		II
		Calendar No. 898
		110th CONGRESS
		2d Session
		S. 3335
		IN THE SENATE OF THE UNITED
		  STATES

			July 24 (legislative
			 day, July 23), 2008
			Mr. Baucus (for himself
			 and Mr. Reid) introduced the following
			 bill; which was read the first time

			July 25, 2008
			Read the second time and placed on the
			 calendar

		A BILL
		To amend the Internal Revenue Code of 1986
		  to extend certain expiring provisions, and for other purposes.

		1.Short title, etc
			(a)Short titleThis Act may be cited as the
			 Jobs, Energy, Families, and Disaster
			 Relief Act of 2008.
			(b)ReferenceExcept as otherwise expressly provided,
			 whenever in this Act an amendment or repeal is expressed in terms of an
			 amendment to, or repeal of, a section or other provision, the reference shall
			 be considered to be made to a section or other provision of the Internal
			 Revenue Code of 1986.
			(c)Table of contentsThe table of contents for this Act is as
			 follows:

					Sec. 1. Short title,
				etc.
					TITLE I—Energy tax
				incentives
					Subtitle A—Energy
				production incentives
					Part I—Renewable energy
				incentives
					Sec. 101. Renewable
				energy credit.
					Sec. 102. Production
				credit for electricity produced from marine renewables.
					Sec. 103. Energy
				credit.
					Sec. 104. Credit for
				residential energy efficient property.
					Sec. 105. Special
				rule to implement FERC and State electric restructuring policy.
					Sec. 106. New clean
				renewable energy bonds.
					Part II—Carbon mitigation provisions
					Sec. 111. Expansion
				and modification of advanced coal project investment credit.
					Sec. 112. Expansion
				and modification of coal gasification investment credit.
					Sec. 113. Temporary
				increase in coal excise tax.
					Sec. 114. Special
				rules for refund of the coal excise tax to certain coal producers and
				exporters.
					Sec. 115. Carbon
				audit of the tax code.
					Subtitle B—Transportation and domestic fuel security
				provisions
					Sec. 121. Inclusion
				of cellulosic biofuel in bonus depreciation for biomass ethanol plant
				property.
					Sec. 122. Credits for
				biodiesel and renewable diesel.
					Sec. 123. Clarification that credits for fuel are designed to
				provide an incentive for United States production.
					Sec. 124. Credit for
				new qualified plug-in electric drive motor vehicles.
					Sec. 125. Exclusion
				from heavy truck tax for idling reduction units and advanced
				insulation.
					Sec. 126. Transportation fringe benefit to bicycle
				commuters.
					Sec. 127. Alternative
				fuel vehicle refueling property credit.
					Sec. 128. Certain income and gains relating to alcohol fuels
				and mixtures, biodiesel fuels and mixtures, and alternative fuels and mixtures
				treated as qualifying income for publicly traded partnerships.
					Subtitle C—Energy
				conservation and efficiency provisions
					Sec. 141. Qualified energy conservation bonds.
					Sec. 142. Credit for
				nonbusiness energy property.
					Sec. 143. Energy
				efficient commercial buildings deduction.
					Sec. 144.
				Modifications of energy efficient appliance credit for appliances produced
				after 2007.
					Sec. 145. Accelerated
				recovery period for depreciation of smart meters and smart grid
				systems.
					Sec. 146. Qualified green building and sustainable design
				projects.
					Sec. 147. Special depreciation allowance for certain reuse and
				recycling property.
					TITLE II—One-year
				extension of temporary provisions
					Subtitle A—Alternative minimum tax
					Sec. 201. Extension
				of alternative minimum tax relief for nonrefundable personal
				credits.
					Sec. 202. Extension of increased alternative minimum tax
				exemption amount.
					Sec. 203. Increase of
				AMT refundable credit amount for individuals with long-term unused credits for
				prior year minimum tax liability, etc.
					Subtitle
				B—Extensions Primarily Affecting Individuals
					Sec. 211. Deduction
				for State and local sales taxes.
					Sec. 212. Deduction
				of qualified tuition and related expenses.
					Sec. 213. Treatment
				of certain dividends of regulated investment companies.
					Sec. 214. Tax-free
				distributions from individual retirement plans for charitable
				purposes.
					Sec. 215. Deduction
				for certain expenses of elementary and secondary school teachers.
					Sec. 216. Stock in
				RIC for purposes of determining estates of nonresidents not
				citizens.
					Sec. 217. Qualified
				investment entities.
					Sec. 218. Exclusion
				of amounts received under qualified group legal services plans.
					Subtitle
				C—Extensions Primarily Affecting Businesses
					Sec. 221. Extension and modification of research
				credit.
					Sec. 222. Indian
				employment credit.
					Sec. 223. Extension and modification of new markets tax
				credit.
					Sec. 224. Railroad
				track maintenance.
					Sec. 225. Extension of mine rescue team training
				credit.
					Sec. 226. Extension of 15-year straight-line cost recovery for
				qualified leasehold improvements and qualified restaurant improvements; 15-year
				straight-line cost recovery for certain improvements to retail
				space.
					Sec. 227. Seven-year
				cost recovery period for motorsports racing track facility.
					Sec. 228. Accelerated
				depreciation for business property on Indian reservation.
					Sec. 229. Extension of election to expense advanced mine safety
				equipment.
					Sec. 230. Expensing
				of environmental remediation costs.
					Sec. 231. Deduction allowable with respect to income
				attributable to domestic production activities in Puerto Rico.
					Sec. 232.
				Modification of tax treatment of certain payments to controlling exempt
				organizations.
					Sec. 233. Qualified
				zone academy bonds.
					Sec. 234. Tax
				incentives for investment in the District of Columbia.
					Sec. 235. Economic
				development credit for American Samoa.
					Sec. 236. Extension and expansion of charitable deduction for
				contributions of food inventory.
					Sec. 237. Enhanced
				charitable deduction for contributions of book inventory to public
				schools.
					Sec. 238. Enhanced
				deduction for qualified computer contributions.
					Sec. 239. Basis
				adjustment to stock of S corporations making charitable contributions of
				property.
					Sec. 240. Work
				opportunity tax credit for Hurricane Katrina employees.
					Sec. 241. Subpart
				F exception for active financing
				income.
					Sec. 242. Look-thru rule for related controlled foreign
				corporations.
					Sec. 243. Expensing for certain qualified film and television
				productions.
					Sec. 244. Extension and modification of duty suspension on wool
				products; wool research fund; wool duty refunds.
					Subtitle D—Other
				Extensions
					Sec. 251. Authority
				to disclose information related to terrorist activities made
				permanent.
					Sec. 252. Authority for undercover operations made
				permanent.
					Sec. 253. Increase in
				limit on cover over of rum excise tax to Puerto Rico and the Virgin
				Islands.
					TITLE III—Additional
				relief
					Subtitle
				A—Individual tax relief
					Sec. 301. $8,500 income threshold used to calculate refundable
				portion of child tax credit.
					Sec. 302. Income averaging for amounts received in connection
				with the Exxon Valdez litigation.
					Subtitle B—Business
				related provisions
					Sec. 311. Provisions
				related to film and television productions.
					Sec. 312. Modification of rate of excise tax on certain wooden
				arrows designed for use by children.
					Sec. 313. Mental
				health parity.
					Subtitle C—Modification of penalty on understatement of
				taxpayer’s liability by tax return preparer
					Sec. 321.
				Modification of penalty on understatement of taxpayer’s liability by tax return
				preparer.
					Subtitle D—Other provisions
					Sec. 331. Secure rural schools and community self-determination
				program.
					Sec. 332. Clarification of uniform definition of
				child.
					TITLE IV—Transportation and infrastructure
					Sec. 401. Restoration
				of Highway Trust Fund balance.
					TITLE V—Disaster relief
					Subtitle A—Relief for federally declared disasters
					Sec. 501. Losses attributable to federally declared
				disasters.
					Sec. 502. Expensing of Qualified Disaster Expenses.
					Sec. 503. Net operating losses attributable to federally
				declared disasters.
					Sec. 504. Waiver of certain mortgage revenue bond requirements
				following federally declared disasters.
					Sec. 505. Other relief for federally declared
				disasters.
					Sec. 506. Sunset.
					Subtitle B—Other disaster relief provisions
					Sec. 511.
				Restructuring of New York Liberty Zone tax credits.
					Sec. 512. Reporting requirements relating to disaster relief
				contributions.
					TITLE VI—Revenue
				Provisions
					Sec. 601.
				Nonqualified deferred compensation from certain tax indifferent
				parties.
					Sec. 602. Delay in application of worldwide allocation of
				interest.
					Sec. 603. Broker
				reporting of customer’s basis in securities transactions.
					Sec. 604. Time for
				payment of corporate estimated taxes.

			IEnergy tax incentives
			AEnergy production incentives
				IRenewable energy incentives
					101.Renewable energy credit
						(a)Extension of credit
							(1)1-year extension for wind
			 facilitiesParagraph (1) of
			 section 45(d) is amended by striking January 1, 2009 and
			 inserting January 1, 2010.
							(2)3-year extension for certain other
			 facilitiesEach of the
			 following provisions of section 45(d) is amended by striking January 1,
			 2009 and inserting January 1, 2012:
								(A)Clauses (i) and (ii) of paragraph
			 (2)(A).
								(B)Clauses (i)(I) and (ii) of paragraph
			 (3)(A).
								(C)Paragraph (4).
								(D)Paragraph (5).
								(E)Paragraph (6).
								(F)Paragraph (7).
								(G)Subparagraphs (A) and (B) of paragraph
			 (9).
								(b)Modification of Credit Phaseout
							(1)Repeal of phaseoutSubsection (b) of section 45 is
			 amended—
								(A)by striking paragraph (1), and
								(B)by striking the 8 cent amount in
			 paragraph (1), in paragraph (2) thereof.
								(2)Limitation based on investment in
			 facilitySubsection (b) of
			 section 45 is amended by inserting before paragraph (2) the following new
			 paragraph:

									(1)Limitation based on investment in
				facility
										(A)In generalIn the case of any qualified facility
				originally placed in service after December 31, 2009, the amount of the credit
				determined under subsection (a) for any taxable year with respect to
				electricity produced at such facility shall not exceed the product of—
											(i)the applicable percentage with respect to
				such facility, multiplied by
											(ii)the eligible basis of such facility.
											(B)Carryforward of unused limitation and
				excess credit
											(i)Unused limitationIf the limitation imposed under
				subparagraph (A) with respect to any facility for any taxable year exceeds the
				prelimitation credit for such facility for such taxable year, the limitation
				imposed under subparagraph (A) with respect to such facility for the succeeding
				taxable year shall be increased by the amount of such excess.
											(ii)Excess creditIf the prelimitation credit with respect to
				any facility for any taxable year exceeds the limitation imposed under
				subparagraph (A) with respect to such facility for such taxable year, the
				credit determined under subsection (a) with respect to such facility for the
				succeeding taxable year (determined before the application of subparagraph (A)
				for such succeeding taxable year) shall be increased by the amount of such
				excess. With respect to any facility, no amount may be carried forward under
				this clause to any taxable year beginning after the 10-year period described in
				subsection (a)(2)(A)(ii) with respect to such facility.
											(iii)Prelimitation creditThe term prelimitation
				credit with respect to any facility for a taxable year means the credit
				determined under subsection (a) with respect to such facility for such taxable
				year, determined without regard to subparagraph (A) and after taking into
				account any increase for such taxable year under clause (ii).
											(C)Applicable percentageFor purposes of this paragraph—
											(i)In generalThe term applicable
				percentage means, with respect to any facility, the appropriate
				percentage prescribed by the Secretary for the month in which such facility is
				originally placed in service.
											(ii)Method of prescribing applicable
				percentagesThe applicable
				percentages prescribed by the Secretary for any month under clause (i) shall be
				percentages which yield over a 10-year period amounts of limitation under
				subparagraph (A) which have a present value equal to 35 percent of the eligible
				basis of the facility.
											(iii)Method of discountingThe present value under clause (ii) shall
				be determined—
												(I)as of the last day of the 1st year of the
				10-year period referred to in clause (ii),
												(II)by using a discount rate equal to the
				greater of 110 percent of the Federal long-term rate as in effect under section
				1274(d) for the month preceding the month for which the applicable percentage
				is being prescribed, or 4.5 percent, and
												(III)by taking into account the limitation under
				subparagraph (A) for any year on the last day of such year.
												(D)Eligible
				basisFor purposes of this
				paragraph—
											(i)In generalThe term eligible basis
				means, with respect to any facility, the sum of—
												(I)the basis of such facility determined as of
				the time that such facility is originally placed in service, and
												(II)the portion of the basis of any shared
				qualified property which is properly allocable to such facility under clause
				(ii).
												(ii)Rules for allocationFor purposes of subclause (II) of clause
				(i), the basis of shared qualified property shall be allocated among all
				qualified facilities which are projected to be placed in service and which
				require utilization of such property in proportion to projected generation from
				such facilities.
											(iii)Shared qualified propertyFor purposes of this paragraph, the term
				shared qualified property means, with respect to any facility,
				any property described in section 168(e)(3)(B)(vi)—
												(I)which a qualified facility will require for
				utilization of such facility, and
												(II)which is not a qualified facility.
												(iv)Special rule relating to geothermal
				facilitiesIn the case of any
				qualified facility using geothermal energy to produce electricity, the basis of
				such facility for purposes of this paragraph shall be determined as though
				intangible drilling and development costs described in section 263(c) were
				capitalized rather than expensed.
											(E)Special rule for first and last year of
				credit periodIn the case of
				any taxable year any portion of which is not within the 10-year period
				described in subsection (a)(2)(A)(ii) with respect to any facility, the amount
				of the limitation under subparagraph (A) with respect to such facility shall be
				reduced by an amount which bears the same ratio to the amount of such
				limitation (determined without regard to this subparagraph) as such portion of
				the taxable year which is not within such period bears to the entire taxable
				year.
										(F)Election to treat all facilities placed in
				service in a year as 1 facilityAt the election of the taxpayer, all
				qualified facilities which are part of the same project and which are placed in
				service during the same calendar year shall be treated for purposes of this
				section as 1 facility which is placed in service at the mid-point of such year
				or the first day of the following calendar
				year.
										.
							(c)Trash facility clarificationParagraph (7) of section 45(d) is
			 amended—
							(1)by striking facility which
			 burns and inserting facility (other than a facility described in
			 paragraph (6)) which uses, and
							(2)by striking combustion.
							(d)Expansion of biomass facilities
							(1)Open-loop biomass facilitiesParagraph (3) of section 45(d) is amended
			 by redesignating subparagraph (B) as subparagraph (C) and by inserting after
			 subparagraph (A) the following new subparagraph:

									(B)Expansion of facilitySuch term shall include a new unit placed
				in service after the date of the enactment of this subparagraph in connection
				with a facility described in subparagraph (A), but only to the extent of the
				increased amount of electricity produced at the facility by reason of such new
				unit.
									.
							(2)Closed-loop biomass
			 facilitiesParagraph (2) of
			 section 45(d) is amended by redesignating subparagraph (B) as subparagraph (C)
			 and inserting after subparagraph (A) the following new subparagraph:

									(B)Expansion of facilitySuch term shall include a new unit placed
				in service after the date of the enactment of this subparagraph in connection
				with a facility described in subparagraph (A)(i), but only to the extent of the
				increased amount of electricity produced at the facility by reason of such new
				unit.
									.
							(e)Sales of net electricity to regulated
			 public utilities treated as sales to unrelated personsParagraph (4) of section 45(e) is amended
			 by adding at the end the following new sentence: The net amount of
			 electricity sold by any taxpayer to a regulated public utility (as defined in
			 section 7701(a)(33)) shall be treated as sold to an unrelated
			 person..
						(f)Modification of rules for hydropower
			 productionSubparagraph (C)
			 of section 45(c)(8) is amended to read as follows:

								(C)Nonhydroelectric damFor purposes of subparagraph (A), a
				facility is described in this subparagraph if—
									(i)the hydroelectric project installed on the
				nonhydroelectric dam is licensed by the Federal Energy Regulatory Commission
				and meets all other applicable environmental, licensing, and regulatory
				requirements,
									(ii)the nonhydroelectric dam was placed in
				service before the date of the enactment of this paragraph and operated for
				flood control, navigation, or water supply purposes and did not produce
				hydroelectric power on the date of the enactment of this paragraph, and
									(iii)the hydroelectric project is operated so
				that the water surface elevation at any given location and time that would have
				occurred in the absence of the hydroelectric project is maintained, subject to
				any license requirements imposed under applicable law that change the water
				surface elevation for the purpose of improving environmental quality of the
				affected waterway.
									The Secretary, in consultation
				with the Federal Energy Regulatory Commission, shall certify if a hydroelectric
				project licensed at a nonhydroelectric dam meets the criteria in clause (iii).
				Nothing in this section shall affect the standards under which the Federal
				Energy Regulatory Commission issues licenses for and regulates hydropower
				projects under part I of the Federal Power
				Act..
						(g)Effective date
							(1)In generalExcept as otherwise provided in this
			 subsection, the amendments made by this section shall apply to property
			 originally placed in service after December 31, 2008.
							(2)Repeal of credit phaseoutThe amendments made by subsection (b)(1)
			 shall apply to taxable years ending after December 31, 2008.
							(3)Limitation based on investment in
			 facilityThe amendment made
			 by subsection (b)(2) shall apply to property originally placed in service after
			 December 31, 2009.
							(4)Trash facility clarification; sales to
			 related regulated public utilitiesThe amendments made by subsections (c) and
			 (e) shall apply to electricity produced and sold after the date of the
			 enactment of this Act.
							(5)Expansion of biomass
			 facilitiesThe amendments
			 made by subsection (d) shall apply to property placed in service after the date
			 of the enactment of this Act.
							102.Production credit for electricity produced
			 from marine renewables
						(a)In generalParagraph (1) of section 45(c) is amended
			 by striking and at the end of subparagraph (G), by striking the
			 period at the end of subparagraph (H) and inserting , and, and
			 by adding at the end the following new subparagraph:

								(I)marine and hydrokinetic renewable
				energy.
								.
						(b)Marine renewablesSubsection (c) of section 45 is amended by
			 adding at the end the following new paragraph:

								(10)Marine and hydrokinetic renewable
				energy
									(A)In generalThe term marine and hydrokinetic
				renewable energy means energy derived from—
										(i)waves, tides, and currents in oceans,
				estuaries, and tidal areas,
										(ii)free flowing water in rivers, lakes, and
				streams,
										(iii)free flowing water in an irrigation system,
				canal, or other man-made channel, including projects that utilize nonmechanical
				structures to accelerate the flow of water for electric power production
				purposes, or
										(iv)differentials in ocean temperature (ocean
				thermal energy conversion).
										(B)ExceptionsSuch term shall not include any energy
				which is derived from any source which utilizes a dam, diversionary structure
				(except as provided in subparagraph (A)(iii)), or impoundment for electric
				power production
				purposes.
									.
						(c)Definition of facilitySubsection (d) of section 45 is amended by
			 adding at the end the following new paragraph:

								(11)Marine and hydrokinetic renewable energy
				facilitiesIn the case of a
				facility producing electricity from marine and hydrokinetic renewable energy,
				the term qualified facility means any facility owned by the
				taxpayer—
									(A)which has a nameplate capacity rating of at
				least 150 kilowatts, and
									(B)which is originally placed in service on or
				after the date of the enactment of this paragraph and before January 1,
				2012.
									.
						(d)Credit rateSubparagraph (A) of section 45(b)(4) is
			 amended by striking or (9) and inserting (9), or
			 (11).
						(e)Coordination with small irrigation
			 powerParagraph (5) of
			 section 45(d), as amended by section 101, is amended by striking January
			 1, 2012 and inserting the date of the enactment of paragraph
			 (11).
						(f)Effective
			 dateThe amendments made by
			 this section shall apply to electricity produced and sold after the date of the
			 enactment of this Act, in taxable years ending after such date.
						103.Energy credit
						(a)Extension of credit
							(1)Solar energy propertyParagraphs (2)(A)(i)(II) and (3)(A)(ii) of
			 section 48(a) are each amended by striking January 1, 2009 and
			 inserting January 1, 2017.
							(2)Fuel cell propertySubparagraph (E) of section 48(c)(1) is
			 amended by striking December 31, 2008 and inserting
			 December 31, 2017.
							(3)Microturbine propertySubparagraph (E) of section 48(c)(2) is
			 amended by striking December 31, 2008 and inserting
			 December 31, 2017.
							(b)Allowance of energy credit against
			 alternative minimum taxSubparagraph (B) of section 38(c)(4), as
			 amended by the Housing Assistance Tax Act of 2008, is amended by redesignating
			 clauses (v) and (vi) as clauses (vi) and (vii), respectively, and by inserting
			 after clause (iv) the following new clause:

								(v)the credit determined under section 46 to
				the extent that such credit is attributable to the energy credit determined
				under section 48,
				and
								.
						(c)Energy credit for combined heat and power
			 system property
							(1)In generalSection 48(a)(3)(A) is amended by striking
			 or at the end of clause (iii), by inserting or at
			 the end of clause (iv), and by adding at the end the following new
			 clause:

									(v)combined heat and power system
				property,
									.
							(2)Combined Heat and Power System
			 PropertySection 48 is
			 amended by adding at the end the following new subsection:

									(d)Combined Heat and Power System
				PropertyFor purposes of
				subsection (a)(3)(A)(v)—
										(1)Combined heat and power system
				propertyThe term
				combined heat and power system property means property comprising
				a system—
											(A)which uses the same energy source for the
				simultaneous or sequential generation of electrical power, mechanical shaft
				power, or both, in combination with the generation of steam or other forms of
				useful thermal energy (including heating and cooling applications),
											(B)which produces—
												(i)at least 20 percent of its total useful
				energy in the form of thermal energy which is not used to produce electrical or
				mechanical power (or combination thereof), and
												(ii)at least 20 percent of its total useful
				energy in the form of electrical or mechanical power (or combination
				thereof),
												(C)the energy efficiency percentage of which
				exceeds 60 percent, and
											(D)which is placed in service before January
				1, 2018.
											(2)Limitation
											(A)In generalIn the case of combined heat and power
				system property with an electrical capacity in excess of the applicable
				capacity placed in service during the taxable year, the credit under subsection
				(a)(1) (determined without regard to this paragraph) for such year shall be
				equal to the amount which bears the same ratio to such credit as the applicable
				capacity bears to the capacity of such property.
											(B)Applicable capacityFor purposes of subparagraph (A), the term
				applicable capacity means 15 megawatts or a mechanical energy
				capacity of more than 20,000 horsepower or an equivalent combination of
				electrical and mechanical energy capacities.
											(C)Maximum capacityThe term combined heat and power
				system property shall not include any property comprising a system if
				such system has a capacity in excess of 50 megawatts or a mechanical energy
				capacity in excess of 67,000 horsepower or an equivalent combination of
				electrical and mechanical energy capacities.
											(3)Special rules
											(A)Energy efficiency percentageFor purposes of this subsection, the energy
				efficiency percentage of a system is the fraction—
												(i)the numerator of which is the total useful
				electrical, thermal, and mechanical power produced by the system at normal
				operating rates, and expected to be consumed in its normal application,
				and
												(ii)the denominator of which is the lower
				heating value of the fuel sources for the system.
												(B)Determinations made on btu
				basisThe energy efficiency
				percentage and the percentages under paragraph (1)(B) shall be determined on a
				Btu basis.
											(C)Input and output property not
				includedThe term
				combined heat and power system property does not include property
				used to transport the energy source to the facility or to distribute energy
				produced by the facility.
											(4)Systems using biomassIf a system is designed to use biomass
				(within the meaning of paragraphs (2) and (3) of section 45(c) without regard
				to the last sentence of paragraph (3)(A)) for at least 90 percent of the energy
				source—
											(A)paragraph (1)(C) shall not apply,
				but
											(B)the amount of credit determined under
				subsection (a) with respect to such system shall not exceed the amount which
				bears the same ratio to such amount of credit (determined without regard to
				this paragraph) as the energy efficiency percentage of such system bears to 60
				percent.
											.
							(d)Increase of credit limitation for fuel cell
			 propertySubparagraph (B) of
			 section 48(c)(1) is amended by striking $500 and inserting
			 $1,500.
						(e)Public utility property taken into
			 account
							(1)In generalParagraph (3) of section 48(a) is amended
			 by striking the second sentence thereof.
							(2)Conforming amendments
								(A)Paragraph (1) of section 48(c) is amended
			 by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph
			 (D).
								(B)Paragraph (2) of section 48(c) is amended
			 by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph
			 (D).
								(f)Effective date
							(1)In generalExcept as otherwise provided in this
			 subsection, the amendments made by this section shall take effect on the date
			 of the enactment of this Act.
							(2)Allowance against alternative minimum
			 taxThe amendments made by
			 subsection (b) shall apply to credits determined under section 46 of the
			 Internal Revenue Code of 1986 in taxable years beginning after the date of the
			 enactment of this Act and to carrybacks of such credits.
							(3)Combined heat and power and fuel cell
			 propertyThe amendments made
			 by subsections (c) and (d) shall apply to periods after the date of the
			 enactment of this Act, in taxable years ending after such date, under rules
			 similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as
			 in effect on the day before the date of the enactment of the Revenue
			 Reconciliation Act of 1990).
							(4) Public utility propertyThe amendments made by subsection (e) shall
			 apply to periods after February 13, 2008, in taxable years ending after such
			 date, under rules similar to the rules of section 48(m) of the Internal Revenue
			 Code of 1986 (as in effect on the day before the date of the enactment of the
			 Revenue Reconciliation Act of 1990).
							104.Credit for residential energy efficient
			 property
						(a)ExtensionSection 25D(g) is amended by striking
			 December 31, 2008 and inserting December 31,
			 2016.
						(b)Maximum credit for solar electric
			 property
							(1)In generalSection 25D(b)(1)(A) is amended by striking
			 $2,000 and inserting $4,000.
							(2)Conforming amendmentSection 25D(e)(4)(A)(i) is amended by
			 striking $6,667 and inserting $13,333.
							(c)Credit for residential wind
			 property
							(1)In generalSection 25D(a) is amended by striking
			 and at the end of paragraph (2), by striking the period at the
			 end of paragraph (3) and inserting , and, and by adding at the
			 end the following new paragraph:

									(4)30 percent of the qualified small wind
				energy property expenditures made by the taxpayer during such
				year.
									.
							(2)LimitationSection 25D(b)(1) is amended by striking
			 and at the end of subparagraph (B), by striking the period at
			 the end of subparagraph (C) and inserting , and, and by adding
			 at the end the following new subparagraph:

									(D)$500 with respect to each half kilowatt of
				capacity (not to exceed $4,000) of wind turbines for which qualified small wind
				energy property expenditures are
				made.
									.
							(3)Qualified small wind energy property
			 expenditures
								(A)In generalSection 25D(d) is amended by adding at the
			 end the following new paragraph:

										(4)Qualified small wind energy property
				expenditureThe term
				qualified small wind energy property expenditure means an
				expenditure for property which uses a wind turbine to generate electricity for
				use in connection with a dwelling unit located in the United States and used as
				a residence by the
				taxpayer.
										.
								(B)No double benefitSection 45(d)(1) is amended by adding at
			 the end the following new sentence: Such term shall not include any
			 facility with respect to which any qualified small wind energy property
			 expenditure (as defined in subsection (d)(4) of section 25D) is taken into
			 account in determining the credit under such section..
								(4)Maximum expenditures in case of joint
			 occupancySection
			 25D(e)(4)(A) is amended by striking and at the end of clause
			 (ii), by striking the period at the end of clause (iii) and inserting ,
			 and, and by adding at the end the following new clause:

									(iv)$1,667 in the case of each half kilowatt of
				capacity (not to exceed $13,333) of wind turbines for which qualified small
				wind energy property expenditures are
				made.
									.
							(d)Credit for geothermal heat pump
			 systems
							(1)In generalSection 25D(a), as amended by subsection
			 (c), is amended by striking and at the end of paragraph (3), by
			 striking the period at the end of paragraph (4) and inserting ,
			 and, and by adding at the end the following new paragraph:

									(5)30 percent of the qualified geothermal heat
				pump property expenditures made by the taxpayer during such
				year.
									.
							(2)LimitationSection 25D(b)(1), as amended by subsection
			 (c), 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)$2,000 with respect to any qualified
				geothermal heat pump property
				expenditures.
									.
							(3)Qualified geothermal heat pump property
			 expenditureSection 25D(d),
			 as amended by subsection (c), is amended by adding at the end the following new
			 paragraph:

									(5)Qualified geothermal heat pump property
				expenditure
										(A)In generalThe term qualified geothermal heat
				pump property expenditure means an expenditure for qualified geothermal
				heat pump property installed on or in connection with a dwelling unit located
				in the United States and used as a residence by the taxpayer.
										(B)Qualified geothermal heat pump
				propertyThe term
				qualified geothermal heat pump property means any equipment
				which—
											(i)uses the ground or ground water as a
				thermal energy source to heat the dwelling unit referred to in subparagraph (A)
				or as a thermal energy sink to cool such dwelling unit, and
											(ii)meets the requirements of the Energy Star
				program which are in effect at the time that the expenditure for such equipment
				is
				made.
											.
							(4)Maximum expenditures in case of joint
			 occupancySection
			 25D(e)(4)(A), as amended by subsection (c), is amended by striking
			 and at the end of clause (iii), by striking the period at the
			 end of clause (iv) and inserting , and, and by adding at the end
			 the following new clause:

									(v)$6,667 in the case of any qualified
				geothermal heat pump property
				expenditures.
									.
							(e)Credit allowed against alternative minimum
			 tax
							(1)In generalSubsection (c) of section 25D is amended to
			 read as follows:

									(c)Limitation based on amount of tax;
				carryforward of unused credit
										(1)Limitation based on amount of
				taxIn the case of a taxable
				year to which section 26(a)(2) does not apply, the credit allowed under
				subsection (a) for the taxable year shall not exceed the excess of—
											(A)the sum of the regular tax liability (as
				defined in section 26(b)) plus the tax imposed by section 55, over
											(B)the sum of the credits allowable under this
				subpart (other than this section) and section 27 for the taxable year.
											(2)Carryforward of unused credit
											(A)Rule for years in which all personal
				credits allowed against regular and alternative minimum taxIn the case of a taxable year to which
				section 26(a)(2) applies, if the credit allowable under subsection (a) exceeds
				the limitation imposed by section 26(a)(2) for such taxable year reduced by the
				sum of the credits allowable under this subpart (other than this section), such
				excess shall be carried to the succeeding taxable year and added to the credit
				allowable under subsection (a) for such succeeding taxable year.
											(B)Rule for other yearsIn the case of a taxable year to which
				section 26(a)(2) does not apply, if the credit allowable under subsection (a)
				exceeds the limitation imposed by paragraph (1) for such taxable year, such
				excess shall be carried to the succeeding taxable year and added to the credit
				allowable under subsection (a) for such succeeding taxable
				year.
											.
							(2)Conforming amendments
								(A)Section 23(b)(4)(B) is amended by inserting
			 and section 25D after this section.
								(B)Section 24(b)(3)(B) is amended by striking
			 and 25B and inserting , 25B, and 25D.
								(C)Section 25B(g)(2) is amended by striking
			 section 23 and inserting sections 23 and
			 25D.
								(D)Section 26(a)(1) is amended by striking
			 and 25B and inserting 25B, and 25D.
								(f)Effective date
							(1)In generalThe amendments made by this section shall
			 apply to taxable years beginning after December 31, 2007.
							(2)Application of EGTRRA sunsetThe amendments made by subparagraphs (A)
			 and (B) of subsection (e)(2) shall be subject to title IX of the Economic
			 Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the
			 provisions of such Act to which such amendments relate.
							105.Special rule to implement FERC and State
			 electric restructuring policy
						(a)Extension for qualified electric
			 utilities
							(1)In generalParagraph (3) of section 451(i) is amended
			 by inserting (before January 1, 2010, in the case of a qualified
			 electric utility) after January 1, 2008.
							(2)Qualified electric utilitySubsection (i) of section 451 is amended by
			 redesignating paragraphs (6) through (10) as paragraphs (7) through (11),
			 respectively, and by inserting after paragraph (5) the following new
			 paragraph:

									(6)Qualified electric utilityFor purposes of this subsection, the term
				qualified electric utility means a person that, as of the date
				of the qualifying electric transmission transaction, is vertically integrated,
				in that it is both—
										(A)a transmitting utility (as defined in
				section 3(23) of the Federal Power Act (16 U.S.C. 796(23))) with respect to the
				transmission facilities to which the election under this subsection applies,
				and
										(B)an electric utility (as defined in section
				3(22) of the Federal Power Act (16 U.S.C.
				796(22))).
										.
							(b)Extension of period for transfer of
			 operational control authorized by FERCClause (ii) of section 451(i)(4)(B) is
			 amended by striking December 31, 2007 and inserting the
			 date which is 4 years after the close of the taxable year in which the
			 transaction occurs.
						(c)Property located outside the united states
			 not treated as exempt utility propertyParagraph (5) of section 451(i) is amended
			 by adding at the end the following new subparagraph:

								(C)Exception for property located outside the
				united statesThe term
				exempt utility property shall not include any property which is
				located outside the United
				States.
								.
						(d)Effective Dates
							(1)ExtensionThe amendments made by subsection (a) shall
			 apply to transactions after December 31, 2007.
							(2)Transfers of operational
			 controlThe amendment made by
			 subsection (b) shall take effect as if included in section 909 of the American
			 Jobs Creation Act of 2004.
							(3)Exception for property located outside the
			 united statesThe amendment
			 made by subsection (c) shall apply to transactions after the date of the
			 enactment of this Act.
							106.New clean renewable energy bonds
						(a)In generalSubpart I of part IV of subchapter A of
			 chapter 1 is amended by adding at the end the following new section:

								54C.New clean renewable energy bonds
									(a)New clean renewable energy
				bondFor purposes of this
				subpart, the term new clean renewable energy bond means any bond
				issued as part of an issue if—
										(1)100 percent of the available project
				proceeds of such issue are to be used for capital expenditures incurred by
				governmental bodies, public power providers, or cooperative electric companies
				for one or more qualified renewable energy facilities,
										(2)the bond is issued by a qualified issuer,
				and
										(3)the issuer designates such bond for
				purposes of this section.
										(b)Reduced credit amountThe annual credit determined under section
				54A(b) with respect to any new clean renewable energy bond shall be 70 percent
				of the amount so determined without regard to this subsection.
									(c)Limitation on amount of bonds
				designated
										(1)In generalThe maximum aggregate face amount of bonds
				which may be designated under subsection (a) by any issuer shall not exceed the
				limitation amount allocated under this subsection to such issuer.
										(2)National limitation on amount of bonds
				designatedThere is a
				national new clean renewable energy bond limitation of $2,000,000,000 which
				shall be allocated by the Secretary as provided in paragraph (3), except
				that—
											(A)not more than 331/3
				percent thereof may be allocated to qualified projects of public power
				providers,
											(B)not more than 331/3
				percent thereof may be allocated to qualified projects of governmental bodies,
				and
											(C)not more than 331/3
				percent thereof may be allocated to qualified projects of cooperative electric
				companies.
											(3)Method of allocation
											(A)Allocation among public power
				providersAfter the Secretary
				determines the qualified projects of public power providers which are
				appropriate for receiving an allocation of the national new clean renewable
				energy bond limitation, the Secretary shall, to the maximum extent practicable,
				make allocations among such projects in such manner that the amount allocated
				to each such project bears the same ratio to the cost of such project as the
				limitation under paragraph (2)(A) bears to the cost of all such
				projects.
											(B)Allocation among governmental bodies and
				cooperative electric companiesThe Secretary shall make allocations of the
				amount of the national new clean renewable energy bond limitation described in
				paragraphs (2)(B) and (2)(C) among qualified projects of governmental bodies
				and cooperative electric companies, respectively, in such manner as the
				Secretary determines appropriate.
											(d)DefinitionsFor purposes of this section—
										(1)Qualified renewable energy
				facilityThe term
				qualified renewable energy facility means a qualified facility (as
				determined under section 45(d) without regard to paragraphs (8) and (10)
				thereof and to any placed in service date) owned by a public power provider, a
				governmental body, or a cooperative electric company.
										(2)Public power providerThe term public power provider
				means a State utility with a service obligation, as such terms are defined in
				section 217 of the Federal Power Act (as in effect on the date of the enactment
				of this paragraph).
										(3)Governmental bodyThe term governmental body
				means any State or Indian tribal government, or any political subdivision
				thereof.
										(4)Cooperative electric companyThe term cooperative electric
				company means a mutual or cooperative electric company described in
				section 501(c)(12) or section 1381(a)(2)(C).
										(5)Clean renewable energy bond
				lenderThe term clean
				renewable energy bond lender means a lender which is a cooperative which
				is owned by, or has outstanding loans to, 100 or more cooperative electric
				companies and is in existence on February 1, 2002, and shall include any
				affiliated entity which is controlled by such lender.
										(6)Qualified issuerThe term qualified issuer
				means a public power provider, a cooperative electric company, a governmental
				body, a clean renewable energy bond lender, or a not-for-profit electric
				utility which has received a loan or loan guarantee under the Rural
				Electrification
				Act.
										.
						(b)Conforming amendments
							(1)Paragraph (1) of section 54A(d) is amended
			 to read as follows:

									(1)Qualified tax credit bondThe term qualified tax credit
				bond means—
										(A)a qualified forestry conservation bond,
				or
										(B)a new clean renewable energy bond,
										which is part of an issue that meets
				requirements of paragraphs (2), (3), (4), (5), and
				(6)..
							(2)Subparagraph (C) of section 54A(d)(2) is
			 amended to read as follows:

									(C)Qualified purposeFor purposes of this paragraph, the term
				qualified purpose means—
										(i)in the case of a qualified forestry
				conservation bond, a purpose specified in section 54B(e), and
										(ii)in the case of a new clean renewable energy
				bond, a purpose specified in section
				54C(a)(1).
										.
							(3)The table of sections for subpart I of part
			 IV of subchapter A of chapter 1 is amended by adding at the end the following
			 new item:

										Sec. 54C. Qualified
				clean renewable energy
				bonds.

									.
							(c)Effective
			 dateThe amendments made by
			 this section shall apply to obligations issued after the date of the enactment
			 of this Act.
						IICarbon mitigation provisions
					111.Expansion and modification of advanced coal
			 project investment credit
						(a)Modification of credit amountSection 48A(a) is amended by striking
			 and at the end of paragraph (1), by striking the period at the
			 end of paragraph (2) and inserting , and, and by adding at the
			 end the following new paragraph:

								(3)30 percent of the qualified investment for
				such taxable year in the case of projects described in clause (iii) of
				subsection
				(d)(3)(B).
								.
						(b)Expansion of aggregate
			 creditsSection 48A(d)(3)(A)
			 is amended by striking $1,300,000,000 and inserting
			 $2,550,000,000.
						(c)Authorization of Additional
			 Projects
							(1)In generalSubparagraph (B) of section 48A(d)(3) is
			 amended to read as follows:

									(B)Particular projectsOf the dollar amount in subparagraph (A),
				the Secretary is authorized to certify—
										(i)$800,000,000 for integrated gasification
				combined cycle projects the application for which is submitted during the
				period described in paragraph (2)(A)(i),
										(ii)$500,000,000 for projects which use other
				advanced coal-based generation technologies the application for which is
				submitted during the period described in paragraph (2)(A)(i), and
										(iii)$1,250,000,000 for advanced coal-based
				generation technology projects the application for which is submitted during
				the period described in paragraph
				(2)(A)(ii).
										.
							(2)Application period for additional
			 projectsSubparagraph (A) of
			 section 48A(d)(2) is amended to read as follows:

									(A)Application periodEach applicant for certification under this
				paragraph shall submit an application meeting the requirements of subparagraph
				(B). An applicant may only submit an application—
										(i)for an allocation from the dollar amount
				specified in clause (i) or (ii) of paragraph (3)(B) during the 3-year period
				beginning on the date the Secretary establishes the program under paragraph
				(1), and
										(ii)for an allocation from the dollar amount
				specified in paragraph (3)(B)(iii) during the 3-year period beginning at the
				earlier of the termination of the period described in clause (i) or the date
				prescribed by the
				Secretary.
										.
							(3)Capture and sequestration of carbon dioxide
			 emissions requirement
								(A)In generalSection 48A(e)(1) is amended by striking
			 and at the end of subparagraph (E), by striking the period at
			 the end of subparagraph (F) and inserting ; and, and by adding
			 at the end the following new subparagraph:

										(G)in the case of any project the application
				for which is submitted during the period described in subsection (d)(2)(A)(ii),
				the project includes equipment which separates and sequesters at least 65
				percent (70 percent in the case of an application for reallocated credits under
				subsection (d)(4)) of such project's total carbon dioxide
				emissions.
										.
								(B)Highest priority for projects which
			 sequester carbon dioxide emissionsSection 48A(e)(3) is amended by striking
			 and at the end of subparagraph (A)(iii), by striking the period
			 at the end of subparagraph (B)(iii) and inserting , and, and by
			 adding at the end the following new subparagraph:

										(C)give highest priority to projects with the
				greatest separation and sequestration percentage of total carbon dioxide
				emissions.
										.
								(C)Recapture of credit for failure to
			 sequesterSection 48A is
			 amended by adding at the end the following new subsection:

										(i)Recapture of credit for failure To
				sequesterThe Secretary shall
				provide for recapturing the benefit of any credit allowable under subsection
				(a) with respect to any project which fails to attain or maintain the
				separation and sequestration requirements of subsection
				(e)(1)(G).
										.
								(4)Additional priority for research
			 partnershipsSection
			 48A(e)(3)(B), as amended by paragraph (3)(B), is amended—
								(A)by striking and at the end
			 of clause (ii),
								(B)by redesignating clause (iii) as clause
			 (iv), and
								(C)by inserting after clause (ii) the
			 following new clause:

										(iii)applicant participants who have a research
				partnership with an eligible educational institution (as defined in section
				529(e)(5)),
				and
										.
								(5)Clerical amendmentSection 48A(e)(3) is amended by striking
			 integrated gasification
			 combined cycle in the heading and inserting
			 certain.
							(d)Disclosure of allocationsSection 48A(d) is amended by adding at the
			 end the following new paragraph:

								(5)Disclosure of allocationsThe Secretary shall, upon making a
				certification under this subsection or section 48B(d), publicly disclose the
				identity of the applicant and the amount of the credit certified with respect
				to such
				applicant.
								.
						(e)Effective dates
							(1)In generalExcept as otherwise provided in this
			 subsection, the amendments made by this section shall apply to credits the
			 application for which is submitted during the period described in section
			 48A(d)(2)(A)(ii) of the Internal Revenue Code of 1986 and which are allocated
			 or reallocated after the date of the enactment of this Act.
							(2)Disclosure of allocationsThe amendment made by subsection (d) shall
			 apply to certifications made after the date of the enactment of this
			 Act.
							(3)Clerical amendmentThe amendment made by subsection (c)(5)
			 shall take effect as if included in the amendment made by section 1307(b) of
			 the Energy Tax Incentives Act of 2005.
							112.Expansion and modification of coal
			 gasification investment credit
						(a)Modification of credit amountSection 48B(a) is amended by inserting
			 (30 percent in the case of credits allocated under subsection
			 (d)(1)(B)) after 20 percent.
						(b)Expansion of aggregate
			 creditsSection 48B(d)(1) is
			 amended by striking shall not exceed $350,000,000 and all that
			 follows and inserting

								shall not
			 exceed—(A)$350,000,000, plus
								(B)$250,000,000 for qualifying gasification
				projects that include equipment which separates and sequesters at least 75
				percent of such project’s total carbon dioxide
				emissions.
								.
						(c)Recapture of credit for failure To
			 sequesterSection 48B is
			 amended by adding at the end the following new subsection:

								(f)Recapture of credit for failure To
				sequesterThe Secretary shall
				provide for recapturing the benefit of any credit allowable under subsection
				(a) with respect to any project which fails to attain or maintain the
				separation and sequestration requirements for such project under subsection
				(d)(1).
								.
						(d)Selection prioritiesSection 48B(d) is amended by adding at the
			 end the following new paragraph:

								(4)Selection prioritiesIn determining which qualifying
				gasification projects to certify under this section, the Secretary
				shall—
									(A)give highest priority to projects with the
				greatest separation and sequestration percentage of total carbon dioxide
				emissions, and
									(B)give high priority to applicant
				participants who have a research partnership with an eligible educational
				institution (as defined in section
				529(e)(5)).
									.
						(e)Effective
			 dateThe amendments made by
			 this section shall apply to credits described in section 48B(d)(1)(B) of the
			 Internal Revenue Code of 1986 which are allocated or reallocated after the date
			 of the enactment of this Act.
						113.Temporary increase in coal excise
			 taxParagraph (2) of section
			 4121(e) is amended—
						(1)by striking January 1, 2014
			 in subparagraph (A) and inserting December 31, 2018, and
						(2)by striking January 1 after
			 1981 in subparagraph (B) and inserting December 31 after
			 2007.
						114.Special rules for refund of the coal excise
			 tax to certain coal producers and exporters
						(a)Refund
							(1)Coal producers
								(A)In generalNotwithstanding subsections (a)(1) and (c)
			 of section 6416 and section 6511 of the Internal Revenue Code of 1986,
			 if—
									(i)a coal producer establishes that such coal
			 producer, or a party related to such coal producer, exported coal produced by
			 such coal producer to a foreign country or shipped coal produced by such coal
			 producer to a possession of the United States, or caused such coal to be
			 exported or shipped, the export or shipment of which was other than through an
			 exporter who meets the requirements of paragraph (2),
									(ii)such coal producer filed an excise tax
			 return on or after October 1, 1990, and on or before the date of the enactment
			 of this Act, and
									(iii)such coal producer files a claim for refund
			 with the Secretary not later than the close of the 30-day period beginning on
			 the date of the enactment of this Act,
									then the Secretary shall pay to
			 such coal producer an amount equal to the tax paid under section 4121 of such
			 Code on such coal exported or shipped by the coal producer or a party related
			 to such coal producer, or caused by the coal producer or a party related to
			 such coal producer to be exported or shipped.(B)Special rules for certain
			 taxpayersFor purposes of
			 this section—
									(i)In generalIf a coal producer or a party related to a
			 coal producer has received a judgment described in clause (iii), such coal
			 producer shall be deemed to have established the export of coal to a foreign
			 country or shipment of coal to a possession of the United States under
			 subparagraph (A)(i).
									(ii)Amount of paymentIf a taxpayer described in clause (i) is
			 entitled to a payment under subparagraph (A), the amount of such payment shall
			 be reduced by any amount paid pursuant to the judgment described in clause
			 (iii).
									(iii)Judgment describedA judgment is described in this
			 subparagraph if such judgment—
										(I)is made by a court of competent
			 jurisdiction within the United States,
										(II)relates to the constitutionality of any tax
			 paid on exported coal under section 4121 of the Internal Revenue Code of 1986,
			 and
										(III)is in favor of the coal producer or the
			 party related to the coal producer.
										(2)ExportersNotwithstanding subsections (a)(1) and (c)
			 of section 6416 and section 6511 of the Internal Revenue Code of 1986, and a
			 judgment described in paragraph (1)(B)(iii) of this subsection, if—
								(A)an exporter establishes that such exporter
			 exported coal to a foreign country or shipped coal to a possession of the
			 United States, or caused such coal to be so exported or shipped,
								(B)such exporter filed a tax return on or
			 after October 1, 1990, and on or before the date of the enactment of this Act,
			 and
								(C)such exporter files a claim for refund with
			 the Secretary not later than the close of the 30-day period beginning on the
			 date of the enactment of this Act,
								then the Secretary shall pay to such
			 exporter an amount equal to $0.825 per ton of such coal exported by the
			 exporter or caused to be exported or shipped, or caused to be exported or
			 shipped, by the exporter.(b)LimitationsSubsection (a) shall not apply with respect
			 to exported coal if a settlement with the Federal Government has been made with
			 and accepted by, the coal producer, a party related to such coal producer, or
			 the exporter, of such coal, as of the date that the claim is filed under this
			 section with respect to such exported coal. For purposes of this subsection,
			 the term settlement with the Federal Government shall not include
			 any settlement or stipulation entered into as of the date of the enactment of
			 this Act, the terms of which contemplate a judgment concerning which any party
			 has reserved the right to file an appeal, or has filed an appeal.
						(c)Subsequent refund prohibitedNo refund shall be made under this section
			 to the extent that a credit or refund of such tax on such exported or shipped
			 coal has been paid to any person.
						(d)DefinitionsFor purposes of this section—
							(1)Coal producerThe term coal producer means
			 the person in whom is vested ownership of the coal immediately after the coal
			 is severed from the ground, without regard to the existence of any contractual
			 arrangement for the sale or other disposition of the coal or the payment of any
			 royalties between the producer and third parties. The term includes any person
			 who extracts coal from coal waste refuse piles or from the silt waste product
			 which results from the wet washing (or similar processing) of coal.
							(2)ExporterThe term exporter means a
			 person, other than a coal producer, who does not have a contract, fee
			 arrangement, or any other agreement with a producer or seller of such coal to
			 export or ship such coal to a third party on behalf of the producer or seller
			 of such coal and—
								(A)is indicated in the shipper’s export
			 declaration or other documentation as the exporter of record, or
								(B)actually exported such coal to a foreign
			 country or shipped such coal to a possession of the United States, or caused
			 such coal to be so exported or shipped.
								(3)Related partyThe term a party related to such coal
			 producer means a person who—
								(A)is related to such coal producer through
			 any degree of common management, stock ownership, or voting control,
								(B)is related (within the meaning of section
			 144(a)(3) of the Internal Revenue Code of 1986) to such coal producer,
			 or
								(C)has a contract, fee arrangement, or any
			 other agreement with such coal producer to sell such coal to a third party on
			 behalf of such coal producer.
								(4)SecretaryThe term Secretary means the
			 Secretary of Treasury or the Secretary's designee.
							(e)Timing of refundWith respect to any claim for refund filed
			 pursuant to this section, the Secretary shall determine whether the
			 requirements of this section are met not later than 180 days after such claim
			 is filed. If the Secretary determines that the requirements of this section are
			 met, the claim for refund shall be paid not later than 180 days after the
			 Secretary makes such determination.
						(f)InterestAny refund paid pursuant to this section
			 shall be paid by the Secretary with interest from the date of overpayment
			 determined by using the overpayment rate and method under section 6621 of the
			 Internal Revenue Code of 1986.
						(g)Denial of double benefitThe payment under subsection (a) with
			 respect to any coal shall not exceed—
							(1)in the case of a payment to a coal
			 producer, the amount of tax paid under section 4121 of the Internal Revenue
			 Code of 1986 with respect to such coal by such coal producer or a party related
			 to such coal producer, and
							(2)in the case of a payment to an exporter, an
			 amount equal to $0.825 per ton with respect to such coal exported by the
			 exporter or caused to be exported by the exporter.
							(h)Application of sectionThis section applies only to claims on coal
			 exported or shipped on or after October 1, 1990, through the date of the
			 enactment of this Act.
						(i)Standing not conferred
							(1)ExportersWith respect to exporters, this section
			 shall not confer standing upon an exporter to commence, or intervene in, any
			 judicial or administrative proceeding concerning a claim for refund by a coal
			 producer of any Federal or State tax, fee, or royalty paid by the coal
			 producer.
							(2)Coal
			 producersWith respect to
			 coal producers, this section shall not confer standing upon a coal producer to
			 commence, or intervene in, any judicial or administrative proceeding concerning
			 a claim for refund by an exporter of any Federal or State tax, fee, or royalty
			 paid by the producer and alleged to have been passed on to an exporter.
							115.Carbon audit of the tax code
						(a)StudyThe Secretary of the Treasury shall enter
			 into an agreement with the National Academy of Sciences to undertake a
			 comprehensive review of the Internal Revenue Code of 1986 to identify the types
			 of and specific tax provisions that have the largest effects on carbon and
			 other greenhouse gas emissions and to estimate the magnitude of those
			 effects.
						(b)ReportNot later than 2 years after the date of
			 enactment of this Act, the National Academy of Sciences shall submit to
			 Congress a report containing the results of study authorized under this
			 section.
						(c)Authorization of
			 appropriationsThere is
			 authorized to be appropriated to carry out this section $1,500,000 for the
			 period of fiscal years 2008 and 2009.
						BTransportation and domestic fuel security
			 provisions
				121.Inclusion of cellulosic biofuel in bonus
			 depreciation for biomass ethanol plant property
					(a)In generalParagraph (3) of section 168(l) is amended
			 to read as follows:

							(3)Cellulosic biofuelThe term cellulosic biofuel
				means any liquid fuel which is produced from any lignocellulosic or
				hemicellulosic matter that is available on a renewable or recurring
				basis.
							.
					(b)Conforming amendmentsSubsection (l) of section 168 is
			 amended—
						(1)by striking cellulosic biomass
			 ethanol each place it appears and inserting cellulosic
			 biofuel,
						(2)by striking cellulosic biomass
			 ethanol in the heading of such subsection and
			 inserting cellulosic
			 biofuel, and
						(3)by striking cellulosic biomass
			 ethanol in the heading of paragraph (2) thereof and
			 inserting cellulosic
			 biofuel.
						(c)Effective
			 dateThe amendments made by
			 this section shall apply to property placed in service after the date of the
			 enactment of this Act, in taxable years ending after such date.
					122.Credits for biodiesel and renewable
			 diesel
					(a)In generalSections 40A(g), 6426(c)(6), and
			 6427(e)(5)(B) are each amended by striking December 31, 2008 and
			 inserting December 31, 2009.
					(b)Increase in rate of credit
						(1)Income tax creditParagraphs (1)(A) and (2)(A) of section
			 40A(b) are each amended by striking 50 cents and inserting
			 $1.00.
						(2)Excise tax creditParagraph (2) of section 6426(c) is amended
			 to read as follows:

								(2)Applicable amountFor purposes of this subsection, the
				applicable amount is
				$1.00.
								.
						(3)Conforming amendments
							(A)Subsection (b) of section 40A is amended by
			 striking paragraph (3) and by redesignating paragraphs (4) and (5) as
			 paragraphs (3) and (4), respectively.
							(B)Paragraph (2) of section 40A(f) is amended
			 to read as follows:

									(2)ExceptionSubsection (b)(4) shall not apply with
				respect to renewable
				diesel.
									.
							(C)Paragraphs (2) and (3) of section 40A(e)
			 are each amended by striking subsection (b)(5)(C) and inserting
			 subsection (b)(4)(C).
							(D)Clause (ii) of section 40A(d)(3)(C) is
			 amended by striking subsection (b)(5)(B) and inserting
			 subsection (b)(4)(B).
							(c)Uniform treatment of diesel produced from
			 biomassParagraph (3) of
			 section 40A(f) is amended—
						(1)by striking diesel fuel and
			 inserting liquid fuel,
						(2)by striking using a thermal
			 depolymerization process, and
						(3)by striking or D396 in
			 subparagraph (B) and inserting , D396, or other equivalent standard
			 approved by the Secretary.
						(d)Coproduction of renewable diesel with
			 petroleum feedstock
						(1)In generalParagraph (3) of section 40A(f) is amended
			 by adding at the end the following new sentence: Such term does not
			 include any fuel derived from coprocessing biomass with a feedstock which is
			 not biomass. For purposes of this paragraph, the term biomass has
			 the meaning given such term by section 45K(c)(3)..
						(2)Conforming amendmentParagraph (3) of section 40A(f) is amended
			 by striking (as defined in section 45K(c)(3)).
						(e)Eligibility of certain aviation
			 fuelParagraph (3) of section
			 40A(f) is amended by adding at the end the following: The term
			 renewable diesel also means fuel derived from biomass which meets
			 the requirements of a Department of Defense specification for military jet fuel
			 or an American Society of Testing and Materials specification for aviation
			 turbine fuel..
					(f)Effective date
						(1)In generalExcept as otherwise provided in this
			 subsection, the amendments made by this section shall apply to fuel produced,
			 and sold or used, after December 31, 2008.
						(2)Coproduction of renewable diesel with
			 petroleum feedstockThe
			 amendments made by subsection (d) shall apply to fuel produced, and sold or
			 used, after the date of the enactment of this Act.
						123.Clarification that credits for fuel are
			 designed to provide an incentive for United States production
					(a)Alcohol fuels creditParagraph (6) of section 40(d) is amended
			 to read as follows:

							(6)Limitation to alcohol with connection to
				the United StatesNo credit
				shall be determined under this section with respect to any alcohol which is
				produced outside the United States for use as a fuel outside the United States.
				For purposes of this paragraph, the term United States includes
				any possession of the United
				States.
							.
					(b)Biodiesel fuels creditSubsection (d) of section 40A is amended by
			 adding at the end the following new paragraph:

							(5)Limitation to biodiesel with connection to
				the United StatesNo credit
				shall be determined under this section with respect to any biodiesel which is
				produced outside the United States for use as a fuel outside the United States.
				For purposes of this paragraph, the term United States includes
				any possession of the United
				States.
							.
					(c)Excise tax credit
						(1)In generalSection 6426 is amended by adding at the
			 end the following new subsection:

								(i)Limitation to fuels with connection to the
				United States
									(1)AlcoholNo credit shall be determined under this
				section with respect to any alcohol which is produced outside the United States
				for use as a fuel outside the United States.
									(2)Biodiesel and alternative
				fuelsNo credit shall be
				determined under this section with respect to any biodiesel or alternative fuel
				which is produced outside the United States for use as a fuel outside the
				United States.
									For purposes of this subsection, the
				term United States includes any possession of the United
				States..
						(2)Conforming amendmentSubsection (e) of section 6427 is amended
			 by redesignating paragraph (5) as paragraph (6) and by inserting after
			 paragraph (4) the following new paragraph:

								(5)Limitation to fuels with connection to the
				United StatesNo amount shall
				be payable under paragraph (1) or (2) with respect to any mixture or
				alternative fuel if credit is not allowed with respect to such mixture or
				alternative fuel by reason of section
				6426(i).
								.
						(d)Effective
			 dateThe amendments made by
			 this section shall apply to claims for credit or payment made on or after May
			 15, 2008.
					124.Credit for new qualified plug-in electric
			 drive motor vehicles
					(a)In generalSubpart B of part IV of subchapter A of
			 chapter 1 is amended by adding at the end the following new section:

							30D.New qualified plug-in electric drive motor
				vehicles
								(a)Allowance of creditThere shall be allowed as a credit against
				the tax imposed by this chapter for the taxable year an amount equal to the sum
				of the credit amounts determined under subsection (b) with respect to each new
				qualified plug-in electric drive motor vehicle placed in service by the
				taxpayer during the taxable year.
								(b)Per vehicle dollar limitation
									(1)In generalThe amount determined under this subsection
				with respect to any new qualified plug-in electric drive motor vehicle is the
				sum of the amounts determined under paragraphs (2) and (3) with respect to such
				vehicle.
									(2)Base amountThe amount determined under this paragraph
				is $3,000.
									(3)Battery capacityIn the case of a vehicle which draws
				propulsion energy from a battery with not less than 5 kilowatt hours of
				capacity, the amount determined under this paragraph is $200, plus $200 for
				each kilowatt hour of capacity in excess of 5 kilowatt hours. The amount
				determined under this paragraph shall not exceed $2,000.
									(c)Application with other credits
									(1)Business credit treated as part of general
				business creditSo much of
				the credit which would be allowed under subsection (a) for any taxable year
				(determined without regard to this subsection) that is attributable to property
				of a character subject to an allowance for depreciation shall be treated as a
				credit listed in section 38(b) for such taxable year (and not allowed under
				subsection (a)).
									(2)Personal credit
										(A)In generalFor purposes of this title, the credit
				allowed under subsection (a) for any taxable year (determined after application
				of paragraph (1)) shall be treated as a credit allowable under subpart A for
				such taxable year.
										(B)Limitation based on amount of
				taxIn the case of a taxable
				year to which section 26(a)(2) does not apply, the credit allowed under
				subsection (a) for any taxable year (determined after application of paragraph
				(1)) shall not exceed the excess of—
											(i)the sum of the regular tax liability (as
				defined in section 26(b)) plus the tax imposed by section 55, over
											(ii)the sum of the credits allowable under
				subpart A (other than this section and sections 23 and 25D) and section 27 for
				the taxable year.
											(d)New qualified plug-In electric drive motor
				vehicleFor purposes of this
				section—
									(1)In generalThe term new qualified plug-in
				electric drive motor vehicle means a motor vehicle (as defined in
				section 30(c)(2))—
										(A)the original use of which commences with
				the taxpayer,
										(B)which is acquired for use or lease by the
				taxpayer and not for resale,
										(C)which is made by a manufacturer,
										(D)which has a gross vehicle weight rating of
				less than 14,000 pounds,
										(E)which has received a certificate of
				conformity under the Clean Air Act and meets or exceeds the Bin 5 Tier II
				emission standard established in regulations prescribed by the Administrator of
				the Environmental Protection Agency under section 202(i) of the Clean Air Act
				for that make and model year vehicle, and
										(F)which is propelled to a significant extent
				by an electric motor which draws electricity from a battery which—
											(i)has a capacity of not less than 4 kilowatt
				hours, and
											(ii)is capable of being recharged from an
				external source of electricity.
											(2)ExceptionThe term new qualified plug-in
				electric drive motor vehicle shall not include any vehicle which is not
				a passenger automobile or light truck if such vehicle has a gross vehicle
				weight rating of less than 8,500 pounds.
									(3)Other termsThe terms passenger
				automobile, light truck, and manufacturer have
				the meanings given such terms in regulations prescribed by the Administrator of
				the Environmental Protection Agency for purposes of the administration of title
				II of the Clean Air Act (42 U.S.C. 7521 et seq.).
									(4)Battery capacityThe term capacity means, with
				respect to any battery, the quantity of electricity which the battery is
				capable of storing, expressed in kilowatt hours, as measured from a 100 percent
				state of charge to a 0 percent state of charge.
									(e)Limitation on number of new qualified
				plug-In electric drive motor vehicles eligible for credit
									(1)In generalIn the case of a new qualified plug-in
				electric drive motor vehicle sold during the phaseout period, only the
				applicable percentage of the credit otherwise allowable under subsection (a)
				shall be allowed.
									(2)Phaseout periodFor purposes of this subsection, the
				phaseout period is the period beginning with the second calendar quarter
				following the calendar quarter which includes the first date on which the
				number of new qualified plug-in electric drive motor vehicles manufactured by
				the manufacturer of the vehicle referred to in paragraph (1) sold for use in
				the United States after the date of the enactment of this section, is at least
				60,000.
									(3)Applicable percentageFor purposes of paragraph (1), the
				applicable percentage is—
										(A)50 percent for the first 2 calendar
				quarters of the phaseout period,
										(B)25 percent for the 3d and 4th calendar
				quarters of the phaseout period, and
										(C)0 percent for each calendar quarter
				thereafter.
										(4)Controlled groupsRules similar to the rules of section
				30B(f)(4) shall apply for purposes of this subsection.
									(f)Special rules
									(1)Basis reductionThe basis of any property for which a
				credit is allowable under subsection (a) shall be reduced by the amount of such
				credit (determined without regard to subsection (c)).
									(2)RecaptureThe Secretary shall, by regulations,
				provide for recapturing the benefit of any credit allowable under subsection
				(a) with respect to any property which ceases to be property eligible for such
				credit.
									(3)Property used outside United States, etc.,
				not qualifiedNo credit shall
				be allowed under subsection (a) with respect to any property referred to in
				section 50(b)(1) or with respect to the portion of the cost of any property
				taken into account under section 179.
									(4)Election not to take creditNo credit shall be allowed under subsection
				(a) for any vehicle if the taxpayer elects to not have this section apply to
				such vehicle.
									(5)Property used by tax-exempt entity;
				interaction with air quality and motor vehicle safety standardsRules similar to the rules of paragraphs
				(6) and (10) of section 30B(h) shall apply for purposes of this
				section.
									.
					(b)Coordination with alternative motor vehicle
			 creditSection 30B(d)(3) is
			 amended by adding at the end the following new subparagraph:

							(D)Exclusion of plug-in vehiclesAny vehicle with respect to which a credit
				is allowable under section 30D (determined without regard to subsection (c)
				thereof) shall not be taken into account under this
				section.
							.
					(c)Credit made part of general business
			 creditSection 38(b) is
			 amended—
						(1)by striking plus at the end
			 of paragraph (32),
						(2)by striking the period at the end of
			 paragraph (33) and inserting ‘‘, plus’’, and
						(3)by adding at the end the following new
			 paragraph:

								(34)the portion of the new qualified plug-in
				electric drive motor vehicle credit to which section 30D(c)(1)
				applies.
								.
						(d)Conforming amendments
						(1)(A)Section 24(b)(3)(B), as amended by section
			 104, is amended by striking and 25D and inserting 25D,
			 and 30D.
							(B)Section 25(e)(1)(C)(ii) is amended by
			 inserting 30D, after 25D,.
							(C)Section 25B(g)(2), as amended by section
			 104, is amended by striking and 25D and inserting , 25D,
			 and 30D.
							(D)Section 26(a)(1), as amended by section
			 104, is amended by striking and 25D and inserting 25D,
			 and 30D.
							(E)Section 1400C(d)(2) is amended by striking
			 and 25D and inserting 25D, and 30D.
							(2)Section 1016(a) is amended by striking
			 and at the end of paragraph (35), by striking the period at the
			 end of paragraph (36) and inserting , and, and by adding at the
			 end the following new paragraph:

								(37)to the extent provided in section
				30D(f)(1).
								.
						(3)Section 6501(m) is amended by inserting
			 30D(f)(4), after 30C(e)(5),.
						(4)The table of sections for subpart B of part
			 IV of subchapter A of chapter 1 is amended by adding at the end the following
			 new item:

									Sec. 30D. New qualified plug-in
				electric drive motor
				vehicles.

								.
						(e)Treatment of alternative motor vehicle
			 credit as a personal credit
						(1)In generalParagraph (2) of section 30B(g) is amended
			 to read as follows:

								(2)Personal creditThe credit allowed under subsection (a) for
				any taxable year (after application of paragraph (1)) shall be treated as a
				credit allowable under subpart A for such taxable
				year.
								.
						(2)Conforming amendments
							(A)Subparagraph (A) of section 30C(d)(2) is
			 amended by striking sections 27, 30, and 30B and inserting
			 sections 27 and 30.
							(B)Paragraph (3) of section 55(c) is amended
			 by striking 30B(g)(2),.
							(f)Effective date
						(1)In generalExcept as otherwise provided in this
			 subsection, the amendments made by this section shall apply to taxable years
			 beginning after December 31, 2008.
						(2)Treatment of alternative motor vehicle
			 credit as personal creditThe
			 amendments made by subsection (e) shall apply to taxable years beginning after
			 December 31, 2007.
						(g)Application of EGTRRA sunsetThe amendment made by subsection (d)(1)(A)
			 shall be subject to title IX of the Economic Growth and Tax Relief
			 Reconciliation Act of 2001 in the same manner as the provision of such Act to
			 which such amendment relates.
					125.Exclusion from heavy truck tax for idling
			 reduction units and advanced insulation
					(a)In generalSection 4053 is amended by adding at the
			 end the following new paragraphs:

							(9)Idling reduction deviceAny device or system of devices
				which—
								(A)is designed to provide to a vehicle those
				services (such as heat, air conditioning, or electricity) that would otherwise
				require the operation of the main drive engine while the vehicle is temporarily
				parked or remains stationary using one or more devices affixed to a tractor,
				and
								(B)is determined by the Administrator of the
				Environmental Protection Agency, in consultation with the Secretary of Energy
				and the Secretary of Transportation, to reduce idling of such vehicle at a
				motor vehicle rest stop or other location where such vehicles are temporarily
				parked or remain stationary.
								(10)Advanced insulationAny insulation that has an R value of not
				less than R35 per
				inch.
							.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to sales or installations after the date of the
			 enactment of this Act.
					126.Transportation fringe benefit to bicycle
			 commuters
					(a)In generalParagraph (1) of section 132(f) is amended
			 by adding at the end the following:

							(D)Any qualified bicycle commuting
				reimbursement.
							.
					(b)Limitation on exclusionParagraph (2) of section 132(f) 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)the applicable annual limitation in the
				case of any qualified bicycle commuting
				reimbursement.
							.
					(c)DefinitionsParagraph (5) of section 132(f) is amended
			 by adding at the end the following:

							(F)Definitions related to bicycle commuting
				reimbursement
								(i)Qualified bicycle commuting
				reimbursementThe term
				qualified bicycle commuting reimbursement means, with respect to
				any calendar year, any employer reimbursement during the 15-month period
				beginning with the first day of such calendar year for reasonable expenses
				incurred by the employee during such calendar year for the purchase of a
				bicycle and bicycle improvements, repair, and storage, if such bicycle is
				regularly used for travel between the employee’s residence and place of
				employment.
								(ii)Applicable annual limitationThe term applicable annual
				limitation means, with respect to any employee for any calendar year,
				the product of $20 multiplied by the number of qualified bicycle commuting
				months during such year.
								(iii)Qualified bicycle commuting
				monthThe term
				qualified bicycle commuting month means, with respect to any
				employee, any month during which such employee—
									(I)regularly uses the bicycle for a
				substantial portion of the travel between the employee’s residence and place of
				employment, and
									(II)does not receive any benefit described in
				subparagraph (A), (B), or (C) of paragraph
				(1).
									.
					(d)Constructive receipt of
			 benefitParagraph (4) of
			 section 132(f) is amended by inserting (other than a qualified bicycle
			 commuting reimbursement) after qualified transportation
			 fringe.
					(e)Effective
			 dateThe amendments made by
			 this section shall apply to taxable years beginning after December 31,
			 2008.
					127.Alternative fuel vehicle refueling property
			 credit
					(a)Increase in credit amountSection 30C is amended—
						(1)by striking 30 percent in
			 subsection (a) and inserting 50 percent, and
						(2)by striking $30,000 in
			 subsection (b)(1) and inserting $50,000.
						(b)Extension of creditParagraph (2) of section 30C(g) is amended
			 by striking December 31, 2009 and inserting December 31,
			 2010.
					(c)Effective
			 dateThe amendments made by
			 this section shall apply to property placed in service after the date of the
			 enactment of this Act, in taxable years ending after such date.
					128.Certain income and gains relating to
			 alcohol fuels and mixtures, biodiesel fuels and mixtures, and alternative fuels
			 and mixtures treated as qualifying income for publicly traded
			 partnerships
					(a)In generalSubparagraph (E) of section 7704(d)(1) is
			 amended by inserting “, or the transportation, storage, or marketing of any
			 fuel described in subsection (b), (c), (d), or (e) of section 6426, or any
			 alcohol fuel defined in section 6426(b)(4)(A) or any biodiesel fuel as defined
			 in section 40A(d)(1)” after timber).
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to taxable years beginning after December 31,
			 2011.
					CEnergy conservation and efficiency
			 provisions
				141.Qualified energy conservation
			 bonds
					(a)In generalSubpart I of part IV of subchapter A of
			 chapter 1, as amended by section 106, is amended by adding at the end the
			 following new section:

							54D.Qualified energy conservation
				bonds
								(a)Qualified energy conservation
				bondFor purposes of this
				subchapter, the term qualified energy conservation bond means any
				bond issued as part of an issue if—
									(1)100 percent of the available project
				proceeds of such issue are to be used for one or more qualified conservation
				purposes,
									(2)the bond is issued by a State or local
				government, and
									(3)the issuer designates such bond for
				purposes of this section.
									(b)Reduced credit amountThe annual credit determined under section
				54A(b) with respect to any qualified energy conservation bond shall be 70
				percent of the amount so determined without regard to this subsection.
								(c)Limitation on amount of bonds
				designatedThe maximum
				aggregate face amount of bonds which may be designated under subsection (a) by
				any issuer shall not exceed the limitation amount allocated to such issuer
				under subsection (e).
								(d)National limitation on amount of bonds
				designatedThere is a
				national qualified energy conservation bond limitation of
				$3,000,000,000.
								(e)Allocations
									(1)In generalThe limitation applicable under subsection
				(d) shall be allocated by the Secretary among the States in proportion to the
				population of the States.
									(2)Allocations to largest local
				governments
										(A)In generalIn the case of any State in which there is
				a large local government, each such local government shall be allocated a
				portion of such State’s allocation which bears the same ratio to the State’s
				allocation (determined without regard to this subparagraph) as the population
				of such large local government bears to the population of such State.
										(B)Allocation of unused limitation to
				StateThe amount allocated
				under this subsection to a large local government may be reallocated by such
				local government to the State in which such local government is located.
										(C)Large local governmentFor purposes of this section, the term
				large local government means any municipality or county if such
				municipality or county has a population of 100,000 or more.
										(3)Allocation to issuers; restriction on
				private activity bondsAny
				allocation under this subsection to a State or large local government shall be
				allocated by such State or large local government to issuers within the State
				in a manner that results in not less than 70 percent of the allocation to such
				State or large local government being used to designate bonds which are not
				private activity bonds.
									(f)Qualified conservation
				purposeFor purposes of this
				section—
									(1)In generalThe term qualified conservation
				purpose means any of the following:
										(A)Capital expenditures incurred for purposes
				of—
											(i)reducing energy consumption in
				publicly-owned buildings by at least 20 percent,
											(ii)implementing green community
				programs,
											(iii)rural development involving the production
				of electricity from renewable energy resources, or
											(iv)any qualified facility (as determined under
				section 45(d) without regard to paragraphs (8) and (10) thereof and without
				regard to any placed in service date).
											(B)Expenditures with respect to research
				facilities, and research grants, to support research in—
											(i)development of cellulosic ethanol or other
				nonfossil fuels,
											(ii)technologies for the capture and
				sequestration of carbon dioxide produced through the use of fossil
				fuels,
											(iii)increasing the efficiency of existing
				technologies for producing nonfossil fuels,
											(iv)automobile battery technologies and other
				technologies to reduce fossil fuel consumption in transportation, or
											(v)technologies to reduce energy use in
				buildings.
											(C)Mass commuting facilities and related
				facilities that reduce the consumption of energy, including expenditures to
				reduce pollution from vehicles used for mass commuting.
										(D)Demonstration projects designed to promote
				the commercialization of—
											(i)green building technology,
											(ii)conversion of agricultural waste for use in
				the production of fuel or otherwise,
											(iii)advanced battery manufacturing
				technologies,
											(iv)technologies to reduce peak use of
				electricity, or
											(v)technologies for the capture and
				sequestration of carbon dioxide emitted from combusting fossil fuels in order
				to produce electricity.
											(E)Public education campaigns to promote
				energy efficiency.
										(2)Special rules for private activity
				bondsFor purposes of this
				section, in the case of any private activity bond, the term qualified
				conservation purposes shall not include any expenditure which is not a
				capital expenditure.
									(g)Population
									(1)In generalThe population of any State or local
				government shall be determined for purposes of this section as provided in
				section 146(j) for the calendar year which includes the date of the enactment
				of this section.
									(2)Special rule for countiesIn determining the population of any county
				for purposes of this section, any population of such county which is taken into
				account in determining the population of any municipality which is a large
				local government shall not be taken into account in determining the population
				of such county.
									(h)Application to Indian tribal
				governmentsAn Indian tribal
				government shall be treated for purposes of this section in the same manner as
				a large local government, except that—
									(1)an Indian tribal government shall be
				treated for purposes of subsection (e) as located within a State to the extent
				of so much of the population of such government as resides within such State,
				and
									(2)any bond issued by an Indian tribal
				government shall be treated as a qualified energy conservation bond only if
				issued as part of an issue the available project proceeds of which are used for
				purposes for which such Indian tribal government could issue bonds to which
				section 103(a)
				applies.
									.
					(b)Conforming amendments
						(1)Paragraph (1) of section 54A(d), as amended
			 by section 106, is amended to read as follows:

								(1)Qualified tax credit bondThe term qualified tax credit
				bond means—
									(A)a qualified forestry conservation
				bond,
									(B)a new clean renewable energy bond,
				or
									(C)a qualified energy conservation
				bond,
									which is part of an issue that meets
				requirements of paragraphs (2), (3), (4), (5), and
				(6)..
						(2)Subparagraph (C) of section 54A(d)(2), as
			 amended by section 106, is amended to read as follows:

								(C)Qualified purposeFor purposes of this paragraph, the term
				qualified purpose means—
									(i)in the case of a qualified forestry
				conservation bond, a purpose specified in section 54B(e),
									(ii)in the case of a new clean renewable energy
				bond, a purpose specified in section 54C(a)(1), and
									(iii)in the case of a qualified energy
				conservation bond, a purpose specified in section
				54D(a)(1).
									.
						(3)The table of sections for subpart I of part
			 IV of subchapter A of chapter 1 is amended by adding at the end the following
			 new item:

									Sec. 54D. Qualified
				energy conservation
				bonds.

								.
						(c)Effective
			 dateThe amendments made by
			 this section shall apply to obligations issued after the date of the enactment
			 of this Act.
					142.Credit for nonbusiness energy
			 property
					(a)Extension of creditSection 25C(g) is amended by striking
			 December 31, 2007 and inserting December 31,
			 2008.
					(b)Qualified biomass fuel property
						(1)In generalSection 25C(d)(3) is amended—
							(A)by striking and at the end
			 of subparagraph (D),
							(B)by striking the period at the end of
			 subparagraph (E) and inserting , and, and
							(C)by adding at the end the following new
			 subparagraph:

									(F)a stove which uses the burning of biomass
				fuel to heat a dwelling unit located in the United States and used as a
				residence by the taxpayer, or to heat water for use in such a dwelling unit,
				and which has a thermal efficiency rating of at least 75
				percent.
									.
							(2)Biomass fuelSection 25C(d) is amended by adding at the
			 end the following new paragraph:

								(6)Biomass fuelThe term biomass fuel means
				any plant-derived fuel available on a renewable or recurring basis, including
				agricultural crops and trees, wood and wood waste and residues (including wood
				pellets), plants (including aquatic plants), grasses, residues, and
				fibers.
								.
						(c)Modification of water heater
			 requirementsSection
			 25C(d)(3)(E) is amended by inserting or a thermal efficiency of at least
			 90 percent after 0.80.
					(d)Coordination with credit for qualified
			 geothermal heat pump property expenditures
						(1)In generalParagraph (3) of section 25C(d), as amended
			 by subsections (b) and (c), is amended by striking subparagraph (C) and by
			 redesignating subparagraphs (D), (E), and (F) as subparagraphs (C), (D), and
			 (E), respectively.
						(2)Conforming amendmentSubparagraph (C) of section 25C(d)(2) is
			 amended to read as follows:

								(C)Requirements and standards for air
				conditioners and heat pumpsThe standards and requirements prescribed
				by the Secretary under subparagraph (B) with respect to the energy efficiency
				ratio (EER) for central air conditioners and electric heat pumps—
									(i)shall require measurements to be based on
				published data which is tested by manufacturers at 95 degrees Fahrenheit,
				and
									(ii)may be based on the certified data of the
				Air Conditioning and Refrigeration Institute that are prepared in partnership
				with the Consortium for Energy
				Efficiency.
									.
						(e)Modification of qualified energy efficiency
			 improvements
						(1)In generalParagraph (1) of section 25C(c) is amended
			 by inserting , or an asphalt roof with appropriate cooling
			 granules, before which meet the Energy Star program
			 requirements.
						(2)Building envelope componentSubparagraph (D) of section 25C(c)(2) is
			 amended—
							(A)by inserting or asphalt roof
			 after metal roof, and
							(B)by inserting or cooling
			 granules after pigmented coatings.
							(f)Effective dates
						(1)In generalExcept as provided in paragraph (2), the
			 amendments made this section shall apply to expenditures made after December
			 31, 2007.
						(2)Modification of qualified energy efficiency
			 improvementsThe amendments
			 made by subsection (e) shall apply to property placed in service after the date
			 of the enactment of this Act.
						143.Energy efficient commercial buildings
			 deductionSubsection (h) of
			 section 179D is amended by striking December 31, 2008 and
			 inserting December 31, 2013.
				144.Modifications of energy efficient appliance
			 credit for appliances produced after 2007
					(a)In generalSubsection (b) of section 45M is amended to
			 read as follows:

							(b)Applicable amountFor purposes of subsection (a)—
								(1)DishwashersThe applicable amount is—
									(A)$45 in the case of a dishwasher which is
				manufactured in calendar year 2008 or 2009 and which uses no more than 324
				kilowatt hours per year and 5.8 gallons per cycle, and
									(B)$75 in the case of a dishwasher which is
				manufactured in calendar year 2008, 2009, or 2010 and which uses no more than
				307 kilowatt hours per year and 5.0 gallons per cycle (5.5 gallons per cycle
				for dishwashers designed for greater than 12 place settings).
									(2)Clothes washersThe applicable amount is—
									(A)$75 in the case of a residential
				top-loading clothes washer manufactured in calendar year 2008 which meets or
				exceeds a 1.72 modified energy factor and does not exceed a 8.0 water
				consumption factor,
									(B)$125 in the case of a residential
				top-loading clothes washer manufactured in calendar year 2008 or 2009 which
				meets or exceeds a 1.8 modified energy factor and does not exceed a 7.5 water
				consumption factor,
									(C)$150 in the case of a residential or
				commercial clothes washer manufactured in calendar year 2008, 2009, or 2010
				which meets or exceeds 2.0 modified energy factor and does not exceed a 6.0
				water consumption factor, and
									(D)$250 in the case of a residential or
				commercial clothes washer manufactured in calendar year 2008, 2009, or 2010
				which meets or exceeds 2.2 modified energy factor and does not exceed a 4.5
				water consumption factor.
									(3)RefrigeratorsThe applicable amount is—
									(A)$50 in the case of a refrigerator which is
				manufactured in calendar year 2008, and consumes at least 20 percent but not
				more than 22.9 percent less kilowatt hours per year than the 2001 energy
				conservation standards,
									(B)$75 in the case of a refrigerator which is
				manufactured in calendar year 2008 or 2009, and consumes at least 23 percent
				but no more than 24.9 percent less kilowatt hours per year than the 2001 energy
				conservation standards,
									(C)$100 in the case of a refrigerator which is
				manufactured in calendar year 2008, 2009, or 2010, and consumes at least 25
				percent but not more than 29.9 percent less kilowatt hours per year than the
				2001 energy conservation standards, and
									(D)$200 in the case of a refrigerator
				manufactured in calendar year 2008, 2009, or 2010 and which consumes at least
				30 percent less energy than the 2001 energy conservation
				standards.
									.
					(b)Eligible production
						(1)Similar treatment for all
			 appliancesSubsection (c) of
			 section 45M is amended—
							(A)by striking paragraph (2),
							(B)by striking (1)
			 In
			 general and all that follows through the
			 eligible and inserting The eligible,
							(C)by moving the text of such subsection in
			 line with the subsection heading, and
							(D)by redesignating subparagraphs (A) and (B)
			 as paragraphs (1) and (2), respectively, and by moving such paragraphs 2 ems to
			 the left.
							(2)Modification of base periodParagraph (2) of section 45M(c), as amended
			 by paragraph (1), is amended by striking 3-calendar year and
			 inserting 2-calendar year.
						(c)Types of energy efficient
			 appliancesSubsection (d) of
			 section 45M is amended to read as follows:

							(d)Types of energy efficient
				applianceFor purposes of
				this section, the types of energy efficient appliances are—
								(1)dishwashers described in subsection
				(b)(1),
								(2)clothes washers described in subsection
				(b)(2), and
								(3)refrigerators described in subsection
				(b)(3).
								.
					(d)Aggregate credit amount allowed
						(1)Increase in limitParagraph (1) of section 45M(e) is amended
			 to read as follows:

								(1)Aggregate credit amount
				allowedThe aggregate amount
				of credit allowed under subsection (a) with respect to a taxpayer for any
				taxable year shall not exceed $75,000,000 reduced by the amount of the credit
				allowed under subsection (a) to the taxpayer (or any predecessor) for all prior
				taxable years beginning after December 31,
				2007.
								.
						(2)Exception for certain refrigerator and
			 clothes washersParagraph (2)
			 of section 45M(e) is amended to read as follows:

								(2)Amount allowed for certain refrigerators
				and clothes washersRefrigerators described in subsection
				(b)(3)(D) and clothes washers described in subsection (b)(2)(D) shall not be
				taken into account under paragraph
				(1).
								.
						(e)Qualified energy efficient
			 appliances
						(1)In generalParagraph (1) of section 45M(f) is amended
			 to read as follows:

								(1)Qualified energy efficient
				applianceThe term
				qualified energy efficient appliance means—
									(A)any dishwasher described in subsection
				(b)(1),
									(B)any clothes washer described in subsection
				(b)(2), and
									(C)any refrigerator described in subsection
				(b)(3).
									.
						(2)Clothes
			 washerSection 45M(f)(3) is
			 amended by inserting commercial before
			 residential the second place it appears.
						(3)Top-loading clothes washerSubsection (f) of section 45M is amended by
			 redesignating paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), (7),
			 and (8), respectively, and by inserting after paragraph (3) the following new
			 paragraph:

								(4)Top-loading clothes washerThe term top-loading clothes
				washer means a clothes washer which has the clothes container
				compartment access located on the top of the machine and which operates on a
				vertical
				axis.
								.
						(4)Replacement of energy factorSection 45M(f)(6), as redesignated by
			 paragraph (3), is amended to read as follows:

								(6)Modified energy factorThe term modified energy
				factor means the modified energy factor established by the Department of
				Energy for compliance with the Federal energy conservation
				standard.
								.
						(5)Gallons per cycle; water consumption
			 factorSection 45M(f), as
			 amended by paragraph (3), is amended by adding at the end the following:

								(9)Gallons per cycleThe term gallons per cycle
				means, with respect to a dishwasher, the amount of water, expressed in gallons,
				required to complete a normal cycle of a dishwasher.
								(10)Water consumption factorThe term water consumption
				factor means, with respect to a clothes washer, the quotient of the
				total weighted per-cycle water consumption divided by the cubic foot (or liter)
				capacity of the clothes
				washer.
								.
						(f)Effective
			 dateThe amendments made by
			 this section shall apply to appliances produced after December 31, 2007.
					145.Accelerated recovery period for
			 depreciation of smart meters and smart grid systems
					(a)In generalSection 168(e)(3)(D) is amended by striking
			 and at the end of clause (i), by striking the period at the end
			 of clause (ii) and inserting a comma, and by inserting after clause (ii) the
			 following new clauses:

							(iii)any qualified smart electric meter,
				and
							(iv)any qualified smart electric grid
				system.
							.
					(b)DefinitionsSection 168(i) is amended by inserting at
			 the end the following new paragraph:

							(18)Qualified smart electric meters
								(A)In generalThe term qualified smart electric
				meter means any smart electric meter which is placed in service by a
				taxpayer who is a supplier of electric energy or a provider of electric energy
				services.
								(B)Smart electric meterFor purposes of subparagraph (A), the term
				smart electric meter means any time-based meter and related
				communication equipment which is capable of being used by the taxpayer as part
				of a system that—
									(i)measures and records electricity usage data
				on a time-differentiated basis in at least 24 separate time segments per
				day,
									(ii)provides for the exchange of information
				between supplier or provider and the customer’s electric meter in support of
				time-based rates or other forms of demand response,
									(iii)provides data to such supplier or provider
				so that the supplier or provider can provide energy usage information to
				customers electronically, and
									(iv)provides net metering.
									(19)Qualified smart electric grid
				systems
								(A)In generalThe term qualified smart electric
				grid system means any smart grid property used as part of a system for
				electric distribution grid communications, monitoring, and management placed in
				service by a taxpayer who is a supplier of electric energy or a provider of
				electric energy services.
								(B)Smart grid propertyFor the purposes of subparagraph (A), the
				term smart grid property means electronics and related equipment
				that is capable of—
									(i)sensing, collecting, and monitoring data of
				or from all portions of a utility’s electric distribution grid,
									(ii)providing real-time, two-way communications
				to monitor or manage such grid, and
									(iii)providing real time analysis of and event
				prediction based upon collected data that can be used to improve electric
				distribution system reliability, quality, and
				performance.
									.
					(c)Continued application of 150 percent
			 declining balance methodParagraph (2) of section 168(b) is amended
			 by striking or at the end of subparagraph (B), by redesignating
			 subparagraph (C) as subparagraph (D), and by inserting after subparagraph (B)
			 the following new subparagraph:

							(C)any property (other than property described
				in paragraph (3)) which is a qualified smart electric meter or qualified smart
				electric grid system,
				or
							.
					(d)Effective
			 dateThe amendments made by
			 this section shall apply to property placed in service after the date of the
			 enactment of this Act.
					146.Qualified green building and sustainable
			 design projects
					(a)In generalParagraph (8) of section 142(l) is amended
			 by striking September 30, 2009 and inserting September
			 30, 2012.
					(b)Treatment of current refunding
			 bondsParagraph (9) of
			 section 142(l) is amended by striking October 1, 2009 and
			 inserting October 1, 2012.
					(c)AccountabilityThe second sentence of section 701(d) of
			 the American Jobs Creation Act of 2004 is amended by striking
			 issuance, and inserting issuance of the last issue with
			 respect to such project,.
					147.Special depreciation allowance for certain
			 reuse and recycling property
					(a)In generalSection 168 is amended by adding at the end
			 the following new subsection:

							(m)Special allowance for certain reuse and
				recycling property
								(1)In generalIn the case of any qualified reuse and
				recycling property—
									(A)the depreciation deduction provided by
				section 167(a) for the taxable year in which such property is placed in service
				shall include an allowance equal to 50 percent of the adjusted basis of the
				qualified reuse and recycling property, and
									(B)the adjusted basis of the qualified reuse
				and recycling property shall be reduced by the amount of such deduction before
				computing the amount otherwise allowable as a depreciation deduction under this
				chapter for such taxable year and any subsequent taxable year.
									(2)Qualified reuse and recycling
				propertyFor purposes of this
				subsection—
									(A)In generalThe term qualified reuse and
				recycling property means any reuse and recycling property—
										(i)to which this section applies,
										(ii)which has a useful life of at least 5
				years,
										(iii)the original use of which commences with
				the taxpayer after December 31, 2007, and
										(iv)which is—
											(I)acquired by purchase (as defined in section
				179(d)(2)) by the taxpayer after December 31, 2007, but only if no written
				binding contract for the acquisition was in effect before January 1, 2008,
				or
											(II)acquired by the taxpayer pursuant to a
				written binding contract which was entered into after December 31, 2007.
											(B)Exceptions
										(i)Bonus depreciation property under
				subsection (k)The term qualified reuse and
				recycling property shall not include any property to which section
				168(k) applies.
										(ii)Alternative depreciation
				propertyThe term
				qualified reuse and recycling property shall not include any
				property to which the alternative depreciation system under subsection (g)
				applies, determined without regard to paragraph (7) of subsection (g) (relating
				to election to have system apply).
										(iii)Election outIf a taxpayer makes an election under this
				clause with respect to any class of property for any taxable year, this
				subsection shall not apply to all property in such class placed in service
				during such taxable year.
										(C)Special rule for self-constructed
				propertyIn the case of a
				taxpayer manufacturing, constructing, or producing property for the taxpayer's
				own use, the requirements of clause (iv) of subparagraph (A) shall be treated
				as met if the taxpayer begins manufacturing, constructing, or producing the
				property after December 31, 2007.
									(D)Deduction allowed in computing minimum
				taxFor purposes of
				determining alternative minimum taxable income under section 55, the deduction
				under subsection (a) for qualified reuse and recycling property shall be
				determined under this section without regard to any adjustment under section
				56.
									(3)DefinitionsFor purposes of this subsection—
									(A)Reuse and recycling property
										(i)In generalThe term reuse and recycling
				property means any machinery and equipment (not including buildings or
				real estate), along with all appurtenances thereto, including software
				necessary to operate such equipment, which is used exclusively to collect,
				distribute, or recycle qualified reuse and recyclable materials.
										(ii)ExclusionSuch term does not include rolling stock or
				other equipment used to transport reuse and recyclable materials.
										(B)Qualified reuse and recyclable
				materials
										(i)In generalThe term qualified reuse and
				recyclable materials means scrap plastic, scrap glass, scrap textiles,
				scrap rubber, scrap packaging, recovered fiber, scrap ferrous and nonferrous
				metals, or electronic scrap generated by an individual or business.
										(ii)Electronic scrapFor purposes of clause (i), the term
				electronic scrap means—
											(I)any cathode ray tube, flat panel screen, or
				similar video display device with a screen size greater than 4 inches measured
				diagonally, or
											(II)any central processing unit.
											(C)Recycling or recycleThe term recycling or
				recycle means that process (including sorting) by which worn or
				superfluous materials are manufactured or processed into specification grade
				commodities that are suitable for use as a replacement or substitute for virgin
				materials in manufacturing tangible consumer and commercial products, including
				packaging.
									.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to property placed in service after December 31,
			 2007.
					IIOne-year extension of temporary
			 provisions
			AAlternative minimum tax
				201.Extension of alternative minimum tax relief
			 for nonrefundable personal credits
					(a)In generalParagraph (2) of section 26(a) is
			 amended—
						(1)by striking or 2007 and
			 inserting 2007, or 2008, and
						(2)by striking 2007 in the heading
			 thereof and inserting 2008.
						(b) Effective dateThe amendments made by this section shall
			 apply to taxable years beginning after December 31, 2007.
					202.Extension of increased alternative minimum
			 tax exemption amount
					(a)In generalParagraph (1) of section 55(d) is
			 amended—
						(1)by striking ($66,250 in the case of
			 taxable years beginning in 2007) in subparagraph (A) and inserting
			 ($69,950 in the case of taxable years beginning in 2008),
			 and
						(2)by striking ($44,350 in the case of
			 taxable years beginning in 2007) in subparagraph (B) and inserting
			 ($46,200 in the case of taxable years beginning in 2008).
						(b)Effective
			 dateThe amendments made by
			 this section shall apply to taxable years beginning after December 31,
			 2007.
					203.Increase of AMT refundable credit amount
			 for individuals with long-term unused credits for prior year minimum tax
			 liability, etc
					(a)In generalParagraph (2) of section 53(e) is amended
			 to read as follows:

							(2)AMT refundable credit amountFor purposes of paragraph (1), the term
				AMT refundable credit amount means, with respect to any taxable
				year, the amount (not in excess of the long-term unused minimum tax credit for
				such taxable year) equal to the greater of—
								(A)50 percent of the long-term unused minimum
				tax credit for such taxable year, or
								(B)the amount (if any) of the AMT refundable
				credit amount for the taxpayer’s preceding taxable year (determined without
				regard to subsection
				(f)(2)).
								.
					(b)Treatment of certain underpayments,
			 interest, and penalties attributable to the treatment of incentive stock
			 optionsSection 53 is amended
			 by adding at the end the following new subsection:

							(f)Treatment of certain underpayments,
				interest, and penalties attributable to the treatment of incentive stock
				options
								(1)AbatementAny underpayment of tax outstanding on the
				date of the enactment of this subsection which is attributable to the
				application of section 56(b)(3) for any taxable year ending before January 1,
				2008 (and any interest or penalty with respect to such underpayment which is
				outstanding on such date of enactment), is hereby abated. The amount determined
				under subsection (b)(1) shall not include any tax abated under the preceding
				sentence.
								(2)Increase in credit for certain interest and
				penalties already paidThe
				AMT refundable credit amount, and the minimum tax credit determined under
				subsection (b), for the taxpayer’s first 2 taxable years beginning after
				December 31, 2007, shall each be increased by 50 percent of the aggregate
				amount of the interest and penalties which were paid by the taxpayer before the
				date of the enactment of this subsection and which would (but for such payment)
				have been abated under paragraph
				(1).
								.
					(c)Effective date
						(1)In generalExcept as provided in paragraph (2), the
			 amendment made by this section shall apply to taxable years beginning after
			 December 31, 2007.
						(2)AbatementSection 53(f)(1), as added by subsection
			 (b), shall take effect on the date of the enactment of this Act.
						BExtensions Primarily Affecting
			 Individuals
				211.Deduction for State and local sales
			 taxes
					(a)In generalSubparagraph (I) of section 164(b)(5) is
			 amended by striking January 1, 2008 and inserting January
			 1, 2009.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to taxable years beginning after December 31,
			 2007.
					212.Deduction of qualified tuition and related
			 expenses
					(a)In generalSubsection (e) of section 222 is amended by
			 striking December 31, 2007 and inserting December 31,
			 2008.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to taxable years beginning after December 31,
			 2007.
					213.Treatment of certain dividends of regulated
			 investment companies
					(a)Interest-related dividendsSubparagraph (C) of section 871(k)(1) is
			 amended by striking December 31, 2007 and inserting
			 December 31, 2008.
					(b)Short-term capital gain
			 dividendsSubparagraph (C) of
			 section 871(k)(2) is amended by striking December 31, 2007 and
			 inserting December 31, 2008.
					(c)Effective
			 dateThe amendments made by
			 this section shall apply to dividends with respect to taxable years of
			 regulated investment companies beginning after December 31, 2007.
					214.Tax-free distributions from individual
			 retirement plans for charitable purposes
					(a)In generalSubparagraph (F) of section 408(d)(8) is
			 amended by striking December 31, 2007 and inserting
			 December 31, 2008.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to distributions made in taxable years beginning after
			 December 31, 2007.
					215.Deduction for certain expenses of
			 elementary and secondary school teachers
					(a)In generalSubparagraph (D) of section 62(a)(2) is
			 amended by striking or 2007 and inserting 2007, or
			 2008.
					(b)Effective
			 dateThe amendment made by
			 subsection (a) shall apply to taxable years beginning after December 31,
			 2007.
					216.Stock in RIC for purposes of determining
			 estates of nonresidents not citizens
					(a)In generalParagraph (3) of section 2105(d) is amended
			 by striking December 31, 2007 and inserting December 31,
			 2008.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to decedents dying after December 31, 2007.
					217.Qualified investment entities
					(a)In generalClause (ii) of section 897(h)(4)(A) is
			 amended by striking December 31, 2007 and inserting
			 December 31, 2008.
					(b)Effective
			 dateThe amendment made by
			 subsection (a) shall take effect on January 1, 2008, except that such amendment
			 shall not apply to the application of withholding requirements with respect to
			 any payment made on or before the date of the enactment of this Act.
					218.Exclusion of amounts received under
			 qualified group legal services plans
					(a)In generalSubsection (e) of section 120 is amended by
			 striking shall not apply to taxable years beginning after June 30,
			 1992 and inserting shall apply to taxable years beginning after
			 December 31, 2007, and before January 1, 2009.
					(b)Effective
			 dateThe amendments made by
			 this section shall apply to taxable years beginning after December 31,
			 2007.
					CExtensions Primarily Affecting
			 Businesses
				221.Extension and modification of research
			 credit
					(a)ExtensionSection 41(h)(1)(B) is amended by striking
			 December 31, 2007 and inserting December 31,
			 2008.
					(b)Termination of alternative incremental
			 creditParagraph (4) of
			 section 41(c) is repealed.
					(c)Modification of alternative simplified
			 creditSection 41(c)(5)(A) is
			 amended by striking 12 percent and inserting 14
			 percent.
					(d)Conforming amendmentSubparagraph (D) of section 45C(b)(1) is
			 amended by striking December 31, 2007 and inserting
			 December 31, 2008.
					(e)Technical correctionParagraph (3) of section 41(h) is amended
			 to read as follows:

							(2)Computation for taxable year in which
				credit terminatesIn the case
				of any taxable year with respect to which this section applies to a number of
				days which is less than the total number of days in such taxable year—
								(A)the amount determined under subsection
				(c)(1)(B) with respect to such taxable year shall be the amount which bears the
				same ratio to such amount (determined without regard to this paragraph) as the
				number of days in such taxable year to which this section applies bears to the
				total number of days in such taxable year, and
								(B)for purposes of subsection (c)(5), the
				average qualified research expenses for the preceding 3 taxable years shall be
				the amount which bears the same ratio to such average qualified research
				expenses (determined without regard to this paragraph) as the number of days in
				such taxable year to which this section applies bears to the total number of
				days in such taxable
				year.
								.
					(f)Effective dates
						(1)In generalExcept as provided in paragraph (2), the
			 amendments made by this section shall apply to amounts paid or incurred after
			 December 31, 2007.
						(2)Alternative incremental and simplified
			 credits and technical amendmentThe repeal made by subsection (b) and the
			 amendments made by subsections (c) and (e) shall apply to taxable years
			 beginning after December 31, 2007.
						222.Indian employment credit
					(a)In generalSubsection (f) of section 45A is amended by
			 striking December 31, 2007 and inserting December 31,
			 2008.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to taxable years beginning after December 31,
			 2007.
					223.Extension and modification of new markets
			 tax credit
					(a)ExtensionSubparagraph (D) of section 45D(f)(1) is
			 amended by striking and 2008 and inserting 2008, and
			 2009.
					(b)Expansion of definition of low-income
			 community for new markets tax credit
						(1)In generalSection 45D(e) is amended by adding at the
			 end the following new paragraph:

								(6)Certain counties treated as low-income
				communities
									(A)In generalThe term low-income community
				shall include any county if such county—
										(i)has a decennial average annual wage which
				is at or below 75 percent of the national decennial average annual wage,
				and
										(ii)is located in a State the decennial average
				annual wage of which is at or below 75 percent of the national decennial
				average annual wage.
										(B)Decennial average annual wageFor purposes of subparagraph (A), the term
				decennial average annual wage means the average wage, as
				determined based on data from the Bureau of Labor Statistics, for the year in
				which the most recent decennial census was
				taken.
									.
						(2)Effective
			 dateThe amendment made by
			 this subsection shall apply to investments made after the date of the enactment
			 of this Act.
						224.Railroad track maintenance
					(a)In generalSubsection (f) of section 45G is amended by
			 striking January 1, 2008 and inserting January 1,
			 2009.
					(b)Credit allowed against alternative minimum
			 taxSubparagraph (B) of
			 section 38(c)(4), as amended by the Housing Assistance Tax Act of 2008 and by
			 section 103, is amended—
						(1)by redesignating clauses (v), (vi), and
			 (vii) as clauses (vi), (vii), and (viii), respectively, and
						(2)by inserting after clause (iv) the
			 following new clause:

								(v)the credit determined under section
				45G,
								.
						(c)Effective dates
						(1)The amendment made by subsection (a) shall
			 apply to expenditures paid or incurred during taxable years beginning after
			 December 31, 2007.
						(2)The amendments made by subsection (b) shall
			 apply to credits determined under section 45G of the Internal Revenue Code of
			 1986 in taxable years beginning after December 31, 2007, and to carrybacks of
			 such credits.
						225.Extension of mine rescue team training
			 creditSection 45N(e) is
			 amended by striking December 31, 2008 and inserting
			 December 31, 2009.
				226.Extension of 15-year straight-line cost
			 recovery for qualified leasehold improvements and qualified restaurant
			 improvements; 15-year straight-line cost recovery for certain improvements to
			 retail space
					(a)Extension of Leasehold and Restaurant
			 Improvements
						(1)In generalClauses (iv) and (v) of section
			 168(e)(3)(E) are each amended by striking January 1, 2008 and
			 inserting January 1, 2009.
						(2)Effective
			 dateThe amendments made by
			 this subsection shall apply to property placed in service after December 31,
			 2007.
						(b)Treatment To include new
			 construction
						(1)In generalParagraph (7) of section 168(e) is amended
			 to read as follows:

								(7)Qualified restaurant propertyThe term qualified restaurant
				property means any section 1250 property which is a building or an
				improvement to a building if more than 50 percent of the building’s square
				footage is devoted to preparation of, and seating for on-premises consumption
				of, prepared
				meals.
								.
						(2)Effective
			 dateThe amendments made by
			 this subsection shall apply to property placed in service after the date of the
			 enactment of this Act.
						(c)Recovery Period for Depreciation of Certain
			 Improvements to Retail Space
						(1)15-year recovery periodSection 168(e)(3)(E) is amended by striking
			 and at the end of clause (vii), by striking the period at the
			 end of clause (viii) and inserting , and, and by adding at the
			 end the following new clause:

								(ix)any qualified retail improvement property
				placed in service before January 1,
				2009.
								.
						(2)Qualified retail improvement
			 propertySection 168(e) is
			 amended by adding at the end the following new paragraph:

								(8)Qualified retail improvement
				property
									(A)In generalThe term qualified retail improvement
				property means any improvement to an interior portion of a building
				which is nonresidential real property if—
										(i)such portion is open to the general public
				and is used in the retail trade or business of selling tangible personal
				property to the general public, and
										(ii)such improvement is placed in service more
				than 3 years after the date the building was first placed in service.
										(B)Improvements made by ownerIn the case of an improvement made by the
				owner of such improvement, such improvement shall be qualified retail
				improvement property (if at all) only so long as such improvement is held by
				such owner. Rules similar to the rules under paragraph (6)(B) shall apply for
				purposes of the preceding sentence.
									(C)Certain improvements not
				includedSuch term shall not
				include any improvement for which the expenditure is attributable to—
										(i)the enlargement of the building,
										(ii)any elevator or escalator,
										(iii)any structural component benefitting a
				common area, or
										(iv)the internal structural framework of the
				building.
										.
						(3)Requirement to use straight line
			 methodSection 168(b)(3) is
			 amended by adding at the end the following new subparagraph:

								(I)Qualified retail improvement property
				described in subsection
				(e)(8).
								.
						(4)Alternative systemThe table contained in section 168(g)(3)(B)
			 is amended by inserting after the item relating to subparagraph (E)(viii) the
			 following new item:

											“(E)(ix)39

								.
						(5)Effective
			 dateThe amendments made by
			 this subsection shall apply to property placed in service after the date of the
			 enactment of this Act.
						227.Seven-year cost recovery period for
			 motorsports racing track facility
					(a)In generalSubparagraph (D) of section 168(i)(15) is
			 amended by striking December 31, 2007 and inserting
			 December 31, 2008.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to property placed in service after December 31,
			 2007.
					228.Accelerated depreciation for business
			 property on Indian reservation
					(a)In generalParagraph (8) of section 168(j) is amended
			 by striking December 31, 2007 and inserting December 31,
			 2008.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to property placed in service after December 31,
			 2007.
					229.Extension of election to expense advanced
			 mine safety equipmentSection
			 179E(g) is amended by striking December 31, 2008 and inserting
			 December 31, 2009.
				230.Expensing of environmental remediation
			 costs
					(a)In generalSubsection (h) of section 198 is amended by
			 striking December 31, 2007 and inserting December 31,
			 2008.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to expenditures paid or incurred after December 31,
			 2007.
					231.Deduction allowable with respect to income
			 attributable to domestic production activities in Puerto Rico
					(a)In generalSubparagraph (C) of section 199(d)(8) is
			 amended—
						(1)by striking first 2 taxable
			 years and inserting first 3 taxable years, and
						(2)by striking January 1, 2008
			 and inserting January 1, 2009.
						(b)Effective
			 dateThe amendments made by
			 this section shall apply to taxable years beginning after December 31,
			 2007.
					232.Modification of tax treatment of certain
			 payments to controlling exempt organizations
					(a)In generalClause (iv) of section 512(b)(13)(E) is
			 amended by striking December 31, 2007 and inserting
			 December 31, 2008.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to payments received or accrued after December 31,
			 2007.
					233.Qualified zone academy bonds
					(a)In generalSubpart I of part IV of subchapter A of
			 chapter 1, as amended by sections 106 and 141, is amended by adding at the end
			 the following new section:

							54E.Qualified zone academy bonds
								(a)Qualified zone academy bondsFor purposes of this subchapter, the term
				qualified zone academy bond means any bond issued as part of an
				issue if—
									(1)100 percent of the available project
				proceeds of such issue are to be used for a qualified purpose with respect to a
				qualified zone academy established by an eligible local education
				agency,
									(2)the bond is issued by a State or local
				government within the jurisdiction of which such academy is located, and
									(3)the issuer—
										(A)designates such bond for purposes of this
				section,
										(B)certifies that it has written assurances
				that the private business contribution requirement of subsection (b) will be
				met with respect to such academy, and
										(C)certifies that it has the written approval
				of the eligible local education agency for such bond issuance.
										(b) Private business contribution
				requirementFor purposes of
				subsection (a), the private business contribution requirement of this
				subsection is met with respect to any issue if the eligible local education
				agency that established the qualified zone academy has written commitments from
				private entities to make qualified contributions having a present value (as of
				the date of issuance of the issue) of not less than 10 percent of the proceeds
				of the issue.
								(c)Limitation on amount of bonds
				designated
									(1)National limitationThere is a national zone academy bond
				limitation for each calendar year. Such limitation is $400,000,000 for 2008,
				and, except as provided in paragraph (4), zero thereafter.
									(2)Allocation of limitationThe national zone academy bond limitation
				for a calendar year shall be allocated by the Secretary among the States on the
				basis of their respective populations of individuals below the poverty line (as
				defined by the Office of Management and Budget). The limitation amount
				allocated to a State under the preceding sentence shall be allocated by the
				State education agency to qualified zone academies within such State.
									(3)Designation subject to limitation
				amountThe maximum aggregate
				face amount of bonds issued during any calendar year which may be designated
				under subsection (a) with respect to any qualified zone academy shall not
				exceed the limitation amount allocated to such academy under paragraph (2) for
				such calendar year.
									(4)Carryover of unused limitation
										(A)In generalIf for any calendar year—
											(i)the limitation amount for any State,
				exceeds
											(ii)the amount of bonds issued during such year
				which are designated under subsection (a) with respect to qualified zone
				academies within such State,
											the limitation amount for such
				State for the following calendar year shall be increased by the amount of such
				excess.(B)Limitation on carryoverAny carryforward of a limitation amount may
				be carried only to the first 2 years following the unused limitation year. For
				purposes of the preceding sentence, a limitation amount shall be treated as
				used on a first-in first-out basis.
										(C)Coordination with section
				1397EAny carryover
				determined under section 1397E(e)(4) (relating to carryover of unused
				limitation) with respect to any State to calendar year 2008 shall be treated
				for purposes of this section as a carryover with respect to such State for such
				calendar year under subparagraph (A), and the limitation of subparagraph (B)
				shall apply to such carryover taking into account the calendar years to which
				such carryover relates.
										(d)DefinitionsFor purposes of this section—
									(1)Qualified zone academyThe term qualified zone
				academy means any public school (or academic program within a public
				school) which is established by and operated under the supervision of an
				eligible local education agency to provide education or training below the
				postsecondary level if—
										(A)such public school or program (as the case
				may be) is designed in cooperation with business to enhance the academic
				curriculum, increase graduation and employment rates, and better prepare
				students for the rigors of college and the increasingly complex
				workforce,
										(B)students in such public school or program
				(as the case may be) will be subject to the same academic standards and
				assessments as other students educated by the eligible local education
				agency,
										(C)the comprehensive education plan of such
				public school or program is approved by the eligible local education agency,
				and
										(D)(i)such public school is located in an
				empowerment zone or enterprise community (including any such zone or community
				designated after the date of the enactment of this section), or
											(ii)there is a reasonable expectation (as of
				the date of issuance of the bonds) that at least 35 percent of the students
				attending such school or participating in such program (as the case may be)
				will be eligible for free or reduced-cost lunches under the school lunch
				program established under the National School Lunch Act.
											(2)Eligible local education
				agencyFor purposes of this
				section, the term eligible local education agency means any
				local educational agency as defined in section 9101 of the Elementary and
				Secondary Education Act of 1965.
									(3)Qualified purposeThe term qualified purpose
				means, with respect to any qualified zone academy—
										(A)rehabilitating or repairing the public
				school facility in which the academy is established,
										(B)providing equipment for use at such
				academy,
										(C)developing course materials for education
				to be provided at such academy, and
										(D)training teachers and other school
				personnel in such academy.
										(4)Qualified contributionsThe term qualified
				contribution means any contribution (of a type and quality acceptable
				to the eligible local education agency) of—
										(A)equipment for use in the qualified zone
				academy (including state-of-the-art technology and vocational
				equipment),
										(B)technical assistance in developing
				curriculum or in training teachers in order to promote appropriate market
				driven technology in the classroom,
										(C)services of employees as volunteer
				mentors,
										(D)internships, field trips, or other
				educational opportunities outside the academy for students, or
										(E)any other property or service specified by
				the eligible local education
				agency.
										.
					(b)Conforming amendments
						(1)Paragraph (1) of section 54A(d), as amended
			 by sections 106 and 141, is amended by striking or at the end of
			 subparagraph (B), by inserting or at the end of subparagraph
			 (C), and by inserting after subparagraph (C) the following new
			 subparagraph:

								(D)a qualified zone academy
				bond,
								.
						(2)Subparagraph (C) of section 54A(d)(2), as
			 amended by sections 106 and 141, is amended by striking and at
			 the end of clause (ii), by striking the period at the end of clause (iii) and
			 inserting , and, and by adding at the end the following new
			 clause:

								(iv)in the case of a qualified zone academy
				bond, a purpose specified in section
				54E(a)(1).
								.
						(3)Section 1397E is amended by adding at the
			 end the following new subsection:

								(m)TerminationThis section shall not apply to any
				obligation issued after the date of the enactment of this
				Act.
								.
						(4)The table of sections for subpart I of part
			 IV of subchapter A of chapter 1 is amended by adding at the end the following
			 new item:

									Sec. 54E. Qualified
				zone academy
				bonds.

								.
						(c)Effective
			 dateThe amendments made by
			 this section shall apply to obligations issued after the date of the enactment
			 of this Act.
					234.Tax incentives for investment in the
			 District of Columbia
					(a)Designation of Zone
						(1)In generalSubsection (f) of section 1400 is amended
			 by striking 2007 both places it appears and inserting
			 2008.
						(2)Effective
			 dateThe amendments made by
			 this subsection shall apply to periods beginning after December 31,
			 2007.
						(b)Tax-Exempt Economic Development
			 Bonds
						(1)In generalSubsection (b) of section 1400A is amended
			 by striking 2007 and inserting 2008.
						(2)Effective
			 dateThe amendment made by
			 this subsection shall apply to bonds issued after December 31, 2007.
						(c)Zero Percent Capital Gains Rate
						(1)In generalSubsection (b) of section 1400B is amended
			 by striking 2008 each place it appears and inserting
			 2009.
						(2)Conforming amendments
							(A)Section 1400B(e)(2) is amended—
								(i)by striking 2012 and
			 inserting 2013, and
								(ii)by striking 2012 in the heading
			 thereof and inserting 2013.
								(B)Section 1400B(g)(2) is amended by striking
			 2012 and inserting 2013.
							(C)Section 1400F(d) is amended by striking
			 2012 and inserting 2013.
							(3)Effective dates
							(A)ExtensionThe amendments made by paragraph (1) shall
			 apply to acquisitions after December 31, 2007.
							(B)Conforming amendmentsThe amendments made by paragraph (2) shall
			 take effect on the date of the enactment of this Act.
							(d)First-Time Homebuyer Credit
						(1)In generalSubsection (i) of section 1400C is amended
			 by striking 2008 and inserting 2009.
						(2)Effective
			 dateThe amendment made by
			 this subsection shall apply to property purchased after December 31,
			 2007.
						235.Economic development credit for American
			 Samoa
					(a)In generalSubsection (d) of section 119 of division A
			 of the Tax Relief and Health Care Act of 2006 is amended—
						(1)by striking first two taxable
			 years and inserting first 3 taxable years, and
						(2)by striking January 1, 2008
			 and inserting January 1, 2009.
						(b)Effective
			 dateThe amendment made by
			 this section shall apply to taxable years beginning after December 31,
			 2007.
					236.Extension and expansion of charitable
			 deduction for contributions of food inventory
					(a)In generalSection 170(e)(3)(C) is amended—
						(1)by striking December 31,
			 2007 in clause (iv) and inserting December 31, 2008,
			 and
						(2)by redesignating clauses (iii) and (iv) as
			 clauses (iv) and (v), respectively, and by inserting after clause (ii) the
			 following new clause:

								(iii)Determination of basisIf a taxpayer—
									(I)does not account for inventories under
				section 471, and
									(II)is not required to capitalize indirect
				costs under section 263A,
									the taxpayer may elect, solely for
				purposes of subparagraph (B), to treat the basis of any apparently wholesome
				food as being equal to 25 percent of the fair market value of such
				food..
						(b)Temporary suspension of limitations on
			 charitable contributions
						(1)In generalSection 170(b) is amended by adding at the
			 end the following new paragraph:

								(3)Temporary suspension of limitations on
				charitable contributionsIn
				the case of a qualified farmer or rancher (as defined in paragraph (1)(E)(v)),
				any charitable contribution of food—
									(A)to which subsection (e)(3)(C) applies
				(without regard to clause (ii) thereof), and
									(B)which is made during the period beginning
				on the date of the enactment of this paragraph and before January 1,
				2009,
									shall be treated for purposes of
				paragraph (1)(E) or (2)(B), whichever is applicable, as if it were a qualified
				conservation contribution which is made by a qualified farmer or rancher and
				which otherwise meets the requirements of such
				paragraph..
						(2)Effective
			 dateThe amendment made by
			 this subsection shall apply to taxable years ending after the date of the
			 enactment of this Act.
						(c)Effective
			 dateThe amendments made by
			 subsection (a) shall apply to contributions made after December 31,
			 2007.
					237.Enhanced charitable deduction for
			 contributions of book inventory to public schools
					(a)In generalClause (iv) of section 170(e)(3)(D) is
			 amended by striking December 31, 2007 and inserting
			 December 31, 2008.
					(b)Clerical amendmentClause (iii) of section 170(e)(3)(D) is
			 amended by inserting of books after to any
			 contribution.
					(c)Effective
			 dateThe amendments made by
			 this section shall apply to contributions made after December 31, 2007.
					238.Enhanced deduction for qualified computer
			 contributions
					(a)In generalSubparagraph (G) of section 170(e)(6) is
			 amended by striking December 31, 2007 and inserting
			 December 31, 2008.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to contributions made during taxable years beginning
			 after December 31, 2007.
					239.Basis adjustment to stock of S corporations
			 making charitable contributions of property
					(a)In generalThe last sentence of section 1367(a)(2) is
			 amended by striking December 31, 2007 and inserting
			 December 31, 2008.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to contributions made in taxable years beginning after
			 December 31, 2007.
					240.Work opportunity tax credit for Hurricane
			 Katrina employees
					(a)In generalParagraph (1) of section 201(b) of the
			 Katrina Emergency Tax Relief Act of 2005 is amended by striking
			 2-year and inserting 3-year.
					(b)Effective
			 dateThe amendment made by
			 subsection (a) shall apply to individuals hired after August 27, 2007.
					241.Subpart F
			 exception for active financing income
					(a)Exempt insurance incomeParagraph (10) of section 953(e) is
			 amended—
						(1)by striking January 1, 2009
			 and inserting January 1, 2010, and
						(2)by striking December 31,
			 2008 and inserting December 31, 2009.
						(b)Exception to treatment as foreign personal
			 holding company incomeParagraph (9) of section 954(h) is amended
			 by striking January 1, 2009 and inserting January 1,
			 2010.
					242.Look-thru rule for related controlled
			 foreign corporations
					(a)In generalSubparagraph (C) of section 954(c)(6) is
			 amended by striking January 1, 2009 and inserting January
			 1, 2010.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to taxable years of foreign corporations beginning
			 after December 31, 2008, and to taxable years of United States shareholders
			 with or within which such taxable years of foreign corporations end.
					243.Expensing for certain qualified film and
			 television productions
					(a)In generalSubsection (f) of section 181 is amended by
			 striking December 31, 2008 and inserting December 31,
			 2009.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to productions commencing after December 31,
			 2008.
					244.Extension and modification of duty
			 suspension on wool products; wool research fund; wool duty refunds
					(a)Extension of temporary duty
			 reductionsEach of the
			 following headings of the Harmonized Tariff Schedule of the United States is
			 amended by striking the date in the effective period column and inserting
			 12/31/2014:
						(1)Heading 9902.51.11 (relating to fabrics of
			 worsted wool).
						(2)Heading 9902.51.13 (relating to yarn of
			 combed wool).
						(3)Heading 9902.51.14 (relating to wool fiber,
			 waste, garnetted stock, combed wool, or wool top).
						(4)Heading 9902.51.15 (relating to fabrics of
			 combed wool).
						(5)Heading 9902.51.16 (relating to fabrics of
			 combed wool).
						(b)Extension of duty refunds and wool research
			 trust fund
						(1)In generalSection 4002(c) of the Wool Suit and
			 Textile Trade Extension Act of 2004 (Public Law 108–429; 118 Stat. 2603) is
			 amended—
							(A)in paragraph (3)(C), by striking
			 2010 and inserting 2015; and
							(B)in paragraph (6)(A), by striking
			 through 2009 and inserting through 2014.
							(2)SunsetSection 506(f) of the Trade and Development
			 Act of 2000 (Public 106–200; 114 Stat. 303 (7 U.S.C. 7101 note)) is amended by
			 striking 2010 and inserting 2015.
						DOther Extensions
				251.Authority to disclose information related
			 to terrorist activities made permanent
					(a)In generalSubparagraph (C) of section 6103(i)(3) is
			 amended by striking clause (iv).
					(b)Disclosure on requestParagraph (7) of section 6103(i) is amended
			 by striking subparagraph (E).
					(c)Effective
			 dateThe amendments made by
			 this section shall apply to disclosures after the date of the enactment of this
			 Act.
					252.Authority for undercover operations made
			 permanent
					(a)In generalSubsection (c) of section 7608 is amended
			 by striking paragraph (6).
					(b)Effective
			 dateThe amendment made by
			 this section shall take effect on January 1, 2008.
					253.Increase in limit on cover over of rum
			 excise tax to Puerto Rico and the Virgin Islands
					(a)In generalParagraph (1) of section 7652(f) is amended
			 by striking January 1, 2008 and inserting January 1,
			 2009.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to distilled spirits brought into the United States
			 after December 31, 2007.
					IIIAdditional relief
			AIndividual tax relief
				301.$8,500 income threshold used to calculate
			 refundable portion of child tax credit
					(a)In generalSection 24(d) is amended by adding at the
			 end the following new paragraph:

							(4)Special rule for 2008Notwithstanding paragraph (3), in the case
				of any taxable year beginning in 2008, the dollar amount in effect for such
				taxable year under paragraph (1)(B)(i) shall be
				$8,500.
							.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to taxable years beginning after December 31,
			 2007.
					302.Income averaging for amounts received in
			 connection with the Exxon Valdez litigation
					(a)Income averaging of amounts received from
			 the Exxon Valdez litigationFor purposes of section 1301 of the
			 Internal Revenue Code of 1986—
						(1)any qualified taxpayer who receives any
			 qualified settlement income in any taxable year shall be treated as engaged in
			 a fishing business (determined without regard to the commercial nature of the
			 business), and
						(2)such qualified settlement income shall be
			 treated as income attributable to such a fishing business for such taxable
			 year.
						(b)Contributions of amounts received to
			 retirement accounts
						(1)In generalAny qualified taxpayer who receives
			 qualified settlement income during the taxable year may, at any time before the
			 end of the taxable year in which such income was received, make one or more
			 contributions to an eligible retirement plan of which such qualified taxpayer
			 is a beneficiary in an aggregate amount not to exceed the lesser of—
							(A)$100,000 (reduced by the amount of
			 qualified settlement income contributed to an eligible retirement plan in prior
			 taxable years pursuant to this subsection), or
							(B)the amount of qualified settlement income
			 received by the individual during the taxable year.
							(2)Time when contributions deemed
			 madeFor purposes of
			 paragraph (1), a qualified taxpayer shall be deemed to have made a contribution
			 to an eligible retirement plan on the last day of the taxable year in which
			 such income is received 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).
						(3)Treatment of contributions to eligible
			 retirement plansFor purposes
			 of the Internal Revenue Code of 1986, if a contribution is made pursuant to
			 paragraph (1) with respect to qualified settlement income, then—
							(A)except as provided in paragraph (4)—
								(i)to the extent of such contribution, the
			 qualified settlement income shall not be included in taxable income, and
								(ii)for purposes of section 72 of such Code,
			 such contribution shall not be considered to be investment in the
			 contract,
								(B)the qualified taxpayer shall, to the extent
			 of the amount of the contribution, be treated—
								(i)as having received the qualified settlement
			 income—
									(I)in the case of a contribution to an
			 individual retirement plan (as defined under section 7701(a)(37) of such Code),
			 in a distribution described in section 408(d)(3) of such Code, and
									(II)in the case of any other eligible
			 retirement plan, in an eligible rollover distribution (as defined under section
			 402(f)(2) of such Code), and
									(ii)as having transferred the amount to the
			 eligible retirement plan in a direct trustee to trustee transfer within 60 days
			 of the distribution,
								(C)section 408(d)(3)(B) of the Internal
			 Revenue Code of 1986 shall not apply with respect to amounts treated as a
			 rollover under this paragraph, and
							(D)section 408A(c)(3)(B) of the Internal
			 Revenue Code of 1986 shall not apply with respect to amounts contributed to a
			 Roth IRA (as defined under section 408A(b) of such Code) or a designated Roth
			 contribution to an applicable retirement plan (within the meaning of section
			 402A of such Code) under this paragraph.
							(4)Special rule for Roth IRAs and Roth
			 401(k)sFor purposes of the Internal Revenue Code
			 of 1986, if a contribution is made pursuant to paragraph (1) with respect to
			 qualified settlement income to a Roth IRA (as defined under section 408A(b) of
			 such Code) or as a designated Roth contribution to an applicable retirement
			 plan (within the meaning of section 402A of such Code), then—
							(A)the qualified settlement income shall be
			 includible in taxable income, and
							(B)for purposes of section 72 of such Code,
			 such contribution shall be considered to be investment in the contract.
							(5)Eligible retirement planFor purpose of this subsection, the term
			 eligible retirement plan has the meaning given such term under
			 section 402(c)(8)(B) of the Internal Revenue Code of 1986.
						(c)Treatment of qualified settlement income
			 under employment taxes
						(1)SECAFor purposes of chapter 2 of the Internal
			 Revenue Code of 1986 and section 211 of the Social Security Act, no portion of
			 qualified settlement income received by a qualified taxpayer shall be treated
			 as self-employment income.
						(2)FICAFor purposes of chapter 21 of the Internal
			 Revenue Code of 1986 and section 209 of the Social Security Act, no portion of
			 qualified settlement income received by a qualified taxpayer shall be treated
			 as wages.
						(d)Qualified taxpayerFor purposes of this section, the term
			 qualified taxpayer means—
						(1)any individual who is a plaintiff in the
			 civil action In re Exxon Valdez, No. 89–095–CV (HRH) (Consolidated) (D.
			 Alaska); or
						(2)any individual who is a beneficiary of the
			 estate of such a plaintiff who—
							(A)acquired the right to receive qualified
			 settlement income from that plaintiff; and
							(B)was the spouse or an immediate relative of
			 that plaintiff.
							(e)Qualified settlement incomeFor purposes of this section, the term
			 qualified settlement income means any interest and punitive damage
			 awards which are—
						(1)otherwise includible in taxable income,
			 and
						(2)received (whether as lump sums or periodic
			 payments) in connection with the civil action In re Exxon Valdez, No. 89–095–CV
			 (HRH) (Consolidated) (D. Alaska) (whether pre- or post-judgment and whether
			 related to a settlement or judgment).
						BBusiness related provisions
				311.Provisions related to film and television
			 productions
					(a)Modification of limitation on
			 expensingSubparagraph (A) of
			 section 181(a)(2) is amended to read as follows:

							(A)In generalParagraph (1) shall not apply to so much of
				the aggregate cost of any qualified film or television production as exceeds
				$15,000,000.
							.
					(b)Modifications to deduction for domestic
			 activities
						(1)Determination of W–2 wagesParagraph (2) of section 199(b) is amended
			 by adding at the end the following new subparagraph:

								(D)Special rule for qualified
				filmIn the case of a
				qualified film, such term shall include compensation for services performed in
				the United States by actors, production personnel, directors, and
				producers.
								.
						(2)Definition of qualified filmParagraph (6) of section 199(c) is amended
			 by adding at the end the following: A qualified film shall include any
			 copyrights, trademarks, or other intangibles with respect to such film. The
			 methods and means of distributing a qualified film shall not affect the
			 availability of the deduction under this section..
						(3)PartnershipsSubparagraph (A) of section 199(d)(1) is
			 amended by striking and at the end of clause (ii), by striking
			 the period at the end of clause (iii) and inserting , and, and
			 by adding at the end the following new clause:

								(iv)in the case of each partner of a
				partnership, or shareholder of an S corporation, who owns (directly or
				indirectly) at least 20 percent of the capital interests in such partnership or
				of the stock of such S corporation—
									(I)such partner or shareholder shall be
				treated as having engaged directly in any film produced by such partnership or
				S corporation, and
									(II)such partnership or S corporation shall be
				treated as having engaged directly in any film produced by such partner or
				shareholder.
									.
						(c)Effective date
						(1)In generalExcept as otherwise provided in this
			 subsection, the amendments made by this section shall apply to taxable years
			 beginning after December 31, 2007.
						(2)ExpensingThe amendments made by subsection (a) shall
			 apply to qualified film and television productions commencing after December
			 31, 2007.
						312.Modification of rate of excise tax on
			 certain wooden arrows designed for use by children
					(a)In generalParagraph (2) of section 4161(b) is amended
			 by redesignating subparagraph (B) as subparagraph (C) and by inserting after
			 subparagraph (A) the following new subparagraph:

							(B)Exemption for certain wooden arrow
				shaftsSubparagraph (A) shall
				not apply to any shaft consisting of all natural wood with no laminations or
				artificial means of enhancing the spine of such shaft (whether sold separately
				or incorporated as part of a finished or unfinished product) of a type used in
				the manufacture of any arrow which after its assembly—
								(i)measures 5/16 of an
				inch or less in diameter, and
								(ii)is not suitable for use with a bow
				described in paragraph
				(1)(A).
								.
					(b)Effective
			 dateThe amendments made by
			 this section shall apply to shafts first sold after the date of enactment of
			 this Act.
					313.Mental health parity
					(a)Amendments to ERISASection 712 of the
			 Employee Retirement Income Security Act of
			 1974 (29 U.S.C. 1185a) is amended—
						(1)in subsection (a), by adding at the end the
			 following:

								(3)Financial requirements and treatment
				limitations
									(A)In generalIn the case of a group health plan (or
				health insurance coverage offered in connection with such a plan) that provides
				both medical and surgical benefits and mental health or substance use disorder
				benefits, such plan or coverage shall ensure that—
										(i)the financial requirements applicable to
				such mental health or substance use disorder benefits are no more restrictive
				than the predominant financial requirements applied to substantially all
				medical and surgical benefits covered by the plan (or coverage), and there are
				no separate cost sharing requirements that are applicable only with respect to
				mental health or substance use disorder benefits; and
										(ii)the treatment limitations applicable to
				such mental health or substance use disorder benefits are no more restrictive
				than the predominant treatment limitations applied to substantially all medical
				and surgical benefits covered by the plan (or coverage) and there are no
				separate treatment limitations that are applicable only with respect to mental
				health or substance use disorder benefits.
										(B)DefinitionsIn this paragraph:
										(i)Financial requirementThe term financial
				requirement includes deductibles, copayments, coinsurance, and
				out-of-pocket expenses, but excludes an aggregate lifetime limit and an annual
				limit subject to paragraphs (1) and (2).
										(ii)PredominantA financial requirement or treatment limit
				is considered to be predominant if it is the most common or frequent of such
				type of limit or requirement.
										(iii)Treatment limitationThe term treatment limitation
				includes limits on the frequency of treatment, number of visits, days of
				coverage, or other similar limits on the scope or duration of treatment.
										(4)Availability of plan
				informationThe criteria for
				medical necessity determinations made under the plan with respect to mental
				health or substance use disorder benefits (or the health insurance coverage
				offered in connection with the plan with respect to such benefits) shall be
				made available by the plan administrator (or the health insurance issuer
				offering such coverage) in accordance with regulations to any current or
				potential participant, beneficiary, or contracting provider upon request. The
				reason for any denial under the plan (or coverage) of reimbursement or payment
				for services with respect to mental health or substance use disorder benefits
				in the case of any participant or beneficiary shall, on request or as otherwise
				required, be made available by the plan administrator (or the health insurance
				issuer offering such coverage) to the participant or beneficiary in accordance
				with regulations.
								(5)Out-of-network providersIn the case of a plan or coverage that
				provides both medical and surgical benefits and mental health or substance use
				disorder benefits, if the plan or coverage provides coverage for medical or
				surgical benefits provided by out-of-network providers, the plan or coverage
				shall provide coverage for mental health or substance use disorder benefits
				provided by out-of-network providers in a manner that is consistent with the
				requirements of this
				section.
								;
						(2)in subsection (b), by amending paragraph
			 (2) to read as follows:

								(2)in the case of a group health plan (or
				health insurance coverage offered in connection with such a plan) that provides
				mental health or substance use disorder benefits, as affecting the terms and
				conditions of the plan or coverage relating to such benefits under the plan or
				coverage, except as provided in subsection
				(a).
								;
						(3)in subsection (c)—
							(A)in paragraph (1)(B)—
								(i)by inserting (or 1 in the case of an
			 employer residing in a State that permits small groups to include a single
			 individual) after at least 2 the first place that such
			 appears; and
								(ii)by striking and who employs at least
			 2 employees on the first day of the plan year; and
								(B)by striking paragraph (2) and inserting the
			 following:

									(2)Cost Exemption
										(A)In generalWith respect to a group health plan (or
				health insurance coverage offered in connection with such a plan), if the
				application of this section to such plan (or coverage) results in an increase
				for the plan year involved of the actual total costs of coverage with respect
				to medical and surgical benefits and mental health and substance use disorder
				benefits under the plan (as determined and certified under subparagraph (C)) by
				an amount that exceeds the applicable percentage described in subparagraph (B)
				of the actual total plan costs, the provisions of this section shall not apply
				to such plan (or coverage) during the following plan year, and such exemption
				shall apply to the plan (or coverage) for 1 plan year. An employer may elect to
				continue to apply mental health and substance use disorder parity pursuant to
				this section with respect to the group health plan (or coverage) involved
				regardless of any increase in total costs.
										(B)Applicable percentageWith respect to a plan (or coverage), the
				applicable percentage described in this subparagraph shall be—
											(i)2 percent in the case of the first plan
				year in which this section is applied; and
											(ii)1 percent in the case of each subsequent
				plan year.
											(C)Determinations by actuariesDeterminations as to increases in actual
				costs under a plan (or coverage) for purposes of this section shall be made and
				certified by a qualified and licensed actuary who is a member in good standing
				of the American Academy of Actuaries. All such determinations shall be in a
				written report prepared by the actuary. The report, and all underlying
				documentation relied upon by the actuary, shall be maintained by the group
				health plan or health insurance issuer for a period of 6 years following the
				notification made under subparagraph (E).
										(D)6-month determinationsIf a group health plan (or a health
				insurance issuer offering coverage in connection with a group health plan)
				seeks an exemption under this paragraph, determinations under subparagraph (A)
				shall be made after such plan (or coverage) has complied with this section for
				the first 6 months of the plan year involved.
										(E)Notification
											(i)In generalA group health plan (or a health insurance
				issuer offering coverage in connection with a group health plan) that, based
				upon a certification described under subparagraph (C), qualifies for an
				exemption under this paragraph, and elects to implement the exemption, shall
				notify the Secretary, the appropriate State agencies, and participants and
				beneficiaries in the plan of such election in a timely manner promptly
				following such certification.
											(ii)RequirementA notification to the Secretary under
				clause (i) shall include—
												(I)a description of the number of covered
				lives under the plan (or coverage) involved at the time of the notification,
				and as applicable, at the time of any prior election of the cost-exemption
				under this paragraph by such plan (or coverage);
												(II)for both the plan year upon which a cost
				exemption is sought and the year prior, a description of the actual total costs
				of coverage with respect to medical and surgical benefits and mental health and
				substance use disorder benefits under the plan; and
												(III)for both the plan year upon which a cost
				exemption is sought and the year prior, the actual total costs of coverage with
				respect to mental health and substance use disorder benefits under the
				plan.
												(iii)ConfidentialityA notification to the Secretary under
				clause (i) shall be confidential. The Secretary shall make available, upon
				request and on not more than an annual basis, an anonymous itemization of such
				notifications, that includes—
												(I)a breakdown of States by the size and type
				of employers submitting such notification; and
												(II)a summary of the data received under clause
				(ii).
												(F)Audits by appropriate
				agenciesTo determine
				compliance with this paragraph, the Secretary may audit the books and records
				of a group health plan or health insurance issuer relating to an exemption,
				including any actuarial reports prepared pursuant to subparagraph (C), during
				the 6 year period following the notification of such exemption under
				subparagraph (E). A State agency receiving a notification under subparagraph
				(E) may also conduct such an audit with respect to an exemption covered by such
				notification.
										;
							(4)in subsection (e), by striking paragraph
			 (4) and inserting the following:

								(4)Mental health benefitsThe term mental health
				benefits means benefits with respect to services for mental health
				conditions, as defined under the terms of the plan and in accordance with
				applicable Federal and State law.
								(5)Substance use disorder
				benefitsThe term
				substance use disorder benefits means benefits with respect to
				services for substance use disorders, as defined under the terms of the plan
				and in accordance with applicable Federal and State
				law.
								;
						(5)by striking subsection (f);
						(6)by inserting after subsection (e) the
			 following:

								(f)Secretary reportThe Secretary shall, by January 1, 2012,
				and every two years thereafter, submit to the appropriate committees of
				Congress a report on compliance of group health plans (and health insurance
				coverage offered in connection with such plans) with the requirements of this
				section. Such report shall include the results of any surveys or audits on
				compliance of group health plans (and health insurance coverage offered in
				connection with such plans) with such requirements and an analysis of the
				reasons for any failures to comply.
								(g)Notice and assistanceThe Secretary, in cooperation with the
				Secretaries of Health and Human Services and Treasury, as appropriate, shall
				publish and widely disseminate guidance and information for group health plans,
				participants and beneficiaries, applicable State and local regulatory bodies,
				and the National Association of Insurance Commissioners concerning the
				requirements of this section and shall provide assistance concerning such
				requirements and the continued operation of applicable State law. Such guidance
				and information shall inform participants and beneficiaries of how they may
				obtain assistance under this section, including, where appropriate, assistance
				from State consumer and insurance
				agencies.
								;
						(7)by striking mental health
			 benefits and inserting mental health and substance use disorder
			 benefits each place it appears in subsections (a)(1)(B)(i), (a)(1)(C),
			 (a)(2)(B)(i), and (a)(2)(C); and
						(8)by striking mental health
			 benefits and inserting mental health or substance use disorder
			 benefits each place it appears (other than in any provision amended by
			 the previous paragraph).
						(b)Amendments to Public Health Service
			 ActSection 2705 of the
			 Public Health Service Act  (42
			 U.S.C. 300gg–5) is amended—
						(1)in subsection (a), by adding at the end the
			 following:

								(3)Financial requirements and treatment
				limitations
									(A)In generalIn the case of a group health plan (or
				health insurance coverage offered in connection with such a plan) that provides
				both medical and surgical benefits and mental health or substance use disorder
				benefits, such plan or coverage shall ensure that—
										(i)the financial requirements applicable to
				such mental health or substance use disorder benefits are no more restrictive
				than the predominant financial requirements applied to substantially all
				medical and surgical benefits covered by the plan (or coverage), and there are
				no separate cost sharing requirements that are applicable only with respect to
				mental health or substance use disorder benefits; and
										(ii)the treatment limitations applicable to
				such mental health or substance use disorder benefits are no more restrictive
				than the predominant treatment limitations applied to substantially all medical
				and surgical benefits covered by the plan (or coverage) and there are no
				separate treatment limitations that are applicable only with respect to mental
				health or substance use disorder benefits.
										(B)DefinitionsIn this paragraph:
										(i)Financial requirementThe term financial
				requirement includes deductibles, copayments, coinsurance, and
				out-of-pocket expenses, but excludes an aggregate lifetime limit and an annual
				limit subject to paragraphs (1) and (2).
										(ii)PredominantA financial requirement or treatment limit
				is considered to be predominant if it is the most common or frequent of such
				type of limit or requirement.
										(iii)Treatment limitationThe term treatment limitation
				includes limits on the frequency of treatment, number of visits, days of
				coverage, or other similar limits on the scope or duration of treatment.
										(4)Availability of plan
				informationThe criteria for
				medical necessity determinations made under the plan with respect to mental
				health or substance use disorder benefits (or the health insurance coverage
				offered in connection with the plan with respect to such benefits) shall be
				made available by the plan administrator (or the health insurance issuer
				offering such coverage) in accordance with regulations to any current or
				potential participant, beneficiary, or contracting provider upon request. The
				reason for any denial under the plan (or coverage) of reimbursement or payment
				for services with respect to mental health or substance use disorder benefits
				in the case of any participant or beneficiary shall, on request or as otherwise
				required, be made available by the plan administrator (or the health insurance
				issuer offering such coverage) to the participant or beneficiary in accordance
				with regulations.
								(5)Out-of-network providersIn the case of a plan or coverage that
				provides both medical and surgical benefits and mental health or substance use
				disorder benefits, if the plan or coverage provides coverage for medical or
				surgical benefits provided by out-of-network providers, the plan or coverage
				shall provide coverage for mental health or substance use disorder benefits
				provided by out-of-network providers in a manner that is consistent with the
				requirements of this
				section.
								;
						(2)in subsection (b), by amending paragraph
			 (2) to read as follows:

								(2)in the case of a group health plan (or
				health insurance coverage offered in connection with such a plan) that provides
				mental health or substance use disorder benefits, as affecting the terms and
				conditions of the plan or coverage relating to such benefits under the plan or
				coverage, except as provided in subsection
				(a).
								;
						(3)in subsection (c)—
							(A)in paragraph (1), by inserting before the
			 period the following: (as defined in section 2791(e)(4), except that for
			 purposes of this paragraph such term shall include employers with 1 employee in
			 the case of an employer residing in a State that permits small groups to
			 include a single individual); and
							(B)by striking paragraph (2) and inserting the
			 following:

									(2)Cost Exemption
										(A)In generalWith respect to a group health plan (or
				health insurance coverage offered in connection with such a plan), if the
				application of this section to such plan (or coverage) results in an increase
				for the plan year involved of the actual total costs of coverage with respect
				to medical and surgical benefits and mental health and substance use disorder
				benefits under the plan (as determined and certified under subparagraph (C)) by
				an amount that exceeds the applicable percentage described in subparagraph (B)
				of the actual total plan costs, the provisions of this section shall not apply
				to such plan (or coverage) during the following plan year, and such exemption
				shall apply to the plan (or coverage) for 1 plan year. An employer may elect to
				continue to apply mental health and substance use disorder parity pursuant to
				this section with respect to the group health plan (or coverage) involved
				regardless of any increase in total costs.
										(B)Applicable percentageWith respect to a plan (or coverage), the
				applicable percentage described in this subparagraph shall be—
											(i)2 percent in the case of the first plan
				year in which this section is applied; and
											(ii)1 percent in the case of each subsequent
				plan year.
											(C)Determinations by actuariesDeterminations as to increases in actual
				costs under a plan (or coverage) for purposes of this section shall be made and
				certified by a qualified and licensed actuary who is a member in good standing
				of the American Academy of Actuaries. All such determinations shall be in a
				written report prepared by the actuary. The report, and all underlying
				documentation relied upon by the actuary, shall be maintained by the group
				health plan or health insurance issuer for a period of 6 years following the
				notification made under subparagraph (E).
										(D)6-month determinationsIf a group health plan (or a health
				insurance issuer offering coverage in connection with a group health plan)
				seeks an exemption under this paragraph, determinations under subparagraph (A)
				shall be made after such plan (or coverage) has complied with this section for
				the first 6 months of the plan year involved.
										(E)Notification
											(i)In generalA group health plan (or a health insurance
				issuer offering coverage in connection with a group health plan) that, based
				upon a certification described under subparagraph (C), qualifies for an
				exemption under this paragraph, and elects to implement the exemption, shall
				notify the Secretary, the appropriate State agencies, and participants and
				beneficiaries in the plan of such election in a timely manner promptly
				following such certification.
											(ii)RequirementA notification to the Secretary under
				clause (i) shall include—
												(I)a description of the number of covered
				lives under the plan (or coverage) involved at the time of the notification,
				and as applicable, at the time of any prior election of the cost-exemption
				under this paragraph by such plan (or coverage);
												(II)for both the plan year upon which a cost
				exemption is sought and the year prior, a description of the actual total costs
				of coverage with respect to medical and surgical benefits and mental health and
				substance use disorder benefits under the plan; and
												(III)for both the plan year upon which a cost
				exemption is sought and the year prior, the actual total costs of coverage with
				respect to mental health and substance use disorder benefits under the
				plan.
												(iii)ConfidentialityA notification to the Secretary under
				clause (i) shall be confidential. The Secretary shall make available, upon
				request and on not more than an annual basis, an anonymous itemization of such
				notifications, that includes—
												(I)a breakdown of States by the size and type
				of employers submitting such notification; and
												(II)a summary of the data received under clause
				(ii).
												(F)Audits by appropriate
				agenciesTo determine
				compliance with this paragraph, the Secretary may audit the books and records
				of a group health plan or health insurance issuer relating to an exemption,
				including any actuarial reports prepared pursuant to subparagraph (C), during
				the 6 year period following the notification of such exemption under
				subparagraph (E). A State agency receiving a notification under subparagraph
				(E) may also conduct such an audit with respect to an exemption covered by such
				notification.
										;
							(4)in subsection (e), by striking paragraph
			 (4) and inserting the following:

								(4)Mental health benefitsThe term mental health
				benefits means benefits with respect to services for mental health
				conditions, as defined under the terms of the plan and in accordance with
				applicable Federal and State law.
								(5)Substance use disorder
				benefitsThe term
				substance use disorder benefits means benefits with respect to
				services for substance use disorders, as defined under the terms of the plan
				and in accordance with applicable Federal and State
				law.
								;
						(5)by striking subsection (f);
						(6)by striking mental health
			 benefits and inserting mental health and substance use disorder
			 benefits each place it appears in subsections (a)(1)(B)(i), (a)(1)(C),
			 (a)(2)(B)(i), and (a)(2)(C); and
						(7)by striking mental health
			 benefits and inserting mental health or substance use disorder
			 benefits each place it appears (other than in any provision amended by
			 the previous paragraph).
						(c)Amendments to Internal Revenue
			 CodeSection 9812 is
			 amended—
						(1)in subsection (a), by adding at the end the
			 following:

								(3)Financial requirements and treatment
				limitations
									(A)In generalIn the case of a group health plan that
				provides both medical and surgical benefits and mental health or substance use
				disorder benefits, such plan shall ensure that—
										(i)the financial requirements applicable to
				such mental health or substance use disorder benefits are no more restrictive
				than the predominant financial requirements applied to substantially all
				medical and surgical benefits covered by the plan, and there are no separate
				cost sharing requirements that are applicable only with respect to mental
				health or substance use disorder benefits; and
										(ii)the treatment limitations applicable to
				such mental health or substance use disorder benefits are no more restrictive
				than the predominant treatment limitations applied to substantially all medical
				and surgical benefits covered by the plan and there are no separate treatment
				limitations that are applicable only with respect to mental health or substance
				use disorder benefits.
										(B)DefinitionsIn this paragraph:
										(i)Financial requirementThe term financial
				requirement includes deductibles, copayments, coinsurance, and
				out-of-pocket expenses, but excludes an aggregate lifetime limit and an annual
				limit subject to paragraphs (1) and (2).
										(ii)PredominantA financial requirement or treatment limit
				is considered to be predominant if it is the most common or frequent of such
				type of limit or requirement.
										(iii)Treatment limitationThe term treatment limitation
				includes limits on the frequency of treatment, number of visits, days of
				coverage, or other similar limits on the scope or duration of treatment.
										(4)Availability of plan
				informationThe criteria for
				medical necessity determinations made under the plan with respect to mental
				health or substance use disorder benefits shall be made available by the plan
				administrator in accordance with regulations to any current or potential
				participant, beneficiary, or contracting provider upon request. The reason for
				any denial under the plan of reimbursement or payment for services with respect
				to mental health or substance use disorder benefits in the case of any
				participant or beneficiary shall, on request or as otherwise required, be made
				available by the plan administrator to the participant or beneficiary in
				accordance with regulations.
								(5)Out-of-network providersIn the case of a plan that provides both
				medical and surgical benefits and mental health or substance use disorder
				benefits, if the plan provides coverage for medical or surgical benefits
				provided by out-of-network providers, the plan shall provide coverage for
				mental health or substance use disorder benefits provided by out-of-network
				providers in a manner that is consistent with the requirements of this
				section.
								;
						(2)in subsection (b), by amending paragraph
			 (2) to read as follows:

								(2)in the case of a group health plan that
				provides mental health or substance use disorder benefits, as affecting the
				terms and conditions of the plan relating to such benefits under the plan,
				except as provided in subsection
				(a).
								;
						(3)in subsection (c)—
							(A)by amending paragraph (1) to read as
			 follows:

									(1)Small employer exemption
										(A)In generalThis section shall not apply to any group
				health plan for any plan year of a small employer.
										(B)Small
				employerFor purposes of
				subparagraph (A), the term small employer means, with respect to
				a calendar year and a plan year, an employer who employed an average of at
				least 2 (or 1 in the case of an employer residing in a State that permits small
				groups to include a single individual) but not more than 50 employees on
				business days during the preceding calendar year. For purposes of the preceding
				sentence, all persons treated as a single employer under subsection (b), (c),
				(m), or (o) of section 414 shall be treated as 1 employer and rules similar to
				rules of subparagraphs (B) and (C) of section 4980D(d)(2) shall
				apply.
										;
				and
							(B)by striking paragraph (2) and inserting the
			 following:

									(2)Cost exemption
										(A)In generalWith respect to a group health plan, if the
				application of this section to such plan results in an increase for the plan
				year involved of the actual total costs of coverage with respect to medical and
				surgical benefits and mental health and substance use disorder benefits under
				the plan (as determined and certified under subparagraph (C)) by an amount that
				exceeds the applicable percentage described in subparagraph (B) of the actual
				total plan costs, the provisions of this section shall not apply to such plan
				during the following plan year, and such exemption shall apply to the plan for
				1 plan year. An employer may elect to continue to apply mental health and
				substance use disorder parity pursuant to this section with respect to the
				group health plan involved regardless of any increase in total costs.
										(B)Applicable percentageWith respect to a plan, the applicable
				percentage described in this subparagraph shall be—
											(i)2 percent in the case of the first plan
				year in which this section is applied; and
											(ii)1 percent in the case of each subsequent
				plan year.
											(C)Determinations by actuariesDeterminations as to increases in actual
				costs under a plan for purposes of this section shall be made and certified by
				a qualified and licensed actuary who is a member in good standing of the
				American Academy of Actuaries. All such determinations shall be in a written
				report prepared by the actuary. The report, and all underlying documentation
				relied upon by the actuary, shall be maintained by the group health plan for a
				period of 6 years following the notification made under subparagraph
				(E).
										(D)6-month determinationsIf a group health plan seeks an exemption
				under this paragraph, determinations under subparagraph (A) shall be made after
				such plan has complied with this section for the first 6 months of the plan
				year involved.
										(E)Notification
											(i)In generalA group health plan that, based upon a
				certification described under subparagraph (C), qualifies for an exemption
				under this paragraph, and elects to implement the exemption, shall notify the
				Secretary, the appropriate State agencies, and participants and beneficiaries
				in the plan of such election in a timely manner promptly following such
				certification.
											(ii)RequirementA notification to the Secretary under
				clause (i) shall include—
												(I)a description of the number of covered
				lives under the plan involved at the time of the notification, and as
				applicable, at the time of any prior election of the cost-exemption under this
				paragraph by such plan;
												(II)for both the plan year upon which a cost
				exemption is sought and the year prior, a description of the actual total costs
				of coverage with respect to medical and surgical benefits and mental health and
				substance use disorder benefits under the plan; and
												(III)for both the plan year upon which a cost
				exemption is sought and the year prior, the actual total costs of coverage with
				respect to mental health and substance use disorder benefits under the
				plan.
												(iii)ConfidentialityA notification to the Secretary under
				clause (i) shall be confidential. The Secretary shall make available, upon
				request and on not more than an annual basis, an anonymous itemization of such
				notifications, that includes—
												(I)a breakdown of States by the size and type
				of employers submitting such notification; and
												(II)a summary of the data received under clause
				(ii).
												(F)Audits by appropriate
				agenciesTo determine
				compliance with this paragraph, the Secretary may audit the books and records
				of a group health plan relating to an exemption, including any actuarial
				reports prepared pursuant to subparagraph (C), during the 6 year period
				following the notification of such exemption under subparagraph (E). A State
				agency receiving a notification under subparagraph (E) may also conduct such an
				audit with respect to an exemption covered by such
				notification.
										;
							(4)in subsection (e), by striking paragraph
			 (4) and inserting the following:

								(4)Mental health benefitsThe term mental health
				benefits means benefits with respect to services for mental health
				conditions, as defined under the terms of the plan and in accordance with
				applicable Federal and State law.
								(5)Substance use disorder
				benefitsThe term
				substance use disorder benefits means benefits with respect to
				services for substance use disorders, as defined under the terms of the plan
				and in accordance with applicable Federal and State
				law.
								;
						(5)by striking subsection (f);
						(6)by striking mental health
			 benefits and inserting mental health and substance use disorder
			 benefits each place it appears in subsections (a)(1)(B)(i), (a)(1)(C),
			 (a)(2)(B)(i), and (a)(2)(C); and
						(7)by striking mental health
			 benefits and inserting mental health or substance use disorder
			 benefits each place it appears (other than in any provision amended by
			 the previous paragraph).
						(d)RegulationsNot later than 1 year after the date of
			 enactment of this Act, the Secretaries of Labor, Health and Human Services, and
			 the Treasury shall issue regulations to carry out the amendments made by
			 subsections (a), (b), and (c), respectively.
					(e)Effective date
						(1)In generalThe amendments made by this section shall
			 apply with respect to group health plans for plan years beginning after the
			 date that is 1 year after the date of enactment of this Act, regardless of
			 whether regulations have been issued to carry out such amendment by such
			 effective date, except that the amendments made by subsections (a)(5), (b)(5),
			 and (c)(5) shall take effect on January 1, 2009.
						(2)Special rule for collective bargaining
			 agreementsIn the case of a
			 group health plan maintained pursuant to one or more collective bargaining
			 agreements between employee representatives and one or more employers ratified
			 before the date of the enactment of this Act, the amendments made by this
			 section shall not apply to plan years beginning before the later of—
							(A)the date on which the last of the
			 collective bargaining agreements relating to the plan terminates (determined
			 without regard to any extension thereof agreed to after the date of the
			 enactment of this Act), or
							(B)January 1, 2009.
							For purposes of subparagraph (A), any
			 plan amendment made pursuant to a collective bargaining agreement relating to
			 the plan which amends the plan solely to conform to any requirement added by
			 this section shall not be treated as a termination of such collective
			 bargaining agreement.(f)Assuring coordinationThe Secretary of Health and Human Services,
			 the Secretary of Labor, and the Secretary of the Treasury may ensure, through
			 the execution or revision of an interagency memorandum of understanding among
			 such Secretaries, that—
						(1)regulations, rulings, and interpretations
			 issued by such Secretaries relating to the same matter over which two or more
			 such Secretaries have responsibility under this section (and the amendments
			 made by this section) are administered so as to have the same effect at all
			 times; and
						(2)coordination of policies relating to
			 enforcing the same requirements through such Secretaries in order to have a
			 coordinated enforcement strategy that avoids duplication of enforcement efforts
			 and assigns priorities in enforcement.
						(g)Conforming clerical amendments
						(1)ERISA heading
							(A)In generalThe heading of section 712 of the Employee
			 Retirement Income Security Act of 1974 is amended to read as follows:

									712.Parity in mental health and substance use
				disorder
				benefits
									.
							(B)Clerical amendmentThe table of contents in section 1 of such
			 Act is amended by striking the item relating to section 712 and inserting the
			 following new item:

										Sec. 712. Parity in mental
				health and substance use disorder
				benefits.

									.
							(2)PHSA headingThe heading of section 2705 of the Public
			 Health Service Act is amended to read as follows:

								2705.Parity in mental health and substance use
				disorder
				benefits
								.
						(3)IRC heading
							(A)In generalThe heading of section 9812 is amended to
			 read as follows:

									9812.Parity in mental health and substance use
				disorder
				benefits
									.
							(B)Clerical amendmentThe table of sections for subchapter B of
			 chapter 100 is amended by striking the item relating to section 9812 and
			 inserting the following new item:

										Sec. 9812. Parity in mental
				health and substance use disorder
				benefits.

									.
							(h)GAO study on coverage and exclusion of
			 mental health and substance use disorder diagnoses
						(1)In generalThe Comptroller General of the United
			 States shall conduct a study that analyzes the specific rates, patterns, and
			 trends in coverage and exclusion of specific mental health and substance use
			 disorder diagnoses by health plans and health insurance. The study shall
			 include an analysis of—
							(A)specific coverage rates for all mental
			 health conditions and substance use disorders;
							(B)which diagnoses are most commonly covered
			 or excluded;
							(C)whether implementation of this Act has
			 affected trends in coverage or exclusion of such diagnoses; and
							(D)the impact of covering or excluding
			 specific diagnoses on participants’ and enrollees’ health, their health care
			 coverage, and the costs of delivering health care.
							(2)ReportsNot later than 3 years after the date of
			 the enactment of this Act, and 2 years after the date of submission the first
			 report under this paragraph, the Comptroller General shall submit to Congress a
			 report on the results of the study conducted under paragraph (1).
						CModification of penalty on understatement
			 of taxpayer’s liability by tax return preparer
				321.Modification of penalty on understatement
			 of taxpayer’s liability by tax return preparer
					(a)In generalSubsection (a) of section 6694 is amended
			 to read as follows:

							(a)Understatement due to unreasonable
				positions
								(1)In generalIf a tax return preparer—
									(A)prepares any return or claim of refund with
				respect to which any part of an understatement of liability is due to a
				position described in paragraph (2), and
									(B)knew (or reasonably should have known) of
				the position,
									such tax return preparer shall pay a
				penalty with respect to each such return or claim in an amount equal to the
				greater of $1,000 or 50 percent of the income derived (or to be derived) by the
				tax return preparer with respect to the return or claim.(2)Unreasonable position
									(A)In generalExcept as otherwise provided in this
				paragraph, a position is described in this paragraph unless there is or was
				substantial authority for the position.
									(B)Disclosed positionsIf the position was disclosed as provided
				in section 6662(d)(2)(B)(ii)(I) and is not a position to which subparagraph (C)
				applies, the position is described in this paragraph unless there is a
				reasonable basis for the position.
									(C)Tax shelters and reportable
				transactionsIf the position
				is with respect to a tax shelter (as defined in section 6662(d)(2)(C)(ii)) or a
				reportable transaction to which section 6662A applies, the position is
				described in this paragraph unless it is reasonable to believe that the
				position would more likely than not be sustained on its merits.
									(3)Reasonable cause exceptionNo penalty shall be imposed under this
				subsection if it is shown that there is reasonable cause for the understatement
				and the tax return preparer acted in good
				faith.
								.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply—
						(1)in the case of a position other than a
			 position described in subparagraph (C) of section 6694(a)(2) of the Internal
			 Revenue Code of 1986 (as amended by this section), to returns prepared after
			 May 25, 2007, and
						(2)in the case of a position described in such
			 subparagraph (C), to returns prepared for taxable years ending after the date
			 of the enactment of this Act.
						DOther provisions
				331.Secure rural schools and community
			 self-determination program
					(a)Reauthorization of the secure rural schools
			 and community self-determination act of 2000The Secure Rural Schools and Community
			 Self-Determination Act of 2000 (16 U.S.C. 500 note; Public Law 106–393) is
			 amended by striking sections 1 through 403 and inserting the following:

							1.Short titleThis Act may be cited as the Secure
				Rural Schools and Community Self-Determination Act of 2000.
							2.PurposesThe purposes of this Act are—
								(1)to stabilize and transition payments to
				counties to provide funding for schools and roads that supplements other
				available funds;
								(2)to make additional investments in, and
				create additional employment opportunities through, projects that—
									(A)(i)improve the maintenance of existing
				infrastructure;
										(ii)implement stewardship objectives that
				enhance forest ecosystems; and
										(iii)restore and improve land health and water
				quality;
										(B)enjoy broad-based support; and
									(C)have objectives that may include—
										(i)road, trail, and infrastructure maintenance
				or obliteration;
										(ii)soil productivity improvement;
										(iii)improvements in forest ecosystem
				health;
										(iv)watershed restoration and
				maintenance;
										(v)the restoration, maintenance, and
				improvement of wildlife and fish habitat;
										(vi)the control of noxious and exotic weeds;
				and
										(vii)the reestablishment of native species;
				and
										(3)to improve cooperative relationships
				among—
									(A)the people that use and care for Federal
				land; and
									(B)the agencies that manage the Federal
				land.
									3.DefinitionsIn this Act:
								(1)Adjusted
				shareThe term adjusted
				share means the number equal to the quotient obtained by
				dividing—
									(A)the number equal to the quotient obtained
				by dividing—
										(i)the base share for the eligible county;
				by
										(ii)the income adjustment for the eligible
				county; by
										(B)the number equal to the sum of the
				quotients obtained under subparagraph (A) and paragraph (8)(A) for all eligible
				counties.
									(2)Base shareThe term base share means the
				number equal to the average of—
									(A)the quotient obtained by dividing—
										(i)the number of acres of Federal land
				described in paragraph (7)(A) in each eligible county; by
										(ii)the total number acres of Federal land in
				all eligible counties in all eligible States; and
										(B)the quotient obtained by dividing—
										(i)the amount equal to the average of the 3
				highest 25-percent payments and safety net payments made to each eligible State
				for each eligible county during the eligibility period; by
										(ii)the amount equal to the sum of the amounts
				calculated under clause (i) and paragraph (9)(B)(i) for all eligible counties
				in all eligible States during the eligibility period.
										(3)County
				paymentThe term county
				payment means the payment for an eligible county calculated under
				section 101(b).
								(4)Eligible countyThe term eligible county means
				any county that—
									(A)contains Federal land (as defined in
				paragraph (7)); and
									(B)elects to receive a share of the State
				payment or the county payment under section 102(b).
									(5)Eligibility periodThe term eligibility period
				means fiscal year 1986 through fiscal year 1999.
								(6)Eligible
				stateThe term eligible
				State means a State or territory of the United States that received a
				25-percent payment for 1 or more fiscal years of the eligibility period.
								(7)Federal landThe term Federal land
				means—
									(A)land within the National Forest System, as
				defined in section 11(a) of the Forest and
				Rangeland Renewable Resources Planning Act of 1974 (16 U.S.C.
				1609(a)) exclusive of the National Grasslands and land utilization projects
				designated as National Grasslands administered pursuant to the Act of July 22,
				1937 (7 U.S.C. 1010–1012); and
									(B)such portions of the revested Oregon and
				California Railroad and reconveyed Coos Bay Wagon Road grant land as are or may
				hereafter come under the jurisdiction of the Department of the Interior, which
				have heretofore or may hereafter be classified as timberlands, and power-site
				land valuable for timber, that shall be managed, except as provided in the
				former section 3 of the Act of August 28, 1937 (50 Stat. 875; 43 U.S.C. 1181c),
				for permanent forest production.
									(8)50-Percent adjusted shareThe term 50-percent adjusted
				share means the number equal to the quotient obtained by
				dividing—
									(A)the number equal to the quotient obtained
				by dividing—
										(i)the 50-percent base share for the eligible
				county; by
										(ii)the income adjustment for the eligible
				county; by
										(B)the number equal to the sum of the
				quotients obtained under subparagraph (A) and paragraph (1)(A) for all eligible
				counties.
									(9)50-Percent base shareThe term 50-percent base share
				means the number equal to the average of—
									(A)the quotient obtained by dividing—
										(i)the number of acres of Federal land
				described in paragraph (7)(B) in each eligible county; by
										(ii)the total number acres of Federal land in
				all eligible counties in all eligible States; and
										(B)the quotient obtained by dividing—
										(i)the amount equal to the average of the 3
				highest 50-percent payments made to each eligible county during the eligibility
				period; by
										(ii)the amount equal to the sum of the amounts
				calculated under clause (i) and paragraph (2)(B)(i) for all eligible counties
				in all eligible States during the eligibility period.
										(10)50-percent paymentThe term 50-percent payment
				means the payment that is the sum of the 50-percent share otherwise paid to a
				county pursuant to title II of the Act of August 28, 1937 (chapter 876; 50
				Stat. 875; 43 U.S.C. 1181f), and the payment made to a county pursuant to the
				Act of May 24, 1939 (chapter 144; 53 Stat. 753; 43 U.S.C. 1181f–1 et
				seq.).
								(11)Full funding amountThe term full funding amount
				means—
									(A)$500,000,000 for fiscal year 2008;
				and
									(B)for fiscal year 2009 and each fiscal year
				thereafter, the amount that is equal to 90 percent of the full funding amount
				for the preceding fiscal year.
									(12)Income adjustmentThe term income adjustment
				means the square of the quotient obtained by dividing—
									(A)the per capita personal income for each
				eligible county; by
									(B)the median per capita personal income of
				all eligible counties.
									(13)Per capita personal incomeThe term per capita personal
				income means the most recent per capita personal income data, as
				determined by the Bureau of Economic Analysis.
								(14)Safety net paymentsThe term safety net payments
				means the special payment amounts paid to States and counties required by
				section 13982 or 13983 of the Omnibus Budget
				Reconciliation Act of 1993 (Public Law 103–66; 16 U.S.C. 500 note;
				43 U.S.C. 1181f note).
								(15)Secretary concernedThe term Secretary concerned
				means—
									(A)the Secretary of Agriculture or the
				designee of the Secretary of Agriculture with respect to the Federal land
				described in paragraph (7)(A); and
									(B)the Secretary of the Interior or the
				designee of the Secretary of the Interior with respect to the Federal land
				described in paragraph (7)(B).
									(16)State paymentThe term State payment means
				the payment for an eligible State calculated under section 101(a).
								(17)25-Percent paymentThe term 25-percent payment
				means the payment to States required by the sixth paragraph under the heading
				of FOREST SERVICE in the Act of May
				23, 1908 (35 Stat. 260; 16 U.S.C. 500), and section 13 of the Act of March 1,
				1911 (36 Stat. 963; 16 U.S.C. 500).
								ISECURE PAYMENTS FOR STATES AND COUNTIES
				CONTAINING FEDERAL LAND
								101.Secure payments for States containing
				Federal land
									(a)State PaymentFor each of fiscal years 2008 through 2011,
				the Secretary of Agriculture shall calculate for each eligible State an amount
				equal to the sum of the products obtained by multiplying—
										(1)the adjusted share for each eligible county
				within the eligible State; by
										(2)the full funding amount for the fiscal
				year.
										(b)County
				PaymentFor each of fiscal
				years 2008 through 2011, the Secretary of the Interior shall calculate for each
				eligible county that received a 50-percent payment during the eligibility
				period an amount equal to the product obtained by multiplying—
										(1)the 50-percent adjusted share for the
				eligible county; by
										(2)the full funding amount for the fiscal
				year.
										102.Payments to States and counties
									(a)Payment AmountsExcept as provided in section 103, the
				Secretary of the Treasury shall pay to—
										(1)a State or territory of the United States
				an amount equal to the sum of the amounts elected under subsection (b) by each
				county within the State or territory for—
											(A)if the county is eligible for the
				25-percent payment, the share of the 25-percent payment; or
											(B)the share of the State payment of the
				eligible county; and
											(2)a county an amount equal to the amount
				elected under subsection (b) by each county for—
											(A)if the county is eligible for the
				50-percent payment, the 50-percent payment; or
											(B)the county payment for the eligible
				county.
											(b)Election To Receive Payment Amount
										(1)Election; submission of results
											(A)In generalThe election to receive a share of the
				State payment, the county payment, a share of the State payment and the county
				payment, a share of the 25-percent payment, the 50-percent payment, or a share
				of the 25-percent payment and the 50-percent payment, as applicable, shall be
				made at the discretion of each affected county by August 1, 2008 (or as soon
				thereafter as the Secretary concerned determines is practicable), and August 1
				of each second fiscal year thereafter, in accordance with paragraph (2), and
				transmitted to the Secretary concerned by the Governor of each eligible
				State.
											(B)Failure to transmitIf an election for an affected county is
				not transmitted to the Secretary concerned by the date specified under
				subparagraph (A), the affected county shall be considered to have elected to
				receive a share of the State payment, the county payment, or a share of the
				State payment and the county payment, as applicable.
											(2)Duration of election
											(A)In generalA county election to receive a share of the
				25-percent payment or 50-percent payment, as applicable, shall be effective for
				2 fiscal years.
											(B)Full funding amountIf a county elects to receive a share of
				the State payment or the county payment, the election shall be effective for
				all subsequent fiscal years through fiscal year 2011.
											(3)Source of payment amountsThe payment to an eligible State or
				eligible county under this section for a fiscal year shall be derived
				from—
											(A)any amounts that are appropriated to carry
				out this Act;
											(B)any revenues, fees, penalties, or
				miscellaneous receipts, exclusive of deposits to any relevant trust fund,
				special account, or permanent operating funds, received by the Federal
				Government from activities by the Bureau of Land Management or the Forest
				Service on the applicable Federal land; and
											(C)to the extent of any shortfall, out of any
				amounts in the Treasury of the United States not otherwise appropriated.
											(c)Distribution and Expenditure of
				Payments
										(1)Distribution methodA State that receives a payment under
				subsection (a) for Federal land described in section 3(7)(A) shall distribute
				the appropriate payment amount among the appropriate counties in the State in
				accordance with—
											(A)the Act of May 23, 1908 (16 U.S.C. 500);
				and
											(B)section 13 of the Act of March 1, 1911 (36
				Stat. 963; 16 U.S.C. 500).
											(2)Expenditure purposesSubject to subsection (d), payments
				received by a State under subsection (a) and distributed to counties in
				accordance with paragraph (1) shall be expended as required by the laws
				referred to in paragraph (1).
										(d)Expenditure Rules for Eligible
				Counties
										(1)Allocations
											(A)Use of portion in same manner as 25-percent
				payment or 50-percent payment, as applicableExcept as provided in paragraph (3)(B), if
				an eligible county elects to receive its share of the State payment or the
				county payment, not less than 80 percent, but not more than 85 percent, of the
				funds shall be expended in the same manner in which the 25-percent payments or
				50-percent payment, as applicable, are required to be expended.
											(B)Election as to use of balanceExcept as provided in subparagraph (C), an
				eligible county shall elect to do 1 or more of the following with the balance
				of any funds not expended pursuant to subparagraph (A):
												(i)Reserve any portion of the balance for
				projects in accordance with title II.
												(ii)Reserve not more than 7 percent of the
				total share for the eligible county of the State payment or the county payment
				for projects in accordance with title III.
												(iii)Return the portion of the balance not
				reserved under clauses (i) and (ii) to the Treasury of the United
				States.
												(C)Counties with modest
				distributionsIn the case of
				each eligible county to which more than $100,000, but less than $350,000, is
				distributed for any fiscal year pursuant to either or both of paragraphs (1)(B)
				and (2)(B) of subsection (a), the eligible county, with respect to the balance
				of any funds not expended pursuant to subparagraph (A) for that fiscal year,
				shall—
												(i)reserve any portion of the balance
				for—
													(I)carrying out projects under title
				II;
													(II)carrying out projects under title III;
				or
													(III)a combination of the purposes described in
				subclauses (I) and (II); or
													(ii)return the portion of the balance not
				reserved under clause (i) to the Treasury of the United States.
												(2)Distribution of funds
											(A)In generalFunds reserved by an eligible county under
				subparagraph (B)(i) or (C)(i) of paragraph (1) for carrying out projects under
				title II shall be deposited in a special account in the Treasury of the United
				States.
											(B)AvailabilityAmounts deposited under subparagraph (A)
				shall—
												(i)be available for expenditure by the
				Secretary concerned, without further appropriation; and
												(ii)remain available until expended in
				accordance with title II.
												(3)Election
											(A)Notification
												(i)In generalAn eligible county shall notify the
				Secretary concerned of an election by the eligible county under this subsection
				not later than September 30, 2008 (or as soon thereafter as the Secretary
				concerned determines is practicable), and September 30 of each fiscal year
				thereafter.
												(ii)Failure to electExcept as provided in subparagraph (B), if
				the eligible county fails to make an election by the date specified in clause
				(i), the eligible county shall—
													(I)be considered to have elected to expend 85
				percent of the funds in accordance with paragraph (1)(A); and
													(II)return the balance to the Treasury of the
				United States.
													(B)Counties with minor
				distributionsIn the case of
				each eligible county to which less than $100,000 is distributed for any fiscal
				year pursuant to either or both of paragraphs (1)(B) and (2)(B) of subsection
				(a), the eligible county may elect to expend all the funds in the same manner
				in which the 25-percent payments or 50-percent payments, as applicable, are
				required to be expended.
											(e)Time for PaymentThe payments required under this section
				for a fiscal year shall be made as soon as practicable after the end of that
				fiscal year.
									103.Transition payments to States
									(a)DefinitionsIn this section:
										(1)Adjusted amountThe term adjusted amount
				means, with respect to a covered State—
											(A)for fiscal year 2008, 90 percent of—
												(i)the sum of the amounts paid for fiscal year
				2006 under section 102(a)(2) (as in effect on September 29, 2006) for the
				eligible counties in the covered State that have elected under section 102(b)
				to receive a share of the State payment for fiscal year 2008; and
												(ii)the sum of the amounts paid for fiscal year
				2006 under section 103(a)(2) (as in effect on September 29, 2006) for the
				eligible counties in the State of Oregon that have elected under section 102(b)
				to receive the county payment for fiscal year 2008;
												(B)for fiscal year 2009, 76 percent of—
												(i)the sum of the amounts paid for fiscal year
				2006 under section 102(a)(2) (as in effect on September 29, 2006) for the
				eligible counties in the covered State that have elected under section 102(b)
				to receive a share of the State payment for fiscal year 2009; and
												(ii)the sum of the amounts paid for fiscal year
				2006 under section 103(a)(2) (as in effect on September 29, 2006) for the
				eligible counties in the State of Oregon that have elected under section 102(b)
				to receive the county payment for fiscal year 2009; and
												(C)for fiscal year 2010, 65 percent of—
												(i)the sum of the amounts paid for fiscal year
				2006 under section 102(a)(2) (as in effect on September 29, 2006) for the
				eligible counties in the covered State that have elected under section 102(b)
				to receive a share of the State payment for fiscal year 2010; and
												(ii)the sum of the amounts paid for fiscal year
				2006 under section 103(a)(2) (as in effect on September 29, 2006) for the
				eligible counties in the State of Oregon that have elected under section 102(b)
				to receive the county payment for fiscal year 2010.
												(2)Covered stateThe term covered State means
				each of the States of California, Louisiana, Oregon, Pennsylvania, South
				Carolina, South Dakota, Texas, and Washington.
										(b)Transition PaymentsFor each of fiscal years 2008 through 2010,
				in lieu of the payment amounts that otherwise would have been made under
				paragraphs (1)(B) and (2)(B) of section 102(a), the Secretary of the Treasury
				shall pay the adjusted amount to each covered State and the eligible counties
				within the covered State, as applicable.
									(c)Distribution of Adjusted
				AmountExcept as provided in
				subsection (d), it is the intent of Congress that the method of distributing
				the payments under subsection (b) among the counties in the covered States for
				each of fiscal years 2008 through 2010 be in the same proportion that the
				payments were distributed to the eligible counties in fiscal year 2006.
									(d)Distribution of Payments in
				CaliforniaThe following
				payments shall be distributed among the eligible counties in the State of
				California in the same proportion that payments under section 102(a)(2) (as in
				effect on September 29, 2006) were distributed to the eligible counties for
				fiscal year 2006:
										(1)Payments to the State of California under
				subsection (b).
										(2)The shares of the eligible counties of the
				State payment for California under section 102 for fiscal year 2011.
										(e)Treatment of PaymentsFor purposes of this Act, any payment made
				under subsection (b) shall be considered to be a payment made under section
				102(a).
									IISPECIAL PROJECTS ON FEDERAL LAND
								201.DefinitionsIn this title:
									(1)Participating countyThe term participating county
				means an eligible county that elects under section 102(d) to expend a portion
				of the Federal funds received under section 102 in accordance with this
				title.
									(2)Project fundsThe term project funds means
				all funds an eligible county elects under section 102(d) to reserve for
				expenditure in accordance with this title.
									(3)Resource advisory committeeThe term resource advisory
				committee means—
										(A)an advisory committee established by the
				Secretary concerned under section 205; or
										(B)an advisory committee determined by the
				Secretary concerned to meet the requirements of section 205.
										(4)Resource management planThe term resource management
				plan means—
										(A)a land use plan prepared by the Bureau of
				Land Management for units of the Federal land described in section 3(7)(B)
				pursuant to section 202 of the Federal Land
				Policy and Management Act of 1976 (43 U.S.C. 1712); or
										(B)a land and resource management plan
				prepared by the Forest Service for units of the National Forest System pursuant
				to section 6 of the Forest and Rangeland
				Renewable Resources Planning Act of 1974 (16 U.S.C. 1604).
										202.General limitation on use of project
				funds
									(a)LimitationProject funds shall be expended solely on
				projects that meet the requirements of this title.
									(b)Authorized UsesProject funds may be used by the Secretary
				concerned for the purpose of entering into and implementing cooperative
				agreements with willing Federal agencies, State and local governments, private
				and nonprofit entities, and landowners for protection, restoration, and
				enhancement of fish and wildlife habitat, and other resource objectives
				consistent with the purposes of this Act on Federal land and on non-Federal
				land where projects would benefit the resources on Federal land.
									203.Submission of project proposals
									(a)Submission of Project Proposals to
				Secretary Concerned
										(1)Projects funded using project
				fundsNot later than
				September 30 for fiscal year 2008 (or as soon thereafter as the Secretary
				concerned determines is practicable), and each September 30 thereafter for each
				succeeding fiscal year through fiscal year 2011, each resource advisory
				committee shall submit to the Secretary concerned a description of any projects
				that the resource advisory committee proposes the Secretary undertake using any
				project funds reserved by eligible counties in the area in which the resource
				advisory committee has geographic jurisdiction.
										(2)Projects funded using other
				fundsA resource advisory
				committee may submit to the Secretary concerned a description of any projects
				that the committee proposes the Secretary undertake using funds from State or
				local governments, or from the private sector, other than project funds and
				funds appropriated and otherwise available to do similar work.
										(3)Joint
				projectsParticipating
				counties or other persons may propose to pool project funds or other funds,
				described in paragraph (2), and jointly propose a project or group of projects
				to a resource advisory committee established under section 205.
										(b)Required Description of
				ProjectsIn submitting
				proposed projects to the Secretary concerned under subsection (a), a resource
				advisory committee shall include in the description of each proposed project
				the following information:
										(1)The purpose of the project and a
				description of how the project will meet the purposes of this title.
										(2)The anticipated duration of the
				project.
										(3)The anticipated cost of the project.
										(4)The proposed source of funding for the
				project, whether project funds or other funds.
										(5)(A)Expected outcomes, including how the
				project will meet or exceed desired ecological conditions, maintenance
				objectives, or stewardship objectives.
											(B)An
				estimate of the amount of any timber, forage, and other commodities and other
				economic activity, including jobs generated, if any, anticipated as part of the
				project.
											(6)A detailed monitoring plan, including
				funding needs and sources, that—
											(A)tracks and identifies the positive or
				negative impacts of the project, implementation, and provides for validation
				monitoring; and
											(B)includes an assessment of the
				following:
												(i)Whether or not the project met or exceeded
				desired ecological conditions; created local employment or training
				opportunities, including summer youth jobs programs such as the Youth
				Conservation Corps where appropriate.
												(ii)Whether the project improved the use of, or
				added value to, any products removed from land consistent with the purposes of
				this title.
												(7)An assessment that the project is to be in
				the public interest.
										(c)Authorized ProjectsProjects proposed under subsection (a)
				shall be consistent with section 2.
									204.Evaluation and approval of projects by
				Secretary concerned
									(a)Conditions for Approval of Proposed
				ProjectThe Secretary
				concerned may make a decision to approve a project submitted by a resource
				advisory committee under section 203 only if the proposed project satisfies
				each of the following conditions:
										(1)The project complies with all applicable
				Federal laws (including regulations).
										(2)The project is consistent with the
				applicable resource management plan and with any watershed or subsequent plan
				developed pursuant to the resource management plan and approved by the
				Secretary concerned.
										(3)The project has been approved by the
				resource advisory committee in accordance with section 205, including the
				procedures issued under subsection (e) of that section.
										(4)A project description has been submitted by
				the resource advisory committee to the Secretary concerned in accordance with
				section 203.
										(5)The project will improve the maintenance of
				existing infrastructure, implement stewardship objectives that enhance forest
				ecosystems, and restore and improve land health and water quality.
										(b)Environmental Reviews
										(1)Request for payment by countyThe Secretary concerned may request the
				resource advisory committee submitting a proposed project to agree to the use
				of project funds to pay for any environmental review, consultation, or
				compliance with applicable environmental laws required in connection with the
				project.
										(2)Conduct of environmental
				reviewIf a payment is
				requested under paragraph (1) and the resource advisory committee agrees to the
				expenditure of funds for this purpose, the Secretary concerned shall conduct
				environmental review, consultation, or other compliance responsibilities in
				accordance with Federal laws (including regulations).
										(3)Effect of refusal to pay
											(A)In generalIf a resource advisory committee does not
				agree to the expenditure of funds under paragraph (1), the project shall be
				deemed withdrawn from further consideration by the Secretary concerned pursuant
				to this title.
											(B)Effect of withdrawalA withdrawal under subparagraph (A) shall
				be deemed to be a rejection of the project for purposes of section
				207(c).
											(c)Decisions of Secretary Concerned
										(1)Rejection of projects
											(A)In generalA decision by the Secretary concerned to
				reject a proposed project shall be at the sole discretion of the Secretary
				concerned.
											(B)No administrative appeal or judicial
				reviewNotwithstanding any
				other provision of law, a decision by the Secretary concerned to reject a
				proposed project shall not be subject to administrative appeal or judicial
				review.
											(C)Notice of rejectionNot later than 30 days after the date on
				which the Secretary concerned makes the rejection decision, the Secretary
				concerned shall notify in writing the resource advisory committee that
				submitted the proposed project of the rejection and the reasons for
				rejection.
											(2)Notice of project approvalThe Secretary concerned shall publish in
				the Federal Register notice of each project approved under subsection (a) if
				the notice would be required had the project originated with the
				Secretary.
										(d)Source and Conduct of ProjectOnce the Secretary concerned accepts a
				project for review under section 203, the acceptance shall be deemed a Federal
				action for all purposes.
									(e)Implementation of Approved
				Projects
										(1)CooperationNotwithstanding chapter 63 of title 31,
				United States Code, using project funds the Secretary concerned may enter into
				contracts, grants, and cooperative agreements with States and local
				governments, private and nonprofit entities, and landowners and other persons
				to assist the Secretary in carrying out an approved project.
										(2)Best value contracting
											(A)In generalFor any project involving a contract
				authorized by paragraph (1) the Secretary concerned may elect a source for
				performance of the contract on a best value basis.
											(B)FactorsThe Secretary concerned shall determine
				best value based on such factors as—
												(i)the technical demands and complexity of the
				work to be done;
												(ii)(I)the ecological objectives of the project;
				and
													(II)the sensitivity of the resources being
				treated;
													(iii)the past experience by the contractor with
				the type of work being done, using the type of equipment proposed for the
				project, and meeting or exceeding desired ecological conditions; and
												(iv)the commitment of the contractor to hiring
				highly qualified workers and local residents.
												(3)Merchantable timber contracting pilot
				program
											(A)EstablishmentThe Secretary concerned shall establish a
				pilot program to implement a certain percentage of approved projects involving
				the sale of merchantable timber using separate contracts for—
												(i)the harvesting or collection of
				merchantable timber; and
												(ii)the sale of the timber.
												(B)Annual percentagesUnder the pilot program, the Secretary
				concerned shall ensure that, on a nationwide basis, not less than the following
				percentage of all approved projects involving the sale of merchantable timber
				are implemented using separate contracts:
												(i)For fiscal year 2008, 35 percent.
												(ii)For fiscal year 2009, 45 percent.
												(iii)For each of fiscal years 2010 and 2011, 50
				percent.
												(C)Inclusion in pilot programThe decision whether to use separate
				contracts to implement a project involving the sale of merchantable timber
				shall be made by the Secretary concerned after the approval of the project
				under this title.
											(D)Assistance
												(i)In generalThe Secretary concerned may use funds from
				any appropriated account available to the Secretary for the Federal land to
				assist in the administration of projects conducted under the pilot
				program.
												(ii)Maximum amount of assistanceThe total amount obligated under this
				subparagraph may not exceed $1,000,000 for any fiscal year during which the
				pilot program is in effect.
												(E)Review and report
												(i)Initial
				reportNot later than
				September 30, 2010, the Comptroller General shall submit to the Committees on
				Agriculture, Nutrition, and Forestry and Energy and Natural Resources of the
				Senate and the Committees on Agriculture and Natural Resources of the House of
				Representatives a report assessing the pilot program.
												(ii)Annual reportThe Secretary concerned shall submit to the
				Committees on Agriculture, Nutrition, and Forestry and Energy and Natural
				Resources of the Senate and the Committees on Agriculture and Natural Resources
				of the House of Representatives an annual report describing the results of the
				pilot program.
												(f)Requirements for Project
				FundsThe Secretary shall
				ensure that at least 50 percent of all project funds be used for projects that
				are primarily dedicated—
										(1)to road maintenance, decommissioning, or
				obliteration; or
										(2)to restoration of streams and
				watersheds.
										205.Resource advisory Committees
									(a)Establishment and Purpose of Resource
				Advisory Committees
										(1)EstablishmentThe Secretary concerned shall establish and
				maintain resource advisory committees to perform the duties in subsection (b),
				except as provided in paragraph (4).
										(2)PurposeThe purpose of a resource advisory
				committee shall be—
											(A)to improve collaborative relationships;
				and
											(B)to provide advice and recommendations to
				the land management agencies consistent with the purposes of this title.
											(3)Access to resource advisory
				committeesTo ensure that
				each unit of Federal land has access to a resource advisory committee, and that
				there is sufficient interest in participation on a committee to ensure that
				membership can be balanced in terms of the points of view represented and the
				functions to be performed, the Secretary concerned may, establish resource
				advisory committees for part of, or 1 or more, units of Federal land.
										(4)Existing advisory committees
											(A)In generalAn advisory committee that meets the
				requirements of this section, a resource advisory committee established before
				September 29, 2006, or an advisory committee determined by the Secretary
				concerned before September 29, 2006, to meet the requirements of this section
				may be deemed by the Secretary concerned to be a resource advisory committee
				for the purposes of this title.
											(B)CharterA charter for a committee described in
				subparagraph (A) that was filed on or before September 29, 2006, shall be
				considered to be filed for purposes of this Act.
											(C)Bureau of land management advisory
				committeesThe Secretary of
				the Interior may deem a resource advisory committee meeting the requirements of
				subpart 1784 of part 1780 of title 43, Code of Federal Regulations, as a
				resource advisory committee for the purposes of this title.
											(b)DutiesA resource advisory committee shall—
										(1)review projects proposed under this title
				by participating counties and other persons;
										(2)propose projects and funding to the
				Secretary concerned under section 203;
										(3)provide early and continuous coordination
				with appropriate land management agency officials in recommending projects
				consistent with purposes of this Act under this title;
										(4)provide frequent opportunities for
				citizens, organizations, tribes, land management agencies, and other interested
				parties to participate openly and meaningfully, beginning at the early stages
				of the project development process under this title;
										(5)(A)monitor projects that have been approved
				under section 204; and
											(B)advise the designated Federal official on
				the progress of the monitoring efforts under subparagraph (A); and
											(6)make recommendations to the Secretary
				concerned for any appropriate changes or adjustments to the projects being
				monitored by the resource advisory committee.
										(c)Appointment by the Secretary
										(1)Appointment and term
											(A)In generalThe Secretary concerned, shall appoint the
				members of resource advisory committees for a term of 4 years beginning on the
				date of appointment.
											(B)ReappointmentThe Secretary concerned may reappoint
				members to subsequent 4-year terms.
											(2)Basic requirementsThe Secretary concerned shall ensure that
				each resource advisory committee established meets the requirements of
				subsection (d).
										(3)Initial appointmentNot later than 180 days after the date of
				the enactment of this Act, the Secretary concerned shall make initial
				appointments to the resource advisory committees.
										(4)VacanciesThe Secretary concerned shall make
				appointments to fill vacancies on any resource advisory committee as soon as
				practicable after the vacancy has occurred.
										(5)CompensationMembers of the resource advisory committees
				shall not receive any compensation.
										(d)Composition of Advisory Committee
										(1)NumberEach resource advisory committee shall be
				comprised of 15 members.
										(2)Community interests
				representedCommittee members
				shall be representative of the interests of the following 3 categories:
											(A)5 persons that—
												(i)represent organized labor or non-timber
				forest product harvester groups;
												(ii)represent developed outdoor recreation, off
				highway vehicle users, or commercial recreation activities;
												(iii)represent—
													(I)energy and mineral development interests;
				or
													(II)commercial or recreational fishing
				interests;
													(iv)represent the commercial timber industry;
				or
												(v)hold Federal grazing or other land use
				permits, or represent nonindustrial private forest land owners, within the area
				for which the committee is organized.
												(B)5 persons that represent—
												(i)nationally recognized environmental
				organizations;
												(ii)regionally or locally recognized
				environmental organizations;
												(iii)dispersed recreational activities;
												(iv)archaeological and historical interests;
				or
												(v)nationally or regionally recognized wild
				horse and burro interest groups, wildlife or hunting organizations, or
				watershed associations.
												(C)5 persons that—
												(i)hold State elected office (or a
				designee);
												(ii)hold county or local elected office;
												(iii)represent American Indian tribes within or
				adjacent to the area for which the committee is organized;
												(iv)are school officials or teachers; or
												(v)represent the affected public at
				large.
												(3)Balanced representationIn appointing committee members from the 3
				categories in paragraph (2), the Secretary concerned shall provide for balanced
				and broad representation from within each category.
										(4)Geographic distributionThe members of a resource advisory
				committee shall reside within the State in which the committee has jurisdiction
				and, to extent practicable, the Secretary concerned shall ensure local
				representation in each category in paragraph (2).
										(5)ChairpersonA majority on each resource advisory
				committee shall select the chairperson of the committee.
										(e)Approval Procedures
										(1)In generalSubject to paragraph (3), each resource
				advisory committee shall establish procedures for proposing projects to the
				Secretary concerned under this title.
										(2)QuorumA quorum must be present to constitute an
				official meeting of the committee.
										(3)Approval by majority of
				membersA project may be
				proposed by a resource advisory committee to the Secretary concerned under
				section 203(a), if the project has been approved by a majority of members of
				the committee from each of the 3 categories in subsection (d)(2).
										(f)Other Committee Authorities and
				Requirements
										(1)Staff assistanceA resource advisory committee may submit to
				the Secretary concerned a request for periodic staff assistance from Federal
				employees under the jurisdiction of the Secretary.
										(2)MeetingsAll meetings of a resource advisory
				committee shall be announced at least 1 week in advance in a local newspaper of
				record and shall be open to the public.
										(3)RecordsA resource advisory committee shall
				maintain records of the meetings of the committee and make the records
				available for public inspection.
										206.Use of project funds
									(a)Agreement Regarding Schedule and Cost of
				Project
										(1)Agreement between partiesThe Secretary concerned may carry out a
				project submitted by a resource advisory committee under section 203(a) using
				project funds or other funds described in section 203(a)(2), if, as soon as
				practicable after the issuance of a decision document for the project and the
				exhaustion of all administrative appeals and judicial review of the project
				decision, the Secretary concerned and the resource advisory committee enter
				into an agreement addressing, at a minimum, the following:
											(A)The schedule for completing the
				project.
											(B)The total cost of the project, including
				the level of agency overhead to be assessed against the project.
											(C)For a multiyear project, the estimated cost
				of the project for each of the fiscal years in which it will be carried
				out.
											(D)The remedies for failure of the Secretary
				concerned to comply with the terms of the agreement consistent with current
				Federal law.
											(2)Limited use of federal fundsThe Secretary concerned may decide, at the
				sole discretion of the Secretary concerned, to cover the costs of a portion of
				an approved project using Federal funds appropriated or otherwise available to
				the Secretary for the same purposes as the project.
										(b)Transfer of Project Funds
										(1)Initial transfer requiredAs soon as practicable after the agreement
				is reached under subsection (a) with regard to a project to be funded in whole
				or in part using project funds, or other funds described in section 203(a)(2),
				the Secretary concerned shall transfer to the applicable unit of National
				Forest System land or Bureau of Land Management District an amount of project
				funds equal to—
											(A)in the case of a project to be completed in
				a single fiscal year, the total amount specified in the agreement to be paid
				using project funds, or other funds described in section 203(a)(2); or
											(B)in the case of a multiyear project, the
				amount specified in the agreement to be paid using project funds, or other
				funds described in section 203(a)(2) for the first fiscal year.
											(2)Condition on project
				commencementThe unit of
				National Forest System land or Bureau of Land Management District concerned,
				shall not commence a project until the project funds, or other funds described
				in section 203(a)(2) required to be transferred under paragraph (1) for the
				project, have been made available by the Secretary concerned.
										(3)Subsequent transfers for multiyear
				projects
											(A)In generalFor the second and subsequent fiscal years
				of a multiyear project to be funded in whole or in part using project funds,
				the unit of National Forest System land or Bureau of Land Management District
				concerned shall use the amount of project funds required to continue the
				project in that fiscal year according to the agreement entered into under
				subsection (a).
											(B)Suspension of workThe Secretary concerned shall suspend work
				on the project if the project funds required by the agreement in the second and
				subsequent fiscal years are not available.
											207.Availability of project funds
									(a)Submission of Proposed Projects To Obligate
				FundsBy September 30, 2008
				(or as soon thereafter as the Secretary concerned determines is practicable),
				and each September 30 thereafter for each succeeding fiscal year through fiscal
				year 2011, a resource advisory committee shall submit to the Secretary
				concerned pursuant to section 203(a)(1) a sufficient number of project
				proposals that, if approved, would result in the obligation of at least the
				full amount of the project funds reserved by the participating county in the
				preceding fiscal year.
									(b)Use or Transfer of Unobligated
				FundsSubject to section 208,
				if a resource advisory committee fails to comply with subsection (a) for a
				fiscal year, any project funds reserved by the participating county in the
				preceding fiscal year and remaining unobligated shall be available for use as
				part of the project submissions in the next fiscal year.
									(c)Effect of Rejection of
				ProjectsSubject to section
				208, any project funds reserved by a participating county in the preceding
				fiscal year that are unobligated at the end of a fiscal year because the
				Secretary concerned has rejected one or more proposed projects shall be
				available for use as part of the project submissions in the next fiscal
				year.
									(d)Effect of Court Orders
										(1)In generalIf an approved project under this Act is
				enjoined or prohibited by a Federal court, the Secretary concerned shall return
				the unobligated project funds related to the project to the participating
				county or counties that reserved the funds.
										(2)Expenditure of fundsThe returned funds shall be available for
				the county to expend in the same manner as the funds reserved by the county
				under subparagraph (B) or (C)(i) of section 102(d)(1).
										208.Termination of authority
									(a)In GeneralThe authority to initiate projects under
				this title shall terminate on September 30, 2011.
									(b)Deposits in TreasuryAny project funds not obligated by
				September 30, 2012, shall be deposited in the Treasury of the United
				States.
									IIICOUNTY FUNDS
								301.DefinitionsIn this title:
									(1)County fundsThe term county funds means
				all funds an eligible county elects under section 102(d) to reserve for
				expenditure in accordance with this title.
									(2)Participating countyThe term participating county
				means an eligible county that elects under section 102(d) to expend a portion
				of the Federal funds received under section 102 in accordance with this
				title.
									302.Use
									(a)Authorized UsesA participating county, including any
				applicable agencies of the participating county, shall use county funds, in
				accordance with this title, only—
										(1)to carry out activities under the Firewise
				Communities program to provide to homeowners in fire-sensitive ecosystems
				education on, and assistance with implementing, techniques in home siting, home
				construction, and home landscaping that can increase the protection of people
				and property from wildfires;
										(2)to reimburse the participating county for
				search and rescue and other emergency services, including firefighting, that
				are—
											(A)performed on Federal land after the date on
				which the use was approved under subsection (b);
											(B)paid for by the participating county;
				and
											(3)to develop community wildfire protection
				plans in coordination with the appropriate Secretary concerned.
										(b)ProposalsA participating county shall use county
				funds for a use described in subsection (a) only after a 45-day public comment
				period, at the beginning of which the participating county shall—
										(1)publish in any publications of local record
				a proposal that describes the proposed use of the county funds; and
										(2)submit the proposal to any resource
				advisory committee established under section 205 for the participating
				county.
										303.Certification
									(a)In GeneralNot later than February 1 of the year after
				the year in which any county funds were expended by a participating county, the
				appropriate official of the participating county shall submit to the Secretary
				concerned a certification that the county funds expended in the applicable year
				have been used for the uses authorized under section 302(a), including a
				description of the amounts expended and the uses for which the amounts were
				expended.
									(b)ReviewThe Secretary concerned shall review the
				certifications submitted under subsection (a) as the Secretary concerned
				determines to be appropriate.
									304.Termination of authority
									(a)In GeneralThe authority to initiate projects under
				this title terminates on September 30, 2011.
									(b)AvailabilityAny county funds not obligated by September
				30, 2012, shall be returned to the Treasury of the United States.
									IVMISCELLANEOUS PROVISIONS
								401.RegulationsThe Secretary of Agriculture and the
				Secretary of the Interior shall issue regulations to carry out the purposes of
				this Act.
								402.Authorization of
				appropriationsThere are
				authorized to be appropriated such sums as are necessary to carry out this Act
				for each of fiscal years 2008 through 2011.
								403.Treatment of funds and revenues
									(a)Relation to Other
				AppropriationsFunds made
				available under section 402 and funds made available to a Secretary concerned
				under section 206 shall be in addition to any other annual appropriations for
				the Forest Service and the Bureau of Land Management.
									(b)Deposit of Revenues and Other
				FundsAll revenues generated
				from projects pursuant to title II, including any interest accrued from the
				revenues, shall be deposited in the Treasury of the United
				States.
									.
					(b)Forest receipt payments to eligible states
			 and counties
						(1)Act of May 23, 1908The sixth paragraph under the heading
			 FOREST
			 SERVICE in the Act of May 23, 1908 (16 U.S.C. 500) is
			 amended in the first sentence by striking twenty-five percentum
			 and all that follows through shall be paid and inserting the
			 following: an amount equal to the annual average of 25 percent of all
			 amounts received for the applicable fiscal year and each of the preceding 6
			 fiscal years from each national forest shall be paid.
						(2)Weeks lawSection 13 of the Act of March 1, 1911
			 (commonly known as the Weeks Law) (16 U.S.C. 500) is amended in
			 the first sentence by striking twenty-five percentum and all
			 that follows through shall be paid and inserting the following:
			 an amount equal to the annual average of 25 percent of all amounts
			 received for the applicable fiscal year and each of the preceding 6 fiscal
			 years from each national forest shall be paid.
						(c)Payments in lieu of taxes
						(1)In generalSection 6906 of title 31, United States
			 Code, is amended to read as follows:

								6906.FundingFor each of fiscal years 2008 through
				2012—
									(1)each county or other eligible unit of local
				government shall be entitled to payment under this chapter; and
									(2)sums shall be made available to the
				Secretary of the Interior for obligation or expenditure in accordance with this
				chapter.
									.
						(2)Conforming amendmentThe table of sections for chapter 69 of
			 title 31, United States Code, is amended by striking the item relating to
			 section 6906 and inserting the following:

									6906.
				Funding.

								.
						(3)Budget scorekeeping
							(A)In generalNotwithstanding the Budget Scorekeeping
			 Guidelines and the accompanying list of programs and accounts set forth in the
			 joint explanatory statement of the committee of conference accompanying
			 Conference Report 105–217, the section in this title regarding Payments in Lieu
			 of Taxes shall be treated in the baseline for purposes of section 257 of the
			 Balanced Budget and Emergency Deficit Control Act of 1985 (as in effect prior
			 to September 30, 2002), and by the Chairmen of the House and Senate Budget
			 Committees, as appropriate, for purposes of budget enforcement in the House and
			 Senate, and under the Congressional Budget Act of 1974 as if Payment in Lieu of
			 Taxes (14–1114–0–1–806) were an account designated as Appropriated Entitlements
			 and Mandatories for Fiscal Year 1997 in the joint explanatory statement of the
			 committee of conference accompanying Conference Report 105–217.
							(B)Effective
			 dateThis paragraph shall
			 remain in effect for the fiscal years to which the entitlement in section 6906
			 of title 31, United States Code (as amended by paragraph (1)), applies.
							332.Clarification of uniform definition of
			 child
					(a)Child must be younger than
			 claimantSection 152(c)(3)(A)
			 is amended by inserting is younger than the taxpayer claiming such
			 individual as a qualifying child and after such
			 individual.
					(b)Child must be unmarriedSection 152(c)(1) 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)who has not filed a joint return (other
				than only for a claim of refund) with the individual's spouse under section
				6013 for the taxable year beginning in the calendar year in which the taxable
				year of the taxpayer
				begins.
							.
					(c)Restrict qualifying child tax benefits to
			 child's parent
						(1)Child tax creditSubsection (a) of section 24 is amended by
			 inserting for which the taxpayer is allowed a deduction under section
			 151 after of the taxpayer.
						(2)Persons other than parents claiming
			 qualifying child
							(A)In generalParagraph (4) of section 152(c) is amended
			 by adding at the end the following new subparagraph:

									(C)No parent claiming qualifying
				childIf the parents of an
				individual may claim such individual as a qualifying child but no parent so
				claims the individual, such individual may be claimed as the qualifying child
				of another taxpayer but only if the adjusted gross income of such taxpayer is
				higher than the highest adjusted gross income of any parent of the
				individual.
									.
							(B)Conforming amendments
								(i)Subparagraph (A) of section 152(c)(4) is
			 amended by striking Except through 2 or more
			 taxpayers and inserting Except as provided in subparagraphs (B)
			 and (C), if (but for this paragraph) an individual may be claimed as a
			 qualifying child by 2 or more taxpayers.
								(ii)The heading for paragraph (4) of section
			 152(c) is amended by striking claiming and inserting
			 who can claim the
			 same.
								(d)Effective
			 dateThe amendments made by
			 this section shall apply to taxable years beginning after December 31,
			 2008.
					IVTransportation and infrastructure
			401.Restoration of Highway Trust Fund
			 balance
				(a)In generalSubsection (f) of section 9503 is
			 amended—
					(1)by redesignating paragraphs (1) and (2) as
			 subparagraphs (A) and (B), respectively, and by moving such subparagraphs 2 ems
			 to the right,
					(2)by striking For purposes and
			 inserting the following:

							(1)In generalFor
				purposes
							,
					(3)by moving the flush sentence at the end of
			 paragraph (1), as so amended, 2 ems to the right, and
					(4)by adding at the end the following new
			 paragraph:

							(2)Restoration of fund balanceOut of money in the Treasury not otherwise
				appropriated, there is hereby appropriated to the Highway Trust Fund
				$8,017,000,000.
							.
					(b)Conforming amendmentThe last sentence of section 9503(f)(1), as
			 amended by subsection (a), is amended by striking subsection and
			 inserting paragraph.
				(c)Effective
			 dateThe amendments made by
			 this section shall take effect on September 30, 2008.
				VDisaster relief
			ARelief for federally declared
			 disasters
				501.Losses attributable to federally declared
			 disasters
					(a)Waiver of adjusted gross income
			 limitation
						(1)In generalSubsection (h) of section 165 is amended by
			 redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively,
			 and by inserting after paragraph (2) the following new paragraph:

								(3)Special rule for losses in federally
				declared disasters
									(A)In generalIf an individual has a net disaster loss
				for any taxable year, the amount determined under paragraph (2)(A)(ii) shall be
				the sum of—
										(i)such net disaster loss, and
										(ii)so much of the excess referred to in the
				matter preceding clause (i) of paragraph (2)(A) (reduced by the amount in
				clause (i) of this subparagraph) as exceeds 10 percent of the adjusted gross
				income of the individual.
										(B)Net disaster lossFor purposes of subparagraph (A), the term
				net disaster loss means the excess of—
										(i)the personal casualty losses—
											(I)attributable to a federally declared
				disaster, and
											(II)occurring in a disaster area, over
											(ii)personal casualty gains.
										(C)Federally declared disasterFor purposes of this paragraph—
										(i)Federally declared disasterThe term federally declared
				disaster means any disaster subsequently determined by the President of
				the United States to warrant assistance by the Federal Government under the
				Robert T. Stafford Disaster Relief and Emergency Assistance Act.
										(ii)Disaster areaThe term disaster area means
				the area so determined to warrant such
				assistance.
										.
						(2)Conforming amendments
							(A)Section 165(h)(4)(B) (as so redesignated)
			 is amended by striking paragraph (2) and inserting
			 paragraphs (2) and (3).
							(B)Section 165(i)(1) is amended by striking
			 loss and all that follows through Act and
			 inserting loss occurring in a disaster area (as defined by clause (ii)
			 of subsection (h)(3)(C)) and attributable to a federally declared disaster (as
			 defined by clause (i) of such subsection).
							(C)Section 165(i)(4) is amended by striking
			 Presidentially declared disaster (as defined by section
			 1033(h)(3)) and inserting federally declared disaster (as
			 defined by subsection (h)(3)(C)(i).
							(D)(i)So much of subsection (h) of section 1033
			 as precedes subparagraph (A) of paragraph (1) thereof is amended to read as
			 follows:

										(h)Special rules for property damaged by
				federally declared disasters
											(1)Principal residencesIf the taxpayer’s principal residence or
				any of its contents is located in a disaster area and is compulsorily or
				involuntarily converted as a result of a federally declared
				disaster—
											.
								(ii)Paragraph (2) of section 1033(h) is amended
			 by striking investment and all that follows through “disaster”
			 and inserting investment located in a disaster area and compulsorily or
			 involuntarily converted as a result of a federally declared
			 disaster.
								(iii)Paragraph (3) of section 1033(h) is amended
			 to read as follows:

										(3)Federally declared disaster; disaster
				areaThe terms
				‘federally declared disaster’ and ‘disaster area’
				shall have the respective meaning given such terms by section
				165(h)(3)(C).
										.
								(iv)Section 139(c)(2) is amended to read as
			 follows:

										(2)federally declared disaster (as defined by
				section
				165(h)(3)(C)(i)),
										.
								(v)Subclause (II) of section 172(b)(1)(F)(ii)
			 is amended by striking Presidentially declared disasters (as defined in
			 section 1033(h)(3)) and inserting federally declared disasters
			 (as defined by subsection (h)(3)(C)(i)).
								(vi)Subclause (III) of section 172(b)(1)(F)(ii)
			 is amended by striking Presidentially declared disasters and
			 inserting federally declared disasters.
								(vii)Subsection (a) of section 7508A is amended
			 by striking Presidentially declared disaster (as defined in section
			 1033(h)(3)) and inserting federally declared disaster (as
			 defined by section 165(h)(3)(C)(i)).
								(b)Increase in standard deduction by disaster
			 casualty loss
						(1)In generalParagraph (1) of section 63(c)is amended by
			 striking and at the end of subparagraph (B), by striking the
			 period at the end of subparagraph (C) and inserting , and, and
			 by adding at the end the following new subparagraph:

								(D)the disaster loss
				deduction.
								.
						(2)Disaster loss deductionSubsection (c) of section 63 is amended by
			 adding at the end the following new paragraph:

								(8)Disaster loss deductionFor the purposes of paragraph (1), the term
				disaster loss deduction means the net disaster loss (as defined in
				section
				165(h)(3)(B)).
								.
						(3)Allowance in computing alternative minimum
			 taxable incomeSubparagraph
			 (E) of section 56(b)(1) is amended by adding at the end the following new
			 sentence: The preceding sentence shall not apply to so much of the
			 standard deduction as is determined under section 63(c)(1)(D)..
						(c)Increase in limitation on individual loss
			 per casualtyParagraph (1) of
			 section 165(h) is amended by striking $100 and inserting
			 $500.
					(d)Effective dates
						(1)In generalExcept as provided by paragraph (2), the
			 amendments made by this section shall apply to taxable years beginning after
			 December 31, 2007.
						(2)Increase in limitation on individual loss
			 per casualtyThe amendment
			 made by subsection (c) shall apply to taxable years beginning after December
			 31, 2008.
						502.Expensing of Qualified Disaster
			 Expenses
					(a)In generalPart VI of subchapter B of chapter 1 is
			 amended by inserting after section 198 the following new section:

							198A.Expensing of Qualified Disaster
				Expenses
								(a)In generalA taxpayer may elect to treat any qualified
				disaster expenses which are paid or incurred by the taxpayer as an expense
				which is not chargeable to capital account. Any expense which is so treated
				shall be allowed as a deduction for the taxable year in which it is paid or
				incurred.
								(b)Qualified disaster expenseFor purposes of this section, the term
				qualified disaster expense means any expenditure—
									(1)which is paid or incurred in connection
				with a trade or business or with business-related property,
									(2)which is—
										(A)for the abatement or control of hazardous
				substances that were released on account of a federally declared
				disaster,
										(B)for the removal of debris from, or the
				demolition of structures on, real property which is business-related property
				damaged or destroyed as a result of a federally declared disaster, or
										(C)for the repair of business-related property
				damaged as a result of a federally declared disaster, and
										(3)is otherwise chargeable to capital
				account.
									(c)Other definitionsFor purposes of this section—
									(1)Business-related propertyThe term business-related
				property means property—
										(A)held by the taxpayer for use in a trade or
				business or for the production of income, or
										(B)described in section 1221(a)(1) in the
				hands of the taxpayer.
										(2)Federally declared disasterThe term federally declared
				disaster has the meaning given such term by section
				165(h)(3)(C)(i).
									(d)Deduction recaptured as ordinary income on
				sale, etcSolely for purposes
				of section 1245, in the case of property to which a qualified disaster expense
				would have been capitalized but for this section—
									(1)the deduction allowed by this section for
				such expense shall be treated as a deduction for depreciation, and
									(2)such property (if not otherwise section
				1245 property) shall be treated as section 1245 property solely for purposes of
				applying section 1245 to such deduction.
									(e)Coordination with other
				provisionsSections 198,
				280B, and 468 shall not apply to amounts which are treated as expenses under
				this section.
								(f)RegulationsThe Secretary shall prescribe such
				regulations as may be necessary or appropriate to carry out the purposes of
				this
				section.
								.
					(b)Clerical amendmentThe table of sections for part VI of
			 subchapter B of chapter 1 is amended by inserting after the item relating to
			 section 198 the following new item:

								Sec. 198A. Expensing of
				Qualified Disaster
				Expenses.

							.
					(c)Effective
			 dateThe amendments made by
			 this section shall apply to amounts paid or incurred after December 31,
			 2007.
					503.Net operating losses attributable to
			 federally declared disasters
					(a)In generalParagraph (1) of section 172(b) is amended
			 by adding at the end the following new subparagraph:

							(J)Certain losses attributable federally
				declared disastersIn the
				case of a taxpayer who has a qualified disaster loss (as defined in subsection
				(j)), such loss shall be a net operating loss carryback to each of the 5
				taxable years preceding the taxable year of such
				loss.
							.
					(b)Qualified disaster lossSection 172 is amended by redesignating
			 subsections (j) and (k) as subsections (k) and (l), respectively, and by
			 inserting after subsection (i) the following new subsection:

							(j)Rules relating to qualified disaster
				lossesFor purposes of this
				section—
								(1)In generalThe term qualified disaster
				loss means the lesser of—
									(A)the sum of—
										(i)the losses allowable under section 165 for
				the taxable year—
											(I)attributable to a federally declared
				disaster (as defined in section 165(h)(3)(C)(i)), and
											(II)occurring in a disaster area (as defined in
				section 165(h)(3)(C)(ii)), and
											(ii)the deduction for the taxable year for
				qualified disaster expenses which is allowable under section 198A(a) or which
				would be so allowable if not otherwise treated as an expense, or
										(B)the net operating loss for such taxable
				year.
									(2)Coordination with subsection
				(b)(2)For purposes of applying subsection (b)(2),
				a qualified disaster loss for any taxable year shall be treated in a manner
				similar to the manner in which a specified liability loss is treated.
								(3)ElectionAny taxpayer entitled to a 5-year carryback
				under subsection (b)(1)(J) from any loss year may elect to have the carryback
				period with respect to such loss year determined without regard to subsection
				(b)(1)(J). Such election shall be made in such manner as may be prescribed by
				the Secretary and shall be made by the due date (including extensions of time)
				for filing the taxpayer’s return for the taxable year of the net operating
				loss. Such election, once made for any taxable year, shall be irrevocable for
				such taxable
				year.
								.
					(c)Loss deduction allowed in computing
			 alternative minimum taxable incomeSubsection (d) of section 55 is amended by
			 adding at the end the following new paragraph:

							(3)Net operating loss attributable to
				federally declared disastersIn the case of a taxpayer which has a
				qualified disaster loss (as defined by section 172(b)(1)(J)) for the taxable
				year, paragraph (1) shall be applied by increasing the amount determined under
				subparagraph (A)(ii)(I) thereof by the sum of the carrybacks and carryovers of
				such
				loss.
							.
					(d)Conforming amendments
						(1)Clause (ii) of section 172(b)(1)(F) is
			 amended by inserting or qualified disaster loss (as defined in
			 subsection (j)) before the period at the end of the last
			 sentence.
						(2)Paragraph (1) of section 172(i) is amended
			 by adding at the end the following new flush sentence:

								Such term shall not include any
				qualified disaster loss (as defined in subsection
				(j)).”.
						(e)Effective
			 dateThe amendments made by
			 this section shall apply to losses arising in taxable years beginning after
			 December 31, 2007.
					504.Waiver of certain mortgage revenue bond
			 requirements following federally declared disasters
					(a)In generalParagraph (11) of section 143(k) is amended
			 to read as follows:

							(11)Special rules for federally declared
				disasters
								(A)Principal residence destroyedIf the principal residence (within the
				meaning of section 121) of a taxpayer is—
									(i)rendered unsafe for use as a residence by
				reason of a federally declared disaster, or
									(ii)demolished or relocated by reason of an
				order of the government of a State or political subdivision thereof on account
				of a federally declared disaster,
									then for the 2-year period
				beginning on the date of the disaster declaration, subsection (d)(1) shall not
				apply with respect to such taxpayer and subsection (e) shall be applied by
				substituting 110 for 90 in paragraph (1)
				thereof.(B)Principle residence damaged
									(i)In generalIf the principal residence (within the
				meaning of section 121) of a taxpayer resulting from a federally declared
				disaster was damaged, any owner-financing provided in connection with the
				repair or reconstruction of such residence shall be treated as a qualified
				rehabilitation loan.
									(ii)LimitationThe aggregate owner-financing to which
				clause (i) applies shall not exceed the lesser of—
										(I)the cost of such repair or reconstruction,
				or
										(II)$150,000.
										(C)Federally declared disasterFor purposes of this paragraph, the term
				federally declared disaster has the meaning given such term by
				section
				165(h)(3)(C)(i).
								.
					(b)Effective
			 dateThe amendment made by
			 subsection (a) shall apply to disasters occurring after December 31,
			 2007.
					505.Other relief for federally declared
			 disasters
					(a)In generalChapter 1 is amended by adding at the end
			 the following new subchapter:

							ZRelief for federally declared
				disasters

									Sec. 1400U. Tax benefits for federally declared disaster
				  areas.

								1400U.Tax benefits for federally declared
				disaster areas
									(a)Federally declared disasterFor purposes of this section—
										(1)Federally declared disasterThe term federally declared
				disaster means any disaster subsequently determined by the President of
				the United States to warrant assistance by the Federal Government under the
				Robert T. Stafford Disaster Relief and Emergency Assistance Act.
										(2)Disaster areaThe term disaster area means
				the area so determined to warrant such assistance.
										(b)Special rules for use of retirement
				funds
										(1)Tax-favored withdrawals from retirement
				plans
											(A)In generalSection
				72(t)
				shall not apply to any qualified disaster distribution.
											(B)Aggregate dollar limitation
												(i)In generalFor purposes of this paragraph, the
				aggregate amount of distributions received by an individual which may be
				treated as qualified disaster distributions for any taxable year shall not
				exceed the excess (if any) of—
													(I)$100,000, over
													(II)the aggregate amounts treated as qualified
				disaster distributions received by such individual for all prior taxable
				years.
													(ii)Treatment of plan
				distributionsIf a
				distribution to an individual would (without regard to clause (i)) be a
				qualified disaster distribution, a plan shall not be treated as violating any
				requirement of this title merely because the plan treats such distribution as a
				qualified disaster distribution, unless the aggregate amount of such
				distributions from all plans maintained by the employer (and any member of any
				controlled group which includes the employer) to such individual exceeds
				$100,000.
												(iii)Controlled groupFor purposes of clause (ii), the term
				controlled group means any group treated as a single employer
				under subsection (b), (c), (m), or (o) of section
				414.
												(C)Amount distributed may be repaid
												(i)In generalAny individual who receives a qualified
				disaster distribution may, at any time during the 3-year period beginning on
				the day after the date on which such distribution was received, make one or
				more contributions in an aggregate amount not to exceed the amount of such
				distribution to an eligible retirement plan of which such individual is a
				beneficiary and to which a rollover contribution of such distribution could be
				made under section 402(c),
				403(a)(4),
				403(b)(8),
				408(d)(3), or
				457(e)(16), as the case may be.
												(ii)Treatment of repayments of distributions
				from eligible retirement plans other than irasFor purposes of this title, if a
				contribution is made pursuant to clause (i) with respect to a qualified
				disaster distribution from an eligible retirement plan other than an individual
				retirement plan, then the taxpayer shall, to the extent of the amount of the
				contribution, be treated as having received the qualified disaster distribution
				in an eligible rollover distribution (as defined in section
				402(c)(4)) and as having transferred
				the amount to the eligible retirement plan in a direct trustee to trustee
				transfer within 60 days of the distribution.
												(iii)Treatment of repayments for distributions
				from irasFor purposes of
				this title, if a contribution is made pursuant to clause (i) with respect to a
				qualified disaster distribution from an individual retirement plan (as defined
				by section 7701(a)(37)), then, to the extent of
				the amount of the contribution, the qualified disaster distribution shall be
				treated as a distribution described in section
				408(d)(3) and as having been
				transferred to the eligible retirement plan in a direct trustee to trustee
				transfer within 60 days of the distribution.
												(D)DefinitionsFor purposes of this paragraph—
												(i)Qualified disaster
				distributionExcept as
				provided in subparagraph (B), the term qualified disaster
				distribution means, with respect to any federally declared disaster, any
				distribution—
													(I)from an eligible retirement plan made
				during the 15-month period beginning on the date on which such disaster
				occurred, and
													(II)to an individual whose principal place of
				abode on the date on which such disaster occurred is located in the federally
				declared disaster area and who has sustained an economic loss attributable to
				the federally declared disaster,
													(ii)Eligible retirement planThe term eligible retirement
				plan shall have the meaning given such term by section
				402(c)(8)(B).
												(E)Income inclusion spread over 3-year
				period
												(i)In generalIn the case of any qualified disaster
				distribution, unless the taxpayer elects not to have this subparagraph apply
				for any taxable year, any amount required to be included in gross income for
				such taxable year shall be so included ratably over the 3-taxable year period
				beginning with such taxable year.
												(ii)Special ruleFor purposes of clause (i), rules similar
				to the rules of subparagraph (E) of section
				408A(d)(3) shall apply.
												(F)Special rules
												(i)Exemption of distributions from trustee to
				trustee transfer and withholding rulesFor purposes of sections
				401(a)(31),
				402(f),
				and 3405, qualified disaster
				distributions shall not be treated as eligible rollover distributions.
												(ii)Qualified disaster distributions treated as
				meeting plan distribution requirementsFor purposes this title, a qualified
				disaster distribution shall be treated as meeting the requirements of sections
				401(k)(2)(B)(i),
				403(b)(7)(A)(ii),
				403(b)(11), and
				457(d)(1)(A).
												(2)Recontributions of withdrawals for home
				purchases
											(A)Recontributions
												(i)In generalAny individual who received a qualified
				distribution may, during the applicable period, make one or more contributions
				in an aggregate amount not to exceed the amount of such qualified distribution
				to an eligible retirement plan (as defined in section
				402(c)(8)(B)) of which such individual
				is a beneficiary and to which a rollover contribution of such distribution
				could be made under section
				402(c),
				403(a)(4),
				403(b)(8), or
				408(d)(3), as the case may be.
												(ii)Treatment of repaymentsRules similar to the rules of clauses (ii)
				and (iii) of paragraph (1)(C) shall apply for purposes of this
				paragraph.
												(B)Qualified distributionFor purposes of this paragraph, the term
				qualified distribution means, with respect to any federally
				declared disaster, any distribution—
												(i)described in section
				401(k)(2)(B)(i)(IV),
				403(b)(7)(A)(ii) (but only to the
				extent such distribution relates to financial hardship),
				403(b)(11)(B), or
				72(t)(2)(F),
												(ii)received during the 6-month period ending
				on the date on which the disaster occurred, and
												(iii)which was to be used to purchase or
				construct a principal residence in the disaster area, but which was not so
				purchased or constructed on account of the federally declared disaster.
												(C)Applicable periodFor purposes of this paragraph, the term
				applicable period means, with respect to any federally declared
				disaster, the 6-month period beginning on the date on which the disaster
				occurred.
											(3)Loans from qualified plans
											(A)Increase in limit on loans not treated as
				distributionsIn the case of
				any loan from a qualified employer plan (as defined under section
				72(p)(4)) to a qualified individual
				with respect to a federally declared disaster made during the 18-month period
				beginning on the date on which such disaster occurs—
												(i)clause (i) of section
				72(p)(2)(A) shall be applied by
				substituting $100,000 for $50,000, and
												(ii)clause (ii) of such section shall be
				applied by substituting the present value of the nonforfeitable accrued
				benefit of the employee under the plan for one-half of the
				present value of the nonforfeitable accrued benefit of the employee under the
				plan.
												(B)Delay of repaymentIn the case of a qualified individual with
				an outstanding loan on or after the date on which the federally declared
				disaster occurs from a qualified employer plan (as defined in section
				72(p)(4))—
												(i)if the due date pursuant to subparagraph
				(B) or (C) of section 72(p)(2) for any repayment with respect
				to such loan occurs during the 18-month period beginning on the date on which
				the federally declared disaster occurs, such due date shall be delayed for 1
				year,
												(ii)any subsequent repayments with respect to
				any such loan shall be appropriately adjusted to reflect the delay in the due
				date under clause (i) and any interest accruing during such delay, and
												(iii)in determining the 5-year period and the
				term of a loan under subparagraph (B) or (C) of section
				72(p)(2), the period described in
				clause (i) shall be disregarded.
												(C)Qualified individualFor purposes of this subsection, the term
				qualified individual means, with respect to any federally
				declared disaster, any individual whose principal place of abode on the date on
				which the federally declared disaster occurs is located in the disaster area
				and who has sustained an economic loss by reason of such disaster.
											(4)Provisions relating to plan
				amendments
											(A)In generalIf this paragraph applies to any amendment
				to any plan or annuity contract, such plan or contract shall be treated as
				being operated in accordance with the terms of the plan during the period
				described in subparagraph (B)(ii)(I).
											(B)Amendments to which paragraph
				applies
												(i)In generalIn the case of any federally declared
				disaster, this paragraph shall apply to any amendment to any plan or annuity
				contract which is made—
													(I)pursuant to any provision of this
				subsection, or pursuant to any regulation issued by the Secretary or the
				Secretary of Labor under any provision of this subsection, and
													(II)on or before the last day of the first plan
				year beginning on or after the first day of the second calendar year following
				the calendar year in which the federally declared disaster occurs, or such
				later date as the Secretary may prescribe.
													In the case of a governmental plan (as
				defined in section 414(d)), subclause (II) shall be
				applied by substituting the date which is 2 years after the date otherwise
				applied under subclause (II).(ii)ConditionsIn the case of any federally declared
				disaster, this paragraph shall not apply to any amendment unless—
													(I)during the period beginning on the date
				that this subsection or the regulation described in clause (i)(I) takes effect
				with respect to such disaster (or in the case of a plan or contract amendment
				not required by this subsection or such regulation, the effective date
				specified by the plan with respect to such disaster) and ending on the date
				described in clause (i)(II) with respect to such disaster (or, if earlier, the
				date the plan or contract amendment is adopted), the plan or contract is
				operated as if such plan or contract amendment were in effect, and
													(II)such plan or contract amendment applies
				retroactively for such period.
													(c)Additional exemption for individuals
				displaced by federally declared disasters
										(1)In generalIn the case of taxable years of a natural
				person beginning in the taxable year in which a federally declared disaster
				occurs and the following taxable year, for purposes of this title, taxable
				income shall be reduced by $500 for each qualified displaced individual of the
				taxpayer for the taxable year.
										(2)Limitations
											(A)Dollar limitationThe reduction under paragraph (1) with
				respect to any federally declared disaster, shall not exceed $2,000, reduced by
				the amount of the reduction under this subsection with respect to such disaster
				for all prior taxable years.
											(B)Individuals taken into account only
				onceAn individual shall not
				be taken into account under paragraph (1) with respect to any federally
				declared disaster if such individual was taken into account under such
				paragraph with respect to such disaster by the taxpayer for any prior taxable
				year.
											(C)Identifying information
				requiredAn individual shall
				not be taken into account under paragraph (1) for a taxable year unless the
				taxpayer identification number of such individual is included on the return of
				the taxpayer for such taxable year.
											(3)Qualified displaced
				individualFor purposes of
				this section, in the case of any federally declared disaster, the term
				qualified displaced individual means, with respect to any taxpayer
				for any taxable year, any natural person if—
											(A)such person's principal place of abode on
				the date on which the disaster occurred was in the disaster area,
											(B)(i)in the case of such an abode located in the
				portion of a disaster area with respect to which the President has determined
				individual or individual and public assistance is warranted from the Federal
				government, such person is displaced from such abode, or
												(ii)in the case of such an abode located in any
				other portion of a disaster area, such person is displaced from such abode,
				and
													(I)such abode was damaged by the disaster,
				or
													(II)such person was evacuated from such abode
				by reason of the disaster, and
													(C)such person is provided housing free of
				charge by the taxpayer in the principal residence of the taxpayer for a period
				of 60 consecutive days which ends in such taxable year.
											Such term shall not include the
				spouse or any dependent of the taxpayer.(4)Compensation for housingNo deduction shall be allowed under this
				subsection if the taxpayer receives any rent or other amount (from any source)
				in connection with the providing of such housing.
										(d)Employee retention credit for employers
				affected by federally declared disaster
										(1)In generalFor purposes of section
				38, in
				the case of an eligible employer, the employee disaster retention credit for
				any taxable year is an amount equal to 40 percent of the qualified wages with
				respect to each eligible employee of such employer for such taxable year. For
				purposes of the preceding sentence, the amount of qualified wages which may be
				taken into account with respect to any individual shall not exceed
				$6,000.
										(2)DefinitionsFor purposes of this subsection—
											(A)Eligible employerThe term eligible employer
				means, with respect to any federally declared disaster, any employer—
												(i)which conducted an active trade or business
				on the date such disaster occurred in the disaster area, and
												(ii)with respect to whom the trade or business
				described in clause (i) is inoperable on any day during the 4-month period
				beginning on the date the disaster occurred, as a result of damage sustained by
				reason of the disaster.
												(B)Eligible employeeIn the case of any federally declared
				disaster, the term eligible employee means, with respect to an
				eligible employer, an employee whose principal place of employment on the date
				on which such disaster occurred, with such eligible employer was in the
				disaster area.
											(C)Qualified wagesThe term qualified wages means
				wages (as defined in section
				51(c)(1), but without regard to section
				3306(b)(2)(B)) paid or incurred by an
				eligible employer with respect to an eligible employee on any day during any
				portion of the 4-month period described in subparagraph (A)(ii) during which
				the trade or business described in subparagraph (A) is inoperable at the
				principal place of employment by reason of the federally declared disaster. For
				purposes of this subparagraph, a trade or business shall be treated as
				inoperable if it is unable to conduct significant operations. Such term shall
				include wages paid without regard to whether the employee performs no services,
				performs services at a different place of employment than such principal place
				of employment, or performs services at such principal place of employment
				before significant operations have resumed.
											(3)Certain rules to applyFor purposes of this subsection, rules
				similar to the rules of sections
				51(i)(1)
				and 52
				shall apply.
										(4)Employee not taken into account more than
				onceAn employee shall not be
				treated as an eligible employee for purposes of this subsection for any period
				with respect to any employer if such employer is allowed a credit under section
				51 with
				respect to such employee for such period.
										(e)Exclusions of certain cancellations of
				indebtedness by reason of federally declared disasters
										(1)In generalFor purposes of this title, gross income
				shall not include any amount which (but for this subsection) would be
				includible in gross income by reason of the discharge (in whole or in part) of
				indebtedness of a natural person described in paragraph (2) by an applicable
				entity (as defined in section 6050P(c)(1) of such Code) during the 18-month
				period beginning on the date on which the disaster described in paragraph (2)
				occurs.
										(2)Persons describedA natural person is described in this
				paragraph with respect to any federally declared disaster if the principal
				place of abode of such person on the date on which the disaster occurred was
				located—
											(A)in any portion of the disaster area with
				respect to which the President has determined individual or individual and
				public assistance is warranted from the Federal government, or
											(B)in the disaster area (but outside the
				portion of the disaster area described in subparagraph (A)) and such person
				suffered economic loss by reason of the disaster.
											(3)Exceptions
											(A)Business indebtednessParagraph (1) shall not apply to any
				indebtedness incurred in connection with a trade or business.
											(B)Real property outside core disaster
				areaParagraph (1) shall not
				apply to any discharge of indebtedness to the extent that real property
				constituting security for such indebtedness is located outside of the disaster
				area.
											(4)Denial of double benefitFor purposes of this title, the amount
				excluded from gross income under paragraph (1) shall be treated in the same
				manner as an amount excluded under section 108(a).
										(f)Extension of replacement period for
				nonrecognition of gain for property located in federally declared disaster
				areasIn the case of any
				federally declared disaster area, clause (i) of section 1033(a)(2)(B) shall be
				applied by substituting 5 years for 2 years with
				respect to property in the disaster area which is compulsorily or involuntarily
				converted on or after the date on which such disaster occurred, by reason of
				the disaster, but only if substantially all of the use of the replacement
				property is in such area.
									(g)Temporary suspension of limitations on
				charitable contributions
										(1)In generalExcept as otherwise provided in paragraph
				(2), section 170(b) shall not apply to qualified
				contributions and such contributions shall not be taken into account for
				purposes of applying subsections (b) and (d) of section
				170 to
				other contributions.
										(2)Treatment of excess
				contributionsFor purposes of
				section 170—
											(A)IndividualsIn the case of an individual—
												(i)LimitationAny qualified contribution shall be allowed
				only to the extent that the aggregate of such contributions does not exceed the
				excess of the taxpayer's contribution base (as defined in subparagraph (G) of
				section 170(b)(1)) over the amount of all
				other charitable contributions allowed under section
				170(b)(1).
												(ii)CarryoverIf the aggregate amount of qualified
				contributions made in the contribution year (within the meaning of section
				170(d)(1)) exceeds the limitation of
				clause (i), such excess shall be added to the excess described in the portion
				of subparagraph (A) of such section which precedes clause (i) thereof for
				purposes of applying such section.
												(B)CorporationsIn the case of a corporation—
												(i)LimitationAny qualified contribution shall be allowed
				only to the extent that the aggregate of such contributions does not exceed the
				excess of the taxpayer's taxable income (as determined under paragraph (2) of
				section 170(b)) over the amount of all other
				charitable contributions allowed under such paragraph.
												(ii)CarryoverRules similar to the rules of subparagraph
				(A)(ii) shall apply for purposes of this subparagraph.
												(3)Exception to overall limitation on itemized
				deductionsSo much of any
				deduction allowed under section
				170 as
				does not exceed the qualified contributions paid during the taxable year shall
				not be treated as an itemized deduction for purposes of section
				68.
										(4)Qualified contributions
											(A)In generalFor purposes of this subsection, the term
				qualified contribution means, with respect to an federally
				declared disaster, any charitable contribution (as defined in section 170(c))
				if—
												(i)such contribution—
													(I)is paid during the 18-month period
				beginning on the date on which the disaster occurs in cash to an organization
				described in section 170(b)(1)(A), and
													(II)is made for relief efforts in the disaster
				area,
													(ii)the taxpayer obtains from such organization
				contemporaneous written acknowledgment (within the meaning of section
				170(f)(8)) that such contribution was used (or is to be used) for relief
				efforts in the disaster area, and
												(iii)the taxpayer has elected the application of
				this subsection with respect to such contribution.
												(B)ExceptionSuch term shall not include a contribution
				by a donor if the contribution is—
												(i)to an organization described in section
				509(a)(3), or
												(ii)for establishment of a new, or maintenance
				of an existing, donor advised fund (as defined in section 4966(d)(2)).
												(C)Application of election to partnerships and
				S corporationsIn the case of
				a partnership or S corporation, the election under subparagraph (A)(iii) shall
				be made separately by each partner or shareholder.
											(h)Increase in standard mileage rate for
				charitable use of vehiclesIn
				the case of a federally declared disaster, notwithstanding section 170(i), for
				purposes of computing the deduction under section 170 for use of a vehicle
				described in subsection (f)(12)(E)(i) of such section for provision of relief
				related to the disaster during the 18-month period beginning on the date on
				which such disaster occurred, the standard mileage rate shall be 70 percent of
				the standard mileage rate in effect under section 162(a) at the time of such
				use. Any increase under this subsection shall be rounded to the next highest
				cent.
									(i)Mileage reimbursements to charitable
				volunteers excluded from gross income
										(1)In generalFor purposes of this title, in the case of
				a federally declared disaster, gross income of an individual for taxable years
				ending on or after the date on which the disaster occurs, does not include
				amounts received, from an organization described in section 170(c), as
				reimbursement of operating expenses with respect to use of a passenger
				automobile for the benefit of such organization in connection with providing
				relief relating to the disaster during the 18-month period beginning on the
				date on which such disaster occurred. The preceding sentence shall apply only
				to the extent that the expenses which are reimbursed would be deductible under
				this chapter if section 274(d) were applied—
											(A)by using the standard business mileage rate
				in effect under section 162(a) at the time of such use, and
											(B)as if the individual were an employee of an
				organization not described in section 170(c).
											(2)Application to volunteer services
				onlyParagraph (1) shall not
				apply with respect to any expenses relating to the performance of services for
				compensation.
										(3)No double benefitNo deduction or credit shall be allowed
				under any other provision of this title with respect to the expenses excludable
				from gross income under paragraph
				(1).
										.
					(b)Conforming amendmentSection 38(b) is amended by striking
			 plus at the end of paragraph (32), by striking the period at the
			 end of paragraph (33) and inserting , plus, and by adding at the
			 end the following new paragraph:

							(34)the employee disaster retention credit
				under section
				1400U(d).
							.
					(c)Clerical amendmentThe table of subchapters for chapter 1 is
			 amended by adding at the end the following new item:

								SUBCHAPTER Z—Relief for federally declared
				disasters

							.
					(d)Effective
			 dateThe amendments made by
			 this section shall apply to disasters occurring after December 31, 2007.
					506.SunsetThe amendments made by this subtitle shall
			 not apply to federally declared disasters (as defined in section
			 165(h)(3)(C)(i) of the Internal Revenue Code of 1986, as added by this
			 subtitle) (casualties, in the case of the amendment made by section 511(c))
			 occurring after December 31, 2009. The Internal Revenue Code of 1986 shall be
			 applied and administered with respect to disasters and casualties described in
			 the preceding sentence as if the amendments so described had never been
			 enacted.
				BOther disaster relief provisions
				511.Restructuring of New York Liberty Zone tax
			 credits
					(a)In generalPart I of subchapter Y of chapter 1 is
			 amended by redesignating section 1400L as section 1400K and by adding at the
			 end the following new section:

							1400L.New York Liberty Zone tax credits
								(a)In generalIn the case of a New York Liberty Zone
				governmental unit, there shall be allowed as a credit against any taxes imposed
				for any payroll period by section 3402 for which such governmental unit is
				liable under section 3403 an amount equal to so much of the portion of the
				qualifying project expenditure amount allocated under subsection (b)(3) to such
				governmental unit for the calendar year as is allocated by such governmental
				unit to such period under subsection (b)(4).
								(b)Qualifying project expenditure
				amountFor purposes of this
				section—
									(1)In generalThe term qualifying project
				expenditure amount means, with respect to any calendar year, the sum
				of—
										(A)the total expenditures paid or incurred
				during such calendar year by all New York Liberty Zone governmental units and
				the Port Authority of New York and New Jersey for any portion of qualifying
				projects located wholly within the City of New York, New York, and
										(B)any such expenditures—
											(i)paid or incurred in any preceding calendar
				year which begins after the date of enactment of this section, and
											(ii)not previously allocated under paragraph
				(3).
											(2)Qualifying projectThe term qualifying project
				means any transportation infrastructure project, including highways, mass
				transit systems, railroads, airports, ports, and waterways, in or connecting
				with the New York Liberty Zone (as defined in section 1400K(h)), which is
				designated as a qualifying project under this section jointly by the Governor
				of the State of New York and the Mayor of the City of New York, New
				York.
									(3)General allocation
										(A)In generalThe Governor of the State of New York and
				the Mayor of the City of New York, New York, shall jointly allocate to each New
				York Liberty Zone governmental unit the portion of the qualifying project
				expenditure amount which may be taken into account by such governmental unit
				under subsection (a) for any calendar year in the credit period.
										(B)Aggregate limitThe aggregate amount which may be allocated
				under subparagraph (A) for all calendar years in the credit period shall not
				exceed $2,000,000,000.
										(C)Annual limitThe aggregate amount which may be allocated
				under subparagraph (A) for any calendar year in the credit period shall not
				exceed the sum of—
											(i)$115,000,000 ($425,000,000 in the case of
				the last 2 years in the credit period), plus
											(ii)the aggregate amount authorized to be
				allocated under this paragraph for all preceding calendar years in the credit
				period which was not so allocated.
											(D)Unallocated amounts at end of credit
				periodIf, as of the close of
				the credit period, the amount under subparagraph (B) exceeds the aggregate
				amount allocated under subparagraph (A) for all calendar years in the credit
				period, the Governor of the State of New York and the Mayor of the City of New
				York, New York, may jointly allocate to New York Liberty Zone governmental
				units for any calendar year in the 5-year period following the credit period an
				amount equal to—
											(i)the lesser of—
												(I)such excess, or
												(II)the qualifying project expenditure amount
				for such calendar year, reduced by
												(ii)the aggregate amount allocated under this
				subparagraph for all preceding calendar years.
											(4)Allocation to payroll periodsEach New York Liberty Zone governmental
				unit which has been allocated a portion of the qualifying project expenditure
				amount under paragraph (3) for a calendar year may allocate such portion to
				payroll periods beginning in such calendar year as such governmental unit
				determines appropriate.
									(c)Carryover of unused allocations
									(1)In generalExcept as provided in paragraph (2), if the
				amount allocated under subsection (b)(3) to a New York Liberty Zone
				governmental unit for any calendar year exceeds the aggregate taxes imposed by
				section 3402 for which such governmental unit is liable under section 3403 for
				periods beginning in such year, such excess shall be carried to the succeeding
				calendar year and added to the allocation of such governmental unit for such
				succeeding calendar year.
									(2)ReallocationIf a New York Liberty Zone governmental
				unit does not use an amount allocated to it under subsection (b)(3) within the
				time prescribed by the Governor of the State of New York and the Mayor of the
				City of New York, New York, then such amount shall after such time be treated
				for purposes of subsection (b)(3) in the same manner as if it had never been
				allocated.
									(d)Definitions and special rulesFor purposes of this section—
									(1)Credit periodThe term credit period means
				the 12-year period beginning on January 1, 2009.
									(2)New York liberty zone governmental
				unitThe term New York
				Liberty Zone governmental unit means—
										(A)the State of New York,
										(B)the City of New York, New York, and
										(C)any agency or instrumentality of such State
				or City.
										(3)Treatment of fundsAny expenditure for a qualifying project
				taken into account for purposes of the credit under this section shall be
				considered State and local funds for the purpose of any Federal program.
									(4)Treatment of credit amounts for purposes of
				withholding taxesFor
				purposes of this title, a New York Liberty Zone governmental unit shall be
				treated as having paid to the Secretary, on the day on which wages are paid to
				employees, an amount equal to the amount of the credit allowed to such entity
				under subsection (a) with respect to such wages, but only if such governmental
				unit deducts and withholds wages for such payroll period under section 3401
				(relating to wage withholding).
									(e)ReportingThe Governor of the State of New York and
				the Mayor of the City of New York, New York, shall jointly submit to the
				Secretary an annual report—
									(1)which certifies—
										(A)the qualifying project expenditure amount
				for the calendar year, and
										(B)the amount allocated to each New York
				Liberty Zone governmental unit under subsection (b)(3) for the calendar year,
				and
										(2)includes such other information as the
				Secretary may require to carry out this section.
									(f)GuidanceThe Secretary may prescribe such guidance
				as may be necessary or appropriate to ensure compliance with the purposes of
				this
				section.
								.
					(b)Termination of special allowance and
			 expensingSubparagraph (A) of
			 section 1400K(b)(2), as redesignated by subsection (a), is amended by striking
			 the parenthetical therein and inserting (in the case of nonresidential
			 real property and residential rental property, the date of the enactment of the
			 Jobs, Energy, Families, and Disaster Relief
			 Act of 2008 or, if acquired pursuant to a binding contract in
			 effect on such enactment date, December 31, 2009).
					(c)Conforming amendments
						(1)Section 38(c)(3)(B) is amended by striking
			 section 1400L(a) and inserting section
			 1400K(a).
						(2)Section 168(k)(2)(D)(ii) is amended by
			 striking section 1400L(c)(2) and inserting section
			 1400K(c)(2).
						(3)The table of sections for part I of
			 subchapter Y of chapter 1 is amended by redesignating the item relating to
			 section 1400L as an item relating to section 1400K and by inserting after such
			 item the following new item:

									Sec. 1400L. New York Liberty
				Zone tax
				credits.

								.
						(d)Effective
			 dateThe amendments made by
			 this section shall take effect on the date of the enactment of this Act.
					512.Reporting requirements relating to disaster
			 relief contributions
					(a)In generalSection 6033(b) is amended by striking
			 and at the end of paragraph (13), by redesignating paragraph
			 (14) as paragraph (15), and by adding after paragraph (13) the following new
			 paragraph:

							(14)such information as the Secretary may
				require with respect to disaster relief activities, including the amount and
				use of qualified contributions to which sections 1400S(a) and 1400U(g) apply,
				and
							.
					(b)Effective
			 dateThe amendments made by
			 this section shall apply to returns the due date for which (determined without
			 regard to any extension) occurs after December 31, 2008.
					VIRevenue Provisions
			601.Nonqualified deferred compensation from
			 certain tax indifferent parties
				(a)In generalSubpart B of part II of subchapter E of
			 chapter 1 is amended by inserting after section 457 the following new
			 section:

						457A.Nonqualified deferred compensation from
				certain tax indifferent parties
							(a)In generalAny compensation which is deferred under a
				nonqualified deferred compensation plan of a nonqualified entity shall be
				includible in gross income when there is no substantial risk of forfeiture of
				the rights to such compensation.
							(b)Nonqualified entityFor purposes of this section, the term
				nonqualified entity means—
								(1)any foreign corporation unless
				substantially all of its income is—
									(A)effectively connected with the conduct of a
				trade or business in the United States, or
									(B)subject to a comprehensive foreign income
				tax, and
									(2)any partnership unless substantially all of
				its income is allocated to persons other than—
									(A)foreign persons with respect to whom such
				income is not subject to a comprehensive foreign income tax, and
									(B)organizations which are exempt from tax
				under this title.
									(c)Determinability of amounts of
				compensation
								(1)In generalIf the amount of any compensation is not
				determinable at the time that such compensation is otherwise includible in
				gross income under subsection (a)—
									(A)such amount shall be so includible in gross
				income when determinable, and
									(B)the tax imposed under this chapter for the
				taxable year in which such compensation is includible in gross income shall be
				increased by the sum of—
										(i)the amount of interest determined under
				paragraph (2), and
										(ii)an amount equal to 20 percent of the amount
				of such compensation.
										(2)InterestFor purposes of paragraph (1)(B)(i), the
				interest determined under this paragraph for any taxable year is the amount of
				interest at the underpayment rate under section 6621 plus 1 percentage point on
				the underpayments that would have occurred had the deferred compensation been
				includible in gross income for the taxable year in which first deferred or, if
				later, the first taxable year in which such deferred compensation is not
				subject to a substantial risk of forfeiture.
								(d)Other definitions and special
				rulesFor purposes of this
				section—
								(1)Substantial risk of forfeiture
									(A)In generalThe rights of a person to compensation
				shall be treated as subject to a substantial risk of forfeiture only if such
				person’s rights to such compensation are conditioned upon the future
				performance of substantial services by any individual.
									(B)Exception for compensation based on gain
				recognized on an investment asset
										(i)In generalTo the extent provided in regulations
				prescribed by the Secretary, if compensation is determined solely by reference
				to the amount of gain recognized on the disposition of an investment asset,
				such compensation shall be treated as subject to a substantial risk of
				forfeiture until the date of such disposition.
										(ii)Investment assetFor purposes of clause (i), the term
				investment asset means any single asset (other than an
				investment fund or similar entity)—
											(I)acquired directly by an investment fund or
				similar entity,
											(II)with respect to which such entity does not
				(nor does any person related to such entity) participate in the active
				management of such asset (or if such asset is an interest in an entity, in the
				active management of the activities of such entity), and
											(III)substantially all of any gain on the
				disposition of which (other than such deferred compensation) is allocated to
				investors in such entity.
											(iii)Coordination with special
				ruleParagraph (3)(B) shall
				not apply to any compensation to which clause (i) applies.
										(2)Comprehensive foreign income
				taxThe term
				comprehensive foreign income tax means, with respect to any
				foreign person, the income tax of a foreign country if—
									(A)such person is eligible for the benefits of
				a comprehensive income tax treaty between such foreign country and the United
				States, or
									(B)such person demonstrates to the
				satisfaction of the Secretary that such foreign country has a comprehensive
				income tax.
									(3)Nonqualified deferred compensation
				plan
									(A)In generalThe term nonqualified deferred
				compensation plan has the meaning given such term under section 409A(d),
				except that such term shall include any plan that provides a right to
				compensation based on the appreciation in value of a specified number of equity
				units of the service recipient.
									(B)ExceptionCompensation shall not be treated as
				deferred for purposes of this section if the service provider receives payment
				of such compensation not later than 12 months after the end of the taxable year
				of the service recipient during which the right to the payment of such
				compensation is no longer subject to a substantial risk of forfeiture.
									(4)Exception for certain compensation with
				respect to effectively connected incomeIn the case a foreign corporation with
				income which is taxable under section 882, this section shall not apply to
				compensation which, had such compensation had been paid in cash on the date
				that such compensation ceased to be subject to a substantial risk of
				forfeiture, would have been deductible by such foreign corporation against such
				income.
								(5)Application of rulesRules similar to the rules of paragraphs
				(5) and (6) of section 409A(d) shall apply.
								(e)RegulationsThe Secretary shall prescribe such
				regulations as may be necessary or appropriate to carry out the purposes of
				this section, including regulations disregarding a substantial risk of
				forfeiture in cases where necessary to carry out the purposes of this
				section.
							(f)TerminationThis section shall not apply to amounts
				deferred which are attributable to services performed after December 31,
				2018.
							.
				(b)Conforming amendmentSection 26(b)(2), as amended by the Housing
			 Assistance Tax Act of 2008, is amended by striking and at the
			 end of subparagraph (V), by striking the period at the end of subparagraph (W)
			 and inserting , and, and by adding at the end the following new
			 subparagraph:

						(X)section 457A(c)(1)(B) (relating to
				determinability of amounts of
				compensation).
						.
				(c)Clerical amendmentThe table of sections of subpart B of part
			 II of subchapter E of chapter 1 is amended by inserting after the item relating
			 to section 457 the following new item:

							Sec. 457A. Nonqualified deferred compensation from certain tax
				indifferent
				parties.

						.
				(d)Effective date
					(1)In generalExcept as otherwise provided in this
			 subsection, the amendments made by this section shall apply to amounts deferred
			 which are attributable to services performed after December 31, 2008.
					(2)Application to existing
			 deferralsIn the case of any
			 amount deferred to which the amendments made by this section do not apply
			 solely by reason of the fact that the amount is attributable to services
			 performed before January 1, 2009, to the extent such amount is not includible
			 in gross income in a taxable year beginning before 2018, such amounts shall be
			 includible in gross income in the later of—
						(A)the last taxable year beginning before
			 2018, or
						(B)the taxable year in which there is no
			 substantial risk of forfeiture of the rights to such compensation (determined
			 in the same manner as determined for purposes of section 457A of the Internal
			 Revenue Code of 1986, as added by this section).
						(3)Charitable contributions of existing
			 deferrals permitted
						(A)In generalSubsection (b) of section 170 of the
			 Internal Revenue Code of 1986 shall not apply to (and subsections (b) and (d)
			 of such section shall be applied without regard to) so much of the taxpayer’s
			 qualified contributions made during the taxpayer’s last taxable year beginning
			 before 2018 as does not exceed the taxpayer’s qualified inclusion amount. For
			 purposes of subsection (b) of section 170 of such Code, the taxpayer’s
			 contribution base for such last taxable year shall be reduced by the amount of
			 the taxpayer’s qualified contributions to which such subsection does not apply
			 by reason the preceding sentence.
						(B)Qualified contributionsFor purposes of this paragraph, the term
			 qualified contributions means the aggregate charitable
			 contributions (as defined in section 170(c) of such Code) paid in cash by the
			 taxpayer to organizations described in section 170(b)(1)(A) of such Code (other
			 than any organization described in section 509(a)(3) of such Code or any fund
			 or account described in section 4966(d)(2) of such Code).
						(C)Qualified inclusion amountFor purposes of this paragraph, the term
			 qualified inclusion amount means the amount includible in the
			 taxpayer’s gross income for the last taxable year beginning before 2018 by
			 reason of paragraph (2).
						(4)Accelerated paymentsNo later than 120 days after the date of
			 the enactment of this Act, the Secretary shall issue guidance providing a
			 limited period of time during which a nonqualified deferred compensation
			 arrangement attributable to services performed on or before December 31, 2008,
			 may, without violating the requirements of section 409A(a) of the Internal
			 Revenue Code of 1986, be amended to conform the date of distribution to the
			 date the amounts are required to be included in income.
					(5)Certain back-to-back
			 arrangementsIf the taxpayer
			 is also a service recipient and maintains one or more nonqualified deferred
			 compensation arrangements for its service providers under which any amount is
			 attributable to services performed on or before December 31, 2008, the guidance
			 issued under paragraph (4) shall permit such arrangements to be amended to
			 conform the dates of distribution under such arrangement to the date amounts
			 are required to be included in the income of such taxpayer under this
			 subsection.
					(6)Accelerated payment not treated as material
			 modificationAny amendment to
			 a nonqualified deferred compensation arrangement made pursuant to paragraph (4)
			 or (5) shall not be treated as a material modification of the arrangement for
			 purposes of section 409A of the Internal Revenue Code of 1986.
					602.Delay in application of worldwide
			 allocation of interest
				(a)In generalParagraph (6) of section 864(f), as amended
			 by the Housing Assistance Tax Act of 2008, is amended by striking
			 December 31, 2010 and inserting December 31,
			 2018.
				(b)Conforming amendmentParagraph (5)(D) of section 864(f) is
			 amended by striking December 31, 2008 and inserting
			 December 31, 2018.
				(c)Effective
			 dateThe amendments made by
			 this section shall apply to taxable years beginning after December 31,
			 2008.
				603.Broker reporting of customer’s basis in
			 securities transactions
				(a)In general
					(1)Broker reporting for securities
			 transactionsSection 6045 is
			 amended by adding at the end the following new subsection:

							(g)Additional information required in the case
				of securities transactions, etc
								(1)In generalIf a broker is otherwise required to make a
				return under subsection (a) with respect to the gross proceeds of the sale of a
				covered security, the broker shall include in such return the information
				described in paragraph (2).
								(2)Additional information required
									(A)In generalThe information required under paragraph
				(1) to be shown on a return with respect to a covered security of a customer
				shall include the customer’s adjusted basis in such security and whether any
				gain or loss with respect to such security is long-term or short-term (within
				the meaning of section 1222).
									(B)Determination of adjusted
				basisFor purposes of
				subparagraph (A)—
										(i)In generalThe customer’s adjusted basis shall be
				determined—
											(I)in the case of any security (other than any
				stock for which an average basis method is permissible under section 1012), in
				accordance with the first-in first-out method unless the customer notifies the
				broker by means of making an adequate identification of the stock sold or
				transferred, and
											(II)in the case of any stock for which an
				average basis method is permissible under section 1012, in accordance with the
				broker’s default method unless the customer notifies the broker that he elects
				another acceptable method under section 1012 with respect to the account in
				which such stock is held.
											(ii)Exception for wash salesExcept as otherwise provided by the
				Secretary, the customer’s adjusted basis shall be determined without regard to
				section 1091 (relating to loss from wash sales of stock or securities) unless
				the transactions occur in the same account with respect to identical
				securities.
										(3)Covered securityFor purposes of this subsection—
									(A)In generalThe term covered security
				means any specified security acquired on or after the applicable date if such
				security—
										(i)was acquired through a transaction in the
				account in which such security is held, or
										(ii)was transferred to such account from an
				account in which such security was a covered security, but only if the broker
				received a statement under section 6045A with respect to the transfer.
										(B)Specified securityThe term specified security
				means—
										(i)any share of stock in a corporation,
										(ii)any note, bond, debenture, or other
				evidence of indebtedness,
										(iii)any commodity, or contract or derivative
				with respect to such commodity, if the Secretary determines that adjusted basis
				reporting is appropriate for purposes of this subsection, and
										(iv)any other financial instrument with respect
				to which the Secretary determines that adjusted basis reporting is appropriate
				for purposes of this subsection.
										(C)Applicable dateThe term applicable date
				means—
										(i)January 1, 2010, in the case of any
				specified security which is stock in a corporation (other than any stock
				described in clause (ii)),
										(ii)January 1, 2011, in the case of any stock
				for which an average basis method is permissible under section 1012, and
										(iii)January 1, 2012, or such later date
				determined by the Secretary in the case of any other specified security.
										(4)Treatment of S corporationsIn the case of the sale of a covered
				security acquired by an S corporation (other than a financial institution)
				after December 31, 2011, such S corporation shall be treated in the same manner
				as a partnership for purposes of this section.
								(5)Special rules for short salesIn the case of a short sale, reporting
				under this section shall be made for the year in which such sale is
				closed.
								.
					(2)Broker information required with respect to
			 optionsSection 6045, as
			 amended by subsection (a), is amended by adding at the end the following new
			 subsection:

							(h)Application to options on
				securities
								(1)Exercise of optionFor purposes of this section, if a covered
				security is acquired or disposed of pursuant to the exercise of an option that
				was granted or acquired in the same account as the covered security, the amount
				received with respect to the grant or paid with respect to the acquisition of
				such option shall be treated as an adjustment to gross proceeds or as an
				adjustment to basis, as the case may be.
								(2)Lapse or closing transactionIn the case of the lapse (or closing
				transaction (as defined in section 1234(b)(2)(A))) of an option on a specified
				security or the exercise of a cash-settled option on a specified security,
				reporting under subsections (a) and (g) with respect to such option shall be
				made for the calendar year which includes the date of such lapse, closing
				transaction, or exercise.
								(3)Prospective applicationParagraphs (1) and (2) shall not apply to
				any option which is granted or acquired before January 1, 2012.
								(4)DefinitionsFor purposes of this subsection, the terms
				covered security and specified security shall have
				the meanings given such terms in subsection
				(g)(3).
								.
					(3)Extension of period for statements sent to
			 customers
						(A)In generalSubsection (b) of section 6045 is amended
			 by striking January 31 and inserting February
			 15.
						(B)Statements related to substitute
			 paymentsSubsection (d) of
			 section 6045 is amended—
							(i)by striking at such time
			 and, and
							(ii)by inserting after other
			 item. the following new sentence: The written statement required
			 under the preceding sentence shall be furnished on or before February 15 of the
			 year following the calendar year in which the payment was made..
							(C)Other statementsSubsection (b) of section 6045 is amended
			 by adding at the end the following: In the case of a consolidated
			 reporting statement (as defined in regulations) with respect to any account,
			 any statement which would otherwise be required to be furnished on or before
			 January 31 of a calendar year with respect to any item reportable to the
			 taxpayer shall instead be required to be furnished on or before February 15 of
			 such calendar year if furnished with such consolidated reporting
			 statement..
						(b)Determination of basis of certain
			 securities on account by account or average basis methodSection 1012 is amended—
					(1)by striking The basis of
			 property and inserting the following:

							(a)In generalThe basis of
				property
							,
					(2)by striking The cost of real
			 property and inserting the following:

							(b)Special rule for apportioned real estate
				taxesThe cost of real
				property
							,
				and
					(3)by adding at the end the following new
			 subsections:

							(c)Determinations by account
								(1)In generalIn the case of the sale, exchange, or other
				disposition of a specified security on or after the applicable date, the
				conventions prescribed by regulations under this section shall be applied on an
				account by account basis.
								(2)Application to open-end funds
									(A)In generalExcept as provided in subparagraph (B), any
				stock in an open-end fund acquired before January 1, 2011, shall be treated as
				a separate account from any such stock acquired on or after such date.
									(B)Election by open-end fund for treatment as
				single accountIf an open-end
				fund elects to have this subparagraph apply with respect to one or more of its
				stockholders—
										(i)subparagraph (A) shall not apply with
				respect to any stock in such fund held by such stockholders, and
										(ii)all stock in such fund which is held by
				such stockholders shall be treated as covered securities described in section
				6045(g)(3) without regard to the date of the acquisition of such stock.
										A rule similar to the rule of the
				preceding sentence shall apply with respect to a broker holding stock in an
				open-end fund as a nominee.(3)DefinitionsFor purposes of this section—
									(A)Open-end fundThe term open-end fund means a
				regulated investment company (as defined in section 851) which is offering for
				sale or has outstanding any redeemable security of which it is the issuer. Any
				stock which is traded on an established securities exchange shall not be
				treated as stock in an open-end fund.
									(B)Specified security; applicable
				dateThe terms
				specified security and applicable date shall have the
				meaning given such terms in section 6045(g).
									(d)Average basis for stock acquired pursuant
				to a dividend reinvestment plan
								(1)In generalIn the case of any stock acquired after
				December 31, 2010, in connection with a dividend reinvestment plan, the basis
				of such stock while held as part of such plan shall be determined using one of
				the methods which may be used for determining the basis of stock in an open-end
				fund.
								(2)Treatment after transferIn the case of the transfer to another
				account of stock to which paragraph (1) applies, such stock shall have a cost
				basis in such other account equal to its basis in the dividend reinvestment
				plan immediately before such transfer (properly adjusted for any fees or other
				charges taken into account in connection with such transfer).
								(3)Separate accounts; election for treatment
				as single accountRules
				similar to the rules of subsection (c)(2) shall apply for purposes of this
				subsection.
								(4)Dividend reinvestment planFor purposes of this subsection—
									(A)In generalThe term dividend reinvestment
				plan means any arrangement under which dividends on any stock are
				reinvested in stock identical to the stock with respect to which the dividends
				are paid.
									(B)Initial stock acquisition treated as
				acquired in connection with planStock shall be treated as acquired in
				connection with a dividend reinvestment plan if such stock is acquired pursuant
				to such plan or if the dividends paid on such stock are subject to such
				plan.
									.
					(c)Information by transferors To aid
			 brokers
					(1)In generalSubpart B of part III of subchapter A of
			 chapter 61 is amended by inserting after section 6045 the following new
			 section:

							6045A.Information required in connection with
				transfers of covered securities to brokers
								(a)Furnishing of informationEvery applicable person which transfers to
				a broker (as defined in section 6045(c)(1)) a security which is a covered
				security (as defined in section 6045(g)(3)) in the hands of such applicable
				person shall furnish to such broker a written statement in such manner and
				setting forth such information as the Secretary may by regulations prescribe
				for purposes of enabling such broker to meet the requirements of section
				6045(g).
								(b)Applicable personFor purposes of subsection (a), the term
				applicable person means—
									(1)any broker (as defined in section
				6045(c)(1)), and
									(2)any other person as provided by the
				Secretary in regulations.
									(c)Time for furnishing statementExcept as otherwise provided by the
				Secretary, any statement required by subsection (a) shall be furnished not
				later than 15 days after the date of the transfer described in such
				subsection.
								.
					(2)Assessable penaltiesParagraph (2) of section 6724(d), as
			 amended by the Housing Assistance Tax Act of 2008, is amended by redesignating
			 subparagraphs (I) through (DD) as subparagraphs (J) through (EE), respectively,
			 and by inserting after subparagraph (H) the following new subparagraph:

							(I)section 6045A (relating to information
				required in connection with transfers of covered securities to
				brokers),
							.
					(3)Clerical amendmentThe table of sections for subpart B of part
			 III of subchapter A of chapter 61 is amended by inserting after the item
			 relating to section 6045 the following new item:

								Sec.
				6045A. Information required in connection with transfers of covered securities
				to
				brokers.

							.
					(d)Additional issuer information To aid
			 brokers
					(1)In generalSubpart B of part III of subchapter A of
			 chapter 61, as amended by subsection (b), is amended by inserting after section
			 6045A the following new section:

							6045B.Returns relating to actions affecting basis
				of specified securities
								(a)In generalAccording to the forms or regulations
				prescribed by the Secretary, any issuer of a specified security shall make a
				return setting forth—
									(1)a description of any organizational action
				which affects the basis of such specified security of such issuer,
									(2)the quantitative effect on the basis of
				such specified security resulting from such action, and
									(3)such other information as the Secretary may
				prescribe.
									(b)Time for filing returnAny return required by subsection (a) shall
				be filed not later than the earlier of—
									(1)45 days after the date of the action
				described in subsection (a), or
									(2)January 15 of the year following the
				calendar year during which such action occurred.
									(c)Statements To be furnished to holders of
				specified securities or their nomineesAccording to the forms or regulations
				prescribed by the Secretary, every person required to make a return under
				subsection (a) with respect to a specified security shall furnish to the
				nominee with respect to the specified security (or certificate holder if there
				is no nominee) a written statement showing—
									(1)the name, address, and phone number of the
				information contact of the person required to make such return,
									(2)the information required to be shown on
				such return with respect to such security, and
									(3)such other information as the Secretary may
				prescribe.
									The written statement required under
				the preceding sentence shall be furnished to the holder on or before January 15
				of the year following the calendar year during which the action described in
				subsection (a) occurred.(d)Specified securityFor purposes of this section, the term
				specified security has the meaning given such term by section
				6045(g)(3)(B). No return shall be required under this section with respect to
				actions described in subsection (a) with respect to a specified security which
				occur before the applicable date (as defined in section 6045(g)(3)(C)) with
				respect to such security.
								(e)Public reporting in lieu of
				returnThe Secretary may
				waive the requirements under subsections (a) and (c) with respect to a
				specified security, if the person required to make the return under subsection
				(a) makes publicly available, in such form and manner as the Secretary
				determines necessary to carry out the purposes of this section—
									(1)the name, address, phone number, and email
				address of the information contact of such person, and
									(2)the information described in paragraphs
				(1), (2), and (3) of subsection
				(a).
									.
					(2)Assessable penalties
						(A)Subparagraph (B) of section 6724(d)(1), as
			 amended by the Housing Assistance Tax Act of 2008, is amended by redesignating
			 clause (iv) and each of the clauses which follow as clauses (v) through
			 (xxiii), respectively, and by inserting after clause (iii) the following new
			 clause:

								(iv)section 6045B(a) (relating to returns
				relating to actions affecting basis of specified
				securities),
								.
						(B)Paragraph (2) of section 6724(d), as
			 amended by the Housing Assistance Tax Act of 2008 and by subsection (c)(2), is
			 amended by redesignating subparagraphs (J) through (EE) as subparagraphs (K)
			 through (FF), respectively, and by inserting after subparagraph (I) the
			 following new subparagraph:

								(J)subsections (c) and (e) of section 6045B
				(relating to returns relating to actions affecting basis of specified
				securities),
								.
						(3)Clerical amendmentThe table of sections for subpart B of part
			 III of subchapter A of chapter 61, as amended by subsection (b)(3), is amended
			 by inserting after the item relating to section 6045A the following new
			 item:

								Sec.
				6045B. Returns relating to actions affecting basis of specified
				securities.

							.
					(e)Effective date
					(1)In generalExcept as otherwise provided in this
			 subsection, the amendments made by this section shall take effect on January 1,
			 2010.
					(2)Extension of period for statements sent to
			 customersThe amendments made
			 by subsection (a)(3) shall apply to statements required to be furnished after
			 December 31, 2008.
					604.Time for payment of corporate estimated
			 taxesThe percentage under
			 subparagraph (C) of section 401(1) of the Tax Increase Prevention and
			 Reconciliation Act of 2005 in effect on the date of the enactment of this Act
			 is increased by 47.5 percentage points.

		July 25, 2008
		Read the second time and placed on the
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