In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.

Example Input: SECTION 1. MODIFICATIONS AND INCREASED VOLUME CAP WITH RESPECT TO 
              QUALIFIED MORTGAGE BONDS.

    (a) Use of Qualified Mortgage Bonds Proceeds for Subprime 
Refinancing Loans.--Section 143(k) of the Internal Revenue Code of 1986 
(relating to other definitions and special rules) is amended by adding 
at the end the following new paragraph:
            ``(12) Special rules for subprime refinancings.--
                    ``(A) In general.--In the case of a residence which 
                was originally financed by the mortgagor through a 
                qualified subprime loan, this section shall be applied 
                with the following modifications:
                            ``(i) Subsection (i)(1) (relating to 
                        mortgages must be new mortgages) shall not 
                        apply.
                            ``(ii) Subsection (a)(2)(D)(i) shall be 
                        applied by substituting `12-month period' for 
                        `42-month period' each place it appears.
                            ``(iii) Subsection (d) (relating to 3-year 
                        requirement) shall not apply.
                            ``(iv) Subsection (e) (relating to purchase 
                        price requirement) shall be applied by using 
                        the market value of the residence at the time 
                        of refinancing in lieu of the acquisition cost.
                    ``(B) Qualified subprime loan.--
                            ``(i) In general.--The term `qualified 
                        subprime loan' means an adjustable rate single-
                        family residential mortgage loan originated 
                        after December 31, 2001, and before January 1, 
                        2008, that the bond issuer determines has 
                        characteristics that suggest both a reasonably 
                        foreseeable risk of default and a reasonable 
                        potential to avoid default with the benefit of 
                        a lower cost refinancing.
                            ``(ii) Considerations.--In making the 
                        determination under clause (i), the bond issuer 
                        may consider the following characteristics:
                                    ``(I) Loan payments which are 
                                scheduled to increase by more than 10 
                                percent after December 31, 2007, and 
                                before January 1, 2011.
                                    ``(II) A loan-to-value ratio of 97 
                                percent or greater at the time of the 
                                original mortgage loan or at the time 
                                of the refinancing of such loan after 
                                adjustment for any decline in the fair 
                                market value of the residence.
                                    ``(III) A borrower whose 
                                creditworthiness is relatively low in 
                                comparison to a prime borrower, based 
                                on a lower credit score, such as a Fair 
                                Isaac Credit Organization credit score 
                                at the time of the original subprime 
                                loan of less than 660 and the absence 
                                of an increase in such score by more 
                                than 10 percent since the time of the 
                                original loan.
                                    ``(IV) Whether loan payments on the 
                                original mortgage loan generally have 
                                been made in a current, timely manner, 
                                subject only to isolated late payments.
                    ``(C) Termination.--This paragraph shall not apply 
                to any bonds issued after December 31, 2010.''.
    (b) Increased Volume Cap for Qualified Mortgage Bonds.--
            (1) In general.--Subsection (d) of section 146 of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new paragraph:
            ``(5) Increase and set aside for qualified mortgage bonds 
        for 2008.--
                    ``(A) In general.--The State ceiling for calendar 
                year 2008 shall be increased by $15,000,000,000.
                    ``(B) Set aside.--
                            ``(i) In general.--Not less than an amount 
                        equal to each State's allocable share of the 
                        increase in the State ceiling under 
                        subparagraph (A) shall be allocated solely for 
                        the purpose of a qualified mortgage issue which 
                        meets the requirement clause (ii).
                            ``(ii) Requirement.--A qualified mortgage 
                        issue meets the requirement of this clause if 
                        such issue meets the requirement of section 
                        143(a)(2)(D)(i) (determined by substituting 
                        `12-month period' for `42-month period' each 
                        place it appears).''.
            (2) Carryforward of unused limitations.--Subsection (f) of 
        section 146 of such Code is amended by adding at the end the 
        following new paragraph:
            ``(6) Special rules for increased volume cap under 
        subsection (d)(5).--No amount which is attributable to the 
        increase under subsection (d)(5) may be used--
                    ``(A) for a carryforward purpose other than issuing 
                qualified mortgage bonds, and
                    ``(B) to issue any bond after calendar year 
                2010.''.
    (c) Alternative Minimum Tax.--
            (1) In general.--Clause (ii) of section 57(a)(5)(C) of the 
        Internal Revenue Code of 1986 is amended by striking ``shall 
        not include'' and all that follows and inserting ``shall not 
        include--
                                    ``(I) any qualified 501(c)(3) bond 
                                (as defined in section 145), or
                                    ``(II) any qualified mortgage bond 
                                (as defined in section 143(a)) or 
                                qualified veterans' mortgage bond (as 
                                defined in section 143(b)) issued after 
                                December 31, 2007, and before January 
                                1, 2011.''.
            (2) Conforming amendment.--The heading for section 
        57(a)(5)(C)(ii) is amended by striking ``qualified 501(c)(3) 
        bonds'' and inserting ``certain bonds''.
    (d) Effective Date.--The amendments made by this section shall 
apply to bonds issued after December 31, 2007.
Example Output: Amends the Internal Revenue Code to: (1) allow proceeds of qualified mortgage bonds to be used to refinance certain residential subprime loans issued between 2002 and 2008; (2) increase in 2008 limitations on issuance amounts for qualified mortgage bonds; and (3) exempt tax-exempt interest on qualified mortgage or veterans' mortgage bonds issued before 2011 from the alternative minimum tax.

Example Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Farm and Ranch Risk Management 
Act''.

SEC. 2. FARM AND RANCH RISK MANAGEMENT ACCOUNTS.

    (a) In General.--Subpart C of part II of subchapter E of chapter 1 
of the Internal Revenue Code of 1986 (relating to taxable year for 
which deductions taken) is amended by inserting after section 468B the 
following:

``SEC. 468C. FARM AND RANCH RISK MANAGEMENT ACCOUNTS.

    ``(a) Deduction Allowed.--In the case of an individual engaged in 
an eligible farming business or commercial fishing, there shall be 
allowed as a deduction for any taxable year the amount paid in cash by 
the taxpayer during the taxable year to a Farm and Ranch Risk 
Management Account (hereinafter referred to as the `FARRM Account').
    ``(b) Limitation.--
            ``(1) Contributions.--The amount which a taxpayer may pay 
        into the FARRM Account for any taxable year shall not exceed 20 
        percent of so much of the taxable income of the taxpayer 
        (determined without regard to this section) which is 
        attributable (determined in the manner applicable under section 
        1301) to any eligible farming business or commercial fishing.
            ``(2) Distributions.--Distributions from a FARRM Account 
        may not be used to purchase, lease, or finance any new fishing 
        vessel, add capacity to any fishery, or otherwise contribute to 
        the overcapitalization of any fishery. The Secretary of 
        Commerce shall implement regulations to enforce this paragraph.
    ``(c) Eligible Businesses.--For purposes of this section--
            ``(1) Eligible farming business.--The term `eligible 
        farming business' means any farming business (as defined in 
        section 263A(e)(4)) which is not a passive activity (within the 
        meaning of section 469(c)) of the taxpayer.
            ``(2) Commercial fishing.--The term `commercial fishing' 
        has the meaning given such term by section (3) of the Magnuson-
        Stevens Fishery Conservation and Management Act (16 U.S.C. 
        1802) but only if such fishing is not a passive activity 
        (within the meaning of section 469(c)) of the taxpayer.
    ``(d) FARRM Account.--For purposes of this section--
            ``(1) In general.--The term `FARRM Account' means a trust 
        created or organized in the United States for the exclusive 
        benefit of the taxpayer, but only if the written governing 
        instrument creating the trust meets the following requirements:
                    ``(A) No contribution will be accepted for any 
                taxable year in excess of the amount allowed as a 
                deduction under subsection (a) for such year.
                    ``(B) The trustee is a bank (as defined in section 
                408(n)) or another person who demonstrates to the 
                satisfaction of the Secretary that the manner in which 
                such person will administer the trust will be 
                consistent with the requirements of this section.
                    ``(C) The assets of the trust consist entirely of 
                cash or of obligations which have adequate stated 
                interest (as defined in section 1274(c)(2)) and which 
                pay such interest not less often than annually.
                    ``(D) All income of the trust is distributed 
                currently to the grantor.
                    ``(E) The assets of the trust will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
            ``(2) Account taxed as grantor trust.--The grantor of a 
        FARRM Account shall be treated for purposes of this title as 
        the owner of such Account and shall be subject to tax thereon 
        in accordance with subpart E of part I of subchapter J of this 
        chapter (relating to grantors and others treated as substantial 
        owners).
    ``(e) Inclusion of Amounts Distributed.--
            ``(1) In general.--Except as provided in paragraph (2), 
        there shall be includible in the gross income of the taxpayer 
        for any taxable year--
                    ``(A) any amount distributed from a FARRM Account 
                of the taxpayer during such taxable year, and
                    ``(B) any deemed distribution under--
                            ``(i) subsection (f)(1) (relating to 
                        deposits not distributed within 5 years),
                            ``(ii) subsection (f)(2) (relating to 
                        cessation in eligible farming business), and
                            ``(iii) subparagraph (A) or (B) of 
                        subsection (f)(3) (relating to prohibited 
                        transactions and pledging account as security).
            ``(2) Exceptions.--Paragraph (1)(A) shall not apply to--
                    ``(A) any distribution to the extent attributable 
                to income of the Account, and
                    ``(B) the distribution of any contribution paid 
                during a taxable year to a FARRM Account to the extent 
                that such contribution exceeds the limitation 
                applicable under subsection (b) if requirements similar 
                to the requirements of section 408(d)(4) are met.
        For purposes of subparagraph (A), distributions shall be 
        treated as first attributable to income and then to other 
        amounts.
    ``(f) Special Rules.--
            ``(1) Tax on deposits in account which are not distributed 
        within 5 years.--
                    ``(A) In general.--If, at the close of any taxable 
                year, there is a nonqualified balance in any FARRM 
                Account--
                            ``(i) there shall be deemed distributed 
                        from such Account during such taxable year an 
                        amount equal to such balance, and
                            ``(ii) the taxpayer's tax imposed by this 
                        chapter for such taxable year shall be 
                        increased by 10 percent of such deemed 
                        distribution.
                The preceding sentence shall not apply if an amount 
                equal to such nonqualified balance is distributed from 
                such Account to the taxpayer before the due date 
                (including extensions) for filing the return of tax 
                imposed by this chapter for such year (or, if earlier, 
                the date the taxpayer files such return for such year).
                    ``(B) Nonqualified balance.--For purposes of 
                subparagraph (A), the term `nonqualified balance' means 
                any balance in the Account on the last day of the 
                taxable year which is attributable to amounts deposited 
                in such Account before the 4th preceding taxable year.
                    ``(C) Ordering rule.--For purposes of this 
                paragraph, distributions from a FARRM Account (other 
                than distributions of current income) shall be treated 
                as made from deposits in the order in which such 
                deposits were made, beginning with the earliest 
                deposits.
            ``(2) Cessation in eligible business.--At the close of the 
        first disqualification period after a period for which the 
        taxpayer was engaged in an eligible farming business or 
        commercial fishing, there shall be deemed distributed from the 
        FARRM Account of the taxpayer an amount equal to the balance in 
        such Account (if any) at the close of such disqualification 
        period. For purposes of the preceding sentence, the term 
        `disqualification period' means any period of 2 consecutive 
        taxable years for which the taxpayer is not engaged in an 
eligible farming business or commercial fishing.
            ``(3) Certain rules to apply.--Rules similar to the 
        following rules shall apply for purposes of this section:
                    ``(A) Section 220(f)(8) (relating to treatment on 
                death).
                    ``(B) Section 408(e)(2) (relating to loss of 
                exemption of account where individual engages in 
                prohibited transaction).
                    ``(C) Section 408(e)(4) (relating to effect of 
                pledging account as security).
                    ``(D) Section 408(g) (relating to community 
                property laws).
                    ``(E) Section 408(h) (relating to custodial 
                accounts).
            ``(4) Time when payments deemed made.--For purposes of this 
        section, a taxpayer shall be deemed to have made a payment to a 
        FARRM Account on the last day of a taxable year if such payment 
        is made on account of such taxable year and is made on or 
        before the due date (without regard to extensions) for filing 
        the return of tax for such taxable year.
            ``(5) Individual.--For purposes of this section, the term 
        `individual' shall not include an estate or trust.
            ``(6) Deduction not allowed for self-employment tax.--The 
        deduction allowable by reason of subsection (a) shall not be 
        taken into account in determining an individual's net earnings 
        from self-employment (within the meaning of section 1402(a)) 
        for purposes of chapter 2.
    ``(g) Reports.--The trustee of a FARRM Account shall make such 
reports regarding such Account to the Secretary and to the person for 
whose benefit the Account is maintained with respect to contributions, 
distributions, and such other matters as the Secretary may require 
under regulations. The reports required by this subsection shall be 
filed at such time and in such manner and furnished to such persons at 
such time and in such manner as may be required by such regulations.''.
    (b) Tax on Excess Contributions.--
            (1) Subsection (a) of section 4973 of such Code (relating 
        to tax on excess contributions to certain tax-favored accounts 
        and annuities) is amended by striking ``or'' at the end of 
        paragraph (3), by redesignating paragraph (4) as paragraph (5), 
        and by inserting after paragraph (3) the following:
            ``(4) a FARRM Account (within the meaning of section 
        468C(d)), or''.
            (2) Section 4973 of such Code is amended by adding at the 
        end the following:
    ``(g) Excess Contributions to FARRM Accounts.--For purposes of this 
section, in the case of a FARRM Account (within the meaning of section 
468C(d)), the term `excess contributions' means the amount by which the 
amount contributed for the taxable year to the Account exceeds the 
amount which may be contributed to the Account under section 468C(b) 
for such taxable year. For purposes of this subsection, any 
contribution which is distributed out of the FARRM Account in a 
distribution to which section 468C(e)(2)(B) applies shall be treated as 
an amount not contributed.''.
            (3) The section heading for section 4973 of such Code is 
        amended to read as follows:

``SEC. 4973. EXCESS CONTRIBUTIONS TO CERTAIN ACCOUNTS, ANNUITIES, 
              ETC.''.

            (4) The table of sections for chapter 43 of such Code is 
        amended by striking the item relating to section 4973 and 
        inserting the following:

                              ``Sec. 4973. Excess contributions to 
                                        certain accounts, annuities, 
                                        etc.''.
    (c) Tax on Prohibited Transactions.--
            (1) Subsection (c) of section 4975 of such Code (relating 
        to tax on prohibited transactions) is amended by adding at the 
        end the following:
            ``(6) Special rule for farrm accounts.--A person for whose 
        benefit a FARRM Account (within the meaning of section 468C(d)) 
        is established shall be exempt from the tax imposed by this 
        section with respect to any transaction concerning such account 
        (which would otherwise be taxable under this section) if, with 
        respect to such transaction, the account ceases to be a FARRM 
        Account by reason of the application of section 468C(f)(3)(A) 
        to such account.''.
            (2) Paragraph (1) of section 4975(e) of such Code is 
        amended by redesignating subparagraphs (E) and (F) as 
        subparagraphs (F) and (G), respectively, and by inserting after 
        subparagraph (D) the following:
                    ``(E) a FARRM Account described in section 
                468C(d),''.
    (d) Failure To Provide Reports on FARRM Accounts.--Paragraph (2) of 
section 6693(a) of such Code (relating to failure to provide reports on 
certain tax-favored accounts or annuities) is amended by redesignating 
subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively, 
and by inserting after subparagraph (B) the following:
                    ``(C) section 468C(g) (relating to FARRM 
                Accounts),''.
    (e) Clerical Amendment.--The table of sections for subpart C of 
part II of subchapter E of chapter 1 of such Code is amended by 
inserting after the item relating to section 468B the following:

                              ``Sec. 468C. Farm and Ranch Risk 
                                        Management Accounts.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
Example Output: Farm and Ranch Risk Management Act - Amends the Internal Revenue Code to allow an individual engaged in an eligible farming or commercial fishing business a deduction for any taxable year of up to 20 percent of taxable income attributable to the eligible farming or commercial fishing business which was paid in cash by the taxpayer to a Farm and Ranch Risk Management Account (FARRM Account).Includes distributions from a FARRM account in the taxpayer's gross income, and subjects to a special ten percent surtax any distributions not made within five years of contribution. Establishes a tax on excess contributions, but exempts the taxpayer from the tax on certain prohibited transactions.

Example Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Mobilized Reserve Savings Account 
Act''.

SEC. 2. DEDUCTION FOR CONTRIBUTIONS TO SAVINGS ACCOUNTS OF ARMED FORCES 
              RESERVES.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions for individuals) is amended by redesignating section 223 as 
section 224 and by inserting after section 222 the following new 
section:

``SEC. 223. CONTRIBUTIONS TO ARMED FORCES RESERVE SAVINGS ACCOUNTS.

    ``(a) Deduction Allowed.--
            ``(1) In general.--In the case of an individual who is a 
        qualified reservist, there shall be allowed as a deduction for 
        the taxable year an amount equal to the contributions of the 
        individual to an Armed Forces reserve savings account of the 
        individual for the taxable year.
            ``(2) Maximum amount.--The amount allowable as a deduction 
        under subsection (a) to any individual for a taxable year shall 
        not exceed the lesser of--
                    ``(A) $5,000, or
                    ``(B) $25,000, reduced by the aggregate 
                contributions by such individual to Armed Forces 
                reserve savings accounts for all preceding taxable 
                years.
    ``(b) Qualified Reservist.--For purposes of this section, the term 
`qualified reservist' means an individual who, on the last day of the 
taxable year, is a member of a reserve component of the Armed Forces.
    ``(c) Armed Forces Reserve Savings Account.--For purposes of this 
section, the term `Armed Forces reserve savings account' means a trust 
created or organized in the United States for the exclusive benefit of 
an individual and the individual's beneficiaries, but only if the 
written governing instrument creating the trust meets the following 
requirements:
            ``(1) No contribution will be accepted unless it is in 
        cash.
            ``(2) The trustee is a bank (as defined in section 408(n)) 
        or another person who demonstrates to the satisfaction of the 
        Secretary that the manner in which that person will administer 
        the trust will be consistent with the requirements of this 
        section.
            ``(3) No part of the trust assets will be invested in life 
        insurance contracts.
            ``(4) The assets of the trust will not be commingled with 
        other property except in a common trust fund or common 
        investment fund.
            ``(5) The interest of an individual in the balance of the 
        individual's account is nonforfeitable.
    ``(d) Tax Treatment of Distributions.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, any amount paid or distributed out of an Armed 
        Forces reserve savings account shall be included in the gross 
        income of the payee or distributee for the taxable year in 
        which the payment or distribution is received in the manner 
        provided under section 72.
            ``(2) Excess contributions returned before due date of 
        return.--Paragraph (1) shall not apply to the distribution of 
        any contribution paid during a taxable year to an Armed Forces 
        reserve savings account to the extent that such contribution 
        exceeds the amount allowable as a deduction under subsection 
        (a) if--
                    ``(A) such distribution is received on or before 
                the day prescribed by law (including extensions of 
                time) for filing such individual's return for such 
                taxable year,
                    ``(B) no deduction is allowed under subsection (a) 
                with respect to such excess contribution, and
                    ``(C) such distribution is accompanied by the 
                amount of net income attributable to such excess 
                contribution.
        Any net income described in subparagraph (C) shall be included 
        in the gross income of the individual for the taxable year in 
        which such excess contribution was made.
            ``(3) Rollover contribution.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                any amount paid or distributed from an Armed Forces 
                reserve savings account to the account holder to the 
                extent the amount received is paid to another such 
                account for the benefit of such holder not later than 
                the 60th day on which the holder receives the payment 
                or distribution.
                    ``(B) Limitation.--If an individual receives more 
                than 1 payment or distribution during any 12-month 
                period, this paragraph shall not apply to any such 
                payment or distribution to the individual if this 
                paragraph previously applied to any such payment or 
                distribution.
            ``(4) Additional tax on certain distributions.--
                    ``(A) In general.--The tax imposed by this chapter 
                on the account holder for any taxable year in which 
                there is a payment or distribution from an Armed Forces 
                reserve account which is includible in gross income 
                shall be increased by 10 percent of the amount which is 
                so includible.
                    ``(B) Exceptions related to military service.--
                Subparagraph (A) shall not apply if the payment or 
                distribution is made--
                            ``(i) during any period during which the 
                        account holder is serving on active duty to 
                        which called or ordered under a provision of 
                        law referred to in section 101(a)(13)(B) of 
                        title 10, United States Code, or
                            ``(ii) after the account holder ceases to 
                        be a member of a reserve component of the Armed 
                        Forces or is transferred to the retired list of 
                        such a reserve component.
                For purposes of clause (i), a payment made during the 
                60-day period immediately preceding or following the 
                period described in clause (i) shall be treated as made 
                during the period so described.
                    ``(C) Exceptions for disability or death.--
                Subparagraph (A) shall not apply if the payment or 
                distribution is made after the account holder becomes 
                disabled within the meaning of section 72(m)(7) or 
                dies.
            ``(5) Investment in collectibles treated as 
        distributions.--Rules similar to the rules of section 408(m) 
        shall apply for purposes of this section.
    ``(e) Tax Treatment of Accounts.--
            ``(1) Exemption from tax.--An Armed Forces reserve savings 
        account is exempt from taxation under this subtitle unless such 
        account has ceased to be an Armed Forces reserve savings 
        account by reason of paragraph (2). Notwithstanding the 
        preceding sentence, any such account is subject to the taxes 
        imposed by section 511 (relating to imposition of tax on 
        unrelated business income of charitable, etc. organizations).
            ``(2) Loss of exemption of account where individual engages 
        in prohibited transaction.--
                    ``(A) In general.--If the individual for whose 
                benefit an Armed Forces reserve savings account is 
                established or any individual who contributes to such 
                account engages in any transaction prohibited by 
                section 4975 with respect to the account, the account 
                shall cease to be an Armed Forces reserve savings 
                account as of the first day of the taxable year (of the 
                individual so engaging in such transaction) during 
                which such transaction occurs.
                    ``(B) Account treated as distributing all its 
                assets.--In any case in which any account ceases to be 
                an Armed Forces reserve savings account by reason of 
                subparagraph (A) as of the first day of any taxable 
                year, paragraph (1) of subsection (d) shall apply as if 
                there was a distribution on such first day in an amount 
                equal to the fair market value (on such first day) of 
                all assets in the account (on such first day).
            ``(3) Effect of pledging account as security.--If, during 
        any taxable year, the individual for whose benefit an Armed 
        Forces reserve savings account is established uses the account 
        or any portion thereof as security for a loan, the portion so 
        used shall be treated as distributed to the individual so using 
        such portion.
    ``(f) Special Rules.--
            ``(1) Time when contributions deemed made.--A taxpayer 
        shall be deemed to have made a contribution to an Armed Forces 
        reserve savings account on the last day of the preceding 
        taxable year if the contribution is made on account of such 
        taxable year and is made not later than the time prescribed by 
        law for filing the return for such taxable year (not including 
        extensions thereof).
            ``(2) Death and divorce.--Rules similar to the rules of 
        sections 401(a)(9), 401(a)(11), and 408(d)(6) shall apply for 
        purposes of this section.
            ``(3) Community property laws.--This section shall be 
        applied without regard to any community property laws.
    ``(g) Reports.--The trustee of an Armed Forces reserve savings 
account shall make such reports regarding such account to the Secretary 
and to the account holder with respect to contributions, distributions, 
and such other matters as the Secretary may require under regulations. 
The reports required by this subsection shall be filed at such time and 
in such manner and furnished to such individuals at such time and in 
such manner as may be required by those regulations.''
    (b) Allowance of Deduction in Computing Adjusted Gross Income.--
Subsection (a) of section 62 of such Code (defining adjusted gross 
income) is amended by inserting after paragraph (18) the following new 
paragraph:
            ``(19) Contributions to armed forces reserve savings 
        accounts.--The deduction allowed by section 223(a).''
    (c) Tax on Excess Contributions.--Section 4973 of such Code 
(relating to tax on excess contributions to certain tax-favored 
accounts and annuities) is amended--
            (1) in subsection (a), by striking ``or'' at the end of 
        paragraph (3), by inserting ``or'' at the end of paragraph (4), 
        and by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) an Armed Forces reserve savings account (as defined 
        in section 223(c)),'', and
            (2) by adding at the end the following new subsection:
    ``(g) Excess Contributions to an Armed Forces Reserve Savings 
Account.--For purposes of this section, in the case of an Armed Forces 
reserve savings account, the term `excess contributions' means the sum 
of--
            ``(1) the aggregate amount contributed for the taxable year 
        to the account which is not allowable as a deduction under 
section 223 for such taxable year, and
            ``(2) the amount determined under this subsection for the 
        preceding taxable year, reduced by--
                    ``(A) the distributions out of the accounts which 
                were included in gross income under section 223(d)(1) 
                for the taxable year, over
                    ``(B) the amount contributed to the accounts for 
                the taxable year.
        For purposes of this subsection, any contribution which is 
        distributed out of the Armed Forces reserve savings account in 
        a distribution to which section 223(d)(2) applies shall be 
        treated as an amount not contributed.''.
    (d) Tax on Prohibited Transactions.--Section 4975 of such Code 
(relating to prohibited transactions) is amended--
            (1) by adding at the end of subsection (c) the following 
        new paragraph:
            ``(6) Special rule for armed forces reserve savings 
        accounts.--An individual for whose benefit an Armed Forces 
        reserve savings account is established and any contributor to 
        such account shall be exempt from the tax imposed by this 
        section with respect to any transaction concerning such account 
        (which would otherwise be taxable under this section) if, with 
        respect to such transaction, the account ceases to be an Armed 
        Forces reserve savings account by reason of the application of 
        section 223 to such account.'', and
            (2) in subsection (e)(1), by striking ``or'' at the end of 
        subparagraph (E), by redesignating subparagraph (F) as 
        subparagraph (G), and by inserting after subparagraph (E) the 
        following new subparagraph:
                    ``(F) an Armed Forces reserve savings account 
                described in section 223, or''.
    (e) Failure To Provide Reports on Armed Forces Reserve Savings 
Accounts.--Paragraph (2) of section 6693(a) of such Code (relating to 
failure to provide reports on certain tax-favored accounts or 
annuities) is amended by striking ``and'' at the end of subparagraph 
(C), by striking the period at the end of subparagraph (D) and 
inserting ``, and'', and by adding at the end the following new 
subparagraph:
                    ``(E) section 223(g) (relating to Armed Forces 
                reserve savings accounts).''.
    (f) Conforming Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by striking the item 
relating to section 223 and inserting the following new items:

                              ``Sec. 223. Contributions to Armed Forces 
                                        reserve savings accounts.
                              ``Sec. 224. Cross reference.''
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
Example Output:
Mobilized Reserve Savings Account Act - Amends the Internal Revenue Code to allow a qualified armed forces reservist to deduct annual contributions to an Armed Forces reserve savings account (as defined by this Act). Limits annual contributions to the lesser of $5,000, or $25,000 reduced by previous contributions to such accounts.Treats account distributions from deductible contributions as taxable income. Provides an additional ten percent tax unless the distribution is made: (1) while the account holder is serving on active duty (including the 60-day period immediately preceding or following such period); or (2) after the account holder ceases to be a member of a reserve component or is transferred to such component's retired list.Exempts an Armed Forces reserve savings account from taxation unless such account has ceased to be an Armed Forces reserve savings account due to a prohibited transaction by a contributor or a person for whose benefit such account was established.