H. R. 6111—14
(i) SPECIFIED TRANSITIONAL TAXABLE YEAR.—The 
term ‘‘specified transitional taxable year’’ means any 
taxable year which ends after December 31, 2006, and 
which includes such date. 
(ii) APPLICABLE
2006
PERCENTAGE.—The term 
‘‘applicable 2006 percentage’’ means the number of 
days in the specified transitional taxable year before 
January 1, 2007, divided by the number of days in 
such taxable year. 
(iii) APPLICABLE
2007
PERCENTAGE.—The term 
‘‘applicable 2007 percentage’’ means the number of 
days in the specified transitional taxable year after 
December 31, 2006, divided by the number of days 
in such taxable year. 
(c) ALTERNATIVE SIMPLIFIED CREDIT FOR QUALIFIED RESEARCH 
EXPENSES.—
(1) IN GENERAL.—Subsection (c) of section 41 (relating to 
base amount) is amended by redesignating paragraphs (5) and 
(6) as paragraphs (6) and (7), respectively, and by inserting 
after paragraph (4) the following new paragraph: 
‘‘(5) ELECTION OF ALTERNATIVE SIMPLIFIED CREDIT.—
‘‘(A) IN GENERAL.—At the election of the taxpayer, the 
credit determined under subsection (a)(1) shall be equal 
to 12 percent of so much of the qualified research expenses 
for the taxable year as exceeds 50 percent of the average 
qualified research expenses for the 3 taxable years pre-
ceding the taxable year for which the credit is being deter-
mined. 
‘‘(B) SPECIAL RULE IN CASE OF NO QUALIFIED RESEARCH 
EXPENSES IN ANY OF 3 PRECEDING TAXABLE YEARS.—
‘‘(i) 
TAXPAYERS
TO
WHICH
SUBPARAGRAPH 
APPLIES.—The credit under this paragraph shall be 
determined under this subparagraph if the taxpayer 
has no qualified research expenses in any one of the 
3 taxable years preceding the taxable year for which 
the credit is being determined. 
‘‘(ii) CREDIT RATE.—The credit determined under 
this subparagraph shall be equal to 6 percent of the 
qualified research expenses for the taxable year. 
‘‘(C) ELECTION.—An election under this paragraph shall 
apply to the taxable year for which made and all succeeding 
taxable years unless revoked with the consent of the Sec-
retary. An election under this paragraph may not be made 
for any taxable year to which an election under paragraph 
(4) applies.’’. 
(2) TRANSITION RULE FOR DEEMED REVOCATION OF ELECTION 
OF ALTERNATIVE INCREMENTAL CREDIT.—In the case of an elec-
tion under section 41(c)(4) of the Internal Revenue Code of 
1986 which applies to the taxable year which includes January 
1, 2007, such election shall be treated as revoked with the 
consent of the Secretary of the Treasury if the taxpayer makes 
an election under section 41(c)(5) of such Code (as added by 
this subsection) for such year. 
(3) EFFECTIVE DATE.—Except as provided in paragraph (4), 
the amendments made by this subsection shall apply to taxable 
years ending after December 31, 2006. 
(4) TRANSITION RULE FOR NONCALENDAR TAXABLE YEARS.—
H. R. 6111—15
(A) IN GENERAL.—In the case of a specified transitional 
taxable year for which an election under section 41(c)(5) 
of the Internal Revenue Code of 1986 (as added by this 
subsection) applies, the credit determined under section 
41(a)(1) of such Code shall be equal to the sum of—
(i) the applicable 2006 percentage multiplied by 
the amount determined under section 41(a)(1) of such 
Code (as in effect for taxable years ending on December 
31, 2006), plus 
(ii) the applicable 2007 percentage multiplied by 
the amount determined under section 41(c)(5) of such 
Code (as in effect for taxable years ending on January 
1, 2007). 
(B) DEFINITIONS
AND
SPECIAL
RULES.—For purposes 
of subparagraph (A)—
(i) DEFINITIONS.—Terms used in this paragraph 
which are also used in subsection (b)(3) shall have 
the respective meanings given such terms in such sub-
section. 
(ii) DUAL ELECTIONS PERMITTED.—Elections under 
paragraphs (4) and (5) of section 41(c) of such Code 
may both apply for the specified transitional taxable 
year. 
(iii) DEFERRAL
OF
DEEMED
ELECTION
REVOCA-
TION.—Any election under section 41(c)(4) of the 
Internal Revenue Code of 1986 treated as revoked 
under paragraph (2) shall be treated as revoked for 
the taxable year after the specified transitional taxable 
year. 
SEC. 105. WORK OPPORTUNITY TAX CREDIT AND WELFARE-TO-WORK 
CREDIT. 
(a) IN GENERAL.—Sections 51(c)(4)(B) and 51A(f) are each 
amended by striking ‘‘2005’’ and inserting ‘‘2007’’. 
(b) ELIGIBILITY OF EX-FELONS DETERMINED WITHOUT REGARD 
TO FAMILY INCOME.—Paragraph (4) of section 51(d) is amended 
by adding ‘‘and’’ at the end of subparagraph (A), by striking ‘‘, 
and’’ at the end of subparagraph (B) and inserting a period, and 
by striking all that follows subparagraph (B). 
(c) INCREASE IN MAXIMUM AGE FOR ELIGIBILITY OF FOOD STAMP 
RECIPIENTS.—Clause (i) of section 51(d)(8)(A) is amended by striking 
‘‘25’’ and inserting ‘‘40’’. 
(d) EXTENSION
OF
PAPERWORK
FILING
DEADLINE.—Section 
51(d)(12)(A)(ii)(II) is amended by striking ‘‘21st day’’ and inserting 
‘‘28th day’’. 
(e) CONSOLIDATION OF WORK OPPORTUNITY CREDIT WITH WEL-
FARE-TO-WORK CREDIT.—
(1) IN GENERAL.—Paragraph (1) of section 51(d) is amended 
by striking ‘‘or’’ at the end of subparagraph (G), by striking 
the period at the end of subparagraph (H) and inserting ‘‘, 
or’’, and by adding at the end the following new subparagraph: 
‘‘(I) a long-term family assistance recipient.’’. 
(2) LONG-TERM FAMILY ASSISTANCE RECIPIENT.—Subsection 
(d) of section 51 is amended by redesignating paragraphs (10) 
through (12) as paragraphs (11) through (13), respectively, and 
by inserting after paragraph (9) the following new paragraph:
H. R. 6111—16
‘‘(10) LONG-TERM FAMILY ASSISTANCE RECIPIENT.—The term 
‘long-term family assistance recipient’ means any individual 
who is certified by the designated local agency—
‘‘(A) as being a member of a family receiving assistance 
under a IV–A program (as defined in paragraph (2)(B)) 
for at least the 18-month period ending on the hiring 
date, 
‘‘(B)(i) as being a member of a family receiving such 
assistance for 18 months beginning after August 5, 1997, 
and 
‘‘(ii) as having a hiring date which is not more than 
2 years after the end of the earliest such 18-month period, 
or 
‘‘(C)(i) as being a member of a family which ceased 
to be eligible for such assistance by reason of any limitation 
imposed by Federal or State law on the maximum period 
such assistance is payable to a family, and 
‘‘(ii) as having a hiring date which is not more than 
2 years after the date of such cessation.’’. 
(3) INCREASED
CREDIT
FOR
EMPLOYMENT
OF
LONG-TERM 
FAMILY
ASSISTANCE
RECIPIENTS.—Section 51 is amended by 
inserting after subsection (d) the following new subsection: 
‘‘(e) CREDIT FOR SECOND-YEAR WAGES FOR EMPLOYMENT OF 
LONG-TERM FAMILY ASSISTANCE RECIPIENTS.—
‘‘(1) IN GENERAL.—With respect to the employment of a 
long-term family assistance recipient—
‘‘(A) the amount of the work opportunity credit deter-
mined under this section for the taxable year shall include 
50 percent of the qualified second-year wages for such 
year, and 
‘‘(B) in lieu of applying subsection (b)(3), the amount 
of the qualified first-year wages, and the amount of quali-
fied second-year wages, which may be taken into account 
with respect to such a recipient shall not exceed $10,000 
per year. 
‘‘(2) QUALIFIED SECOND-YEAR WAGES.—For purposes of this 
subsection, the term ‘qualified second-year wages’ means quali-
fied wages—
‘‘(A) which are paid to a long-term family assistance 
recipient, and 
‘‘(B) which are attributable to service rendered during 
the 1-year period beginning on the day after the last day 
of the 1-year period with respect to such recipient deter-
mined under subsection (b)(2). 
‘‘(3) SPECIAL
RULES
FOR
AGRICULTURAL
AND
RAILWAY 
LABOR.—If such recipient is an employee to whom subparagraph 
(A) or (B) of subsection (h)(1) applies, rules similar to the 
rules of such subparagraphs shall apply except that—
‘‘(A) such subparagraph (A) shall be applied by sub-
stituting ‘$10,000’ for ‘$6,000’, and 
‘‘(B) such subparagraph (B) shall be applied by sub-
stituting ‘$833.33’ for ‘$500’.’’. 
(4) REPEAL OF SEPARATE WELFARE-TO-WORK CREDIT.—
(A) IN GENERAL.—Section 51A is hereby repealed. 
(B) CLERICAL AMENDMENT.—The table of sections for 
subpart F of part IV of subchapter A of chapter 1 is 
amended by striking the item relating to section 51A.
H. R. 6111—17
(f) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in paragraph (2), the 
amendments made by this section shall apply to individuals 
who begin work for the employer after December 31, 2005. 
(2) CONSOLIDATION.—The amendments made by sub-
sections (b), (c), (d), and (e) shall apply to individuals who 
begin work for the employer after December 31, 2006. 
SEC. 106. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME 
FOR PURPOSES OF EARNED INCOME CREDIT. 
(a) IN GENERAL.—Section 32(c)(2)(B)(vi)(II) is amended by 
striking ‘‘2007’’ and inserting ‘‘2008’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2006. 
SEC. 107. EXTENSION AND MODIFICATION OF QUALIFIED ZONE 
ACADEMY BONDS. 
(a) IN GENERAL.—Paragraph (1) of section 1397E(e) is amended 
by striking ‘‘and 2005’’ and inserting ‘‘2005, 2006, and 2007’’. 
(b) SPECIAL RULES RELATING TO EXPENDITURES, ARBITRAGE, 
AND REPORTING.—
(1) IN GENERAL.—Section 1397E is amended—
(A) in subsection (d)(1), by striking ‘‘and’’ at the end 
of subparagraph (C)(iii), by striking the period at the end 
of subparagraph (D) and inserting ‘‘, and’’, and by adding 
at the end the following new subparagraph: 
‘‘(E) the issue meets the requirements of subsections 
(f), (g), and (h).’’, and 
(B) by redesignating subsections (f), (g), (h), and (i) 
as subsections (i), (j), (k), and (l), respectively, and by 
inserting after subsection (e) the following new subsections: 
‘‘(f) SPECIAL RULES RELATING TO EXPENDITURES.—
‘‘(1) IN GENERAL.—An issue shall be treated as meeting 
the requirements of this subsection if, as of the date of issuance, 
the issuer reasonably expects—
‘‘(A) at least 95 percent of the proceeds from the sale 
of the issue are to be spent for 1 or more qualified purposes 
with respect to qualified zone academies within the 5-
year period beginning on the date of issuance of the quali-
fied zone academy bond, 
‘‘(B) a binding commitment with a third party to spend 
at least 10 percent of the proceeds from the sale of the 
issue will be incurred within the 6-month period beginning 
on the date of issuance of the qualified zone academy 
bond, and 
‘‘(C) such purposes will be completed with due diligence 
and the proceeds from the sale of the issue will be spent 
with due diligence. 
‘‘(2) EXTENSION OF PERIOD.—Upon submission of a request 
prior to the expiration of the period described in paragraph 
(1)(A), the Secretary may extend such period if the issuer 
establishes that the failure to satisfy the 5-year requirement 
is due to reasonable cause and the related purposes will con-
tinue to proceed with due diligence. 
‘‘(3) FAILURE TO SPEND REQUIRED AMOUNT OF BOND PRO-
CEEDS WITHIN 5 YEARS.—To the extent that less than 95 percent 
of the proceeds of such issue are expended by the close of 
the 5-year period beginning on the date of issuance (or if
H. R. 6111—18
an extension has been obtained under paragraph (2), by the 
close of the extended period), the issuer shall redeem all of 
the nonqualified bonds within 90 days after the end of such 
period. For purposes of this paragraph, the amount of the 
nonqualified bonds required to be redeemed shall be determined 
in the same manner as under section 142. 
‘‘(g) SPECIAL RULES RELATING TO ARBITRAGE.—An issue shall 
be treated as meeting the requirements of this subsection if the 
issuer satisfies the arbitrage requirements of section 148 with 
respect to proceeds of the issue. 
‘‘(h) REPORTING.—Issuers of qualified academy zone bonds shall 
submit reports similar to the reports required under section 149(e).’’. 
(2) CONFORMING
AMENDMENTS.—Sections 54(l)(3)(B) and 
1400N(l)(7)(B)(ii) are each amended by striking ‘‘section 
1397E(i)’’ and inserting ‘‘section 1397E(l)’’. 
(c) EFFECTIVE DATES.—
(1) EXTENSION.—The amendment made by subsection (a) 
shall apply to obligations issued after December 31, 2005. 
(2) SPECIAL RULES.—The amendments made by subsection 
(b) shall apply to obligations issued after the date of the enact-
ment of this Act pursuant to allocations of the national zone 
academy bond limitation for calendar years after 2005. 
SEC. 108. ABOVE-THE-LINE DEDUCTION FOR CERTAIN EXPENSES OF 
ELEMENTARY AND SECONDARY SCHOOL TEACHERS. 
(a) IN GENERAL.—Subparagraph (D) of section 62(a)(2) is 
amended by striking ‘‘or 2005’’ and inserting ‘‘2005, 2006, or 2007’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2005. 
SEC. 
109. 
EXTENSION 
AND 
EXPANSION 
OF 
EXPENSING 
OF 
BROWNFIELDS REMEDIATION COSTS. 
(a) EXTENSION.—Subsection (h) of section 198 is amended by 
striking ‘‘2005’’ and inserting ‘‘2007’’. 
(b) EXPANSION.—Section 198(d)(1) (defining hazardous sub-
stance) is amended by striking ‘‘and’’ at the end of subparagraph 
(A), by striking the period at the end of subparagraph (B) and 
inserting ‘‘, and’’, and by adding at the end the following new 
subparagraph: 
‘‘(C) any petroleum product (as defined in section 
4612(a)(3)).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to expenditures paid or incurred after December 31, 
2005. 
SEC. 110. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF 
COLUMBIA. 
(a) DESIGNATION OF ZONE.—
(1) IN GENERAL.—Subsection (f) of section 1400 is amended 
by striking ‘‘2005’’ both places it appears and inserting ‘‘2007’’. 
(2) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to periods beginning after December 31, 
2005. 
(b) TAX-EXEMPT ECONOMIC DEVELOPMENT BONDS.—
(1) IN
GENERAL.—Subsection (b) of section 1400A is 
amended by striking ‘‘2005’’ and inserting ‘‘2007’’. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply to bonds issued after December 31, 2005.
H. R. 6111—19
(c) ZERO PERCENT CAPITAL GAINS RATE.—
(1) IN
GENERAL.—Subsection (b) of section 1400B is 
amended by striking ‘‘2006’’ each place it appears and inserting 
‘‘2008’’. 
(2) CONFORMING AMENDMENTS.—
(A) Section 1400B(e)(2) is amended—
(i) by striking ‘‘2010’’ and inserting ‘‘2012’’, and 
(ii) by striking ‘‘2010’’ in the heading thereof and 
inserting ‘‘2012’’. 
(B) Section 1400B(g)(2) is amended by striking ‘‘2010’’ 
and inserting ‘‘2012’’. 
(C) Section 1400F(d) is amended by striking ‘‘2010’’ 
and inserting ‘‘2012’’. 
(3) EFFECTIVE DATES.—
(A) EXTENSION.—The amendments made by paragraph 
(1) shall apply to acquisitions after December 31, 2005. 
(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 ‘‘2006’’ and inserting ‘‘2008’’. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply to property purchased after December 31, 
2005. 
SEC. 111. INDIAN EMPLOYMENT TAX CREDIT. 
(a) IN GENERAL.—Section 45A(f) is amended by striking ‘‘2005’’ 
and inserting ‘‘2007’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2005. 
SEC. 112. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY 
ON INDIAN RESERVATIONS. 
(a) IN GENERAL.—Section 168(j)(8) is amended by striking 
‘‘2005’’ and inserting ‘‘2007’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to property placed in service after December 31, 2005. 
SEC. 113. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALI-
FIED LEASEHOLD IMPROVEMENTS AND QUALIFIED RES-
TAURANT PROPERTY. 
(a) IN GENERAL.—Clauses (iv) and (v) of section 168(e)(3)(E) 
are each amended by striking ‘‘2006’’ and inserting ‘‘2008’’. 
(b) EFFECTIVE DATE.—The amendments made by subsection 
(a) shall apply to property placed in service after December 31, 
2005. 
SEC. 114. COVER OVER OF TAX ON DISTILLED SPIRITS. 
(a) IN GENERAL.—Section 7652(f)(1) is amended by striking 
‘‘2006’’ and inserting ‘‘2008’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to articles brought into the United States after December 
31, 2005.
H. R. 6111—20
SEC. 115. PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL 
HEALTH BENEFITS. 
(a) AMENDMENT TO THE INTERNAL REVENUE CODE OF 1986.—
Section 9812(f)(3) is amended by striking ‘‘2006’’ and inserting 
‘‘2007’’. 
(b) AMENDMENT TO THE EMPLOYEE RETIREMENT INCOME SECU-
RITY ACT
OF 1974.—Section 712(f) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1185a(f)) is amended by 
striking ‘‘2006’’ and inserting ‘‘2007’’. 
(c) AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.—Section 
2705(f) of the Public Health Service Act (42 U.S.C. 300gg–5(f)) 
is amended by striking ‘‘2006’’ and inserting ‘‘2007’’. 
SEC. 116. CORPORATE DONATIONS OF SCIENTIFIC PROPERTY USED 
FOR RESEARCH AND OF COMPUTER TECHNOLOGY AND 
EQUIPMENT. 
(a) EXTENSION
OF COMPUTER TECHNOLOGY
AND EQUIPMENT 
DONATION.—
(1) IN
GENERAL.—Section 170(e)(6)(G) is amended by 
striking ‘‘2005’’ and inserting ‘‘2007’’. 
(2) EFFECTIVE DATE.—The amendment made by paragraph 
(1) shall apply to contributions made in taxable years beginning 
after December 31, 2005. 
(b) EXPANSION OF CHARITABLE CONTRIBUTION ALLOWED FOR 
SCIENTIFIC PROPERTY USED
FOR RESEARCH
AND
FOR COMPUTER 
TECHNOLOGY AND EQUIPMENT USED FOR EDUCATIONAL PURPOSES.—
(1) SCIENTIFIC PROPERTY USED FOR RESEARCH.—
(A) IN
GENERAL.—Clause (ii) of section 170(e)(4)(B) 
(defining qualified research contributions) is amended by 
inserting ‘‘or assembled’’ after ‘‘constructed’’. 
(B) CONFORMING AMENDMENT.—Clause (iii) of section 
170(e)(4)(B) is amended by inserting ‘‘or assembly’’ after 
‘‘construction’’. 
(2) COMPUTER
TECHNOLOGY
AND
EQUIPMENT
FOR
EDU-
CATIONAL PURPOSES.—
(A) IN GENERAL.—Clause (ii) of section 170(e)(6)(B) is 
amended by inserting ‘‘or assembled’’ after ‘‘constructed’’ 
and ‘‘or assembling’’ after ‘‘construction’’. 
(B) CONFORMING AMENDMENT.—Subparagraph (D) of 
section 170(e)(6) is amended by inserting ‘‘or assembled’’ 
after ‘‘constructed’’ and ‘‘or assembly’’ after ‘‘construction’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to taxable years beginning after December 
31, 2005. 
SEC. 117. AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Paragraphs (2) and (3)(B) of section 220(i) 
are each amended by striking ‘‘2005’’ each place it appears in 
the text and headings and inserting ‘‘2007’’. 
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 220(j) is amended—
(A) in the text by striking ‘‘or 2004’’ each place it 
appears and inserting ‘‘2004, 2005, or 2006’’, and 
(B) in the heading by striking ‘‘OR 2004’’ and inserting 
‘‘2004, 2005, OR 2006’’. 
(2) Subparagraph (A) of section 220(j)(4) is amended by 
striking ‘‘and 2004’’ and inserting ‘‘2004, 2005, and 2006’’.
H. R. 6111—21
(c) TIME FOR FILING REPORTS, ETC.—
(1) The report required by section 220(j)(4) of the Internal 
Revenue Code of 1986 to be made on August 1, 2005, or August 
1, 2006, as the case may be, shall be treated as timely if 
made before the close of the 90-day period beginning on the 
date of the enactment of this Act. 
(2) The determination and publication required by section 
220(j)(5) of such Code with respect to calendar year 2005 or 
calendar year 2006, as the case may be, shall be treated as 
timely if made before the close of the 120-day period beginning 
on the date of the enactment of this Act. If the determination 
under the preceding sentence is that 2005 or 2006 is a cut-
off year under section 220(i) of such Code, the cut-off date 
under such section 220(i) shall be the last day of such 120-
day period. 
SEC. 118. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR 
OIL AND NATURAL GAS PRODUCED FROM MARGINAL 
PROPERTIES. 
(a) IN GENERAL.—Section 613A(c)(6)(H) is amended by striking 
‘‘2006’’ and inserting ‘‘2008’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to taxable years beginning after December 31, 2005. 
SEC. 119. AMERICAN SAMOA ECONOMIC DEVELOPMENT CREDIT. 
(a) IN GENERAL.—For purposes of section 30A of the Internal 
Revenue Code of 1986, a domestic corporation shall be treated 
as a qualified domestic corporation to which such section applies 
if such corporation—
(1) is an existing credit claimant with respect to American 
Samoa, and 
(2) elected the application of section 936 of the Internal 
Revenue Code of 1986 for its last taxable year beginning before 
January 1, 2006. 
(b) SPECIAL RULES
FOR APPLICATION
OF SECTION.—The fol-
lowing rules shall apply in applying section 30A of the Internal 
Revenue Code of 1986 for purposes of this section: 
(1) AMOUNT OF CREDIT.—Notwithstanding section 30A(a)(1) 
of such Code, the amount of the credit determined under section 
30A(a)(1) of such Code for any taxable year shall be the amount 
determined under section 30A(d) of such Code, except that 
section 30A(d) shall be applied without regard to paragraph 
(3) thereof. 
(2) SEPARATE APPLICATION.—In applying section 30A(a)(3) 
of such Code in the case of a corporation treated as a qualified 
domestic corporation by reason of this section, section 30A 
of such Code (and so much of section 936 of such Code as 
relates to such section 30A) shall be applied separately with 
respect to American Samoa. 
(3) FOREIGN TAX CREDIT ALLOWED.—Notwithstanding sec-
tion 30A(e) of such Code, the provisions of section 936(c) of 
such Code shall not apply with respect to the credit allowed 
by reason of this section. 
(c) DEFINITIONS.—For purposes of this section, any term which 
is used in this section which is also used in section 30A or 936 
of such Code shall have the same meaning given such term by 
such section 30A or 936.
H. R. 6111—22
(d) APPLICATION OF SECTION.—Notwithstanding section 30A(h) 
or section 936(j) of such Code, this section (and so much of section 
30A and section 936 of such Code as relates to this section) shall 
apply to the first two taxable years of a corporation to which 
subsection (a) applies which begin after December 31, 2005, and 
before January 1, 2008. 
SEC. 120. EXTENSION OF BONUS DEPRECIATION FOR CERTAIN QUALI-
FIED GULF OPPORTUNITY ZONE PROPERTY. 
(a) IN GENERAL.—Subsection (d) of section 1400N is amended 
by adding at the end the following new paragraph: 
‘‘(6) EXTENSION FOR CERTAIN PROPERTY.—
‘‘(A) IN GENERAL.—In the case of any specified Gulf 
Opportunity Zone extension property, paragraph (2)(A) 
shall be applied without regard to clause (v) thereof. 
‘‘(B) SPECIFIED
GULF
OPPORTUNITY
ZONE
EXTENSION 
PROPERTY.—For purposes of this paragraph, the term ‘speci-
fied Gulf Opportunity Zone extension property’ means prop-
erty—
‘‘(i) substantially all of the use of which is in one 
or more specified portions of the GO Zone, and 
‘‘(ii) which is—
‘‘(I) nonresidential real property or residential 
rental property which is placed in service by the 
taxpayer on or before December 31, 2010, or 
‘‘(II) in the case of a taxpayer who places a 
building described in subclause (I) in service on 
or before December 31, 2010, property described 
in section 168(k)(2)(A)(i) if substantially all of the 
use of such property is in such building and such 
property is placed in service by the taxpayer not 
later than 90 days after such building is placed 
in service. 
‘‘(C) SPECIFIED PORTIONS OF THE GO ZONE.—For pur-
poses of this paragraph, the term ‘specified portions of 
the GO Zone’ means those portions of the GO Zone which 
are in any county or parish which is identified by the 
Secretary as being a county or parish in which hurricanes 
occurring during 2005 damaged (in the aggregate) more 
than 60 percent of the housing units in such county or 
parish which were occupied (determined according to the 
2000 Census). 
‘‘(D) ONLY PRE-JANUARY 1, 2010, BASIS OF REAL PROP-
ERTY ELIGIBLE FOR ADDITIONAL ALLOWANCE.—In the case 
of property which is qualified Gulf Opportunity Zone prop-
erty solely by reason of subparagraph (B)(ii)(I), paragraph 
(1) shall apply only to the extent of the adjusted basis 
thereof attributable to manufacture, construction, or 
production before January 1, 2010.’’. 
(b) EXTENSION NOT APPLICABLE TO INCREASED SECTION 179 
EXPENSING.—Paragraph (2) of section 1400N(e) is amended by 
inserting ‘‘without regard to subsection (d)(6)’’ after ‘‘subsection 
(d)(2)’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall take effect as if included in section 101 of the Gulf Opportunity 
Zone Act of 2005.
H. R. 6111—23
SEC. 121. AUTHORITY FOR UNDERCOVER OPERATIONS. 
Paragraph (6) of section 7608(c) (relating to application of sec-
tion) is amended by striking ‘‘2007’’ both places it appears and 
inserting ‘‘2008’’. 
SEC. 122. DISCLOSURES OF CERTAIN TAX RETURN INFORMATION. 
(a) DISCLOSURES TO FACILITATE COMBINED EMPLOYMENT TAX 
REPORTING.—
(1) IN GENERAL.—Subparagraph (B) of section 6103(d)(5) 
(relating to termination) is amended by striking ‘‘2006’’ and 
inserting ‘‘2007’’. 
(2) EFFECTIVE DATE.—The amendment made by paragraph 
(1) shall apply to disclosures after December 31, 2006. 
(b) DISCLOSURES RELATING TO TERRORIST ACTIVITIES.—
(1) IN GENERAL.—Clause (iv) of section 6103(i)(3)(C) and 
subparagraph (E) of section 6103(i)(7) are each amended by 
striking ‘‘2006’’ and inserting ‘‘2007’’. 
(2) EFFECTIVE DATE.—The amendments made by paragraph 
(1) shall apply to disclosures after December 31, 2006. 
(c) DISCLOSURES RELATING TO STUDENT LOANS.—
(1) IN GENERAL.—Subparagraph (D) of section 6103(l)(13) 
(relating to termination) is amended by striking ‘‘2006’’ and 
inserting ‘‘2007’’. 
(2) EFFECTIVE DATE.—The amendment made by paragraph 
(1) shall apply to requests made after December 31, 2006. 
SEC. 123. SPECIAL RULE FOR ELECTIONS UNDER EXPIRED PROVI-
SIONS. 
(a) RESEARCH CREDIT ELECTIONS.—In the case of any taxable 
year ending after December 31, 2005, and before the date of the 
enactment of this Act, any election under section 41(c)(4) or section 
280C(c)(3)(C) of the Internal Revenue Code of 1986 shall be treated 
as having been timely made for such taxable year if such election 
is made not later than the later of April 15, 2007, or such time 
as the Secretary of the Treasury, or his designee, may specify. 
Such election shall be made in the manner prescribed by such 
Secretary or designee. 
(b) OTHER ELECTIONS.—Except as otherwise provided by such 
Secretary or designee, a rule similar to the rule of subsection 
(a) shall apply with respect to elections under any other expired 
provision of the Internal Revenue Code of 1986 the applicability 
of which is extended by reason of the amendments made by this 
title. 
TITLE II—ENERGY TAX PROVISIONS 
SEC. 201. CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN 
RENEWABLE RESOURCES. 
Subsection (d) of section 45 is amended by striking ‘‘January 
1, 2008’’ each place it appears and inserting ‘‘January 1, 2009’’. 
SEC. 202. CREDIT TO HOLDERS OF CLEAN RENEWABLE ENERGY 
BONDS. 
(a) IN GENERAL.—Section 54 is amended—
(1) by striking ‘‘$800,000,000’’ in subsection (f)(1) and 
inserting ‘‘$1,200,000,000’’,
H. R. 6111—24
(2) by striking ‘‘$500,000,000’’ in subsection (f)(2) and 
inserting ‘‘$750,000,000’’, and 
(3) by striking ‘‘December 31, 2007’’ in subsection (m) and 
inserting ‘‘December 31, 2008’’. 
(b) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendments made by paragraphs 
(1) and (3) of subsection (a) shall apply to bonds issued after 
December 31, 2006. 
(2) ALLOCATIONS.—The amendment made by subsection 
(a)(2) shall apply to allocations or reallocations after December 
31, 2006. 
SEC. 203. PERFORMANCE STANDARDS FOR SULFUR DIOXIDE REMOVAL 
IN ADVANCED COAL-BASED GENERATION TECHNOLOGY 
UNITS DESIGNED TO USE SUBBITUMINOUS COAL. 
(a) IN GENERAL.—Paragraph (1) of section 48A(f) (relating to 
advanced coal-based generation technology) is amended by adding 
at the end the following new flush sentence: 
‘‘For purposes of the performance requirement specified for 
the removal of SO2 in the table contained in subparagraph 
(B), the SO2 removal design level in the case of a unit designed 
for the use of feedstock substantially all of which is subbitu-
minous coal shall be 99 percent SO2 removal or the achievement 
of an emission level of 0.04 pounds or less of SO2 per million 
Btu, determined on a 30-day average.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall take apply with respect to applications for certification under 
section 48A(d)(2) of the Internal Revenue Code of 1986 submitted 
after October 2, 2006. 
SEC. 
204. 
DEDUCTION 
FOR 
ENERGY 
EFFICIENT 
COMMERCIAL 
BUILDINGS. 
Subsection (h) of section 179D is amended by striking 
‘‘December 31, 2007’’ and inserting ‘‘December 31, 2008’’. 
SEC. 205. CREDIT FOR NEW ENERGY EFFICIENT HOMES. 
Subsection (g) of section 45L is amended by striking ‘‘December 
31, 2007’’ and inserting ‘‘December 31, 2008’’. 
SEC. 206. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY. 
(a) EXTENSION.—Subsection (g) of section 25D is amended by 
striking ‘‘December 31, 2007’’ and inserting ‘‘December 31, 2008’’. 
(b) CLARIFICATION OF TERM.—
(1) Subsections (a)(1), (b)(1)(A), and (e)(4)(A)(i) of section 
25D are each amended by striking ‘‘qualified photovoltaic prop-
erty expenditures’’ and inserting ‘‘qualified solar electric prop-
erty expenditures’’. 
(2) Section 25D(d)(2) is amended—
(A) 
by 
striking 
‘‘qualified 
photovoltaic 
property 
expenditure’’ and inserting ‘‘qualified solar electric property 
expenditure’’, and 
(B) in the heading by striking ‘‘QUALIFIED
PHOTO-
VOLTAIC PROPERTY EXPENDITURE’’ and inserting ‘‘QUALIFIED 
SOLAR ELECTRIC PROPERTY EXPENDITURE’’. 
SEC. 207. ENERGY CREDIT. 
Section 48 is amended—
H. R. 6111—25
(1) by striking ‘‘January 1, 2008’’ both places it appears 
and inserting ‘‘January 1, 2009’’, and 
(2) by striking ‘‘December 31, 2007’’ both places it appears 
and inserting ‘‘December 31, 2008’’. 
SEC. 208. SPECIAL RULE FOR QUALIFIED METHANOL OR ETHANOL 
FUEL. 
(a) EXTENSION.—Subparagraph (D) of section 4041(b)(2) is 
amended by striking ‘‘October 1, 2007’’ and inserting ‘‘January 
1, 2009’’. 
(b) APPLICABLE BLENDER RATE.—Section 4041(b)(2)(C)(ii) is 
amended by striking ‘‘2007’’ and inserting ‘‘2008’’. 
(c) 
CLERICAL
AMENDMENT.—The 
heading 
for 
section 
4041(b)(2)(B) is amended to read as follows: ‘‘QUALIFIED METHANOL 
AND ETHANOL FUEL PRODUCED FROM COAL’’. 
SEC. 209. SPECIAL DEPRECIATION ALLOWANCE FOR CELLULOSIC BIO-
MASS ETHANOL PLANT PROPERTY. 
(a) IN GENERAL.—Section 168 (relating to accelerated cost 
recovery system) is amended by adding at the end the following: 
‘‘(l) SPECIAL ALLOWANCE FOR CELLULOSIC BIOMASS ETHANOL 
PLANT PROPERTY.—
‘‘(1) ADDITIONAL ALLOWANCE.—In the case of any qualified 
cellulosic biomass ethanol plant property—
‘‘(A) the depreciation deduction provided by section 
167(a) for the taxable year in which such property is placed 
in service shall include an allowance equal to 50 percent 
of the adjusted basis of such property, and 
‘‘(B) the adjusted basis of such property shall be 
reduced by the amount of such deduction before computing 
the amount otherwise allowable as a depreciation deduction 
under this chapter for such taxable year and any subse-
quent taxable year. 
‘‘(2) QUALIFIED CELLULOSIC BIOMASS ETHANOL PLANT PROP-
ERTY.—The term ‘qualified cellulosic biomass ethanol plant 
property’ means property of a character subject to the allowance 
for depreciation—
‘‘(A) which is used in the United States solely to 
produce cellulosic biomass ethanol, 
‘‘(B) the original use of which commences with the 
taxpayer after the date of the enactment of this subsection, 
‘‘(C) which is acquired by the taxpayer by purchase 
(as defined in section 179(d)) after the date of the enact-
ment of this subsection, but only if no written binding 
contract for the acquisition was in effect on or before the 
date of the enactment of this subsection, and 
‘‘(D) which is placed in service by the taxpayer before 
January 1, 2013. 
‘‘(3) CELLULOSIC BIOMASS ETHANOL.—For purposes of this 
subsection, the term ‘cellulosic biomass ethanol’ means ethanol 
produced by enzymatic hydrolysis of any lignocellulosic or 
hemicellulosic matter that is available on a renewable or recur-
ring basis. 
‘‘(4) EXCEPTIONS.—
‘‘(A) ALTERNATIVE
DEPRECIATION
PROPERTY.—Such 
term shall not include any property described in section 
168(k)(2)(D)(i).
H. R. 6111—26
‘‘(B) TAX-EXEMPT
BOND-FINANCED
PROPERTY.—Such 
term shall not include any property any portion of which 
is financed with the proceeds of any obligation the interest 
on which is exempt from tax under section 103. 
‘‘(C) ELECTION OUT.—If a taxpayer makes an election 
under this subparagraph with respect to any class of prop-
erty for any taxable year, this subsection shall not apply 
to all property in such class placed in service during such 
taxable year. 
‘‘(5) SPECIAL RULES.—For purposes of this subsection, rules 
similar to the rules of subparagraph (E) of section 168(k)(2) 
shall apply, except that such subparagraph shall be applied—
‘‘(A) by substituting ‘the date of the enactment of sub-
section (l)’ for ‘September 10, 2001’ each place it appears 
therein, 
‘‘(B) by substituting ‘January 1, 2013’ for ‘January 
1, 2005’ in clause (i) thereof, and 
‘‘(C) by substituting ‘qualified cellulosic biomass eth-
anol plant property’ for ‘qualified property’ in clause (iv) 
thereof. 
‘‘(6) ALLOWANCE AGAINST ALTERNATIVE MINIMUM TAX.—For 
purposes of this subsection, rules similar to the rules of section 
168(k)(2)(G) shall apply. 
‘‘(7) RECAPTURE.—For purposes of this subsection, rules 
similar to the rules under section 179(d)(10) shall apply with 
respect to any qualified cellulosic biomass ethanol plant prop-
erty which ceases to be qualified cellulosic biomass ethanol 
plant property. 
‘‘(8) DENIAL OF DOUBLE BENEFIT.—Paragraph (1) shall not 
apply to any qualified cellulosic biomass ethanol plant property 
with respect to which an election has been made under section 
179C (relating to election to expense certain refineries).’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to property placed in service after the date of the 
enactment of this Act in taxable years ending after such date. 
SEC. 210. EXPENDITURES PERMITTED FROM THE LEAKING UNDER-
GROUND STORAGE TANK TRUST FUND. 
(a) IN GENERAL.—Subsection (c) of section 9508 is amended—
(1) by striking ‘‘section 9003(h)’’ and inserting ‘‘sections 
9003(h), 9003(i), 9003(j), 9004(f), 9005(c), 9010, 9011, 9012, 
and 9013’’, and 
(2) by striking ‘‘Superfund Amendments and Reauthoriza-
tion Act of 1986’’ and inserting ‘‘Public Law 109–168’’. 
(b) CONFORMING AMENDMENTS.—Section 9014(2) of the Solid 
Waste Disposal Act is amended by striking ‘‘Fund, notwithstanding 
section 9508(c)(1) of the Internal Revenue Code of 1986’’ and 
inserting ‘‘Fund’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall take effect on the date of the enactment of this Act. 
SEC. 211. TREATMENT OF COKE AND COKE GAS. 
(a) NONAPPLICATION
OF
PHASEOUT.—Section 45K(g)(2) is 
amended by adding at the end the following new subparagraph: 
‘‘(D) NONAPPLICATION OF PHASEOUT.—Subsection (b)(1) 
shall not apply.’’.
H. R. 6111—27
(b) CLARIFICATION OF QUALIFYING FACILITY.—Section 45K(g)(1) 
is amended by inserting ‘‘(other than from petroleum based prod-
ucts)’’ after ‘‘coke or coke gas’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall take effect as if included in section 1321 of the Energy Policy 
Act of 2005. 
TITLE III—HEALTH SAVINGS ACCOUNTS 
SEC. 301. SHORT TITLE. 
This title may be cited as the ‘‘Health Opportunity Patient 
Empowerment Act of 2006’’. 
SEC. 302. FSA AND HRA TERMINATIONS TO FUND HSAS. 
(a) IN GENERAL.—Section 106 (relating to contributions by 
employer to accident and health plans) is amended by adding at 
the end the following new subsection: 
‘‘(e) FSA AND HRA TERMINATIONS TO FUND HSAS.—
‘‘(1) IN GENERAL.—A plan shall not fail to be treated as 
a health flexible spending arrangement or health reimburse-
ment arrangement under this section or section 105 merely 
because such plan provides for a qualified HSA distribution. 
‘‘(2) QUALIFIED
HSA
DISTRIBUTION.—The term ‘qualified 
HSA distribution’ means a distribution from a health flexible 
spending arrangement or health reimbursement arrangement 
to the extent that such distribution—
‘‘(A) does not exceed the lesser of the balance in such 
arrangement on September 21, 2006, or as of the date 
of such distribution, and 
‘‘(B) is contributed by the employer directly to the 
health savings account of the employee before January 
1, 2012. 
Such term shall not include more than 1 distribution with 
respect to any arrangement. 
‘‘(3) ADDITIONAL
TAX
FOR
FAILURE
TO
MAINTAIN
HIGH 
DEDUCTIBLE HEALTH PLAN COVERAGE.—
‘‘(A) IN GENERAL.—If, at any time during the testing 
period, the employee is not an eligible individual, then 
the amount of the qualified HSA distribution—
‘‘(i) shall be includible in the gross income of the 
employee for the taxable year in which occurs the 
first month in the testing period for which such 
employee is not an eligible individual, and 
‘‘(ii) the tax imposed by this chapter for such tax-
able year on the employee shall be increased by 10 
percent of the amount which is so includible. 
‘‘(B) EXCEPTION
FOR
DISABILITY
OR
DEATH.—Clauses 
(i) and (ii) of subparagraph (A) shall not apply if the 
employee ceases to be an eligible individual by reason 
of the death of the employee or the employee becoming 
disabled (within the meaning of section 72(m)(7)). 
‘‘(4) DEFINITIONS AND SPECIAL RULES.—For purposes of this 
subsection—
‘‘(A) TESTING PERIOD.—The term ‘testing period’ means 
the period beginning with the month in which the qualified 
HSA distribution is contributed to the health savings