313 
‘‘(iv) COORDINATION
WITH
ALTER-
NATIVE TAX NET OPERATING LOSS DEDUC-
TION.—In the case of a taxpayer who 
elects to have clause (ii)(II) apply, section 
56(d)(1)(A)(ii) shall be applied by sub-
stituting ‘ending during 2001 or 2002 or 
beginning during 2008 or 2009’ for ‘end-
ing during 2001, 2002, 2008, or 2009’.’’. 
(b) ALTERNATIVE TAX NET OPERATING LOSS DE-
DUCTION.—Subclause (I) of section 56(d)(1)(A)(ii) is 
amended to read as follows: 
‘‘(I) the amount of such deduc-
tion attributable to the sum of 
carrybacks of net operating losses 
from taxable years ending during 
2001, 2002, 2008, or 2009 and 
carryovers of net operating losses to 
such taxable years, or’’. 
(c) LOSS FROM OPERATIONS OF LIFE INSURANCE 
COMPANIES.—Subsection (b) of section 810 is amended 
by adding at the end the following new paragraph: 
‘‘(4) CARRYBACK FOR 2008 AND 2009 LOSSES.— 
‘‘(A) IN GENERAL.—In the case of an ap-
plicable 2008 or 2009 loss from operations with
314 
respect to which the taxpayer has elected the 
application of this paragraph— 
‘‘(i) such loss from operations shall be 
reduced by 10 percent of such loss (deter-
mined without regard to this paragraph), 
and 
‘‘(ii) paragraph (1)(A) shall be ap-
plied, at the election of the taxpayer, by 
substituting ‘5’ or ‘4’ for ‘3’. 
‘‘(B) APPLICABLE 2008 OR 2009 LOSS FROM 
OPERATIONS.—For purposes of this paragraph, 
the term ‘applicable 2008 or 2009 loss from op-
erations’ means— 
‘‘(i) the taxpayer’s loss from oper-
ations for any taxable year ending in 2008 
or 2009, or 
‘‘(ii) if the taxpayer elects to have this 
clause apply in lieu of clause (i), the tax-
payer’s loss from operations for any tax-
able year beginning in 2008 or 2009. 
‘‘(C) ELECTION.—Any election under this 
paragraph shall be made in such manner as 
may be prescribed by the Secretary, and shall 
be made by the due date (including extension of 
time) for filing the taxpayer’s return for the
315 
taxable year of the loss from operations. Any 
such election, once made, shall be irrevocable. 
‘‘(D) COORDINATION WITH ALTERNATIVE 
TAX NET OPERATING LOSS DEDUCTION.—In the 
case of a taxpayer who elects to have subpara-
graph (B)(ii) apply, section 56(d)(1)(A)(ii) shall 
be applied by substituting ‘ending during 2001 
or 2002 or beginning during 2008 or 2009’ for 
‘ending during 2001, 2002, 2008, or 2009’.’’. 
(d) CONFORMING
AMENDMENT.—Section 172 is 
amended by striking subsection (k). 
(e) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to net operating losses aris-
ing in taxable years ending after December 31, 
2007. 
(2) ALTERNATIVE TAX NET OPERATING LOSS 
DEDUCTION.—The amendment made by subsection 
(b) shall apply to taxable years ending after 1997. 
(3) LOSS FROM OPERATIONS OF LIFE INSUR-
ANCE COMPANIES.—The amendment made by sub-
section (d) shall apply to losses from operations aris-
ing in taxable years ending after December 31, 
2007.
316 
(4) TRANSITIONAL RULE.—In the case of a net 
operating loss (or, in the case of a life insurance 
company, a loss from operations) for a taxable year 
ending before the date of the enactment of this 
Act— 
(A) any election made under section 
172(b)(3) or 810(b)(3) of the Internal Revenue 
Code of 1986 with respect to such loss may 
(notwithstanding such section) be revoked be-
fore the applicable date, 
(B) any election made under section 
172(b)(1)(H) or 810(b)(4) of such Code with 
respect to such loss shall (notwithstanding such 
section) be treated as timely made if made be-
fore the applicable date, and 
(C) any application under section 6411(a) 
of such Code with respect to such loss shall be 
treated as timely filed if filed before the appli-
cable date. 
For purposes of this paragraph, the term ‘‘applica-
ble date’’ means the date which is 60 days after the 
date of the enactment of this Act. 
SEC. 1412. EXCEPTION FOR TARP RECIPIENTS. 
The amendments made by this part shall not apply 
to—
317 
(1) any taxpayer if— 
(A) the Federal Government acquires, at 
any time, an equity interest in the taxpayer 
pursuant to the Emergency Economic Stabiliza-
tion Act of 2008, or 
(B) the Federal Government acquires, at 
any time, any warrant (or other right) to ac-
quire any equity interest with respect to the 
taxpayer pursuant to such Act, 
(2) the Federal National Mortgage Association 
and the Federal Home Loan Mortgage Corporation, 
and 
(3) any taxpayer which at any time in 2008 or 
2009 is a member of the same affiliated group (as 
defined in section 1504 of the Internal Revenue 
Code of 1986, determined without regard to sub-
section (b) thereof) as a taxpayer described in para-
graph (1) or (2). 
PART 3—INCENTIVES FOR NEW JOBS 
SEC. 1421. INCENTIVES TO HIRE UNEMPLOYED VETERANS 
AND DISCONNECTED YOUTH. 
(a) IN GENERAL.—Subsection (d) of section 51 is 
amended by adding at the end the following new para-
graph:
318 
‘‘(14) CREDIT
ALLOWED
FOR
UNEMPLOYED 
VETERANS
AND
DISCONNECTED
YOUTH
HIRED
IN 
2009 OR 2010.— 
‘‘(A) IN GENERAL.—Any unemployed vet-
eran or disconnected youth who begins work for 
the employer during 2009 or 2010 shall be 
treated as a member of a targeted group for 
purposes of this subpart. 
‘‘(B) DEFINITIONS.—For purposes of this 
paragraph— 
‘‘(i) UNEMPLOYED
VETERAN.—The 
term ‘unemployed veteran’ means any vet-
eran (as defined in paragraph (3)(B), de-
termined without regard to clause (ii) 
thereof) who is certified by the designated 
local agency as— 
‘‘(I) having been discharged or 
released from active duty in the 
Armed Forces during 2008, 2009, or 
2010, and 
‘‘(II) being in receipt of unem-
ployment compensation under State or 
Federal law for not less than 4 weeks 
during the 1-year period ending on 
the hiring date.
319 
‘‘(ii) DISCONNECTED
YOUTH.—The 
term ‘disconnected youth’ means any indi-
vidual who is certified by the designated 
local agency— 
‘‘(I) as having attained age 16 
but not age 25 on the hiring date, 
‘‘(II) as not regularly attending 
any secondary, technical, or post-sec-
ondary school during the 6-month pe-
riod preceding the hiring date, 
‘‘(III) as not regularly employed 
during such 6-month period, and 
‘‘(IV) as not readily employable 
by reason of lacking a sufficient num-
ber of basic skills.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to individuals who begin work for 
the employer after December 31, 2008.
320 
PART 4—CLARIFICATION OF REGULATIONS RE-
LATED TO LIMITATIONS ON CERTAIN BUILT- 
IN 
LOSSES 
FOLLOWING 
AN 
OWNERSHIP 
CHANGE 
SEC. 1431. CLARIFICATION OF REGULATIONS RELATED TO 
LIMITATIONS ON CERTAIN BUILT-IN LOSSES 
FOLLOWING AN OWNERSHIP CHANGE. 
(a) FINDINGS.—Congress finds as follows: 
(1) The delegation of authority to the Secretary 
of the Treasury under section 382(m) of the Inter-
nal Revenue Code of 1986 does not authorize the 
Secretary to provide exemptions or special rules that 
are restricted to particular industries or classes of 
taxpayers. 
(2) Internal Revenue Service Notice 2008–83 is 
inconsistent with the congressional intent in enact-
ing such section 382(m). 
(3) The legal authority to prescribe Internal 
Revenue Service Notice 2008–83 is doubtful. 
(4) However, as taxpayers should generally be 
able to rely on guidance issued by the Secretary of 
the Treasury legislation is necessary to clarify the 
force and effect of Internal Revenue Service Notice 
2008–83 and restore the proper application under 
the Internal Revenue Code of 1986 of the limitation
321 
on built-in losses following an ownership change of 
a bank. 
(b) DETERMINATION OF FORCE AND EFFECT OF IN-
TERNAL REVENUE SERVICE NOTICE 2008–83 EXEMPT-
ING BANKS FROM LIMITATION ON CERTAIN BUILT–IN 
LOSSES FOLLOWING OWNERSHIP CHANGE.— 
(1) IN
GENERAL.—Internal Revenue Service 
Notice 2008–83— 
(A) shall be deemed to have the force and 
effect of law with respect to any ownership 
change (as defined in section 382(g) of the In-
ternal Revenue Code of 1986) occurring on or 
before January 16, 2009, and 
(B) shall have no force or effect with re-
spect to any ownership change after such date. 
(2) 
BINDING
CONTRACTS.—Notwithstanding 
paragraph (1), Internal Revenue Service Notice 
2008–83 shall have the force and effect of law with 
respect to any ownership change (as so defined) 
which occurs after January 16, 2009 if such 
change— 
(A) is pursuant to a written binding con-
tract entered into on or before such date, or 
(B) is pursuant to a written agreement en-
tered into on or before such date and such