II 

109TH CONGRESS 

2D SESSION S. 3829 

To extend and expand certain tax relief provisions and to increase the Federal 

minimum wage, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 3, 2006 

Ms. STABENOW (for herself, Mr. MENENDEZ, Mr. KERRY, Mrs. CLINTON, Mr. 

OBAMA, Mr. LEAHY, Mr. JOHNSON, Mr. LIEBERMAN, Mr. DURBIN, Mr. 

BIDEN, Mr. DAYTON, Mrs. FEINSTEIN, and Mr. LEVIN) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To extend and expand certain tax relief provisions and to 

increase the Federal minimum wage, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CON4 TENTS. 

5 (a) SHORT TITLE.—This Act may be cited as the 

6 ‘‘Tax Relief and Minimum Wage Act of 2006’’. 

7 (b) AMENDMENT OF 1986 CODE.—Except as other8 wise expressly provided, whenever in this Act an amend9 ment or repeal is expressed in terms of an amendment 


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1 to, or repeal of, a section or other provision, the reference 

2 shall be considered to be made to a section or other provi3 sion of the Internal Revenue Code of 1986. 

4 (c) TABLE OF CONTENTS.—The table of contents for 

5 this Act is as follows: 

Sec. 1. Short title; reference; table of contents. 

TITLE I—EXTENSION AND EXPANSION OF CERTAIN TAX RELIEF 

PROVISIONS 

Subtitle A—Extension and Modification of Certain Provisions 

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

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

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

Sec. 104. Extension and modification of research credit. 

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

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

earned income credit. 

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

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

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

costs. 

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

Sec. 111. Indian employment tax credit. 

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

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

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

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

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

computer technology and equipment. 

Sec. 117. Availability of medical savings accounts. 

Sec. 118. Taxable income limit on percentage depletion for oil and natural gas 

produced from marginal properties. 

Sec. 119. American Samoa economic development credit. 

Sec. 120. Restructuring of New York Liberty Zone tax credits. 

Sec. 121. Extension of bonus depreciation for certain qualified Gulf Opportunity Zone property. 

Sec. 122. Authority for undercover operations. 

Sec. 123. Disclosures of certain tax return information. 

Subtitle B—Other Provisions 

Sec. 131. Deduction allowable with respect to income attributable to domestic 

production activities in Puerto Rico. 

Sec. 132. Credit for prior year minimum tax liability made refundable after period of years. 

Sec. 133. Returns required in connection with certain options. 


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Sec. 134. Partial expensing for advanced mine safety equipment. 

Sec. 135. Mine rescue team training tax credit. 

Sec. 136. Whistleblower reforms. 

Sec. 137. Frivolous tax submissions. 

Sec. 138. Addition of meningococcal and human papillomavirus vaccines to list 

of taxable vaccines. 

Sec. 139. Clarification of taxation of certain settlement funds made permanent. 

Sec. 140. Modification of active business definition under section 355 made permanent. 

Sec. 141. Revision of State veterans limit made permanent. 

Sec. 142. Capital gains treatment for certain self-created musical works made 

permanent. 

Sec. 143. Reduction in minimum vessel tonnage which qualifies for tonnage tax 

made permanent. 

Sec. 144. Modification of special arbitrage rule for certain funds made permanent. 

Sec. 145. Great Lakes domestic shipping to not disqualify vessel from tonnage 

tax. 

Sec. 146. Use of qualified mortgage bonds to finance residences for veterans 

without regard to first-time homebuyer requirement. 

Sec. 147. Exclusion of gain from sale of a principal residence by certain employees of the intelligence community. 

Sec. 148. Treatment of coke and coke gas. 

Sec. 149. Sale of property by judicial officers. 

Sec. 150. Premiums for mortgage insurance. 

Sec. 151. Modification of refunds for kerosene used in aviation. 

Sec. 152. Deduction for qualified timber gain. 

Sec. 153. Credit to holders of rural renaissance bonds. 

Sec. 154. Restoration of deduction for travel expenses of spouse, etc. accompanying taxpayer on business travel. 

Sec. 155. Technical corrections. 

TITLE II—INCREASE IN FEDERAL MINIMUM WAGE 

Sec. 201. Minimum wage. 

Sec. 202. Applicability of minimum wage to the Commonwealth of the Northern 

Mariana Islands. 

TITLE III—SURFACE MINING CONTROL AND RECLAMATION ACT 

AMENDMENTS OF 2006 

Sec. 301. Short title. 

Subtitle A—Mining Control and Reclamation 

Sec. 311. Abandoned Mine Reclamation Fund and purposes. 

Sec. 312. Reclamation fee. 

Sec. 313. Objectives of Fund. 

Sec. 314. Reclamation of rural land. 

Sec. 315. Liens. 

Sec. 316. Certification. 

Sec. 317. Remining incentives. 

Sec. 318. Extension of limitation on application of prohibition on issuance of 

permit. 

Sec. 319. Tribal regulation of surface coal mining and reclamation operations. 

Subtitle B—Coal Industry Retiree Health Benefit Act 


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Sec. 321. Certain related persons and successors in interest relieved of liability 

if premiums prepaid. 

Sec. 322. Transfers to funds; premium relief. 

Sec. 323. Other provisions. 

1 TITLE I—EXTENSION AND EX2 PANSION OF CERTAIN TAX 

3 RELIEF PROVISIONS 

4 Subtitle A—Extension and 

5 Modification of Certain Provisions 

6 SEC. 101. DEDUCTION FOR QUALIFIED TUITION AND RE7 LATED EXPENSES. 

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

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

10 (b) CONFORMING AMENDMENTS.—Section 

11 222(b)(2)(B) is amended— 

12 (1) by striking ‘‘a taxable year beginning in 

13 2004 or 2005’’ and inserting ‘‘any taxable year be14 ginning after 2003’’, and 

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

16 and inserting ‘‘AFTER 2003’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to taxable years beginning after 

19 December 31, 2005. 

20 SEC. 102. EXTENSION AND MODIFICATION OF NEW MAR21 KETS TAX CREDIT. 

22 (a) EXTENSION.—Section 45D(f)(1)(D) is amended 

23 by striking ‘‘and 2007’’ and inserting ‘‘, 2007, and 2008’’. 


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1 (b) REGULATIONS REGARDING NON-METROPOLITAN

2 COUNTIES.—Section 45D(i) is amended by striking ‘‘and’’ 

3 at the end of paragraph (4), by striking the period at the 

4 end of paragraph (5) and inserting ‘‘, and’’, and by adding 

5 at the end the following new paragraph: 

6 ‘‘(6) which ensure that non-metropolitan coun7 ties receive a proportional allocation of qualified eq8 uity investments.’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall take effect on the date of the enactment 

11 of this Act. 

12 SEC. 103. ELECTION TO DEDUCT STATE AND LOCAL GEN13 ERAL SALES TAXES. 

14 (a) IN GENERAL.—Section 164(b)(5)(I) is amended 

15 by striking ‘‘2006’’ and inserting ‘‘2008’’. 

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

17 this section shall apply to taxable years beginning after 

18 December 31, 2005. 

19 SEC. 104. EXTENSION AND MODIFICATION OF RESEARCH 

20 CREDIT. 

21 (a) EXTENSION.— 

22 (1) IN GENERAL.—Section 41(h)(1)(B) is 

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


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1 (2) CONFORMING AMENDMENT.—Section 

2 45C(b)(1)(D) is amended by striking ‘‘2005’’ and 

3 inserting ‘‘2007’’. 

4 (3) EFFECTIVE DATE.—The amendments made 

5 by this subsection shall apply to amounts paid or in6 curred after December 31, 2005. 

7 (b) INCREASE IN RATES OF ALTERNATIVE INCRE8 MENTAL CREDIT.— 

9 (1) IN GENERAL.—Subparagraph (A) of section 

10 41(c)(4) (relating to election of alternative incre11 mental credit) is amended— 

12 (A) by striking ‘‘2.65 percent’’ and insert13 ing ‘‘3 percent’’, 

14 (B) by striking ‘‘3.2 percent’’ and inserting 

15 ‘‘4 percent’’, and 

16 (C) by striking ‘‘3.75 percent’’ and insert17 ing ‘‘5 percent’’. 

18 (2) EFFECTIVE DATE.—The amendments made 

19 by this subsection shall apply to amounts paid or in20 curred after December 31, 2006. 

21 (c) ALTERNATIVE SIMPLIFIED CREDIT FOR QUALI22 FIED RESEARCH EXPENSES.— 

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

24 (relating to base amount) is amended by redesig25 nating paragraphs (5) and (6) as paragraphs (6) 


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1 and (7), respectively, and by inserting after para2 graph (4) the following new paragraph: 

3 ‘‘(5) ELECTION OF ALTERNATIVE SIMPLIFIED

4 CREDIT.— 

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

6 taxpayer, the credit determined under sub7 section (a)(1) shall be equal to 12 percent of so 

8 much of the qualified research expenses for the 

9 taxable year as exceeds 50 percent of the aver10 age qualified research expenses for the 3 tax11 able years preceding the taxable year for which 

12 the credit is being determined. 

13 ‘‘(B) SPECIAL RULE IN CASE OF NO

14 QUALIFIED RESEARCH EXPENSES IN ANY OF 3

15 PRECEDING TAXABLE YEARS.— 

16 ‘‘(i) TAXPAYERS TO WHICH SUBPARA17 GRAPH APPLIES.—The credit under this 

18 paragraph shall be determined under this 

19 subparagraph if the taxpayer has no quali20 fied research expenses in any one of the 3 

21 taxable years preceding the taxable year 

22 for which the credit is being determined. 

23 ‘‘(ii) CREDIT RATE.—The credit de24 termined under this subparagraph shall be 


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1 equal to 6 percent of the qualified research 

2 expenses for the taxable year. 

3 ‘‘(C) ELECTION.—An election under this 

4 paragraph shall apply to the taxable year for 

5 which made and all succeeding taxable years 

6 unless revoked with the consent of the Sec7 retary. An election under this paragraph may 

8 not be made for any taxable year to which an 

9 election under paragraph (4) applies.’’. 

10 (2) COORDINATION WITH ELECTION OF ALTER11 NATIVE INCREMENTAL CREDIT.— 

12 (A) IN GENERAL.—Section 41(c)(4)(B) 

13 (relating to election) is amended by adding at 

14 the end the following: ‘‘An election under this 

15 paragraph may not be made for any taxable 

16 year to which an election under paragraph (5) 

17 applies.’’. 

18 (B) TRANSITION RULE.—In the case of an 

19 election under section 41(c)(4) of the Internal 

20 Revenue Code of 1986 which applies to the tax21 able year which includes the date of the enact22 ment of this Act, such election shall be treated 

23 as revoked with the consent of the Secretary of 

24 the Treasury if the taxpayer makes an election 


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1 under section 41(c)(5) of such Code (as added 

2 by subsection (c)) for such year. 

3 (3) EFFECTIVE DATE.—The amendments made 

4 by this subsection shall apply to amounts paid or in5 curred after December 31, 2006. 

6 SEC. 105. WORK OPPORTUNITY TAX CREDIT AND WELFARE7 TO-WORK CREDIT. 

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

9 are each amended by striking ‘‘2005’’ and inserting 

10 ‘‘2007’’. 

11 (b) ELIGIBILITY OF EX-FELONS DETERMINED

12 WITHOUT REGARD TO FAMILY INCOME.—Paragraph (4) 

13 of section 51(d) is amended by adding ‘‘and’’ at the end 

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

15 subparagraph (B) and inserting a period, and by striking 

16 all that follows subparagraph (B). 

17 (c) INCREASE IN MAXIMUM AGE FOR ELIGIBILITY OF

18 FOOD STAMP RECIPIENTS.—Clause (i) of section 

19 51(d)(8)(A) is amended by striking ‘‘25’’ and inserting 

20 ‘‘40’’. 

21 (d) EXTENSION OF PAPERWORK FILING DEAD22 LINE.—Section 51(d)(12)(A)(ii)(II) is amended by strik23 ing ‘‘21st day’’ and inserting ‘‘28th day’’. 

24 (e) CONSOLIDATION OF WORK OPPORTUNITY CRED25 IT WITH WELFARE-TO-WORK CREDIT.— 


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1 (1) IN GENERAL.—Paragraph (1) of section 

2 51(d) is amended by striking ‘‘or’’ at the end of sub3 paragraph (G), by striking the period at the end of 

4 subparagraph (H) and inserting ‘‘, or’’, and by add5 ing at the end the following new subparagraph: 

6 ‘‘(I) a long-term family assistance recipi7 ent.’’. 

8 (2) LONG-TERM FAMILY ASSISTANCE RECIPI9 ENT.—Subsection (d) of section 51 is amended by 

10 redesignating paragraphs (10) through (12) as para11 graphs (11) through (13), respectively, and by in12 serting after paragraph (9) the following new para13 graph: 

14 ‘‘(10) LONG-TERM FAMILY ASSISTANCE RECIPI15 ENT.—The term ‘long-term family assistance recipi16 ent’ means any individual who is certified by the 

17 designated local agency— 

18 ‘‘(A) as being a member of a family receiv19 ing assistance under a IV–A program (as de20 fined in paragraph (2)(B)) for at least the 18- 

21 month period ending on the hiring date, 

22 ‘‘(B)(i) as being a member of a family re23 ceiving such assistance for 18 months beginning 

24 after August 5, 1997, and 


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1 ‘‘(ii) as having a hiring date which is not 

2 more than 2 years after the end of the earliest 

3 such 18-month period, or 

4 ‘‘(C)(i) as being a member of a family 

5 which ceased to be eligible for such assistance 

6 by reason of any limitation imposed by Federal 

7 or State law on the maximum period such as8 sistance is payable to a family, and 

9 ‘‘(ii) as having a hiring date which is not 

10 more than 2 years after the date of such ces11 sation.’’. 

12 (3) INCREASED CREDIT FOR EMPLOYMENT OF

13 LONG-TERM FAMILY ASSISTANCE RECIPIENTS.—Sec14 tion 51 is amended by inserting after subsection (d) 

15 the following new subsection: 

16 ‘‘(e) CREDIT FOR SECOND-YEAR WAGES FOR EM17 PLOYMENT OF LONG-TERM FAMILY ASSISTANCE RECIPI18 ENTS.— 

19 ‘‘(1) IN GENERAL.—With respect to the em20 ployment of a long-term family assistance recipi21 ent— 

22 ‘‘(A) the amount of the work opportunity 

23 credit determined under this section for the tax24 able year shall include 50 percent of the quali25 fied second-year wages for such year, and 


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1 ‘‘(B) in lieu of applying subsection (b)(3), 

2 the amount of the qualified first-year wages, 

3 and the amount of qualified second-year wages, 

4 which may be taken into account with respect 

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

6 year. 

7 ‘‘(2) QUALIFIED SECOND-YEAR WAGES.—For 

8 purposes of this subsection, the term ‘qualified sec9 ond-year wages’ means qualified wages— 

10 ‘‘(A) which are paid to a long-term family 

11 assistance recipient, and 

12 ‘‘(B) which are attributable to service ren13 dered during the 1-year period beginning on the 

14 day after the last day of the 1-year period with 

15 respect to such recipient determined under sub16 section (b)(2). 

17 ‘‘(3) SPECIAL RULES FOR AGRICULTURAL AND

18 RAILWAY LABOR.—If such recipient is an employee 

19 to whom subparagraph (A) or (B) of subsection 

20 (h)(1) applies, rules similar to the rules of such sub21 paragraphs shall apply except that— 

22 ‘‘(A) such subparagraph (A) shall be ap23 plied by substituting ‘$10,000’ for ‘$6,000’, and 

24 ‘‘(B) such subparagraph (B) shall be ap25 plied by substituting ‘$833.33’ for ‘$500’.’’. 


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1 (4) REPEAL OF SEPARATE WELFARE-TO-WORK

2 CREDIT.— 

3 (A) IN GENERAL.—Section 51A is hereby 

4 repealed. 

5 (B) CLERICAL AMENDMENT.—The table of 

6 sections for subpart F of part IV of subchapter 

7 A of chapter 1 is amended by striking the item 

8 relating to section 51A. 

9 (f) EFFECTIVE DATES.— 

10 (1) IN GENERAL.—Except as provided in para11 graph (2), the amendments made by this section 

12 shall apply to individuals who begin work for the 

13 employer after December 31, 2005. 

14 (2) CONSOLIDATION.—The amendments made 

15 by subsections (b), (c), (d), and (e) shall apply to in16 dividuals who begin work for the employer after De17 cember 31, 2006. 

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

19 INCOME FOR PURPOSES OF EARNED INCOME 

20 CREDIT. 

21 (a) IN GENERAL.—Section 32(c)(2)(B)(vi)(II) is 

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

23 (b) EFFECTIVE DATE.—The amendment made by 

24 this section shall apply to taxable years beginning after 

25 December 31, 2006. 


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1 SEC. 107. EXTENSION AND MODIFICATION OF QUALIFIED 

2 ZONE ACADEMY BONDS. 

3 (a) IN GENERAL.—Paragraph (1) of section 

4 1397E(e) is amended by striking ‘‘and 2005’’ and insert5 ing ‘‘2005, 2006, and 2007’’. 

6 (b) SPECIAL RULES RELATING TO EXPENDITURES, 

7 ARBITRAGE, AND REPORTING.— 

8 (1) IN GENERAL.—Section 1397E is amend9 ed— 

10 (A) in subsection (d)(1), by striking ‘‘and’’ 

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

12 the period at the end of subparagraph (D) and 

13 inserting ‘‘, and’’, and by adding at the end the 

14 following new subparagraph: 

15 ‘‘(E) the issue meets the requirements of 

16 subsections (f), (g), and (h).’’, and 

17 (B) by redesignating subsections (f), (g), 

18 (h), and (i) as subsection (i), (j), (k), and (l), 

19 respectively, and by inserting after subsection 

20 (e) the following new subsections: 

21 ‘‘(f) SPECIAL RULES RELATING TO EXPENDI22 TURES.— 

23 ‘‘(1) IN GENERAL.—An issue shall be treated as 

24 meeting the requirements of this subsection if, as of 

25 the date of issuance, the issuer reasonably expects— 


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1 ‘‘(A) at least 95 percent of the proceeds 

2 from the sale of the issue are to be spent for 

3 1 or more qualified purposes with respect to 

4 qualified zone academies within the 5-year pe5 riod beginning on the date of issuance of the 

6 qualified zone academy bond, 

7 ‘‘(B) a binding commitment with a third 

8 party to spend at least 10 percent of the pro9 ceeds from the sale of the issue will be incurred 

10 within the 6-month period beginning on the 

11 date of issuance of the qualified zone academy 

12 bond, and 

13 ‘‘(C) such purposes will be completed with 

14 due diligence and the proceeds from the sale of 

15 the issue will be spent with due diligence. 

16 ‘‘(2) EXTENSION OF PERIOD.—Upon submis17 sion of a request prior to the expiration of the period 

18 described in paragraph (1)(A), the Secretary may 

19 extend such period if the issuer establishes that the 

20 failure to satisfy the 5-year requirement is due to 

21 reasonable cause and the related purposes will con22 tinue to proceed with due diligence. 

23 ‘‘(3) FAILURE TO SPEND REQUIRED AMOUNT

24 OF BOND PROCEEDS WITHIN 5 YEARS.—To the ex25 tent that less than 95 percent of the proceeds of 


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

2 period beginning on the date of issuance (or if an 

3 extension has been obtained under paragraph (2), by 

4 the close of the extended period), the issuer shall re5 deem all of the nonqualified bonds within 90 days 

6 after the end of such period. For purposes of this 

7 paragraph, the amount of the nonqualified bonds re8 quired to be redeemed shall be determined in the 

9 same manner as under section 142. 

10 ‘‘(g) SPECIAL RULES RELATING TO ARBITRAGE.— 

11 An issue shall be treated as meeting the requirements of 

12 this subsection if the issuer satisfies the arbitrage require13 ments of section 148 with respect to proceeds of the issue. 

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

15 bonds shall submit reports similar to the reports required 

16 under section 149(e).’’. 

17 (2) CONFORMING AMENDMENTS.—Sections 

18 54(l)(3)(B) and 1400N(l)(7)(B)(ii) are each amend19 ed by striking ‘‘section 1397E(i)’’ and inserting 

20 ‘‘section 1397E(l)’’. 

21 (c) EFFECTIVE DATES.— 

22 (1) EXTENSION.—The amendment made by 

23 subsection (a) shall apply to obligations issued after 

24 December 31, 2005. 


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1 (2) SPECIAL RULES.—The amendments made 

2 by subsection (b) shall apply to obligations issued 

3 after the date of the enactment of this Act pursuant 

4 to allocations of the national zone academy bond 

5 limitation for calendar years after 2005. 

6 SEC. 108. ABOVE-THE-LINE DEDUCTION FOR CERTAIN EX7 PENSES OF ELEMENTARY AND SECONDARY 

8 SCHOOL TEACHERS. 

9 (a) IN GENERAL.—Subparagraph (D) of section 

10 62(a)(2) is amended by striking ‘‘or 2005’’ and inserting 

11 ‘‘2005, 2006, or 2007’’. 

12 (b) EFFECTIVE DATE.—The amendment made by 

13 this section shall apply to taxable years beginning after 

14 December 31, 2005. 

15 SEC. 109. EXTENSION AND EXPANSION OF EXPENSING OF 

16 BROWNFIELDS REMEDIATION COSTS. 

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

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

19 (b) EXPANSION.—Section 198(d)(1) (defining haz20 ardous substance) is amended by striking ‘‘and’’ at the 

21 end of subparagraph (A), by striking the period at the 

22 end of subparagraph (B) and inserting ‘‘, and’’, and by 

23 adding at the end the following new subparagraph: 

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

25 section 4612(a)(3)).’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to expenditures paid or incurred 

3 after December 31, 2005. 

4 SEC. 110. TAX INCENTIVES FOR INVESTMENT IN THE DIS5 TRICT OF COLUMBIA. 

6 (a) DESIGNATION OF ZONE.— 

7 (1) IN GENERAL.—Subsection (f) of section 

8 1400 is amended by striking ‘‘2005’’ both places it 

9 appears and inserting ‘‘2007’’. 

10 (2) EFFECTIVE DATE.—The amendments made 

11 by this subsection shall apply to periods beginning 

12 after December 31, 2005. 

13 (b) TAX-EXEMPT ECONOMIC DEVELOPMENT

14 BONDS.— 

15 (1) IN GENERAL.—Subsection (b) of section 

16 1400A is amended by striking ‘‘2005’’ and inserting 

17 ‘‘2007’’. 

18 (2) EFFECTIVE DATE.—The amendment made 

19 by this subsection shall apply to bonds issued after 

20 December 31, 2005. 

21 (c) ZERO PERCENT CAPITAL GAINS RATE.— 

22 (1) IN GENERAL.—Subsection (b) of section 

23 1400B is amended by striking ‘‘2006’’ each place it 

24 appears and inserting ‘‘2008’’. 

25 (2) CONFORMING AMENDMENTS.— 


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1 (A) Section 1400B(e)(2) is amended— 

2 (i) by striking ‘‘2010’’ and inserting 

3 ‘‘2012’’, and 

4 (ii) by striking ‘‘2010’’ in the heading 

5 thereof and inserting ‘‘2012’’. 

6 (B) Section 1400B(g)(2) is amended by 

7 striking ‘‘2010’’ and inserting ‘‘2012’’. 

8 (C) Section 1400F(d) is amended by strik9 ing ‘‘2010’’ and inserting ‘‘2012’’. 

10 (3) EFFECTIVE DATES.— 

11 (A) EXTENSION.—The amendments made 

12 by paragraph (1) shall apply to acquisitions 

13 after December 31, 2005. 

14 (B) CONFORMING AMENDMENTS.—The 

15 amendments made by paragraph (2) shall take 

16 effect on the date of the enactment of this Act. 

17 (d) FIRST-TIME HOMEBUYER CREDIT.— 

18 (1) IN GENERAL.—Subsection (i) of section 

19 1400C is amended by striking ‘‘2006’’ and inserting 

20 ‘‘2008’’. 

21 (2) EFFECTIVE DATE.—The amendment made 

22 by this subsection shall apply to property purchased 

23 after December 31, 2005. 


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1 SEC. 111. INDIAN EMPLOYMENT TAX CREDIT. 

2 (a) IN GENERAL.—Section 45A(f) is amended by 

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

4 (b) EFFECTIVE DATE.—The amendment made by 

5 this section shall apply to taxable years beginning after 

6 December 31, 2005. 

7 SEC. 112. ACCELERATED DEPRECIATION FOR BUSINESS 

8 PROPERTY ON INDIAN RESERVATIONS. 

9 (a) IN GENERAL.—Section 168(j)(8) is amended by 

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

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall apply to property placed in service after 

13 December 31, 2005. 

14 SEC. 113. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY 

15 FOR QUALIFIED LEASEHOLD IMPROVEMENTS 

16 AND QUALIFIED RESTAURANT PROPERTY. 

17 (a) IN GENERAL.—Clauses (iv) and (v) of section 

18 168(e)(3)(E) are each amended by striking ‘‘2006’’ and 

19 inserting ‘‘2008’’. 

20 (b) TREATMENT OF RESTAURANT PROPERTY TO IN21 CLUDE NEW CONSTRUCTION.—Paragraph (7) of section 

22 168(e) (relating to classification of property) is amended 

23 to read as follows: 

24 ‘‘(7) QUALIFIED RESTAURANT PROPERTY.—The 

25 term ‘qualified restaurant property’ means any sec26 tion 1250 property which is a building or an imVerDate Aug 31 2005 02:13 Aug 10, 2006 Jkt 049200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S3829.IS S3829

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1 provement to a building if more than 50 percent of 

2 the building’s square footage is devoted to prepara3 tion of, and seating for on-premises consumption of, 

4 prepared meals.’’. 

5 (c) EFFECTIVE DATES.— 

6 (1) SUBSECTION (a).—The amendments made 

7 by subsection (a) shall apply to property placed in 

8 service after December 31, 2005. 

9 (2) SUBSECTION (b).—The amendment made 

10 by subsection (b) shall apply to property placed in 

11 service after the date of the enactment of this Act. 

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

13 (a) IN GENERAL.—Section 7652(f)(1) is amended by 

14 striking ‘‘2006’’ and inserting ‘‘2008’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 subsection (a) shall apply to articles brought into the 

17 United States after December 31, 2005. 

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

19 MENTAL HEALTH BENEFITS. 

20 (a) AMENDMENT TO THE INTERNAL REVENUE CODE

21 OF 1986.—Section 9812(f)(3) is amended by striking 

22 ‘‘2006’’ and inserting ‘‘2007’’. 

23 (b) AMENDMENT TO THE EMPLOYEE RETIREMENT

24 INCOME SECURITY ACT OF 1974.—Section 712(f) of the 

25 Employee Retirement Income Security Act of 1974 (29 


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1 U.S.C. 1185a(f)) is amended by striking ‘‘2006’’ and in2 serting ‘‘2007’’. 

3 (c) AMENDMENT TO THE PUBLIC HEALTH SERVICE

4 ACT.—Section 2705(f) of the Public Health Service Act 

5 (42 U.S.C. 300gg–5(f)) is amended by striking 

6 ‘‘2006’’and inserting ‘‘2007’’. 

7 SEC. 116. CORPORATE DONATIONS OF SCIENTIFIC PROP8 ERTY USED FOR RESEARCH AND OF COM9 PUTER TECHNOLOGY AND EQUIPMENT. 

10 (a) EXTENSION OF COMPUTER TECHNOLOGY AND

11 EQUIPMENT DONATION.— 

12 (1) IN GENERAL.—Section 170(e)(6)(G) is 

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

14 (2) EFFECTIVE DATE.—The amendment made 

15 by paragraph (1) shall apply to contributions made 

16 in taxable years beginning after December 31, 2005. 

17 (b) EXPANSION OF CHARITABLE CONTRIBUTION AL18 LOWED FOR SCIENTIFIC PROPERTY USED FOR RESEARCH

19 AND FOR COMPUTER TECHNOLOGY AND EQUIPMENT

20 USED FOR EDUCATIONAL PURPOSES.— 

21 (1) SCIENTIFIC PROPERTY USED FOR RE22 SEARCH.— 

23 (A) IN GENERAL.—Clause (ii) of section 

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1 tributions) is amended by inserting ‘‘or assem2 bled’’ after ‘‘constructed’’. 

3 (B) CONFORMING AMENDMENT.—Clause 

4 (iii) of section 170(e)(4)(B) is amended by in5 serting ‘‘or assembly’’ after ‘‘construction’’. 

6 (2) COMPUTER TECHNOLOGY AND EQUIPMENT

7 FOR EDUCATIONAL PURPOSES.— 

8 (A) IN GENERAL.—Clause (ii) of section 

9 170(e)(6)(B) is amended by inserting ‘‘or as10 sembled’’ after ‘‘constructed’’ and ‘‘or assem11 bling’’ after ‘‘construction’’. 

12 (B) CONFORMING AMENDMENT.—Subpara13 graph (D) of section 170(e)(6) is amended by 

14 inserting ‘‘or assembled’’ after ‘‘constructed’’ 

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

16 (3) EFFECTIVE DATE.—The amendments made 

17 by this subsection shall apply to taxable years begin18 ning after December 31, 2005. 

19 SEC. 117. AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS. 

20 (a) IN GENERAL.—Paragraphs (2) and (3)(B) of sec21 tion 220(i) are each amended by striking ‘‘2005’’ each 

22 place it appears in the text and headings and inserting 

23 ‘‘2007’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) Paragraph (2) of section 220(j) is amend2 ed— 

3 (A) in the text by striking ‘‘or 2004’’ each 

4 place it appears and inserting ‘‘2004, 2005, or 

5 2006’’, and 

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

7 and inserting ‘‘2004, 2005, OR 2006’’ . 

8 (2) Subparagraph (A) of section 220(j)(4) is 

9 amended by striking ‘‘and 2004’’ and inserting 

10 ‘‘2004, 2005, and 2006’’. 

11 (c) TIME FOR FILING REPORTS, ETC.— 

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

13 the Internal Revenue Code of 1986 to be made on 

14 August 1, 2005, shall be treated as timely if made 

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

16 the date of the enactment of this Act. 

17 (2) The determination and publication required 

18 by section 220(j)(5) of such Code with respect to 

19 calendar year 2005 shall be treated as timely if 

20 made before the close of the 120-day period begin21 ning on the date of the enactment of this Act. If the 

22 determination under the preceding sentence is that 

23 2005 is a cut-off year under section 220(i) of such 

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

25 shall be the last day of such 120-day period. 


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1 SEC. 118. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLE2 TION FOR OIL AND NATURAL GAS PRODUCED 

3 FROM MARGINAL PROPERTIES. 

4 (a) IN GENERAL.—Section 613A(c)(6)(H) is amend5 ed by striking ‘‘2006’’ and inserting ‘‘2008’’. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 subsection (a) shall apply to taxable years beginning after 

8 December 31, 2005. 

9 SEC. 119. AMERICAN SAMOA ECONOMIC DEVELOPMENT 

10 CREDIT. 

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

12 the Internal Revenue Code of 1986, a domestic corpora13 tion shall be treated as a qualified domestic corporation 

14 to which such section applies if such corporation— 

15 (1) is an existing credit claimant with respect 

16 to American Samoa, and 

17 (2) elected the application of section 936 of the 

18 Internal Revenue Code of 1986 for its last taxable 

19 year beginning before January 1, 2006. 

20 (b) SPECIAL RULES FOR APPLICATION OF SEC21 TION.—The following rules shall apply in applying section 

22 30A of the Internal Revenue Code of 1986 for purposes 

23 of this section: 

24 (1) AMOUNT OF CREDIT.—Notwithstanding sec25 tion 30A(a)(1) of such Code, the amount of the 

26 credit determined under section 30A(a)(1) of such 


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1 Code for any taxable year shall be the amount deter2 mined under section 30A(d) of such Code, except 

3 that section 30A(d) shall be applied without regard 

4 to paragraph (3) thereof. 

5 (2) SEPARATE APPLICATION.—In applying sec6 tion 30A(a)(3) of such Code in the case of a cor7 poration treated as a qualified domestic corporation 

8 by reason of this section, section 30A of such Code 

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

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

11 respect to American Samoa. 

12 (3) FOREIGN TAX CREDIT ALLOWED.—Notwith13 standing section 30A(e) of such Code, the provisions 

14 of section 936(c) of such Code shall not apply with 

15 respect to the credit allowed by reason of this sec16 tion. 

17 (c) DEFINITIONS.—For purposes of this section, any 

18 term which is used in this section which is also used in 

19 section 30A or 936 of such Code shall have the same 

20 meaning given such term by such section 30A or 936. 

21 (d) APPLICATION OF SECTION.—Notwithstanding 

22 section 30A(h) or section 936(j) of such Code, this section 

23 (and so much of section 30A and section 936 of such Code 

24 as relates to this section) shall apply to the first two tax25 able years of a corporation to which subsection (a) applies 


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1 which begin after December 31, 2005, and before January 

2 1, 2008. 

3 SEC. 120. RESTRUCTURING OF NEW YORK LIBERTY ZONE 

4 TAX CREDITS. 

5 (a) IN GENERAL.—Part I of subchapter Y of chapter 

6 1 is amended by redesignating section 1400L as 1400K 

7 and by adding at the end the following new section: 

8 ‘‘SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS. 

9 ‘‘(a) IN GENERAL.—In the case of a New York Lib10 erty Zone governmental unit, there shall be allowed as a 

11 credit against any taxes imposed for any payroll period 

12 by section 3402 for which such governmental unit is liable 

13 under section 3403 an amount equal to so much of the 

14 portion of the qualifying project expenditure amount allo15 cated under subsection (b)(3) to such governmental unit 

16 for the calendar year as is allocated by such governmental 

17 unit to such period under subsection (b)(4). 

18 ‘‘(b) QUALIFYING PROJECT EXPENDITURE

19 AMOUNT.—For purposes of this section— 

20 ‘‘(1) IN GENERAL.—The term ‘qualifying 

21 project expenditure amount’ means, with respect to 

22 any calendar year, the sum of— 

23 ‘‘(A) the total expenditures paid or in24 curred during such calendar year by all New 

25 York Liberty Zone governmental units and the 


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1 Port Authority of New York and New Jersey 

2 for any portion of qualifying projects located 

3 wholly within the City of New York, New York, 

4 and 

5 ‘‘(B) any such expenditures— 

6 ‘‘(i) paid or incurred in any preceding 

7 calendar year which begins after the date 

8 of enactment of this section, and 

9 ‘‘(ii) not previously allocated under 

10 paragraph (3). 

11 ‘‘(2) QUALIFYING PROJECT.—The term ‘quali12 fying project’ means any transportation infrastruc13 ture project, including highways, mass transit sys14 tems, railroads, airports, ports, and waterways, in or 

15 connecting with the New York Liberty Zone (as de16 fined in section 1400K(h)), which is designated as a 

17 qualifying project under this section jointly by the 

18 Governor of the State of New York and the Mayor 

19 of the City of New York, New York. 

20 ‘‘(3) GENERAL ALLOCATION.— 

21 ‘‘(A) IN GENERAL.—The Governor of the 

22 State of New York and the Mayor of the City 

23 of New York, New York, shall jointly allocate to 

24 each New York Liberty Zone governmental unit 

25 the portion of the qualifying project expenditure 


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1 amount which may be taken into account by 

2 such governmental unit under subsection (a) for 

3 any calendar year in the credit period. 

4 ‘‘(B) AGGREGATE LIMIT.—The aggregate 

5 amount which may be allocated under subpara6 graph (A) for all calendar years in the credit 

7 period shall not exceed $1,750,000,000. 

8 ‘‘(C) ANNUAL LIMIT.— 

9 ‘‘(i) IN GENERAL.—The aggregate 

10 amount which may be allocated under sub11 paragraph (A) for any calendar year in the 

12 credit period shall not exceed the sum of— 

13 ‘‘(I) the applicable limit, plus 

14 ‘‘(II) the aggregate amount au15 thorized to be allocated under this 

16 paragraph for all preceding calendar 

17 years in the credit period which was 

18 not so allocated. 

19 ‘‘(ii) APPLICABLE LIMIT.—For pur20 poses of clause (i), the applicable limit for 

21 any calendar year is— 

22 ‘‘(I) in the case of calendar years 

23 2007 through 2016, $100,000,000, 

24 ‘‘(II) in the case of calendar year 

25 2017 or 2018, $200,000,000, 


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1 ‘‘(III) in the case of calendar 

2 year 2019, $150,000,000, 

3 ‘‘(IV) in the case of calendar 

4 year 2020 or 2021, $100,000,000, 

5 and 

6 ‘‘(V) in the case of any calendar 

7 year after 2021, zero. 

8 ‘‘(D) UNALLOCATED AMOUNTS AT END OF

9 CREDIT PERIOD.—If, as of the close of the cred10 it period, the amount under subparagraph (B) 

11 exceeds the aggregate amount allocated under 

12 subparagraph (A) for all calendar years in the 

13 credit period, the Governor of the State of New 

14 York and the Mayor of the City of New York, 

15 New York, may jointly allocate to New York 

16 Liberty Zone governmental units for any cal17 endar year in the 5-year period following the 

18 credit period an amount equal to— 

19 ‘‘(i) the lesser of— 

20 ‘‘(I) such excess, or 

21 ‘‘(II) the qualifying project ex22 penditure amount for such calendar 

23 year, reduced by 


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1 ‘‘(ii) the aggregate amount allocated 

2 under this subparagraph for all preceding 

3 calendar years. 

4 ‘‘(4) ALLOCATION TO PAYROLL PERIODS.— 

5 Each New York Liberty Zone governmental unit 

6 which has been allocated a portion of the qualifying 

7 project expenditure amount under paragraph (3) for 

8 a calendar year may allocate such portion to payroll 

9 periods beginning in such calendar year as such gov10 ernmental unit determines appropriate. 

11 ‘‘(c) CARRYOVER OF UNUSED ALLOCATIONS.— 

12 ‘‘(1) IN GENERAL.—Except as provided in para13 graph (2), if the amount allocated under subsection 

14 (b)(3) to a New York Liberty Zone governmental 

15 unit for any calendar year exceeds the aggregate 

16 taxes imposed by section 3402 for which such gov17 ernmental unit is liable under section 3403 for peri18 ods beginning in such year, such excess shall be car19 ried to the succeeding calendar year and added to 

20 the allocation of such governmental unit for such 

21 succeeding calendar year. No amount may be carried 

22 under the preceding sentence to a calendar year 

23 after 2026. 

24 ‘‘(2) REALLOCATION.—If a New York Liberty 

25 Zone governmental unit does not use an amount alVerDate Aug 31 2005 02:13 Aug 10, 2006 Jkt 049200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S3829.IS S3829

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1 located to it under subsection (b)(3) within the time 

2 prescribed by the Governor of the State of New York 

3 and the Mayor of the City of New York, New York, 

4 then such amount shall after such time be treated 

5 for purposes of subsection (b)(3) in the same man6 ner as if it had never been allocated. 

7 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur8 poses of this section— 

9 ‘‘(1) CREDIT PERIOD.—The term ‘credit period’ 

10 means the 15-year period beginning on January 1, 

11 2007. 

12 ‘‘(2) NEW YORK LIBERTY ZONE GOVERN13 MENTAL UNIT.—The term ‘New York Liberty Zone 

14 governmental unit’ means— 

15 ‘‘(A) the State of New York, 

16 ‘‘(B) the City of New York, New York, and 

17 ‘‘(C) any agency or instrumentality of such 

18 State or City. 

19 ‘‘(3) TREATMENT OF FUNDS.—Any expenditure 

20 for a qualifying project taken into account for pur21 poses of the credit under this section shall be consid22 ered State and local funds for the purpose of any 

23 Federal program. 

24 ‘‘(4) TREATMENT OF CREDIT AMOUNTS FOR

25 PURPOSES OF WITHHOLDING TAXES.—For purposes 


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1 of this title, a New York Liberty Zone governmental 

2 unit shall be treated as having paid to the Secretary, 

3 on the day on which wages are paid to employees, 

4 an amount equal to the amount of the credit allowed 

5 to such entity under subsection (a) with respect to 

6 such wages, but only if such governmental unit de7 ducts and withholds wages for such payroll period 

8 under section 3401 (relating to wage withholding). 

9 ‘‘(e) REPORTING.—The Governor of the State of New 

10 York and the Mayor of the City of New York, New York, 

11 shall jointly submit to the Secretary an annual report— 

12 ‘‘(1) which certifies— 

13 ‘‘(A) the qualifying project expenditure 

14 amount for the calendar year, and 

15 ‘‘(B) the amount allocated to each New 

16 York Liberty Zone governmental unit under 

17 subsection (b)(3) for the calendar year, and 

18 ‘‘(2) includes such other information as the 

19 Secretary may require to carry out this section. 

20 ‘‘(f) GUIDANCE.—The Secretary may prescribe such 

21 guidance as may be necessary or appropriate to ensure 

22 compliance with the purposes of this section. 

23 ‘‘(g) TERMINATION.—No credit shall be allowed 

24 under subsection (a) for any calender year after 2026.’’. 


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1 (b) TERMINATION OF CERTAIN NEW YORK LIBERTY

2 ZONE BENEFITS.— 

3 (1) SPECIAL ALLOWANCE AND EXPENSING.— 

4 Section 1400K(b)(2)(A)(v), as redesignated by sub5 section (a), is amended by striking ‘‘the termination 

6 date’’ and inserting ‘‘the date of the enactment of 

7 the Tax Relief and Minimum Wage Act of 2006 or 

8 the termination date if pursuant to a binding con9 tract in effect on such enactment date’’. 

10 (2) LEASEHOLD.—Section 1400K(c)(2)(B), as 

11 so redesignated, is amended by striking ‘‘before Jan12 uary 1, 2007’’ and inserting ‘‘on or before the date 

13 of the enactment of the Tax Relief and Minimum 

14 Wage Act of 2006 or before January 1, 2007, if 

15 pursuant to a binding contract in effect on such en16 actment date’’. 

17 (c) CONFORMING AMENDMENTS.— 

18 (1) Section 38(c)(3)(B) is amended by striking 

19 ‘‘section 1400L(a)’’ and inserting ‘‘section 

20 1400K(a)’’. 

21 (2) Section 168(k)(2)(D)(ii) is amended by 

22 striking ‘‘section 1400L(c)(2)’’ and inserting 

23 ‘‘1400K(c)(2)’’. 


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1 (3) The table of sections for part I of sub2 chapter Y of chapter 1 is amended by striking 

3 ‘‘1400L’’ and inserting ‘‘1400K’’. 

4 (d) EFFECTIVE DATE.— 

5 (1) IN GENERAL.—Except as provided in para6 graph (2), the amendments made by this section 

7 shall apply to periods beginning after December 31, 

8 2006. 

9 (2) SUBSECTION (b).—The amendments made 

10 by subsection (b) shall take effect as if included in 

11 section 301 of the Job Creation and Worker Assist12 ance Act of 2002. 

13 SEC. 121. EXTENSION OF BONUS DEPRECIATION FOR CER14 TAIN QUALIFIED GULF OPPORTUNITY ZONE 

15 PROPERTY. 

16 (a) IN GENERAL.—Subsection (d) of section 1400N 

17 is amended by adding at the end the following new para18 graph: 

19 ‘‘(6) EXTENSION FOR CERTAIN PROPERTY.— 

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

21 specified Gulf Opportunity Zone extension prop22 erty, paragraph (2)(A) shall be applied without 

23 regard to clause (v) thereof. 

24 ‘‘(B) SPECIFIED GULF OPPORTUNITY ZONE

25 EXTENSION PROPERTY.—For purposes of this 


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1 paragraph, the term ‘specified Gulf Opportunity 

2 Zone extension property’ means property— 

3 ‘‘(i) substantially all of the use of 

4 which is in one or more specified portions 

5 of the GO Zone, and 

6 ‘‘(ii) which is— 

7 ‘‘(I) nonresidential real property 

8 or residential rental property which is 

9 placed in service by the taxpayer on or 

10 before December 31, 2009, or 

11 ‘‘(II) in the case of a taxpayer 

12 who places a building described in 

13 subclause (I) in service on or before 

14 December 31, 2009, property de15 scribed in section 168(k)(2)(A)(i) if 

16 substantially all of the use of such 

17 property is in such building and such 

18 property is placed in service by the 

19 taxpayer not later than 90 days after 

20 such building is placed in service. 

21 ‘‘(C) SPECIFIED PORTIONS OF THE GO

22 ZONE.—For purposes of this paragraph, the 

23 term ‘specified portions of the GO Zone’ means 

24 those portions of the GO Zone which are in any 

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1 retary as being a county or parish in which hur2 ricanes occurring during 2005 damaged (in the 

3 aggregate) more than 40 percent of the housing 

4 units in such county or parish which were occu5 pied (determined according to the 2000 Cen6 sus).’’. 

7 (b) EXTENSION NOT APPLICABLE TO INCREASED

8 SECTION 179 EXPENSING.—Paragraph (2) of section 

9 1400N(e) is amended by inserting ‘‘without regard to sub10 section (d)(6)’’ after ‘‘subsection (d)(2)’’. 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall take effect as if included in section 101 

13 of the Gulf Opportunity Zone Act of 2005. 

14 SEC. 122. AUTHORITY FOR UNDERCOVER OPERATIONS. 

15 Paragraph (6) of section 7608(c) (relating to applica16 tion of section) is amended by striking ‘‘2007’’ both places 

17 it appears and inserting ‘‘2008’’. 

18 SEC. 123. DISCLOSURES OF CERTAIN TAX RETURN INFOR19 MATION. 

20 (a) DISCLOSURES TO FACILITATE COMBINED EM21 PLOYMENT TAX REPORTING.— 

22 (1) IN GENERAL.—Subparagraph (B) of section 

23 6103(d)(5) (relating to termination) is amended by 

24 striking ‘‘2006’’ and inserting ‘‘2007’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by paragraph (1) shall apply to disclosures after De3 cember 31, 2006. 

4 (b) DISCLOSURES RELATING TO TERRORIST ACTIVI5 TIES.— 

6 (1) IN GENERAL.—Clause (iv) of section 

7 6103(i)(3)(C) and subparagraph (E) of section 

8 6103(i)(7) are each amended by striking ‘‘2006’’ 

9 and inserting ‘‘2007’’. 

10 (2) EFFECTIVE DATE.—The amendments made 

11 by paragraph (1) shall apply to disclosures after De12 cember 31, 2006. 

13 (c) DISCLOSURES RELATING TO STUDENT LOANS.— 

14 (1) IN GENERAL.—Subparagraph (D) of section 

15 6103(l)(13) (relating to termination) is amended by 

16 striking ‘‘2006’’ and inserting ‘‘2007’’. 

17 (2) EFFECTIVE DATE.—The amendment made 

18 by paragraph (1) shall apply to requests made after 

19 December 31, 2006. 

20 Subtitle B—Other Provisions 

21 SEC. 131. DEDUCTION ALLOWABLE WITH RESPECT TO IN22 COME ATTRIBUTABLE TO DOMESTIC PRO23 DUCTION ACTIVITIES IN PUERTO RICO. 

24 (a) IN GENERAL.—Subsection (d) of section 199 (re25 lating to definitions and special rules) is amended by reVerDate Aug 31 2005 02:13 Aug 10, 2006 Jkt 049200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\S3829.IS S3829

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1 designating paragraph (8) as paragraph (9) and by insert2 ing after paragraph (7) the following new paragraph: 

3 ‘‘(8) TREATMENT OF ACTIVITIES IN PUERTO

4 RICO.— 

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

6 taxpayer with gross receipts for any taxable 

7 year from sources within the Commonwealth of 

8 Puerto Rico, if all of such receipts are taxable 

9 under section 1 or 11 for such taxable year, 

10 then for purposes of determining the domestic 

11 production gross receipts of such taxpayer for 

12 such taxable year under subsection (c)(4), the 

13 term ‘United States’ shall include the Common14 wealth of Puerto Rico. 

15 ‘‘(B) SPECIAL RULE FOR APPLYING WAGE

16 LIMITATION.—In the case of any taxpayer de17 scribed in subparagraph (A), for purposes of 

18 applying the limitation under subsection (b) for 

19 any taxable year, the determination of W–2 

20 wages of such taxpayer shall be made without 

21 regard to any exclusion under section 

22 3401(a)(8) for remuneration paid for services 

23 performed in Puerto Rico. 

24 ‘‘(C) TERMINATION.—This paragraph shall 

25 apply only with respect to the first 2 taxable 


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1 years of the taxpayer beginning after December 

2 31, 2005, and before January 1, 2008.’’. 

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

4 subsection (a) shall apply to taxable years beginning after 

5 December 31, 2005. 

6 SEC. 132. CREDIT FOR PRIOR YEAR MINIMUM TAX LIABIL7 ITY MADE REFUNDABLE AFTER PERIOD OF 

8 YEARS. 

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

10 prior year minimum tax liability) is amended by adding 

11 at the end the following new subsection: 

12 ‘‘(e) SPECIAL RULE FOR INDIVIDUALS WITH LONG13 TERM UNUSED CREDITS.— 

14 ‘‘(1) IN GENERAL.—If an individual has a long15 term unused minimum tax credit for any taxable 

16 year beginning before January 1, 2013, the amount 

17 determined under subsection (c) for such taxable 

18 year shall not be less than the AMT refundable cred19 it amount for such taxable year. 

20 ‘‘(2) AMT REFUNDABLE CREDIT AMOUNT.—For 

21 purposes of paragraph (1)— 

22 ‘‘(A) IN GENERAL.—The term ‘AMT re23 fundable credit amount’ means, with respect to 

24 any taxable year, the amount equal to the 

25 greater of— 


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1 ‘‘(i) the lesser of— 

2 ‘‘(I) $5,000, or 

3 ‘‘(II) the amount of long-term 

4 unused minimum tax credit for such 

5 taxable year, or 

6 ‘‘(ii) 20 percent of the amount of such 

7 credit. 

8 ‘‘(B) PHASEOUT OF AMT REFUNDABLE

9 CREDIT AMOUNT.— 

10 ‘‘(i) IN GENERAL.—In the case of an 

11 individual whose adjusted gross income for 

12 any taxable year exceeds the threshold 

13 amount (within the meaning of section 

14 151(d)(3)(C)), the AMT refundable credit 

15 amount determined under subparagraph 

16 (A) for such taxable year shall be reduced 

17 by the applicable percentage (within the 

18 meaning of section 151(d)(3)(B)). 

19 ‘‘(ii) ADJUSTED GROSS INCOME.—For 

20 purposes of clause (i), adjusted gross in21 come shall be determined without regard to 

22 sections 911, 931, and 933. 

23 ‘‘(3) LONG-TERM UNUSED MINIMUM TAX CRED24 IT.— 


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1 ‘‘(A) IN GENERAL.—For purposes of this 

2 subsection, the term ‘long-term unused min3 imum tax credit’ means, with respect to any 

4 taxable year, the portion of the minimum tax 

5 credit determined under subsection (b) attrib6 utable to the adjusted net minimum tax for tax7 able years before the 3rd taxable year imme8 diately preceding such taxable year. 

9 ‘‘(B) FIRST-IN, FIRST-OUT ORDERING

10 RULE.—For purposes of subparagraph (A), 

11 credits shall be treated as allowed under sub12 section (a) on a first-in, first-out basis. 

13 ‘‘(4) CREDIT REFUNDABLE.—For purposes of 

14 this title (other than this section), the credit allowed 

15 by reason of this subsection shall be treated as if it 

16 were allowed under subpart C.’’. 

17 (b) CONFORMING AMENDMENTS.— 

18 (1) Section 6211(b)(4)(A) is amended by strik19 ing ‘‘and 34’’ and inserting ‘‘34, and 53(e)’’. 

20 (2) Paragraph (2) of section 1324(b) of title 

21 31, United States Code, is amended by inserting ‘‘or 

22 53(e)’’ after ‘‘section 35’’. 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to taxable years beginning after 

25 the date of the enactment of this Act. 


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1 SEC. 133. RETURNS REQUIRED IN CONNECTION WITH CER2 TAIN OPTIONS. 

3 (a) IN GENERAL.—So much of section 6039(a) as fol4 lows paragraph (2) is amended to read as follows: 

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

6 and in such manner, and setting forth such information, 

7 as the Secretary may by regulations prescribe.’’. 

8 (b) STATEMENTS TO PERSONS WITH RESPECT TO

9 WHOM INFORMATION IS FURNISHED.—Section 6039 is 

10 amended by redesignating subsections (b) and (c) as sub11 section (c) and (d), respectively, and by inserting after 

12 subsection (a) the following new subsection: 

13 ‘‘(b) STATEMENTS TO BE FURNISHED TO PERSONS

14 WITH RESPECT TO WHOM INFORMATION IS RE15 PORTED.—Every corporation making a return under sub16 section (a) shall furnish to each person whose name is set 

17 forth in such return a written statement setting forth such 

18 information as the Secretary may by regulations prescribe. 

19 The written statement required under the preceding sen20 tence shall be furnished to such person on or before Janu21 ary 31 of the year following the calendar year for which 

22 the return under subsection (a) was made.’’. 

23 (c) CONFORMING AMENDMENTS.— 

24 (1) Section 6724(d)(1)(B) is amended by strik25 ing ‘‘or’’ at the end of clause (xvii), by striking 


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•S 3829 IS

1 ‘‘and’’ at the end of clause (xviii) and inserting ‘‘or’’, 

2 and by adding at the end the following new clause: 

3 ‘‘(xix) section 6039(a) (relating to re4 turns required with respect to certain op5 tions), and’’. 

6 (2) Section 6724(d)(2)(B) is amended by strik7 ing ‘‘section 6039(a)’’ and inserting ‘‘section 

8 6039(b)’’. 

9 (3) The heading of section 6039 and the item 

10 relating to such section in the table of sections of 

11 subpart A of part III of subchapter A of chapter 61 

12 of such Code are each amended by striking ‘‘Infor13 mation’’ and inserting ‘‘Returns’’. 

14 (4) The heading of subsection (a) of section 

15 6039 is amended by striking ‘‘FURNISHING OF IN16 FORMATION’’ and inserting ‘‘REQUIREMENT OF RE17 PORTING’’. 

18 (d) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to calendar years beginning after 

20 the date of the enactment of this Act. 

21 SEC. 134. PARTIAL EXPENSING FOR ADVANCED MINE SAFE22 TY EQUIPMENT. 

23 (a) IN GENERAL.—Part VI of subchapter B of chap24 ter 1 is amended by inserting after section 179D the fol25 lowing new section: 


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1 ‘‘SEC. 179E. ELECTION TO EXPENSE ADVANCED MINE SAFE2 TY EQUIPMENT. 

3 ‘‘(a) TREATMENT AS EXPENSES.—A taxpayer may 

4 elect to treat 50 percent of the cost of any qualified ad5 vanced mine safety equipment property as an expense 

6 which is not chargeable to capital account. Any cost so 

7 treated shall be allowed as a deduction for the taxable year 

8 in which the qualified advanced mine safety equipment 

9 property is placed in service. 

10 ‘‘(b) ELECTION.— 

11 ‘‘(1) IN GENERAL.—An election under this sec12 tion for any taxable year shall be made on the tax13 payer’s return of the tax imposed by this chapter for 

14 the taxable year. Such election shall specify the ad15 vanced mine safety equipment property to which the 

16 election applies and shall be made in such manner 

17 as the Secretary may by regulations prescribe. 

18 ‘‘(2) ELECTION IRREVOCABLE.—Any election 

19 made under this section may not be revoked except 

20 with the consent of the Secretary. 

21 ‘‘(c) QUALIFIED ADVANCED MINE SAFETY EQUIP22 MENT PROPERTY.—For purposes of this section, the term 

23 ‘qualified advanced mine safety equipment property’ 

24 means any advanced mine safety equipment property for 

25 use in any underground mine located in the United 

26 States— 


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•S 3829 IS

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

2 the taxpayer, and 

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

4 after the date of the enactment of this section. 

5 ‘‘(d) ADVANCED MINE SAFETY EQUIPMENT PROP6 ERTY.—For purposes of this section, the term ‘advanced 

7 mine safety equipment property’ means any of the fol8 lowing: 

9 ‘‘(1) Emergency communication technology or 

10 device which is used to allow a miner to maintain 

11 constant communication with an individual who is 

12 not in the mine. 

13 ‘‘(2) Electronic identification and location de14 vice which allows an individual who is not in the 

15 mine to track at all times the movements and loca16 tion of miners working in or at the mine. 

17 ‘‘(3) Emergency oxygen-generating, self-rescue 

18 device which provides oxygen for at least 90 min19 utes. 

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

21 combination with self-rescue devices) can be used to 

22 provide each miner on a shift, in the event of an ac23 cident or other event which traps the miner in the 

24 mine or otherwise necessitates the use of such a selfVerDate Aug 31 2005 02:13 Aug 10, 2006 Jkt 049200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 E:\BILLS\S3829.IS S3829

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1 rescue device, the ability to survive for at least 48 

2 hours. 

3 ‘‘(5) Comprehensive atmospheric monitoring 

4 system which monitors the levels of carbon mon5 oxide, methane, and oxygen that are present in all 

6 areas of the mine and which can detect smoke in the 

7 case of a fire in a mine. 

8 ‘‘(e) COORDINATION WITH SECTION 179.—No ex9 penditures shall be taken into account under subsection 

10 (a) with respect to the portion of the cost of any property 

11 specified in an election under section 179. 

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

13 under subsection (a) to any taxpayer for any taxable year 

14 unless such taxpayer files with the Secretary a report con15 taining such information with respect to the operation of 

16 the mines of the taxpayer as the Secretary shall require. 

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

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

19 (b) CONFORMING AMENDMENTS.— 

20 (1) Section 263(a)(1) is amended by striking 

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

22 period at the end of subparagraph (K) and inserting 

23 ‘‘, or’’, and by inserting after subparagraph (K) the 

24 following new subparagraph: 


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1 ‘‘(L) expenditures for which a deduction is 

2 allowed under section 179E.’’. 

3 (2) Section 312(k)(3)(B) is amended by strik4 ing ‘‘or 179D’’ each place it appears in the heading 

5 and text thereof and inserting ‘‘179D, or 179E’’. 

6 (3) Paragraphs (2)(C) and (3)(C) of section 

7 1245(a) are each amended by inserting ‘‘179E,’’ 

8 after ‘‘179D,’’. 

9 (4) The table of sections for part VI of sub10 chapter B of chapter 1 is amended by inserting after 

11 the item relating to section 179D the following new 

12 item: 

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

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to costs paid or incurred after the 

15 date of the enactment of this Act. 

16 SEC. 135. MINE RESCUE TEAM TRAINING TAX CREDIT. 

17 (a) IN GENERAL.—Subpart D of part IV of sub18 chapter A of chapter 1 (relating to business related cred19 its) is amended by adding at the end the following new 

20 section: 

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

22 ‘‘(a) AMOUNT OF CREDIT.—For purposes of section 

23 38, the mine rescue team training credit determined under 

24 this section with respect to each qualified mine rescue 


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•S 3829 IS

1 team employee of an eligible employer for any taxable year 

2 is an amount equal to the lesser of— 

3 ‘‘(1) 20 percent of the amount paid or incurred 

4 by the taxpayer during the taxable year with respect 

5 to the training program costs of such qualified mine 

6 rescue team employee (including wages of such em7 ployee while attending such program), or 

8 ‘‘(2) $10,000. 

9 ‘‘(b) QUALIFIED MINE RESCUE TEAM EMPLOYEE.— 

10 For purposes of this section, the term ‘qualified mine res11 cue team employee’ means with respect to any taxable year 

12 any full-time employee of the taxpayer who is— 

13 ‘‘(1) a miner eligible for more than 6 months 

14 of such taxable year to serve as a mine rescue team 

15 member as a result of completing, at a minimum, an 

16 initial 20-hour course of instruction as prescribed by 

17 the Mine Safety and Health Administration’s Office 

18 of Educational Policy and Development, or 

19 ‘‘(2) a miner eligible for more than 6 months 

20 of such taxable year to serve as a mine rescue team 

21 member by virtue of receiving at least 40 hours of 

22 refresher training in such instruction. 

23 ‘‘(c) ELIGIBLE EMPLOYER.—For purposes of this 

24 section, the term ‘eligible employer’ means any taxpayer 


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1 which employs individuals as miners in underground mines 

2 in the United States. 

3 ‘‘(d) WAGES.—For purposes of this section, the term 

4 ‘wages’ has the meaning given to such term by subsection 

5 (b) of section 3306 (determined without regard to any dol6 lar limitation contained in such section). 

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

8 taxable years beginning after December 31, 2008.’’. 

9 (b) CREDIT MADE PART OF GENERAL BUSINESS

10 CREDIT.—Section 38(b) is amended by striking ‘‘and’’ at 

11 the end of paragraph (29), by striking the period at the 

12 end of paragraph (30) and inserting ‘‘, plus’’, and by add13 ing at the end the following new paragraph: 

14 ‘‘(31) the mine rescue team training credit de15 termined under section 45N(a).’’. 

16 (c) NO DOUBLE BENEFIT.—Section 280C is amend17 ed by adding at the end the following new subsection: 

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

19 deduction shall be allowed for that portion of the expenses 

20 otherwise allowable as a deduction for the taxable year 

21 which is equal to the amount of the credit determined for 

22 the taxable year under section 45N(a).’’. 

23 (d) CLERICAL AMENDMENT.—The table of sections 

24 for subpart D of part IV of subchapter A of chapter 1 

25 is amended by adding at the end the following new item: 

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


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1 (e) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2005. 

4 SEC. 136. WHISTLEBLOWER REFORMS. 

5 (a) AWARDS TO WHISTLEBLOWERS.— 

6 (1) IN GENERAL.—Section 7623 (relating to ex7 penses of detection of underpayments and fraud, 

8 etc.) is amended— 

9 (A) by striking ‘‘The Secretary’’ and in10 serting ‘‘(a) IN GENERAL.—The Secretary’’, 

11 (B) by striking ‘‘and’’ at the end of para12 graph (1) and inserting ‘‘or’’, 

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

14 and 

15 (D) by adding at the end the following new 

16 subsection: 

17 ‘‘(b) AWARDS TO WHISTLEBLOWERS.— 

18 ‘‘(1) IN GENERAL.—If the Secretary proceeds 

19 with any administrative or judicial action described 

20 in subsection (a) based on information brought to 

21 the Secretary’s attention by an individual, such indi22 vidual shall, subject to paragraph (2), receive as an 

23 award at least 15 percent but not more than 30 per24 cent of the collected proceeds (including penalties, 

25 interest, additions to tax, and additional amounts) 


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1 resulting from the action (including any related ac2 tions) or from any settlement in response to such ac3 tion. The determination of the amount of such 

4 award by the Whistleblower Office shall depend upon 

5 the extent to which the individual substantially con6 tributed to such action. 

7 ‘‘(2) AWARD IN CASE OF LESS SUBSTANTIAL

8 CONTRIBUTION.— 

9 ‘‘(A) IN GENERAL.—In the event the ac10 tion described in paragraph (1) is one which the 

11 Whistleblower Office determines to be based 

12 principally on disclosures of specific allegations 

13 (other than information provided by the indi14 vidual described in paragraph (1)) resulting 

15 from a judicial or administrative hearing, from 

16 a governmental report, hearing, audit, or inves17 tigation, or from the news media, the Whistle18 blower Office may award such sums as it con19 siders appropriate, but in no case more than 10 

20 percent of the collected proceeds (including pen21 alties, interest, additions to tax, and additional 

22 amounts) resulting from the action (including 

23 any related actions) or from any settlement in 

24 response to such action, taking into account the 

25 significance of the individual’s information and 


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1 the role of such individual and any legal rep2 resentative of such individual in contributing to 

3 such action. 

4 ‘‘(B) NONAPPLICATION OF PARAGRAPH

5 WHERE INDIVIDUAL IS ORIGINAL SOURCE OF

6 INFORMATION.—Subparagraph (A) shall not 

7 apply if the information resulting in the initi8 ation of the action described in paragraph (1) 

9 was originally provided by the individual de10 scribed in paragraph (1). 

11 ‘‘(3) REDUCTION IN OR DENIAL OF AWARD.— 

12 If the Whistleblower Office determines that the 

13 claim for an award under paragraph (1) or (2) is 

14 brought by an individual who planned and initiated 

15 the actions that led to the underpayment of tax or 

16 actions described in subsection (a)(2), then the 

17 Whistleblower Office may appropriately reduce such 

18 award. If such individual is convicted of criminal 

19 conduct arising from the role described in the pre20 ceding sentence, the Whistleblower Office shall deny 

21 any award. 

22 ‘‘(4) APPEAL OF AWARD DETERMINATION.— 

23 Any determination regarding an award under para24 graph (1), (2), or (3) may, within 30 days of such 

25 determination, be appealed to the Tax Court (and 


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1 the Tax Court shall have jurisdiction with respect to 

2 such matter). 

3 ‘‘(5) APPLICATION OF THIS SUBSECTION.—This 

4 subsection shall apply with respect to any action— 

5 ‘‘(A) against any taxpayer, but in the case 

6 of any individual, only if such individual’s gross 

7 income exceeds $200,000 for any taxable year 

8 subject to such action, and 

9 ‘‘(B) if the tax, penalties, interest, addi10 tions to tax, and additional amounts in dispute 

11 exceed $2,000,000. 

12 ‘‘(6) ADDITIONAL RULES.— 

13 ‘‘(A) NO CONTRACT NECESSARY.—No con14 tract with the Internal Revenue Service is nec15 essary for any individual to receive an award 

16 under this subsection. 

17 ‘‘(B) REPRESENTATION.—Any individual 

18 described in paragraph (1) or (2) may be rep19 resented by counsel. 

20 ‘‘(C) SUBMISSION OF INFORMATION.—No 

21 award may be made under this subsection 

22 based on information submitted to the Sec23 retary unless such information is submitted 

24 under penalty of perjury.’’. 

25 (2) ASSIGNMENT TO SPECIAL TRIAL JUDGES.— 


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1 (A) IN GENERAL.—Section 7443A(b) (re2 lating to proceedings which may be assigned to 

3 special trial judges) is amended by striking 

4 ‘‘and’’ at the end of paragraph (4), by redesig5 nating paragraph (5) as paragraph (6), and by 

6 inserting after paragraph (4) the following new 

7 paragraph: 

8 ‘‘(5) any proceeding under section 7623(b)(4), 

9 and’’. 

10 (B) CONFORMING AMENDMENT.—Section 

11 7443A(c) is amended by striking ‘‘or (4)’’ and 

12 inserting ‘‘(4), or (5)’’. 

13 (3) DEDUCTION ALLOWED WHETHER OR NOT

14 TAXPAYER ITEMIZES.—Subsection (a) of section 62 

15 (relating to general rule defining adjusted gross in16 come) is amended by inserting after paragraph (20) 

17 the following new paragraph: 

18 ‘‘(21) ATTORNEYS FEES RELATING TO AWARDS

19 TO WHISTLEBLOWERS.—Any deduction allowable 

20 under this chapter for attorney fees and court costs 

21 paid by, or on behalf of, the taxpayer in connection 

22 with any award under section 7623(b) (relating to 

23 awards to whistleblowers). The preceding sentence 

24 shall not apply to any deduction in excess of the 


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1 amount includible in the taxpayer’s gross income for 

2 the taxable year on account of such award.’’. 

3 (b) WHISTLEBLOWER OFFICE.— 

4 (1) IN GENERAL.—Not later than the date 

5 which is 12 months after the date of the enactment 

6 of this Act, the Secretary of the Treasury shall issue 

7 guidance for the operation of a whistleblower pro8 gram to be administered in the Internal Revenue 

9 Service by an office to be known as the ‘‘Whistle10 blower Office’’ which— 

11 (A) shall at all times operate at the direc12 tion of the Commissioner of Internal Revenue 

13 and coordinate and consult with other divisions 

14 in the Internal Revenue Service as directed by 

15 the Commissioner of Internal Revenue, 

16 (B) shall analyze information received from 

17 any individual described in section 7623(b) of 

18 the Internal Revenue Code of 1986 and either 

19 investigate the matter itself or assign it to the 

20 appropriate Internal Revenue Service office, 

21 and 

22 (C) in its sole discretion, may ask for addi23 tional assistance from such individual or any 

24 legal representative of such individual. 


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1 (2) REQUEST FOR ASSISTANCE.—The guidance 

2 issued under paragraph (1) shall specify that any as3 sistance requested under paragraph (1)(C) shall be 

4 under the direction and control of the Whistleblower 

5 Office or the office assigned to investigate the mat6 ter under paragraph (1)(A). No individual or legal 

7 representative whose assistance is so requested may 

8 by reason of such request represent himself or her9 self as an employee of the Federal Government. 

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

11 Treasury shall each year conduct a study and report to 

12 Congress on the use of section 7623 of the Internal Rev13 enue Code of 1986, including— 

14 (1) an analysis of the use of such section dur15 ing the preceding year and the results of such use, 

16 and 

17 (2) any legislative or administrative rec18 ommendations regarding the provisions of such sec19 tion and its application. 

20 (d) EFFECTIVE DATE.—The amendments made by 

21 subsection (a) shall apply to information provided on or 

22 after the date of the enactment of this Act. 

23 SEC. 137. FRIVOLOUS TAX SUBMISSIONS. 

24 (a) CIVIL PENALTIES.—Section 6702 is amended to 

25 read as follows: 


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1 ‘‘SEC. 6702. FRIVOLOUS TAX SUBMISSIONS. 

2 ‘‘(a) CIVIL PENALTY FOR FRIVOLOUS TAX RE3 TURNS.—A person shall pay a penalty of $5,000 if— 

4 ‘‘(1) such person files what purports to be a re5 turn of a tax imposed by this title but which— 

6 ‘‘(A) does not contain information on 

7 which the substantial correctness of the self-as8 sessment may be judged, or 

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

10 indicates that the self-assessment is substan11 tially incorrect, and 

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

13 ‘‘(A) is based on a position which the Sec14 retary has identified as frivolous under sub15 section (c), or 

16 ‘‘(B) reflects a desire to delay or impede 

17 the administration of Federal tax laws. 

18 ‘‘(b) CIVIL PENALTY FOR SPECIFIED FRIVOLOUS

19 SUBMISSIONS.— 

20 ‘‘(1) IMPOSITION OF PENALTY.—Except as pro21 vided in paragraph (3), any person who submits a 

22 specified frivolous submission shall pay a penalty of 

23 $5,000. 

24 ‘‘(2) SPECIFIED FRIVOLOUS SUBMISSION.—For 

25 purposes of this section— 


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1 ‘‘(A) SPECIFIED FRIVOLOUS SUBMIS2 SION.—The term ‘specified frivolous submis3 sion’ means a specified submission if any por4 tion of such submission— 

5 ‘‘(i) is based on a position which the 

6 Secretary has identified as frivolous under 

7 subsection (c), or 

8 ‘‘(ii) reflects a desire to delay or im9 pede the administration of Federal tax 

10 laws. 

11 ‘‘(B) SPECIFIED SUBMISSION.—The term 

12 ‘specified submission’ means— 

13 ‘‘(i) a request for a hearing under— 

14 ‘‘(I) section 6320 (relating to no15 tice and opportunity for hearing upon 

16 filing of notice of lien), or 

17 ‘‘(II) section 6330 (relating to 

18 notice and opportunity for hearing be19 fore levy), and 

20 ‘‘(ii) an application under— 

21 ‘‘(I) section 6159 (relating to 

22 agreements for payment of tax liabil23 ity in installments), 

24 ‘‘(II) section 7122 (relating to 

25 compromises), or 


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1 ‘‘(III) section 7811 (relating to 

2 taxpayer assistance orders). 

3 ‘‘(3) OPPORTUNITY TO WITHDRAW SUBMIS4 SION.—If the Secretary provides a person with no5 tice that a submission is a specified frivolous sub6 mission and such person withdraws such submission 

7 within 30 days after such notice, the penalty im8 posed under paragraph (1) shall not apply with re9 spect to such submission. 

10 ‘‘(c) LISTING OF FRIVOLOUS POSITIONS.—The Sec11 retary shall prescribe (and periodically revise) a list of po12 sitions which the Secretary has identified as being frivo13 lous for purposes of this subsection. The Secretary shall 

14 not include in such list any position that the Secretary 

15 determines meets the requirement of section 

16 6662(d)(2)(B)(ii)(II). 

17 ‘‘(d) REDUCTION OF PENALTY.—The Secretary may 

18 reduce the amount of any penalty imposed under this sec19 tion if the Secretary determines that such reduction would 

20 promote compliance with and administration of the Fed21 eral tax laws. 

22 ‘‘(e) PENALTIES IN ADDITION TO OTHER PEN23 ALTIES.—The penalties imposed by this section shall be 

24 in addition to any other penalty provided by law.’’. 


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1 (b) TREATMENT OF FRIVOLOUS REQUESTS FOR

2 HEARINGS BEFORE LEVY.— 

3 (1) FRIVOLOUS REQUESTS DISREGARDED.— 

4 Section 6330 (relating to notice and opportunity for 

5 hearing before levy) is amended by adding at the 

6 end the following new subsection: 

7 ‘‘(g) FRIVOLOUS REQUESTS FOR HEARING, ETC.— 

8 Notwithstanding any other provision of this section, if the 

9 Secretary determines that any portion of a request for a 

10 hearing under this section or section 6320 meets the re11 quirement of clause (i) or (ii) of section 6702(b)(2)(A), 

12 then the Secretary may treat such portion as if it were 

13 never submitted and such portion shall not be subject to 

14 any further administrative or judicial review.’’. 

15 (2) PRECLUSION FROM RAISING FRIVOLOUS

16 ISSUES AT HEARING.—Section 6330(c)(4) is amend17 ed— 

18 (A) by striking ‘‘(A)’’ and inserting 

19 ‘‘(A)(i)’’; 

20 (B) by striking ‘‘(B)’’ and inserting ‘‘(ii)’’; 

21 (C) by striking the period at the end of the 

22 first sentence and inserting ‘‘; or’’; and 

23 (D) by inserting after subparagraph (A)(ii) 

24 (as so redesignated) the following: 


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1 ‘‘(B) the issue meets the requirement of 

2 clause (i) or (ii) of section 6702(b)(2)(A).’’. 

3 (3) STATEMENT OF GROUNDS.—Section 

4 6330(b)(1) is amended by striking ‘‘under sub5 section (a)(3)(B)’’ and inserting ‘‘in writing under 

6 subsection (a)(3)(B) and states the grounds for the 

7 requested hearing’’. 

8 (c) TREATMENT OF FRIVOLOUS REQUESTS FOR

9 HEARINGS UPON FILING OF NOTICE OF LIEN.—Section 

10 6320 is amended— 

11 (1) in subsection (b)(1), by striking ‘‘under sub12 section (a)(3)(B)’’ and inserting ‘‘in writing under 

13 subsection (a)(3)(B) and states the grounds for the 

14 requested hearing’’, and 

15 (2) in subsection (c), by striking ‘‘and (e)’’ and 

16 inserting ‘‘(e), and (g)’’. 

17 (d) TREATMENT OF FRIVOLOUS APPLICATIONS FOR

18 OFFERS-IN-COMPROMISE AND INSTALLMENT AGREE19 MENTS.—Section 7122 is amended by adding at the end 

20 the following new subsection: 

21 ‘‘(f) FRIVOLOUS SUBMISSIONS, ETC.—Notwith22 standing any other provision of this section, if the Sec23 retary determines that any portion of an application for 

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•S 3829 IS

1 quirement of clause (i) or (ii) of section 6702(b)(2)(A), 

2 then the Secretary may treat such portion as if it were 

3 never submitted and such portion shall not be subject to 

4 any further administrative or judicial review.’’. 

5 (e) CLERICAL AMENDMENT.—The table of sections 

6 for part I of subchapter B of chapter 68 is amended by 

7 striking the item relating to section 6702 and inserting 

8 the following new item: 

‘‘Sec. 6702. Frivolous tax submissions.’’. 

9 (f) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to submissions made and issues 

11 raised after the date on which the Secretary first pre12 scribes a list under section 6702(c) of the Internal Rev13 enue Code of 1986, as amended by subsection (a). 

14 SEC. 138. ADDITION OF MENINGOCOCCAL AND HUMAN 

15 PAPILLOMAVIRUS VACCINES TO LIST OF TAX16 ABLE VACCINES. 

17 (a) MENINGOCOCCAL VACCINE.—Section 4132(a)(1) 

18 (defining taxable vaccine) is amended by adding at the end 

19 the following new subparagraph: 

20 ‘‘(O) Any meningococcal vaccine.’’. 

21 (b) HUMAN PAPILLOMAVIRUS VACCINE.—Section 

22 4132(a)(1), as amended by subsection (a), is amended by 

23 adding at the end the following new subparagraph: 

24 ‘‘(P) Any vaccine against the human 

25 papillomavirus.’’. 


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1 (c) EFFECTIVE DATE.— 

2 (1) SALES, ETC.—The amendments made by 

3 this section shall apply to sales and uses on or after 

4 the first day of the first month which begins more 

5 than 4 weeks after the date of the enactment of this 

6 Act. 

7 (2) DELIVERIES.—For purposes of paragraph 

8 (1) and section 4131 of the Internal Revenue Code 

9 of 1986, in the case of sales on or before the effec10 tive date described in such paragraph for which de11 livery is made after such date, the delivery date shall 

12 be considered the sale date. 

13 SEC. 139. CLARIFICATION OF TAXATION OF CERTAIN SET14 TLEMENT FUNDS MADE PERMANENT. 

15 (a) IN GENERAL.—Subsection (g) of section 468B, 

16 as amended by section 201 of the Tax Increase Prevention 

17 and Reconciliation Act of 2005, is amended by striking 

18 paragraph (3). 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 this section shall take effect as if included in section 201 

21 of the Tax Increase Prevention and Reconciliation Act of 

22 2005. 


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1 SEC. 140. MODIFICATION OF ACTIVE BUSINESS DEFINITION 

2 UNDER SECTION 355 MADE PERMANENT. 

3 (a) IN GENERAL.—Subparagraphs (A) and (D) of 

4 section 355(b)(3), as amended by section 202 of the Tax 

5 Increase Prevention and Reconciliation Act of 2005, are 

6 each amended by striking ‘‘and on or before December 31, 

7 2010’’. 

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

9 this section shall take effect as if included in section 202 

10 of the Tax Increase Prevention and Reconciliation Act of 

11 2005. 

12 SEC. 141. REVISION OF STATE VETERANS LIMIT MADE PER13 MANENT. 

14 (a) IN GENERAL.—Subparagraph (B) of section 

15 143(l)(3), as amended by section 203 of the Tax Increase 

16 Prevention and Reconciliation Act of 2005, is amended by 

17 striking clause (iv). 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall take effect as if included in section 203 

20 of the Tax Increase Prevention and Reconciliation Act of 

21 2005. 

22 SEC. 142. CAPITAL GAINS TREATMENT FOR CERTAIN SELF23 CREATED MUSICAL WORKS MADE PERMA24 NENT. 

25 (a) IN GENERAL.—Paragraph (3) of section 1221(b), 

26 as amended by section 204 of the Tax Increase Prevention 


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1 and Reconciliation Act of 2005, is amended by striking 

2 ‘‘before January 1, 2011,’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 this section shall take effect as if included in section 204 

5 of the Tax Increase Prevention and Reconciliation Act of 

6 2005. 

7 SEC. 143. REDUCTION IN MINIMUM VESSEL TONNAGE 

8 WHICH QUALIFIES FOR TONNAGE TAX MADE 

9 PERMANENT. 

10 (a) IN GENERAL.—Paragraph (4) of section 1355(a), 

11 as amended by section 205 of the Tax Increase Prevention 

12 and Reconciliation Act of 2005, is amended by striking 

13 ‘‘10,000 (6,000, in the case of taxable years beginning 

14 after December 31, 2005, and ending before January 1, 

15 2011)’’ and inserting ‘‘6,000’’. 

16 (b) EFFECTIVE DATE.—The amendment made by 

17 this section shall take effect as if included in section 205 

18 of the Tax Increase Prevention and Reconciliation Act of 

19 2005. 

20 SEC. 144. MODIFICATION OF SPECIAL ARBITRAGE RULE 

21 FOR CERTAIN FUNDS MADE PERMANENT. 

22 (a) IN GENERAL.—Section 206 of the Tax Increase 

23 Prevention and Reconciliation Act of 2005 is amended by 

24 striking ‘‘and before August 31, 2009’’. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall take effect as if included in section 206 

3 of the Tax Increase Prevention and Reconciliation Act of 

4 2005. 

5 SEC. 145. GREAT LAKES DOMESTIC SHIPPING TO NOT DIS6 QUALIFY VESSEL FROM TONNAGE TAX. 

7 (a) IN GENERAL.—Section 1355 (relating to defini8 tions and special rules) is amended by redesignating sub9 section (g) as subsection (h) and by inserting after sub10 section (f) the following new subsection: 

11 ‘‘(g) GREAT LAKES DOMESTIC SHIPPING TO NOT

12 DISQUALIFY VESSEL.— 

13 ‘‘(1) IN GENERAL.—If the electing corporation 

14 elects (at such time and in such manner as the Sec15 retary may require) to apply this subsection for any 

16 taxable year to any qualifying vessel which is used 

17 in qualified zone domestic trade during the taxable 

18 year— 

19 ‘‘(A) solely for purposes of subsection 

20 (a)(4), such use shall be treated as use in 

21 United States foreign trade (and not as use in 

22 United States domestic trade), and 

23 ‘‘(B) subsection (f) shall not apply with re24 spect to such vessel for such taxable year. 


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1 ‘‘(2) EFFECT OF TEMPORARILY OPERATING

2 VESSEL IN UNITED STATES DOMESTIC TRADE.—In 

3 the case of a qualifying vessel to which this sub4 section applies— 

5 ‘‘(A) IN GENERAL.—An electing corpora6 tion shall be treated as using such vessel in 

7 qualified zone domestic trade during any period 

8 of temporary use in the United States domestic 

9 trade (other than qualified zone domestic trade) 

10 if the electing corporation gives timely notice to 

11 the Secretary stating— 

12 ‘‘(i) that it temporarily operates or 

13 has operated in the United States domestic 

14 trade (other than qualified zone domestic 

15 trade) a qualifying vessel which had been 

16 used in the United States foreign trade or 

17 qualified zone domestic trade, and 

18 ‘‘(ii) its intention to resume operation 

19 of the vessel in the United States foreign 

20 trade or qualified zone domestic trade. 

21 ‘‘(B) NOTICE.—Notice shall be deemed 

22 timely if given not later than the due date (in23 cluding extensions) for the corporation’s tax re24 turn for the taxable year in which the tem25 porary cessation begins. 


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1 ‘‘(C) PERIOD DISREGARD IN EFFECT.— 

2 The period of temporary use under subpara3 graph (A) continues until the earlier of the date 

4 of which— 

5 ‘‘(i) the electing corporation abandons 

6 its intention to resume operations of the 

7 vessel in the United States foreign trade or 

8 qualified zone domestic trade, or 

9 ‘‘(ii) the electing corporation resumes 

10 operation of the vessel in the United States 

11 foreign trade or qualified zone domestic 

12 trade. 

13 ‘‘(D) NO DISREGARD IF DOMESTIC TRADE

14 USE EXCEEDS 30 DAYS.—Subparagraph (A) 

15 shall not apply to any qualifying vessel which is 

16 operated in the United States domestic trade 

17 (other than qualified zone domestic trade) for 

18 more than 30 days during the taxable year. 

19 ‘‘(3) ALLOCATION OF INCOME AND DEDUC20 TIONS TO QUALIFYING SHIPPING ACTIVITIES.—In 

21 the case of a qualifying vessel to which this sub22 section applies, the Secretary shall prescribe rules 

23 for the proper allocation of income, expenses, losses, 

24 and deductions between the qualified shipping activi25 ties and the other activities of such vessel. 


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1 ‘‘(4) QUALIFIED ZONE DOMESTIC TRADE.—For 

2 purposes of this subsection— 

3 ‘‘(A) IN GENERAL.—The term ‘qualified 

4 zone domestic trade’ means the transportation 

5 of goods or passengers between places in the 

6 qualified zone if such transportation is in the 

7 United States domestic trade. 

8 ‘‘(B) QUALIFIED ZONE.—The term ‘quali9 fied zone’ means the Great Lakes Waterway 

10 and the St. Lawrence Seaway.’’. 

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

12 this section shall apply to taxable years beginning after 

13 the date of the enactment of this Act. 

14 SEC. 146. USE OF QUALIFIED MORTGAGE BONDS TO FI15 NANCE RESIDENCES FOR VETERANS WITH16 OUT REGARD TO FIRST-TIME HOMEBUYER 

17 REQUIREMENT. 

18 (a) IN GENERAL.—Section 143(d)(2) (relating to ex19 ceptions to 3-year requirement) is amended by striking 

20 ‘‘and’’ at the end of subparagraph (B), by adding ‘‘and’’ 

21 at the end of subparagraph (C), and by inserting after 

22 subparagraph (C) the following new subparagraph: 

23 ‘‘(D) in the case of bonds issued after the 

24 date of the enactment of this subparagraph and 

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1 dence for a veteran (as defined in section 101 

2 of title 38, United States Code), if such veteran 

3 has not previously qualified for and received 

4 such financing by reason of this subpara5 graph,’’. 

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

7 this section shall apply to bonds issued after the date of 

8 the enactment of this Act. 

9 SEC. 147. EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL 

10 RESIDENCE BY CERTAIN EMPLOYEES OF THE 

11 INTELLIGENCE COMMUNITY. 

12 (a) IN GENERAL.—Subparagraph (A) of section 

13 121(d)(9) (relating to exclusion of gain from sale of prin14 cipal residence) is amended by striking ‘‘duty’’ and all that 

15 follows and inserting ‘‘duty— 

16 ‘‘(i) as a member of the uniformed 

17 services, 

18 ‘‘(ii) as a member of the Foreign 

19 Service of the United States, or 

20 ‘‘(iii) as an employee of the intel21 ligence community.’’. 

22 (b) EMPLOYEE OF INTELLIGENCE COMMUNITY DE23 FINED.—Subparagraph (C) of section 121(d)(9) is amend24 ed by redesignating clause (iv) as clause (v) and by insert25 ing after clause (iii) the following new clause: 


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1 ‘‘(iv) EMPLOYEE OF INTELLIGENCE

2 COMMUNITY.—The term ‘employee of the 

3 intelligence community’ means an employee 

4 (as defined by section 2105 of title 5, 

5 United States Code) of— 

6 ‘‘(I) the Office of the Director of 

7 National Intelligence, 

8 ‘‘(II) the Central Intelligence 

9 Agency, 

10 ‘‘(III) the National Security 

11 Agency, 

12 ‘‘(IV) the Defense Intelligence 

13 Agency, 

14 ‘‘(V) the National Geospatial-In15 telligence Agency, 

16 ‘‘(VI) the National Reconnais17 sance Office, 

18 ‘‘(VII) any other office within the 

19 Department of Defense for the collec20 tion of specialized national intelligence 

21 through reconnaissance programs, 

22 ‘‘(VIII) any of the intelligence 

23 elements of the Army, the Navy, the 

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1 partment of Treasury, the Depart2 ment of Energy, and the Coast 

3 Guard, 

4 ‘‘(IX) the Bureau of Intelligence 

5 and Research of the Department of 

6 State, or 

7 ‘‘(X) any of the elements of the 

8 Department of Homeland Security 

9 concerned with the analyses of foreign 

10 intelligence information.’’. 

11 (c) SPECIAL RULE.—Subparagraph (C) of section 

12 121(d)(9), as amended by subsection (b), is amended by 

13 adding at the end the following new clause: 

14 ‘‘(vi) SPECIAL RULE RELATING TO IN15 TELLIGENCE COMMUNITY.—An employee 

16 of the intelligence community shall not be 

17 treated as serving on qualified extended 

18 duty unless such duty is at a duty station 

19 located outside the United States.’’. 

20 (d) CONFORMING AMENDMENT.—The heading for 

21 section 121(d)(9) is amended to read as follows: ‘‘UNI22 FORMED SERVICES, FOREIGN SERVICE, AND INTEL23 LIGENCE COMMUNITY’’. 


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1 (e) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to sales or exchanges after the date 

3 of the enactment of this Act and before January 1, 2011. 

4 SEC. 148. TREATMENT OF COKE AND COKE GAS. 

5 (a) NONAPPLICATION OF PHASEOUT.—Section 

6 45K(g)(2) is amended by adding at the end the following 

7 new subparagraph: 

8 ‘‘(D) NONAPPLICATION OF PHASEOUT.— 

9 Subsection (b)(1) shall not apply.’’. 

10 (b) CLARIFICATION OF QUALIFYING FACILITY.—Sec11 tion 45K(g)(1) is amended by inserting ‘‘(other than from 

12 petroleum based products)’’ after ‘‘coke or coke gas’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall take effect as if included in section 1321 

15 of the Energy Policy Act of 2005. 

16 SEC. 149. SALE OF PROPERTY BY JUDICIAL OFFICERS. 

17 (a) IN GENERAL.—Section 1043(b) (relating to the 

18 sale of property to comply with conflict-of-interest require19 ments) is amended— 

20 (1) in paragraph (1)— 

21 (A) in subparagraph (A), by inserting ‘‘, or 

22 a judicial officer,’’ after ‘‘an officer or employee 

23 of the executive branch’’; and 


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1 (B) in subparagraph (B), by inserting ‘‘ju2 dicial canon,’’ after ‘‘any statute, regulation, 

3 rule,’’; 

4 (2) in paragraph (2)— 

5 (A) in subparagraph (A), by inserting ‘‘ju6 dicial canon,’’ after ‘‘any Federal conflict of in7 terest statute, regulation, rule,’’; and 

8 (B) in subparagraph (B), by inserting 

9 after ‘‘the Director of the Office of Government 

10 Ethics,’’ the following: ‘‘in the case of executive 

11 branch officers or employees, or by the Judicial 

12 Conference of the United States (or its des13 ignee), in the case of judicial officers,’’; and 

14 (3) in paragraph (5)(B), by inserting ‘‘judicial 

15 canon,’’ after ‘‘any statute, regulation, rule,’’. 

16 (b) JUDICIAL OFFICER DEFINED.—Section 1043(b) 

17 is amended by adding at the end the following new para18 graph: 

19 ‘‘(6) JUDICIAL OFFICER.—The term ‘judicial 

20 officer’ means the Chief Justice of the United 

21 States, the Associate Justices of the Supreme Court, 

22 and the judges of the United States courts of ap23 peals, United States district courts, including the 

24 district courts in Guam, the Northern Mariana Is25 lands, and the Virgin Islands, Court of Appeals for 


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1 the Federal Circuit, Court of International Trade, 

2 Tax Court, Court of Federal Claims, Court of Ap3 peals for Veterans Claims, United States Court of 

4 Appeals for the Armed Forces, and any court cre5 ated by Act of Congress, the judges of which are en6 titled to hold office during good behavior.’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to sales after the date of enactment 

9 of this Act. 

10 SEC. 150. PREMIUMS FOR MORTGAGE INSURANCE. 

11 (a) IN GENERAL.—Section 163(h)(3) (relating to 

12 qualified residence interest) is amended by adding at the 

13 end the following new subparagraph: 

14 ‘‘(E) MORTGAGE INSURANCE PREMIUMS

15 TREATED AS INTEREST.— 

16 ‘‘(i) IN GENERAL.—Premiums paid or 

17 accrued for qualified mortgage insurance 

18 by a taxpayer during the taxable year in 

19 connection with acquisition indebtedness 

20 with respect to a qualified residence of the 

21 taxpayer shall be treated for purposes of 

22 this section as interest which is qualified 

23 residence interest. 

24 ‘‘(ii) PHASEOUT.—The amount other25 wise treated as interest under clause (i) 


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1 shall be reduced (but not below zero) by 10 

2 percent of such amount for each $1,000 

3 ($500 in the case of a married individual 

4 filing a separate return) (or fraction there5 of) that the taxpayer’s adjusted gross in6 come for the taxable year exceeds 

7 $100,000 ($50,000 in the case of a mar8 ried individual filing a separate return). 

9 ‘‘(iii) LIMITATION.—Clause (i) shall 

10 not apply with respect to any mortgage in11 surance contracts issued before January 1, 

12 2007. 

13 ‘‘(iv) TERMINATION.—Clause (i) shall 

14 not apply to amounts— 

15 ‘‘(I) paid or accrued after De16 cember 31, 2007, or 

17 ‘‘(II) properly allocable to any 

18 period after such date.’’. 

19 (b) DEFINITION AND SPECIAL RULES.—Section 

20 163(h)(4) (relating to other definitions and special rules) 

21 is amended by adding at the end the following new sub22 paragraphs: 

23 ‘‘(E) QUALIFIED MORTGAGE INSUR24 ANCE.—The term ‘qualified mortgage insur25 ance’ means— 


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1 ‘‘(i) mortgage insurance provided by 

2 the Veterans Administration, the Federal 

3 Housing Administration, or the Rural 

4 Housing Administration, and 

5 ‘‘(ii) private mortgage insurance (as 

6 defined by section 2 of the Homeowners 

7 Protection Act of 1998 (12 U.S.C. 4901), 

8 as in effect on the date of the enactment 

9 of this subparagraph). 

10 ‘‘(F) SPECIAL RULES FOR PREPAID QUALI11 FIED MORTGAGE INSURANCE.—Any amount 

12 paid by the taxpayer for qualified mortgage in13 surance that is properly allocable to any mort14 gage the payment of which extends to periods 

15 that are after the close of the taxable year in 

16 which such amount is paid shall be chargeable 

17 to capital account and shall be treated as paid 

18 in such periods to which so allocated. No deduc19 tion shall be allowed for the unamortized bal20 ance of such account if such mortgage is satis21 fied before the end of its term. The preceding 

22 sentences shall not apply to amounts paid for 

23 qualified mortgage insurance provided by the 

24 Veterans Administration or the Rural Housing 

25 Administration.’’. 


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1 (c) INFORMATION RETURNS RELATING TO MORT2 GAGE INSURANCE.—Section 6050H (relating to returns 

3 relating to mortgage interest received in trade or business 

4 from individuals) is amended by adding at the end the fol5 lowing new subsection: 

6 ‘‘(h) RETURNS RELATING TO MORTGAGE INSURANCE

7 PREMIUMS.— 

8 ‘‘(1) IN GENERAL.—The Secretary may pre9 scribe, by regulations, that any person who, in the 

10 course of a trade or business, receives from any indi11 vidual premiums for mortgage insurance aggregating 

12 $600 or more for any calendar year, shall make a 

13 return with respect to each such individual. Such re14 turn shall be in such form, shall be made at such 

15 time, and shall contain such information as the Sec16 retary may prescribe. 

17 ‘‘(2) STATEMENT TO BE FURNISHED TO INDI18 VIDUALS WITH RESPECT TO WHOM INFORMATION IS

19 REQUIRED.—Every person required to make a re20 turn under paragraph (1) shall furnish to each indi21 vidual with respect to whom a return is made a writ22 ten statement showing such information as the Sec23 retary may prescribe. Such written statement shall 

24 be furnished on or before January 31 of the year 


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1 following the calendar year for which the return 

2 under paragraph (1) was required to be made. 

3 ‘‘(3) SPECIAL RULES.—For purposes of this 

4 subsection— 

5 ‘‘(A) rules similar to the rules of sub6 section (c) shall apply, and 

7 ‘‘(B) the term ‘mortgage insurance’ 

8 means— 

9 ‘‘(i) mortgage insurance provided by 

10 the Veterans Administration, the Federal 

11 Housing Administration, or the Rural 

12 Housing Administration, and 

13 ‘‘(ii) private mortgage insurance (as 

14 defined by section 2 of the Homeowners 

15 Protection Act of 1998 (12 U.S.C. 4901), 

16 as in effect on the date of the enactment 

17 of this subsection).’’. 

18 (d) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to amounts paid or accrued after 

20 December 31, 2006. 

21 SEC. 151. MODIFICATION OF REFUNDS FOR KEROSENE 

22 USED IN AVIATION. 

23 (a) IN GENERAL.—Paragraph (4) of section 6427(l) 

24 (relating to nontaxable uses of diesel fuel and kerosene) 

25 is amended to read as follows: 


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1 ‘‘(4) REFUNDS FOR KEROSENE USED IN AVIA2 TION.— 

3 ‘‘(A) KEROSENE USED IN COMMERCIAL

4 AVIATION.—In the case of kerosene used in 

5 commercial aviation (as defined in section 

6 4083(b)) (other than supplies for vessels or air7 craft within the meaning of section 4221(d)(3)), 

8 paragraph (1) shall not apply to so much of the 

9 tax imposed by section 4041 or 4081, as the 

10 case may be, as is attributable to— 

11 ‘‘(i) the Leaking Underground Stor12 age Tank Trust Fund financing rate im13 posed by such section, and 

14 ‘‘(ii) so much of the rate of tax speci15 fied in section 4041(c) or 

16 4081(a)(2)(A)(iii), as the case may be, as 

17 does not exceed 4.3 cents per gallon. 

18 ‘‘(B) KEROSENE USED IN NONCOMMER19 CIAL AVIATION.—In the case of kerosene used 

20 in aviation that is not commercial aviation (as 

21 so defined) (other than any use which is exempt 

22 from the tax imposed by section 4041(c) other 

23 than by reason of a prior imposition of tax), 

24 paragraph (1) shall not apply to— 


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1 ‘‘(i) any tax imposed by section 

2 4041(c), and 

3 ‘‘(ii) so much of the tax imposed by 

4 section 4081 as is attributable to— 

5 ‘‘(I) the Leaking Underground 

6 Storage Tank Trust Fund financing 

7 rate imposed by such section, and 

8 ‘‘(II) so much of the rate of tax 

9 specified in section 4081(a)(2)(A)(iii) 

10 as does not exceed the rate specified 

11 in section 4081(a)(2)(C)(ii). 

12 ‘‘(C) PAYMENTS TO ULTIMATE, REG13 ISTERED VENDOR.— 

14 ‘‘(i) IN GENERAL.—With respect to 

15 any kerosene used in aviation (other than 

16 kerosene described in clause (ii) or ker17 osene to which paragraph (5) applies), if 

18 the ultimate purchaser of such kerosene 

19 waives (at such time and in such form and 

20 manner as the Secretary shall prescribe) 

21 the right to payment under paragraph (1) 

22 and assigns such right to the ultimate ven23 dor, then the Secretary shall pay the 

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1 graph (1) to such ultimate vendor, but 

2 only if such ultimate vendor— 

3 ‘‘(I) is registered under section 

4 4101, and 

5 ‘‘(II) meets the requirements of 

6 subparagraph (A), (B), or (D) of sec7 tion 6416(a)(1). 

8 ‘‘(ii) PAYMENTS FOR KEROSENE USED

9 IN NONCOMMERCIAL AVIATION.—The 

10 amount which would be paid under para11 graph (1) with respect to any kerosene to 

12 which subparagraph (B) applies shall be 

13 paid only to the ultimate vendor of such 

14 kerosene. A payment shall be made to such 

15 vendor if such vendor— 

16 ‘‘(I) is registered under section 

17 4101, and 

18 ‘‘(II) meets the requirements of 

19 subparagraph (A), (B), or (D) of sec20 tion 6416(a)(1).’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) Section 6427(l) is amended by striking 

23 paragraph (5) and by redesignating paragraph (6) 

24 as paragraph (5). 


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1 (2) Section 4082(d)(2)(B) is amended by strik2 ing ‘‘section 6427(l)(6)(B)’’ and inserting ‘‘section 

3 6427(l)(5)(B)’’. 

4 (3) Section 6427(i)(4)(A) is amended— 

5 (A) by striking ‘‘paragraph (4)(B), (5), or 

6 (6)’’ each place it appears and inserting ‘‘para7 graph (4)(C) or (5)’’, and 

8 (B) by striking ‘‘(l)(5), and (l)(6)’’ and in9 serting ‘‘(l)(4)(C)(ii), and (l)(5)’’. 

10 (4) Section 6427(l)(1) is amended by striking 

11 ‘‘paragraph (4)(B)’’ and inserting ‘‘paragraph 

12 (4)(C)(i)’’. 

13 (5) Section 9502(d) is amended— 

14 (A) in paragraph (2), by striking ‘‘and 

15 (l)(5)’’, and 

16 (B) in paragraph (3), by striking ‘‘or (5)’’. 

17 (6) Section 9503(c)(7) is amended— 

18 (A) by amending subparagraphs (A) and 

19 (B) to read as follows: 

20 ‘‘(A) 4.3 cents per gallon of kerosene sub21 ject to section 6427(l)(4)(A) with respect to 

22 which a payment has been made by the Sec23 retary under section 6427(l), and 

24 ‘‘(B) 21.8 cents per gallon of kerosene sub25 ject to section 6427(l)(4)(B) with respect to 


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1 which a payment has been made by the Sec2 retary under section 6427(l).’’, and 

3 (B) in the matter following subparagraph 

4 (B), by striking ‘‘or (5)’’. 

5 (c) EFFECTIVE DATE.— 

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

7 this section shall apply to kerosene sold after Sep8 tember 30, 2005. 

9 (2) SPECIAL RULE FOR PENDING CLAIMS.—In 

10 the case of kerosene sold for use in aviation (other 

11 than kerosene to which section 6427(l)(4)(C)(ii) of 

12 the Internal Revenue Code of 1986 (as added by 

13 subsection (a)) applies or kerosene to which section 

14 6427(l)(5) of such Code (as redesignated by sub15 section (b)) applies) after September 30, 2005, and 

16 before the date of the enactment of this Act, the ul17 timate purchaser shall be treated as having waived 

18 the right to payment under section 6427(l)(1) of 

19 such Code and as having assigned such right to the 

20 ultimate vendor if such ultimate vendor has met the 

21 requirements of subparagraph (A), (B), or (D) of 

22 section 6416(a)(1) of such Code. 

23 (d) SPECIAL RULE FOR KEROSENE USED IN AVIA24 TION ON A FARM FOR FARMING PURPOSES.— 


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1 (1) REFUNDS FOR PURCHASES AFTER DECEM2 BER 31, 2004, AND BEFORE OCTOBER 1, 2005.— 

3 The Secretary of the Treasury shall pay to the ulti4 mate purchaser of any kerosene which is used in 

5 aviation on a farm for farming purposes and which 

6 was purchased after December 31, 2004, and before 

7 October 1, 2005, an amount equal to the aggregate 

8 amount of tax imposed on such fuel under section 

9 4041 or 4081 of the Internal Revenue Code of 1986, 

10 as the case may be, reduced by any payment to the 

11 ultimate vendor under section 6427(l)(5)(C) of such 

12 Code (as in effect on the day before the date of the 

13 enactment of the Safe, Accountable, Flexible, Effi14 cient Transportation Equity Act: a Legacy for 

15 Users). 

16 (2) USE ON A FARM FOR FARMING PUR17 POSES.—For purposes of paragraph (1), kerosene 

18 shall be treated as used on a farm for farming pur19 poses if such kerosene is used for farming purposes 

20 (within the meaning of section 6420(c)(3) of the In21 ternal Revenue Code of 1986) in carrying on a trade 

22 or business on a farm situated in the United States. 

23 For purposes of the preceding sentence, rules similar 

24 to the rules of section 6420(c)(4) of such Code shall 

25 apply. 


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1 (3) TIME FOR FILING CLAIMS.—No claim shall 

2 be allowed under paragraph (1) unless the ultimate 

3 purchaser files such claim before the date that is 3 

4 months after the date of the enactment of this Act. 

5 (4) NO DOUBLE BENEFIT.—No amount shall be 

6 paid under paragraph (1) or section 6427(l) of the 

7 Internal Revenue Code of 1986 with respect to any 

8 kerosene described in paragraph (1) to the extent 

9 that such amount is in excess of the tax imposed on 

10 such kerosene under section 4041 or 4081 of such 

11 Code, as the case may be. 

12 (5) APPLICABLE LAWS.—For purposes of this 

13 subsection, rules similar to the rules of section 

14 6427(j) of the Internal Revenue Code of 1986 shall 

15 apply. 

16 SEC. 152. DEDUCTION FOR QUALIFIED TIMBER GAIN. 

17 (a) IN GENERAL.—Part I of subchapter P of chapter 

18 1 is amended by adding at the end the following new sec19 tion: 

20 ‘‘SEC. 1203. DEDUCTION FOR QUALIFIED TIMBER GAIN. 

21 ‘‘(a) IN GENERAL.—In the case of a taxpayer which 

22 elects the application of this section for a taxable year, 

23 there shall be allowed a deduction against gross income 

24 equal to 60 percent of the lesser of— 


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•S 3829 IS

1 ‘‘(1) the taxpayer’s qualified timber gain for 

2 such year, or 

3 ‘‘(2) the taxpayer’s net capital gain for such 

4 year. 

5 ‘‘(b) QUALIFIED TIMBER GAIN.—For purposes of 

6 this section, the term ‘qualified timber gain’ means, with 

7 respect to any taxpayer for any taxable year, the excess 

8 (if any) of— 

9 ‘‘(1) the sum of the taxpayer’s gains described 

10 in subsections (a) and (b) of section 631 for such 

11 year, over 

12 ‘‘(2) the sum of the taxpayer’s losses described 

13 in such subsections for such year. 

14 ‘‘(c) SPECIAL RULES FOR PASS-THRU ENTITIES.— 

15 In the case of any qualified timber gain of a pass-thru 

16 entity (as defined in section 1(h)(10))— 

17 ‘‘(1) the election under this section shall be 

18 made separately by each taxpayer subject to tax on 

19 such gain, and 

20 ‘‘(2) the Secretary may prescribe such regula21 tions as are appropriate to apply this section to such 

22 gain. 

23 ‘‘(d) TERMINATION.—No disposition of timber after 

24 December 31, 2007, shall be taken into account under 

25 subsection (b).’’. 


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1 (b) COORDINATION WITH MAXIMUM CAPITAL GAINS

2 RATES.— 

3 (1) TAXPAYERS OTHER THAN CORPORA4 TIONS.—Paragraph (2) of section 1(h) is amended 

5 to read as follows: 

6 ‘‘(2) REDUCTION OF NET CAPITAL GAIN.—For 

7 purposes of this subsection, the net capital gain for 

8 any taxable year shall be reduced (but not below 

9 zero) by the sum of— 

10 ‘‘(A) the amount which the taxpayer takes 

11 into account as investment income under sec12 tion 163(d)(4)(B)(iii), and 

13 ‘‘(B) in the case of a taxable year with re14 spect to which an election is in effect under sec15 tion 1203, the lesser of— 

16 ‘‘(i) the amount described in para17 graph (1) of section 1203(a), or 

18 ‘‘(ii) the amount described in para19 graph (2) of such section.’’. 

20 (2) CORPORATIONS.—Section 1201 is amended 

21 by redesignating subsection (b) as subsection (c) and 

22 inserting after subsection (a) the following new sub23 section: 

24 ‘‘(b) QUALIFIED TIMBER GAIN NOT TAKEN INTO

25 ACCOUNT.—For purposes of this section, in the case of 


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1 a corporation with respect to which an election is in effect 

2 under section 1203, the net capital gain for any taxable 

3 year shall be reduced (but not below zero) by the corpora4 tion’s qualified timber gain (as defined in section 

5 1203(b)).’’. 

6 (c) DEDUCTION ALLOWED WHETHER OR NOT INDI7 VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 

8 of section 62, as amended by this Act, is amended by in9 serting before the last sentence the following new para10 graph: 

11 ‘‘(22) QUALIFIED TIMBER GAINS.—The deduc12 tion allowed by section 1203.’’. 

13 (d) DEDUCTION ALLOWED IN COMPUTING AD14 JUSTED CURRENT EARNINGS.—Subparagraph (C) of sec15 tion 56(g)(4) is amended by adding at the end the fol16 lowing new clause: 

17 ‘‘(vii) DEDUCTION FOR QUALIFIED

18 TIMBER GAIN.—Clause (i) shall not apply 

19 to any deduction allowed under section 

20 1203.’’. 

21 (e) DEDUCTION ALLOWED IN COMPUTING TAXABLE

22 INCOME OF ELECTING SMALL BUSINESS TRUSTS.—Sub23 paragraph (C) of section 641(c)(2) is amended by insert24 ing after clause (iii) the following new clause: 


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1 ‘‘(iv) The deduction allowed under 

2 section 1203.’’. 

3 (f) CONFORMING AMENDMENTS.— 

4 (1) Subparagraph (B) of section 172(d)(2) is 

5 amended to read as follows: 

6 ‘‘(B) the exclusion under section 1202 and 

7 the deduction under section 1203 shall not be 

8 allowed.’’. 

9 (2) Paragraph (4) of section 642(c) is amended 

10 by striking the first sentence and inserting the fol11 lowing: ‘‘To the extent that the amount otherwise al12 lowable as a deduction under this subsection consists 

13 of gain described in section 1202(a) or qualified tim14 ber gain (as defined in section 1203(b)), proper ad15 justment shall be made for any exclusion allowable 

16 to the estate or trust under section 1202 and for 

17 any deduction allowable to the estate or trust under 

18 section 1203.’’. 

19 (3) Paragraph (3) of section 643(a) is amended 

20 by striking the last sentence and inserting the fol21 lowing: ‘‘The exclusion under section 1202 and the 

22 deduction under section 1203 shall not be taken into 

23 account.’’. 

24 (4) Subparagraph (C) of section 643(a)(6) is 

25 amended to read as follows: 


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1 ‘‘(C) Paragraph (3) shall not apply to a 

2 foreign trust. In the case of such a trust— 

3 ‘‘(i) there shall be included gains from 

4 the sale or exchange of capital assets, re5 duced by losses from such sales or ex6 changes to the extent such losses do not 

7 exceed gains from such sales or exchanges, 

8 and 

9 ‘‘(ii) the deduction under section 1203 

10 shall not be taken into account.’’. 

11 (5) Paragraph (4) of section 691(c) is amended 

12 by inserting ‘‘1203,’’ after ‘‘1202,’’. 

13 (6) Paragraph (2) of section 871(a) is amended 

14 by striking ‘‘section 1202’’ and inserting ‘‘sections 

15 1202 and 1203’’. 

16 (7) The table of sections for part I of sub17 chapter P of chapter 1 is amended by adding at the 

18 end the following new item: 

‘‘Sec. 1203. Deduction for qualified timber gain.’’. 

19 (g) EFFECTIVE DATE.— 

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

21 this section shall apply to taxable years ending after 

22 the date of the enactment of this Act. 

23 (2) TAXABLE YEARS WHICH INCLUDE DATE OF

24 ENACTMENT.—In the case of any taxable year which 

25 includes the date of the enactment of this Act, for 


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1 purposes of the Internal Revenue Code of 1986, the 

2 taxpayer’s qualified timber gain shall not exceed the 

3 excess that would be described in section 1203(b) of 

4 such Code, as added by this section, if only disposi5 tions of timber after such date were taken into ac6 count. 

7 SEC. 153. CREDIT TO HOLDERS OF RURAL RENAISSANCE 

8 BONDS. 

9 (a) IN GENERAL.—Subpart H of part IV of sub10 chapter A of chapter 1 (relating to credits against tax) 

11 is amended by adding at the end the following new section: 

12 ‘‘SEC. 54A. CREDIT TO HOLDERS OF RURAL RENAISSANCE 

13 BONDS. 

14 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax15 payer who holds a rural renaissance bond on a credit al16 lowance date of such bond, which occurs during the tax17 able year, there shall be allowed as a credit against the 

18 tax imposed by this chapter for such taxable year an 

19 amount equal to the sum of the credits determined under 

20 subsection (b) with respect to credit allowance dates dur21 ing such year on which the taxpayer holds such bond. 

22 ‘‘(b) AMOUNT OF CREDIT.— 

23 ‘‘(1) IN GENERAL.—The amount of the credit 

24 determined under this subsection with respect to any 

25 credit allowance date for a rural renaissance bond is 


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1 25 percent of the annual credit determined with re2 spect to such bond. 

3 ‘‘(2) ANNUAL CREDIT.—The annual credit de4 termined with respect to any rural renaissance bond 

5 is the product of— 

6 ‘‘(A) the credit rate determined by the Sec7 retary under paragraph (3) for the day on 

8 which such bond was sold, multiplied by 

9 ‘‘(B) the outstanding face amount of the 

10 bond. 

11 ‘‘(3) DETERMINATION.—For purposes of para12 graph (2), with respect to any rural renaissance 

13 bond, the Secretary shall determine daily or caused 

14 to be determined daily a credit rate which shall 

15 apply to the first day on which there is a binding, 

16 written contract for the sale or exchange of the 

17 bond. The credit rate for any day is the credit rate 

18 which the Secretary or the Secretary’s designee esti19 mates will permit the issuance of rural renaissance 

20 bonds with a specified maturity or redemption date 

21 without discount and without interest cost to the 

22 qualified issuer. 

23 ‘‘(4) CREDIT ALLOWANCE DATE.—For purposes 

24 of this section, the term ‘credit allowance date’ 

25 means— 


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1 ‘‘(A) March 15, 

2 ‘‘(B) June 15, 

3 ‘‘(C) September 15, and 

4 ‘‘(D) December 15. 

5 Such term also includes the last day on which the 

6 bond is outstanding. 

7 ‘‘(5) SPECIAL RULE FOR ISSUANCE AND RE8 DEMPTION.—In the case of a bond which is issued 

9 during the 3-month period ending on a credit allow10 ance date, the amount of the credit determined 

11 under this subsection with respect to such credit al12 lowance date shall be a ratable portion of the credit 

13 otherwise determined based on the portion of the 3- 

14 month period during which the bond is outstanding. 

15 A similar rule shall apply when the bond is redeemed 

16 or matures. 

17 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.—The 

18 credit allowed under subsection (a) for any taxable year 

19 shall not exceed the excess of— 

20 ‘‘(1) the sum of the regular tax liability (as de21 fined in section 26(b)) plus the tax imposed by sec22 tion 55, over 

23 ‘‘(2) the sum of the credits allowable under this 

24 part (other than subpart C and this section). 


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1 ‘‘(d) RURAL RENAISSANCE BOND.—For purposes of 

2 this section— 

3 ‘‘(1) IN GENERAL.—The term ‘rural renais4 sance bond’ means any bond issued as part of an 

5 issue if— 

6 ‘‘(A) the bond is issued by a qualified 

7 issuer, 

8 ‘‘(B) 95 percent or more of the proceeds 

9 from the sale of such issue are to be used for 

10 capital expenditures incurred for 1 or more 

11 qualified projects, 

12 ‘‘(C) the qualified issuer designates such 

13 bond for purposes of this section and the bond 

14 is in registered form, and 

15 ‘‘(D) the issue meets the requirements of 

16 subsections (e) and (h). 

17 ‘‘(2) QUALIFIED PROJECT; SPECIAL USE

18 RULES.— 

19 ‘‘(A) IN GENERAL.—The term ‘qualified 

20 project’ means 1 or more projects described in 

21 subparagraph (B) located in a rural area. 

22 ‘‘(B) PROJECTS DESCRIBED.—A project 

23 described in this subparagraph is— 

24 ‘‘(i) a water or waste treatment 

25 project, 


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1 ‘‘(ii) an affordable housing project, 

2 ‘‘(iii) a community facility project, in3 cluding hospitals, fire and police stations, 

4 and nursing and assisted-living facilities, 

5 ‘‘(iv) a value-added agriculture or re6 newable energy facility project for agricul7 tural producers or farmer-owned entities, 

8 including any project to promote the pro9 duction, processing, or retail sale of eth10 anol (including fuel at least 85 percent of 

11 the volume of which consists of ethanol), 

12 biodiesel, animal waste, biomass, raw com13 modities, or wind as a fuel, 

14 ‘‘(v) a distance learning or telemedi15 cine project, 

16 ‘‘(vi) a rural utility infrastructure 

17 project, including any electric or telephone 

18 system, 

19 ‘‘(vii) a project to expand broadband 

20 technology, 

21 ‘‘(viii) a rural teleworks project, and 

22 ‘‘(ix) any project described in any pre23 ceding clause carried out by the Delta Re24 gional Authority. 


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1 ‘‘(C) SPECIAL RULES.—For purposes of 

2 this paragraph— 

3 ‘‘(i) any project described in subpara4 graph (B)(iv) for a farmer-owned entity 

5 may be considered a qualified project if 

6 such entity is located in a rural area, or in 

7 the case of a farmer-owned entity the 

8 headquarters of which are located in a 

9 nonrural area, if the project is located in 

10 a rural area, and 

11 ‘‘(ii) any project for a farmer-owned 

12 entity which is a facility described in sub13 paragraph (B)(iv) for agricultural pro14 ducers may be considered a qualified 

15 project regardless of whether the facility is 

16 located in a rural or nonrural area. 

17 ‘‘(3) SPECIAL USE RULES.— 

18 ‘‘(A) REFINANCING RULES.—For purposes 

19 of paragraph (1)(B), a qualified project may be 

20 refinanced with proceeds of a rural renaissance 

21 bond only if the indebtedness being refinanced 

22 (including any obligation directly or indirectly 

23 refinanced by such indebtedness) was originally 

24 incurred after the date of the enactment of this 

25 section. 


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1 ‘‘(B) REIMBURSEMENT.—For purposes of 

2 paragraph (1)(B), a rural renaissance bond 

3 may be issued to reimburse a borrower for 

4 amounts paid after the date of the enactment 

5 of this section with respect to a qualified 

6 project, but only if— 

7 ‘‘(i) prior to the payment of the origi8 nal expenditure, the borrower declared its 

9 intent to reimburse such expenditure with 

10 the proceeds of a rural renaissance bond, 

11 ‘‘(ii) not later than 60 days after pay12 ment of the original expenditure, the quali13 fied issuer adopts an official intent to re14 imburse the original expenditure with such 

15 proceeds, and 

16 ‘‘(iii) the reimbursement is made not 

17 later than 18 months after the date the 

18 original expenditure is paid. 

19 ‘‘(C) TREATMENT OF CHANGES IN USE.— 

20 For purposes of paragraph (1)(B), the proceeds 

21 of an issue shall not be treated as used for a 

22 qualified project to the extent that a borrower 

23 takes any action within its control which causes 

24 such proceeds not to be used for a qualified 

25 project. The Secretary shall prescribe regulaVerDate Aug 31 2005 02:13 Aug 10, 2006 Jkt 049200 PO 00000 Frm 00099 Fmt 6652 Sfmt 6201 E:\BILLS\S3829.IS S3829

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1 tions specifying remedial actions that may be 

2 taken (including conditions to taking such re3 medial actions) to prevent an action described 

4 in the preceding sentence from causing a bond 

5 to fail to be a rural renaissance bond. 

6 ‘‘(e) MATURITY LIMITATIONS.— 

7 ‘‘(1) DURATION OF TERM.—A bond shall not be 

8 treated as a rural renaissance bond if the maturity 

9 of such bond exceeds the maximum term determined 

10 by the Secretary under paragraph (2) with respect 

11 to such bond. 

12 ‘‘(2) MAXIMUM TERM.—During each calendar 

13 month, the Secretary shall determine the maximum 

14 term permitted under this paragraph for bonds 

15 issued during the following calendar month. Such 

16 maximum term shall be the term which the Sec17 retary estimates will result in the present value of 

18 the obligation to repay the principal on the bond 

19 being equal to 50 percent of the face amount of such 

20 bond. Such present value shall be determined with21 out regard to the requirements of paragraph (3) and 

22 using as a discount rate the average annual interest 

23 rate of tax-exempt obligations having a term of 10 

24 years or more which are issued during the month. If 

25 the term as so determined is not a multiple of a 


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1 whole year, such term shall be rounded to the next 

2 highest whole year. 

3 ‘‘(3) RATABLE PRINCIPAL AMORTIZATION RE4 QUIRED.—A bond shall not be treated as a rural 

5 renaissance bond unless it is part of an issue which 

6 provides for an equal amount of principal to be paid 

7 by the qualified issuer during each calendar year 

8 that the issue is outstanding. 

9 ‘‘(f) LIMITATION ON AMOUNT OF BONDS DES10 IGNATED.— 

11 ‘‘(1) NATIONAL LIMITATION.—There is a rural 

12 renaissance bond limitation of $200,000,000. 

13 ‘‘(2) ALLOCATION BY SECRETARY.—The Sec14 retary shall allocate the amount described in para15 graph (1) among qualified projects in such manner 

16 as the Secretary determines appropriate. 

17 ‘‘(g) CREDIT INCLUDED IN GROSS INCOME.—Gross 

18 income includes the amount of the credit allowed to the 

19 taxpayer under this section (determined without regard to 

20 subsection (c)) and the amount so included shall be treat21 ed as interest income. 

22 ‘‘(h) SPECIAL RULES RELATING TO EXPENDI23 TURES.— 

24 ‘‘(1) IN GENERAL.—An issue shall be treated as 

25 meeting the requirements of this subsection if, as of 


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1 the date of issuance, the qualified issuer reasonably 

2 expects— 

3 ‘‘(A) at least 95 percent of the proceeds 

4 from the sale of the issue are to be spent for 

5 1 or more qualified projects within the 5-year 

6 period beginning on the date of issuance of the 

7 rural renaissance bond, 

8 ‘‘(B) a binding commitment with a third 

9 party to spend at least 10 percent of the pro10 ceeds from the sale of the issue will be incurred 

11 within the 6-month period beginning on the 

12 date of issuance of the rural renaissance bond 

13 or, in the case of a rural renaissance bond, the 

14 proceeds of which are to be loaned to 2 or more 

15 borrowers, such binding commitment will be in16 curred within the 6-month period beginning on 

17 the date of the loan of such proceeds to a bor18 rower, and 

19 ‘‘(C) such projects will be completed with 

20 due diligence and the proceeds from the sale of 

21 the issue will be spent with due diligence. 

22 ‘‘(2) EXTENSION OF PERIOD.—Upon submis23 sion of a request prior to the expiration of the period 

24 described in paragraph (1)(A), the Secretary may 

25 extend such period if the qualified issuer establishes 


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1 that the failure to satisfy the 5-year requirement is 

2 due to reasonable cause and the related projects will 

3 continue to proceed with due diligence. 

4 ‘‘(3) FAILURE TO SPEND REQUIRED AMOUNT

5 OF BOND PROCEEDS WITHIN 5 YEARS.—To the ex6 tent that less than 95 percent of the proceeds of 

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

8 period beginning on the date of issuance (or if an 

9 extension has been obtained under paragraph (2), by 

10 the close of the extended period), the qualified issuer 

11 shall redeem all of the nonqualified bonds within 90 

12 days after the end of such period. For purposes of 

13 this paragraph, the amount of the nonqualified 

14 bonds required to be redeemed shall be determined 

15 in the same manner as under section 142. 

16 ‘‘(i) SPECIAL RULES RELATING TO ARBITRAGE.—A 

17 bond which is part of an issue shall not be treated as a 

18 rural renaissance bond unless, with respect to the issue 

19 of which the bond is a part, the qualified issuer satisfies 

20 the arbitrage requirements of section 148 with respect to 

21 proceeds of the issue. 

22 ‘‘(j) QUALIFIED ISSUER.—For purposes of this sec23 tion— 

24 ‘‘(1) IN GENERAL.—The term ‘qualified issuer’ 

25 means any not-for-profit cooperative lender which 


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1 has as of the date of the enactment of this section 

2 received a guarantee under section 306 of the Rural 

3 Electrification Act and which meets the requirement 

4 of paragraph (2). 

5 ‘‘(2) USER FEE REQUIREMENT.—The require6 ment of this paragraph is met if the issuer of any 

7 rural renaissance bond makes grants for qualified 

8 projects as defined under subsection (d)(2) on a 

9 semi-annual basis every year that such bond is out10 standing in an annual amount equal to one-half of 

11 the rate on United States Treasury Bills of the same 

12 maturity multiplied by the outstanding principal bal13 ance of rural renaissance bonds issued by such 

14 issuer. 

15 ‘‘(k) SPECIAL RULES RELATING TO POOL BONDS.— 

16 No portion of a pooled financing bond may be allocable 

17 to a loan unless the borrower has entered into a written 

18 loan commitment for such portion prior to the issue date 

19 of such issue. 

20 ‘‘(l) OTHER DEFINITIONS AND SPECIAL RULES.— 

21 For purposes of this section— 

22 ‘‘(1) BOND.—The term ‘bond’ includes any ob23 ligation. 


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1 ‘‘(2) POOLED FINANCING BOND.—The term 

2 ‘pooled financing bond’ shall have the meaning given 

3 such term by section 149(f)(4)(A). 

4 ‘‘(3) RURAL AREA.—The term ‘rural area’ 

5 means any area other than— 

6 ‘‘(A) a city or town which has a population 

7 of greater than 50,000 inhabitants, or 

8 ‘‘(B) the urbanized area contiguous and 

9 adjacent to such a city or town. 

10 ‘‘(4) PARTNERSHIP; S CORPORATION; AND

11 OTHER PASS-THRU ENTITIES.— 

12 ‘‘(A) IN GENERAL.—Under regulations 

13 prescribed by the Secretary, in the case of a 

14 partnership, trust, S corporation, or other pass15 thru entity, rules similar to the rules of section 

16 41(g) shall apply with respect to the credit al17 lowable under subsection (a). 

18 ‘‘(B) NO BASIS ADJUSTMENT.—In the case 

19 of a bond held by a partnership or an S cor20 poration, rules similar to the rules under sec21 tion 1397E(l) shall apply. 

22 ‘‘(5) BONDS HELD BY REGULATED INVEST23 MENT COMPANIES.—If any rural renaissance bond is 

24 held by a regulated investment company, the credit 

25 determined under subsection (a) shall be allowed to 


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1 shareholders of such company under procedures pre2 scribed by the Secretary. 

3 ‘‘(6) REPORTING.—Issuers of rural renaissance 

4 bonds shall submit reports similar to the reports re5 quired under section 149(e).’’. 

6 (b) REPORTING.—Subsection (d) of section 6049 (re7 lating to returns regarding payments of interest) is 

8 amended by adding at the end the following new para9 graph: 

10 ‘‘(9) REPORTING OF CREDIT ON RURAL RENAIS11 SANCE BONDS.— 

12 ‘‘(A) IN GENERAL.—For purposes of sub13 section (a), the term ‘interest’ includes amounts 

14 includible in gross income under section 54A(f) 

15 and such amounts shall be treated as paid on 

16 the credit allowance date (as defined in section 

17 54A(b)(4)). 

18 ‘‘(B) REPORTING TO CORPORATIONS, 

19 ETC.—Except as otherwise provided in regula20 tions, in the case of any interest described in 

21 subparagraph (A), subsection (b)(4) shall be 

22 applied without regard to subparagraphs (A), 

23 (H), (I), (J), (K), and (L)(i) of such subsection. 

24 ‘‘(C) REGULATORY AUTHORITY.—The Sec25 retary may prescribe such regulations as are 


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1 necessary or appropriate to carry out the pur2 poses of this paragraph, including regulations 

3 which require more frequent or more detailed 

4 reporting.’’. 

5 (c) CONFORMING AMENDMENTS.— 

6 (1) The table of sections for subpart H of part 

7 IV of subchapter A of chapter 1 is amended by add8 ing at the end the following new item: 

‘‘Sec. 54A. Credit to holders of rural renaissance bonds.’’. 

9 (2) Section 54(c)(2) is amended by inserting ‘‘, 

10 section 54A,’’ after ‘‘subpart C’’. 

11 (3) Section 1400N(l)(3)(B) is amended by in12 serting ‘‘, section 54A,’’ after ‘‘subpart C’’. 

13 (d) ISSUANCE OF REGULATIONS.—The Secretary of 

14 Treasury shall issue regulations required under section 

15 54A of the Internal Revenue Code of 1986 (as added by 

16 this section) not later than 120 days after the date of the 

17 enactment of this Act. 

18 (e) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to bonds issued after the date of 

20 the enactment of this Act and before January 1, 2010. 

21 SEC. 154. RESTORATION OF DEDUCTION FOR TRAVEL EX22 PENSES OF SPOUSE, ETC. ACCOMPANYING 

23 TAXPAYER ON BUSINESS TRAVEL. 

24 (a) IN GENERAL.—Subsection (m) of section 274 (re25 lating to additional limitations on travel expenses) is 


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1 amended by adding at the end the following new para2 graph: 

3 ‘‘(4) TERMINATION.—Paragraph (3) shall not 

4 apply to any expense paid or incurred after the date 

5 of the enactment of this paragraph and before Janu6 ary 1, 2008.’’. 

7 (b) EFFECTIVE DATE.—The amendment made by 

8 this section shall apply to amounts paid or incurred after 

9 the date of the enactment of this Act. 

10 SEC. 155. TECHNICAL CORRECTIONS. 

11 (a) TECHNICAL CORRECTION RELATING TO LOOK12 THROUGH TREATMENT OF PAYMENTS BETWEEN RE13 LATED CONTROLLED FOREIGN CORPORATIONS UNDER

14 THE FOREIGN PERSONAL HOLDING COMPANY RULES.— 

15 (1) IN GENERAL.— 

16 (A) The first sentence of section 

17 954(c)(6)(A), as amended by section 103(b) of 

18 the Tax Increase Prevention and Reconciliation 

19 Act of 2005, is amended by striking ‘‘which is 

20 not subpart F income’’ and inserting ‘‘which is 

21 neither subpart F income nor income treated as 

22 effectively connected with the conduct of a 

23 trade or business in the United States’’. 

24 (B) Section 954(c)(6)(A), as so amended, 

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1 serting the following: ‘‘The Secretary shall pre2 scribe such regulations as may be necessary or 

3 appropriate to carry out this paragraph, includ4 ing such regulations as may be necessary or ap5 propriate to prevent the abuse of the purposes 

6 of this paragraph.’’ 

7 (2) EFFECTIVE DATE.—The amendments made 

8 by this subsection shall take effect as if included in 

9 section 103(b) of the Tax Increase Prevention and 

10 Reconciliation Act of 2005. 

11 (b) TECHNICAL CORRECTION REGARDING AUTHOR12 ITY TO EXERCISE REASONABLE CAUSE AND GOOD FAITH

13 EXCEPTION.— 

14 (1) IN GENERAL.—Section 903(d)(2)(B)(iii) of 

15 the American Jobs Creation Act of 2004, as amend16 ed by section 303(a) of the Gulf Opportunity Zone 

17 Act of 2005, is amended by inserting ‘‘or the Sec18 retary’s delegate’’ after ‘‘the Secretary of the Treas19 ury’’. 

20 (2) EFFECTIVE DATE.—The amendment made 

21 by this subsection shall take effect as if included in 

22 the provisions of the American Jobs Creation Act of 

23 2004 to which it relates. 


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1 TITLE II—INCREASE IN 

2 FEDERAL MINIMUM WAGE 

3 SEC. 201. MINIMUM WAGE. 

4 (a) IN GENERAL.—Section 6(a)(1) of the Fair Labor 

5 Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended 

6 to read as follows: 

7 ‘‘(1) except as otherwise provided in this sec8 tion, not less than— 

9 ‘‘(A) $5.85 an hour, beginning on the 60th 

10 day after the date of enactment of the Fair 

11 Minimum Wage Act of 2005; 

12 ‘‘(B) $6.55 an hour, beginning 12 months 

13 after that 60th day; and 

14 ‘‘(C) $7.25 an hour, beginning 24 months 

15 after that 60th day;’’. 

16 (b) EFFECTIVE DATE.—The amendment made by 

17 subsection (a) shall take effect 60 days after the date of 

18 enactment of this Act. 

19 SEC. 202. APPLICABILITY OF MINIMUM WAGE TO THE COM20 MONWEALTH OF THE NORTHERN MARIANA 

21 ISLANDS. 

22 (a) IN GENERAL.—Section 6 of the Fair Labor 

23 Standards Act of 1938 (29 U.S.C. 206) shall apply to the 

24 Commonwealth of the Northern Mariana Islands. 


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1 (b) TRANSITION.—Notwithstanding subsection (a), 

2 the minimum wage applicable to the Commonwealth of the 

3 Northern Mariana Islands under section 6(a)(1) of the 

4 Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) 

5 shall be— 

6 (1) $3.55 an hour, beginning on the 60th day 

7 after the date of enactment of this Act; and 

8 (2) increased by $0.50 an hour (or such lesser 

9 amount as may be necessary to equal the minimum 

10 wage under section 6(a)(1) of such Act), beginning 

11 6 months after the date of enactment of this Act 

12 and every 6 months thereafter until the minimum 

13 wage applicable to the Commonwealth of the North14 ern Mariana Islands under this subsection is equal 

15 to the minimum wage set forth in such section. 

16 TITLE III—SURFACE MINING 

17 CONTROL AND RECLAMATION 

18 ACT AMENDMENTS OF 2006 

19 SEC. 301. SHORT TITLE. 

20 This title may be cited as the ‘‘Surface Mining Con21 trol and Reclamation Act Amendments of 2006’’. 


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1 Subtitle A—Mining Control and 

2 Reclamation 

3 SEC. 311. ABANDONED MINE RECLAMATION FUND AND 

4 PURPOSES. 

5 (a) IN GENERAL.—Section 401 of the Surface Min6 ing Control and Reclamation Act of 1977 (30 U.S.C. 

7 1231) is amended— 

8 (1) in subsection (c)— 

9 (A) by striking paragraphs (2) and (6); 

10 and 

11 (B) by redesignating paragraphs (3), (4), 

12 and (5) and paragraphs (7) through (13) as 

13 paragraphs (2) through (11), respectively; 

14 (2) by striking subsection (d) and inserting the 

15 following: 

16 ‘‘(d) AVAILABILITY OF MONEYS; NO FISCAL YEAR

17 LIMITATION.— 

18 ‘‘(1) IN GENERAL.—Moneys from the fund for 

19 expenditures under subparagraphs (A) through (D) 

20 of section 402(g)(3) shall be available only when ap21 propriated for those subparagraphs. 

22 ‘‘(2) NO FISCAL YEAR LIMITATION.—Appropria23 tions described in paragraph (1) shall be made with24 out fiscal year limitation. 


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1 ‘‘(3) OTHER PURPOSES.—Moneys from the 

2 fund shall be available for all other purposes of this 

3 title without prior appropriation as provided in sub4 section (f).’’; 

5 (3) in subsection (e)— 

6 (A) in the second sentence, by striking 

7 ‘‘the needs of such fund’’ and inserting ‘‘achiev8 ing the purposes of the transfers under section 

9 402(h)’’; and 

10 (B) in the third sentence, by inserting be11 fore the period the following: ‘‘for the purpose 

12 of the transfers under section 402(h)’’; and 

13 (4) by adding at the end the following: 

14 ‘‘(f) GENERAL LIMITATION ON OBLIGATION AU15 THORITY.— 

16 ‘‘(1) IN GENERAL.—From amounts deposited 

17 into the fund under subsection (b), the Secretary 

18 shall distribute during each fiscal year beginning 

19 after September 30, 2007, an amount determined 

20 under paragraph (2). 

21 ‘‘(2) AMOUNTS.— 

22 ‘‘(A) FOR FISCAL YEARS 2008 THROUGH

23 2022.—For each of fiscal years 2008 through 

24 2022, the amount distributed by the Secretary 

25 under this subsection shall be equal to— 


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1 ‘‘(i) the amounts deposited into the 

2 fund under paragraphs (1), (2), and (4) of 

3 subsection (b) for the preceding fiscal year 

4 that were allocated under paragraphs (1) 

5 and (5) of section 402(g); plus 

6 ‘‘(ii) the amount needed for the ad7 justment under section 402(g)(8) for the 

8 current fiscal year. 

9 ‘‘(B) FISCAL YEARS 2023 AND THERE10 AFTER.—For fiscal year 2023 and each fiscal 

11 year thereafter, to the extent that funds are 

12 available, the Secretary shall distribute an 

13 amount equal to the amount distributed under 

14 subparagraph (A) during fiscal year 2022. 

15 ‘‘(3) DISTRIBUTION.— 

16 ‘‘(A) IN GENERAL.—Except as provided in 

17 subparagraph (B), for each fiscal year, of the 

18 amount to be distributed to States and Indian 

19 tribes pursuant to paragraph (2), the Secretary 

20 shall distribute— 

21 ‘‘(i) the amounts allocated under 

22 paragraph (1) of section 402(g), the 

23 amounts allocated under paragraph (5) of 

24 section 402(g), and any amount reallocated 

25 under section 411(h)(3) in accordance with 


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1 section 411(h)(2), for grants to States and 

2 Indian tribes under section 402(g)(5); and 

3 ‘‘(ii) the amounts allocated under sec4 tion 402(g)(8). 

5 ‘‘(B) EXCLUSION.—Beginning on October 

6 1, 2007, certified States shall be ineligible to 

7 receive amounts under section 402(g)(1). 

8 ‘‘(4) AVAILABILITY.—Amounts in the fund 

9 available to the Secretary for obligation under this 

10 subsection shall be available until expended. 

11 ‘‘(5) ADDITION.— 

12 ‘‘(A) IN GENERAL.—Subject to subpara13 graph (B), the amount distributed under this 

14 subsection for each fiscal year shall be in addi15 tion to the amount appropriated from the fund 

16 during the fiscal year. 

17 ‘‘(B) EXCEPTIONS.—Notwithstanding 

18 paragraph (3), the amount distributed under 

19 this subsection for the first 4 fiscal years begin20 ning on and after October 1, 2007, shall be 

21 equal to the following percentage of the amount 

22 otherwise required to be distributed: 

23 ‘‘(i) 50 percent in fiscal year 2008. 

24 ‘‘(ii) 50 percent in fiscal year 2009. 

25 ‘‘(iii) 75 percent in fiscal year 2010. 


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•S 3829 IS

1 ‘‘(iv) 75 percent in fiscal year 2011.’’. 

2 (b) CONFORMING AMENDMENT.—Section 712(b) of 

3 the Surface Mining Control and Reclamation Act of 1977 

4 (30 U.S.C. 1302(b)) is amended by striking ‘‘section 

5 401(c)(11)’’ and inserting ‘‘section 401(c)(9)’’. 

6 SEC. 312. RECLAMATION FEE. 

7 (a) AMOUNTS.— 

8 (1) FISCAL YEARS 2008–2012.—Effective Octo9 ber 1, 2007, section 402(a) of the Surface Mining 

10 Control and Reclamation Act of 1977 (30 U.S.C. 

11 1232(a)) is amended— 

12 (A) by striking ‘‘35’’ and inserting ‘‘31.5’’; 

13 (B) by striking ‘‘15’’ and inserting ‘‘13.5’’; 

14 and 

15 (C) by striking ‘‘10 cents’’ and inserting 

16 ‘‘9 cents’’. 

17 (2) FISCAL YEARS 2013–2021.—Effective Octo18 ber 1, 2012, section 402(a) of the Surface Mining 

19 Control and Reclamation Act of 1977 (30 U.S.C. 

20 1232(a)) (as amended by paragraph (1)) is amend21 ed— 

22 (A) by striking ‘‘31.5’’ and inserting ‘‘28’’; 

23 (B) by striking ‘‘13.5’’ and inserting ‘‘12’’; 

24 and 


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1 (C) by striking ‘‘9 cents’’ and inserting ‘‘8 

2 cents’’. 

3 (b) DURATION.—Effective September 30, 2007, sec4 tion 402(b) of the Surface Mining Control and Reclama5 tion Act of 1977 (30 U.S.C. 1232(b)) (as amended by sec6 tion 7007 of the Emergency Supplemental Appropriations 

7 Act for Defense, the Global War on Terror, and Hurricane 

8 Recovery, 2006 (Public Law 109–234; 120 Stat. 484)) is 

9 amended by striking ‘‘September 30, 2007’’ and all that 

10 follows through the end of the sentence and inserting 

11 ‘‘September 30, 2021.’’. 

12 (c) ALLOCATION OF FUNDS.—Section 402(g) of the 

13 Surface Mining Control and Reclamation Act of 1977 (30 

14 U.S.C. 1232(g)) is amended— 

15 (1) in paragraph (1)(D)— 

16 (A) by inserting ‘‘(except for grants award17 ed during fiscal years 2008, 2009, and 2010 to 

18 the extent not expended within 5 years)’’ after 

19 ‘‘this paragraph’’; and 

20 (B) by striking ‘‘in any area under para21 graph (2), (3), (4), or (5)’’ and inserting 

22 ‘‘under paragraph (5)’’; 

23 (2) by striking paragraph (2) and inserting: 

24 ‘‘(2) In making the grants referred to in paragraph 

25 (1)(C) and the grants referred to in paragraph (5), the 


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1 Secretary shall ensure strict compliance by the States and 

2 Indian tribes with the priorities described in section 

3 403(a) until a certification is made under section 

4 411(a).’’; 

5 (3) in paragraph (3)— 

6 (A) in the matter preceding subparagraph 

7 (A), by striking ‘‘paragraphs (2) and’’ and in8 serting ‘‘paragraph’’; 

9 (B) in subparagraph (A), by striking 

10 ‘‘401(c)(11)’’ and inserting ‘‘401(c)(9)’’; and 

11 (C) by adding at the end the following: 

12 ‘‘(E) For the purpose of paragraph (8).’’; 

13 (4) in paragraph (5)— 

14 (A) by inserting ‘‘(A)’’ after ‘‘(5)’’; 

15 (B) in the first sentence, by striking ‘‘40’’ 

16 and inserting ‘‘60’’; 

17 (C) in the last sentence, by striking 

18 ‘‘Funds allocated or expended by the Secretary 

19 under paragraphs (2), (3), or (4)’’ and insert20 ing ‘‘Funds made available under paragraph (3) 

21 or (4)’’; and 

22 (D) by adding at the end the following: 

23 ‘‘(B) Any amount that is reallocated and available 

24 under section 411(h)(3) shall be in addition to amounts 

25 that are allocated under subparagraph (A).’’; and 


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1 (5) by striking paragraphs (6) through (8) and 

2 inserting the following: 

3 ‘‘(6)(A) Any State with an approved abandoned mine 

4 reclamation program pursuant to section 405 may receive 

5 and retain, without regard to the 3-year limitation re6 ferred to in paragraph (1)(D), up to 30 percent of the 

7 total of the grants made annually to the State under para8 graphs (1) and (5) if those amounts are deposited into 

9 an acid mine drainage abatement and treatment fund es10 tablished under State law, from which amounts (together 

11 with all interest earned on the amounts) are expended by 

12 the State for the abatement of the causes and the treat13 ment of the effects of acid mine drainage in a comprehen14 sive manner within qualified hydrologic units affected by 

15 coal mining practices. 

16 ‘‘(B) In this paragraph, the term ‘qualified hydrologic 

17 unit’ means a hydrologic unit— 

18 ‘‘(i) in which the water quality has been signifi19 cantly affected by acid mine drainage from coal min20 ing practices in a manner that adversely impacts bi21 ological resources; and 

22 ‘‘(ii) that contains land and water that are— 

23 ‘‘(I) eligible pursuant to section 404 and 

24 include any of the priorities described in section 

25 403(a); and 


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•S 3829 IS

1 ‘‘(II) the subject of expenditures by the 

2 State from the forfeiture of bonds required 

3 under section 509 or from other States sources 

4 to abate and treat acid mine drainage. 

5 ‘‘(7) In complying with the priorities described in sec6 tion 403(a), any State or Indian tribe may use amounts 

7 available in grants made annually to the State or tribe 

8 under paragraphs (1) and (5) for the reclamation of eligi9 ble land and water described in section 403(a)(3) before 

10 the completion of reclamation projects under paragraphs 

11 (1) and (2) of section 403(a) only if the expenditure of 

12 funds for the reclamation is done in conjunction with the 

13 expenditure before, on, or after the date of enactment of 

14 the Surface Mining Control and Reclamation Act Amend15 ments of 2006 of funds for reclamation projects under 

16 paragraphs (1) and (2) of section 403(a). 

17 ‘‘(8)(A) In making funds available under this title, 

18 the Secretary shall ensure that the grant awards total not 

19 less than $3,000,000 annually to each State and each In20 dian tribe having an approved abandoned mine reclama21 tion program pursuant to section 405 and eligible land 

22 and water pursuant to section 404, so long as an alloca23 tion of funds to the State or tribe is necessary to achieve 

24 the priorities stated in paragraphs (1) and (2) of section 

25 403(a). 


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1 ‘‘(B) Notwithstanding any other provision of law, this 

2 paragraph applies to the States of Tennessee and Mis3 souri.’’. 

4 (d) TRANSFERS OF INTEREST EARNED BY ABAN5 DONED MINE RECLAMATION FUND.—Section 402 of the 

6 Surface Mining Control and Reclamation Act of 1977 (30 

7 U.S.C. 1232) is amended by striking subsection (h) and 

8 inserting the following: 

9 ‘‘(h) TRANSFERS OF INTEREST EARNED BY FUND.— 

10 ‘‘(1) IN GENERAL.— 

11 ‘‘(A) TRANSFERS TO COMBINED BENEFIT

12 FUND.—As soon as practicable after the begin13 ning of fiscal year 2007 and each fiscal year 

14 thereafter, and before making any allocation 

15 with respect to the fiscal year under subsection 

16 (g), the Secretary shall use an amount not to 

17 exceed the amount of interest that the Sec18 retary estimates will be earned and paid to the 

19 fund during the fiscal year to make the transfer 

20 described in paragraph (2)(A). 

21 ‘‘(B) TRANSFERS TO 1992 AND 1993

22 PLANS.—As soon as practicable after the begin23 ning of fiscal year 2008 and each fiscal year 

24 thereafter, and before making any allocation 

25 with respect to the fiscal year under subsection 


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•S 3829 IS

1 (g), the Secretary shall use an amount not to 

2 exceed the amount of interest that the Sec3 retary estimates will be earned and paid to the 

4 fund during the fiscal year (reduced by the 

5 amount used under subparagraph (A)) to make 

6 the transfers described in paragraphs (2)(B) 

7 and (2)(C). 

8 ‘‘(2) TRANSFERS DESCRIBED.—The transfers 

9 referred to in paragraph (1) are the following: 

10 ‘‘(A) UNITED MINE WORKERS OF AMERICA

11 COMBINED BENEFIT FUND.—A transfer to the 

12 United Mine Workers of America Combined 

13 Benefit Fund equal to the amount that the 

14 trustees of the Combined Benefit Fund esti15 mate will be expended from the fund for the fis16 cal year in which the transfer is made, reduced 

17 by— 

18 ‘‘(i) the amount the trustees of the 

19 Combined Benefit Fund estimate the Com20 bined Benefit Fund will receive during the 

21 fiscal year in— 

22 ‘‘(I) required premiums; and 

23 ‘‘(II) payments paid by Federal 

24 agencies in connection with benefits 


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1 provided by the Combined Benefit 

2 Fund; and 

3 ‘‘(ii) the amount the trustees of the 

4 Combined Benefit Fund estimate will be 

5 expended during the fiscal year to provide 

6 health benefits to beneficiaries who are un7 assigned beneficiaries solely as a result of 

8 the application of section 9706(h)(1) of the 

9 Internal Revenue Code of 1986, but only 

10 to the extent that such amount does not 

11 exceed the amounts described in subsection 

12 (i)(1)(A) that the Secretary estimates will 

13 be available to pay such estimated expendi14 tures. 

15 ‘‘(B) UNITED MINE WORKERS OF AMERICA

16 1992 BENEFIT PLAN.—A transfer to the United 

17 Mine Workers of America 1992 Benefit Plan, in 

18 an amount equal to the difference between— 

19 ‘‘(i) the amount that the trustees of 

20 the 1992 UMWA Benefit Plan estimate 

21 will be expended from the 1992 UMWA 

22 Benefit Plan during the next calendar year 

23 to provide the benefits required by the 

24 1992 UMWA Benefit Plan on the date of 

25 enactment of this subparagraph; minus 


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•S 3829 IS

1 ‘‘(ii) the amount that the trustees of 

2 the 1992 UMWA Benefit Plan estimate 

3 the 1992 UMWA Benefit Plan will receive 

4 during the next calendar year in— 

5 ‘‘(I) required monthly per bene6 ficiary premiums, including the 

7 amount of any security provided to 

8 the 1992 UMWA Benefit Plan that is 

9 available for use in the provision of 

10 benefits; and 

11 ‘‘(II) payments paid by Federal 

12 agencies in connection with benefits 

13 provided by the 1992 UMWA benefit 

14 plan. 

15 ‘‘(C) MULTIEMPLOYER HEALTH BENEFIT

16 PLAN.—A transfer to the Multiemployer Health 

17 Benefit Plan established after July 20, 1992, 

18 by the parties that are the settlors of the 1992 

19 UMWA Benefit Plan referred to in subpara20 graph (B) (referred to in this subparagraph and 

21 subparagraph (D) as ‘the Plan’), in an amount 

22 equal to the excess (if any) of— 

23 ‘‘(i) the amount that the trustees of 

24 the Plan estimate will be expended from 

25 the Plan during the next calendar year, to 


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1 provide benefits no greater than those pro2 vided by the Plan as of December 31, 

3 2006; over 

4 ‘‘(ii) the amount that the trustees es5 timated the Plan will receive during the 

6 next calendar year in payments paid by 

7 Federal agencies in connection with bene8 fits provided by the Plan. 

9 Such excess shall be calculated by taking into 

10 account only those beneficiaries actually en11 rolled in the Plan as of December 31, 2006, 

12 who are eligible to receive benefits under the 

13 Plan on the first day of the calendar year for 

14 which the transfer is made. 

15 ‘‘(D) INDIVIDUALS CONSIDERED EN16 ROLLED.—For purposes of subparagraph (C), 

17 any individual who was eligible to receive bene18 fits from the Plan as of the date of enactment 

19 of this subsection, even though benefits were 

20 being provided to the individual pursuant to a 

21 settlement agreement approved by order of a 

22 bankruptcy court entered on or before Sep23 tember 30, 2004, will be considered to be actu24 ally enrolled in the Plan and shall receive beneVerDate Aug 31 2005 02:13 Aug 10, 2006 Jkt 049200 PO 00000 Frm 00125 Fmt 6652 Sfmt 6201 E:\BILLS\S3829.IS S3829

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1 fits from the Plan beginning on December 31, 

2 2006. 

3 ‘‘(3) ADJUSTMENT.—If, for any fiscal year, the 

4 amount of a transfer under subparagraph (A), (B), 

5 or (C) of paragraph (2) is more or less than the 

6 amount required to be transferred under that sub7 paragraph, the Secretary shall appropriately adjust 

8 the amount transferred under that subparagraph for 

9 the next fiscal year. 

10 ‘‘(4) ADDITIONAL AMOUNTS.— 

11 ‘‘(A) PREVIOUSLY CREDITED INTEREST.— 

12 Notwithstanding any other provision of law, any 

13 interest credited to the fund that has not pre14 viously been transferred to the Combined Ben15 efit Fund referred to in paragraph (2)(A) under 

16 this section— 

17 ‘‘(i) shall be held in reserve by the 

18 Secretary until such time as necessary to 

19 make the payments under subparagraphs 

20 (A) and (B) of subsection (i)(1), as de21 scribed in clause (ii); and 

22 ‘‘(ii) in the event that the amounts de23 scribed in subsection (i)(1) are insufficient 

24 to make the maximum payments described 

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•S 3829 IS

1 section (i)(1), shall be used by the Sec2 retary to supplement the payments so that 

3 the maximum amount permitted under 

4 those paragraphs is paid. 

5 ‘‘(B) PREVIOUSLY ALLOCATED

6 AMOUNTS.—All amounts allocated under sub7 section (g)(2) before the date of enactment of 

8 this subparagraph for the program described in 

9 section 406, but not appropriated before that 

10 date, shall be available to the Secretary to make 

11 the transfers described in paragraph (2). 

12 ‘‘(C) ADEQUACY OF PREVIOUSLY CRED13 ITED INTEREST.—The Secretary shall— 

14 ‘‘(i) consult with the trustees of the 

15 plans described in paragraph (2) at rea16 sonable intervals; and 

17 ‘‘(ii) notify Congress if a determina18 tion is made that the amounts held in re19 serve under subparagraph (A) are insuffi20 cient to meet future requirements under 

21 subparagraph (A)(ii). 

22 ‘‘(D) ADDITIONAL RESERVE AMOUNTS.— 

23 In addition to amounts held in reserve under 

24 subparagraph (A), there is authorized to be ap25 propriated such sums as may be necessary for 


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•S 3829 IS

1 transfer to the fund to carry out the purposes 

2 of subparagraph (A)(ii). 

3 ‘‘(E) INAPPLICABILITY OF CAP.—The limi4 tation described in subsection (i)(3)(A) shall 

5 not apply to payments made from the reserve 

6 fund under this paragraph. 

7 ‘‘(5) LIMITATIONS.— 

8 ‘‘(A) AVAILABILITY OF FUNDS FOR NEXT

9 FISCAL YEAR.—The Secretary may make trans10 fers under subparagraphs (B) and (C) of para11 graph (2) for a calendar year only if the Sec12 retary determines, using actuarial projections 

13 provided by the trustees of the Combined Ben14 efit Fund referred to in paragraph (2)(A), that 

15 amounts will be available under paragraph (1), 

16 after the transfer, for the next fiscal year for 

17 making the transfer under paragraph (2)(A). 

18 ‘‘(B) RATE OF CONTRIBUTIONS OF OBLI19 GORS.— 

20 ‘‘(i) IN GENERAL.— 

21 ‘‘(I) RATE.—A transfer under 

22 paragraph (2)(C) shall not be made 

23 for a calendar year unless the persons 

24 that are obligated to contribute to the 

25 plan referred to in paragraph (2)(C) 


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•S 3829 IS

1 on the date of the transfer are obli2 gated to make the contributions at 

3 rates that are no less than those in ef4 fect on the date which is 30 days be5 fore the date of enactment of this sub6 section. 

7 ‘‘(II) APPLICATION.—The con8 tributions described in subclause (I) 

9 shall be applied first to the provision 

10 of benefits to those plan beneficiaries 

11 who are not described in paragraph 

12 (2)(C)(ii). 

13 ‘‘(ii) INITIAL CONTRIBUTIONS.— 

14 ‘‘(I) IN GENERAL.—From the 

15 date of enactment of the Surface Min16 ing Control and Reclamation Act 

17 Amendments of 2006 through Decem18 ber 31, 2010, the persons that, on the 

19 date of enactment of that Act, are ob20 ligated to contribute to the plan re21 ferred to in paragraph (2)(C) shall be 

22 obligated, collectively, to make con23 tributions equal to the amount de24 scribed in paragraph (2)(C), less the 


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1 amount actually transferred due to 

2 the operation of subparagraph (C). 

3 ‘‘(II) FIRST CALENDAR YEAR.— 

4 Calendar year 2006 is the first cal5 endar year for which contributions are 

6 required under this clause. 

7 ‘‘(III) AMOUNT OF CONTRIBU8 TION FOR 2006.—Except as provided 

9 in subclause (IV), the amount de10 scribed in paragraph (2)(C) for cal11 endar year 2006 shall be calculated as 

12 if paragraph (2)(C) had been in effect 

13 during 2005. 

14 ‘‘(IV) LIMITATION.—The con15 tributions required under this clause 

16 for calendar year 2006 shall not ex17 ceed the amount necessary for sol18 vency of the plan described in para19 graph (2)(C), measured as of Decem20 ber 31, 2006 and taking into account 

21 all assets held by the plan as of that 

22 date. 

23 ‘‘(iii) DIVISION.—The collective an24 nual contribution obligation required under 

25 clause (ii) shall be divided among the perVerDate Aug 31 2005 02:13 Aug 10, 2006 Jkt 049200 PO 00000 Frm 00130 Fmt 6652 Sfmt 6201 E:\BILLS\S3829.IS S3829

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•S 3829 IS

1 sons subject to the obligation, and applied 

2 uniformly, based on the hours worked for 

3 which contributions referred to in clause 

4 (i) would be owed. 

5 ‘‘(C) PHASE-IN OF TRANSFERS.—For each 

6 of calendar years 2008 through 2010, the 

7 transfers required under subparagraphs (B) 

8 and (C) of paragraph (2) shall equal the fol9 lowing amounts: 

10 ‘‘(i) For calendar year 2008, the Sec11 retary shall make transfers equal to 25 

12 percent of the amounts that would other13 wise be required under subparagraphs (B) 

14 and (C) of paragraph (2). 

15 ‘‘(ii) For calendar year 2009, the Sec16 retary shall make transfers equal to 50 

17 percent of the amounts that would other18 wise be required under subparagraphs (B) 

19 and (C) of paragraph (2). 

20 ‘‘(iii) For calendar year 2010, the 

21 Secretary shall make transfers equal to 75 

22 percent of the amounts that would other23 wise be required under subparagraphs (B) 

24 and (C) of paragraph (2). 

25 ‘‘(i) FUNDING.— 


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1 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

2 out of any funds in the Treasury not otherwise ap3 propriated, the Secretary of the Treasury shall 

4 transfer to the plans described in subsection (h)(2) 

5 such sums as are necessary to pay the following 

6 amounts: 

7 ‘‘(A) To the Combined Fund (as defined in 

8 section 9701(a)(5) of the Internal Revenue 

9 Code of 1986 and referred to in this paragraph 

10 as the ‘Combined Fund’), the amount that the 

11 trustees of the Combined Fund estimate will be 

12 expended from premium accounts maintained 

13 by the Combined Fund for the fiscal year to 

14 provide benefits for beneficiaries who are unas15 signed beneficiaries solely as a result of the ap16 plication of section 9706(h)(1) of the Internal 

17 Revenue Code of 1986, subject to the following 

18 limitations: 

19 ‘‘(i) For fiscal year 2008, the amount 

20 paid under this subparagraph shall equal— 

21 ‘‘(I) the amount described in sub22 paragraph (A); minus 

23 ‘‘(II) the amounts required under 

24 section 9706(h)(3)(A) of the Internal 

25 Revenue Code of 1986. 


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1 ‘‘(ii) For fiscal year 2009, the amount 

2 paid under this subparagraph shall equal— 

3 ‘‘(I) the amount described in sub4 paragraph (A); minus 

5 ‘‘(II) the amounts required under 

6 section 9706(h)(3)(B) of the Internal 

7 Revenue Code of 1986. 

8 ‘‘(iii) For fiscal year 2010, the 

9 amount paid under this subparagraph shall 

10 equal— 

11 ‘‘(I) the amount described in sub12 paragraph (A); minus 

13 ‘‘(II) the amounts required under 

14 section 9706(h)(3)(C) of the Internal 

15 Revenue Code of 1986. 

16 ‘‘(B) On certification by the trustees of 

17 any plan described in subsection (h)(2) that the 

18 amount available for transfer by the Secretary 

19 pursuant to this section (determined after ap20 plication of any limitation under subsection 

21 (h)(5)) is less than the amount required to be 

22 transferred, to the plan the amount necessary 

23 to meet the requirement of subsection (h)(2). 

24 ‘‘(C) To the Combined Fund, $9,000,000 

25 on October 1, 2007, $9,000,000 on October 1, 


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•S 3829 IS

1 2008, and $9,000,000 on October 1, 2009 

2 (which amounts shall not be exceeded) to pro3 vide a refund of any premium (as described in 

4 section 9704(a) of the Internal Revenue Code 

5 of 1986) paid on or before September 7, 2000, 

6 to the Combined Fund, plus interest on the pre7 mium calculated at the rate of 7.5 percent per 

8 year, on a proportional basis and to be paid not 

9 later than 60 days after the date on which each 

10 payment is received by the Combined Fund, to 

11 those signatory operators (to the extent that 

12 the Combined Fund has not previously returned 

13 the premium amounts to the operators), or any 

14 related persons to the operators (as defined in 

15 section 9701(c) of the Internal Revenue Code of 

16 1986), or their heirs, successors, or assigns who 

17 have been denied the refunds as the result of 

18 final judgments or settlements if— 

19 ‘‘(i) prior to the date of enactment of 

20 this paragraph, the signatory operator (or 

21 any related person to the operator)— 

22 ‘‘(I) had all of its beneficiary as23 signments made under section 9706 of 

24 the Internal Revenue Code of 1986 


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•S 3829 IS

1 voided by the Commissioner of the So2 cial Security Administration; and 

3 ‘‘(II) was subject to a final judg4 ment or final settlement of litigation 

5 adverse to a claim by the operator 

6 that the assignment of beneficiaries 

7 under section 9706 of the Internal 

8 Revenue Code of 1986 was unconsti9 tutional as applied to the operator; 

10 and 

11 ‘‘(ii) on or before September 7, 2000, 

12 the signatory operator (or any related per13 son to the operator) had paid to the Com14 bined Fund any premium amount that had 

15 not been refunded. 

16 ‘‘(2) PAYMENTS TO STATES AND INDIAN

17 TRIBES.—Subject to paragraph (3), out of any funds 

18 in the Treasury not otherwise appropriated, the Sec19 retary of the Treasury shall transfer to the Sec20 retary of the Interior for distribution to States and 

21 Indian tribes such sums as are necessary to pay 

22 amounts described in paragraphs (1)(A) and (2)(A) 

23 of section 411(h). 

24 ‘‘(3) LIMITATIONS.— 


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•S 3829 IS

1 ‘‘(A) CAP.—The total amount transferred 

2 under this subsection for any fiscal year shall 

3 not exceed $490,000,000. 

4 ‘‘(B) INSUFFICIENT AMOUNTS.—In a case 

5 in which the amount required to be transferred 

6 without regard to this paragraph exceeds the 

7 maximum annual limitation in subparagraph 

8 (A), the Secretary shall adjust the transfers of 

9 funds so that— 

10 ‘‘(i) each transfer for the fiscal year is 

11 a percentage of the amount described; 

12 ‘‘(ii) the amount is determined with13 out regard to subsection (h)(5)(A); and 

14 ‘‘(iii) the percentage transferred is the 

15 same for all transfers made under this sub16 section for the fiscal year. 

17 ‘‘(4) AVAILABILITY OF FUNDS.—Funds shall be 

18 transferred under paragraph (1) and (2) beginning 

19 in fiscal year 2008 and each fiscal year thereafter, 

20 and shall remain available until expended.’’. 

21 SEC. 313. OBJECTIVES OF FUND. 

22 Section 403 of the Surface Mining Control and Rec23 lamation Act of 1977 (30 U.S.C. 1233) is amended— 

24 (1) in subsection (a)— 

25 (A) in paragraph (1)— 


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1 (i) by striking ‘‘(1) the protection’’ 

2 and inserting the following: 

3 ‘‘(1)(A) the protection;’’; 

4 (ii) in subparagraph (A) (as des5 ignated by clause (i)), by striking ‘‘general 

6 welfare,’’; and 

7 (iii) by adding at the end the fol8 lowing: 

9 ‘‘(B) the restoration of land and water re10 sources and the environment that— 

11 ‘‘(i) have been degraded by the adverse ef12 fects of coal mining practices; and 

13 ‘‘(ii) are adjacent to a site that has been 

14 or will be remediated under subparagraph 

15 (A);’’; 

16 (B) in paragraph (2)— 

17 (i) by striking ‘‘(2) the protection’’ 

18 and inserting the following: 

19 ‘‘(2)(A) the protection’’; 

20 (ii) in subparagraph (A) (as des21 ignated by clause (i), by striking ‘‘health, 

22 safety, and general welfare’’ and inserting 

23 ‘‘health and safety’’; and 

24 (iii) by adding at the end the fol25 lowing: 


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1 ‘‘(B) the restoration of land and water re2 sources and the environment that— 

3 ‘‘(i) have been degraded by the adverse ef4 fects of coal mining practices; and 

5 ‘‘(ii) are adjacent to a site that has been 

6 or will be remediated under subparagraph (A); 

7 and’’; 

8 (C) in paragraph (3), by striking the semi9 colon at the end and inserting a period; and 

10 (D) by striking paragraphs (4) and (5); 

11 (2) in subsection (b)— 

12 (A) by striking the subsection heading and 

13 inserting ‘‘WATER SUPPLY RESTORATION.—’’; 

14 and 

15 (B) in paragraph (1), by striking ‘‘up to 

16 30 percent of the’’; and 

17 (3) in the second sentence of subsection (c), by 

18 inserting ‘‘, subject to the approval of the Sec19 retary,’’ after ‘‘amendments’’. 

20 SEC. 314. RECLAMATION OF RURAL LAND. 

21 (a) ADMINISTRATION.—Section 406(h) of the Sur22 face Mining Control and Reclamation Act of 1977 (30 

23 U.S.C. 1236(h)) is amended by striking ‘‘Soil Conserva24 tion Service’’ and inserting ‘‘Natural Resources Conserva25 tion Service’’. 


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1 (b) AUTHORIZATION OF APPROPRIATIONS FOR CAR2 RYING OUT RURAL LAND RECLAMATION.—Section 406 of 

3 the Surface Mining Control and Reclamation Act of 1977 

4 (30 U.S.C. 1236) is amended by adding at the end the 

5 following: 

6 ‘‘(i) There are authorized to be appropriated to the 

7 Secretary of Agriculture, from amounts in the Treasury 

8 other than amounts in the fund, such sums as may be 

9 necessary to carry out this section.’’. 

10 SEC. 315. LIENS. 

11 Section 408(a) of the Surface Mining Control and 

12 Reclamation Act of 1977 (30 U.S.C. 1238) is amended 

13 in the last sentence by striking ‘‘who owned the surface 

14 prior to May 2, 1977, and’’. 

15 SEC. 316. CERTIFICATION. 

16 Section 411 of the Surface Mining Control and Rec17 lamation Act of 1977 (30 U.S.C. 1240a) is amended— 

18 (1) in subsection (a)— 

19 (A) by inserting ‘‘(1)’’ before the first sen20 tence; and 

21 (B) by adding at the end the following: 

22 ‘‘(2)(A) The Secretary may, on the initiative of the 

23 Secretary, make the certification referred to in paragraph 

24 (1) on behalf of any State or Indian tribe referred to in 

25 paragraph (1) if on the basis of the inventory referred to 


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1 in section 403(c) all reclamation projects relating to the 

2 priorities described in section 403(a) for eligible land and 

3 water pursuant to section 404 in the State or tribe have 

4 been completed. 

5 ‘‘(B) The Secretary shall only make the certification 

6 after notice in the Federal Register and opportunity for 

7 public comment.’’; and 

8 (2) by adding at the end the following: 

9 ‘‘(h) PAYMENTS TO STATES AND INDIAN TRIBES.— 

10 ‘‘(1) IN GENERAL.— 

11 ‘‘(A) PAYMENTS.— 

12 ‘‘(i) IN GENERAL.—Notwithstanding 

13 section 401(f)(3)(B), from funds referred 

14 to in section 402(i)(2), the Secretary shall 

15 make payments to States or Indian tribes 

16 for the amount due for the aggregate un17 appropriated amount allocated to the State 

18 or Indian tribe under subparagraph (A) or 

19 (B) of section 402(g)(1). 

20 ‘‘(ii) CONVERSION AS EQUIVALENT

21 PAYMENTS.—Amounts allocated under sub22 paragraphs (A) or (B) of section 402(g)(1) 

23 shall be reallocated to the allocation estab24 lished in section 402(g)(5) in amounts 


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1 equivalent to payments made to States or 

2 Indian tribes under this paragraph. 

3 ‘‘(B) AMOUNT DUE.—In this paragraph, 

4 the term ‘amount due’ means the unappropri5 ated amount allocated to a State or Indian tribe 

6 before October 1, 2007, under subparagraph 

7 (A) or (B) of section 402(g)(1). 

8 ‘‘(C) SCHEDULE.—Payments under sub9 paragraph (A) shall be made in 7 equal annual 

10 installments, beginning with fiscal year 2008. 

11 ‘‘(D) USE OF FUNDS.— 

12 ‘‘(i) CERTIFIED STATES AND INDIAN

13 TRIBES.—A State or Indian tribe that 

14 makes a certification under subsection (a) 

15 in which the Secretary concurs shall use 

16 any amounts provided under this para17 graph for the purposes established by the 

18 State legislature or tribal council of the In19 dian tribe, with priority given for address20 ing the impacts of mineral development. 

21 ‘‘(ii) UNCERTIFIED STATES AND IN22 DIAN TRIBES.—A State or Indian tribe 

23 that has not made a certification under 

24 subsection (a) in which the Secretary has 

25 concurred shall use any amounts provided 


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1 under this paragraph for the purposes de2 scribed in section 403. 

3 ‘‘(2) SUBSEQUENT STATE AND INDIAN TRIBE

4 SHARE FOR CERTIFIED STATES AND INDIAN

5 TRIBES.— 

6 ‘‘(A) IN GENERAL.—Notwithstanding sec7 tion 401(f)(3)(B), from funds referred to in 

8 section 402(i)(2), the Secretary shall pay to 

9 each certified State or Indian tribe an amount 

10 equal to the sum of the aggregate unappropri11 ated amount allocated on or after October 1, 

12 2007, to the certified State or Indian tribe 

13 under subparagraph (A) or (B) of section 

14 402(g)(1). 

15 ‘‘(B) CERTIFIED STATE OR INDIAN TRIBE

16 DEFINED.—In this paragraph the term ‘cer17 tified State or Indian tribe’ means a State or 

18 Indian tribe for which a certification is made 

19 under subsection (a) in which the Secretary 

20 concurs. 

21 ‘‘(3) MANNER OF PAYMENT.— 

22 ‘‘(A) IN GENERAL.—Subject to subpara23 graph (B), payments to States or Indian tribes 

24 under this subsection shall be made without re25 gard to any limitation in section 401(d) and 


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1 concurrently with payments to States under 

2 that section. 

3 ‘‘(B) INITIAL PAYMENTS.—The first 3 pay4 ments made to any State or Indian tribe shall 

5 be reduced to 25 percent, 50 percent, and 75 

6 percent, respectively, of the amounts otherwise 

7 required under paragraph (2)(A). 

8 ‘‘(C) INSTALLMENTS.—Amounts withheld 

9 from the first 3 annual installments as provided 

10 under subparagraph (B) shall be paid in 2 

11 equal annual installments beginning with fiscal 

12 year 2018. 

13 ‘‘(4) REALLOCATION.— 

14 ‘‘(A) IN GENERAL.—The amount allocated 

15 to any State or Indian tribe under subpara16 graph (A) or (B) of section 402(g)(1) that is 

17 paid to the State or Indian tribe as a result of 

18 a payment under paragraph (1) or (2) shall be 

19 reallocated and available for grants under sec20 tion 402(g)(5). 

21 ‘‘(B) ALLOCATION.—The grants shall be 

22 allocated based on the amount of coal histori23 cally produced before August 3, 1977, in the 

24 same manner as under section 402(g)(5).’’. 


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1 SEC. 317. REMINING INCENTIVES. 

2 Title IV of the Surface Mining Control and Reclama3 tion Act of 1977 (30 U.S.C. 1231 et seq.) is amended by 

4 adding at the following: 

5 ‘‘SEC. 415. REMINING INCENTIVES. 

6 ‘‘(a) IN GENERAL.—Notwithstanding any other pro7 vision of this Act, the Secretary may, after opportunity 

8 for public comment, promulgate regulations that describe 

9 conditions under which amounts in the fund may be used 

10 to provide incentives to promote remining of eligible land 

11 under section 404 in a manner that leverages the use of 

12 amounts from the fund to achieve more reclamation with 

13 respect to the eligible land than would be achieved without 

14 the incentives. 

15 ‘‘(b) REQUIREMENTS.—Any regulations promulgated 

16 under subsection (a) shall specify that the incentives shall 

17 apply only if the Secretary determines, with the concur18 rence of the State regulatory authority referred to in title 

19 V, that, without the incentives, the eligible land would not 

20 be likely to be remined and reclaimed. 

21 ‘‘(c) INCENTIVES.— 

22 ‘‘(1) IN GENERAL.—Incentives that may be con23 sidered for inclusion in the regulations promulgated 

24 under subsection (a) include, but are not limited 

25 to— 


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1 ‘‘(A) a rebate or waiver of the reclamation 

2 fees required under section 402(a); and 

3 ‘‘(B) the use of amounts in the fund to 

4 provide financial assurance for remining oper5 ations in lieu of all or a portion of the perform6 ance bonds required under section 509. 

7 ‘‘(2) LIMITATIONS.— 

8 ‘‘(A) USE.—A rebate or waiver under 

9 paragraph (1)(A) shall be used only for oper10 ations that— 

11 ‘‘(i) remove or reprocess abandoned 

12 coal mine waste; or 

13 ‘‘(ii) conduct remining activities that 

14 meet the priorities specified in paragraph 

15 (1) or (2) of section 403(a). 

16 ‘‘(B) AMOUNT.—The amount of a rebate 

17 or waiver provided as an incentive under para18 graph (1)(A) to remine or reclaim eligible land 

19 shall not exceed the estimated cost of reclaim20 ing the eligible land under this section.’’. 

21 SEC. 318. EXTENSION OF LIMITATION ON APPLICATION OF 

22 PROHIBITION ON ISSUANCE OF PERMIT. 

23 Section 510(e) of the Surface Mining Control and 

24 Reclamation Act of 1977 (30 U.S.C. 1260(e)) is amended 

25 by striking the last sentence. 


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1 SEC. 319. TRIBAL REGULATION OF SURFACE COAL MINING 

2 AND RECLAMATION OPERATIONS. 

3 (a) IN GENERAL.—Section 710 of the Surface Min4 ing Control and Reclamation Act of 1977 (30 U.S.C. 

5 1300) is amended by adding at the end the following: 

6 ‘‘(j) TRIBAL REGULATORY AUTHORITY.— 

7 ‘‘(1) TRIBAL REGULATORY PROGRAMS.— 

8 ‘‘(A) IN GENERAL.—Notwithstanding any 

9 other provision of law, an Indian tribe may 

10 apply for, and obtain the approval of, a tribal 

11 program under section 503 regulating in whole 

12 or in part surface coal mining and reclamation 

13 operations on reservation land under the juris14 diction of the Indian tribe using the procedures 

15 of section 504(e). 

16 ‘‘(B) REFERENCES TO STATE.—For pur17 poses of this subsection and the implementation 

18 and administration of a tribal program under 

19 title V, any reference to a ‘State’ in this Act 

20 shall be considered to be a reference to a ‘tribe’. 

21 ‘‘(2) CONFLICTS OF INTEREST.— 

22 ‘‘(A) IN GENERAL.—The fact that an indi23 vidual is a member of an Indian tribe does not 

24 in itself constitute a violation of section 201(f). 

25 ‘‘(B) EMPLOYEES OF TRIBAL REGULATORY

26 AUTHORITY.—Any employee of a tribal reguVerDate Aug 31 2005 02:13 Aug 10, 2006 Jkt 049200 PO 00000 Frm 00146 Fmt 6652 Sfmt 6201 E:\BILLS\S3829.IS S3829

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1 latory authority shall not be eligible for a per 

2 capita distribution of any proceeds from coal 

3 mining operations conducted on Indian reserva4 tion lands under this Act. 

5 ‘‘(3) SOVEREIGN IMMUNITY.—To receive pri6 mary regulatory authority under section 504(e), an 

7 Indian tribe shall waive sovereign immunity for pur8 poses of section 520 and paragraph (4). 

9 ‘‘(4) JUDICIAL REVIEW.— 

10 ‘‘(A) CIVIL ACTIONS.— 

11 ‘‘(i) IN GENERAL.—After exhausting 

12 all tribal remedies with respect to a civil 

13 action arising under a tribal program ap14 proved under section 504(e), an interested 

15 party may file a petition for judicial review 

16 of the civil action in the United States cir17 cuit court for the circuit in which the sur18 face coal mining operation named in the 

19 petition is located. 

20 ‘‘(ii) SCOPE OF REVIEW.— 

21 ‘‘(I) QUESTIONS OF LAW.—The 

22 United States circuit court shall re23 view de novo any questions of law 

24 under clause (i). 


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1 ‘‘(II) FINDINGS OF FACT.—The 

2 United States circuit court shall re3 view findings of fact under clause (i) 

4 using a clearly erroneous standard. 

5 ‘‘(B) CRIMINAL ACTIONS.—Any criminal 

6 action brought under section 518 with respect 

7 to surface coal mining or reclamation oper8 ations on Indian reservation lands shall be 

9 brought in— 

10 ‘‘(i) the United States District Court 

11 for the District of Columbia; or 

12 ‘‘(ii) the United States district court 

13 in which the criminal activity is alleged to 

14 have occurred. 

15 ‘‘(5) GRANTS.— 

16 ‘‘(A) IN GENERAL.—Except as provided in 

17 subparagraph (B), grants for developing, ad18 ministering, and enforcing tribal programs ap19 proved in accordance with section 504(e) shall 

20 be provided to an Indian tribe in accordance 

21 with section 705. 

22 ‘‘(B) EXCEPTION.—Notwithstanding sub23 paragraph (A), the Federal share of the costs 

24 of developing, administering, and enforcing an 

25 approved tribal program shall be 100 percent. 


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1 ‘‘(6) REPORT.—Not later than 18 months after 

2 the date on which a tribal program is approved 

3 under subsection (e) of section 504, the Secretary 

4 shall submit to the appropriate committees of Con5 gress a report, developed in cooperation with the ap6 plicable Indian tribe, on the tribal program that in7 cludes a recommendation of the Secretary on wheth8 er primary regulatory authority under that sub9 section should be expanded to include additional In10 dian lands.’’. 

11 (b) CONFORMING AMENDMENT.—Section 710(i) of 

12 the Surface Mining Control and Reclamation Act of 1977 

13 (30 U.S.C. 1300(i)) is amended in the first sentence by 

14 striking ‘‘, except’’ and all that follows through ‘‘section 

15 503’’. 

16 Subtitle B—Coal Industry Retiree 

17 Health Benefit Act 

18 SEC. 321. CERTAIN RELATED PERSONS AND SUCCESSORS 

19 IN INTEREST RELIEVED OF LIABILITY IF PRE20 MIUMS PREPAID. 

21 (a) COMBINED BENEFIT FUND.— 

22 (1) IN GENERAL.—Section 9704 of the Internal 

23 Revenue Code of 1986 (relating to liability of as24 signed operators) is amended by adding at the end 

25 the following new subsection: 


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1 ‘‘(j) PREPAYMENT OF PREMIUM LIABILITY.— 

2 ‘‘(1) IN GENERAL.—If— 

3 ‘‘(A) a payment meeting the requirements 

4 of paragraph (3) is made to the Combined 

5 Fund by or on behalf of— 

6 ‘‘(i) any assigned operator to which 

7 this subsection applies, or 

8 ‘‘(ii) any related person to any as9 signed operator described in clause (i), and 

10 ‘‘(B) the common parent of the controlled 

11 group of corporations described in paragraph 

12 (2)(B) is jointly and severally liable for any pre13 mium under this section which (but for this 

14 subsection) would be required to be paid by the 

15 assigned operator or related person, 

16 then such common parent (and no other person) 

17 shall be liable for such premium. 

18 ‘‘(2) ASSIGNED OPERATORS TO WHICH SUB19 SECTION APPLIES.— 

20 ‘‘(A) IN GENERAL.—This subsection shall 

21 apply to any assigned operator if— 

22 ‘‘(i) the assigned operator (or a re23 lated person to the assigned operator)— 

24 ‘‘(I) made contributions to the 

25 1950 UMWA Benefit Plan and the 


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1 1974 UMWA Benefit Plan for em2 ployment during the period covered by 

3 the 1988 agreement; and 

4 ‘‘(II) is not a 1988 agreement 

5 operator, 

6 ‘‘(ii) the assigned operator (and all re7 lated persons to the assigned operator) are 

8 not actively engaged in the production of 

9 coal as of July 1, 2005, and 

10 ‘‘(iii) the assigned operator was, as of 

11 July 20, 1992, a member of a controlled 

12 group of corporations described in sub13 paragraph (B). 

14 ‘‘(B) CONTROLLED GROUP OF CORPORA15 TIONS.—A controlled group of corporations is 

16 described in this subparagraph if the common 

17 parent of such group is a corporation the shares 

18 of which are publicly traded on a United States 

19 exchange. 

20 ‘‘(C) COORDINATION WITH REPEAL OF AS21 SIGNMENTS.—A person shall not fail to be 

22 treated as an assigned operator to which this 

23 subsection applies solely because the person 

24 ceases to be an assigned operator by reason of 

25 section 9706(h)(1) if the person otherwise 


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1 meets the requirements of this subsection and 

2 is liable for the payment of premiums under 

3 section 9706(h)(3). 

4 ‘‘(D) CONTROLLED GROUP.—For purposes 

5 of this subsection, the term ‘controlled group of 

6 corporations’ has the meaning given such term 

7 by section 52(a). 

8 ‘‘(3) REQUIREMENTS.—A payment meets the 

9 requirements of this paragraph if— 

10 ‘‘(A) the amount of the payment is not less 

11 than the present value of the total premium li12 ability under this chapter with respect to the 

13 Combined Fund of the assigned operators or re14 lated persons described in paragraph (1) or 

15 their assignees, as determined by the operator’s 

16 or related person’s enrolled actuary (as defined 

17 in section 7701(a)(35)) using actuarial methods 

18 and assumptions each of which is reasonable 

19 and which are reasonable in the aggregate, as 

20 determined by such enrolled actuary; 

21 ‘‘(B) such enrolled actuary files with the 

22 Secretary of Labor a signed actuarial report 

23 containing— 

24 ‘‘(i) the date of the actuarial valuation 

25 applicable to the report; and 


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1 ‘‘(ii) a statement by the enrolled actu2 ary signing the report that, to the best of 

3 the actuary’s knowledge, the report is com4 plete and accurate and that in the actu5 ary’s opinion the actuarial assumptions 

6 used are in the aggregate reasonably re7 lated to the experience of the operator and 

8 to reasonable expectations; and 

9 ‘‘(C) 90 calendar days have elapsed after 

10 the report required by subparagraph (B) is filed 

11 with the Secretary of Labor, and the Secretary 

12 of Labor has not notified the assigned operator 

13 in writing that the requirements of this para14 graph have not been satisfied. 

15 ‘‘(4) USE OF PREPAYMENT.—The Combined 

16 Fund shall— 

17 ‘‘(A) establish and maintain an account for 

18 each assigned operator or related person by, or 

19 on whose behalf, a payment described in para20 graph (3) was made, 

21 ‘‘(B) credit such account with such pay22 ment (and any earnings thereon), and 

23 ‘‘(C) use all amounts in such account ex24 clusively to pay premiums that would (but for 


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1 this subsection) be required to be paid by the 

2 assigned operator. 

3 Upon termination of the obligations for the premium 

4 liability of any assigned operator or related person 

5 for which such account is maintained, all funds re6 maining in such account (and earnings thereon) 

7 shall be refunded to such person as may be des8 ignated by the common parent described in para9 graph (1)(B).’’. 

10 (b) INDIVIDUAL EMPLOYER PLANS.—Section 

11 9711(c) of the Internal Revenue Code of 1986 (relating 

12 to joint and several liability) is amended to read as follows: 

13 ‘‘(c) JOINT AND SEVERAL LIABILITY OF RELATED

14 PERSONS.— 

15 ‘‘(1) IN GENERAL.—Except as provided in para16 graph (2), each related person of a last signatory op17 erator to which subsection (a) or (b) applies shall be 

18 jointly and severally liable with the last signatory op19 erator for the provision of health care coverage de20 scribed in subsection (a) or (b). 

21 ‘‘(2) LIABILITY LIMITED IF SECURITY PRO22 VIDED.—If— 

23 ‘‘(A) security meeting the requirements of 

24 paragraph (3) is provided by or on behalf of— 


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1 ‘‘(i) any last signatory operator which 

2 is an assigned operator described in section 

3 9704(j)(2), or 

4 ‘‘(ii) any related person to any last 

5 signatory operator described in clause (i), 

6 and 

7 ‘‘(B) the common parent of the controlled 

8 group of corporations described in section 

9 9704(j)(2)(B) is jointly and severally liable for 

10 the provision of health care under this section 

11 which, but for this paragraph, would be re12 quired to be provided by the last signatory op13 erator or related person, 

14 then, as of the date the security is provided, such 

15 common parent (and no other person) shall be liable 

16 for the provision of health care under this section 

17 which the last signatory operator or related person 

18 would otherwise be required to provide. Security may 

19 be provided under this paragraph without regard to 

20 whether a payment was made under section 9704(j). 

21 ‘‘(3) SECURITY.—Security meets the require22 ments of this paragraph if— 

23 ‘‘(A) the security— 

24 ‘‘(i) is in the form of a bond, letter of 

25 credit, or cash escrow, 


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1 ‘‘(ii) is provided to the trustees of the 

2 1992 UMWA Benefit Plan solely for the 

3 purpose of paying premiums for bene4 ficiaries who would be described in section 

5 9712(b)(2)(B) if the requirements of this 

6 section were not met by the last signatory 

7 operator, and 

8 ‘‘(iii) is in an amount equal to 1 year 

9 of liability of the last signatory operator 

10 under this section, determined by using the 

11 average cost of such operator’s liability 

12 during the prior 3 calendar years; 

13 ‘‘(B) the security is in addition to any 

14 other security required under any other provi15 sion of this title; and 

16 ‘‘(C) the security remains in place for 5 

17 years. 

18 ‘‘(4) REFUNDS OF SECURITY.—The remaining 

19 amount of any security provided under this sub20 section (and earnings thereon) shall be refunded to 

21 the last signatory operator as of the earlier of— 

22 ‘‘(A) the termination of the obligations of 

23 the last signatory operator under this section, 

24 or 


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1 ‘‘(B) the end of the 5-year period described 

2 in paragraph (4)(C).’’. 

3 (c) 1992 UMWA BENEFIT PLAN.—Section 

4 9712(d)(4) of the Internal Revenue Code of 1986 (relating 

5 to joint and several liability) is amended by adding at the 

6 end the following new sentence: ‘‘The provisions of section 

7 9711(c)(2) shall apply to any last signatory operator de8 scribed in such section (without regard to whether security 

9 is provided under such section, a payment is made under 

10 section 9704(j), or both) and if security meeting the re11 quirements of section 9711(c)(3) is provided, the common 

12 parent described in section 9711(c)(2)(B) shall be exclu13 sively responsible for any liability for premiums under this 

14 section which, but for this sentence, would be required to 

15 be paid by the last signatory operator or any related per16 son.’’. 

17 (d) SUCCESSOR IN INTEREST.—Section 9701(c) of 

18 the Internal Revenue Code of 1986 (relating to terms re19 lating to operators) is amended by adding at the end the 

20 following new paragraph: 

21 ‘‘(8) SUCCESSOR IN INTEREST.— 

22 ‘‘(A) SAFE HARBOR.—The term ‘successor 

23 in interest’ shall not include any person who— 


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1 ‘‘(i) is an unrelated person to an eligi2 ble seller described in subparagraph (C); 

3 and 

4 ‘‘(ii) purchases for fair market value 

5 assets, or all of the stock, of a related per6 son to such seller, in a bona fide, arm’s7 length sale. 

8 ‘‘(B) UNRELATED PERSON.—The term 

9 ‘unrelated person’ means a purchaser who does 

10 not bear a relationship to the eligible seller de11 scribed in section 267(b). 

12 ‘‘(C) ELIGIBLE SELLER.—For purposes of 

13 this paragraph, the term ‘eligible seller’ means 

14 an assigned operator described in section 

15 9704(j)(2) or a related person to such assigned 

16 operator.’’. 

17 (e) EFFECTIVE DATE.—The amendments made by 

18 this section shall take effect on the date of the enactment 

19 of this Act, except that the amendment made by sub20 section (d) shall apply to transactions after the date of 

21 the enactment of this Act. 

22 SEC. 322. TRANSFERS TO FUNDS; PREMIUM RELIEF. 

23 (a) COMBINED FUND.— 

24 (1) FEDERAL TRANSFERS.—Section 9705(b) of 

25 the Internal Revenue Code of 1986 (relating to 


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1 transfers from Abandoned Mine Reclamation Fund) 

2 is amended— 

3 (A) in paragraph (1), by striking ‘‘section 

4 402(h)’’ and inserting ‘‘subsections (h) and (i) 

5 of section 402’’; 

6 (B) by striking paragraph (2) and insert7 ing the following new paragraph: 

8 ‘‘(2) USE OF FUNDS.—Any amount transferred 

9 under paragraph (1) for any fiscal year shall be used 

10 to pay benefits and administrative costs of bene11 ficiaries of the Combined Fund or for such other 

12 purposes as are specifically provided in the Acts de13 scribed in paragraph (1).’’; and 

14 (C) by striking ‘‘FROM ABANDONED MINE

15 RECLAMATION FUND’’. 

16 (2) MODIFICATIONS OF PREMIUMS TO REFLECT

17 FEDERAL TRANSFERS.— 

18 (A) ELIMINATION OF UNASSIGNED BENE19 FICIARIES PREMIUM.—Section 9704(d) of such 

20 Code (establishing unassigned beneficiaries pre21 mium) is amended to read as follows: 

22 ‘‘(d) UNASSIGNED BENEFICIARIES PREMIUM.— 

23 ‘‘(1) PLAN YEARS ENDING ON OR BEFORE SEP24 TEMBER 30, 2006.—For plan years ending on or be25 fore September 30, 2006, the unassigned beneVerDate Aug 31 2005 02:13 Aug 10, 2006 Jkt 049200 PO 00000 Frm 00159 Fmt 6652 Sfmt 6201 E:\BILLS\S3829.IS S3829

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1 ficiaries premium for any assigned operator shall be 

2 equal to the applicable percentage of the product of 

3 the per beneficiary premium for the plan year multi4 plied by the number of eligible beneficiaries who are 

5 not assigned under section 9706 to any person for 

6 such plan year. 

7 ‘‘(2) PLAN YEARS BEGINNING ON OR AFTER OC8 TOBER 1, 2006.— 

9 ‘‘(A) IN GENERAL.—For plan years begin10 ning on or after October 1, 2006, subject to 

11 subparagraph (B), there shall be no unassigned 

12 beneficiaries premium, and benefit costs with 

13 respect to eligible beneficiaries who are not as14 signed under section 9706 to any person for 

15 any such plan year shall be paid from amounts 

16 transferred under section 9705(b). 

17 ‘‘(B) INADEQUATE TRANSFERS.—If, for 

18 any plan year beginning on or after October 1, 

19 2006, the amounts transferred under section 

20 9705(b) are less than the amounts required to 

21 be transferred to the Combined Fund under 

22 subsection (h)(2)(A) or (i) of section 402 of the 

23 Surface Mining Control and Reclamation Act of 

24 1977 (30 U.S.C. 1232)), then the unassigned 

25 beneficiaries premium for any assigned operator 


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1 shall be equal to the operator’s applicable per2 centage of the amount required to be so trans3 ferred which was not so transferred.’’. 

4 (B) PREMIUM ACCOUNTS.— 

5 (i) CREDITING OF ACCOUNTS.—Sec6 tion 9704(e)(1) of such Code (relating to 

7 premium accounts; adjustments) is amend8 ed by inserting ‘‘and amounts transferred 

9 under section 9705(b)’’ after ‘‘premiums 

10 received’’. 

11 (ii) SURPLUSES ATTRIBUTABLE TO

12 PUBLIC FUNDING.—Section 9704(e)(3)(A) 

13 of such Code is amended by adding at the 

14 end the following new sentence: ‘‘Amounts 

15 credited to an account from amounts 

16 transferred under section 9705(b) shall not 

17 be taken into account in determining 

18 whether there is a surplus in the account 

19 for purposes of this paragraph.’’ 

20 (C) APPLICABLE PERCENTAGE.—Section 

21 9704(f)(2) of such Code (relating to annual ad22 justments) is amended by adding at the end the 

23 following new subparagraph: 

24 ‘‘(C) In the case of plan years beginning 

25 on or after October 1, 2007, the total number 


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1 of assigned eligible beneficiaries shall be re2 duced by the eligible beneficiaries whose assign3 ments have been revoked under section 

4 9706(h).’’. 

5 (3) ASSIGNMENTS AND REASSIGNMENT.—Sec6 tion 9706 of the Internal Revenue Code of 1986 (re7 lating to assignment of eligible beneficiaries) is 

8 amended by adding at the end the following: 

9 ‘‘(h) ASSIGNMENTS AS OF OCTOBER 1, 2007.— 

10 ‘‘(1) IN GENERAL.—Subject to the premium ob11 ligation set forth in paragraph (3), the Commis12 sioner of Social Security shall— 

13 ‘‘(A) revoke all assignments to persons 

14 other than 1988 agreement operators for pur15 poses of assessing premiums for plan years be16 ginning on and after October 1, 2007; and 

17 ‘‘(B) make no further assignments to per18 sons other than 1988 agreement operators, ex19 cept that no individual who becomes an unas20 signed beneficiary by reason of subparagraph 

21 (A) may be assigned to a 1988 agreement oper22 ator. 

23 ‘‘(2) REASSIGNMENT UPON PURCHASE.—This 

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1 assignment under subsection (b)(2) of an eligible 

2 beneficiary. 

3 ‘‘(3) LIABILITY OF PERSONS DURING THREE

4 FISCAL YEARS BEGINNING ON AND AFTER OCTOBER

5 1, 2007.—In the case of each of the fiscal years be6 ginning on October 1, 2007, 2008, and 2009, each 

7 person other than a 1988 agreement operator shall 

8 pay to the Combined Fund the following percentage 

9 of the amount of annual premiums that such person 

10 would otherwise be required to pay under section 

11 9704(a), determined on the basis of assignments in 

12 effect without regard to the revocation of assign13 ments under paragraph (1)(A): 

14 ‘‘(A) For the fiscal year beginning on Oc15 tober 1, 2007, 55 percent. 

16 ‘‘(B) For the fiscal year beginning on Oc17 tober 1, 2008, 40 percent. 

18 ‘‘(C) For the fiscal year beginning on Oc19 tober 1, 2009, 15 percent.’’. 

20 (4) EFFECTIVE DATE.—The amendments made 

21 by this subsection shall apply to plan years of the 

22 Combined Fund beginning after September 30, 

23 2006. 

24 (b) 1992 UMWA BENEFIT AND OTHER PLANS.— 


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1 (1) TRANSFERS TO PLANS.—Section 9712(a) of 

2 the Internal Revenue Code of 1986 (relating to the 

3 establishment and coverage of the 1992 UMWA 

4 Benefit Plan) is amended by adding at the end the 

5 following: 

6 ‘‘(3) TRANSFERS UNDER OTHER FEDERAL

7 STATUTES.— 

8 ‘‘(A) IN GENERAL.—The 1992 UMWA 

9 Benefit Plan shall include any amount trans10 ferred to the plan under subsections (h) and (i) 

11 of section 402 of the Surface Mining Control 

12 and Reclamation Act of 1977 (30 U.S.C. 1232). 

13 ‘‘(B) USE OF FUNDS.—Any amount trans14 ferred under subparagraph (A) for any fiscal 

15 year shall be used to provide the health benefits 

16 described in subsection (c) with respect to any 

17 beneficiary for whom no monthly per bene18 ficiary premium is paid pursuant to paragraph 

19 (1)(A) or (3) of subsection (d). 

20 ‘‘(4) SPECIAL RULE FOR 1993 PLAN.— 

21 ‘‘(A) IN GENERAL.—The plan described in 

22 section 402(h)(2)(C) of the Surface Mining 

23 Control and Reclamation Act of 1977 (30 

24 U.S.C. 1232(h)(2)(C)) shall include any 

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1 sections (h) and (i) of the Surface Mining Con2 trol and Reclamation Act of 1977 (30 U.S.C. 

3 1232). 

4 ‘‘(B) USE OF FUNDS.—Any amount trans5 ferred under subparagraph (A) for any fiscal 

6 year shall be used to provide the health benefits 

7 described in section 402(h)(2)(C)(i) of the Sur8 face Mining Control and Reclamation Act of 

9 1977 (30 U.S.C. 1232(h)(2)(C)(i)) to individ10 uals described in section 402(h)(2)(C) of such 

11 Act (30 U.S.C. 1232(h)(2)(C)).’’. 

12 (2) PREMIUM ADJUSTMENTS.— 

13 (A) IN GENERAL.—Section 9712(d)(1) of 

14 such Code (relating to guarantee of benefits) is 

15 amended to read as follows: 

16 ‘‘(1) IN GENERAL.—All 1988 last signatory op17 erators shall be responsible for financing the benefits 

18 described in subsection (c) by meeting the following 

19 requirements in accordance with the contribution re20 quirements established in the 1992 UMWA Benefit 

21 Plan: 

22 ‘‘(A) The payment of a monthly per bene23 ficiary premium by each 1988 last signatory op24 erator for each eligible beneficiary of such oper25 ator who is described in subsection (b)(2) and 


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1 who is receiving benefits under the 1992 

2 UMWA benefit plan. 

3 ‘‘(B) The provision of a security (in the 

4 form of a bond, letter of credit, or cash escrow) 

5 in an amount equal to a portion of the pro6 jected future cost to the 1992 UMWA Benefit 

7 Plan of providing health benefits for eligible 

8 and potentially eligible beneficiaries attributable 

9 to the 1988 last signatory operator. 

10 ‘‘(C) If the amounts transferred under 

11 subsection (a)(3) are less than the amounts re12 quired to be transferred to the 1992 UMWA 

13 Benefit Plan under subsections (h) and (i) of 

14 section 402 of the Surface Mining Control and 

15 Reclamation Act of 1977 (30 U.S.C. 1232), the 

16 payment of an additional backstop premium by 

17 each 1988 last signatory operator which is 

18 equal to such operator’s share of the amounts 

19 required to be so transferred but which were 

20 not so transferred, determined on the basis of 

21 the number of eligible and potentially eligible 

22 beneficiaries attributable to the operator.’’. 

23 (B) CONFORMING AMENDMENTS.—Section 

24 9712(d) of such Code is amended— 


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1 (i) in paragraph (2)(B), by striking 

2 ‘‘prefunding’’ and inserting ‘‘backstop’’, 

3 and 

4 (ii) in paragraph (3), by striking 

5 ‘‘paragraph (1)(B)’’ and inserting ‘‘para6 graph (1) (A)’’. 

7 (C) EFFECTIVE DATE.—The amendments 

8 made by this paragraph shall apply to fiscal 

9 years beginning on or after October 1, 2010. 

10 SEC. 323. OTHER PROVISIONS. 

11 (a) BOARD OF TRUSTEES.—Section 9702(b) of the 

12 Internal Revenue Code of 1986 (relating to board of trust13 ees of the Combined Fund) is amended to read as follows: 

14 ‘‘(b) BOARD OF TRUSTEES.— 

15 ‘‘(1) IN GENERAL.—For purposes of subsection 

16 (a), the board of trustees for the Combined Fund 

17 shall be appointed as follows: 

18 ‘‘(A) 2 individuals who represent employers 

19 in the coal mining industry shall be designated 

20 by the BCOA; 

21 ‘‘(B) 2 individuals designated by the 

22 United Mine Workers of America; and 

23 ‘‘(C) 3 individuals selected by the individ24 uals appointed under subparagraphs (A) and 

25 (B). 


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1 ‘‘(2) SUCCESSOR TRUSTEES.—Any successor 

2 trustee shall be appointed in the same manner as 

3 the trustee being succeeded. The plan establishing 

4 the Combined Fund shall provide for the removal of 

5 trustees. 

6 ‘‘(3) SPECIAL RULE.—If the BCOA ceases to 

7 exist, any trustee or successor under paragraph 

8 (1)(A) shall be designated by the 3 employers who 

9 were members of the BCOA on the enactment date 

10 and who have been assigned the greatest number of 

11 eligible beneficiaries under section 9706.’’. 

12 (b) ENFORCEMENT OF OBLIGATIONS.— 

13 (1) FAILURE TO PAY PREMIUMS.—Section 

14 9707(a) of the Internal Revenue Code of 1986 is 

15 amended to read as follows: 

16 ‘‘(a) FAILURES TO PAY.— 

17 ‘‘(1) PREMIUMS FOR ELIGIBLE BENE18 FICIARIES.—There is hereby imposed a penalty on 

19 the failure of any assigned operator to pay any pre20 mium required to be paid under section 9704 with 

21 respect to any eligible beneficiary. 

22 ‘‘(2) CONTRIBUTIONS REQUIRED UNDER THE

23 MINING LAWS.—There is hereby imposed a penalty 

24 on the failure of any person to make a contribution 

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1 face Mining Control and Reclamation Act of 1977 to 

2 a plan referred to in section 402(h)(2)(C) of such 

3 Act. For purposes of applying this section, each such 

4 required monthly contribution for the hours worked 

5 of any individual shall be treated as if it were a pre6 mium required to be paid under section 9704 with 

7 respect to an eligible beneficiary.’’. 

8 (2) CIVIL ENFORCEMENT.—Section 9721 of 

9 such Code is amended to read as follows: 

10 ‘‘SEC. 9721. CIVIL ENFORCEMENT. 

11 ‘‘The provisions of section 4301 of the Employee Re12 tirement Income Security Act of 1974 shall apply, in the 

13 same manner as any claim arising out of an obligation 

14 to pay withdrawal liability under subtitle E of title IV of 

15 such Act, to any claim— 

16 ‘‘(1) arising out of an obligation to pay any 

17 amount required to be paid by this chapter; or 

18 ‘‘(2) arising out of an obligation to pay any 

19 amount required by section 402(h)(5)(B)(ii) of the 

20 Surface Mining Control and Reclamation Act of 

21 1977 (30 U.S.C. 1232(h)(5)(B)(ii)).’’. 

Æ 


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