H. R. 1424—163 
‘‘(I) 
rehabilitates 
property 
damaged, 
or 
replaces property destroyed or condemned, as a 
result of such federally declared disaster, except 
that, for purposes of this clause, property shall 
be treated as replacing property destroyed or con-
demned if, as part of an integrated plan, such 
property replaces property which is included in 
a continuous area which includes real property 
destroyed or condemned, and 
‘‘(II) is similar in nature to, and located in 
the same county as, the property being rehabili-
tated or replaced, 
‘‘(iv) the original use of which in such disaster 
area commences with an eligible taxpayer on or after 
the applicable disaster date, 
‘‘(v) which is acquired by such eligible taxpayer 
by purchase (as defined in section 179(d)) on or after 
the applicable disaster date, but only if no written 
binding contract for the acquisition was in effect before 
such date, and 
‘‘(vi) which is placed in service by such eligible 
taxpayer on or before the date which is the last day 
of the third calendar year following the applicable dis-
aster date (the fourth calendar year in the case of 
nonresidential real property and residential rental 
property). 
‘‘(B) EXCEPTIONS.— 
‘‘(i) OTHER BONUS DEPRECIATION PROPERTY.—The 
term ‘qualified disaster assistance property’ shall not 
include— 
‘‘(I) any property to which subsection (k) 
(determined without regard to paragraph (4)), (l), 
or (m) applies, 
‘‘(II) any property to which section 1400N(d) 
applies, and 
‘‘(III) any property described in section 
1400N(p)(3). 
‘‘(ii) ALTERNATIVE DEPRECIATION PROPERTY.—The 
term ‘qualified disaster assistance property’ shall not 
include any property to which the alternative deprecia-
tion system under subsection (g) applies, determined 
without regard to paragraph (7) of subsection (g) 
(relating to election to have system apply). 
‘‘(iii) 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. 
‘‘(iv) QUALIFIED REVITALIZATION BUILDINGS.—Such 
term shall not include any qualified revitalization 
building with respect to which the taxpayer has elected 
the application of paragraph (1) or (2) of section 
1400I(a). 
‘‘(v) ELECTION OUT.—If a taxpayer makes an elec-
tion under this clause with respect to any class of 
property for any taxable year, this subsection shall
H. R. 1424—164 
not apply to all property in such class placed in service 
during such taxable year. 
‘‘(C) SPECIAL RULES.—For purposes of this subsection, 
rules similar to the rules of subparagraph (E) of subsection 
(k)(2) shall apply, except that such subparagraph shall 
be applied— 
‘‘(i) by substituting ‘the applicable disaster date’ 
for ‘December 31, 2007’ each place it appears therein, 
‘‘(ii) without regard to ‘and before January 1, 2009’ 
in clause (i) thereof, and 
‘‘(iii) by substituting ‘qualified disaster assistance 
property’ for ‘qualified property’ in clause (iv) thereof. 
‘‘(D) ALLOWANCE
AGAINST
ALTERNATIVE
MINIMUM 
TAX.—For purposes of this subsection, rules similar to the 
rules of subsection (k)(2)(G) shall apply. 
‘‘(3) OTHER DEFINITIONS.—For purposes of this subsection— 
‘‘(A) APPLICABLE DISASTER DATE.—The term ‘applicable 
disaster date’ means, with respect to any federally declared 
disaster, the date on which such federally declared disaster 
occurs. 
‘‘(B) FEDERALLY DECLARED DISASTER.—The term ‘feder-
ally declared disaster’ has the meaning given such term 
under section 165(h)(3)(C)(i). 
‘‘(C) DISASTER AREA.—The term ‘disaster area’ has the 
meaning given such term under section 165(h)(3)(C)(ii). 
‘‘(D) ELIGIBLE TAXPAYER.—The term ‘eligible taxpayer’ 
means a taxpayer who has suffered an economic loss attrib-
utable to a federally declared disaster. 
‘‘(4) RECAPTURE.—For purposes of this subsection, rules 
similar to the rules under section 179(d)(10) shall apply with 
respect to any qualified disaster assistance property which 
ceases to be qualified disaster assistance property.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to property placed in service after December 31, 2007, 
with respect disasters declared after such date. 
SEC. 711. INCREASED EXPENSING FOR QUALIFIED DISASTER ASSIST-
ANCE PROPERTY. 
(a) IN GENERAL.—Section 179 is amended by adding at the 
end the following new subsection: 
‘‘(e) SPECIAL RULES FOR QUALIFIED DISASTER ASSISTANCE PROP-
ERTY.— 
‘‘(1) IN GENERAL.—For purposes of this section— 
‘‘(A) the dollar amount in effect under subsection (b)(1) 
for the taxable year shall be increased by the lesser of— 
‘‘(i) $100,000, or 
‘‘(ii) the cost of qualified section 179 disaster assist-
ance property placed in service during the taxable year, 
and 
‘‘(B) the dollar amount in effect under subsection (b)(2) 
for the taxable year shall be increased by the lesser of— 
‘‘(i) $600,000, or 
‘‘(ii) the cost of qualified section 179 disaster assist-
ance property placed in service during the taxable year.
H. R. 1424—165 
‘‘(2) QUALIFIED
SECTION
179
DISASTER
ASSISTANCE
PROP-
ERTY.—For purposes of this subsection, the term ‘qualified sec-
tion 179 disaster assistance property’ means section 179 prop-
erty (as defined in subsection (d)) which is qualified disaster 
assistance property (as defined in section 168(n)(2)). 
‘‘(3) COORDINATION
WITH
EMPOWERMENT
ZONES
AND 
RENEWAL COMMUNITIES.—For purposes of sections 1397A and 
1400J, qualified section 179 disaster assistance property shall 
not be treated as qualified zone property or qualified renewal 
property, unless the taxpayer elects not to take such qualified 
section 179 disaster assistance property into account for pur-
poses of this subsection. 
‘‘(4) RECAPTURE.—For purposes of this subsection, rules 
similar to the rules under subsection (d)(10) shall apply with 
respect to any qualified section 179 disaster assistance property 
which ceases to be qualified section 179 disaster assistance 
property.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to property placed in service after December 31, 2007, 
with respect disasters declared after such date. 
SEC. 712. COORDINATION WITH HEARTLAND DISASTER RELIEF. 
The amendments made by this subtitle, other than the amend-
ments made by sections 706(a)(2), 710, and 711, shall not apply 
to any disaster described in section 702(c)(1)(A), or to any expendi-
ture or loss resulting from such disaster. 
TITLE 
VIII—SPENDING 
REDUCTIONS 
AND APPROPRIATE REVENUE RAIS-
ERS FOR NEW TAX RELIEF POLICY 
SEC. 801. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN 
TAX INDIFFERENT PARTIES. 
(a) IN GENERAL.—Subpart B of part II of subchapter E of 
chapter 1 is amended by inserting after section 457 the following 
new section: 
‘‘SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CER-
TAIN TAX INDIFFERENT PARTIES. 
‘‘(a) IN GENERAL.—Any compensation which is deferred under 
a nonqualified deferred compensation plan of a nonqualified entity 
shall be includible in gross income when there is no substantial 
risk of forfeiture of the rights to such compensation. 
‘‘(b) NONQUALIFIED ENTITY.—For purposes of this section, the 
term ‘nonqualified entity’ means— 
‘‘(1) any foreign corporation unless substantially all of its 
income is— 
‘‘(A) effectively connected with the conduct of a trade 
or business in the United States, or 
‘‘(B) subject to a comprehensive foreign income tax, 
and 
‘‘(2) any partnership unless substantially all of its income 
is allocated to persons other than— 
‘‘(A) foreign persons with respect to whom such income 
is not subject to a comprehensive foreign income tax, and
H. R. 1424—166 
‘‘(B) organizations which are exempt from tax under 
this title. 
‘‘(c) DETERMINABILITY OF AMOUNTS OF COMPENSATION.— 
‘‘(1) IN GENERAL.—If the amount of any compensation is 
not determinable at the time that such compensation is other-
wise includible in gross income under subsection (a)— 
‘‘(A) such amount shall be so includible in gross income 
when determinable, and 
‘‘(B) the tax imposed under this chapter for the taxable 
year in which such compensation is includible in gross 
income shall be increased by the sum of— 
‘‘(i) the amount of interest determined under para-
graph (2), and 
‘‘(ii) an amount equal to 20 percent of the amount 
of such compensation. 
‘‘(2) INTEREST.—For purposes of paragraph (1)(B)(i), the 
interest determined under this paragraph for any taxable year 
is the amount of interest at the underpayment rate under 
section 6621 plus 1 percentage point on the underpayments 
that would have occurred had the deferred compensation been 
includible in gross income for the taxable year in which first 
deferred or, if later, the first taxable year in which such 
deferred compensation is not subject to a substantial risk of 
forfeiture. 
‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.—For purposes 
of this section— 
‘‘(1) SUBSTANTIAL RISK OF FORFEITURE.— 
‘‘(A) IN GENERAL.—The rights of a person to compensa-
tion shall be treated as subject to a substantial risk of 
forfeiture only if such person’s rights to such compensation 
are conditioned upon the future performance of substantial 
services by any individual. 
‘‘(B) EXCEPTION
FOR
COMPENSATION
BASED
ON
GAIN 
RECOGNIZED ON AN INVESTMENT ASSET.— 
‘‘(i) IN GENERAL.—To the extent provided in regula-
tions prescribed by the Secretary, if compensation is 
determined solely by reference to the amount of gain 
recognized on the disposition of an investment asset, 
such compensation shall be treated as subject to a 
substantial risk of forfeiture until the date of such 
disposition. 
‘‘(ii) INVESTMENT ASSET.—For purposes of clause 
(i), the term ‘investment asset’ means any single asset 
(other than an investment fund or similar entity)— 
‘‘(I) acquired directly by an investment fund 
or similar entity, 
‘‘(II) with respect to which such entity does 
not (nor does any person related to such entity) 
participate in the active management of such asset 
(or if such asset is an interest in an entity, in 
the active management of the activities of such 
entity), and 
‘‘(III) substantially all of any gain on the dis-
position of which (other than such deferred com-
pensation) is allocated to investors in such entity.
H. R. 1424—167 
‘‘(iii) COORDINATION
WITH
SPECIAL
RULE.—Para-
graph (3)(B) shall not apply to any compensation to 
which clause (i) applies. 
‘‘(2) COMPREHENSIVE FOREIGN INCOME TAX.—The term ‘com-
prehensive foreign income tax’ means, with respect to any 
foreign person, the income tax of a foreign country if— 
‘‘(A) such person is eligible for the benefits of a com-
prehensive income tax treaty between such foreign country 
and the United States, or 
‘‘(B) such person demonstrates to the satisfaction of 
the Secretary that such foreign country has a comprehen-
sive income tax. 
‘‘(3) NONQUALIFIED DEFERRED COMPENSATION PLAN.— 
‘‘(A) IN
GENERAL.—The term ‘nonqualified deferred 
compensation plan’ has the meaning given such term under 
section 409A(d), except that such term shall include any 
plan that provides a right to compensation based on the 
appreciation in value of a specified number of equity units 
of the service recipient. 
‘‘(B) EXCEPTION.—Compensation shall not be treated 
as deferred for purposes of this section if the service pro-
vider receives payment of such compensation not later than 
12 months after the end of the taxable year of the service 
recipient during which the right to the payment of such 
compensation is no longer subject to a substantial risk 
of forfeiture. 
‘‘(4) EXCEPTION FOR CERTAIN COMPENSATION WITH RESPECT 
TO EFFECTIVELY CONNECTED INCOME.—In the case a foreign 
corporation with income which is taxable under section 882, 
this section shall not apply to compensation which, had such 
compensation had been paid in cash on the date that such 
compensation ceased to be subject to a substantial risk of 
forfeiture, would have been deductible by such foreign corpora-
tion against such income. 
‘‘(5) APPLICATION OF RULES.—Rules similar to the rules 
of paragraphs (5) and (6) of section 409A(d) shall apply. 
‘‘(e) REGULATIONS.—The Secretary shall prescribe such regula-
tions as may be necessary or appropriate to carry out the purposes 
of this section, including regulations disregarding a substantial 
risk of forfeiture in cases where necessary to carry out the purposes 
of this section.’’. 
(b) CONFORMING AMENDMENT.—Section 26(b)(2), as amended 
by the Housing Assistance Tax Act of 2008, is amended by striking 
‘‘and’’ at the end of subparagraph (V), by striking the period at 
the end of subparagraph (W) and inserting ‘‘, and’’, and by adding 
at the end the following new subparagraph: 
‘‘(X) section 457A(c)(1)(B) (relating to determinability 
of amounts of compensation).’’. 
(c) CLERICAL AMENDMENT.—The table of sections of subpart 
B of part II of subchapter E of chapter 1 is amended by inserting 
after the item relating to section 457 the following new item: 
‘‘Sec. 457A. Nonqualified deferred compensation from certain tax indifferent par-
ties.’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided in this sub-
section, the amendments made by this section shall apply to
H. R. 1424—168 
amounts deferred which are attributable to services performed 
after December 31, 2008. 
(2) APPLICATION TO EXISTING DEFERRALS.—In the case of 
any amount deferred to which the amendments made by this 
section do not apply solely by reason of the fact that the 
amount is attributable to services performed before January 
1, 2009, to the extent such amount is not includible in gross 
income in a taxable year beginning before 2018, such amounts 
shall be includible in gross income in the later of— 
(A) the last taxable year beginning before 2018, or 
(B) the taxable year in which there is no substantial 
risk of forfeiture of the rights to such compensation (deter-
mined in the same manner as determined for purposes 
of section 457A of the Internal Revenue Code of 1986, 
as added by this section). 
(3) ACCELERATED PAYMENTS.—No later than 120 days after 
the date of the enactment of this Act, the Secretary shall 
issue guidance providing a limited period of time during which 
a nonqualified deferred compensation arrangement attributable 
to services performed on or before December 31, 2008, may, 
without violating the requirements of section 409A(a) of the 
Internal Revenue Code of 1986, be amended to conform the 
date of distribution to the date the amounts are required to 
be included in income. 
(4) CERTAIN
BACK-TO-BACK
ARRANGEMENTS.—If the tax-
payer is also a service recipient and maintains one or more 
nonqualified deferred compensation arrangements for its 
service providers under which any amount is attributable to 
services performed on or before December 31, 2008, the guid-
ance issued under paragraph (4) shall permit such arrange-
ments to be amended to conform the dates of distribution 
under such arrangement to the date amounts are required 
to be included in the income of such taxpayer under this sub-
section. 
(5) ACCELERATED PAYMENT NOT TREATED AS MATERIAL MODI-
FICATION.—Any amendment to a nonqualified deferred com-
pensation arrangement made pursuant to paragraph (4) or 
(5) shall not be treated as a material modification of the
H. R. 1424—169 
arrangement for purposes of section 409A of the Internal Rev-
enue Code of 1986. 
Speaker of the House of Representatives. 
Vice President of the United States and
President of the Senate.