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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 re-
ceiving 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 assist-
ance is payable to a family, and
‘‘(ii) as having a hiring date which is not
more than 2 years after the date of such ces-
sation.’’
(3) INCREASED
CREDIT
FOR
EMPLOYMENT
OF
LONG-TERM
FAMILY
ASSISTANCE
RECIPIENTS.—Sec-
tion 51 is amended by inserting after subsection (d)
the following new subsection:
‘‘(e) CREDIT FOR SECOND-YEAR WAGES FOR EMPLOY-
MENT OF LONG-TERM FAMILY ASSISTANCE RECIPIENTS.—
‘‘(1) IN GENERAL.—With respect to the employ-
ment of a long-term family assistance recipient—
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‘‘(A) the amount of the work opportunity
credit determined under this section for the tax-
able 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 qualified 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 qualified wages—
‘‘(A) which are paid to a long-term family
assistance recipient, and
‘‘(B) which are attributable to service ren-
dered during the 1-year period beginning on the
day after the last day of the 1-year period with
respect to such recipient determined under sub-
section (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 subpara-
graphs shall apply except that—
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‘‘(A) such subparagraph (A) shall be ap-
plied by substituting ‘$10,000’ for ‘$6,000’, and
‘‘(B) such subparagraph (B) shall be ap-
plied by substituting ‘$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repealed.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.
(f) EFFECTIVE DATE.—The amendments made by this
section shall apply to individuals who begin work for the
employer after December 31, 2005.
SEC. 110. 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) FORM OF PRIVATE BUSINESS CONTRIBUTIONS.—
Section 1397E(d)(2)(B) is amended by striking ‘‘any con-
tribution’’ and all that follows and inserting ‘‘any cash or
cash equivalent contribution’’.
(c) SPECIAL RULES RELATING TO AMORTIZATION, EX-
PENDITURES, ARBITRAGE, AND REPORTING.—
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(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), (h), and (i).’’, and
(B) by redesignating subsections (f), (g),
(h), and (i) as subsection (j), (k), (l), and (m),
respectively, and by inserting after subsection (e)
the following new subsections:
‘‘(f) 
RATABLE
PRINCIPAL
AMORTIZATION
RE-
QUIRED.—An issue shall be treated as meeting the require-
ments of this subsection if such issue provides for an equal
amount of principal to be paid by the issuer during each
calendar year that the issue is outstanding.
‘‘(g) 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
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the date of issuance of the qualified zone acad-
emy 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 de-
scribed in paragraph (1)(A), the Secretary may ex-
tend such period if the issuer establishes that the fail-
ure to satisfy the 5-year requirement is due to reason-
able cause and the related purposes will continue to
proceed with due diligence.
‘‘(3) FAILURE TO SPEND REQUIRED AMOUNT OF
BOND PROCEEDS 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 an extension has been
obtained under paragraph (2), by the close of the ex-
tended period), the issuer shall redeem all of the non-
qualified bonds within 90 days after the end of such
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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 sec-
tion 142.
‘‘(h) 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.
‘‘(i) REPORTING.—Issuers of qualified academy zone
bonds shall submit reports similar to the reports required
under section 149(e).’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 1397E(d)(3) is amended by in-
serting ‘‘without regard to the requirements of
subsection (f) and’’ after ‘‘Such present value
shall be determined’’.
(B) 
Sections 
54(l)(3)(B) 
and
1400N(l)(7)(B)(ii) are each amended by striking
‘‘section 
1397E(i)’’ 
and 
inserting 
‘‘section
1397E(l)’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to obligations issued after December 31,
2005.