a description of any organizational action which affects 

the basis of such specified security of such issuer, 

‘‘(2) the quantitative effect on the basis of such specified 

security resulting from such action, and 

‘‘(3) such other information as the Secretary may prescribe. 

‘‘(b) TIME FOR FILING RETURN.—Any return required by subsection (a) shall be filed not later than the earlier of— 

‘‘(1) 45 days after the date of the action described in subsection (a), or 

‘‘(2) January 15 of the year following the calendar year 

during which such action occurred. 

‘‘(c) STATEMENTS TO BE FURNISHED TO HOLDERS OF SPECIFIED

SECURITIES OR THEIR NOMINEES.—According to the forms or regulations prescribed by the Secretary, every person required to make 

a return under subsection (a) with respect to a specified security 

shall furnish to the nominee with respect to the specified security 

(or certificate holder if there is no nominee) a written statement 

showing— 

‘‘(1) the name, address, and phone number of the information contact of the person required to make such return, 

‘‘(2) the information required to be shown on such return 

with respect to such security, and 

‘‘(3) such other information as the Secretary may prescribe. 

The written statement required under the preceding sentence shall 

be furnished to the holder on or before January 15 of the year 

following the calendar year during which the action described in 

subsection (a) occurred. 

‘‘(d) SPECIFIED SECURITY.—For purposes of this section, the 

term ‘specified security’ has the meaning given such term by section 

6045(g)(3)(B). No return shall be required under this section with 

respect to actions described in subsection (a) with respect to a 

specified security which occur before the applicable date (as defined 

in section 6045(g)(3)(C)) with respect to such security. 

‘‘(e) PUBLIC REPORTING IN LIEU OF RETURN.—The Secretary 

may waive the requirements under subsections (a) and (c) with 

respect to a specified security, if the person required to make 

the return under subsection (a) makes publicly available, in such 

form and manner as the Secretary determines necessary to carry 

out the purposes of this section— 

‘‘(1) the name, address, phone number, and email address 

of the information contact of such person, and 

‘‘(2) the information described in paragraphs (1), (2), and 

(3) of subsection (a).’’. 

Deadline. 

Regulations. 


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122 STAT. 3860 PUBLIC LAW 110–343—OCT. 3, 2008 

(2) ASSESSABLE PENALTIES.— (A) Subparagraph (B) of section 6724(d)(1), as amended 

by the Housing Assistance Tax Act of 2008, is amended 

by redesignating clause (iv) and each of the clauses which 

follow as clauses (v) through (xxiii), respectively, and by 

inserting after clause (iii) the following new clause: 

‘‘(iv) section 6045B(a) (relating to returns relating 

to actions affecting basis of specified securities),’’. 

(B) Paragraph (2) of section 6724(d), as amended by 

the Housing Assistance Tax Act of 2008 and by subsection 

(c)(2), is amended by redesignating subparagraphs (J) 

through (EE) as subparagraphs (K) through (FF), respectively, and by inserting after subparagraph (I) the following 

new subparagraph: 

‘‘(J) subsections (c) and (e) of section 6045B (relating 

to returns relating to actions affecting basis of specified 

securities),’’. 

(3) CLERICAL AMENDMENT.—The table of sections for subpart B of part III of subchapter A of chapter 61, as amended 

by subsection (b)(3), is amended by inserting after the item 

relating to section 6045A the following new item: 

‘‘Sec. 6045B. Returns relating to actions affecting basis of specified securities.’’. 

(e) EFFECTIVE DATE.— (1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall take effect 

on January 1, 2011. 

(2) EXTENSION OF PERIOD FOR STATEMENTS SENT TO CUS- TOMERS.—The amendments made by subsection (a)(3) shall 

apply to statements required to be furnished after December 

31, 2008. 

SEC. 404. 0.2 PERCENT FUTA SURTAX. 

(a) IN GENERAL.—Section 3301 (relating to rate of tax) is 

amended— 

(1) by striking ‘‘through 2008’’ in paragraph (1) and 

inserting ‘‘through 2009’’, and 

(2) by striking ‘‘calendar year 2009’’ in paragraph (2) and 

inserting ‘‘calendar year 2010’’. 

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

shall apply to wages paid after December 31, 2008. 

SEC. 405. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST 

FUND TAX. 

(a) INCREASE IN RATE.— 

(1) IN GENERAL.—Section 4611(c)(2)(B) (relating to rates) 

is amended by striking ‘‘is 5 cents a barrel.’’ and inserting 

‘‘is— 

‘‘(i) in the case of crude oil received or petroleum 

products entered before January 1, 2017, 8 cents a 

barrel, and 

‘‘(ii) in the case of crude oil received or petroleum 

products entered after December 31, 2016, 9 cents 

a barrel.’’. 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply on and after the first day of the first calendar 

quarter beginning more than 60 days after the date of the 

enactment of this Act. 

26 USC 4611 

note. 

26 USC 3301 

note. 

26 USC 3301. 

Applicability. 

26 USC 1012 

note. 

26 USC 6724. 


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(b) EXTENSION.— (1) IN GENERAL.—Section 4611(f) (relating to application 

of Oil Spill Liability Trust Fund financing rate) is amended 

by striking paragraphs (2) and (3) and inserting the following 

new paragraph: 

‘‘(2) TERMINATION.—The Oil Spill Liability Trust Fund 

financing rate shall not apply after December 31, 2017.’’. 

(2) CONFORMING AMENDMENT.—Section 4611(f)(1) is 

amended by striking ‘‘paragraphs (2) and (3)’’ and inserting 

‘‘paragraph (2)’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on the date of the enactment of this 

Act. 

DIVISION C—TAX EXTENDERS AND 

ALTERNATIVE MINIMUM TAX RELIEF 

SEC. 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This division may be cited as the ‘‘Tax 

Extenders and Alternative Minimum Tax Relief Act of 2008’’. 

(b) AMENDMENT OF 1986 CODE.—Except as otherwise expressly 

provided, whenever in this division an amendment or repeal is 

expressed in terms of an amendment to, or repeal of, a section 

or other provision, the reference shall be considered to be made 

to a section or other provision of the Internal Revenue Code of 

1986. 

(c) TABLE OF CONTENTS.—The table of contents of this division 

is as follows: 

Sec. 1. Short title; amendment of 1986 Code; table of contents. 

TITLE I—ALTERNATIVE MINIMUM TAX RELIEF 

Sec. 101. Extension of alternative minimum tax relief for nonrefundable personal 

credits. 

Sec. 102. Extension of increased alternative minimum tax exemption amount. 

Sec. 103. Increase of AMT refundable credit amount for individuals with long-term 

unused credits for prior year minimum tax liability, etc. 

TITLE II—EXTENSION OF INDIVIDUAL TAX PROVISIONS 

Sec. 201. Deduction for State and local sales taxes. 

Sec. 202. Deduction of qualified tuition and related expenses. 

Sec. 203. Deduction for certain expenses of elementary and secondary school teachers. Sec. 204. Additional standard deduction for real property taxes for nonitemizers. 

Sec. 205. Tax-free distributions from individual retirement plans for charitable purposes. 

Sec. 206. Treatment of certain dividends of regulated investment companies. 

Sec. 207. Stock in RIC for purposes of determining estates of nonresidents not citizens. Sec. 208. Qualified investment entities. 

TITLE III—EXTENSION OF BUSINESS TAX PROVISIONS 

Sec. 301. Extension and modification of research credit. 

Sec. 302. New markets tax credit. 

Sec. 303. Subpart F exception for active financing income. 

Sec. 304. Extension of look-thru rule for related controlled foreign corporations. 

Sec. 305. Extension of 15-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant improvements; 15-year straightline cost recovery for certain improvements to retail space. 

Sec. 306. Modification of tax treatment of certain payments to controlling exempt 

organizations. 

26 USC 1 note. 

Tax Extenders 

and Alternative 

Minimum Tax 

Relief Act 

of 2008. 

26 USC 4611 

note. 

26 USC 4611. 


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Sec. 307. Basis adjustment to stock of S corporations making charitable contributions of property. 

Sec. 308. Increase in limit on cover over of rum excise tax to Puerto Rico and the 

Virgin Islands. 

Sec. 309. Extension of economic development credit for American Samoa. 

Sec. 310. Extension of mine rescue team training credit. 

Sec. 311. Extension of election to expense advanced mine safety equipment. 

Sec. 312. Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico. 

Sec. 313. Qualified zone academy bonds. 

Sec. 314. Indian employment credit. 

Sec. 315. Accelerated depreciation for business property on Indian reservations. 

Sec. 316. Railroad track maintenance. 

Sec. 317. Seven-year cost recovery period for motorsports racing track facility. 

Sec. 318. Expensing of environmental remediation costs. 

Sec. 319. Extension of work opportunity tax credit for Hurricane Katrina employees. 

Sec. 320. Extension of increased rehabilitation credit for structures in the Gulf Opportunity Zone. 

Sec. 321. Enhanced deduction for qualified computer contributions. 

Sec. 322. Tax incentives for investment in the District of Columbia. 

Sec. 323. Enhanced charitable deductions for contributions of food inventory. 

Sec. 324. Extension of enhanced charitable deduction for contributions of book inventory. 

Sec. 325. Extension and modification of duty suspension on wool products; wool research fund; wool duty refunds. 

TITLE IV—EXTENSION OF TAX ADMINISTRATION PROVISIONS 

Sec. 401. Permanent authority for undercover operations. 

Sec. 402. Permanent authority for disclosure of information relating to terrorist activities. 

TITLE V—ADDITIONAL TAX RELIEF AND OTHER TAX PROVISIONS 

Subtitle A—General Provisions 

Sec. 501. $8,500 income threshold used to calculate refundable portion of child tax 

credit. 

Sec. 502. Provisions related to film and television productions. 

Sec. 503. Exemption from excise tax for certain wooden arrows designed for use by 

children. 

Sec. 504. Income averaging for amounts received in connection with the Exxon 

Valdez litigation. 

Sec. 505. Certain farming business machinery and equipment treated as 5-year 

property. 

Sec. 506. Modification of penalty on understatement of taxpayer’s liability by tax 

return preparer. 

Subtitle B—Paul Wellstone and Pete Domenici Mental Health Parity and Addiction 

Equity Act of 2008 

Sec. 511. Short title. 

Sec. 512. Mental health parity. 

TITLE VI—OTHER PROVISIONS 

Sec. 601. Secure rural schools and community self-determination program. 

Sec. 602. Transfer to abandoned mine reclamation fund. 

TITLE VII—DISASTER RELIEF 

Subtitle A—Heartland and Hurricane Ike Disaster Relief 

Sec. 701. Short title. 

Sec. 702. Temporary tax relief for areas damaged by 2008 Midwestern severe 

storms, tornados, and flooding. 

Sec. 703. Reporting requirements relating to disaster relief contributions. 

Sec. 704. Temporary tax-exempt bond financing and low-income housing tax relief 

for areas damaged by Hurricane Ike. 

Subtitle B—National Disaster Relief 

Sec. 706. Losses attributable to federally declared disasters. 

Sec. 707. Expensing of Qualified Disaster Expenses. 

Sec. 708. Net operating losses attributable to federally declared disasters. 


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Sec. 709. Waiver of certain mortgage revenue bond requirements following federally declared disasters. 

Sec. 710. Special depreciation allowance for qualified disaster property. 

Sec. 711. Increased expensing for qualified disaster assistance property. 

Sec. 712. Coordination with Heartland disaster relief. 

TITLE VIII—SPENDING REDUCTIONS AND APPROPRIATE REVENUE 

RAISERS FOR NEW TAX RELIEF POLICY 

Sec. 801. Nonqualified deferred compensation from certain tax indifferent parties. 

TITLE I—ALTERNATIVE MINIMUM TAX 

RELIEF 

SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR 

NONREFUNDABLE PERSONAL CREDITS. 

(a) IN GENERAL.—Paragraph (2) of section 26(a) (relating to 

special rule for taxable years 2000 through 2007) is amended— 

(1) by striking ‘‘or 2007’’ and inserting ‘‘2007, or 2008’’, 

and 

(2) by striking ‘‘2007’’ in the heading thereof and inserting 

‘‘2008’’. 

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

shall apply to taxable years beginning after December 31, 2007. 

SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX 

EXEMPTION AMOUNT. 

(a) IN GENERAL.—Paragraph (1) of section 55(d) (relating to 

exemption amount) is amended— 

(1) by striking ‘‘($66,250 in the case of taxable years beginning in 2007)’’ in subparagraph (A) and inserting ‘‘($69,950 

in the case of taxable years beginning in 2008)’’, and 

(2) by striking ‘‘($44,350 in the case of taxable years beginning in 2007)’’ in subparagraph (B) and inserting ‘‘($46,200 

in the case of taxable years beginning in 2008)’’. 

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

shall apply to taxable years beginning after December 31, 2007. 

SEC. 103. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT FOR 

INDIVIDUALS WITH LONG-TERM UNUSED CREDITS FOR 

PRIOR YEAR MINIMUM TAX LIABILITY, ETC. 

(a) IN GENERAL.—Paragraph (2) of section 53(e) is amended 

to read as follows: 

‘‘(2) AMT REFUNDABLE CREDIT AMOUNT.—For purposes of 

paragraph (1), the term ‘AMT refundable credit amount’ means, 

with respect to any taxable year, the amount (not in excess 

of the long-term unused minimum tax credit for such taxable 

year) equal to the greater of— 

‘‘(A) 50 percent of the long-term unused minimum tax 

credit for such taxable year, or 

‘‘(B) the amount (if any) of the AMT refundable credit 

amount determined under this paragraph for the taxpayer’s 

preceding taxable year (determined without regard to subsection (f)(2)).’’. 

(b) TREATMENT OF CERTAIN UNDERPAYMENTS, INTEREST, AND

PENALTIES ATTRIBUTABLE TO THE TREATMENT OF INCENTIVE STOCK

OPTIONS.—Section 53 is amended by adding at the end the following 

new subsection: 

26 USC 55 note. 

26 USC 26 note. 

26 USC 26. 


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‘‘(f) TREATMENT OF CERTAIN UNDERPAYMENTS, INTEREST, AND

PENALTIES ATTRIBUTABLE TO THE TREATMENT OF INCENTIVE STOCK

OPTIONS.— 

‘‘(1) ABATEMENT.—Any underpayment of tax outstanding 

on the date of the enactment of this subsection which is attributable to the application of section 56(b)(3) for any taxable 

year ending before January 1, 2008, and any interest or penalty 

with respect to such underpayment which is outstanding on 

such date of enactment, is hereby abated. The amount determined under subsection (b)(1) shall not include any tax abated 

under the preceding sentence. 

‘‘(2) INCREASE IN CREDIT FOR CERTAIN INTEREST AND PENALTIES ALREADY PAID.—The AMT refundable credit amount, 

and the minimum tax credit determined under subsection (b), 

for the taxpayer’s first 2 taxable years beginning after 

December 31, 2007, shall each be increased by 50 percent 

of the aggregate amount of the interest and penalties which 

were paid by the taxpayer before the date of the enactment 

of this subsection and which would (but for such payment) 

have been abated under paragraph (1).’’. 

(c) EFFECTIVE DATE.— 

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

amendments made by this section shall apply to taxable years 

beginning after December 31, 2007. 

(2) ABATEMENT.—Section 53(f)(1), as added by subsection 

(b), shall take effect on the date of the enactment of this 

Act. 

TITLE II—EXTENSION OF INDIVIDUAL 

TAX PROVISIONS 

SEC. 201. DEDUCTION FOR STATE AND LOCAL SALES TAXES. 

(a) IN GENERAL.—Subparagraph (I) of section 164(b)(5) is 

amended by striking ‘‘January 1, 2008’’ and inserting ‘‘January 

1, 2010’’. 

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

shall apply to taxable years beginning after December 31, 2007. 

SEC. 202. DEDUCTION OF QUALIFIED TUITION AND RELATED 

EXPENSES. 

(a) IN GENERAL.—Subsection (e) of section 222 (relating to 

termination) is amended by striking ‘‘December 31, 2007’’ and 

inserting ‘‘December 31, 2009’’. 

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

shall apply to taxable years beginning after December 31, 2007. 

SEC. 203. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND 

SECONDARY SCHOOL TEACHERS. 

(a) IN GENERAL.—Subparagraph (D) of section 62(a)(2) (relating 

to certain expenses of elementary and secondary school teachers) 

is amended by striking ‘‘or 2007’’ and inserting ‘‘2007, 2008, or 

2009’’. 

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

shall apply to taxable years beginning after December 31, 2007. 

26 USC 62 note. 

26 USC 222 note. 

26 USC 164 note. 

26 USC 164. 

26 USC 53 note. 


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SEC. 204. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY 

TAXES FOR NONITEMIZERS. 

(a) IN GENERAL.—Subparagraph (C) of section 63(c)(1), as added 

by the Housing Assistance Tax Act of 2008, is amended by inserting 

‘‘or 2009’’ after ‘‘2008’’. 

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

shall apply to taxable years beginning after December 31, 2008. 

SEC. 205. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 

PLANS FOR CHARITABLE PURPOSES. 

(a) IN GENERAL.—Subparagraph (F) of section 408(d)(8) 

(relating to termination) is amended by striking ‘‘December 31, 

2007’’ and inserting ‘‘December 31, 2009’’. 

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

shall apply to distributions made in taxable years beginning after 

December 31, 2007. 

SEC. 206. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED 

INVESTMENT COMPANIES. 

(a) INTEREST-RELATED DIVIDENDS.—Subparagraph (C) of section 

871(k)(1) (defining interest-related dividend) is amended by striking 

‘‘December 31, 2007’’ and inserting ‘‘December 31, 2009’’. 

(b) SHORT-TERM CAPITAL GAIN DIVIDENDS.—Subparagraph (C) 

of section 871(k)(2) (defining short-term capital gain dividend) is 

amended by striking ‘‘December 31, 2007’’ and inserting ‘‘December 

31, 2009’’. 

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

shall apply to dividends with respect to taxable years of regulated 

investment companies beginning after December 31, 2007. 

SEC. 207. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES 

OF NONRESIDENTS NOT CITIZENS. 

(a) IN GENERAL.—Paragraph (3) of section 2105(d) (relating 

to stock in a RIC) is amended by striking ‘‘December 31, 2007’’ 

and inserting ‘‘December 31, 2009’’. 

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

shall apply to decedents dying after December 31, 2007. 

SEC. 208. QUALIFIED INVESTMENT ENTITIES. 

(a) IN GENERAL.—Clause (ii) of section 897(h)(4)(A) (relating 

to termination) is amended by striking ‘‘December 31, 2007’’ and 

inserting ‘‘December 31, 2009’’. 

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

shall take effect on January 1, 2008. 

TITLE III—EXTENSION OF BUSINESS 

TAX PROVISIONS 

SEC. 301. EXTENSION AND MODIFICATION OF RESEARCH CREDIT. 

(a) EXTENSION.— 

(1) IN GENERAL.—Section 41(h) (relating to termination) 

is amended by striking ‘‘December 31, 2007’’ and inserting 

‘‘December 31, 2009’’ in paragraph (1)(B). 

(2) CONFORMING AMENDMENT.—Subparagraph (D) of section 45C(b)(1) (relating to special rule) is amended by striking 

26 USC 897 note. 

26 USC 2105 

note. 

26 USC 871 note. 

26 USC 408 note. 

26 USC 63 note. 

26 USC 63. 


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122 STAT. 3866 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘after December 31, 2007’’ and inserting ‘‘after December 31, 

2009’’. 

(b) TERMINATION OF ALTERNATIVE INCREMENTAL CREDIT.—Section 41(h) is amended by redesignating paragraph (2) as paragraph 

(3), and by inserting after paragraph (1) the following new paragraph: 

‘‘(2) TERMINATION OF ALTERNATIVE INCREMENTAL CREDIT.— No election under subsection (c)(4) shall apply to taxable years 

beginning after December 31, 2008.’’. 

(c) MODIFICATION OF ALTERNATIVE SIMPLIFIED CREDIT.—Paragraph (5)(A) of section 41(c) (relating to election of alternative 

simplified credit) is amended by striking ‘‘12 percent’’ and inserting 

‘‘14 percent (12 percent in the case of taxable years ending before 

January 1, 2009)’’. 

(d) TECHNICAL CORRECTION.—Paragraph (3) of section 41(h) 

is amended to read as follows: 

‘‘(2) COMPUTATION FOR TAXABLE YEAR IN WHICH CREDIT

TERMINATES.—In the case of any taxable year with respect 

to which this section applies to a number of days which is 

less than the total number of days in such taxable year— 

‘‘(A) the amount determined under subsection (c)(1)(B) 

with respect to such taxable year shall be the amount 

which bears the same ratio to such amount (determined 

without regard to this paragraph) as the number of days 

in such taxable year to which this section applies bears 

to the total number of days in such taxable year, and 

‘‘(B) for purposes of subsection (c)(5), the average qualified research expenses for the preceding 3 taxable years 

shall be the amount which bears the same ratio to such 

average qualified research expenses (determined without 

regard to this paragraph) as the number of days in such 

taxable year to which this section applies bears to the 

total number of days in such taxable year.’’. 

(e) EFFECTIVE DATE.— 

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

amendments made by this section shall apply to taxable years 

beginning after December 31, 2007. 

(2) EXTENSION.—The amendments made by subsection (a) 

shall apply to amounts paid or incurred after December 31, 

2007. 

SEC. 302. NEW MARKETS TAX CREDIT. 

Subparagraph (D) of section 45D(f)(1) (relating to national 

limitation on amount of investments designated) is amended by 

striking ‘‘and 2008’’ and inserting ‘‘2008, and 2009’’. 

SEC. 303. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME. 

(a) EXEMPT INSURANCE INCOME.—Paragraph (10) of section 

953(e) (relating to application) is amended— 

(1) by striking ‘‘January 1, 2009’’ and inserting ‘‘January 

1, 2010’’, and 

(2) by striking ‘‘December 31, 2008’’ and inserting 

‘‘December 31, 2009’’. 

(b) EXCEPTION TO TREATMENT AS FOREIGN PERSONAL HOLDING

COMPANY INCOME.—Paragraph (9) of section 954(h) (relating to 

application) is amended by striking ‘‘January 1, 2009’’ and inserting 

‘‘January 1, 2010’’. 

26 USC 41 note. 

Applicability. 

26 USC 41. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3867 

SEC. 304. EXTENSION OF LOOK-THRU RULE FOR RELATED CONTROLLED FOREIGN CORPORATIONS. 

(a) IN GENERAL.—Subparagraph (C) of section 954(c)(6) 

(relating to application) is amended by striking ‘‘January 1, 2009’’ 

and inserting ‘‘January 1, 2010’’. 

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

shall apply to taxable years of foreign corporations beginning after 

December 31, 2007, and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end. 

SEC. 305. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RECOVERY 

FOR QUALIFIED LEASEHOLD IMPROVEMENTS AND QUALIFIED RESTAURANT IMPROVEMENTS; 15-YEAR STRAIGHTLINE COST RECOVERY FOR CERTAIN IMPROVEMENTS TO 

RETAIL SPACE. 

(a) EXTENSION OF LEASEHOLD AND RESTAURANT IMPROVEMENTS.— 

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

(relating to 15-year property) are each amended by striking 

‘‘January 1, 2008’’ and inserting ‘‘January 1, 2010’’. 

(2) EFFECTIVE DATE.—The amendments made by this subsection shall apply to property placed in service after December 

31, 2007. 

(b) TREATMENT TO INCLUDE NEW CONSTRUCTION.— 

(1) IN GENERAL.—Paragraph (7) of section 168(e) (relating 

to classification of property) is amended to read as follows: 

‘‘(7) QUALIFIED RESTAURANT PROPERTY.— 

‘‘(A) IN GENERAL.—The term ‘qualified restaurant property’ means any section 1250 property which is— 

‘‘(i) a building, if such building is placed in service 

after December 31, 2008, and before January 1, 2010, 

or 

‘‘(ii) an improvement to a building, 

if more than 50 percent of the building’s square footage 

is devoted to preparation of, and seating for on-premises 

consumption of, prepared meals. 

‘‘(B) EXCLUSION FROM BONUS DEPRECIATION.—Property 

described in this paragraph shall not be considered qualified property for purposes of subsection (k).’’. 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to property placed in service after December 

31, 2008. 

(c) RECOVERY PERIOD FOR DEPRECIATION OF CERTAIN IMPROVEMENTS TO RETAIL SPACE.— 

(1) 15-YEAR RECOVERY PERIOD.—Section 168(e)(3)(E) 

(relating to 15-year property) is amended by striking ‘‘and’’ 

at the end of clause (vii), by striking the period at the end 

of clause (viii) and inserting ‘‘, and’’, and by adding at the 

end the following new clause: 

‘‘(ix) any qualified retail improvement property 

placed in service after December 31, 2008, and before 

January 1, 2010.’’. 

(2) QUALIFIED RETAIL IMPROVEMENT PROPERTY.—Section 

168(e) is amended by adding at the end the following new 

paragraph: 

‘‘(8) QUALIFIED RETAIL IMPROVEMENT PROPERTY.— 

26 USC 168 note. 

26 USC 168 note. 

26 USC 954 note. 

26 USC 954. 


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122 STAT. 3868 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(A) IN GENERAL.—The term ‘qualified retail improvement property’ means any improvement to an interior portion of a building which is nonresidential real property 

if— 

‘‘(i) such portion is open to the general public and 

is used in the retail trade or business of selling tangible 

personal property to the general public, and 

‘‘(ii) such improvement is placed in service more 

than 3 years after the date the building was first 

placed in service. 

‘‘(B) IMPROVEMENTS MADE BY OWNER.—In the case of 

an improvement made by the owner of such improvement, 

such improvement shall be qualified retail improvement 

property (if at all) only so long as such improvement is 

held by such owner. Rules similar to the rules under paragraph (6)(B) shall apply for purposes of the preceding sentence. 

‘‘(C) CERTAIN IMPROVEMENTS NOT INCLUDED.—Such 

term shall not include any improvement for which the 

expenditure is attributable to— 

‘‘(i) the enlargement of the building, 

‘‘(ii) any elevator or escalator, 

‘‘(iii) any structural component benefitting a 

common area, or 

‘‘(iv) the internal structural framework of the 

building. 

‘‘(D) EXCLUSION FROM BONUS DEPRECIATION.—Property 

described in this paragraph shall not be considered qualified property for purposes of subsection (k). 

‘‘(E) TERMINATION.—Such term shall not include any 

improvement placed in service after December 31, 2009.’’. 

(3) REQUIREMENT TO USE STRAIGHT LINE METHOD.—Section 

168(b)(3) is amended by adding at the end the following new 

subparagraph: 

‘‘(I) Qualified retail improvement property described 

in subsection (e)(8).’’. 

(4) ALTERNATIVE SYSTEM.—The table contained in section 

168(g)(3)(B) is amended by inserting after the item relating 

to subparagraph (E)(viii) the following new item: 

‘‘(E)(ix) ............................................................................. 39’’. 

(5) EFFECTIVE DATE.—The amendments made by this subsection shall apply to property placed in service after December 

31, 2008. 

SEC. 306. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS 

TO CONTROLLING EXEMPT ORGANIZATIONS. 

(a) IN GENERAL.—Clause (iv) of section 512(b)(13)(E) (relating 

to termination) is amended by striking ‘‘December 31, 2007’’ and 

inserting ‘‘December 31, 2009’’. 

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

shall apply to payments received or accrued after December 31, 

2007. 

26 USC 512 note. 

26 USC 168 note. 

26 USC 168. 


dkrause on GSDDPC44 with PUBLIC LAWS
PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3869 

SEC. 307. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING 

CHARITABLE CONTRIBUTIONS OF PROPERTY. 

(a) IN GENERAL.—The last sentence of section 1367(a)(2) 

(relating to decreases in basis) is amended by striking ‘‘December 

31, 2007’’ and inserting ‘‘December 31, 2009’’. 

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

shall apply to contributions made in taxable years beginning after 

December 31, 2007. 

SEC. 308. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX 

TO PUERTO RICO AND THE VIRGIN ISLANDS. 

(a) IN GENERAL.—Paragraph (1) of section 7652(f) is amended 

by striking ‘‘January 1, 2008’’ and inserting ‘‘January 1, 2010’’. 

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

shall apply to distilled spirits brought into the United States after 

December 31, 2007. 

SEC. 309. EXTENSION OF ECONOMIC DEVELOPMENT CREDIT FOR 

AMERICAN SAMOA. 

(a) IN GENERAL.—Subsection (d) of section 119 of division A 

of the Tax Relief and Health Care Act of 2006 is amended— 

(1) by striking ‘‘first two taxable years’’ and inserting ‘‘first 

4 taxable years’’, and 

(2) by striking ‘‘January 1, 2008’’ and inserting ‘‘January 

1, 2010’’. 

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

shall apply to taxable years beginning after December 31, 2007. 

SEC. 310. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT. 

Section 45N(e) (relating to termination) is amended by striking 

‘‘December 31, 2008’’ and inserting ‘‘December 31, 2009’’. 

SEC. 311. EXTENSION OF ELECTION TO EXPENSE ADVANCED MINE 

SAFETY EQUIPMENT. 

Section 179E(g) (relating to termination) is amended by striking 

‘‘December 31, 2008’’ and inserting ‘‘December 31, 2009’’. 

SEC. 312. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES IN 

PUERTO RICO. 

(a) IN GENERAL.—Subparagraph (C) of section 199(d)(8) 

(relating to termination) is amended— 

(1) by striking ‘‘first 2 taxable years’’ and inserting ‘‘first 

4 taxable years’’, and 

(2) by striking ‘‘January 1, 2008’’ and inserting ‘‘January 

1, 2010’’. 

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

shall apply to taxable years beginning after December 31, 2007. 

SEC. 313. QUALIFIED ZONE ACADEMY BONDS. 

(a) IN GENERAL.—Subpart I of part IV of subchapter A of 

chapter 1 is amended by adding at the end the following new 

section: 

‘‘SEC. 54E. QUALIFIED ZONE ACADEMY BONDS. 

‘‘(a) QUALIFIED ZONE ACADEMY BONDS.—For purposes of this 

subchapter, the term ‘qualified zone academy bond’ means any 

bond issued as part of an issue if— 

26 USC 199 note. 

26 USC 30A note. 

26 USC 30A note. 

26 USC 7652 

note. 

26 USC 1367. 


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122 STAT. 3870 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(1) 100 percent of the available project proceeds of such 

issue are to be used for a qualified purpose with respect to 

a qualified zone academy established by an eligible local education agency, 

‘‘(2) the bond is issued by a State or local government 

within the jurisdiction of which such academy is located, and 

‘‘(3) the issuer— 

‘‘(A) designates such bond for purposes of this section, 

‘‘(B) certifies that it has written assurances that the 

private business contribution requirement of subsection (b) 

will be met with respect to such academy, and 

‘‘(C) certifies that it has the written approval of the 

eligible local education agency for such bond issuance. 

‘‘(b) PRIVATE BUSINESS CONTRIBUTION REQUIREMENT.—For purposes of subsection (a), the private business contribution requirement of this subsection is met with respect to any issue if the 

eligible local education agency that established the qualified zone 

academy has written commitments from private entities to make 

qualified contributions having a present value (as of the date of 

issuance of the issue) of not less than 10 percent of the proceeds 

of the issue. 

‘‘(c) LIMITATION ON AMOUNT OF BONDS DESIGNATED.— 

‘‘(1) NATIONAL LIMITATION.—There is a national zone 

academy bond limitation for each calendar year. Such limitation 

is $400,000,000 for 2008 and 2009, and, except as provided 

in paragraph (4), zero thereafter. 

‘‘(2) ALLOCATION OF LIMITATION.—The national zone 

academy bond limitation for a calendar year shall be allocated 

by the Secretary among the States on the basis of their respective populations of individuals below the poverty line (as defined 

by the Office of Management and Budget). The limitation 

amount allocated to a State under the preceding sentence shall 

be allocated by the State education agency to qualified zone 

academies within such State. 

‘‘(3) DESIGNATION SUBJECT TO LIMITATION AMOUNT.—The 

maximum aggregate face amount of bonds issued during any 

calendar year which may be designated under subsection (a) 

with respect to any qualified zone academy shall not exceed 

the limitation amount allocated to such academy under paragraph (2) for such calendar year. 

‘‘(4) CARRYOVER OF UNUSED LIMITATION.— 

‘‘(A) IN GENERAL.—If for any calendar year— 

‘‘(i) the limitation amount for any State, exceeds 

‘‘(ii) the amount of bonds issued during such year 

which are designated under subsection (a) with respect 

to qualified zone academies within such State, 

the limitation amount for such State for the following calendar year shall be increased by the amount of such excess. 

‘‘(B) LIMITATION ON CARRYOVER.—Any carryforward of 

a limitation amount may be carried only to the first 2 

years following the unused limitation year. For purposes 

of the preceding sentence, a limitation amount shall be 

treated as used on a first-in first-out basis. 

‘‘(C) COORDINATION WITH SECTION 1397E.—Any carryover determined under section 1397E(e)(4) (relating to 

carryover of unused limitation) with respect to any State 

to calendar year 2008 or 2009 shall be treated for purposes 

Certification. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3871 

of this section as a carryover with respect to such State 

for such calendar year under subparagraph (A), and the 

limitation of subparagraph (B) shall apply to such carryover 

taking into account the calendar years to which such carryover relates. 

‘‘(d) DEFINITIONS.—For purposes of this section— 

‘‘(1) QUALIFIED ZONE ACADEMY.—The term ‘qualified zone 

academy’ means any public school (or academic program within 

a public school) which is established by and operated under 

the supervision of an eligible local education agency to provide 

education or training below the postsecondary level if— 

‘‘(A) such public school or program (as the case may 

be) is designed in cooperation with business to enhance 

the academic curriculum, increase graduation and employment rates, and better prepare students for the rigors 

of college and the increasingly complex workforce, 

‘‘(B) students in such public school or program (as 

the case may be) will be subject to the same academic 

standards and assessments as other students educated by 

the eligible local education agency, 

‘‘(C) the comprehensive education plan of such public 

school or program is approved by the eligible local education 

agency, and 

‘‘(D)(i) such public school is located in an empowerment 

zone or enterprise community (including any such zone 

or community designated after the date of the enactment 

of this section), or 

‘‘(ii) there is a reasonable expectation (as of the date 

of issuance of the bonds) that at least 35 percent of the 

students attending such school or participating in such 

program (as the case may be) will be eligible for free 

or reduced-cost lunches under the school lunch program 

established under the National School Lunch Act. 

‘‘(2) ELIGIBLE LOCAL EDUCATION AGENCY.—For purposes of 

this section, the term ‘eligible local education agency’ means 

any local educational agency as defined in section 9101 of 

the Elementary and Secondary Education Act of 1965. 

‘‘(3) QUALIFIED PURPOSE.—The term ‘qualified purpose’ 

means, with respect to any qualified zone academy— 

‘‘(A) rehabilitating or repairing the public school facility 

in which the academy is established, 

‘‘(B) providing equipment for use at such academy, 

‘‘(C) developing course materials for education to be 

provided at such academy, and 

‘‘(D) training teachers and other school personnel in 

such academy. 

‘‘(4) QUALIFIED CONTRIBUTIONS.—The term ‘qualified contribution’ means any contribution (of a type and quality acceptable to the eligible local education agency) of— 

‘‘(A) equipment for use in the qualified zone academy 

(including state-of-the-art technology and vocational equipment), 

‘‘(B) technical assistance in developing curriculum or 

in training teachers in order to promote appropriate market 

driven technology in the classroom, 

‘‘(C) services of employees as volunteer mentors, 


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122 STAT. 3872 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(D) internships, field trips, or other educational 

opportunities outside the academy for students, or 

‘‘(E) any other property or service specified by the 

eligible local education agency.’’. 

(b) CONFORMING AMENDMENTS.— (1) Paragraph (1) of section 54A(d), as amended by this 

Act, is amended by striking ‘‘or’’ at the end of subparagraph 

(B), by inserting ‘‘or’’ at the end of subparagraph (C), and 

by inserting after subparagraph (C) the following new subparagraph: 

‘‘(D) a qualified zone academy bond,’’. 

(2) Subparagraph (C) of section 54A(d)(2), as amended by 

this Act, is amended by striking ‘‘and’’ at the end of clause 

(ii), by striking the period at the end of clause (iii) and inserting 

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

‘‘(iv) in the case of a qualified zone academy bond, 

a purpose specified in section 54E(a)(1).’’. 

(3) Section 1397E is amended by adding at the end the 

following new subsection: 

‘‘(m) TERMINATION.—This section shall not apply to any obligation issued after the date of the enactment of the Tax Extenders 

and Alternative Minimum Tax Relief Act of 2008.’’. 

(4) The table of sections for subpart I of part IV of subchapter A of chapter 1 is amended by adding at the end the 

following new item: 

‘‘Sec. 54E. Qualified zone academy bonds.’’. 

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

shall apply to obligations issued after the date of the enactment 

of this Act. 

SEC. 314. INDIAN EMPLOYMENT CREDIT. 

(a) IN GENERAL.—Subsection (f) of section 45A (relating to 

termination) is amended by striking ‘‘December 31, 2007’’ and 

inserting ‘‘December 31, 2009’’. 

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

shall apply to taxable years beginning after December 31, 2007. 

SEC. 315. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY 

ON INDIAN RESERVATIONS. 

(a) IN GENERAL.—Paragraph (8) of section 168(j) (relating to 

termination) is amended by striking ‘‘December 31, 2007’’ and 

inserting ‘‘December 31, 2009’’. 

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

shall apply to property placed in service after December 31, 2007. 

SEC. 316. RAILROAD TRACK MAINTENANCE. 

(a) IN GENERAL.—Subsection (f) of section 45G (relating to 

application of section) is amended by striking ‘‘January 1, 2008’’ 

and inserting ‘‘January 1, 2010’’. 

(b) CREDIT ALLOWED AGAINST ALTERNATIVE MINIMUM TAX.— 

Subparagraph (B) of section 38(c)(4), as amended by this Act, is 

amended— 

(1) by redesignating clauses (v), (vi), and (vii) as clauses 

(vi), (vii), and (viii), respectively, and 

(2) by inserting after clause (iv) the following new clause: 

‘‘(v) the credit determined under section 45G,’’. 

(c) EFFECTIVE DATES.— 

26 USC 168 note. 

26 USC 45A note. 

26 USC 54A note. 

26 USC 54A. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3873 

(1) The amendment made by subsection (a) shall apply 

to expenditures paid or incurred during taxable years beginning 

after December 31, 2007. 

(2) The amendments made by subsection (b) shall apply 

to credits determined under section 45G of the Internal Revenue 

Code of 1986 in taxable years beginning after December 31, 

2007, and to carrybacks of such credits. 

SEC. 317. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS 

RACING TRACK FACILITY. 

(a) IN GENERAL.—Subparagraph (D) of section 168(i)(15) 

(relating to termination) is amended by striking ‘‘December 31, 

2007’’ and inserting ‘‘December 31, 2009’’. 

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

shall apply to property placed in service after December 31, 2007. 

SEC. 318. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS. 

(a) IN GENERAL.—Subsection (h) of section 198 (relating to 

termination) is amended by striking ‘‘December 31, 2007’’ and 

inserting ‘‘December 31, 2009’’. 

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

shall apply to expenditures paid or incurred after December 31, 

2007. 

SEC. 319. EXTENSION OF WORK OPPORTUNITY TAX CREDIT FOR 

HURRICANE KATRINA EMPLOYEES. 

(a) IN GENERAL.—Paragraph (1) of section 201(b) of the Katrina 

Emergency Tax Relief Act of 2005 is amended by striking ‘‘2- 

year’’ and inserting ‘‘4-year’’. 

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

shall apply to individuals hired after August 27, 2007. 

SEC. 320. EXTENSION OF INCREASED REHABILITATION CREDIT FOR 

STRUCTURES IN THE GULF OPPORTUNITY ZONE. 

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

by striking ‘‘December 31, 2008’’ and inserting ‘‘December 31, 2009’’. 

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

shall apply to expenditures paid or incurred after the date of the 

enactment of this Act. 

SEC. 321. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER CONTRIBUTIONS. 

(a) IN GENERAL.—Subparagraph (G) of section 170(e)(6) is 

amended by striking ‘‘December 31, 2007’’ and inserting ‘‘December 

31, 2009’’. 

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

shall apply to contributions made during taxable years beginning 

after December 31, 2007. 

SEC. 322. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF 

COLUMBIA. 

(a) DESIGNATION OF ZONE.— (1) IN GENERAL.—Subsection (f) of section 1400 is amended 

by striking ‘‘2007’’ both places it appears and inserting ‘‘2009’’. 

(2) EFFECTIVE DATE.—The amendments made by this subsection shall apply to periods beginning after December 31, 

2007. 

(b) TAX-EXEMPT ECONOMIC DEVELOPMENT BONDS.— 

26 USC 1400 

note. 

26 USC 170 note. 

26 USC 1400N 

note. 

119 Stat. 2020. 

26 USC 198 note. 

26 USC 168 note. 

26 USC 168. 

26 USC 38 note. 

26 USC 45G 

note. 


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122 STAT. 3874 PUBLIC LAW 110–343—OCT. 3, 2008 

(1) IN GENERAL.—Subsection (b) of section 1400A is 

amended by striking ‘‘2007’’ and inserting ‘‘2009’’. 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to bonds issued after December 31, 2007. 

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

amended by striking ‘‘2008’’ each place it appears and inserting 

‘‘2010’’. 

(2) CONFORMING AMENDMENTS.— (A) Section 1400B(e)(2) is amended— 

(i) by striking ‘‘2012’’ and inserting ‘‘2014’’, and 

(ii) by striking ‘‘2012’’ in the heading thereof and 

inserting ‘‘2014’’. 

(B) Section 1400B(g)(2) is amended by striking ‘‘2012’’ 

and inserting ‘‘2014’’. 

(C) Section 1400F(d) is amended by striking ‘‘2012’’ 

and inserting ‘‘2014’’. 

(3) EFFECTIVE DATES.— 

(A) EXTENSION.—The amendments made by paragraph 

(1) shall apply to acquisitions after December 31, 2007. 

(B) CONFORMING AMENDMENTS.—The amendments 

made by paragraph (2) shall take effect on the date of 

the enactment of this Act. 

(d) FIRST-TIME HOMEBUYER CREDIT.— 

(1) IN GENERAL.—Subsection (i) of section 1400C is 

amended by striking ‘‘2008’’ and inserting ‘‘2010’’. 

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

2007. 

SEC. 323. ENHANCED CHARITABLE DEDUCTIONS FOR CONTRIBUTIONS 

OF FOOD INVENTORY. 

(a) INCREASED AMOUNT OF DEDUCTION.— 

(1) IN GENERAL.—Clause (iv) of section 170(e)(3)(C) (relating 

to termination) is amended by striking ‘‘December 31, 2007’’ 

and inserting ‘‘December 31, 2009’’. 

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

2007. 

(b) TEMPORARY SUSPENSION OF LIMITATIONS ON CHARITABLE

CONTRIBUTIONS.— 

(1) IN GENERAL.—Section 170(b) is amended by adding 

at the end the following new paragraph: 

‘‘(3) TEMPORARY SUSPENSION OF LIMITATIONS ON CHARITABLE CONTRIBUTIONS.—In the case of a qualified farmer or 

rancher (as defined in paragraph (1)(E)(v)), any charitable contribution of food— 

‘‘(A) to which subsection (e)(3)(C) applies (without 

regard to clause (ii) thereof), and 

‘‘(B) which is made during the period beginning on 

the date of the enactment of this paragraph and before 

January 1, 2009, 

shall be treated for purposes of paragraph (1)(E) or (2)(B), 

whichever is applicable, as if it were a qualified conservation 

contribution which is made by a qualified farmer or rancher 

and which otherwise meets the requirements of such paragraph.’’. 

26 USC 170 note. 

26 USC 1400C 

note. 

26 USC 1400B 

note. 

26 USC 1400A. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3875 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to taxable years ending after the date of 

the enactment of this Act. 

SEC. 324. EXTENSION OF ENHANCED CHARITABLE DEDUCTION FOR 

CONTRIBUTIONS OF BOOK INVENTORY. 

(a) EXTENSION.—Clause (iv) of section 170(e)(3)(D) (relating 

to termination) is amended by striking ‘‘December 31, 2007’’ and 

inserting ‘‘December 31, 2009’’. 

(b) CLERICAL AMENDMENT.—Clause (iii) of section 170(e)(3)(D) 

(relating to certification by donee) is amended by inserting ‘‘of 

books’’ after ‘‘to any contribution’’. 

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

shall apply to contributions made after December 31, 2007. 

SEC. 325. EXTENSION AND MODIFICATION OF DUTY SUSPENSION ON 

WOOL PRODUCTS; WOOL RESEARCH FUND; WOOL DUTY 

REFUNDS. 

(a) EXTENSION OF TEMPORARY DUTY REDUCTIONS.—Each of the 

following headings of the Harmonized Tariff Schedule of the United 

States is amended by striking the date in the effective period 

column and inserting ‘‘12/31/2014’’: 

(1) Heading 9902.51.11 (relating to fabrics of worsted wool). 

(2) Heading 9902.51.13 (relating to yarn of combed wool). 

(3) Heading 9902.51.14 (relating to wool fiber, waste, 

garnetted stock, combed wool, or wool top). 

(4) Heading 9902.51.15 (relating to fabrics of combed wool). 

(5) Heading 9902.51.16 (relating to fabrics of combed wool). 

(b) EXTENSION OF DUTY REFUNDS AND WOOL RESEARCH TRUST

FUND.— 

(1) IN GENERAL.—Section 4002(c) of the Wool Suit and 

Textile Trade Extension Act of 2004 (Public Law 108–429; 

118 Stat. 2603) is amended— 

(A) in paragraph (3)(C), by striking ‘‘2010’’ and 

inserting ‘‘2015’’; and 

(B) in paragraph (6)(A), by striking ‘‘through 2009’’ 

and inserting ‘‘through 2014’’. 

(2) SUNSET.—Section 506(f) of the Trade and Development 

Act of 2000 (Public 106–200; 114 Stat. 303 (7 U.S.C. 7101 

note)) is amended by striking ‘‘2010’’ and inserting ‘‘2015’’. 

TITLE IV—EXTENSION OF TAX 

ADMINISTRATION PROVISIONS 

SEC. 401. PERMANENT AUTHORITY FOR UNDERCOVER OPERATIONS. 

(a) IN GENERAL.—Section 7608(c) (relating to rules relating 

to undercover operations) is amended by striking paragraph (6). 

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

shall apply to operations conducted after the date of the enactment 

of this Act. 

SEC. 402. PERMANENT AUTHORITY FOR DISCLOSURE OF INFORMATION RELATING TO TERRORIST ACTIVITIES. 

(a) DISCLOSURE OF RETURN INFORMATION TO APPRISE APPROPRIATE OFFICIALS OF TERRORIST ACTIVITIES.—Subparagraph (C) of 

section 6103(i)(3) is amended by striking clause (iv). 

26 USC 7608 

note. 

26 USC 170 note. 

26 USC 170. 

26 USC 170 note. 


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122 STAT. 3876 PUBLIC LAW 110–343—OCT. 3, 2008 

(b) DISCLOSURE UPON REQUEST OF INFORMATION RELATING TO

TERRORIST ACTIVITIES.—Paragraph (7) of section 6103(i) is amended 

by striking subparagraph (E). 

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

shall apply to disclosures after the date of the enactment of this 

Act. 

TITLE V—ADDITIONAL TAX RELIEF AND 

OTHER TAX PROVISIONS 

Subtitle A—General Provisions 

SEC. 501. $8,500 INCOME THRESHOLD USED TO CALCULATE REFUNDABLE PORTION OF CHILD TAX CREDIT. 

(a) IN GENERAL.—Section 24(d) is amended by adding at the 

end the following new paragraph: 

‘‘(4) SPECIAL RULE FOR 2008.—Notwithstanding paragraph 

(3), in the case of any taxable year beginning in 2008, the 

dollar amount in effect for such taxable year under paragraph 

(1)(B)(i) shall be $8,500.’’. 

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

shall apply to taxable years beginning after December 31, 2007. 

SEC. 502. PROVISIONS RELATED TO FILM AND TELEVISION PRODUCTIONS. 

(a) EXTENSION OF EXPENSING RULES FOR QUALIFIED FILM AND

TELEVISION PRODUCTIONS.—Section 181(f) (relating to termination) 

is amended by striking ‘‘December 31, 2008’’ and inserting 

‘‘December 31, 2009’’. 

(b) MODIFICATION OF LIMITATION ON EXPENSING.—Subparagraph (A) of section 181(a)(2) is amended to read as follows: 

‘‘(A) IN GENERAL.—Paragraph (1) shall not apply to 

so much of the aggregate cost of any qualified film or 

television production as exceeds $15,000,000.’’. 

(c) MODIFICATIONS TO DEDUCTION FOR DOMESTIC ACTIVITIES.— 

(1) DETERMINATION OF W–2 WAGES.—Paragraph (2) of section 199(b) is amended by adding at the end the following 

new subparagraph: 

‘‘(D) SPECIAL RULE FOR QUALIFIED FILM.—In the case 

of a qualified film, such term shall include compensation 

for services performed in the United States by actors, 

production personnel, directors, and producers.’’. 

(2) DEFINITION OF QUALIFIED FILM.—Paragraph (6) of section 199(c) is amended by adding at the end the following: 

‘‘A qualified film shall include any copyrights, trademarks, or 

other intangibles with respect to such film. The methods and 

means of distributing a qualified film shall not affect the availability of the deduction under this section.’’. 

(3) PARTNERSHIPS.—Subparagraph (A) of section 199(d)(1) 

is amended by striking ‘‘and’’ at the end of clause (ii), by 

striking the period at the end of clause (iii) and inserting 

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

‘‘(iv) in the case of each partner of a partnership, 

or shareholder of an S corporation, who owns (directly 

or indirectly) at least 20 percent of the capital interests 

26 USC 24 note. 

26 USC 6103 

note. 

26 USC 6103. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3877 

in such partnership or of the stock of such S corporation— 

‘‘(I) such partner or shareholder shall be 

treated as having engaged directly in any film 

produced by such partnership or S corporation, 

and 

‘‘(II) such partnership or S corporation shall 

be treated as having engaged directly in any film 

produced by such partner or shareholder.’’. 

(d) CONFORMING AMENDMENT.—Section 181(d)(3)(A) is amended 

by striking ‘‘actors’’ and all that follows and inserting ‘‘actors, 

production personnel, directors, and producers.’’. 

(e) EFFECTIVE DATES.— (1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to 

qualified film and television productions commencing after 

December 31, 2007. 

(2) DEDUCTION.—The amendments made by subsection (c) 

shall apply to taxable years beginning after December 31, 2007. 

SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN 

ARROWS DESIGNED FOR USE BY CHILDREN. 

(a) IN GENERAL.—Paragraph (2) of section 4161(b) is amended 

by redesignating subparagraph (B) as subparagraph (C) and by 

inserting after subparagraph (A) the following new subparagraph: 

‘‘(B) EXEMPTION FOR CERTAIN WOODEN ARROW

SHAFTS.—Subparagraph (A) shall not apply to any shaft 

consisting of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether 

sold separately or incorporated as part of a finished or 

unfinished product) of a type used in the manufacture 

of any arrow which after its assembly— 

‘‘(i) measures 5⁄16 of an inch or less in diameter, 

and 

‘‘(ii) is not suitable for use with a bow described 

in paragraph (1)(A).’’. 

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

shall apply to shafts first sold after the date of enactment of 

this Act. 

SEC. 504. INCOME AVERAGING FOR AMOUNTS RECEIVED IN CONNECTION WITH THE EXXON VALDEZ LITIGATION. 

(a) INCOME AVERAGING OF AMOUNTS RECEIVED FROM THE

EXXON VALDEZ LITIGATION.—For purposes of section 1301 of the 

Internal Revenue Code of 1986— 

(1) any qualified taxpayer who receives any qualified settlement income in any taxable year shall be treated as engaged 

in a fishing business (determined without regard to the commercial nature of the business), and 

(2) such qualified settlement income shall be treated as 

income attributable to such a fishing business for such taxable 

year. 

(b) CONTRIBUTIONS OF AMOUNTS RECEIVED TO RETIREMENT

ACCOUNTS.— 

(1) IN GENERAL.—Any qualified taxpayer who receives 

qualified settlement income during the taxable year may, at 

any time before the end of the taxable year in which such 

income was received, make one or more contributions to an 

26 USC 4161 

note. 

26 USC 181 note. 

26 USC 181. 


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122 STAT. 3878 PUBLIC LAW 110–343—OCT. 3, 2008 

eligible retirement plan of which such qualified taxpayer is 

a beneficiary in an aggregate amount not to exceed the lesser 

of— 

(A) $100,000 (reduced by the amount of qualified settlement income contributed to an eligible retirement plan 

in prior taxable years pursuant to this subsection), or 

(B) the amount of qualified settlement income received 

by the individual during the taxable year. 

(2) TIME WHEN CONTRIBUTIONS DEEMED MADE.—For purposes of paragraph (1), a qualified taxpayer shall be deemed 

to have made a contribution to an eligible retirement plan 

on the last day of the taxable year in which such income 

is received if the contribution is made on account of such 

taxable year and is made not later than the time prescribed 

by law for filing the return for such taxable year (not including 

extensions thereof). 

(3) TREATMENT OF CONTRIBUTIONS TO ELIGIBLE RETIREMENT

PLANS.—For purposes of the Internal Revenue Code of 1986, 

if a contribution is made pursuant to paragraph (1) with respect 

to qualified settlement income, then— 

(A) except as provided in paragraph (4)— 

(i) to the extent of such contribution, the qualified 

settlement income shall not be included in taxable 

income, and 

(ii) for purposes of section 72 of such Code, such 

contribution shall not be considered to be investment 

in the contract, 

(B) the qualified taxpayer shall, to the extent of the 

amount of the contribution, be treated— 

(i) as having received the qualified settlement 

income— 

(I) in the case of a contribution to an individual 

retirement plan (as defined under section 

7701(a)(37) of such Code), in a distribution 

described in section 408(d)(3) of such Code, and 

(II) in the case of any other eligible retirement 

plan, in an eligible rollover distribution (as defined 

under section 402(f)(2) of such Code), and 

(ii) as having transferred the amount to the eligible 

retirement plan in a direct trustee to trustee transfer 

within 60 days of the distribution, 

(C) section 408(d)(3)(B) of the Internal Revenue Code 

of 1986 shall not apply with respect to amounts treated 

as a rollover under this paragraph, and 

(D) section 408A(c)(3)(B) of the Internal Revenue Code 

of 1986 shall not apply with respect to amounts contributed 

to a Roth IRA (as defined under section 408A(b) of such 

Code) or a designated Roth contribution to an applicable 

retirement plan (within the meaning of section 402A of 

such Code) under this paragraph. 

(4) SPECIAL RULE FOR ROTH IRAS AND ROTH 401(k)S.—For 

purposes of the Internal Revenue Code of 1986, if a contribution 

is made pursuant to paragraph (1) with respect to qualified 

settlement income to a Roth IRA (as defined under section 

408A(b) of such Code) or as a designated Roth contribution 

to an applicable retirement plan (within the meaning of section 

402A of such Code), then— 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3879 

(A) the qualified settlement income shall be includible 

in taxable income, and 

(B) for purposes of section 72 of such Code, such contribution shall be considered to be investment in the contract. 

(5) ELIGIBLE RETIREMENT PLAN.—For purpose of this subsection, the term ‘‘eligible retirement plan’’ has the meaning 

given such term under section 402(c)(8)(B) of the Internal Revenue Code of 1986. 

(c) TREATMENT OF QUALIFIED SETTLEMENT INCOME UNDER

EMPLOYMENT TAXES.— (1) SECA.—For purposes of chapter 2 of the Internal Revenue Code of 1986 and section 211 of the Social Security Act, 

no portion of qualified settlement income received by a qualified 

taxpayer shall be treated as self-employment income. 

(2) FICA.—For purposes of chapter 21 of the Internal Revenue Code of 1986 and section 209 of the Social Security Act, 

no portion of qualified settlement income received by a qualified 

taxpayer shall be treated as wages. 

(d) QUALIFIED TAXPAYER.—For purposes of this section, the 

term ‘‘qualified taxpayer’’ means— 

(1) any individual who is a plaintiff in the civil action 

In re Exxon Valdez, No. 89–095–CV (HRH) (Consolidated) (D. 

Alaska); or 

(2) any individual who is a beneficiary of the estate of 

such a plaintiff who— 

(A) acquired the right to receive qualified settlement 

income from that plaintiff; and 

(B) was the spouse or an immediate relative of that 

plaintiff. 

(e) QUALIFIED SETTLEMENT INCOME.—For purposes of this section, the term ‘‘qualified settlement income’’ means any interest 

and punitive damage awards which are— 

(1) otherwise includible in taxable income, and 

(2) received (whether as lump sums or periodic payments) 

in connection with the civil action In re Exxon Valdez, No. 

89–095–CV (HRH) (Consolidated) (D. Alaska) (whether preor post-judgment and whether related to a settlement or judgment). 

SEC. 505. CERTAIN FARMING BUSINESS MACHINERY AND EQUIPMENT 

TREATED AS 5-YEAR PROPERTY. 

(a) IN GENERAL.—Section 168(e)(3)(B) (defining 5-year property) 

is amended by striking ‘‘and’’ at the end of clause (v), by striking 

the period at the end of clause (vi)(III) and inserting ‘‘, and’’, 

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

‘‘(vii) any machinery or equipment (other than any 

grain bin, cotton ginning asset, fence, or other land 

improvement) which is used in a farming business 

(as defined in section 263A(e)(4)), the original use of 

which commences with the taxpayer after December 

31, 2008, and which is placed in service before January 

1, 2010.’’. 

(b) ALTERNATIVE SYSTEM.—The table contained in section 

168(g)(3)(B) (relating to special rule for certain property assigned 

to classes) is amended by inserting after the item relating to 

subparagraph (B)(iii) the following: 

26 USC 168. 


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122 STAT. 3880 PUBLIC LAW 110–343—OCT. 3, 2008 

(B)(vii) ........................................................................ 10’’. 

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

shall apply to property placed in service after December 31, 2008. 

SEC. 506. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF TAXPAYER’S LIABILITY BY TAX RETURN PREPARER. 

(a) IN GENERAL.—Subsection (a) of section 6694 is amended 

to read as follows: 

‘‘(a) UNDERSTATEMENT DUE TO UNREASONABLE POSITIONS.— 

‘‘(1) IN GENERAL.—If a tax return preparer— 

‘‘(A) prepares any return or claim of refund with respect 

to which any part of an understatement of liability is 

due to a position described in paragraph (2), and 

‘‘(B) knew (or reasonably should have known) of the 

position, 

such tax return preparer shall pay a penalty with respect 

to each such return or claim in an amount equal to the greater 

of $1,000 or 50 percent of the income derived (or to be derived) 

by the tax return preparer with respect to the return or claim. 

‘‘(2) UNREASONABLE POSITION.— 

‘‘(A) IN GENERAL.—Except as otherwise provided in 

this paragraph, a position is described in this paragraph 

unless there is or was substantial authority for the position. 

‘‘(B) DISCLOSED POSITIONS.—If the position was disclosed as provided in section 6662(d)(2)(B)(ii)(I) and is not 

a position to which subparagraph (C) applies, the position 

is described in this paragraph unless there is a reasonable 

basis for the position. 

‘‘(C) TAX SHELTERS AND REPORTABLE TRANSACTIONS.— 

If the position is with respect to a tax shelter (as defined 

in section 6662(d)(2)(C)(ii)) or a reportable transaction to 

which section 6662A applies, the position is described in 

this paragraph unless it is reasonable to believe that the 

position would more likely than not be sustained on its 

merits. 

‘‘(3) REASONABLE CAUSE EXCEPTION.—No penalty shall be 

imposed under this subsection if it is shown that there is 

reasonable cause for the understatement and the tax return 

preparer acted in good faith.’’. 

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

shall apply— 

(1) in the case of a position other than a position described 

in subparagraph (C) of section 6694(a)(2) of the Internal Revenue Code of 1986 (as amended by this section), to returns 

prepared after May 25, 2007, and 

(2) in the case of a position described in such subparagraph 

(C), to returns prepared for taxable years ending after the 

date of the enactment of this Act. 

26 USC 6694 

note. 

26 USC 6694. 

26 USC 168 note. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3881 

Subtitle B—Paul Wellstone and Pete 

Domenici Mental Health Parity and Addiction Equity Act of 2008 

SEC. 511. SHORT TITLE. 

This subtitle may be cited as the ‘‘Paul Wellstone and Pete 

Domenici Mental Health Parity and Addiction Equity Act of 2008’’. 

SEC. 512. MENTAL HEALTH PARITY. 

(a) AMENDMENTS TO ERISA.—Section 712 of the Employee 

Retirement Income Security Act of 1974 (29 U.S.C. 1185a) is 

amended— 

(1) in subsection (a), by adding at the end the following: 

‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT LIMITATIONS.— 

‘‘(A) IN GENERAL.—In the case of a group health plan 

(or health insurance coverage offered in connection with 

such a plan) that provides both medical and surgical benefits and mental health or substance use disorder benefits, 

such plan or coverage shall ensure that— 

‘‘(i) the financial requirements applicable to such 

mental health or substance use disorder benefits are 

no more restrictive than the predominant financial 

requirements applied to substantially all medical and 

surgical benefits covered by the plan (or coverage), 

and there are no separate cost sharing requirements 

that are applicable only with respect to mental health 

or substance use disorder benefits; and 

‘‘(ii) the treatment limitations applicable to such 

mental health or substance use disorder benefits are 

no more restrictive than the predominant treatment 

limitations applied to substantially all medical and 

surgical benefits covered by the plan (or coverage) and 

there are no separate treatment limitations that are 

applicable only with respect to mental health or substance use disorder benefits. 

‘‘(B) DEFINITIONS.—In this paragraph: 

‘‘(i) FINANCIAL REQUIREMENT.—The term ‘financial 

requirement’ includes deductibles, copayments, 

coinsurance, and out-of-pocket expenses, but excludes 

an aggregate lifetime limit and an annual limit subject 

to paragraphs (1) and (2), 

‘‘(ii) PREDOMINANT.—A financial requirement or 

treatment limit is considered to be predominant if it 

is the most common or frequent of such type of limit 

or requirement. 

‘‘(iii) TREATMENT LIMITATION.—The term ‘treatment limitation’ includes limits on the frequency of 

treatment, number of visits, days of coverage, or other 

similar limits on the scope or duration of treatment. 

‘‘(4) AVAILABILITY OF PLAN INFORMATION.—The criteria for 

medical necessity determinations made under the plan with 

respect to mental health or substance use disorder benefits 

(or the health insurance coverage offered in connection with 

the plan with respect to such benefits) shall be made available 

42 USC 201 note. 

Paul Wellstone 

and Pete 

Domenici Mental 

Health Parity and 

Addiction Equity 

Act of 2008. 


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122 STAT. 3882 PUBLIC LAW 110–343—OCT. 3, 2008 

by the plan administrator (or the health insurance issuer 

offering such coverage) in accordance with regulations to any 

current or potential participant, beneficiary, or contracting provider upon request. The reason for any denial under the plan 

(or coverage) of reimbursement or payment for services with 

respect to mental health or substance use disorder benefits 

in the case of any participant or beneficiary shall, on request 

or as otherwise required, be made available by the plan 

administrator (or the health insurance issuer offering such 

coverage) to the participant or beneficiary in accordance with 

regulations. 

‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the case of a plan 

or coverage that provides both medical and surgical benefits 

and mental health or substance use disorder benefits, if the 

plan or coverage provides coverage for medical or surgical benefits provided by out-of-network providers, the plan or coverage 

shall provide coverage for mental health or substance use disorder benefits provided by out-of-network providers in a manner 

that is consistent with the requirements of this section.’’; 

(2) in subsection (b), by amending paragraph (2) to read 

as follows: 

‘‘(2) in the case of a group health plan (or health insurance 

coverage offered in connection with such a plan) that provides 

mental health or substance use disorder benefits, as affecting 

the terms and conditions of the plan or coverage relating to 

such benefits under the plan or coverage, except as provided 

in subsection (a).’’; 

(3) in subsection (c)— 

(A) in paragraph (1)(B)— 

(i) by inserting ‘‘(or 1 in the case of an employer 

residing in a State that permits small groups to include 

a single individual)’’ after ‘‘at least 2’’ the first place 

that such appears; and 

(ii) by striking ‘‘and who employs at least 2 

employees on the first day of the plan year’’; and 

(B) by striking paragraph (2) and inserting the following: 

‘‘(2) COST EXEMPTION.— 

‘‘(A) IN GENERAL.—With respect to a group health plan 

(or health insurance coverage offered in connection with 

such a plan), if the application of this section to such 

plan (or coverage) results in an increase for the plan year 

involved of the actual total costs of coverage with respect 

to medical and surgical benefits and mental health and 

substance use disorder benefits under the plan (as determined and certified under subparagraph (C)) by an amount 

that exceeds the applicable percentage described in 

subparagraph (B) of the actual total plan costs, the provisions of this section shall not apply to such plan (or coverage) during the following plan year, and such exemption 

shall apply to the plan (or coverage) for 1 plan year. An 

employer may elect to continue to apply mental health 

and substance use disorder parity pursuant to this section 

with respect to the group health plan (or coverage) involved 

regardless of any increase in total costs. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3883 

‘‘(B) APPLICABLE PERCENTAGE.—With respect to a plan 

(or coverage), the applicable percentage described in this 

subparagraph shall be— 

‘‘(i) 2 percent in the case of the first plan year 

in which this section is applied; and 

‘‘(ii) 1 percent in the case of each subsequent plan 

year. 

‘‘(C) DETERMINATIONS BY ACTUARIES.—Determinations 

as to increases in actual costs under a plan (or coverage) 

for purposes of this section shall be made and certified 

by a qualified and licensed actuary who is a member in 

good standing of the American Academy of Actuaries. All 

such determinations shall be in a written report prepared 

by the actuary. The report, and all underlying documentation relied upon by the actuary, shall be maintained by 

the group health plan or health insurance issuer for a 

period of 6 years following the notification made under 

subparagraph (E). 

‘‘(D) 6-MONTH DETERMINATIONS.—If a group health plan 

(or a health insurance issuer offering coverage in connection 

with a group health plan) seeks an exemption under this 

paragraph, determinations under subparagraph (A) shall 

be made after such plan (or coverage) has complied with 

this section for the first 6 months of the plan year involved. 

‘‘(E) NOTIFICATION.— 

‘‘(i) IN GENERAL.—A group health plan (or a health 

insurance issuer offering coverage in connection with 

a group health plan) that, based upon a certification 

described under subparagraph (C), qualifies for an 

exemption under this paragraph, and elects to implement the exemption, shall promptly notify the Secretary, the appropriate State agencies, and participants 

and beneficiaries in the plan of such election. 

‘‘(ii) REQUIREMENT.—A notification to the Secretary 

under clause (i) shall include— 

‘‘(I) a description of the number of covered 

lives under the plan (or coverage) involved at the 

time of the notification, and as applicable, at the 

time of any prior election of the cost-exemption 

under this paragraph by such plan (or coverage); 

‘‘(II) for both the plan year upon which a cost 

exemption is sought and the year prior, a description of the actual total costs of coverage with 

respect to medical and surgical benefits and 

mental health and substance use disorder benefits 

under the plan; and 

‘‘(III) for both the plan year upon which a 

cost exemption is sought and the year prior, the 

actual total costs of coverage with respect to 

mental health and substance use disorder benefits 

under the plan. 

‘‘(iii) CONFIDENTIALITY.—A notification to the Secretary under clause (i) shall be confidential. The Secretary shall make available, upon request and on not 

more than an annual basis, an anonymous itemization 

of such notifications, that includes— 


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122 STAT. 3884 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(I) a breakdown of States by the size and 

type of employers submitting such notification; and 

‘‘(II) a summary of the data received under 

clause (ii). 

‘‘(F) AUDITS BY APPROPRIATE AGENCIES.—To determine 

compliance with this paragraph, the Secretary may audit 

the books and records of a group health plan or health 

insurance issuer relating to an exemption, including any 

actuarial reports prepared pursuant to subparagraph (C), 

during the 6 year period following the notification of such 

exemption under subparagraph (E). A State agency 

receiving a notification under subparagraph (E) may also 

conduct such an audit with respect to an exemption covered 

by such notification.’’; 

(4) in subsection (e), by striking paragraph (4) and inserting 

the following: 

‘‘(4) MENTAL HEALTH BENEFITS.—The term ‘mental health 

benefits’ means benefits with respect to services for mental 

health conditions, as defined under the terms of the plan and 

in accordance with applicable Federal and State law. 

‘‘(5) SUBSTANCE USE DISORDER BENEFITS.—The term ‘substance use disorder benefits’ means benefits with respect to 

services for substance use disorders, as defined under the terms 

of the plan and in accordance with applicable Federal and 

State law.’’; 

(5) by striking subsection (f); 

(6) by inserting after subsection (e) the following: 

‘‘(f) SECRETARY REPORT.—The Secretary shall, by January 1, 

2012, and every two years thereafter, submit to the appropriate 

committees of Congress a report on compliance of group health 

plans (and health insurance coverage offered in connection with 

such plans) with the requirements of this section. Such report 

shall include the results of any surveys or audits on compliance 

of group health plans (and health insurance coverage offered in 

connection with such plans) with such requirements and an analysis 

of the reasons for any failures to comply. 

‘‘(g) NOTICE AND ASSISTANCE.—The Secretary, in cooperation 

with the Secretaries of Health and Human Services and Treasury, 

as appropriate, shall publish and widely disseminate guidance and 

information for group health plans, participants and beneficiaries, 

applicable State and local regulatory bodies, and the National 

Association of Insurance Commissioners concerning the requirements of this section and shall provide assistance concerning such 

requirements and the continued operation of applicable State law. 

Such guidance and information shall inform participants and beneficiaries of how they may obtain assistance under this section, 

including, where appropriate, assistance from State consumer and 

insurance agencies.’’; 

(7) by striking ‘‘mental health benefits’’ and inserting 

‘‘mental health and substance use disorder benefits’’ each place 

it appears in subsections (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and 

(a)(2)(C); and 

(8) by striking ‘‘mental health benefits’’ and inserting 

‘‘mental health or substance use disorder benefits’’ each place 

it appears (other than in any provision amended by the previous 

paragraph). 

Publication. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3885 

(b) AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.—Section 

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

amended— 

(1) in subsection (a), by adding at the end the following: 

‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT LIMITA- TIONS.— ‘‘(A) IN GENERAL.—In the case of a group health plan 

(or health insurance coverage offered in connection with 

such a plan) that provides both medical and surgical benefits and mental health or substance use disorder benefits, 

such plan or coverage shall ensure that— 

‘‘(i) the financial requirements applicable to such 

mental health or substance use disorder benefits are 

no more restrictive than the predominant financial 

requirements applied to substantially all medical and 

surgical benefits covered by the plan (or coverage), 

and there are no separate cost sharing requirements 

that are applicable only with respect to mental health 

or substance use disorder benefits; and 

‘‘(ii) the treatment limitations applicable to such 

mental health or substance use disorder benefits are 

no more restrictive than the predominant treatment 

limitations applied to substantially all medical and 

surgical benefits covered by the plan (or coverage) and 

there are no separate treatment limitations that are 

applicable only with respect to mental health or substance use disorder benefits. 

‘‘(B) DEFINITIONS.—In this paragraph: 

‘‘(i) FINANCIAL REQUIREMENT.—The term ‘financial 

requirement’ includes deductibles, copayments, 

coinsurance, and out-of-pocket expenses, but excludes 

an aggregate lifetime limit and an annual limit subject 

to paragraphs (1) and (2). 

‘‘(ii) PREDOMINANT.—A financial requirement or 

treatment limit is considered to be predominant if it 

is the most common or frequent of such type of limit 

or requirement. 

‘‘(iii) TREATMENT LIMITATION.—The term ‘treatment limitation’ includes limits on the frequency of 

treatment, number of visits, days of coverage, or other 

similar limits on the scope or duration of treatment. 

‘‘(4) AVAILABILITY OF PLAN INFORMATION.—The criteria for 

medical necessity determinations made under the plan with 

respect to mental health or substance use disorder benefits 

(or the health insurance coverage offered in connection with 

the plan with respect to such benefits) shall be made available 

by the plan administrator (or the health insurance issuer 

offering such coverage) in accordance with regulations to any 

current or potential participant, beneficiary, or contracting provider upon request. The reason for any denial under the plan 

(or coverage) of reimbursement or payment for services with 

respect to mental health or substance use disorder benefits 

in the case of any participant or beneficiary shall, on request 

or as otherwise required, be made available by the plan 

administrator (or the health insurance issuer offering such 

coverage) to the participant or beneficiary in accordance with 

regulations. 


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122 STAT. 3886 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the case of a plan 

or coverage that provides both medical and surgical benefits 

and mental health or substance use disorder benefits, if the 

plan or coverage provides coverage for medical or surgical benefits provided by out-of-network providers, the plan or coverage 

shall provide coverage for mental health or substance use disorder benefits provided by out-of-network providers in a manner 

that is consistent with the requirements of this section.’’; 

(2) in subsection (b), by amending paragraph (2) to read 

as follows: 

‘‘(2) in the case of a group health plan (or health insurance 

coverage offered in connection with such a plan) that provides 

mental health or substance use disorder benefits, as affecting 

the terms and conditions of the plan or coverage relating to 

such benefits under the plan or coverage, except as provided 

in subsection (a).’’; 

(3) in subsection (c)— 

(A) in paragraph (1), by inserting before the period 

the following: ‘‘(as defined in section 2791(e)(4), except that 

for purposes of this paragraph such term shall include 

employers with 1 employee in the case of an employer 

residing in a State that permits small groups to include 

a single individual)’’; and 

(B) by striking paragraph (2) and inserting the following: 

‘‘(2) COST EXEMPTION.— 

‘‘(A) IN GENERAL.—With respect to a group health plan 

(or health insurance coverage offered in connection with 

such a plan), if the application of this section to such 

plan (or coverage) results in an increase for the plan year 

involved of the actual total costs of coverage with respect 

to medical and surgical benefits and mental health and 

substance use disorder benefits under the plan (as determined and certified under subparagraph (C)) by an amount 

that exceeds the applicable percentage described in 

subparagraph (B) of the actual total plan costs, the provisions of this section shall not apply to such plan (or coverage) during the following plan year, and such exemption 

shall apply to the plan (or coverage) for 1 plan year. An 

employer may elect to continue to apply mental health 

and substance use disorder parity pursuant to this section 

with respect to the group health plan (or coverage) involved 

regardless of any increase in total costs. 

‘‘(B) APPLICABLE PERCENTAGE.—With respect to a plan 

(or coverage), the applicable percentage described in this 

subparagraph shall be— 

‘‘(i) 2 percent in the case of the first plan year 

in which this section is applied; and 

‘‘(ii) 1 percent in the case of each subsequent plan 

year. 

‘‘(C) DETERMINATIONS BY ACTUARIES.—Determinations 

as to increases in actual costs under a plan (or coverage) 

for purposes of this section shall be made and certified 

by a qualified and licensed actuary who is a member in 

good standing of the American Academy of Actuaries. All 

such determinations shall be in a written report prepared 

Reports. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3887 

by the actuary. The report, and all underlying documentation relied upon by the actuary, shall be maintained by 

the group health plan or health insurance issuer for a 

period of 6 years following the notification made under 

subparagraph (E). 

‘‘(D) 6-MONTH DETERMINATIONS.—If a group health plan 

(or a health insurance issuer offering coverage in connection 

with a group health plan) seeks an exemption under this 

paragraph, determinations under subparagraph (A) shall 

be made after such plan (or coverage) has complied with 

this section for the first 6 months of the plan year involved. 

‘‘(E) NOTIFICATION.— ‘‘(i) IN GENERAL.—A group health plan (or a health 

insurance issuer offering coverage in connection with 

a group health plan) that, based upon a certification 

described under subparagraph (C), qualifies for an 

exemption under this paragraph, and elects to implement the exemption, shall promptly notify the Secretary, the appropriate State agencies, and participants 

and beneficiaries in the plan of such election. 

‘‘(ii) REQUIREMENT.—A notification to the Secretary 

under clause (i) shall include— 

‘‘(I) a description of the number of covered 

lives under the plan (or coverage) involved at the 

time of the notification, and as applicable, at the 

time of any prior election of the cost-exemption 

under this paragraph by such plan (or coverage); 

‘‘(II) for both the plan year upon which a cost 

exemption is sought and the year prior, a description of the actual total costs of coverage with 

respect to medical and surgical benefits and 

mental health and substance use disorder benefits 

under the plan; and 

‘‘(III) for both the plan year upon which a 

cost exemption is sought and the year prior, the 

actual total costs of coverage with respect to 

mental health and substance use disorder benefits 

under the plan. 

‘‘(iii) CONFIDENTIALITY.—A notification to the Secretary under clause (i) shall be confidential. The Secretary shall make available, upon request and on not 

more than an annual basis, an anonymous itemization 

of such notifications, that includes— 

‘‘(I) a breakdown of States by the size and 

type of employers submitting such notification; and 

‘‘(II) a summary of the data received under 

clause (ii). 

‘‘(F) AUDITS BY APPROPRIATE AGENCIES.—To determine 

compliance with this paragraph, the Secretary may audit 

the books and records of a group health plan or health 

insurance issuer relating to an exemption, including any 

actuarial reports prepared pursuant to subparagraph (C), 

during the 6 year period following the notification of such 

exemption under subparagraph (E). A State agency 

receiving a notification under subparagraph (E) may also 

conduct such an audit with respect to an exemption covered 

by such notification.’’; 

Records. 


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122 STAT. 3888 PUBLIC LAW 110–343—OCT. 3, 2008 

(4) in subsection (e), by striking paragraph (4) and inserting 

the following: 

‘‘(4) MENTAL HEALTH BENEFITS.—The term ‘mental health 

benefits’ means benefits with respect to services for mental 

health conditions, as defined under the terms of the plan and 

in accordance with applicable Federal and State law. 

‘‘(5) SUBSTANCE USE DISORDER BENEFITS.—The term ‘substance use disorder benefits’ means benefits with respect to 

services for substance use disorders, as defined under the terms 

of the plan and in accordance with applicable Federal and 

State law.’’; 

(5) by striking subsection (f); 

(6) by striking ‘‘mental health benefits’’ and inserting 

‘‘mental health and substance use disorder benefits’’ each place 

it appears in subsections (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and 

(a)(2)(C); and 

(7) by striking ‘‘mental health benefits’’ and inserting 

‘‘mental health or substance use disorder benefits’’ each place 

it appears (other than in any provision amended by the previous 

paragraph). 

(c) AMENDMENTS TO INTERNAL REVENUE CODE.—Section 9812 

of the Internal Revenue Code of 1986 is amended— 

(1) in subsection (a), by adding at the end the following: 

‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT LIMITATIONS.— 

‘‘(A) IN GENERAL.—In the case of a group health plan 

that provides both medical and surgical benefits and mental 

health or substance use disorder benefits, such plan shall 

ensure that— 

‘‘(i) the financial requirements applicable to such 

mental health or substance use disorder benefits are 

no more restrictive than the predominant financial 

requirements applied to substantially all medical and 

surgical benefits covered by the plan, and there are 

no separate cost sharing requirements that are 

applicable only with respect to mental health or substance use disorder benefits; and 

‘‘(ii) the treatment limitations applicable to such 

mental health or substance use disorder benefits are 

no more restrictive than the predominant treatment 

limitations applied to substantially all medical and 

surgical benefits covered by the plan and there are 

no separate treatment limitations that are applicable 

only with respect to mental health or substance use 

disorder benefits. 

‘‘(B) DEFINITIONS.—In this paragraph: 

‘‘(i) FINANCIAL REQUIREMENT.—The term ‘financial 

requirement’ includes deductibles, copayments, 

coinsurance, and out-of-pocket expenses, but excludes 

an aggregate lifetime limit and an annual limit subject 

to paragraphs (1) and (2), 

‘‘(ii) PREDOMINANT.—A financial requirement or 

treatment limit is considered to be predominant if it 

is the most common or frequent of such type of limit 

or requirement. 

‘‘(iii) TREATMENT LIMITATION.—The term ‘treatment limitation’ includes limits on the frequency of 

26 USC 9812. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3889 

treatment, number of visits, days of coverage, or other 

similar limits on the scope or duration of treatment. 

‘‘(4) AVAILABILITY OF PLAN INFORMATION.—The criteria for 

medical necessity determinations made under the plan with 

respect to mental health or substance use disorder benefits 

shall be made available by the plan administrator in accordance 

with regulations to any current or potential participant, beneficiary, or contracting provider upon request. The reason for 

any denial under the plan of reimbursement or payment for 

services with respect to mental health or substance use disorder 

benefits in the case of any participant or beneficiary shall, 

on request or as otherwise required, be made available by 

the plan administrator to the participant or beneficiary in 

accordance with regulations. 

‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the case of a plan 

that provides both medical and surgical benefits and mental 

health or substance use disorder benefits, if the plan provides 

coverage for medical or surgical benefits provided by out-ofnetwork providers, the plan shall provide coverage for mental 

health or substance use disorder benefits provided by out-ofnetwork providers in a manner that is consistent with the 

requirements of this section.’’; 

(2) in subsection (b), by amending paragraph (2) to read 

as follows: 

‘‘(2) in the case of a group health plan that provides mental 

health or substance use disorder benefits, as affecting the terms 

and conditions of the plan relating to such benefits under 

the plan, except as provided in subsection (a).’’; 

(3) in subsection (c)— 

(A) by amending paragraph (1) to read as follows: 

‘‘(1) SMALL EMPLOYER EXEMPTION.— 

‘‘(A) IN GENERAL.—This section shall not apply to any 

group health plan for any plan year of a small employer. 

‘‘(B) SMALL EMPLOYER.—For purposes of subparagraph 

(A), the term ‘small employer’ means, with respect to a 

calendar year and a plan year, an employer who employed 

an average of at least 2 (or 1 in the case of an employer 

residing in a State that permits small groups to include 

a single individual) but not more than 50 employees on 

business days during the preceding calendar year. For purposes of the preceding sentence, all persons treated as 

a single employer under subsection (b), (c), (m), or (o) 

of section 414 shall be treated as 1 employer and rules 

similar to rules of subparagraphs (B) and (C) of section 

4980D(d)(2) shall apply.’’; and 

(B) by striking paragraph (2) and inserting the following: 

‘‘(2) COST EXEMPTION.— 

‘‘(A) IN GENERAL.—With respect to a group health plan, 

if the application of this section to such plan results in 

an increase for the plan year involved of the actual total 

costs of coverage with respect to medical and surgical benefits and mental health and substance use disorder benefits 

under the plan (as determined and certified under subparagraph (C)) by an amount that exceeds the applicable 

percentage described in subparagraph (B) of the actual 

total plan costs, the provisions of this section shall not 

Applicability. 

Applicability. 


dkrause on GSDDPC44 with PUBLIC LAWS
122 STAT. 3890 PUBLIC LAW 110–343—OCT. 3, 2008 

apply to such plan during the following plan year, and 

such exemption shall apply to the plan for 1 plan year. 

An employer may elect to continue to apply mental health 

and substance use disorder parity pursuant to this section 

with respect to the group health plan involved regardless 

of any increase in total costs. 

‘‘(B) APPLICABLE PERCENTAGE.—With respect to a plan, 

the applicable percentage described in this subparagraph 

shall be— 

‘‘(i) 2 percent in the case of the first plan year 

in which this section is applied; and 

‘‘(ii) 1 percent in the case of each subsequent plan 

year. 

‘‘(C) DETERMINATIONS BY ACTUARIES.—Determinations 

as to increases in actual costs under a plan for purposes 

of this section shall be made and certified by a qualified 

and licensed actuary who is a member in good standing 

of the American Academy of Actuaries. All such determinations shall be in a written report prepared by the actuary. 

The report, and all underlying documentation relied upon 

by the actuary, shall be maintained by the group health 

plan for a period of 6 years following the notification made 

under subparagraph (E). 

‘‘(D) 6-MONTH DETERMINATIONS.—If a group health plan 

seeks an exemption under this paragraph, determinations 

under subparagraph (A) shall be made after such plan 

has complied with this section for the first 6 months of 

the plan year involved. 

‘‘(E) NOTIFICATION.— 

‘‘(i) IN GENERAL.—A group health plan that, based 

upon a certification described under subparagraph (C), 

qualifies for an exemption under this paragraph, and 

elects to implement the exemption, shall promptly 

notify the Secretary, the appropriate State agencies, 

and participants and beneficiaries in the plan of such 

election. 

‘‘(ii) REQUIREMENT.—A notification to the Secretary 

under clause (i) shall include— 

‘‘(I) a description of the number of covered 

lives under the plan involved at the time of the 

notification, and as applicable, at the time of any 

prior election of the cost-exemption under this 

paragraph by such plan; 

‘‘(II) for both the plan year upon which a cost 

exemption is sought and the year prior, a description of the actual total costs of coverage with 

respect to medical and surgical benefits and 

mental health and substance use disorder benefits 

under the plan; and 

‘‘(III) for both the plan year upon which a 

cost exemption is sought and the year prior, the 

actual total costs of coverage with respect to 

mental health and substance use disorder benefits 

under the plan. 

‘‘(iii) CONFIDENTIALITY.—A notification to the Secretary under clause (i) shall be confidential. The Secretary shall make available, upon request and on not 

Records. 

Reports. 


dkrause on GSDDPC44 with PUBLIC LAWS
PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3891 

more than an annual basis, an anonymous itemization 

of such notifications, that includes— 

‘‘(I) a breakdown of States by the size and 

type of employers submitting such notification; and 

‘‘(II) a summary of the data received under 

clause (ii). 

‘‘(F) AUDITS BY APPROPRIATE AGENCIES.—To determine 

compliance with this paragraph, the Secretary may audit 

the books and records of a group health plan relating 

to an exemption, including any actuarial reports prepared 

pursuant to subparagraph (C), during the 6 year period 

following the notification of such exemption under subparagraph (E). A State agency receiving a notification under 

subparagraph (E) may also conduct such an audit with 

respect to an exemption covered by such notification.’’; 

(4) in subsection (e), by striking paragraph (4) and inserting 

the following: 

‘‘(4) MENTAL HEALTH BENEFITS.—The term ‘mental health 

benefits’ means benefits with respect to services for mental 

health conditions, as defined under the terms of the plan and 

in accordance with applicable Federal and State law. 

‘‘(5) SUBSTANCE USE DISORDER BENEFITS.—The term ‘substance use disorder benefits’ means benefits with respect to 

services for substance use disorders, as defined under the terms 

of the plan and in accordance with applicable Federal and 

State law.’’; 

(5) by striking subsection (f); 

(6) by striking ‘‘mental health benefits’’ and inserting 

‘‘mental health and substance use disorder benefits’’ each place 

it appears in subsections (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and 

(a)(2)(C); and 

(7) by striking ‘‘mental health benefits’’ and inserting 

‘‘mental health or substance use disorder benefits’’ each place 

it appears (other than in any provision amended by the previous 

paragraph). 

(d) REGULATIONS.—Not later than 1 year after the date of 

enactment of this Act, the Secretaries of Labor, Health and Human 

Services, and the Treasury shall issue regulations to carry out 

the amendments made by subsections (a), (b), and (c), respectively. 

(e) EFFECTIVE DATE.— 

(1) IN GENERAL.—The amendments made by this section 

shall apply with respect to group health plans for plan years 

beginning after the date that is 1 year after the date of enactment of this Act, regardless of whether regulations have been 

issued to carry out such amendments by such effective date, 

except that the amendments made by subsections (a)(5), (b)(5), 

and (c)(5), relating to striking of certain sunset provisions, 

shall take effect on January 1, 2009. 

(2) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREEMENTS.—In the case of a group health plan maintained pursuant to one or more collective bargaining agreements between 

employee representatives and one or more employers ratified 

before the date of the enactment of this Act, the amendments 

made by this section shall not apply to plan years beginning 

before the later of— 

42 USC 300gg–5 

note. 

Deadline. 

42 USC 300gg–5 

note. 


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122 STAT. 3892 PUBLIC LAW 110–343—OCT. 3, 2008 

(A) the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to 

after the date of the enactment of this Act), or 

(B) January 1, 2009. 

For purposes of subparagraph (A), any plan amendment made 

pursuant to a collective bargaining agreement relating to the 

plan which amends the plan solely to conform to any requirement added by this section shall not be treated as a termination 

of such collective bargaining agreement. 

(f) ASSURING COORDINATION.—The Secretary of Health and 

Human Services, the Secretary of Labor, and the Secretary of 

the Treasury may ensure, through the execution or revision of 

an interagency memorandum of understanding among such Secretaries, that— 

(1) regulations, rulings, and interpretations issued by such 

Secretaries relating to the same matter over which two or 

more such Secretaries have responsibility under this section 

(and the amendments made by this section) are administered 

so as to have the same effect at all times; and 

(2) coordination of policies relating to enforcing the same 

requirements through such Secretaries in order to have a 

coordinated enforcement strategy that avoids duplication of 

enforcement efforts and assigns priorities in enforcement. 

(g) CONFORMING CLERICAL AMENDMENTS.— 

(1) ERISA HEADING.— 

(A) IN GENERAL.—The heading of section 712 of the 

Employee Retirement Income Security Act of 1974 is 

amended to read as follows: 

‘‘SEC. 712. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER BENEFITS.’’. 

(B) CLERICAL AMENDMENT.—The table of contents in 

section 1 of such Act is amended by striking the item 

relating to section 712 and inserting the following new 

item: 

‘‘Sec. 712. Parity in mental health and substance use disorder benefits.’’. 

(2) PHSA HEADING.—The heading of section 2705 of the 

Public Health Service Act is amended to read as follows: 

‘‘SEC. 2705. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER BENEFITS.’’. 

(3) IRC HEADING.— 

(A) IN GENERAL.—The heading of section 9812 of the 

Internal Revenue Code of 1986 is amended to read as 

follows: 

‘‘SEC. 9812. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER BENEFITS.’’. 

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

subchapter B of chapter 100 of such Code is amended 

by striking the item relating to section 9812 and inserting 

the following new item: 

‘‘Sec. 9812. Parity in mental health and substance use disorder benefits.’’. 

(h) GAO STUDY ON COVERAGE AND EXCLUSION OF MENTAL

HEALTH AND SUBSTANCE USE DISORDER DIAGNOSES.— 

26 USC 9812. 

42 USC 300gg–5. 

29 USC 1185a. 

42 USC 300gg–5 

note. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3893 

(1) IN GENERAL.—The Comptroller General of the United 

States shall conduct a study that analyzes the specific rates, 

patterns, and trends in coverage and exclusion of specific 

mental health and substance use disorder diagnoses by health 

plans and health insurance. The study shall include an analysis 

of— 

(A) specific coverage rates for all mental health conditions and substance use disorders; 

(B) which diagnoses are most commonly covered or 

excluded; 

(C) whether implementation of this Act has affected 

trends in coverage or exclusion of such diagnoses; and 

(D) the impact of covering or excluding specific 

diagnoses on participants’ and enrollees’ health, their 

health care coverage, and the costs of delivering health 

care. 

(2) REPORTS.—Not later than 3 years after the date of 

the enactment of this Act, and 2 years after the date of submission the first report under this paragraph, the Comptroller 

General shall submit to Congress a report on the results of 

the study conducted under paragraph (1). 

TITLE VI—OTHER PROVISIONS 

SEC. 601. SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION PROGRAM. 

(a) REAUTHORIZATION OF THE SECURE RURAL SCHOOLS AND

COMMUNITY SELF-DETERMINATION ACT OF 2000.—The Secure Rural 

Schools and Community Self-Determination Act of 2000 (16 U.S.C. 

500 note; Public Law 106–393) is amended by striking sections 

1 through 403 and inserting the following: 

‘‘SEC. 1. SHORT TITLE. 

‘‘This Act may be cited as the ‘Secure Rural Schools and 

Community Self-Determination Act of 2000’. 

‘‘SEC. 2. PURPOSES. 

‘‘The purposes of this Act are— 

‘‘(1) to stabilize and transition payments to counties to 

provide funding for schools and roads that supplements other 

available funds; 

‘‘(2) to make additional investments in, and create additional employment opportunities through, projects that— 

‘‘(A)(i) improve the maintenance of existing infrastructure; 

‘‘(ii) implement stewardship objectives that enhance 

forest ecosystems; and 

‘‘(iii) restore and improve land health and water 

quality; 

‘‘(B) enjoy broad-based support; and 

‘‘(C) have objectives that may include— 

‘‘(i) road, trail, and infrastructure maintenance or 

obliteration; 

‘‘(ii) soil productivity improvement; 

‘‘(iii) improvements in forest ecosystem health; 

‘‘(iv) watershed restoration and maintenance; 

16 USC 7101. 

16 USC 7101 

note. 

16 USC 500 

notes. 


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122 STAT. 3894 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(v) the restoration, maintenance, and improvement of wildlife and fish habitat; 

‘‘(vi) the control of noxious and exotic weeds; and 

‘‘(vii) the reestablishment of native species; and 

‘‘(3) to improve cooperative relationships among— 

‘‘(A) the people that use and care for Federal land; 

and 

‘‘(B) the agencies that manage the Federal land. 

‘‘SEC. 3. DEFINITIONS. 

‘‘In this Act: 

‘‘(1) ADJUSTED SHARE.—The term ‘adjusted share’ means 

the number equal to the quotient obtained by dividing— 

‘‘(A) the number equal to the quotient obtained by 

dividing— 

‘‘(i) the base share for the eligible county; by 

‘‘(ii) the income adjustment for the eligible county; 

by 

‘‘(B) the number equal to the sum of the quotients 

obtained under subparagraph (A) and paragraph (8)(A) for 

all eligible counties. 

‘‘(2) BASE SHARE.—The term ‘base share’ means the number 

equal to the average of— 

‘‘(A) the quotient obtained by dividing— 

‘‘(i) the number of acres of Federal land described 

in paragraph (7)(A) in each eligible county; by 

‘‘(ii) the total number acres of Federal land in 

all eligible counties in all eligible States; and 

‘‘(B) the quotient obtained by dividing— 

‘‘(i) the amount equal to the average of the 3 

highest 25-percent payments and safety net payments 

made to each eligible State for each eligible county 

during the eligibility period; by 

‘‘(ii) the amount equal to the sum of the amounts 

calculated under clause (i) and paragraph (9)(B)(i) for 

all eligible counties in all eligible States during the 

eligibility period. 

‘‘(3) COUNTY PAYMENT.—The term ‘county payment’ means 

the payment for an eligible county calculated under section 

101(b). 

‘‘(4) ELIGIBLE COUNTY.—The term ‘eligible county’ means 

any county that— 

‘‘(A) contains Federal land (as defined in paragraph 

(7)); and 

‘‘(B) elects to receive a share of the State payment 

or the county payment under section 102(b). 

‘‘(5) ELIGIBILITY PERIOD.—The term ‘eligibility period’ 

means fiscal year 1986 through fiscal year 1999. 

‘‘(6) ELIGIBLE STATE.—The term ‘eligible State’ means a 

State or territory of the United States that received a 25- 

percent payment for 1 or more fiscal years of the eligibility 

period. 

‘‘(7) FEDERAL LAND.—The term ‘Federal land’ means— 

‘‘(A) land within the National Forest System, as defined 

in section 11(a) of the Forest and Rangeland Renewable 

Resources Planning Act of 1974 (16 U.S.C. 1609(a)) exclusive of the National Grasslands and land utilization 

16 USC 7102. 


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projects designated as National Grasslands administered 

pursuant to the Act of July 22, 1937 (7 U.S.C. 1010– 

1012); and 

‘‘(B) such portions of the revested Oregon and California Railroad and reconveyed Coos Bay Wagon Road 

grant land as are or may hereafter come under the jurisdiction of the Department of the Interior, which have heretofore or may hereafter be classified as timberlands, and 

power-site land valuable for timber, that shall be managed, 

except as provided in the former section 3 of the Act of 

August 28, 1937 (50 Stat. 875; 43 U.S.C. 1181c), for permanent forest production. 

‘‘(8) 50-PERCENT ADJUSTED SHARE.—The term ‘50-percent 

adjusted share’ means the number equal to the quotient 

obtained by dividing— 

‘‘(A) the number equal to the quotient obtained by 

dividing— 

‘‘(i) the 50-percent base share for the eligible 

county; by 

‘‘(ii) the income adjustment for the eligible county; 

by 

‘‘(B) the number equal to the sum of the quotients 

obtained under subparagraph (A) and paragraph (1)(A) for 

all eligible counties. 

‘‘(9) 50-PERCENT BASE SHARE.—The term ‘50-percent base 

share’ means the number equal to the average of— 

‘‘(A) the quotient obtained by dividing— 

‘‘(i) the number of acres of Federal land described 

in paragraph (7)(B) in each eligible county; by 

‘‘(ii) the total number acres of Federal land in 

all eligible counties in all eligible States; and 

‘‘(B) the quotient obtained by dividing— 

‘‘(i) the amount equal to the average of the 3 

highest 50-percent payments made to each eligible 

county during the eligibility period; by 

‘‘(ii) the amount equal to the sum of the amounts 

calculated under clause (i) and paragraph (2)(B)(i) for 

all eligible counties in all eligible States during the 

eligibility period. 

‘‘(10) 50-PERCENT PAYMENT.—The term ‘50-percent payment’ means the payment that is the sum of the 50-percent 

share otherwise paid to a county pursuant to title II of the 

Act of August 28, 1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 

1181f), and the payment made to a county pursuant to the 

Act of May 24, 1939 (chapter 144; 53 Stat. 753; 43 U.S.C. 

1181f–1 et seq.). 

‘‘(11) FULL FUNDING AMOUNT.—The term ‘full funding 

amount’ means— 

‘‘(A) $500,000,000 for fiscal year 2008; and 

‘‘(B) for fiscal year 2009 and each fiscal year thereafter, 

the amount that is equal to 90 percent of the full funding 

amount for the preceding fiscal year. 

‘‘(12) INCOME ADJUSTMENT.—The term ‘income adjustment’ 

means the square of the quotient obtained by dividing— 

‘‘(A) the per capita personal income for each eligible 

county; by 


dkrause on GSDDPC44 with PUBLIC LAWS
122 STAT. 3896 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(B) the median per capita personal income of all 

eligible counties. 

‘‘(13) PER CAPITA PERSONAL INCOME.—The term ‘per capita 

personal income’ means the most recent per capita personal 

income data, as determined by the Bureau of Economic Analysis. 

‘‘(14) SAFETY NET PAYMENTS.—The term ‘safety net payments’ means the special payment amounts paid to States 

and counties required by section 13982 or 13983 of the Omnibus 

Budget Reconciliation Act of 1993 (Public Law 103–66; 16 

U.S.C. 500 note; 43 U.S.C. 1181f note). 

‘‘(15) SECRETARY CONCERNED.—The term ‘Secretary concerned’ means— 

‘‘(A) the Secretary of Agriculture or the designee of 

the Secretary of Agriculture with respect to the Federal 

land described in paragraph (7)(A); and 

‘‘(B) the Secretary of the Interior or the designee of 

the Secretary of the Interior with respect to the Federal 

land described in paragraph (7)(B). 

‘‘(16) STATE PAYMENT.—The term ‘State payment’ means 

the payment for an eligible State calculated under section 

101(a). 

‘‘(17) 25-PERCENT PAYMENT.—The term ‘25-percent payment’ means the payment to States required by the sixth paragraph under the heading of ‘FOREST SERVICE’ in the Act 

of May 23, 1908 (35 Stat. 260; 16 U.S.C. 500), and section 

13 of the Act of March 1, 1911 (36 Stat. 963; 16 U.S.C. 500). 

‘‘TITLE I—SECURE PAYMENTS FOR 

STATES AND COUNTIES CONTAINING 

FEDERAL LAND 

‘‘SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING FEDERAL 

LAND. 

‘‘(a) STATE PAYMENT.—For each of fiscal years 2008 through 

2011, the Secretary of Agriculture shall calculate for each eligible 

State an amount equal to the sum of the products obtained by 

multiplying— 

‘‘(1) the adjusted share for each eligible county within the 

eligible State; by 

‘‘(2) the full funding amount for the fiscal year. 

‘‘(b) COUNTY PAYMENT.—For each of fiscal years 2008 through 

2011, the Secretary of the Interior shall calculate for each eligible 

county that received a 50-percent payment during the eligibility 

period an amount equal to the product obtained by multiplying— 

‘‘(1) the 50-percent adjusted share for the eligible county; 

by 

‘‘(2) the full funding amount for the fiscal year. 

‘‘SEC. 102. PAYMENTS TO STATES AND COUNTIES. 

‘‘(a) PAYMENT AMOUNTS.—Except as provided in section 103, 

the Secretary of the Treasury shall pay to— 

‘‘(1) a State or territory of the United States an amount 

equal to the sum of the amounts elected under subsection 

(b) by each county within the State or territory for— 

16 USC 7112. 

16 USC 7111. 


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‘‘(A) if the county is eligible for the 25-percent payment, 

the share of the 25-percent payment; or 

‘‘(B) the share of the State payment of the eligible 

county; and 

‘‘(2) a county an amount equal to the amount elected under 

subsection (b) by each county for— 

‘‘(A) if the county is eligible for the 50-percent payment, 

the 50-percent payment; or 

‘‘(B) the county payment for the eligible county. 

‘‘(b) ELECTION TO RECEIVE PAYMENT AMOUNT.— ‘‘(1) ELECTION; SUBMISSION OF RESULTS.— ‘‘(A) IN GENERAL.—The election to receive a share of 

the State payment, the county payment, a share of the 

State payment and the county payment, a share of the 

25-percent payment, the 50-percent payment, or a share 

of the 25-percent payment and the 50-percent payment, 

as applicable, shall be made at the discretion of each 

affected county by August 1, 2008 (or as soon thereafter 

as the Secretary concerned determines is practicable), and 

August 1 of each second fiscal year thereafter, in accordance 

with paragraph (2), and transmitted to the Secretary concerned by the Governor of each eligible State. 

‘‘(B) FAILURE TO TRANSMIT.—If an election for an 

affected county is not transmitted to the Secretary concerned by the date specified under subparagraph (A), the 

affected county shall be considered to have elected to 

receive a share of the State payment, the county payment, 

or a share of the State payment and the county payment, 

as applicable. 

‘‘(2) DURATION OF ELECTION.— 

‘‘(A) IN GENERAL.—A county election to receive a share 

of the 25-percent payment or 50-percent payment, as 

applicable, shall be effective for 2 fiscal years. 

‘‘(B) FULL FUNDING AMOUNT.—If a county elects to 

receive a share of the State payment or the county payment, the election shall be effective for all subsequent 

fiscal years through fiscal year 2011. 

‘‘(3) SOURCE OF PAYMENT AMOUNTS.—The payment to an 

eligible State or eligible county under this section for a fiscal 

year shall be derived from— 

‘‘(A) any amounts that are appropriated to carry out 

this Act; 

‘‘(B) any revenues, fees, penalties, or miscellaneous 

receipts, exclusive of deposits to any relevant trust fund, 

special account, or permanent operating funds, received 

by the Federal Government from activities by the Bureau 

of Land Management or the Forest Service on the 

applicable Federal land; and 

‘‘(C) to the extent of any shortfall, out of any amounts 

in the Treasury of the United States not otherwise appropriated. 

‘‘(c) DISTRIBUTION AND EXPENDITURE OF PAYMENTS.— 

‘‘(1) DISTRIBUTION METHOD.—A State that receives a payment under subsection (a) for Federal land described in section 

3(7)(A) shall distribute the appropriate payment amount among 

the appropriate counties in the State in accordance with— 

‘‘(A) the Act of May 23, 1908 (16 U.S.C. 500); and 


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‘‘(B) section 13 of the Act of March 1, 1911 (36 Stat. 

963; 16 U.S.C. 500). 

‘‘(2) EXPENDITURE PURPOSES.—Subject to subsection (d), 

payments received by a State under subsection (a) and distributed to counties in accordance with paragraph (1) shall be 

expended as required by the laws referred to in paragraph 

(1). 

‘‘(d) EXPENDITURE RULES FOR ELIGIBLE COUNTIES.— ‘‘(1) ALLOCATIONS.— ‘‘(A) USE OF PORTION IN SAME MANNER AS 25-PERCENT

PAYMENT OR 50-PERCENT PAYMENT, AS APPLICABLE.—Except 

as provided in paragraph (3)(B), if an eligible county elects 

to receive its share of the State payment or the county 

payment, not less than 80 percent, but not more than 

85 percent, of the funds shall be expended in the same 

manner in which the 25-percent payments or 50-percent 

payment, as applicable, are required to be expended. 

‘‘(B) ELECTION AS TO USE OF BALANCE.—Except as provided in subparagraph (C), an eligible county shall elect 

to do 1 or more of the following with the balance of any 

funds not expended pursuant to subparagraph (A): 

‘‘(i) Reserve any portion of the balance for projects 

in accordance with title II. 

‘‘(ii) Reserve not more than 7 percent of the total 

share for the eligible county of the State payment 

or the county payment for projects in accordance with 

title III. 

‘‘(iii) Return the portion of the balance not reserved 

under clauses (i) and (ii) to the Treasury of the United 

States. 

‘‘(C) COUNTIES WITH MODEST DISTRIBUTIONS.—In the 

case of each eligible county to which more than $100,000, 

but less than $350,000, is distributed for any fiscal year 

pursuant to either or both of paragraphs (1)(B) and (2)(B) 

of subsection (a), the eligible county, with respect to the 

balance of any funds not expended pursuant to subparagraph (A) for that fiscal year, shall— 

‘‘(i) reserve any portion of the balance for— 

‘‘(I) carrying out projects under title II; 

‘‘(II) carrying out projects under title III; or 

‘‘(III) a combination of the purposes described 

in subclauses (I) and (II); or 

‘‘(ii) return the portion of the balance not reserved 

under clause (i) to the Treasury of the United States. 

‘‘(2) DISTRIBUTION OF FUNDS.— 

‘‘(A) IN GENERAL.—Funds reserved by an eligible county 

under subparagraph (B)(i) or (C)(i) of paragraph (1) for 

carrying out projects under title II shall be deposited in 

a special account in the Treasury of the United States. 

‘‘(B) AVAILABILITY.—Amounts deposited under subparagraph (A) shall— 

‘‘(i) be available for expenditure by the Secretary 

concerned, without further appropriation; and 

‘‘(ii) remain available until expended in accordance 

with title II. 

‘‘(3) ELECTION.— ‘‘(A) NOTIFICATION.— 


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‘‘(i) IN GENERAL.—An eligible county shall notify 

the Secretary concerned of an election by the eligible 

county under this subsection not later than September 

30, 2008 (or as soon thereafter as the Secretary concerned determines is practicable), and each September 

30 thereafter for each succeeding fiscal year. 

‘‘(ii) FAILURE TO ELECT.—Except as provided in 

subparagraph (B), if the eligible county fails to make 

an election by the date specified in clause (i), the 

eligible county shall— 

‘‘(I) be considered to have elected to expend 

85 percent of the funds in accordance with paragraph (1)(A); and 

‘‘(II) return the balance to the Treasury of 

the United States. 

‘‘(B) COUNTIES WITH MINOR DISTRIBUTIONS.—In the case 

of each eligible county to which less than $100,000 is 

distributed for any fiscal year pursuant to either or both 

of paragraphs (1)(B) and (2)(B) of subsection (a), the eligible 

county may elect to expend all the funds in the same 

manner in which the 25-percent payments or 50-percent 

payments, as applicable, are required to be expended. 

‘‘(e) TIME FOR PAYMENT.—The payments required under this 

section for a fiscal year shall be made as soon as practicable 

after the end of that fiscal year. 

‘‘SEC. 103. TRANSITION PAYMENTS TO STATES. 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) ADJUSTED AMOUNT.—The term ‘adjusted amount’ 

means, with respect to a covered State— 

‘‘(A) for fiscal year 2008, 90 percent of— 

‘‘(i) the sum of the amounts paid for fiscal year 

2006 under section 102(a)(2) (as in effect on September 

29, 2006) for the eligible counties in the covered State 

that have elected under section 102(b) to receive a 

share of the State payment for fiscal year 2008; and 

‘‘(ii) the sum of the amounts paid for fiscal year 

2006 under section 103(a)(2) (as in effect on September 

29, 2006) for the eligible counties in the State of Oregon 

that have elected under section 102(b) to receive the 

county payment for fiscal year 2008; 

‘‘(B) for fiscal year 2009, 81 percent of— 

‘‘(i) the sum of the amounts paid for fiscal year 

2006 under section 102(a)(2) (as in effect on September 

29, 2006) for the eligible counties in the covered State 

that have elected under section 102(b) to receive a 

share of the State payment for fiscal year 2009; and 

‘‘(ii) the sum of the amounts paid for fiscal year 

2006 under section 103(a)(2) (as in effect on September 

29, 2006) for the eligible counties in the State of Oregon 

that have elected under section 102(b) to receive the 

county payment for fiscal year 2009; and 

‘‘(C) for fiscal year 2010, 73 percent of— 

‘‘(i) the sum of the amounts paid for fiscal year 

2006 under section 102(a)(2) (as in effect on September 

29, 2006) for the eligible counties in the covered State 

16 USC 7113. 


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that have elected under section 102(b) to receive a 

share of the State payment for fiscal year 2010; and 

‘‘(ii) the sum of the amounts paid for fiscal year 

2006 under section 103(a)(2) (as in effect on September 

29, 2006) for the eligible counties in the State of Oregon 

that have elected under section 102(b) to receive the 

county payment for fiscal year 2010. 

‘‘(2) COVERED STATE.—The term ‘covered State’ means each 

of the States of California, Louisiana, Oregon, Pennsylvania, 

South Carolina, South Dakota, Texas, and Washington. 

‘‘(b) TRANSITION PAYMENTS.—For each of fiscal years 2008 

through 2010, in lieu of the payment amounts that otherwise would 

have been made under paragraphs (1)(B) and (2)(B) of section 

102(a), the Secretary of the Treasury shall pay the adjusted amount 

to each covered State and the eligible counties within the covered 

State, as applicable. 

‘‘(c) DISTRIBUTION OF ADJUSTED AMOUNT.—Except as provided 

in subsection (d), it is the intent of Congress that the method 

of distributing the payments under subsection (b) among the counties in the covered States for each of fiscal years 2008 through 

2010 be in the same proportion that the payments were distributed 

to the eligible counties in fiscal year 2006. 

‘‘(d) DISTRIBUTION OF PAYMENTS IN CALIFORNIA.—The following 

payments shall be distributed among the eligible counties in the 

State of California in the same proportion that payments under 

section 102(a)(2) (as in effect on September 29, 2006) were distributed to the eligible counties for fiscal year 2006: 

‘‘(1) Payments to the State of California under subsection 

(b). 

‘‘(2) The shares of the eligible counties of the State payment 

for California under section 102 for fiscal year 2011. 

‘‘(e) TREATMENT OF PAYMENTS.—For purposes of this Act, any 

payment made under subsection (b) shall be considered to be a 

payment made under section 102(a). 

‘‘TITLE II—SPECIAL PROJECTS ON 

FEDERAL LAND 

‘‘SEC. 201. DEFINITIONS. 

‘‘In this title: 

‘‘(1) PARTICIPATING COUNTY.—The term ‘participating 

county’ means an eligible county that elects under section 

102(d) to expend a portion of the Federal funds received under 

section 102 in accordance with this title. 

‘‘(2) PROJECT FUNDS.—The term ‘project funds’ means all 

funds an eligible county elects under section 102(d) to reserve 

for expenditure in accordance with this title. 

‘‘(3) RESOURCE ADVISORY COMMITTEE.—The term ‘resource 

advisory committee’ means— 

‘‘(A) an advisory committee established by the Secretary concerned under section 205; or 

‘‘(B) an advisory committee determined by the Secretary concerned to meet the requirements of section 205. 

‘‘(4) RESOURCE MANAGEMENT PLAN.—The term ‘resource 

management plan’ means— 

16 USC 7121. 


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‘‘(A) a land use plan prepared by the Bureau of Land 

Management for units of the Federal land described in 

section 3(7)(B) pursuant to section 202 of the Federal Land 

Policy and Management Act of 1976 (43 U.S.C. 1712); or 

‘‘(B) a land and resource management plan prepared 

by the Forest Service for units of the National Forest 

System pursuant to section 6 of the Forest and Rangeland 

Renewable Resources Planning Act of 1974 (16 U.S.C. 

1604). 

‘‘SEC. 202. GENERAL LIMITATION ON USE OF PROJECT FUNDS. 

‘‘(a) LIMITATION.—Project funds shall be expended solely on 

projects that meet the requirements of this title. 

‘‘(b) AUTHORIZED USES.—Project funds may be used by the 

Secretary concerned for the purpose of entering into and implementing cooperative agreements with willing Federal agencies, 

State and local governments, private and nonprofit entities, and 

landowners for protection, restoration, and enhancement of fish 

and wildlife habitat, and other resource objectives consistent with 

the purposes of this Act on Federal land and on non-Federal land 

where projects would benefit the resources on Federal land. 

‘‘SEC. 203. SUBMISSION OF PROJECT PROPOSALS. 

‘‘(a) SUBMISSION OF PROJECT PROPOSALS TO SECRETARY CONCERNED.— 

‘‘(1) PROJECTS FUNDED USING PROJECT FUNDS.—Not later 

than September 30 for fiscal year 2008 (or as soon thereafter 

as the Secretary concerned determines is practicable), and each 

September 30 thereafter for each succeeding fiscal year through 

fiscal year 2011, each resource advisory committee shall submit 

to the Secretary concerned a description of any projects that 

the resource advisory committee proposes the Secretary undertake using any project funds reserved by eligible counties in 

the area in which the resource advisory committee has 

geographic jurisdiction. 

‘‘(2) PROJECTS FUNDED USING OTHER FUNDS.—A resource 

advisory committee may submit to the Secretary concerned 

a description of any projects that the committee proposes the 

Secretary undertake using funds from State or local governments, or from the private sector, other than project funds 

and funds appropriated and otherwise available to do similar 

work. 

‘‘(3) JOINT PROJECTS.—Participating counties or other persons may propose to pool project funds or other funds, described 

in paragraph (2), and jointly propose a project or group of 

projects to a resource advisory committee established under 

section 205. 

‘‘(b) REQUIRED DESCRIPTION OF PROJECTS.—In submitting proposed projects to the Secretary concerned under subsection (a), 

a resource advisory committee shall include in the description of 

each proposed project the following information: 

‘‘(1) The purpose of the project and a description of how 

the project will meet the purposes of this title. 

‘‘(2) The anticipated duration of the project. 

‘‘(3) The anticipated cost of the project. 

‘‘(4) The proposed source of funding for the project, whether 

project funds or other funds. 

Deadlines. 

16 USC 7123. 

16 USC 7122. 


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‘‘(5)(A) Expected outcomes, including how the project will 

meet or exceed desired ecological conditions, maintenance objectives, or stewardship objectives. 

‘‘(B) An estimate of the amount of any timber, forage, 

and other commodities and other economic activity, including 

jobs generated, if any, anticipated as part of the project. 

‘‘(6) A detailed monitoring plan, including funding needs 

and sources, that— 

‘‘(A) tracks and identifies the positive or negative 

impacts of the project, implementation, and provides for 

validation monitoring; and 

‘‘(B) includes an assessment of the following: 

‘‘(i) Whether or not the project met or exceeded 

desired ecological conditions; created local employment 

or training opportunities, including summer youth jobs 

programs such as the Youth Conservation Corps where 

appropriate. 

‘‘(ii) Whether the project improved the use of, or 

added value to, any products removed from land consistent with the purposes of this title. 

‘‘(7) An assessment that the project is to be in the public 

interest. 

‘‘(c) AUTHORIZED PROJECTS.—Projects proposed under subsection (a) shall be consistent with section 2. 

‘‘SEC. 204. EVALUATION AND APPROVAL OF PROJECTS BY SECRETARY 

CONCERNED. 

‘‘(a) CONDITIONS FOR APPROVAL OF PROPOSED PROJECT.—The 

Secretary concerned may make a decision to approve a project 

submitted by a resource advisory committee under section 203 

only if the proposed project satisfies each of the following conditions: 

‘‘(1) The project complies with all applicable Federal laws 

(including regulations). 

‘‘(2) The project is consistent with the applicable resource 

management plan and with any watershed or subsequent plan 

developed pursuant to the resource management plan and 

approved by the Secretary concerned. 

‘‘(3) The project has been approved by the resource advisory 

committee in accordance with section 205, including the procedures issued under subsection (e) of that section. 

‘‘(4) A project description has been submitted by the 

resource advisory committee to the Secretary concerned in 

accordance with section 203. 

‘‘(5) The project will improve the maintenance of existing 

infrastructure, implement stewardship objectives that enhance 

forest ecosystems, and restore and improve land health and 

water quality. 

‘‘(b) ENVIRONMENTAL REVIEWS.— 

‘‘(1) REQUEST FOR PAYMENT BY COUNTY.—The Secretary 

concerned may request the resource advisory committee submitting a proposed project to agree to the use of project funds 

to pay for any environmental review, consultation, or compliance with applicable environmental laws required in connection 

with the project. 

‘‘(2) CONDUCT OF ENVIRONMENTAL REVIEW.—If a payment 

is requested under paragraph (1) and the resource advisory 

committee agrees to the expenditure of funds for this purpose, 

16 USC 7124. 


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the Secretary concerned shall conduct environmental review, 

consultation, or other compliance responsibilities in accordance 

with Federal laws (including regulations). 

‘‘(3) EFFECT OF REFUSAL TO PAY.— ‘‘(A) IN GENERAL.—If a resource advisory committee 

does not agree to the expenditure of funds under paragraph 

(1), the project shall be deemed withdrawn from further 

consideration by the Secretary concerned pursuant to this 

title. 

‘‘(B) EFFECT OF WITHDRAWAL.—A withdrawal under 

subparagraph (A) shall be deemed to be a rejection of 

the project for purposes of section 207(c). 

‘‘(c) DECISIONS OF SECRETARY CONCERNED.— ‘‘(1) REJECTION OF PROJECTS.— ‘‘(A) IN GENERAL.—A decision by the Secretary concerned to reject a proposed project shall be at the sole 

discretion of the Secretary concerned. 

‘‘(B) NO ADMINISTRATIVE APPEAL OR JUDICIAL REVIEW.— 

Notwithstanding any other provision of law, a decision 

by the Secretary concerned to reject a proposed project 

shall not be subject to administrative appeal or judicial 

review. 

‘‘(C) NOTICE OF REJECTION.—Not later than 30 days 

after the date on which the Secretary concerned makes 

the rejection decision, the Secretary concerned shall notify 

in writing the resource advisory committee that submitted 

the proposed project of the rejection and the reasons for 

rejection. 

‘‘(2) NOTICE OF PROJECT APPROVAL.—The Secretary concerned shall publish in the Federal Register notice of each 

project approved under subsection (a) if the notice would be 

required had the project originated with the Secretary. 

‘‘(d) SOURCE AND CONDUCT OF PROJECT.—Once the Secretary 

concerned accepts a project for review under section 203, the acceptance shall be deemed a Federal action for all purposes. 

‘‘(e) IMPLEMENTATION OF APPROVED PROJECTS.— 

‘‘(1) COOPERATION.—Notwithstanding chapter 63 of title 31, 

United States Code, using project funds the Secretary concerned 

may enter into contracts, grants, and cooperative agreements 

with States and local governments, private and nonprofit entities, and landowners and other persons to assist the Secretary 

in carrying out an approved project. 

‘‘(2) BEST VALUE CONTRACTING.— 

‘‘(A) IN GENERAL.—For any project involving a contract 

authorized by paragraph (1) the Secretary concerned may 

elect a source for performance of the contract on a best 

value basis. 

‘‘(B) FACTORS.—The Secretary concerned shall determine best value based on such factors as— 

‘‘(i) the technical demands and complexity of the 

work to be done; 

‘‘(ii)(I) the ecological objectives of the project; and 

‘‘(II) the sensitivity of the resources being treated; 

‘‘(iii) the past experience by the contractor with 

the type of work being done, using the type of equipment proposed for the project, and meeting or 

exceeding desired ecological conditions; and 

Federal Register, 

publication. 

Deadline. 

Notification. 


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‘‘(iv) the commitment of the contractor to hiring 

highly qualified workers and local residents. 

‘‘(3) MERCHANTABLE TIMBER CONTRACTING PILOT PROGRAM.— 

‘‘(A) ESTABLISHMENT.—The Secretary concerned shall 

establish a pilot program to implement a certain percentage 

of approved projects involving the sale of merchantable 

timber using separate contracts for— 

‘‘(i) the harvesting or collection of merchantable 

timber; and 

‘‘(ii) the sale of the timber. 

‘‘(B) ANNUAL PERCENTAGES.—Under the pilot program, 

the Secretary concerned shall ensure that, on a nationwide 

basis, not less than the following percentage of all approved 

projects involving the sale of merchantable timber are 

implemented using separate contracts: 

‘‘(i) For fiscal year 2008, 35 percent. 

‘‘(ii) For fiscal year 2009, 45 percent. 

‘‘(iii) For each of fiscal years 2010 and 2011, 50 

percent. 

‘‘(C) INCLUSION IN PILOT PROGRAM.—The decision 

whether to use separate contracts to implement a project 

involving the sale of merchantable timber shall be made 

by the Secretary concerned after the approval of the project 

under this title. 

‘‘(D) ASSISTANCE.— 

‘‘(i) IN GENERAL.—The Secretary concerned may 

use funds from any appropriated account available to 

the Secretary for the Federal land to assist in the 

administration of projects conducted under the pilot 

program. 

‘‘(ii) MAXIMUM AMOUNT OF ASSISTANCE.—The total 

amount obligated under this subparagraph may not 

exceed $1,000,000 for any fiscal year during which 

the pilot program is in effect. 

‘‘(E) REVIEW AND REPORT.— 

‘‘(i) INITIAL REPORT.—Not later than September 

30, 2010, the Comptroller General shall submit to the 

Committees on Agriculture, Nutrition, and Forestry 

and Energy and Natural Resources of the Senate and 

the Committees on Agriculture and Natural Resources 

of the House of Representatives a report assessing 

the pilot program. 

‘‘(ii) ANNUAL REPORT.—The Secretary concerned 

shall submit to the Committees on Agriculture, Nutrition, and Forestry and Energy and Natural Resources 

of the Senate and the Committees on Agriculture and 

Natural Resources of the House of Representatives 

an annual report describing the results of the pilot 

program. 

‘‘(f) REQUIREMENTS FOR PROJECT FUNDS.—The Secretary shall 

ensure that at least 50 percent of all project funds be used for 

projects that are primarily dedicated— 

‘‘(1) to road maintenance, decommissioning, or obliteration; 

or 

‘‘(2) to restoration of streams and watersheds. 


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‘‘SEC. 205. RESOURCE ADVISORY COMMITTEES. 

‘‘(a) ESTABLISHMENT AND PURPOSE OF RESOURCE ADVISORY

COMMITTEES.— ‘‘(1) ESTABLISHMENT.—The Secretary concerned shall establish and maintain resource advisory committees to perform 

the duties in subsection (b), except as provided in paragraph 

(4). 

‘‘(2) PURPOSE.—The purpose of a resource advisory committee shall be— 

‘‘(A) to improve collaborative relationships; and 

‘‘(B) to provide advice and recommendations to the 

land management agencies consistent with the purposes 

of this title. 

‘‘(3) ACCESS TO RESOURCE ADVISORY COMMITTEES.—To 

ensure that each unit of Federal land has access to a resource 

advisory committee, and that there is sufficient interest in 

participation on a committee to ensure that membership can 

be balanced in terms of the points of view represented and 

the functions to be performed, the Secretary concerned may, 

establish resource advisory committees for part of, or 1 or 

more, units of Federal land. 

‘‘(4) EXISTING ADVISORY COMMITTEES.— 

‘‘(A) IN GENERAL.—An advisory committee that meets 

the requirements of this section, a resource advisory committee established before September 29, 2006, or an 

advisory committee determined by the Secretary concerned 

before September 29, 2006, to meet the requirements of 

this section may be deemed by the Secretary concerned 

to be a resource advisory committee for the purposes of 

this title. 

‘‘(B) CHARTER.—A charter for a committee described 

in subparagraph (A) that was filed on or before September 

29, 2006, shall be considered to be filed for purposes of 

this Act. 

‘‘(C) BUREAU OF LAND MANAGEMENT ADVISORY COMMITTEES.—The Secretary of the Interior may deem a resource 

advisory committee meeting the requirements of subpart 

1784 of part 1780 of title 43, Code of Federal Regulations, 

as a resource advisory committee for the purposes of this 

title. 

‘‘(b) DUTIES.—A resource advisory committee shall— 

‘‘(1) review projects proposed under this title by participating counties and other persons; 

‘‘(2) propose projects and funding to the Secretary concerned 

under section 203; 

‘‘(3) provide early and continuous coordination with appropriate land management agency officials in recommending 

projects consistent with purposes of this Act under this title; 

‘‘(4) provide frequent opportunities for citizens, organizations, tribes, land management agencies, and other interested 

parties to participate openly and meaningfully, beginning at 

the early stages of the project development process under this 

title; 

‘‘(5)(A) monitor projects that have been approved under 

section 204; and 

‘‘(B) advise the designated Federal official on the progress 

of the monitoring efforts under subparagraph (A); and 

16 USC 7125. 


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‘‘(6) make recommendations to the Secretary concerned for 

any appropriate changes or adjustments to the projects being 

monitored by the resource advisory committee. 

‘‘(c) APPOINTMENT BY THE SECRETARY.— 

‘‘(1) APPOINTMENT AND TERM.— 

‘‘(A) IN GENERAL.—The Secretary concerned, shall 

appoint the members of resource advisory committees for 

a term of 4 years beginning on the date of appointment. 

‘‘(B) REAPPOINTMENT.—The Secretary concerned may 

reappoint members to subsequent 4-year terms. 

‘‘(2) BASIC REQUIREMENTS.—The Secretary concerned shall 

ensure that each resource advisory committee established meets 

the requirements of subsection (d). 

‘‘(3) INITIAL APPOINTMENT.—Not later than 180 days after 

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

shall make initial appointments to the resource advisory 

committees. 

‘‘(4) VACANCIES.—The Secretary concerned shall make 

appointments to fill vacancies on any resource advisory committee as soon as practicable after the vacancy has occurred. 

‘‘(5) COMPENSATION.—Members of the resource advisory 

committees shall not receive any compensation. 

‘‘(d) COMPOSITION OF ADVISORY COMMITTEE.— 

‘‘(1) NUMBER.—Each resource advisory committee shall be 

comprised of 15 members. 

‘‘(2) COMMUNITY INTERESTS REPRESENTED.—Committee 

members shall be representative of the interests of the following 

3 categories: 

‘‘(A) 5 persons that— 

‘‘(i) represent organized labor or non-timber forest 

product harvester groups; 

‘‘(ii) represent developed outdoor recreation, off 

highway vehicle users, or commercial recreation activities; 

‘‘(iii) represent— 

‘‘(I) energy and mineral development interests; 

or 

‘‘(II) commercial or recreational fishing 

interests; 

‘‘(iv) represent the commercial timber industry; or 

‘‘(v) hold Federal grazing or other land use permits, 

or represent nonindustrial private forest land owners, 

within the area for which the committee is organized. 

‘‘(B) 5 persons that represent— 

‘‘(i) nationally recognized environmental organizations; 

‘‘(ii) regionally or locally recognized environmental 

organizations; 

‘‘(iii) dispersed recreational activities; 

‘‘(iv) archaeological and historical interests; or 

‘‘(v) nationally or regionally recognized wild horse 

and burro interest groups, wildlife or hunting organizations, or watershed associations. 

‘‘(C) 5 persons that— 

‘‘(i) hold State elected office (or a designee); 

‘‘(ii) hold county or local elected office; 

Deadline. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3907 

‘‘(iii) represent American Indian tribes within or 

adjacent to the area for which the committee is organized; 

‘‘(iv) are school officials or teachers; or 

‘‘(v) represent the affected public at large. 

‘‘(3) BALANCED REPRESENTATION.—In appointing committee 

members from the 3 categories in paragraph (2), the Secretary 

concerned shall provide for balanced and broad representation 

from within each category. 

‘‘(4) GEOGRAPHIC DISTRIBUTION.—The members of a 

resource advisory committee shall reside within the State in 

which the committee has jurisdiction and, to extent practicable, 

the Secretary concerned shall ensure local representation in 

each category in paragraph (2). 

‘‘(5) CHAIRPERSON.—A majority on each resource advisory 

committee shall select the chairperson of the committee. 

‘‘(e) APPROVAL PROCEDURES.— 

‘‘(1) IN GENERAL.—Subject to paragraph (3), each resource 

advisory committee shall establish procedures for proposing 

projects to the Secretary concerned under this title. 

‘‘(2) QUORUM.—A quorum must be present to constitute 

an official meeting of the committee. 

‘‘(3) APPROVAL BY MAJORITY OF MEMBERS.—A project may 

be proposed by a resource advisory committee to the Secretary 

concerned under section 203(a), if the project has been approved 

by a majority of members of the committee from each of the 

3 categories in subsection (d)(2). 

‘‘(f) OTHER COMMITTEE AUTHORITIES AND REQUIREMENTS.— 

‘‘(1) STAFF ASSISTANCE.—A resource advisory committee 

may submit to the Secretary concerned a request for periodic 

staff assistance from Federal employees under the jurisdiction 

of the Secretary. 

‘‘(2) MEETINGS.—All meetings of a resource advisory committee shall be announced at least 1 week in advance in a 

local newspaper of record and shall be open to the public. 

‘‘(3) RECORDS.—A resource advisory committee shall maintain records of the meetings of the committee and make the 

records available for public inspection. 

‘‘SEC. 206. USE OF PROJECT FUNDS. 

‘‘(a) AGREEMENT REGARDING SCHEDULE AND COST OF

PROJECT.— 

‘‘(1) AGREEMENT BETWEEN PARTIES.—The Secretary concerned may carry out a project submitted by a resource advisory 

committee under section 203(a) using project funds or other 

funds described in section 203(a)(2), if, as soon as practicable 

after the issuance of a decision document for the project and 

the exhaustion of all administrative appeals and judicial review 

of the project decision, the Secretary concerned and the resource 

advisory committee enter into an agreement addressing, at 

a minimum, the following: 

‘‘(A) The schedule for completing the project. 

‘‘(B) The total cost of the project, including the level 

of agency overhead to be assessed against the project. 

‘‘(C) For a multiyear project, the estimated cost of 

the project for each of the fiscal years in which it will 

be carried out. 

16 USC 7126. 


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122 STAT. 3908 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(D) The remedies for failure of the Secretary concerned 

to comply with the terms of the agreement consistent with 

current Federal law. 

‘‘(2) LIMITED USE OF FEDERAL FUNDS.—The Secretary concerned may decide, at the sole discretion of the Secretary concerned, to cover the costs of a portion of an approved project 

using Federal funds appropriated or otherwise available to 

the Secretary for the same purposes as the project. 

‘‘(b) TRANSFER OF PROJECT FUNDS.— ‘‘(1) INITIAL TRANSFER REQUIRED.—As soon as practicable 

after the agreement is reached under subsection (a) with regard 

to a project to be funded in whole or in part using project 

funds, or other funds described in section 203(a)(2), the Secretary concerned shall transfer to the applicable unit of 

National Forest System land or Bureau of Land Management 

District an amount of project funds equal to— 

‘‘(A) in the case of a project to be completed in a 

single fiscal year, the total amount specified in the agreement to be paid using project funds, or other funds 

described in section 203(a)(2); or 

‘‘(B) in the case of a multiyear project, the amount 

specified in the agreement to be paid using project funds, 

or other funds described in section 203(a)(2) for the first 

fiscal year. 

‘‘(2) CONDITION ON PROJECT COMMENCEMENT.—The unit of 

National Forest System land or Bureau of Land Management 

District concerned, shall not commence a project until the 

project funds, or other funds described in section 203(a)(2) 

required to be transferred under paragraph (1) for the project, 

have been made available by the Secretary concerned. 

‘‘(3) SUBSEQUENT TRANSFERS FOR MULTIYEAR PROJECTS.— 

‘‘(A) IN GENERAL.—For the second and subsequent fiscal 

years of a multiyear project to be funded in whole or 

in part using project funds, the unit of National Forest 

System land or Bureau of Land Management District concerned shall use the amount of project funds required to 

continue the project in that fiscal year according to the 

agreement entered into under subsection (a). 

‘‘(B) SUSPENSION OF WORK.—The Secretary concerned 

shall suspend work on the project if the project funds 

required by the agreement in the second and subsequent 

fiscal years are not available. 

‘‘SEC. 207. AVAILABILITY OF PROJECT FUNDS. 

‘‘(a) SUBMISSION OF PROPOSED PROJECTS TO OBLIGATE FUNDS.— 

By September 30, 2008 (or as soon thereafter as the Secretary 

concerned determines is practicable), and each September 30 thereafter for each succeeding fiscal year through fiscal year 2011, a 

resource advisory committee shall submit to the Secretary concerned 

pursuant to section 203(a)(1) a sufficient number of project proposals 

that, if approved, would result in the obligation of at least the 

full amount of the project funds reserved by the participating county 

in the preceding fiscal year. 

‘‘(b) USE OR TRANSFER OF UNOBLIGATED FUNDS.—Subject to 

section 208, if a resource advisory committee fails to comply with 

subsection (a) for a fiscal year, any project funds reserved by the 

participating county in the preceding fiscal year and remaining 

16 USC 7127. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3909 

unobligated shall be available for use as part of the project submissions in the next fiscal year. 

‘‘(c) EFFECT OF REJECTION OF PROJECTS.—Subject to section 

208, any project funds reserved by a participating county in the 

preceding fiscal year that are unobligated at the end of a fiscal 

year because the Secretary concerned has rejected one or more 

proposed projects shall be available for use as part of the project 

submissions in the next fiscal year. 

‘‘(d) EFFECT OF COURT ORDERS.— ‘‘(1) IN GENERAL.—If an approved project under this Act 

is enjoined or prohibited by a Federal court, the Secretary 

concerned shall return the unobligated project funds related 

to the project to the participating county or counties that 

reserved the funds. 

‘‘(2) EXPENDITURE OF FUNDS.—The returned funds shall 

be available for the county to expend in the same manner 

as the funds reserved by the county under subparagraph (B) 

or (C)(i) of section 102(d)(1). 

‘‘SEC. 208. TERMINATION OF AUTHORITY. 

‘‘(a) IN GENERAL.—The authority to initiate projects under this 

title shall terminate on September 30, 2011. 

‘‘(b) DEPOSITS IN TREASURY.—Any project funds not obligated 

by September 30, 2012, shall be deposited in the Treasury of the 

United States. 

‘‘TITLE III—COUNTY FUNDS 

‘‘SEC. 301. DEFINITIONS. 

‘‘In this title: 

‘‘(1) COUNTY FUNDS.—The term ‘county funds’ means all 

funds an eligible county elects under section 102(d) to reserve 

for expenditure in accordance with this title. 

‘‘(2) PARTICIPATING COUNTY.—The term ‘participating 

county’ means an eligible county that elects under section 

102(d) to expend a portion of the Federal funds received under 

section 102 in accordance with this title. 

‘‘SEC. 302. USE. 

‘‘(a) AUTHORIZED USES.—A participating county, including any 

applicable agencies of the participating county, shall use county 

funds, in accordance with this title, only— 

‘‘(1) to carry out activities under the Firewise Communities 

program to provide to homeowners in fire-sensitive ecosystems 

education on, and assistance with implementing, techniques 

in home siting, home construction, and home landscaping that 

can increase the protection of people and property from 

wildfires; 

‘‘(2) to reimburse the participating county for search and 

rescue and other emergency services, including firefighting, 

that are— 

‘‘(A) performed on Federal land after the date on which 

the use was approved under subsection (b); 

‘‘(B) paid for by the participating county; and 

‘‘(3) to develop community wildfire protection plans in 

coordination with the appropriate Secretary concerned. 

16 USC 7142. 

16 USC 7141. 

16 USC 7128. 


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122 STAT. 3910 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(b) PROPOSALS.—A participating county shall use county funds 

for a use described in subsection (a) only after a 45-day public 

comment period, at the beginning of which the participating county 

shall— 

‘‘(1) publish in any publications of local record a proposal 

that describes the proposed use of the county funds; and 

‘‘(2) submit the proposal to any resource advisory committee 

established under section 205 for the participating county. 

‘‘SEC. 303. CERTIFICATION. 

‘‘(a) IN GENERAL.—Not later than February 1 of the year after 

the year in which any county funds were expended by a participating county, the appropriate official of the participating county 

shall submit to the Secretary concerned a certification that the 

county funds expended in the applicable year have been used for 

the uses authorized under section 302(a), including a description 

of the amounts expended and the uses for which the amounts 

were expended. 

‘‘(b) REVIEW.—The Secretary concerned shall review the certifications submitted under subsection (a) as the Secretary concerned 

determines to be appropriate. 

‘‘SEC. 304. TERMINATION OF AUTHORITY. 

‘‘(a) IN GENERAL.—The authority to initiate projects under this 

title terminates on September 30, 2011. 

‘‘(b) AVAILABILITY.—Any county funds not obligated by September 30, 2012, shall be returned to the Treasury of the United 

States. 

‘‘TITLE IV—MISCELLANEOUS 

PROVISIONS 

‘‘SEC. 401. REGULATIONS. 

‘‘The Secretary of Agriculture and the Secretary of the Interior 

shall issue regulations to carry out the purposes of this Act. 

‘‘SEC. 402. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated such sums as are 

necessary to carry out this Act for each of fiscal years 2008 through 

2011. 

‘‘SEC. 403. TREATMENT OF FUNDS AND REVENUES. 

‘‘(a) RELATION TO OTHER APPROPRIATIONS.—Funds made available under section 402 and funds made available to a Secretary 

concerned under section 206 shall be in addition to any other 

annual appropriations for the Forest Service and the Bureau of 

Land Management. 

‘‘(b) DEPOSIT OF REVENUES AND OTHER FUNDS.—All revenues 

generated from projects pursuant to title II, including any interest 

accrued from the revenues, shall be deposited in the Treasury 

of the United States.’’. 

(b) FOREST RECEIPT PAYMENTS TO ELIGIBLE STATES AND COUNTIES.— 

(1) ACT OF MAY 23, 1908.—The sixth paragraph under the 

heading ‘‘FOREST SERVICE’’ in the Act of May 23, 1908 (16 

U.S.C. 500) is amended in the first sentence by striking 

‘‘twenty-five percentum’’ and all that follows through ‘‘shall 

16 USC 7153. 

16 USC 7152. 

16 USC 7151. 

16 USC 7144. 

Deadline. 

16 USC 7143. 

Publication. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3911 

be paid’’ and inserting the following: ‘‘an amount equal to 

the annual average of 25 percent of all amounts received for 

the applicable fiscal year and each of the preceding 6 fiscal 

years from each national forest shall be paid’’. 

(2) WEEKS LAW.—Section 13 of the Act of March 1, 1911 

(commonly known as the ‘‘Weeks Law’’) (16 U.S.C. 500) is 

amended in the first sentence by striking ‘‘twenty-five 

percentum’’ and all that follows through ‘‘shall be paid’’ and 

inserting the following: ‘‘an amount equal to the annual average 

of 25 percent of all amounts received for the applicable fiscal 

year and each of the preceding 6 fiscal years from each national 

forest shall be paid’’. 

(c) PAYMENTS IN LIEU OF TAXES.— 

(1) IN GENERAL.—Section 6906 of title 31, United States 

Code, is amended to read as follows: 

‘‘§ 6906. Funding 

‘‘For each of fiscal years 2008 through 2012— 

‘‘(1) each county or other eligible unit of local government 

shall be entitled to payment under this chapter; and 

‘‘(2) sums shall be made available to the Secretary of the 

Interior for obligation or expenditure in accordance with this 

chapter.’’. 

(2) CONFORMING AMENDMENT.—The table of sections for 

chapter 69 of title 31, United States Code, is amended by 

striking the item relating to section 6906 and inserting the 

following: 

‘‘6906. Funding.’’. 

(3) BUDGET SCOREKEEPING.— (A) IN GENERAL.—Notwithstanding the Budget 

Scorekeeping Guidelines and the accompanying list of programs and accounts set forth in the joint explanatory statement of the committee of conference accompanying Conference Report 105–217, the section in this title regarding 

Payments in Lieu of Taxes shall be treated in the baseline 

for purposes of section 257 of the Balanced Budget and 

Emergency Deficit Control Act of 1985 (as in effect prior 

to September 30, 2002), and by the Chairmen of the House 

and Senate Budget Committees, as appropriate, for purposes of budget enforcement in the House and Senate, 

and under the Congressional Budget Act of 1974 as if 

Payment in Lieu of Taxes (14–1114–0–1–806) were an 

account designated as Appropriated Entitlements and 

Mandatories for Fiscal Year 1997 in the joint explanatory 

statement of the committee of conference accompanying 

Conference Report 105–217. 

(B) EFFECTIVE DATE.—This paragraph shall remain in 

effect for the fiscal years to which the entitlement in section 

6906 of title 31, United States Code (as amended by paragraph (1)), applies. 

SEC. 602. TRANSFER TO ABANDONED MINE RECLAMATION FUND. 

Subparagraph (C) of section 402(i)(1) of the Surface Mining 

Control and Reclamation Act of 1977 (30 U.S.C. 1232(i)(1)) is 

amended by striking ‘‘and $9,000,000 on October 1, 2009’’ and 


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122 STAT. 3912 PUBLIC LAW 110–343—OCT. 3, 2008 

inserting ‘‘$9,000,000 on October 1, 2009, and $9,000,000 on October 

1, 2010’’. 

TITLE VII—DISASTER RELIEF 

Subtitle A—Heartland and Hurricane Ike 

Disaster Relief 

SEC. 701. SHORT TITLE. 

This subtitle may be cited as the ‘‘Heartland Disaster Tax 

Relief Act of 2008’’. 

SEC. 702. TEMPORARY TAX RELIEF FOR AREAS DAMAGED BY 2008 MIDWESTERN SEVERE STORMS, TORNADOS, AND FLOODING. 

(a) IN GENERAL.—Subject to the modifications described in this 

section, the following provisions of or relating to the Internal Revenue Code of 1986 shall apply to any Midwestern disaster area 

in addition to the areas to which such provisions otherwise apply: 

(1) GO ZONE BENEFITS.— 

(A) Section 1400N (relating to tax benefits) other than 

subsections (b), (d), (e), (i), (j), (m), and (o) thereof. 

(B) Section 1400O (relating to education tax benefits). 

(C) Section 1400P (relating to housing tax benefits). 

(D) Section 1400Q (relating to special rules for use 

of retirement funds). 

(E) Section 1400R(a) (relating to employee retention 

credit for employers). 

(F) Section 1400S (relating to additional tax relief) 

other than subsection (d) thereof. 

(G) Section 1400T (relating to special rules for mortgage revenue bonds). 

(2) OTHER BENEFITS INCLUDED IN KATRINA EMERGENCY TAX

RELIEF ACT OF 2005.—Sections 302, 303, 304, 401, and 405 

of the Katrina Emergency Tax Relief Act of 2005. 

(b) MIDWESTERN DISASTER AREA.— 

(1) IN GENERAL.—For purposes of this section and for 

applying the substitutions described in subsections (d) and 

(e), the term ‘‘Midwestern disaster area’’ means an area— 

(A) with respect to which a major disaster has been 

declared by the President on or after May 20, 2008, and 

before August 1, 2008, under section 401 of the Robert 

T. Stafford Disaster Relief and Emergency Assistance Act 

by reason of severe storms, tornados, or flooding occurring 

in any of the States of Arkansas, Illinois, Indiana, Iowa, 

Kansas, Michigan, Minnesota, Missouri, Nebraska, and 

Wisconsin, and 

(B) determined by the President to warrant individual 

or individual and public assistance from the Federal 

Government under such Act with respect to damages attributable to such severe storms, tornados, or flooding. 

(2) CERTAIN BENEFITS AVAILABLE TO AREAS ELIGIBLE ONLY

FOR PUBLIC ASSISTANCE.—For purposes of applying this section 

to benefits under the following provisions, paragraph (1) shall 

be applied without regard to subparagraph (B): 

Applicability. 

Applicability. 

26 USC 1 note. 

Heartland 

Disaster Tax 

Relief Act 

of 2008. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3913 

(A) Sections 1400Q, 1400S(b), and 1400S(d) of the 

Internal Revenue Code of 1986. 

(B) Sections 302, 401, and 405 of the Katrina Emergency Tax Relief Act of 2005. 

(c) REFERENCES.— (1) AREA.—Any reference in such provisions to the Hurricane Katrina disaster area or the Gulf Opportunity Zone shall 

be treated as a reference to any Midwestern disaster area 

and any reference to the Hurricane Katrina disaster area or 

the Gulf Opportunity Zone within a State shall be treated 

as a reference to all Midwestern disaster areas within the 

State. 

(2) ITEMS ATTRIBUTABLE TO DISASTER.—Any reference in 

such provisions to any loss, damage, or other item attributable 

to Hurricane Katrina shall be treated as a reference to any 

loss, damage, or other item attributable to the severe storms, 

tornados, or flooding giving rise to any Presidential declaration 

described in subsection (b)(1)(A). 

(3) APPLICABLE DISASTER DATE.—For purposes of applying 

the substitutions described in subsections (d) and (e), the term 

‘‘applicable disaster date’’ means, with respect to any Midwestern disaster area, the date on which the severe storms, 

tornados, or flooding giving rise to the Presidential declaration 

described in subsection (b)(1)(A) occurred. 

(d) MODIFICATIONS TO 1986 CODE.—The following provisions 

of the Internal Revenue Code of 1986 shall be applied with the 

following modifications: 

(1) TAX-EXEMPT BOND FINANCING.—Section 1400N(a)— 

(A) by substituting ‘‘qualified Midwestern disaster area 

bond’’ for ‘‘qualified Gulf Opportunity Zone Bond’’ each 

place it appears, except that in determining whether a 

bond is a qualified Midwestern disaster area bond— 

(i) paragraph (2)(A)(i) shall be applied by only 

treating costs as qualified project costs if— 

(I) in the case of a project involving a private 

business use (as defined in section 141(b)(6)), 

either the person using the property suffered a 

loss in a trade or business attributable to the 

severe storms, tornados, or flooding giving rise 

to any Presidential declaration described in subsection (b)(1)(A) or is a person designated for purposes of this section by the Governor of the State 

in which the project is located as a person carrying 

on a trade or business replacing a trade or business 

with respect to which another person suffered such 

a loss, and 

(II) in the case of a project relating to public 

utility property, the project involves repair or 

reconstruction of public utility property damaged 

by such severe storms, tornados, or flooding, and 

(ii) paragraph (2)(A)(ii) shall be applied by treating 

an issue as a qualified mortgage issue only if 95 percent 

or more of the net proceeds (as defined in section 

150(a)(3)) of the issue are to be used to provide 

financing for mortgagors who suffered damages to their 

principal residences attributable to such severe storms, 

tornados, or flooding. 

Applicability. 


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122 STAT. 3914 PUBLIC LAW 110–343—OCT. 3, 2008 

(B) by substituting ‘‘any State in which a Midwestern 

disaster area is located’’ for ‘‘the State of Alabama, Louisiana, or Mississippi’’ in paragraph (2)(B), 

(C) by substituting ‘‘designated for purposes of this 

section (on the basis of providing assistance to areas in 

the order in which such assistance is most needed)’’ for 

‘‘designated for purposes of this section’’ in paragraph 

(2)(C), 

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

1, 2011’’ in paragraph (2)(D), 

(E) in paragraph (3)(A)— 

(i) by substituting ‘‘$1,000’’ for ‘‘$2,500’’, and 

(ii) by substituting ‘‘before the earliest applicable 

disaster date for Midwestern disaster areas within the 

State’’ for ‘‘before August 28, 2005’’, 

(F) by substituting ‘‘qualified Midwestern disaster area 

repair or construction’’ for ‘‘qualified GO Zone repair or 

construction’’ each place it appears, 

(G) by substituting ‘‘after the date of the enactment 

of the Heartland Disaster Tax Relief Act of 2008 and before 

January 1, 2013’’ for ‘‘after the date of the enactment 

of this paragraph and before January 1, 2011’’ in paragraph 

(7)(C), and 

(H) by disregarding paragraph (8) thereof. 

(2) LOW-INCOME HOUSING CREDIT.—Section 1400N(c)— 

(A) only with respect to calendar years 2008, 2009, 

and 2010, 

(B) by substituting ‘‘Disaster Recovery Assistance 

housing amount’’ for ‘‘Gulf Opportunity housing amount’’ 

each place it appears, 

(C) in paragraph (1)(B)— 

(i) by substituting ‘‘$8.00’’ for ‘‘$18.00’’, and 

(ii) by substituting ‘‘before the earliest applicable 

disaster date for Midwestern disaster areas within the 

State’’ for ‘‘before August 28, 2005’’, and 

(D) determined without regard to paragraphs (2), (3), 

(4), (5), and (6) thereof. 

(3) EXPENSING FOR CERTAIN DEMOLITION AND CLEAN-UP

COSTS.—Section 1400N(f)— 

(A) by substituting ‘‘qualified Disaster Recovery Assistance clean-up cost’’ for ‘‘qualified Gulf Opportunity Zone 

clean-up cost’’ each place it appears, 

(B) by substituting ‘‘beginning on the applicable disaster date and ending on December 31, 2010’’ for ‘‘beginning 

on August 28, 2005, and ending on December 31, 2007’’ 

in paragraph (2), and 

(C) by treating costs as qualified Disaster Recovery 

Assistance clean-up costs only if the removal of debris 

or demolition of any structure was necessary due to damage 

attributable to the severe storms, tornados, or flooding 

giving rise to any Presidential declaration described in 

subsection (b)(1)(A). 

(4) EXTENSION OF EXPENSING FOR ENVIRONMENTAL REMEDIATION COSTS.—Section 1400N(g)— 

(A) by substituting ‘‘the applicable disaster date’’ for 

‘‘August 28, 2005’’ each place it appears, 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3915 

(B) by substituting ‘‘January 1, 2011’’ for ‘‘January 

1, 2008’’ in paragraph (1), 

(C) by substituting ‘‘December 31, 2010’’ for ‘‘December 

31, 2007’’ in paragraph (1), and 

(D) by treating a site as a qualified contaminated site 

only if the release (or threat of release) or disposal of 

a hazardous substance at the site was attributable to the 

severe storms, tornados, or flooding giving rise to any Presidential declaration described in subsection (b)(1)(A). 

(5) INCREASE IN REHABILITATION CREDIT.—Section 

1400N(h), as amended by this Act— 

(A) by substituting ‘‘the applicable disaster date’’ for 

‘‘August 28, 2005’’, 

(B) by substituting ‘‘December 31, 2011’’ for ‘‘December 

31, 2009’’ in paragraph (1), and 

(C) by only applying such subsection to qualified 

rehabilitation expenditures with respect to any building 

or structure which was damaged or destroyed as a result 

of the severe storms, tornados, or flooding giving rise to 

any Presidential declaration described in subsection 

(b)(1)(A). 

(6) TREATMENT OF NET OPERATING LOSSES ATTRIBUTABLE

TO DISASTER LOSSES.—Section 1400N(k)— 

(A) by substituting ‘‘qualified Disaster Recovery Assistance loss’’ for ‘‘qualified Gulf Opportunity Zone loss’’ each 

place it appears, 

(B) by substituting ‘‘after the day before the applicable 

disaster date, and before January 1, 2011’’ for ‘‘after August 

27, 2005, and before January 1, 2008’’ each place it appears, 

(C) by substituting ‘‘the applicable disaster date’’ for 

‘‘August 28, 2005’’ in paragraph (2)(B)(ii)(I), 

(D) by substituting ‘‘qualified Disaster Recovery Assistance property’’ for ‘‘qualified Gulf Opportunity Zone property’’ in paragraph (2)(B)(iv), and 

(E) by substituting ‘‘qualified Disaster Recovery Assistance casualty loss’’ for ‘‘qualified Gulf Opportunity Zone 

casualty loss’’ each place it appears. 

(7) CREDIT TO HOLDERS OF TAX CREDIT BONDS.—Section 

1400N(l)— 

(A) by substituting ‘‘Midwestern tax credit bond’’ for 

‘‘Gulf tax credit bond’’ each place it appears, 

(B) by substituting ‘‘any State in which a Midwestern 

disaster area is located or any instrumentality of the State’’ 

for ‘‘the State of Alabama, Louisiana, or Mississippi’’ in 

paragraph (4)(A)(i), 

(C) by substituting ‘‘after December 31, 2008 and before 

January 1, 2010’’ for ‘‘after December 31, 2005, and before 

January 1, 2007’’, 

(D) by substituting ‘‘shall not exceed $100,000,000 for 

any State with an aggregate population located in all Midwestern disaster areas within the State of at least 

2,000,000, $50,000,000 for any State with an aggregate 

population located in all Midwestern disaster areas within 

the State of at least 1,000,000 but less than 2,000,000, 

and zero for any other State. The population of a State 

within any area shall be determined on the basis of the 

most recent census estimate of resident population released 


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122 STAT. 3916 PUBLIC LAW 110–343—OCT. 3, 2008 

by the Bureau of Census before the earliest applicable 

disaster date for Midwestern disaster areas within the 

State.’’ for ‘‘shall not exceed’’ and all that follows in paragraph (4)(C), and 

(E) by substituting ‘‘the earliest applicable disaster 

date for Midwestern disaster areas within the State’’ for 

‘‘August 28, 2005’’ in paragraph (5)(A). 

(8) EDUCATION TAX BENEFITS.—Section 1400O, by substituting ‘‘2008 or 2009’’ for ‘‘2005 or 2006’’. 

(9) HOUSING TAX BENEFITS.—Section 1400P, by substituting 

‘‘the applicable disaster date’’ for ‘‘August 28, 2005’’ in subsection (c)(1). 

(10) SPECIAL RULES FOR USE OF RETIREMENT FUNDS.—Section 1400Q— 

(A) by substituting ‘‘qualified Disaster Recovery Assistance distribution’’ for ‘‘qualified hurricane distribution’’ 

each place it appears, 

(B) by substituting ‘‘on or after the applicable disaster 

date and before January 1, 2010’’ for ‘‘on or after August 

25, 2005, and before January 1, 2007’’ in subsection 

(a)(4)(A)(i), 

(C) by substituting ‘‘the applicable disaster date’’ for 

‘‘August 28, 2005’’ in subsections (a)(4)(A)(i) and (c)(3)(B), 

(D) by disregarding clauses (ii) and (iii) of subsection 

(a)(4)(A) thereof, 

(E) by substituting ‘‘qualified storm damage distribution’’ for ‘‘qualified Katrina distribution’’ each place it 

appears, 

(F) by substituting ‘‘after the date which is 6 months 

before the applicable disaster date and before the date 

which is the day after the applicable disaster date’’ for 

‘‘after February 28, 2005, and before August 29, 2005’’ 

in subsection (b)(2)(B)(ii), 

(G) by substituting ‘‘the Midwestern disaster area, but 

not so purchased or constructed on account of severe 

storms, tornados, or flooding giving rise to the designation 

of the area as a disaster area’’ for ‘‘the Hurricane Katrina 

disaster area, but not so purchased or constructed on 

account of Hurricane Katrina’’ in subsection (b)(2)(B)(iii), 

(H) by substituting ‘‘beginning on the applicable disaster date and ending on the date which is 5 months 

after the date of the enactment of the Heartland Disaster 

Tax Relief Act of 2008’’ for ‘‘beginning on August 25, 2005, 

and ending on February 28, 2006’’ in subsection (b)(3)(A), 

(I) by substituting ‘‘qualified storm damage individual’’ 

for ‘‘qualified Hurricane Katrina individual’’ each place it 

appears, 

(J) by substituting ‘‘December 31, 2009’’ for ‘‘December 

31, 2006’’ in subsection (c)(2)(A), 

(K) by disregarding subparagraphs (C) and (D) of subsection (c)(3) thereof, 

(L) by substituting ‘‘beginning on the date of the enactment of the Heartland Disaster Tax Relief Act of 2008 

and ending on December 31, 2009’’ for ‘‘beginning on September 24, 2005, and ending on December 31, 2006’’ in 

subsection (c)(4)(A)(i), 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3917 

(M) by substituting ‘‘the applicable disaster date’’ for 

‘‘August 25, 2005’’ in subsection (c)(4)(A)(ii), and 

(N) by substituting ‘‘January 1, 2010’’ for ‘‘January 

1, 2007’’ in subsection (d)(2)(A)(ii). 

(11) EMPLOYEE RETENTION CREDIT FOR EMPLOYERS

AFFECTED BY SEVERE STORMS, TORNADOS, AND FLOODING.—Section 1400R(a)— 

(A) by substituting ‘‘the applicable disaster date’’ for 

‘‘August 28, 2005’’ each place it appears, 

(B) by substituting ‘‘January 1, 2009’’ for ‘‘January 

1, 2006’’ both places it appears, and 

(C) only with respect to eligible employers who 

employed an average of not more than 200 employees on 

business days during the taxable year before the applicable 

disaster date. 

(12) TEMPORARY SUSPENSION OF LIMITATIONS ON CHARITABLE CONTRIBUTIONS.—Section 1400S(a), by substituting the 

following paragraph for paragraph (4) thereof: 

‘‘(4) QUALIFIED CONTRIBUTIONS.— 

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

term ‘qualified contribution’ means any charitable contribution (as defined in section 170(c)) if— 

‘‘(i) such contribution— 

‘‘(I) is paid during the period beginning on 

the earliest applicable disaster date for all States 

and ending on December 31, 2008, in cash to an 

organization described in section 170(b)(1)(A), and 

‘‘(II) is made for relief efforts in 1 or more 

Midwestern disaster areas, 

‘‘(ii) the taxpayer obtains from such organization 

contemporaneous written acknowledgment (within the 

meaning of section 170(f)(8)) that such contribution 

was used (or is to be used) for relief efforts in 1 

or more Midwestern disaster areas, and 

‘‘(iii) the taxpayer has elected the application of 

this subsection with respect to such contribution. 

‘‘(B) EXCEPTION.—Such term shall not include a contribution by a donor if the contribution is— 

‘‘(i) to an organization described in section 

509(a)(3), or 

‘‘(ii) for establishment of a new, or maintenance 

of an existing, donor advised fund (as defined in section 

4966(d)(2)). 

‘‘(C) APPLICATION OF ELECTION TO PARTNERSHIPS AND

S CORPORATIONS.—In the case of a partnership or S corporation, the election under subparagraph (A)(iii) shall be made 

separately by each partner or shareholder.’’. 

(13) SUSPENSION OF CERTAIN LIMITATIONS ON PERSONAL

CASUALTY LOSSES.—Section 1400S(b)(1), by substituting ‘‘the 

applicable disaster date’’ for ‘‘August 25, 2005’’. 

(14) SPECIAL RULE FOR DETERMINING EARNED INCOME.— 

Section 1400S(d)— 

(A) by treating an individual as a qualified individual 

if such individual’s principal place of abode on the 

applicable disaster date was located in a Midwestern disaster area, 


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122 STAT. 3918 PUBLIC LAW 110–343—OCT. 3, 2008 

(B) by treating the applicable disaster date with respect 

to any such individual as the applicable date for purposes 

of such subsection, and 

(C) by treating an area as described in paragraph 

(2)(B)(ii) thereof if the area is a Midwestern disaster area 

only by reason of subsection (b)(2) of this section (relating 

to areas eligible only for public assistance). 

(15) ADJUSTMENTS REGARDING TAXPAYER AND DEPENDENCY

STATUS.—Section 1400S(e), by substituting ‘‘2008 or 2009’’ for 

‘‘2005 or 2006’’. 

(e) MODIFICATIONS TO KATRINA EMERGENCY TAX RELIEF ACT

OF 2005.—The following provisions of the Katrina Emergency Tax 

Relief Act of 2005 shall be applied with the following modifications: 

(1) ADDITIONAL EXEMPTION FOR HOUSING DISPLACED INDIVIDUAL.—Section 302— 

(A) by substituting ‘‘2008 or 2009’’ for ‘‘2005 or 2006’’ 

in subsection (a) thereof, 

(B) by substituting ‘‘Midwestern displaced individual’’ 

for ‘‘Hurricane Katrina displaced individual’’ each place 

it appears, and 

(C) by treating an area as a core disaster area for 

purposes of applying subsection (c) thereof if the area is 

a Midwestern disaster area without regard to subsection 

(b)(2) of this section (relating to areas eligible only for 

public assistance). 

(2) INCREASE IN STANDARD MILEAGE RATE.—Section 303, 

by substituting ‘‘beginning on the applicable disaster date and 

ending on December 31, 2008’’ for ‘‘beginning on August 25, 

2005, and ending on December 31, 2006’’. 

(3) MILEAGE REIMBURSEMENTS FOR CHARITABLE VOLUNTEERS.—Section 304— 

(A) by substituting ‘‘beginning on the applicable disaster date and ending on December 31, 2008’’ for ‘‘beginning 

on August 25, 2005, and ending on December 31, 2006’’ 

in subsection (a), and 

(B) by substituting ‘‘the applicable disaster date’’ for 

‘‘August 25, 2005’’ in subsection (a). 

(4) EXCLUSION OF CERTAIN CANCELLATION OF INDEBTEDNESS

INCOME.—Section 401— 

(A) by treating an individual whose principal place 

of abode on the applicable disaster date was in a Midwestern disaster area (determined without regard to subsection (b)(2) of this section) as an individual described 

in subsection (b)(1) thereof, and by treating an individual 

whose principal place of abode on the applicable disaster 

date was in a Midwestern disaster area solely by reason 

of subsection (b)(2) of this section as an individual described 

in subsection (b)(2) thereof, 

(B) by substituting ‘‘the applicable disaster date’’ for 

‘‘August 28, 2005’’ both places it appears, and 

(C) by substituting ‘‘January 1, 2010’’ for ‘‘January 

1, 2007’’ in subsection (e). 

(5) EXTENSION OF REPLACEMENT PERIOD FOR NONRECOGNITION OF GAIN.—Section 405, by substituting ‘‘on or after the 

applicable disaster date’’ for ‘‘on or after August 25, 2005’’. 

Applicability. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3919 

SEC. 703. REPORTING REQUIREMENTS RELATING TO DISASTER 

RELIEF CONTRIBUTIONS. 

(a) IN GENERAL.—Section 6033(b) (relating to returns of certain 

organizations described in section 501(c)(3)) is amended by striking 

‘‘and’’ at the end of paragraph (13), by redesignating paragraph 

(14) as paragraph (15), and by adding after paragraph (13) the 

following new paragraph: 

‘‘(14) such information as the Secretary may require with 

respect to disaster relief activities, including the amount and 

use of qualified contributions to which section 1400S(a) applies, 

and’’. 

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

shall apply to returns the due date for which (determined without 

regard to any extension) occurs after December 31, 2008. 

SEC. 704. TEMPORARY TAX-EXEMPT BOND FINANCING AND LOWINCOME HOUSING TAX RELIEF FOR AREAS DAMAGED BY 

HURRICANE IKE. 

(a) TAX-EXEMPT BOND FINANCING.—Section 1400N(a) of the 

Internal Revenue Code of 1986 shall apply to any Hurricane Ike 

disaster area in addition to any other area referenced in such 

section, but with the following modifications: 

(1) By substituting ‘‘qualified Hurricane Ike disaster area 

bond’’ for ‘‘qualified Gulf Opportunity Zone Bond’’ each place 

it appears, except that in determining whether a bond is a 

qualified Hurricane Ike disaster area bond— 

(A) paragraph (2)(A)(i) shall be applied by only treating 

costs as qualified project costs if— 

(i) in the case of a project involving a private 

business use (as defined in section 141(b)(6)), either 

the person using the property suffered a loss in a 

trade or business attributable to Hurricane Ike or is 

a person designated for purposes of this section by 

the Governor of the State in which the project is located 

as a person carrying on a trade or business replacing 

a trade or business with respect to which another 

person suffered such a loss, and 

(ii) in the case of a project relating to public utility 

property, the project involves repair or reconstruction 

of public utility property damaged by Hurricane Ike, 

and 

(B) paragraph (2)(A)(ii) shall be applied by treating 

an issue as a qualified mortgage issue only if 95 percent 

or more of the net proceeds (as defined in section 150(a)(3)) 

of the issue are to be used to provide financing for mortgagors who suffered damages to their principal residences 

attributable to Hurricane Ike. 

(2) By substituting ‘‘any State in which any Hurricane 

Ike disaster area is located’’ for ‘‘the State of Alabama, Louisiana, or Mississippi’’ in paragraph (2)(B). 

(3) By substituting ‘‘designated for purposes of this section 

(on the basis of providing assistance to areas in the order 

in which such assistance is most needed)’’ for ‘‘designated for 

purposes of this section’’ in paragraph (2)(C). 

(4) By substituting ‘‘January 1, 2013’’ for ‘‘January 1, 2011’’ 

in paragraph (2)(D). 

Applicability. 

26 USC 6033 

note. 

26 USC 6033. 


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122 STAT. 3920 PUBLIC LAW 110–343—OCT. 3, 2008 

(5) By substituting the following for subparagraph (A) of 

paragraph (3): 

‘‘(A) AGGREGATE AMOUNT DESIGNATED.—The maximum 

aggregate face amount of bonds which may be designated 

under this subsection with respect to any State shall not 

exceed the product of $2,000 multiplied by the portion 

of the State population which is in— 

‘‘(i) in the case of Texas, the counties of Brazoria, 

Chambers, Galveston, Jefferson, and Orange, and 

‘‘(ii) in the case of Louisiana, the parishes of 

Calcasieu and Cameron, 

(as determined on the basis of the most recent census 

estimate of resident population released by the Bureau 

of Census before September 13, 2008).’’. 

(6) By substituting ‘‘qualified Hurricane Ike disaster area 

repair or construction’’ for ‘‘qualified GO Zone repair or 

construction’’ each place it appears. 

(7) By substituting ‘‘after the date of the enactment of 

the Heartland Disaster Tax Relief Act of 2008 and before 

January 1, 2013’’ for ‘‘after the date of the enactment of this 

paragraph and before January 1, 2011’’ in paragraph (7)(C). 

(8) By disregarding paragraph (8) thereof. 

(9) By substituting ‘‘any Hurricane Ike disaster area’’ for 

‘‘the Gulf Opportunity Zone’’ each place it appears. 

(b) LOW-INCOME HOUSING CREDIT.—Section 1400N(c) of the 

Internal Revenue Code of 1986 shall apply to any Hurricane Ike 

disaster area in addition to any other area referenced in such 

section, but with the following modifications: 

(1) Only with respect to calendar years 2008, 2009, and 

2010. 

(2) By substituting ‘‘any Hurricane Ike disaster area’’ for 

‘‘the Gulf Opportunity Zone’’ each place it appears. 

(3) By substituting ‘‘Hurricane Ike Recovery Assistance 

housing amount’’ for ‘‘Gulf Opportunity housing amount’’ each 

place it appears. 

(4) By substituting the following for subparagraph (B) of 

paragraph (1): 

‘‘(B) HURRICANE IKE HOUSING AMOUNT.—For purposes 

of subparagraph (A), the term ‘Hurricane Ike housing 

amount’ means, for any calendar year, the amount equal 

to the product of $16.00 multiplied by the portion of the 

State population which is in— 

‘‘(i) in the case of Texas, the counties of Brazoria, 

Chambers, Galveston, Jefferson, and Orange, and 

‘‘(ii) in the case of Louisiana, the parishes of 

Calcasieu and Cameron, 

(as determined on the basis of the most recent census 

estimate of resident population released by the Bureau 

of Census before September 13, 2008).’’. 

(5) Determined without regard to paragraphs (2), (3), (4), 

(5), and (6) thereof. 

(c) HURRICANE IKE DISASTER AREA.—For purposes of this section and for applying the substitutions described in subsections 

(a) and (b), the term ‘‘Hurricane Ike disaster area’’ means an 

area in the State of Texas or Louisiana— 

(1) with respect to which a major disaster has been declared 

by the President on September 13, 2008, under section 401 

Louisiana. 

Texas. 

Applicability. 

Louisiana. 

Texas. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3921 

of the Robert T. Stafford Disaster Relief and Emergency Assistance Act by reason of Hurricane Ike, and 

(2) determined by the President to warrant individual or 

individual and public assistance from the Federal Government 

under such Act with respect to damages attributable to Hurricane Ike. 

Subtitle B—National Disaster Relief 

SEC. 706. LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED DISASTERS. 

(a) WAIVER OF ADJUSTED GROSS INCOME LIMITATION.— 

(1) IN GENERAL.—Subsection (h) of section 165 is amended 

by redesignating paragraphs (3) and (4) as paragraphs (4) and 

(5), respectively, and by inserting after paragraph (2) the following new paragraph: 

‘‘(3) SPECIAL RULE FOR LOSSES IN FEDERALLY DECLARED

DISASTERS.— 

‘‘(A) IN GENERAL.—If an individual has a net disaster 

loss for any taxable year, the amount determined under 

paragraph (2)(A)(ii) shall be the sum of— 

‘‘(i) such net disaster loss, and 

‘‘(ii) so much of the excess referred to in the matter 

preceding clause (i) of paragraph (2)(A) (reduced by 

the amount in clause (i) of this subparagraph) as 

exceeds 10 percent of the adjusted gross income of 

the individual. 

‘‘(B) NET DISASTER LOSS.—For purposes of subparagraph (A), the term ‘net disaster loss’ means the excess 

of— 

‘‘(i) the personal casualty losses— 

‘‘(I) attributable to a federally declared disaster occurring before January 1, 2010, and 

‘‘(II) occurring in a disaster area, over 

‘‘(ii) personal casualty gains. 

‘‘(C) FEDERALLY DECLARED DISASTER.—For purposes of 

this paragraph— 

‘‘(i) FEDERALLY DECLARED DISASTER.—The term 

‘federally declared disaster’ means any disaster subsequently determined by the President of the United 

States to warrant assistance by the Federal Government under the Robert T. Stafford Disaster Relief and 

Emergency Assistance Act. 

‘‘(ii) DISASTER AREA.—The term ‘disaster area’ 

means the area so determined to warrant such assistance.’’. 

(2) CONFORMING AMENDMENTS.— 

(A) Section 165(h)(4)(B) (as so redesignated) is 

amended by striking ‘‘paragraph (2)’’ and inserting ‘‘paragraphs (2) and (3)’’. 

(B) Section 165(i)(1) is amended by striking ‘‘loss’’ and 

all that follows through ‘‘Act’’ and inserting ‘‘loss occurring 

in a disaster area (as defined by clause (ii) of subsection 

(h)(3)(C)) and attributable to a federally declared disaster 

(as defined by clause (i) of such subsection)’’. 

26 USC 165. 


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122 STAT. 3922 PUBLIC LAW 110–343—OCT. 3, 2008 

(C) Section 165(i)(4) is amended by striking ‘‘Presidentially declared disaster (as defined by section 

1033(h)(3))’’ and inserting ‘‘federally declared disaster (as 

defined by subsection (h)(3)(C)(i)’’. 

(D)(i) So much of subsection (h) of section 1033 as 

precedes subparagraph (A) of paragraph (1) thereof is 

amended to read as follows: 

‘‘(h) SPECIAL RULES FOR PROPERTY DAMAGED BY FEDERALLY

DECLARED DISASTERS.— 

‘‘(1) PRINCIPAL RESIDENCES.—If the taxpayer’s principal 

residence or any of its contents is located in a disaster area 

and is compulsorily or involuntarily converted as a result of 

a federally declared disaster—’’. 

(ii) Paragraph (2) of section 1033(h) is amended by 

striking ‘‘investment’’ and all that follows through ‘‘disaster’’ and inserting ‘‘investment located in a disaster area 

and compulsorily or involuntarily converted as a result 

of a federally declared disaster’’. 

(iii) Paragraph (3) of section 1033(h) is amended to 

read as follows: 

‘‘(3) FEDERALLY DECLARED DISASTER; DISASTER AREA.—The 

terms ‘‘federally declared disaster’’ and ‘‘disaster area’’ shall 

have the respective meaning given such terms by section 

165(h)(3)(C).’’. 

(iv) Section 139(c)(2) is amended to read as follows: 

‘‘(2) federally declared disaster (as defined by section 

165(h)(3)(C)(i)),’’. 

(v) Subclause (II) of section 172(b)(1)(F)(ii) is amended 

by striking ‘‘Presidentially declared disasters (as defined 

in section 1033(h)(3))’’ and inserting ‘‘federally declared 

disasters (as defined by subsection (h)(3)(C)(i))’’. 

(vi) Subclause (III) of section 172(b)(1)(F)(ii) is amended 

by striking ‘‘Presidentially declared disasters’’ and inserting 

‘‘federally declared disasters’’. 

(vii) Subsection (a) of section 7508A is amended by 

striking ‘‘Presidentially declared disaster (as defined in 

section 1033(h)(3))’’ and inserting ‘‘federally declared disaster (as defined by section 165(h)(3)(C)(i))’’. 

(b) INCREASE IN STANDARD DEDUCTION BY DISASTER CASUALTY

LOSS.— 

(1) IN GENERAL.—Paragraph (1) of section 63(c), as 

amended by the Housing Assistance Tax Act of 2008, is 

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

by striking the period at the end of subparagraph (C) and 

inserting ‘‘, and’’, and by adding at the end the following new 

subparagraph: 

‘‘(D) the disaster loss deduction.’’. 

(2) DISASTER LOSS DEDUCTION.—Subsection (c) of section 

63, as amended by the Housing Assistance Tax Act of 2008, 

is amended by adding at the end the following new paragraph: 

‘‘(8) DISASTER LOSS DEDUCTION.—For the purposes of paragraph (1), the term ‘disaster loss deduction’ means the net 

disaster loss (as defined in section 165(h)(3)(B)).’’. 

(3) ALLOWANCE IN COMPUTING ALTERNATIVE MINIMUM TAXABLE INCOME.—Subparagraph (E) of section 56(b)(1) is amended 

by adding at the end the following new sentence: ‘‘The preceding 

26 USC 165. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3923 

sentence shall not apply to so much of the standard deduction 

as is determined under section 63(c)(1)(D).’’. 

(c) INCREASE IN LIMITATION ON INDIVIDUAL LOSS PER CASUALTY.—Paragraph (1) of section 165(h) is amended by striking 

‘‘$100’’ and inserting ‘‘$500 ($100 for taxable years beginning after 

December 31, 2009)’’. 

(d) EFFECTIVE DATES.— 

(1) IN GENERAL.—Except as provided by paragraph (2), 

the amendments made by this section shall apply to disasters 

declared in taxable years beginning after December 31, 2007. 

(2) INCREASE IN LIMITATION ON INDIVIDUAL LOSS PER CASUALTY.—The amendment made by subsection (c) shall apply 

to taxable years beginning after December 31, 2008. 

SEC. 707. EXPENSING OF QUALIFIED DISASTER EXPENSES. 

(a) IN GENERAL.—Part VI of subchapter B of chapter 1 is 

amended by inserting after section 198 the following new section: 

‘‘SEC. 198A. EXPENSING OF QUALIFIED DISASTER EXPENSES. 

‘‘(a) IN GENERAL.—A taxpayer may elect to treat any qualified 

disaster expenses which are paid or incurred by the taxpayer as 

an expense which is not chargeable to capital account. Any expense 

which is so treated shall be allowed as a deduction for the taxable 

year in which it is paid or incurred. 

‘‘(b) QUALIFIED DISASTER EXPENSE.—For purposes of this section, the term ‘qualified disaster expense’ means any expenditure— 

‘‘(1) which is paid or incurred in connection with a trade 

or business or with business-related property, 

‘‘(2) which is— 

‘‘(A) for the abatement or control of hazardous substances that were released on account of a federally 

declared disaster occurring before January 1, 2010, 

‘‘(B) for the removal of debris from, or the demolition 

of structures on, real property which is business-related 

property damaged or destroyed as a result of a federally 

declared disaster occurring before such date, or 

‘‘(C) for the repair of business-related property damaged as a result of a federally declared disaster occurring 

before such date, and 

‘‘(3) which is otherwise chargeable to capital account. 

‘‘(c) OTHER DEFINITIONS.—For purposes of this section— 

‘‘(1) BUSINESS-RELATED PROPERTY.—The term ‘businessrelated property’ means property— 

‘‘(A) held by the taxpayer for use in a trade or business 

or for the production of income, or 

‘‘(B) described in section 1221(a)(1) in the hands of 

the taxpayer. 

‘‘(2) FEDERALLY DECLARED DISASTER.—The term ‘federally 

declared disaster’ has the meaning given such term by section 

165(h)(3)(C)(i). 

‘‘(d) DEDUCTION RECAPTURED AS ORDINARY INCOME ON SALE, 

ETC.—Solely for purposes of section 1245, in the case of property 

to which a qualified disaster expense would have been capitalized 

but for this section— 

‘‘(1) the deduction allowed by this section for such expense 

shall be treated as a deduction for depreciation, and 

26 USC 56 note. 

26 USC 165. 


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122 STAT. 3924 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(2) such property (if not otherwise section 1245 property) 

shall be treated as section 1245 property solely for purposes 

of applying section 1245 to such deduction. 

‘‘(e) COORDINATION WITH OTHER PROVISIONS.—Sections 198, 

280B, and 468 shall not apply to amounts which are treated as 

expenses under this section. 

‘‘(f) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes 

of this section.’’. 

(b) CLERICAL AMENDMENT.—The table of sections for part VI 

of subchapter B of chapter 1 is amended by inserting after the 

item relating to section 198 the following new item: 

‘‘Sec. 198A. Expensing of Qualified Disaster Expenses.’’. 

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

shall apply to amounts paid or incurred after December 31, 2007 

in connection with disaster declared after such date. 

SEC. 708. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY 

DECLARED DISASTERS. 

(a) IN GENERAL.—Paragraph (1) of section 172(b) is amended 

by adding at the end the following new subparagraph: 

‘‘(J) CERTAIN LOSSES ATTRIBUTABLE FEDERALLY

DECLARED DISASTERS.—In the case of a taxpayer who has 

a qualified disaster loss (as defined in subsection (j)), such 

loss shall be a net operating loss carryback to each of 

the 5 taxable years preceding the taxable year of such 

loss.’’. 

(b) QUALIFIED DISASTER LOSS.—Section 172 is amended by 

redesignating subsections (j) and (k) as subsections (k) and (l), 

respectively, and by inserting after subsection (i) the following 

new subsection: 

‘‘(j) RULES RELATING TO QUALIFIED DISASTER LOSSES.—For purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘qualified disaster loss’ means 

the lesser of— 

‘‘(A) the sum of— 

‘‘(i) the losses allowable under section 165 for the 

taxable year— 

‘‘(I) attributable to a federally declared disaster (as defined in section 165(h)(3)(C)(i)) occurring before January 1, 2010, and 

‘‘(II) occurring in a disaster area (as defined 

in section 165(h)(3)(C)(ii)), and 

‘‘(ii) the deduction for the taxable year for qualified 

disaster expenses which is allowable under section 

198A(a) or which would be so allowable if not otherwise 

treated as an expense, or 

‘‘(B) the net operating loss for such taxable year. 

‘‘(2) COORDINATION WITH SUBSECTION (b)(2).—For purposes 

of applying subsection (b)(2), a qualified disaster loss for any 

taxable year shall be treated in a manner similar to the manner 

in which a specified liability loss is treated. 

‘‘(3) ELECTION.—Any taxpayer entitled to a 5-year 

carryback under subsection (b)(1)(J) from any loss year may 

elect to have the carryback period with respect to such loss 

year determined without regard to subsection (b)(1)(J). Such 

26 USC 172. 

26 USC 198A 

note. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3925 

election shall be made in such manner as may be prescribed 

by the Secretary and shall be made by the due date (including 

extensions of time) for filing the taxpayer’s return for the 

taxable year of the net operating loss. Such election, once 

made for any taxable year, shall be irrevocable for such taxable 

year. 

‘‘(4) EXCLUSION.—The term ‘qualified disaster loss’ shall 

not include any loss with respect to any property described 

in section 1400N(p)(3).’’. 

(c) LOSS DEDUCTION ALLOWED IN COMPUTING ALTERNATIVE

MINIMUM TAXABLE INCOME.—Subsection (d) of section 56 is 

amended by adding at the end the following new paragraph: 

‘‘(3) NET OPERATING LOSS ATTRIBUTABLE TO FEDERALLY

DECLARED DISASTERS.—In the case of a taxpayer which has 

a qualified disaster loss (as defined by section 172(b)(1)(J)) 

for the taxable year, paragraph (1) shall be applied by 

increasing the amount determined under subparagraph (A)(ii)(I) 

thereof by the sum of the carrybacks and carryovers of such 

loss.’’. 

(d) CONFORMING AMENDMENTS.— 

(1) Clause (ii) of section 172(b)(1)(F) is amended by 

inserting ‘‘or qualified disaster loss (as defined in subsection 

(j))’’ before the period at the end of the last sentence. 

(2) Paragraph (1) of section 172(i) is amended by adding 

at the end the following new flush sentence: 

‘‘Such term shall not include any qualified disaster loss (as 

defined in subsection (j)).’’. 

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

shall apply to losses arising in taxable years beginning after 

December 31, 2007, in connection with disasters declared after 

such date. 

SEC. 709. WAIVER OF CERTAIN MORTGAGE REVENUE BOND REQUIREMENTS FOLLOWING FEDERALLY DECLARED DISASTERS. 

(a) IN GENERAL.—Subsection (k) of section 143 is amended 

by adding at the end the following new paragraph: 

‘‘(12) SPECIAL RULES FOR RESIDENCES DESTROYED IN FEDERALLY DECLARED DISASTERS.— 

‘‘(A) PRINCIPAL RESIDENCE DESTROYED.—At the election 

of the taxpayer, if the principal residence (within the 

meaning of section 121) of such taxpayer is— 

‘‘(i) rendered unsafe for use as a residence by reason of a federally declared disaster occurring before 

January 1, 2010, or 

‘‘(ii) demolished or relocated by reason of an order 

of the government of a State or political subdivision 

thereof on account of a federally declared disaster 

occurring before such date, 

then, for the 2-year period beginning on the date of the 

disaster declaration, subsection (d)(1) shall not apply with 

respect to such taxpayer and subsection (e) shall be applied 

by substituting ‘110’ for ‘90’ in paragraph (1) thereof. 

‘‘(B) PRINCIPAL RESIDENCE DAMAGED.— 

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

if the principal residence (within the meaning of section 

121) of such taxpayer was damaged as the result of 

a federally declared disaster occurring before January 

Applicability. 

26 USC 56 note. 

Applicability. 

26 USC 56. 


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122 STAT. 3926 PUBLIC LAW 110–343—OCT. 3, 2008 

1, 2010, any owner-financing provided in connection 

with the repair or reconstruction of such residence 

shall be treated as a qualified rehabilitation loan. 

‘‘(ii) LIMITATION.—The aggregate owner-financing 

to which clause (i) applies shall not exceed the lesser 

of— 

‘‘(I) the cost of such repair or reconstruction, 

or 

‘‘(II) $150,000. 

‘‘(C) FEDERALLY DECLARED DISASTER.—For purposes of 

this paragraph, the term ‘federally declared disaster’ has 

the meaning given such term by section 165(h)(3)(C)(i). 

‘‘(D) ELECTION; DENIAL OF DOUBLE BENEFIT.— 

‘‘(i) ELECTION.—An election under this paragraph 

may not be revoked except with the consent of the 

Secretary. 

‘‘(ii) DENIAL OF DOUBLE BENEFIT.—If a taxpayer 

elects the application of this paragraph, paragraph 

(11) shall not apply with respect to the purchase or 

financing of any residence by such taxpayer.’’. 

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

shall apply to disasters occurring after December 31, 2007. 

SEC. 710. SPECIAL DEPRECIATION ALLOWANCE FOR QUALIFIED DISASTER PROPERTY. 

(a) IN GENERAL.—Section 168, as amended by this Act, is 

amended by adding at the end the following new subsection: 

‘‘(n) SPECIAL ALLOWANCE FOR QUALIFIED DISASTER ASSISTANCE

PROPERTY.— 

‘‘(1) IN GENERAL.—In the case of any qualified disaster 

assistance property— 

‘‘(A) the depreciation deduction provided by section 

167(a) for the taxable year in which such property is placed 

in service shall include an allowance equal to 50 percent 

of the adjusted basis of the qualified disaster assistance 

property, and 

‘‘(B) the adjusted basis of the qualified disaster assistance property shall be reduced by the amount of such 

deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for 

such taxable year and any subsequent taxable year. 

‘‘(2) QUALIFIED DISASTER ASSISTANCE PROPERTY.—For purposes of this subsection— 

‘‘(A) IN GENERAL.—The term ‘qualified disaster assistance property’ means any property— 

‘‘(i)(I) which is described in subsection (k)(2)(A)(i), 

or 

‘‘(II) which is nonresidential real property or residential rental property, 

‘‘(ii) substantially all of the use of which is— 

‘‘(I) in a disaster area with respect to a federally declared disaster occurring before January 1, 

2010, and 

‘‘(II) in the active conduct of a trade or business by the taxpayer in such disaster area, 

‘‘(iii) which— 

26 USC 168. 

26 USC 143 note. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3927 

‘‘(I) rehabilitates property damaged, or 

replaces property destroyed or condemned, as a 

result of such federally declared disaster, except 

that, for purposes of this clause, property shall 

be treated as replacing property destroyed or condemned if, as part of an integrated plan, such 

property replaces property which is included in 

a continuous area which includes real property 

destroyed or condemned, and 

‘‘(II) is similar in nature to, and located in 

the same county as, the property being rehabilitated or replaced, 

‘‘(iv) the original use of which in such disaster 

area commences with an eligible taxpayer on or after 

the applicable disaster date, 

‘‘(v) which is acquired by such eligible taxpayer 

by purchase (as defined in section 179(d)) on or after 

the applicable disaster date, but only if no written 

binding contract for the acquisition was in effect before 

such date, and 

‘‘(vi) which is placed in service by such eligible 

taxpayer on or before the date which is the last day 

of the third calendar year following the applicable disaster date (the fourth calendar year in the case of 

nonresidential real property and residential rental 

property). 

‘‘(B) EXCEPTIONS.— 

‘‘(i) OTHER BONUS DEPRECIATION PROPERTY.—The 

term ‘qualified disaster assistance property’ shall not 

include— 

‘‘(I) any property to which subsection (k) 

(determined without regard to paragraph (4)), (l), 

or (m) applies, 

‘‘(II) any property to which section 1400N(d) 

applies, and 

‘‘(III) any property described in section 

1400N(p)(3). 

‘‘(ii) ALTERNATIVE DEPRECIATION PROPERTY.—The 

term ‘qualified disaster assistance property’ shall not 

include any property to which the alternative depreciation system under subsection (g) applies, determined 

without regard to paragraph (7) of subsection (g) 

(relating to election to have system apply). 

‘‘(iii) TAX-EXEMPT BOND FINANCED PROPERTY.— 

Such term shall not include any property any portion 

of which is financed with the proceeds of any obligation 

the interest on which is exempt from tax under section 

103. 

‘‘(iv) QUALIFIED REVITALIZATION BUILDINGS.—Such 

term shall not include any qualified revitalization 

building with respect to which the taxpayer has elected 

the application of paragraph (1) or (2) of section 

1400I(a). 

‘‘(v) ELECTION OUT.—If a taxpayer makes an election under this clause with respect to any class of 

property for any taxable year, this subsection shall 


dkrause on GSDDPC44 with PUBLIC LAWS
122 STAT. 3928 PUBLIC LAW 110–343—OCT. 3, 2008 

not apply to all property in such class placed in service 

during such taxable year. 

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

rules similar to the rules of subparagraph (E) of subsection 

(k)(2) shall apply, except that such subparagraph shall 

be applied— 

‘‘(i) by substituting ‘the applicable disaster date’ 

for ‘December 31, 2007’ each place it appears therein, 

‘‘(ii) without regard to ‘and before January 1, 2009’ 

in clause (i) thereof, and 

‘‘(iii) by substituting ‘qualified disaster assistance 

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

‘‘(D) ALLOWANCE AGAINST ALTERNATIVE MINIMUM

TAX.—For purposes of this subsection, rules similar to the 

rules of subsection (k)(2)(G) shall apply. 

‘‘(3) OTHER DEFINITIONS.—For purposes of this subsection— 

‘‘(A) APPLICABLE DISASTER DATE.—The term ‘applicable 

disaster date’ means, with respect to any federally declared 

disaster, the date on which such federally declared disaster 

occurs. 

‘‘(B) FEDERALLY DECLARED DISASTER.—The term ‘federally declared disaster’ has the meaning given such term 

under section 165(h)(3)(C)(i). 

‘‘(C) DISASTER AREA.—The term ‘disaster area’ has the 

meaning given such term under section 165(h)(3)(C)(ii). 

‘‘(D) ELIGIBLE TAXPAYER.—The term ‘eligible taxpayer’ 

means a taxpayer who has suffered an economic loss attributable to a federally declared disaster. 

‘‘(4) RECAPTURE.—For purposes of this subsection, rules 

similar to the rules under section 179(d)(10) shall apply with 

respect to any qualified disaster assistance property which 

ceases to be qualified disaster assistance property.’’. 

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

shall apply to property placed in service after December 31, 2007, 

with respect disasters declared after such date. 

SEC. 711. INCREASED EXPENSING FOR QUALIFIED DISASTER ASSISTANCE PROPERTY. 

(a) IN GENERAL.—Section 179 is amended by adding at the 

end the following new subsection: 

‘‘(e) SPECIAL RULES FOR QUALIFIED DISASTER ASSISTANCE PROPERTY.— 

‘‘(1) IN GENERAL.—For purposes of this section— 

‘‘(A) the dollar amount in effect under subsection (b)(1) 

for the taxable year shall be increased by the lesser of— 

‘‘(i) $100,000, or 

‘‘(ii) the cost of qualified section 179 disaster assistance property placed in service during the taxable year, 

and 

‘‘(B) the dollar amount in effect under subsection (b)(2) 

for the taxable year shall be increased by the lesser of— 

‘‘(i) $600,000, or 

‘‘(ii) the cost of qualified section 179 disaster assistance property placed in service during the taxable year. 

26 USC 179. 

26 USC 168 note. 

Applicability. 

Applicability. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3929 

‘‘(2) QUALIFIED SECTION 179 DISASTER ASSISTANCE PROP- ERTY.—For purposes of this subsection, the term ‘qualified section 179 disaster assistance property’ means section 179 property (as defined in subsection (d)) which is qualified disaster 

assistance property (as defined in section 168(n)(2)). 

‘‘(3) COORDINATION WITH EMPOWERMENT ZONES AND

RENEWAL COMMUNITIES.—For purposes of sections 1397A and 

1400J, qualified section 179 disaster assistance property shall 

not be treated as qualified zone property or qualified renewal 

property, unless the taxpayer elects not to take such qualified 

section 179 disaster assistance property into account for purposes of this subsection. 

‘‘(4) RECAPTURE.—For purposes of this subsection, rules 

similar to the rules under subsection (d)(10) shall apply with 

respect to any qualified section 179 disaster assistance property 

which ceases to be qualified section 179 disaster assistance 

property.’’. 

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

shall apply to property placed in service after December 31, 2007, 

with respect disasters declared after such date. 

SEC. 712. COORDINATION WITH HEARTLAND DISASTER RELIEF. 

The amendments made by this subtitle, other than the amendments made by sections 706(a)(2), 710, and 711, shall not apply 

to any disaster described in section 702(c)(1)(A), or to any expenditure or loss resulting from such disaster. 

TITLE VIII—SPENDING REDUCTIONS 

AND APPROPRIATE REVENUE RAISERS FOR NEW TAX RELIEF POLICY 

SEC. 801. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN 

TAX INDIFFERENT PARTIES. 

(a) IN GENERAL.—Subpart B of part II of subchapter E of 

chapter 1 is amended by inserting after section 457 the following 

new section: 

‘‘SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX INDIFFERENT PARTIES. 

‘‘(a) IN GENERAL.—Any compensation which is deferred under 

a nonqualified deferred compensation plan of a nonqualified entity 

shall be includible in gross income when there is no substantial 

risk of forfeiture of the rights to such compensation. 

‘‘(b) NONQUALIFIED ENTITY.—For purposes of this section, the 

term ‘nonqualified entity’ means— 

‘‘(1) any foreign corporation unless substantially all of its 

income is— 

‘‘(A) effectively connected with the conduct of a trade 

or business in the United States, or 

‘‘(B) subject to a comprehensive foreign income tax, 

and 

‘‘(2) any partnership unless substantially all of its income 

is allocated to persons other than— 

‘‘(A) foreign persons with respect to whom such income 

is not subject to a comprehensive foreign income tax, and 

26 USC 56 note. 

26 USC 179 note. 

Applicability. 


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122 STAT. 3930 PUBLIC LAW 110–343—OCT. 3, 2008 

‘‘(B) organizations which are exempt from tax under 

this title. 

‘‘(c) DETERMINABILITY OF AMOUNTS OF COMPENSATION.— 

‘‘(1) IN GENERAL.—If the amount of any compensation is 

not determinable at the time that such compensation is otherwise includible in gross income under subsection (a)— 

‘‘(A) such amount shall be so includible in gross income 

when determinable, and 

‘‘(B) the tax imposed under this chapter for the taxable 

year in which such compensation is includible in gross 

income shall be increased by the sum of— 

‘‘(i) the amount of interest determined under paragraph (2), and 

‘‘(ii) an amount equal to 20 percent of the amount 

of such compensation. 

‘‘(2) INTEREST.—For purposes of paragraph (1)(B)(i), the 

interest determined under this paragraph for any taxable year 

is the amount of interest at the underpayment rate under 

section 6621 plus 1 percentage point on the underpayments 

that would have occurred had the deferred compensation been 

includible in gross income for the taxable year in which first 

deferred or, if later, the first taxable year in which such 

deferred compensation is not subject to a substantial risk of 

forfeiture. 

‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.—For purposes 

of this section— 

‘‘(1) SUBSTANTIAL RISK OF FORFEITURE.— 

‘‘(A) IN GENERAL.—The rights of a person to compensation shall be treated as subject to a substantial risk of 

forfeiture only if such person’s rights to such compensation 

are conditioned upon the future performance of substantial 

services by any individual. 

‘‘(B) EXCEPTION FOR COMPENSATION BASED ON GAIN

RECOGNIZED ON AN INVESTMENT ASSET.— 

‘‘(i) IN GENERAL.—To the extent provided in regulations prescribed by the Secretary, if compensation is 

determined solely by reference to the amount of gain 

recognized on the disposition of an investment asset, 

such compensation shall be treated as subject to a 

substantial risk of forfeiture until the date of such 

disposition. 

‘‘(ii) INVESTMENT ASSET.—For purposes of clause 

(i), the term ‘investment asset’ means any single asset 

(other than an investment fund or similar entity)— 

‘‘(I) acquired directly by an investment fund 

or similar entity, 

‘‘(II) with respect to which such entity does 

not (nor does any person related to such entity) 

participate in the active management of such asset 

(or if such asset is an interest in an entity, in 

the active management of the activities of such 

entity), and 

‘‘(III) substantially all of any gain on the disposition of which (other than such deferred compensation) is allocated to investors in such entity. 

Regulations. 


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PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3931 

‘‘(iii) COORDINATION WITH SPECIAL RULE.—Paragraph (3)(B) shall not apply to any compensation to 

which clause (i) applies. 

‘‘(2) COMPREHENSIVE FOREIGN INCOME TAX.—The term ‘comprehensive foreign income tax’ means, with respect to any 

foreign person, the income tax of a foreign country if— 

‘‘(A) such person is eligible for the benefits of a comprehensive income tax treaty between such foreign country 

and the United States, or 

‘‘(B) such person demonstrates to the satisfaction of 

the Secretary that such foreign country has a comprehensive income tax. 

‘‘(3) NONQUALIFIED DEFERRED COMPENSATION PLAN.— ‘‘(A) IN GENERAL.—The term ‘nonqualified deferred 

compensation plan’ has the meaning given such term under 

section 409A(d), except that such term shall include any 

plan that provides a right to compensation based on the 

appreciation in value of a specified number of equity units 

of the service recipient. 

‘‘(B) EXCEPTION.—Compensation shall not be treated 

as deferred for purposes of this section if the service provider receives payment of such compensation not later than 

12 months after the end of the taxable year of the service 

recipient during which the right to the payment of such 

compensation is no longer subject to a substantial risk 

of forfeiture. 

‘‘(4) EXCEPTION FOR CERTAIN COMPENSATION WITH RESPECT

TO EFFECTIVELY CONNECTED INCOME.—In the case a foreign 

corporation with income which is taxable under section 882, 

this section shall not apply to compensation which, had such 

compensation had been paid in cash on the date that such 

compensation ceased to be subject to a substantial risk of 

forfeiture, would have been deductible by such foreign corporation against such income. 

‘‘(5) APPLICATION OF RULES.—Rules similar to the rules 

of paragraphs (5) and (6) of section 409A(d) shall apply. 

‘‘(e) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes 

of this section, including regulations disregarding a substantial 

risk of forfeiture in cases where necessary to carry out the purposes 

of this section.’’. 

(b) CONFORMING AMENDMENT.—Section 26(b)(2), as amended 

by the Housing Assistance Tax Act of 2008, is amended by striking 

‘‘and’’ at the end of subparagraph (V), by striking the period at 

the end of subparagraph (W) and inserting ‘‘, and’’, and by adding 

at the end the following new subparagraph: 

‘‘(X) section 457A(c)(1)(B) (relating to determinability 

of amounts of compensation).’’. 

(c) CLERICAL AMENDMENT.—The table of sections of subpart 

B of part II of subchapter E of chapter 1 is amended by inserting 

after the item relating to section 457 the following new item: 

‘‘Sec. 457A. Nonqualified deferred compensation from certain tax indifferent parties.’’. 

(d) EFFECTIVE DATE.— (1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to 

26 USC 457A 

note. 

26 USC 26. 

Deadline. 


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122 STAT. 3932 PUBLIC LAW 110–343—OCT. 3, 2008 

amounts deferred which are attributable to services performed 

after December 31, 2008. 

(2) APPLICATION TO EXISTING DEFERRALS.—In the case of 

any amount deferred to which the amendments made by this 

section do not apply solely by reason of the fact that the 

amount is attributable to services performed before January 

1, 2009, to the extent such amount is not includible in gross 

income in a taxable year beginning before 2018, such amounts 

shall be includible in gross income in the later of— 

(A) the last taxable year beginning before 2018, or 

(B) the taxable year in which there is no substantial 

risk of forfeiture of the rights to such compensation (determined in the same manner as determined for purposes 

of section 457A of the Internal Revenue Code of 1986, 

as added by this section). 

(3) ACCELERATED PAYMENTS.—No later than 120 days after 

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

issue guidance providing a limited period of time during which 

a nonqualified deferred compensation arrangement attributable 

to services performed on or before December 31, 2008, may, 

without violating the requirements of section 409A(a) of the 

Internal Revenue Code of 1986, be amended to conform the 

date of distribution to the date the amounts are required to 

be included in income. 

(4) CERTAIN BACK-TO-BACK ARRANGEMENTS.—If the taxpayer is also a service recipient and maintains one or more 

nonqualified deferred compensation arrangements for its 

service providers under which any amount is attributable to 

services performed on or before December 31, 2008, the guidance issued under paragraph (4) shall permit such arrangements to be amended to conform the dates of distribution 

under such arrangement to the date amounts are required 

to be included in the income of such taxpayer under this subsection. 

(5) ACCELERATED PAYMENT NOT TREATED AS MATERIAL MODIFICATION.—Any amendment to a nonqualified deferred compensation arrangement made pursuant to paragraph (4) or 

(5) shall not be treated as a material modification of the 

Deadline. 

Guidance. 


dkrause on GSDDPC44 with PUBLIC LAWS
PUBLIC LAW 110–343—OCT. 3, 2008 122 STAT. 3933 

LEGISLATIVE HISTORY—H.R. 1424: 

HOUSE REPORTS: No. 110–374, Pt. 1 (Comm. on Education and Labor), Pt. 2 

(Comm. on Ways and Means), and Pt. 3 (Comm. on Energy 

and Commerce). 

CONGRESSIONAL RECORD, Vol. 154 (2008): 

Mar. 5, considered and passed House. 

Oct. 1, considered and passed Senate, amended. 

Oct. 3, House concurred in Senate amendments. 

Æ 

arrangement for purposes of section 409A of the Internal Revenue Code of 1986. 

Approved October 3, 2008. 


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