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tend such period if the qualified issuer establishes that
the failure to satisfy the 5-year requirement is due to
reasonable cause and the related projects 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 qualified 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 re-
deemed shall be determined in the same manner as
under section 142.
‘‘(i) SPECIAL RULES RELATING TO ARBITRAGE.—A
bond which is part of an issue shall not be treated as a
rural renaissance bond unless, with respect to the issue of
which the bond is a part, the qualified issuer satisfies the
arbitrage requirements of section 148 with respect to pro-
ceeds of the issue.
‘‘(j) QUALIFIED
ISSUER.—For purposes of this
section—
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‘‘(1) IN GENERAL.—The term ‘qualified issuer’
means any not-for-profit cooperative lender which has
as of the date of the enactment of this section received
a guarantee under section 306 of the Rural Elec-
trification Act and which meets the requirement of
paragraph (2).
‘‘(2) USER
FEE
REQUIREMENT.—The require-
ment of this paragraph is met if the issuer of any
rural renaissance bond makes grants for qualified
projects as defined under subsection (d)(2) on a semi-
annual basis every year that such bond is outstanding
in an annual amount equal to one-half of the rate on
United States Treasury Bills of the same maturity
multiplied by the outstanding principle balance of
rural renaissance bonds issued by such issuer.
‘‘(k) SPECIAL RULES RELATING TO POOL BONDS.—
No portion of a pooled financing bond may be allocable to
loan unless the borrower has entered into a written loan
commitment for such portion prior to the issue date of such
issue.
‘‘(l) OTHER DEFINITIONS AND SPECIAL RULES.—For
purposes of this section—
‘‘(1) BOND.—The term ‘bond’ includes any obli-
gation.
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‘‘(2) POOLED
FINANCING
BOND.—The term
‘pooled financing bond’ shall have the meaning given
such term by section 149(f)(4)(A).
‘‘(3) RURAL AREA.—The term ‘rural area’ means
any area other than—
‘‘(A) a city or town which has a population
of greater than 50,000 inhabitants, or
‘‘(B) the urbanized area contiguous and ad-
jacent to such a city or town.
‘‘(4) PARTNERSHIP; S CORPORATION; AND OTHER
PASS-THRU ENTITIES.—
‘‘(A) IN GENERAL.—Under regulations pre-
scribed by the Secretary, in the case of a part-
nership, trust, S corporation, or other pass-thru
entity, rules similar to the rules of section 41(g)
shall apply with respect to the credit allowable
under subsection (a).
‘‘(B) NO BASIS ADJUSTMENT.—In the case
of a bond held by a partnership or an S corpora-
tion, rules similar to the rules under section
1397E(l) shall apply.
‘‘(5) BONDS HELD BY REGULATED INVESTMENT
COMPANIES.—If any rural renaissance bond is held
by a regulated investment company, the credit deter-
mined under subsection (a) shall be allowed to share-
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holders of such company under procedures prescribed
by the Secretary.
‘‘(6) REPORTING.—Issuers of rural renaissance
bonds shall submit reports similar to the reports re-
quired under section 149(e).’’.
(b) REPORTING.—Subsection (d) of section 6049 (relat-
ing to returns regarding payments of interest) is amended
by adding at the end the following new paragraph:
‘‘(9) REPORTING OF CREDIT ON RURAL RENAIS-
SANCE BONDS.—
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts
includible in gross income under section 54(f)
and such amounts shall be treated as paid on the
credit allowance date (as defined in section
54(b)(4)).
‘‘(B) REPORTING TO CORPORATIONS, ETC.—
Except as otherwise provided in regulations, in
the case of any interest described in subpara-
graph (A), subsection (b)(4) shall be applied
without regard to subparagraphs (A), (H), (I),
(J), (K), and (L)(i) of such subsection.
‘‘(C) REGULATORY
AUTHORITY.—The Sec-
retary may prescribe such regulations as are nec-
essary or appropriate to carry out the purposes
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of this paragraph, including regulations which
require more frequent or more detailed report-
ing.’’.
(c) CONFORMING AMENDMENTS.—
(1) The table of sections for subpart H of part
IV of subchapter A of chapter 1 is amended by adding
at the end the following new item:
‘‘Sec. 54A. Credit to holders of rural renaissance bonds.’’.
(2) Section 54(c)(2) is amended by inserting ‘‘,
section 54A,’’ after ‘‘subpart C’’.
(d) ISSUANCE OF REGULATIONS.—The Secretary of
Treasury shall issue regulations required under section 54A
of the Internal Revenue Code of 1986 (as added by this sec-
tion) not later than 120 days after the date of the enactment
of this Act.
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to bonds issued after the date of the en-
actment of this Act and before January 1, 2010.
SEC. 470. MODIFICATIONS OF FOREIGN TAX CREDIT RULES
APPLICABLE TO LARGE INTEGRATED OIL
COMPANIES WHICH ARE DUAL CAPACITY TAX-
PAYERS.
(a) IN GENERAL.—Section 901 (relating to credit for
taxes of foreign countries and of possessions of the United
States), as amended by this Act, is amended by redesig-
nating subsections (m) and (n) as subsections (n) and (o),
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respectively, and by inserting after subsection (l) the fol-
lowing new subsection:
‘‘(m) SPECIAL RULES RELATING TO LARGE INTE-
GRATED OIL COMPANIES WHICH ARE DUAL CAPACITY TAX-
PAYERS.—
‘‘(1) GENERAL
RULE.—Notwithstanding any
other provision of this chapter, any amount paid or
accrued by a dual capacity taxpayer which is a large
integrated oil company to a foreign country or posses-
sion of the United States for any period shall not be
considered a tax—
‘‘(A) if, for such period, the foreign country
or possession does not impose a generally appli-
cable income tax, or
‘‘(B) to the extent such amount exceeds the
amount (determined in accordance with regula-
tions) which—
‘‘(i) is paid by such dual capacity tax-
payer pursuant to the generally applicable
income tax imposed by the country or pos-
session, or
‘‘(ii) would be paid if the generally ap-
plicable income tax imposed by the country
or possession were applicable to such dual
capacity taxpayer.
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Nothing in this paragraph shall be construed to
imply the proper treatment of any such amount
not in excess of the amount determined under
subparagraph (B).
‘‘(2) DUAL CAPACITY TAXPAYER.—For purposes
of this subsection, the term ‘dual capacity taxpayer’
means, with respect to any foreign country or posses-
sion of the United States, a person who—
‘‘(A) is subject to a levy of such country or
possession, and
‘‘(B) receives (or will receive) directly or in-
directly a specific economic benefit (as deter-
mined in accordance with regulations) from such
country or possession.
‘‘(3) GENERALLY APPLICABLE INCOME TAX.—For
purposes of this subsection—
‘‘(A) IN GENERAL.—The term ‘generally ap-
plicable income tax’ means an income tax (or a
series of income taxes) which is generally im-
posed under the laws of a foreign country or pos-
session on income derived from the conduct of a
trade or business within such country or posses-
sion.
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‘‘(B) EXCEPTIONS.—Such term shall not in-
clude a tax unless it has substantial application,
by its terms and in practice, to—
‘‘(i) persons who are not dual capacity
taxpayers, and
‘‘(ii) persons who are citizens or resi-
dents of the foreign country or possession.
‘‘(4) LARGE
INTEGRATED
OIL
COMPANY.—For
purposes of this subsection, the term ‘large integrated
oil company’ means, with respect to any taxable year,
an integrated oil company (as defined in section
291(b)(4)) which—
‘‘(A) had gross receipts in excess of
$1,000,000,000 for such taxable year, and
‘‘(B) has an average daily worldwide pro-
duction of crude oil of at least 500,000 barrels
for such taxable year.’’
(b) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall apply to taxes paid or accrued in
taxable years beginning after the date of the enact-
ment of this Act.
(2) CONTRARY TREATY OBLIGATIONS UPHELD.—
The amendments made by this section shall not apply
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to the extent contrary to any treaty obligation of the
United States.
SEC. 471. DISABILITY PREFERENCE PROGRAM FOR TAX
COLLECTION CONTRACTS.
(a) IN GENERAL.—The Secretary of the Treasury shall
not enter into any qualified tax collection contract after
April 1, 2006, until the Secretary implements a disability
preference program that meets the requirements of sub-
section (b).
(b) DISABILITY PREFERENCE PROGRAM REQUIRE-
MENTS.—
(1) IN GENERAL.—A disability preference pro-
gram meets the requirements of this subsection if such
program requires that not less than 10 percent of the
accounts of each dollar value category are awarded to
persons described in paragraph (2).
(2) PERSON DESCRIBED.—For purposes of para-
graph (1), a person is described in this paragraph
if—
(A) as of the date any qualified tax collec-
tion contract is awarded—
(i) such person employs not less than
50 severely disabled individuals within the
United States; or
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(ii) not less than 30 percent of the em-
ployees of such person within the United
States are severely disabled individuals;
(B) such person agrees as a condition of the
qualified tax collection contract that not more
than 90 days after the date such contract is
awarded, not less than 35 percent of the employ-
ees of such person employed in connection with
providing services under such contract shall—
(i) be hired after the date such contract
is awarded; and
(ii) be severely disabled individuals;
and
(C) such person is otherwise qualified to
perform the services required.
(c) DEFINITIONS.—For purposes of this section—
(1) QUALIFIED
TAX
COLLECTION
CONTRACT.—
The term ‘‘qualified tax collection contract’’ shall have
the meaning given such term under section 6306(b) of
the Internal Revenue Code of 1986.
(2) DOLLAR VALUE CATEGORY.—The term ‘‘dol-
lar value category’’ means the dollar ranges of ac-
counts for collection as determined and assigned by
the Secretary under section 6306(b)(1)(B) of the In-
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ternal Revenue Code of 1986 with respect to a quali-
fied tax collection contract.
(3) SEVERELY DISABLED INDIVIDUAL.—The term
‘‘severely disabled individual’’ means—
(A) a veteran of the United States armed
forces with a disability of 50 percent or
greater—
(i) determined by the Secretary of Vet-
erans Affairs to be service-connected; or
(ii) deemed by law to be service-con-
nected; or
(B) any individual who is a disabled bene-
ficiary (as defined in section 1148(k)(2) of the
Social Security Act (42 U.S.C. 1320b–19(k)(2)))
or who would be considered to be such a disabled
beneficiary but for having income or resources in
excess of the income or resources eligibility limits
established under title XVI of the Social Security
Act (42 U.S.C. 1381 et seq.), respectively.
TITLE V—COMPLIANCE WITH
CONGRESSIONAL BUDGET ACT
SEC. 501. SUNSET OF CERTAIN PROVISIONS AND AMEND-
MENTS.
The provisions of, and amendments made by, title I,
subtitle A of title II, and title III shall not apply to taxable
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years beginning after September 30, 2010, and the Internal
Revenue Code of 1986 shall be applied and administered
to such years as if such provisions and amendments had
never been enacted.
TITLE VI—STRENGTHENING
AMERICA’S MILITARY
SEC. 601. SHORT TITLE.
This title may be cited as the ‘‘Strengthening Amer-
ica’s Military Act’’.
Subtitle A—Military Funding
SEC. 602. FUNDING FOR MILITARY OPERATIONS.
There is appropriated, out of any money in the Treas-
ury which is not otherwise appropriated, for the fiscal years
2006 through 2010, the following amounts, to be used for
resetting and recapitalizing equipment being used in thea-
ters of operations:
(1) $16,900,000,000 for operations and mainte-
nance of the Army.
(2) $1,800,000,000 for aircraft for the Army.
(3) $6,300,000,000 for other Army procurement.
(4) $10,000,000,000 for wheeled and tracked
combat vehicles for the Army.
(5) $467,000,000 for the Army working capital
fund.
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(6) $6,000,000 for missiles for the Department of
Defense.
(7) $100,000,000 for defense wide procurement
for the Department of Defense.
(8) $4,500,000,000 for Marine Corps procure-
ment.
(9) $4,500,000,000 for operations and mainte-
nance of the Marine Corps.
(10) $2,700,000,000 for Navy aircraft procure-
ment.
Attest:
Secretary.