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 extended period), the issuer shall re-
deem 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 re-
quired 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 require-
ments 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 amend-
ed 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. 
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(2) SPECIAL RULES.—The amendments made 
by subsection (b) shall apply to obligations issued 
after the date of the enactment of this Act pursuant 
to allocations of the national zone academy bond 
limitation for calendar years after 2005. 
SEC. 208. ABOVE-THE-LINE DEDUCTION FOR CERTAIN EX-
PENSES 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. 209. 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 haz-
ardous substance) 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)).’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenditures paid or incurred 
after December 31, 2005. 
SEC. 210. 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 ‘‘2005’’ both places it 
appears and inserting ‘‘2007’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection 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 subsection shall apply to bonds issued after 
December 31, 2005. 
(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.— 
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