I 
110TH CONGRESS 
2D SESSION 
H. R. 7202 
To amend the Internal Revenue Code of 1986 to extend certain expiring 
provisions, to provide individual income tax relief, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 28, 2008 
Mr. RANGEL introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committees on Agri-
culture, Natural Resources, Energy and Commerce, and Education and 
Labor, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to extend 
certain expiring provisions, to provide individual income 
tax relief, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Temporary Tax Relief Act of 2008’’. 
(b) REFERENCE.—Except as otherwise expressly pro-
vided, whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a 
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section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the In-
ternal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title, etc. 
TITLE I—EXTENSION OF TEMPORARY PROVISIONS 
Subtitle A—Extensions Primarily Affecting Individuals 
Sec. 101. Deduction for State and local sales taxes. 
Sec. 102. Deduction of qualified tuition and related expenses. 
Sec. 103. Treatment of certain dividends of regulated investment companies. 
Sec. 104. Tax-free distributions from individual retirement plans for charitable 
purposes. 
Sec. 105. Deduction for certain expenses of elementary and secondary school 
teachers. 
Sec. 106. Stock in RIC for purposes of determining estates of nonresidents not 
citizens. 
Sec. 107. Qualified investment entities. 
Sec. 108. Real property tax standard deduction. 
Subtitle B—Extensions Primarily Affecting Businesses 
Sec. 121. Research credit. 
Sec. 122. Indian employment credit. 
Sec. 123. New markets tax credit. 
Sec. 124. Railroad track maintenance. 
Sec. 125. Fifteen-year straight-line cost recovery for qualified leasehold im-
provements and qualified restaurant property. 
Sec. 126. Seven-year cost recovery period for motorsports racing track facility. 
Sec. 127. Accelerated depreciation for business property on Indian reservation. 
Sec. 128. Expensing of environmental remediation costs. 
Sec. 129. Deduction allowable with respect to income attributable to domestic 
production activities in Puerto Rico. 
Sec. 130. Modification of tax treatment of certain payments to controlling ex-
empt organizations. 
Sec. 131. Qualified zone academy bonds. 
Sec. 132. Tax incentives for investment in the District of Columbia. 
Sec. 133. Economic development credit for American Samoa. 
Sec. 134. Enhanced charitable deduction for contributions of food inventory. 
Sec. 135. Enhanced charitable deduction for contributions of book inventory to 
public schools. 
Sec. 136. Enhanced deduction for qualified computer contributions. 
Sec. 137. Basis adjustment to stock of S corporations making charitable con-
tributions of property. 
Sec. 138. Work opportunity tax credit for Hurricane Katrina employees. 
Sec. 139. Subpart F exception for active financing income. 
Sec. 140. Look-thru rule for related controlled foreign corporations. 
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Sec. 141. Expensing for certain qualified film and television productions. 
Subtitle C—Other Extensions 
Sec. 151. Authority to disclose information related to terrorist activities made 
permanent. 
Sec. 152. Authority for undercover operations made permanent. 
Sec. 153. Increase in limit on cover over of rum excise tax to Puerto Rico and 
the Virgin Islands. 
TITLE II—ADDITIONAL TAX RELIEF AND OTHER PROVISIONS 
Sec. 201. Refundable child credit. 
Sec. 202. Provisions related to film and television productions. 
Sec. 203. Exemption from excise tax for certain arrows designed for use by 
children. 
Sec. 204. Modification of penalty on understatement of taxpayer’s liability by 
tax return preparer. 
TITLE III—SECURE RURAL SCHOOLS 
Sec. 301. Secure rural schools and community self-determination program. 
TITLE IV—PAUL WELLSTONE AND PETE DOMENICI MENTAL 
HEALTH PARITY AND ADDICTION EQUITY ACT OF 2008 
Sec. 401. Short title. 
Sec. 402. Mental health parity. 
TITLE V—REVENUE PROVISIONS 
Sec. 501. 0.2 percent FUTA surtax. 
Sec. 502. Nonqualified deferred compensation from certain tax indifferent par-
ties. 
Sec. 503. Increase and extension of Oil Spill Liability Trust Fund tax. 
Sec. 504. Delay in application of worldwide allocation of interest. 
Sec. 505. Time for payment of corporate estimated taxes. 
TITLE I—EXTENSION OF 
TEMPORARY PROVISIONS 
Subtitle A—Extensions Primarily 
Affecting Individuals 
SEC. 101. DEDUCTION FOR STATE AND LOCAL SALES 
TAXES. 
(a) IN
GENERAL.—Subparagraph (I) of section 
164(b)(5) is amended by striking ‘‘January 1, 2008’’ and 
inserting ‘‘January 1, 2010’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 102. DEDUCTION OF QUALIFIED TUITION AND RE-
LATED EXPENSES. 
(a) IN GENERAL.—Subsection (e) of section 222 is 
amended by striking ‘‘December 31, 2007’’ and inserting 
‘‘December 31, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
(c) TEMPORARY COORDINATION WITH HOPE AND 
LIFETIME LEARNING CREDIT.—In the case of any tax-
payer for any taxable year beginning in 2008 or 2009, 
no deduction shall be allowed under section 222 of the In-
ternal Revenue Code of 1986 if— 
(1) the taxpayer’s net Federal income tax re-
duction which would be attributable to such deduc-
tion for such taxable year, is less than 
(2) the credit which would be allowed to the 
taxpayer for such taxable year under section 25A of 
such Code (determined without regard to sections 
25A(e) and 26 of such Code). 
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SEC. 103. TREATMENT OF CERTAIN DIVIDENDS OF REGU-
LATED INVESTMENT COMPANIES. 
(a) 
INTEREST-RELATED
DIVIDENDS.—Subpara-
graph (C) of section 871(k)(1) (defining interest-related 
dividend) is amended by striking ‘‘December 31, 2007’’ 
and inserting ‘‘December 31, 2009’’. 
(b) SHORT-TERM CAPITAL GAIN DIVIDENDS.—Sub-
paragraph (C) of section 871(k)(2) (defining short-term 
capital gain dividend) is amended by striking ‘‘December 
31, 2007’’ and inserting ‘‘December 31, 2009’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to dividends with respect to taxable 
years of regulated investment companies beginning after 
December 31, 2007. 
SEC. 104. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE-
TIREMENT PLANS FOR CHARITABLE PUR-
POSES. 
(a) IN GENERAL.—Subparagraph (F) of section 
408(d)(8) is amended by striking ‘‘December 31, 2007’’ 
and inserting ‘‘December 31, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distributions made in taxable 
years beginning after December 31, 2007. 
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SEC. 105. DEDUCTION FOR CERTAIN EXPENSES OF ELE-
MENTARY AND SECONDARY SCHOOL TEACH-
ERS. 
(a) IN GENERAL.—Subparagraph (D) of section 
62(a)(2) is amended by striking ‘‘or 2007’’ and inserting 
‘‘2007, 2008, or 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 106. STOCK IN RIC FOR PURPOSES OF DETERMINING 
ESTATES OF NONRESIDENTS NOT CITIZENS. 
(a) IN GENERAL.—Paragraph (3) of section 2105(d) 
is amended by striking ‘‘December 31, 2007’’ and insert-
ing ‘‘December 31, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to decedents dying after December 
31, 2007. 
SEC. 107. QUALIFIED INVESTMENT ENTITIES. 
(a) 
IN
GENERAL.—Clause 
(ii) 
of 
section 
897(h)(4)(A) is amended by striking ‘‘December 31, 
2007’’ and inserting ‘‘December 31, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on January 1, 2008, except 
that such amendment shall not apply to the application 
of withholding requirements with respect to any payment 
made on or before the date of the enactment of this Act. 
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SEC. 130. MODIFICATION OF TAX TREATMENT OF CERTAIN 
PAYMENTS TO CONTROLLING EXEMPT ORGA-
NIZATIONS. 
(a) 
IN
GENERAL.—Clause 
(iv) 
of 
section 
512(b)(13)(E) is amended by striking ‘‘December 31, 
2007’’ and inserting ‘‘December 31, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to payments received or accrued 
after December 31, 2007. 
SEC. 131. QUALIFIED ZONE ACADEMY BONDS. 
(a) IN GENERAL.—Subpart I of part IV of sub-
chapter A of chapter 1 is amended by adding at the end 
the following new section: 
‘‘SEC. 54C. QUALIFIED ZONE ACADEMY BONDS. 
‘‘(a) QUALIFIED ZONE ACADEMY BONDS.—For pur-
poses of this subchapter, the term ‘qualified zone academy 
bond’ means any bond issued as part of an issue if— 
‘‘(1) 100 percent of the available project pro-
ceeds of such issue are to be used for a qualified 
purpose with respect to a qualified zone academy es-
tablished by an eligible local education agency, 
‘‘(2) the bond is issued by a State or local gov-
ernment within the jurisdiction of which such acad-
emy is located, and 
‘‘(3) the issuer— 
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‘‘(A) designates such bond for purposes of 
this section, 
‘‘(B) certifies that it has written assur-
ances that the private business contribution re-
quirement of subsection (b) will be met with re-
spect to such academy, and 
‘‘(C) certifies that it has the written ap-
proval of the eligible local education agency for 
such bond issuance. 
‘‘(b) PRIVATE BUSINESS CONTRIBUTION REQUIRE-
MENT.—For purposes of subsection (a), the private busi-
ness contribution requirement of this subsection is met 
with respect to any issue if the eligible local education 
agency that established the qualified zone academy has 
written commitments from private entities to make quali-
fied contributions having a present value (as of the date 
of issuance of the issue) of not less than 10 percent of 
the proceeds of the issue. 
‘‘(c) LIMITATION
ON AMOUNT
OF BONDS DES-
IGNATED.— 
‘‘(1) NATIONAL LIMITATION.—There is a na-
tional zone academy bond limitation for each cal-
endar year. Such limitation is $400,000,000 for 
2008 and 2009, and, except as provided in para-
graph (4), zero thereafter. 
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‘‘(2) ALLOCATION
OF
LIMITATION.—The na-
tional zone academy bond limitation for a calendar 
year shall be allocated by the Secretary among the 
States on the basis of their respective populations of 
individuals below the poverty line (as defined by the 
Office of Management and Budget). The limitation 
amount allocated to a State under the preceding 
sentence shall be allocated by the State education 
agency to qualified zone academies within such 
State. 
‘‘(3) DESIGNATION
SUBJECT
TO
LIMITATION 
AMOUNT.—The maximum aggregate face amount of 
bonds issued during any calendar year which may be 
designated under subsection (a) with respect to any 
qualified zone academy shall not exceed the limita-
tion amount allocated to such academy under para-
graph (2) for such calendar year. 
‘‘(4) CARRYOVER OF UNUSED LIMITATION.— 
‘‘(A) IN
GENERAL.—If for any calendar 
year— 
‘‘(i) the limitation amount for any 
State, exceeds 
‘‘(ii) the amount of bonds issued dur-
ing such year which are designated under 
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subsection (a) with respect to qualified 
zone academies within such State, 
the limitation amount for such State for the fol-
lowing calendar year shall be increased by the 
amount of such excess. 
‘‘(B) LIMITATION
ON
CARRYOVER.—Any 
carryforward of a limitation amount may be 
carried only to the first 2 years following the 
unused limitation year. For purposes of the pre-
ceding sentence, a limitation amount shall be 
treated as used on a first-in first-out basis. 
‘‘(C) 
COORDINATION
WITH
SECTION 
1397E.—Any carryover determined under sec-
tion 1397E(e)(4) (relating to carryover of un-
used limitation) with respect to any State to 
calendar year 2008 shall be treated for pur-
poses of this section as a carryover with respect 
to such State for such calendar year under sub-
paragraph (A), and the limitation of subpara-
graph (B) shall apply to such carryover taking 
into account the calendar years to which such 
carryover relates. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED
ZONE
ACADEMY.—The term 
‘qualified zone academy’ means any public school (or 
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academic program within a public school) which is 
established by and operated under the supervision of 
an eligible local education agency to provide edu-
cation or training below the postsecondary level if— 
‘‘(A) such public school or program (as the 
case may be) is designed in cooperation with 
business to enhance the academic curriculum, 
increase graduation and employment rates, and 
better prepare students for the rigors of college 
and the increasingly complex workforce, 
‘‘(B) students in such public school or pro-
gram (as the case may be) will be subject to the 
same academic standards and assessments as 
other students educated by the eligible local 
education agency, 
‘‘(C) the comprehensive education plan of 
such public school or program is approved by 
the eligible local education agency, and 
‘‘(D)(i) such public school is located in an 
empowerment zone or enterprise community 
(including any such zone or community des-
ignated after the date of the enactment of this 
section), or 
‘‘(ii) there is a reasonable expectation (as 
of the date of issuance of the bonds) that at 
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least 35 percent of the students attending such 
school or participating in such program (as the 
case may be) will be eligible for free or reduced- 
cost lunches under the school lunch program es-
tablished under the National School Lunch Act. 
‘‘(2) ELIGIBLE LOCAL EDUCATION AGENCY.— 
For purposes of this section, the term ‘eligible local 
education agency’ means any local educational agen-
cy as defined in section 9101 of the Elementary and 
Secondary Education Act of 1965. 
‘‘(3) QUALIFIED PURPOSE.—The term ‘quali-
fied purpose’ means, with respect to any qualified 
zone academy— 
‘‘(A) rehabilitating or repairing the public 
school facility in which the academy is estab-
lished, 
‘‘(B) providing equipment for use at such 
academy, 
‘‘(C) developing course materials for edu-
cation to be provided at such academy, and 
‘‘(D) training teachers and other school 
personnel in such academy. 
‘‘(4) QUALIFIED
CONTRIBUTIONS.—The term 
‘qualified contribution’ means any contribution (of a 
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type and quality acceptable to the eligible local edu-
cation agency) of— 
‘‘(A) equipment for use in the qualified 
zone academy (including state-of-the-art tech-
nology and vocational equipment), 
‘‘(B) technical assistance in developing 
curriculum or in training teachers in order to 
promote appropriate market driven technology 
in the classroom, 
‘‘(C) services of employees as volunteer 
mentors, 
‘‘(D) internships, field trips, or other edu-
cational opportunities outside the academy for 
students, or 
‘‘(E) any other property or service speci-
fied by the eligible local education agency.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (1) of section 54A(d) is amended 
to read as follows: 
‘‘(1) QUALIFIED TAX CREDIT BOND.—The term 
‘qualified tax credit bond’ means— 
‘‘(A) a qualified forestry conservation 
bond, or 
‘‘(B) a qualified zone academy bond, 
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which is part of an issue that meets the require-
ments of paragraphs (2), (3), (4), (5), and (6).’’. 
(2) Subparagraph (C) of section 54A(d)(2) is 
amended to read as follows: 
‘‘(C) QUALIFIED PURPOSE.—For purposes 
of this paragraph, the term ‘qualified purpose’ 
means— 
‘‘(i) in the case of a qualified forestry 
conservation bond, a purpose specified in 
section 54B(e), and 
‘‘(ii) in the case of a qualified zone 
academy bond, a purpose specified in sec-
tion 54C(a)(1).’’. 
(3) Section 1397E is amended by adding at the 
end the following new subsection: 
‘‘(m) TERMINATION.—This section shall not apply to 
any obligation issued after the date of the enactment of 
this subsection.’’. 
(4) The table of sections for subpart I of part 
IV of subchapter A of chapter 1 is amended by add-
ing at the end the following new item: 
‘‘Sec. 54C. Qualified zone academy bonds.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
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SEC. 132. TAX INCENTIVES FOR INVESTMENT IN THE DIS-
TRICT OF COLUMBIA. 
(a) DESIGNATION OF ZONE.— 
(1) IN
GENERAL.—Subsection (f) of section 
1400 is amended by striking ‘‘2007’’ both places it 
appears and inserting ‘‘2009’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to periods beginning 
after December 31, 2007. 
(b) 
TAX-EXEMPT
ECONOMIC
DEVELOPMENT 
BONDS.— 
(1) IN
GENERAL.—Subsection (b) of section 
1400A is amended by striking ‘‘2007’’ and inserting 
‘‘2009’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to bonds issued after 
December 31, 2007. 
(c) ZERO PERCENT CAPITAL GAINS RATE.— 
(1) IN
GENERAL.—Subsection (b) of section 
1400B is amended by striking ‘‘2008’’ each place it 
appears and inserting ‘‘2010’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 1400B(e)(2) is amended— 
(i) by striking ‘‘2012’’ and inserting 
‘‘2014’’, and 
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(ii) by striking ‘‘2012’’ in the heading 
thereof and inserting ‘‘2014’’. 
(B) Section 1400B(g)(2) is amended by 
striking ‘‘2012’’ and inserting ‘‘2014’’. 
(C) Section 1400F(d) is amended by strik-
ing ‘‘2012’’ and inserting ‘‘2014’’. 
(3) EFFECTIVE DATES.— 
(A) EXTENSION.—The amendments made 
by paragraph (1) shall apply to acquisitions 
after December 31, 2007. 
(B) 
CONFORMING
AMENDMENTS.—The 
amendments made by paragraph (2) shall take 
effect on the date of the enactment of this Act. 
(d) FIRST-TIME HOMEBUYER CREDIT.— 
(1) IN
GENERAL.—Subsection (i) of section 
1400C is amended by striking ‘‘2008’’ and inserting 
‘‘2010’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to property purchased 
after December 31, 2007. 
SEC. 133. ECONOMIC DEVELOPMENT CREDIT FOR AMER-
ICAN SAMOA. 
(a) IN GENERAL.—Subsection (d) of section 119 of 
division A of the Tax Relief and Health Care Act of 2006 
is amended— 
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(1) by striking ‘‘first two taxable years’’ and in-
serting ‘‘first 4 taxable years’’, and 
(2) by striking ‘‘January 1, 2008’’ and insert-
ing ‘‘January 1, 2010’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 134. ENHANCED CHARITABLE DEDUCTION FOR CON-
TRIBUTIONS OF FOOD INVENTORY. 
(a) 
IN
GENERAL.—Clause 
(iv) 
of 
section 
170(e)(3)(C) is amended by striking ‘‘December 31, 
2007’’ and inserting ‘‘December 31, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made after De-
cember 31, 2007. 
SEC. 135. ENHANCED CHARITABLE DEDUCTION FOR CON-
TRIBUTIONS OF BOOK INVENTORY TO PUB-
LIC SCHOOLS. 
(a) 
IN
GENERAL.—Clause 
(iv) 
of 
section 
170(e)(3)(D) is amended by striking ‘‘December 31, 
2007’’ and inserting ‘‘December 31, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made after De-
cember 31, 2007. 
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SEC. 136. ENHANCED DEDUCTION FOR QUALIFIED COM-
PUTER CONTRIBUTIONS. 
(a) IN GENERAL.—Subparagraph (G) of section 
170(e)(6) is amended by striking ‘‘December 31, 2007’’ 
and inserting ‘‘December 31, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made during tax-
able years beginning after December 31, 2007. 
SEC. 137. BASIS ADJUSTMENT TO STOCK OF S CORPORA-
TIONS 
MAKING 
CHARITABLE 
CONTRIBU-
TIONS OF PROPERTY. 
(a) IN GENERAL.—The last sentence of section 
1367(a)(2) is amended by striking ‘‘December 31, 2007’’ 
and inserting ‘‘December 31, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made in taxable 
years beginning after December 31, 2007. 
SEC. 138. WORK OPPORTUNITY TAX CREDIT FOR HURRI-
CANE KATRINA EMPLOYEES. 
(a) IN GENERAL.—Paragraph (1) of section 201(b) 
of the Katrina Emergency Tax Relief Act of 2005 is 
amended by striking ‘‘2-year’’ and inserting ‘‘4-year’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to individuals hired after August 
27, 2007. 
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SEC. 139. SUBPART F EXCEPTION FOR ACTIVE FINANCING 
INCOME. 
(a) EXEMPT INSURANCE INCOME.—Paragraph (10) 
of section 953(e) (relating to application) is amended— 
(1) by striking ‘‘January 1, 2009’’ and insert-
ing ‘‘January 1, 2010’’, and 
(2) by striking ‘‘December 31, 2008’’ and in-
serting ‘‘December 31, 2009’’. 
(b) EXCEPTION TO TREATMENT AS FOREIGN PER-
SONAL HOLDING COMPANY INCOME.—Paragraph (9) of 
section 954(h) (relating to application) is amended by 
striking ‘‘January 1, 2009’’ and inserting ‘‘January 1, 
2010’’. 
SEC. 140. LOOK-THRU RULE FOR RELATED CONTROLLED 
FOREIGN CORPORATIONS. 
(a) IN GENERAL.—Subparagraph (C) of section 
954(c)(6) (relating to application) is amended by striking 
‘‘January 1, 2009’’ and inserting ‘‘January 1, 2010’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years of foreign corpora-
tions beginning after December 31, 2008, and to taxable 
years of United States shareholders with or within which 
such taxable years of foreign corporations end. 
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SEC. 141. EXPENSING FOR CERTAIN QUALIFIED FILM AND 
TELEVISION PRODUCTIONS. 
(a) IN GENERAL.—Subsection (f) of section 181 is 
amended by striking ‘‘December 31, 2008’’ and inserting 
‘‘December 31, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to productions commencing after 
December 31, 2008. 
Subtitle C—Other Extensions 
SEC. 151. AUTHORITY TO DISCLOSE INFORMATION RE-
LATED TO TERRORIST ACTIVITIES MADE 
PERMANENT. 
(a) IN GENERAL.—Subparagraph (C) of section 
6103(i)(3) is amended by striking clause (iv). 
(b) DISCLOSURE ON REQUEST.—Paragraph (7) of 
section 6103(i) is amended by striking subparagraph (E). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to disclosures after the date of the 
enactment of this Act. 
SEC. 152. AUTHORITY FOR UNDERCOVER OPERATIONS 
MADE PERMANENT. 
(a) IN GENERAL.—Subsection (c) of section 7608 is 
amended by striking paragraph (6). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on January 1, 2008. 
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SEC. 153. INCREASE IN LIMIT ON COVER OVER OF RUM EX-
CISE TAX TO PUERTO RICO AND THE VIRGIN 
ISLANDS. 
(a) IN GENERAL.—Paragraph (1) of section 7652(f) 
is amended by striking ‘‘January 1, 2008’’ and inserting 
‘‘January 1, 2010’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distilled spirits brought into the 
United States after December 31, 2007. 
TITLE II—ADDITIONAL TAX RE-
LIEF 
AND 
OTHER 
PROVI-
SIONS 
SEC. 201. REFUNDABLE CHILD CREDIT. 
(a) MODIFICATION
OF
THRESHOLD
AMOUNT.— 
Clause (i) of section 24(d)(1)(B) is amended by inserting 
‘‘($8,500 in the case of taxable years beginning in 2009)’’ 
after ‘‘$10,000’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2008. 
SEC. 202. PROVISIONS RELATED TO FILM AND TELEVISION 
PRODUCTIONS. 
(a) MODIFICATION
OF LIMITATION
ON EXPENS-
ING.—Subparagraph (A) of section 181(a)(2) is amended 
to read as follows: 
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‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply to so much of the aggregate cost of 
any qualified film or television production as ex-
ceeds $15,000,000.’’. 
(b) MODIFICATIONS TO DEDUCTION FOR DOMESTIC 
ACTIVITIES.— 
(1) DETERMINATION
OF
W-2
WAGES.—Para-
graph (2) of section 199(b) is amended by adding at 
the end the following new subparagraph: 
‘‘(D) SPECIAL
RULE
FOR
QUALIFIED 
FILM.—In the case of a qualified film, such 
term shall include compensation for services 
performed in the United States by actors, pro-
duction personnel, directors, and producers.’’. 
(2) DEFINITION
OF
QUALIFIED
FILM.—Para-
graph (6) of section 199(c) is amended by adding at 
the end the following: ‘‘A qualified film shall include 
any copyrights, trademarks, or other intangibles 
with respect to such film. The methods and means 
of distributing a qualified film shall not affect the 
availability of the deduction under this section.’’. 
(3) PARTNERSHIPS.—Subparagraph (A) of sec-
tion 199(d)(1) is amended by striking ‘‘and’’ at the 
end of clause (ii), by striking the period at the end 
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of clause (iii) and inserting ‘‘, and’’, and by adding 
at the end the following new clause: 
‘‘(iv) in the case of each partner of a 
partnership, or shareholder of an S cor-
poration, who owns (directly or indirectly) 
at least 20 percent of the capital interests 
in such partnership or of the stock of such 
S corporation— 
‘‘(I) such partner or shareholder 
shall be treated as having engaged di-
rectly in any film produced by such 
partnership or S corporation, and 
‘‘(II) such partnership or S cor-
poration shall be treated as having en-
gaged directly in any film produced by 
such partner or shareholder.’’. 
(c) 
CONFORMING
AMENDMENT.—Section 
181(d)(3)(A) is amended by striking ‘‘actors’’ and all that 
follows and inserting ‘‘actors, production personnel, direc-
tors, and producers.’’. 
(d) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2007. 
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(2) EXPENSING.—The amendments made by 
subsection (a) shall apply to qualified film and tele-
vision productions commencing after December 31, 
2007. 
SEC. 203. EXEMPTION FROM EXCISE TAX FOR CERTAIN AR-
ROWS DESIGNED FOR USE BY CHILDREN. 
(a) IN GENERAL.—Paragraph (2) of section 4161(b) 
(relating to arrows) is amended by redesignating subpara-
graph (B) as subparagraph (C) and by inserting after sub-
paragraph (A) the following new subparagraph: 
‘‘(B) EXEMPTION
FOR
CERTAIN
ARROW 
SHAFTS.—Subparagraph (A) shall not apply to 
any shaft measuring 5⁄16 of an inch or less in 
diameter and consisting of either— 
‘‘(i) all fiberglass and hollow, or 
‘‘(ii) all natural wood, 
with no laminations or artificial means of en-
hancing the spine of such shaft (whether sold 
separately or incorporated as part of a finished 
or unfinished product) of a type used in the 
manufacture of any arrow which after its as-
sembly is not suitable for use with a bow de-
scribed in paragraph (1)(A).’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to shafts first sold after the date 
of enactment of this Act. 
SEC. 204. MODIFICATION OF PENALTY ON UNDERSTATE-
MENT OF TAXPAYER’S LIABILITY BY TAX RE-
TURN PREPARER. 
(a) IN GENERAL.—Subsection (a) of section 6694 
(relating to understatement due to unreasonable positions) 
is amended to read as follows: 
‘‘(a) UNDERSTATEMENT DUE
TO UNREASONABLE 
POSITIONS.— 
‘‘(1) IN GENERAL.—If a tax return preparer— 
‘‘(A) prepares any return or claim of re-
fund with respect to which any part of an un-
derstatement of liability is due to a position de-
scribed in paragraph (2), and 
‘‘(B) knew (or reasonably should have 
known) of the position, 
such tax return preparer shall pay a penalty with re-
spect to each such return or claim in an amount 
equal to the greater of $1,000 or 50 percent of the 
income derived (or to be derived) by the tax return 
preparer with respect to the return or claim. 
‘‘(2) UNREASONABLE POSITION.— 
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‘‘(A) IN GENERAL.—Except as otherwise 
provided in this paragraph, a position is de-
scribed in this paragraph unless there is or was 
substantial authority for the position. 
‘‘(B) DISCLOSED POSITIONS.—If the posi-
tion was disclosed as provided in section 
6662(d)(2)(B)(ii)(I) and is not a position to 
which subparagraph (C) applies, the position is 
described in this paragraph unless there is a 
reasonable basis for the position. 
‘‘(C) REPORTABLE TRANSACTIONS.—If the 
position is with respect to a reportable trans-
action to which section 6662A applies, the posi-
tion is described in this paragraph unless it is 
reasonable to believe that the position would 
more likely than not be sustained on its merits. 
‘‘(3) REASONABLE
CAUSE
EXCEPTION.—No 
penalty shall be imposed under this subsection if it 
is shown that there is reasonable cause for the un-
derstatement and the tax return preparer acted in 
good faith.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply— 
(1) in the case of a position other than a posi-
tion described in subparagraph (C) of section 
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6694(a)(2) of the Internal Revenue Code of 1986 
(as amended by this section), to returns prepared 
after May 25, 2007, and 
(2) in the case of a position described in such 
subparagraph (C), to returns prepared for taxable 
years beginning after the date of the enactment of 
this Act. 
TITLE III—SECURE RURAL 
SCHOOLS 
SEC. 301. SECURE RURAL SCHOOLS AND COMMUNITY SELF- 
DETERMINATION PROGRAM. 
(a) REAUTHORIZATION
OF
THE SECURE RURAL 
SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT 
OF 2000.—The Secure Rural Schools and Community 
Self-Determination Act of 2000 (16 U.S.C. 500 note; Pub-
lic Law 106–393) is amended by striking sections 1 
through 403 and inserting the following: 
‘‘SECTION 1. SHORT TITLE. 
‘‘This Act may be cited as the ‘Secure Rural Schools 
and Community Self-Determination Act of 2000’. 
‘‘SEC. 2. PURPOSES. 
‘‘The purposes of this Act are— 
‘‘(1) to stabilize and transition payments to 
counties to provide funding for schools and roads 
that supplements other available funds; 
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‘‘(2) to make additional investments in, and 
create additional employment opportunities through, 
projects that— 
‘‘(A)(i) improve the maintenance of exist-
ing infrastructure; 
‘‘(ii) implement stewardship objectives that 
enhance forest ecosystems; and 
‘‘(iii) restore and improve land health and 
water quality; 
‘‘(B) enjoy broad-based support; and 
‘‘(C) have objectives that may include— 
‘‘(i) road, trail, and infrastructure 
maintenance or obliteration; 
‘‘(ii) soil productivity improvement; 
‘‘(iii) improvements in forest eco-
system health; 
‘‘(iv) watershed restoration and main-
tenance; 
‘‘(v) the restoration, maintenance, and 
improvement of wildlife and fish habitat; 
‘‘(vi) the control of noxious and exotic 
weeds; and 
‘‘(vii) the reestablishment of native 
species; and 
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‘‘(3) 
to 
improve 
cooperative 
relationships 
among— 
‘‘(A) the people that use and care for Fed-
eral land; and 
‘‘(B) the agencies that manage the Federal 
land. 
‘‘SEC. 3. DEFINITIONS. 
‘‘In this Act: 
‘‘(1) ADJUSTED
SHARE.—The term ‘adjusted 
share’ means the number equal to the quotient ob-
tained by dividing— 
‘‘(A) the number equal to the quotient ob-
tained by dividing— 
‘‘(i) the base share for the eligible 
county; by 
‘‘(ii) the income adjustment for the el-
igible county; by 
‘‘(B) the number equal to the sum of the 
quotients obtained under subparagraph (A) and 
paragraph (8)(A) for all eligible counties. 
‘‘(2) BASE
SHARE.—The term ‘base share’ 
means the number equal to the average of— 
‘‘(A) the quotient obtained by dividing— 
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‘‘(i) the number of acres of Federal 
land described in paragraph (7)(A) in each 
eligible county; by 
‘‘(ii) the total number acres of Fed-
eral land in all eligible counties in all eligi-
ble States; and 
‘‘(B) the quotient obtained by dividing— 
‘‘(i) the amount equal to the average 
of the 3 highest 25-percent payments and 
safety net payments made to each eligible 
State for each eligible county during the 
eligibility period; by 
‘‘(ii) the amount equal to the sum of 
the amounts calculated under clause (i) 
and paragraph (9)(B)(i) for all eligible 
counties in all eligible States during the 
eligibility period. 
‘‘(3) COUNTY
PAYMENT.—The term ‘county 
payment’ means the payment for an eligible county 
calculated under section 101(b). 
‘‘(4) ELIGIBLE
COUNTY.—The term ‘eligible 
county’ means any county that— 
‘‘(A) contains Federal land (as defined in 
paragraph (7)); and 
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‘‘(B) elects to receive a share of the State 
payment or the county payment under section 
102(b). 
‘‘(5) ELIGIBILITY
PERIOD.—The term ‘eligi-
bility period’ means fiscal year 1986 through fiscal 
year 1999. 
‘‘(6) ELIGIBLE
STATE.—The term ‘eligible 
State’ means a State or territory of the United 
States that received a 25-percent payment for 1 or 
more fiscal years of the eligibility period. 
‘‘(7) FEDERAL LAND.—The term ‘Federal land’ 
means— 
‘‘(A) land within the National Forest Sys-
tem, as defined in section 11(a) of the Forest 
and Rangeland Renewable Resources Planning 
Act of 1974 (16 U.S.C. 1609(a)) exclusive of 
the National Grasslands and land utilization 
projects designated as National Grasslands ad-
ministered pursuant to the Act of July 22, 
1937 (7 U.S.C. 1010–1012); and 
‘‘(B) such portions of the revested Oregon 
and California Railroad and reconveyed Coos 
Bay Wagon Road grant land as are or may 
hereafter come under the jurisdiction of the De-
partment of the Interior, which have heretofore 
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or may hereafter be classified as timberlands, 
and power-site land valuable for timber, that 
shall be managed, except as provided in the 
former section 3 of the Act of August 28, 1937 
(50 Stat. 875; 43 U.S.C. 1181c), for permanent 
forest production. 
‘‘(8) 50-PERCENT
ADJUSTED
SHARE.—The 
term ‘50-percent adjusted share’ means the number 
equal to the quotient obtained by dividing— 
‘‘(A) the number equal to the quotient ob-
tained by dividing— 
‘‘(i) the 50-percent base share for the 
eligible county; by 
‘‘(ii) the income adjustment for the el-
igible county; by 
‘‘(B) the number equal to the sum of the 
quotients obtained under subparagraph (A) and 
paragraph (1)(A) for all eligible counties. 
‘‘(9) 50-PERCENT BASE SHARE.—The term ‘50- 
percent base share’ means the number equal to the 
average of— 
‘‘(A) the quotient obtained by dividing— 
‘‘(i) the number of acres of Federal 
land described in paragraph (7)(B) in each 
eligible county; by 
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‘‘(ii) the total number acres of Fed-
eral land in all eligible counties in all eligi-
ble States; and 
‘‘(B) the quotient obtained by dividing— 
‘‘(i) the amount equal to the average 
of the 3 highest 50-percent payments made 
to each eligible county during the eligibility 
period; by 
‘‘(ii) the amount equal to the sum of 
the amounts calculated under clause (i) 
and paragraph (2)(B)(i) for all eligible 
counties in all eligible States during the 
eligibility period. 
‘‘(10) 50-PERCENT PAYMENT.—The term ‘50- 
percent payment’ means the payment that is the 
sum of the 50-percent share otherwise paid to a 
county pursuant to title II of the Act of August 28, 
1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 1181f), 
and the payment made to a county pursuant to the 
Act of May 24, 1939 (chapter 144; 53 Stat. 753; 43 
U.S.C. 1181f–1 et seq.). 
‘‘(11) FULL FUNDING AMOUNT.—The term ‘full 
funding amount’ means $500,000,000 for fiscal year 
2008. 
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‘‘(12) INCOME
ADJUSTMENT.—The term ‘in-
come adjustment’ means the square of the quotient 
obtained by dividing— 
‘‘(A) the per capita personal income for 
each eligible county; by 
‘‘(B) the median per capita personal in-
come of all eligible counties. 
‘‘(13) PER
CAPITA
PERSONAL
INCOME.—The 
term ‘per capita personal income’ means the most 
recent per capita personal income data, as deter-
mined by the Bureau of Economic Analysis. 
‘‘(14) SAFETY
NET
PAYMENTS.—The term 
‘safety net payments’ means the special payment 
amounts paid to States and counties required by 
section 13982 or 13983 of the Omnibus Budget 
Reconciliation Act of 1993 (Public Law 103–66; 16 
U.S.C. 500 note; 43 U.S.C. 1181f note). 
‘‘(15) SECRETARY
CONCERNED.—The term 
‘Secretary concerned’ means— 
‘‘(A) the Secretary of Agriculture or the 
designee of the Secretary of Agriculture with 
respect to the Federal land described in para-
graph (7)(A); and 
‘‘(B) the Secretary of the Interior or the 
designee of the Secretary of the Interior with 
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respect to the Federal land described in para-
graph (7)(B). 
‘‘(16) STATE PAYMENT.—The term ‘State pay-
ment’ means the payment for an eligible State cal-
culated under section 101(a). 
‘‘(17) 25-PERCENT PAYMENT.—The term ‘25- 
percent payment’ means the payment to States re-
quired by the sixth paragraph under the heading of 
‘FOREST SERVICE’ in the Act of May 23, 1908 
(35 Stat. 260; 16 U.S.C. 500), and section 13 of the 
Act of March 1, 1911 (36 Stat. 963; 16 U.S.C. 
500). 
‘‘TITLE 
I—SECURE 
PAYMENTS 
FOR STATES AND COUNTIES 
CONTAINING FEDERAL LAND 
‘‘SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING 
FEDERAL LAND. 
‘‘(a) STATE PAYMENT.—For fiscal year 2008, the 
Secretary of Agriculture shall calculate for each eligible 
State an amount equal to the sum of the products ob-
tained by multiplying— 
‘‘(1) the adjusted share for each eligible county 
within the eligible State; by 
‘‘(2) the full funding amount for the fiscal year. 
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‘‘(b) COUNTY PAYMENT.—For fiscal year 2008, the 
Secretary of the Interior shall calculate for each eligible 
county that received a 50-percent payment during the eli-
gibility period an amount equal to the product obtained 
by multiplying— 
‘‘(1) the 50-percent adjusted share for the eligi-
ble county; by 
‘‘(2) the full funding amount for the fiscal year. 
‘‘SEC. 102. PAYMENTS TO STATES AND COUNTIES. 
‘‘(a) PAYMENT AMOUNTS.—Except as provided in 
section 103, the Secretary of the Treasury shall pay to— 
‘‘(1) a State or territory of the United States 
an amount equal to the sum of the amounts elected 
under subsection (b) by each county within the State 
or territory for— 
‘‘(A) if the county is eligible for the 25- 
percent payment, the share of the 25-percent 
payment; or 
‘‘(B) the share of the State payment of the 
eligible county; and 
‘‘(2) a county an amount equal to the amount 
elected under subsection (b) by each county for— 
‘‘(A) if the county is eligible for the 50- 
percent payment, the 50-percent payment; or 
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‘‘(B) the county payment for the eligible 
county. 
‘‘(b) ELECTION TO RECEIVE PAYMENT AMOUNT.— 
‘‘(1) ELECTION; SUBMISSION OF RESULTS.— 
‘‘(A) IN GENERAL.—The election to receive 
a share of the State payment, the county pay-
ment, a share of the State payment and the 
county payment, a share of the 25-percent pay-
ment, the 50-percent payment, or a share of the 
25-percent payment and the 50-percent pay-
ment, as applicable, shall be made at the discre-
tion of each affected county by August 1, 2008 
(or as soon thereafter as the Secretary con-
cerned determines is practicable) and trans-
mitted to the Secretary concerned by the Gov-
ernor of each eligible State. 
‘‘(B) FAILURE TO TRANSMIT.—If an elec-
tion for an affected county is not transmitted to 
the Secretary concerned by the date specified 
under subparagraph (A), the affected county 
shall be considered to have elected to receive a 
share of the State payment, the county pay-
ment, or a share of the State payment and the 
county payment, as applicable. 
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‘‘(2) SOURCE
OF
PAYMENT
AMOUNTS.—The 
payment to an eligible State or eligible county under 
this section for a fiscal year shall be derived from— 
‘‘(A) any amounts that are appropriated to 
carry out this Act; 
‘‘(B) any revenues, fees, penalties, or mis-
cellaneous receipts, exclusive of deposits to any 
relevant trust fund, special account, or perma-
nent operating funds, received by the Federal 
Government from activities by the Bureau of 
Land Management or the Forest Service on the 
applicable Federal land; and 
‘‘(C) to the extent of any shortfall, out of 
any amounts in the Treasury of the United 
States not otherwise appropriated. 
‘‘(c) DISTRIBUTION
AND EXPENDITURE
OF PAY-
MENTS.— 
‘‘(1) DISTRIBUTION METHOD.—A State that re-
ceives a payment under subsection (a) for Federal 
land described in section 3(7)(A) shall distribute the 
appropriate payment amount among the appropriate 
counties in the State in accordance with— 
‘‘(A) the Act of May 23, 1908 (16 U.S.C. 
500); and 
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‘‘(B) section 13 of the Act of March 1, 
1911 (36 Stat. 963; 16 U.S.C. 500). 
‘‘(2) EXPENDITURE
PURPOSES.—Subject to 
subsection (d), payments received by a State under 
subsection (a) and distributed to counties in accord-
ance with paragraph (1) shall be expended as re-
quired by the laws referred to in paragraph (1). 
‘‘(d) EXPENDITURE RULES FOR ELIGIBLE COUN-
TIES.— 
‘‘(1) ALLOCATIONS.— 
‘‘(A) USE OF PORTION IN SAME MANNER 
AS 25-PERCENT PAYMENT OR 50-PERCENT PAY-
MENT, AS APPLICABLE.—Except as provided in 
paragraph (3)(B), if an eligible county elects to 
receive its share of the State payment or the 
county payment, not less than 80 percent, but 
not more than 85 percent, of the funds shall be 
expended in the same manner in which the 25- 
percent payments or 50-percent payment, as 
applicable, are required to be expended. 
‘‘(B) ELECTION
AS
TO
USE
OF
BAL-
ANCE.—Except as provided in subparagraph 
(C), an eligible county shall elect to do 1 or 
more of the following with the balance of any 
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funds not expended pursuant to subparagraph 
(A): 
‘‘(i) Reserve any portion of the bal-
ance for projects in accordance with title 
II. 
‘‘(ii) Reserve not more than 7 percent 
of the total share for the eligible county of 
the State payment or the county payment 
for projects in accordance with title III. 
‘‘(iii) Return the portion of the bal-
ance not reserved under clauses (i) and (ii) 
to the Treasury of the United States. 
‘‘(C) COUNTIES WITH MODEST DISTRIBU-
TIONS.—In the case of each eligible county to 
which more than $100,000, but less than 
$350,000, is distributed for any fiscal year pur-
suant to either or both of paragraphs (1)(B) 
and (2)(B) of subsection (a), the eligible coun-
ty, with respect to the balance of any funds not 
expended pursuant to subparagraph (A) for 
that fiscal year, shall— 
‘‘(i) reserve any portion of the balance 
for— 
‘‘(I) carrying out projects under 
title II; 
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‘‘(II) carrying out projects under 
title III; or 
‘‘(III) a combination of the pur-
poses described in subclauses (I) and 
(II); or 
‘‘(ii) return the portion of the balance 
not reserved under clause (i) to the Treas-
ury of the United States. 
‘‘(2) DISTRIBUTION OF FUNDS.— 
‘‘(A) IN GENERAL.—Funds reserved by an 
eligible county under subparagraph (B)(i) or 
(C)(i) of paragraph (1) for carrying out 
projects under title II shall be deposited in a 
special account in the Treasury of the United 
States. 
‘‘(B) AVAILABILITY.—Amounts deposited 
under subparagraph (A) shall— 
‘‘(i) be available for expenditure by 
the Secretary concerned, without further 
appropriation; and 
‘‘(ii) remain available until expended 
in accordance with title II. 
‘‘(3) ELECTION.— 
‘‘(A) NOTIFICATION.— 
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‘‘(i) IN GENERAL.—An eligible county 
shall notify the Secretary concerned of an 
election by the eligible county under this 
subsection not later than September 30, 
2008 (or as soon thereafter as the Sec-
retary concerned determines is prac-
ticable). 
‘‘(ii) FAILURE TO ELECT.—Except as 
provided in subparagraph (B), if the eligi-
ble county fails to make an election by the 
date specified in clause (i), the eligible 
county shall— 
‘‘(I) be considered to have elected 
to expend 85 percent of the funds in 
accordance with paragraph (1)(A); 
and 
‘‘(II) return the balance to the 
Treasury of the United States. 
‘‘(B) COUNTIES
WITH
MINOR
DISTRIBU-
TIONS.—In the case of each eligible county to 
which less than $100,000 is distributed for any 
fiscal year pursuant to either or both of para-
graphs (1)(B) and (2)(B) of subsection (a), the 
eligible county may elect to expend all the funds 
in the same manner in which the 25-percent 
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payments or 50-percent payments, as applica-
ble, are required to be expended. 
‘‘(e) TIME FOR PAYMENT.—The payments required 
under this section for a fiscal year shall be made as soon 
as practicable after the end of that fiscal year. 
‘‘SEC. 103. TRANSITION PAYMENTS TO STATES. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) ADJUSTED AMOUNT.—The term ‘adjusted 
amount’ means, with respect to a covered State for 
fiscal year 2008, 90 percent of— 
‘‘(A) the sum of the amounts paid for fis-
cal year 2006 under section 102(a)(2) (as in ef-
fect on September 29, 2006) for the eligible 
counties in the covered State that have elected 
under section 102(b) to receive a share of the 
State payment for fiscal year 2008; and 
‘‘(B) the sum of the amounts paid for fis-
cal year 2006 under section 103(a)(2) (as in ef-
fect on September 29, 2006) for the eligible 
counties in the State of Oregon that have elect-
ed under section 102(b) to receive the county 
payment for fiscal year 2008. 
‘‘(2) COVERED
STATE.—The term ‘covered 
State’ means each of the States of California, Lou-
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isiana, Oregon, Pennsylvania, South Carolina, South 
Dakota, Texas, and Washington. 
‘‘(b) TRANSITION PAYMENTS.—For fiscal year 2008, 
in lieu of the payment amounts that otherwise would have 
been made under paragraphs (1)(B) and (2)(B) of section 
102(a), the Secretary of the Treasury shall pay the ad-
justed amount to each covered State and the eligible coun-
ties within the covered State, as applicable. 
‘‘(c) DISTRIBUTION OF ADJUSTED AMOUNT.—Ex-
cept as provided in subsection (d), it is the intent of Con-
gress that the method of distributing the payments under 
subsection (b) among the counties in the covered States 
for fiscal year 2008 be in the same proportion that the 
payments were distributed to the eligible counties in fiscal 
year 2006. 
‘‘(d) 
DISTRIBUTION
OF
PAYMENTS
IN
CALI-
FORNIA.—The following payments shall be distributed 
among the eligible counties in the State of California in 
the same proportion that payments under section 
102(a)(2) (as in effect on September 29, 2006) were dis-
tributed to the eligible counties for fiscal year 2006: 
‘‘(1) Payments to the State of California under 
subsection (b). 
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‘‘(2) The shares of the eligible counties of the 
State payment for California under section 102 for 
fiscal year 2011. 
‘‘(e) TREATMENT OF PAYMENTS.—For purposes of 
this Act, any payment made under subsection (b) shall be 
considered to be a payment made under section 102(a). 
‘‘TITLE II—SPECIAL PROJECTS 
ON FEDERAL LAND 
‘‘SEC. 201. DEFINITIONS. 
‘‘In this title: 
‘‘(1) PARTICIPATING COUNTY.—The term ‘par-
ticipating county’ means an eligible county that 
elects under section 102(d) to expend a portion of 
the Federal funds received under section 102 in ac-
cordance with this title. 
‘‘(2) PROJECT
FUNDS.—The term ‘project 
funds’ means all funds an eligible county elects 
under section 102(d) to reserve for expenditure in 
accordance with this title. 
‘‘(3) RESOURCE
ADVISORY
COMMITTEE.—The 
term ‘resource advisory committee’ means— 
‘‘(A) an advisory committee established by 
the Secretary concerned under section 205; or 
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‘‘(B) an advisory committee determined by 
the Secretary concerned to meet the require-
ments of section 205. 
‘‘(4) RESOURCE
MANAGEMENT
PLAN.—The 
term ‘resource management plan’ means— 
‘‘(A) a land use plan prepared by the Bu-
reau of Land Management for units of the Fed-
eral land described in section 3(7)(B) pursuant 
to section 202 of the Federal Land Policy and 
Management Act of 1976 (43 U.S.C. 1712); or 
‘‘(B) a land and resource management 
plan prepared by the Forest Service for units of 
the National Forest System pursuant to section 
6 of the Forest and Rangeland Renewable Re-
sources Planning Act of 1974 (16 U.S.C. 
1604). 
‘‘SEC. 202. GENERAL LIMITATION ON USE OF PROJECT 
FUNDS. 
‘‘(a) LIMITATION.—Project funds shall be expended 
solely on projects that meet the requirements of this title. 
‘‘(b) AUTHORIZED USES.—Project funds may be 
used by the Secretary concerned for the purpose of enter-
ing into and implementing cooperative agreements with 
willing Federal agencies, State and local governments, pri-
vate and nonprofit entities, and landowners for protection, 
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restoration, and enhancement of fish and wildlife habitat, 
and other resource objectives consistent with the purposes 
of this Act on Federal land and on non-Federal land where 
projects would benefit the resources on Federal land. 
‘‘SEC. 203. SUBMISSION OF PROJECT PROPOSALS. 
‘‘(a) SUBMISSION OF PROJECT PROPOSALS TO SEC-
RETARY CONCERNED.— 
‘‘(1) 
PROJECTS
FUNDED
USING
PROJECT 
FUNDS.—Not later than September 30 for fiscal 
year 2008 (or as soon thereafter as the Secretary 
concerned determines is practicable) each resource 
advisory committee shall submit to the Secretary 
concerned a description of any projects that the re-
source advisory committee proposes the Secretary 
undertake using any project funds reserved by eligi-
ble counties in the area in which the resource advi-
sory committee has geographic jurisdiction. 
‘‘(2) 
PROJECTS
FUNDED
USING
OTHER 
FUNDS.—A resource advisory committee may submit 
to the Secretary concerned a description of any 
projects that the committee proposes the Secretary 
undertake using funds from State or local govern-
ments, or from the private sector, other than project 
funds and funds appropriated and otherwise avail-
able to do similar work. 
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‘‘(3) JOINT PROJECTS.—Participating counties 
or other persons may propose to pool project funds 
or other funds, described in paragraph (2), and 
jointly propose a project or group of projects to a re-
source advisory committee established under section 
205. 
‘‘(b) REQUIRED DESCRIPTION
OF PROJECTS.—In 
submitting proposed projects to the Secretary concerned 
under subsection (a), a resource advisory committee shall 
include in the description of each proposed project the fol-
lowing information: 
‘‘(1) The purpose of the project and a descrip-
tion of how the project will meet the purposes of this 
title. 
‘‘(2) The anticipated duration of the project. 
‘‘(3) The anticipated cost of the project. 
‘‘(4) The proposed source of funding for the 
project, whether project funds or other funds. 
‘‘(5)(A) Expected outcomes, including how the 
project will meet or exceed desired ecological condi-
tions, maintenance objectives, or stewardship objec-
tives. 
‘‘(B) An estimate of the amount of any timber, 
forage, and other commodities and other economic 
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activity, including jobs generated, if any, anticipated 
as part of the project. 
‘‘(6) A detailed monitoring plan, including 
funding needs and sources, that— 
‘‘(A) tracks and identifies the positive or 
negative impacts of the project, implementation, 
and provides for validation monitoring; and 
‘‘(B) includes an assessment of the fol-
lowing: 
‘‘(i) Whether or not the project met or 
exceeded desired ecological conditions; cre-
ated local employment or training opportu-
nities, including summer youth jobs pro-
grams such as the Youth Conservation 
Corps where appropriate. 
‘‘(ii) Whether the project improved 
the use of, or added value to, any products 
removed from land consistent with the pur-
poses of this title. 
‘‘(7) An assessment that the project is to be in 
the public interest. 
‘‘(c) AUTHORIZED PROJECTS.—Projects proposed 
under subsection (a) shall be consistent with section 2. 
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‘‘SEC. 204. EVALUATION AND APPROVAL OF PROJECTS BY 
SECRETARY CONCERNED. 
‘‘(a) CONDITIONS
FOR APPROVAL
OF PROPOSED 
PROJECT.—The Secretary concerned may make a decision 
to approve a project submitted by a resource advisory com-
mittee under section 203 only if the proposed project satis-
fies each of the following conditions: 
‘‘(1) The project complies with all applicable 
Federal laws (including regulations). 
‘‘(2) The project is consistent with the applica-
ble resource management plan and with any water-
shed or subsequent plan developed pursuant to the 
resource management plan and approved by the Sec-
retary concerned. 
‘‘(3) The project has been approved by the re-
source advisory committee in accordance with sec-
tion 205, including the procedures issued under sub-
section (e) of that section. 
‘‘(4) A project description has been submitted 
by the resource advisory committee to the Secretary 
concerned in accordance with section 203. 
‘‘(5) The project will improve the maintenance 
of existing infrastructure, implement stewardship ob-
jectives that enhance forest ecosystems, and restore 
and improve land health and water quality. 
‘‘(b) ENVIRONMENTAL REVIEWS.— 
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‘‘(1) REQUEST FOR PAYMENT BY COUNTY.— 
The Secretary concerned may request the resource 
advisory committee submitting a proposed project to 
agree to the use of project funds to pay for any envi-
ronmental review, consultation, or compliance with 
applicable environmental laws required in connection 
with the project. 
‘‘(2) CONDUCT OF ENVIRONMENTAL REVIEW.— 
If a payment is requested under paragraph (1) and 
the resource advisory committee agrees to the ex-
penditure of funds for this purpose, the Secretary 
concerned shall conduct environmental review, con-
sultation, or other compliance responsibilities in ac-
cordance with Federal laws (including regulations). 
‘‘(3) EFFECT OF REFUSAL TO PAY.— 
‘‘(A) IN GENERAL.—If a resource advisory 
committee does not agree to the expenditure of 
funds under paragraph (1), the project shall be 
deemed withdrawn from further consideration 
by the Secretary concerned pursuant to this 
title. 
‘‘(B) EFFECT OF WITHDRAWAL.—A with-
drawal under subparagraph (A) shall be deemed 
to be a rejection of the project for purposes of 
section 207(c). 
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‘‘(c) DECISIONS OF SECRETARY CONCERNED.— 
‘‘(1) REJECTION OF PROJECTS.— 
‘‘(A) IN GENERAL.—A decision by the Sec-
retary concerned to reject a proposed project 
shall be at the sole discretion of the Secretary 
concerned. 
‘‘(B) NO ADMINISTRATIVE APPEAL OR JU-
DICIAL
REVIEW.—Notwithstanding any other 
provision of law, a decision by the Secretary 
concerned to reject a proposed project shall not 
be subject to administrative appeal or judicial 
review. 
‘‘(C) NOTICE
OF
REJECTION.—Not later 
than 30 days after the date on which the Sec-
retary concerned makes the rejection decision, 
the Secretary concerned shall notify in writing 
the resource advisory committee that submitted 
the proposed project of the rejection and the 
reasons for rejection. 
‘‘(2) NOTICE
OF
PROJECT
APPROVAL.—The 
Secretary concerned shall publish in the Federal 
Register notice of each project approved under sub-
section (a) if the notice would be required had the 
project originated with the Secretary. 
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‘‘(d) SOURCE AND CONDUCT OF PROJECT.—Once the 
Secretary concerned accepts a project for review under 
section 203, the acceptance shall be deemed a Federal ac-
tion for all purposes. 
‘‘(e) IMPLEMENTATION OF APPROVED PROJECTS.— 
‘‘(1) COOPERATION.—Notwithstanding chapter 
63 of title 31, United States Code, using project 
funds the Secretary concerned may enter into con-
tracts, grants, and cooperative agreements with 
States and local governments, private and nonprofit 
entities, and landowners and other persons to assist 
the Secretary in carrying out an approved project. 
‘‘(2) BEST VALUE CONTRACTING.— 
‘‘(A) IN GENERAL.—For any project in-
volving a contract authorized by paragraph (1) 
the Secretary concerned may elect a source for 
performance of the contract on a best value 
basis. 
‘‘(B) FACTORS.—The Secretary concerned 
shall determine best value based on such factors 
as— 
‘‘(i) the technical demands and com-
plexity of the work to be done; 
‘‘(ii)(I) the ecological objectives of the 
project; and 
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‘‘(II) the sensitivity of the resources 
being treated; 
‘‘(iii) the past experience by the con-
tractor with the type of work being done, 
using the type of equipment proposed for 
the project, and meeting or exceeding de-
sired ecological conditions; and 
‘‘(iv) the commitment of the con-
tractor to hiring highly qualified workers 
and local residents. 
‘‘(3) MERCHANTABLE
TIMBER
CONTRACTING 
PILOT PROGRAM.— 
‘‘(A) 
ESTABLISHMENT.—The 
Secretary 
concerned shall establish a pilot program to im-
plement a certain percentage of approved 
projects involving the sale of merchantable tim-
ber using separate contracts for— 
‘‘(i) the harvesting or collection of 
merchantable timber; and 
‘‘(ii) the sale of the timber. 
‘‘(B) ANNUAL PERCENTAGES.—Under the 
pilot program, the Secretary concerned shall en-
sure that, on a nationwide basis, not less than 
35 percent of all approved projects involving the 
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sale of merchantable timber are implemented 
using separate contracts. 
‘‘(C) INCLUSION IN PILOT PROGRAM.—The 
decision whether to use separate contracts to 
implement a project involving the sale of mer-
chantable timber shall be made by the Sec-
retary concerned after the approval of the 
project under this title. 
‘‘(D) ASSISTANCE.— 
‘‘(i) IN
GENERAL.—The Secretary 
concerned may use funds from any appro-
priated account available to the Secretary 
for the Federal land to assist in the ad-
ministration of projects conducted under 
the pilot program. 
‘‘(ii) MAXIMUM AMOUNT OF ASSIST-
ANCE.—The total amount obligated under 
this 
subparagraph 
may 
not 
exceed 
$1,000,000 for any fiscal year during 
which the pilot program is in effect. 
‘‘(E) REVIEW AND REPORT.— 
‘‘(i) INITIAL REPORT.—Not later than 
September 30, 2010, the Comptroller Gen-
eral shall submit to the Committees on Ag-
riculture, Nutrition, and Forestry and En-
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ergy and Natural Resources of the Senate 
and the Committees on Agriculture and 
Natural Resources of the House of Rep-
resentatives a report assessing the pilot 
program. 
‘‘(ii) ANNUAL
REPORT.—The Sec-
retary concerned shall submit to the Com-
mittees on Agriculture, Nutrition, and For-
estry and Energy and Natural Resources 
of the Senate and the Committees on Agri-
culture and Natural Resources of the 
House of Representatives an annual report 
describing the results of the pilot program. 
‘‘(f) REQUIREMENTS
FOR PROJECT FUNDS.—The 
Secretary shall ensure that at least 50 percent of all 
project funds be used for projects that are primarily dedi-
cated— 
‘‘(1) to road maintenance, decommissioning, or 
obliteration; or 
‘‘(2) to restoration of streams and watersheds. 
‘‘SEC. 205. RESOURCE ADVISORY COMMITTEES. 
‘‘(a) ESTABLISHMENT AND PURPOSE OF RESOURCE 
ADVISORY COMMITTEES.— 
‘‘(1) ESTABLISHMENT.—The Secretary con-
cerned shall establish and maintain resource advi-
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sory committees to perform the duties in subsection 
(b), except as provided in paragraph (4). 
‘‘(2) PURPOSE.—The purpose of a resource ad-
visory committee shall be— 
‘‘(A) to improve collaborative relationships; 
and 
‘‘(B) to provide advice and recommenda-
tions to the land management agencies con-
sistent with the purposes of this title. 
‘‘(3) ACCESS TO RESOURCE ADVISORY COMMIT-
TEES.—To ensure that each unit of Federal land 
has access to a resource advisory committee, and 
that there is sufficient interest in participation on a 
committee to ensure that membership can be bal-
anced in terms of the points of view represented and 
the functions to be performed, the Secretary con-
cerned may, establish resource advisory committees 
for part of, or 1 or more, units of Federal land. 
‘‘(4) EXISTING ADVISORY COMMITTEES.— 
‘‘(A) IN
GENERAL.—An advisory com-
mittee that meets the requirements of this sec-
tion, a resource advisory committee established 
before September 29, 2006, or an advisory com-
mittee determined by the Secretary concerned 
before September 29, 2006, to meet the re-
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quirements of this section may be deemed by 
the Secretary concerned to be a resource advi-
sory committee for the purposes of this title. 
‘‘(B) CHARTER.—A charter for a com-
mittee described in subparagraph (A) that was 
filed on or before September 29, 2006, shall be 
considered to be filed for purposes of this Act. 
‘‘(C) BUREAU OF LAND MANAGEMENT AD-
VISORY COMMITTEES.—The Secretary of the In-
terior may deem a resource advisory committee 
meeting the requirements of subpart 1784 of 
part 1780 of title 43, Code of Federal Regula-
tions, as a resource advisory committee for the 
purposes of this title. 
‘‘(b) DUTIES.—A resource advisory committee 
shall— 
‘‘(1) review projects proposed under this title by 
participating counties and other persons; 
‘‘(2) propose projects and funding to the Sec-
retary concerned under section 203; 
‘‘(3) provide early and continuous coordination 
with appropriate land management agency officials 
in recommending projects consistent with purposes 
of this Act under this title; 
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stance use disorder benefits, if the plan or coverage 
provides coverage for medical or surgical benefits 
provided by out-of-network providers, the plan or 
coverage shall provide coverage for mental health or 
substance use disorder benefits provided by out-of- 
network providers in a manner that is consistent 
with the requirements of this section.’’; 
(2) in subsection (b), by amending paragraph 
(2) to read as follows: 
‘‘(2) in the case of a group health plan (or 
health insurance coverage offered in connection with 
such a plan) that provides mental health or sub-
stance use disorder benefits, as affecting the terms 
and conditions of the plan or coverage relating to 
such benefits under the plan or coverage, except as 
provided in subsection (a).’’; 
(3) in subsection (c)— 
(A) in paragraph (1)(B)— 
(i) by inserting ‘‘(or 1 in the case of 
an employer residing in a State that per-
mits small groups to include a single indi-
vidual)’’ after ‘‘at least 2’’ the first place 
that such appears; and 
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