In the Senate of the United States, 

October 1 (legislative day, September 17), 2008. 

Resolved, That the bill from the House of Representatives (H.R. 1424) entitled ‘‘An Act to amend section 712 of 

the Employee Retirement Income Security Act of 1974, section 2705 of the Public Health Service Act, section 9812 of 

the Internal Revenue Code of 1986 to require equity in the 

provision of mental health and substance-related disorder 

benefits under group health plans, to prohibit discrimination 

on the basis of genetic information with respect to health insurance and employment, and for other purposes.’’, do pass 

with the following 

AMENDMENTS: 

Strike all after the enacting clause and insert the 

following: 

1 DIVISION A—EMERGENCY 

2 ECONOMIC STABILIZATION 

3 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

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

5 ‘‘Emergency Economic Stabilization Act of 2008’’. 
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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 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. 

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. 
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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. 

1 SEC. 2. PURPOSES. 

2 The purposes of this Act are— 

3 (1) to immediately provide authority and facili4 ties that the Secretary of the Treasury can use to re5 store liquidity and stability to the financial system of 

6 the United States; and 

7 (2) to ensure that such authority and such facili8 ties are used in a manner that— 

9 (A) protects home values, college funds, re10 tirement accounts, and life savings; 

11 (B) preserves homeownership and promotes 

12 jobs and economic growth; 

13 (C) maximizes overall returns to the tax14 payers of the United States; and 

15 (D) provides public accountability for the 

16 exercise of such authority. 

17 SEC. 3. DEFINITIONS. 

18 For purposes of this Act, the following definitions shall 

19 apply: 

20 (1) APPROPRIATE COMMITTEES OF CONGRESS.— 

21 The term ‘‘appropriate committees of Congress’’ 

22 means— 
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1 (A) the Committee on Banking, Housing, 

2 and Urban Affairs, the Committee on Finance, 

3 the Committee on the Budget, and the Committee 

4 on Appropriations of the Senate; and 

5 (B) the Committee on Financial Services, 

6 the Committee on Ways and Means, the Com7 mittee on the Budget, and the Committee on Ap8 propriations of the House of Representatives. 

9 (2) BOARD.—The term ‘‘Board’’ means the 

10 Board of Governors of the Federal Reserve System. 

11 (3) CONGRESSIONAL SUPPORT AGENCIES.—The 

12 term ‘‘congressional support agencies’’ means the Con13 gressional Budget Office and the Joint Committee on 

14 Taxation. 

15 (4) CORPORATION.—The term ‘‘Corporation’’ 

16 means the Federal Deposit Insurance Corporation. 

17 (5) FINANCIAL INSTITUTION.—The term ‘‘finan18 cial institution’’ means any institution, including, 

19 but not limited to, any bank, savings association, 

20 credit union, security broker or dealer, or insurance 

21 company, established and regulated under the laws of 

22 the United States or any State, territory, or posses23 sion of the United States, the District of Columbia, 

24 Commonwealth of Puerto Rico, Commonwealth of 

25 Northern Mariana Islands, Guam, American Samoa, 
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1 or the United States Virgin Islands, and having sig2 nificant operations in the United States, but exclud3 ing any central bank of, or institution owned by, a 

4 foreign government. 

5 (6) FUND.—The term ‘‘Fund’’ means the Trou6 bled Assets Insurance Financing Fund established 

7 under section 102. 

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

9 the Secretary of the Treasury. 

10 (8) TARP.—The term ‘‘TARP’’ means the Trou11 bled Asset Relief Program established under section 

12 101. 

13 (9) TROUBLED ASSETS.—The term ‘‘troubled as14 sets’’ means— 

15 (A) residential or commercial mortgages 

16 and any securities, obligations, or other instru17 ments that are based on or related to such mort18 gages, that in each case was originated or issued 

19 on or before March 14, 2008, the purchase of 

20 which the Secretary determines promotes finan21 cial market stability; and 

22 (B) any other financial instrument that the 

23 Secretary, after consultation with the Chairman 

24 of the Board of Governors of the Federal Reserve 

25 System, determines the purchase of which is nec-
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1 essary to promote financial market stability, but 

2 only upon transmittal of such determination, in 

3 writing, to the appropriate committees of Con4 gress. 

5 TITLE I—TROUBLED ASSETS 

6 RELIEF PROGRAM 

7 SEC. 101. PURCHASES OF TROUBLED ASSETS. 

8 (a) OFFICES; AUTHORITY.— 

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

10 establish the Troubled Asset Relief Program (or 

11 ‘‘TARP’’) to purchase, and to make and fund com12 mitments to purchase, troubled assets from any finan13 cial institution, on such terms and conditions as are 

14 determined by the Secretary, and in accordance with 

15 this Act and the policies and procedures developed 

16 and published by the Secretary. 

17 (2) COMMENCEMENT OF PROGRAM.—Establish18 ment of the policies and procedures and other similar 

19 administrative requirements imposed on the Secretary 

20 by this Act are not intended to delay the commence21 ment of the TARP. 

22 (3) ESTABLISHMENT OF TREASURY OFFICE.— 

23 (A) IN GENERAL.—The Secretary shall im24 plement any program under paragraph (1) 

25 through an Office of Financial Stability, estab-
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1 lished for such purpose within the Office of Do2 mestic Finance of the Department of the Treas3 ury, which office shall be headed by an Assistant 

4 Secretary of the Treasury, appointed by the 

5 President, by and with the advice and consent of 

6 the Senate, except that an interim Assistant Sec7 retary may be appointed by the Secretary. 

8 (B) CLERICAL AMENDMENTS.— 

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

10 United States Code, is amended in the item 

11 relating to Assistant Secretaries of the 

12 Treasury, by striking ‘‘(9)’’ and inserting 

13 ‘‘(10)’’. 

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

15 31, United States Code, is amended by 

16 striking ‘‘9’’ and inserting ‘‘10’’. 

17 (b) CONSULTATION.—In exercising the authority under 

18 this section, the Secretary shall consult with the Board, the 

19 Corporation, the Comptroller of the Currency, the Director 

20 of the Office of Thrift Supervision, the Chairman of the Na21 tional Credit Union Administration Board, and the Sec22 retary of Housing and Urban Development. 

23 (c) NECESSARY ACTIONS.—The Secretary is author24 ized to take such actions as the Secretary deems necessary 
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1 to carry out the authorities in this Act, including, without 

2 limitation, the following: 

3 (1) The Secretary shall have direct hiring au4 thority with respect to the appointment of employees 

5 to administer this Act. 

6 (2) Entering into contracts, including contracts 

7 for services authorized by section 3109 of title 5, 

8 United States Code. 

9 (3) Designating financial institutions as finan10 cial agents of the Federal Government, and such in11 stitutions shall perform all such reasonable duties re12 lated to this Act as financial agents of the Federal 

13 Government as may be required. 

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

15 flexibility to manage troubled assets in a manner de16 signed to minimize cost to the taxpayers, establishing 

17 vehicles that are authorized, subject to supervision by 

18 the Secretary, to purchase, hold, and sell troubled as19 sets and issue obligations. 

20 (5) Issuing such regulations and other guidance 

21 as may be necessary or appropriate to define terms 

22 or carry out the authorities or purposes of this Act. 

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

24 end of the 2-business-day period beginning on the date of 

25 the first purchase of troubled assets pursuant to the author-
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1 ity under this section or the end of the 45-day period begin2 ning on the date of enactment of this Act, the Secretary 

3 shall publish program guidelines, including the following: 

4 (1) Mechanisms for purchasing troubled assets. 

5 (2) Methods for pricing and valuing troubled as6 sets. 

7 (3) Procedures for selecting asset managers. 

8 (4) Criteria for identifying troubled assets for 

9 purchase. 

10 (e) PREVENTING UNJUST ENRICHMENT.—In making 

11 purchases under the authority of this Act, the Secretary 

12 shall take such steps as may be necessary to prevent unjust 

13 enrichment of financial institutions participating in a pro14 gram established under this section, including by pre15 venting the sale of a troubled asset to the Secretary at a 

16 higher price than what the seller paid to purchase the asset. 

17 This subsection does not apply to troubled assets acquired 

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

19 a financial institution in conservatorship or receivership, 

20 or that has initiated bankruptcy proceedings under title 11, 

21 United States Code. 

22 SEC. 102. INSURANCE OF TROUBLED ASSETS. 

23 (a) AUTHORITY.— 

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

25 program authorized under section 101, then the Sec-
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1 retary shall establish a program to guarantee troubled 

2 assets originated or issued prior to March 14, 2008, 

3 including mortgage-backed securities. 

4 (2) GUARANTEES.—In establishing any program 

5 under this subsection, the Secretary may develop 

6 guarantees of troubled assets and the associated pre7 miums for such guarantees. Such guarantees and pre8 miums may be determined by category or class of the 

9 troubled assets to be guaranteed. 

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

11 financial institution, the Secretary may guarantee 

12 the timely payment of principal of, and interest on, 

13 troubled assets in amounts not to exceed 100 percent 

14 of such payments. Such guarantee may be on such 

15 terms and conditions as are determined by the Sec16 retary, provided that such terms and conditions are 

17 consistent with the purposes of this Act. 

18 (b) REPORTS.—Not later than 90 days after the date 

19 of enactment of this Act, the Secretary shall report to the 

20 appropriate committees of Congress on the program estab21 lished under subsection (a). 

22 (c) PREMIUMS.— 

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

24 premiums from any financial institution partici25 pating in the program established under subsection 
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1 (a). Such premiums shall be in an amount that the 

2 Secretary determines necessary to meet the purposes 

3 of this Act and to provide sufficient reserves pursuant 

4 to paragraph (3). 

5 (2) AUTHORITY TO BASE PREMIUMS ON PRODUCT

6 RISK.—In establishing any premium under para7 graph (1), the Secretary may provide for variations 

8 in such rates according to the credit risk associated 

9 with the particular troubled asset that is being guar10 anteed. The Secretary shall publish the methodology 

11 for setting the premium for a class of troubled assets 

12 together with an explanation of the appropriateness of 

13 the class of assets for participation in the program es14 tablished under this section. The methodology shall 

15 ensure that the premium is consistent with paragraph 

16 (3). 

17 (3) MINIMUM LEVEL.—The premiums referred to 

18 in paragraph (1) shall be set by the Secretary at a 

19 level necessary to create reserves sufficient to meet an20 ticipated claims, based on an actuarial analysis, and 

21 to ensure that taxpayers are fully protected. 

22 (4) ADJUSTMENT TO PURCHASE AUTHORITY.— 

23 The purchase authority limit in section 115 shall be 

24 reduced by an amount equal to the difference between 

25 the total of the outstanding guaranteed obligations 
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1 and the balance in the Troubled Assets Insurance Fi2 nancing Fund. 

3 (d) TROUBLED ASSETS INSURANCE FINANCING

4 FUND.— 

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

6 collected under this section into the Fund established 

7 under paragraph (2). 

8 (2) ESTABLISHMENT.—There is established a 

9 Troubled Assets Insurance Financing Fund that shall 

10 consist of the amounts collected pursuant to para11 graph (1), and any balance in such fund shall be in12 vested by the Secretary in United States Treasury se13 curities, or kept in cash on hand or on deposit, as 

14 necessary. 

15 (3) PAYMENTS FROM FUND.—The Secretary shall 

16 make payments from amounts deposited in the Fund 

17 to fulfill obligations of the guarantees provided to fi18 nancial institutions under subsection (a). 

19 SEC. 103. CONSIDERATIONS. 

20 In exercising the authorities granted in this Act, the 

21 Secretary shall take into consideration— 

22 (1) protecting the interests of taxpayers by maxi23 mizing overall returns and minimizing the impact on 

24 the national debt; 
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1 (2) providing stability and preventing disrup2 tion to financial markets in order to limit the impact 

3 on the economy and protect American jobs, savings, 

4 and retirement security; 

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

6 and to stabilize communities; 

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

8 purchase from an individual financial institution, the 

9 long-term viability of the financial institution in de10 termining whether the purchase represents the most 

11 efficient use of funds under this Act; 

12 (5) ensuring that all financial institutions are 

13 eligible to participate in the program, without dis14 crimination based on size, geography, form of organi15 zation, or the size, type, and number of assets eligible 

16 for purchase under this Act; 

17 (6) providing financial assistance to financial 

18 institutions, including those serving low- and mod19 erate-income populations and other underserved com20 munities, and that have assets less than 

21 $1,000,000,000, that were well or adequately capital22 ized as of June 30, 2008, and that as a result of the 

23 devaluation of the preferred government-sponsored en24 terprises stock will drop one or more capital levels, in 
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1 a manner sufficient to restore the financial institu2 tions to at least an adequately capitalized level; 

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

4 public instrumentalities, such as counties and cities, 

5 that may have suffered significant increased costs or 

6 losses in the current market turmoil; 

7 (8) protecting the retirement security of Ameri8 cans by purchasing troubled assets held by or on be9 half of an eligible retirement plan described in clause 

10 (iii), (iv), (v), or (vi) of section 402(c)(8)(B) of the 

11 Internal Revenue Code of 1986, except that such au12 thority shall not extend to any compensation arrange13 ments subject to section 409A of such Code; and 

14 (9) the utility of purchasing other real estate 

15 owned and instruments backed by mortgages on mul16 tifamily properties. 

17 SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD. 

18 (a) ESTABLISHMENT.—There is established the Finan19 cial Stability Oversight Board, which shall be responsible 

20 for— 

21 (1) reviewing the exercise of authority under a 

22 program developed in accordance with this Act, in23 cluding— 

24 (A) policies implemented by the Secretary 

25 and the Office of Financial Stability created 
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1 under sections 101 and 102, including the ap2 pointment of financial agents, the designation of 

3 asset classes to be purchased, and plans for the 

4 structure of vehicles used to purchase troubled as5 sets; and 

6 (B) the effect of such actions in assisting 

7 American families in preserving home owner8 ship, stabilizing financial markets, and pro9 tecting taxpayers; 

10 (2) making recommendations, as appropriate, to 

11 the Secretary regarding use of the authority under 

12 this Act; and 

13 (3) reporting any suspected fraud, misrepresen14 tation, or malfeasance to the Special Inspector Gen15 eral for the Troubled Assets Relief Program or the At16 torney General of the United States, consistent with 

17 section 535(b) of title 28, United States Code. 

18 (b) MEMBERSHIP.—The Financial Stability Oversight 

19 Board shall be comprised of— 

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

21 the Federal Reserve System; 

22 (2) the Secretary; 

23 (3) the Director of the Federal Housing Finance 

24 Agency; 
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1 (4) the Chairman of the Securities Exchange 

2 Commission; and 

3 (5) the Secretary of Housing and Urban Devel4 opment. 

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

6 Stability Oversight Board shall be elected by the members 

7 of the Board from among the members other than the Sec8 retary. 

9 (d) MEETINGS.—The Financial Stability Oversight 

10 Board shall meet 2 weeks after the first exercise of the pur11 chase authority of the Secretary under this Act, and month12 ly thereafter. 

13 (e) ADDITIONAL AUTHORITIES.—In addition to the re14 sponsibilities described in subsection (a), the Financial Sta15 bility Oversight Board shall have the authority to ensure 

16 that the policies implemented by the Secretary are— 

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

18 (2) in the economic interests of the United 

19 States; and 

20 (3) consistent with protecting taxpayers, in ac21 cordance with section 113(a). 

22 (f) CREDIT REVIEW COMMITTEE.—The Financial Sta23 bility Oversight Board may appoint a credit review com24 mittee for the purpose of evaluating the exercise of the pur25 chase authority provided under this Act and the assets ac-
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1 quired through the exercise of such authority, as the Finan2 cial Stability Oversight Board determines appropriate. 

3 (g) REPORTS.—The Financial Stability Oversight 

4 Board shall report to the appropriate committees of Con5 gress and the Congressional Oversight Panel established 

6 under section 125, not less frequently than quarterly, on 

7 the matters described under subsection (a)(1). 

8 (h) TERMINATION.—The Financial Stability Oversight 

9 Board, and its authority under this section, shall terminate 

10 on the expiration of the 15-day period beginning upon the 

11 later of— 

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

13 by the Secretary under section 101 has been sold or 

14 transferred out of the ownership or control of the Fed15 eral Government; or 

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

17 contract issued under section 102. 

18 SEC. 105. REPORTS. 

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

20 period beginning on the date of the first exercise of the au21 thority granted in section 101(a), or of the first exercise 

22 of the authority granted in section 102, whichever occurs 

23 first, and every 30-day period thereafter, the Secretary shall 

24 report to the appropriate committees of Congress, with re25 spect to each such period— 
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1 (1) an overview of actions taken by the Sec2 retary, including the considerations required by sec3 tion 103 and the efforts under section 109; 

4 (2) the actual obligation and expenditure of the 

5 funds provided for administrative expenses by section 

6 118 during such period and the expected expenditure 

7 of such funds in the subsequent period; and 

8 (3) a detailed financial statement with respect to 

9 the exercise of authority under this Act, including— 

10 (A) all agreements made or renewed; 

11 (B) all insurance contracts entered into 

12 pursuant to section 102; 

13 (C) all transactions occurring during such 

14 period, including the types of parties involved; 

15 (D) the nature of the assets purchased; 

16 (E) all projected costs and liabilities; 

17 (F) operating expenses, including com18 pensation for financial agents; 

19 (G) the valuation or pricing method used 

20 for each transaction; and 

21 (H) a description of the vehicles established 

22 to exercise such authority. 

23 (b) TRANCHE REPORTS TO CONGRESS.— 

24 (1) REPORTS.—The Secretary shall provide to 

25 the appropriate committees of Congress, at the times 
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1 specified in paragraph (2), a written report, includ2 ing— 

3 (A) a description of all of the transactions 

4 made during the reporting period; 

5 (B) a description of the pricing mechanism 

6 for the transactions; 

7 (C) a justification of the price paid for and 

8 other financial terms associated with the trans9 actions; 

10 (D) a description of the impact of the exer11 cise of such authority on the financial system, 

12 supported, to the extent possible, by specific data; 

13 (E) a description of challenges that remain 

14 in the financial system, including any bench15 marks yet to be achieved; and 

16 (F) an estimate of additional actions under 

17 the authority provided under this Act that may 

18 be necessary to address such challenges. 

19 (2) TIMING.—The report required by this sub20 section shall be submitted not later than 7 days after 

21 the date on which commitments to purchase troubled 

22 assets under the authorities provided in this Act first 

23 reach an aggregate of $50,000,000,000 and not later 

24 than 7 days after each $50,000,000,000 interval of 

25 such commitments is reached thereafter. 
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1 (c) REGULATORY MODERNIZATION REPORT.—The Sec2 retary shall review the current state of the financial markets 

3 and the regulatory system and submit a written report to 

4 the appropriate committees of Congress not later than April 

5 30, 2009, analyzing the current state of the regulatory sys6 tem and its effectiveness at overseeing the participants in 

7 the financial markets, including the over-the-counter swaps 

8 market and government-sponsored enterprises, and pro9 viding recommendations for improvement, including— 

10 (1) recommendations regarding— 

11 (A) whether any participants in the finan12 cial markets that are currently outside the regu13 latory system should become subject to the regu14 latory system; and 

15 (B) enhancement of the clearing and settle16 ment of over-the-counter swaps; and 

17 (2) the rationale underlying such recommenda18 tions. 

19 (d) SHARING OF INFORMATION.—Any report required 

20 under this section shall also be submitted to the Congres21 sional Oversight Panel established under section 125. 

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

23 section shall terminate on the later of— 

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

25 by the Secretary under section 101 has been sold or 
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1 transferred out of the ownership or control of the Fed2 eral Government; or 

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

4 contract issued under section 102. 

5 SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED AS6 SETS; REVENUES AND SALE PROCEEDS. 

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

8 any time, exercise any rights received in connection with 

9 troubled assets purchased under this Act. 

10 (b) MANAGEMENT OF TROUBLED ASSETS.—The Sec11 retary shall have authority to manage troubled assets pur12 chased under this Act, including revenues and portfolio 

13 risks therefrom. 

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

15 at any time, upon terms and conditions and at a price de16 termined by the Secretary, sell, or enter into securities 

17 loans, repurchase transactions, or other financial trans18 actions in regard to, any troubled asset purchased under 

19 this Act. 

20 (d) TRANSFER TO TREASURY.—Revenues of, and pro21 ceeds from the sale of troubled assets purchased under this 

22 Act, or from the sale, exercise, or surrender of warrants or 

23 senior debt instruments acquired under section 113 shall 

24 be paid into the general fund of the Treasury for reduction 

25 of the public debt. 
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1 (e) APPLICATION OF SUNSET TO TROUBLED AS2 SETS.—The authority of the Secretary to hold any troubled 

3 asset purchased under this Act before the termination date 

4 in section 120, or to purchase or fund the purchase of a 

5 troubled asset under a commitment entered into before the 

6 termination date in section 120, is not subject to the provi7 sions of section 120. 

8 SEC. 107. CONTRACTING PROCEDURES. 

9 (a) STREAMLINED PROCESS.—For purposes of this 

10 Act, the Secretary may waive specific provisions of the Fed11 eral Acquisition Regulation upon a determination that ur12 gent and compelling circumstances make compliance with 

13 such provisions contrary to the public interest. Any such 

14 determination, and the justification for such determination, 

15 shall be submitted to the Committees on Oversight and Gov16 ernment Reform and Financial Services of the House of 

17 Representatives and the Committees on Homeland Security 

18 and Governmental Affairs and Banking, Housing, and 

19 Urban Affairs of the Senate within 7 days. 

20 (b) ADDITIONAL CONTRACTING REQUIREMENTS.—In 

21 any solicitation or contract where the Secretary has, pursu22 ant to subsection (a), waived any provision of the Federal 

23 Acquisition Regulation pertaining to minority contracting, 

24 the Secretary shall develop and implement standards and 

25 procedures to ensure, to the maximum extent practicable, 
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1 the inclusion and utilization of minorities (as such term 

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

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

4 1811 note)) and women, and minority- and women-owned 

5 businesses (as such terms are defined in section 21A(r)(4) 

6 of the Federal Home Loan Bank Act (12 U.S.C. 

7 1441a(r)(4)), in that solicitation or contract, including con8 tracts to asset managers, servicers, property managers, and 

9 other service providers or expert consultants. 

10 (c) ELIGIBILITY OF FDIC.—Notwithstanding sub11 sections (a) and (b), the Corporation— 

12 (1) shall be eligible for, and shall be considered 

13 in, the selection of asset managers for residential 

14 mortgage loans and residential mortgage-backed secu15 rities; and 

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

17 services provided. 

18 SEC. 108. CONFLICTS OF INTEREST. 

19 (a) STANDARDS REQUIRED.—The Secretary shall issue 

20 regulations or guidelines necessary to address and manage 

21 or to prohibit conflicts of interest that may arise in connec22 tion with the administration and execution of the authori23 ties provided under this Act, including— 

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

25 contractors or advisors, including asset managers; 
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1 (2) the purchase of troubled assets; 

2 (3) the management of the troubled assets held; 

3 (4) post-employment restrictions on employees; 

4 and 

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

6 Secretary deems necessary or appropriate in the pub7 lic interest. 

8 (b) TIMING.—Regulations or guidelines required by 

9 this section shall be issued as soon as practicable after the 

10 date of enactment of this Act. 

11 SEC. 109. FORECLOSURE MITIGATION EFFORTS. 

12 (a) RESIDENTIAL MORTGAGE LOAN SERVICING

13 STANDARDS.—To the extent that the Secretary acquires 

14 mortgages, mortgage backed securities, and other assets se15 cured by residential real estate, including multifamily 

16 housing, the Secretary shall implement a plan that seeks 

17 to maximize assistance for homeowners and use the author18 ity of the Secretary to encourage the servicers of the under19 lying mortgages, considering net present value to the tax20 payer, to take advantage of the HOPE for Homeowners 

21 Program under section 257 of the National Housing Act 

22 or other available programs to minimize foreclosures. In ad23 dition, the Secretary may use loan guarantees and credit 

24 enhancements to facilitate loan modifications to prevent 

25 avoidable foreclosures. 
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1 (b) COORDINATION.—The Secretary shall coordinate 

2 with the Corporation, the Board (with respect to any mort3 gage or mortgage-backed securities or pool of securities held, 

4 owned, or controlled by or on behalf of a Federal reserve 

5 bank, as provided in section 110(a)(1)(C)), the Federal 

6 Housing Finance Agency, the Secretary of Housing and 

7 Urban Development, and other Federal Government entities 

8 that hold troubled assets to attempt to identify opportuni9 ties for the acquisition of classes of troubled assets that will 

10 improve the ability of the Secretary to improve the loan 

11 modification and restructuring process and, where permis12 sible, to permit bona fide tenants who are current on their 

13 rent to remain in their homes under the terms of the lease. 

14 In the case of a mortgage on a residential rental property, 

15 the plan required under this section shall include protecting 

16 Federal, State, and local rental subsidies and protections, 

17 and ensuring any modification takes into account the need 

18 for operating funds to maintain decent and safe conditions 

19 at the property. 

20 (c) CONSENT TO REASONABLE LOAN MODIFICATION

21 REQUESTS.—Upon any request arising under existing in22 vestment contracts, the Secretary shall consent, where ap23 propriate, and considering net present value to the tax24 payer, to reasonable requests for loss mitigation measures, 

25 including term extensions, rate reductions, principal write 
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1 downs, increases in the proportion of loans within a trust 

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

3 other limitation on modifications. 

4 SEC. 110. ASSISTANCE TO HOMEOWNERS. 

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

6 (1) the term ‘‘Federal property manager’’ 

7 means— 

8 (A) the Federal Housing Finance Agency, 

9 in its capacity as conservator of the Federal Na10 tional Mortgage Association and the Federal 

11 Home Loan Mortgage Corporation; 

12 (B) the Corporation, with respect to resi13 dential mortgage loans and mortgage-backed se14 curities held by any bridge depository institution 

15 pursuant to section 11(n) of the Federal Deposit 

16 Insurance Act; and 

17 (C) the Board, with respect to any mortgage 

18 or mortgage-backed securities or pool of securities 

19 held, owned, or controlled by or on behalf of a 

20 Federal reserve bank, other than mortgages or se21 curities held, owned, or controlled in connection 

22 with open market operations under section 14 of 

23 the Federal Reserve Act (12 U.S.C. 353), or as 

24 collateral for an advance or discount that is not 

25 in default; 
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1 (2) the term ‘‘consumer’’ has the same meaning 

2 as in section 103 of the Truth in Lending Act (15 

3 U.S.C. 1602); 

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

5 the same meaning as in section 3 of the Federal De6 posit Insurance Act (12 U.S.C. 1813); and 

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

8 in section 6(i)(2) of the Real Estate Settlement Proce9 dures Act of 1974 (12 U.S.C. 2605(i)(2)). 

10 (b) HOMEOWNER ASSISTANCE BY AGENCIES.— 

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

12 property manager holds, owns, or controls mortgages, 

13 mortgage backed securities, and other assets secured 

14 by residential real estate, including multifamily hous15 ing, the Federal property manager shall implement a 

16 plan that seeks to maximize assistance for home17 owners and use its authority to encourage the 

18 servicers of the underlying mortgages, and considering 

19 net present value to the taxpayer, to take advantage 

20 of the HOPE for Homeowners Program under section 

21 257 of the National Housing Act or other available 

22 programs to minimize foreclosures. 

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

24 mortgage loan, modifications made under paragraph 

25 (1) may include— 
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1 (A) reduction in interest rates; 

2 (B) reduction of loan principal; and 

3 (C) other similar modifications. 

4 (3) TENANT PROTECTIONS.—In the case of mort5 gages on residential rental properties, modifications 

6 made under paragraph (1) shall ensure— 

7 (A) the continuation of any existing Fed8 eral, State, and local rental subsidies and protec9 tions; and 

10 (B) that modifications take into account the 

11 need for operating funds to maintain decent and 

12 safe conditions at the property. 

13 (4) TIMING.—Each Federal property manager 

14 shall develop and begin implementation of the plan 

15 required by this subsection not later than 60 days 

16 after the date of enactment of this Act. 

17 (5) REPORTS TO CONGRESS.—Each Federal 

18 property manager shall, 60 days after the date of en19 actment of this Act and every 30 days thereafter, re20 port to Congress specific information on the number 

21 and types of loan modifications made and the number 

22 of actual foreclosures occurring during the reporting 

23 period in accordance with this section. 

24 (6) CONSULTATION.—In developing the plan re25 quired by this subsection, the Federal property man-
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1 agers shall consult with one another and, to the extent 

2 possible, utilize consistent approaches to implement 

3 the requirements of this subsection. 

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

5 case in which a Federal property manager is not the owner 

6 of a residential mortgage loan, but holds an interest in obli7 gations or pools of obligations secured by residential mort8 gage loans, the Federal property manager shall— 

9 (1) encourage implementation by the loan 

10 servicers of loan modifications developed under sub11 section (b); and 

12 (2) assist in facilitating any such modifications, 

13 to the extent possible. 

14 (d) LIMITATION.—The requirements of this section 

15 shall not supersede any other duty or requirement imposed 

16 on the Federal property managers under otherwise applica17 ble law. 

18 SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE 

19 GOVERNANCE. 

20 (a) APPLICABILITY.—Any financial institution that 

21 sells troubled assets to the Secretary under this Act shall 

22 be subject to the executive compensation requirements of 

23 subsections (b) and (c) and the provisions under the Inter24 nal Revenue Code of 1986, as provided under the amend25 ment by section 302, as applicable. 
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1 (b) DIRECT PURCHASES.— 

2 (1) IN GENERAL.—Where the Secretary deter3 mines that the purposes of this Act are best met 

4 through direct purchases of troubled assets from an 

5 individual financial institution where no bidding 

6 process or market prices are available, and the Sec7 retary receives a meaningful equity or debt position 

8 in the financial institution as a result of the trans9 action, the Secretary shall require that the financial 

10 institution meet appropriate standards for executive 

11 compensation and corporate governance. The stand12 ards required under this subsection shall be effective 

13 for the duration of the period that the Secretary holds 

14 an equity or debt position in the financial institu15 tion. 

16 (2) CRITERIA.—The standards required under 

17 this subsection shall include— 

18 (A) limits on compensation that exclude in19 centives for senior executive officers of a finan20 cial institution to take unnecessary and excessive 

21 risks that threaten the value of the financial in22 stitution during the period that the Secretary 

23 holds an equity or debt position in the financial 

24 institution; 
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1 (B) a provision for the recovery by the fi2 nancial institution of any bonus or incentive 

3 compensation paid to a senior executive officer 

4 based on statements of earnings, gains, or other 

5 criteria that are later proven to be materially in6 accurate; and 

7 (C) a prohibition on the financial institu8 tion making any golden parachute payment to 

9 its senior executive officer during the period that 

10 the Secretary holds an equity or debt position in 

11 the financial institution. 

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

13 the term ‘‘senior executive officer’’ means an indi14 vidual who is one of the top 5 highly paid executives 

15 of a public company, whose compensation is required 

16 to be disclosed pursuant to the Securities Exchange 

17 Act of 1934, and any regulations issued thereunder, 

18 and non-public company counterparts. 

19 (c) AUCTION PURCHASES.—Where the Secretary deter20 mines that the purposes of this Act are best met through 

21 auction purchases of troubled assets, and only where such 

22 purchases per financial institution in the aggregate exceed 

23 $300,000,000 (including direct purchases), the Secretary 

24 shall prohibit, for such financial institution, any new em25 ployment contract with a senior executive officer that pro-
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1 vides a golden parachute in the event of an involuntary 

2 termination, bankruptcy filing, insolvency, or receivership. 

3 The Secretary shall issue guidance to carry out this para4 graph not later than 2 months after the date of enactment 

5 of this Act, and such guidance shall be effective upon 

6 issuance. 

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

8 apply only to arrangements entered into during the period 

9 during which the authorities under section 101(a) are in 

10 effect, as determined under section 120. 

11 SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES 

12 AND CENTRAL BANKS. 

13 The Secretary shall coordinate, as appropriate, with 

14 foreign financial authorities and central banks to work to15 ward the establishment of similar programs by such au16 thorities and central banks. To the extent that such foreign 

17 financial authorities or banks hold troubled assets as a re18 sult of extending financing to financial institutions that 

19 have failed or defaulted on such financing, such troubled 

20 assets qualify for purchase under section 101. 

21 SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXI22 MIZATION OF BENEFITS FOR TAXPAYERS. 

23 (a) LONG-TERM COSTS AND BENEFITS.— 

24 (1) MINIMIZING NEGATIVE IMPACT.—The Sec25 retary shall use the authority under this Act in a 
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•HR 1424 EAS 

1 manner that will minimize any potential long-term 

2 negative impact on the taxpayer, taking into account 

3 the direct outlays, potential long-term returns on as4 sets purchased, and the overall economic benefits of 

5 the program, including economic benefits due to im6 provements in economic activity and the availability 

7 of credit, the impact on the savings and pensions of 

8 individuals, and reductions in losses to the Federal 

9 Government. 

10 (2) AUTHORITY.—In carrying out paragraph 

11 (1), the Secretary shall— 

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

13 for and until such time as the Secretary deter14 mines that the market is optimal for selling such 

15 assets, in order to maximize the value for tax16 payers; and 

17 (B) sell such assets at a price that the Sec18 retary determines, based on available financial 

19 analysis, will maximize return on investment for 

20 the Federal Government. 

21 (3) PRIVATE SECTOR PARTICIPATION.—The Sec22 retary shall encourage the private sector to partici23 pate in purchases of troubled assets, and to invest in 

24 financial institutions, consistent with the provisions 

25 of this section. 
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1 (b) USE OF MARKET MECHANISMS.—In making pur2 chases under this Act, the Secretary shall— 

3 (1) make such purchases at the lowest price that 

4 the Secretary determines to be consistent with the 

5 purposes of this Act; and 

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

7 resources by using market mechanisms, including 

8 auctions or reverse auctions, where appropriate. 

9 (c) DIRECT PURCHASES.—If the Secretary determines 

10 that use of a market mechanism under subsection (b) is not 

11 feasible or appropriate, and the purposes of the Act are best 

12 met through direct purchases from an individual financial 

13 institution, the Secretary shall pursue additional measures 

14 to ensure that prices paid for assets are reasonable and re15 flect the underlying value of the asset. 

16 (d) CONDITIONS ON PURCHASE AUTHORITY FOR WAR17 RANTS AND DEBT INSTRUMENTS.— 

18 (1) IN GENERAL.—The Secretary may not pur19 chase, or make any commitment to purchase, any 

20 troubled asset under the authority of this Act, unless 

21 the Secretary receives from the financial institution 

22 from which such assets are to be purchased— 

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

24 the securities of which are traded on a national 

25 securities exchange, a warrant giving the right to 
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1 the Secretary to receive nonvoting common stock 

2 or preferred stock in such financial institution, 

3 or voting stock with respect to which, the Sec4 retary agrees not to exercise voting power, as the 

5 Secretary determines appropriate; or 

6 (B) in the case of any financial institution 

7 other than one described in subparagraph (A), a 

8 warrant for common or preferred stock, or a sen9 ior debt instrument from such financial institu10 tion, as described in paragraph (2)(C). 

11 (2) TERMS AND CONDITIONS.—The terms and 

12 conditions of any warrant or senior debt instrument 

13 required under paragraph (1) shall meet the following 

14 requirements: 

15 (A) PURPOSES.—Such terms and conditions 

16 shall, at a minimum, be designed— 

17 (i) to provide for reasonable participa18 tion by the Secretary, for the benefit of tax19 payers, in equity appreciation in the case of 

20 a warrant or other equity security, or a 

21 reasonable interest rate premium, in the 

22 case of a debt instrument; and 

23 (ii) to provide additional protection 

24 for the taxpayer against losses from sale of 
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•HR 1424 EAS 

1 assets by the Secretary under this Act and 

2 the administrative expenses of the TARP. 

3 (B) AUTHORITY TO SELL, EXERCISE, OR

4 SURRENDER.—The Secretary may sell, exercise, 

5 or surrender a warrant or any senior debt in6 strument received under this subsection, based on 

7 the conditions established under subparagraph 

8 (A). 

9 (C) CONVERSION.—The warrant shall pro10 vide that if, after the warrant is received by the 

11 Secretary under this subsection, the financial in12 stitution that issued the warrant is no longer 

13 listed or traded on a national securities exchange 

14 or securities association, as described in para15 graph (1)(A), such warrants shall convert to sen16 ior debt, or contain appropriate protections for 

17 the Secretary to ensure that the Treasury is ap18 propriately compensated for the value of the war19 rant, in an amount determined by the Secretary. 

20 (D) PROTECTIONS.—Any warrant rep21 resenting securities to be received by the Sec22 retary under this subsection shall contain anti23 dilution provisions of the type employed in cap24 ital market transactions, as determined by the 

25 Secretary. Such provisions shall protect the value 
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•HR 1424 EAS 

1 of the securities from market transactions such 

2 as stock splits, stock distributions, dividends, 

3 and other distributions, mergers, and other forms 

4 of reorganization or recapitalization. 

5 (E) EXERCISE PRICE.—The exercise price 

6 for any warrant issued pursuant to this sub7 section shall be set by the Secretary, in the inter8 est of the taxpayers. 

9 (F) SUFFICIENCY.—The financial institu10 tion shall guarantee to the Secretary that it has 

11 authorized shares of nonvoting stock available to 

12 fulfill its obligations under this subsection. 

13 Should the financial institution not have suffi14 cient authorized shares, including preferred 

15 shares that may carry dividend rights equal to 

16 a multiple number of common shares, the Sec17 retary may, to the extent necessary, accept a sen18 ior debt note in an amount, and on such terms 

19 as will compensate the Secretary with equivalent 

20 value, in the event that a sufficient shareholder 

21 vote to authorize the necessary additional shares 

22 cannot be obtained. 

23 (3) EXCEPTIONS.— 

24 (A) DE MINIMIS.—The Secretary shall es25 tablish de minimis exceptions to the require-
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•HR 1424 EAS 

1 ments of this subsection, based on the size of the 

2 cumulative transactions of troubled assets pur3 chased from any one financial institution for the 

4 duration of the program, at not more than 

5 $100,000,000. 

6 (B) OTHER EXCEPTIONS.—The Secretary 

7 shall establish an exception to the requirements 

8 of this subsection and appropriate alternative re9 quirements for any participating financial insti10 tution that is legally prohibited from issuing se11 curities and debt instruments, so as not to allow 

12 circumvention of the requirements of this section. 

13 SEC. 114. MARKET TRANSPARENCY. 

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

15 Secretary shall make available to the public, in electronic 

16 form, a description, amounts, and pricing of assets acquired 

17 under this Act, within 2 business days of purchase, trade, 

18 or other disposition. 

19 (b) DISCLOSURE.—For each type of financial institu20 tions that sells troubled assets to the Secretary under this 

21 Act, the Secretary shall determine whether the public disclo22 sure required for such financial institutions with respect 

23 to off-balance sheet transactions, derivatives instruments, 

24 contingent liabilities, and similar sources of potential expo25 sure is adequate to provide to the public sufficient informa-
39 

•HR 1424 EAS 

1 tion as to the true financial position of the institutions. 

2 If such disclosure is not adequate for that purpose, the Sec3 retary shall make recommendations for additional disclo4 sure requirements to the relevant regulators. 

5 SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE. 

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

7 purchase troubled assets under this Act shall be limited as 

8 follows: 

9 (1) Effective upon the date of enactment of this 

10 Act, such authority shall be limited to 

11 $250,000,000,000 outstanding at any one time. 

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

13 Congress a written certification that the Secretary 

14 needs to exercise the authority under this paragraph, 

15 effective upon such submission, such authority shall 

16 be limited to $350,000,000,000 outstanding at any 

17 one time. 

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

19 paragraph (2) has been made, the President transmits 

20 to the Congress a written report detailing the plan of 

21 the Secretary to exercise the authority under this 

22 paragraph, unless there is enacted, within 15 cal23 endar days of such transmission, a joint resolution 

24 described in subsection (c), effective upon the expira25 tion of such 15-day period, such authority shall be 
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1 limited to $700,000,000,000 outstanding at any one 

2 time. 

3 (b) AGGREGATION OF PURCHASE PRICES.—The 

4 amount of troubled assets purchased by the Secretary out5 standing at any one time shall be determined for purposes 

6 of the dollar amount limitations under subsection (a) by 

7 aggregating the purchase prices of all troubled assets held. 

8 (c) JOINT RESOLUTION OF DISAPPROVAL.— 

9 (1) IN GENERAL.—Notwithstanding any other 

10 provision of this section, the Secretary may not exer11 cise any authority to make purchases under this Act 

12 with regard to any amount in excess of 

13 $350,000,000,000 previously obligated, as described in 

14 this section if, within 15 calendar days after the date 

15 on which Congress receives a report of the plan of the 

16 Secretary described in subsection (a)(3), there is en17 acted into law a joint resolution disapproving the 

18 plan of the Secretary with respect to such additional 

19 amount. 

20 (2) CONTENTS OF JOINT RESOLUTION.—For the 

21 purpose of this section, the term ‘‘joint resolution’’ 

22 means only a joint resolution— 

23 (A) that is introduced not later than 3 cal24 endar days after the date on which the report of 
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1 the plan of the Secretary referred to in subsection 

2 (a)(3) is received by Congress; 

3 (B) which does not have a preamble; 

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

5 resolution relating to the disapproval of obliga6 tions under the Emergency Economic Stabiliza7 tion Act of 2008’’; and 

8 (D) the matter after the resolving clause of 

9 which is as follows: ‘‘That Congress disapproves 

10 the obligation of any amount exceeding the 

11 amounts obligated as described in paragraphs 

12 (1) and (2) of section 115(a) of the Emergency 

13 Economic Stabilization Act of 2008.’’. 

14 (d) FAST TRACK CONSIDERATION IN HOUSE OF REP15 RESENTATIVES.— 

16 (1) RECONVENING.—Upon receipt of a report 

17 under subsection (a)(3), the Speaker, if the House 

18 would otherwise be adjourned, shall notify the Mem19 bers of the House that, pursuant to this section, the 

20 House shall convene not later than the second cal21 endar day after receipt of such report; 

22 (2) REPORTING AND DISCHARGE.—Any com23 mittee of the House of Representatives to which a 

24 joint resolution is referred shall report it to the House 

25 not later than 5 calendar days after the date of re-
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1 ceipt of the report described in subsection (a)(3). If a 

2 committee fails to report the joint resolution within 

3 that period, the committee shall be discharged from 

4 further consideration of the joint resolution and the 

5 joint resolution shall be referred to the appropriate 

6 calendar. 

7 (3) PROCEEDING TO CONSIDERATION.—After 

8 each committee authorized to consider a joint resolu9 tion reports it to the House or has been discharged 

10 from its consideration, it shall be in order, not later 

11 than the sixth day after Congress receives the report 

12 described in subsection (a)(3), to move to proceed to 

13 consider the joint resolution in the House. All points 

14 of order against the motion are waived. Such a mo15 tion shall not be in order after the House has disposed 

16 of a motion to proceed on the joint resolution. The 

17 previous question shall be considered as ordered on 

18 the motion to its adoption without intervening mo19 tion. The motion shall not be debatable. A motion to 

20 reconsider the vote by which the motion is disposed of 

21 shall not be in order. 

22 (4) CONSIDERATION.—The joint resolution shall 

23 be considered as read. All points of order against the 

24 joint resolution and against its consideration are 

25 waived. The previous question shall be considered as 
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1 ordered on the joint resolution to its passage without 

2 intervening motion except two hours of debate equally 

3 divided and controlled by the proponent and an oppo4 nent. A motion to reconsider the vote on passage of 

5 the joint resolution shall not be in order. 

6 (e) FAST TRACK CONSIDERATION IN SENATE.— 

7 (1) RECONVENING.—Upon receipt of a report 

8 under subsection (a)(3), if the Senate has adjourned 

9 or recessed for more than 2 days, the majority leader 

10 of the Senate, after consultation with the minority 

11 leader of the Senate, shall notify the Members of the 

12 Senate that, pursuant to this section, the Senate shall 

13 convene not later than the second calendar day after 

14 receipt of such message. 

15 (2) PLACEMENT ON CALENDAR.—Upon introduc16 tion in the Senate, the joint resolution shall be placed 

17 immediately on the calendar. 

18 (3) FLOOR CONSIDERATION.— 

19 (A) IN GENERAL.—Notwithstanding Rule 

20 XXII of the Standing Rules of the Senate, it is 

21 in order at any time during the period begin22 ning on the 4th day after the date on which Con23 gress receives a report of the plan of the Sec24 retary described in subsection (a)(3) and ending 

25 on the 6th day after the date on which Congress 
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1 receives a report of the plan of the Secretary de2 scribed in subsection (a)(3) (even though a pre3 vious motion to the same effect has been dis4 agreed to) to move to proceed to the consider5 ation of the joint resolution, and all points of 

6 order against the joint resolution (and against 

7 consideration of the joint resolution) are waived. 

8 The motion to proceed is not debatable. The mo9 tion is not subject to a motion to postpone. A 

10 motion to reconsider the vote by which the mo11 tion is agreed to or disagreed to shall not be in 

12 order. If a motion to proceed to the consideration 

13 of the resolution is agreed to, the joint resolution 

14 shall remain the unfinished business until dis15 posed of. 

16 (B) DEBATE.—Debate on the joint resolu17 tion, and on all debatable motions and appeals 

18 in connection therewith, shall be limited to not 

19 more than 10 hours, which shall be divided 

20 equally between the majority and minority lead21 ers or their designees. A motion further to limit 

22 debate is in order and not debatable. An amend23 ment to, or a motion to postpone, or a motion 

24 to proceed to the consideration of other business, 
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•HR 1424 EAS 

1 or a motion to recommit the joint resolution is 

2 not in order. 

3 (C) VOTE ON PASSAGE.—The vote on pas4 sage shall occur immediately following the con5 clusion of the debate on a joint resolution, and 

6 a single quorum call at the conclusion of the de7 bate if requested in accordance with the rules of 

8 the Senate. 

9 (D) RULINGS OF THE CHAIR ON PROCE10 DURE.—Appeals from the decisions of the Chair 

11 relating to the application of the rules of the 

12 Senate, as the case may be, to the procedure re13 lating to a joint resolution shall be decided with14 out debate. 

15 (f) RULES RELATING TO SENATE AND HOUSE OF REP16 RESENTATIVES.— 

17 (1) COORDINATION WITH ACTION BY OTHER

18 HOUSE.—If, before the passage by one House of a 

19 joint resolution of that House, that House receives 

20 from the other House a joint resolution, then the fol21 lowing procedures shall apply: 

22 (A) The joint resolution of the other House 

23 shall not be referred to a committee. 

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

25 House receiving the resolution— 
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1 (i) the procedure in that House shall be 

2 the same as if no joint resolution had been 

3 received from the other House; but 

4 (ii) the vote on passage shall be on the 

5 joint resolution of the other House. 

6 (2) TREATMENT OF JOINT RESOLUTION OF

7 OTHER HOUSE.—If one House fails to introduce or 

8 consider a joint resolution under this section, the joint 

9 resolution of the other House shall be entitled to expe10 dited floor procedures under this section. 

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

12 following passage of the joint resolution in the Senate, 

13 the Senate then receives the companion measure from 

14 the House of Representatives, the companion measure 

15 shall not be debatable. 

16 (4) CONSIDERATION AFTER PASSAGE.— 

17 (A) IN GENERAL.—If Congress passes a 

18 joint resolution, the period beginning on the date 

19 the President is presented with the joint resolu20 tion and ending on the date the President takes 

21 action with respect to the joint resolution shall 

22 be disregarded in computing the 15-calendar day 

23 period described in subsection (a)(3). 

24 (B) VETOES.—If the President vetoes the 

25 joint resolution— 
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•HR 1424 EAS 

1 (i) the period beginning on the date the 

2 President vetoes the joint resolution and 

3 ending on the date the Congress receives the 

4 veto message with respect to the joint resolu5 tion shall be disregarded in computing the 

6 15-calendar day period described in sub7 section (a)(3), and 

8 (ii) debate on a veto message in the 

9 Senate under this section shall be 1 hour 

10 equally divided between the majority and 

11 minority leaders or their designees. 

12 (5) RULES OF HOUSE OF REPRESENTATIVES AND

13 SENATE.—This subsection and subsections (c), (d), 

14 and (e) are enacted by Congress— 

15 (A) as an exercise of the rulemaking power 

16 of the Senate and House of Representatives, re17 spectively, and as such it is deemed a part of the 

18 rules of each House, respectively, but applicable 

19 only with respect to the procedure to be followed 

20 in that House in the case of a joint resolution, 

21 and it supersedes other rules only to the extent 

22 that it is inconsistent with such rules; and 

23 (B) with full recognition of the constitu24 tional right of either House to change the rules 

25 (so far as relating to the procedure of that 
48 

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1 House) at any time, in the same manner, and 

2 to the same extent as in the case of any other 

3 rule of that House. 

4 SEC. 116. OVERSIGHT AND AUDITS. 

5 (a) COMPTROLLER GENERAL OVERSIGHT.— 

6 (1) SCOPE OF OVERSIGHT.—The Comptroller 

7 General of the United States shall, upon establishment 

8 of the troubled assets relief program under this Act 

9 (in this section referred to as the ‘‘TARP’’), commence 

10 ongoing oversight of the activities and performance of 

11 the TARP and of any agents and representatives of 

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

13 activities on behalf of or under the authority of the 

14 TARP), including vehicles established by the Sec15 retary under this Act. The subjects of such oversight 

16 shall include the following: 

17 (A) The performance of the TARP in meet18 ing the purposes of this Act, particularly those 

19 involving— 

20 (i) foreclosure mitigation; 

21 (ii) cost reduction; 

22 (iii) whether it has provided stability 

23 or prevented disruption to the financial 

24 markets or the banking system; and 

25 (iv) whether it has protected taxpayers. 
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1 (B) The financial condition and internal 

2 controls of the TARP, its representatives and 

3 agents. 

4 (C) Characteristics of transactions and com5 mitments entered into, including transaction 

6 type, frequency, size, prices paid, and all other 

7 relevant terms and conditions, and the timing, 

8 duration and terms of any future commitments 

9 to purchase assets. 

10 (D) Characteristics and disposition of ac11 quired assets, including type, acquisition price, 

12 current market value, sale prices and terms, and 

13 use of proceeds from sales. 

14 (E) Efficiency of the operations of the 

15 TARP in the use of appropriated funds. 

16 (F) Compliance with all applicable laws 

17 and regulations by the TARP, its agents and 

18 representatives. 

19 (G) The efforts of the TARP to prevent, 

20 identify, and minimize conflicts of interest in21 volving any agent or representative performing 

22 activities on behalf of or under the authority of 

23 the TARP. 

24 (H) The efficacy of contracting procedures 

25 pursuant to section 107(b), including, as appli-
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1 cable, the efforts of the TARP in evaluating pro2 posals for inclusion and contracting to the max3 imum extent possible of minorities (as such term 

4 is defined in 1204(c) of the Financial Institu5 tions Reform, Recovery, and Enhancement Act of 

6 1989 (12 U.S.C. 1811 note), women, and 

7 minority- and women-owned businesses, includ8 ing ascertaining and reporting the total amount 

9 of fees paid and other value delivered by the 

10 TARP to all of its agents and representatives, 

11 and such amounts paid or delivered to such 

12 firms that are minority- and women-owned busi13 nesses (as such terms are defined in section 21A 

14 of the Federal Home Loan Bank Act (12 U.S.C. 

15 1441a)). 

16 (2) CONDUCT AND ADMINISTRATION OF OVER17 SIGHT.— 

18 (A) GAO PRESENCE.—The Secretary shall 

19 provide the Comptroller General with appro20 priate space and facilities in the Department of 

21 the Treasury as necessary to facilitate oversight 

22 of the TARP until the termination date estab23 lished in section 120. 

24 (B) ACCESS TO RECORDS.—To the extent 

25 otherwise consistent with law, the Comptroller 
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1 General shall have access, upon request, to any 

2 information, data, schedules, books, accounts, fi3 nancial records, reports, files, electronic commu4 nications, or other papers, things, or property 

5 belonging to or in use by the TARP, or any vehi6 cles established by the Secretary under this Act, 

7 and to the officers, directors, employees, inde8 pendent public accountants, financial advisors, 

9 and other agents and representatives of the 

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

11 activities on behalf of or under the authority of 

12 the TARP) or any such vehicle at such reason13 able time as the Comptroller General may re14 quest. The Comptroller General shall be afforded 

15 full facilities for verifying transactions with the 

16 balances or securities held by depositaries, fiscal 

17 agents, and custodians. The Comptroller General 

18 may make and retain copies of such books, ac19 counts, and other records as the Comptroller 

20 General deems appropriate. 

21 (C) REIMBURSEMENT OF COSTS.—The 

22 Treasury shall reimburse the Government Ac23 countability Office for the full cost of any such 

24 oversight activities as billed therefor by the 

25 Comptroller General of the United States. Such 
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1 reimbursements shall be credited to the appro2 priation account ‘‘Salaries and Expenses, Gov3 ernment Accountability Office’’ current when the 

4 payment is received and remain available until 

5 expended. 

6 (3) REPORTING.—The Comptroller General shall 

7 submit reports of findings under this section, regu8 larly and no less frequently than once every 60 days, 

9 to the appropriate committees of Congress, and the 

10 Special Inspector General for the Troubled Asset Re11 lief Program established under this Act on the activi12 ties and performance of the TARP. The Comptroller 

13 may also submit special reports under this subsection 

14 as warranted by the findings of its oversight activi15 ties. 

16 (b) COMPTROLLER GENERAL AUDITS.— 

17 (1) ANNUAL AUDIT.—The TARP shall annually 

18 prepare and issue to the appropriate committees of 

19 Congress and the public audited financial statements 

20 prepared in accordance with generally accepted ac21 counting principles, and the Comptroller General 

22 shall annually audit such statements in accordance 

23 with generally accepted auditing standards. The 

24 Treasury shall reimburse the Government Account25 ability Office for the full cost of any such audit as 
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1 billed therefor by the Comptroller General. Such reim2 bursements shall be credited to the appropriation ac3 count ‘‘Salaries and Expenses, Government Account4 ability Office’’ current when the payment is received 

5 and remain available until expended. The financial 

6 statements prepared under this paragraph shall be on 

7 the fiscal year basis prescribed under section 1102 of 

8 title 31, United States Code. 

9 (2) AUTHORITY.—The Comptroller General may 

10 audit the programs, activities, receipts, expenditures, 

11 and financial transactions of the TARP and any 

12 agents and representatives of the TARP (as related to 

13 the agent or representative’s activities on behalf of or 

14 under the authority of the TARP), including vehicles 

15 established by the Secretary under this Act. 

16 (3) CORRECTIVE RESPONSES TO AUDIT PROB17 LEMS.—The TARP shall— 

18 (A) take action to address deficiencies iden19 tified by the Comptroller General or other audi20 tor engaged by the TARP; or 

21 (B) certify to appropriate committees of 

22 Congress that no action is necessary or appro23 priate. 

24 (c) INTERNAL CONTROL.— 
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1 (1) ESTABLISHMENT.—The TARP shall establish 

2 and maintain an effective system of internal control, 

3 consistent with the standards prescribed under section 

4 3512(c) of title 31, United States Code, that provides 

5 reasonable assurance of— 

6 (A) the effectiveness and efficiency of oper7 ations, including the use of the resources of the 

8 TARP; 

9 (B) the reliability of financial reporting, 

10 including financial statements and other reports 

11 for internal and external use; and 

12 (C) compliance with applicable laws and 

13 regulations. 

14 (2) REPORTING.—In conjunction with each an15 nual financial statement issued under this section, the 

16 TARP shall— 

17 (A) state the responsibility of management 

18 for establishing and maintaining adequate inter19 nal control over financial reporting; and 

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

21 most recent year covered by such financial state22 ment of the TARP, of the effectiveness of the in23 ternal control over financial reporting. 

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

25 required under this section shall also be submitted to the 
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1 Congressional Oversight Panel established under section 

2 125. 

3 (e) TERMINATION.—Any oversight, reporting, or audit 

4 requirement under this section shall terminate on the later 

5 of— 

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

7 by the Secretary under section 101 has been sold or 

8 transferred out of the ownership or control of the Fed9 eral Government; or 

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

11 contract issued under section 102. 

12 SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY. 

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

14 a study to determine the extent to which leverage and sud15 den deleveraging of financial institutions was a factor be16 hind the current financial crisis. 

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

18 shall include— 

19 (1) an analysis of the roles and responsibilities 

20 of the Board, the Securities and Exchange Commis21 sion, the Secretary, and other Federal banking agen22 cies with respect to monitoring leverage and acting to 

23 curtail excessive leveraging; 

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

25 regulate leverage, including by setting margin re-
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1 quirements, and what process the Board used to de2 cide whether or not to use its authority; 

3 (3) an analysis of any usage of the margin au4 thority by the Board; and 

5 (4) recommendations for the Board and appro6 priate committees of Congress with respect to the ex7 isting authority of the Board. 

8 (c) REPORT.—Not later than June 1, 2009, the Comp9 troller General shall complete and submit a report on the 

10 study required by this section to the Committee on Banking, 

11 Housing, and Urban Affairs of the Senate and the Com12 mittee on Financial Services of the House of Representa13 tives. 

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

15 under this section shall also be submitted to the Congres16 sional Oversight Panel established under section 125. 

17 SEC. 118. FUNDING. 

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

19 and for the costs of administering those authorities, the Sec20 retary may use the proceeds of the sale of any securities 

21 issued under chapter 31 of title 31, United States Code, and 

22 the purposes for which securities may be issued under chap23 ter 31 of title 31, United States Code, are extended to in24 clude actions authorized by this Act, including the payment 

25 of administrative expenses. Any funds expended or obligated 
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1 by the Secretary for actions authorized by this Act, includ2 ing the payment of administrative expenses, shall be deemed 

3 appropriated at the time of such expenditure or obligation. 

4 SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS. 

5 (a) JUDICIAL REVIEW.— 

6 (1) STANDARD.—Actions by the Secretary pursu7 ant to the authority of this Act shall be subject to 

8 chapter 7 of title 5, United States Code, including 

9 that such final actions shall be held unlawful and set 

10 aside if found to be arbitrary, capricious, an abuse of 

11 discretion, or not in accordance with law. 

12 (2) LIMITATIONS ON EQUITABLE RELIEF.— 

13 (A) INJUNCTION.—No injunction or other 

14 form of equitable relief shall be issued against the 

15 Secretary for actions pursuant to section 101, 

16 102, 106, and 109, other than to remedy a viola17 tion of the Constitution. 

18 (B) TEMPORARY RESTRAINING ORDER.— 

19 Any request for a temporary restraining order 

20 against the Secretary for actions pursuant to 

21 this Act shall be considered and granted or de22 nied by the court within 3 days of the date of 

23 the request. 

24 (C) PRELIMINARY INJUNCTION.—Any re25 quest for a preliminary injunction against the 
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1 Secretary for actions pursuant to this Act shall 

2 be considered and granted or denied by the court 

3 on an expedited basis consistent with the provi4 sions of rule 65(b)(3) of the Federal Rules of 

5 Civil Procedure, or any successor thereto. 

6 (D) PERMANENT INJUNCTION.—Any request 

7 for a permanent injunction against the Secretary 

8 for actions pursuant to this Act shall be consid9 ered and granted or denied by the court on an 

10 expedited basis. Whenever possible, the court 

11 shall consolidate trial on the merits with any 

12 hearing on a request for a preliminary injunc13 tion, consistent with the provisions of rule 

14 65(a)(2) of the Federal Rules of Civil Procedure, 

15 or any successor thereto. 

16 (3) LIMITATION ON ACTIONS BY PARTICIPATING

17 COMPANIES.—No action or claims may be brought 

18 against the Secretary by any person that divests its 

19 assets with respect to its participation in a program 

20 under this Act, except as provided in paragraph (1), 

21 other than as expressly provided in a written contract 

22 with the Secretary. 

23 (4) STAYS.—Any injunction or other form of eq24 uitable relief issued against the Secretary for actions 

25 pursuant to section 101, 102, 106, and 109, shall be 
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1 automatically stayed. The stay shall be lifted unless 

2 the Secretary seeks a stay from a higher court within 

3 3 calendar days after the date on which the relief is 

4 issued. 

5 (b) RELATED MATTERS.— 

6 (1) TREATMENT OF HOMEOWNERS’ RIGHTS.— 

7 The terms of any residential mortgage loan that is 

8 part of any purchase by the Secretary under this Act 

9 shall remain subject to all claims and defenses that 

10 would otherwise apply, notwithstanding the exercise 

11 of authority by the Secretary under this Act. 

12 (2) SAVINGS CLAUSE.—Any exercise of the au13 thority of the Secretary pursuant to this Act shall not 

14 impair the claims or defenses that would otherwise 

15 apply with respect to persons other than the Sec16 retary. Except as established in any contract, a 

17 servicer of pooled residential mortgages owes any duty 

18 to determine whether the net present value of the pay19 ments on the loan, as modified, is likely to be greater 

20 than the anticipated net recovery that would result 

21 from foreclosure to all investors and holders of bene22 ficial interests in such investment, but not to any in23 dividual or groups of investors or beneficial interest 

24 holders, and shall be deemed to act in the best inter25 ests of all such investors or holders of beneficial inter-
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1 ests if the servicer agrees to or implements a modi2 fication or workout plan when the servicer takes rea3 sonable loss mitigation actions, including partial 

4 payments. 

5 SEC. 120. TERMINATION OF AUTHORITY. 

6 (a) TERMINATION.—The authorities provided under 

7 sections 101(a), excluding section 101(a)(3), and 102 shall 

8 terminate on December 31, 2009. 

9 (b) EXTENSION UPON CERTIFICATION.—The Sec10 retary, upon submission of a written certification to Con11 gress, may extend the authority provided under this Act to 

12 expire not later than 2 years from the date of enactment 

13 of this Act. Such certification shall include a justification 

14 of why the extension is necessary to assist American fami15 lies and stabilize financial markets, as well as the expected 

16 cost to the taxpayers for such an extension. 

17 SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE TROU18 BLED ASSET RELIEF PROGRAM. 

19 (a) OFFICE OF INSPECTOR GENERAL.—There is hereby 

20 established the Office of the Special Inspector General for 

21 the Troubled Asset Relief Program. 

22 (b) APPOINTMENT OF INSPECTOR GENERAL; RE23 MOVAL.—(1) The head of the Office of the Special Inspector 

24 General for the Troubled Asset Relief Program is the Spe25 cial Inspector General for the Troubled Asset Relief Pro-
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1 gram (in this section referred to as the ‘‘Special Inspector 

2 General’’), who shall be appointed by the President, by and 

3 with the advice and consent of the Senate. 

4 (2) The appointment of the Special Inspector General 

5 shall be made on the basis of integrity and demonstrated 

6 ability in accounting, auditing, financial analysis, law, 

7 management analysis, public administration, or investiga8 tions. 

9 (3) The nomination of an individual as Special In10 spector General shall be made as soon as practicable after 

11 the establishment of any program under sections 101 and 

12 102. 

13 (4) The Special Inspector General shall be removable 

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

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

16 (5) For purposes of section 7324 of title 5, United 

17 States Code, the Special Inspector General shall not be con18 sidered an employee who determines policies to be pursued 

19 by the United States in the nationwide administration of 

20 Federal law. 

21 (6) The annual rate of basic pay of the Special Inspec22 tor General shall be the annual rate of basic pay for an 

23 Inspector General under section 3(e) of the Inspector Gen24 eral Act of 1978 (5 U.S.C. App.). 
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1 (c) DUTIES.—(1) It shall be the duty of the Special 

2 Inspector General to conduct, supervise, and coordinate au3 dits and investigations of the purchase, management, and 

4 sale of assets by the Secretary of the Treasury under any 

5 program established by the Secretary under section 101, 

6 and the management by the Secretary of any program es7 tablished under section 102, including by collecting and 

8 summarizing the following information: 

9 (A) A description of the categories of troubled as10 sets purchased or otherwise procured by the Secretary. 

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

12 each such category described under subparagraph (A). 

13 (C) An explanation of the reasons the Secretary 

14 deemed it necessary to purchase each such troubled 

15 asset. 

16 (D) A listing of each financial institution that 

17 such troubled assets were purchased from. 

18 (E) A listing of and detailed biographical infor19 mation on each person or entity hired to manage such 

20 troubled assets. 

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

22 troubled assets purchased pursuant to any program 

23 established under section 101, the amount of troubled 

24 assets on the books of the Treasury, the amount of 
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1 troubled assets sold, and the profit and loss incurred 

2 on each sale or disposition of each such troubled asset. 

3 (G) A listing of the insurance contracts issued 

4 under section 102. 

5 (2) The Special Inspector General shall establish, 

6 maintain, and oversee such systems, procedures, and con7 trols as the Special Inspector General considers appropriate 

8 to discharge the duty under paragraph (1). 

9 (3) In addition to the duties specified in paragraphs 

10 (1) and (2), the Inspector General shall also have the duties 

11 and responsibilities of inspectors general under the Inspec12 tor General Act of 1978. 

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

14 the duties specified in subsection (c), the Special Inspector 

15 General shall have the authorities provided in section 6 of 

16 the Inspector General Act of 1978. 

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

18 duties specified in subsection (c)(1) in accordance with sec19 tion 4(b)(1) of the Inspector General Act of 1978. 

20 (e) PERSONNEL, FACILITIES, AND OTHER RE21 SOURCES.—(1) The Special Inspector General may select, 

22 appoint, and employ such officers and employees as may 

23 be necessary for carrying out the duties of the Special In24 spector General, subject to the provisions of title 5, United 

25 States Code, governing appointments in the competitive 
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1 service, and the provisions of chapter 51 and subchapter 

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

3 General Schedule pay rates. 

4 (2) The Special Inspector General may obtain services 

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

6 at daily rates not to exceed the equivalent rate prescribed 

7 for grade GS–15 of the General Schedule by section 5332 

8 of such title. 

9 (3) The Special Inspector General may enter into con10 tracts and other arrangements for audits, studies, analyses, 

11 and other services with public agencies and with private 

12 persons, and make such payments as may be necessary to 

13 carry out the duties of the Inspector General. 

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

15 for information or assistance from any department, agency, 

16 or other entity of the Federal Government, the head of such 

17 entity shall, insofar as is practicable and not in contraven18 tion of any existing law, furnish such information or assist19 ance to the Special Inspector General, or an authorized des20 ignee. 

21 (B) Whenever information or assistance requested by 

22 the Special Inspector General is, in the judgment of the Spe23 cial Inspector General, unreasonably refused or not pro24 vided, the Special Inspector General shall report the cir-
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1 cumstances to the appropriate committees of Congress with2 out delay. 

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

4 confirmation of the Special Inspector General, and every 

5 calendar quarter thereafter, the Special Inspector General 

6 shall submit to the appropriate committees of Congress a 

7 report summarizing the activities of the Special Inspector 

8 General during the 120-day period ending on the date of 

9 such report. Each report shall include, for the period cov10 ered by such report, a detailed statement of all purchases, 

11 obligations, expenditures, and revenues associated with any 

12 program established by the Secretary of the Treasury under 

13 sections 101 and 102, as well as the information collected 

14 under subsection (c)(1). 

15 (2) Nothing in this subsection shall be construed to au16 thorize the public disclosure of information that is— 

17 (A) specifically prohibited from disclosure by 

18 any other provision of law; 

19 (B) specifically required by Executive order to be 

20 protected from disclosure in the interest of national 

21 defense or national security or in the conduct of for22 eign affairs; or 

23 (C) a part of an ongoing criminal investigation. 
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1 (3) Any reports required under this section shall also 

2 be submitted to the Congressional Oversight Panel estab3 lished under section 125. 

4 (g) FUNDING.—(1) Of the amounts made available to 

5 the Secretary of the Treasury under section 118, 

6 $50,000,000 shall be available to the Special Inspector Gen7 eral to carry out this section. 

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

9 remain available until expended. 

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

11 General shall terminate on the later of— 

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

13 by the Secretary under section 101 has been sold or 

14 transferred out of the ownership or control of the Fed15 eral Government; or 

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

17 contract issued under section 102. 

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

19 DEBT. 

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

21 Code, is amended by striking out the dollar limitation con22 tained in such subsection and inserting 

23 ‘‘$11,315,000,000,000’’. 
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1 SEC. 123. CREDIT REFORM. 

2 (a) IN GENERAL.—Subject to subsection (b), the costs 

3 of purchases of troubled assets made under section 101(a) 

4 and guarantees of troubled assets under section 102, and 

5 any cash flows associated with the activities authorized in 

6 section 102 and subsections (a), (b), and (c) of section 106 

7 shall be determined as provided under the Federal Credit 

8 Reform Act of 1990 (2 U.S.C. 661 et. seq.). 

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

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

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

12 troubled assets shall be calculated by adjusting the 

13 discount rate in section 502(5)(E) (2 U.S.C. 

14 661a(5)(E)) for market risks; and 

15 (2) the cost of a modification of a troubled asset 

16 or guarantee of a troubled asset shall be the difference 

17 between the current estimate consistent with para18 graph (1) under the terms of the troubled asset or 

19 guarantee of the troubled asset and the current esti20 mate consistent with paragraph (1) under the terms 

21 of the troubled asset or guarantee of the troubled asset, 

22 as modified. 

23 SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS. 

24 Section 257 of the National Housing Act (12 U.S.C. 

25 1715z–23) is amended— 

26 (1) in subsection (e)— 
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1 (A) in paragraph (1)(B), by inserting before 

2 ‘‘a ratio’’ the following: ‘‘, or thereafter is likely 

3 to have, due to the terms of the mortgage being 

4 reset,’’; 

5 (B) in paragraph (2)(B), by inserting be6 fore the period at the end ‘‘(or such higher per7 centage as the Board determines, in the discre8 tion of the Board)’’; 

9 (C) in paragraph (4)(A)— 

10 (i) in the first sentence, by inserting 

11 after ‘‘insured loan’’ the following: ‘‘and 

12 any payments made under this para13 graph,’’; and 

14 (ii) by adding at the end the following: 

15 ‘‘Such actions may include making pay16 ments, which shall be accepted as payment 

17 in full of all indebtedness under the eligible 

18 mortgage, to any holder of an existing sub19 ordinate mortgage, in lieu of any future ap20 preciation payments authorized under sub21 paragraph (B).’’; and 

22 (2) in subsection (w), by inserting after ‘‘admin23 istrative costs’’ the following: ‘‘and payments pursu24 ant to subsection (e)(4)(A)’’. 
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1 SEC. 125. CONGRESSIONAL OVERSIGHT PANEL. 

2 (a) ESTABLISHMENT.—There is hereby established the 

3 Congressional Oversight Panel (hereafter in this section re4 ferred to as the ‘‘Oversight Panel’’) as an establishment in 

5 the legislative branch. 

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

7 current state of the financial markets and the regulatory 

8 system and submit the following reports to Congress: 

9 (1) REGULAR REPORTS.— 

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

11 Oversight Panel shall include the following: 

12 (i) The use by the Secretary of author13 ity under this Act, including with respect to 

14 the use of contracting authority and admin15 istration of the program. 

16 (ii) The impact of purchases made 

17 under the Act on the financial markets and 

18 financial institutions. 

19 (iii) The extent to which the informa20 tion made available on transactions under 

21 the program has contributed to market 

22 transparency. 

23 (iv) The effectiveness of foreclosure 

24 mitigation efforts, and the effectiveness of 

25 the program from the standpoint of mini-
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1 mizing long-term costs to the taxpayers and 

2 maximizing the benefits for taxpayers. 

3 (B) TIMING.—The reports required under 

4 this paragraph shall be submitted not later than 

5 30 days after the first exercise by the Secretary 

6 of the authority under section 101(a) or 102, and 

7 every 30 days thereafter. 

8 (2) SPECIAL REPORT ON REGULATORY RE9 FORM.—The Oversight Panel shall submit a special 

10 report on regulatory reform not later than January 

11 20, 2009, analyzing the current state of the regulatory 

12 system and its effectiveness at overseeing the partici13 pants in the financial system and protecting con14 sumers, and providing recommendations for improve15 ment, including recommendations regarding whether 

16 any participants in the financial markets that are 

17 currently outside the regulatory system should become 

18 subject to the regulatory system, the rationale under19 lying such recommendation, and whether there are 

20 any gaps in existing consumer protections. 

21 (c) MEMBERSHIP.— 

22 (1) IN GENERAL.—The Oversight Panel shall 

23 consist of 5 members, as follows: 

24 (A) 1 member appointed by the Speaker of 

25 the House of Representatives. 
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1 (B) 1 member appointed by the minority 

2 leader of the House of Representatives. 

3 (C) 1 member appointed by the majority 

4 leader of the Senate. 

5 (D) 1 member appointed by the minority 

6 leader of the Senate. 

7 (E) 1 member appointed by the Speaker of 

8 the House of Representatives and the majority 

9 leader of the Senate, after consultation with the 

10 minority leader of the Senate and the minority 

11 leader of the House of Representatives. 

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

13 shall each be paid at a rate equal to the daily equiva14 lent of the annual rate of basic pay for level I of the 

15 Executive Schedule for each day (including travel 

16 time) during which such member is engaged in the 

17 actual performance of duties vested in the Commis18 sion. 

19 (3) PROHIBITION OF COMPENSATION OF FED20 ERAL EMPLOYEES.—Members of the Oversight Panel 

21 who are full-time officers or employees of the United 

22 States or Members of Congress may not receive addi23 tional pay, allowances, or benefits by reason of their 

24 service on the Oversight Panel. 
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1 (4) TRAVEL EXPENSES.—Each member shall re2 ceive travel expenses, including per diem in lieu of 

3 subsistence, in accordance with applicable provisions 

4 under subchapter I of chapter 57 of title 5, United 

5 States Code. 

6 (5) QUORUM.—Four members of the Oversight 

7 Panel shall constitute a quorum but a lesser number 

8 may hold hearings. 

9 (6) VACANCIES.—A vacancy on the Oversight 

10 Panel shall be filled in the manner in which the origi11 nal appointment was made. 

12 (7) MEETINGS.—The Oversight Panel shall meet 

13 at the call of the Chairperson or a majority of its 

14 members. 

15 (d) STAFF.— 

16 (1) IN GENERAL.—The Oversight Panel may ap17 point and fix the pay of any personnel as the Com18 mission considers appropriate. 

19 (2) EXPERTS AND CONSULTANTS.—The Oversight 

20 Panel may procure temporary and intermittent serv21 ices under section 3109(b) of title 5, United States 

22 Code. 

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

24 Oversight Panel, the head of any Federal department 

25 or agency may detail, on a reimbursable basis, any 
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1 of the personnel of that department or agency to the 

2 Oversight Panel to assist it in carrying out its duties 

3 under this Act. 

4 (e) POWERS.— 

5 (1) HEARINGS AND SESSIONS.—The Oversight 

6 Panel may, for the purpose of carrying out this sec7 tion, hold hearings, sit and act at times and places, 

8 take testimony, and receive evidence as the Panel con9 siders appropriate and may administer oaths or af10 firmations to witnesses appearing before it. 

11 (2) POWERS OF MEMBERS AND AGENTS.—Any 

12 member or agent of the Oversight Panel may, if au13 thorized by the Oversight Panel, take any action 

14 which the Oversight Panel is authorized to take by 

15 this section. 

16 (3) OBTAINING OFFICIAL DATA.—The Oversight 

17 Panel may secure directly from any department or 

18 agency of the United States information necessary to 

19 enable it to carry out this section. Upon request of the 

20 Chairperson of the Oversight Panel, the head of that 

21 department or agency shall furnish that information 

22 to the Oversight Panel. 

23 (4) REPORTS.—The Oversight Panel shall receive 

24 and consider all reports required to be submitted to 

25 the Oversight Panel under this Act. 
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1 (f) TERMINATION.—The Oversight Panel shall termi2 nate 6 months after the termination date specified in sec3 tion 120. 

4 (g) FUNDING FOR EXPENSES.— 

5 (1) AUTHORIZATION OF APPROPRIATIONS.— 

6 There is authorized to be appropriated to the Over7 sight Panel such sums as may be necessary for any 

8 fiscal year, half of which shall be derived from the ap9 plicable account of the House of Representatives, and 

10 half of which shall be derived from the contingent 

11 fund of the Senate. 

12 (2) REIMBURSEMENT OF AMOUNTS.—An amount 

13 equal to the expenses of the Oversight Panel shall be 

14 promptly transferred by the Secretary, from time to 

15 time upon the presentment of a statement of such ex16 penses by the Chairperson of the Oversight Panel, 

17 from funds made available to the Secretary under this 

18 Act to the applicable fund of the House of Representa19 tives and the contingent fund of the Senate, as appro20 priate, as reimbursement for amounts expended from 

21 such account and fund under paragraph (1). 

22 SEC. 126. FDIC AUTHORITY. 

23 (a) IN GENERAL.—Section 18(a) of the Federal De24 posit Insurance Act (12 U.S.C. 1828(a)) is amended by 

25 adding at the end the following new paragraph: 
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1 ‘‘(4) FALSE ADVERTISING, MISUSE OF FDIC

2 NAMES, AND MISREPRESENTATION TO INDICATE IN3 SURED STATUS.— 

4 ‘‘(A) PROHIBITION ON FALSE ADVERTISING

5 AND MISUSE OF FDIC NAMES.—No person may 

6 represent or imply that any deposit liability, ob7 ligation, certificate, or share is insured or guar8 anteed by the Corporation, if such deposit liabil9 ity, obligation, certificate, or share is not insured 

10 or guaranteed by the Corporation— 

11 ‘‘(i) by using the terms ‘Federal De12 posit’, ‘Federal Deposit Insurance’, ‘Federal 

13 Deposit Insurance Corporation’, any com14 bination of such terms, or the abbreviation 

15 ‘FDIC’ as part of the business name or firm 

16 name of any person, including any corpora17 tion, partnership, business trust, associa18 tion, or other business entity; or 

19 ‘‘(ii) by using such terms or any other 

20 terms, sign, or symbol as part of an adver21 tisement, solicitation, or other document. 

22 ‘‘(B) PROHIBITION ON MISREPRESENTA23 TIONS OF INSURED STATUS.—No person may 

24 knowingly misrepresent— 
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1 ‘‘(i) that any deposit liability, obliga2 tion, certificate, or share is insured, under 

3 this Act, if such deposit liability, obligation, 

4 certificate, or share is not so insured; or 

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

6 in which any deposit liability, obligation, 

7 certificate, or share is insured under this 

8 Act, if such deposit liability, obligation, cer9 tificate, or share is not so insured, to the ex10 tent or in the manner represented. 

11 ‘‘(C) AUTHORITY OF THE APPROPRIATE

12 FEDERAL BANKING AGENCY.—The appropriate 

13 Federal banking agency shall have enforcement 

14 authority in the case of a violation of this para15 graph by any person for which the agency is the 

16 appropriate Federal banking agency, or any in17 stitution-affiliated party thereof. 

18 ‘‘(D) CORPORATION AUTHORITY IF THE AP19 PROPRIATE FEDERAL BANKING AGENCY FAILS TO

20 FOLLOW RECOMMENDATION.— 

21 ‘‘(i) RECOMMENDATION.—The Cor22 poration may recommend in writing to the 

23 appropriate Federal banking agency that 

24 the agency take any enforcement action au25 thorized under section 8 for purposes of en-
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1 forcement of this paragraph with respect to 

2 any person for which the agency is the ap3 propriate Federal banking agency or any 

4 institution-affiliated party thereof. 

5 ‘‘(ii) AGENCY RESPONSE.—If the ap6 propriate Federal banking agency does not, 

7 within 30 days of the date of receipt of a 

8 recommendation under clause (i), take the 

9 enforcement action with respect to this 

10 paragraph recommended by the Corporation 

11 or provide a plan acceptable to the Corpora12 tion for responding to the situation pre13 sented, the Corporation may take the rec14 ommended enforcement action against such 

15 person or institution-affiliated party. 

16 ‘‘(E) ADDITIONAL AUTHORITY.—In addition 

17 to its authority under subparagraphs (C) and 

18 (D), for purposes of this paragraph, the Corpora19 tion shall have, in the same manner and to the 

20 same extent as with respect to a State non21 member insured bank— 

22 ‘‘(i) jurisdiction over— 

23 ‘‘(I) any person other than a per24 son for which another agency is the ap25 propriate Federal banking agency or 
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1 any institution-affiliated party thereof; 

2 and 

3 ‘‘(II) any person that aids or 

4 abets a violation of this paragraph by 

5 a person described in subclause (I); 

6 and 

7 ‘‘(ii) for purposes of enforcing the re8 quirements of this paragraph, the authority 

9 of the Corporation under— 

10 ‘‘(I) section 10(c) to conduct in11 vestigations; and 

12 ‘‘(II) subsections (b), (c), (d) and 

13 (i) of section 8 to conduct enforcement 

14 actions. 

15 ‘‘(F) OTHER ACTIONS PRESERVED.—No 

16 provision of this paragraph shall be construed as 

17 barring any action otherwise available, under 

18 the laws of the United States or any State, to 

19 any Federal or State agency or individual.’’. 

20 (b) ENFORCEMENT ORDERS.—Section 8(c) of the Fed21 eral Deposit Insurance Act (12 U.S.C. 1818(c)) is amended 

22 by adding at the end the following new paragraph: 

23 ‘‘(4) FALSE ADVERTISING OR MISUSE OF NAMES

24 TO INDICATE INSURED STATUS.— 

25 ‘‘(A) TEMPORARY ORDER.— 
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1 ‘‘(i) IN GENERAL.—If a notice of 

2 charges served under subsection (b)(1) speci3 fies on the basis of particular facts that any 

4 person engaged or is engaging in conduct 

5 described in section 18(a)(4), the Corpora6 tion or other appropriate Federal banking 

7 agency may issue a temporary order requir8 ing— 

9 ‘‘(I) the immediate cessation of 

10 any activity or practice described, 

11 which gave rise to the notice of charges; 

12 and 

13 ‘‘(II) affirmative action to prevent 

14 any further, or to remedy any existing, 

15 violation. 

16 ‘‘(ii) EFFECT OF ORDER.—Any tem17 porary order issued under this subpara18 graph shall take effect upon service. 

19 ‘‘(B) EFFECTIVE PERIOD OF TEMPORARY

20 ORDER.—A temporary order issued under sub21 paragraph (A) shall remain effective and en22 forceable, pending the completion of an adminis23 trative proceeding pursuant to subsection (b)(1) 

24 in connection with the notice of charges— 
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1 ‘‘(i) until such time as the Corporation 

2 or other appropriate Federal banking agen3 cy dismisses the charges specified in such 

4 notice; or 

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

6 issued against such person, until the effec7 tive date of such order. 

8 ‘‘(C) CIVIL MONEY PENALTIES.—Any viola9 tion of section 18(a)(4) shall be subject to civil 

10 money penalties, as set forth in subsection (i), 

11 except that for any person other than an insured 

12 depository institution or an institution-affiliated 

13 party that is found to have violated this para14 graph, the Corporation or other appropriate Fed15 eral banking agency shall not be required to 

16 demonstrate any loss to an insured depository 

17 institution.’’. 

18 (c) UNENFORCEABILITY OF CERTAIN AGREEMENTS.— 

19 Section 13(c) of the Federal Deposit Insurance Act (12 

20 U.S.C. 1823(c)) is amended by adding at the end the fol21 lowing new paragraph: 

22 ‘‘(11) UNENFORCEABILITY OF CERTAIN AGREE23 MENTS.—No provision contained in any existing or 

24 future standstill, confidentiality, or other agreement 

25 that, directly or indirectly— 
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1 ‘‘(A) affects, restricts, or limits the ability of 

2 any person to offer to acquire or acquire, 

3 ‘‘(B) prohibits any person from offering to 

4 acquire or acquiring, or 

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

6 previously disclosed information in connection 

7 with any such offer to acquire or acquisition of, 

8 all or part of any insured depository institution, in9 cluding any liabilities, assets, or interest therein, in 

10 connection with any transaction in which the Cor11 poration exercises its authority under section 11 or 

12 13, shall be enforceable against or impose any liabil13 ity on such person, as such enforcement or liability 

14 shall be contrary to public policy.’’. 

15 (d) TECHNICAL AND CONFORMING AMENDMENTS.— 

16 Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 

17 1828) is amended— 

18 (1) in subsection (a)(3)— 

19 (A) by striking ‘‘this subsection’’ the first 

20 place that term appears and inserting ‘‘para21 graph (1)’’; and 

22 (B) by striking ‘‘this subsection’’ the second 

23 place that term appears and inserting ‘‘para24 graph (2)’’; and 
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1 (2) in the heading for subsection (a), by striking 

2 ‘‘INSURANCE LOGO.—’’ and inserting ‘‘REPRESENTA3 TIONS OF DEPOSIT INSURANCE.—’’. 

4 SEC. 127. COOPERATION WITH THE FBI. 

5 Any Federal financial regulatory agency shall cooper6 ate with the Federal Bureau of Investigation and other law 

7 enforcement agencies investigating fraud, misrepresenta8 tion, and malfeasance with respect to development, adver9 tising, and sale of financial products. 

10 SEC. 128. ACCELERATION OF EFFECTIVE DATE. 

11 Section 203 of the Financial Services Regulatory Re12 lief Act of 2006 (12 U.S.C. 461 note) is amended by striking 

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

14 SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHOR15 ITY. 

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

17 on which the Board exercises its authority under the third 

18 paragraph of section 13 of the Federal Reserve Act (12 

19 U.S.C. 343; relating to discounts for individuals, partner20 ships, and corporations) the Board shall provide to the 

21 Committee on Banking, Housing, and Urban Affairs of the 

22 Senate and the Committee on Financial Services of the 

23 House of Representatives a report which includes— 

24 (1) the justification for exercising the authority; 

25 and 
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1 (2) the specific terms of the actions of the Board, 

2 including the size and duration of the lending, avail3 able information concerning the value of any collat4 eral held with respect to such a loan, the recipient of 

5 warrants or any other potential equity in exchange 

6 for the loan, and any expected cost to the taxpayers 

7 for such exercise. 

8 (b) PERIODIC UPDATES.—The Board shall provide up9 dates to the Committees specified in subsection (a) not less 

10 frequently than once every 60 days while the subject loan 

11 is outstanding, including— 

12 (1) the status of the loan; 

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

14 reserve bank which initiated the loan; and 

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

16 (c) CONFIDENTIALITY.—The information submitted to 

17 the Congress under this section shall be kept confidential, 

18 upon the written request of the Chairman of the Board, in 

19 which case it shall be made available only to the Chair20 persons and Ranking Members of the Committees described 

21 in subsection (a). 

22 (d) APPLICABILITY.—The provisions of this section 

23 shall be in force for all uses of the authority provided under 

24 section 13 of the Federal Reserve Act occurring during the 

25 period beginning on March 1, 2008 and ending on the after 
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1 the date of enactment of this Act, and reports described in 

2 subsection (a) shall be required beginning not later than 

3 30 days after that date of enactment, with respect to any 

4 such exercise of authority. 

5 (e) SHARING OF INFORMATION.—Any reports required 

6 under this section shall also be submitted to the Congres7 sional Oversight Panel established under section 125. 

8 SEC. 130. TECHNICAL CORRECTIONS. 

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

10 Lending Act (15 U.S.C. 1638(b)(2)), as amended by section 

11 2502 of the Mortgage Disclosure Improvement Act of 2008 

12 (Public Law 110–289), is amended— 

13 (1) in subparagraph (A), by striking ‘‘In the 

14 case’’ and inserting ‘‘Except as provided in subpara15 graph (G), in the case’’; and 

16 (2) by amending subparagraph (G) to read as 

17 follows: 

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

19 relating to a plan described in section 101(53D) 

20 of title 11, United States Code— 

21 ‘‘(I) the requirements of subparagraphs 

22 (A) through (E) shall not apply; and 

23 ‘‘(II) a good faith estimate of the dis24 closures required under subsection (a) shall 

25 be made in accordance with regulations of 
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1 the Board under section 121(c) before such 

2 credit is extended, or shall be delivered or 

3 placed in the mail not later than 3 business 

4 days after the date on which the creditor re5 ceives the written application of the con6 sumer for such credit, whichever is earlier. 

7 ‘‘(ii) If a disclosure statement furnished 

8 within 3 business days of the written application 

9 (as provided under clause (i)(II)) contains an 

10 annual percentage rate which is subsequently 

11 rendered inaccurate, within the meaning of sec12 tion 107(c), the creditor shall furnish another 

13 disclosure statement at the time of settlement or 

14 consummation of the transaction.’’. 

15 (b) EFFECTIVE DATE.—The amendments made by sub16 section (a) shall take effect as if included in the amendments 

17 made by section 2502 of the Mortgage Disclosure Improve18 ment Act of 2008 (Public Law 110–289). 

19 SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSE20 MENT. 

21 (a) REIMBURSEMENT.—The Secretary shall reimburse 

22 the Exchange Stabilization Fund established under section 

23 5302 of title 31, United States Code, for any funds that 

24 are used for the Treasury Money Market Funds Guaranty 
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1 Program for the United States money market mutual fund 

2 industry, from funds under this Act. 

3 (b) LIMITS ON USE OF EXCHANGE STABILIZATION

4 FUND.—The Secretary is prohibited from using the Ex5 change Stabilization Fund for the establishment of any fu6 ture guaranty programs for the United States money mar7 ket mutual fund industry. 

8 SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET AC9 COUNTING. 

10 (a) AUTHORITY.—The Securities and Exchange Com11 mission shall have the authority under the securities laws 

12 (as such term is defined in section 3(a)(47) of the Securities 

13 Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to suspend, 

14 by rule, regulation, or order, the application of Statement 

15 Number 157 of the Financial Accounting Standards Board 

16 for any issuer (as such term is defined in section 3(a)(8) 

17 of such Act) or with respect to any class or category of 

18 transaction if the Commission determines that is necessary 

19 or appropriate in the public interest and is consistent with 

20 the protection of investors. 

21 (b) SAVINGS PROVISION.—Nothing in subsection (a) 

22 shall be construed to restrict or limit any authority of the 

23 Securities and Exchange Commission under securities laws 

24 as in effect on the date of enactment of this Act. 
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1 SEC. 133. STUDY ON MARK-TO-MARKET ACCOUNTING. 

2 (a) STUDY.—The Securities and Exchange Commis3 sion, in consultation with the Board and the Secretary, 

4 shall conduct a study on mark-to-market accounting stand5 ards as provided in Statement Number 157 of the Financial 

6 Accounting Standards Board, as such standards are appli7 cable to financial institutions, including depository institu8 tions. Such a study shall consider at a minimum— 

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

10 financial institution’s balance sheet; 

11 (2) the impacts of such accounting on bank fail12 ures in 2008; 

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

14 of financial information available to investors; 

15 (4) the process used by the Financial Accounting 

16 Standards Board in developing accounting standards; 

17 (5) the advisability and feasibility of modifica18 tions to such standards; and 

19 (6) alternative accounting standards to those 

20 provided in such Statement Number 157. 

21 (b) REPORT.—The Securities and Exchange Commis22 sion shall submit to Congress a report of such study before 

23 the end of the 90-day period beginning on the date of the 

24 enactment of this Act containing the findings and deter25 minations of the Commission, including such administra-
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1 tive and legislative recommendations as the Commission de2 termines appropriate. 

3 SEC. 134. RECOUPMENT. 

4 Upon the expiration of the 5-year period beginning 

5 upon the date of the enactment of this Act, the Director of 

6 the Office of Management and Budget, in consultation with 

7 the Director of the Congressional Budget Office, shall sub8 mit a report to the Congress on the net amount within the 

9 Troubled Asset Relief Program under this Act. In any case 

10 where there is a shortfall, the President shall submit a legis11 lative proposal that recoups from the financial industry an 

12 amount equal to the shortfall in order to ensure that the 

13 Troubled Asset Relief Program does not add to the deficit 

14 or national debt. 

15 SEC. 135. PRESERVATION OF AUTHORITY. 

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

17 may be construed to limit the authority of the Secretary 

18 or the Board under any other provision of law. 

19 SEC. 136. TEMPORARY INCREASE IN DEPOSIT AND SHARE 

20 INSURANCE COVERAGE. 

21 (a) FEDERAL DEPOSIT INSURANCE ACT; TEMPORARY

22 INCREASE IN DEPOSIT INSURANCE.— 

23 (1) INCREASED AMOUNT.—Effective only during 

24 the period beginning on the date of enactment of this 

25 Act and ending on December 31, 2009, section 
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1 11(a)(1)(E) of the Federal Deposit Insurance Act (12 

2 U.S.C. 1821(a)(1)(E)) shall apply with ‘‘$250,000’’ 

3 substituted for ‘‘$100,000’’. 

4 (2) TEMPORARY INCREASE NOT TO BE CONSID5 ERED FOR SETTING ASSESSMENTS.—The temporary 

6 increase in the standard maximum deposit insurance 

7 amount made under paragraph (1) shall not be taken 

8 into account by the Board of Directors of the Cor9 poration for purposes of setting assessments under 

10 section 7(b)(2) of the Federal Deposit Insurance Act 

11 (12 U.S.C. 1817(b)(2)). 

12 (3) BORROWING LIMITS TEMPORARILY LIFTED.— 

13 During the period beginning on the date of enactment 

14 of this Act and ending on December 31, 2009, the 

15 Board of Directors of the Corporation may request 

16 from the Secretary, and the Secretary shall approve, 

17 a loan or loans in an amount or amounts necessary 

18 to carry out this subsection, without regard to the 

19 limitations on such borrowing under section 14(a) 

20 and 15(c) of the Federal Deposit Insurance Act (12 

21 U.S.C. 1824(a), 1825(c)). 

22 (b) FEDERAL CREDIT UNION ACT; TEMPORARY IN23 CREASE IN SHARE INSURANCE.— 

24 (1) INCREASED AMOUNT.—Effective only during 

25 the period beginning on the date of enactment of this 
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1 Act and ending on December 31, 2009, section 

2 207(k)(5) of the Federal Credit Union Act (12 U.S.C. 

3 1787(k)(5)) shall apply with ‘‘$250,000’’ substituted 

4 for ‘‘$100,000’’. 

5 (2) TEMPORARY INCREASE NOT TO BE CONSID6 ERED FOR SETTING INSURANCE PREMIUM CHARGES

7 AND INSURANCE DEPOSIT ADJUSTMENTS.—The tem8 porary increase in the standard maximum share in9 surance amount made under paragraph (1) shall not 

10 be taken into account by the National Credit Union 

11 Administration Board for purposes of setting insur12 ance premium charges and share insurance deposit 

13 adjustments under section 202(c)(2) of the Federal 

14 Credit Union Act (12 U.S.C. 1782(c)(2)). 

15 (3) BORROWING LIMITS TEMPORARILY LIFTED.— 

16 During the period beginning on the date of enactment 

17 of this Act and ending on December 31, 2009, the Na18 tional Credit Union Administration Board may re19 quest from the Secretary, and the Secretary shall ap20 prove, a loan or loans in an amount or amounts nec21 essary to carry out this subsection, without regard to 

22 the limitations on such borrowing under section 

23 203(d)(1) of the Federal Credit Union Act (12 U.S.C. 

24 1783(d)(1)). 
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1 (c) NOT FOR USE IN INFLATION ADJUSTMENTS.—The 

2 temporary increase in the standard maximum deposit in3 surance amount made under this section shall not be used 

4 to make any inflation adjustment under section 11(a)(1)(F) 

5 of the Federal Deposit Insurance Act (12 U.S.C. 

6 1821(a)(1)(F)) for purposes of that Act or the Federal Cred7 it Union Act. 

8 TITLE II—BUDGET-RELATED 

9 PROVISIONS 

10 SEC. 201. INFORMATION FOR CONGRESSIONAL SUPPORT 

11 AGENCIES. 

12 Upon request, and to the extent otherwise consistent 

13 with law, all information used by the Secretary in connec14 tion with activities authorized under this Act (including 

15 the records to which the Comptroller General is entitled 

16 under this Act) shall be made available to congressional 

17 support agencies (in accordance with their obligations to 

18 support the Congress as set out in their authorizing stat19 utes) for the purposes of assisting the committees of Con20 gress with conducting oversight, monitoring, and analysis 

21 of the activities authorized under this Act. 
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1 SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND 

2 BUDGET AND THE CONGRESSIONAL BUDGET 

3 OFFICE. 

4 (a) REPORTS BY THE OFFICE OF MANAGEMENT AND

5 BUDGET.—Within 60 days of the first exercise of the au6 thority granted in section 101(a), but in no case later than 

7 December 31, 2008, and semiannually thereafter, the Office 

8 of Management and Budget shall report to the President 

9 and the Congress— 

10 (1) the estimate, notwithstanding section 

11 502(5)(F) of the Federal Credit Reform Act of 1990 

12 (2 U.S.C. 661a(5)(F)), as of the first business day 

13 that is at least 30 days prior to the issuance of the 

14 report, of the cost of the troubled assets, and guaran15 tees of the troubled assets, determined in accordance 

16 with section 123; 

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

18 including assets purchased or guaranteed, prices paid, 

19 revenues received, the impact on the deficit and debt, 

20 and a description of any outstanding commitments to 

21 purchase troubled assets; and 

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

23 changed from the previous report. 

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

25 Office of Management and Budget shall explain the dif26 ferences between the Congressional Budget Office estimates 
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1 delivered in accordance with subsection (b) and prior Office 

2 of Management and Budget estimates. 

3 (b) REPORTS BY THE CONGRESSIONAL BUDGET OF4 FICE.—Within 45 days of receipt by the Congress of each 

5 report from the Office of Management and Budget under 

6 subsection (a), the Congressional Budget Office shall report 

7 to the Congress the Congressional Budget Office’s assessment 

8 of the report submitted by the Office of Management and 

9 Budget, including— 

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

11 of the troubled assets, 

12 (2) the information and valuation methods used 

13 to calculate such cost, and 

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

15 (c) FINANCIAL EXPERTISE.—In carrying out the du16 ties in this subsection or performing analyses of activities 

17 under this Act, the Director of the Congressional Budget 

18 Office may employ personnel and procure the services of 

19 experts and consultants. 

20 (d) AUTHORIZATION OF APPROPRIATIONS.—There are 

21 authorized to be appropriated such sums as may be nec22 essary to produce reports required by this section. 
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1 SEC. 203. ANALYSIS IN PRESIDENT’S BUDGET. 

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

3 States Code, is amended by adding at the end the following 

4 new paragraph: 

5 ‘‘(35) as supplementary materials, a separate 

6 analysis of the budgetary effects for all prior fiscal 

7 years, the current fiscal year, the fiscal year for which 

8 the budget is submitted, and ensuing fiscal years of 

9 the actions the Secretary of the Treasury has taken or 

10 plans to take using any authority provided in the 

11 Emergency Economic Stabilization Act of 2008, in12 cluding— 

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

14 assets purchased, sold, and guaranteed under the 

15 authority provided in the Emergency Economic 

16 Stabilization Act of 2008 using methodology re17 quired by the Federal Credit Reform Act of 1990 

18 (2 U.S.C. 661 et seq.) and section 123 of the 

19 Emergency Economic Stabilization Act of 2008; 

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

21 by the public, and the gross Federal debt using 

22 methodology required by the Federal Credit Re23 form Act of 1990 and section 123 of the Emer24 gency Economic Stabilization Act of 2008; 

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

26 assets purchased, sold, and guaranteed under the 
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1 authority provided in the Emergency Economic 

2 Stabilization Act of 2008 calculated on a cash 

3 basis; 

4 ‘‘(D) a revised estimate of the deficit, the 

5 debt held by the public, and the gross Federal 

6 debt, substituting the cash-based estimates in 

7 subparagraph (C) for the estimates calculated 

8 under subparagraph (A) pursuant to the Federal 

9 Credit Reform Act of 1990 and section 123 of the 

10 Emergency Economic Stabilization Act of 2008; 

11 and 

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

13 attributed to any action taken by the Secretary 

14 using authority provided by the Emergency Eco15 nomic Stabilization Act of 2008 and the extent 

16 to which the change in the deficit since the most 

17 recent estimate is due to a reestimate using the 

18 methodology required by the Federal Credit Re19 form Act of 1990 and section 123 of the Emer20 gency Economic Stabilization Act of 2008.’’ 

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

22 Director of Office of Management and Budget shall consult 

23 periodically, but at least annually, with the Committee on 

24 the Budget of the House of Representatives, the Committee 
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1 on the Budget of the Senate, and the Director of the Con2 gressional Budget Office. 

3 (c) EFFECTIVE DATE.—This section and the amend4 ment made by this section shall apply beginning with re5 spect to the fiscal year 2010 budget submission of the Presi6 dent. 

7 SEC. 204. EMERGENCY TREATMENT. 

8 All provisions of this Act are designated as an emer9 gency requirement and necessary to meet emergency needs 

10 pursuant to section 204(a) of S. Con. Res 21 (110th Con11 gress), the concurrent resolution on the budget for fiscal year 

12 2008 and rescissions of any amounts provided in this Act 

13 shall not be counted for purposes of budget enforcement. 

14 TITLE III—TAX PROVISIONS 

15 SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF CER16 TAIN PREFERRED STOCK. 

17 (a) IN GENERAL.—For purposes of the Internal Rev18 enue Code of 1986, gain or loss from the sale or exchange 

19 of any applicable preferred stock by any applicable finan20 cial institution shall be treated as ordinary income or loss. 

21 (b) APPLICABLE PREFERRED STOCK.—For purposes of 

22 this section, the term ‘‘applicable preferred stock’’ means 

23 any stock— 

24 (1) which is preferred stock in— 
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1 (A) the Federal National Mortgage Associa2 tion, established pursuant to the Federal Na3 tional Mortgage Association Charter Act (12 

4 U.S.C. 1716 et seq.), or 

5 (B) the Federal Home Loan Mortgage Cor6 poration, established pursuant to the Federal 

7 Home Loan Mortgage Corporation Act (12 

8 U.S.C. 1451 et seq.), and 

9 (2) which— 

10 (A) was held by the applicable financial in11 stitution on September 6, 2008, or 

12 (B) was sold or exchanged by the applicable 

13 financial institution on or after January 1, 

14 2008, and before September 7, 2008. 

15 (c) APPLICABLE FINANCIAL INSTITUTION.—For pur16 poses of this section: 

17 (1) IN GENERAL.—Except as provided in para18 graph (2), the term ‘‘applicable financial institution’’ 

19 means— 

20 (A) a financial institution referred to in 

21 section 582(c)(2) of the Internal Revenue Code of 

22 1986, or 

23 (B) a depository institution holding com24 pany (as defined in section 3(w)(1) of the Fed-
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1 eral Deposit Insurance Act (12 U.S.C. 

2 1813(w)(1))). 

3 (2) SPECIAL RULES FOR CERTAIN SALES.—In 

4 the case of— 

5 (A) a sale or exchange described in sub6 section (b)(2)(B), an entity shall be treated as an 

7 applicable financial institution only if it was an 

8 entity described in subparagraph (A) or (B) of 

9 paragraph (1) at the time of the sale or ex10 change, and 

11 (B) a sale or exchange after September 6, 

12 2008, of preferred stock described in subsection 

13 (b)(2)(A), an entity shall be treated as an appli14 cable financial institution only if it was an enti15 ty described in subparagraph (A) or (B) of para16 graph (1) at all times during the period begin17 ning on September 6, 2008, and ending on the 

18 date of the sale or exchange of the preferred stock. 

19 (d) SPECIAL RULE FOR CERTAIN PROPERTY NOT

20 HELD ON SEPTEMBER 6, 2008.—The Secretary of the 

21 Treasury or the Secretary’s delegate may extend the appli22 cation of this section to all or a portion of the gain or loss 

23 from a sale or exchange in any case where— 

24 (1) an applicable financial institution sells or 

25 exchanges applicable preferred stock after September 
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1 6, 2008, which the applicable financial institution 

2 did not hold on such date, but the basis of which in 

3 the hands of the applicable financial institution at 

4 the time of the sale or exchange is the same as the 

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

6 on such date, or 

7 (2) the applicable financial institution is a part8 ner in a partnership which— 

9 (A) held such stock on September 6, 2008, 

10 and later sold or exchanged such stock, or 

11 (B) sold or exchanged such stock during the 

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

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

14 Treasury or the Secretary’s delegate may prescribe such 

15 guidance, rules, or regulations as are necessary to carry out 

16 the purposes of this section. 

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

18 sales or exchanges occurring after December 31, 2007, in 

19 taxable years ending after such date. 
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1 SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECU2 TIVE COMPENSATION OF EMPLOYERS PAR3 TICIPATING IN THE TROUBLED ASSETS RE4 LIEF PROGRAM. 

5 (a) DENIAL OF DEDUCTION.—Subsection (m) of sec6 tion 162 of the Internal Revenue Code of 1986 is amended 

7 by adding at the end the following new paragraph: 

8 ‘‘(5) SPECIAL RULE FOR APPLICATION TO EM9 PLOYERS PARTICIPATING IN THE TROUBLED ASSETS

10 RELIEF PROGRAM.— 

11 ‘‘(A) IN GENERAL.—In the case of an appli12 cable employer, no deduction shall be allowed 

13 under this chapter— 

14 ‘‘(i) in the case of executive remunera15 tion for any applicable taxable year which 

16 is attributable to services performed by a 

17 covered executive during such applicable 

18 taxable year, to the extent that the amount 

19 of such remuneration exceeds $500,000, or 

20 ‘‘(ii) in the case of deferred deduction 

21 executive remuneration for any taxable year 

22 for services performed during any applica23 ble taxable year by a covered executive, to 

24 the extent that the amount of such remu25 neration exceeds $500,000 reduced (but not 

26 below zero) by the sum of— 
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1 ‘‘(I) the executive remuneration 

2 for such applicable taxable year, plus 

3 ‘‘(II) the portion of the deferred 

4 deduction executive remuneration for 

5 such services which was taken into ac6 count under this clause in a preceding 

7 taxable year. 

8 ‘‘(B) APPLICABLE EMPLOYER.—For pur9 poses of this paragraph— 

10 ‘‘(i) IN GENERAL.—Except as provided 

11 in clause (ii), the term ‘applicable em12 ployer’ means any employer from whom 1 

13 or more troubled assets are acquired under 

14 a program established by the Secretary 

15 under section 101(a) of the Emergency Eco16 nomic Stabilization Act of 2008 if the ag17 gregate amount of the assets so acquired for 

18 all taxable years exceeds $300,000,000. 

19 ‘‘(ii) DISREGARD OF CERTAIN ASSETS

20 SOLD THROUGH DIRECT PURCHASE.—If the 

21 only sales of troubled assets by an employer 

22 under the program described in clause (i) 

23 are through 1 or more direct purchases 

24 (within the meaning of section 113(c) of the 

25 Emergency Economic Stabilization Act of 
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1 2008), such assets shall not be taken into 

2 account under clause (i) in determining 

3 whether the employer is an applicable em4 ployer for purposes of this paragraph. 

5 ‘‘(iii) AGGREGATION RULES.—Two or 

6 more persons who are treated as a single 

7 employer under subsection (b) or (c) of sec8 tion 414 shall be treated as a single em9 ployer, except that in applying section 

10 1563(a) for purposes of either such sub11 section, paragraphs (2) and (3) thereof shall 

12 be disregarded. 

13 ‘‘(C) APPLICABLE TAXABLE YEAR.—For 

14 purposes of this paragraph, the term ‘applicable 

15 taxable year’ means, with respect to any em16 ployer— 

17 ‘‘(i) the first taxable year of the em18 ployer— 

19 ‘‘(I) which includes any portion of 

20 the period during which the authorities 

21 under section 101(a) of the Emergency 

22 Economic Stabilization Act of 2008 

23 are in effect (determined under section 

24 120 thereof), and 
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1 ‘‘(II) in which the aggregate 

2 amount of troubled assets acquired 

3 from the employer during the taxable 

4 year pursuant to such authorities 

5 (other than assets to which subpara6 graph (B)(ii) applies), when added to 

7 the aggregate amount so acquired for 

8 all preceding taxable years, exceeds 

9 $300,000,000, and 

10 ‘‘(ii) any subsequent taxable year 

11 which includes any portion of such period. 

12 ‘‘(D) COVERED EXECUTIVE.—For purposes 

13 of this paragraph— 

14 ‘‘(i) IN GENERAL.—The term ‘covered 

15 executive’ means, with respect to any appli16 cable taxable year, any employee— 

17 ‘‘(I) who, at any time during the 

18 portion of the taxable year during 

19 which the authorities under section 

20 101(a) of the Emergency Economic 

21 Stabilization Act of 2008 are in effect 

22 (determined under section 120 thereof), 

23 is the chief executive officer of the ap24 plicable employer or the chief financial 

25 officer of the applicable employer, or 
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1 an individual acting in either such ca2 pacity, or 

3 ‘‘(II) who is described in clause 

4 (ii). 

5 ‘‘(ii) HIGHEST COMPENSATED EMPLOY6 EES.—An employee is described in this 

7 clause if the employee is 1 of the 3 highest 

8 compensated officers of the applicable em9 ployer for the taxable year (other than an 

10 individual described in clause (i)(I)), deter11 mined— 

12 ‘‘(I) on the basis of the share13 holder disclosure rules for compensa14 tion under the Securities Exchange Act 

15 of 1934 (without regard to whether 

16 those rules apply to the employer), and 

17 ‘‘(II) by only taking into account 

18 employees employed during the portion 

19 of the taxable year described in clause 

20 (i)(I). 

21 ‘‘(iii) EMPLOYEE REMAINS COVERED

22 EXECUTIVE.—If an employee is a covered 

23 executive with respect to an applicable em24 ployer for any applicable taxable year, such 

25 employee shall be treated as a covered execu-
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1 tive with respect to such employer for all 

2 subsequent applicable taxable years and for 

3 all subsequent taxable years in which de4 ferred deduction executive remuneration 

5 with respect to services performed in all 

6 such applicable taxable years would (but for 

7 this paragraph) be deductible. 

8 ‘‘(E) EXECUTIVE REMUNERATION.—For 

9 purposes of this paragraph, the term ‘executive 

10 remuneration’ means the applicable employee re11 muneration of the covered executive, as deter12 mined under paragraph (4) without regard to 

13 subparagraphs (B), (C), and (D) thereof. Such 

14 term shall not include any deferred deduction ex15 ecutive remuneration with respect to services per16 formed in a prior applicable taxable year. 

17 ‘‘(F) DEFERRED DEDUCTION EXECUTIVE

18 REMUNERATION.—For purposes of this para19 graph, the term ‘deferred deduction executive re20 muneration’ means remuneration which would 

21 be executive remuneration for services performed 

22 in an applicable taxable year but for the fact 

23 that the deduction under this chapter (deter24 mined without regard to this paragraph) for 
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1 such remuneration is allowable in a subsequent 

2 taxable year. 

3 ‘‘(G) COORDINATION.—Rules similar to the 

4 rules of subparagraphs (F) and (G) of paragraph 

5 (4) shall apply for purposes of this paragraph. 

6 ‘‘(H) REGULATORY AUTHORITY.—The Sec7 retary may prescribe such guidance, rules, or 

8 regulations as are necessary to carry out the 

9 purposes of this paragraph and the Emergency 

10 Economic Stabilization Act of 2008, including 

11 the extent to which this paragraph applies in the 

12 case of any acquisition, merger, or reorganiza13 tion of an applicable employer.’’. 

14 (b) GOLDEN PARACHUTE RULE.—Section 280G of the 

15 Internal Revenue Code of 1986 is amended— 

16 (1) by redesignating subsection (e) as subsection 

17 (f), and 

18 (2) by inserting after subsection (d) the following 

19 new subsection: 

20 ‘‘(e) SPECIAL RULE FOR APPLICATION TO EMPLOYERS

21 PARTICIPATING IN THE TROUBLED ASSETS RELIEF PRO22 GRAM.— 

23 ‘‘(1) IN GENERAL.—In the case of the severance 

24 from employment of a covered executive of an appli25 cable employer during the period during which the 
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1 authorities under section 101(a) of the Emergency 

2 Economic Stabilization Act of 2008 are in effect (de3 termined under section 120 of such Act), this section 

4 shall be applied to payments to such executive with 

5 the following modifications: 

6 ‘‘(A) Any reference to a disqualified indi7 vidual (other than in subsection (c)) shall be 

8 treated as a reference to a covered executive. 

9 ‘‘(B) Any reference to a change described in 

10 subsection (b)(2)(A)(i) shall be treated as a ref11 erence to an applicable severance from employ12 ment of a covered executive, and any reference to 

13 a payment contingent on such a change shall be 

14 treated as a reference to any payment made dur15 ing an applicable taxable year of the employer 

16 on account of such applicable severance from em17 ployment. 

18 ‘‘(C) Any reference to a corporation shall be 

19 treated as a reference to an applicable employer. 

20 ‘‘(D) The provisions of subsections 

21 (b)(2)(C), (b)(4), (b)(5), and (d)(5) shall not 

22 apply. 

23 ‘‘(2) DEFINITIONS AND SPECIAL RULES.—For 

24 purposes of this subsection: 
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1 ‘‘(A) DEFINITIONS.—Any term used in this 

2 subsection which is also used in section 

3 162(m)(5) shall have the meaning given such 

4 term by such section. 

5 ‘‘(B) APPLICABLE SEVERANCE FROM EM6 PLOYMENT.—The term ‘applicable severance from 

7 employment’ means any severance from employ8 ment of a covered executive— 

9 ‘‘(i) by reason of an involuntary termi10 nation of the executive by the employer, or 

11 ‘‘(ii) in connection with any bank12 ruptcy, liquidation, or receivership of the 

13 employer. 

14 ‘‘(C) COORDINATION AND OTHER RULES.— 

15 ‘‘(i) IN GENERAL.—If a payment 

16 which is treated as a parachute payment by 

17 reason of this subsection is also a parachute 

18 payment determined without regard to this 

19 subsection, this subsection shall not apply to 

20 such payment. 

21 ‘‘(ii) REGULATORY AUTHORITY.—The 

22 Secretary may prescribe such guidance, 

23 rules, or regulations as are necessary— 

24 ‘‘(I) to carry out the purposes of 

25 this subsection and the Emergency 
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1 Economic Stabilization Act of 2008, 

2 including the extent to which this sub3 section applies in the case of any ac4 quisition, merger, or reorganization of 

5 an applicable employer, 

6 ‘‘(II) to apply this section and 

7 section 4999 in cases where one or 

8 more payments with respect to any in9 dividual are treated as parachute pay10 ments by reason of this subsection, and 

11 other payments with respect to such in12 dividual are treated as parachute pay13 ments under this section without re14 gard to this subsection, and 

15 ‘‘(III) to prevent the avoidance of 

16 the application of this section through 

17 the mischaracterization of a severance 

18 from employment as other than an ap19 plicable severance from employment.’’. 

20 (c) EFFECTIVE DATES.— 

21 (1) IN GENERAL.—The amendment made by sub22 section (a) shall apply to taxable years ending on or 

23 after the date of the enactment of this Act. 

24 (2) GOLDEN PARACHUTE RULE.—The amend25 ments made by subsection (b) shall apply to payments 
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1 with respect to severances occurring during the period 

2 during which the authorities under section 101(a) of 

3 this Act are in effect (determined under section 120 

4 of this Act). 

5 SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM DIS6 CHARGE OF QUALIFIED PRINCIPAL RESI7 DENCE INDEBTEDNESS. 

8 (a) EXTENSION.—Subparagraph (E) of section 

9 108(a)(1) of the Internal Revenue Code of 1986 is amended 

10 by striking ‘‘January 1, 2010’’ and inserting ‘‘January 1, 

11 2013’’. 

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

13 section shall apply to discharges of indebtedness occurring 

14 on or after January 1, 2010. 

15 DIVISION B—ENERGY IMPROVE16 MENT AND EXTENSION ACT 

17 OF 2008 

18 SECTION 1. SHORT TITLE, ETC. 

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

20 ‘‘Energy Improvement and Extension Act of 2008’’. 

21 (b) REFERENCE.—Except as otherwise expressly pro22 vided, whenever in this division an amendment or repeal 

23 is expressed in terms of an amendment to, or repeal of, a 

24 section or other provision, the reference shall be considered 
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1 to be made to a section or other provision of the Internal 

2 Revenue Code of 1986. 

3 (c) TABLE OF CONTENTS.—The table of contents for 

4 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. 

Sec. 209. Extension and modification of election to expense certain refineries. 
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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. 

1 TITLE I—ENERGY PRODUCTION 

2 INCENTIVES 

3 Subtitle A—Renewable Energy 

4 Incentives 

5 SEC. 101. RENEWABLE ENERGY CREDIT. 

6 (a) EXTENSION OF CREDIT.— 

7 (1) 1-YEAR EXTENSION FOR WIND AND REFINED

8 COAL FACILITIES.—Paragraphs (1) and (8) of section 

9 45(d) are each amended by striking ‘‘January 1, 

10 2009’’ and inserting ‘‘January 1, 2010’’. 

11 (2) 2-YEAR EXTENSION FOR CERTAIN OTHER FA12 CILITIES.—Each of the following provisions of section 
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1 45(d) is amended by striking ‘‘January 1, 2009’’ and 

2 inserting ‘‘January 1, 2011’’: 

3 (A) Clauses (i) and (ii) of paragraph 

4 (2)(A). 

5 (B) Clauses (i)(I) and (ii) of paragraph 

6 (3)(A). 

7 (C) Paragraph (4). 

8 (D) Paragraph (5). 

9 (E) Paragraph (6). 

10 (F) Paragraph (7). 

11 (G) Subparagraphs (A) and (B) of para12 graph (9). 

13 (b) MODIFICATION OF REFINED COAL AS A QUALIFIED

14 ENERGY RESOURCE.— 

15 (1) ELIMINATION OF INCREASED MARKET VALUE

16 TEST.—Section 45(c)(7)(A)(i) (defining refined coal), 

17 as amended by section 108, is amended— 

18 (A) by striking subclause (IV), 

19 (B) by adding ‘‘and’’ at the end of subclause 

20 (II), and 

21 (C) by striking ‘‘, and’’ at the end of sub22 clause (III) and inserting a period. 

23 (2) INCREASE IN REQUIRED EMISSION REDUC24 TION.—Section 45(c)(7)(B) (defining qualified emis25 sion reduction) is amended by inserting ‘‘at least 40 
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1 percent of the emissions of’’ after ‘‘nitrogen oxide 

2 and’’. 

3 (c) TRASH FACILITY CLARIFICATION.—Paragraph (7) 

4 of section 45(d) is amended— 

5 (1) by striking ‘‘facility which burns’’ and in6 serting ‘‘facility (other than a facility described in 

7 paragraph (6)) which uses’’, and 

8 (2) by striking ‘‘COMBUSTION’’. 

9 (d) EXPANSION OF BIOMASS FACILITIES.— 

10 (1) OPEN-LOOP BIOMASS FACILITIES.—Para11 graph (3) of section 45(d) is amended by redesig12 nating subparagraph (B) as subparagraph (C) and 

13 by inserting after subparagraph (A) the following new 

14 subparagraph: 

15 ‘‘(B) EXPANSION OF FACILITY.—Such term 

16 shall include a new unit placed in service after 

17 the date of the enactment of this subparagraph 

18 in connection with a facility described in sub19 paragraph (A), but only to the extent of the in20 creased amount of electricity produced at the fa21 cility by reason of such new unit.’’. 

22 (2) CLOSED-LOOP BIOMASS FACILITIES.—Para23 graph (2) of section 45(d) is amended by redesig24 nating subparagraph (B) as subparagraph (C) and 
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1 inserting after subparagraph (A) the following new 

2 subparagraph: 

3 ‘‘(B) EXPANSION OF FACILITY.—Such term 

4 shall include a new unit placed in service after 

5 the date of the enactment of this subparagraph 

6 in connection with a facility described in sub7 paragraph (A)(i), but only to the extent of the 

8 increased amount of electricity produced at the 

9 facility by reason of such new unit.’’. 

10 (e) MODIFICATION OF RULES FOR HYDROPOWER PRO11 DUCTION.—Subparagraph (C) of section 45(c)(8) is amend12 ed to read as follows: 

13 ‘‘(C) NONHYDROELECTRIC DAM.—For pur14 poses of subparagraph (A), a facility is described 

15 in this subparagraph if— 

16 ‘‘(i) the hydroelectric project installed 

17 on the nonhydroelectric dam is licensed by 

18 the Federal Energy Regulatory Commission 

19 and meets all other applicable environ20 mental, licensing, and regulatory require21 ments, 

22 ‘‘(ii) the nonhydroelectric dam was 

23 placed in service before the date of the en24 actment of this paragraph and operated for 

25 flood control, navigation, or water supply 
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1 purposes and did not produce hydroelectric 

2 power on the date of the enactment of this 

3 paragraph, and 

4 ‘‘(iii) the hydroelectric project is oper5 ated so that the water surface elevation at 

6 any given location and time that would 

7 have occurred in the absence of the hydro8 electric project is maintained, subject to any 

9 license requirements imposed under applica10 ble law that change the water surface ele11 vation for the purpose of improving envi12 ronmental quality of the affected waterway. 

13 The Secretary, in consultation with the Federal 

14 Energy Regulatory Commission, shall certify if a 

15 hydroelectric project licensed at a nonhydro16 electric dam meets the criteria in clause (iii). 

17 Nothing in this section shall affect the standards 

18 under which the Federal Energy Regulatory 

19 Commission issues licenses for and regulates hy20 dropower projects under part I of the Federal 

21 Power Act.’’. 

22 (f) EFFECTIVE DATE.— 

23 (1) IN GENERAL.—Except as otherwise provided 

24 in this subsection, the amendments made by this sec-
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1 tion shall apply to property originally placed in serv2 ice after December 31, 2008. 

3 (2) REFINED COAL.—The amendments made by 

4 subsection (b) shall apply to coal produced and sold 

5 from facilities placed in service after December 31, 

6 2008. 

7 (3) TRASH FACILITY CLARIFICATION.—The 

8 amendments made by subsection (c) shall apply to 

9 electricity produced and sold after the date of the en10 actment of this Act. 

11 (4) EXPANSION OF BIOMASS FACILITIES.—The 

12 amendments made by subsection (d) shall apply to 

13 property placed in service after the date of the enact14 ment of this Act. 

15 SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRO16 DUCED FROM MARINE RENEWABLES. 

17 (a) IN GENERAL.—Paragraph (1) of section 45(c) is 

18 amended by striking ‘‘and’’ at the end of subparagraph (G), 

19 by striking the period at the end of subparagraph (H) and 

20 inserting ‘‘, and’’, and by adding at the end the following 

21 new subparagraph: 

22 ‘‘(I) marine and hydrokinetic renewable en23 ergy.’’. 
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1 (b) MARINE RENEWABLES.—Subsection (c) of section 

2 45 is amended by adding at the end the following new para3 graph: 

4 ‘‘(10) MARINE AND HYDROKINETIC RENEWABLE

5 ENERGY.— 

6 ‘‘(A) IN GENERAL.—The term ‘marine and 

7 hydrokinetic renewable energy’ means energy de8 rived from— 

9 ‘‘(i) waves, tides, and currents in 

10 oceans, estuaries, and tidal areas, 

11 ‘‘(ii) free flowing water in rivers, lakes, 

12 and streams, 

13 ‘‘(iii) free flowing water in an irriga14 tion system, canal, or other man-made 

15 channel, including projects that utilize non16 mechanical structures to accelerate the flow 

17 of water for electric power production pur18 poses, or 

19 ‘‘(iv) differentials in ocean temperature 

20 (ocean thermal energy conversion). 

21 ‘‘(B) EXCEPTIONS.—Such term shall not in22 clude any energy which is derived from any 

23 source which utilizes a dam, diversionary struc24 ture (except as provided in subparagraph 
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1 (A)(iii)), or impoundment for electric power pro2 duction purposes.’’. 

3 (c) DEFINITION OF FACILITY.—Subsection (d) of sec4 tion 45 is amended by adding at the end the following new 

5 paragraph: 

6 ‘‘(11) MARINE AND HYDROKINETIC RENEWABLE

7 ENERGY FACILITIES.—In the case of a facility pro8 ducing electricity from marine and hydrokinetic re9 newable energy, the term ‘qualified facility’ means 

10 any facility owned by the taxpayer— 

11 ‘‘(A) which has a nameplate capacity rat12 ing of at least 150 kilowatts, and 

13 ‘‘(B) which is originally placed in service 

14 on or after the date of the enactment of this 

15 paragraph and before January 1, 2012.’’. 

16 (d) CREDIT RATE.—Subparagraph (A) of section 

17 45(b)(4) is amended by striking ‘‘or (9)’’ and inserting ‘‘(9), 

18 or (11)’’. 

19 (e) COORDINATION WITH SMALL IRRIGATION

20 POWER.—Paragraph (5) of section 45(d), as amended by 

21 section 101, is amended by striking ‘‘January 1, 2012’’ and 

22 inserting ‘‘the date of the enactment of paragraph (11)’’. 

23 (f) EFFECTIVE DATE.—The amendments made by this 

24 section shall apply to electricity produced and sold after 
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1 the date of the enactment of this Act, in taxable years end2 ing after such date. 

3 SEC. 103. ENERGY CREDIT. 

4 (a) EXTENSION OF CREDIT.— 

5 (1) SOLAR ENERGY PROPERTY.—Paragraphs 

6 (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) are each 

7 amended by striking ‘‘January 1, 2009’’ and insert8 ing ‘‘January 1, 2017’’. 

9 (2) FUEL CELL PROPERTY.—Subparagraph (E) 

10 of section 48(c)(1) is amended by striking ‘‘December 

11 31, 2008’’ and inserting ‘‘December 31, 2016’’. 

12 (3) MICROTURBINE PROPERTY.—Subparagraph 

13 (E) of section 48(c)(2) is amended by striking ‘‘De14 cember 31, 2008’’ and inserting ‘‘December 31, 2016’’. 

15 (b) ALLOWANCE OF ENERGY CREDIT AGAINST ALTER16 NATIVE MINIMUM TAX.— 

17 (1) IN GENERAL.—Subparagraph (B) of section 

18 38(c)(4), as amended by the Housing Assistance Tax 

19 Act of 2008, is amended by redesignating clause (vi) 

20 as clause (vi) and (vii), respectively, and by inserting 

21 after clause (iv) the following new clause: 

22 ‘‘(v) the credit determined under sec23 tion 46 to the extent that such credit is at24 tributable to the energy credit determined 

25 under section 48,’’. 
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1 (2) TECHNICAL AMENDMENT.—Clause (vi) of sec2 tion 38(c)(4)(B), as redesignated by paragraph (1), is 

3 amended by striking ‘‘section 47 to the extent attrib4 utable to’’ and inserting ‘‘section 46 to the extent that 

5 such credit is attributable to the rehabilitation credit 

6 under section 47, but only with respect to’’. 

7 (c) ENERGY CREDIT FOR COMBINED HEAT AND

8 POWER SYSTEM PROPERTY.— 

9 (1) IN GENERAL.—Section 48(a)(3)(A) is amend10 ed by striking ‘‘or’’ at the end of clause (iii), by in11 serting ‘‘or’’ at the end of clause (iv), and by adding 

12 at the end the following new clause: 

13 ‘‘(v) combined heat and power system 

14 property,’’. 

15 (2) COMBINED HEAT AND POWER SYSTEM PROP16 ERTY.—Subsection (c) of section 48 is amended— 

17 (A) by striking ‘‘QUALIFIED FUEL CELL

18 PROPERTY; QUALIFIED MICROTURBINE PROP19 ERTY’’ in the heading and inserting ‘‘DEFINI20 TIONS’’, and 

21 (B) by adding at the end the following new 

22 paragraph: 

23 ‘‘(3) COMBINED HEAT AND POWER SYSTEM PROP24 ERTY.— 
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1 ‘‘(A) COMBINED HEAT AND POWER SYSTEM

2 PROPERTY.—The term ‘combined heat and power 

3 system property’ means property comprising a 

4 system— 

5 ‘‘(i) which uses the same energy source 

6 for the simultaneous or sequential genera7 tion of electrical power, mechanical shaft 

8 power, or both, in combination with the 

9 generation of steam or other forms of useful 

10 thermal energy (including heating and cool11 ing applications), 

12 ‘‘(ii) which produces— 

13 ‘‘(I) at least 20 percent of its total 

14 useful energy in the form of thermal 

15 energy which is not used to produce 

16 electrical or mechanical power (or com17 bination thereof), and 

18 ‘‘(II) at least 20 percent of its 

19 total useful energy in the form of elec20 trical or mechanical power (or com21 bination thereof), 

22 ‘‘(iii) the energy efficiency percentage 

23 of which exceeds 60 percent, and 

24 ‘‘(iv) which is placed in service before 

25 January 1, 2017. 
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1 ‘‘(B) LIMITATION.— 

2 ‘‘(i) IN GENERAL.—In the case of com3 bined heat and power system property with 

4 an electrical capacity in excess of the appli5 cable capacity placed in service during the 

6 taxable year, the credit under subsection 

7 (a)(1) (determined without regard to this 

8 paragraph) for such year shall be equal to 

9 the amount which bears the same ratio to 

10 such credit as the applicable capacity bears 

11 to the capacity of such property. 

12 ‘‘(ii) APPLICABLE CAPACITY.—For 

13 purposes of clause (i), the term ‘applicable 

14 capacity’ means 15 megawatts or a me15 chanical energy capacity of more than 

16 20,000 horsepower or an equivalent com17 bination of electrical and mechanical energy 

18 capacities. 

19 ‘‘(iii) MAXIMUM CAPACITY.—The term 

20 ‘combined heat and power system property’ 

21 shall not include any property comprising a 

22 system if such system has a capacity in ex23 cess of 50 megawatts or a mechanical en24 ergy capacity in excess of 67,000 horsepower 
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1 or an equivalent combination of electrical 

2 and mechanical energy capacities. 

3 ‘‘(C) SPECIAL RULES.— 

4 ‘‘(i) ENERGY EFFICIENCY PERCENT5 AGE.—For purposes of this paragraph, the 

6 energy efficiency percentage of a system is 

7 the fraction— 

8 ‘‘(I) the numerator of which is the 

9 total useful electrical, thermal, and me10 chanical power produced by the system 

11 at normal operating rates, and ex12 pected to be consumed in its normal 

13 application, and 

14 ‘‘(II) the denominator of which is 

15 the lower heating value of the fuel 

16 sources for the system. 

17 ‘‘(ii) DETERMINATIONS MADE ON BTU

18 BASIS.—The energy efficiency percentage 

19 and the percentages under subparagraph 

20 (A)(ii) shall be determined on a Btu basis. 

21 ‘‘(iii) INPUT AND OUTPUT PROPERTY

22 NOT INCLUDED.—The term ‘combined heat 

23 and power system property’ does not in24 clude property used to transport the energy 
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1 source to the facility or to distribute energy 

2 produced by the facility. 

3 ‘‘(D) SYSTEMS USING BIOMASS.—If a sys4 tem is designed to use biomass (within the mean5 ing of paragraphs (2) and (3) of section 45(c) 

6 without regard to the last sentence of paragraph 

7 (3)(A)) for at least 90 percent of the energy 

8 source— 

9 ‘‘(i) subparagraph (A)(iii) shall not 

10 apply, but 

11 ‘‘(ii) the amount of credit determined 

12 under subsection (a) with respect to such 

13 system shall not exceed the amount which 

14 bears the same ratio to such amount of cred15 it (determined without regard to this sub16 paragraph) as the energy efficiency percent17 age of such system bears to 60 percent.’’. 

18 (3) CONFORMING AMENDMENT.—Section 48(a)(1) 

19 is amended by striking ‘‘paragraphs (1)(B) and 

20 (2)(B)’’ and inserting ‘‘paragraphs (1)(B), (2)(B), 

21 and (3)(B)’’. 

22 (d) INCREASE OF CREDIT LIMITATION FOR FUEL CELL

23 PROPERTY.—Subparagraph (B) of section 48(c)(1) is 

24 amended by striking ‘‘$500’’ and inserting ‘‘$1,500’’. 
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1 (e) PUBLIC UTILITY PROPERTY TAKEN INTO AC2 COUNT.— 

3 (1) IN GENERAL.—Paragraph (3) of section 

4 48(a) is amended by striking the second sentence 

5 thereof. 

6 (2) CONFORMING AMENDMENTS.— 

7 (A) Paragraph (1) of section 48(c) is 

8 amended by striking subparagraph (D) and re9 designating subparagraph (E) as subparagraph 

10 (D). 

11 (B) Paragraph (2) of section 48(c) is 

12 amended by striking subparagraph (D) and re13 designating subparagraph (E) as subparagraph 

14 (D). 

15 (f) EFFECTIVE DATE.— 

16 (1) IN GENERAL.—Except as otherwise provided 

17 in this subsection, the amendments made by this sec18 tion shall take effect on the date of the enactment of 

19 this Act. 

20 (2) ALLOWANCE AGAINST ALTERNATIVE MINIMUM

21 TAX.—The amendments made by subsection (b) shall 

22 apply to credits determined under section 46 of the 

23 Internal Revenue Code of 1986 in taxable years begin24 ning after the date of the enactment of this Act and 

25 to carrybacks of such credits. 
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1 (3) COMBINED HEAT AND POWER AND FUEL

2 CELL PROPERTY.—The amendments made by sub3 sections (c) and (d) shall apply to periods after the 

4 date of the enactment of this Act, in taxable years 

5 ending after such date, under rules similar to the 

6 rules of section 48(m) of the Internal Revenue Code 

7 of 1986 (as in effect on the day before the date of the 

8 enactment of the Revenue Reconciliation Act of 1990). 

9 (4) PUBLIC UTILITY PROPERTY.—The amend10 ments made by subsection (e) shall apply to periods 

11 after February 13, 2008, in taxable years ending after 

12 such date, under rules similar to the rules of section 

13 48(m) of the Internal Revenue Code of 1986 (as in ef14 fect on the day before the date of the enactment of the 

15 Revenue Reconciliation Act of 1990). 

16 SEC. 104. ENERGY CREDIT FOR SMALL WIND PROPERTY. 

17 (a) IN GENERAL.—Section 48(a)(3)(A), as amended by 

18 section 103, is amended by striking ‘‘or’’ at the end of clause 

19 (iv), by adding ‘‘or’’ at the end of clause (v), and by insert20 ing after clause (v) the following new clause: 

21 ‘‘(vi) qualified small wind energy 

22 property,’’. 

23 (b) 30 PERCENT CREDIT.—Section 48(a)(2)(A)(i) is 

24 amended by striking ‘‘and’’ at the end of subclause (II) and 
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1 by inserting after subclause (III) the following new sub2 clause: 

3 ‘‘(IV) qualified small wind energy 

4 property, and’’. 

5 (c) QUALIFIED SMALL WIND ENERGY PROPERTY.— 

6 Section 48(c), as amended by section 103, is amended by 

7 adding at the end the following new paragraph: 

8 ‘‘(4) QUALIFIED SMALL WIND ENERGY PROP9 ERTY.— 

10 ‘‘(A) IN GENERAL.—The term ‘qualified 

11 small wind energy property’ means property 

12 which uses a qualifying small wind turbine to 

13 generate electricity. 

14 ‘‘(B) LIMITATION.—In the case of qualified 

15 small wind energy property placed in service 

16 during the taxable year, the credit otherwise de17 termined under subsection (a)(1) for such year 

18 with respect to all such property of the taxpayer 

19 shall not exceed $4,000. 

20 ‘‘(C) QUALIFYING SMALL WIND TURBINE.— 

21 The term ‘qualifying small wind turbine’ means 

22 a wind turbine which has a nameplate capacity 

23 of not more than 100 kilowatts. 

24 ‘‘(D) TERMINATION.—The term ‘qualified 

25 small wind energy property’ shall not include 
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1 any property for any period after December 31, 

2 2016.’’. 

3 (d) CONFORMING AMENDMENT.—Section 48(a)(1), as 

4 amended by section 103, is amended by striking ‘‘para5 graphs (1)(B), (2)(B), and (3)(B)’’ and inserting ‘‘para6 graphs (1)(B), (2)(B), (3)(B), and (4)(B)’’. 

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

8 section shall apply to periods after the date of the enactment 

9 of this Act, in taxable years ending after such date, under 

10 rules similar to the rules of section 48(m) of the Internal 

11 Revenue Code of 1986 (as in effect on the day before the 

12 date of the enactment of the Revenue Reconciliation Act of 

13 1990). 

14 SEC. 105. ENERGY CREDIT FOR GEOTHERMAL HEAT PUMP 

15 SYSTEMS. 

16 (a) IN GENERAL.—Subparagraph (A) of section 

17 48(a)(3), as amended by this Act, is amended by striking 

18 ‘‘or’’ at the end of clause (v), by inserting ‘‘or’’ at the end 

19 of clause (vi), and by adding at the end the following new 

20 clause: 

21 ‘‘(vii) equipment which uses the 

22 ground or ground water as a thermal en23 ergy source to heat a structure or as a ther24 mal energy sink to cool a structure, but 
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1 only with respect to periods ending before 

2 January 1, 2017,’’. 

3 (b) EFFECTIVE DATE.—The amendments made by this 

4 section shall apply to periods after the date of the enactment 

5 of this Act, in taxable years ending after such date, under 

6 rules similar to the rules of section 48(m) of the Internal 

7 Revenue Code of 1986 (as in effect on the day before the 

8 date of the enactment of the Revenue Reconciliation Act of 

9 1990). 

10 SEC. 106. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT 

11 PROPERTY. 

12 (a) EXTENSION.—Section 25D(g) is amended by strik13 ing ‘‘December 31, 2008’’ and inserting ‘‘December 31, 

14 2016’’. 

15 (b) REMOVAL OF LIMITATION FOR SOLAR ELECTRIC

16 PROPERTY.— 

17 (1) IN GENERAL.—Section 25D(b)(1), as amend18 ed by subsections (c) and (d), is amended— 

19 (A) by striking subparagraph (A), and 

20 (B) by redesignating subparagraphs (B) 

21 through (E) as subparagraphs (A) through and 

22 (D), respectively. 

23 (2) CONFORMING AMENDMENT.—Section 

24 25D(e)(4)(A), as amended by subsections (c) and (d), 

25 is amended— 
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1 (A) by striking clause (i), and 

2 (B) by redesignating clauses (ii) through (v) 

3 as clauses (i) and (iv), respectively. 

4 (c) CREDIT FOR RESIDENTIAL WIND PROPERTY.— 

5 (1) IN GENERAL.—Section 25D(a) is amended by 

6 striking ‘‘and’’ at the end of paragraph (2), by strik7 ing the period at the end of paragraph (3) and insert8 ing ‘‘, and’’, and by adding at the end the following 

9 new paragraph: 

10 ‘‘(4) 30 percent of the qualified small wind en11 ergy property expenditures made by the taxpayer 

12 during such year.’’. 

13 (2) LIMITATION.—Section 25D(b)(1) is amended 

14 by striking ‘‘and’’ at the end of subparagraph (B), by 

15 striking the period at the end of subparagraph (C) 

16 and inserting ‘‘, and’’, and by adding at the end the 

17 following new subparagraph: 

18 ‘‘(D) $500 with respect to each half kilowatt 

19 of capacity (not to exceed $4,000) of wind tur20 bines for which qualified small wind energy 

21 property expenditures are made.’’. 

22 (3) QUALIFIED SMALL WIND ENERGY PROPERTY

23 EXPENDITURES.— 
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1 (A) IN GENERAL.—Section 25D(d) is 

2 amended by adding at the end the following new 

3 paragraph: 

4 ‘‘(4) QUALIFIED SMALL WIND ENERGY PROPERTY

5 EXPENDITURE.—The term ‘qualified small wind en6 ergy property expenditure’ means an expenditure for 

7 property which uses a wind turbine to generate elec8 tricity for use in connection with a dwelling unit lo9 cated in the United States and used as a residence by 

10 the taxpayer.’’. 

11 (B) NO DOUBLE BENEFIT.—Section 

12 45(d)(1) is amended by adding at the end the 

13 following new sentence: ‘‘Such term shall not in14 clude any facility with respect to which any 

15 qualified small wind energy property expendi16 ture (as defined in subsection (d)(4) of section 

17 25D) is taken into account in determining the 

18 credit under such section.’’. 

19 (4) MAXIMUM EXPENDITURES IN CASE OF JOINT

20 OCCUPANCY.—Section 25D(e)(4)(A) is amended by 

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

22 the period at the end of clause (iii) and inserting ‘‘, 

23 and’’, and by adding at the end the following new 

24 clause: 
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1 ‘‘(iv) $1,667 in the case of each half 

2 kilowatt of capacity (not to exceed $13,333) 

3 of wind turbines for which qualified small 

4 wind energy property expenditures are 

5 made.’’. 

6 (d) CREDIT FOR GEOTHERMAL HEAT PUMP SYS7 TEMS.— 

8 (1) IN GENERAL.—Section 25D(a), as amended 

9 by subsection (c), is amended by striking ‘‘and’’ at the 

10 end of paragraph (3), by striking the period at the 

11 end of paragraph (4) and inserting ‘‘, and’’, and by 

12 adding at the end the following new paragraph: 

13 ‘‘(5) 30 percent of the qualified geothermal heat 

14 pump property expenditures made by the taxpayer 

15 during such year.’’. 

16 (2) LIMITATION.—Section 25D(b)(1), as amend17 ed by subsection (c), is amended by striking ‘‘and’’ at 

18 the end of subparagraph (C), by striking the period 

19 at the end of subparagraph (D) and inserting ‘‘, 

20 and’’, and by adding at the end the following new 

21 subparagraph: 

22 ‘‘(E) $2,000 with respect to any qualified 

23 geothermal heat pump property expenditures.’’. 

24 (3) QUALIFIED GEOTHERMAL HEAT PUMP PROP25 ERTY EXPENDITURE.—Section 25D(d), as amended by 
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1 subsection (c), is amended by adding at the end the 

2 following new paragraph: 

3 ‘‘(5) QUALIFIED GEOTHERMAL HEAT PUMP

4 PROPERTY EXPENDITURE.— 

5 ‘‘(A) IN GENERAL.—The term ‘qualified geo6 thermal heat pump property expenditure’ means 

7 an expenditure for qualified geothermal heat 

8 pump property installed on or in connection 

9 with a dwelling unit located in the United States 

10 and used as a residence by the taxpayer. 

11 ‘‘(B) QUALIFIED GEOTHERMAL HEAT PUMP

12 PROPERTY.—The term ‘qualified geothermal heat 

13 pump property’ means any equipment which— 

14 ‘‘(i) uses the ground or ground water 

15 as a thermal energy source to heat the 

16 dwelling unit referred to in subparagraph 

17 (A) or as a thermal energy sink to cool such 

18 dwelling unit, and 

19 ‘‘(ii) meets the requirements of the En20 ergy Star program which are in effect at 

21 the time that the expenditure for such 

22 equipment is made.’’. 

23 (4) MAXIMUM EXPENDITURES IN CASE OF JOINT

24 OCCUPANCY.—Section 25D(e)(4)(A), as amended by 

25 subsection (c), is amended by striking ‘‘and’’ at the 
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1 end of clause (iii), by striking the period at the end 

2 of clause (iv) and inserting ‘‘, and’’, and by adding 

3 at the end the following new clause: 

4 ‘‘(v) $6,667 in the case of any qualified 

5 geothermal heat pump property expendi6 tures.’’. 

7 (e) CREDIT ALLOWED AGAINST ALTERNATIVE MIN8 IMUM TAX.— 

9 (1) IN GENERAL.—Subsection (c) of section 25D 

10 is amended to read as follows: 

11 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX; 

12 CARRYFORWARD OF UNUSED CREDIT.— 

13 ‘‘(1) LIMITATION BASED ON AMOUNT OF TAX.— 

14 In the case of a taxable year to which section 26(a)(2) 

15 does not apply, the credit allowed under subsection 

16 (a) for the taxable year shall not exceed the excess 

17 of— 

18 ‘‘(A) the sum of the regular tax liability (as 

19 defined in section 26(b)) plus the tax imposed by 

20 section 55, over 

21 ‘‘(B) the sum of the credits allowable under 

22 this subpart (other than this section) and section 

23 27 for the taxable year. 

24 ‘‘(2) CARRYFORWARD OF UNUSED CREDIT.— 
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1 ‘‘(A) RULE FOR YEARS IN WHICH ALL PER2 SONAL CREDITS ALLOWED AGAINST REGULAR

3 AND ALTERNATIVE MINIMUM TAX.—In the case of 

4 a taxable year to which section 26(a)(2) applies, 

5 if the credit allowable under subsection (a) ex6 ceeds the limitation imposed by section 26(a)(2) 

7 for such taxable year reduced by the sum of the 

8 credits allowable under this subpart (other than 

9 this section), such excess shall be carried to the 

10 succeeding taxable year and added to the credit 

11 allowable under subsection (a) for such suc12 ceeding taxable year. 

13 ‘‘(B) RULE FOR OTHER YEARS.—In the case 

14 of a taxable year to which section 26(a)(2) does 

15 not apply, if the credit allowable under sub16 section (a) exceeds the limitation imposed by 

17 paragraph (1) for such taxable year, such excess 

18 shall be carried to the succeeding taxable year 

19 and added to the credit allowable under sub20 section (a) for such succeeding taxable year.’’. 

21 (2) CONFORMING AMENDMENTS.— 

22 (A) Section 23(b)(4)(B) is amended by in23 serting ‘‘and section 25D’’ after ‘‘this section’’. 
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1 (B) Section 24(b)(3)(B) is amended by 

2 striking ‘‘and 25B’’ and inserting ‘‘, 25B, and 

3 25D’’. 

4 (C) Section 25B(g)(2) is amended by strik5 ing ‘‘section 23’’ and inserting ‘‘sections 23 and 

6 25D’’. 

7 (D) Section 26(a)(1) is amended by striking 

8 ‘‘and 25B’’ and inserting ‘‘25B, and 25D’’. 

9 (f) EFFECTIVE DATE.— 

10 (1) IN GENERAL.—Except as provided in para11 graph (2), the amendments made by this section shall 

12 apply to taxable years beginning after December 31, 

13 2007. 

14 (2) SOLAR ELECTRIC PROPERTY LIMITATION.— 

15 The amendments made by subsection (b) shall apply 

16 to taxable years beginning after December 31, 2008. 

17 (3) APPLICATION OF EGTRRA SUNSET.—The 

18 amendments made by subparagraphs (A) and (B) of 

19 subsection (e)(2) shall be subject to title IX of the Eco20 nomic Growth and Tax Relief Reconciliation Act of 

21 2001 in the same manner as the provisions of such 

22 Act to which such amendments relate. 
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1 SEC. 107. NEW CLEAN RENEWABLE ENERGY BONDS. 

2 (a) IN GENERAL.—Subpart I of part IV of subchapter 

3 A of chapter 1 is amended by adding at the end the fol4 lowing new section: 

5 ‘‘SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS. 

6 ‘‘(a) NEW CLEAN RENEWABLE ENERGY BOND.—For 

7 purposes of this subpart, the term ‘new clean renewable en8 ergy bond’ means any bond issued as part of an issue if— 

9 ‘‘(1) 100 percent of the available project proceeds 

10 of such issue are to be used for capital expenditures 

11 incurred by governmental bodies, public power pro12 viders, or cooperative electric companies for one or 

13 more qualified renewable energy facilities, 

14 ‘‘(2) the bond is issued by a qualified issuer, and 

15 ‘‘(3) the issuer designates such bond for purposes 

16 of this section. 

17 ‘‘(b) REDUCED CREDIT AMOUNT.—The annual credit 

18 determined under section 54A(b) with respect to any new 

19 clean renewable energy bond shall be 70 percent of the 

20 amount so determined without regard to this subsection. 

21 ‘‘(c) LIMITATION ON AMOUNT OF BONDS DES22 IGNATED.— 

23 ‘‘(1) IN GENERAL.—The maximum aggregate 

24 face amount of bonds which may be designated under 

25 subsection (a) by any issuer shall not exceed the limi-
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1 tation amount allocated under this subsection to such 

2 issuer. 

3 ‘‘(2) NATIONAL LIMITATION ON AMOUNT OF

4 BONDS DESIGNATED.—There is a national new clean 

5 renewable energy bond limitation of $800,000,000 

6 which shall be allocated by the Secretary as provided 

7 in paragraph (3), except that— 

‘‘(A) not more than 331 8 ⁄3 percent thereof 

9 may be allocated to qualified projects of public 

10 power providers, 

‘‘(B) not more than 331 11 ⁄3 percent thereof 

12 may be allocated to qualified projects of govern13 mental bodies, and 

‘‘(C) not more than 331 14 ⁄3 percent thereof 

15 may be allocated to qualified projects of coopera16 tive electric companies. 

17 ‘‘(3) METHOD OF ALLOCATION.— 

18 ‘‘(A) ALLOCATION AMONG PUBLIC POWER

19 PROVIDERS.—After the Secretary determines the 

20 qualified projects of public power providers 

21 which are appropriate for receiving an alloca22 tion of the national new clean renewable energy 

23 bond limitation, the Secretary shall, to the max24 imum extent practicable, make allocations 

25 among such projects in such manner that the 
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1 amount allocated to each such project bears the 

2 same ratio to the cost of such project as the limi3 tation under paragraph (2)(A) bears to the cost 

4 of all such projects. 

5 ‘‘(B) ALLOCATION AMONG GOVERNMENTAL

6 BODIES AND COOPERATIVE ELECTRIC COMPA7 NIES.—The Secretary shall make allocations of 

8 the amount of the national new clean renewable 

9 energy bond limitation described in paragraphs 

10 (2)(B) and (2)(C) among qualified projects of 

11 governmental bodies and cooperative electric 

12 companies, respectively, in such manner as the 

13 Secretary determines appropriate. 

14 ‘‘(d) DEFINITIONS.—For purposes of this section— 

15 ‘‘(1) QUALIFIED RENEWABLE ENERGY FACIL16 ITY.—The term ‘qualified renewable energy facility’ 

17 means a qualified facility (as determined under sec18 tion 45(d) without regard to paragraphs (8) and (10) 

19 thereof and to any placed in service date) owned by 

20 a public power provider, a governmental body, or a 

21 cooperative electric company. 

22 ‘‘(2) PUBLIC POWER PROVIDER.—The term ‘pub23 lic power provider’ means a State utility with a serv24 ice obligation, as such terms are defined in section 
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1 217 of the Federal Power Act (as in effect on the date 

2 of the enactment of this paragraph). 

3 ‘‘(3) GOVERNMENTAL BODY.—The term ‘govern4 mental body’ means any State or Indian tribal gov5 ernment, or any political subdivision thereof. 

6 ‘‘(4) COOPERATIVE ELECTRIC COMPANY.—The 

7 term ‘cooperative electric company’ means a mutual 

8 or cooperative electric company described in section 

9 501(c)(12) or section 1381(a)(2)(C). 

10 ‘‘(5) CLEAN RENEWABLE ENERGY BOND LEND11 ER.—The term ‘clean renewable energy bond lender’ 

12 means a lender which is a cooperative which is owned 

13 by, or has outstanding loans to, 100 or more coopera14 tive electric companies and is in existence on Feb15 ruary 1, 2002, and shall include any affiliated entity 

16 which is controlled by such lender. 

17 ‘‘(6) QUALIFIED ISSUER.—The term ‘qualified 

18 issuer’ means a public power provider, a cooperative 

19 electric company, a governmental body, a clean re20 newable energy bond lender, or a not-for-profit elec21 tric utility which has received a loan or loan guar22 antee under the Rural Electrification Act.’’. 

23 (b) CONFORMING AMENDMENTS.— 

24 (1) Paragraph (1) of section 54A(d) is amended 

25 to read as follows: 
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1 ‘‘(1) QUALIFIED TAX CREDIT BOND.—The term 

2 ‘qualified tax credit bond’ means— 

3 ‘‘(A) a qualified forestry conservation bond, 

4 or 

5 ‘‘(B) a new clean renewable energy bond, 

6 which is part of an issue that meets requirements of 

7 paragraphs (2), (3), (4), (5), and (6).’’. 

8 (2) Subparagraph (C) of section 54A(d)(2) is 

9 amended to read as follows: 

10 ‘‘(C) QUALIFIED PURPOSE.—For purposes 

11 of this paragraph, the term ‘qualified purpose’ 

12 means— 

13 ‘‘(i) in the case of a qualified forestry 

14 conservation bond, a purpose specified in 

15 section 54B(e), and 

16 ‘‘(ii) in the case of a new clean renew17 able energy bond, a purpose specified in sec18 tion 54C(a)(1).’’. 

19 (3) The table of sections for subpart I of part IV 

20 of subchapter A of chapter 1 is amended by adding 

21 at the end the following new item: 

‘‘Sec. 54C. Qualified clean renewable energy bonds.’’. 

22 (c) EXTENSION FOR CLEAN RENEWABLE ENERGY

23 BONDS.—Subsection (m) of section 54 is amended by strik24 ing ‘‘December 31, 2008’’ and inserting ‘‘December 31, 

25 2009’’. 
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1 (d) EFFECTIVE DATE.—The amendments made by this 

2 section shall apply to obligations issued after the date of 

3 the enactment of this Act. 

4 SEC. 108. CREDIT FOR STEEL INDUSTRY FUEL. 

5 (a) TREATMENT AS REFINED COAL.— 

6 (1) IN GENERAL.—Subparagraph (A) of section 

7 45(c)(7) of the Internal Revenue Code of 1986 (relat8 ing to refined coal), as amended by this Act, is 

9 amended to read as follows: 

10 ‘‘(A) IN GENERAL.—The term ‘refined coal’ 

11 means a fuel— 

12 ‘‘(i) which— 

13 ‘‘(I) is a liquid, gaseous, or solid 

14 fuel produced from coal (including lig15 nite) or high carbon fly ash, including 

16 such fuel used as a feedstock, 

17 ‘‘(II) is sold by the taxpayer with 

18 the reasonable expectation that it will 

19 be used for purpose of producing 

20 steam, 

21 ‘‘(III) is certified by the taxpayer 

22 as resulting (when used in the produc23 tion of steam) in a qualified emission 

24 reduction, and 
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1 ‘‘(IV) is produced in such a man2 ner as to result in an increase of at 

3 least 50 percent in the market value of 

4 the refined coal (excluding any in5 crease caused by materials combined or 

6 added during the production process), 

7 as compared to the value of the feed8 stock coal, or 

9 ‘‘(ii) which is steel industry fuel.’’. 

10 (2) STEEL INDUSTRY FUEL DEFINED.—Para11 graph (7) of section 45(c) of such Code is amended by 

12 adding at the end the following new subparagraph: 

13 ‘‘(C) STEEL INDUSTRY FUEL.— 

14 ‘‘(i) IN GENERAL.—The term ‘steel in15 dustry fuel’ means a fuel which— 

16 ‘‘(I) is produced through a process 

17 of liquifying coal waste sludge and dis18 tributing it on coal, and 

19 ‘‘(II) is used as a feedstock for the 

20 manufacture of coke. 

21 ‘‘(ii) COAL WASTE SLUDGE.—The term 

22 ‘coal waste sludge’ means the tar decanter 

23 sludge and related byproducts of the coking 

24 process, including such materials that have 

25 been stored in ground, in tanks and in la-
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1 goons, that have been treated as hazardous 

2 wastes under applicable Federal environ3 mental rules absent liquefaction and proc4 essing with coal into a feedstock for the 

5 manufacture of coke.’’. 

6 (b) CREDIT AMOUNT.— 

7 (1) IN GENERAL.—Paragraph (8) of section 45(e) 

8 of the Internal Revenue Code of 1986 (relating to re9 fined coal production facilities) is amended by adding 

10 at the end the following new subparagraph 

11 ‘‘(D) SPECIAL RULE FOR STEEL INDUSTRY

12 FUEL.— 

13 ‘‘(i) IN GENERAL.—In the case of a 

14 taxpayer who produces steel industry fuel— 

15 ‘‘(I) this paragraph shall be ap16 plied separately with respect to steel 

17 industry fuel and other refined coal, 

18 and 

19 ‘‘(II) in applying this paragraph 

20 to steel industry fuel, the modifications 

21 in clause (ii) shall apply. 

22 ‘‘(ii) MODIFICATIONS.— 

23 ‘‘(I) CREDIT AMOUNT.—Subpara24 graph (A) shall be applied by sub-
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1 stituting ‘$2 per barrel-of-oil equiva2 lent’ for ‘$4.375 per ton’. 

3 ‘‘(II) CREDIT PERIOD.—In lieu of 

4 the 10-year period referred to in 

5 clauses (i) and (ii)(II) of subpara6 graph (A), the credit period shall be 

7 the period beginning on the later of the 

8 date such facility was originally placed 

9 in service, the date the modifications 

10 described in clause (iii) were placed in 

11 service, or October 1, 2008, and ending 

12 on the later of December 31, 2009, or 

13 the date which is 1 year after the date 

14 such facility or the modifications de15 scribed in clause (iii) were placed in 

16 service. 

17 ‘‘(III) NO PHASEOUT.—Subpara18 graph (B) shall not apply. 

19 ‘‘(iii) MODIFICATIONS.—The modifica20 tions described in this clause are modifica21 tions to an existing facility which allow 

22 such facility to produce steel industry fuel. 

23 ‘‘(iv) BARREL-OF-OIL EQUIVALENT.— 

24 For purposes of this subparagraph, a bar25 rel-of-oil equivalent is the amount of steel 
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1 industry fuel that has a Btu content of 

2 5,800,000 Btus.’’. 

3 (2) INFLATION ADJUSTMENT.—Paragraph (2) of 

4 section 45(b) of such Code is amended by inserting 

5 ‘‘the $3 amount in subsection (e)(8)(D)(ii)(I),’’ after 

6 ‘‘subsection (e)(8)(A),’’. 

7 (c) TERMINATION.—Paragraph (8) of section 45(d) of 

8 the Internal Revenue Code of 1986 (relating to refined coal 

9 production facility), as amended by this Act, is amended 

10 to read as follows: 

11 ‘‘(8) REFINED COAL PRODUCTION FACILITY.—In 

12 the case of a facility that produces refined coal, the 

13 term ‘refined coal production facility’ means— 

14 ‘‘(A) with respect to a facility producing 

15 steel industry fuel, any facility (or any modi16 fication to a facility) which is placed in service 

17 before January 1, 2010, and 

18 ‘‘(B) with respect to any other facility pro19 ducing refined coal, any facility placed in serv20 ice after the date of the enactment of the Amer21 ican Jobs Creation Act of 2004 and before Janu22 ary 1, 2010.’’. 

23 (d) COORDINATION WITH CREDIT FOR PRODUCING

24 FUEL FROM A NONCONVENTIONAL SOURCE.— 
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1 (1) IN GENERAL.—Subparagraph (B) of section 

2 45(e)(9) of the Internal Revenue Code of 1986 is 

3 amended— 

4 (A) by striking ‘‘The term’’ and inserting 

5 the following: 

6 ‘‘(i) IN GENERAL.—The term’’, and 

7 (B) by adding at the end the following new 

8 clause: 

9 ‘‘(ii) EXCEPTION FOR STEEL INDUSTRY

10 COAL.—In the case of a facility producing 

11 steel industry fuel, clause (i) shall not apply 

12 to so much of the refined coal produced at 

13 such facility as is steel industry fuel.’’. 

14 (2) NO DOUBLE BENEFIT.—Section 45K(g)(2) of 

15 such Code is amended by adding at the end the fol16 lowing new subparagraph: 

17 ‘‘(E) COORDINATION WITH SECTION 45.—No 

18 credit shall be allowed with respect to any quali19 fied fuel which is steel industry fuel (as defined 

20 in section 45(c)(7)) if a credit is allowed to the 

21 taxpayer for such fuel under section 45.’’. 

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

23 section shall apply to fuel produced and sold after Sep24 tember 30, 2008. 
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1 SEC. 109. SPECIAL RULE TO IMPLEMENT FERC AND STATE 

2 ELECTRIC RESTRUCTURING POLICY. 

3 (a) EXTENSION FOR QUALIFIED ELECTRIC UTILI4 TIES.— 

5 (1) IN GENERAL.—Paragraph (3) of section 

6 451(i) is amended by inserting ‘‘(before January 1, 

7 2010, in the case of a qualified electric utility)’’ after 

8 ‘‘January 1, 2008’’. 

9 (2) QUALIFIED ELECTRIC UTILITY.—Subsection 

10 (i) of section 451 is amended by redesignating para11 graphs (6) through (10) as paragraphs (7) through 

12 (11), respectively, and by inserting after paragraph 

13 (5) the following new paragraph: 

14 ‘‘(6) QUALIFIED ELECTRIC UTILITY.—For pur15 poses of this subsection, the term ‘qualified electric 

16 utility’ means a person that, as of the date of the 

17 qualifying electric transmission transaction, is 

18 vertically integrated, in that it is both— 

19 ‘‘(A) a transmitting utility (as defined in 

20 section 3(23) of the Federal Power Act (16 

21 U.S.C. 796(23))) with respect to the transmission 

22 facilities to which the election under this sub23 section applies, and 

24 ‘‘(B) an electric utility (as defined in sec25 tion 3(22) of the Federal Power Act (16 U.S.C. 

26 796(22))).’’. 
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1 (b) EXTENSION OF PERIOD FOR TRANSFER OF OPER2 ATIONAL CONTROL AUTHORIZED BY FERC.—Clause (ii) of 

3 section 451(i)(4)(B) is amended by striking ‘‘December 31, 

4 2007’’ and inserting ‘‘the date which is 4 years after the 

5 close of the taxable year in which the transaction occurs’’. 

6 (c) PROPERTY LOCATED OUTSIDE THE UNITED

7 STATES NOT TREATED AS EXEMPT UTILITY PROPERTY.— 

8 Paragraph (5) of section 451(i) is amended by adding at 

9 the end the following new subparagraph: 

10 ‘‘(C) EXCEPTION FOR PROPERTY LOCATED

11 OUTSIDE THE UNITED STATES.—The term ‘ex12 empt utility property’ shall not include any 

13 property which is located outside the United 

14 States.’’. 

15 (d) EFFECTIVE DATES.— 

16 (1) EXTENSION.—The amendments made by sub17 section (a) shall apply to transactions after December 

18 31, 2007. 

19 (2) TRANSFERS OF OPERATIONAL CONTROL.— 

20 The amendment made by subsection (b) shall take ef21 fect as if included in section 909 of the American Jobs 

22 Creation Act of 2004. 

23 (3) EXCEPTION FOR PROPERTY LOCATED OUT24 SIDE THE UNITED STATES.—The amendment made by 
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1 subsection (c) shall apply to transactions after the 

2 date of the enactment of this Act. 

3 Subtitle B—Carbon Mitigation and 

4 Coal Provisions 

5 SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED 

6 COAL PROJECT INVESTMENT CREDIT. 

7 (a) MODIFICATION OF CREDIT AMOUNT.—Section 

8 48A(a) is amended by striking ‘‘and’’ at the end of para9 graph (1), by striking the period at the end of paragraph 

10 (2) and inserting ‘‘, and’’, and by adding at the end the 

11 following new paragraph: 

12 ‘‘(3) 30 percent of the qualified investment for 

13 such taxable year in the case of projects described in 

14 clause (iii) of subsection (d)(3)(B).’’. 

15 (b) EXPANSION OF AGGREGATE CREDITS.—Section 

16 48A(d)(3)(A) is amended by striking ‘‘$1,300,000,000’’ and 

17 inserting ‘‘$2,550,000,000’’. 

18 (c) AUTHORIZATION OF ADDITIONAL PROJECTS.— 

19 (1) IN GENERAL.—Subparagraph (B) of section 

20 48A(d)(3) is amended to read as follows: 

21 ‘‘(B) PARTICULAR PROJECTS.—Of the dollar 

22 amount in subparagraph (A), the Secretary is 

23 authorized to certify— 

24 ‘‘(i) $800,000,000 for integrated gasifi25 cation combined cycle projects the applica-
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1 tion for which is submitted during the pe2 riod described in paragraph (2)(A)(i), 

3 ‘‘(ii) $500,000,000 for projects which 

4 use other advanced coal-based generation 

5 technologies the application for which is 

6 submitted during the period described in 

7 paragraph (2)(A)(i), and 

8 ‘‘(iii) $1,250,000,000 for advanced 

9 coal-based generation technology projects the 

10 application for which is submitted during 

11 the period described in paragraph 

12 (2)(A)(ii).’’. 

13 (2) APPLICATION PERIOD FOR ADDITIONAL

14 PROJECTS.—Subparagraph (A) of section 48A(d)(2) 

15 is amended to read as follows: 

16 ‘‘(A) APPLICATION PERIOD.—Each appli17 cant for certification under this paragraph shall 

18 submit an application meeting the requirements 

19 of subparagraph (B). An applicant may only 

20 submit an application— 

21 ‘‘(i) for an allocation from the dollar 

22 amount specified in clause (i) or (ii) of 

23 paragraph (3)(B) during the 3-year period 

24 beginning on the date the Secretary estab-
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1 lishes the program under paragraph (1), 

2 and 

3 ‘‘(ii) for an allocation from the dollar 

4 amount specified in paragraph (3)(B)(iii) 

5 during the 3-year period beginning at the 

6 earlier of the termination of the period de7 scribed in clause (i) or the date prescribed 

8 by the Secretary.’’. 

9 (3) CAPTURE AND SEQUESTRATION OF CARBON

10 DIOXIDE EMISSIONS REQUIREMENT.— 

11 (A) IN GENERAL.—Section 48A(e)(1) is 

12 amended by striking ‘‘and’’ at the end of sub13 paragraph (E), by striking the period at the end 

14 of subparagraph (F) and inserting ‘‘; and’’, and 

15 by adding at the end the following new subpara16 graph: 

17 ‘‘(G) in the case of any project the applica18 tion for which is submitted during the period de19 scribed in subsection (d)(2)(A)(ii), the project in20 cludes equipment which separates and sequesters 

21 at least 65 percent (70 percent in the case of an 

22 application for reallocated credits under sub23 section (d)(4)) of such project’s total carbon diox24 ide emissions.’’. 
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1 (B) HIGHEST PRIORITY FOR PROJECTS

2 WHICH SEQUESTER CARBON DIOXIDE EMIS3 SIONS.—Section 48A(e)(3) is amended by strik4 ing ‘‘and’’ at the end of subparagraph (A)(iii), 

5 by striking the period at the end of subpara6 graph (B)(iii) and inserting ‘‘, and’’, and by 

7 adding at the end the following new subpara8 graph: 

9 ‘‘(C) give highest priority to projects with 

10 the greatest separation and sequestration per11 centage of total carbon dioxide emissions.’’. 

12 (C) RECAPTURE OF CREDIT FOR FAILURE

13 TO SEQUESTER.—Section 48A is amended by 

14 adding at the end the following new subsection: 

15 ‘‘(i) RECAPTURE OF CREDIT FOR FAILURE TO SE16 QUESTER.—The Secretary shall provide for recapturing the 

17 benefit of any credit allowable under subsection (a) with 

18 respect to any project which fails to attain or maintain 

19 the separation and sequestration requirements of subsection 

20 (e)(1)(G).’’. 

21 (4) ADDITIONAL PRIORITY FOR RESEARCH PART22 NERSHIPS.—Section 48A(e)(3)(B), as amended by 

23 paragraph (3)(B), is amended— 

24 (A) by striking ‘‘and’’ at the end of clause 

25 (ii), 
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1 (B) by redesignating clause (iii) as clause 

2 (iv), and 

3 (C) by inserting after clause (ii) the fol4 lowing new clause: 

5 ‘‘(iii) applicant participants who have 

6 a research partnership with an eligible edu7 cational institution (as defined in section 

8 529(e)(5)), and’’. 

9 (5) CLERICAL AMENDMENT.—Section 48A(e)(3) 

10 is amended by striking ‘‘INTEGRATED GASIFICATION

11 COMBINED CYCLE’’ in the heading and inserting 

12 ‘‘CERTAIN’’. 

13 (d) DISCLOSURE OF ALLOCATIONS.—Section 48A(d) is 

14 amended by adding at the end the following new paragraph: 

15 ‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Sec16 retary shall, upon making a certification under this 

17 subsection or section 48B(d), publicly disclose the 

18 identity of the applicant and the amount of the credit 

19 certified with respect to such applicant.’’. 

20 (e) EFFECTIVE DATES.— 

21 (1) IN GENERAL.—Except as otherwise provided 

22 in this subsection, the amendments made by this sec23 tion shall apply to credits the application for which 

24 is submitted during the period described in section 

25 48A(d)(2)(A)(ii) of the Internal Revenue Code of 1986 
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1 and which are allocated or reallocated after the date 

2 of the enactment of this Act. 

3 (2) DISCLOSURE OF ALLOCATIONS.—The amend4 ment made by subsection (d) shall apply to certifi5 cations made after the date of the enactment of this 

6 Act. 

7 (3) CLERICAL AMENDMENT.—The amendment 

8 made by subsection (c)(5) shall take effect as if in9 cluded in the amendment made by section 1307(b) of 

10 the Energy Tax Incentives Act of 2005. 

11 SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFI12 CATION INVESTMENT CREDIT. 

13 (a) MODIFICATION OF CREDIT AMOUNT.—Section 

14 48B(a) is amended by inserting ‘‘(30 percent in the case 

15 of credits allocated under subsection (d)(1)(B))’’ after ‘‘20 

16 percent’’. 

17 (b) EXPANSION OF AGGREGATE CREDITS.—Section 

18 48B(d)(1) is amended by striking ‘‘shall not exceed 

19 $350,000,000’’ and all that follows and inserting ‘‘shall not 

20 exceed— 

21 ‘‘(A) $350,000,000, plus 

22 ‘‘(B) $250,000,000 for qualifying gasifi23 cation projects that include equipment which 

24 separates and sequesters at least 75 percent of 

25 such project’s total carbon dioxide emissions.’’. 
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1 (c) RECAPTURE OF CREDIT FOR FAILURE TO SEQUES2 TER.—Section 48B is amended by adding at the end the 

3 following new subsection: 

4 ‘‘(f) RECAPTURE OF CREDIT FOR FAILURE TO SE5 QUESTER.—The Secretary shall provide for recapturing the 

6 benefit of any credit allowable under subsection (a) with 

7 respect to any project which fails to attain or maintain 

8 the separation and sequestration requirements for such 

9 project under subsection (d)(1).’’. 

10 (d) SELECTION PRIORITIES.—Section 48B(d) is 

11 amended by adding at the end the following new paragraph: 

12 ‘‘(4) SELECTION PRIORITIES.—In determining 

13 which qualifying gasification projects to certify under 

14 this section, the Secretary shall— 

15 ‘‘(A) give highest priority to projects with 

16 the greatest separation and sequestration per17 centage of total carbon dioxide emissions, and 

18 ‘‘(B) give high priority to applicant par19 ticipants who have a research partnership with 

20 an eligible educational institution (as defined in 

21 section 529(e)(5)).’’. 

22 (e) ELIGIBLE PROJECTS INCLUDE TRANSPORTATION

23 GRADE LIQUID FUELS.—Section 48B(c)(7) (defining eligi24 ble entity) is amended by striking ‘‘and’’ at the end of sub25 paragraph (F), by striking the period at the end of subpara-
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1 graph (G) and inserting ‘‘, and’’, and by adding at the end 

2 the following new subparagraph: 

3 ‘‘(H) transportation grade liquid fuels.’’. 

4 (f) EFFECTIVE DATE.—The amendments made by this 

5 section shall apply to credits described in section 

6 48B(d)(1)(B) of the Internal Revenue Code of 1986 which 

7 are allocated or reallocated after the date of the enactment 

8 of this Act. 

9 SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX; 

10 FUNDING OF BLACK LUNG DISABILITY TRUST 

11 FUND. 

12 (a) EXTENSION OF TEMPORARY INCREASE.—Para13 graph (2) of section 4121(e) is amended— 

14 (1) by striking ‘‘January 1, 2014’’ in subpara15 graph (A) and inserting ‘‘December 31, 2018’’, and 

16 (2) by striking ‘‘January 1 after 1981’’ in sub17 paragraph (B) and inserting ‘‘December 31 after 

18 2007’’. 

19 (b) RESTRUCTURING OF TRUST FUND DEBT.— 

20 (1) DEFINITIONS.—For purposes of this sub21 section— 

22 (A) MARKET VALUE OF THE OUTSTANDING

23 REPAYABLE ADVANCES, PLUS ACCRUED INTER24 EST.—The term ‘‘market value of the out25 standing repayable advances, plus accrued inter-
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1 est’’ means the present value (determined by the 

2 Secretary of the Treasury as of the refinancing 

3 date and using the Treasury rate as the discount 

4 rate) of the stream of principal and interest pay5 ments derived assuming that each repayable ad6 vance that is outstanding on the refinancing 

7 date is due on the 30th anniversary of the end 

8 of the fiscal year in which the advance was made 

9 to the Trust Fund, and that all such principal 

10 and interest payments are made on September 

11 30 of the applicable fiscal year. 

12 (B) REFINANCING DATE.—The term ‘‘refi13 nancing date’’ means the date occurring 2 days 

14 after the enactment of this Act. 

15 (C) REPAYABLE ADVANCE.—The term ‘‘re16 payable advance’’ means an amount that has 

17 been appropriated to the Trust Fund in order to 

18 make benefit payments and other expenditures 

19 that are authorized under section 9501 of the In20 ternal Revenue Code of 1986 and are required to 

21 be repaid when the Secretary of the Treasury de22 termines that monies are available in the Trust 

23 Fund for such purpose. 

24 (D) TREASURY RATE.—The term ‘‘Treasury 

25 rate’’ means a rate determined by the Secretary 
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1 of the Treasury, taking into consideration cur2 rent market yields on outstanding marketable ob3 ligations of the United States of comparable ma4 turities. 

5 (E) TREASURY 1-YEAR RATE.—The term 

6 ‘‘Treasury 1-year rate’’ means a rate determined 

7 by the Secretary of the Treasury, taking into 

8 consideration current market yields on out9 standing marketable obligations of the United 

10 States with remaining periods to maturity of 

11 approximately 1 year, to have been in effect as 

12 of the close of business 1 business day prior to 

13 the date on which the Trust Fund issues obliga14 tions to the Secretary of the Treasury under 

15 paragraph (2)(B). 

16 (2) REFINANCING OF OUTSTANDING PRINCIPAL

17 OF REPAYABLE ADVANCES AND UNPAID INTEREST ON

18 SUCH ADVANCES.— 

19 (A) TRANSFER TO GENERAL FUND.—On the 

20 refinancing date, the Trust Fund shall repay the 

21 market value of the outstanding repayable ad22 vances, plus accrued interest, by transferring 

23 into the general fund of the Treasury the fol24 lowing sums: 
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1 (i) The proceeds from obligations that 

2 the Trust Fund shall issue to the Secretary 

3 of the Treasury in such amounts as the Sec4 retaries of Labor and the Treasury shall de5 termine and bearing interest at the Treas6 ury rate, and that shall be in such forms 

7 and denominations and be subject to such 

8 other terms and conditions, including matu9 rity, as the Secretary of the Treasury shall 

10 prescribe. 

11 (ii) All, or that portion, of the appro12 priation made to the Trust Fund pursuant 

13 to paragraph (3) that is needed to cover the 

14 difference defined in that paragraph. 

15 (B) REPAYMENT OF OBLIGATIONS.—In the 

16 event that the Trust Fund is unable to repay the 

17 obligations that it has issued to the Secretary of 

18 the Treasury under subparagraph (A)(i) and 

19 this subparagraph, or is unable to make benefit 

20 payments and other authorized expenditures, the 

21 Trust Fund shall issue obligations to the Sec22 retary of the Treasury in such amounts as may 

23 be necessary to make such repayments, pay24 ments, and expenditures, with a maturity of 1 

25 year, and bearing interest at the Treasury 1-year 
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1 rate. These obligations shall be in such forms and 

2 denominations and be subject to such other terms 

3 and conditions as the Secretary of the Treasury 

4 shall prescribe. 

5 (C) AUTHORITY TO ISSUE OBLIGATIONS.— 

6 The Trust Fund is authorized to issue obliga7 tions to the Secretary of the Treasury under sub8 paragraphs (A)(i) and (B). The Secretary of the 

9 Treasury is authorized to purchase such obliga10 tions of the Trust Fund. For the purposes of 

11 making such purchases, the Secretary of the 

12 Treasury may use as a public debt transaction 

13 the proceeds from the sale of any securities issued 

14 under chapter 31 of title 31, United States Code, 

15 and the purposes for which securities may be 

16 issued under such chapter are extended to in17 clude any purchase of such Trust Fund obliga18 tions under this subparagraph. 

19 (3) ONE-TIME APPROPRIATION.—There is hereby 

20 appropriated to the Trust Fund an amount sufficient 

21 to pay to the general fund of the Treasury the dif22 ference between— 

23 (A) the market value of the outstanding re24 payable advances, plus accrued interest; and 
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1 (B) the proceeds from the obligations issued 

2 by the Trust Fund to the Secretary of the Treas3 ury under paragraph (2)(A)(i). 

4 (4) PREPAYMENT OF TRUST FUND OBLIGA5 TIONS.—The Trust Fund is authorized to repay any 

6 obligation issued to the Secretary of the Treasury 

7 under subparagraphs (A)(i) and (B) of paragraph (2) 

8 prior to its maturity date by paying a prepayment 

9 price that would, if the obligation being prepaid (in10 cluding all unpaid interest accrued thereon through 

11 the date of prepayment) were purchased by a third 

12 party and held to the maturity date of such obliga13 tion, produce a yield to the third-party purchaser for 

14 the period from the date of purchase to the maturity 

15 date of such obligation substantially equal to the 

16 Treasury yield on outstanding marketable obligations 

17 of the United States having a comparable maturity to 

18 this period. 

19 SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EX20 CISE TAX TO CERTAIN COAL PRODUCERS AND 

21 EXPORTERS. 

22 (a) REFUND.— 

23 (1) COAL PRODUCERS.— 

24 (A) IN GENERAL.—Notwithstanding sub25 sections (a)(1) and (c) of section 6416 and sec-
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1 tion 6511 of the Internal Revenue Code of 1986, 

2 if— 

3 (i) a coal producer establishes that 

4 such coal producer, or a party related to 

5 such coal producer, exported coal produced 

6 by such coal producer to a foreign country 

7 or shipped coal produced by such coal pro8 ducer to a possession of the United States, 

9 or caused such coal to be exported or 

10 shipped, the export or shipment of which 

11 was other than through an exporter who 

12 meets the requirements of paragraph (2), 

13 (ii) such coal producer filed an excise 

14 tax return on or after October 1, 1990, and 

15 on or before the date of the enactment of this 

16 Act, and 

17 (iii) such coal producer files a claim 

18 for refund with the Secretary not later than 

19 the close of the 30-day period beginning on 

20 the date of the enactment of this Act, 

21 then the Secretary shall pay to such coal pro22 ducer an amount equal to the tax paid under 

23 section 4121 of such Code on such coal exported 

24 or shipped by the coal producer or a party re25 lated to such coal producer, or caused by the coal 
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1 producer or a party related to such coal producer 

2 to be exported or shipped. 

3 (B) SPECIAL RULES FOR CERTAIN TAX4 PAYERS.—For purposes of this section— 

5 (i) IN GENERAL.—If a coal producer or 

6 a party related to a coal producer has re7 ceived a judgment described in clause (iii), 

8 such coal producer shall be deemed to have 

9 established the export of coal to a foreign 

10 country or shipment of coal to a possession 

11 of the United States under subparagraph 

12 (A)(i). 

13 (ii) AMOUNT OF PAYMENT.—If a tax14 payer described in clause (i) is entitled to 

15 a payment under subparagraph (A), the 

16 amount of such payment shall be reduced by 

17 any amount paid pursuant to the judgment 

18 described in clause (iii). 

19 (iii) JUDGMENT DESCRIBED.—A judg20 ment is described in this subparagraph if 

21 such judgment— 

22 (I) is made by a court of com23 petent jurisdiction within the United 

24 States, 
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1 (II) relates to the constitutionality 

2 of any tax paid on exported coal under 

3 section 4121 of the Internal Revenue 

4 Code of 1986, and 

5 (III) is in favor of the coal pro6 ducer or the party related to the coal 

7 producer. 

8 (2) EXPORTERS.—Notwithstanding subsections 

9 (a)(1) and (c) of section 6416 and section 6511 of the 

10 Internal Revenue Code of 1986, and a judgment de11 scribed in paragraph (1)(B)(iii) of this subsection, 

12 if— 

13 (A) an exporter establishes that such ex14 porter exported coal to a foreign country or 

15 shipped coal to a possession of the United States, 

16 or caused such coal to be so exported or shipped, 

17 (B) such exporter filed a tax return on or 

18 after October 1, 1990, and on or before the date 

19 of the enactment of this Act, and 

20 (C) such exporter files a claim for refund 

21 with the Secretary not later than the close of the 

22 30-day period beginning on the date of the enact23 ment of this Act, 

24 then the Secretary shall pay to such exporter an 

25 amount equal to $0.825 per ton of such coal exported 
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1 by the exporter or caused to be exported or shipped, 

2 or caused to be exported or shipped, by the exporter. 

3 (b) LIMITATIONS.—Subsection (a) shall not apply with 

4 respect to exported coal if a settlement with the Federal 

5 Government has been made with and accepted by, the coal 

6 producer, a party related to such coal producer, or the ex7 porter, of such coal, as of the date that the claim is filed 

8 under this section with respect to such exported coal. For 

9 purposes of this subsection, the term ‘‘settlement with the 

10 Federal Government’’ shall not include any settlement or 

11 stipulation entered into as of the date of the enactment of 

12 this Act, the terms of which contemplate a judgment con13 cerning which any party has reserved the right to file an 

14 appeal, or has filed an appeal. 

15 (c) SUBSEQUENT REFUND PROHIBITED.—No refund 

16 shall be made under this section to the extent that a credit 

17 or refund of such tax on such exported or shipped coal has 

18 been paid to any person. 

19 (d) DEFINITIONS.—For purposes of this section— 

20 (1) COAL PRODUCER.—The term ‘‘coal producer’’ 

21 means the person in whom is vested ownership of the 

22 coal immediately after the coal is severed from the 

23 ground, without regard to the existence of any con24 tractual arrangement for the sale or other disposition 

25 of the coal or the payment of any royalties between 
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1 the producer and third parties. The term includes any 

2 person who extracts coal from coal waste refuse piles 

3 or from the silt waste product which results from the 

4 wet washing (or similar processing) of coal. 

5 (2) EXPORTER.—The term ‘‘exporter’’ means a 

6 person, other than a coal producer, who does not have 

7 a contract, fee arrangement, or any other agreement 

8 with a producer or seller of such coal to export or 

9 ship such coal to a third party on behalf of the pro10 ducer or seller of such coal and— 

11 (A) is indicated in the shipper’s export dec12 laration or other documentation as the exporter 

13 of record, or 

14 (B) actually exported such coal to a foreign 

15 country or shipped such coal to a possession of 

16 the United States, or caused such coal to be so 

17 exported or shipped. 

18 (3) RELATED PARTY.—The term ‘‘a party related 

19 to such coal producer’’ means a person who— 

20 (A) is related to such coal producer through 

21 any degree of common management, stock owner22 ship, or voting control, 

23 (B) is related (within the meaning of sec24 tion 144(a)(3) of the Internal Revenue Code of 

25 1986) to such coal producer, or 
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1 (C) has a contract, fee arrangement, or any 

2 other agreement with such coal producer to sell 

3 such coal to a third party on behalf of such coal 

4 producer. 

5 (4) SECRETARY.—The term ‘‘Secretary’’ means 

6 the Secretary of Treasury or the Secretary’s designee. 

7 (e) TIMING OF REFUND.—With respect to any claim 

8 for refund filed pursuant to this section, the Secretary shall 

9 determine whether the requirements of this section are met 

10 not later than 180 days after such claim is filed. If the Sec11 retary determines that the requirements of this section are 

12 met, the claim for refund shall be paid not later than 180 

13 days after the Secretary makes such determination. 

14 (f) INTEREST.—Any refund paid pursuant to this sec15 tion shall be paid by the Secretary with interest from the 

16 date of overpayment determined by using the overpayment 

17 rate and method under section 6621 of the Internal Revenue 

18 Code of 1986. 

19 (g) DENIAL OF DOUBLE BENEFIT.—The payment 

20 under subsection (a) with respect to any coal shall not ex21 ceed— 

22 (1) in the case of a payment to a coal producer, 

23 the amount of tax paid under section 4121 of the In24 ternal Revenue Code of 1986 with respect to such coal 
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1 by such coal producer or a party related to such coal 

2 producer, and 

3 (2) in the case of a payment to an exporter, an 

4 amount equal to $0.825 per ton with respect to such 

5 coal exported by the exporter or caused to be exported 

6 by the exporter. 

7 (h) APPLICATION OF SECTION.—This section applies 

8 only to claims on coal exported or shipped on or after Octo9 ber 1, 1990, through the date of the enactment of this Act. 

10 (i) STANDING NOT CONFERRED.— 

11 (1) EXPORTERS.—With respect to exporters, this 

12 section shall not confer standing upon an exporter to 

13 commence, or intervene in, any judicial or adminis14 trative proceeding concerning a claim for refund by 

15 a coal producer of any Federal or State tax, fee, or 

16 royalty paid by the coal producer. 

17 (2) COAL PRODUCERS.—With respect to coal pro18 ducers, this section shall not confer standing upon a 

19 coal producer to commence, or intervene in, any judi20 cial or administrative proceeding concerning a claim 

21 for refund by an exporter of any Federal or State tax, 

22 fee, or royalty paid by the producer and alleged to 

23 have been passed on to an exporter. 
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1 SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRA2 TION. 

3 (a) IN GENERAL.—Subpart D of part IV of subchapter 

4 A of chapter 1 (relating to business credits) is amended by 

5 adding at the end the following new section: 

6 ‘‘SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION. 

7 ‘‘(a) GENERAL RULE.—For purposes of section 38, the 

8 carbon dioxide sequestration credit for any taxable year is 

9 an amount equal to the sum of— 

10 ‘‘(1) $20 per metric ton of qualified carbon diox11 ide which is— 

12 ‘‘(A) captured by the taxpayer at a quali13 fied facility, and 

14 ‘‘(B) disposed of by the taxpayer in secure 

15 geological storage, and 

16 ‘‘(2) $10 per metric ton of qualified carbon diox17 ide which is— 

18 ‘‘(A) captured by the taxpayer at a quali19 fied facility, and 

20 ‘‘(B) used by the taxpayer as a tertiary 

21 injectant in a qualified enhanced oil or natural 

22 gas recovery project. 

23 ‘‘(b) QUALIFIED CARBON DIOXIDE.—For purposes of 

24 this section— 
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1 ‘‘(1) IN GENERAL.—The term ‘qualified carbon 

2 dioxide’ means carbon dioxide captured from an in3 dustrial source which— 

4 ‘‘(A) would otherwise be released into the 

5 atmosphere as industrial emission of greenhouse 

6 gas, and 

7 ‘‘(B) is measured at the source of capture 

8 and verified at the point of disposal or injection. 

9 ‘‘(2) RECYCLED CARBON DIOXIDE.—The term 

10 ‘qualified carbon dioxide’ includes the initial deposit 

11 of captured carbon dioxide used as a tertiary 

12 injectant. Such term does not include carbon dioxide 

13 that is re-captured, recycled, and re-injected as part 

14 of the enhanced oil and natural gas recovery process. 

15 ‘‘(c) QUALIFIED FACILITY.—For purposes of this sec16 tion, the term ‘qualified facility’ means any industrial fa17 cility— 

18 ‘‘(1) which is owned by the taxpayer, 

19 ‘‘(2) at which carbon capture equipment is 

20 placed in service, and 

21 ‘‘(3) which captures not less than 500,000 metric 

22 tons of carbon dioxide during the taxable year. 

23 ‘‘(d) SPECIAL RULES AND OTHER DEFINITIONS.—For 

24 purposes of this section— 
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1 ‘‘(1) ONLY CARBON DIOXIDE CAPTURED AND DIS2 POSED OF OR USED WITHIN THE UNITED STATES

3 TAKEN INTO ACCOUNT.—The credit under this section 

4 shall apply only with respect to qualified carbon di5 oxide the capture and disposal or use of which is 

6 within— 

7 ‘‘(A) the United States (within the meaning 

8 of section 638(1)), or 

9 ‘‘(B) a possession of the United States 

10 (within the meaning of section 638(2)). 

11 ‘‘(2) SECURE GEOLOGICAL STORAGE.—The Sec12 retary, in consultation with the Administrator of the 

13 Environmental Protection Agency, shall establish reg14 ulations for determining adequate security measures 

15 for the geological storage of carbon dioxide under sub16 section (a)(1)(B) such that the carbon dioxide does 

17 not escape into the atmosphere. Such term shall in18 clude storage at deep saline formations and 

19 unminable coal seems under such conditions as the 

20 Secretary may determine under such regulations. 

21 ‘‘(3) TERTIARY INJECTANT.—The term ‘tertiary 

22 injectant’ has the same meaning as when used within 

23 section 193(b)(1). 

24 ‘‘(4) QUALIFIED ENHANCED OIL OR NATURAL

25 GAS RECOVERY PROJECT.—The term ‘qualified en-
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1 hanced oil or natural gas recovery project’ has the 

2 meaning given the term ‘qualified enhanced oil recov3 ery project’ by section 43(c)(2), by substituting ‘crude 

4 oil or natural gas’ for ‘crude oil’ in subparagraph 

5 (A)(i) thereof. 

6 ‘‘(5) CREDIT ATTRIBUTABLE TO TAXPAYER.— 

7 Any credit under this section shall be attributable to 

8 the person that captures and physically or contrac9 tually ensures the disposal of or the use as a tertiary 

10 injectant of the qualified carbon dioxide, except to the 

11 extent provided in regulations prescribed by the Sec12 retary. 

13 ‘‘(6) RECAPTURE.—The Secretary shall, by regu14 lations, provide for recapturing the benefit of any 

15 credit allowable under subsection (a) with respect to 

16 any qualified carbon dioxide which ceases to be cap17 tured, disposed of, or used as a tertiary injectant in 

18 a manner consistent with the requirements of this sec19 tion. 

20 ‘‘(7) INFLATION ADJUSTMENT.—In the case of 

21 any taxable year beginning in a calendar year after 

22 2009, there shall be substituted for each dollar amount 

23 contained in subsection (a) an amount equal to the 

24 product of— 

25 ‘‘(A) such dollar amount, multiplied by 
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1 ‘‘(B) the inflation adjustment factor for 

2 such calendar year determined under section 

3 43(b)(3)(B) for such calendar year, determined 

4 by substituting ‘2008’ for ‘1990’. 

5 ‘‘(e) APPLICATION OF SECTION.—The credit under this 

6 section shall apply with respect to qualified carbon dioxide 

7 before the end of the calendar year in which the Secretary, 

8 in consultation with the Administrator of the Environ9 mental Protection Agency, certifies that 75,000,000 metric 

10 tons of qualified carbon dioxide have been captured and dis11 posed of or used as a tertiary injectant.’’. 

12 (b) CONFORMING AMENDMENT.—Section 38(b) (relat13 ing to general business credit) is amended by striking 

14 ‘‘plus’’ at the end of paragraph (32), by striking the period 

15 at the end of paragraph (33) and inserting ‘‘, plus’’, and 

16 by adding at the end of following new paragraph: 

17 ‘‘(34) the carbon dioxide sequestration credit de18 termined under section 45Q(a).’’. 

19 (c) CLERICAL AMENDMENT.—The table of sections for 

20 subpart B of part IV of subchapter A of chapter 1 (relating 

21 to other credits) is amended by adding at the end the fol22 lowing new section: 

‘‘Sec. 45Q. Credit for carbon dioxide sequestration.’’. 

23 (d) EFFECTIVE DATE.—The amendments made by this 

24 section shall apply to carbon dioxide captured after the date 

25 of the enactment of this Act. 
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1 SEC. 116. CERTAIN INCOME AND GAINS RELATING TO IN2 DUSTRIAL SOURCE CARBON DIOXIDE TREAT3 ED AS QUALIFYING INCOME FOR PUBLICLY 

4 TRADED PARTNERSHIPS. 

5 (a) IN GENERAL.—Subparagraph (E) of section 

6 7704(d)(1) (defining qualifying income) is amended by in7 serting ‘‘or industrial source carbon dioxide’’ after ‘‘tim8 ber)’’. 

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

10 section shall take effect on the date of the enactment of this 

11 Act, in taxable years ending after such date. 

12 SEC. 117. CARBON AUDIT OF THE TAX CODE. 

13 (a) STUDY.—The Secretary of the Treasury shall enter 

14 into an agreement with the National Academy of Sciences 

15 to undertake a comprehensive review of the Internal Rev16 enue Code of 1986 to identify the types of and specific tax 

17 provisions that have the largest effects on carbon and other 

18 greenhouse gas emissions and to estimate the magnitude of 

19 those effects. 

20 (b) REPORT.—Not later than 2 years after the date 

21 of enactment of this Act, the National Academy of Sciences 

22 shall submit to Congress a report containing the results of 

23 study authorized under this section. 

24 (c) AUTHORIZATION OF APPROPRIATIONS.—There is 

25 authorized to be appropriated to carry out this section 

26 $1,500,000 for the period of fiscal years 2009 and 2010. 
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1 TITLE II—TRANSPORTATION 

2 AND DOMESTIC FUEL SECU3 RITY PROVISIONS 

4 SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS 

5 DEPRECIATION FOR BIOMASS ETHANOL 

6 PLANT PROPERTY. 

7 (a) IN GENERAL.—Paragraph (3) of section 168(l) is 

8 amended to read as follows: 

9 ‘‘(3) CELLULOSIC BIOFUEL.—The term ‘cellulosic 

10 biofuel’ means any liquid fuel which is produced from 

11 any lignocellulosic or hemicellulosic matter that is 

12 available on a renewable or recurring basis.’’. 

13 (b) CONFORMING AMENDMENTS.—Subsection (l) of sec14 tion 168 is amended— 

15 (1) by striking ‘‘cellulosic biomass ethanol’’ each 

16 place it appears and inserting ‘‘cellulosic biofuel’’, 

17 (2) by striking ‘‘CELLULOSIC BIOMASS ETH18 ANOL’’ in the heading of such subsection and inserting 

19 ‘‘CELLULOSIC BIOFUEL’’, and 

20 (3) by striking ‘‘CELLULOSIC BIOMASS ETHANOL’’ 

21 in the heading of paragraph (2) thereof and inserting 

22 ‘‘CELLULOSIC BIOFUEL’’. 

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

24 section shall apply to property placed in service after the 
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1 date of the enactment of this Act, in taxable years ending 

2 after such date. 

3 SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIE4 SEL. 

5 (a) IN GENERAL.—Sections 40A(g), 6426(c)(6), and 

6 6427(e)(5)(B) are each amended by striking ‘‘December 31, 

7 2008’’ and inserting ‘‘December 31, 2009’’. 

8 (b) INCREASE IN RATE OF CREDIT.— 

9 (1) INCOME TAX CREDIT.—Paragraphs (1)(A) 

10 and (2)(A) of section 40A(b) are each amended by 

11 striking ‘‘50 cents’’ and inserting ‘‘$1.00’’. 

12 (2) EXCISE TAX CREDIT.—Paragraph (2) of sec13 tion 6426(c) is amended to read as follows: 

14 ‘‘(2) APPLICABLE AMOUNT.—For purposes of this 

15 subsection, the applicable amount is $1.00.’’. 

16 (3) CONFORMING AMENDMENTS.— 

17 (A) Subsection (b) of section 40A is amend18 ed by striking paragraph (3) and by redesig19 nating paragraphs (4) and (5) as paragraphs 

20 (3) and (4), respectively. 

21 (B) Paragraph (2) of section 40A(f) is 

22 amended to read as follows: 

23 ‘‘(2) EXCEPTION.—Subsection (b)(4) shall not 

24 apply with respect to renewable diesel.’’. 
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1 (C) Paragraphs (2) and (3) of section 

2 40A(e) are each amended by striking ‘‘subsection 

3 (b)(5)(C)’’ and inserting ‘‘subsection (b)(4)(C)’’. 

4 (D) Clause (ii) of section 40A(d)(3)(C) is 

5 amended by striking ‘‘subsection (b)(5)(B)’’ and 

6 inserting ‘‘subsection (b)(4)(B)’’. 

7 (c) UNIFORM TREATMENT OF DIESEL PRODUCED

8 FROM BIOMASS.—Paragraph (3) of section 40A(f) is 

9 amended— 

10 (1) by striking ‘‘diesel fuel’’ and inserting ‘‘liq11 uid fuel’’, 

12 (2) by striking ‘‘using a thermal 

13 depolymerization process’’, and 

14 (3) by inserting ‘‘, or other equivalent standard 

15 approved by the Secretary’’ after ‘‘D396’’. 

16 (d) COPRODUCTION OF RENEWABLE DIESEL WITH PE17 TROLEUM FEEDSTOCK.— 

18 (1) IN GENERAL.—Paragraph (3) of section 

19 40A(f) is amended by adding at the end the following 

20 new sentences: ‘‘Such term does not include any fuel 

21 derived from coprocessing biomass with a feedstock 

22 which is not biomass. For purposes of this paragraph, 

23 the term ‘biomass’ has the meaning given such term 

24 by section 45K(c)(3).’’. 
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1 (2) CONFORMING AMENDMENT.—Paragraph (3) 

2 of section 40A(f) is amended by striking ‘‘(as defined 

3 in section 45K(c)(3))’’. 

4 (e) ELIGIBILITY OF CERTAIN AVIATION FUEL.—Sub5 section (f) of section 40A (relating to renewable diesel) is 

6 amended by adding at the end the following new paragraph: 

7 ‘‘(4) CERTAIN AVIATION FUEL.— 

8 ‘‘(A) IN GENERAL.—Except as provided in 

9 the last 3 sentences of paragraph (3), the term 

10 ‘renewable diesel’ shall include fuel derived from 

11 biomass which meets the requirements of a De12 partment of Defense specification for military jet 

13 fuel or an American Society of Testing and Ma14 terials specification for aviation turbine fuel. 

15 ‘‘(B) APPLICATION OF MIXTURE CREDITS.— 

16 In the case of fuel which is treated as renewable 

17 diesel solely by reason of subparagraph (A), sub18 section (b)(1) and section 6426(c) shall be ap19 plied with respect to such fuel by treating ker20 osene as though it were diesel fuel.’’. 

21 (f) MODIFICATION RELATING TO DEFINITION OF AGRI22 BIODIESEL.—Paragraph (2) of section 40A(d) (relating to 

23 agri-biodiesel) is amended by striking ‘‘and mustard seeds’’ 

24 and inserting ‘‘mustard seeds, and camelina’’. 

25 (g) EFFECTIVE DATE.— 
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1 (1) IN GENERAL.—Except as otherwise provided 

2 in this subsection, the amendments made by this sec3 tion shall apply to fuel produced, and sold or used, 

4 after December 31, 2008. 

5 (2) COPRODUCTION OF RENEWABLE DIESEL

6 WITH PETROLEUM FEEDSTOCK.—The amendment 

7 made by subsection (d) shall apply to fuel produced, 

8 and sold or used, after the date of the enactment of 

9 this Act. 

10 SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE DE11 SIGNED TO PROVIDE AN INCENTIVE FOR 

12 UNITED STATES PRODUCTION. 

13 (a) ALCOHOL FUELS CREDIT.—Subsection (d) of sec14 tion 40 is amended by adding at the end the following new 

15 paragraph: 

16 ‘‘(7) LIMITATION TO ALCOHOL WITH CONNECTION

17 TO THE UNITED STATES.—No credit shall be deter18 mined under this section with respect to any alcohol 

19 which is produced outside the United States for use 

20 as a fuel outside the United States. For purposes of 

21 this paragraph, the term ‘United States’ includes any 

22 possession of the United States.’’. 

23 (b) BIODIESEL FUELS CREDIT.—Subsection (d) of sec24 tion 40A is amended by adding at the end the following 

25 new paragraph: 
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1 ‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC2 TION TO THE UNITED STATES.—No credit shall be de3 termined under this section with respect to any bio4 diesel which is produced outside the United States for 

5 use as a fuel outside the United States. For purposes 

6 of this paragraph, the term ‘United States’ includes 

7 any possession of the United States.’’. 

8 (c) EXCISE TAX CREDIT.— 

9 (1) IN GENERAL.—Section 6426 is amended by 

10 adding at the end the following new subsection: 

11 ‘‘(i) LIMITATION TO FUELS WITH CONNECTION TO

12 THE UNITED STATES.— 

13 ‘‘(1) ALCOHOL.—No credit shall be determined 

14 under this section with respect to any alcohol which 

15 is produced outside the United States for use as a fuel 

16 outside the United States. 

17 ‘‘(2) BIODIESEL AND ALTERNATIVE FUELS.—No 

18 credit shall be determined under this section with re19 spect to any biodiesel or alternative fuel which is pro20 duced outside the United States for use as a fuel out21 side the United States. 

22 For purposes of this subsection, the term ‘United States’ in23 cludes any possession of the United States.’’. 

24 (2) CONFORMING AMENDMENT.—Subsection (e) 

25 of section 6427 is amended by redesignating para-
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1 graph (5) as paragraph (6) and by inserting after 

2 paragraph (4) the following new paragraph: 

3 ‘‘(5) LIMITATION TO FUELS WITH CONNECTION

4 TO THE UNITED STATES.—No amount shall be pay5 able under paragraph (1) or (2) with respect to any 

6 mixture or alternative fuel if credit is not allowed 

7 with respect to such mixture or alternative fuel by 

8 reason of section 6426(i).’’. 

9 (d) EFFECTIVE DATE.—The amendments made by this 

10 section shall apply to claims for credit or payment made 

11 on or after May 15, 2008. 

12 SEC. 204. EXTENSION AND MODIFICATION OF ALTERNATIVE 

13 FUEL CREDIT. 

14 (a) EXTENSION.— 

15 (1) ALTERNATIVE FUEL CREDIT.—Paragraph (4) 

16 of section 6426(d) (relating to alternative fuel credit) 

17 is amended by striking ‘‘September 30, 2009’’ and in18 serting ‘‘December 31, 2009’’. 

19 (2) ALTERNATIVE FUEL MIXTURE CREDIT.— 

20 Paragraph (3) of section 6426(e) (relating to alter21 native fuel mixture credit) is amended by striking 

22 ‘‘September 30, 2009’’ and inserting ‘‘December 31, 

23 2009’’. 

24 (3) PAYMENTS.—Subparagraph (C) of section 

25 6427(e)(5) (relating to termination) is amended by 
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1 striking ‘‘September 30, 2009’’ and inserting ‘‘Decem2 ber 31, 2009’’. 

3 (b) MODIFICATIONS.— 

4 (1) ALTERNATIVE FUEL TO INCLUDE COM5 PRESSED OR LIQUIFIED BIOMASS GAS.—Paragraph 

6 (2) of section 6426(d) (relating to alternative fuel 

7 credit) is amended by striking ‘‘and’’ at the end of 

8 subparagraph (E), by redesignating subparagraph 

9 (F) as subparagraph (G), and by inserting after sub10 paragraph (E) the following new subparagraph: 

11 ‘‘(F) compressed or liquefied gas derived 

12 from biomass (as defined in section 45K(c)(3)), 

13 and’’. 

14 (2) CREDIT ALLOWED FOR AVIATION USE OF

15 FUEL.—Paragraph (1) of section 6426(d) is amended 

16 by inserting ‘‘sold by the taxpayer for use as a fuel 

17 in aviation,’’ after ‘‘motorboat,’’. 

18 (c) CARBON CAPTURE REQUIREMENT FOR CERTAIN

19 FUELS.— 

20 (1) IN GENERAL.—Subsection (d) of section 

21 6426, as amended by subsection (a), is amended by 

22 redesignating paragraph (4) as paragraph (5) and by 

23 inserting after paragraph (3) the following new para24 graph: 

25 ‘‘(4) CARBON CAPTURE REQUIREMENT.— 
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1 ‘‘(A) IN GENERAL.—The requirements of 

2 this paragraph are met if the fuel is certified, 

3 under such procedures as required by the Sec4 retary, as having been derived from coal pro5 duced at a gasification facility which separates 

6 and sequesters not less than the applicable per7 centage of such facility’s total carbon dioxide 

8 emissions. 

9 ‘‘(B) APPLICABLE PERCENTAGE.—For pur10 poses of subparagraph (A), the applicable per11 centage is— 

12 ‘‘(i) 50 percent in the case of fuel pro13 duced after September 30, 2009, and on or 

14 before December 30, 2009, and 

15 ‘‘(ii) 75 percent in the case of fuel pro16 duced after December 30, 2009.’’. 

17 (2) CONFORMING AMENDMENT.—Subparagraph 

18 (E) of section 6426(d)(2) is amended by inserting 

19 ‘‘which meets the requirements of paragraph (4) and 

20 which is’’ after ‘‘any liquid fuel’’. 

21 (d) EFFECTIVE DATE.—The amendments made by this 

22 section shall apply to fuel sold or used after the date of the 

23 enactment of this Act. 
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1 SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC 

2 DRIVE MOTOR VEHICLES. 

3 (a) PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CRED4 IT.—Subpart B of part IV of subchapter A of chapter 1 

5 (relating to other credits) is amended by adding at the end 

6 the following new section: 

7 ‘‘SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 

8 MOTOR VEHICLES. 

9 ‘‘(a) ALLOWANCE OF CREDIT.— 

10 ‘‘(1) IN GENERAL.—There shall be allowed as a 

11 credit against the tax imposed by this chapter for the 

12 taxable year an amount equal to the applicable 

13 amount with respect to each new qualified plug-in 

14 electric drive motor vehicle placed in service by the 

15 taxpayer during the taxable year. 

16 ‘‘(2) APPLICABLE AMOUNT.—For purposes of 

17 paragraph (1), the applicable amount is sum of— 

18 ‘‘(A) $2,500, plus 

19 ‘‘(B) $417 for each kilowatt hour of traction 

20 battery capacity in excess of 4 kilowatt hours. 

21 ‘‘(b) LIMITATIONS.— 

22 ‘‘(1) LIMITATION BASED ON WEIGHT.—The 

23 amount of the credit allowed under subsection (a) by 

24 reason of subsection (a)(2) shall not exceed— 

25 ‘‘(A) $7,500, in the case of any new quali26 fied plug-in electric drive motor vehicle with a 
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1 gross vehicle weight rating of not more than 

2 10,000 pounds, 

3 ‘‘(B) $10,000, in the case of any new quali4 fied plug-in electric drive motor vehicle with a 

5 gross vehicle weight rating of more than 10,000 

6 pounds but not more than 14,000 pounds, 

7 ‘‘(C) $12,500, in the case of any new quali8 fied plug-in electric drive motor vehicle with a 

9 gross vehicle weight rating of more than 14,000 

10 pounds but not more than 26,000 pounds, and 

11 ‘‘(D) $15,000, in the case of any new quali12 fied plug-in electric drive motor vehicle with a 

13 gross vehicle weight rating of more than 26,000 

14 pounds. 

15 ‘‘(2) LIMITATION ON NUMBER OF PASSENGER VE16 HICLES AND LIGHT TRUCKS ELIGIBLE FOR CREDIT.— 

17 ‘‘(A) IN GENERAL.—In the case of a new 

18 qualified plug-in electric drive motor vehicle sold 

19 during the phaseout period, only the applicable 

20 percentage of the credit otherwise allowable 

21 under subsection (a) shall be allowed. 

22 ‘‘(B) PHASEOUT PERIOD.—For purposes of 

23 this subsection, the phaseout period is the period 

24 beginning with the second calendar quarter fol25 lowing the calendar quarter which includes the 
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1 first date on which the total number of such new 

2 qualified plug-in electric drive motor vehicles 

3 sold for use in the United States after December 

4 31, 2008, is at least 250,000. 

5 ‘‘(C) APPLICABLE PERCENTAGE.—For pur6 poses of subparagraph (A), the applicable per7 centage is— 

8 ‘‘(i) 50 percent for the first 2 calendar 

9 quarters of the phaseout period, 

10 ‘‘(ii) 25 percent for the 3d and 4th cal11 endar quarters of the phaseout period, and 

12 ‘‘(iii) 0 percent for each calendar quar13 ter thereafter. 

14 ‘‘(D) CONTROLLED GROUPS.—Rules similar 

15 to the rules of section 30B(f)(4) shall apply for 

16 purposes of this subsection. 

17 ‘‘(c) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE

18 MOTOR VEHICLE.—For purposes of this section, the term 

19 ‘new qualified plug-in electric drive motor vehicle’ means 

20 a motor vehicle— 

21 ‘‘(1) which draws propulsion using a traction 

22 battery with at least 4 kilowatt hours of capacity, 

23 ‘‘(2) which uses an offboard source of energy to 

24 recharge such battery, 
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1 ‘‘(3) which, in the case of a passenger vehicle or 

2 light truck which has a gross vehicle weight rating of 

3 not more than 8,500 pounds, has received a certificate 

4 of conformity under the Clean Air Act and meets or 

5 exceeds the equivalent qualifying California low emis6 sion vehicle standard under section 243(e)(2) of the 

7 Clean Air Act for that make and model year, and 

8 ‘‘(A) in the case of a vehicle having a gross 

9 vehicle weight rating of 6,000 pounds or less, the 

10 Bin 5 Tier II emission standard established in 

11 regulations prescribed by the Administrator of 

12 the Environmental Protection Agency under sec13 tion 202(i) of the Clean Air Act for that make 

14 and model year vehicle, and 

15 ‘‘(B) in the case of a vehicle having a gross 

16 vehicle weight rating of more than 6,000 pounds 

17 but not more than 8,500 pounds, the Bin 8 Tier 

18 II emission standard which is so established, 

19 ‘‘(4) the original use of which commences with 

20 the taxpayer, 

21 ‘‘(5) which is acquired for use or lease by the 

22 taxpayer and not for resale, and 

23 ‘‘(6) which is made by a manufacturer. 

24 ‘‘(d) APPLICATION WITH OTHER CREDITS.— 
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1 ‘‘(1) BUSINESS CREDIT TREATED AS PART OF

2 GENERAL BUSINESS CREDIT.—So much of the credit 

3 which would be allowed under subsection (a) for any 

4 taxable year (determined without regard to this sub5 section) that is attributable to property of a character 

6 subject to an allowance for depreciation shall be treat7 ed as a credit listed in section 38(b) for such taxable 

8 year (and not allowed under subsection (a)). 

9 ‘‘(2) PERSONAL CREDIT.— 

10 ‘‘(A) IN GENERAL.—For purposes of this 

11 title, the credit allowed under subsection (a) for 

12 any taxable year (determined after application 

13 of paragraph (1)) shall be treated as a credit al14 lowable under subpart A for such taxable year. 

15 ‘‘(B) LIMITATION BASED ON AMOUNT OF

16 TAX.—In the case of a taxable year to which sec17 tion 26(a)(2) does not apply, the credit allowed 

18 under subsection (a) for any taxable year (deter19 mined after application of paragraph (1)) shall 

20 not exceed the excess of— 

21 ‘‘(i) the sum of the regular tax liability 

22 (as defined in section 26(b)) plus the tax 

23 imposed by section 55, over 

24 ‘‘(ii) the sum of the credits allowable 

25 under subpart A (other than this section 
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1 and sections 23 and 25D) and section 27 

2 for the taxable year. 

3 ‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.—For 

4 purposes of this section— 

5 ‘‘(1) MOTOR VEHICLE.—The term ‘motor vehicle’ 

6 has the meaning given such term by section 30(c)(2). 

7 ‘‘(2) OTHER TERMS.—The terms ‘passenger auto8 mobile’, ‘light truck’, and ‘manufacturer’ have the 

9 meanings given such terms in regulations prescribed 

10 by the Administrator of the Environmental Protection 

11 Agency for purposes of the administration of title II 

12 of the Clean Air Act (42 U.S.C. 7521 et seq.). 

13 ‘‘(3) TRACTION BATTERY CAPACITY.—Traction 

14 battery capacity shall be measured in kilowatt hours 

15 from a 100 percent state of charge to a zero percent 

16 state of charge. 

17 ‘‘(4) REDUCTION IN BASIS.—For purposes of this 

18 subtitle, the basis of any property for which a credit 

19 is allowable under subsection (a) shall be reduced by 

20 the amount of such credit so allowed. 

21 ‘‘(5) NO DOUBLE BENEFIT.—The amount of any 

22 deduction or other credit allowable under this chapter 

23 for a new qualified plug-in electric drive motor vehi24 cle shall be reduced by the amount of credit allowed 
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1 under subsection (a) for such vehicle for the taxable 

2 year. 

3 ‘‘(6) PROPERTY USED BY TAX-EXEMPT ENTITY.— 

4 In the case of a vehicle the use of which is described 

5 in paragraph (3) or (4) of section 50(b) and which 

6 is not subject to a lease, the person who sold such ve7 hicle to the person or entity using such vehicle shall 

8 be treated as the taxpayer that placed such vehicle in 

9 service, but only if such person clearly discloses to 

10 such person or entity in a document the amount of 

11 any credit allowable under subsection (a) with respect 

12 to such vehicle (determined without regard to sub13 section (b)(2)). 

14 ‘‘(7) PROPERTY USED OUTSIDE UNITED STATES, 

15 ETC., NOT QUALIFIED.—No credit shall be allowable 

16 under subsection (a) with respect to any property re17 ferred to in section 50(b)(1) or with respect to the 

18 portion of the cost of any property taken into account 

19 under section 179. 

20 ‘‘(8) RECAPTURE.—The Secretary shall, by regu21 lations, provide for recapturing the benefit of any 

22 credit allowable under subsection (a) with respect to 

23 any property which ceases to be property eligible for 

24 such credit (including recapture in the case of a lease 

25 period of less than the economic life of a vehicle). 
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1 ‘‘(9) ELECTION TO NOT TAKE CREDIT.—No credit 

2 shall be allowed under subsection (a) for any vehicle 

3 if the taxpayer elects not to have this section apply 

4 to such vehicle. 

5 ‘‘(10) INTERACTION WITH AIR QUALITY AND

6 MOTOR VEHICLE SAFETY STANDARDS.—Unless other7 wise provided in this section, a motor vehicle shall 

8 not be considered eligible for a credit under this sec9 tion unless such vehicle is in compliance with— 

10 ‘‘(A) the applicable provisions of the Clean 

11 Air Act for the applicable make and model year 

12 of the vehicle (or applicable air quality provi13 sions of State law in the case of a State which 

14 has adopted such provision under a waiver 

15 under section 209(b) of the Clean Air Act), and 

16 ‘‘(B) the motor vehicle safety provisions of 

17 sections 30101 through 30169 of title 49, United 

18 States Code. 

19 ‘‘(f) REGULATIONS.— 

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), the Secretary shall promulgate such regula22 tions as necessary to carry out the provisions of this 

23 section. 

24 ‘‘(2) COORDINATION IN PRESCRIPTION OF CER25 TAIN REGULATIONS.—The Secretary of the Treasury, 
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1 in coordination with the Secretary of Transportation 

2 and the Administrator of the Environmental Protec3 tion Agency, shall prescribe such regulations as nec4 essary to determine whether a motor vehicle meets the 

5 requirements to be eligible for a credit under this sec6 tion. 

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

8 property purchased after December 31, 2014.’’. 

9 (b) COORDINATION WITH ALTERNATIVE MOTOR VEHI10 CLE CREDIT.—Section 30B(d)(3) is amended by adding at 

11 the end the following new subparagraph: 

12 ‘‘(D) EXCLUSION OF PLUG-IN VEHICLES.— 

13 Any vehicle with respect to which a credit is al14 lowable under section 30D (determined without 

15 regard to subsection (d) thereof) shall not be 

16 taken into account under this section.’’. 

17 (c) CREDIT MADE PART OF GENERAL BUSINESS

18 CREDIT.—Section 38(b), as amended by this Act, is amend19 ed by striking ‘‘plus’’ at the end of paragraph (33), by strik20 ing the period at the end of paragraph (34) and inserting 

21 ‘‘plus’’, and by adding at the end the following new para22 graph: 

23 ‘‘(35) the portion of the new qualified plug-in 

24 electric drive motor vehicle credit to which section 

25 30D(d)(1) applies.’’. 
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1 (d) CONFORMING AMENDMENTS.— 

2 (1)(A) Section 24(b)(3)(B), as amended by sec3 tion 106, is amended by striking ‘‘and 25D’’ and in4 serting ‘‘25D, and 30D’’. 

5 (B) Section 25(e)(1)(C)(ii) is amended by insert6 ing ‘‘30D,’’ after ‘‘25D,’’. 

7 (C) Section 25B(g)(2), as amended by section 

8 106, is amended by striking ‘‘and 25D’’ and inserting 

9 ‘‘, 25D, and 30D’’. 

10 (D) Section 26(a)(1), as amended by section 106, 

11 is amended by striking ‘‘and 25D’’ and inserting 

12 ‘‘25D, and 30D’’. 

13 (E) Section 1400C(d)(2) is amended by striking 

14 ‘‘and 25D’’ and inserting ‘‘25D, and 30D’’. 

15 (2) Section 1016(a) is amended by striking 

16 ‘‘and’’ at the end of paragraph (35), by striking the 

17 period at the end of paragraph (36) and inserting ‘‘, 

18 and’’, and by adding at the end the following new 

19 paragraph: 

20 ‘‘(37) to the extent provided in section 

21 30D(e)(4).’’. 

22 (3) Section 6501(m) is amended by inserting 

23 ‘‘30D(e)(9),’’ after ‘‘30C(e)(5),’’. 
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1 (4) The table of sections for subpart B of part IV 

2 of subchapter A of chapter 1 is amended by adding 

3 at the end the following new item: 

‘‘Sec. 30D. New qualified plug-in electric drive motor vehicles.’’. 

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

5 section shall apply to taxable years beginning after Decem6 ber 31, 2008. 

7 (f) APPLICATION OF EGTRRA SUNSET.—The amend8 ment made by subsection (d)(1)(A) shall be subject to title 

9 IX of the Economic Growth and Tax Relief Reconciliation 

10 Act of 2001 in the same manner as the provision of such 

11 Act to which such amendment relates. 

12 SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING 

13 REDUCTION UNITS AND ADVANCED INSULA14 TION. 

15 (a) IN GENERAL.—Section 4053 is amended by adding 

16 at the end the following new paragraphs: 

17 ‘‘(9) IDLING REDUCTION DEVICE.—Any device or 

18 system of devices which— 

19 ‘‘(A) is designed to provide to a vehicle 

20 those services (such as heat, air conditioning, or 

21 electricity) that would otherwise require the oper22 ation of the main drive engine while the vehicle 

23 is temporarily parked or remains stationary 

24 using one or more devices affixed to a tractor, 

25 and 
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1 ‘‘(B) is determined by the Administrator of 

2 the Environmental Protection Agency, in con3 sultation with the Secretary of Energy and the 

4 Secretary of Transportation, to reduce idling of 

5 such vehicle at a motor vehicle rest stop or other 

6 location where such vehicles are temporarily 

7 parked or remain stationary. 

8 ‘‘(10) ADVANCED INSULATION.—Any insulation 

9 that has an R value of not less than R35 per inch.’’. 

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

11 section shall apply to sales or installations after the date 

12 of the enactment of this Act. 

13 SEC. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROP14 ERTY CREDIT. 

15 (a) EXTENSION OF CREDIT.—Paragraph (2) of section 

16 30C(g) is amended by striking ‘‘December 31, 2009’’ and 

17 inserting ‘‘December 31, 2010’’. 

18 (b) INCLUSION OF ELECTRICITY AS A CLEAN-BURNING

19 FUEL.—Section 30C(c)(2) is amended by adding at the end 

20 the following new subparagraph: 

21 ‘‘(C) Electricity.’’. 

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

23 section shall apply to property placed in service after the 

24 date of the enactment of this Act, in taxable years ending 

25 after such date. 
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1 SEC. 208. CERTAIN INCOME AND GAINS RELATING TO ALCO2 HOL FUELS AND MIXTURES, BIODIESEL 

3 FUELS AND MIXTURES, AND ALTERNATIVE 

4 FUELS AND MIXTURES TREATED AS QUALI5 FYING INCOME FOR PUBLICLY TRADED PART6 NERSHIPS. 

7 (a) IN GENERAL.—Subparagraph (E) of section 

8 7704(d)(1), as amended by this Act, is amended by striking 

9 ‘‘or industrial source carbon dioxide’’ and inserting ‘‘, in10 dustrial source carbon dioxide, or the transportation or 

11 storage of any fuel described in subsection (b), (c), (d), or 

12 (e) of section 6426, or any alcohol fuel defined in section 

13 6426(b)(4)(A) or any biodiesel fuel as defined in section 

14 40A(d)(1)’’ after ‘‘timber)’’. 

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

16 section shall take effect on the date of the enactment of this 

17 Act, in taxable years ending after such date. 

18 SEC. 209. EXTENSION AND MODIFICATION OF ELECTION TO 

19 EXPENSE CERTAIN REFINERIES. 

20 (a) EXTENSION.—Paragraph (1) of section 179C(c) 

21 (relating to qualified refinery property) is amended— 

22 (1) by striking ‘‘January 1, 2012’’ in subpara23 graph (B) and inserting ‘‘January 1, 2014’’, and 

24 (2) by striking ‘‘January 1, 2008’’ each place it 

25 appears in subparagraph (F) and inserting ‘‘January 

26 1, 2010’’. 
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1 (b) INCLUSION OF FUEL DERIVED FROM SHALE AND

2 TAR SANDS.— 

3 (1) IN GENERAL.—Subsection (d) of section 179C 

4 is amended by inserting ‘‘, or directly from shale or 

5 tar sands’’ after ‘‘(as defined in section 45K(c))’’. 

6 (2) CONFORMING AMENDMENT.—Paragraph (2) 

7 of section 179C(e) is amended by inserting ‘‘shale, tar 

8 sands, or’’ before ‘‘qualified fuels’’. 

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

10 section shall apply to property placed in service after the 

11 date of the enactment of this Act. 

12 SEC. 210. EXTENSION OF SUSPENSION OF TAXABLE INCOME 

13 LIMIT ON PERCENTAGE DEPLETION FOR OIL 

14 AND NATURAL GAS PRODUCED FROM MAR15 GINAL PROPERTIES. 

16 Subparagraph (H) of section 613A(c)(6) (relating to 

17 oil and gas produced from marginal properties) is amended 

18 by striking ‘‘for any taxable year’’ and all that follows and 

19 inserting ‘‘for any taxable year— 

20 ‘‘(i) beginning after December 31, 

21 1997, and before January 1, 2008, or 

22 ‘‘(ii) beginning after December 31, 

23 2008, and before January 1, 2010.’’. 
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1 SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE 

2 COMMUTERS. 

3 (a) IN GENERAL.—Paragraph (1) of section 132(f) is 

4 amended by adding at the end the following: 

5 ‘‘(D) Any qualified bicycle commuting re6 imbursement.’’. 

7 (b) LIMITATION ON EXCLUSION.—Paragraph (2) of 

8 section 132(f) is amended by striking ‘‘and’’ at the end of 

9 subparagraph (A), by striking the period at the end of sub10 paragraph (B) and inserting ‘‘, and’’, and by adding at 

11 the end the following new subparagraph: 

12 ‘‘(C) the applicable annual limitation in 

13 the case of any qualified bicycle commuting re14 imbursement.’’. 

15 (c) DEFINITIONS.—Paragraph (5) of section 132(f) is 

16 amended by adding at the end the following: 

17 ‘‘(F) DEFINITIONS RELATED TO BICYCLE

18 COMMUTING REIMBURSEMENT.— 

19 ‘‘(i) QUALIFIED BICYCLE COMMUTING

20 REIMBURSEMENT.—The term ‘qualified bi21 cycle commuting reimbursement’ means, 

22 with respect to any calendar year, any em23 ployer reimbursement during the 15-month 

24 period beginning with the first day of such 

25 calendar year for reasonable expenses in26 curred by the employee during such cal-
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1 endar year for the purchase of a bicycle and 

2 bicycle improvements, repair, and storage, 

3 if such bicycle is regularly used for travel 

4 between the employee’s residence and place 

5 of employment. 

6 ‘‘(ii) APPLICABLE ANNUAL LIMITA7 TION.—The term ‘applicable annual limita8 tion’ means, with respect to any employee 

9 for any calendar year, the product of $20 

10 multiplied by the number of qualified bicy11 cle commuting months during such year. 

12 ‘‘(iii) QUALIFIED BICYCLE COMMUTING

13 MONTH.—The term ‘qualified bicycle com14 muting month’ means, with respect to any 

15 employee, any month during which such 

16 employee— 

17 ‘‘(I) regularly uses the bicycle for 

18 a substantial portion of the travel be19 tween the employee’s residence and 

20 place of employment, and 

21 ‘‘(II) does not receive any benefit 

22 described in subparagraph (A), (B), or 

23 (C) of paragraph (1).’’. 

24 (d) CONSTRUCTIVE RECEIPT OF BENEFIT.—Para25 graph (4) of section 132(f) is amended by inserting ‘‘(other 
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1 than a qualified bicycle commuting reimbursement)’’ after 

2 ‘‘qualified transportation fringe’’. 

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

4 section shall apply to taxable years beginning after Decem5 ber 31, 2008. 

6 TITLE III—ENERGY CONSERVA7 TION AND EFFICIENCY PROVI8 SIONS 

9 SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS. 

10 (a) IN GENERAL.—Subpart I of part IV of subchapter 

11 A of chapter 1, as amended by section 107, is amended by 

12 adding at the end the following new section: 

13 ‘‘SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS. 

14 ‘‘(a) QUALIFIED ENERGY CONSERVATION BOND.—For 

15 purposes of this subchapter, the term ‘qualified energy con16 servation bond’ means any bond issued as part of an issue 

17 if— 

18 ‘‘(1) 100 percent of the available project proceeds 

19 of such issue are to be used for one or more qualified 

20 conservation purposes, 

21 ‘‘(2) the bond is issued by a State or local gov22 ernment, and 

23 ‘‘(3) the issuer designates such bond for purposes 

24 of this section. 
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1 ‘‘(b) REDUCED CREDIT AMOUNT.—The annual credit 

2 determined under section 54A(b) with respect to any quali3 fied energy conservation bond shall be 70 percent of the 

4 amount so determined without regard to this subsection. 

5 ‘‘(c) LIMITATION ON AMOUNT OF BONDS DES6 IGNATED.—The maximum aggregate face amount of bonds 

7 which may be designated under subsection (a) by any issuer 

8 shall not exceed the limitation amount allocated to such 

9 issuer under subsection (e). 

10 ‘‘(d) NATIONAL LIMITATION ON AMOUNT OF BONDS

11 DESIGNATED.—There is a national qualified energy con12 servation bond limitation of $800,000,000. 

13 ‘‘(e) ALLOCATIONS.— 

14 ‘‘(1) IN GENERAL.—The limitation applicable 

15 under subsection (d) shall be allocated by the Sec16 retary among the States in proportion to the popu17 lation of the States. 

18 ‘‘(2) ALLOCATIONS TO LARGEST LOCAL GOVERN19 MENTS.— 

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

21 State in which there is a large local government, 

22 each such local government shall be allocated a 

23 portion of such State’s allocation which bears the 

24 same ratio to the State’s allocation (determined 

25 without regard to this subparagraph) as the pop-
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1 ulation of such large local government bears to 

2 the population of such State. 

3 ‘‘(B) ALLOCATION OF UNUSED LIMITATION

4 TO STATE.—The amount allocated under this 

5 subsection to a large local government may be re6 allocated by such local government to the State 

7 in which such local government is located. 

8 ‘‘(C) LARGE LOCAL GOVERNMENT.—For 

9 purposes of this section, the term ‘large local gov10 ernment’ means any municipality or county if 

11 such municipality or county has a population of 

12 100,000 or more. 

13 ‘‘(3) ALLOCATION TO ISSUERS; RESTRICTION ON

14 PRIVATE ACTIVITY BONDS.—Any allocation under this 

15 subsection to a State or large local government shall 

16 be allocated by such State or large local government 

17 to issuers within the State in a manner that results 

18 in not less than 70 percent of the allocation to such 

19 State or large local government being used to des20 ignate bonds which are not private activity bonds. 

21 ‘‘(f) QUALIFIED CONSERVATION PURPOSE.—For pur22 poses of this section— 

23 ‘‘(1) IN GENERAL.—The term ‘qualified conserva24 tion purpose’ means any of the following: 
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1 ‘‘(A) Capital expenditures incurred for pur2 poses of— 

3 ‘‘(i) reducing energy consumption in 

4 publicly-owned buildings by at least 20 per5 cent, 

6 ‘‘(ii) implementing green community 

7 programs, 

8 ‘‘(iii) rural development involving the 

9 production of electricity from renewable en10 ergy resources, or 

11 ‘‘(iv) any qualified facility (as deter12 mined under section 45(d) without regard 

13 to paragraphs (8) and (10) thereof and 

14 without regard to any placed in service 

15 date). 

16 ‘‘(B) Expenditures with respect to research 

17 facilities, and research grants, to support re18 search in— 

19 ‘‘(i) development of cellulosic ethanol 

20 or other nonfossil fuels, 

21 ‘‘(ii) technologies for the capture and 

22 sequestration of carbon dioxide produced 

23 through the use of fossil fuels, 
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1 ‘‘(iii) increasing the efficiency of exist2 ing technologies for producing nonfossil 

3 fuels, 

4 ‘‘(iv) automobile battery technologies 

5 and other technologies to reduce fossil fuel 

6 consumption in transportation, or 

7 ‘‘(v) technologies to reduce energy use 

8 in buildings. 

9 ‘‘(C) Mass commuting facilities and related 

10 facilities that reduce the consumption of energy, 

11 including expenditures to reduce pollution from 

12 vehicles used for mass commuting. 

13 ‘‘(D) Demonstration projects designed to 

14 promote the commercialization of— 

15 ‘‘(i) green building technology, 

16 ‘‘(ii) conversion of agricultural waste 

17 for use in the production of fuel or other18 wise, 

19 ‘‘(iii) advanced battery manufacturing 

20 technologies, 

21 ‘‘(iv) technologies to reduce peak use of 

22 electricity, or 

23 ‘‘(v) technologies for the capture and 

24 sequestration of carbon dioxide emitted from 
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1 combusting fossil fuels in order to produce 

2 electricity. 

3 ‘‘(E) Public education campaigns to pro4 mote energy efficiency. 

5 ‘‘(2) SPECIAL RULES FOR PRIVATE ACTIVITY

6 BONDS.—For purposes of this section, in the case of 

7 any private activity bond, the term ‘qualified con8 servation purposes’ shall not include any expenditure 

9 which is not a capital expenditure. 

10 ‘‘(g) POPULATION.— 

11 ‘‘(1) IN GENERAL.—The population of any State 

12 or local government shall be determined for purposes 

13 of this section as provided in section 146(j) for the 

14 calendar year which includes the date of the enact15 ment of this section. 

16 ‘‘(2) SPECIAL RULE FOR COUNTIES.—In deter17 mining the population of any county for purposes of 

18 this section, any population of such county which is 

19 taken into account in determining the population of 

20 any municipality which is a large local government 

21 shall not be taken into account in determining the 

22 population of such county. 

23 ‘‘(h) APPLICATION TO INDIAN TRIBAL GOVERN24 MENTS.—An Indian tribal government shall be treated for 
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1 purposes of this section in the same manner as a large local 

2 government, except that— 

3 ‘‘(1) an Indian tribal government shall be treat4 ed for purposes of subsection (e) as located within a 

5 State to the extent of so much of the population of 

6 such government as resides within such State, and 

7 ‘‘(2) any bond issued by an Indian tribal gov8 ernment shall be treated as a qualified energy con9 servation bond only if issued as part of an issue the 

10 available project proceeds of which are used for pur11 poses for which such Indian tribal government could 

12 issue bonds to which section 103(a) applies.’’. 

13 (b) CONFORMING AMENDMENTS.— 

14 (1) Paragraph (1) of section 54A(d), as amended 

15 by this Act, is amended to read as follows: 

16 ‘‘(1) QUALIFIED TAX CREDIT BOND.—The term 

17 ‘qualified tax credit bond’ means— 

18 ‘‘(A) a qualified forestry conservation bond, 

19 ‘‘(B) a new clean renewable energy bond, or 

20 ‘‘(C) a qualified energy conservation bond, 

21 which is part of an issue that meets requirements of 

22 paragraphs (2), (3), (4), (5), and (6).’’. 

23 (2) Subparagraph (C) of section 54A(d)(2), as 

24 amended by this Act, is amended to read as follows: 
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1 ‘‘(C) QUALIFIED PURPOSE.—For purposes 

2 of this paragraph, the term ‘qualified purpose’ 

3 means— 

4 ‘‘(i) in the case of a qualified forestry 

5 conservation bond, a purpose specified in 

6 section 54B(e), 

7 ‘‘(ii) in the case of a new clean renew8 able energy bond, a purpose specified in sec9 tion 54C(a)(1), and 

10 ‘‘(iii) in the case of a qualified energy 

11 conservation bond, a purpose specified in 

12 section 54D(a)(1).’’. 

13 (3) The table of sections for subpart I of part IV 

14 of subchapter A of chapter 1, as amended by this Act, 

15 is amended by adding at the end the following new 

16 item: 

‘‘Sec. 54D. Qualified energy conservation bonds.’’. 

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

18 section shall apply to obligations issued after the date of 

19 the enactment of this Act. 

20 SEC. 302. CREDIT FOR NONBUSINESS ENERGY PROPERTY. 

21 (a) EXTENSION OF CREDIT.—Section 25C(g) is 

22 amended by striking ‘‘placed in service after December 31, 

23 2007’’ and inserting ‘‘placed in service— 

24 ‘‘(1) after December 31, 2007, and before Janu25 ary 1, 2009, or 
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1 ‘‘(2) after December 31, 2009.’’. 

2 (b) QUALIFIED BIOMASS FUEL PROPERTY.— 

3 (1) IN GENERAL.—Section 25C(d)(3) is amend4 ed— 

5 (A) by striking ‘‘and’’ at the end of sub6 paragraph (D), 

7 (B) by striking the period at the end of sub8 paragraph (E) and inserting ‘‘, and’’, and 

9 (C) by adding at the end the following new 

10 subparagraph: 

11 ‘‘(F) a stove which uses the burning of bio12 mass fuel to heat a dwelling unit located in the 

13 United States and used as a residence by the 

14 taxpayer, or to heat water for use in such a 

15 dwelling unit, and which has a thermal effi16 ciency rating of at least 75 percent.’’. 

17 (2) BIOMASS FUEL.—Section 25C(d) is amended 

18 by adding at the end the following new paragraph: 

19 ‘‘(6) BIOMASS FUEL.—The term ‘biomass fuel’ 

20 means any plant-derived fuel available on a renew21 able or recurring basis, including agricultural crops 

22 and trees, wood and wood waste and residues (includ23 ing wood pellets), plants (including aquatic plants), 

24 grasses, residues, and fibers.’’. 
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1 (c) MODIFICATION OF WATER HEATER REQUIRE2 MENTS.—Section 25C(d)(3)(E) is amended by inserting ‘‘or 

3 a thermal efficiency of at least 90 percent’’ after ‘‘0.80’’. 

4 (d) COORDINATION WITH CREDIT FOR QUALIFIED

5 GEOTHERMAL HEAT PUMP PROPERTY EXPENDITURES.— 

6 (1) IN GENERAL.—Paragraph (3) of section 

7 25C(d), as amended by subsections (b) and (c), is 

8 amended by striking subparagraph (C) and by redes9 ignating subparagraphs (D), (E), and (F) as sub10 paragraphs (C), (D), and (E), respectively. 

11 (2) CONFORMING AMENDMENT.—Subparagraph 

12 (C) of section 25C(d)(2) is amended to read as fol13 lows: 

14 ‘‘(C) REQUIREMENTS AND STANDARDS FOR

15 AIR CONDITIONERS AND HEAT PUMPS.—The 

16 standards and requirements prescribed by the 

17 Secretary under subparagraph (B) with respect 

18 to the energy efficiency ratio (EER) for central 

19 air conditioners and electric heat pumps— 

20 ‘‘(i) shall require measurements to be 

21 based on published data which is tested by 

22 manufacturers at 95 degrees Fahrenheit, 

23 and 

24 ‘‘(ii) may be based on the certified 

25 data of the Air Conditioning and Refrigera-
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1 tion Institute that are prepared in partner2 ship with the Consortium for Energy Effi3 ciency.’’. 

4 (e) MODIFICATION OF QUALIFIED ENERGY EFFICIENCY

5 IMPROVEMENTS.— 

6 (1) IN GENERAL.—Paragraph (1) of section 

7 25C(c) is amended by inserting ‘‘, or an asphalt roof 

8 with appropriate cooling granules,’’ before ‘‘which 

9 meet the Energy Star program requirements’’. 

10 (2) BUILDING ENVELOPE COMPONENT.—Sub11 paragraph (D) of section 25C(c)(2) is amended— 

12 (A) by inserting ‘‘or asphalt roof’’ after 

13 ‘‘metal roof’’, and 

14 (B) by inserting ‘‘or cooling granules’’ after 

15 ‘‘pigmented coatings’’. 

16 (f) EFFECTIVE DATES.— 

17 (1) IN GENERAL.—Except as provided in para18 graph (2), the amendments made this section shall 

19 apply to expenditures made after December 31, 2008. 

20 (2) MODIFICATION OF QUALIFIED ENERGY EFFI21 CIENCY IMPROVEMENTS.—The amendments made by 

22 subsection (e) shall apply to property placed in serv23 ice after the date of the enactment of this Act. 
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1 SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DE2 DUCTION. 

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

4 ‘‘December 31, 2008’’ and inserting ‘‘December 31, 2013’’. 

5 SEC. 304. NEW ENERGY EFFICIENT HOME CREDIT. 

6 Subsection (g) of section 45L (relating to termination) 

7 is amended by striking ‘‘December 31, 2008’’ and inserting 

8 ‘‘December 31, 2009’’. 

9 SEC. 305. MODIFICATIONS OF ENERGY EFFICIENT APPLI10 ANCE CREDIT FOR APPLIANCES PRODUCED 

11 AFTER 2007. 

12 (a) IN GENERAL.—Subsection (b) of section 45M is 

13 amended to read as follows: 

14 ‘‘(b) APPLICABLE AMOUNT.—For purposes of sub15 section (a)— 

16 ‘‘(1) DISHWASHERS.—The applicable amount 

17 is— 

18 ‘‘(A) $45 in the case of a dishwasher which 

19 is manufactured in calendar year 2008 or 2009 

20 and which uses no more than 324 kilowatt hours 

21 per year and 5.8 gallons per cycle, and 

22 ‘‘(B) $75 in the case of a dishwasher which 

23 is manufactured in calendar year 2008, 2009, or 

24 2010 and which uses no more than 307 kilowatt 

25 hours per year and 5.0 gallons per cycle (5.5 gal-
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1 lons per cycle for dishwashers designed for great2 er than 12 place settings). 

3 ‘‘(2) CLOTHES WASHERS.—The applicable 

4 amount is— 

5 ‘‘(A) $75 in the case of a residential top6 loading clothes washer manufactured in calendar 

7 year 2008 which meets or exceeds a 1.72 modi8 fied energy factor and does not exceed a 8.0 

9 water consumption factor, 

10 ‘‘(B) $125 in the case of a residential top11 loading clothes washer manufactured in calendar 

12 year 2008 or 2009 which meets or exceeds a 1.8 

13 modified energy factor and does not exceed a 7.5 

14 water consumption factor, 

15 ‘‘(C) $150 in the case of a residential or 

16 commercial clothes washer manufactured in cal17 endar year 2008, 2009, or 2010 which meets or 

18 exceeds 2.0 modified energy factor and does not 

19 exceed a 6.0 water consumption factor, and 

20 ‘‘(D) $250 in the case of a residential or 

21 commercial clothes washer manufactured in cal22 endar year 2008, 2009, or 2010 which meets or 

23 exceeds 2.2 modified energy factor and does not 

24 exceed a 4.5 water consumption factor. 
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1 ‘‘(3) REFRIGERATORS.—The applicable amount 

2 is— 

3 ‘‘(A) $50 in the case of a refrigerator which 

4 is manufactured in calendar year 2008, and con5 sumes at least 20 percent but not more than 22.9 

6 percent less kilowatt hours per year than the 

7 2001 energy conservation standards, 

8 ‘‘(B) $75 in the case of a refrigerator which 

9 is manufactured in calendar year 2008 or 2009, 

10 and consumes at least 23 percent but no more 

11 than 24.9 percent less kilowatt hours per year 

12 than the 2001 energy conservation standards, 

13 ‘‘(C) $100 in the case of a refrigerator 

14 which is manufactured in calendar year 2008, 

15 2009, or 2010, and consumes at least 25 percent 

16 but not more than 29.9 percent less kilowatt 

17 hours per year than the 2001 energy conserva18 tion standards, and 

19 ‘‘(D) $200 in the case of a refrigerator man20 ufactured in calendar year 2008, 2009, or 2010 

21 and which consumes at least 30 percent less en22 ergy than the 2001 energy conservation stand23 ards.’’. 

24 (b) ELIGIBLE PRODUCTION.— 
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1 (1) SIMILAR TREATMENT FOR ALL APPLI2 ANCES.—Subsection (c) of section 45M is amended— 

3 (A) by striking paragraph (2), 

4 (B) by striking ‘‘(1) IN GENERAL’’ and all 

5 that follows through ‘‘the eligible’’ and inserting 

6 ‘‘The eligible’’, 

7 (C) by moving the text of such subsection in 

8 line with the subsection heading, and 

9 (D) by redesignating subparagraphs (A) 

10 and (B) as paragraphs (1) and (2), respectively, 

11 and by moving such paragraphs 2 ems to the 

12 left. 

13 (2) MODIFICATION OF BASE PERIOD.—Para14 graph (2) of section 45M(c), as amended by para15 graph (1), is amended by striking ‘‘3-calendar year’’ 

16 and inserting ‘‘2-calendar year’’. 

17 (c) TYPES OF ENERGY EFFICIENT APPLIANCES.—Sub18 section (d) of section 45M is amended to read as follows: 

19 ‘‘(d) TYPES OF ENERGY EFFICIENT APPLIANCE.—For 

20 purposes of this section, the types of energy efficient appli21 ances are— 

22 ‘‘(1) dishwashers described in subsection (b)(1), 

23 ‘‘(2) clothes washers described in subsection 

24 (b)(2), and 
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1 ‘‘(3) refrigerators described in subsection 

2 (b)(3).’’. 

3 (d) AGGREGATE CREDIT AMOUNT ALLOWED.— 

4 (1) INCREASE IN LIMIT.—Paragraph (1) of sec5 tion 45M(e) is amended to read as follows: 

6 ‘‘(1) AGGREGATE CREDIT AMOUNT ALLOWED.— 

7 The aggregate amount of credit allowed under sub8 section (a) with respect to a taxpayer for any taxable 

9 year shall not exceed $75,000,000 reduced by the 

10 amount of the credit allowed under subsection (a) to 

11 the taxpayer (or any predecessor) for all prior taxable 

12 years beginning after December 31, 2007.’’. 

13 (2) EXCEPTION FOR CERTAIN REFRIGERATOR

14 AND CLOTHES WASHERS.—Paragraph (2) of section 

15 45M(e) is amended to read as follows: 

16 ‘‘(2) AMOUNT ALLOWED FOR CERTAIN REFRIG17 ERATORS AND CLOTHES WASHERS.—Refrigerators de18 scribed in subsection (b)(3)(D) and clothes washers 

19 described in subsection (b)(2)(D) shall not be taken 

20 into account under paragraph (1).’’. 

21 (e) QUALIFIED ENERGY EFFICIENT APPLIANCES.— 

22 (1) IN GENERAL.—Paragraph (1) of section 

23 45M(f) is amended to read as follows: 
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1 ‘‘(1) QUALIFIED ENERGY EFFICIENT APPLI2 ANCE.—The term ‘qualified energy efficient appliance’ 

3 means— 

4 ‘‘(A) any dishwasher described in subsection 

5 (b)(1), 

6 ‘‘(B) any clothes washer described in sub7 section (b)(2), and 

8 ‘‘(C) any refrigerator described in sub9 section (b)(3).’’. 

10 (2) CLOTHES WASHER.—Section 45M(f)(3) is 

11 amended by inserting ‘‘commercial’’ before ‘‘residen12 tial’’ the second place it appears. 

13 (3) TOP-LOADING CLOTHES WASHER.—Sub14 section (f) of section 45M is amended by redesignating 

15 paragraphs (4), (5), (6), and (7) as paragraphs (5), 

16 (6), (7), and (8), respectively, and by inserting after 

17 paragraph (3) the following new paragraph: 

18 ‘‘(4) TOP-LOADING CLOTHES WASHER.—The 

19 term ‘top-loading clothes washer’ means a clothes 

20 washer which has the clothes container compartment 

21 access located on the top of the machine and which 

22 operates on a vertical axis.’’. 

23 (4) REPLACEMENT OF ENERGY FACTOR.—Section 

24 45M(f)(6), as redesignated by paragraph (3), is 

25 amended to read as follows: 
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1 ‘‘(6) MODIFIED ENERGY FACTOR.—The term 

2 ‘modified energy factor’ means the modified energy 

3 factor established by the Department of Energy for 

4 compliance with the Federal energy conservation 

5 standard.’’. 

6 (5) GALLONS PER CYCLE; WATER CONSUMPTION

7 FACTOR.—Section 45M(f), as amended by paragraph 

8 (3), is amended by adding at the end the following: 

9 ‘‘(9) GALLONS PER CYCLE.—The term ‘gallons 

10 per cycle’ means, with respect to a dishwasher, the 

11 amount of water, expressed in gallons, required to 

12 complete a normal cycle of a dishwasher. 

13 ‘‘(10) WATER CONSUMPTION FACTOR.—The term 

14 ‘water consumption factor’ means, with respect to a 

15 clothes washer, the quotient of the total weighted per16 cycle water consumption divided by the cubic foot (or 

17 liter) capacity of the clothes washer.’’. 

18 (f) EFFECTIVE DATE.—The amendments made by this 

19 section shall apply to appliances produced after December 

20 31, 2007. 

21 SEC. 306. ACCELERATED RECOVERY PERIOD FOR DEPRE22 CIATION OF SMART METERS AND SMART 

23 GRID SYSTEMS. 

24 (a) IN GENERAL.—Section 168(e)(3)(D) is amended 

25 by striking ‘‘and’’ at the end of clause (i), by striking the 
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1 period at the end of clause (ii) and inserting a comma, and 

2 by inserting after clause (ii) the following new clauses: 

3 ‘‘(iii) any qualified smart electric 

4 meter, and 

5 ‘‘(iv) any qualified smart electric grid 

6 system.’’. 

7 (b) DEFINITIONS.—Section 168(i) is amended by in8 serting at the end the following new paragraph: 

9 ‘‘(18) QUALIFIED SMART ELECTRIC METERS.— 

10 ‘‘(A) IN GENERAL.—The term ‘qualified 

11 smart electric meter’ means any smart electric 

12 meter which— 

13 ‘‘(i) is placed in service by a taxpayer 

14 who is a supplier of electric energy or a 

15 provider of electric energy services, and 

16 ‘‘(ii) does not have a class life (deter17 mined without regard to subsection (e)) of 

18 less than 10 years. 

19 ‘‘(B) SMART ELECTRIC METER.—For pur20 poses of subparagraph (A), the term ‘smart elec21 tric meter’ means any time-based meter and re22 lated communication equipment which is capable 

23 of being used by the taxpayer as part of a system 

24 that— 
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1 ‘‘(i) measures and records electricity 

2 usage data on a time-differentiated basis in 

3 at least 24 separate time segments per day, 

4 ‘‘(ii) provides for the exchange of infor5 mation between supplier or provider and 

6 the customer’s electric meter in support of 

7 time-based rates or other forms of demand 

8 response, 

9 ‘‘(iii) provides data to such supplier or 

10 provider so that the supplier or provider 

11 can provide energy usage information to 

12 customers electronically, and 

13 ‘‘(iv) provides net metering. 

14 ‘‘(19) QUALIFIED SMART ELECTRIC GRID SYS15 TEMS.— 

16 ‘‘(A) IN GENERAL.—The term ‘qualified 

17 smart electric grid system’ means any smart 

18 grid property which— 

19 ‘‘(i) is used as part of a system for 

20 electric distribution grid communications, 

21 monitoring, and management placed in 

22 service by a taxpayer who is a supplier of 

23 electric energy or a provider of electric en24 ergy services, and 
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1 ‘‘(ii) does not have a class life (deter2 mined without regard to subsection (e)) of 

3 less than 10 years. 

4 ‘‘(B) SMART GRID PROPERTY.—For the pur5 poses of subparagraph (A), the term ‘smart grid 

6 property’ means electronics and related equip7 ment that is capable of— 

8 ‘‘(i) sensing, collecting, and monitoring 

9 data of or from all portions of a utility’s 

10 electric distribution grid, 

11 ‘‘(ii) providing real-time, two-way 

12 communications to monitor or manage such 

13 grid, and 

14 ‘‘(iii) providing real time analysis of 

15 and event prediction based upon collected 

16 data that can be used to improve electric 

17 distribution system reliability, quality, and 

18 performance.’’. 

19 (c) CONTINUED APPLICATION OF 150 PERCENT DE20 CLINING BALANCE METHOD.—Paragraph (2) of section 

21 168(b) is amended by striking ‘‘or’’ at the end of subpara22 graph (B), by redesignating subparagraph (C) as subpara23 graph (D), and by inserting after subparagraph (B) the fol24 lowing new subparagraph: 
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1 ‘‘(C) any property (other than property de2 scribed in paragraph (3)) which is a qualified 

3 smart electric meter or qualified smart electric 

4 grid system, or’’. 

5 (d) EFFECTIVE DATE.—The amendments made by this 

6 section shall apply to property placed in service after the 

7 date of the enactment of this Act. 

8 SEC. 307. QUALIFIED GREEN BUILDING AND SUSTAINABLE 

9 DESIGN PROJECTS. 

10 (a) IN GENERAL.—Paragraph (8) of section 142(l) is 

11 amended by striking ‘‘September 30, 2009’’ and inserting 

12 ‘‘September 30, 2012’’. 

13 (b) TREATMENT OF CURRENT REFUNDING BONDS.— 

14 Paragraph (9) of section 142(l) is amended by striking ‘‘Oc15 tober 1, 2009’’ and inserting ‘‘October 1, 2012’’. 

16 (c) ACCOUNTABILITY.—The second sentence of section 

17 701(d) of the American Jobs Creation Act of 2004 is amend18 ed by striking ‘‘issuance,’’ and inserting ‘‘issuance of the 

19 last issue with respect to such project,’’. 

20 SEC. 308. SPECIAL DEPRECIATION ALLOWANCE FOR CER21 TAIN REUSE AND RECYCLING PROPERTY. 

22 (a) IN GENERAL.—Section 168 is amended by adding 

23 at the end the following new subsection: 

24 ‘‘(m) SPECIAL ALLOWANCE FOR CERTAIN REUSE AND

25 RECYCLING PROPERTY.— 
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1 ‘‘(1) IN GENERAL.—In the case of any qualified 

2 reuse and recycling property— 

3 ‘‘(A) the depreciation deduction provided by 

4 section 167(a) for the taxable year in which such 

5 property is placed in service shall include an al6 lowance equal to 50 percent of the adjusted basis 

7 of the qualified reuse and recycling property, 

8 and 

9 ‘‘(B) the adjusted basis of the qualified reuse 

10 and recycling property shall be reduced by the 

11 amount of such deduction before computing the 

12 amount otherwise allowable as a depreciation de13 duction under this chapter for such taxable year 

14 and any subsequent taxable year. 

15 ‘‘(2) QUALIFIED REUSE AND RECYCLING PROP16 ERTY.—For purposes of this subsection— 

17 ‘‘(A) IN GENERAL.—The term ‘qualified 

18 reuse and recycling property’ means any reuse 

19 and recycling property— 

20 ‘‘(i) to which this section applies, 

21 ‘‘(ii) which has a useful life of at least 

22 5 years, 

23 ‘‘(iii) the original use of which com24 mences with the taxpayer after August 31, 

25 2008, and 
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1 ‘‘(iv) which is— 

2 ‘‘(I) acquired by purchase (as de3 fined in section 179(d)(2)) by the tax4 payer after August 31, 2008, but only 

5 if no written binding contract for the 

6 acquisition was in effect before Sep7 tember 1, 2008, or 

8 ‘‘(II) acquired by the taxpayer 

9 pursuant to a written binding contract 

10 which was entered into after August 

11 31, 2008. 

12 ‘‘(B) EXCEPTIONS.— 

13 ‘‘(i) BONUS DEPRECIATION PROPERTY

14 UNDER SUBSECTION (k).—The term ‘quali15 fied reuse and recycling property’ shall not 

16 include any property to which section 

17 168(k) applies. 

18 ‘‘(ii) ALTERNATIVE DEPRECIATION

19 PROPERTY.—The term ‘qualified reuse and 

20 recycling property’ shall not include any 

21 property to which the alternative deprecia22 tion system under subsection (g) applies, de23 termined without regard to paragraph (7) 

24 of subsection (g) (relating to election to have 

25 system apply). 
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1 ‘‘(iii) ELECTION OUT.—If a taxpayer 

2 makes an election under this clause with re3 spect to any class of property for any tax4 able year, this subsection shall not apply to 

5 all property in such class placed in service 

6 during such taxable year. 

7 ‘‘(C) SPECIAL RULE FOR SELF-CON8 STRUCTED PROPERTY.—In the case of a taxpayer 

9 manufacturing, constructing, or producing prop10 erty for the taxpayer’s own use, the requirements 

11 of clause (iv) of subparagraph (A) shall be treat12 ed as met if the taxpayer begins manufacturing, 

13 constructing, or producing the property after Au14 gust 31, 2008. 

15 ‘‘(D) DEDUCTION ALLOWED IN COMPUTING

16 MINIMUM TAX.—For purposes of determining al17 ternative minimum taxable income under section 

18 55, the deduction under subsection (a) for quali19 fied reuse and recycling property shall be deter20 mined under this section without regard to any 

21 adjustment under section 56. 

22 ‘‘(3) DEFINITIONS.—For purposes of this sub23 section— 

24 ‘‘(A) REUSE AND RECYCLING PROPERTY.— 
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1 ‘‘(i) IN GENERAL.—The term ‘reuse 

2 and recycling property’ means any machin3 ery and equipment (not including buildings 

4 or real estate), along with all appurtenances 

5 thereto, including software necessary to op6 erate such equipment, which is used exclu7 sively to collect, distribute, or recycle quali8 fied reuse and recyclable materials. 

9 ‘‘(ii) EXCLUSION.—Such term does not 

10 include rolling stock or other equipment 

11 used to transport reuse and recyclable mate12 rials. 

13 ‘‘(B) QUALIFIED REUSE AND RECYCLABLE

14 MATERIALS.— 

15 ‘‘(i) IN GENERAL.—The term ‘qualified 

16 reuse and recyclable materials’ means scrap 

17 plastic, scrap glass, scrap textiles, scrap 

18 rubber, scrap packaging, recovered fiber, 

19 scrap ferrous and nonferrous metals, or elec20 tronic scrap generated by an individual or 

21 business. 

22 ‘‘(ii) ELECTRONIC SCRAP.—For pur23 poses of clause (i), the term ‘electronic 

24 scrap’ means— 
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1 ‘‘(I) any cathode ray tube, flat 

2 panel screen, or similar video display 

3 device with a screen size greater than 

4 4 inches measured diagonally, or 

5 ‘‘(II) any central processing unit. 

6 ‘‘(C) RECYCLING OR RECYCLE.—The term 

7 ‘recycling’ or ‘recycle’ means that process (in8 cluding sorting) by which worn or superfluous 

9 materials are manufactured or processed into 

10 specification grade commodities that are suitable 

11 for use as a replacement or substitute for virgin 

12 materials in manufacturing tangible consumer 

13 and commercial products, including packaging.’’. 

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

15 section shall apply to property placed in service after Au16 gust 31, 2008. 

17 TITLE IV—REVENUE 

18 PROVISIONS 

19 SEC. 401. LIMITATION OF DEDUCTION FOR INCOME ATTRIB20 UTABLE TO DOMESTIC PRODUCTION OF OIL, 

21 GAS, OR PRIMARY PRODUCTS THEREOF. 

22 (a) IN GENERAL.—Section 199(d) is amended by re23 designating paragraph (9) as paragraph (10) and by in24 serting after paragraph (8) the following new paragraph: 
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1 ‘‘(9) SPECIAL RULE FOR TAXPAYERS WITH OIL

2 RELATED QUALIFIED PRODUCTION ACTIVITIES IN3 COME.— 

4 ‘‘(A) IN GENERAL.—If a taxpayer has oil 

5 related qualified production activities income for 

6 any taxable year beginning after 2009, the 

7 amount otherwise allowable as a deduction under 

8 subsection (a) shall be reduced by 3 percent of 

9 the least of— 

10 ‘‘(i) the oil related qualified production 

11 activities income of the taxpayer for the 

12 taxable year, 

13 ‘‘(ii) the qualified production activities 

14 income of the taxpayer for the taxable year, 

15 or 

16 ‘‘(iii) taxable income (determined with17 out regard to this section). 

18 ‘‘(B) OIL RELATED QUALIFIED PRODUCTION

19 ACTIVITIES INCOME.—For purposes of this para20 graph, the term ‘oil related qualified production 

21 activities income’ means for any taxable year the 

22 qualified production activities income which is 

23 attributable to the production, refining, proc24 essing, transportation, or distribution of oil, gas, 
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1 or any primary product thereof during such tax2 able year. 

3 ‘‘(C) PRIMARY PRODUCT.—For purposes of 

4 this paragraph, the term ‘primary product’ has 

5 the same meaning as when used in section 

6 927(a)(2)(C), as in effect before its repeal.’’. 

7 (b) CONFORMING AMENDMENT.—Section 199(d)(2) 

8 (relating to application to individuals) is amended by 

9 striking ‘‘subsection (a)(1)(B)’’ and inserting ‘‘subsections 

10 (a)(1)(B) and (d)(9)(A)(iii)’’. 

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

12 section shall apply to taxable years beginning after Decem13 ber 31, 2008. 

14 SEC. 402. ELIMINATION OF THE DIFFERENT TREATMENT OF 

15 FOREIGN OIL AND GAS EXTRACTION INCOME 

16 AND FOREIGN OIL RELATED INCOME FOR 

17 PURPOSES OF THE FOREIGN TAX CREDIT. 

18 (a) IN GENERAL.—Subsections (a) and (b) of section 

19 907 (relating to special rules in case of foreign oil and gas 

20 income) are amended to read as follows: 

21 ‘‘(a) REDUCTION IN AMOUNT ALLOWED AS FOREIGN

22 TAX UNDER SECTION 901.—In applying section 901, the 

23 amount of any foreign oil and gas taxes paid or accrued 

24 (or deemed to have been paid) during the taxable year 

25 which would (but for this subsection) be taken into account 
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1 for purposes of section 901 shall be reduced by the amount 

2 (if any) by which the amount of such taxes exceeds the prod3 uct of— 

4 ‘‘(1) the amount of the combined foreign oil and 

5 gas income for the taxable year, 

6 ‘‘(2) multiplied by— 

7 ‘‘(A) in the case of a corporation, the per8 centage which is equal to the highest rate of tax 

9 specified under section 11(b), or 

10 ‘‘(B) in the case of an individual, a fraction 

11 the numerator of which is the tax against which 

12 the credit under section 901(a) is taken and the 

13 denominator of which is the taxpayer’s entire 

14 taxable income. 

15 ‘‘(b) COMBINED FOREIGN OIL AND GAS INCOME; FOR16 EIGN OIL AND GAS TAXES.—For purposes of this section— 

17 ‘‘(1) COMBINED FOREIGN OIL AND GAS IN18 COME.—The term ‘combined foreign oil and gas in19 come’ means, with respect to any taxable year, the 

20 sum of— 

21 ‘‘(A) foreign oil and gas extraction income, 

22 and 

23 ‘‘(B) foreign oil related income. 
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1 ‘‘(2) FOREIGN OIL AND GAS TAXES.—The term 

2 ‘foreign oil and gas taxes’ means, with respect to any 

3 taxable year, the sum of— 

4 ‘‘(A) oil and gas extraction taxes, and 

5 ‘‘(B) any income, war profits, and excess 

6 profits taxes paid or accrued (or deemed to have 

7 been paid or accrued under section 902 or 960) 

8 during the taxable year with respect to foreign 

9 oil related income (determined without regard to 

10 subsection (c)(4)) or loss which would be taken 

11 into account for purposes of section 901 without 

12 regard to this section.’’. 

13 (b) RECAPTURE OF FOREIGN OIL AND GAS LOSSES.— 

14 Paragraph (4) of section 907(c) (relating to recapture of 

15 foreign oil and gas extraction losses by recharacterizing 

16 later extraction income) is amended to read as follows: 

17 ‘‘(4) RECAPTURE OF FOREIGN OIL AND GAS

18 LOSSES BY RECHARACTERIZING LATER COMBINED

19 FOREIGN OIL AND GAS INCOME.— 

20 ‘‘(A) IN GENERAL.—The combined foreign 

21 oil and gas income of a taxpayer for a taxable 

22 year (determined without regard to this para23 graph) shall be reduced— 

24 ‘‘(i) first by the amount determined 

25 under subparagraph (B), and 
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1 ‘‘(ii) then by the amount determined 

2 under subparagraph (C). 

3 The aggregate amount of such reductions shall be 

4 treated as income (from sources without the 

5 United States) which is not combined foreign oil 

6 and gas income. 

7 ‘‘(B) REDUCTION FOR PRE-2009 FOREIGN

8 OIL EXTRACTION LOSSES.—The reduction under 

9 this paragraph shall be equal to the lesser of— 

10 ‘‘(i) the foreign oil and gas extraction 

11 income of the taxpayer for the taxable year 

12 (determined without regard to this para13 graph), or 

14 ‘‘(ii) the excess of— 

15 ‘‘(I) the aggregate amount of for16 eign oil extraction losses for preceding 

17 taxable years beginning after December 

18 31, 1982, and before January 1, 2009, 

19 over 

20 ‘‘(II) so much of such aggregate 

21 amount as was recharacterized under 

22 this paragraph (as in effect before and 

23 after the date of the enactment of the 

24 Energy Improvement and Extension 

25 Act of 2008) for preceding taxable 
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1 years beginning after December 31, 

2 1982. 

3 ‘‘(C) REDUCTION FOR POST-2008 FOREIGN

4 OIL AND GAS LOSSES.—The reduction under this 

5 paragraph shall be equal to the lesser of— 

6 ‘‘(i) the combined foreign oil and gas 

7 income of the taxpayer for the taxable year 

8 (determined without regard to this para9 graph), reduced by an amount equal to the 

10 reduction under subparagraph (A) for the 

11 taxable year, or 

12 ‘‘(ii) the excess of— 

13 ‘‘(I) the aggregate amount of for14 eign oil and gas losses for preceding 

15 taxable years beginning after December 

16 31, 2008, over 

17 ‘‘(II) so much of such aggregate 

18 amount as was recharacterized under 

19 this paragraph for preceding taxable 

20 years beginning after December 31, 

21 2008. 

22 ‘‘(D) FOREIGN OIL AND GAS LOSS DE23 FINED.— 
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1 ‘‘(i) IN GENERAL.—For purposes of 

2 this paragraph, the term ‘foreign oil and 

3 gas loss’ means the amount by which— 

4 ‘‘(I) the gross income for the tax5 able year from sources without the 

6 United States and its possessions 

7 (whether or not the taxpayer chooses 

8 the benefits of this subpart for such 

9 taxable year) taken into account in de10 termining the combined foreign oil and 

11 gas income for such year, is exceeded 

12 by 

13 ‘‘(II) the sum of the deductions 

14 properly apportioned or allocated 

15 thereto. 

16 ‘‘(ii) NET OPERATING LOSS DEDUCTION

17 NOT TAKEN INTO ACCOUNT.—For purposes 

18 of clause (i), the net operating loss deduc19 tion allowable for the taxable year under 

20 section 172(a) shall not be taken into ac21 count. 

22 ‘‘(iii) EXPROPRIATION AND CASUALTY

23 LOSSES NOT TAKEN INTO ACCOUNT.—For 

24 purposes of clause (i), there shall not be 

25 taken into account— 
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1 ‘‘(I) any foreign expropriation 

2 loss (as defined in section 172(h) (as in 

3 effect on the day before the date of the 

4 enactment of the Revenue Reconcili5 ation Act of 1990)) for the taxable 

6 year, or 

7 ‘‘(II) any loss for the taxable year 

8 which arises from fire, storm, ship9 wreck, or other casualty, or from theft, 

10 to the extent such loss is not compensated 

11 for by insurance or otherwise. 

12 ‘‘(iv) FOREIGN OIL EXTRACTION

13 LOSS.—For purposes of subparagraph 

14 (B)(ii)(I), foreign oil extraction losses shall 

15 be determined under this paragraph as in 

16 effect on the day before the date of the enact17 ment of the Energy Improvement and Ex18 tension Act of 2008.’’. 

19 (c) CARRYBACK AND CARRYOVER OF DISALLOWED

20 CREDITS.—Section 907(f) (relating to carryback and carry21 over of disallowed credits) is amended— 

22 (1) by striking ‘‘oil and gas extraction taxes’’ 

23 each place it appears and inserting ‘‘foreign oil and 

24 gas taxes’’, and 
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1 (2) by adding at the end the following new para2 graph: 

3 ‘‘(4) TRANSITION RULES FOR PRE-2009 AND 2009

4 DISALLOWED CREDITS.— 

5 ‘‘(A) PRE-2009 CREDITS.—In the case of any 

6 unused credit year beginning before January 1, 

7 2009, this subsection shall be applied to any un8 used oil and gas extraction taxes carried from 

9 such unused credit year to a year beginning 

10 after December 31, 2008— 

11 ‘‘(i) by substituting ‘oil and gas extrac12 tion taxes’ for ‘foreign oil and gas taxes’ 

13 each place it appears in paragraphs (1), 

14 (2), and (3), and 

15 ‘‘(ii) by computing, for purposes of 

16 paragraph (2)(A), the limitation under sub17 paragraph (A) for the year to which such 

18 taxes are carried by substituting ‘foreign oil 

19 and gas extraction income’ for ‘foreign oil 

20 and gas income’ in subsection (a). 

21 ‘‘(B) 2009 CREDITS.—In the case of any 

22 unused credit year beginning in 2009, the 

23 amendments made to this subsection by the En24 ergy Improvement and Extension Act of 2008 

25 shall be treated as being in effect for any pre-
238 

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1 ceding year beginning before January 1, 2009, 

2 solely for purposes of determining how much of 

3 the unused foreign oil and gas taxes for such un4 used credit year may be deemed paid or accrued 

5 in such preceding year.’’. 

6 (d) CONFORMING AMENDMENT.—Section 6501(i) is 

7 amended by striking ‘‘oil and gas extraction taxes’’ and in8 serting ‘‘foreign oil and gas taxes’’. 

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

10 section shall apply to taxable years beginning after Decem11 ber 31, 2008. 

12 SEC. 403. BROKER REPORTING OF CUSTOMER’S BASIS IN 

13 SECURITIES TRANSACTIONS. 

14 (a) IN GENERAL.— 

15 (1) BROKER REPORTING FOR SECURITIES TRANS16 ACTIONS.—Section 6045 is amended by adding at the 

17 end the following new subsection: 

18 ‘‘(g) ADDITIONAL INFORMATION REQUIRED IN THE

19 CASE OF SECURITIES TRANSACTIONS, ETC.— 

20 ‘‘(1) IN GENERAL.—If a broker is otherwise re21 quired to make a return under subsection (a) with re22 spect to the gross proceeds of the sale of a covered se23 curity, the broker shall include in such return the in24 formation described in paragraph (2). 

25 ‘‘(2) ADDITIONAL INFORMATION REQUIRED.— 
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1 ‘‘(A) IN GENERAL.—The information re2 quired under paragraph (1) to be shown on a re3 turn with respect to a covered security of a cus4 tomer shall include the customer’s adjusted basis 

5 in such security and whether any gain or loss 

6 with respect to such security is long-term or 

7 short-term (within the meaning of section 1222). 

8 ‘‘(B) DETERMINATION OF ADJUSTED

9 BASIS.—For purposes of subparagraph (A)— 

10 ‘‘(i) IN GENERAL.—The customer’s ad11 justed basis shall be determined— 

12 ‘‘(I) in the case of any security 

13 (other than any stock for which an av14 erage basis method is permissible 

15 under section 1012), in accordance 

16 with the first-in first-out method unless 

17 the customer notifies the broker by 

18 means of making an adequate identi19 fication of the stock sold or transferred, 

20 and 

21 ‘‘(II) in the case of any stock for 

22 which an average basis method is per23 missible under section 1012, in accord24 ance with the broker’s default method 

25 unless the customer notifies the broker 
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1 that he elects another acceptable meth2 od under section 1012 with respect to 

3 the account in which such stock is held. 

4 ‘‘(ii) EXCEPTION FOR WASH SALES.— 

5 Except as otherwise provided by the Sec6 retary, the customer’s adjusted basis shall be 

7 determined without regard to section 1091 

8 (relating to loss from wash sales of stock or 

9 securities) unless the transactions occur in 

10 the same account with respect to identical 

11 securities. 

12 ‘‘(3) COVERED SECURITY.—For purposes of this 

13 subsection— 

14 ‘‘(A) IN GENERAL.—The term ‘covered secu15 rity’ means any specified security acquired on or 

16 after the applicable date if such security— 

17 ‘‘(i) was acquired through a trans18 action in the account in which such security 

19 is held, or 

20 ‘‘(ii) was transferred to such account 

21 from an account in which such security was 

22 a covered security, but only if the broker re23 ceived a statement under section 6045A 

24 with respect to the transfer. 
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1 ‘‘(B) SPECIFIED SECURITY.—The term 

2 ‘specified security’ means— 

3 ‘‘(i) any share of stock in a corpora4 tion, 

5 ‘‘(ii) any note, bond, debenture, or 

6 other evidence of indebtedness, 

7 ‘‘(iii) any commodity, or contract or 

8 derivative with respect to such commodity, 

9 if the Secretary determines that adjusted 

10 basis reporting is appropriate for purposes 

11 of this subsection, and 

12 ‘‘(iv) any other financial instrument 

13 with respect to which the Secretary deter14 mines that adjusted basis reporting is ap15 propriate for purposes of this subsection. 

16 ‘‘(C) APPLICABLE DATE.—The term ‘appli17 cable date’ means— 

18 ‘‘(i) January 1, 2011, in the case of 

19 any specified security which is stock in a 

20 corporation (other than any stock described 

21 in clause (ii)), 

22 ‘‘(ii) January 1, 2012, in the case of 

23 any stock for which an average basis meth24 od is permissible under section 1012, and 
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1 ‘‘(iii) January 1, 2013, or such later 

2 date determined by the Secretary in the case 

3 of any other specified security. 

4 ‘‘(4) TREATMENT OF S CORPORATIONS.—In the 

5 case of the sale of a covered security acquired by an 

6 S corporation (other than a financial institution) 

7 after December 31, 2011, such S corporation shall be 

8 treated in the same manner as a partnership for pur9 poses of this section. 

10 ‘‘(5) SPECIAL RULES FOR SHORT SALES.—In the 

11 case of a short sale, reporting under this section shall 

12 be made for the year in which such sale is closed.’’. 

13 (2) BROKER INFORMATION REQUIRED WITH RE14 SPECT TO OPTIONS.—Section 6045, as amended by 

15 subsection (a), is amended by adding at the end the 

16 following new subsection: 

17 ‘‘(h) APPLICATION TO OPTIONS ON SECURITIES.— 

18 ‘‘(1) EXERCISE OF OPTION.—For purposes of 

19 this section, if a covered security is acquired or dis20 posed of pursuant to the exercise of an option that 

21 was granted or acquired in the same account as the 

22 covered security, the amount received with respect to 

23 the grant or paid with respect to the acquisition of 

24 such option shall be treated as an adjustment to gross 
243 

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1 proceeds or as an adjustment to basis, as the case 

2 may be. 

3 ‘‘(2) LAPSE OR CLOSING TRANSACTION.—In the 

4 case of the lapse (or closing transaction (as defined in 

5 section 1234(b)(2)(A))) of an option on a specified se6 curity or the exercise of a cash-settled option on a 

7 specified security, reporting under subsections (a) and 

8 (g) with respect to such option shall be made for the 

9 calendar year which includes the date of such lapse, 

10 closing transaction, or exercise. 

11 ‘‘(3) PROSPECTIVE APPLICATION.—Paragraphs 

12 (1) and (2) shall not apply to any option which is 

13 granted or acquired before January 1, 2013. 

14 ‘‘(4) DEFINITIONS.—For purposes of this sub15 section, the terms ‘covered security’ and ‘specified se16 curity’ shall have the meanings given such terms in 

17 subsection (g)(3).’’. 

18 (3) EXTENSION OF PERIOD FOR STATEMENTS

19 SENT TO CUSTOMERS.— 

20 (A) IN GENERAL.—Subsection (b) of section 

21 6045 is amended by striking ‘‘January 31’’ and 

22 inserting ‘‘February 15’’. 

23 (B) STATEMENTS RELATED TO SUBSTITUTE

24 PAYMENTS.—Subsection (d) of section 6045 is 

25 amended— 
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1 (i) by striking ‘‘at such time and’’, and 

2 (ii) by inserting after ‘‘other item.’’ the 

3 following new sentence: ‘‘The written state4 ment required under the preceding sentence 

5 shall be furnished on or before February 15 

6 of the year following the calendar year in 

7 which the payment was made.’’. 

8 (C) OTHER STATEMENTS.—Subsection (b) 

9 of section 6045 is amended by adding at the end 

10 the following: ‘‘In the case of a consolidated re11 porting statement (as defined in regulations) 

12 with respect to any customer, any statement 

13 which would otherwise be required to be fur14 nished on or before January 31 of a calendar 

15 year with respect to any item reportable to the 

16 taxpayer shall instead be required to be fur17 nished on or before February 15 of such calendar 

18 year if furnished with such consolidated report19 ing statement.’’. 

20 (b) DETERMINATION OF BASIS OF CERTAIN SECURI21 TIES ON ACCOUNT BY ACCOUNT OR AVERAGE BASIS METH22 OD.—Section 1012 is amended— 

23 (1) by striking ‘‘The basis of property’’ and in24 serting the following: 

25 ‘‘(a) IN GENERAL.—The basis of property’’, 
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1 (2) by striking ‘‘The cost of real property’’ and 

2 inserting the following: 

3 ‘‘(b) SPECIAL RULE FOR APPORTIONED REAL ESTATE

4 TAXES.—The cost of real property’’, and 

5 (3) by adding at the end the following new sub6 sections: 

7 ‘‘(c) DETERMINATIONS BY ACCOUNT.— 

8 ‘‘(1) IN GENERAL.—In the case of the sale, ex9 change, or other disposition of a specified security on 

10 or after the applicable date, the conventions pre11 scribed by regulations under this section shall be ap12 plied on an account by account basis. 

13 ‘‘(2) APPLICATION TO CERTAIN FUNDS.— 

14 ‘‘(A) IN GENERAL.—Except as provided in 

15 subparagraph (B), any stock for which an aver16 age basis method is permissible under section 

17 1012 which is acquired before January 1, 2012, 

18 shall be treated as a separate account from any 

19 such stock acquired on or after such date. 

20 ‘‘(B) ELECTION FUND FOR TREATMENT AS

21 SINGLE ACCOUNT.—If a fund described in sub22 paragraph (A) elects to have this subparagraph 

23 apply with respect to one or more of its stock24 holders— 
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1 ‘‘(i) subparagraph (A) shall not apply 

2 with respect to any stock in such fund held 

3 by such stockholders, and 

4 ‘‘(ii) all stock in such fund which is 

5 held by such stockholders shall be treated as 

6 covered securities described in section 

7 6045(g)(3) without regard to the date of the 

8 acquisition of such stock. 

9 A rule similar to the rule of the preceding sen10 tence shall apply with respect to a broker holding 

11 such stock as a nominee. 

12 ‘‘(3) DEFINITIONS.—For purposes of this section, 

13 the terms ‘specified security’ and ‘applicable date’ 

14 shall have the meaning given such terms in section 

15 6045(g). 

16 ‘‘(d) AVERAGE BASIS FOR STOCK ACQUIRED PURSU17 ANT TO A DIVIDEND REINVESTMENT PLAN.— 

18 ‘‘(1) IN GENERAL.—In the case of any stock ac19 quired after December 31, 2010, in connection with a 

20 dividend reinvestment plan, the basis of such stock 

21 while held as part of such plan shall be determined 

22 using one of the methods which may be used for deter23 mining the basis of stock in an open-end fund. 

24 ‘‘(2) TREATMENT AFTER TRANSFER.—In the case 

25 of the transfer to another account of stock to which 
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1 paragraph (1) applies, such stock shall have a cost 

2 basis in such other account equal to its basis in the 

3 dividend reinvestment plan immediately before such 

4 transfer (properly adjusted for any fees or other 

5 charges taken into account in connection with such 

6 transfer). 

7 ‘‘(3) SEPARATE ACCOUNTS; ELECTION FOR

8 TREATMENT AS SINGLE ACCOUNT.—Rules similar to 

9 the rules of subsection (c)(2) shall apply for purposes 

10 of this subsection. 

11 ‘‘(4) DIVIDEND REINVESTMENT PLAN.—For pur12 poses of this subsection— 

13 ‘‘(A) IN GENERAL.—The term ‘dividend re14 investment plan’ means any arrangement under 

15 which dividends on any stock are reinvested in 

16 stock identical to the stock with respect to which 

17 the dividends are paid. 

18 ‘‘(B) INITIAL STOCK ACQUISITION TREATED

19 AS ACQUIRED IN CONNECTION WITH PLAN.— 

20 Stock shall be treated as acquired in connection 

21 with a dividend reinvestment plan if such stock 

22 is acquired pursuant to such plan or if the divi23 dends paid on such stock are subject to such 

24 plan.’’. 
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1 (c) INFORMATION BY TRANSFERORS TO AID BRO2 KERS.— 

3 (1) IN GENERAL.—Subpart B of part III of sub4 chapter A of chapter 61 is amended by inserting after 

5 section 6045 the following new section: 

6 ‘‘SEC. 6045A. INFORMATION REQUIRED IN CONNECTION 

7 WITH TRANSFERS OF COVERED SECURITIES 

8 TO BROKERS. 

9 ‘‘(a) FURNISHING OF INFORMATION.—Every applica10 ble person which transfers to a broker (as defined in section 

11 6045(c)(1)) a security which is a covered security (as de12 fined in section 6045(g)(3)) in the hands of such applicable 

13 person shall furnish to such broker a written statement in 

14 such manner and setting forth such information as the Sec15 retary may by regulations prescribe for purposes of ena16 bling such broker to meet the requirements of section 

17 6045(g). 

18 ‘‘(b) APPLICABLE PERSON.—For purposes of sub19 section (a), the term ‘applicable person’ means— 

20 ‘‘(1) any broker (as defined in section 

21 6045(c)(1)), and 

22 ‘‘(2) any other person as provided by the Sec23 retary in regulations. 

24 ‘‘(c) TIME FOR FURNISHING STATEMENT.—Except as 

25 otherwise provided by the Secretary, any statement required 
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1 by subsection (a) shall be furnished not later than 15 days 

2 after the date of the transfer described in such subsection.’’. 

3 (2) ASSESSABLE PENALTIES.—Paragraph (2) of 

4 section 6724(d), as amended by the Housing Assist5 ance Tax Act of 2008, is amended by redesignating 

6 subparagraphs (I) through (DD) as subparagraphs 

7 (J) through (EE), respectively, and by inserting after 

8 subparagraph (H) the following new subparagraph: 

9 ‘‘(I) section 6045A (relating to information 

10 required in connection with transfers of covered 

11 securities to brokers),’’. 

12 (3) CLERICAL AMENDMENT.—The table of sec13 tions for subpart B of part III of subchapter A of 

14 chapter 61 is amended by inserting after the item re15 lating to section 6045 the following new item: 

‘‘Sec. 6045A. Information required in connection with transfers of covered securities to brokers.’’. 

16 (d) ADDITIONAL ISSUER INFORMATION TO AID BRO17 KERS.— 

18 (1) IN GENERAL.—Subpart B of part III of sub19 chapter A of chapter 61, as amended by subsection 

20 (b), is amended by inserting after section 6045A the 

21 following new section: 
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1 ‘‘SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING 

2 BASIS OF SPECIFIED SECURITIES. 

3 ‘‘(a) IN GENERAL.—According to the forms or regula4 tions prescribed by the Secretary, any issuer of a specified 

5 security shall make a return setting forth— 

6 ‘‘(1) a description of any organizational action 

7 which affects the basis of such specified security of 

8 such issuer, 

9 ‘‘(2) the quantitative effect on the basis of such 

10 specified security resulting from such action, and 

11 ‘‘(3) such other information as the Secretary 

12 may prescribe. 

13 ‘‘(b) TIME FOR FILING RETURN.—Any return required 

14 by subsection (a) shall be filed not later than the earlier 

15 of— 

16 ‘‘(1) 45 days after the date of the action de17 scribed in subsection (a), or 

18 ‘‘(2) January 15 of the year following the cal19 endar year during which such action occurred. 

20 ‘‘(c) STATEMENTS TO BE FURNISHED TO HOLDERS OF

21 SPECIFIED SECURITIES OR THEIR NOMINEES.—According 

22 to the forms or regulations prescribed by the Secretary, 

23 every person required to make a return under subsection 

24 (a) with respect to a specified security shall furnish to the 

25 nominee with respect to the specified security (or certificate 
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1 holder if there is no nominee) a written statement show2 ing— 

3 ‘‘(1) the name, address, and phone number of the 

4 information contact of the person required to make 

5 such return, 

6 ‘‘(2) the information required to be shown on 

7 such return with respect to such security, and 

8 ‘‘(3) such other information as the Secretary 

9 may prescribe. 

10 The written statement required under the preceding sen11 tence shall be furnished to the holder on or before January 

12 15 of the year following the calendar year during which 

13 the action described in subsection (a) occurred. 

14 ‘‘(d) SPECIFIED SECURITY.—For purposes of this sec15 tion, the term ‘specified security’ has the meaning given 

16 such term by section 6045(g)(3)(B). No return shall be re17 quired under this section with respect to actions described 

18 in subsection (a) with respect to a specified security which 

19 occur before the applicable date (as defined in section 

20 6045(g)(3)(C)) with respect to such security. 

21 ‘‘(e) PUBLIC REPORTING IN LIEU OF RETURN.—The 

22 Secretary may waive the requirements under subsections 

23 (a) and (c) with respect to a specified security, if the person 

24 required to make the return under subsection (a) makes 

25 publicly available, in such form and manner as the Sec-
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1 retary determines necessary to carry out the purposes of this 

2 section— 

3 ‘‘(1) the name, address, phone number, and 

4 email address of the information contact of such per5 son, and 

6 ‘‘(2) the information described in paragraphs 

7 (1), (2), and (3) of subsection (a).’’. 

8 (2) ASSESSABLE PENALTIES.— 

9 (A) Subparagraph (B) of section 

10 6724(d)(1), as amended by the Housing Assist11 ance Tax Act of 2008, is amended by redesig12 nating clause (iv) and each of the clauses which 

13 follow as clauses (v) through (xxiii), respectively, 

14 and by inserting after clause (iii) the following 

15 new clause: 

16 ‘‘(iv) section 6045B(a) (relating to re17 turns relating to actions affecting basis of 

18 specified securities),’’. 

19 (B) Paragraph (2) of section 6724(d), as 

20 amended by the Housing Assistance Tax Act of 

21 2008 and by subsection (c)(2), is amended by re22 designating subparagraphs (J) through (EE) as 

23 subparagraphs (K) through (FF), respectively, 

24 and by inserting after subparagraph (I) the fol25 lowing new subparagraph: 
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1 ‘‘(J) subsections (c) and (e) of section 

2 6045B (relating to returns relating to actions af3 fecting basis of specified securities),’’. 

4 (3) CLERICAL AMENDMENT.—The table of sec5 tions for subpart B of part III of subchapter A of 

6 chapter 61, as amended by subsection (b)(3), is 

7 amended by inserting after the item relating to sec8 tion 6045A the following new item: 

‘‘Sec. 6045B. Returns relating to actions affecting basis of specified securities.’’. 

9 (e) EFFECTIVE DATE.— 

10 (1) IN GENERAL.—Except as otherwise provided 

11 in this subsection, the amendments made by this sec12 tion shall take effect on January 1, 2011. 

13 (2) EXTENSION OF PERIOD FOR STATEMENTS

14 SENT TO CUSTOMERS.—The amendments made by 

15 subsection (a)(3) shall apply to statements required to 

16 be furnished after December 31, 2008. 

17 SEC. 404. 0.2 PERCENT FUTA SURTAX. 

18 (a) IN GENERAL.—Section 3301 (relating to rate of 

19 tax) is amended— 

20 (1) by striking ‘‘through 2008’’ in paragraph (1) 

21 and inserting ‘‘through 2009’’, and 

22 (2) by striking ‘‘calendar year 2009’’ in para23 graph (2) and inserting ‘‘calendar year 2010’’. 

24 (b) EFFECTIVE DATE.—The amendments made by this 

25 section shall apply to wages paid after December 31, 2008. 
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1 SEC. 405. INCREASE AND EXTENSION OF OIL SPILL LIABIL2 ITY TRUST FUND TAX. 

3 (a) INCREASE IN RATE.— 

4 (1) IN GENERAL.—Section 4611(c)(2)(B) (relat5 ing to rates) is amended by striking ‘‘is 5 cents a bar6 rel.’’ and inserting ‘‘is— 

7 ‘‘(i) in the case of crude oil received or 

8 petroleum products entered before January 

9 1, 2017, 8 cents a barrel, and 

10 ‘‘(ii) in the case of crude oil received or 

11 petroleum products entered after December 

12 31, 2016, 9 cents a barrel.’’. 

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

14 this subsection shall apply on and after the first day 

15 of the first calendar quarter beginning more than 60 

16 days after the date of the enactment of this Act. 

17 (b) EXTENSION.— 

18 (1) IN GENERAL.—Section 4611(f) (relating to 

19 application of Oil Spill Liability Trust Fund financ20 ing rate) is amended by striking paragraphs (2) and 

21 (3) and inserting the following new paragraph: 

22 ‘‘(2) TERMINATION.—The Oil Spill Liability 

23 Trust Fund financing rate shall not apply after De24 cember 31, 2017.’’. 
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1 (2) CONFORMING AMENDMENT.—Section 

2 4611(f)(1) is amended by striking ‘‘paragraphs (2) 

3 and (3)’’ and inserting ‘‘paragraph (2)’’. 

4 (3) EFFECTIVE DATE.—The amendments made 

5 by this subsection shall take effect on the date of the 

6 enactment of this Act. 

7 DIVISION C—TAX EXTENDERS 

8 AND ALTERNATIVE MINIMUM 

9 TAX RELIEF 

10 SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; 

11 TABLE OF CONTENTS. 

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

13 ‘‘Tax Extenders and Alternative Minimum Tax Relief Act 

14 of 2008’’. 

15 (b) AMENDMENT OF 1986 CODE.—Except as otherwise 

16 expressly provided, whenever in this division an amend17 ment or repeal is expressed in terms of an amendment to, 

18 or repeal of, a section or other provision, the reference shall 

19 be considered to be made to a section or other provision 

20 of the Internal Revenue Code of 1986. 

21 (c) TABLE OF CONTENTS.—The table of contents of this 

22 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. 
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Sec. 103. Increase of AMT refundable credit amount for individuals with longterm unused credits for prior year minimum tax liability, etc. 

TITLE II—EXTENSION OF INDIVIDUAL TAX PROVISIONS 

Sec. 201. Deduction for State and local sales taxes. 

Sec. 202. Deduction of qualified tuition and related expenses. 

Sec. 203. Deduction for certain expenses of elementary and secondary school 

teachers. 

Sec. 204. Additional standard deduction for real property taxes for nonitemizers. 

Sec. 205. Tax-free distributions from individual retirement plans for charitable 

purposes. 

Sec. 206. Treatment of certain dividends of regulated investment companies. 

Sec. 207. Stock in RIC for purposes of determining estates of nonresidents not 

citizens. 

Sec. 208. Qualified investment entities. 

TITLE III—EXTENSION OF BUSINESS TAX PROVISIONS 

Sec. 301. Extension and modification of research credit. 

Sec. 302. New markets tax credit. 

Sec. 303. Subpart F exception for active financing income. 

Sec. 304. Extension of look-thru rule for related controlled foreign corporations. 

Sec. 305. Extension of 15-year straight-line cost recovery for qualified leasehold 

improvements and qualified restaurant improvements; 15-year 

straight-line cost recovery for certain improvements to retail 

space. 

Sec. 306. Modification of tax treatment of certain payments to controlling exempt 

organizations. 

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. 
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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. 

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. 
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1 TITLE I—ALTERNATIVE 

2 MINIMUM TAX RELIEF 

3 SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RE4 LIEF FOR NONREFUNDABLE PERSONAL 

5 CREDITS. 

6 (a) IN GENERAL.—Paragraph (2) of section 26(a) (re7 lating to special rule for taxable years 2000 through 2007) 

8 is amended— 

9 (1) by striking ‘‘or 2007’’ and inserting ‘‘2007, 

10 or 2008’’, and 

11 (2) by striking ‘‘2007’’ in the heading thereof and 

12 inserting ‘‘2008’’. 

13 (b) EFFECTIVE DATE.—The amendments made by this 

14 section shall apply to taxable years beginning after Decem15 ber 31, 2007. 

16 SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MIN17 IMUM TAX EXEMPTION AMOUNT. 

18 (a) IN GENERAL.—Paragraph (1) of section 55(d) (re19 lating to exemption amount) is amended— 

20 (1) by striking ‘‘($66,250 in the case of taxable 

21 years beginning in 2007)’’ in subparagraph (A) and 

22 inserting ‘‘($69,950 in the case of taxable years begin23 ning in 2008)’’, and 

24 (2) by striking ‘‘($44,350 in the case of taxable 

25 years beginning in 2007)’’ in subparagraph (B) and 
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1 inserting ‘‘($46,200 in the case of taxable years begin2 ning in 2008)’’. 

3 (b) EFFECTIVE DATE.—The amendments made by this 

4 section shall apply to taxable years beginning after Decem5 ber 31, 2007. 

6 SEC. 103. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT 

7 FOR INDIVIDUALS WITH LONG-TERM UNUSED 

8 CREDITS FOR PRIOR YEAR MINIMUM TAX LI9 ABILITY, ETC. 

10 (a) IN GENERAL.—Paragraph (2) of section 53(e) is 

11 amended to read as follows: 

12 ‘‘(2) AMT REFUNDABLE CREDIT AMOUNT.—For 

13 purposes of paragraph (1), the term ‘AMT refundable 

14 credit amount’ means, with respect to any taxable 

15 year, the amount (not in excess of the long-term un16 used minimum tax credit for such taxable year) equal 

17 to the greater of— 

18 ‘‘(A) 50 percent of the long-term unused 

19 minimum tax credit for such taxable year, or 

20 ‘‘(B) the amount (if any) of the AMT re21 fundable credit amount determined under this 

22 paragraph for the taxpayer’s preceding taxable 

23 year (determined without regard to subsection 

24 (f)(2)).’’. 
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1 (b) TREATMENT OF CERTAIN UNDERPAYMENTS, IN2 TEREST, AND PENALTIES ATTRIBUTABLE TO THE TREAT3 MENT OF INCENTIVE STOCK OPTIONS.—Section 53 is 

4 amended by adding at the end the following new subsection: 

5 ‘‘(f) TREATMENT OF CERTAIN UNDERPAYMENTS, IN6 TEREST, AND PENALTIES ATTRIBUTABLE TO THE TREAT7 MENT OF INCENTIVE STOCK OPTIONS.— 

8 ‘‘(1) ABATEMENT.—Any underpayment of tax 

9 outstanding on the date of the enactment of this sub10 section which is attributable to the application of sec11 tion 56(b)(3) for any taxable year ending before Jan12 uary 1, 2008, and any interest or penalty with re13 spect to such underpayment which is outstanding on 

14 such date of enactment, is hereby abated. The amount 

15 determined under subsection (b)(1) shall not include 

16 any tax abated under the preceding sentence. 

17 ‘‘(2) INCREASE IN CREDIT FOR CERTAIN INTER18 EST AND PENALTIES ALREADY PAID.—The AMT re19 fundable credit amount, and the minimum tax credit 

20 determined under subsection (b), for the taxpayer’s 

21 first 2 taxable years beginning after December 31, 

22 2007, shall each be increased by 50 percent of the ag23 gregate amount of the interest and penalties which 

24 were paid by the taxpayer before the date of the enact-
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1 ment of this subsection and which would (but for such 

2 payment) have been abated under paragraph (1).’’. 

3 (c) EFFECTIVE DATE.— 

4 (1) IN GENERAL.—Except as provided in para5 graph (2), the amendments made by this section shall 

6 apply to taxable years beginning after December 31, 

7 2007. 

8 (2) ABATEMENT.—Section 53(f)(1), as added by 

9 subsection (b), shall take effect on the date of the en10 actment of this Act. 

11 TITLE II—EXTENSION OF 

12 INDIVIDUAL TAX PROVISIONS 

13 SEC. 201. DEDUCTION FOR STATE AND LOCAL SALES TAXES. 

14 (a) IN GENERAL.—Subparagraph (I) of section 

15 164(b)(5) is amended by striking ‘‘January 1, 2008’’ and 

16 inserting ‘‘January 1, 2010’’. 

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

18 section shall apply to taxable years beginning after Decem19 ber 31, 2007. 

20 SEC. 202. DEDUCTION OF QUALIFIED TUITION AND RE21 LATED EXPENSES. 

22 (a) IN GENERAL.—Subsection (e) of section 222 (relat23 ing to termination) is amended by striking ‘‘December 31, 

24 2007’’ and inserting ‘‘December 31, 2009’’. 
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1 (b) EFFECTIVE DATE.—The amendment made by this 

2 section shall apply to taxable years beginning after Decem3 ber 31, 2007. 

4 SEC. 203. DEDUCTION FOR CERTAIN EXPENSES OF ELEMEN5 TARY AND SECONDARY SCHOOL TEACHERS. 

6 (a) IN GENERAL.—Subparagraph (D) of section 

7 62(a)(2) (relating to certain expenses of elementary and sec8 ondary school teachers) is amended by striking ‘‘or 2007’’ 

9 and inserting ‘‘2007, 2008, or 2009’’. 

10 (b) EFFECTIVE DATE.—The amendment made by sub11 section (a) shall apply to taxable years beginning after De12 cember 31, 2007. 

13 SEC. 204. ADDITIONAL STANDARD DEDUCTION FOR REAL 

14 PROPERTY TAXES FOR NONITEMIZERS. 

15 (a) IN GENERAL.—Subparagraph (C) of section 

16 63(c)(1), as added by the Housing Assistance Tax Act of 

17 2008, is amended by inserting ‘‘or 2009’’ after ‘‘2008’’. 

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

19 section shall apply to taxable years beginning after Decem20 ber 31, 2008. 
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1 SEC. 205. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE2 TIREMENT PLANS FOR CHARITABLE PUR3 POSES. 

4 (a) IN GENERAL.—Subparagraph (F) of section 

5 408(d)(8) (relating to termination) is amended by striking 

6 ‘‘December 31, 2007’’ and inserting ‘‘December 31, 2009’’. 

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

8 section shall apply to distributions made in taxable years 

9 beginning after December 31, 2007. 

10 SEC. 206. TREATMENT OF CERTAIN DIVIDENDS OF REGU11 LATED INVESTMENT COMPANIES. 

12 (a) INTEREST-RELATED DIVIDENDS.—Subparagraph 

13 (C) of section 871(k)(1) (defining interest-related dividend) 

14 is amended by striking ‘‘December 31, 2007’’ and inserting 

15 ‘‘December 31, 2009’’. 

16 (b) SHORT-TERM CAPITAL GAIN DIVIDENDS.—Sub17 paragraph (C) of section 871(k)(2) (defining short-term 

18 capital gain dividend) is amended by striking ‘‘December 

19 31, 2007’’ and inserting ‘‘December 31, 2009’’. 

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

21 section shall apply to dividends with respect to taxable 

22 years of regulated investment companies beginning after 

23 December 31, 2007. 
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1 SEC. 207. STOCK IN RIC FOR PURPOSES OF DETERMINING 

2 ESTATES OF NONRESIDENTS NOT CITIZENS. 

3 (a) IN GENERAL.—Paragraph (3) of section 2105(d) 

4 (relating to stock in a RIC) is amended by striking ‘‘Decem5 ber 31, 2007’’ and inserting ‘‘December 31, 2009’’. 

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

7 section shall apply to decedents dying after December 31, 

8 2007. 

9 SEC. 208. QUALIFIED INVESTMENT ENTITIES. 

10 (a) IN GENERAL.—Clause (ii) of section 897(h)(4)(A) 

11 (relating to termination) is amended by striking ‘‘December 

12 31, 2007’’ and inserting ‘‘December 31, 2009’’. 

13 (b) EFFECTIVE DATE.—The amendment made by sub14 section (a) shall take effect on January 1, 2008. 

15 TITLE III—EXTENSION OF 

16 BUSINESS TAX PROVISIONS 

17 SEC. 301. EXTENSION AND MODIFICATION OF RESEARCH 

18 CREDIT. 

19 (a) EXTENSION.— 

20 (1) IN GENERAL.—Section 41(h) (relating to ter21 mination) is amended by striking ‘‘December 31, 

22 2007’’ and inserting ‘‘December 31, 2009’’ in para23 graph (1)(B). 

24 (2) CONFORMING AMENDMENT.—Subparagraph 

25 (D) of section 45C(b)(1) (relating to special rule) is 
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1 amended by striking ‘‘after December 31, 2007’’ and 

2 inserting ‘‘after December 31, 2009’’. 

3 (b) TERMINATION OF ALTERNATIVE INCREMENTAL

4 CREDIT.—Section 41(h) is amended by redesignating para5 graph (2) as paragraph (3), and by inserting after para6 graph (1) the following new paragraph: 

7 ‘‘(2) TERMINATION OF ALTERNATIVE INCRE8 MENTAL CREDIT.—No election under subsection (c)(4) 

9 shall apply to taxable years beginning after December 

10 31, 2008.’’. 

11 (c) MODIFICATION OF ALTERNATIVE SIMPLIFIED

12 CREDIT.—Paragraph (5)(A) of section 41(c) (relating to 

13 election of alternative simplified credit) is amended by 

14 striking ‘‘12 percent’’ and inserting ‘‘14 percent (12 percent 

15 in the case of taxable years ending before January 1, 

16 2009)’’. 

17 (d) TECHNICAL CORRECTION.—Paragraph (3) of sec18 tion 41(h) is amended to read as follows: 

19 ‘‘(2) COMPUTATION FOR TAXABLE YEAR IN

20 WHICH CREDIT TERMINATES.—In the case of any tax21 able year with respect to which this section applies to 

22 a number of days which is less than the total number 

23 of days in such taxable year— 

24 ‘‘(A) the amount determined under sub25 section (c)(1)(B) with respect to such taxable 
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1 year shall be the amount which bears the same 

2 ratio to such amount (determined without regard 

3 to this paragraph) as the number of days in such 

4 taxable year to which this section applies bears 

5 to the total number of days in such taxable year, 

6 and 

7 ‘‘(B) for purposes of subsection (c)(5), the 

8 average qualified research expenses for the pre9 ceding 3 taxable years shall be the amount which 

10 bears the same ratio to such average qualified re11 search expenses (determined without regard to 

12 this paragraph) as the number of days in such 

13 taxable year to which this section applies bears 

14 to the total number of days in such taxable 

15 year.’’. 

16 (e) EFFECTIVE DATE.— 

17 (1) IN GENERAL.—Except as provided in para18 graph (2), the amendments made by this section shall 

19 apply to taxable years beginning after December 31, 

20 2007. 

21 (2) EXTENSION.—The amendments made by sub22 section (a) shall apply to amounts paid or incurred 

23 after December 31, 2007. 
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1 SEC. 302. NEW MARKETS TAX CREDIT. 

2 Subparagraph (D) of section 45D(f)(1) (relating to na3 tional limitation on amount of investments designated) is 

4 amended by striking ‘‘and 2008’’ and inserting ‘‘2008, and 

5 2009’’. 

6 SEC. 303. SUBPART F EXCEPTION FOR ACTIVE FINANCING 

7 INCOME. 

8 (a) EXEMPT INSURANCE INCOME.—Paragraph (10) of 

9 section 953(e) (relating to application) is amended— 

10 (1) by striking ‘‘January 1, 2009’’ and inserting 

11 ‘‘January 1, 2010’’, and 

12 (2) by striking ‘‘December 31, 2008’’ and insert13 ing ‘‘December 31, 2009’’. 

14 (b) EXCEPTION TO TREATMENT AS FOREIGN PER15 SONAL HOLDING COMPANY INCOME.—Paragraph (9) of sec16 tion 954(h) (relating to application) is amended by striking 

17 ‘‘January 1, 2009’’ and inserting ‘‘January 1, 2010’’. 

18 SEC. 304. EXTENSION OF LOOK-THRU RULE FOR RELATED 

19 CONTROLLED FOREIGN CORPORATIONS. 

20 (a) IN GENERAL.—Subparagraph (C) of section 

21 954(c)(6) (relating to application) is amended by striking 

22 ‘‘January 1, 2009’’ and inserting ‘‘January 1, 2010’’. 

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

24 section shall apply to taxable years of foreign corporations 

25 beginning after December 31, 2007, and to taxable years 
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•HR 1424 EAS 

1 of United States shareholders with or within which such 

2 taxable years of foreign corporations end. 

3 SEC. 305. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RE4 COVERY FOR QUALIFIED LEASEHOLD IM5 PROVEMENTS AND QUALIFIED RESTAURANT 

6 IMPROVEMENTS; 15-YEAR STRAIGHT-LINE 

7 COST RECOVERY FOR CERTAIN IMPROVE8 MENTS TO RETAIL SPACE. 

9 (a) EXTENSION OF LEASEHOLD AND RESTAURANT IM10 PROVEMENTS.— 

11 (1) IN GENERAL.—Clauses (iv) and (v) of section 

12 168(e)(3)(E) (relating to 15-year property) are each 

13 amended by striking ‘‘January 1, 2008’’ and insert14 ing ‘‘January 1, 2010’’. 

15 (2) EFFECTIVE DATE.—The amendments made 

16 by this subsection shall apply to property placed in 

17 service after December 31, 2007. 

18 (b) TREATMENT TO INCLUDE NEW CONSTRUCTION.— 

19 (1) IN GENERAL.—Paragraph (7) of section 

20 168(e) (relating to classification of property) is 

21 amended to read as follows: 

22 ‘‘(7) QUALIFIED RESTAURANT PROPERTY.— 

23 ‘‘(A) IN GENERAL.—The term ‘qualified res24 taurant property’ means any section 1250 prop25 erty which is— 
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1 ‘‘(i) a building, if such building is 

2 placed in service after December 31, 2008, 

3 and before January 1, 2010, or 

4 ‘‘(ii) an improvement to a building, 

5 if more than 50 percent of the building’s square 

6 footage is devoted to preparation of, and seating 

7 for on-premises consumption of, prepared meals. 

8 ‘‘(B) EXCLUSION FROM BONUS DEPRECIA9 TION.—Property described in this paragraph 

10 shall not be considered qualified property for 

11 purposes of subsection (k).’’. 

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

13 this subsection shall apply to property placed in serv14 ice after December 31, 2008. 

15 (c) RECOVERY PERIOD FOR DEPRECIATION OF CER16 TAIN IMPROVEMENTS TO RETAIL SPACE.— 

17 (1) 15-YEAR RECOVERY PERIOD.—Section 

18 168(e)(3)(E) (relating to 15-year property) is amend19 ed by striking ‘‘and’’ at the end of clause (vii), by 

20 striking the period at the end of clause (viii) and in21 serting ‘‘, and’’, and by adding at the end the fol22 lowing new clause: 

23 ‘‘(ix) any qualified retail improvement 

24 property placed in service after December 

25 31, 2008, and before January 1, 2010.’’. 
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1 (2) QUALIFIED RETAIL IMPROVEMENT PROP2 ERTY.—Section 168(e) is amended by adding at the 

3 end the following new paragraph: 

4 ‘‘(8) QUALIFIED RETAIL IMPROVEMENT PROP5 ERTY.— 

6 ‘‘(A) IN GENERAL.—The term ‘qualified re7 tail improvement property’ means any improve8 ment to an interior portion of a building which 

9 is nonresidential real property if— 

10 ‘‘(i) such portion is open to the general 

11 public and is used in the retail trade or 

12 business of selling tangible personal prop13 erty to the general public, and 

14 ‘‘(ii) such improvement is placed in 

15 service more than 3 years after the date the 

16 building was first placed in service. 

17 ‘‘(B) IMPROVEMENTS MADE BY OWNER.—In 

18 the case of an improvement made by the owner 

19 of such improvement, such improvement shall be 

20 qualified retail improvement property (if at all) 

21 only so long as such improvement is held by such 

22 owner. Rules similar to the rules under para23 graph (6)(B) shall apply for purposes of the pre24 ceding sentence. 
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1 ‘‘(C) CERTAIN IMPROVEMENTS NOT IN2 CLUDED.—Such term shall not include any im3 provement for which the expenditure is attrib4 utable to— 

5 ‘‘(i) the enlargement of the building, 

6 ‘‘(ii) any elevator or escalator, 

7 ‘‘(iii) any structural component bene8 fitting a common area, or 

9 ‘‘(iv) the internal structural framework 

10 of the building. 

11 ‘‘(D) EXCLUSION FROM BONUS DEPRECIA12 TION.—Property described in this paragraph 

13 shall not be considered qualified property for 

14 purposes of subsection (k). 

15 ‘‘(E) TERMINATION.—Such term shall not 

16 include any improvement placed in service after 

17 December 31, 2009.’’. 

18 (3) REQUIREMENT TO USE STRAIGHT LINE

19 METHOD.—Section 168(b)(3) is amended by adding 

20 at the end the following new subparagraph: 

21 ‘‘(I) Qualified retail improvement property 

22 described in subsection (e)(8).’’. 

23 (4) ALTERNATIVE SYSTEM.—The table contained 

24 in section 168(g)(3)(B) is amended by inserting after 
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1 the item relating to subparagraph (E)(viii) the fol2 lowing new item: 

‘‘(E)(ix) ................................................................................................... 39’’. 

3 (5) EFFECTIVE DATE.—The amendments made 

4 by this subsection shall apply to property placed in 

5 service after December 31, 2008. 

6 SEC. 306. MODIFICATION OF TAX TREATMENT OF CERTAIN 

7 PAYMENTS TO CONTROLLING EXEMPT ORGA8 NIZATIONS. 

9 (a) IN GENERAL.—Clause (iv) of section 512(b)(13)(E) 

10 (relating to termination) is amended by striking ‘‘December 

11 31, 2007’’ and inserting ‘‘December 31, 2009’’. 

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

13 section shall apply to payments received or accrued after 

14 December 31, 2007. 

15 SEC. 307. BASIS ADJUSTMENT TO STOCK OF S CORPORA16 TIONS MAKING CHARITABLE CONTRIBUTIONS 

17 OF PROPERTY. 

18 (a) IN GENERAL.—The last sentence of section 

19 1367(a)(2) (relating to decreases in basis) is amended by 

20 striking ‘‘December 31, 2007’’ and inserting ‘‘December 31, 

21 2009’’. 

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

23 section shall apply to contributions made in taxable years 

24 beginning after December 31, 2007. 
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1 SEC. 308. INCREASE IN LIMIT ON COVER OVER OF RUM EX2 CISE TAX TO PUERTO RICO AND THE VIRGIN 

3 ISLANDS. 

4 (a) IN GENERAL.—Paragraph (1) of section 7652(f) is 

5 amended by striking ‘‘January 1, 2008’’ and inserting 

6 ‘‘January 1, 2010’’. 

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

8 section shall apply to distilled spirits brought into the 

9 United States after December 31, 2007. 

10 SEC. 309. EXTENSION OF ECONOMIC DEVELOPMENT CRED11 IT FOR AMERICAN SAMOA. 

12 (a) IN GENERAL.—Subsection (d) of section 119 of di13 vision A of the Tax Relief and Health Care Act of 2006 

14 is amended— 

15 (1) by striking ‘‘first two taxable years’’ and in16 serting ‘‘first 4 taxable years’’, and 

17 (2) by striking ‘‘January 1, 2008’’ and inserting 

18 ‘‘January 1, 2010’’. 

19 (b) EFFECTIVE DATE.—The amendments made by this 

20 section shall apply to taxable years beginning after Decem21 ber 31, 2007. 

22 SEC. 310. EXTENSION OF MINE RESCUE TEAM TRAINING 

23 CREDIT. 

24 Section 45N(e) (relating to termination) is amended 

25 by striking ‘‘December 31, 2008’’ and inserting ‘‘December 

26 31, 2009’’. 
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1 SEC. 311. EXTENSION OF ELECTION TO EXPENSE AD2 VANCED MINE SAFETY EQUIPMENT. 

3 Section 179E(g) (relating to termination) is amended 

4 by striking ‘‘December 31, 2008’’ and inserting ‘‘December 

5 31, 2009’’. 

6 SEC. 312. DEDUCTION ALLOWABLE WITH RESPECT TO IN7 COME ATTRIBUTABLE TO DOMESTIC PRODUC8 TION ACTIVITIES IN PUERTO RICO. 

9 (a) IN GENERAL.—Subparagraph (C) of section 

10 199(d)(8) (relating to termination) is amended— 

11 (1) by striking ‘‘first 2 taxable years’’ and in12 serting ‘‘first 4 taxable years’’, and 

13 (2) by striking ‘‘January 1, 2008’’ and inserting 

14 ‘‘January 1, 2010’’. 

15 (b) EFFECTIVE DATE.—The amendments made by this 

16 section shall apply to taxable years beginning after Decem17 ber 31, 2007. 

18 SEC. 313. QUALIFIED ZONE ACADEMY BONDS. 

19 (a) IN GENERAL.—Subpart I of part IV of subchapter 

20 A of chapter 1 is amended by adding at the end the fol21 lowing new section: 

22 ‘‘SEC. 54E. QUALIFIED ZONE ACADEMY BONDS. 

23 ‘‘(a) QUALIFIED ZONE ACADEMY BONDS.—For pur24 poses of this subchapter, the term ‘qualified zone academy 

25 bond’ means any bond issued as part of an issue if— 
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1 ‘‘(1) 100 percent of the available project proceeds 

2 of such issue are to be used for a qualified purpose 

3 with respect to a qualified zone academy established 

4 by an eligible local education agency, 

5 ‘‘(2) the bond is issued by a State or local gov6 ernment within the jurisdiction of which such acad7 emy is located, and 

8 ‘‘(3) the issuer— 

9 ‘‘(A) designates such bond for purposes of 

10 this section, 

11 ‘‘(B) certifies that it has written assurances 

12 that the private business contribution require13 ment of subsection (b) will be met with respect 

14 to such academy, and 

15 ‘‘(C) certifies that it has the written ap16 proval of the eligible local education agency for 

17 such bond issuance. 

18 ‘‘(b) PRIVATE BUSINESS CONTRIBUTION REQUIRE19 MENT.—For purposes of subsection (a), the private business 

20 contribution requirement of this subsection is met with re21 spect to any issue if the eligible local education agency that 

22 established the qualified zone academy has written commit23 ments from private entities to make qualified contributions 

24 having a present value (as of the date of issuance of the 

25 issue) of not less than 10 percent of the proceeds of the issue. 
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1 ‘‘(c) LIMITATION ON AMOUNT OF BONDS DES2 IGNATED.— 

3 ‘‘(1) NATIONAL LIMITATION.—There is a na4 tional zone academy bond limitation for each cal5 endar year. Such limitation is $400,000,000 for 2008 

6 and 2009, and, except as provided in paragraph (4), 

7 zero thereafter. 

8 ‘‘(2) ALLOCATION OF LIMITATION.—The national 

9 zone academy bond limitation for a calendar year 

10 shall be allocated by the Secretary among the States 

11 on the basis of their respective populations of individ12 uals below the poverty line (as defined by the Office 

13 of Management and Budget). The limitation amount 

14 allocated to a State under the preceding sentence shall 

15 be allocated by the State education agency to quali16 fied zone academies within such State. 

17 ‘‘(3) DESIGNATION SUBJECT TO LIMITATION

18 AMOUNT.—The maximum aggregate face amount of 

19 bonds issued during any calendar year which may be 

20 designated under subsection (a) with respect to any 

21 qualified zone academy shall not exceed the limitation 

22 amount allocated to such academy under paragraph 

23 (2) for such calendar year. 

24 ‘‘(4) CARRYOVER OF UNUSED LIMITATION.— 
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1 ‘‘(A) IN GENERAL.—If for any calendar 

2 year— 

3 ‘‘(i) the limitation amount for any 

4 State, exceeds 

5 ‘‘(ii) the amount of bonds issued dur6 ing such year which are designated under 

7 subsection (a) with respect to qualified zone 

8 academies within such State, 

9 the limitation amount for such State for the fol10 lowing calendar year shall be increased by the 

11 amount of such excess. 

12 ‘‘(B) LIMITATION ON CARRYOVER.—Any 

13 carryforward of a limitation amount may be 

14 carried only to the first 2 years following the un15 used limitation year. For purposes of the pre16 ceding sentence, a limitation amount shall be 

17 treated as used on a first-in first-out basis. 

18 ‘‘(C) COORDINATION WITH SECTION 1397E.— 

19 Any carryover determined under section 

20 1397E(e)(4) (relating to carryover of unused 

21 limitation) with respect to any State to calendar 

22 year 2008 or 2009 shall be treated for purposes 

23 of this section as a carryover with respect to such 

24 State for such calendar year under subparagraph 

25 (A), and the limitation of subparagraph (B) 
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1 shall apply to such carryover taking into account 

2 the calendar years to which such carryover re3 lates. 

4 ‘‘(d) DEFINITIONS.—For purposes of this section— 

5 ‘‘(1) QUALIFIED ZONE ACADEMY.—The term 

6 ‘qualified zone academy’ means any public school (or 

7 academic program within a public school) which is 

8 established by and operated under the supervision of 

9 an eligible local education agency to provide edu10 cation or training below the postsecondary level if— 

11 ‘‘(A) such public school or program (as the 

12 case may be) is designed in cooperation with 

13 business to enhance the academic curriculum, in14 crease graduation and employment rates, and 

15 better prepare students for the rigors of college 

16 and the increasingly complex workforce, 

17 ‘‘(B) students in such public school or pro18 gram (as the case may be) will be subject to the 

19 same academic standards and assessments as 

20 other students educated by the eligible local edu21 cation agency, 

22 ‘‘(C) the comprehensive education plan of 

23 such public school or program is approved by the 

24 eligible local education agency, and 
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1 ‘‘(D)(i) such public school is located in an 

2 empowerment zone or enterprise community (in3 cluding any such zone or community designated 

4 after the date of the enactment of this section), 

5 or 

6 ‘‘(ii) there is a reasonable expectation (as of 

7 the date of issuance of the bonds) that at least 

8 35 percent of the students attending such school 

9 or participating in such program (as the case 

10 may be) will be eligible for free or reduced-cost 

11 lunches under the school lunch program estab12 lished under the National School Lunch Act. 

13 ‘‘(2) ELIGIBLE LOCAL EDUCATION AGENCY.—For 

14 purposes of this section, the term ‘eligible local edu15 cation agency’ means any local educational agency as 

16 defined in section 9101 of the Elementary and Sec17 ondary Education Act of 1965. 

18 ‘‘(3) QUALIFIED PURPOSE.—The term ‘qualified 

19 purpose’ means, with respect to any qualified zone 

20 academy— 

21 ‘‘(A) rehabilitating or repairing the public 

22 school facility in which the academy is estab23 lished, 

24 ‘‘(B) providing equipment for use at such 

25 academy, 
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1 ‘‘(C) developing course materials for edu2 cation to be provided at such academy, and 

3 ‘‘(D) training teachers and other school per4 sonnel in such academy. 

5 ‘‘(4) QUALIFIED CONTRIBUTIONS.—The term 

6 ‘qualified contribution’ means any contribution (of a 

7 type and quality acceptable to the eligible local edu8 cation agency) of— 

9 ‘‘(A) equipment for use in the qualified zone 

10 academy (including state-of-the-art technology 

11 and vocational equipment), 

12 ‘‘(B) technical assistance in developing cur13 riculum or in training teachers in order to pro14 mote appropriate market driven technology in 

15 the classroom, 

16 ‘‘(C) services of employees as volunteer men17 tors, 

18 ‘‘(D) internships, field trips, or other edu19 cational opportunities outside the academy for 

20 students, or 

21 ‘‘(E) any other property or service specified 

22 by the eligible local education agency.’’. 

23 (b) CONFORMING AMENDMENTS.— 

24 (1) Paragraph (1) of section 54A(d), as amended 

25 by this Act, is amended by striking ‘‘or’’ at the end 
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1 of subparagraph (B), by inserting ‘‘or’’ at the end of 

2 subparagraph (C), and by inserting after subpara3 graph (C) the following new subparagraph: 

4 ‘‘(D) a qualified zone academy bond,’’. 

5 (2) Subparagraph (C) of section 54A(d)(2), as 

6 amended by this Act, is amended by striking ‘‘and’’ 

7 at the end of clause (ii), by striking the period at the 

8 end of clause (iii) and inserting ‘‘, and’’, and by add9 ing at the end the following new clause: 

10 ‘‘(iv) in the case of a qualified zone 

11 academy bond, a purpose specified in sec12 tion 54E(a)(1).’’. 

13 (3) Section 1397E is amended by adding at the 

14 end the following new subsection: 

15 ‘‘(m) TERMINATION.—This section shall not apply to 

16 any obligation issued after the date of the enactment of the 

17 Tax Extenders and Alternative Minimum Tax Relief Act 

18 of 2008.’’. 

19 (4) The table of sections for subpart I of part IV 

20 of subchapter A of chapter 1 is amended by adding 

21 at the end the following new item: 

‘‘Sec. 54E. Qualified zone academy bonds.’’. 

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

23 section shall apply to obligations issued after the date of 

24 the enactment of this Act. 
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1 SEC. 314. INDIAN EMPLOYMENT CREDIT. 

2 (a) IN GENERAL.—Subsection (f) of section 45A (relat3 ing to termination) is amended by striking ‘‘December 31, 

4 2007’’ and inserting ‘‘December 31, 2009’’. 

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

6 section shall apply to taxable years beginning after Decem7 ber 31, 2007. 

8 SEC. 315. ACCELERATED DEPRECIATION FOR BUSINESS 

9 PROPERTY ON INDIAN RESERVATIONS. 

10 (a) IN GENERAL.—Paragraph (8) of section 168(j) (re11 lating to termination) is amended by striking ‘‘December 

12 31, 2007’’ and inserting ‘‘December 31, 2009’’. 

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

14 section shall apply to property placed in service after De15 cember 31, 2007. 

16 SEC. 316. RAILROAD TRACK MAINTENANCE. 

17 (a) IN GENERAL.—Subsection (f) of section 45G (relat18 ing to application of section) is amended by striking ‘‘Jan19 uary 1, 2008’’ and inserting ‘‘January 1, 2010’’. 

20 (b) CREDIT ALLOWED AGAINST ALTERNATIVE MIN21 IMUM TAX.—Subparagraph (B) of section 38(c)(4), as 

22 amended by this Act, is amended— 

23 (1) by redesignating clauses (v), (vi), and (vii) 

24 as clauses (vi), (vii), and (viii), respectively, and 

25 (2) by inserting after clause (iv) the following 

26 new clause: 
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1 ‘‘(v) the credit determined under sec2 tion 45G,’’. 

3 (c) EFFECTIVE DATES.— 

4 (1) The amendment made by subsection (a) shall 

5 apply to expenditures paid or incurred during tax6 able years beginning after December 31, 2007. 

7 (2) The amendments made by subsection (b) 

8 shall apply to credits determined under section 45G 

9 of the Internal Revenue Code of 1986 in taxable years 

10 beginning after December 31, 2007, and to carrybacks 

11 of such credits. 

12 SEC. 317. SEVEN-YEAR COST RECOVERY PERIOD FOR MO13 TORSPORTS RACING TRACK FACILITY. 

14 (a) IN GENERAL.—Subparagraph (D) of section 

15 168(i)(15) (relating to termination) is amended by striking 

16 ‘‘December 31, 2007’’ and inserting ‘‘December 31, 2009’’. 

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

18 section shall apply to property placed in service after De19 cember 31, 2007. 

20 SEC. 318. EXPENSING OF ENVIRONMENTAL REMEDIATION 

21 COSTS. 

22 (a) IN GENERAL.—Subsection (h) of section 198 (relat23 ing to termination) is amended by striking ‘‘December 31, 

24 2007’’ and inserting ‘‘December 31, 2009’’. 
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1 (b) EFFECTIVE DATE.—The amendment made by this 

2 section shall apply to expenditures paid or incurred after 

3 December 31, 2007. 

4 SEC. 319. EXTENSION OF WORK OPPORTUNITY TAX CREDIT 

5 FOR HURRICANE KATRINA EMPLOYEES. 

6 (a) IN GENERAL.—Paragraph (1) of section 201(b) of 

7 the Katrina Emergency Tax Relief Act of 2005 is amended 

8 by striking ‘‘2-year’’ and inserting ‘‘4-year’’. 

9 (b) EFFECTIVE DATE.—The amendment made by sub10 section (a) shall apply to individuals hired after August 

11 27, 2007. 

12 SEC. 320. EXTENSION OF INCREASED REHABILITATION 

13 CREDIT FOR STRUCTURES IN THE GULF OP14 PORTUNITY ZONE. 

15 (a) IN GENERAL.—Subsection (h) of section 1400N is 

16 amended by striking ‘‘December 31, 2008’’ and inserting 

17 ‘‘December 31, 2009’’. 

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

19 section shall apply to expenditures paid or incurred after 

20 the date of the enactment of this Act. 

21 SEC. 321. ENHANCED DEDUCTION FOR QUALIFIED COM22 PUTER CONTRIBUTIONS. 

23 (a) IN GENERAL.—Subparagraph (G) of section 

24 170(e)(6) is amended by striking ‘‘December 31, 2007’’ and 

25 inserting ‘‘December 31, 2009’’. 
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1 (b) EFFECTIVE DATE.—The amendment made by this 

2 section shall apply to contributions made during taxable 

3 years beginning after December 31, 2007. 

4 SEC. 322. TAX INCENTIVES FOR INVESTMENT IN THE DIS5 TRICT OF COLUMBIA. 

6 (a) DESIGNATION OF ZONE.— 

7 (1) IN GENERAL.—Subsection (f) of section 1400 

8 is amended by striking ‘‘2007’’ both places it appears 

9 and inserting ‘‘2009’’. 

10 (2) EFFECTIVE DATE.—The amendments made 

11 by this subsection shall apply to periods beginning 

12 after December 31, 2007. 

13 (b) TAX-EXEMPT ECONOMIC DEVELOPMENT BONDS.— 

14 (1) IN GENERAL.—Subsection (b) of section 

15 1400A is amended by striking ‘‘2007’’ and inserting 

16 ‘‘2009’’. 

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

18 this subsection shall apply to bonds issued after De19 cember 31, 2007. 

20 (c) ZERO PERCENT CAPITAL GAINS RATE.— 

21 (1) IN GENERAL.—Subsection (b) of section 

22 1400B is amended by striking ‘‘2008’’ each place it 

23 appears and inserting ‘‘2010’’. 

24 (2) CONFORMING AMENDMENTS.— 

25 (A) Section 1400B(e)(2) is amended— 
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1 (i) by striking ‘‘2012’’ and inserting 

2 ‘‘2014’’, and 

3 (ii) by striking ‘‘2012’’ in the heading 

4 thereof and inserting ‘‘2014’’. 

5 (B) Section 1400B(g)(2) is amended by 

6 striking ‘‘2012’’ and inserting ‘‘2014’’. 

7 (C) Section 1400F(d) is amended by strik8 ing ‘‘2012’’ and inserting ‘‘2014’’. 

9 (3) EFFECTIVE DATES.— 

10 (A) EXTENSION.—The amendments made 

11 by paragraph (1) shall apply to acquisitions 

12 after December 31, 2007. 

13 (B) CONFORMING AMENDMENTS.—The 

14 amendments made by paragraph (2) shall take 

15 effect on the date of the enactment of this Act. 

16 (d) FIRST-TIME HOMEBUYER CREDIT.— 

17 (1) IN GENERAL.—Subsection (i) of section 

18 1400C is amended by striking ‘‘2008’’ and inserting 

19 ‘‘2010’’. 

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

21 this subsection shall apply to property purchased 

22 after December 31, 2007. 

23 SEC. 323. ENHANCED CHARITABLE DEDUCTIONS FOR CON24 TRIBUTIONS OF FOOD INVENTORY. 

25 (a) INCREASED AMOUNT OF DEDUCTION.— 
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1 (1) IN GENERAL.—Clause (iv) of section 

2 170(e)(3)(C) (relating to termination) is amended by 

3 striking ‘‘December 31, 2007’’ and inserting ‘‘Decem4 ber 31, 2009’’. 

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

6 this subsection shall apply to contributions made 

7 after December 31, 2007. 

8 (b) TEMPORARY SUSPENSION OF LIMITATIONS ON

9 CHARITABLE CONTRIBUTIONS.— 

10 (1) IN GENERAL.—Section 170(b) is amended by 

11 adding at the end the following new paragraph: 

12 ‘‘(3) TEMPORARY SUSPENSION OF LIMITATIONS

13 ON CHARITABLE CONTRIBUTIONS.—In the case of a 

14 qualified farmer or rancher (as defined in paragraph 

15 (1)(E)(v)), any charitable contribution of food— 

16 ‘‘(A) to which subsection (e)(3)(C) applies 

17 (without regard to clause (ii) thereof), and 

18 ‘‘(B) which is made during the period be19 ginning on the date of the enactment of this 

20 paragraph and before January 1, 2009, 

21 shall be treated for purposes of paragraph (1)(E) or 

22 (2)(B), whichever is applicable, as if it were a quali23 fied conservation contribution which is made by a 

24 qualified farmer or rancher and which otherwise 

25 meets the requirements of such paragraph.’’. 
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1 (2) EFFECTIVE DATE.—The amendment made by 

2 this subsection shall apply to taxable years ending 

3 after the date of the enactment of this Act. 

4 SEC. 324. EXTENSION OF ENHANCED CHARITABLE DEDUC5 TION FOR CONTRIBUTIONS OF BOOK INVEN6 TORY. 

7 (a) EXTENSION.—Clause (iv) of section 170(e)(3)(D) 

8 (relating to termination) is amended by striking ‘‘December 

9 31, 2007’’ and inserting ‘‘December 31, 2009’’. 

10 (b) CLERICAL AMENDMENT.—Clause (iii) of section 

11 170(e)(3)(D) (relating to certification by donee) is amended 

12 by inserting ‘‘of books’’ after ‘‘to any contribution’’. 

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

14 section shall apply to contributions made after December 

15 31, 2007. 

16 SEC. 325. EXTENSION AND MODIFICATION OF DUTY SUS17 PENSION ON WOOL PRODUCTS; WOOL RE18 SEARCH FUND; WOOL DUTY REFUNDS. 

19 (a) EXTENSION OF TEMPORARY DUTY REDUCTIONS.— 

20 Each of the following headings of the Harmonized Tariff 

21 Schedule of the United States is amended by striking the 

22 date in the effective period column and inserting ‘‘12/31/ 

23 2014’’: 

24 (1) Heading 9902.51.11 (relating to fabrics of 

25 worsted wool). 
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1 (2) Heading 9902.51.13 (relating to yarn of 

2 combed wool). 

3 (3) Heading 9902.51.14 (relating to wool fiber, 

4 waste, garnetted stock, combed wool, or wool top). 

5 (4) Heading 9902.51.15 (relating to fabrics of 

6 combed wool). 

7 (5) Heading 9902.51.16 (relating to fabrics of 

8 combed wool). 

9 (b) EXTENSION OF DUTY REFUNDS AND WOOL RE10 SEARCH TRUST FUND.— 

11 (1) IN GENERAL.—Section 4002(c) of the Wool 

12 Suit and Textile Trade Extension Act of 2004 (Public 

13 Law 108–429; 118 Stat. 2603) is amended— 

14 (A) in paragraph (3)(C), by striking 

15 ‘‘2010’’ and inserting ‘‘2015’’; and 

16 (B) in paragraph (6)(A), by striking 

17 ‘‘through 2009’’ and inserting ‘‘through 2014’’. 

18 (2) SUNSET.—Section 506(f) of the Trade and 

19 Development Act of 2000 (Public 106–200; 114 Stat. 

20 303 (7 U.S.C. 7101 note)) is amended by striking 

21 ‘‘2010’’ and inserting ‘‘2015’’. 
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1 TITLE IV—EXTENSION OF TAX 

2 ADMINISTRATION PROVISIONS 

3 SEC. 401. PERMANENT AUTHORITY FOR UNDERCOVER OP4 ERATIONS. 

5 (a) IN GENERAL.—Section 7608(c) (relating to rules 

6 relating to undercover operations) is amended by striking 

7 paragraph (6). 

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

9 section shall apply to operations conducted after the date 

10 of the enactment of this Act. 

11 SEC. 402. PERMANENT AUTHORITY FOR DISCLOSURE OF IN12 FORMATION RELATING TO TERRORIST AC13 TIVITIES. 

14 (a) DISCLOSURE OF RETURN INFORMATION TO AP15 PRISE APPROPRIATE OFFICIALS OF TERRORIST ACTIVI16 TIES.—Subparagraph (C) of section 6103(i)(3) is amended 

17 by striking clause (iv). 

18 (b) DISCLOSURE UPON REQUEST OF INFORMATION

19 RELATING TO TERRORIST ACTIVITIES.—Paragraph (7) of 

20 section 6103(i) is amended by striking subparagraph (E). 

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

22 section shall apply to disclosures after the date of the enact23 ment of this Act. 
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1 TITLE V—ADDITIONAL TAX RE2 LIEF AND OTHER TAX PROVI3 SIONS 

4 Subtitle A—General Provisions 

5 SEC. 501. $8,500 INCOME THRESHOLD USED TO CALCULATE 

6 REFUNDABLE PORTION OF CHILD TAX CRED7 IT. 

8 (a) IN GENERAL.—Section 24(d) is amended by add9 ing at the end the following new paragraph: 

10 ‘‘(4) SPECIAL RULE FOR 2008.—Notwithstanding 

11 paragraph (3), in the case of any taxable year begin12 ning in 2008, the dollar amount in effect for such 

13 taxable year under paragraph (1)(B)(i) shall be 

14 $8,500.’’. 

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

16 section shall apply to taxable years beginning after Decem17 ber 31, 2007. 

18 SEC. 502. PROVISIONS RELATED TO FILM AND TELEVISION 

19 PRODUCTIONS. 

20 (a) EXTENSION OF EXPENSING RULES FOR QUALIFIED

21 FILM AND TELEVISION PRODUCTIONS.—Section 181(f) (re22 lating to termination) is amended by striking ‘‘December 

23 31, 2008’’ and inserting ‘‘December 31, 2009’’. 
292 

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1 (b) MODIFICATION OF LIMITATION ON EXPENSING.— 

2 Subparagraph (A) of section 181(a)(2) is amended to read 

3 as follows: 

4 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

5 not apply to so much of the aggregate cost of any 

6 qualified film or television production as exceeds 

7 $15,000,000.’’. 

8 (c) MODIFICATIONS TO DEDUCTION FOR DOMESTIC

9 ACTIVITIES.— 

10 (1) DETERMINATION OF W–2 WAGES.—Para11 graph (2) of section 199(b) is amended by adding at 

12 the end the following new subparagraph: 

13 ‘‘(D) SPECIAL RULE FOR QUALIFIED

14 FILM.—In the case of a qualified film, such term 

15 shall include compensation for services performed 

16 in the United States by actors, production per17 sonnel, directors, and producers.’’. 

18 (2) DEFINITION OF QUALIFIED FILM.—Para19 graph (6) of section 199(c) is amended by adding at 

20 the end the following: ‘‘A qualified film shall include 

21 any copyrights, trademarks, or other intangibles with 

22 respect to such film. The methods and means of dis23 tributing a qualified film shall not affect the avail24 ability of the deduction under this section.’’. 
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1 (3) PARTNERSHIPS.—Subparagraph (A) of sec2 tion 199(d)(1) is amended by striking ‘‘and’’ at the 

3 end of clause (ii), by striking the period at the end 

4 of clause (iii) and inserting ‘‘, and’’, and by adding 

5 at the end the following new clause: 

6 ‘‘(iv) in the case of each partner of a 

7 partnership, or shareholder of an S corpora8 tion, who owns (directly or indirectly) at 

9 least 20 percent of the capital interests in 

10 such partnership or of the stock of such S 

11 corporation— 

12 ‘‘(I) such partner or shareholder 

13 shall be treated as having engaged di14 rectly in any film produced by such 

15 partnership or S corporation, and 

16 ‘‘(II) such partnership or S cor17 poration shall be treated as having en18 gaged directly in any film produced by 

19 such partner or shareholder.’’. 

20 (d) CONFORMING AMENDMENT.—Section 181(d)(3)(A) 

21 is amended by striking ‘‘actors’’ and all that follows and 

22 inserting ‘‘actors, production personnel, directors, and pro23 ducers.’’. 

24 (e) EFFECTIVE DATES.— 
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1 (1) IN GENERAL.—Except as otherwise provided 

2 in this subsection, the amendments made by this sec3 tion shall apply to qualified film and television pro4 ductions commencing after December 31, 2007. 

5 (2) DEDUCTION.—The amendments made by sub6 section (c) shall apply to taxable years beginning 

7 after December 31, 2007. 

8 SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN 

9 WOODEN ARROWS DESIGNED FOR USE BY 

10 CHILDREN. 

11 (a) IN GENERAL.—Paragraph (2) of section 4161(b) 

12 is amended by redesignating subparagraph (B) as subpara13 graph (C) and by inserting after subparagraph (A) the fol14 lowing new subparagraph: 

15 ‘‘(B) EXEMPTION FOR CERTAIN WOODEN

16 ARROW SHAFTS.—Subparagraph (A) shall not 

17 apply to any shaft consisting of all natural wood 

18 with no laminations or artificial means of en19 hancing the spine of such shaft (whether sold sep20 arately or incorporated as part of a finished or 

21 unfinished product) of a type used in the manu22 facture of any arrow which after its assembly— 

‘‘(i) measures 5 23 ⁄16 of an inch or less in 

24 diameter, and 
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1 ‘‘(ii) is not suitable for use with a bow 

2 described in paragraph (1)(A).’’. 

3 (b) EFFECTIVE DATE.—The amendments made by this 

4 section shall apply to shafts first sold after the date of enact5 ment of this Act. 

6 SEC. 504. INCOME AVERAGING FOR AMOUNTS RECEIVED IN 

7 CONNECTION WITH THE EXXON VALDEZ LITI8 GATION. 

9 (a) INCOME AVERAGING OF AMOUNTS RECEIVED FROM

10 THE EXXON VALDEZ LITIGATION.—For purposes of section 

11 1301 of the Internal Revenue Code of 1986— 

12 (1) any qualified taxpayer who receives any 

13 qualified settlement income in any taxable year shall 

14 be treated as engaged in a fishing business (deter15 mined without regard to the commercial nature of the 

16 business), and 

17 (2) such qualified settlement income shall be 

18 treated as income attributable to such a fishing busi19 ness for such taxable year. 

20 (b) CONTRIBUTIONS OF AMOUNTS RECEIVED TO RE21 TIREMENT ACCOUNTS.— 

22 (1) IN GENERAL.—Any qualified taxpayer who 

23 receives qualified settlement income during the tax24 able year may, at any time before the end of the tax25 able year in which such income was received, make 
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1 one or more contributions to an eligible retirement 

2 plan of which such qualified taxpayer is a beneficiary 

3 in an aggregate amount not to exceed the lesser of— 

4 (A) $100,000 (reduced by the amount of 

5 qualified settlement income contributed to an eli6 gible retirement plan in prior taxable years pur7 suant to this subsection), or 

8 (B) the amount of qualified settlement in9 come received by the individual during the tax10 able year. 

11 (2) TIME WHEN CONTRIBUTIONS DEEMED

12 MADE.—For purposes of paragraph (1), a qualified 

13 taxpayer shall be deemed to have made a contribution 

14 to an eligible retirement plan on the last day of the 

15 taxable year in which such income is received if the 

16 contribution is made on account of such taxable year 

17 and is made not later than the time prescribed by law 

18 for filing the return for such taxable year (not includ19 ing extensions thereof). 

20 (3) TREATMENT OF CONTRIBUTIONS TO ELIGIBLE

21 RETIREMENT PLANS.—For purposes of the Internal 

22 Revenue Code of 1986, if a contribution is made pur23 suant to paragraph (1) with respect to qualified set24 tlement income, then— 

25 (A) except as provided in paragraph (4)— 
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1 (i) to the extent of such contribution, 

2 the qualified settlement income shall not be 

3 included in taxable income, and 

4 (ii) for purposes of section 72 of such 

5 Code, such contribution shall not be consid6 ered to be investment in the contract, 

7 (B) the qualified taxpayer shall, to the ex8 tent of the amount of the contribution, be treat9 ed— 

10 (i) as having received the qualified set11 tlement income— 

12 (I) in the case of a contribution to 

13 an individual retirement plan (as de14 fined under section 7701(a)(37) of such 

15 Code), in a distribution described in 

16 section 408(d)(3) of such Code, and 

17 (II) in the case of any other eligi18 ble retirement plan, in an eligible roll19 over distribution (as defined under sec20 tion 402(f)(2) of such Code), and 

21 (ii) as having transferred the amount 

22 to the eligible retirement plan in a direct 

23 trustee to trustee transfer within 60 days of 

24 the distribution, 
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1 (C) section 408(d)(3)(B) of the Internal 

2 Revenue Code of 1986 shall not apply with re3 spect to amounts treated as a rollover under this 

4 paragraph, and 

5 (D) section 408A(c)(3)(B) of the Internal 

6 Revenue Code of 1986 shall not apply with re7 spect to amounts contributed to a Roth IRA (as 

8 defined under section 408A(b) of such Code) or 

9 a designated Roth contribution to an applicable 

10 retirement plan (within the meaning of section 

11 402A of such Code) under this paragraph. 

12 (4) SPECIAL RULE FOR ROTH IRAS AND ROTH

13 401(k)S.—For purposes of the Internal Revenue Code 

14 of 1986, if a contribution is made pursuant to para15 graph (1) with respect to qualified settlement income 

16 to a Roth IRA (as defined under section 408A(b) of 

17 such Code) or as a designated Roth contribution to an 

18 applicable retirement plan (within the meaning of 

19 section 402A of such Code), then— 

20 (A) the qualified settlement income shall be 

21 includible in taxable income, and 

22 (B) for purposes of section 72 of such Code, 

23 such contribution shall be considered to be in24 vestment in the contract. 
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1 (5) ELIGIBLE RETIREMENT PLAN.—For purpose 

2 of this subsection, the term ‘‘eligible retirement plan’’ 

3 has the meaning given such term under section 

4 402(c)(8)(B) of the Internal Revenue Code of 1986. 

5 (c) TREATMENT OF QUALIFIED SETTLEMENT INCOME

6 UNDER EMPLOYMENT TAXES.— 

7 (1) SECA.—For purposes of chapter 2 of the In8 ternal Revenue Code of 1986 and section 211 of the 

9 Social Security Act, no portion of qualified settlement 

10 income received by a qualified taxpayer shall be treat11 ed as self-employment income. 

12 (2) FICA.—For purposes of chapter 21 of the In13 ternal Revenue Code of 1986 and section 209 of the 

14 Social Security Act, no portion of qualified settlement 

15 income received by a qualified taxpayer shall be treat16 ed as wages. 

17 (d) QUALIFIED TAXPAYER.—For purposes of this sec18 tion, the term ‘‘qualified taxpayer’’ means— 

19 (1) any individual who is a plaintiff in the civil 

20 action In re Exxon Valdez, No. 89–095–CV (HRH) 

21 (Consolidated) (D. Alaska); or 

22 (2) any individual who is a beneficiary of the es23 tate of such a plaintiff who— 

24 (A) acquired the right to receive qualified 

25 settlement income from that plaintiff; and 
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1 (B) was the spouse or an immediate relative 

2 of that plaintiff. 

3 (e) QUALIFIED SETTLEMENT INCOME.—For purposes 

4 of this section, the term ‘‘qualified settlement income’’ 

5 means any interest and punitive damage awards which 

6 are— 

7 (1) otherwise includible in taxable income, and 

8 (2) received (whether as lump sums or periodic 

9 payments) in connection with the civil action In re 

10 Exxon Valdez, No. 89–095–CV (HRH) (Consolidated) 

11 (D. Alaska) (whether pre- or post-judgment and 

12 whether related to a settlement or judgment). 

13 SEC. 505. CERTAIN FARMING BUSINESS MACHINERY AND 

14 EQUIPMENT TREATED AS 5-YEAR PROPERTY. 

15 (a) IN GENERAL.—Section 168(e)(3)(B) (defining 5- 

16 year property) is amended by striking ‘‘and’’ at the end 

17 of clause (v), by striking the period at the end of clause 

18 (vi)(III) and inserting ‘‘, and’’, and by inserting after 

19 clause (vi) the following new clause: 

20 ‘‘(vii) any machinery or equipment 

21 (other than any grain bin, cotton ginning 

22 asset, fence, or other land improvement) 

23 which is used in a farming business (as de24 fined in section 263A(e)(4)), the original 

25 use of which commences with the taxpayer 
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1 after December 31, 2008, and which is 

2 placed in service before January 1, 2010.’’. 

3 (b) ALTERNATIVE SYSTEM.—The table contained in 

4 section 168(g)(3)(B) (relating to special rule for certain 

5 property assigned to classes) is amended by inserting after 

6 the item relating to subparagraph (B)(iii) the following: 

(B)(vii) ......................................................................................... 10’’. 

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

8 section shall apply to property placed in service after De9 cember 31, 2008. 

10 SEC. 506. MODIFICATION OF PENALTY ON UNDERSTATE11 MENT OF TAXPAYER’S LIABILITY BY TAX RE12 TURN PREPARER. 

13 (a) IN GENERAL.—Subsection (a) of section 6694 is 

14 amended to read as follows: 

15 ‘‘(a) UNDERSTATEMENT DUE TO UNREASONABLE PO16 SITIONS.— 

17 ‘‘(1) IN GENERAL.—If a tax return preparer— 

18 ‘‘(A) prepares any return or claim of refund 

19 with respect to which any part of an understate20 ment of liability is due to a position described 

21 in paragraph (2), and 

22 ‘‘(B) knew (or reasonably should have 

23 known) of the position, 
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1 such tax return preparer shall pay a penalty with re2 spect to each such return or claim in an amount 

3 equal to the greater of $1,000 or 50 percent of the in4 come derived (or to be derived) by the tax return pre5 parer with respect to the return or claim. 

6 ‘‘(2) UNREASONABLE POSITION.— 

7 ‘‘(A) IN GENERAL.—Except as otherwise 

8 provided in this paragraph, a position is de9 scribed in this paragraph unless there is or was 

10 substantial authority for the position. 

11 ‘‘(B) DISCLOSED POSITIONS.—If the posi12 tion was disclosed as provided in section 

13 6662(d)(2)(B)(ii)(I) and is not a position to 

14 which subparagraph (C) applies, the position is 

15 described in this paragraph unless there is a rea16 sonable basis for the position. 

17 ‘‘(C) TAX SHELTERS AND REPORTABLE

18 TRANSACTIONS.—If the position is with respect 

19 to a tax shelter (as defined in section 

20 6662(d)(2)(C)(ii)) or a reportable transaction to 

21 which section 6662A applies, the position is de22 scribed in this paragraph unless it is reasonable 

23 to believe that the position would more likely 

24 than not be sustained on its merits. 
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1 ‘‘(3) REASONABLE CAUSE EXCEPTION.—No pen2 alty shall be imposed under this subsection if it is 

3 shown that there is reasonable cause for the under4 statement and the tax return preparer acted in good 

5 faith.’’. 

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

7 section shall apply— 

8 (1) in the case of a position other than a posi9 tion described in subparagraph (C) of section 

10 6694(a)(2) of the Internal Revenue Code of 1986 (as 

11 amended by this section), to returns prepared after 

12 May 25, 2007, and 

13 (2) in the case of a position described in such 

14 subparagraph (C), to returns prepared for taxable 

15 years ending after the date of the enactment of this 

16 Act. 

17 Subtitle B—Paul Wellstone and 

18 Pete Domenici Mental Health 

19 Parity and Addiction Equity Act 

20 of 2008 

21 SEC. 511. SHORT TITLE. 

22 This subtitle may be cited as the ‘‘Paul Wellstone and 

23 Pete Domenici Mental Health Parity and Addiction Equity 

24 Act of 2008’’. 
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1 SEC. 512. MENTAL HEALTH PARITY. 

2 (a) AMENDMENTS TO ERISA.—Section 712 of the Em3 ployee Retirement Income Security Act of 1974 (29 U.S.C. 

4 1185a) is amended— 

5 (1) in subsection (a), by adding at the end the 

6 following: 

7 ‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT

8 LIMITATIONS.— 

9 ‘‘(A) IN GENERAL.—In the case of a group 

10 health plan (or health insurance coverage offered 

11 in connection with such a plan) that provides 

12 both medical and surgical benefits and mental 

13 health or substance use disorder benefits, such 

14 plan or coverage shall ensure that— 

15 ‘‘(i) the financial requirements appli16 cable to such mental health or substance use 

17 disorder benefits are no more restrictive 

18 than the predominant financial require19 ments applied to substantially all medical 

20 and surgical benefits covered by the plan (or 

21 coverage), and there are no separate cost 

22 sharing requirements that are applicable 

23 only with respect to mental health or sub24 stance use disorder benefits; and 

25 ‘‘(ii) the treatment limitations applica26 ble to such mental health or substance use 
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1 disorder benefits are no more restrictive 

2 than the predominant treatment limitations 

3 applied to substantially all medical and 

4 surgical benefits covered by the plan (or 

5 coverage) and there are no separate treat6 ment limitations that are applicable only 

7 with respect to mental health or substance 

8 use disorder benefits. 

9 ‘‘(B) DEFINITIONS.—In this paragraph: 

10 ‘‘(i) FINANCIAL REQUIREMENT.—The 

11 term ‘financial requirement’ includes 

12 deductibles, copayments, coinsurance, and 

13 out-of-pocket expenses, but excludes an ag14 gregate lifetime limit and an annual limit 

15 subject to paragraphs (1) and (2), 

16 ‘‘(ii) PREDOMINANT.—A financial re17 quirement or treatment limit is considered 

18 to be predominant if it is the most common 

19 or frequent of such type of limit or require20 ment. 

21 ‘‘(iii) TREATMENT LIMITATION.—The 

22 term ‘treatment limitation’ includes limits 

23 on the frequency of treatment, number of 

24 visits, days of coverage, or other similar 
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1 limits on the scope or duration of treat2 ment. 

3 ‘‘(4) AVAILABILITY OF PLAN INFORMATION.—The 

4 criteria for medical necessity determinations made 

5 under the plan with respect to mental health or sub6 stance use disorder benefits (or the health insurance 

7 coverage offered in connection with the plan with re8 spect to such benefits) shall be made available by the 

9 plan administrator (or the health insurance issuer of10 fering such coverage) in accordance with regulations 

11 to any current or potential participant, beneficiary, 

12 or contracting provider upon request. The reason for 

13 any denial under the plan (or coverage) of reimburse14 ment or payment for services with respect to mental 

15 health or substance use disorder benefits in the case 

16 of any participant or beneficiary shall, on request or 

17 as otherwise required, be made available by the plan 

18 administrator (or the health insurance issuer offering 

19 such coverage) to the participant or beneficiary in ac20 cordance with regulations. 

21 ‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the case 

22 of a plan or coverage that provides both medical and 

23 surgical benefits and mental health or substance use 

24 disorder benefits, if the plan or coverage provides cov25 erage for medical or surgical benefits provided by out- 
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1 of-network providers, the plan or coverage shall pro2 vide coverage for mental health or substance use dis3 order benefits provided by out-of-network providers in 

4 a manner that is consistent with the requirements of 

5 this section.’’; 

6 (2) in subsection (b), by amending paragraph 

7 (2) to read as follows: 

8 ‘‘(2) in the case of a group health plan (or health 

9 insurance coverage offered in connection with such a 

10 plan) that provides mental health or substance use 

11 disorder benefits, as affecting the terms and condi12 tions of the plan or coverage relating to such benefits 

13 under the plan or coverage, except as provided in sub14 section (a).’’; 

15 (3) in subsection (c)— 

16 (A) in paragraph (1)(B)— 

17 (i) by inserting ‘‘(or 1 in the case of 

18 an employer residing in a State that per19 mits small groups to include a single indi20 vidual)’’ after ‘‘at least 2’’ the first place 

21 that such appears; and 

22 (ii) by striking ‘‘and who employs at 

23 least 2 employees on the first day of the 

24 plan year’’; and 
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1 (B) by striking paragraph (2) and inserting 

2 the following: 

3 ‘‘(2) COST EXEMPTION.— 

4 ‘‘(A) IN GENERAL.—With respect to a group 

5 health plan (or health insurance coverage offered 

6 in connection with such a plan), if the applica7 tion of this section to such plan (or coverage) re8 sults in an increase for the plan year involved 

9 of the actual total costs of coverage with respect 

10 to medical and surgical benefits and mental 

11 health and substance use disorder benefits under 

12 the plan (as determined and certified under sub13 paragraph (C)) by an amount that exceeds the 

14 applicable percentage described in subparagraph 

15 (B) of the actual total plan costs, the provisions 

16 of this section shall not apply to such plan (or 

17 coverage) during the following plan year, and 

18 such exemption shall apply to the plan (or cov19 erage) for 1 plan year. An employer may elect 

20 to continue to apply mental health and substance 

21 use disorder parity pursuant to this section with 

22 respect to the group health plan (or coverage) in23 volved regardless of any increase in total costs. 

24 ‘‘(B) APPLICABLE PERCENTAGE.—With re25 spect to a plan (or coverage), the applicable per-
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1 centage described in this subparagraph shall 

2 be— 

3 ‘‘(i) 2 percent in the case of the first 

4 plan year in which this section is applied; 

5 and 

6 ‘‘(ii) 1 percent in the case of each sub7 sequent plan year. 

8 ‘‘(C) DETERMINATIONS BY ACTUARIES.— 

9 Determinations as to increases in actual costs 

10 under a plan (or coverage) for purposes of this 

11 section shall be made and certified by a qualified 

12 and licensed actuary who is a member in good 

13 standing of the American Academy of Actuaries. 

14 All such determinations shall be in a written re15 port prepared by the actuary. The report, and 

16 all underlying documentation relied upon by the 

17 actuary, shall be maintained by the group health 

18 plan or health insurance issuer for a period of 

19 6 years following the notification made under 

20 subparagraph (E). 

21 ‘‘(D) 6-MONTH DETERMINATIONS.—If a 

22 group health plan (or a health insurance issuer 

23 offering coverage in connection with a group 

24 health plan) seeks an exemption under this para25 graph, determinations under subparagraph (A) 
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1 shall be made after such plan (or coverage) has 

2 complied with this section for the first 6 months 

3 of the plan year involved. 

4 ‘‘(E) NOTIFICATION.— 

5 ‘‘(i) IN GENERAL.—A group health 

6 plan (or a health insurance issuer offering 

7 coverage in connection with a group health 

8 plan) that, based upon a certification de9 scribed under subparagraph (C), qualifies 

10 for an exemption under this paragraph, 

11 and elects to implement the exemption, shall 

12 promptly notify the Secretary, the appro13 priate State agencies, and participants and 

14 beneficiaries in the plan of such election. 

15 ‘‘(ii) REQUIREMENT.—A notification 

16 to the Secretary under clause (i) shall in17 clude— 

18 ‘‘(I) a description of the number 

19 of covered lives under the plan (or cov20 erage) involved at the time of the noti21 fication, and as applicable, at the time 

22 of any prior election of the cost-exemp23 tion under this paragraph by such 

24 plan (or coverage); 
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1 ‘‘(II) for both the plan year upon 

2 which a cost exemption is sought and 

3 the year prior, a description of the ac4 tual total costs of coverage with respect 

5 to medical and surgical benefits and 

6 mental health and substance use dis7 order benefits under the plan; and 

8 ‘‘(III) for both the plan year upon 

9 which a cost exemption is sought and 

10 the year prior, the actual total costs of 

11 coverage with respect to mental health 

12 and substance use disorder benefits 

13 under the plan. 

14 ‘‘(iii) CONFIDENTIALITY.—A notifica15 tion to the Secretary under clause (i) shall 

16 be confidential. The Secretary shall make 

17 available, upon request and on not more 

18 than an annual basis, an anonymous 

19 itemization of such notifications, that in20 cludes— 

21 ‘‘(I) a breakdown of States by the 

22 size and type of employers submitting 

23 such notification; and 

24 ‘‘(II) a summary of the data re25 ceived under clause (ii). 
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1 ‘‘(F) AUDITS BY APPROPRIATE AGENCIES.— 

2 To determine compliance with this paragraph, 

3 the Secretary may audit the books and records of 

4 a group health plan or health insurance issuer 

5 relating to an exemption, including any actu6 arial reports prepared pursuant to subparagraph 

7 (C), during the 6 year period following the noti8 fication of such exemption under subparagraph 

9 (E). A State agency receiving a notification 

10 under subparagraph (E) may also conduct such 

11 an audit with respect to an exemption covered 

12 by such notification.’’; 

13 (4) in subsection (e), by striking paragraph (4) 

14 and inserting the following: 

15 ‘‘(4) MENTAL HEALTH BENEFITS.—The term 

16 ‘mental health benefits’ means benefits with respect to 

17 services for mental health conditions, as defined under 

18 the terms of the plan and in accordance with applica19 ble Federal and State law. 

20 ‘‘(5) SUBSTANCE USE DISORDER BENEFITS.— 

21 The term ‘substance use disorder benefits’ means bene22 fits with respect to services for substance use dis23 orders, as defined under the terms of the plan and in 

24 accordance with applicable Federal and State law.’’; 

25 (5) by striking subsection (f); 
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1 (6) by inserting after subsection (e) the following: 

2 ‘‘(f) SECRETARY REPORT.—The Secretary shall, by 

3 January 1, 2012, and every two years thereafter, submit 

4 to the appropriate committees of Congress a report on com5 pliance of group health plans (and health insurance cov6 erage offered in connection with such plans) with the re7 quirements of this section. Such report shall include the re8 sults of any surveys or audits on compliance of group health 

9 plans (and health insurance coverage offered in connection 

10 with such plans) with such requirements and an analysis 

11 of the reasons for any failures to comply. 

12 ‘‘(g) NOTICE AND ASSISTANCE.—The Secretary, in co13 operation with the Secretaries of Health and Human Serv14 ices and Treasury, as appropriate, shall publish and widely 

15 disseminate guidance and information for group health 

16 plans, participants and beneficiaries, applicable State and 

17 local regulatory bodies, and the National Association of In18 surance Commissioners concerning the requirements of this 

19 section and shall provide assistance concerning such re20 quirements and the continued operation of applicable State 

21 law. Such guidance and information shall inform partici22 pants and beneficiaries of how they may obtain assistance 

23 under this section, including, where appropriate, assistance 

24 from State consumer and insurance agencies.’’; 
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1 (7) by striking ‘‘mental health benefits’’ and in2 serting ‘‘mental health and substance use disorder 

3 benefits’’ each place it appears in subsections 

4 (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and (a)(2)(C); 

5 and 

6 (8) by striking ‘‘mental health benefits’’ and in7 serting ‘‘mental health or substance use disorder bene8 fits’’ each place it appears (other than in any provi9 sion amended by the previous paragraph). 

10 (b) AMENDMENTS TO PUBLIC HEALTH SERVICE

11 ACT.—Section 2705 of the Public Health Service Act (42 

12 U.S.C. 300gg–5) is amended— 

13 (1) in subsection (a), by adding at the end the 

14 following: 

15 ‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT

16 LIMITATIONS.— 

17 ‘‘(A) IN GENERAL.—In the case of a group 

18 health plan (or health insurance coverage offered 

19 in connection with such a plan) that provides 

20 both medical and surgical benefits and mental 

21 health or substance use disorder benefits, such 

22 plan or coverage shall ensure that— 

23 ‘‘(i) the financial requirements appli24 cable to such mental health or substance use 

25 disorder benefits are no more restrictive 
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1 than the predominant financial require2 ments applied to substantially all medical 

3 and surgical benefits covered by the plan (or 

4 coverage), and there are no separate cost 

5 sharing requirements that are applicable 

6 only with respect to mental health or sub7 stance use disorder benefits; and 

8 ‘‘(ii) the treatment limitations applica9 ble to such mental health or substance use 

10 disorder benefits are no more restrictive 

11 than the predominant treatment limitations 

12 applied to substantially all medical and 

13 surgical benefits covered by the plan (or 

14 coverage) and there are no separate treat15 ment limitations that are applicable only 

16 with respect to mental health or substance 

17 use disorder benefits. 

18 ‘‘(B) DEFINITIONS.—In this paragraph: 

19 ‘‘(i) FINANCIAL REQUIREMENT.—The 

20 term ‘financial requirement’ includes 

21 deductibles, copayments, coinsurance, and 

22 out-of-pocket expenses, but excludes an ag23 gregate lifetime limit and an annual limit 

24 subject to paragraphs (1) and (2). 
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1 ‘‘(ii) PREDOMINANT.—A financial re2 quirement or treatment limit is considered 

3 to be predominant if it is the most common 

4 or frequent of such type of limit or require5 ment. 

6 ‘‘(iii) TREATMENT LIMITATION.—The 

7 term ‘treatment limitation’ includes limits 

8 on the frequency of treatment, number of 

9 visits, days of coverage, or other similar 

10 limits on the scope or duration of treat11 ment. 

12 ‘‘(4) AVAILABILITY OF PLAN INFORMATION.—The 

13 criteria for medical necessity determinations made 

14 under the plan with respect to mental health or sub15 stance use disorder benefits (or the health insurance 

16 coverage offered in connection with the plan with re17 spect to such benefits) shall be made available by the 

18 plan administrator (or the health insurance issuer of19 fering such coverage) in accordance with regulations 

20 to any current or potential participant, beneficiary, 

21 or contracting provider upon request. The reason for 

22 any denial under the plan (or coverage) of reimburse23 ment or payment for services with respect to mental 

24 health or substance use disorder benefits in the case 

25 of any participant or beneficiary shall, on request or 
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1 as otherwise required, be made available by the plan 

2 administrator (or the health insurance issuer offering 

3 such coverage) to the participant or beneficiary in ac4 cordance with regulations. 

5 ‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the case 

6 of a plan or coverage that provides both medical and 

7 surgical benefits and mental health or substance use 

8 disorder benefits, if the plan or coverage provides cov9 erage for medical or surgical benefits provided by out10 of-network providers, the plan or coverage shall pro11 vide coverage for mental health or substance use dis12 order benefits provided by out-of-network providers in 

13 a manner that is consistent with the requirements of 

14 this section.’’; 

15 (2) in subsection (b), by amending paragraph 

16 (2) to read as follows: 

17 ‘‘(2) in the case of a group health plan (or health 

18 insurance coverage offered in connection with such a 

19 plan) that provides mental health or substance use 

20 disorder benefits, as affecting the terms and condi21 tions of the plan or coverage relating to such benefits 

22 under the plan or coverage, except as provided in sub23 section (a).’’; 

24 (3) in subsection (c)— 
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1 (A) in paragraph (1), by inserting before 

2 the period the following: ‘‘(as defined in section 

3 2791(e)(4), except that for purposes of this para4 graph such term shall include employers with 1 

5 employee in the case of an employer residing in 

6 a State that permits small groups to include a 

7 single individual)’’; and 

8 (B) by striking paragraph (2) and inserting 

9 the following: 

10 ‘‘(2) COST EXEMPTION.— 

11 ‘‘(A) IN GENERAL.—With respect to a group 

12 health plan (or health insurance coverage offered 

13 in connection with such a plan), if the applica14 tion of this section to such plan (or coverage) re15 sults in an increase for the plan year involved 

16 of the actual total costs of coverage with respect 

17 to medical and surgical benefits and mental 

18 health and substance use disorder benefits under 

19 the plan (as determined and certified under sub20 paragraph (C)) by an amount that exceeds the 

21 applicable percentage described in subparagraph 

22 (B) of the actual total plan costs, the provisions 

23 of this section shall not apply to such plan (or 

24 coverage) during the following plan year, and 

25 such exemption shall apply to the plan (or cov-
319 

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1 erage) for 1 plan year. An employer may elect 

2 to continue to apply mental health and substance 

3 use disorder parity pursuant to this section with 

4 respect to the group health plan (or coverage) in5 volved regardless of any increase in total costs. 

6 ‘‘(B) APPLICABLE PERCENTAGE.—With re7 spect to a plan (or coverage), the applicable per8 centage described in this subparagraph shall 

9 be— 

10 ‘‘(i) 2 percent in the case of the first 

11 plan year in which this section is applied; 

12 and 

13 ‘‘(ii) 1 percent in the case of each sub14 sequent plan year. 

15 ‘‘(C) DETERMINATIONS BY ACTUARIES.— 

16 Determinations as to increases in actual costs 

17 under a plan (or coverage) for purposes of this 

18 section shall be made and certified by a qualified 

19 and licensed actuary who is a member in good 

20 standing of the American Academy of Actuaries. 

21 All such determinations shall be in a written re22 port prepared by the actuary. The report, and 

23 all underlying documentation relied upon by the 

24 actuary, shall be maintained by the group health 

25 plan or health insurance issuer for a period of 
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1 6 years following the notification made under 

2 subparagraph (E). 

3 ‘‘(D) 6-MONTH DETERMINATIONS.—If a 

4 group health plan (or a health insurance issuer 

5 offering coverage in connection with a group 

6 health plan) seeks an exemption under this para7 graph, determinations under subparagraph (A) 

8 shall be made after such plan (or coverage) has 

9 complied with this section for the first 6 months 

10 of the plan year involved. 

11 ‘‘(E) NOTIFICATION.— 

12 ‘‘(i) IN GENERAL.—A group health 

13 plan (or a health insurance issuer offering 

14 coverage in connection with a group health 

15 plan) that, based upon a certification de16 scribed under subparagraph (C), qualifies 

17 for an exemption under this paragraph, 

18 and elects to implement the exemption, shall 

19 promptly notify the Secretary, the appro20 priate State agencies, and participants and 

21 beneficiaries in the plan of such election. 

22 ‘‘(ii) REQUIREMENT.—A notification 

23 to the Secretary under clause (i) shall in24 clude— 
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1 ‘‘(I) a description of the number 

2 of covered lives under the plan (or cov3 erage) involved at the time of the noti4 fication, and as applicable, at the time 

5 of any prior election of the cost-exemp6 tion under this paragraph by such 

7 plan (or coverage); 

8 ‘‘(II) for both the plan year upon 

9 which a cost exemption is sought and 

10 the year prior, a description of the ac11 tual total costs of coverage with respect 

12 to medical and surgical benefits and 

13 mental health and substance use dis14 order benefits under the plan; and 

15 ‘‘(III) for both the plan year upon 

16 which a cost exemption is sought and 

17 the year prior, the actual total costs of 

18 coverage with respect to mental health 

19 and substance use disorder benefits 

20 under the plan. 

21 ‘‘(iii) CONFIDENTIALITY.—A notifica22 tion to the Secretary under clause (i) shall 

23 be confidential. The Secretary shall make 

24 available, upon request and on not more 

25 than an annual basis, an anonymous 
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1 itemization of such notifications, that in2 cludes— 

3 ‘‘(I) a breakdown of States by the 

4 size and type of employers submitting 

5 such notification; and 

6 ‘‘(II) a summary of the data re7 ceived under clause (ii). 

8 ‘‘(F) AUDITS BY APPROPRIATE AGENCIES.— 

9 To determine compliance with this paragraph, 

10 the Secretary may audit the books and records of 

11 a group health plan or health insurance issuer 

12 relating to an exemption, including any actu13 arial reports prepared pursuant to subparagraph 

14 (C), during the 6 year period following the noti15 fication of such exemption under subparagraph 

16 (E). A State agency receiving a notification 

17 under subparagraph (E) may also conduct such 

18 an audit with respect to an exemption covered 

19 by such notification.’’; 

20 (4) in subsection (e), by striking paragraph (4) 

21 and inserting the following: 

22 ‘‘(4) MENTAL HEALTH BENEFITS.—The term 

23 ‘mental health benefits’ means benefits with respect to 

24 services for mental health conditions, as defined under 
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1 the terms of the plan and in accordance with applica2 ble Federal and State law. 

3 ‘‘(5) SUBSTANCE USE DISORDER BENEFITS.— 

4 The term ‘substance use disorder benefits’ means bene5 fits with respect to services for substance use dis6 orders, as defined under the terms of the plan and in 

7 accordance with applicable Federal and State law.’’; 

8 (5) by striking subsection (f); 

9 (6) by striking ‘‘mental health benefits’’ and in10 serting ‘‘mental health and substance use disorder 

11 benefits’’ each place it appears in subsections 

12 (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and (a)(2)(C); 

13 and 

14 (7) by striking ‘‘mental health benefits’’ and in15 serting ‘‘mental health or substance use disorder bene16 fits’’ each place it appears (other than in any provi17 sion amended by the previous paragraph). 

18 (c) AMENDMENTS TO INTERNAL REVENUE CODE.— 

19 Section 9812 of the Internal Revenue Code of 1986 is 

20 amended— 

21 (1) in subsection (a), by adding at the end the 

22 following: 

23 ‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT

24 LIMITATIONS.— 
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1 ‘‘(A) IN GENERAL.—In the case of a group 

2 health plan that provides both medical and sur3 gical benefits and mental health or substance use 

4 disorder benefits, such plan shall ensure that— 

5 ‘‘(i) the financial requirements appli6 cable to such mental health or substance use 

7 disorder benefits are no more restrictive 

8 than the predominant financial require9 ments applied to substantially all medical 

10 and surgical benefits covered by the plan, 

11 and there are no separate cost sharing re12 quirements that are applicable only with re13 spect to mental health or substance use dis14 order benefits; and 

15 ‘‘(ii) the treatment limitations applica16 ble to such mental health or substance use 

17 disorder benefits are no more restrictive 

18 than the predominant treatment limitations 

19 applied to substantially all medical and 

20 surgical benefits covered by the plan and 

21 there are no separate treatment limitations 

22 that are applicable only with respect to 

23 mental health or substance use disorder ben24 efits. 

25 ‘‘(B) DEFINITIONS.—In this paragraph: 
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1 ‘‘(i) FINANCIAL REQUIREMENT.—The 

2 term ‘financial requirement’ includes 

3 deductibles, copayments, coinsurance, and 

4 out-of-pocket expenses, but excludes an ag5 gregate lifetime limit and an annual limit 

6 subject to paragraphs (1) and (2), 

7 ‘‘(ii) PREDOMINANT.—A financial re8 quirement or treatment limit is considered 

9 to be predominant if it is the most common 

10 or frequent of such type of limit or require11 ment. 

12 ‘‘(iii) TREATMENT LIMITATION.—The 

13 term ‘treatment limitation’ includes limits 

14 on the frequency of treatment, number of 

15 visits, days of coverage, or other similar 

16 limits on the scope or duration of treat17 ment. 

18 ‘‘(4) AVAILABILITY OF PLAN INFORMATION.—The 

19 criteria for medical necessity determinations made 

20 under the plan with respect to mental health or sub21 stance use disorder benefits shall be made available by 

22 the plan administrator in accordance with regula23 tions to any current or potential participant, bene24 ficiary, or contracting provider upon request. The 

25 reason for any denial under the plan of reimburse-
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1 ment or payment for services with respect to mental 

2 health or substance use disorder benefits in the case 

3 of any participant or beneficiary shall, on request or 

4 as otherwise required, be made available by the plan 

5 administrator to the participant or beneficiary in ac6 cordance with regulations. 

7 ‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the case 

8 of a plan that provides both medical and surgical 

9 benefits and mental health or substance use disorder 

10 benefits, if the plan provides coverage for medical or 

11 surgical benefits provided by out-of-network providers, 

12 the plan shall provide coverage for mental health or 

13 substance use disorder benefits provided by out-of-net14 work providers in a manner that is consistent with 

15 the requirements of this section.’’; 

16 (2) in subsection (b), by amending paragraph 

17 (2) to read as follows: 

18 ‘‘(2) in the case of a group health plan that pro19 vides mental health or substance use disorder benefits, 

20 as affecting the terms and conditions of the plan re21 lating to such benefits under the plan, except as pro22 vided in subsection (a).’’; 

23 (3) in subsection (c)— 

24 (A) by amending paragraph (1) to read as 

25 follows: 
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1 ‘‘(1) SMALL EMPLOYER EXEMPTION.— 

2 ‘‘(A) IN GENERAL.—This section shall not 

3 apply to any group health plan for any plan 

4 year of a small employer. 

5 ‘‘(B) SMALL EMPLOYER.—For purposes of 

6 subparagraph (A), the term ‘small employer’ 

7 means, with respect to a calendar year and a 

8 plan year, an employer who employed an aver9 age of at least 2 (or 1 in the case of an employer 

10 residing in a State that permits small groups to 

11 include a single individual) but not more than 

12 50 employees on business days during the pre13 ceding calendar year. For purposes of the pre14 ceding sentence, all persons treated as a single 

15 employer under subsection (b), (c), (m), or (o) of 

16 section 414 shall be treated as 1 employer and 

17 rules similar to rules of subparagraphs (B) and 

18 (C) of section 4980D(d)(2) shall apply.’’; and 

19 (B) by striking paragraph (2) and inserting 

20 the following: 

21 ‘‘(2) COST EXEMPTION.— 

22 ‘‘(A) IN GENERAL.—With respect to a group 

23 health plan, if the application of this section to 

24 such plan results in an increase for the plan 

25 year involved of the actual total costs of coverage 
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1 with respect to medical and surgical benefits and 

2 mental health and substance use disorder benefits 

3 under the plan (as determined and certified 

4 under subparagraph (C)) by an amount that ex5 ceeds the applicable percentage described in sub6 paragraph (B) of the actual total plan costs, the 

7 provisions of this section shall not apply to such 

8 plan during the following plan year, and such 

9 exemption shall apply to the plan for 1 plan 

10 year. An employer may elect to continue to 

11 apply mental health and substance use disorder 

12 parity pursuant to this section with respect to 

13 the group health plan involved regardless of any 

14 increase in total costs. 

15 ‘‘(B) APPLICABLE PERCENTAGE.—With re16 spect to a plan, the applicable percentage de17 scribed in this subparagraph shall be— 

18 ‘‘(i) 2 percent in the case of the first 

19 plan year in which this section is applied; 

20 and 

21 ‘‘(ii) 1 percent in the case of each sub22 sequent plan year. 

23 ‘‘(C) DETERMINATIONS BY ACTUARIES.— 

24 Determinations as to increases in actual costs 

25 under a plan for purposes of this section shall be 
329 

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1 made and certified by a qualified and licensed 

2 actuary who is a member in good standing of the 

3 American Academy of Actuaries. All such deter4 minations shall be in a written report prepared 

5 by the actuary. The report, and all underlying 

6 documentation relied upon by the actuary, shall 

7 be maintained by the group health plan for a pe8 riod of 6 years following the notification made 

9 under subparagraph (E). 

10 ‘‘(D) 6-MONTH DETERMINATIONS.—If a 

11 group health plan seeks an exemption under this 

12 paragraph, determinations under subparagraph 

13 (A) shall be made after such plan has complied 

14 with this section for the first 6 months of the 

15 plan year involved. 

16 ‘‘(E) NOTIFICATION.— 

17 ‘‘(i) IN GENERAL.—A group health 

18 plan that, based upon a certification de19 scribed under subparagraph (C), qualifies 

20 for an exemption under this paragraph, 

21 and elects to implement the exemption, shall 

22 promptly notify the Secretary, the appro23 priate State agencies, and participants and 

24 beneficiaries in the plan of such election. 
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1 ‘‘(ii) REQUIREMENT.—A notification 

2 to the Secretary under clause (i) shall in3 clude— 

4 ‘‘(I) a description of the number 

5 of covered lives under the plan involved 

6 at the time of the notification, and as 

7 applicable, at the time of any prior 

8 election of the cost-exemption under 

9 this paragraph by such plan; 

10 ‘‘(II) for both the plan year upon 

11 which a cost exemption is sought and 

12 the year prior, a description of the ac13 tual total costs of coverage with respect 

14 to medical and surgical benefits and 

15 mental health and substance use dis16 order benefits under the plan; and 

17 ‘‘(III) for both the plan year upon 

18 which a cost exemption is sought and 

19 the year prior, the actual total costs of 

20 coverage with respect to mental health 

21 and substance use disorder benefits 

22 under the plan. 

23 ‘‘(iii) CONFIDENTIALITY.—A notifica24 tion to the Secretary under clause (i) shall 

25 be confidential. The Secretary shall make 
331 

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1 available, upon request and on not more 

2 than an annual basis, an anonymous 

3 itemization of such notifications, that in4 cludes— 

5 ‘‘(I) a breakdown of States by the 

6 size and type of employers submitting 

7 such notification; and 

8 ‘‘(II) a summary of the data re9 ceived under clause (ii). 

10 ‘‘(F) AUDITS BY APPROPRIATE AGENCIES.— 

11 To determine compliance with this paragraph, 

12 the Secretary may audit the books and records of 

13 a group health plan relating to an exemption, 

14 including any actuarial reports prepared pursu15 ant to subparagraph (C), during the 6 year pe16 riod following the notification of such exemption 

17 under subparagraph (E). A State agency receiv18 ing a notification under subparagraph (E) may 

19 also conduct such an audit with respect to an ex20 emption covered by such notification.’’; 

21 (4) in subsection (e), by striking paragraph (4) 

22 and inserting the following: 

23 ‘‘(4) MENTAL HEALTH BENEFITS.—The term 

24 ‘mental health benefits’ means benefits with respect to 

25 services for mental health conditions, as defined under 
332 

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1 the terms of the plan and in accordance with applica2 ble Federal and State law. 

3 ‘‘(5) SUBSTANCE USE DISORDER BENEFITS.— 

4 The term ‘substance use disorder benefits’ means bene5 fits with respect to services for substance use dis6 orders, as defined under the terms of the plan and in 

7 accordance with applicable Federal and State law.’’; 

8 (5) by striking subsection (f); 

9 (6) by striking ‘‘mental health benefits’’ and in10 serting ‘‘mental health and substance use disorder 

11 benefits’’ each place it appears in subsections 

12 (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and (a)(2)(C); 

13 and 

14 (7) by striking ‘‘mental health benefits’’ and in15 serting ‘‘mental health or substance use disorder bene16 fits’’ each place it appears (other than in any provi17 sion amended by the previous paragraph). 

18 (d) REGULATIONS.—Not later than 1 year after the 

19 date of enactment of this Act, the Secretaries of Labor, 

20 Health and Human Services, and the Treasury shall issue 

21 regulations to carry out the amendments made by sub22 sections (a), (b), and (c), respectively. 

23 (e) EFFECTIVE DATE.— 

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

25 this section shall apply with respect to group health 
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1 plans for plan years beginning after the date that is 

2 1 year after the date of enactment of this Act, regard3 less of whether regulations have been issued to carry 

4 out such amendments by such effective date, except 

5 that the amendments made by subsections (a)(5), 

6 (b)(5), and (c)(5), relating to striking of certain sun7 set provisions, shall take effect on January 1, 2009. 

8 (2) SPECIAL RULE FOR COLLECTIVE BARGAINING

9 AGREEMENTS.—In the case of a group health plan 

10 maintained pursuant to one or more collective bar11 gaining agreements between employee representatives 

12 and one or more employers ratified before the date of 

13 the enactment of this Act, the amendments made by 

14 this section shall not apply to plan years beginning 

15 before the later of— 

16 (A) the date on which the last of the collec17 tive bargaining agreements relating to the plan 

18 terminates (determined without regard to any 

19 extension thereof agreed to after the date of the 

20 enactment of this Act), or 

21 (B) January 1, 2009. 

22 For purposes of subparagraph (A), any plan amend23 ment made pursuant to a collective bargaining agree24 ment relating to the plan which amends the plan sole25 ly to conform to any requirement added by this sec-
334 

•HR 1424 EAS 

1 tion shall not be treated as a termination of such col2 lective bargaining agreement. 

3 (f) ASSURING COORDINATION.—The Secretary of 

4 Health and Human Services, the Secretary of Labor, and 

5 the Secretary of the Treasury may ensure, through the exe6 cution or revision of an interagency memorandum of under7 standing among such Secretaries, that— 

8 (1) regulations, rulings, and interpretations 

9 issued by such Secretaries relating to the same matter 

10 over which two or more such Secretaries have respon11 sibility under this section (and the amendments made 

12 by this section) are administered so as to have the 

13 same effect at all times; and 

14 (2) coordination of policies relating to enforcing 

15 the same requirements through such Secretaries in 

16 order to have a coordinated enforcement strategy that 

17 avoids duplication of enforcement efforts and assigns 

18 priorities in enforcement. 

19 (g) CONFORMING CLERICAL AMENDMENTS.— 

20 (1) ERISA HEADING.— 

21 (A) IN GENERAL.—The heading of section 

22 712 of the Employee Retirement Income Security 

23 Act of 1974 is amended to read as follows: 
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1 ‘‘SEC. 712. PARITY IN MENTAL HEALTH AND SUBSTANCE 

2 USE DISORDER BENEFITS.’’. 

3 (B) CLERICAL AMENDMENT.—The table of 

4 contents in section 1 of such Act is amended by 

5 striking the item relating to section 712 and in6 serting the following new item: 

‘‘Sec. 712. Parity in mental health and substance use disorder benefits.’’. 

7 (2) PHSA HEADING.—The heading of section 

8 2705 of the Public Health Service Act is amended to 

9 read as follows: 

10 ‘‘SEC. 2705. PARITY IN MENTAL HEALTH AND SUBSTANCE 

11 USE DISORDER BENEFITS.’’. 

12 (3) IRC HEADING.— 

13 (A) IN GENERAL.—The heading of section 

14 9812 of the Internal Revenue Code of 1986 is 

15 amended to read as follows: 

16 ‘‘SEC. 9812. PARITY IN MENTAL HEALTH AND SUBSTANCE 

17 USE DISORDER BENEFITS.’’. 

18 (B) CLERICAL AMENDMENT.—The table of 

19 sections for subchapter B of chapter 100 of such 

20 Code is amended by striking the item relating to 

21 section 9812 and inserting the following new 

22 item: 

‘‘Sec. 9812. Parity in mental health and substance use disorder benefits.’’. 
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1 (h) GAO STUDY ON COVERAGE AND EXCLUSION OF

2 MENTAL HEALTH AND SUBSTANCE USE DISORDER DIAG3 NOSES.— 

4 (1) IN GENERAL.—The Comptroller General of 

5 the United States shall conduct a study that analyzes 

6 the specific rates, patterns, and trends in coverage 

7 and exclusion of specific mental health and substance 

8 use disorder diagnoses by health plans and health in9 surance. The study shall include an analysis of— 

10 (A) specific coverage rates for all mental 

11 health conditions and substance use disorders; 

12 (B) which diagnoses are most commonly 

13 covered or excluded; 

14 (C) whether implementation of this Act has 

15 affected trends in coverage or exclusion of such 

16 diagnoses; and 

17 (D) the impact of covering or excluding spe18 cific diagnoses on participants’ and enrollees’ 

19 health, their health care coverage, and the costs 

20 of delivering health care. 

21 (2) REPORTS.—Not later than 3 years after the 

22 date of the enactment of this Act, and 2 years after 

23 the date of submission the first report under this 

24 paragraph, the Comptroller General shall submit to 
337 

•HR 1424 EAS 

1 Congress a report on the results of the study con2 ducted under paragraph (1). 

3 TITLE VI—OTHER PROVISIONS 

4 SEC. 601. SECURE RURAL SCHOOLS AND COMMUNITY SELF5 DETERMINATION PROGRAM. 

6 (a) REAUTHORIZATION OF THE SECURE RURAL

7 SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT OF

8 2000.—The Secure Rural Schools and Community Self-De9 termination Act of 2000 (16 U.S.C. 500 note; Public Law 

10 106–393) is amended by striking sections 1 through 403 

11 and inserting the following: 

12 ‘‘SECTION 1. SHORT TITLE. 

13 ‘‘This Act may be cited as the ‘Secure Rural Schools 

14 and Community Self-Determination Act of 2000’. 

15 ‘‘SEC. 2. PURPOSES. 

16 ‘‘The purposes of this Act are— 

17 ‘‘(1) to stabilize and transition payments to 

18 counties to provide funding for schools and roads that 

19 supplements other available funds; 

20 ‘‘(2) to make additional investments in, and cre21 ate additional employment opportunities through, 

22 projects that— 

23 ‘‘(A)(i) improve the maintenance of existing 

24 infrastructure; 
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•HR 1424 EAS 

1 ‘‘(ii) implement stewardship objectives that 

2 enhance forest ecosystems; and 

3 ‘‘(iii) restore and improve land health and 

4 water quality; 

5 ‘‘(B) enjoy broad-based support; and 

6 ‘‘(C) have objectives that may include— 

7 ‘‘(i) road, trail, and infrastructure 

8 maintenance or obliteration; 

9 ‘‘(ii) soil productivity improvement; 

10 ‘‘(iii) improvements in forest ecosystem 

11 health; 

12 ‘‘(iv) watershed restoration and main13 tenance; 

14 ‘‘(v) the restoration, maintenance, and 

15 improvement of wildlife and fish habitat; 

16 ‘‘(vi) the control of noxious and exotic 

17 weeds; and 

18 ‘‘(vii) the reestablishment of native spe19 cies; and 

20 ‘‘(3) to improve cooperative relationships 

21 among— 

22 ‘‘(A) the people that use and care for Fed23 eral land; and 

24 ‘‘(B) the agencies that manage the Federal 

25 land. 
339 

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1 ‘‘SEC. 3. DEFINITIONS. 

2 ‘‘In this Act: 

3 ‘‘(1) ADJUSTED SHARE.—The term ‘adjusted 

4 share’ means the number equal to the quotient ob5 tained by dividing— 

6 ‘‘(A) the number equal to the quotient ob7 tained by dividing— 

8 ‘‘(i) the base share for the eligible coun9 ty; by 

10 ‘‘(ii) the income adjustment for the eli11 gible county; by 

12 ‘‘(B) the number equal to the sum of the 

13 quotients obtained under subparagraph (A) and 

14 paragraph (8)(A) for all eligible counties. 

15 ‘‘(2) BASE SHARE.—The term ‘base share’ means 

16 the number equal to the average of— 

17 ‘‘(A) the quotient obtained by dividing— 

18 ‘‘(i) the number of acres of Federal 

19 land described in paragraph (7)(A) in each 

20 eligible county; by 

21 ‘‘(ii) the total number acres of Federal 

22 land in all eligible counties in all eligible 

23 States; and 

24 ‘‘(B) the quotient obtained by dividing— 

25 ‘‘(i) the amount equal to the average of 

26 the 3 highest 25-percent payments and safe-
340 

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1 ty net payments made to each eligible State 

2 for each eligible county during the eligi3 bility period; by 

4 ‘‘(ii) the amount equal to the sum of 

5 the amounts calculated under clause (i) and 

6 paragraph (9)(B)(i) for all eligible counties 

7 in all eligible States during the eligibility 

8 period. 

9 ‘‘(3) COUNTY PAYMENT.—The term ‘county pay10 ment’ means the payment for an eligible county cal11 culated under section 101(b). 

12 ‘‘(4) ELIGIBLE COUNTY.—The term ‘eligible 

13 county’ means any county that— 

14 ‘‘(A) contains Federal land (as defined in 

15 paragraph (7)); and 

16 ‘‘(B) elects to receive a share of the State 

17 payment or the county payment under section 

18 102(b). 

19 ‘‘(5) ELIGIBILITY PERIOD.—The term ‘eligibility 

20 period’ means fiscal year 1986 through fiscal year 

21 1999. 

22 ‘‘(6) ELIGIBLE STATE.—The term ‘eligible State’ 

23 means a State or territory of the United States that 

24 received a 25-percent payment for 1 or more fiscal 

25 years of the eligibility period. 
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1 ‘‘(7) FEDERAL LAND.—The term ‘Federal land’ 

2 means— 

3 ‘‘(A) land within the National Forest Sys4 tem, as defined in section 11(a) of the Forest and 

5 Rangeland Renewable Resources Planning Act of 

6 1974 (16 U.S.C. 1609(a)) exclusive of the Na7 tional Grasslands and land utilization projects 

8 designated as National Grasslands administered 

9 pursuant to the Act of July 22, 1937 (7 U.S.C. 

10 1010–1012); and 

11 ‘‘(B) such portions of the revested Oregon 

12 and California Railroad and reconveyed Coos 

13 Bay Wagon Road grant land as are or may 

14 hereafter come under the jurisdiction of the De15 partment of the Interior, which have heretofore 

16 or may hereafter be classified as timberlands, 

17 and power-site land valuable for timber, that 

18 shall be managed, except as provided in the 

19 former section 3 of the Act of August 28, 1937 

20 (50 Stat. 875; 43 U.S.C. 1181c), for permanent 

21 forest production. 

22 ‘‘(8) 50-PERCENT ADJUSTED SHARE.—The term 

23 ‘50-percent adjusted share’ means the number equal to 

24 the quotient obtained by dividing— 
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1 ‘‘(A) the number equal to the quotient ob2 tained by dividing— 

3 ‘‘(i) the 50-percent base share for the 

4 eligible county; by 

5 ‘‘(ii) the income adjustment for the eli6 gible county; by 

7 ‘‘(B) the number equal to the sum of the 

8 quotients obtained under subparagraph (A) and 

9 paragraph (1)(A) for all eligible counties. 

10 ‘‘(9) 50-PERCENT BASE SHARE.—The term ‘50- 

11 percent base share’ means the number equal to the av12 erage of— 

13 ‘‘(A) the quotient obtained by dividing— 

14 ‘‘(i) the number of acres of Federal 

15 land described in paragraph (7)(B) in each 

16 eligible county; by 

17 ‘‘(ii) the total number acres of Federal 

18 land in all eligible counties in all eligible 

19 States; and 

20 ‘‘(B) the quotient obtained by dividing— 

21 ‘‘(i) the amount equal to the average of 

22 the 3 highest 50-percent payments made to 

23 each eligible county during the eligibility 

24 period; by 
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1 ‘‘(ii) the amount equal to the sum of 

2 the amounts calculated under clause (i) and 

3 paragraph (2)(B)(i) for all eligible counties 

4 in all eligible States during the eligibility 

5 period. 

6 ‘‘(10) 50-PERCENT PAYMENT.—The term ‘50-per7 cent payment’ means the payment that is the sum of 

8 the 50-percent share otherwise paid to a county pur9 suant to title II of the Act of August 28, 1937 (chap10 ter 876; 50 Stat. 875; 43 U.S.C. 1181f), and the pay11 ment made to a county pursuant to the Act of May 

12 24, 1939 (chapter 144; 53 Stat. 753; 43 U.S.C. 1181f– 

13 1 et seq.). 

14 ‘‘(11) FULL FUNDING AMOUNT.—The term ‘full 

15 funding amount’ means— 

16 ‘‘(A) $500,000,000 for fiscal year 2008; and 

17 ‘‘(B) for fiscal year 2009 and each fiscal 

18 year thereafter, the amount that is equal to 90 

19 percent of the full funding amount for the pre20 ceding fiscal year. 

21 ‘‘(12) INCOME ADJUSTMENT.—The term ‘income 

22 adjustment’ means the square of the quotient obtained 

23 by dividing— 

24 ‘‘(A) the per capita personal income for 

25 each eligible county; by 
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1 ‘‘(B) the median per capita personal income 

2 of all eligible counties. 

3 ‘‘(13) PER CAPITA PERSONAL INCOME.—The 

4 term ‘per capita personal income’ means the most re5 cent per capita personal income data, as determined 

6 by the Bureau of Economic Analysis. 

7 ‘‘(14) SAFETY NET PAYMENTS.—The term ‘safety 

8 net payments’ means the special payment amounts 

9 paid to States and counties required by section 13982 

10 or 13983 of the Omnibus Budget Reconciliation Act 

11 of 1993 (Public Law 103–66; 16 U.S.C. 500 note; 43 

12 U.S.C. 1181f note). 

13 ‘‘(15) SECRETARY CONCERNED.—The term ‘Sec14 retary concerned’ means— 

15 ‘‘(A) the Secretary of Agriculture or the des16 ignee of the Secretary of Agriculture with respect 

17 to the Federal land described in paragraph 

18 (7)(A); and 

19 ‘‘(B) the Secretary of the Interior or the des20 ignee of the Secretary of the Interior with respect 

21 to the Federal land described in paragraph 

22 (7)(B). 

23 ‘‘(16) STATE PAYMENT.—The term ‘State pay24 ment’ means the payment for an eligible State cal25 culated under section 101(a). 
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1 ‘‘(17) 25-PERCENT PAYMENT.—The term ‘25-per2 cent payment’ means the payment to States required 

3 by the sixth paragraph under the heading of ‘FOR4 EST SERVICE’ in the Act of May 23, 1908 (35 Stat. 

5 260; 16 U.S.C. 500), and section 13 of the Act of 

6 March 1, 1911 (36 Stat. 963; 16 U.S.C. 500). 

7 ‘‘TITLE I—SECURE PAYMENTS 

8 FOR STATES AND COUNTIES 

9 CONTAINING FEDERAL LAND 

10 ‘‘SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING 

11 FEDERAL LAND. 

12 ‘‘(a) STATE PAYMENT.—For each of fiscal years 2008 

13 through 2011, the Secretary of Agriculture shall calculate 

14 for each eligible State an amount equal to the sum of the 

15 products obtained by multiplying— 

16 ‘‘(1) the adjusted share for each eligible county 

17 within the eligible State; by 

18 ‘‘(2) the full funding amount for the fiscal year. 

19 ‘‘(b) COUNTY PAYMENT.—For each of fiscal years 2008 

20 through 2011, the Secretary of the Interior shall calculate 

21 for each eligible county that received a 50-percent payment 

22 during the eligibility period an amount equal to the product 

23 obtained by multiplying— 

24 ‘‘(1) the 50-percent adjusted share for the eligible 

25 county; by 
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1 ‘‘(2) the full funding amount for the fiscal year. 

2 ‘‘SEC. 102. PAYMENTS TO STATES AND COUNTIES. 

3 ‘‘(a) PAYMENT AMOUNTS.—Except as provided in sec4 tion 103, the Secretary of the Treasury shall pay to— 

5 ‘‘(1) a State or territory of the United States an 

6 amount equal to the sum of the amounts elected under 

7 subsection (b) by each county within the State or ter8 ritory for— 

9 ‘‘(A) if the county is eligible for the 25-per10 cent payment, the share of the 25-percent pay11 ment; or 

12 ‘‘(B) the share of the State payment of the 

13 eligible county; and 

14 ‘‘(2) a county an amount equal to the amount 

15 elected under subsection (b) by each county for— 

16 ‘‘(A) if the county is eligible for the 50-per17 cent payment, the 50-percent payment; or 

18 ‘‘(B) the county payment for the eligible 

19 county. 

20 ‘‘(b) ELECTION TO RECEIVE PAYMENT AMOUNT.— 

21 ‘‘(1) ELECTION; SUBMISSION OF RESULTS.— 

22 ‘‘(A) IN GENERAL.—The election to receive 

23 a share of the State payment, the county pay24 ment, a share of the State payment and the 

25 county payment, a share of the 25-percent pay-
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1 ment, the 50-percent payment, or a share of the 

2 25-percent payment and the 50-percent payment, 

3 as applicable, shall be made at the discretion of 

4 each affected county by August 1, 2008 (or as 

5 soon thereafter as the Secretary concerned deter6 mines is practicable), and August 1 of each sec7 ond fiscal year thereafter, in accordance with 

8 paragraph (2), and transmitted to the Secretary 

9 concerned by the Governor of each eligible State. 

10 ‘‘(B) FAILURE TO TRANSMIT.—If an elec11 tion for an affected county is not transmitted to 

12 the Secretary concerned by the date specified 

13 under subparagraph (A), the affected county 

14 shall be considered to have elected to receive a 

15 share of the State payment, the county payment, 

16 or a share of the State payment and the county 

17 payment, as applicable. 

18 ‘‘(2) DURATION OF ELECTION.— 

19 ‘‘(A) IN GENERAL.—A county election to re20 ceive a share of the 25-percent payment or 50- 

21 percent payment, as applicable, shall be effective 

22 for 2 fiscal years. 

23 ‘‘(B) FULL FUNDING AMOUNT.—If a county 

24 elects to receive a share of the State payment or 

25 the county payment, the election shall be effective 
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1 for all subsequent fiscal years through fiscal year 

2 2011. 

3 ‘‘(3) SOURCE OF PAYMENT AMOUNTS.—The pay4 ment to an eligible State or eligible county under this 

5 section for a fiscal year shall be derived from— 

6 ‘‘(A) any amounts that are appropriated to 

7 carry out this Act; 

8 ‘‘(B) any revenues, fees, penalties, or mis9 cellaneous receipts, exclusive of deposits to any 

10 relevant trust fund, special account, or perma11 nent operating funds, received by the Federal 

12 Government from activities by the Bureau of 

13 Land Management or the Forest Service on the 

14 applicable Federal land; and 

15 ‘‘(C) to the extent of any shortfall, out of 

16 any amounts in the Treasury of the United 

17 States not otherwise appropriated. 

18 ‘‘(c) DISTRIBUTION AND EXPENDITURE OF PAY19 MENTS.— 

20 ‘‘(1) DISTRIBUTION METHOD.—A State that re21 ceives a payment under subsection (a) for Federal 

22 land described in section 3(7)(A) shall distribute the 

23 appropriate payment amount among the appropriate 

24 counties in the State in accordance with— 
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1 ‘‘(A) the Act of May 23, 1908 (16 U.S.C. 

2 500); and 

3 ‘‘(B) section 13 of the Act of March 1, 1911 

4 (36 Stat. 963; 16 U.S.C. 500). 

5 ‘‘(2) EXPENDITURE PURPOSES.—Subject to sub6 section (d), payments received by a State under sub7 section (a) and distributed to counties in accordance 

8 with paragraph (1) shall be expended as required by 

9 the laws referred to in paragraph (1). 

10 ‘‘(d) EXPENDITURE RULES FOR ELIGIBLE COUN11 TIES.— 

12 ‘‘(1) ALLOCATIONS.— 

13 ‘‘(A) USE OF PORTION IN SAME MANNER AS

14 25-PERCENT PAYMENT OR 50-PERCENT PAYMENT, 

15 AS APPLICABLE.—Except as provided in para16 graph (3)(B), if an eligible county elects to re17 ceive its share of the State payment or the coun18 ty payment, not less than 80 percent, but not 

19 more than 85 percent, of the funds shall be ex20 pended in the same manner in which the 25-per21 cent payments or 50-percent payment, as appli22 cable, are required to be expended. 

23 ‘‘(B) ELECTION AS TO USE OF BALANCE.— 

24 Except as provided in subparagraph (C), an eli25 gible county shall elect to do 1 or more of the fol-
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1 lowing with the balance of any funds not ex2 pended pursuant to subparagraph (A): 

3 ‘‘(i) Reserve any portion of the balance 

4 for projects in accordance with title II. 

5 ‘‘(ii) Reserve not more than 7 percent 

6 of the total share for the eligible county of 

7 the State payment or the county payment 

8 for projects in accordance with title III. 

9 ‘‘(iii) Return the portion of the balance 

10 not reserved under clauses (i) and (ii) to the 

11 Treasury of the United States. 

12 ‘‘(C) COUNTIES WITH MODEST DISTRIBU13 TIONS.—In the case of each eligible county to 

14 which more than $100,000, but less than 

15 $350,000, is distributed for any fiscal year pur16 suant to either or both of paragraphs (1)(B) and 

17 (2)(B) of subsection (a), the eligible county, with 

18 respect to the balance of any funds not expended 

19 pursuant to subparagraph (A) for that fiscal 

20 year, shall— 

21 ‘‘(i) reserve any portion of the balance 

22 for— 

23 ‘‘(I) carrying out projects under 

24 title II; 
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1 ‘‘(II) carrying out projects under 

2 title III; or 

3 ‘‘(III) a combination of the pur4 poses described in subclauses (I) and 

5 (II); or 

6 ‘‘(ii) return the portion of the balance 

7 not reserved under clause (i) to the Treas8 ury of the United States. 

9 ‘‘(2) DISTRIBUTION OF FUNDS.— 

10 ‘‘(A) IN GENERAL.—Funds reserved by an 

11 eligible county under subparagraph (B)(i) or 

12 (C)(i) of paragraph (1) for carrying out projects 

13 under title II shall be deposited in a special ac14 count in the Treasury of the United States. 

15 ‘‘(B) AVAILABILITY.—Amounts deposited 

16 under subparagraph (A) shall— 

17 ‘‘(i) be available for expenditure by the 

18 Secretary concerned, without further appro19 priation; and 

20 ‘‘(ii) remain available until expended 

21 in accordance with title II. 

22 ‘‘(3) ELECTION.— 

23 ‘‘(A) NOTIFICATION.— 

24 ‘‘(i) IN GENERAL.—An eligible county 

25 shall notify the Secretary concerned of an 
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1 election by the eligible county under this 

2 subsection not later than September 30, 

3 2008 (or as soon thereafter as the Secretary 

4 concerned determines is practicable), and 

5 each September 30 thereafter for each suc6 ceeding fiscal year. 

7 ‘‘(ii) FAILURE TO ELECT.—Except as 

8 provided in subparagraph (B), if the eligi9 ble county fails to make an election by the 

10 date specified in clause (i), the eligible 

11 county shall— 

12 ‘‘(I) be considered to have elected 

13 to expend 85 percent of the funds in 

14 accordance with paragraph (1)(A); and 

15 ‘‘(II) return the balance to the 

16 Treasury of the United States. 

17 ‘‘(B) COUNTIES WITH MINOR DISTRIBU18 TIONS.—In the case of each eligible county to 

19 which less than $100,000 is distributed for any 

20 fiscal year pursuant to either or both of para21 graphs (1)(B) and (2)(B) of subsection (a), the 

22 eligible county may elect to expend all the funds 

23 in the same manner in which the 25-percent 

24 payments or 50-percent payments, as applicable, 

25 are required to be expended. 
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1 ‘‘(e) TIME FOR PAYMENT.—The payments required 

2 under this section for a fiscal year shall be made as soon 

3 as practicable after the end of that fiscal year. 

4 ‘‘SEC. 103. TRANSITION PAYMENTS TO STATES. 

5 ‘‘(a) DEFINITIONS.—In this section: 

6 ‘‘(1) ADJUSTED AMOUNT.—The term ‘adjusted 

7 amount’ means, with respect to a covered State— 

8 ‘‘(A) for fiscal year 2008, 90 percent of— 

9 ‘‘(i) the sum of the amounts paid for 

10 fiscal year 2006 under section 102(a)(2) (as 

11 in effect on September 29, 2006) for the eli12 gible counties in the covered State that have 

13 elected under section 102(b) to receive a 

14 share of the State payment for fiscal year 

15 2008; and 

16 ‘‘(ii) the sum of the amounts paid for 

17 fiscal year 2006 under section 103(a)(2) (as 

18 in effect on September 29, 2006) for the eli19 gible counties in the State of Oregon that 

20 have elected under section 102(b) to receive 

21 the county payment for fiscal year 2008; 

22 ‘‘(B) for fiscal year 2009, 81 percent of— 

23 ‘‘(i) the sum of the amounts paid for 

24 fiscal year 2006 under section 102(a)(2) (as 

25 in effect on September 29, 2006) for the eli-
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1 gible counties in the covered State that have 

2 elected under section 102(b) to receive a 

3 share of the State payment for fiscal year 

4 2009; and 

5 ‘‘(ii) the sum of the amounts paid for 

6 fiscal year 2006 under section 103(a)(2) (as 

7 in effect on September 29, 2006) for the eli8 gible counties in the State of Oregon that 

9 have elected under section 102(b) to receive 

10 the county payment for fiscal year 2009; 

11 and 

12 ‘‘(C) for fiscal year 2010, 73 percent of— 

13 ‘‘(i) the sum of the amounts paid for 

14 fiscal year 2006 under section 102(a)(2) (as 

15 in effect on September 29, 2006) for the eli16 gible counties in the covered State that have 

17 elected under section 102(b) to receive a 

18 share of the State payment for fiscal year 

19 2010; and 

20 ‘‘(ii) the sum of the amounts paid for 

21 fiscal year 2006 under section 103(a)(2) (as 

22 in effect on September 29, 2006) for the eli23 gible counties in the State of Oregon that 

24 have elected under section 102(b) to receive 

25 the county payment for fiscal year 2010. 
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1 ‘‘(2) COVERED STATE.—The term ‘covered State’ 

2 means each of the States of California, Louisiana, Or3 egon, Pennsylvania, South Carolina, South Dakota, 

4 Texas, and Washington. 

5 ‘‘(b) TRANSITION PAYMENTS.—For each of fiscal years 

6 2008 through 2010, in lieu of the payment amounts that 

7 otherwise would have been made under paragraphs (1)(B) 

8 and (2)(B) of section 102(a), the Secretary of the Treasury 

9 shall pay the adjusted amount to each covered State and 

10 the eligible counties within the covered State, as applicable. 

11 ‘‘(c) DISTRIBUTION OF ADJUSTED AMOUNT.—Except 

12 as provided in subsection (d), it is the intent of Congress 

13 that the method of distributing the payments under sub14 section (b) among the counties in the covered States for each 

15 of fiscal years 2008 through 2010 be in the same proportion 

16 that the payments were distributed to the eligible counties 

17 in fiscal year 2006. 

18 ‘‘(d) DISTRIBUTION OF PAYMENTS IN CALIFORNIA.— 

19 The following payments shall be distributed among the eli20 gible counties in the State of California in the same propor21 tion that payments under section 102(a)(2) (as in effect on 

22 September 29, 2006) were distributed to the eligible counties 

23 for fiscal year 2006: 

24 ‘‘(1) Payments to the State of California under 

25 subsection (b). 
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1 ‘‘(2) The shares of the eligible counties of the 

2 State payment for California under section 102 for 

3 fiscal year 2011. 

4 ‘‘(e) TREATMENT OF PAYMENTS.—For purposes of this 

5 Act, any payment made under subsection (b) shall be con6 sidered to be a payment made under section 102(a). 

7 ‘‘TITLE II—SPECIAL PROJECTS 

8 ON FEDERAL LAND 

9 ‘‘SEC. 201. DEFINITIONS. 

10 ‘‘In this title: 

11 ‘‘(1) PARTICIPATING COUNTY.—The term ‘par12 ticipating county’ means an eligible county that elects 

13 under section 102(d) to expend a portion of the Fed14 eral funds received under section 102 in accordance 

15 with this title. 

16 ‘‘(2) PROJECT FUNDS.—The term ‘project funds’ 

17 means all funds an eligible county elects under section 

18 102(d) to reserve for expenditure in accordance with 

19 this title. 

20 ‘‘(3) RESOURCE ADVISORY COMMITTEE.—The 

21 term ‘resource advisory committee’ means— 

22 ‘‘(A) an advisory committee established by 

23 the Secretary concerned under section 205; or 
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1 ‘‘(B) an advisory committee determined by 

2 the Secretary concerned to meet the requirements 

3 of section 205. 

4 ‘‘(4) RESOURCE MANAGEMENT PLAN.—The term 

5 ‘resource management plan’ means— 

6 ‘‘(A) a land use plan prepared by the Bu7 reau of Land Management for units of the Fed8 eral land described in section 3(7)(B) pursuant 

9 to section 202 of the Federal Land Policy and 

10 Management Act of 1976 (43 U.S.C. 1712); or 

11 ‘‘(B) a land and resource management plan 

12 prepared by the Forest Service for units of the 

13 National Forest System pursuant to section 6 of 

14 the Forest and Rangeland Renewable Resources 

15 Planning Act of 1974 (16 U.S.C. 1604). 

16 ‘‘SEC. 202. GENERAL LIMITATION ON USE OF PROJECT 

17 FUNDS. 

18 ‘‘(a) LIMITATION.—Project funds shall be expended 

19 solely on projects that meet the requirements of this title. 

20 ‘‘(b) AUTHORIZED USES.—Project funds may be used 

21 by the Secretary concerned for the purpose of entering into 

22 and implementing cooperative agreements with willing 

23 Federal agencies, State and local governments, private and 

24 nonprofit entities, and landowners for protection, restora25 tion, and enhancement of fish and wildlife habitat, and 
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1 other resource objectives consistent with the purposes of this 

2 Act on Federal land and on non-Federal land where projects 

3 would benefit the resources on Federal land. 

4 ‘‘SEC. 203. SUBMISSION OF PROJECT PROPOSALS. 

5 ‘‘(a) SUBMISSION OF PROJECT PROPOSALS TO SEC6 RETARY CONCERNED.— 

7 ‘‘(1) PROJECTS FUNDED USING PROJECT

8 FUNDS.—Not later than September 30 for fiscal year 

9 2008 (or as soon thereafter as the Secretary concerned 

10 determines is practicable), and each September 30 

11 thereafter for each succeeding fiscal year through fis12 cal year 2011, each resource advisory committee shall 

13 submit to the Secretary concerned a description of 

14 any projects that the resource advisory committee pro15 poses the Secretary undertake using any project funds 

16 reserved by eligible counties in the area in which the 

17 resource advisory committee has geographic jurisdic18 tion. 

19 ‘‘(2) PROJECTS FUNDED USING OTHER FUNDS.— 

20 A resource advisory committee may submit to the Sec21 retary concerned a description of any projects that the 

22 committee proposes the Secretary undertake using 

23 funds from State or local governments, or from the 

24 private sector, other than project funds and funds ap-
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•HR 1424 EAS 

1 propriated and otherwise available to do similar 

2 work. 

3 ‘‘(3) JOINT PROJECTS.—Participating counties 

4 or other persons may propose to pool project funds or 

5 other funds, described in paragraph (2), and jointly 

6 propose a project or group of projects to a resource 

7 advisory committee established under section 205. 

8 ‘‘(b) REQUIRED DESCRIPTION OF PROJECTS.—In sub9 mitting proposed projects to the Secretary concerned under 

10 subsection (a), a resource advisory committee shall include 

11 in the description of each proposed project the following in12 formation: 

13 ‘‘(1) The purpose of the project and a description 

14 of how the project will meet the purposes of this title. 

15 ‘‘(2) The anticipated duration of the project. 

16 ‘‘(3) The anticipated cost of the project. 

17 ‘‘(4) The proposed source of funding for the 

18 project, whether project funds or other funds. 

19 ‘‘(5)(A) Expected outcomes, including how the 

20 project will meet or exceed desired ecological condi21 tions, maintenance objectives, or stewardship objec22 tives. 

23 ‘‘(B) An estimate of the amount of any timber, 

24 forage, and other commodities and other economic ac-
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1 tivity, including jobs generated, if any, anticipated as 

2 part of the project. 

3 ‘‘(6) A detailed monitoring plan, including fund4 ing needs and sources, that— 

5 ‘‘(A) tracks and identifies the positive or 

6 negative impacts of the project, implementation, 

7 and provides for validation monitoring; and 

8 ‘‘(B) includes an assessment of the fol9 lowing: 

10 ‘‘(i) Whether or not the project met or 

11 exceeded desired ecological conditions; cre12 ated local employment or training opportu13 nities, including summer youth jobs pro14 grams such as the Youth Conservation 

15 Corps where appropriate. 

16 ‘‘(ii) Whether the project improved the 

17 use of, or added value to, any products re18 moved from land consistent with the pur19 poses of this title. 

20 ‘‘(7) An assessment that the project is to be in 

21 the public interest. 

22 ‘‘(c) AUTHORIZED PROJECTS.—Projects proposed 

23 under subsection (a) shall be consistent with section 2. 
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1 ‘‘SEC. 204. EVALUATION AND APPROVAL OF PROJECTS BY 

2 SECRETARY CONCERNED. 

3 ‘‘(a) CONDITIONS FOR APPROVAL OF PROPOSED

4 PROJECT.—The Secretary concerned may make a decision 

5 to approve a project submitted by a resource advisory com6 mittee under section 203 only if the proposed project satis7 fies each of the following conditions: 

8 ‘‘(1) The project complies with all applicable 

9 Federal laws (including regulations). 

10 ‘‘(2) The project is consistent with the applicable 

11 resource management plan and with any watershed 

12 or subsequent plan developed pursuant to the resource 

13 management plan and approved by the Secretary 

14 concerned. 

15 ‘‘(3) The project has been approved by the re16 source advisory committee in accordance with section 

17 205, including the procedures issued under subsection 

18 (e) of that section. 

19 ‘‘(4) A project description has been submitted by 

20 the resource advisory committee to the Secretary con21 cerned in accordance with section 203. 

22 ‘‘(5) The project will improve the maintenance of 

23 existing infrastructure, implement stewardship objec24 tives that enhance forest ecosystems, and restore and 

25 improve land health and water quality. 

26 ‘‘(b) ENVIRONMENTAL REVIEWS.— 
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1 ‘‘(1) REQUEST FOR PAYMENT BY COUNTY.—The 

2 Secretary concerned may request the resource advi3 sory committee submitting a proposed project to agree 

4 to the use of project funds to pay for any environ5 mental review, consultation, or compliance with ap6 plicable environmental laws required in connection 

7 with the project. 

8 ‘‘(2) CONDUCT OF ENVIRONMENTAL REVIEW.—If 

9 a payment is requested under paragraph (1) and the 

10 resource advisory committee agrees to the expenditure 

11 of funds for this purpose, the Secretary concerned 

12 shall conduct environmental review, consultation, or 

13 other compliance responsibilities in accordance with 

14 Federal laws (including regulations). 

15 ‘‘(3) EFFECT OF REFUSAL TO PAY.— 

16 ‘‘(A) IN GENERAL.—If a resource advisory 

17 committee does not agree to the expenditure of 

18 funds under paragraph (1), the project shall be 

19 deemed withdrawn from further consideration by 

20 the Secretary concerned pursuant to this title. 

21 ‘‘(B) EFFECT OF WITHDRAWAL.—A with22 drawal under subparagraph (A) shall be deemed 

23 to be a rejection of the project for purposes of sec24 tion 207(c). 

25 ‘‘(c) DECISIONS OF SECRETARY CONCERNED.— 
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1 ‘‘(1) REJECTION OF PROJECTS.— 

2 ‘‘(A) IN GENERAL.—A decision by the Sec3 retary concerned to reject a proposed project 

4 shall be at the sole discretion of the Secretary 

5 concerned. 

6 ‘‘(B) NO ADMINISTRATIVE APPEAL OR JUDI7 CIAL REVIEW.—Notwithstanding any other pro8 vision of law, a decision by the Secretary con9 cerned to reject a proposed project shall not be 

10 subject to administrative appeal or judicial re11 view. 

12 ‘‘(C) NOTICE OF REJECTION.—Not later 

13 than 30 days after the date on which the Sec14 retary concerned makes the rejection decision, the 

15 Secretary concerned shall notify in writing the 

16 resource advisory committee that submitted the 

17 proposed project of the rejection and the reasons 

18 for rejection. 

19 ‘‘(2) NOTICE OF PROJECT APPROVAL.—The Sec20 retary concerned shall publish in the Federal Register 

21 notice of each project approved under subsection (a) 

22 if the notice would be required had the project origi23 nated with the Secretary. 

24 ‘‘(d) SOURCE AND CONDUCT OF PROJECT.—Once the 

25 Secretary concerned accepts a project for review under sec-
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•HR 1424 EAS 

1 tion 203, the acceptance shall be deemed a Federal action 

2 for all purposes. 

3 ‘‘(e) IMPLEMENTATION OF APPROVED PROJECTS.— 

4 ‘‘(1) COOPERATION.—Notwithstanding chapter 

5 63 of title 31, United States Code, using project funds 

6 the Secretary concerned may enter into contracts, 

7 grants, and cooperative agreements with States and 

8 local governments, private and nonprofit entities, and 

9 landowners and other persons to assist the Secretary 

10 in carrying out an approved project. 

11 ‘‘(2) BEST VALUE CONTRACTING.— 

12 ‘‘(A) IN GENERAL.—For any project involv13 ing a contract authorized by paragraph (1) the 

14 Secretary concerned may elect a source for per15 formance of the contract on a best value basis. 

16 ‘‘(B) FACTORS.—The Secretary concerned 

17 shall determine best value based on such factors 

18 as— 

19 ‘‘(i) the technical demands and com20 plexity of the work to be done; 

21 ‘‘(ii)(I) the ecological objectives of the 

22 project; and 

23 ‘‘(II) the sensitivity of the resources 

24 being treated; 
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1 ‘‘(iii) the past experience by the con2 tractor with the type of work being done, 

3 using the type of equipment proposed for 

4 the project, and meeting or exceeding de5 sired ecological conditions; and 

6 ‘‘(iv) the commitment of the contractor 

7 to hiring highly qualified workers and local 

8 residents. 

9 ‘‘(3) MERCHANTABLE TIMBER CONTRACTING

10 PILOT PROGRAM.— 

11 ‘‘(A) ESTABLISHMENT.—The Secretary con12 cerned shall establish a pilot program to imple13 ment a certain percentage of approved projects 

14 involving the sale of merchantable timber using 

15 separate contracts for— 

16 ‘‘(i) the harvesting or collection of mer17 chantable timber; and 

18 ‘‘(ii) the sale of the timber. 

19 ‘‘(B) ANNUAL PERCENTAGES.—Under the 

20 pilot program, the Secretary concerned shall en21 sure that, on a nationwide basis, not less than 

22 the following percentage of all approved projects 

23 involving the sale of merchantable timber are 

24 implemented using separate contracts: 

25 ‘‘(i) For fiscal year 2008, 35 percent. 
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1 ‘‘(ii) For fiscal year 2009, 45 percent. 

2 ‘‘(iii) For each of fiscal years 2010 and 

3 2011, 50 percent. 

4 ‘‘(C) INCLUSION IN PILOT PROGRAM.—The 

5 decision whether to use separate contracts to im6 plement a project involving the sale of merchant7 able timber shall be made by the Secretary con8 cerned after the approval of the project under 

9 this title. 

10 ‘‘(D) ASSISTANCE.— 

11 ‘‘(i) IN GENERAL.—The Secretary con12 cerned may use funds from any appro13 priated account available to the Secretary 

14 for the Federal land to assist in the admin15 istration of projects conducted under the 

16 pilot program. 

17 ‘‘(ii) MAXIMUM AMOUNT OF ASSIST18 ANCE.—The total amount obligated under 

19 this subparagraph may not exceed 

20 $1,000,000 for any fiscal year during which 

21 the pilot program is in effect. 

22 ‘‘(E) REVIEW AND REPORT.— 

23 ‘‘(i) INITIAL REPORT.—Not later than 

24 September 30, 2010, the Comptroller Gen25 eral shall submit to the Committees on Ag-
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1 riculture, Nutrition, and Forestry and En2 ergy and Natural Resources of the Senate 

3 and the Committees on Agriculture and 

4 Natural Resources of the House of Rep5 resentatives a report assessing the pilot pro6 gram. 

7 ‘‘(ii) ANNUAL REPORT.—The Secretary 

8 concerned shall submit to the Committees on 

9 Agriculture, Nutrition, and Forestry and 

10 Energy and Natural Resources of the Senate 

11 and the Committees on Agriculture and 

12 Natural Resources of the House of Rep13 resentatives an annual report describing the 

14 results of the pilot program. 

15 ‘‘(f) REQUIREMENTS FOR PROJECT FUNDS.—The Sec16 retary shall ensure that at least 50 percent of all project 

17 funds be used for projects that are primarily dedicated— 

18 ‘‘(1) to road maintenance, decommissioning, or 

19 obliteration; or 

20 ‘‘(2) to restoration of streams and watersheds. 

21 ‘‘SEC. 205. RESOURCE ADVISORY COMMITTEES. 

22 ‘‘(a) ESTABLISHMENT AND PURPOSE OF RESOURCE

23 ADVISORY COMMITTEES.— 

24 ‘‘(1) ESTABLISHMENT.—The Secretary concerned 

25 shall establish and maintain resource advisory com-
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•HR 1424 EAS 

1 mittees to perform the duties in subsection (b), except 

2 as provided in paragraph (4). 

3 ‘‘(2) PURPOSE.—The purpose of a resource advi4 sory committee shall be— 

5 ‘‘(A) to improve collaborative relationships; 

6 and 

7 ‘‘(B) to provide advice and recommenda8 tions to the land management agencies consistent 

9 with the purposes of this title. 

10 ‘‘(3) ACCESS TO RESOURCE ADVISORY COMMIT11 TEES.—To ensure that each unit of Federal land has 

12 access to a resource advisory committee, and that 

13 there is sufficient interest in participation on a com14 mittee to ensure that membership can be balanced in 

15 terms of the points of view represented and the func16 tions to be performed, the Secretary concerned may, 

17 establish resource advisory committees for part of, or 

18 1 or more, units of Federal land. 

19 ‘‘(4) EXISTING ADVISORY COMMITTEES.— 

20 ‘‘(A) IN GENERAL.—An advisory committee 

21 that meets the requirements of this section, a re22 source advisory committee established before Sep23 tember 29, 2006, or an advisory committee deter24 mined by the Secretary concerned before Sep25 tember 29, 2006, to meet the requirements of this 
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1 section may be deemed by the Secretary con2 cerned to be a resource advisory committee for 

3 the purposes of this title. 

4 ‘‘(B) CHARTER.—A charter for a committee 

5 described in subparagraph (A) that was filed on 

6 or before September 29, 2006, shall be considered 

7 to be filed for purposes of this Act. 

8 ‘‘(C) BUREAU OF LAND MANAGEMENT ADVI9 SORY COMMITTEES.—The Secretary of the Inte10 rior may deem a resource advisory committee 

11 meeting the requirements of subpart 1784 of part 

12 1780 of title 43, Code of Federal Regulations, as 

13 a resource advisory committee for the purposes of 

14 this title. 

15 ‘‘(b) DUTIES.—A resource advisory committee shall— 

16 ‘‘(1) review projects proposed under this title by 

17 participating counties and other persons; 

18 ‘‘(2) propose projects and funding to the Sec19 retary concerned under section 203; 

20 ‘‘(3) provide early and continuous coordination 

21 with appropriate land management agency officials 

22 in recommending projects consistent with purposes of 

23 this Act under this title; 

24 ‘‘(4) provide frequent opportunities for citizens, 

25 organizations, tribes, land management agencies, and 
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1 other interested parties to participate openly and 

2 meaningfully, beginning at the early stages of the 

3 project development process under this title; 

4 ‘‘(5)(A) monitor projects that have been approved 

5 under section 204; and 

6 ‘‘(B) advise the designated Federal official on the 

7 progress of the monitoring efforts under subparagraph 

8 (A); and 

9 ‘‘(6) make recommendations to the Secretary 

10 concerned for any appropriate changes or adjustments 

11 to the projects being monitored by the resource advi12 sory committee. 

13 ‘‘(c) APPOINTMENT BY THE SECRETARY.— 

14 ‘‘(1) APPOINTMENT AND TERM.— 

15 ‘‘(A) IN GENERAL.—The Secretary con16 cerned, shall appoint the members of resource ad17 visory committees for a term of 4 years begin18 ning on the date of appointment. 

19 ‘‘(B) REAPPOINTMENT.—The Secretary con20 cerned may reappoint members to subsequent 4- 

21 year terms. 

22 ‘‘(2) BASIC REQUIREMENTS.—The Secretary con23 cerned shall ensure that each resource advisory com24 mittee established meets the requirements of subsection 

25 (d). 
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1 ‘‘(3) INITIAL APPOINTMENT.—Not later than 180 

2 days after the date of the enactment of this Act, the 

3 Secretary concerned shall make initial appointments 

4 to the resource advisory committees. 

5 ‘‘(4) VACANCIES.—The Secretary concerned shall 

6 make appointments to fill vacancies on any resource 

7 advisory committee as soon as practicable after the 

8 vacancy has occurred. 

9 ‘‘(5) COMPENSATION.—Members of the resource 

10 advisory committees shall not receive any compensa11 tion. 

12 ‘‘(d) COMPOSITION OF ADVISORY COMMITTEE.— 

13 ‘‘(1) NUMBER.—Each resource advisory com14 mittee shall be comprised of 15 members. 

15 ‘‘(2) COMMUNITY INTERESTS REPRESENTED.— 

16 Committee members shall be representative of the in17 terests of the following 3 categories: 

18 ‘‘(A) 5 persons that— 

19 ‘‘(i) represent organized labor or non20 timber forest product harvester groups; 

21 ‘‘(ii) represent developed outdoor recre22 ation, off highway vehicle users, or commer23 cial recreation activities; 

24 ‘‘(iii) represent— 
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1 ‘‘(I) energy and mineral develop2 ment interests; or 

3 ‘‘(II) commercial or recreational 

4 fishing interests; 

5 ‘‘(iv) represent the commercial timber 

6 industry; or 

7 ‘‘(v) hold Federal grazing or other land 

8 use permits, or represent nonindustrial pri9 vate forest land owners, within the area for 

10 which the committee is organized. 

11 ‘‘(B) 5 persons that represent— 

12 ‘‘(i) nationally recognized environ13 mental organizations; 

14 ‘‘(ii) regionally or locally recognized 

15 environmental organizations; 

16 ‘‘(iii) dispersed recreational activities; 

17 ‘‘(iv) archaeological and historical in18 terests; or 

19 ‘‘(v) nationally or regionally recog20 nized wild horse and burro interest groups, 

21 wildlife or hunting organizations, or water22 shed associations. 

23 ‘‘(C) 5 persons that— 

24 ‘‘(i) hold State elected office (or a des25 ignee); 
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1 ‘‘(ii) hold county or local elected office; 

2 ‘‘(iii) represent American Indian tribes 

3 within or adjacent to the area for which the 

4 committee is organized; 

5 ‘‘(iv) are school officials or teachers; or 

6 ‘‘(v) represent the affected public at 

7 large. 

8 ‘‘(3) BALANCED REPRESENTATION.—In appoint9 ing committee members from the 3 categories in para10 graph (2), the Secretary concerned shall provide for 

11 balanced and broad representation from within each 

12 category. 

13 ‘‘(4) GEOGRAPHIC DISTRIBUTION.—The members 

14 of a resource advisory committee shall reside within 

15 the State in which the committee has jurisdiction 

16 and, to extent practicable, the Secretary concerned 

17 shall ensure local representation in each category in 

18 paragraph (2). 

19 ‘‘(5) CHAIRPERSON.—A majority on each re20 source advisory committee shall select the chairperson 

21 of the committee. 

22 ‘‘(e) APPROVAL PROCEDURES.— 

23 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

24 each resource advisory committee shall establish pro-
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1 cedures for proposing projects to the Secretary con2 cerned under this title. 

3 ‘‘(2) QUORUM.—A quorum must be present to 

4 constitute an official meeting of the committee. 

5 ‘‘(3) APPROVAL BY MAJORITY OF MEMBERS.—A 

6 project may be proposed by a resource advisory com7 mittee to the Secretary concerned under section 

8 203(a), if the project has been approved by a majority 

9 of members of the committee from each of the 3 cat10 egories in subsection (d)(2). 

11 ‘‘(f) OTHER COMMITTEE AUTHORITIES AND REQUIRE12 MENTS.— 

13 ‘‘(1) STAFF ASSISTANCE.—A resource advisory 

14 committee may submit to the Secretary concerned a 

15 request for periodic staff assistance from Federal em16 ployees under the jurisdiction of the Secretary. 

17 ‘‘(2) MEETINGS.—All meetings of a resource ad18 visory committee shall be announced at least 1 week 

19 in advance in a local newspaper of record and shall 

20 be open to the public. 

21 ‘‘(3) RECORDS.—A resource advisory committee 

22 shall maintain records of the meetings of the com23 mittee and make the records available for public in24 spection. 
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1 ‘‘SEC. 206. USE OF PROJECT FUNDS. 

2 ‘‘(a) AGREEMENT REGARDING SCHEDULE AND COST

3 OF PROJECT.— 

4 ‘‘(1) AGREEMENT BETWEEN PARTIES.—The Sec5 retary concerned may carry out a project submitted 

6 by a resource advisory committee under section 

7 203(a) using project funds or other funds described in 

8 section 203(a)(2), if, as soon as practicable after the 

9 issuance of a decision document for the project and 

10 the exhaustion of all administrative appeals and judi11 cial review of the project decision, the Secretary con12 cerned and the resource advisory committee enter into 

13 an agreement addressing, at a minimum, the fol14 lowing: 

15 ‘‘(A) The schedule for completing the 

16 project. 

17 ‘‘(B) The total cost of the project, including 

18 the level of agency overhead to be assessed 

19 against the project. 

20 ‘‘(C) For a multiyear project, the estimated 

21 cost of the project for each of the fiscal years in 

22 which it will be carried out. 

23 ‘‘(D) The remedies for failure of the Sec24 retary concerned to comply with the terms of the 

25 agreement consistent with current Federal law. 
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1 ‘‘(2) LIMITED USE OF FEDERAL FUNDS.—The 

2 Secretary concerned may decide, at the sole discretion 

3 of the Secretary concerned, to cover the costs of a por4 tion of an approved project using Federal funds ap5 propriated or otherwise available to the Secretary for 

6 the same purposes as the project. 

7 ‘‘(b) TRANSFER OF PROJECT FUNDS.— 

8 ‘‘(1) INITIAL TRANSFER REQUIRED.—As soon as 

9 practicable after the agreement is reached under sub10 section (a) with regard to a project to be funded in 

11 whole or in part using project funds, or other funds 

12 described in section 203(a)(2), the Secretary con13 cerned shall transfer to the applicable unit of Na14 tional Forest System land or Bureau of Land Man15 agement District an amount of project funds equal 

16 to— 

17 ‘‘(A) in the case of a project to be completed 

18 in a single fiscal year, the total amount specified 

19 in the agreement to be paid using project funds, 

20 or other funds described in section 203(a)(2); or 

21 ‘‘(B) in the case of a multiyear project, the 

22 amount specified in the agreement to be paid 

23 using project funds, or other funds described in 

24 section 203(a)(2) for the first fiscal year. 
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1 ‘‘(2) CONDITION ON PROJECT COMMENCEMENT.— 

2 The unit of National Forest System land or Bureau 

3 of Land Management District concerned, shall not 

4 commence a project until the project funds, or other 

5 funds described in section 203(a)(2) required to be 

6 transferred under paragraph (1) for the project, have 

7 been made available by the Secretary concerned. 

8 ‘‘(3) SUBSEQUENT TRANSFERS FOR MULTIYEAR

9 PROJECTS.— 

10 ‘‘(A) IN GENERAL.—For the second and sub11 sequent fiscal years of a multiyear project to be 

12 funded in whole or in part using project funds, 

13 the unit of National Forest System land or Bu14 reau of Land Management District concerned 

15 shall use the amount of project funds required to 

16 continue the project in that fiscal year according 

17 to the agreement entered into under subsection 

18 (a). 

19 ‘‘(B) SUSPENSION OF WORK.—The Sec20 retary concerned shall suspend work on the 

21 project if the project funds required by the agree22 ment in the second and subsequent fiscal years 

23 are not available. 
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1 ‘‘SEC. 207. AVAILABILITY OF PROJECT FUNDS. 

2 ‘‘(a) SUBMISSION OF PROPOSED PROJECTS TO OBLI3 GATE FUNDS.—By September 30, 2008 (or as soon there4 after as the Secretary concerned determines is practicable), 

5 and each September 30 thereafter for each succeeding fiscal 

6 year through fiscal year 2011, a resource advisory com7 mittee shall submit to the Secretary concerned pursuant to 

8 section 203(a)(1) a sufficient number of project proposals 

9 that, if approved, would result in the obligation of at least 

10 the full amount of the project funds reserved by the partici11 pating county in the preceding fiscal year. 

12 ‘‘(b) USE OR TRANSFER OF UNOBLIGATED FUNDS.— 

13 Subject to section 208, if a resource advisory committee fails 

14 to comply with subsection (a) for a fiscal year, any project 

15 funds reserved by the participating county in the preceding 

16 fiscal year and remaining unobligated shall be available for 

17 use as part of the project submissions in the next fiscal year. 

18 ‘‘(c) EFFECT OF REJECTION OF PROJECTS.—Subject 

19 to section 208, any project funds reserved by a partici20 pating county in the preceding fiscal year that are unobli21 gated at the end of a fiscal year because the Secretary con22 cerned has rejected one or more proposed projects shall be 

23 available for use as part of the project submissions in the 

24 next fiscal year. 

25 ‘‘(d) EFFECT OF COURT ORDERS.— 
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1 ‘‘(1) IN GENERAL.—If an approved project under 

2 this Act is enjoined or prohibited by a Federal court, 

3 the Secretary concerned shall return the unobligated 

4 project funds related to the project to the partici5 pating county or counties that reserved the funds. 

6 ‘‘(2) EXPENDITURE OF FUNDS.—The returned 

7 funds shall be available for the county to expend in 

8 the same manner as the funds reserved by the county 

9 under subparagraph (B) or (C)(i) of section 

10 102(d)(1). 

11 ‘‘SEC. 208. TERMINATION OF AUTHORITY. 

12 ‘‘(a) IN GENERAL.—The authority to initiate projects 

13 under this title shall terminate on September 30, 2011. 

14 ‘‘(b) DEPOSITS IN TREASURY.—Any project funds not 

15 obligated by September 30, 2012, shall be deposited in the 

16 Treasury of the United States. 

17 ‘‘TITLE III—COUNTY FUNDS 

18 ‘‘SEC. 301. DEFINITIONS. 

19 ‘‘In this title: 

20 ‘‘(1) COUNTY FUNDS.—The term ‘county funds’ 

21 means all funds an eligible county elects under section 

22 102(d) to reserve for expenditure in accordance with 

23 this title. 

24 ‘‘(2) PARTICIPATING COUNTY.—The term ‘par25 ticipating county’ means an eligible county that elects 
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1 under section 102(d) to expend a portion of the Fed2 eral funds received under section 102 in accordance 

3 with this title. 

4 ‘‘SEC. 302. USE. 

5 ‘‘(a) AUTHORIZED USES.—A participating county, 

6 including any applicable agencies of the participating 

7 county, shall use county funds, in accordance with this title, 

8 only— 

9 ‘‘(1) to carry out activities under the Firewise 

10 Communities program to provide to homeowners in 

11 fire-sensitive ecosystems education on, and assistance 

12 with implementing, techniques in home siting, home 

13 construction, and home landscaping that can increase 

14 the protection of people and property from wildfires; 

15 ‘‘(2) to reimburse the participating county for 

16 search and rescue and other emergency services, in17 cluding firefighting, that are— 

18 ‘‘(A) performed on Federal land after the 

19 date on which the use was approved under sub20 section (b); 

21 ‘‘(B) paid for by the participating county; 

22 and 

23 ‘‘(3) to develop community wildfire protection 

24 plans in coordination with the appropriate Secretary 

25 concerned. 
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1 ‘‘(b) PROPOSALS.—A participating county shall use 

2 county funds for a use described in subsection (a) only after 

3 a 45-day public comment period, at the beginning of which 

4 the participating county shall— 

5 ‘‘(1) publish in any publications of local record 

6 a proposal that describes the proposed use of the coun7 ty funds; and 

8 ‘‘(2) submit the proposal to any resource advi9 sory committee established under section 205 for the 

10 participating county. 

11 ‘‘SEC. 303. CERTIFICATION. 

12 ‘‘(a) IN GENERAL.—Not later than February 1 of the 

13 year after the year in which any county funds were ex14 pended by a participating county, the appropriate official 

15 of the participating county shall submit to the Secretary 

16 concerned a certification that the county funds expended in 

17 the applicable year have been used for the uses authorized 

18 under section 302(a), including a description of the 

19 amounts expended and the uses for which the amounts were 

20 expended. 

21 ‘‘(b) REVIEW.—The Secretary concerned shall review 

22 the certifications submitted under subsection (a) as the Sec23 retary concerned determines to be appropriate. 
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1 ‘‘SEC. 304. TERMINATION OF AUTHORITY. 

2 ‘‘(a) IN GENERAL.—The authority to initiate projects 

3 under this title terminates on September 30, 2011. 

4 ‘‘(b) AVAILABILITY.—Any county funds not obligated 

5 by September 30, 2012, shall be returned to the Treasury 

6 of the United States. 

7 ‘‘TITLE IV—MISCELLANEOUS 

8 PROVISIONS 

9 ‘‘SEC. 401. REGULATIONS. 

10 ‘‘The Secretary of Agriculture and the Secretary of the 

11 Interior shall issue regulations to carry out the purposes 

12 of this Act. 

13 ‘‘SEC. 402. AUTHORIZATION OF APPROPRIATIONS. 

14 ‘‘There are authorized to be appropriated such sums 

15 as are necessary to carry out this Act for each of fiscal years 

16 2008 through 2011. 

17 ‘‘SEC. 403. TREATMENT OF FUNDS AND REVENUES. 

18 ‘‘(a) RELATION TO OTHER APPROPRIATIONS.—Funds 

19 made available under section 402 and funds made available 

20 to a Secretary concerned under section 206 shall be in addi21 tion to any other annual appropriations for the Forest 

22 Service and the Bureau of Land Management. 

23 ‘‘(b) DEPOSIT OF REVENUES AND OTHER FUNDS.— 

24 All revenues generated from projects pursuant to title II, 

25 including any interest accrued from the revenues, shall be 

26 deposited in the Treasury of the United States.’’. 
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1 (b) FOREST RECEIPT PAYMENTS TO ELIGIBLE STATES

2 AND COUNTIES.— 

3 (1) ACT OF MAY 23, 1908.—The sixth paragraph 

4 under the heading ‘‘FOREST SERVICE’’ in the Act 

5 of May 23, 1908 (16 U.S.C. 500) is amended in the 

6 first sentence by striking ‘‘twenty-five percentum’’ 

7 and all that follows through ‘‘shall be paid’’ and in8 serting the following: ‘‘an amount equal to the annual 

9 average of 25 percent of all amounts received for the 

10 applicable fiscal year and each of the preceding 6 fis11 cal years from each national forest shall be paid’’. 

12 (2) WEEKS LAW.—Section 13 of the Act of 

13 March 1, 1911 (commonly known as the ‘‘Weeks 

14 Law’’) (16 U.S.C. 500) is amended in the first sen15 tence by striking ‘‘twenty-five percentum’’ and all 

16 that follows through ‘‘shall be paid’’ and inserting the 

17 following: ‘‘an amount equal to the annual average of 

18 25 percent of all amounts received for the applicable 

19 fiscal year and each of the preceding 6 fiscal years 

20 from each national forest shall be paid’’. 

21 (c) PAYMENTS IN LIEU OF TAXES.— 

22 (1) IN GENERAL.—Section 6906 of title 31, 

23 United States Code, is amended to read as follows: 

24 ‘‘§ 6906. Funding 

25 ‘‘For each of fiscal years 2008 through 2012— 
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1 ‘‘(1) each county or other eligible unit of local 

2 government shall be entitled to payment under this 

3 chapter; and 

4 ‘‘(2) sums shall be made available to the Sec5 retary of the Interior for obligation or expenditure in 

6 accordance with this chapter.’’. 

7 (2) CONFORMING AMENDMENT.—The table of sec8 tions for chapter 69 of title 31, United States Code, 

9 is amended by striking the item relating to section 

10 6906 and inserting the following: 

‘‘6906. Funding.’’. 

11 (3) BUDGET SCOREKEEPING.— 

12 (A) IN GENERAL.—Notwithstanding the 

13 Budget Scorekeeping Guidelines and the accom14 panying list of programs and accounts set forth 

15 in the joint explanatory statement of the com16 mittee of conference accompanying Conference 

17 Report 105–217, the section in this title regard18 ing Payments in Lieu of Taxes shall be treated 

19 in the baseline for purposes of section 257 of the 

20 Balanced Budget and Emergency Deficit Control 

21 Act of 1985 (as in effect prior to September 30, 

22 2002), and by the Chairmen of the House and 

23 Senate Budget Committees, as appropriate, for 

24 purposes of budget enforcement in the House and 

25 Senate, and under the Congressional Budget Act 
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1 of 1974 as if Payment in Lieu of Taxes (14– 

2 1114–0–1–806) were an account designated as 

3 Appropriated Entitlements and Mandatories for 

4 Fiscal Year 1997 in the joint explanatory state5 ment of the committee of conference accom6 panying Conference Report 105–217. 

7 (B) EFFECTIVE DATE.—This paragraph 

8 shall remain in effect for the fiscal years to 

9 which the entitlement in section 6906 of title 31, 

10 United States Code (as amended by paragraph 

11 (1)), applies. 

12 SEC. 602. TRANSFER TO ABANDONED MINE RECLAMATION 

13 FUND. 

14 Subparagraph (C) of section 402(i)(1) of the Surface 

15 Mining Control and Reclamation Act of 1977 (30 U.S.C. 

16 1232(i)(1)) is amended by striking ‘‘and $9,000,000 on Oc17 tober 1, 2009’’ and inserting ‘‘$9,000,000 on October 1, 

18 2009, and $9,000,000 on October 1, 2010’’. 

19 TITLE VII—DISASTER RELIEF 

20 Subtitle A—Heartland and 

21 Hurricane Ike Disaster Relief 

22 SEC. 701. SHORT TITLE. 

23 This subtitle may be cited as the ‘‘Heartland Disaster 

24 Tax Relief Act of 2008’’. 
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1 SEC. 702. TEMPORARY TAX RELIEF FOR AREAS DAMAGED 

2 BY 2008 MIDWESTERN SEVERE STORMS, TOR3 NADOS, AND FLOODING. 

4 (a) IN GENERAL.—Subject to the modifications de5 scribed in this section, the following provisions of or relat6 ing to the Internal Revenue Code of 1986 shall apply to 

7 any Midwestern disaster area in addition to the areas to 

8 which such provisions otherwise apply: 

9 (1) GO ZONE BENEFITS.— 

10 (A) Section 1400N (relating to tax benefits) 

11 other than subsections (b), (d), (e), (i), (j), (m), 

12 and (o) thereof. 

13 (B) Section 1400O (relating to education 

14 tax benefits). 

15 (C) Section 1400P (relating to housing tax 

16 benefits). 

17 (D) Section 1400Q (relating to special rules 

18 for use of retirement funds). 

19 (E) Section 1400R(a) (relating to employee 

20 retention credit for employers). 

21 (F) Section 1400S (relating to additional 

22 tax relief) other than subsection (d) thereof. 

23 (G) Section 1400T (relating to special rules 

24 for mortgage revenue bonds). 

25 (2) OTHER BENEFITS INCLUDED IN KATRINA

26 EMERGENCY TAX RELIEF ACT OF 2005.—Sections 302, 
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1 303, 304, 401, and 405 of the Katrina Emergency 

2 Tax Relief Act of 2005. 

3 (b) MIDWESTERN DISASTER AREA.— 

4 (1) IN GENERAL.—For purposes of this section 

5 and for applying the substitutions described in sub6 sections (d) and (e), the term ‘‘Midwestern disaster 

7 area’’ means an area— 

8 (A) with respect to which a major disaster 

9 has been declared by the President on or after 

10 May 20, 2008, and before August 1, 2008, under 

11 section 401 of the Robert T. Stafford Disaster 

12 Relief and Emergency Assistance Act by reason 

13 of severe storms, tornados, or flooding occurring 

14 in any of the States of Arkansas, Illinois, Indi15 ana, Iowa, Kansas, Michigan, Minnesota, Mis16 souri, Nebraska, and Wisconsin, and 

17 (B) determined by the President to warrant 

18 individual or individual and public assistance 

19 from the Federal Government under such Act 

20 with respect to damages attributable to such se21 vere storms, tornados, or flooding. 

22 (2) CERTAIN BENEFITS AVAILABLE TO AREAS EL23 IGIBLE ONLY FOR PUBLIC ASSISTANCE.—For purposes 

24 of applying this section to benefits under the following 
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1 provisions, paragraph (1) shall be applied without re2 gard to subparagraph (B): 

3 (A) Sections 1400Q, 1400S(b), and 

4 1400S(d) of the Internal Revenue Code of 1986. 

5 (B) Sections 302, 401, and 405 of the 

6 Katrina Emergency Tax Relief Act of 2005. 

7 (c) REFERENCES.— 

8 (1) AREA.—Any reference in such provisions to 

9 the Hurricane Katrina disaster area or the Gulf Op10 portunity Zone shall be treated as a reference to any 

11 Midwestern disaster area and any reference to the 

12 Hurricane Katrina disaster area or the Gulf Oppor13 tunity Zone within a State shall be treated as a ref14 erence to all Midwestern disaster areas within the 

15 State. 

16 (2) ITEMS ATTRIBUTABLE TO DISASTER.—Any 

17 reference in such provisions to any loss, damage, or 

18 other item attributable to Hurricane Katrina shall be 

19 treated as a reference to any loss, damage, or other 

20 item attributable to the severe storms, tornados, or 

21 flooding giving rise to any Presidential declaration 

22 described in subsection (b)(1)(A). 

23 (3) APPLICABLE DISASTER DATE.—For purposes 

24 of applying the substitutions described in subsections 

25 (d) and (e), the term ‘‘applicable disaster date’’ 
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1 means, with respect to any Midwestern disaster area, 

2 the date on which the severe storms, tornados, or 

3 flooding giving rise to the Presidential declaration de4 scribed in subsection (b)(1)(A) occurred. 

5 (d) MODIFICATIONS TO 1986 CODE.—The following 

6 provisions of the Internal Revenue Code of 1986 shall be 

7 applied with the following modifications: 

8 (1) TAX-EXEMPT BOND FINANCING.—Section 

9 1400N(a)— 

10 (A) by substituting ‘‘qualified Midwestern 

11 disaster area bond’’ for ‘‘qualified Gulf Oppor12 tunity Zone Bond’’ each place it appears, except 

13 that in determining whether a bond is a quali14 fied Midwestern disaster area bond— 

15 (i) paragraph (2)(A)(i) shall be ap16 plied by only treating costs as qualified 

17 project costs if— 

18 (I) in the case of a project involv19 ing a private business use (as defined 

20 in section 141(b)(6)), either the person 

21 using the property suffered a loss in a 

22 trade or business attributable to the se23 vere storms, tornados, or flooding giv24 ing rise to any Presidential declara25 tion described in subsection (b)(1)(A) 
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1 or is a person designated for purposes 

2 of this section by the Governor of the 

3 State in which the project is located as 

4 a person carrying on a trade or busi5 ness replacing a trade or business with 

6 respect to which another person suf7 fered such a loss, and 

8 (II) in the case of a project relat9 ing to public utility property, the 

10 project involves repair or reconstruc11 tion of public utility property dam12 aged by such severe storms, tornados, 

13 or flooding, and 

14 (ii) paragraph (2)(A)(ii) shall be ap15 plied by treating an issue as a qualified 

16 mortgage issue only if 95 percent or more of 

17 the net proceeds (as defined in section 

18 150(a)(3)) of the issue are to be used to pro19 vide financing for mortgagors who suffered 

20 damages to their principal residences at21 tributable to such severe storms, tornados, 

22 or flooding. 

23 (B) by substituting ‘‘any State in which a 

24 Midwestern disaster area is located’’ for ‘‘the 
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1 State of Alabama, Louisiana, or Mississippi’’ in 

2 paragraph (2)(B), 

3 (C) by substituting ‘‘designated for purposes 

4 of this section (on the basis of providing assist5 ance to areas in the order in which such assist6 ance is most needed)’’ for ‘‘designated for pur7 poses of this section’’ in paragraph (2)(C), 

8 (D) by substituting ‘‘January 1, 2013’’ for 

9 ‘‘January 1, 2011’’ in paragraph (2)(D), 

10 (E) in paragraph (3)(A)— 

11 (i) by substituting ‘‘$1,000’’ for 

12 ‘‘$2,500’’, and 

13 (ii) by substituting ‘‘before the earliest 

14 applicable disaster date for Midwestern dis15 aster areas within the State’’ for ‘‘before 

16 August 28, 2005’’, 

17 (F) by substituting ‘‘qualified Midwestern 

18 disaster area repair or construction’’ for ‘‘quali19 fied GO Zone repair or construction’’ each place 

20 it appears, 

21 (G) by substituting ‘‘after the date of the en22 actment of the Heartland Disaster Tax Relief 

23 Act of 2008 and before January 1, 2013’’ for 

24 ‘‘after the date of the enactment of this para-
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1 graph and before January 1, 2011’’ in para2 graph (7)(C), and 

3 (H) by disregarding paragraph (8) thereof. 

4 (2) LOW-INCOME HOUSING CREDIT.—Section 

5 1400N(c)— 

6 (A) only with respect to calendar years 

7 2008, 2009, and 2010, 

8 (B) by substituting ‘‘Disaster Recovery As9 sistance housing amount’’ for ‘‘Gulf Opportunity 

10 housing amount’’ each place it appears, 

11 (C) in paragraph (1)(B)— 

12 (i) by substituting ‘‘$8.00’’ for 

13 ‘‘$18.00’’, and 

14 (ii) by substituting ‘‘before the earliest 

15 applicable disaster date for Midwestern dis16 aster areas within the State’’ for ‘‘before 

17 August 28, 2005’’, and 

18 (D) determined without regard to para19 graphs (2), (3), (4), (5), and (6) thereof. 

20 (3) EXPENSING FOR CERTAIN DEMOLITION AND

21 CLEAN-UP COSTS.—Section 1400N(f)— 

22 (A) by substituting ‘‘qualified Disaster Re23 covery Assistance clean-up cost’’ for ‘‘qualified 

24 Gulf Opportunity Zone clean-up cost’’ each place 

25 it appears, 
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1 (B) by substituting ‘‘beginning on the ap2 plicable disaster date and ending on December 

3 31, 2010’’ for ‘‘beginning on August 28, 2005, 

4 and ending on December 31, 2007’’ in para5 graph (2), and 

6 (C) by treating costs as qualified Disaster 

7 Recovery Assistance clean-up costs only if the re8 moval of debris or demolition of any structure 

9 was necessary due to damage attributable to the 

10 severe storms, tornados, or flooding giving rise to 

11 any Presidential declaration described in sub12 section (b)(1)(A). 

13 (4) EXTENSION OF EXPENSING FOR ENVIRON14 MENTAL REMEDIATION COSTS.—Section 1400N(g)— 

15 (A) by substituting ‘‘the applicable disaster 

16 date’’ for ‘‘August 28, 2005’’ each place it ap17 pears, 

18 (B) by substituting ‘‘January 1, 2011’’ for 

19 ‘‘January 1, 2008’’ in paragraph (1), 

20 (C) by substituting ‘‘December 31, 2010’’ for 

21 ‘‘December 31, 2007’’ in paragraph (1), and 

22 (D) by treating a site as a qualified con23 taminated site only if the release (or threat of re24 lease) or disposal of a hazardous substance at the 

25 site was attributable to the severe storms, tor-
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1 nados, or flooding giving rise to any Presidential 

2 declaration described in subsection (b)(1)(A). 

3 (5) INCREASE IN REHABILITATION CREDIT.—Sec4 tion 1400N(h), as amended by this Act— 

5 (A) by substituting ‘‘the applicable disaster 

6 date’’ for ‘‘August 28, 2005’’, 

7 (B) by substituting ‘‘December 31, 2011’’ 

8 for ‘‘December 31, 2009’’ in paragraph (1), and 

9 (C) by only applying such subsection to 

10 qualified rehabilitation expenditures with respect 

11 to any building or structure which was damaged 

12 or destroyed as a result of the severe storms, tor13 nados, or flooding giving rise to any Presidential 

14 declaration described in subsection (b)(1)(A). 

15 (6) TREATMENT OF NET OPERATING LOSSES AT16 TRIBUTABLE TO DISASTER LOSSES.—Section 

17 1400N(k)— 

18 (A) by substituting ‘‘qualified Disaster Re19 covery Assistance loss’’ for ‘‘qualified Gulf Op20 portunity Zone loss’’ each place it appears, 

21 (B) by substituting ‘‘after the day before the 

22 applicable disaster date, and before January 1, 

23 2011’’ for ‘‘after August 27, 2005, and before 

24 January 1, 2008’’ each place it appears, 
395 

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1 (C) by substituting ‘‘the applicable disaster 

2 date’’ for ‘‘August 28, 2005’’ in paragraph 

3 (2)(B)(ii)(I), 

4 (D) by substituting ‘‘qualified Disaster Re5 covery Assistance property’’ for ‘‘qualified Gulf 

6 Opportunity Zone property’’ in paragraph 

7 (2)(B)(iv), and 

8 (E) by substituting ‘‘qualified Disaster Re9 covery Assistance casualty loss’’ for ‘‘qualified 

10 Gulf Opportunity Zone casualty loss’’ each place 

11 it appears. 

12 (7) CREDIT TO HOLDERS OF TAX CREDIT

13 BONDS.—Section 1400N(l)— 

14 (A) by substituting ‘‘Midwestern tax credit 

15 bond’’ for ‘‘Gulf tax credit bond’’ each place it 

16 appears, 

17 (B) by substituting ‘‘any State in which a 

18 Midwestern disaster area is located or any in19 strumentality of the State’’ for ‘‘the State of Ala20 bama, Louisiana, or Mississippi’’ in paragraph 

21 (4)(A)(i), 

22 (C) by substituting ‘‘after December 31, 

23 2008 and before January 1, 2010’’ for ‘‘after De24 cember 31, 2005, and before January 1, 2007’’, 
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1 (D) by substituting ‘‘shall not exceed 

2 $100,000,000 for any State with an aggregate 

3 population located in all Midwestern disaster 

4 areas within the State of at least 2,000,000, 

5 $50,000,000 for any State with an aggregate 

6 population located in all Midwestern disaster 

7 areas within the State of at least 1,000,000 but 

8 less than 2,000,000, and zero for any other State. 

9 The population of a State within any area shall 

10 be determined on the basis of the most recent cen11 sus estimate of resident population released by 

12 the Bureau of Census before the earliest applica13 ble disaster date for Midwestern disaster areas 

14 within the State.’’ for ‘‘shall not exceed’’ and all 

15 that follows in paragraph (4)(C), and 

16 (E) by substituting ‘‘the earliest applicable 

17 disaster date for Midwestern disaster areas with18 in the State’’ for ‘‘August 28, 2005’’ in para19 graph (5)(A). 

20 (8) EDUCATION TAX BENEFITS.—Section 1400O, 

21 by substituting ‘‘2008 or 2009’’ for ‘‘2005 or 2006’’. 

22 (9) HOUSING TAX BENEFITS.—Section 1400P, by 

23 substituting ‘‘the applicable disaster date’’ for ‘‘Au24 gust 28, 2005’’ in subsection (c)(1). 
397 

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1 (10) SPECIAL RULES FOR USE OF RETIREMENT

2 FUNDS.—Section 1400Q— 

3 (A) by substituting ‘‘qualified Disaster Re4 covery Assistance distribution’’ for ‘‘qualified 

5 hurricane distribution’’ each place it appears, 

6 (B) by substituting ‘‘on or after the applica7 ble disaster date and before January 1, 2010’’ for 

8 ‘‘on or after August 25, 2005, and before Janu9 ary 1, 2007’’ in subsection (a)(4)(A)(i), 

10 (C) by substituting ‘‘the applicable disaster 

11 date’’ for ‘‘August 28, 2005’’ in subsections 

12 (a)(4)(A)(i) and (c)(3)(B), 

13 (D) by disregarding clauses (ii) and (iii) of 

14 subsection (a)(4)(A) thereof, 

15 (E) by substituting ‘‘qualified storm dam16 age distribution’’ for ‘‘qualified Katrina dis17 tribution’’ each place it appears, 

18 (F) by substituting ‘‘after the date which is 

19 6 months before the applicable disaster date and 

20 before the date which is the day after the appli21 cable disaster date’’ for ‘‘after February 28, 

22 2005, and before August 29, 2005’’ in subsection 

23 (b)(2)(B)(ii), 

24 (G) by substituting ‘‘the Midwestern dis25 aster area, but not so purchased or constructed 
398 

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1 on account of severe storms, tornados, or flooding 

2 giving rise to the designation of the area as a 

3 disaster area’’ for ‘‘the Hurricane Katrina dis4 aster area, but not so purchased or constructed 

5 on account of Hurricane Katrina’’ in subsection 

6 (b)(2)(B)(iii), 

7 (H) by substituting ‘‘beginning on the ap8 plicable disaster date and ending on the date 

9 which is 5 months after the date of the enactment 

10 of the Heartland Disaster Tax Relief Act of 

11 2008’’ for ‘‘beginning on August 25, 2005, and 

12 ending on February 28, 2006’’ in subsection 

13 (b)(3)(A), 

14 (I) by substituting ‘‘qualified storm damage 

15 individual’’ for ‘‘qualified Hurricane Katrina 

16 individual’’ each place it appears, 

17 (J) by substituting ‘‘December 31, 2009’’ for 

18 ‘‘December 31, 2006’’ in subsection (c)(2)(A), 

19 (K) by disregarding subparagraphs (C) and 

20 (D) of subsection (c)(3) thereof, 

21 (L) by substituting ‘‘beginning on the date 

22 of the enactment of the Heartland Disaster Tax 

23 Relief Act of 2008 and ending on December 31, 

24 2009’’ for ‘‘beginning on September 24, 2005, 
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1 and ending on December 31, 2006’’ in subsection 

2 (c)(4)(A)(i), 

3 (M) by substituting ‘‘the applicable disaster 

4 date’’ for ‘‘August 25, 2005’’ in subsection 

5 (c)(4)(A)(ii), and 

6 (N) by substituting ‘‘January 1, 2010’’ for 

7 ‘‘January 1, 2007’’ in subsection (d)(2)(A)(ii). 

8 (11) EMPLOYEE RETENTION CREDIT FOR EM9 PLOYERS AFFECTED BY SEVERE STORMS, TORNADOS, 

10 AND FLOODING.—Section 1400R(a)— 

11 (A) by substituting ‘‘the applicable disaster 

12 date’’ for ‘‘August 28, 2005’’ each place it ap13 pears, 

14 (B) by substituting ‘‘January 1, 2009’’ for 

15 ‘‘January 1, 2006’’ both places it appears, and 

16 (C) only with respect to eligible employers 

17 who employed an average of not more than 200 

18 employees on business days during the taxable 

19 year before the applicable disaster date. 

20 (12) TEMPORARY SUSPENSION OF LIMITATIONS

21 ON CHARITABLE CONTRIBUTIONS.—Section 1400S(a), 

22 by substituting the following paragraph for para23 graph (4) thereof: 

24 ‘‘(4) QUALIFIED CONTRIBUTIONS.— 
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1 ‘‘(A) IN GENERAL.—For purposes of this 

2 subsection, the term ‘qualified contribution’ 

3 means any charitable contribution (as defined in 

4 section 170(c)) if— 

5 ‘‘(i) such contribution— 

6 ‘‘(I) is paid during the period be7 ginning on the earliest applicable dis8 aster date for all States and ending on 

9 December 31, 2008, in cash to an orga10 nization described in section 

11 170(b)(1)(A), and 

12 ‘‘(II) is made for relief efforts in 

13 1 or more Midwestern disaster areas, 

14 ‘‘(ii) the taxpayer obtains from such 

15 organization contemporaneous written ac16 knowledgment (within the meaning of sec17 tion 170(f)(8)) that such contribution was 

18 used (or is to be used) for relief efforts in 

19 1 or more Midwestern disaster areas, and 

20 ‘‘(iii) the taxpayer has elected the ap21 plication of this subsection with respect to 

22 such contribution. 

23 ‘‘(B) EXCEPTION.—Such term shall not in24 clude a contribution by a donor if the contribu25 tion is— 
401 

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1 ‘‘(i) to an organization described in 

2 section 509(a)(3), or 

3 ‘‘(ii) for establishment of a new, or 

4 maintenance of an existing, donor advised 

5 fund (as defined in section 4966(d)(2)). 

6 ‘‘(C) APPLICATION OF ELECTION TO PART7 NERSHIPS AND S CORPORATIONS.—In the case of 

8 a partnership or S corporation, the election 

9 under subparagraph (A)(iii) shall be made sepa10 rately by each partner or shareholder.’’. 

11 (13) SUSPENSION OF CERTAIN LIMITATIONS ON

12 PERSONAL CASUALTY LOSSES.—Section 1400S(b)(1), 

13 by substituting ‘‘the applicable disaster date’’ for 

14 ‘‘August 25, 2005’’. 

15 (14) SPECIAL RULE FOR DETERMINING EARNED

16 INCOME.—Section 1400S(d)— 

17 (A) by treating an individual as a qualified 

18 individual if such individual’s principal place of 

19 abode on the applicable disaster date was located 

20 in a Midwestern disaster area, 

21 (B) by treating the applicable disaster date 

22 with respect to any such individual as the appli23 cable date for purposes of such subsection, and 

24 (C) by treating an area as described in 

25 paragraph (2)(B)(ii) thereof if the area is a 
402 

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1 Midwestern disaster area only by reason of sub2 section (b)(2) of this section (relating to areas el3 igible only for public assistance). 

4 (15) ADJUSTMENTS REGARDING TAXPAYER AND

5 DEPENDENCY STATUS.—Section 1400S(e), by sub6 stituting ‘‘2008 or 2009’’ for ‘‘2005 or 2006’’. 

7 (e) MODIFICATIONS TO KATRINA EMERGENCY TAX RE8 LIEF ACT OF 2005.—The following provisions of the 

9 Katrina Emergency Tax Relief Act of 2005 shall be applied 

10 with the following modifications: 

11 (1) ADDITIONAL EXEMPTION FOR HOUSING DIS12 PLACED INDIVIDUAL.—Section 302— 

13 (A) by substituting ‘‘2008 or 2009’’ for 

14 ‘‘2005 or 2006’’ in subsection (a) thereof, 

15 (B) by substituting ‘‘Midwestern displaced 

16 individual’’ for ‘‘Hurricane Katrina displaced 

17 individual’’ each place it appears, and 

18 (C) by treating an area as a core disaster 

19 area for purposes of applying subsection (c) 

20 thereof if the area is a Midwestern disaster area 

21 without regard to subsection (b)(2) of this section 

22 (relating to areas eligible only for public assist23 ance). 

24 (2) INCREASE IN STANDARD MILEAGE RATE.— 

25 Section 303, by substituting ‘‘beginning on the appli-
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1 cable disaster date and ending on December 31, 2008’’ 

2 for ‘‘beginning on August 25, 2005, and ending on 

3 December 31, 2006’’. 

4 (3) MILEAGE REIMBURSEMENTS FOR CHARI5 TABLE VOLUNTEERS.—Section 304— 

6 (A) by substituting ‘‘beginning on the ap7 plicable disaster date and ending on December 

8 31, 2008’’ for ‘‘beginning on August 25, 2005, 

9 and ending on December 31, 2006’’ in subsection 

10 (a), and 

11 (B) by substituting ‘‘the applicable disaster 

12 date’’ for ‘‘August 25, 2005’’ in subsection (a). 

13 (4) EXCLUSION OF CERTAIN CANCELLATION OF

14 INDEBTEDNESS INCOME.—Section 401— 

15 (A) by treating an individual whose prin16 cipal place of abode on the applicable disaster 

17 date was in a Midwestern disaster area (deter18 mined without regard to subsection (b)(2) of this 

19 section) as an individual described in subsection 

20 (b)(1) thereof, and by treating an individual 

21 whose principal place of abode on the applicable 

22 disaster date was in a Midwestern disaster area 

23 solely by reason of subsection (b)(2) of this sec24 tion as an individual described in subsection 

25 (b)(2) thereof, 
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1 (B) by substituting ‘‘the applicable disaster 

2 date’’ for ‘‘August 28, 2005’’ both places it ap3 pears, and 

4 (C) by substituting ‘‘January 1, 2010’’ for 

5 ‘‘January 1, 2007’’ in subsection (e). 

6 (5) EXTENSION OF REPLACEMENT PERIOD FOR

7 NONRECOGNITION OF GAIN.—Section 405, by sub8 stituting ‘‘on or after the applicable disaster date’’ for 

9 ‘‘on or after August 25, 2005’’. 

10 SEC. 703. REPORTING REQUIREMENTS RELATING TO DIS11 ASTER RELIEF CONTRIBUTIONS. 

12 (a) IN GENERAL.—Section 6033(b) (relating to returns 

13 of certain organizations described in section 501(c)(3)) is 

14 amended by striking ‘‘and’’ at the end of paragraph (13), 

15 by redesignating paragraph (14) as paragraph (15), and 

16 by adding after paragraph (13) the following new para17 graph: 

18 ‘‘(14) such information as the Secretary may re19 quire with respect to disaster relief activities, includ20 ing the amount and use of qualified contributions to 

21 which section 1400S(a) applies, and’’. 

22 (b) EFFECTIVE DATE.—The amendments made by this 

23 section shall apply to returns the due date for which (deter24 mined without regard to any extension) occurs after Decem25 ber 31, 2008. 
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1 SEC. 704. TEMPORARY TAX-EXEMPT BOND FINANCING AND 

2 LOW-INCOME HOUSING TAX RELIEF FOR 

3 AREAS DAMAGED BY HURRICANE IKE. 

4 (a) TAX-EXEMPT BOND FINANCING.—Section 

5 1400N(a) of the Internal Revenue Code of 1986 shall apply 

6 to any Hurricane Ike disaster area in addition to any other 

7 area referenced in such section, but with the following modi8 fications: 

9 (1) By substituting ‘‘qualified Hurricane Ike 

10 disaster area bond’’ for ‘‘qualified Gulf Opportunity 

11 Zone Bond’’ each place it appears, except that in de12 termining whether a bond is a qualified Hurricane 

13 Ike disaster area bond— 

14 (A) paragraph (2)(A)(i) shall be applied by 

15 only treating costs as qualified project costs if— 

16 (i) in the case of a project involving a 

17 private business use (as defined in section 

18 141(b)(6)), either the person using the prop19 erty suffered a loss in a trade or business 

20 attributable to Hurricane Ike or is a person 

21 designated for purposes of this section by 

22 the Governor of the State in which the 

23 project is located as a person carrying on a 

24 trade or business replacing a trade or busi25 ness with respect to which another person 

26 suffered such a loss, and 
406 

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1 (ii) in the case of a project relating to 

2 public utility property, the project involves 

3 repair or reconstruction of public utility 

4 property damaged by Hurricane Ike, and 

5 (B) paragraph (2)(A)(ii) shall be applied 

6 by treating an issue as a qualified mortgage 

7 issue only if 95 percent or more of the net pro8 ceeds (as defined in section 150(a)(3)) of the 

9 issue are to be used to provide financing for 

10 mortgagors who suffered damages to their prin11 cipal residences attributable to Hurricane Ike. 

12 (2) By substituting ‘‘any State in which any 

13 Hurricane Ike disaster area is located’’ for ‘‘the State 

14 of Alabama, Louisiana, or Mississippi’’ in paragraph 

15 (2)(B). 

16 (3) By substituting ‘‘designated for purposes of 

17 this section (on the basis of providing assistance to 

18 areas in the order in which such assistance is most 

19 needed)’’ for ‘‘designated for purposes of this section’’ 

20 in paragraph (2)(C). 

21 (4) By substituting ‘‘January 1, 2013’’ for ‘‘Jan22 uary 1, 2011’’ in paragraph (2)(D). 

23 (5) By substituting the following for subpara24 graph (A) of paragraph (3): 
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1 ‘‘(A) AGGREGATE AMOUNT DESIGNATED.— 

2 The maximum aggregate face amount of bonds 

3 which may be designated under this subsection 

4 with respect to any State shall not exceed the 

5 product of $2,000 multiplied by the portion of 

6 the State population which is in— 

7 ‘‘(i) in the case of Texas, the counties 

8 of Brazoria, Chambers, Galveston, Jefferson, 

9 and Orange, and 

10 ‘‘(ii) in the case of Louisiana, the par11 ishes of Calcasieu and Cameron, 

12 (as determined on the basis of the most recent 

13 census estimate of resident population released 

14 by the Bureau of Census before September 13, 

15 2008).’’. 

16 (6) By substituting ‘‘qualified Hurricane Ike 

17 disaster area repair or construction’’ for ‘‘qualified 

18 GO Zone repair or construction’’ each place it ap19 pears. 

20 (7) By substituting ‘‘after the date of the enact21 ment of the Heartland Disaster Tax Relief Act of 

22 2008 and before January 1, 2013’’ for ‘‘after the date 

23 of the enactment of this paragraph and before Janu24 ary 1, 2011’’ in paragraph (7)(C). 

25 (8) By disregarding paragraph (8) thereof. 
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1 (9) By substituting ‘‘any Hurricane Ike disaster 

2 area’’ for ‘‘the Gulf Opportunity Zone’’ each place it 

3 appears. 

4 (b) LOW-INCOME HOUSING CREDIT.—Section 

5 1400N(c) of the Internal Revenue Code of 1986 shall apply 

6 to any Hurricane Ike disaster area in addition to any other 

7 area referenced in such section, but with the following modi8 fications: 

9 (1) Only with respect to calendar years 2008, 

10 2009, and 2010. 

11 (2) By substituting ‘‘any Hurricane Ike disaster 

12 area’’ for ‘‘the Gulf Opportunity Zone’’ each place it 

13 appears. 

14 (3) By substituting ‘‘Hurricane Ike Recovery As15 sistance housing amount’’ for ‘‘Gulf Opportunity 

16 housing amount’’ each place it appears. 

17 (4) By substituting the following for subpara18 graph (B) of paragraph (1): 

19 ‘‘(B) HURRICANE IKE HOUSING AMOUNT.— 

20 For purposes of subparagraph (A), the term 

21 ‘Hurricane Ike housing amount’ means, for any 

22 calendar year, the amount equal to the product 

23 of $16.00 multiplied by the portion of the State 

24 population which is in— 
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1 ‘‘(i) in the case of Texas, the counties 

2 of Brazoria, Chambers, Galveston, Jefferson, 

3 and Orange, and 

4 ‘‘(ii) in the case of Louisiana, the par5 ishes of Calcasieu and Cameron, 

6 (as determined on the basis of the most recent 

7 census estimate of resident population released 

8 by the Bureau of Census before September 13, 

9 2008).’’. 

10 (5) Determined without regard to paragraphs 

11 (2), (3), (4), (5), and (6) thereof. 

12 (c) HURRICANE IKE DISASTER AREA.—For purposes 

13 of this section and for applying the substitutions described 

14 in subsections (a) and (b), the term ‘‘Hurricane Ike disaster 

15 area’’ means an area in the State of Texas or Louisiana— 

16 (1) with respect to which a major disaster has 

17 been declared by the President on September 13, 2008, 

18 under section 401 of the Robert T. Stafford Disaster 

19 Relief and Emergency Assistance Act by reason of 

20 Hurricane Ike, and 

21 (2) determined by the President to warrant indi22 vidual or individual and public assistance from the 

23 Federal Government under such Act with respect to 

24 damages attributable to Hurricane Ike. 
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1 Subtitle B—National Disaster 

2 Relief 

3 SEC. 706. LOSSES ATTRIBUTABLE TO FEDERALLY DE4 CLARED DISASTERS. 

5 (a) WAIVER OF ADJUSTED GROSS INCOME LIMITA6 TION.— 

7 (1) IN GENERAL.—Subsection (h) of section 165 

8 is amended by redesignating paragraphs (3) and (4) 

9 as paragraphs (4) and (5), respectively, and by in10 serting after paragraph (2) the following new para11 graph: 

12 ‘‘(3) SPECIAL RULE FOR LOSSES IN FEDERALLY

13 DECLARED DISASTERS.— 

14 ‘‘(A) IN GENERAL.—If an individual has a 

15 net disaster loss for any taxable year, the 

16 amount determined under paragraph (2)(A)(ii) 

17 shall be the sum of— 

18 ‘‘(i) such net disaster loss, and 

19 ‘‘(ii) so much of the excess referred to 

20 in the matter preceding clause (i) of para21 graph (2)(A) (reduced by the amount in 

22 clause (i) of this subparagraph) as exceeds 

23 10 percent of the adjusted gross income of 

24 the individual. 
411 

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1 ‘‘(B) NET DISASTER LOSS.—For purposes of 

2 subparagraph (A), the term ‘net disaster loss’ 

3 means the excess of— 

4 ‘‘(i) the personal casualty losses— 

5 ‘‘(I) attributable to a federally de6 clared disaster occurring before Janu7 ary 1, 2010, and 

8 ‘‘(II) occurring in a disaster area, 

9 over 

10 ‘‘(ii) personal casualty gains. 

11 ‘‘(C) FEDERALLY DECLARED DISASTER.— 

12 For purposes of this paragraph— 

13 ‘‘(i) FEDERALLY DECLARED DIS14 ASTER.—The term ‘federally declared dis15 aster’ means any disaster subsequently de16 termined by the President of the United 

17 States to warrant assistance by the Federal 

18 Government under the Robert T. Stafford 

19 Disaster Relief and Emergency Assistance 

20 Act. 

21 ‘‘(ii) DISASTER AREA.—The term ‘dis22 aster area’ means the area so determined to 

23 warrant such assistance.’’. 

24 (2) CONFORMING AMENDMENTS.— 
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1 (A) Section 165(h)(4)(B) (as so redesig2 nated) is amended by striking ‘‘paragraph (2)’’ 

3 and inserting ‘‘paragraphs (2) and (3)’’. 

4 (B) Section 165(i)(1) is amended by strik5 ing ‘‘loss’’ and all that follows through ‘‘Act’’ 

6 and inserting ‘‘loss occurring in a disaster area 

7 (as defined by clause (ii) of subsection (h)(3)(C)) 

8 and attributable to a federally declared disaster 

9 (as defined by clause (i) of such subsection)’’. 

10 (C) Section 165(i)(4) is amended by strik11 ing ‘‘Presidentially declared disaster (as defined 

12 by section 1033(h)(3))’’ and inserting ‘‘federally 

13 declared disaster (as defined by subsection 

14 (h)(3)(C)(i)’’. 

15 (D)(i) So much of subsection (h) of section 

16 1033 as precedes subparagraph (A) of paragraph 

17 (1) thereof is amended to read as follows: 

18 ‘‘(h) SPECIAL RULES FOR PROPERTY DAMAGED BY

19 FEDERALLY DECLARED DISASTERS.— 

20 ‘‘(1) PRINCIPAL RESIDENCES.—If the taxpayer’s 

21 principal residence or any of its contents is located 

22 in a disaster area and is compulsorily or involun23 tarily converted as a result of a federally declared dis24 aster—’’. 
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1 (ii) Paragraph (2) of section 1033(h) is 

2 amended by striking ‘‘investment’’ and all that 

3 follows through ‘‘disaster’’ and inserting ‘‘invest4 ment located in a disaster area and compulsorily 

5 or involuntarily converted as a result of a feder6 ally declared disaster’’. 

7 (iii) Paragraph (3) of section 1033(h) is 

8 amended to read as follows: 

9 ‘‘(3) FEDERALLY DECLARED DISASTER; DIS10 ASTER AREA.—The terms ‘‘federally declared disaster’’ 

11 and ‘‘disaster area’’ shall have the respective meaning 

12 given such terms by section 165(h)(3)(C).’’. 

13 (iv) Section 139(c)(2) is amended to read as 

14 follows: 

15 ‘‘(2) federally declared disaster (as defined by 

16 section 165(h)(3)(C)(i)),’’. 

17 (v) Subclause (II) of section 

18 172(b)(1)(F)(ii) is amended by striking ‘‘Presi19 dentially declared disasters (as defined in section 

20 1033(h)(3))’’ and inserting ‘‘federally declared 

21 disasters (as defined by subsection (h)(3)(C)(i))’’. 

22 (vi) Subclause (III) of section 

23 172(b)(1)(F)(ii) is amended by striking ‘‘Presi24 dentially declared disasters’’ and inserting ‘‘fed25 erally declared disasters’’. 
414 

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1 (vii) Subsection (a) of section 7508A is 

2 amended by striking ‘‘Presidentially declared 

3 disaster (as defined in section 1033(h)(3))’’ and 

4 inserting ‘‘federally declared disaster (as defined 

5 by section 165(h)(3)(C)(i))’’. 

6 (b) INCREASE IN STANDARD DEDUCTION BY DISASTER

7 CASUALTY LOSS.— 

8 (1) IN GENERAL.—Paragraph (1) of section 

9 63(c), as amended by the Housing Assistance Tax Act 

10 of 2008, is amended by striking ‘‘and’’ at the end of 

11 subparagraph (B), by striking the period at the end 

12 of subparagraph (C) and inserting ‘‘, and’’, and by 

13 adding at the end the following new subparagraph: 

14 ‘‘(D) the disaster loss deduction.’’. 

15 (2) DISASTER LOSS DEDUCTION.—Subsection (c) 

16 of section 63, as amended by the Housing Assistance 

17 Tax Act of 2008, is amended by adding at the end 

18 the following new paragraph: 

19 ‘‘(8) DISASTER LOSS DEDUCTION.—For the pur20 poses of paragraph (1), the term ‘disaster loss deduc21 tion’ means the net disaster loss (as defined in section 

22 165(h)(3)(B)).’’. 

23 (3) ALLOWANCE IN COMPUTING ALTERNATIVE

24 MINIMUM TAXABLE INCOME.—Subparagraph (E) of 

25 section 56(b)(1) is amended by adding at the end the 
415 

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1 following new sentence: ‘‘The preceding sentence shall 

2 not apply to so much of the standard deduction as is 

3 determined under section 63(c)(1)(D).’’. 

4 (c) INCREASE IN LIMITATION ON INDIVIDUAL LOSS

5 PER CASUALTY.—Paragraph (1) of section 165(h) is 

6 amended by striking ‘‘$100’’ and inserting ‘‘$500 ($100 for 

7 taxable years beginning after December 31, 2009)’’. 

8 (d) EFFECTIVE DATES.— 

9 (1) IN GENERAL.—Except as provided by para10 graph (2), the amendments made by this section shall 

11 apply to disasters declared in taxable years beginning 

12 after December 31, 2007. 

13 (2) INCREASE IN LIMITATION ON INDIVIDUAL

14 LOSS PER CASUALTY.—The amendment made by sub15 section (c) shall apply to taxable years beginning 

16 after December 31, 2008. 

17 SEC. 707. EXPENSING OF QUALIFIED DISASTER EXPENSES. 

18 (a) IN GENERAL.—Part VI of subchapter B of chapter 

19 1 is amended by inserting after section 198 the following 

20 new section: 

21 ‘‘SEC. 198A. EXPENSING OF QUALIFIED DISASTER EX22 PENSES. 

23 ‘‘(a) IN GENERAL.—A taxpayer may elect to treat any 

24 qualified disaster expenses which are paid or incurred by 

25 the taxpayer as an expense which is not chargeable to cap-
416 

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1 ital account. Any expense which is so treated shall be al2 lowed as a deduction for the taxable year in which it is 

3 paid or incurred. 

4 ‘‘(b) QUALIFIED DISASTER EXPENSE.—For purposes 

5 of this section, the term ‘qualified disaster expense’ means 

6 any expenditure— 

7 ‘‘(1) which is paid or incurred in connection 

8 with a trade or business or with business-related 

9 property, 

10 ‘‘(2) which is— 

11 ‘‘(A) for the abatement or control of haz12 ardous substances that were released on account 

13 of a federally declared disaster occurring before 

14 January 1, 2010, 

15 ‘‘(B) for the removal of debris from, or the 

16 demolition of structures on, real property which 

17 is business-related property damaged or de18 stroyed as a result of a federally declared dis19 aster occurring before such date, or 

20 ‘‘(C) for the repair of business-related prop21 erty damaged as a result of a federally declared 

22 disaster occurring before such date, and 

23 ‘‘(3) which is otherwise chargeable to capital ac24 count. 
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1 ‘‘(c) OTHER DEFINITIONS.—For purposes of this sec2 tion— 

3 ‘‘(1) BUSINESS-RELATED PROPERTY.—The term 

4 ‘business-related property’ means property— 

5 ‘‘(A) held by the taxpayer for use in a trade 

6 or business or for the production of income, or 

7 ‘‘(B) described in section 1221(a)(1) in the 

8 hands of the taxpayer. 

9 ‘‘(2) FEDERALLY DECLARED DISASTER.—The 

10 term ‘federally declared disaster’ has the meaning 

11 given such term by section 165(h)(3)(C)(i). 

12 ‘‘(d) DEDUCTION RECAPTURED AS ORDINARY INCOME

13 ON SALE, ETC.—Solely for purposes of section 1245, in the 

14 case of property to which a qualified disaster expense would 

15 have been capitalized but for this section— 

16 ‘‘(1) the deduction allowed by this section for 

17 such expense shall be treated as a deduction for depre18 ciation, and 

19 ‘‘(2) such property (if not otherwise section 1245 

20 property) shall be treated as section 1245 property 

21 solely for purposes of applying section 1245 to such 

22 deduction. 

23 ‘‘(e) COORDINATION WITH OTHER PROVISIONS.—Sec24 tions 198, 280B, and 468 shall not apply to amounts which 

25 are treated as expenses under this section. 
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1 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

2 such regulations as may be necessary or appropriate to 

3 carry out the purposes of this section.’’. 

4 (b) CLERICAL AMENDMENT.—The table of sections for 

5 part VI of subchapter B of chapter 1 is amended by insert6 ing after the item relating to section 198 the following new 

7 item: 

‘‘Sec. 198A. Expensing of Qualified Disaster Expenses.’’. 

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

9 section shall apply to amounts paid or incurred after De10 cember 31, 2007 in connection with disaster declared after 

11 such date. 

12 SEC. 708. NET OPERATING LOSSES ATTRIBUTABLE TO FED13 ERALLY DECLARED DISASTERS. 

14 (a) IN GENERAL.—Paragraph (1) of section 172(b) is 

15 amended by adding at the end the following new subpara16 graph: 

17 ‘‘(J) CERTAIN LOSSES ATTRIBUTABLE FED18 ERALLY DECLARED DISASTERS.—In the case of a 

19 taxpayer who has a qualified disaster loss (as de20 fined in subsection (j)), such loss shall be a net 

21 operating loss carryback to each of the 5 taxable 

22 years preceding the taxable year of such loss.’’. 

23 (b) QUALIFIED DISASTER LOSS.—Section 172 is 

24 amended by redesignating subsections (j) and (k) as sub-
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1 sections (k) and (l), respectively, and by inserting after sub2 section (i) the following new subsection: 

3 ‘‘(j) RULES RELATING TO QUALIFIED DISASTER

4 LOSSES.—For purposes of this section— 

5 ‘‘(1) IN GENERAL.—The term ‘qualified disaster 

6 loss’ means the lesser of— 

7 ‘‘(A) the sum of— 

8 ‘‘(i) the losses allowable under section 

9 165 for the taxable year— 

10 ‘‘(I) attributable to a federally de11 clared disaster (as defined in section 

12 165(h)(3)(C)(i)) occurring before Janu13 ary 1, 2010, and 

14 ‘‘(II) occurring in a disaster area 

15 (as defined in section 165(h)(3)(C)(ii)), 

16 and 

17 ‘‘(ii) the deduction for the taxable year 

18 for qualified disaster expenses which is al19 lowable under section 198A(a) or which 

20 would be so allowable if not otherwise treat21 ed as an expense, or 

22 ‘‘(B) the net operating loss for such taxable 

23 year. 

24 ‘‘(2) COORDINATION WITH SUBSECTION (b)(2).— 

25 For purposes of applying subsection (b)(2), a quali-
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1 fied disaster loss for any taxable year shall be treated 

2 in a manner similar to the manner in which a speci3 fied liability loss is treated. 

4 ‘‘(3) ELECTION.—Any taxpayer entitled to a 5- 

5 year carryback under subsection (b)(1)(J) from any 

6 loss year may elect to have the carryback period with 

7 respect to such loss year determined without regard to 

8 subsection (b)(1)(J). Such election shall be made in 

9 such manner as may be prescribed by the Secretary 

10 and shall be made by the due date (including exten11 sions of time) for filing the taxpayer’s return for the 

12 taxable year of the net operating loss. Such election, 

13 once made for any taxable year, shall be irrevocable 

14 for such taxable year. 

15 ‘‘(4) EXCLUSION.—The term ‘qualified disaster 

16 loss’ shall not include any loss with respect to any 

17 property described in section 1400N(p)(3).’’. 

18 (c) LOSS DEDUCTION ALLOWED IN COMPUTING AL19 TERNATIVE MINIMUM TAXABLE INCOME.—Subsection (d) of 

20 section 56 is amended by adding at the end the following 

21 new paragraph: 

22 ‘‘(3) NET OPERATING LOSS ATTRIBUTABLE TO

23 FEDERALLY DECLARED DISASTERS.—In the case of a 

24 taxpayer which has a qualified disaster loss (as de25 fined by section 172(b)(1)(J)) for the taxable year, 
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1 paragraph (1) shall be applied by increasing the 

2 amount determined under subparagraph (A)(ii)(I) 

3 thereof by the sum of the carrybacks and carryovers 

4 of such loss.’’. 

5 (d) CONFORMING AMENDMENTS.— 

6 (1) Clause (ii) of section 172(b)(1)(F) is amend7 ed by inserting ‘‘or qualified disaster loss (as defined 

8 in subsection (j))’’ before the period at the end of the 

9 last sentence. 

10 (2) Paragraph (1) of section 172(i) is amended 

11 by adding at the end the following new flush sentence: 

12 ‘‘Such term shall not include any qualified disaster 

13 loss (as defined in subsection (j)).’’. 

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

15 section shall apply to losses arising in taxable years begin16 ning after December 31, 2007, in connection with disasters 

17 declared after such date. 

18 SEC. 709. WAIVER OF CERTAIN MORTGAGE REVENUE BOND 

19 REQUIREMENTS FOLLOWING FEDERALLY DE20 CLARED DISASTERS. 

21 (a) IN GENERAL.—Subsection (k) of section 143 is 

22 amended by adding at the end the following new paragraph: 

23 ‘‘(12) SPECIAL RULES FOR RESIDENCES DE24 STROYED IN FEDERALLY DECLARED DISASTERS.— 
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1 ‘‘(A) PRINCIPAL RESIDENCE DESTROYED.— 

2 At the election of the taxpayer, if the principal 

3 residence (within the meaning of section 121) of 

4 such taxpayer is— 

5 ‘‘(i) rendered unsafe for use as a resi6 dence by reason of a federally declared dis7 aster occurring before January 1, 2010, or 

8 ‘‘(ii) demolished or relocated by reason 

9 of an order of the government of a State or 

10 political subdivision thereof on account of a 

11 federally declared disaster occurring before 

12 such date, 

13 then, for the 2-year period beginning on the date 

14 of the disaster declaration, subsection (d)(1) shall 

15 not apply with respect to such taxpayer and sub16 section (e) shall be applied by substituting ‘110’ 

17 for ‘90’ in paragraph (1) thereof. 

18 ‘‘(B) PRINCIPAL RESIDENCE DAMAGED.— 

19 ‘‘(i) IN GENERAL.—At the election of 

20 the taxpayer, if the principal residence 

21 (within the meaning of section 121) of such 

22 taxpayer was damaged as the result of a 

23 federally declared disaster occurring before 

24 January 1, 2010, any owner-financing pro25 vided in connection with the repair or re-
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1 construction of such residence shall be treat2 ed as a qualified rehabilitation loan. 

3 ‘‘(ii) LIMITATION.—The aggregate 

4 owner-financing to which clause (i) applies 

5 shall not exceed the lesser of— 

6 ‘‘(I) the cost of such repair or re7 construction, or 

8 ‘‘(II) $150,000. 

9 ‘‘(C) FEDERALLY DECLARED DISASTER.— 

10 For purposes of this paragraph, the term ‘feder11 ally declared disaster’ has the meaning given 

12 such term by section 165(h)(3)(C)(i). 

13 ‘‘(D) ELECTION; DENIAL OF DOUBLE BEN14 EFIT.— 

15 ‘‘(i) ELECTION.—An election under 

16 this paragraph may not be revoked except 

17 with the consent of the Secretary. 

18 ‘‘(ii) DENIAL OF DOUBLE BENEFIT.—If 

19 a taxpayer elects the application of this 

20 paragraph, paragraph (11) shall not apply 

21 with respect to the purchase or financing of 

22 any residence by such taxpayer.’’. 

23 (b) EFFECTIVE DATE.—The amendment made by sub24 section (a) shall apply to disasters occurring after December 

25 31, 2007. 
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1 SEC. 710. SPECIAL DEPRECIATION ALLOWANCE FOR QUALI2 FIED DISASTER PROPERTY. 

3 (a) IN GENERAL.—Section 168, as amended by this 

4 Act, is amended by adding at the end the following new 

5 subsection: 

6 ‘‘(n) SPECIAL ALLOWANCE FOR QUALIFIED DISASTER

7 ASSISTANCE PROPERTY.— 

8 ‘‘(1) IN GENERAL.—In the case of any qualified 

9 disaster assistance property— 

10 ‘‘(A) the depreciation deduction provided by 

11 section 167(a) for the taxable year in which such 

12 property is placed in service shall include an al13 lowance equal to 50 percent of the adjusted basis 

14 of the qualified disaster assistance property, and 

15 ‘‘(B) the adjusted basis of the qualified dis16 aster assistance property shall be reduced by the 

17 amount of such deduction before computing the 

18 amount otherwise allowable as a depreciation de19 duction under this chapter for such taxable year 

20 and any subsequent taxable year. 

21 ‘‘(2) QUALIFIED DISASTER ASSISTANCE PROP22 ERTY.—For purposes of this subsection— 

23 ‘‘(A) IN GENERAL.—The term ‘qualified dis24 aster assistance property’ means any property— 

25 ‘‘(i)(I) which is described in subsection 

26 (k)(2)(A)(i), or 
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1 ‘‘(II) which is nonresidential real 

2 property or residential rental property, 

3 ‘‘(ii) substantially all of the use of 

4 which is— 

5 ‘‘(I) in a disaster area with re6 spect to a federally declared disaster 

7 occurring before January 1, 2010, and 

8 ‘‘(II) in the active conduct of a 

9 trade or business by the taxpayer in 

10 such disaster area, 

11 ‘‘(iii) which— 

12 ‘‘(I) rehabilitates property dam13 aged, or replaces property destroyed or 

14 condemned, as a result of such feder15 ally declared disaster, except that, for 

16 purposes of this clause, property shall 

17 be treated as replacing property de18 stroyed or condemned if, as part of an 

19 integrated plan, such property replaces 

20 property which is included in a con21 tinuous area which includes real prop22 erty destroyed or condemned, and 

23 ‘‘(II) is similar in nature to, and 

24 located in the same county as, the 
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1 property being rehabilitated or re2 placed, 

3 ‘‘(iv) the original use of which in such 

4 disaster area commences with an eligible 

5 taxpayer on or after the applicable disaster 

6 date, 

7 ‘‘(v) which is acquired by such eligible 

8 taxpayer by purchase (as defined in section 

9 179(d)) on or after the applicable disaster 

10 date, but only if no written binding con11 tract for the acquisition was in effect before 

12 such date, and 

13 ‘‘(vi) which is placed in service by such 

14 eligible taxpayer on or before the date which 

15 is the last day of the third calendar year 

16 following the applicable disaster date (the 

17 fourth calendar year in the case of nonresi18 dential real property and residential rental 

19 property). 

20 ‘‘(B) EXCEPTIONS.— 

21 ‘‘(i) OTHER BONUS DEPRECIATION

22 PROPERTY.—The term ‘qualified disaster 

23 assistance property’ shall not include— 
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1 ‘‘(I) any property to which sub2 section (k) (determined without regard 

3 to paragraph (4)), (l), or (m) applies, 

4 ‘‘(II) any property to which sec5 tion 1400N(d) applies, and 

6 ‘‘(III) any property described in 

7 section 1400N(p)(3). 

8 ‘‘(ii) ALTERNATIVE DEPRECIATION

9 PROPERTY.—The term ‘qualified disaster 

10 assistance property’ shall not include any 

11 property to which the alternative deprecia12 tion system under subsection (g) applies, de13 termined without regard to paragraph (7) 

14 of subsection (g) (relating to election to have 

15 system apply). 

16 ‘‘(iii) TAX-EXEMPT BOND FINANCED

17 PROPERTY.—Such term shall not include 

18 any property any portion of which is fi19 nanced with the proceeds of any obligation 

20 the interest on which is exempt from tax 

21 under section 103. 

22 ‘‘(iv) QUALIFIED REVITALIZATION

23 BUILDINGS.—Such term shall not include 

24 any qualified revitalization building with 

25 respect to which the taxpayer has elected the 
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1 application of paragraph (1) or (2) of sec2 tion 1400I(a). 

3 ‘‘(v) ELECTION OUT.—If a taxpayer 

4 makes an election under this clause with re5 spect to any class of property for any tax6 able year, this subsection shall not apply to 

7 all property in such class placed in service 

8 during such taxable year. 

9 ‘‘(C) SPECIAL RULES.—For purposes of this 

10 subsection, rules similar to the rules of subpara11 graph (E) of subsection (k)(2) shall apply, except 

12 that such subparagraph shall be applied— 

13 ‘‘(i) by substituting ‘the applicable dis14 aster date’ for ‘December 31, 2007’ each 

15 place it appears therein, 

16 ‘‘(ii) without regard to ‘and before 

17 January 1, 2009’ in clause (i) thereof, and 

18 ‘‘(iii) by substituting ‘qualified dis19 aster assistance property’ for ‘qualified 

20 property’ in clause (iv) thereof. 

21 ‘‘(D) ALLOWANCE AGAINST ALTERNATIVE

22 MINIMUM TAX.—For purposes of this subsection, 

23 rules similar to the rules of subsection (k)(2)(G) 

24 shall apply. 
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1 ‘‘(3) OTHER DEFINITIONS.—For purposes of this 

2 subsection— 

3 ‘‘(A) APPLICABLE DISASTER DATE.—The 

4 term ‘applicable disaster date’ means, with re5 spect to any federally declared disaster, the date 

6 on which such federally declared disaster occurs. 

7 ‘‘(B) FEDERALLY DECLARED DISASTER.— 

8 The term ‘federally declared disaster’ has the 

9 meaning given such term under section 

10 165(h)(3)(C)(i). 

11 ‘‘(C) DISASTER AREA.—The term ‘disaster 

12 area’ has the meaning given such term under 

13 section 165(h)(3)(C)(ii). 

14 ‘‘(D) ELIGIBLE TAXPAYER.—The term ‘eli15 gible taxpayer’ means a taxpayer who has suf16 fered an economic loss attributable to a federally 

17 declared disaster. 

18 ‘‘(4) RECAPTURE.—For purposes of this sub19 section, rules similar to the rules under section 

20 179(d)(10) shall apply with respect to any qualified 

21 disaster assistance property which ceases to be quali22 fied disaster assistance property.’’. 

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

24 section shall apply to property placed in service after De-
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1 cember 31, 2007, with respect disasters declared after such 

2 date. 

3 SEC. 711. INCREASED EXPENSING FOR QUALIFIED DIS4 ASTER ASSISTANCE PROPERTY. 

5 (a) IN GENERAL.—Section 179 is amended by adding 

6 at the end the following new subsection: 

7 ‘‘(e) SPECIAL RULES FOR QUALIFIED DISASTER AS8 SISTANCE PROPERTY.— 

9 ‘‘(1) IN GENERAL.—For purposes of this sec10 tion— 

11 ‘‘(A) the dollar amount in effect under sub12 section (b)(1) for the taxable year shall be in13 creased by the lesser of— 

14 ‘‘(i) $100,000, or 

15 ‘‘(ii) the cost of qualified section 179 

16 disaster assistance property placed in serv17 ice during the taxable year, and 

18 ‘‘(B) the dollar amount in effect under sub19 section (b)(2) for the taxable year shall be in20 creased by the lesser of— 

21 ‘‘(i) $600,000, or 

22 ‘‘(ii) the cost of qualified section 179 

23 disaster assistance property placed in serv24 ice during the taxable year. 
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1 ‘‘(2) QUALIFIED SECTION 179 DISASTER ASSIST2 ANCE PROPERTY.—For purposes of this subsection, the 

3 term ‘qualified section 179 disaster assistance prop4 erty’ means section 179 property (as defined in sub5 section (d)) which is qualified disaster assistance 

6 property (as defined in section 168(n)(2)). 

7 ‘‘(3) COORDINATION WITH EMPOWERMENT ZONES

8 AND RENEWAL COMMUNITIES.—For purposes of sec9 tions 1397A and 1400J, qualified section 179 disaster 

10 assistance property shall not be treated as qualified 

11 zone property or qualified renewal property, unless 

12 the taxpayer elects not to take such qualified section 

13 179 disaster assistance property into account for pur14 poses of this subsection. 

15 ‘‘(4) RECAPTURE.—For purposes of this sub16 section, rules similar to the rules under subsection 

17 (d)(10) shall apply with respect to any qualified sec18 tion 179 disaster assistance property which ceases to 

19 be qualified section 179 disaster assistance property.’’. 

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

21 section shall apply to property placed in service after De22 cember 31, 2007, with respect disasters declared after such 

23 date. 
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1 SEC. 712. COORDINATION WITH HEARTLAND DISASTER RE2 LIEF. 

3 The amendments made by this subtitle, other than the 

4 amendments made by sections 706(a)(2), 710, and 711, 

5 shall not apply to any disaster described in section 

6 702(c)(1)(A), or to any expenditure or loss resulting from 

7 such disaster. 

8 TITLE VIII—SPENDING REDUC9 TIONS AND APPROPRIATE 

10 REVENUE RAISERS FOR NEW 

11 TAX RELIEF POLICY 

12 SEC. 801. NONQUALIFIED DEFERRED COMPENSATION FROM 

13 CERTAIN TAX INDIFFERENT PARTIES. 

14 (a) IN GENERAL.—Subpart B of part II of subchapter 

15 E of chapter 1 is amended by inserting after section 457 

16 the following new section: 

17 ‘‘SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION 

18 FROM CERTAIN TAX INDIFFERENT PARTIES. 

19 ‘‘(a) IN GENERAL.—Any compensation which is de20 ferred under a nonqualified deferred compensation plan of 

21 a nonqualified entity shall be includible in gross income 

22 when there is no substantial risk of forfeiture of the rights 

23 to such compensation. 

24 ‘‘(b) NONQUALIFIED ENTITY.—For purposes of this 

25 section, the term ‘nonqualified entity’ means— 
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1 ‘‘(1) any foreign corporation unless substantially 

2 all of its income is— 

3 ‘‘(A) effectively connected with the conduct 

4 of a trade or business in the United States, or 

5 ‘‘(B) subject to a comprehensive foreign in6 come tax, and 

7 ‘‘(2) any partnership unless substantially all of 

8 its income is allocated to persons other than— 

9 ‘‘(A) foreign persons with respect to whom 

10 such income is not subject to a comprehensive 

11 foreign income tax, and 

12 ‘‘(B) organizations which are exempt from 

13 tax under this title. 

14 ‘‘(c) DETERMINABILITY OF AMOUNTS OF COMPENSA15 TION.— 

16 ‘‘(1) IN GENERAL.—If the amount of any com17 pensation is not determinable at the time that such 

18 compensation is otherwise includible in gross income 

19 under subsection (a)— 

20 ‘‘(A) such amount shall be so includible in 

21 gross income when determinable, and 

22 ‘‘(B) the tax imposed under this chapter for 

23 the taxable year in which such compensation is 

24 includible in gross income shall be increased by 

25 the sum of— 
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1 ‘‘(i) the amount of interest determined 

2 under paragraph (2), and 

3 ‘‘(ii) an amount equal to 20 percent of 

4 the amount of such compensation. 

5 ‘‘(2) INTEREST.—For purposes of paragraph 

6 (1)(B)(i), the interest determined under this para7 graph for any taxable year is the amount of interest 

8 at the underpayment rate under section 6621 plus 1 

9 percentage point on the underpayments that would 

10 have occurred had the deferred compensation been in11 cludible in gross income for the taxable year in which 

12 first deferred or, if later, the first taxable year in 

13 which such deferred compensation is not subject to a 

14 substantial risk of forfeiture. 

15 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.—For 

16 purposes of this section— 

17 ‘‘(1) SUBSTANTIAL RISK OF FORFEITURE.— 

18 ‘‘(A) IN GENERAL.—The rights of a person 

19 to compensation shall be treated as subject to a 

20 substantial risk of forfeiture only if such person’s 

21 rights to such compensation are conditioned 

22 upon the future performance of substantial serv23 ices by any individual. 
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1 ‘‘(B) EXCEPTION FOR COMPENSATION

2 BASED ON GAIN RECOGNIZED ON AN INVESTMENT

3 ASSET.— 

4 ‘‘(i) IN GENERAL.—To the extent pro5 vided in regulations prescribed by the Sec6 retary, if compensation is determined solely 

7 by reference to the amount of gain recog8 nized on the disposition of an investment 

9 asset, such compensation shall be treated as 

10 subject to a substantial risk of forfeiture 

11 until the date of such disposition. 

12 ‘‘(ii) INVESTMENT ASSET.—For pur13 poses of clause (i), the term ‘investment 

14 asset’ means any single asset (other than an 

15 investment fund or similar entity)— 

16 ‘‘(I) acquired directly by an in17 vestment fund or similar entity, 

18 ‘‘(II) with respect to which such 

19 entity does not (nor does any person 

20 related to such entity) participate in 

21 the active management of such asset 

22 (or if such asset is an interest in an 

23 entity, in the active management of the 

24 activities of such entity), and 
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1 ‘‘(III) substantially all of any 

2 gain on the disposition of which (other 

3 than such deferred compensation) is al4 located to investors in such entity. 

5 ‘‘(iii) COORDINATION WITH SPECIAL

6 RULE.—Paragraph (3)(B) shall not apply 

7 to any compensation to which clause (i) ap8 plies. 

9 ‘‘(2) COMPREHENSIVE FOREIGN INCOME TAX.— 

10 The term ‘comprehensive foreign income tax’ means, 

11 with respect to any foreign person, the income tax of 

12 a foreign country if— 

13 ‘‘(A) such person is eligible for the benefits 

14 of a comprehensive income tax treaty between 

15 such foreign country and the United States, or 

16 ‘‘(B) such person demonstrates to the satis17 faction of the Secretary that such foreign country 

18 has a comprehensive income tax. 

19 ‘‘(3) NONQUALIFIED DEFERRED COMPENSATION

20 PLAN.— 

21 ‘‘(A) IN GENERAL.—The term ‘nonqualified 

22 deferred compensation plan’ has the meaning 

23 given such term under section 409A(d), except 

24 that such term shall include any plan that pro25 vides a right to compensation based on the ap-
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1 preciation in value of a specified number of eq2 uity units of the service recipient. 

3 ‘‘(B) EXCEPTION.—Compensation shall not 

4 be treated as deferred for purposes of this section 

5 if the service provider receives payment of such 

6 compensation not later than 12 months after the 

7 end of the taxable year of the service recipient 

8 during which the right to the payment of such 

9 compensation is no longer subject to a substan10 tial risk of forfeiture. 

11 ‘‘(4) EXCEPTION FOR CERTAIN COMPENSATION

12 WITH RESPECT TO EFFECTIVELY CONNECTED IN13 COME.—In the case a foreign corporation with income 

14 which is taxable under section 882, this section shall 

15 not apply to compensation which, had such com16 pensation had been paid in cash on the date that such 

17 compensation ceased to be subject to a substantial risk 

18 of forfeiture, would have been deductible by such for19 eign corporation against such income. 

20 ‘‘(5) APPLICATION OF RULES.—Rules similar to 

21 the rules of paragraphs (5) and (6) of section 409A(d) 

22 shall apply. 

23 ‘‘(e) REGULATIONS.—The Secretary shall prescribe 

24 such regulations as may be necessary or appropriate to 

25 carry out the purposes of this section, including regulations 
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1 disregarding a substantial risk of forfeiture in cases where 

2 necessary to carry out the purposes of this section.’’. 

3 (b) CONFORMING AMENDMENT.—Section 26(b)(2), as 

4 amended by the Housing Assistance Tax Act of 2008, is 

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

6 by striking the period at the end of subparagraph (W) and 

7 inserting ‘‘, and’’, and by adding at the end the following 

8 new subparagraph: 

9 ‘‘(X) section 457A(c)(1)(B) (relating to de10 terminability of amounts of compensation).’’. 

11 (c) CLERICAL AMENDMENT.—The table of sections of 

12 subpart B of part II of subchapter E of chapter 1 is amend13 ed by inserting after the item relating to section 457 the 

14 following new item: 

‘‘Sec. 457A. Nonqualified deferred compensation from certain tax indifferent parties.’’. 

15 (d) EFFECTIVE DATE.— 

16 (1) IN GENERAL.—Except as otherwise provided 

17 in this subsection, the amendments made by this sec18 tion shall apply to amounts deferred which are attrib19 utable to services performed after December 31, 2008. 

20 (2) APPLICATION TO EXISTING DEFERRALS.—In 

21 the case of any amount deferred to which the amend22 ments made by this section do not apply solely by 

23 reason of the fact that the amount is attributable to 

24 services performed before January 1, 2009, to the ex-
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1 tent such amount is not includible in gross income in 

2 a taxable year beginning before 2018, such amounts 

3 shall be includible in gross income in the later of— 

4 (A) the last taxable year beginning before 

5 2018, or 

6 (B) the taxable year in which there is no 

7 substantial risk of forfeiture of the rights to such 

8 compensation (determined in the same manner 

9 as determined for purposes of section 457A of the 

10 Internal Revenue Code of 1986, as added by this 

11 section). 

12 (3) ACCELERATED PAYMENTS.—No later than 

13 120 days after the date of the enactment of this Act, 

14 the Secretary shall issue guidance providing a limited 

15 period of time during which a nonqualified deferred 

16 compensation arrangement attributable to services 

17 performed on or before December 31, 2008, may, with18 out violating the requirements of section 409A(a) of 

19 the Internal Revenue Code of 1986, be amended to 

20 conform the date of distribution to the date the 

21 amounts are required to be included in income. 

22 (4) CERTAIN BACK-TO-BACK ARRANGEMENTS.—If 

23 the taxpayer is also a service recipient and maintains 

24 one or more nonqualified deferred compensation ar25 rangements for its service providers under which any 
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•HR 1424 EAS 

1 amount is attributable to services performed on or be2 fore December 31, 2008, the guidance issued under 

3 paragraph (4) shall permit such arrangements to be 

4 amended to conform the dates of distribution under 

5 such arrangement to the date amounts are required to 

6 be included in the income of such taxpayer under this 

7 subsection. 

8 (5) ACCELERATED PAYMENT NOT TREATED AS

9 MATERIAL MODIFICATION.—Any amendment to a 

10 nonqualified deferred compensation arrangement 

11 made pursuant to paragraph (4) or (5) shall not be 

12 treated as a material modification of the arrangement 

13 for purposes of section 409A of the Internal Revenue 

14 Code of 1986. 

Amend the title so as to read: ‘‘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 purpose’’. 

Attest: 

Secretary. 

110TH CONGRESS 

2D SESSION H.R. 1424 

AMENDMENTS