II 

109TH CONGRESS 

2D SESSION S. 4026 

To amend the Internal Revenue Code of 1986 to make technical corrections, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 29, 2006 

Mr. GRASSLEY (for himself and Mr. BAUCUS) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to make 

technical corrections, 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; AMENDMENT OF 1986 CODE; 

4 TABLE OF CONTENTS. 

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

6 ‘‘Tax Technical Corrections 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 

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


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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986. 

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

4 this Act is as follows: 

Sec. 1. Short title; amendment of 1986 Code; table of contents. 

Sec. 2. Amendments related to the Tax Increase Prevention and Reconciliation 

Act of 2005. 

Sec. 3. Amendment related to the Gulf Opportunity Zone Act of 2005. 

Sec. 4. Amendments related to the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users. 

Sec. 5. Amendments related to the Energy Policy Act of 2005. 

Sec. 6. Amendments related to the American Jobs Creation Act of 2004. 

Sec. 7. Amendment related to the Jobs and Growth Tax Relief Reconciliation 

Act of 2003. 

Sec. 8. Amendments related to the Economic Growth and Tax Relief Reconciliation Act of 2001. 

Sec. 9. Amendment related to the Tax Relief Extension Act of 1999. 

Sec. 10. Amendment related to the Internal Revenue Service Restructuring and 

Reform Act of 1998. 

Sec. 11. Clerical corrections. 

5 SEC. 2. AMENDMENTS RELATED TO THE TAX INCREASE 

6 PREVENTION AND RECONCILIATION ACT OF 

7 2005. 

8 (a) AMENDMENTS RELATED TO SECTION 103 OF

9 THE ACT.— 

10 (1) Subparagraph (A) of section 954(c)(6) is 

11 amended— 

12 (A) in the first sentence, by striking 

13 ‘‘which is not subpart F income’’ and inserting 

14 ‘‘which is neither subpart F income nor income 

15 treated as effectively connected with the con16 duct of a trade or business in the United 

17 States’’, and 


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1 (B) by striking the last sentence and in2 serting the following: ‘‘The Secretary shall pre3 scribe such regulations as may be necessary or 

4 appropriate to carry out this paragraph, includ5 ing such regulations as may be necessary or ap6 propriate to prevent the abuse of the purposes 

7 of this paragraph.’’. 

8 (2) Paragraph (6) of section 954(c) is amended 

9 by redesignating subparagraph (B) as subparagraph 

10 (C) and inserting after subparagraph (A) the fol11 lowing new subparagraph: 

12 ‘‘(B) EXCEPTION.—Subparagraph (A) 

13 shall not apply in the case of any interest, rent, 

14 or royalty to the extent such interest, rent, or 

15 royalty creates (or increases) a deficit which 

16 under section 952(c) may reduce the subpart F 

17 income of the payor or another controlled for18 eign corporation.’’. 

19 (b) AMENDMENTS RELATED TO SECTION 202 OF

20 THE ACT.— 

21 (1) Subparagraph (B) of section 355(b)(3) is 

22 amended to read as follows: 

23 ‘‘(B) AFFILIATED GROUP RULE.— 

24 ‘‘(i) IN GENERAL.—For purposes of 

25 subparagraph (A), all members of such 


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1 corporation’s separate affiliated group 

2 shall be treated as one corporation. 

3 ‘‘(ii) SEPARATE AFFILIATED

4 GROUP.—For purposes of clause (i), the 

5 term ‘separate affiliated group’ means, 

6 with respect to any corporation, the affili7 ated group which would be determined 

8 under section 1504(a) if such corporation 

9 were the common parent and section 

10 1504(b) did not apply. Such term shall not 

11 include any corporation which became a 

12 member of— 

13 ‘‘(I) such separate affiliated 

14 group (determined without regard to 

15 this sentence), or 

16 ‘‘(II) any other separate affili17 ated group (determined without re18 gard to this sentence) which includes 

19 any other corporation to which sub20 paragraph (A) applies with respect to 

21 the same distribution, 

22 during the 5-year period described in para23 graph (2)(B) by reason of one or more 

24 transactions in which gain or loss was rec25 ognized in whole or in part (and shall not 


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1 include any trade or business conducted by 

2 such corporation at the time it became 

3 such a member).’’. 

4 (2) Paragraph (3) of section 355(b) is amended 

5 by adding at the end the following new subpara6 graph: 

7 ‘‘(E) REGULATIONS.—The Secretary shall 

8 prescribe regulations which provide for the 

9 proper application of subparagraphs (B), (C), 

10 and (D) of paragraph (2) with respect to dis11 tributions to which this paragraph applies.’’. 

12 (c) AMENDMENTS RELATED TO SECTION 515 OF

13 THE ACT.—Paragraph (2) of section 911(f) is amended— 

14 (1) by striking ‘‘the tentative minimum tax 

15 under section 55’’ in the matter preceding subpara16 graph (A) and inserting ‘‘the amount determined 

17 under the first sentence of section 55(b)(1)(A)(i)’’, 

18 and 

19 (2) by striking ‘‘the amount which would be 

20 such tentative minimum tax’’ each place it appears 

21 in subparagraphs (A) and (B) and inserting ‘‘the 

22 amount which would be determined under such sen23 tence’’. 

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

25 this section shall take effect as if included in the provisions 


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1 of the Tax Increase Prevention and Reconciliation Act of 

2 2005 to which they relate. 

3 SEC. 3. AMENDMENT RELATED TO THE GULF OPPOR4 TUNITY ZONE ACT OF 2005. 

5 (a) AMENDMENT RELATED TO SECTION 303 OF THE

6 ACT.—Clause (iii) of section 903(d)(2)(B) of the Amer7 ican Jobs Creation Act of 2004, as amended by section 

8 303 of the Gulf Opportunity Zone Act of 2005, is amended 

9 by inserting ‘‘or the Secretary’s delegate’’ after ‘‘The Sec10 retary of the Treasury’’. 

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

12 this section shall take effect as if included in section 303 

13 of the Gulf Opportunity Zone Act of 2005. 

14 SEC. 4. AMENDMENTS RELATED TO THE SAFE, ACCOUNT15 ABLE, FLEXIBLE, EFFICIENT TRANSPOR16 TATION EQUITY ACT: A LEGACY FOR USERS. 

17 (a) AMENDMENTS RELATED TO SECTION 11113 OF

18 THE ACT.—Paragraph (3) of section 6427(i) is amend19 ed— 

20 (1) by inserting ‘‘or under subsection (e)(2) by 

21 any person with respect to an alternative fuel (as de22 fined in section 6426(d)(2))’’ after ‘‘section 6426’’ 

23 in subparagraph (A), 

24 (2) by inserting ‘‘or (e)(2)’’ after ‘‘subsection 

25 (e)(1)’’ in subparagraphs (A)(i) and (B), and 


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1 (3) by inserting ‘‘AND ALTERNATIVE FUEL

2 CREDIT’’ after ‘‘MIXTURE CREDIT’’ in the heading 

3 thereof. 

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

5 this section shall take effect as if included in the provisions 

6 of the SAFETEA–LU to which they relate. 

7 SEC. 5. AMENDMENTS RELATED TO THE ENERGY POLICY 

8 ACT OF 2005. 

9 (a) AMENDMENT RELATED TO SECTION 1306 OF

10 THE ACT.—Paragraph (2) of section 45J(b) is amended 

11 to read as follows: 

12 ‘‘(2) AMOUNT OF NATIONAL LIMITATION.—The 

13 aggregate amount of national megawatt capacity 

14 limitation allocated by the Secretary under para15 graph (3) shall not exceed 6,000 megawatts.’’. 

16 (b) AMENDMENT RELATED TO SECTION 1342 OF

17 THE ACT.—So much of subsection (b) of section 30C as 

18 precedes paragraph (1) thereof is amended to read as fol19 lows: 

20 ‘‘(b) LIMITATION.—The credit allowed under sub21 section (a) with respect to all alternative fuel vehicle re22 fueling property placed in service by the taxpayer during 

23 the taxable year at a location shall not exceed—’’. 

24 (c) AMENDMENTS RELATED TO SECTION 1351 OF

25 THE ACT.— 


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1 (1) Paragraph (3) of section 41(a) is amended 

2 by inserting ‘‘for energy research’’ before the period 

3 at the end. 

4 (2) Paragraph (6) of section 41(f) is amended 

5 by adding at the end the following new subpara6 graph: 

7 ‘‘(E) ENERGY RESEARCH.—The term ‘en8 ergy research’ does not include any research 

9 which is not qualified research.’’. 

10 (d) AMENDMENTS RELATED TO SECTION 1362 OF

11 THE ACT.— 

12 (1)(A) Paragraph (1) of section 4041(d) is 

13 amended by adding at the end the following new 

14 sentence: ‘‘No tax shall be imposed under the pre15 ceding sentence on the sale or use of any liquid if 

16 tax was imposed with respect to such liquid under 

17 section 4081 at the Leaking Underground Storage 

18 Tank Trust Fund financing rate.’’. 

19 (B) Paragraph (3) of section 4042(b) is amend20 ed to read as follows: 

21 ‘‘(3) EXCEPTION FOR FUEL ON WHICH LEAK22 ING UNDERGROUND STORAGE TANK TRUST FUND FI23 NANCING RATE SEPARATELY IMPOSED.—The Leak24 ing Underground Storage Tank Trust Fund financ25 ing rate under paragraph (2)(B) shall not apply to 


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1 the use of any fuel if tax was imposed with respect 

2 to such fuel under section 4041(d) or 4081 at the 

3 Leaking Underground Storage Tank Trust Fund fi4 nancing rate.’’. 

5 (C) Notwithstanding section 6430 of the Inter6 nal Revenue Code of 1986, a refund, credit, or pay7 ment may be made under subchapter B of chapter 

8 65 of such Code for taxes imposed with respect to 

9 any liquid after September 30, 2005, and before the 

10 date of the enactment of this Act under section 

11 4041(d)(1) or 4042 of such Code at the Leaking 

12 Underground Storage Tank Trust Fund financing 

13 rate to the extent that tax was imposed with respect 

14 to such liquid under section 4081 at the Leaking 

15 Underground Storage Tank Trust Fund financing 

16 rate. 

17 (2)(A) Paragraph (5) of section 4041(d) is 

18 amended— 

19 (i) by striking ‘‘(other than with respect to 

20 any sale for export under paragraph (3) there21 of)’’, and 

22 (ii) by adding at the end the following new 

23 sentence: ‘‘The preceding sentence shall not 

24 apply with respect to subsection (g)(3) and so 

25 much of subsection (g)(1) as relates to vessels 


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1 (within the meaning of section 4221(d)(3)) em2 ployed in foreign trade or trade between the 

3 United States and any of its possessions.’’ 

4 (B) Section 4082 is amended— 

5 (i) by striking ‘‘(other than such tax at the 

6 Leaking Underground Storage Tank Trust 

7 Fund financing rate imposed in all cases other 

8 than for export)’’ in subsection (a), and 

9 (ii) by redesignating subsections (f) and 

10 (g) as subsections (g) and (h) and by inserting 

11 after subsection (e) the following new sub12 section: 

13 ‘‘(f) EXCEPTION FOR LEAKING UNDERGROUND

14 STORAGE TANK TRUST FUND FINANCING RATE.— 

15 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

16 apply to the tax imposed under section 4081 at the 

17 Leaking Underground Storage Tank Trust Fund fi18 nancing rate. 

19 ‘‘(2) EXCEPTION FOR EXPORT, ETC.—Para20 graph (1) shall not apply with respect to any fuel if 

21 the Secretary determines that such fuel is destined 

22 for export or for use by the purchaser as supplies for 

23 vessels (within the meaning of section 4221(d)(3)) 

24 employed in foreign trade or trade between the 

25 United States and any of its possessions.’’. 


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1 (C) Subsection (e) of section 4082 is amend2 ed— 

3 (i) by striking ‘‘an aircraft, the rate of tax 

4 under section 4081(a)(2)(A)(iii) shall be zero.’’ 

5 and inserting ‘‘an aircraft— 

6 ‘‘(1) the rate of tax under section 

7 4081(a)(2)(A)(iii) shall be zero, and 

8 ‘‘(2) if such aircraft is employed in foreign 

9 trade or trade between the United States and any of 

10 its possessions, the increase in such rate under sec11 tion 4081(a)(2)(B) shall be zero.’’; and 

12 (ii) by moving the last sentence flush with 

13 the margin of such subsection (following the 

14 paragraph (2) added by clause (i)). 

15 (D) Section 6430 is amended to read as follows: 

16 ‘‘SEC. 6430. TREATMENT OF TAX IMPOSED AT LEAKING UN17 DERGROUND STORAGE TANK TRUST FUND 

18 FINANCING RATE. 

19 ‘‘No refunds, credits, or payments shall be made 

20 under this subchapter for any tax imposed at the Leaking 

21 Underground Storage Tank Trust Fund financing rate, 

22 except in the case of fuels— 

23 ‘‘(1) which are exempt from tax under section 

24 4081(a) by reason of section 4081(f)(2), 


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1 ‘‘(2) which are exempt from tax under section 

2 4041(d) by reason of the last sentence of paragraph 

3 (5) thereof, or 

4 ‘‘(3) with respect to which the rate increase 

5 under section 4081(a)(2)(B) is zero by reason of 

6 section 4082(e)(2).’’. 

7 (3) Paragraph (5) of section 4041(d) is amend8 ed by inserting ‘‘(b)(1)(A)’’ after ‘‘subsections’’. 

9 (e) EFFECTIVE DATE.— 

10 (1) IN GENERAL.—Except as otherwise pro11 vided in this subsection, the amendments made by 

12 this section shall take effect as if included in the 

13 provisions of the Energy Policy Act of 2005 to which 

14 they relate. 

15 (2) NONAPPLICATION OF EXEMPTION FOR OFF16 HIGHWAY BUSINESS USE.—The amendment made by 

17 subsection (d)(3) shall apply to fuel sold for use or 

18 used after the date of the enactment of this Act. 

19 (3) AMENDMENT MADE BY THE SAFETEA– 

20 LU.—The amendment made by subsection 

21 (d)(2)(C)(ii) shall take effect as if included in sec22 tion 11161 of the SAFETEA–LU. 


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1 SEC. 6. AMENDMENTS RELATED TO THE AMERICAN JOBS 

2 CREATION ACT OF 2004. 

3 (a) AMENDMENTS RELATED TO SECTION 710 OF

4 THE ACT.— 

5 (1) Clause (ii) of section 45(c)(3)(A) is amend6 ed by striking ‘‘which is segregated from other waste 

7 materials and’’. 

8 (2) Subparagraph (B) of section 45(d)(2) is 

9 amended by inserting ‘‘and’’ at the end of clause (i), 

10 by striking clause (ii), and by redesignating clause 

11 (iii) as clause (ii). 

12 (b) AMENDMENTS RELATED TO SECTION 848 OF

13 THE ACT.— 

14 (1) Section 470 is amended by redesignating 

15 subsections (e), (f), and (g) as subsections (f), (g), 

16 and (h) and by inserting after subsection (d) the fol17 lowing new subsection: 

18 ‘‘(e) EXCEPTION FOR CERTAIN PARTNERSHIPS.— 

19 ‘‘(1) IN GENERAL.—In the case of any property 

20 which would (but for this subsection) be tax-exempt 

21 use property solely by reason of section 168(h)(6), 

22 such property shall not be treated as tax-exempt use 

23 property for purposes of this section for any taxable 

24 year of the partnership if— 


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1 ‘‘(A) such property is not property of a 

2 character subject to the allowance for deprecia3 tion, 

4 ‘‘(B) any credit is allowable under section 

5 42 or 47 with respect to such property, or 

6 ‘‘(C) except as provided in regulations pre7 scribed by the Secretary under subsection 

8 (h)(4), the requirements of paragraphs (2) and 

9 (3) are met with respect to such property for 

10 such taxable year. 

11 ‘‘(2) AVAILABILITY OF FUNDS.— 

12 ‘‘(A) IN GENERAL.—The requirement of 

13 this paragraph is met for any taxable year with 

14 respect to any property owned by the partner15 ship if (at all times during the taxable year) not 

16 more than the allowable partnership amount of 

17 funds are— 

18 ‘‘(i) subject to any arrangement re19 ferred to in subparagraph (C), or 

20 ‘‘(ii) set aside or expected to be set 

21 aside, 

22 to or for the benefit of any taxable partner of 

23 the partnership or any lender, or to or for the 

24 benefit of any tax-exempt partner of the part25 nership to satisfy any obligation of such tax-exVerDate Aug 31 2005 23:48 Oct 04, 2006 Jkt 059196 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S4026.IS S4026

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1 empt partners to the partnership, any taxable 

2 partner of the partnership, or any lender. 

3 ‘‘(B) ALLOWABLE PARTNERSHIP

4 AMOUNT.—For purposes of this subsection, the 

5 term ‘allowable partnership amount’ means, as 

6 of any date, the greater of— 

7 ‘‘(i) the sum of— 

8 ‘‘(I) 20 percent of the sum of the 

9 taxable partners’ capital accounts de10 termined as of such date under the 

11 rules of section 704(b), plus 

12 ‘‘(II) 20 percent of the sum of 

13 the taxable partners’ share of the re14 course liabilities of the partnership as 

15 determined under section 752, or 

16 ‘‘(ii) 20 percent of the aggregate debt 

17 of the partnership as of such date. 

18 ‘‘(iii) NO ALLOWABLE PARTNERSHIP

19 AMOUNT FOR ARRANGEMENTS OUTSIDE

20 THE PARTNERSHIP.—The allowable part21 nership amount shall be zero with respect 

22 to any set aside or arrangement under 

23 which any of the funds referred to in sub24 paragraph (A) are not partnership prop25 erty. 


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1 ‘‘(C) ARRANGEMENTS.—The arrangements 

2 referred to in this subparagraph include a loan 

3 by a tax-exempt partner or the partnership to 

4 any taxable partner, the partnership, or any 

5 lender and any arrangement referred to in sub6 section (d)(1)(B). 

7 ‘‘(D) SPECIAL RULES.— 

8 ‘‘(i) EXCEPTION FOR SHORT-TERM

9 FUNDS.—Funds which are set aside, or 

10 subject to any arrangement, for a period of 

11 less than 12 months shall not be taken 

12 into account under subparagraph (A). Ex13 cept as provided by the Secretary, all re14 lated set asides and arrangements shall be 

15 treated as 1 arrangement for purposes of 

16 this clause. 

17 ‘‘(ii) ECONOMIC RELATIONSHIP

18 TEST.—Funds shall not be taken into ac19 count under subparagraph (A) if such 

20 funds— 

21 ‘‘(I) bear no connection to the 

22 economic relationships among the 

23 partners, and 


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1 ‘‘(II) bear no connection to the 

2 economic relationships among the 

3 partners and the partnership. 

4 ‘‘(iii) REASONABLE PERSON STAND5 ARD.—For purpose of subparagraph 

6 (A)(ii), funds shall be treated as set aside 

7 or expected to be set aside only if a reason8 able person would conclude, based on the 

9 facts and circumstances, that such funds 

10 are set aside or expected to be set aside. 

11 ‘‘(3) OPTION TO PURCHASE.— 

12 ‘‘(A) IN GENERAL.—The requirement of 

13 this paragraph is met for any taxable year with 

14 respect to any property owned by the partner15 ship if (at all times during such taxable year)— 

16 ‘‘(i) each tax-exempt partner does not 

17 have an option to purchase (or compel dis18 tribution of) such property or any direct or 

19 indirect interest in the partnership at any 

20 time other than at the fair market value of 

21 such property or interest at the time of 

22 such purchase or distribution, and 

23 ‘‘(ii) the partnership and each taxable 

24 partner does not have an option to sell (or 

25 compel distribution of) such property or 


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1 any direct or indirect interest in the part2 nership to a tax-exempt partner at any 

3 time other than at the fair market value of 

4 such property or interest at the time of 

5 such sale or distribution. 

6 ‘‘(B) OPTION FOR DETERMINATION OF

7 FAIR MARKET VALUE.—Under regulations pre8 scribed by the Secretary, a value of property de9 termined on the basis of a formula shall be 

10 treated for purposes of subparagraph (A) as the 

11 fair market value of such property if such value 

12 is determined on the basis of objective criteria 

13 that are reasonably designed to approximate the 

14 fair market value of such property at the time 

15 of the purchase, sale, or distribution, as the 

16 case may be.’’. 

17 (2) Subsection (g) of section 470, as redesig18 nated by paragraph (1), is amended by adding at 

19 the end the following new paragraphs: 

20 ‘‘(5) TAX-EXEMPT PARTNER.—The term ‘tax21 exempt partner’ means, with respect to any partner22 ship, any partner of such partnership which is a tax23 exempt entity within the meaning of section 

24 168(h)(6). 


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1 ‘‘(6) TAXABLE PARTNER.—The term ‘taxable 

2 partner’ means, with respect to any partnership, any 

3 partner of such partnership which is not a tax-ex4 empt partner.’’. 

5 (3) Subsection (h) of section 470, as redesig6 nated by paragraph (1), is amended— 

7 (A) by striking ‘‘, and’’ at the end of para8 graph (1) and inserting ‘‘or owned by the same 

9 partnership,’’, 

10 (B) by striking the period at the end of 

11 paragraph (2) and inserting a comma, and 

12 (C) by adding at the end the following new 

13 paragraphs: 

14 ‘‘(3) provide for the application of this section 

15 to tiered and other related partnerships, and 

16 ‘‘(4) provide for the treatment of partnership 

17 property (other than property described in sub18 section (e)(1)(A)) as tax-exempt use property if such 

19 property is used in an arrangement which is incon20 sistent with the purposes of this section determined 

21 by taking into account one or more of the following 

22 factors: 

23 ‘‘(A) A tax-exempt partner maintains phys24 ical possession or control or holds the benefits 


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1 and burdens of ownership with respect to such 

2 property. 

3 ‘‘(B) There is insignificant equity invest4 ment in such property by any taxable partner. 

5 ‘‘(C) The transfer of such property to the 

6 partnership does not result in a change in use 

7 of such property. 

8 ‘‘(D) Such property is necessary for the 

9 provision of government services. 

10 ‘‘(E) The deductions for depreciation with 

11 respect to such property are allocated dis12 proportionately to one or more taxable partners 

13 relative to such partner’s risk of loss with re14 spect to such property or to such partner’s allo15 cation of other partnership items. 

16 ‘‘(F) Such other factors as the Secretary 

17 may determine.’’. 

18 (4) Paragraph (2) of section 470(c) is amend19 ed— 

20 (A) by striking ‘‘and’’ at the end of sub21 paragraph (A), by redesignating subparagraph 

22 (B) as subparagraph (C), and by inserting after 

23 subparagraph (A) the following new subpara24 graph: 


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1 ‘‘(B) by treating the entire property as 

2 tax-exempt use property if any portion of such 

3 property is treated as tax-exempt use property 

4 by reason of paragraph (6) thereof.’’, and 

5 (B) by striking the flush sentence at the 

6 end. 

7 (5) Subparagraph (A) of section 470(d)(1) is 

8 amended by striking ‘‘(at any time during the lease 

9 term)’’ and inserting ‘‘(at all times during the lease 

10 term)’’. 

11 (c) AMENDMENTS RELATED TO SECTION 888 OF

12 THE ACT.— 

13 (1) Subparagraph (A) of section 1092(a)(2) is 

14 amended by striking ‘‘and’’ at the end of clause (ii), 

15 by redesignating clause (iii) as clause (iv), and by in16 serting after clause (ii) the following new clause: 

17 ‘‘(iii) if the application of clause (ii) 

18 does not result in an increase in the basis 

19 of any offsetting position in the identified 

20 straddle, the basis of each of the offsetting 

21 positions in the identified straddle shall be 

22 increased in a manner which— 

23 ‘‘(I) is reasonable, consistent 

24 with the purposes of this paragraph, 


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1 and consistently applied by the tax2 payer, and 

3 ‘‘(II) results in an aggregate in4 crease in the basis of such offsetting 

5 positions which is equal to the loss de6 scribed in clause (ii), and’’. 

7 (2)(A) Subparagraph (B) of section 1092(a)(2) 

8 is amended by adding at the end the following flush 

9 sentence: 

10 ‘‘A straddle shall be treated as clearly identified 

11 for purposes of clause (i) only if such identifica12 tion includes an identification of the positions 

13 in the straddle which are offsetting with respect 

14 other positions in the straddle.’’. 

15 (B) Subparagraph (A) of section 1092(a)(2) is 

16 amended— 

17 (i) by striking ‘‘identified positions’’ in 

18 clause (i) and inserting ‘‘positions’’, 

19 (ii) by striking ‘‘identified position’’ in 

20 clause (ii) and inserting ‘‘position’’, and 

21 (iii) by striking ‘‘identified offsetting posi22 tions’’ in clause (ii) and inserting ‘‘offsetting 

23 positions’’. 


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1 (C) Subparagraph (B) of section 1092(a)(3) is 

2 amended by striking ‘‘identified offsetting position’’ 

3 and inserting ‘‘offsetting position’’. 

4 (3) Paragraph (2) of section 1092(a) is amend5 ed by redesignating subparagraph (C) as subpara6 graph (D) and inserting after subparagraph (B) the 

7 following new subparagraph: 

8 ‘‘(C) APPLICATION TO LIABILITIES AND

9 OBLIGATIONS.—Except as otherwise provided 

10 by the Secretary, rules similar to the rules of 

11 clauses (ii) and (iii) of subparagraph (A) shall 

12 apply for purposes of this paragraph with re13 spect to any position which is, or has been, a 

14 liability or obligation.’’. 

15 (4) Subparagraph (D) of section 1092(a)(2), as 

16 redesignated by paragraph (3), is amended by in17 serting ‘‘the rules for the application of this section 

18 to a position which is or has been a liability or obli19 gation, methods of loss allocation which satisfy the 

20 requirements of subparagraph (A)(iii),’’ before ‘‘and 

21 the ordering rules’’. 

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

23 this section shall take effect as if included in the provisions 

24 of the American Jobs Creation Act of 2004 to which they 

25 relate. 


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1 SEC. 7. AMENDMENT RELATED TO THE JOBS AND GROWTH 

2 TAX RELIEF RECONCILIATION ACT OF 2003. 

3 (a) AMENDMENT RELATED TO SECTION 302 OF THE

4 ACT.—Clause (ii) of section 1(h)(11)(B) is amended by 

5 striking ‘‘and’’ at the end of subclause (II), by striking 

6 the period at the end of subclause (III) and inserting ‘‘, 

7 and’’, and by adding at the end the following new sub8 clause: 

9 ‘‘(IV) any dividend received from 

10 a corporation which is a DISC or 

11 former DISC (as defined in section 

12 992(a)) to the extent such dividend is 

13 paid out of the corporation’s accumu14 lated DISC income or is a deemed 

15 distribution pursuant to section 

16 995(b)(1).’’. 

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

18 this section shall apply to dividends received on or after 

19 September 29, 2006, in taxable years ending after such 

20 date. 

21 SEC. 8. AMENDMENTS RELATED TO THE ECONOMIC 

22 GROWTH AND TAX RELIEF RECONCILIATION 

23 ACT OF 2001. 

24 (a) AMENDMENTS RELATED TO SECTION 617 OF

25 THE ACT.— 


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1 (1) Subclause (II) of section 402(g)(7)(A)(ii) is 

2 amended by striking ‘‘for prior taxable years’’ and 

3 inserting ‘‘permitted for prior taxable years by rea4 son of this paragraph’’. 

5 (2) Subparagraph (A) of section 3121(v)(1) is 

6 amended by inserting ‘‘or consisting of designated 

7 Roth contributions (as defined in section 402A(c))’’ 

8 before the comma at the end. 

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

10 this section shall take effect as if included in the provisions 

11 of the Economic Growth and Tax Relief Reconciliation Act 

12 of 2001 to which they relate. 

13 SEC. 9. AMENDMENT RELATED TO THE TAX RELIEF EXTEN14 SION ACT OF 1999. 

15 (a) AMENDMENT RELATED TO SECTION 507 OF THE

16 ACT.—Clause (i) of section 45(e)(7)(A) is amended by 

17 striking ‘‘placed in service by the taxpayer’’ and inserting 

18 ‘‘originally placed in service’’. 

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

20 this section shall take effect as if included in section 507 

21 of the Tax Relief Extension Act of 1999. 


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1 SEC. 10. AMENDMENT RELATED TO THE INTERNAL REV2 ENUE SERVICE RESTRUCTURING AND RE3 FORM ACT OF 1998. 

4 (a) AMENDMENT RELATED TO SECTION 3509 OF

5 THE ACT.—Paragraph (3) of section 6110(i) is amended 

6 by inserting ‘‘and related background file documents’’ 

7 after ‘‘Chief Counsel advice’’ in the matter preceding sub8 paragraph (A). 

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

10 this section shall take effect as if included in the provision 

11 of the Internal Revenue Service Restructuring and Reform 

12 Act of 1998 to which it relates. 

13 SEC. 11. CLERICAL CORRECTIONS. 

14 (a) IN GENERAL.— 

15 (1) Paragraph (5) of section 21(e) is amended 

16 by striking ‘‘section 152(e)(3)(A)’’ in the flush mat17 ter after subparagraph (B) and inserting ‘‘section 

18 152(e)(4)(A)’’. 

19 (2) Paragraph (3) of section 25C(c) is amended 

20 by striking ‘‘section 3280’’ and inserting ‘‘part 

21 3280’’. 

22 (3) Subsection (a) of section 34 is amended— 

23 (A) in paragraph (1), by striking ‘‘with re24 spect to gasoline used during the taxable year 

25 on a farm for farming purposes’’, 


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1 (B) in paragraph (2), by striking ‘‘with re2 spect to gasoline used during the taxable year 

3 (A) otherwise than as a fuel in a highway vehi4 cle or (B) in vehicles while engaged in fur5 nishing certain public passenger land transpor6 tation service’’, and 

7 (C) in paragraph (3), by striking ‘‘with re8 spect to fuels used for nontaxable purposes or 

9 resold during the taxable year’’. 

10 (4) Paragraph (2) of section 35(d) is amend11 ed— 

12 (A) by striking ‘‘paragraph (2) or (4) of’’, 

13 and 

14 (B) by striking ‘‘(within the meaning of 

15 section 152(e)(1))’’ and inserting ‘‘(as defined 

16 in section 152(e)(4)(A))’’. 

17 (5) Paragraph (24) of section 38(b) is amended 

18 by striking ‘‘and’’ at the end. 

19 (6) Paragraphs (2) and (3) of section 45L(c) 

20 are each amended by striking ‘‘section 3280’’ and 

21 inserting ‘‘part 3280’’. 

22 (7) Clause (ii) of section 48A(d)(4)(B) is 

23 amended by striking ‘‘subsection’’ both places it ap24 pears. 


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1 (8) The last sentence of section 125(b)(2) is 

2 amended by striking ‘‘last sentence’’ and inserting 

3 ‘‘second sentence’’. 

4 (9) Subclause (II) of section 167(g)(8)(C)(ii) is 

5 amended by striking ‘‘section 263A(j)(2)’’ and in6 serting ‘‘section 263A(i)(2)’’. 

7 (10) Subparagraph (G) of section 1260(c)(2) is 

8 amended by adding ‘‘and’’ at the end. 

9 (11) Paragraph (2) of section 1297(a) is 

10 amended by striking ‘‘subsection (e)’’ and inserting 

11 ‘‘subsection (f)’’. 

12 (12) Paragraph (2) of section 1400O is amend13 ed by striking ‘‘under of’’ and inserting ‘‘under’’. 

14 (13) The table of sections for part II of sub15 chapter Y of chapter 1 is amended by adding at the 

16 end the following new item: 

‘‘Sec. 1400T. Special rules for mortgage revenue bonds.’’. 

17 (14) Subsection (b) of section 4082 is amended 

18 to read as follows: 

19 ‘‘(b) NONTAXABLE USE.—For purposes of this sec20 tion, the term ‘nontaxable use’ means— 

21 ‘‘(1) any use which is exempt from the tax im22 posed by section 4041(a)(1) other than by reason of 

23 a prior imposition of tax, 

24 ‘‘(2) any use in a train, and 


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1 ‘‘(3) any use described in section 

2 4041(a)(1)(C)(iii)(II). 

3 The term ‘nontaxable use’ does not include the use of ker4 osene in an aircraft and such term shall not include any 

5 use described in section 6421(e)(2)(C).’’. 

6 (15) Paragraph (4) of section 4101(a) (relating 

7 to registration in event of change of ownership) is 

8 redesignated as paragraph (5). 

9 (16) Paragraph (6) of section 4965(c) is 

10 amended by striking ‘‘section 4457(e)(1)(A)’’ and 

11 inserting ‘‘section 457(e)(1)(A)’’. 

12 (17) Subpart C of part II of subchapter A of 

13 chapter 51 is amended by redesignating section 

14 5432 (relating to recordkeeping by wholesale deal15 ers) as section 5121. 

16 (18) Paragraph (2) of section 5732(c), as re17 designated by section 11125(b)(20)(A) of the 

18 SAFETEA–LU, is amended by striking ‘‘this sub19 part’’ and inserting ‘‘this subchapter’’. 

20 (19) Paragraph (3) of section 6427(e) (relating 

21 to termination), as added by section 11113 of the 

22 SAFETEA–LU, is redesignated as paragraph (5) 

23 and moved after paragraph (4). 


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1 (20) Clause (ii) of section 6427(l)(4)(A) is 

2 amended by striking ‘‘section 4081(a)(2)(iii)’’ and 

3 inserting ‘‘section 4081(a)(2)(A)(iii)’’. 

4 (21)(A) Section 6427, as amended by section 

5 1343(b)(1) of the Energy Policy Act of 2005, is 

6 amended by striking subsection (p) and redesig7 nating subsection (q) as subsection (p). 

8 (B) The Internal Revenue Code of 1986 shall 

9 be applied and administered as if the amendments 

10 made by paragraph (2) of section 11151(a) of the 

11 SAFETEA–LU had never been enacted. 

12 (22)(A) Paragraph (3) of section 9002 is 

13 amended by striking ‘‘section 309(a)(1)’’ and insert14 ing ‘‘section 306(a)(1)’’. 

15 (B) Paragraph (1) of section 9004(a) is amend16 ed by striking ‘‘section 320(b)(1)(B)’’ and inserting 

17 ‘‘section 315(b)(1)(B)’’. 

18 (C) Paragraph (3) of section 9032 is amended 

19 by striking ‘‘section 309(a)(1)’’ and inserting ‘‘sec20 tion 306(a)(1)’’. 

21 (D) Subsection (b) of section 9034 is amended 

22 by striking ‘‘section 320(b)(1)(A)’’ and inserting 

23 ‘‘section 315(b)(1)(A)’’. 


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1 (23) Section 9006 is amended by striking 

2 ‘‘Comptroller General’’ each place it appears and in3 serting ‘‘Commission’’. 

4 (24) Subsection (c) of section 9503 is amended 

5 by redesignating paragraph (7) (relating to transfers 

6 from the trust fund for certain aviation fuels taxes) 

7 as paragraph (6). 

8 (25) Paragraph (1) of section 1301(g) of the 

9 Energy Policy Act of 2005 is amended by striking 

10 ‘‘shall take effect of the date of the enactment’’ and 

11 inserting ‘‘shall take effect on the date of the enact12 ment’’. 

13 (b) CLERICAL AMENDMENTS RELATED TO THE

14 GULF OPPORTUNITY ZONE ACT OF 2005.— 

15 (1) AMENDMENTS RELATED TO SECTION 402 OF

16 THE ACT.—Subparagraph (B) of section 24(d)(1) is 

17 amended— 

18 (A) by striking ‘‘the excess (if any) of’’ in 

19 the matter preceding clause (i) and inserting 

20 ‘‘the greater of’’, and 

21 (B) by striking ‘‘section’’ in clause (ii)(II) 

22 and inserting ‘‘section 32’’. 

23 (2) EFFECTIVE DATE.—The amendments made 

24 by this subsection shall take effect as if included in 


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1 the provisions of the Gulf Opportunity Zone Act of 

2 2005 to which they relate. 

3 (c) CLERICAL AMENDMENTS RELATED TO THE

4 SAFE, ACCOUNTABLE, FLEXIBLE, EFFICIENT TRANSPOR5 TATION EQUITY ACT: A LEGACY FOR USERS.— 

6 (1) AMENDMENTS RELATED TO SECTION 11163

7 OF THE ACT.—Subparagraph (C) of section 

8 6416(a)(4) is amended— 

9 (A) by striking ‘‘ultimate vendor’’ and all 

10 that follows through ‘‘has certified’’ and insert11 ing ‘‘ultimate vendor or credit card issuer has 

12 certified’’, and 

13 (B) by striking ‘‘all ultimate purchasers of 

14 the vendor’’ and all that follows through ‘‘are 

15 certified’’ and inserting ‘‘all ultimate purchasers 

16 of the vendor or credit card issuer are cer17 tified’’. 

18 (2) EFFECTIVE DATE.—The amendments made 

19 by this subsection shall take effect as if included in 

20 the provisions of the Safe, Accountable, Flexible, Ef21 ficient Transportation Equity Act: A Legacy for 

22 Users to which they relate. 

23 (d) CLERICAL AMENDMENTS RELATED TO THE EN24 ERGY POLICY ACT OF 2005.— 


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1 (1) AMENDMENT RELATED TO SECTION 1344 OF

2 THE ACT.—Subparagraph (B) of section 6427(e)(5), 

3 as redesignated by subsection (a)(19), is amended by 

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

5 (2) AMENDMENTS RELATED TO SECTION 1351

6 OF THE ACT.—Subparagraphs (A)(ii) and (B)(ii) of 

7 section 41(f)(1) are each amended by striking 

8 ‘‘qualified research expenses and basic research pay9 ments’’ and inserting ‘‘qualified research expenses, 

10 basic research payments, and amounts paid or in11 curred to energy research consortiums,’’. 

12 (3) EFFECTIVE DATE.—The amendments made 

13 by this subsection shall take effect as if included in 

14 the provisions of the Energy Policy Act of 2005 to 

15 which they relate. 

Æ 


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