		110th CONGRESS
		2d Session
		H. R. 6049
		In the Senate of the United
	 States,

			September 23 (legislative
		day, September 17), 2008.

		Amendment:
		That the bill from the House of Representatives
		(H.R. 6049) entitled An Act to amend the Internal Revenue Code of 1986
		to provide incentives for energy production and conservation, to extend certain
		expiring provisions, to provide individual income tax relief, and for other
		purposes., do pass with the following
		Strike all after
	 the enacting clause and insert the
	 following:
				1.Short title, etc
					(a)Short titleThis Act may be cited as the
		Energy Improvement and Extension 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 production incentives
							Subtitle A—Renewable energy incentives
							Sec.
		  101. Renewable energy credit.
							Sec.
		  102. Production credit for electricity produced from marine
		  renewables.
							Sec.
		  103. Energy credit.
							Sec. 104. Energy credit for small wind property.
							Sec.
		  105. Energy credit for geothermal heat pump systems.
							Sec.
		  106. Credit for residential energy efficient property.
							Sec.
		  107. New clean renewable energy bonds.
							Sec. 108. Credit for steel industry fuel.
							Sec.
		  109. Special rule to implement FERC and State electric restructuring
		  policy.
							Subtitle B—Carbon mitigation and coal 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; funding of Black Lung Disability
		  Trust Fund.
							Sec.
		  114. Special rules for refund of the coal excise tax to certain coal producers
		  and exporters.
							Sec.
		  115. Tax credit for carbon dioxide sequestration.
							Sec. 116. Certain income and gains relating to industrial
		  source carbon dioxide treated as qualifying income for publicly traded
		  partnerships.
							Sec.
		  117. Carbon audit of the tax code.
							TITLE
		  II—Transportation and domestic fuel security provisions
							Sec.
		  201. Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol
		  plant property.
							Sec. 202. Credits for biodiesel and renewable
		  diesel.
							Sec.
		  203. Clarification that credits for fuel are designed to provide an incentive
		  for United States production.
							Sec. 204. Extension and modification of alternative fuel
		  credit.
							Sec. 205. Credit for new qualified plug-in electric drive motor
		  vehicles.
							Sec.
		  206. Exclusion from heavy truck tax for idling reduction units and advanced
		  insulation.
							Sec.
		  207. Alternative fuel vehicle refueling property credit.
							Sec. 208. 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.
							Sec. 209. Extension and modification of election to expense
		  certain refineries.
							Sec. 210. Extension of suspension of taxable income limit on
		  percentage depletion for oil and natural gas produced from marginal
		  properties.
							Sec.
		  211. Transportation fringe benefit to bicycle commuters.
							TITLE
		  III—Energy conservation and efficiency provisions
							Sec.
		  301. Qualified energy conservation bonds.
							Sec.
		  302. Credit for nonbusiness energy property.
							Sec.
		  303. Energy efficient commercial buildings deduction.
							Sec. 304. New energy efficient home credit.
							Sec.
		  305. Modifications of energy efficient appliance credit for appliances produced
		  after 2007.
							Sec. 306. Accelerated recovery period for depreciation of smart
		  meters and smart grid systems.
							Sec.
		  307. Qualified green building and sustainable design projects.
							Sec. 308. Special depreciation allowance for certain reuse and
		  recycling property.
							TITLE
		  IV—Revenue provisions
							Sec. 401. Limitation of deduction for income attributable to
		  domestic production of oil, gas, or primary products thereof.
							Sec. 402. Elimination of the different treatment of foreign oil
		  and gas extraction income and foreign oil related income for purposes of the
		  foreign tax credit.
							Sec. 403. Broker reporting of customer’s basis in securities
		  transactions.
							Sec. 404. 0.2 percent FUTA surtax.
							Sec. 405. Increase and extension of Oil Spill Liability Trust
		  Fund tax.

					IEnergy production incentives
					ARenewable energy incentives
						101.Renewable energy credit
							(a)Extension of
		credit
								(1)1-year extension
		for wind and refined coal facilitiesParagraphs (1) and (8) of
		section 45(d) are each amended by striking January 1, 2009 and
		inserting January 1, 2010.
								(2)2-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, 2011:
									(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
		refined coal as a qualified energy resource
								(1)Elimination of
		increased market value testSection 45(c)(7)(A)(i) (defining
		refined coal), as amended by section 108, is amended—
									(A)by striking
		subclause (IV),
									(B)by adding
		and at the end of subclause (II), and
									(C)by striking
		, and at the end of subclause (III) and inserting a
		period.
									(2)Increase in
		required emission reductionSection 45(c)(7)(B) (defining
		qualified emission reduction) is amended by inserting at least 40
		percent of the emissions of after nitrogen oxide
		and.
								(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)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..
							(f)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)Refined
		coalThe amendments made by
		subsection (b) shall apply to coal produced and sold from facilities placed in
		service after December 31, 2008.
								(3)Trash facility clarificationThe amendments made by subsection (c) shall
		apply to electricity produced and sold after the date of the enactment of this
		Act.
								(4)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, 2016.
								(3)Microturbine propertySubparagraph (E) of section 48(c)(2) is
		amended by striking December 31, 2008 and inserting
		December 31, 2016.
								(b)Allowance of energy credit against
		alternative minimum tax
								(1)In
		generalSubparagraph (B) of
		section 38(c)(4), as amended by the Housing Assistance Tax Act of 2008, is
		amended by redesignating clause (vi) as clause (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,
										.
								(2)Technical
		amendmentClause (vi) of section 38(c)(4)(B), as redesignated by
		paragraph (1), is amended by striking section 47 to the extent
		attributable to and inserting section 46 to the extent that such
		credit is attributable to the rehabilitation credit under section 47, but only
		with respect to.
								(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
		PropertySubsection (c) of
		section 48 is amended—
									(A)by striking
		Qualified fuel cell
		property; qualified microturbine property in the
		heading and inserting Definitions, and
									(B)by adding at the end the following new
		paragraph:

											(3)Combined Heat and Power System
		  Property
												(A)Combined heat and power system
		  propertyThe term
		  combined heat and power system property means property comprising
		  a system—
													(i)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),
													(ii)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),
														(iii)the energy efficiency percentage of which
		  exceeds 60 percent, and
													(iv)which is placed in service before January
		  1, 2017.
													(B)Limitation
													(i)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.
													(ii)Applicable capacityFor purposes of clause (i), 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.
													(iii)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.
													(C)Special rules
													(i)Energy efficiency percentageFor purposes of this paragraph, 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.
														(ii)Determinations made on btu
		  basisThe energy efficiency
		  percentage and the percentages under subparagraph (A)(ii) shall be determined
		  on a Btu basis.
													(iii)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.
													(D)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—
													(i)subparagraph (A)(iii) shall not apply,
		  but
													(ii)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 subparagraph) as the energy efficiency percentage of such system bears to
		  60
		  percent.
													.
									(3)Conforming
		amendmentSection 48(a)(1) is amended by striking
		paragraphs (1)(B) and (2)(B) and inserting paragraphs
		(1)(B), (2)(B), and (3)(B).
								(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.Energy credit
		for small wind property
							(a)In
		generalSection 48(a)(3)(A), as amended by section 103, is
		amended by striking or at the end of clause (iv), by adding
		or at the end of clause (v), and by inserting after clause (v)
		the following new clause:

									(vi)qualified small
		  wind energy
		  property,
									.
							(b)30 percent
		creditSection 48(a)(2)(A)(i) is amended by striking
		and at the end of subclause (II) and by inserting after
		subclause (III) the following new subclause:

									(IV)qualified small
		  wind energy property,
		  and
									.
							(c)Qualified small
		wind energy propertySection 48(c), as amended by section 103, is
		amended by adding at the end the following new paragraph:

									(4)Qualified small
		  wind energy property
										(A)In
		  generalThe term qualified small wind energy
		  property means property which uses a qualifying small wind turbine to
		  generate electricity.
										(B)LimitationIn
		  the case of qualified small wind energy property placed in service during the
		  taxable year, the credit otherwise determined under subsection (a)(1) for such
		  year with respect to all such property of the taxpayer shall not exceed
		  $4,000.
										(C)Qualifying
		  small wind turbineThe term qualifying small wind
		  turbine means a wind turbine which has a nameplate capacity of not more
		  than 100 kilowatts.
										(D)TerminationThe
		  term qualified small wind energy property shall not include any
		  property for any period after December 31,
		  2016.
										.
							(d)Conforming
		amendmentSection 48(a)(1), as amended by section 103, is amended
		by striking paragraphs (1)(B), (2)(B), and (3)(B) and inserting
		paragraphs (1)(B), (2)(B), (3)(B), and (4)(B).
							(e)Effective
		dateThe amendments made by this section 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).
							105.Energy credit for
		geothermal heat pump systems
							(a)In
		generalSubparagraph (A) of
		section 48(a)(3),
		as amended by this Act, is amended by striking
		or at the end of clause (v), by inserting or at
		the end of clause (vi), and by adding at the end the following new
		clause:

									(vii)equipment which
		  uses the ground or ground water as a thermal energy source to heat a structure
		  or as a thermal energy sink to cool a structure, but only with respect to
		  periods ending before January 1,
		  2017,
									.
							(b)Effective
		dateThe amendments made by this section 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).
							106.Credit for residential energy efficient
		property
							(a)ExtensionSection 25D(g) is amended by striking
		December 31, 2008 and inserting December 31,
		2016.
							(b)Removal of limitation for solar electric
		property
								(1)In generalSection 25D(b)(1), as amended by
		subsections (c) and (d), is amended—
									(A)by striking subparagraph (A), and
									(B)by redesignating subparagraphs (B) through
		(E) as subparagraphs (A) through and (D), respectively.
									(2)Conforming amendmentSection 25D(e)(4)(A), as amended by
		subsections (c) and (d), is amended—
									(A)by striking clause (i), and
									(B)by redesignating clauses (ii) through (v)
		as clauses (i) and (iv), respectively.
									(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 generalExcept as provided in paragraph (2), the
		amendments made by this section shall apply to taxable years beginning after
		December 31, 2007.
								(2)Solar electric
		property limitationThe amendments made by subsection (b) shall
		apply to taxable years beginning after December 31, 2008.
								(3)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.
								107.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 $800,000,000 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)Extension for
		clean renewable energy bondsSubsection (m) of section 54 is
		amended by striking December 31, 2008 and inserting
		December 31, 2009.
							(d)Effective
		dateThe amendments made by
		this section shall apply to obligations issued after the date of the enactment
		of this Act.
							108.Credit for
		steel industry fuel
							(a)Treatment as
		refined coal
								(1)In
		generalSubparagraph (A) of section 45(c)(7) of the Internal
		Revenue Code of 1986 (relating to refined coal), as amended by this Act, is
		amended to read as follows:

										(A)In
		  generalThe term refined coal means a fuel—
											(i)which—
												(I)is
		  a liquid, gaseous, or solid fuel produced from coal (including lignite) or high
		  carbon fly ash, including such fuel used as a feedstock,
												(II)is sold by the
		  taxpayer with the reasonable expectation that it will be used for purpose of
		  producing steam,
												(III)is certified by
		  the taxpayer as resulting (when used in the production of steam) in a qualified
		  emission reduction, and
												(IV)is produced in
		  such a manner as to result in an increase of at least 50 percent in the market
		  value of the refined coal (excluding any increase caused by materials combined
		  or added during the production process), as compared to the value of the
		  feedstock coal, or
												(ii)which is steel
		  industry
		  fuel.
											.
								(2)Steel industry
		fuel definedParagraph (7) of section 45(c) of such Code is
		amended by adding at the end the following new subparagraph:

										(C)Steel industry
		  fuel
											(i)In
		  generalThe term steel industry fuel means a fuel
		  which—
												(I)is
		  produced through a process of liquifying coal waste sludge and distributing it
		  on coal, and
												(II)is used as a
		  feedstock for the manufacture of coke.
												(ii)Coal waste
		  sludgeThe term coal waste sludge means the tar
		  decanter sludge and related byproducts of the coking process, including such
		  materials that have been stored in ground, in tanks and in lagoons, that have
		  been treated as hazardous wastes under applicable Federal environmental rules
		  absent liquefaction and processing with coal into a feedstock for the
		  manufacture of
		  coke.
											.
								(b)Credit
		amount
								(1)In
		generalParagraph (8) of section 45(e) of the Internal Revenue
		Code of 1986 (relating to refined coal production facilities) is amended by
		adding at the end the following new subparagraph

										(D)Special rule
		  for steel industry fuel
											(i)In
		  generalIn the case of a taxpayer who produces steel industry
		  fuel—
												(I)this paragraph
		  shall be applied separately with respect to steel industry fuel and other
		  refined coal, and
												(II)in applying this
		  paragraph to steel industry fuel, the modifications in clause (ii) shall
		  apply.
												(ii)Modifications
												(I)Credit
		  amountSubparagraph (A) shall be applied by substituting
		  $2 per barrel-of-oil equivalent for $4.375 per
		  ton.
												(II)Credit
		  periodIn lieu of the 10-year period referred to in clauses (i)
		  and (ii)(II) of subparagraph (A), the credit period shall be the period
		  beginning on the later of the date such facility was originally placed in
		  service, the date the modifications described in clause (iii) were placed in
		  service, or October 1, 2008, and ending on the later of December 31, 2009, or
		  the date which is 1 year after the date such facility or the modifications
		  described in clause (iii) were placed in service.
												(III)No
		  phaseoutSubparagraph (B) shall not apply.
												(iii)ModificationsThe
		  modifications described in this clause are modifications to an existing
		  facility which allow such facility to produce steel industry fuel.
											(iv)Barrel-of-oil
		  equivalentFor purposes of this subparagraph, a barrel-of-oil
		  equivalent is the amount of steel industry fuel that has a Btu content of
		  5,800,000
		  Btus.
											.
								(2)Inflation
		adjustmentParagraph (2) of section 45(b) of such Code is amended
		by inserting the $3 amount in subsection (e)(8)(D)(ii)(I), after
		subsection (e)(8)(A),.
								(c)TerminationParagraph
		(8) of section 45(d) of the Internal Revenue Code of 1986 (relating to refined
		coal production facility), as amended by this Act, is amended to read as
		follows:

									(8)Refined coal
		  production facilityIn the case of a facility that produces
		  refined coal, the term refined coal production facility
		  means—
										(A)with respect to a
		  facility producing steel industry fuel, any facility (or any modification to a
		  facility) which is placed in service before January 1, 2010, and
										(B)with respect to
		  any other facility producing refined coal, any facility placed in service after
		  the date of the enactment of the American Jobs Creation Act of 2004 and before
		  January 1,
		  2010.
										.
							(d)Coordination
		with credit for producing fuel from a nonconventional source
								(1)In
		generalSubparagraph (B) of section 45(e)(9) of the Internal
		Revenue Code of 1986 is amended—
									(A)by striking
		The term and inserting the following:

											(i)In
		  generalThe term
											,
		  and
									(B)by adding at the
		end the following new clause:

											(ii)Exception for
		  steel industry coalIn the case of a facility producing steel
		  industry fuel, clause (i) shall not apply to so much of the refined coal
		  produced at such facility as is steel industry
		  fuel.
											.
									(2)No
		double benefitSection 45K(g)(2) of such Code is amended by
		adding at the end the following new subparagraph:

										(E)Coordination
		  with section 45No credit shall be allowed with respect to any
		  qualified fuel which is steel industry fuel (as defined in section 45(c)(7)) if
		  a credit is allowed to the taxpayer for such fuel under section
		  45.
										.
								(e)Effective
		dateThe amendments made by this section shall apply to fuel
		produced and sold after September 30, 2008.
							109.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.
								BCarbon mitigation and coal
		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)Eligible
		projects include transportation grade liquid fuelsSection
		48B(c)(7) (defining eligible entity) is amended by striking and
		at the end of subparagraph (F), by striking the period at the end of
		subparagraph (G) and inserting , and, and by adding at the end
		the following new subparagraph:

									(H)transportation
		  grade liquid
		  fuels.
									.
							(f)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 tax;
		funding of Black Lung Disability Trust Fund
							(a)Extension of temporary
		increaseParagraph (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.
								(b)Restructuring
		of Trust Fund debt
								(1)DefinitionsFor
		purposes of this subsection—
									(A)Market value of
		the outstanding repayable advances, plus accrued interestThe term market value of the
		outstanding repayable advances, plus accrued interest means the present
		value (determined by the Secretary of the Treasury as of the refinancing date
		and using the Treasury rate as the discount rate) of the stream of principal
		and interest payments derived assuming that each repayable advance that is
		outstanding on the refinancing date is due on the 30th anniversary of the end
		of the fiscal year in which the advance was made to the Trust Fund, and that
		all such principal and interest payments are made on September 30 of the
		applicable fiscal year.
									(B)Refinancing
		dateThe term
		refinancing date means the date occurring 2 days after the
		enactment of this Act.
									(C)Repayable
		advanceThe term
		repayable advance means an amount that has been appropriated to
		the Trust Fund in order to make benefit payments and other expenditures that
		are authorized under section 9501 of the Internal Revenue Code of 1986 and are
		required to be repaid when the Secretary of the Treasury determines that monies
		are available in the Trust Fund for such purpose.
									(D)Treasury
		rateThe term Treasury
		rate means a rate determined by the Secretary of the Treasury, taking
		into consideration current market yields on outstanding marketable obligations
		of the United States of comparable maturities.
									(E)Treasury 1-year
		rateThe term Treasury
		1-year rate means a rate determined by the Secretary of the Treasury,
		taking into consideration current market yields on outstanding marketable
		obligations of the United States with remaining periods to maturity of
		approximately 1 year, to have been in effect as of the close of business 1
		business day prior to the date on which the Trust Fund issues obligations to
		the Secretary of the Treasury under paragraph (2)(B).
									(2)Refinancing of
		outstanding principal of repayable advances and unpaid interest on such
		advances
									(A)Transfer to
		general fundOn the refinancing date, the Trust Fund shall repay
		the market value of the outstanding repayable advances, plus accrued interest,
		by transferring into the general fund of the Treasury the following
		sums:
										(i)The
		proceeds from obligations that the Trust Fund shall issue to the Secretary of
		the Treasury in such amounts as the Secretaries of Labor and the Treasury shall
		determine and bearing interest at the Treasury rate, and that shall be in such
		forms and denominations and be subject to such other terms and conditions,
		including maturity, as the Secretary of the Treasury shall prescribe.
										(ii)All,
		or that portion, of the appropriation made to the Trust Fund pursuant to
		paragraph (3) that is needed to cover the difference defined in that
		paragraph.
										(B)Repayment of
		obligationsIn the event that the Trust Fund is unable to repay
		the obligations that it has issued to the Secretary of the Treasury under
		subparagraph (A)(i) and this subparagraph, or is unable to make benefit
		payments and other authorized expenditures, the Trust Fund shall issue
		obligations to the Secretary of the Treasury in such amounts as may be
		necessary to make such repayments, payments, and expenditures, with a maturity
		of 1 year, and bearing interest at the Treasury 1-year rate. These obligations
		shall be in such forms and denominations and be subject to such other terms and
		conditions as the Secretary of the Treasury shall prescribe.
									(C)Authority to
		issue obligationsThe Trust Fund is authorized to issue
		obligations to the Secretary of the Treasury under subparagraphs (A)(i) and
		(B). The Secretary of the Treasury is authorized to purchase such obligations
		of the Trust Fund. For the purposes of making such purchases, the Secretary of
		the Treasury may use as a public debt transaction the proceeds from the sale of
		any securities issued under chapter 31 of title 31, United States Code, and the
		purposes for which securities may be issued under such chapter are extended to
		include any purchase of such Trust Fund obligations under this
		subparagraph.
									(3)One-time
		appropriationThere is hereby
		appropriated to the Trust Fund an amount sufficient to pay to the general fund
		of the Treasury the difference between—
									(A)the market value
		of the outstanding repayable advances, plus accrued interest; and
									(B)the proceeds from
		the obligations issued by the Trust Fund to the Secretary of the Treasury under
		paragraph (2)(A)(i).
									(4)Prepayment of
		Trust Fund obligationsThe
		Trust Fund is authorized to repay any obligation issued to the Secretary of the
		Treasury under subparagraphs (A)(i) and (B) of paragraph (2) prior to its
		maturity date by paying a prepayment price that would, if the obligation being
		prepaid (including all unpaid interest accrued thereon through the date of
		prepayment) were purchased by a third party and held to the maturity date of
		such obligation, produce a yield to the third-party purchaser for the period
		from the date of purchase to the maturity date of such obligation substantially
		equal to the Treasury yield on outstanding marketable obligations of the United
		States having a comparable maturity to this period.
								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.Tax credit for
		carbon dioxide sequestration
							(a)In
		generalSubpart D of part IV of subchapter A of chapter 1
		(relating to business credits) is amended by adding at the end the following
		new section:

									45Q.Credit for
		  carbon dioxide sequestration
										(a)General
		  ruleFor purposes of section
		  38, the carbon dioxide sequestration credit for any taxable year is an amount
		  equal to the sum of—
											(1)$20 per metric ton
		  of qualified carbon dioxide which is—
												(A)captured by the
		  taxpayer at a qualified facility, and
												(B)disposed of by
		  the taxpayer in secure geological storage, and
												(2)$10 per metric
		  ton of qualified carbon dioxide which is—
												(A)captured by the
		  taxpayer at a qualified facility, and
												(B)used by the
		  taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas
		  recovery project.
												(b)Qualified carbon
		  dioxideFor purposes of this section—
											(1)In
		  generalThe term qualified carbon dioxide means
		  carbon dioxide captured from an industrial source which—
												(A)would otherwise be
		  released into the atmosphere as industrial emission of greenhouse gas,
		  and
												(B)is measured at the
		  source of capture and verified at the point of disposal or injection.
												(2)Recycled carbon
		  dioxideThe term qualified carbon dioxide includes
		  the initial deposit of captured carbon dioxide used as a tertiary injectant.
		  Such term does not include carbon dioxide that is re-captured, recycled, and
		  re-injected as part of the enhanced oil and natural gas recovery
		  process.
											(c)Qualified
		  facilityFor purposes of this section, the term qualified
		  facility means any industrial facility—
											(1)which is owned by
		  the taxpayer,
											(2)at which carbon
		  capture equipment is placed in service, and
											(3)which captures
		  not less than 500,000 metric tons of carbon dioxide during the taxable
		  year.
											(d)Special rules
		  and other definitionsFor purposes of this section—
											(1)Only carbon
		  dioxide captured and disposed of or used within the United States taken into
		  accountThe credit under this section shall apply only with
		  respect to qualified carbon dioxide the capture and disposal or use of which is
		  within—
												(A)the United States
		  (within the meaning of section 638(1)), or
												(B)a possession of
		  the United States (within the meaning of section 638(2)).
												(2)Secure
		  geological storageThe Secretary, in consultation with the
		  Administrator of the Environmental Protection Agency, shall establish
		  regulations for determining adequate security measures for the geological
		  storage of carbon dioxide under subsection (a)(1)(B) such that the carbon
		  dioxide does not escape into the atmosphere. Such term shall include storage at
		  deep saline formations and unminable coal seems under such conditions as the
		  Secretary may determine under such regulations.
											(3)Tertiary
		  injectantThe term tertiary injectant has the same
		  meaning as when used within section 193(b)(1).
											(4)Qualified
		  enhanced oil or natural gas recovery projectThe term
		  qualified enhanced oil or natural gas recovery project has the
		  meaning given the term qualified enhanced oil recovery project by
		  section 43(c)(2), by substituting crude oil or natural gas for
		  crude oil in subparagraph (A)(i) thereof.
											(5)Credit
		  attributable to taxpayerAny credit under this section shall be
		  attributable to the person that captures and physically or contractually
		  ensures the disposal of or the use as a tertiary injectant of the qualified
		  carbon dioxide, except to the extent provided in regulations prescribed by the
		  Secretary.
											(6)RecaptureThe
		  Secretary shall, by regulations, provide for recapturing the benefit of any
		  credit allowable under subsection (a) with respect to any qualified carbon
		  dioxide which ceases to be captured, disposed of, or used as a tertiary
		  injectant in a manner consistent with the requirements of this section.
											(7)Inflation
		  adjustmentIn the case of any
		  taxable year beginning in a calendar year after 2009, there shall be
		  substituted for each dollar amount contained in subsection (a) an amount equal
		  to the product of—
												(A)such dollar amount, multiplied by
												(B)the inflation
		  adjustment factor for such calendar year determined under section 43(b)(3)(B)
		  for such calendar year, determined by substituting 2008 for
		  1990.
												(e)Application of
		  sectionThe credit under this section shall apply with respect to
		  qualified carbon dioxide before the end of the calendar year in which the
		  Secretary, in consultation with the Administrator of the Environmental
		  Protection Agency, certifies that 75,000,000 metric tons of qualified carbon
		  dioxide have been captured and disposed of or used as a tertiary
		  injectant.
										.
							(b)Conforming
		amendmentSection 38(b) (relating to general business credit) 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 of following new paragraph:

									(34)the carbon dioxide sequestration credit
		  determined under section
		  45Q(a).
									.
							(c)Clerical
		amendmentThe table of sections for subpart B of part IV of
		subchapter A of chapter 1 (relating to other credits) is amended by adding at
		the end the following new section:

										Sec. 45Q. Credit for carbon dioxide
		  sequestration.

									.
							(d)Effective
		dateThe amendments made by this section shall apply to carbon
		dioxide captured after the date of the enactment of this Act.
							116.Certain income
		and gains relating to industrial source carbon dioxide treated as qualifying
		income for publicly traded partnerships
							(a)In
		generalSubparagraph (E) of section 7704(d)(1) (defining
		qualifying income) is amended by inserting or industrial source carbon
		dioxide after timber).
							(b)Effective
		dateThe amendment made by this section shall take effect on the
		date of the enactment of this Act, in taxable years ending after such
		date.
							117.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 2009 and 2010.
							IITransportation and domestic fuel security
		provisions
					201.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.
						202.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 inserting , or other equivalent
		standard approved by the Secretary after D396.
							(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 sentences: 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 fuelSubsection (f) of section 40A (relating to
		renewable diesel) is amended by adding at the end the following new
		paragraph:

								(4)Certain
		  aviation fuel
									(A)In
		  generalExcept as provided in the last 3 sentences of paragraph
		  (3), the term renewable diesel shall include 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.
									(B)Application of
		  mixture creditsIn the case of fuel which is treated as renewable
		  diesel solely by reason of subparagraph (A), subsection (b)(1) and section
		  6426(c) shall be applied with respect to such fuel by treating kerosene as
		  though it were diesel
		  fuel.
									.
						(f)Modification
		relating to definition of agri-biodieselParagraph (2) of section
		40A(d) (relating to agri-biodiesel) is amended by striking and mustard
		seeds and inserting mustard seeds, and camelina.
						(g)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
		amendment made by subsection (d) shall apply to fuel produced, and sold or
		used, after the date of the enactment of this Act.
							203.Clarification that credits for fuel are
		designed to provide an incentive for United States production
						(a)Alcohol fuels creditSubsection (d) of section 40 is amended by
		adding at the end the following new paragraph:

								(7)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.
						204.Extension and
		modification of alternative fuel credit
						(a)Extension
							(1)Alternative
		fuel creditParagraph (4) of section 6426(d) (relating to
		alternative fuel credit) is amended by striking September 30,
		2009 and inserting December 31, 2009.
							(2)Alternative
		fuel mixture creditParagraph (3) of section 6426(e) (relating to
		alternative fuel mixture credit) is amended by striking September 30,
		2009 and inserting December 31, 2009.
							(3)PaymentsSubparagraph
		(C) of section 6427(e)(5) (relating to termination) is amended by striking
		September 30, 2009 and inserting December 31,
		2009.
							(b)Modifications
							(1)Alternative
		fuel to include compressed or liquified biomass gasParagraph (2)
		of section 6426(d) (relating to alternative fuel credit) is amended by striking
		and at the end of subparagraph (E), by redesignating
		subparagraph (F) as subparagraph (G), and by inserting after subparagraph (E)
		the following new subparagraph:

									(F)compressed or
		  liquefied gas derived from biomass (as defined in section 45K(c)(3)),
		  and
									.
							(2)Credit allowed
		for aviation use of fuelParagraph (1) of section 6426(d) is
		amended by inserting sold by the taxpayer for use as a fuel in
		aviation, after motorboat,.
							(c)Carbon capture
		requirement for certain fuels
							(1)In
		generalSubsection (d) of section 6426, as amended by subsection
		(a), is amended by redesignating paragraph (4) as paragraph (5) and by
		inserting after paragraph (3) the following new paragraph:

									(4)Carbon capture
		  requirement
										(A)In
		  generalThe requirements of this paragraph are met if the fuel is
		  certified, under such procedures as required by the Secretary, as having been
		  derived from coal produced at a gasification facility which separates and
		  sequesters not less than the applicable percentage of such facility's total
		  carbon dioxide emissions.
										(B)Applicable
		  percentageFor purposes of subparagraph (A), the applicable
		  percentage is—
											(i)50
		  percent in the case of fuel produced after September 30, 2009, and on or before
		  December 30, 2009, and
											(ii)75
		  percent in the case of fuel produced after December 30,
		  2009.
											.
							(2)Conforming
		amendmentSubparagraph (E) of section 6426(d)(2) is amended by
		inserting which meets the requirements of paragraph (4) and which
		is after any liquid fuel.
							(d)Effective
		dateThe amendments made by this section shall apply to fuel sold
		or used after the date of the enactment of this Act.
						205.Credit for new
		qualified plug-in electric drive motor vehicles
						(a)Plug-in
		electric drive motor vehicle creditSubpart B of part IV of
		subchapter A of chapter 1 (relating to other credits) is amended by adding at
		the end the following new section:

								30D.New qualified
		  plug-in electric drive motor vehicles
									(a)Allowance of
		  credit
										(1)In
		  generalThere shall be allowed as a credit against the tax
		  imposed by this chapter for the taxable year an amount equal to the applicable
		  amount with respect to each new qualified plug-in electric drive motor vehicle
		  placed in service by the taxpayer during the taxable year.
										(2)Applicable
		  amountFor purposes of paragraph (1), the applicable amount is
		  sum of—
											(A)$2,500,
		  plus
											(B)$417 for each
		  kilowatt hour of traction battery capacity in excess of 4 kilowatt
		  hours.
											(b)Limitations
										(1)Limitation
		  based on weightThe amount of the credit allowed under subsection
		  (a) by reason of subsection (a)(2) shall not exceed—
											(A)$7,500, in the
		  case of any new qualified plug-in electric drive motor vehicle with a gross
		  vehicle weight rating of not more than 10,000 pounds,
											(B)$10,000, in the case of any new qualified
		  plug-in electric drive motor vehicle with a gross vehicle weight rating of more
		  than 10,000 pounds but not more than 14,000 pounds,
											(C)$12,500, in the case of any new qualified
		  plug-in electric drive motor vehicle with a gross vehicle weight rating of more
		  than 14,000 pounds but not more than 26,000 pounds, and
											(D)$15,000, in the case of any new qualified
		  plug-in electric drive motor vehicle with a gross vehicle weight rating of more
		  than 26,000 pounds.
											(2)Limitation on
		  number of passenger vehicles and light trucks eligible for credit
											(A)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.
											(B)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 total number of such new
		  qualified plug-in electric drive motor vehicles sold for use in the United
		  States after December 31, 2008, is at least 250,000.
											(C)Applicable
		  percentageFor purposes of
		  subparagraph (A), the applicable percentage is—
												(i)50
		  percent for the first 2 calendar quarters of the phaseout period,
												(ii)25
		  percent for the 3d and 4th calendar quarters of the phaseout period, and
												(iii)0
		  percent for each calendar quarter thereafter.
												(D)Controlled
		  groupsRules similar to the rules of section 30B(f)(4) shall
		  apply for purposes of this subsection.
											(c)New qualified
		  plug-in electric drive motor vehicleFor purposes of this section, the term
		  new qualified plug-in electric drive motor vehicle means a motor
		  vehicle—
										(1)which draws propulsion using a traction
		  battery with at least 4 kilowatt hours of capacity,
										(2)which uses an offboard source of energy to
		  recharge such battery,
										(3)which, in the case of a passenger vehicle
		  or light truck which has a gross vehicle weight rating of not more than 8,500
		  pounds, has received a certificate of conformity under the Clean Air Act and
		  meets or exceeds the equivalent qualifying California low emission vehicle
		  standard under section 243(e)(2) of the Clean Air Act for that make and model
		  year, and
											(A)in the case of a
		  vehicle having a gross vehicle weight rating of 6,000 pounds or less, 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
											(B)in the case of a
		  vehicle having a gross vehicle weight rating of more than 6,000 pounds but not
		  more than 8,500 pounds, the Bin 8 Tier II emission standard which is so
		  established,
											(4)the original use
		  of which commences with the taxpayer,
										(5)which is acquired
		  for use or lease by the taxpayer and not for resale, and
										(6)which is made by
		  a manufacturer.
										(d)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.
												(e)Other
		  definitions and special rulesFor purposes of this
		  section—
										(1)Motor
		  vehicleThe term motor vehicle has the meaning given
		  such term by section 30(c)(2).
										(2)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.).
										(3)Traction
		  battery capacityTraction battery capacity shall be measured in
		  kilowatt hours from a 100 percent state of charge to a zero percent state of
		  charge.
										(4)Reduction in
		  basisFor purposes of this subtitle, the basis of any property
		  for which a credit is allowable under subsection (a) shall be reduced by the
		  amount of such credit so allowed.
										(5)No double
		  benefitThe amount of any deduction or other credit allowable
		  under this chapter for a new qualified plug-in electric drive motor vehicle
		  shall be reduced by the amount of credit allowed under subsection (a) for such
		  vehicle for the taxable year.
										(6)Property used
		  by tax-exempt entityIn the case of a vehicle the use of which is
		  described in paragraph (3) or (4) of section 50(b) and which is not subject to
		  a lease, the person who sold such vehicle to the person or entity using such
		  vehicle shall be treated as the taxpayer that placed such vehicle in service,
		  but only if such person clearly discloses to such person or entity in a
		  document the amount of any credit allowable under subsection (a) with respect
		  to such vehicle (determined without regard to subsection (b)(2)).
										(7)Property used
		  outside United States, etc., not qualifiedNo credit shall be
		  allowable 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.
										(8)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 (including recapture in the case of a
		  lease period of less than the economic life of a vehicle).
										(9)Election to not
		  take creditNo credit shall be allowed under subsection (a) for
		  any vehicle if the taxpayer elects not to have this section apply to such
		  vehicle.
										(10)Interaction
		  with air quality and motor vehicle safety standardsUnless
		  otherwise provided in this section, a motor vehicle shall not be considered
		  eligible for a credit under this section unless such vehicle is in compliance
		  with—
											(A)the applicable
		  provisions of the Clean Air Act for the applicable make and model year of the
		  vehicle (or applicable air quality provisions of State law in the case of a
		  State which has adopted such provision under a waiver under section 209(b) of
		  the Clean Air Act), and
											(B)the motor vehicle
		  safety provisions of sections 30101 through 30169 of title 49, United States
		  Code.
											(f)Regulations
										(1)In
		  generalExcept as provided in paragraph (2), the Secretary shall
		  promulgate such regulations as necessary to carry out the provisions of this
		  section.
										(2)Coordination in
		  prescription of certain regulationsThe Secretary of the
		  Treasury, in coordination with the Secretary of Transportation and the
		  Administrator of the Environmental Protection Agency, shall prescribe such
		  regulations as necessary to determine whether a motor vehicle meets the
		  requirements to be eligible for a credit under this section.
										(g)TerminationThis
		  section shall not apply to property purchased after December 31,
		  2014.
									.
						(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 (d)
		  thereof) shall not be taken into account under this
		  section.
								.
						(c)Credit made
		part of general business creditSection 38(b), as amended by this
		Act, is amended by striking plus at the end of paragraph (33),
		by striking the period at the end of paragraph (34) and inserting
		plus, and by adding at the end the following new
		paragraph:

								(35)the portion of
		  the new qualified plug-in electric drive motor vehicle credit to which section
		  30D(d)(1)
		  applies.
								.
						(d)Conforming
		amendments
							(1)(A)Section 24(b)(3)(B), as
		amended by section 106, 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 106, is amended by striking and 25D and inserting
		, 25D, and 30D.
								(D)Section 26(a)(1), as amended by
		section 106, 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(e)(4).
									.
							(3)Section 6501(m)
		is amended by inserting 30D(e)(9), 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)Effective
		dateThe amendments made by this section shall apply to taxable
		years beginning after December 31, 2008.
						(f)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.
						206.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.
						207.Alternative fuel vehicle refueling property
		credit
						(a)Extension of creditParagraph (2) of section 30C(g) is amended
		by striking December 31, 2009 and inserting December 31,
		2010.
						(b)Inclusion of
		electricity as a clean-burning fuelSection 30C(c)(2) is amended
		by adding at the end the following new subparagraph:

								(C)Electricity.
								.
						(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.
						208.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), as
		amended by this Act, is amended by striking or industrial source carbon
		dioxide and inserting “, industrial source carbon dioxide, or the
		transportation or storage 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 take effect on the date of the enactment of this Act, in
		taxable years ending after such date.
						209.Extension and
		modification of election to expense certain refineries
						(a)ExtensionParagraph
		(1) of section 179C(c) (relating to qualified refinery property) is
		amended—
							(1)by
		striking January 1, 2012 in subparagraph (B) and inserting
		January 1, 2014, and
							(2)by
		striking January 1, 2008 each place it appears in subparagraph
		(F) and inserting January 1, 2010.
							(b)Inclusion of
		fuel derived from shale and tar sands
							(1)In
		generalSubsection (d) of section 179C is amended by inserting
		, or directly from shale or tar sands after (as defined
		in section 45K(c)).
							(2)Conforming
		amendmentParagraph (2) of section 179C(e) is amended by
		inserting shale, tar sands, or before qualified
		fuels.
							(c)Effective
		dateThe amendments made by this section shall apply to property
		placed in service after the date of the enactment of this Act.
						210.Extension of
		suspension of taxable income limit on percentage depletion for oil and natural
		gas produced from marginal propertiesSubparagraph (H) of section 613A(c)(6)
		(relating to oil and gas produced from marginal properties) is amended by
		striking for any taxable year and all that follows and
		inserting

							for any taxable
		year—(i)beginning after December 31, 1997, and
		  before January 1, 2008, or
							(ii)beginning after December 31, 2008, and
		  before January 1,
		  2010.
							.
					211.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.
						IIIEnergy conservation and efficiency
		provisions
					301.Qualified energy conservation
		bonds
						(a)In generalSubpart I of part IV of subchapter A of
		chapter 1, as amended by section 107, 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 $800,000,000.
									(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 this Act, 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 this Act, 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, as amended by this Act, 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.
						302.Credit for nonbusiness energy
		property
						(a)Extension of creditSection 25C(g) is amended by striking
		placed in service after December 31, 2007 and inserting “placed
		in service—

								(1)after December
		  31, 2007, and before January 1, 2009, or
								(2)after December
		  31,
		  2009.
								.
						(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, 2008.
							(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.
							303.Energy efficient commercial buildings
		deductionSubsection (h) of
		section 179D is amended by striking December 31, 2008 and
		inserting December 31, 2013.
					304.New energy efficient
		home creditSubsection (g) of
		section 45L (relating to termination) is amended by striking December
		31, 2008 and inserting December 31, 2009.
					305.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.
						306.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—
										(i)is placed in service by a taxpayer who is a
		  supplier of electric energy or a provider of electric energy services,
		  and
										(ii)does not have a
		  class life (determined without regard to subsection (e)) of less than 10
		  years.
										(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 which—
										(i)is 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, and
										(ii)does not have a
		  class life (determined without regard to subsection (e)) of less than 10
		  years.
										(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.
						307.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,.
						308.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 August 31, 2008, and
											(iv)which is—
												(I)acquired by purchase (as defined in section
		  179(d)(2)) by the taxpayer after August 31, 2008, but only if no written
		  binding contract for the acquisition was in effect before September 1, 2008,
		  or
												(II)acquired by the taxpayer pursuant to a
		  written binding contract which was entered into after August 31, 2008.
												(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 August 31, 2008.
										(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 August 31,
		2008.
						IVRevenue
		provisions
					401.Limitation of
		deduction for income attributable to domestic production of oil, gas, or
		primary products thereof
						(a)In
		generalSection 199(d) is amended by
		redesignating paragraph (9) as paragraph (10) and by inserting after paragraph
		(8) the following new paragraph:

								(9)Special rule for
		  taxpayers with oil related qualified production activities income
									(A)In
		  generalIf a taxpayer has oil related qualified production
		  activities income for any taxable year beginning after 2009, the amount
		  otherwise allowable as a deduction under subsection (a) shall be reduced by 3
		  percent of the least of—
										(i)the
		  oil related qualified production activities income of the taxpayer for the
		  taxable year,
										(ii)the
		  qualified production activities income of the taxpayer for the taxable year,
		  or
										(iii)taxable income
		  (determined without regard to this section).
										(B)Oil related
		  qualified production activities incomeFor purposes of this
		  paragraph, the term oil related qualified production activities
		  income means for any taxable year the qualified production activities
		  income which is attributable to the production, refining, processing,
		  transportation, or distribution of oil, gas, or any primary product thereof
		  during such taxable year.
									(C)Primary
		  productFor purposes of this paragraph, the term primary
		  product has the same meaning as when used in section 927(a)(2)(C), as in
		  effect before its
		  repeal.
									.
						(b)Conforming
		amendmentSection 199(d)(2) (relating to application to
		individuals) is amended by striking subsection (a)(1)(B) and
		inserting subsections (a)(1)(B) and (d)(9)(A)(iii).
						(c)Effective
		dateThe amendments made by this section shall apply to taxable
		years beginning after December 31, 2008.
						402.Elimination of
		the different treatment of foreign oil and gas extraction income and foreign
		oil related income for purposes of the foreign tax credit
						(a)In
		generalSubsections (a) and (b) of section 907 (relating to
		special rules in case of foreign oil and gas income) are amended to read as
		follows:

								(a)Reduction in
		  amount allowed as foreign tax under section 901In applying
		  section 901, the amount of any foreign oil and gas taxes paid or accrued (or
		  deemed to have been paid) during the taxable year which would (but for this
		  subsection) be taken into account for purposes of section 901 shall be reduced
		  by the amount (if any) by which the amount of such taxes exceeds the product
		  of—
									(1)the amount of the
		  combined foreign oil and gas income for the taxable year,
									(2)multiplied
		  by—
										(A)in the case of a
		  corporation, the percentage which is equal to the highest rate of tax specified
		  under section 11(b), or
										(B)in the case of an
		  individual, a fraction the numerator of which is the tax against which the
		  credit under section 901(a) is taken and the denominator of which is the
		  taxpayer's entire taxable income.
										(b)Combined
		  foreign oil and gas income; foreign oil and gas taxesFor
		  purposes of this section—
									(1)Combined
		  foreign oil and gas incomeThe term combined foreign oil
		  and gas income means, with respect to any taxable year, the sum
		  of—
										(A)foreign oil and
		  gas extraction income, and
										(B)foreign oil
		  related income.
										(2)Foreign oil and
		  gas taxesThe term foreign oil and gas taxes means,
		  with respect to any taxable year, the sum of—
										(A)oil and gas
		  extraction taxes, and
										(B)any income, war
		  profits, and excess profits taxes paid or accrued (or deemed to have been paid
		  or accrued under section 902 or 960) during the taxable year with respect to
		  foreign oil related income (determined without regard to subsection (c)(4)) or
		  loss which would be taken into account for purposes of section 901 without
		  regard to this
		  section.
										.
						(b)Recapture of
		foreign oil and gas lossesParagraph (4) of section 907(c)
		(relating to recapture of foreign oil and gas extraction losses by
		recharacterizing later extraction income) is amended to read as follows:

								(4)Recapture of
		  foreign oil and gas losses by recharacterizing later combined foreign oil and
		  gas income
									(A)In
		  generalThe combined foreign oil and gas income of a taxpayer for
		  a taxable year (determined without regard to this paragraph) shall be
		  reduced—
										(i)first
		  by the amount determined under subparagraph (B), and
										(ii)then
		  by the amount determined under subparagraph (C).
										The
		  aggregate amount of such reductions shall be treated as income (from sources
		  without the United States) which is not combined foreign oil and gas
		  income.(B)Reduction for
		  pre-2009 foreign oil extraction lossesThe reduction under this
		  paragraph shall be equal to the lesser of—
										(i)the
		  foreign oil and gas extraction income of the taxpayer for the taxable year
		  (determined without regard to this paragraph), or
										(ii)the
		  excess of—
											(I)the aggregate
		  amount of foreign oil extraction losses for preceding taxable years beginning
		  after December 31, 1982, and before January 1, 2009, over
											(II)so much of such
		  aggregate amount as was recharacterized under this paragraph (as in effect
		  before and after the date of the enactment of the
		  Energy Improvement and Extension Act of
		  2008) for preceding taxable years beginning after December 31,
		  1982.
											(C)Reduction for
		  post-2008 foreign oil and gas lossesThe reduction under this
		  paragraph shall be equal to the lesser of—
										(i)the
		  combined foreign oil and gas income of the taxpayer for the taxable year
		  (determined without regard to this paragraph), reduced by an amount equal to
		  the reduction under subparagraph (A) for the taxable year, or
										(ii)the
		  excess of—
											(I)the aggregate
		  amount of foreign oil and gas losses for preceding taxable years beginning
		  after December 31, 2008, over
											(II)so much of such
		  aggregate amount as was recharacterized under this paragraph for preceding
		  taxable years beginning after December 31, 2008.
											(D)Foreign oil and
		  gas loss defined
										(i)In
		  generalFor purposes of this paragraph, the term foreign
		  oil and gas loss means the amount by which—
											(I)the gross income
		  for the taxable year from sources without the United States and its possessions
		  (whether or not the taxpayer chooses the benefits of this subpart for such
		  taxable year) taken into account in determining the combined foreign oil and
		  gas income for such year, is exceeded by
											(II)the sum of the
		  deductions properly apportioned or allocated thereto.
											(ii)Net operating
		  loss deduction not taken into accountFor purposes of clause (i),
		  the net operating loss deduction allowable for the taxable year under section
		  172(a) shall not be taken into account.
										(iii)Expropriation
		  and casualty losses not taken into accountFor purposes of clause
		  (i), there shall not be taken into account—
											(I)any foreign
		  expropriation loss (as defined in section 172(h) (as in effect on the day
		  before the date of the enactment of the Revenue Reconciliation Act of 1990))
		  for the taxable year, or
											(II)any loss for the
		  taxable year which arises from fire, storm, shipwreck, or other casualty, or
		  from theft,
											to the extent
		  such loss is not compensated for by insurance or otherwise.(iv)Foreign oil
		  extraction lossFor purposes of subparagraph (B)(ii)(I), foreign
		  oil extraction losses shall be determined under this paragraph as in effect on
		  the day before the date of the enactment of the
		  Energy Improvement and Extension Act of
		  2008.
										.
						(c)Carryback and
		carryover of disallowed creditsSection 907(f) (relating to
		carryback and carryover of disallowed credits) is amended—
							(1)by
		striking oil and gas extraction taxes each place it appears and
		inserting foreign oil and gas taxes, and
							(2)by
		adding at the end the following new paragraph:

									(4)Transition
		  rules for pre-2009 and 2009 disallowed credits
										(A)Pre-2009
		  creditsIn the case of any unused credit year beginning before
		  January 1, 2009, this subsection shall be applied to any unused oil and gas
		  extraction taxes carried from such unused credit year to a year beginning after
		  December 31, 2008—
											(i)by
		  substituting oil and gas extraction taxes for foreign oil
		  and gas taxes each place it appears in paragraphs (1), (2), and (3),
		  and
											(ii)by
		  computing, for purposes of paragraph (2)(A), the limitation under subparagraph
		  (A) for the year to which such taxes are carried by substituting foreign
		  oil and gas extraction income for foreign oil and gas
		  income in subsection (a).
											(B)2009
		  creditsIn the case of any unused credit year beginning in 2009,
		  the amendments made to this subsection by the Energy Improvement and Extension Act of 2008
		  shall be treated as being in effect for any preceding year beginning before
		  January 1, 2009, solely for purposes of determining how much of the unused
		  foreign oil and gas taxes for such unused credit year may be deemed paid or
		  accrued in such preceding
		  year.
										.
							(d)Conforming
		amendmentSection 6501(i) is amended by striking oil and
		gas extraction taxes and inserting foreign oil and gas
		taxes.
						(e)Effective dateThe amendments
		made by this section shall apply to taxable years beginning after December 31,
		2008.
						403.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, 2011, in the case of any
		  specified security which is stock in a corporation (other than any stock
		  described in clause (ii)),
												(ii)January 1, 2012, in the case of any stock
		  for which an average basis method is permissible under section 1012, and
												(iii)January 1, 2013, 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, 2013.
										(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 customer,
		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 certain funds
											(A)In generalExcept as provided in subparagraph (B), any
		  stock for which an average basis method is permissible under section 1012 which
		  is acquired before January 1, 2012, shall be treated as a separate account from
		  any such stock acquired on or after such date.
											(B)Election fund for treatment as single
		  accountIf a fund described
		  in subparagraph (A) 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 such stock as a
		  nominee.(3)DefinitionsFor purposes of this section, the 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,
		2011.
							(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.
							404.0.2 percent
		FUTA surtax
						(a)In
		generalSection 3301 (relating to rate of tax) is amended—
							(1)by striking
		through 2008 in paragraph (1) and inserting through
		2009, and
							(2)by striking
		calendar year 2009 in paragraph (2) and inserting
		calendar year 2010.
							(b)Effective
		dateThe amendments made by this section shall apply to wages
		paid after December 31, 2008.
						405.Increase and
		extension of Oil Spill Liability Trust Fund tax
						(a)Increase in
		rate
							(1)In
		generalSection 4611(c)(2)(B) (relating to rates) is amended by
		striking is 5 cents a barrel. and
		inserting

									is—(i)in the case of
		  crude oil received or petroleum products entered before January 1, 2017, 8
		  cents a barrel, and
									(ii)in the case of
		  crude oil received or petroleum products entered after December 31, 2016, 9
		  cents a
		  barrel.
									.
							(2)Effective
		dateThe amendment made by this subsection shall apply on and
		after the first day of the first calendar quarter beginning more than 60 days
		after the date of the enactment of this Act.
							(b)Extension
							(1)In
		generalSection 4611(f) (relating to application of Oil Spill
		Liability Trust Fund financing rate) is amended by striking paragraphs (2) and
		(3) and inserting the following new paragraph:

									(2)TerminationThe
		  Oil Spill Liability Trust Fund financing rate shall not apply after December
		  31,
		  2017.
									.
							(2)Conforming
		amendmentSection 4611(f)(1) is amended by striking
		paragraphs (2) and (3) and inserting paragraph
		(2).
							(3)Effective
		dateThe amendments made by this subsection shall take effect on
		the date of the enactment of this Act.
							BTax
		extenders and alternative minimum tax relief
					1.Short title; amendment of
		1986 Code; table of contents
						(a)Short
		titleThis division may be cited as the Tax Extenders and Alternative Minimum Tax Relief Act of
		2008.
						(b)Amendment of
		1986 CodeExcept as otherwise
		expressly provided, whenever in this division 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 of this division is as
		follows:

								DIVISION B—Tax extenders and alternative minimum tax
		  relief
								Sec. 1. Short title; amendment of 1986 Code; table of
		  contents.
								TITLE
		  I—Alternative minimum tax relief
								Sec.
		  101. Extension of alternative minimum tax relief for nonrefundable personal
		  credits.
								Sec.
		  102. Extension of increased alternative minimum tax exemption
		  amount.
								Sec.
		  103. Increase of AMT refundable credit amount for individuals with long-term
		  unused credits for prior year minimum tax liability, etc.
								TITLE
		  II—Extension of individual tax provisions
								Sec.
		  201. Deduction for State and local sales taxes.
								Sec.
		  202. Deduction of qualified tuition and related expenses.
								Sec.
		  203. Deduction for certain expenses of elementary and secondary school
		  teachers.
								Sec. 204. Additional standard deduction for real property taxes
		  for nonitemizers.
								Sec.
		  205. Tax-free distributions from individual retirement plans for charitable
		  purposes.
								Sec.
		  206. Treatment of certain dividends of regulated investment
		  companies.
								Sec.
		  207. Stock in RIC for purposes of determining estates of nonresidents not
		  citizens.
								Sec.
		  208. Qualified investment entities.
								TITLE
		  III—Extension of business tax provisions
								Sec. 301. Extension and modification of research
		  credit.
								Sec.
		  302. New markets tax credit.
								Sec. 303. Subpart F exception
		  for active financing income.
								Sec. 304. Extension of look-thru rule for related controlled
		  foreign corporations.
								Sec. 305. 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.
		  306. Modification of tax treatment of certain payments to controlling exempt
		  organizations.
								Sec.
		  307. Basis adjustment to stock of S corporations making charitable
		  contributions of property.
								Sec.
		  308. Increase in limit on cover over of rum excise tax to Puerto Rico and the
		  Virgin Islands.
								Sec.
		  309. Extension of economic development credit for American Samoa.
								Sec. 310. Extension of mine rescue team training
		  credit.
								Sec. 311. Extension of election to expense advanced mine safety
		  equipment.
								Sec.
		  312. Deduction allowable with respect to income attributable to domestic
		  production activities in Puerto Rico.
								Sec.
		  313. Qualified zone academy bonds.
								Sec.
		  314. Indian employment credit.
								Sec.
		  315. Accelerated depreciation for business property on Indian
		  reservations.
								Sec.
		  316. Railroad track maintenance.
								Sec.
		  317. Seven-year cost recovery period for motorsports racing track
		  facility.
								Sec.
		  318. Expensing of environmental remediation costs.
								Sec.
		  319. Extension of work opportunity tax credit for Hurricane Katrina
		  employees.
								Sec. 320. Extension of increased rehabilitation credit for
		  structures in the Gulf Opportunity Zone.
								Sec.
		  321. Enhanced deduction for qualified computer contributions.
								Sec.
		  322. Tax incentives for investment in the District of Columbia.
								Sec. 323. Enhanced charitable deductions for contributions of
		  food inventory.
								Sec. 324. Extension of enhanced charitable deduction for
		  contributions of book inventory.
								Sec. 325. Extension and modification of duty suspension on wool
		  products; wool research fund; wool duty refunds.
								TITLE
		  IV—Extension of tax administration provisions
								Sec.
		  401. Permanent authority for undercover operations.
								Sec.
		  402. Permanent authority for disclosure of information relating to terrorist
		  activities.
								TITLE
		  V—Additional tax relief and other tax provisions
								Subtitle A—General provisions
								Sec. 501. $8,500 income threshold used to calculate refundable
		  portion of child tax credit.
								Sec.
		  502. Provisions related to film and television productions.
								Sec. 503. Exemption from excise tax for certain wooden arrows
		  designed for use by children.
								Sec. 504. Income averaging for amounts received in connection
		  with the Exxon Valdez litigation.
								Sec. 505. Certain farming business machinery and equipment
		  treated as 5-year property.
								Sec.
		  506. Modification of penalty on understatement of taxpayer’s liability by tax
		  return preparer.
								Subtitle B—Paul Wellstone and Pete Domenici Mental Health
		  Parity and Addiction Equity Act of 2008
								Sec. 511. Short title.
								Sec. 512. Mental health parity.
								TITLE
		  VI—Other provisions
								Sec. 601. Secure rural schools and community self-determination
		  program.
								Sec. 602. Transfer to abandoned mine reclamation
		  fund.
								TITLE
		  VII—Disaster relief
								Subtitle A—Heartland and Hurricane Ike disaster
		  relief
								Sec. 701. Short title.
								Sec. 702. Temporary tax relief for areas damaged by 2008
		  Midwestern severe storms, tornados, and flooding.
								Sec. 703. Reporting requirements relating to disaster relief
		  contributions.
								Sec. 704. Temporary tax-exempt bond financing
		  and low-income housing tax relief for areas damaged by Hurricane
		  Ike.
								Subtitle B—National disaster relief
								Sec. 706. Losses attributable to federally declared
		  disasters.
								Sec. 707. Expensing of Qualified Disaster Expenses.
								Sec. 708. Net operating losses attributable to federally
		  declared disasters.
								Sec. 709. Waiver of certain mortgage revenue bond requirements
		  following federally declared disasters.
								Sec. 710. Special depreciation allowance for qualified disaster
		  property.
								Sec. 711. Increased expensing for qualified disaster assistance
		  property.
								Sec. 712. Coordination with Heartland disaster
		  relief.
								TITLE
		  VIII—Spending reductions and appropriate revenue raisers for new tax relief
		  policy
								Sec.
		  801. Nonqualified deferred compensation from certain tax indifferent
		  parties.

						IAlternative
		minimum tax relief
						101.Extension of
		alternative minimum tax relief for nonrefundable personal credits
							(a)In
		generalParagraph (2) of section 26(a) (relating to special rule
		for taxable years 2000 through 2007) 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.
							102.Extension of
		increased alternative minimum tax exemption amount
							(a)In
		generalParagraph (1) of section 55(d) (relating to exemption
		amount) 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.
							103.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 determined under this paragraph 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 amendments 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.
								IIExtension of
		individual tax provisions
						201.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,
		2010.
							(b)Effective
		dateThe amendment made by this section shall apply to taxable
		years beginning after December 31, 2007.
							202.Deduction of
		qualified tuition and related expenses
							(a)In
		generalSubsection (e) of section 222 (relating to termination)
		is amended by striking December 31, 2007 and inserting
		December 31, 2009.
							(b)Effective
		dateThe amendment made by this section shall apply to taxable
		years beginning after December 31, 2007.
							203.Deduction for
		certain expenses of elementary and secondary school teachers
							(a)In
		generalSubparagraph (D) of
		section 62(a)(2) (relating to certain expenses of elementary and secondary
		school teachers) is amended by striking or 2007 and inserting
		2007, 2008, or 2009.
							(b)Effective
		dateThe amendment made by subsection (a) shall apply to taxable
		years beginning after December 31, 2007.
							204.Additional
		standard deduction for real property taxes for nonitemizers
							(a)In
		generalSubparagraph (C) of section 63(c)(1), as added by the
		Housing Assistance Tax Act of 2008, is amended by inserting or
		2009 after 2008.
							(b)Effective
		dateThe amendment made by this section shall apply to taxable
		years beginning after December 31, 2008.
							205.Tax-free
		distributions from individual retirement plans for charitable purposes
							(a)In
		generalSubparagraph (F) of section 408(d)(8) (relating to
		termination) is amended by striking December 31, 2007 and
		inserting December 31, 2009.
							(b)Effective
		dateThe amendment made by this section shall apply to
		distributions made in taxable years beginning after December 31, 2007.
							206.Treatment of
		certain dividends of regulated investment companies
							(a)Interest-related
		dividendsSubparagraph (C) of section 871(k)(1) (defining
		interest-related dividend) is amended by striking December 31,
		2007 and inserting December 31, 2009.
							(b)Short-term
		capital gain dividendsSubparagraph (C) of section 871(k)(2)
		(defining short-term capital gain dividend) is amended by striking
		December 31, 2007 and inserting December 31,
		2009.
							(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.
							207.Stock in RIC
		for purposes of determining estates of nonresidents not citizens
							(a)In
		generalParagraph (3) of
		section 2105(d) (relating to stock in a RIC) is amended by striking
		December 31, 2007 and inserting December 31,
		2009.
							(b)Effective
		dateThe amendment made by this section shall apply to decedents
		dying after December 31, 2007.
							208.Qualified
		investment entities
							(a)In
		generalClause (ii) of
		section 897(h)(4)(A) (relating to termination) is amended by striking
		December 31, 2007 and inserting December 31,
		2009.
							(b)Effective
		dateThe amendment made by subsection (a) shall take effect on
		January 1, 2008.
							IIIExtension of
		business tax provisions
						301.Extension and
		modification of research credit
							(a)Extension
								(1)In
		generalSection 41(h) (relating to termination) is amended by
		striking December 31, 2007 and inserting December 31,
		2009 in paragraph (1)(B).
								(2)Conforming
		amendmentSubparagraph (D) of section 45C(b)(1) (relating to
		special rule) is amended by striking after December 31, 2007 and
		inserting after December 31, 2009.
								(b)Termination of
		alternative incremental creditSection 41(h) is amended by
		redesignating paragraph (2) as paragraph (3), and by inserting after paragraph
		(1) the following new paragraph:

									(2)Termination of
		  alternative incremental creditNo election under subsection
		  (c)(4) shall apply to taxable years beginning after December 31,
		  2008.
									.
							(c)Modification of
		alternative simplified creditParagraph (5)(A) of section 41(c)
		(relating to election of alternative simplified credit) is amended by striking
		12 percent and inserting 14 percent (12 percent in the
		case of taxable years ending before January 1, 2009).
							(d)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.
										.
							(e)Effective
		date
								(1)In
		generalExcept as provided in paragraph (2), the amendments made
		by this section shall apply to taxable years beginning after December 31,
		2007.
								(2)ExtensionThe
		amendments made by subsection (a) shall apply to amounts paid or incurred after
		December 31, 2007.
								302.New
		markets tax creditSubparagraph (D) of section 45D(f)(1)
		(relating to national limitation on amount of investments designated) is
		amended by striking and 2008 and inserting 2008, and
		2009.
						303.Subpart
		F exception for active financing
		income
							(a)Exempt
		insurance incomeParagraph (10) of section 953(e) (relating to
		application) 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) (relating to application) is amended by striking
		January 1, 2009 and inserting January 1,
		2010.
							304.Extension of
		look-thru rule for related controlled foreign corporations
							(a)In
		generalSubparagraph (C) of section 954(c)(6) (relating to
		application) 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, 2007, and to taxable
		years of United States shareholders with or within which such taxable years of
		foreign corporations end.
							305.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) (relating to
		15-year property) are each amended by striking January 1, 2008
		and inserting January 1, 2010.
								(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) (relating to
		classification of property) is amended to read as follows:

										(7)Qualified
		  restaurant property
											(A)In
		  generalThe term qualified restaurant property means
		  any section 1250 property which is—
												(i)a
		  building, if such building is placed in service after December 31, 2008, and
		  before January 1, 2010, or
												(ii)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.(B)Exclusion from
		  bonus depreciationProperty described in this paragraph shall not
		  be considered qualified property for purposes of subsection
		  (k).
											.
								(2)Effective
		dateThe amendment made by this subsection shall apply to
		property placed in service after December 31, 2008.
								(c)Recovery period
		for depreciation of certain improvements to retail space
								(1)15-year
		recovery periodSection 168(e)(3)(E) (relating to 15-year
		property) 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 after December 31,
		  2008, and before January 1,
		  2010.
										.
								(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.
												(D)Exclusion from
		  bonus depreciationProperty described in this paragraph shall not
		  be considered qualified property for purposes of subsection (k).
											(E)TerminationSuch
		  term shall not include any improvement placed in service after December 31,
		  2009.
											.
								(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 December 31, 2008.
								306.Modification of
		tax treatment of certain payments to controlling exempt organizations
							(a)In
		generalClause (iv) of section 512(b)(13)(E) (relating to
		termination) is amended by striking December 31, 2007 and
		inserting December 31, 2009.
							(b)Effective
		dateThe amendment made by this section shall apply to payments
		received or accrued after December 31, 2007.
							307.Basis adjustment to
		stock of S corporations making charitable contributions of property
							(a)In
		generalThe last sentence of section 1367(a)(2) (relating to
		decreases in basis) is amended by striking December 31, 2007 and
		inserting December 31, 2009.
							(b)Effective
		dateThe amendment made by this section shall apply to
		contributions made in taxable years beginning after December 31, 2007.
							308.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,
		2010.
							(b)Effective
		dateThe amendment made by this section shall apply to distilled
		spirits brought into the United States after December 31, 2007.
							309.Extension of
		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 4
		taxable years, and
								(2)by
		striking January 1, 2008 and inserting January 1,
		2010.
								(b)Effective
		dateThe amendments made by this section shall apply to taxable
		years beginning after December 31, 2007.
							310.Extension of
		mine rescue team training creditSection 45N(e) (relating to termination) is
		amended by striking December 31, 2008 and inserting
		December 31, 2009.
						311.Extension of
		election to expense advanced mine safety equipmentSection
		179E(g) (relating to termination) is amended by striking December 31,
		2008 and inserting December 31, 2009.
						312.Deduction
		allowable with respect to income attributable to domestic production activities
		in Puerto Rico
							(a)In
		generalSubparagraph (C) of section 199(d)(8) (relating to
		termination) is amended—
								(1)by
		striking first 2 taxable years and inserting first 4
		taxable years, and
								(2)by
		striking January 1, 2008 and inserting January 1,
		2010.
								(b)Effective
		dateThe amendments made by this section shall apply to taxable
		years beginning after December 31, 2007.
							313.Qualified zone
		academy 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:

									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 2009, 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 or 2009 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 this Act, 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 this Act, 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 the
		  Tax Extenders and Alternative Minimum Tax
		  Relief Act of
		  2008.
										.
								(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.
							314.Indian employment
		credit
							(a)In
		generalSubsection (f) of section 45A (relating to termination)
		is amended by striking December 31, 2007 and inserting
		December 31, 2009.
							(b)Effective
		dateThe amendment made by this section shall apply to taxable
		years beginning after December 31, 2007.
							315.Accelerated
		depreciation for business property on Indian reservations
							(a)In
		generalParagraph (8) of section 168(j) (relating to termination)
		is amended by striking December 31, 2007 and inserting
		December 31, 2009.
							(b)Effective
		dateThe amendment made by this section shall apply to property
		placed in service after December 31, 2007.
							316.Railroad track
		maintenance
							(a)In
		generalSubsection (f) of section 45G (relating to application of
		section) is amended by striking January 1, 2008 and inserting
		January 1, 2010.
							(b)Credit allowed
		against alternative minimum taxSubparagraph (B) of section
		38(c)(4), as amended by this Act, 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.
								317.Seven-year cost
		recovery period for motorsports racing track facility
							(a)In
		generalSubparagraph (D) of section 168(i)(15) (relating to
		termination) is amended by striking December 31, 2007 and
		inserting December 31, 2009.
							(b)Effective
		dateThe amendment made by this section shall apply to property
		placed in service after December 31, 2007.
							318.Expensing of
		environmental remediation costs
							(a)In
		generalSubsection (h) of section 198 (relating to termination)
		is amended by striking December 31, 2007 and inserting
		December 31, 2009.
							(b)Effective
		dateThe amendment made by this section shall apply to
		expenditures paid or incurred after December 31, 2007.
							319.Extension of 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 4-year.
							(b)Effective
		dateThe amendment made by
		subsection (a) shall apply to individuals hired after August 27, 2007.
							320.Extension of
		increased rehabilitation credit for structures in the Gulf Opportunity
		Zone
							(a)In
		generalSubsection (h) of section 1400N is amended by striking
		December 31, 2008 and inserting December 31,
		2009.
							(b)Effective
		dateThe amendment made by this section shall apply to
		expenditures paid or incurred after the date of the enactment of this
		Act.
							321.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, 2009.
							(b)Effective
		dateThe amendment made by
		this section shall apply to contributions made during taxable years beginning
		after December 31, 2007.
							322.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
		2009.
								(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 2009.
								(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
		2010.
								(2)Conforming
		amendments
									(A)Section
		1400B(e)(2) is amended—
										(i)by striking
		2012 and inserting 2014, and
										(ii)by striking
		2012 in the heading thereof and inserting
		2014.
										(B)Section
		1400B(g)(2) is amended by striking 2012 and inserting
		2014.
									(C)Section 1400F(d)
		is amended by striking 2012 and inserting
		2014.
									(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 2010.
								(2)Effective
		dateThe amendment made by this subsection shall apply to
		property purchased after December 31, 2007.
								323.Enhanced charitable deductions for
		contributions of food inventory
							(a)Increased amount of deduction
								(1)In generalClause (iv) of section 170(e)(3)(C)
		(relating to termination) is amended by striking December 31,
		2007 and inserting December 31, 2009.
								(2)Effective
		dateThe amendment made by
		this subsection shall apply to contributions made after December 31,
		2007.
								(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.
								324.Extension of enhanced charitable deduction
		for contributions of book inventory
							(a)ExtensionClause (iv) of section 170(e)(3)(D)
		(relating to termination) is amended by striking December 31,
		2007 and inserting December 31, 2009.
							(b)Clerical amendmentClause (iii) of section 170(e)(3)(D)
		(relating to certification by donee) 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.
							325.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.
								IVExtension of tax
		administration provisions
						401.Permanent
		authority for undercover operations
							(a)In
		generalSection 7608(c)
		(relating to rules relating to undercover operations) is amended by striking
		paragraph (6).
							(b)Effective
		dateThe amendment made by this section shall apply to operations
		conducted after the date of the enactment of this Act.
							402.Permanent
		authority for disclosure of information relating to terrorist
		activities
							(a)Disclosure of
		return information to apprise appropriate officials of terrorist
		activitiesSubparagraph (C) of section 6103(i)(3) is amended by
		striking clause (iv).
							(b)Disclosure upon
		request of information relating to terrorist activitiesParagraph
		(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.
							VAdditional tax
		relief and other tax provisions
						AGeneral
		provisions
							501.$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.
								502.Provisions
		related to film and television productions
								(a)Extension of
		expensing rules for qualified film and television productionsSection 181(f) (relating to termination) is
		amended by striking December 31, 2008 and inserting
		December 31, 2009.
								(b)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.
										.
								(c)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.
												.
									(d)Conforming
		amendmentSection 181(d)(3)(A) is amended by striking
		actors and all that follows and inserting actors,
		production personnel, directors, and producers..
								(e)Effective
		dates
									(1)In
		generalExcept as otherwise provided in this subsection, the
		amendments made by this section shall apply to qualified film and television
		productions commencing after December 31, 2007.
									(2)DeductionThe
		amendments made by subsection (c) shall apply to taxable years beginning after
		December 31, 2007.
									503.Exemption from
		excise tax for 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.
								504.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).
									505.Certain
		farming business machinery and equipment treated as 5-year property
								(a)In
		GeneralSection 168(e)(3)(B) (defining 5-year property) is
		amended by striking and at the end of clause (v), by striking
		the period at the end of clause (vi)(III) and inserting , and,
		and by inserting after clause (vi) the following new clause:

										(vii)any
		  machinery or equipment (other than any grain bin, cotton ginning asset, fence,
		  or other land improvement) which is used in a farming business (as defined in
		  section 263A(e)(4)), the original use of which commences with the taxpayer
		  after December 31, 2008, and which is placed in service before January 1,
		  2010.
										.
								(b)Alternative
		SystemThe table contained in section 168(g)(3)(B) (relating to
		special rule for certain property assigned to classes) is amended by inserting
		after the item relating to subparagraph (B)(iii) the following:

													(B)(vii)10

										.
								(c)Effective
		DateThe amendments made by this section shall apply to property
		placed in service after December 31, 2008.
								506.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.
									BPaul
		Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of
		2008
							511.Short
		titleThis subtitle may be
		cited as the Paul Wellstone and Pete Domenici Mental Health Parity and
		Addiction Equity Act of 2008.
							512.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 promptly
		  notify the Secretary, the appropriate State agencies, and participants and
		  beneficiaries in the plan of such election.
														(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 promptly
		  notify the Secretary, the appropriate State agencies, and participants and
		  beneficiaries in the plan of such election.
														(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 of the
		Internal Revenue Code of 1986  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 promptly notify the
		  Secretary, the appropriate State agencies, and participants and beneficiaries
		  in the plan of such election.
														(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 amendments by such effective date, except
		that the amendments made by subsections (a)(5), (b)(5), and (c)(5), relating to
		striking of certain sunset provisions, 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 of the Internal Revenue Code
		of 1986 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
		of such Code 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).
									VIOther
		provisions
						601.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 each September 30 thereafter for each succeeding fiscal
		  year.
														(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, 81 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, 73 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.
									602.Transfer to
		abandoned mine reclamation fundSubparagraph (C) of section 402(i)(1) of the
		Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1232(i)(1)) is
		amended by striking and $9,000,000 on October 1, 2009 and
		inserting $9,000,000 on October 1, 2009, and $9,000,000 on October 1,
		2010.
						VIIDisaster
		relief
						AHeartland and
		Hurricane Ike disaster relief
							701.Short titleThis subtitle may be cited as the
		Heartland Disaster Tax Relief Act of
		2008.
							702.Temporary tax relief for areas damaged by
		2008 Midwestern severe storms, tornados, and flooding
								(a)In generalSubject to the modifications described in
		this section, the following provisions of or relating to the Internal Revenue
		Code of 1986 shall apply to any Midwestern disaster area in addition to the
		areas to which such provisions otherwise apply:
									(1)Go Zone benefits
										(A)Section 1400N (relating to tax benefits)
		other than subsections (b), (d), (e), (i), (j), (m), and (o) thereof.
										(B)Section 1400O (relating to education tax
		benefits).
										(C)Section 1400P (relating to housing tax
		benefits).
										(D)Section 1400Q (relating to special rules
		for use of retirement funds).
										(E)Section 1400R(a) (relating to employee
		retention credit for employers).
										(F)Section 1400S (relating to additional tax
		relief) other than subsection (d) thereof.
										(G)Section 1400T (relating to special rules
		for mortgage revenue bonds).
										(2)Other benefits included in Katrina
		Emergency Tax Relief Act of 2005Sections 302, 303, 304, 401, and 405 of the
		Katrina Emergency Tax Relief Act of 2005.
									(b)Midwestern disaster area
									(1)In generalFor purposes of this section and for
		applying the substitutions described in subsections (d) and (e), the term
		Midwestern disaster area means an area—
										(A)with respect to which a major disaster has
		been declared by the President on or after May 20, 2008, and before August 1,
		2008, under section 401 of the Robert T. Stafford Disaster Relief and Emergency
		Assistance Act by reason of severe storms, tornados, or flooding occurring in
		any of the States of Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan,
		Minnesota, Missouri, Nebraska, and Wisconsin, and
										(B)determined by the President to warrant
		individual or individual and public assistance from the Federal Government
		under such Act with respect to damages attributable to such severe storms,
		tornados, or flooding.
										(2)Certain benefits available to areas
		eligible only for public assistanceFor purposes of applying this section to
		benefits under the following provisions, paragraph (1) shall be applied without
		regard to subparagraph (B):
										(A)Sections 1400Q, 1400S(b), and 1400S(d) of
		the Internal Revenue Code of 1986.
										(B)Sections 302, 401, and 405 of the Katrina
		Emergency Tax Relief Act of 2005.
										(c)References
									(1)AreaAny reference in such provisions to the
		Hurricane Katrina disaster area or the Gulf Opportunity Zone shall be treated
		as a reference to any Midwestern disaster area and any reference to the
		Hurricane Katrina disaster area or the Gulf Opportunity Zone within a State
		shall be treated as a reference to all Midwestern disaster areas within the
		State.
									(2)Items attributable to
		disasterAny reference in
		such provisions to any loss, damage, or other item attributable to Hurricane
		Katrina shall be treated as a reference to any loss, damage, or other item
		attributable to the severe storms, tornados, or flooding giving rise to any
		Presidential declaration described in subsection (b)(1)(A).
									(3)Applicable disaster dateFor purposes of applying the substitutions
		described in subsections (d) and (e), the term applicable disaster
		date means, with respect to any Midwestern disaster area, the date on
		which the severe storms, tornados, or flooding giving rise to the Presidential
		declaration described in subsection (b)(1)(A) occurred.
									(d)Modifications to 1986 CodeThe following provisions of the Internal
		Revenue Code of 1986 shall be applied with the following modifications:
									(1)Tax-exempt bond financingSection 1400N(a)—
										(A)by substituting qualified Midwestern
		disaster area bond for qualified Gulf Opportunity Zone
		Bond each place it appears, except that in determining whether a bond
		is a qualified Midwestern disaster area bond—
											(i)paragraph (2)(A)(i) shall be applied by
		only treating costs as qualified project costs if—
												(I)in the case of a project involving a
		private business use (as defined in section 141(b)(6)), either the person using
		the property suffered a loss in a trade or business attributable to the severe
		storms, tornados, or flooding giving rise to any Presidential declaration
		described in subsection (b)(1)(A) or is a person designated for purposes of
		this section by the Governor of the State in which the project is located as a
		person carrying on a trade or business replacing a trade or business with
		respect to which another person suffered such a loss, and
												(II)in the case of a project relating to public
		utility property, the project involves repair or reconstruction of public
		utility property damaged by such severe storms, tornados, or flooding,
		and
												(ii)paragraph (2)(A)(ii) shall be applied by
		treating an issue as a qualified mortgage issue only if 95 percent or more of
		the net proceeds (as defined in section 150(a)(3)) of the issue are to be used
		to provide financing for mortgagors who suffered damages to their principal
		residences attributable to such severe storms, tornados, or flooding.
											(B)by substituting any State in which a
		Midwestern disaster area is located for the State of Alabama,
		Louisiana, or Mississippi in paragraph (2)(B),
										(C)by substituting designated for
		purposes of this section (on the basis of providing assistance to areas in the
		order in which such assistance is most needed) for designated
		for purposes of this section in paragraph (2)(C),
										(D)by substituting January 1,
		2013 for January 1, 2011 in paragraph (2)(D),
										(E)in paragraph (3)(A)—
											(i)by substituting $1,000 for
		$2,500, and
											(ii)by substituting before the earliest
		applicable disaster date for Midwestern disaster areas within the State
		for before August 28, 2005,
											(F)by substituting qualified Midwestern
		disaster area repair or construction for qualified GO Zone
		repair or construction each place it appears,
										(G)by substituting after the date of
		the enactment of the Heartland Disaster Tax
		Relief Act of 2008 and before January 1, 2013 for
		after the date of the enactment of this paragraph and before January 1,
		2011 in paragraph (7)(C), and
										(H)by disregarding
		paragraph (8) thereof.
										(2)Low-income housing creditSection 1400N(c)—
										(A)only with respect to calendar years 2008,
		2009, and 2010,
										(B)by substituting Disaster Recovery
		Assistance housing amount for Gulf Opportunity housing
		amount each place it appears,
										(C)in paragraph (1)(B)—
											(i)by substituting $8.00 for
		$18.00, and
											(ii)by substituting before the earliest
		applicable disaster date for Midwestern disaster areas within the State
		for before August 28, 2005, and
											(D)determined without regard to paragraphs
		(2), (3), (4), (5), and (6) thereof.
										(3)Expensing for certain demolition and
		clean-up costsSection
		1400N(f)—
										(A)by substituting qualified Disaster
		Recovery Assistance clean-up cost for qualified Gulf Opportunity
		Zone clean-up cost each place it appears,
										(B)by substituting beginning on the
		applicable disaster date and ending on December 31, 2010 for
		beginning on August 28, 2005, and ending on December 31, 2007 in
		paragraph (2), and
										(C)by treating costs as qualified Disaster
		Recovery Assistance clean-up costs only if the removal of debris or demolition
		of any structure was necessary due to damage attributable to the severe storms,
		tornados, or flooding giving rise to any Presidential declaration described in
		subsection (b)(1)(A).
										(4)Extension of expensing for environmental
		remediation costsSection
		1400N(g)—
										(A)by substituting the applicable
		disaster date for August 28, 2005 each place it
		appears,
										(B)by substituting January 1,
		2011 for January 1, 2008 in paragraph (1),
										(C)by substituting December 31,
		2010 for December 31, 2007 in paragraph (1), and
										(D)by treating a site as a qualified
		contaminated site only if the release (or threat of release) or disposal of a
		hazardous substance at the site was attributable to the severe storms,
		tornados, or flooding giving rise to any Presidential declaration described in
		subsection (b)(1)(A).
										(5)Increase in rehabilitation
		creditSection 1400N(h), as
		amended by this Act—
										(A)by substituting the applicable
		disaster date for August 28, 2005,
										(B)by substituting December 31,
		2011 for December 31, 2009 in paragraph (1), and
										(C)by only applying such subsection to
		qualified rehabilitation expenditures with respect to any building or structure
		which was damaged or destroyed as a result of the severe storms, tornados, or
		flooding giving rise to any Presidential declaration described in subsection
		(b)(1)(A).
										(6)Treatment of net operating losses
		attributable to disaster lossesSection 1400N(k)—
										(A)by substituting qualified Disaster
		Recovery Assistance loss for qualified Gulf Opportunity Zone
		loss each place it appears,
										(B)by substituting after the day before
		the applicable disaster date, and before January 1, 2011 for
		after August 27, 2005, and before January 1, 2008 each place it
		appears,
										(C)by substituting the applicable
		disaster date for August 28, 2005 in paragraph
		(2)(B)(ii)(I),
										(D)by substituting qualified Disaster
		Recovery Assistance property for qualified Gulf Opportunity Zone
		property in paragraph (2)(B)(iv), and
										(E)by substituting qualified Disaster
		Recovery Assistance casualty loss for qualified Gulf Opportunity
		Zone casualty loss each place it appears.
										(7)Credit to holders of tax credit
		bondsSection
		1400N(l)—
										(A)by substituting Midwestern tax
		credit bond for Gulf tax credit bond each place it
		appears,
										(B)by substituting any State in which a
		Midwestern disaster area is located or any instrumentality of the State
		for the State of Alabama, Louisiana, or Mississippi in paragraph
		(4)(A)(i),
										(C)by substituting after December 31,
		2008 and before January 1, 2010 for after December 31, 2005, and
		before January 1, 2007,
										(D)by substituting shall not exceed
		$100,000,000 for any State with an aggregate population located in all
		Midwestern disaster areas within the State of at least 2,000,000, $50,000,000
		for any State with an aggregate population located in all Midwestern disaster
		areas within the State of at least 1,000,000 but less than 2,000,000, and zero
		for any other State. The population of a State within any area shall be
		determined on the basis of the most recent census estimate of resident
		population released by the Bureau of Census before the earliest applicable
		disaster date for Midwestern disaster areas within the State. for
		shall not exceed and all that follows in paragraph (4)(C),
		and
										(E)by substituting the earliest
		applicable disaster date for Midwestern disaster areas within the State
		for August 28, 2005 in paragraph (5)(A).
										(8)Education tax benefitsSection 1400O, by substituting 2008
		or 2009 for 2005 or 2006.
									(9)Housing tax benefitsSection 1400P, by substituting the
		applicable disaster date for August 28, 2005 in
		subsection (c)(1).
									(10)Special rules for use of retirement
		fundsSection 1400Q—
										(A)by substituting qualified Disaster
		Recovery Assistance distribution for qualified hurricane
		distribution each place it appears,
										(B)by substituting on or after the
		applicable disaster date and before January 1, 2010 for on or
		after August 25, 2005, and before January 1, 2007 in subsection
		(a)(4)(A)(i),
										(C)by substituting the applicable
		disaster date for August 28, 2005 in subsections
		(a)(4)(A)(i) and (c)(3)(B),
										(D)by disregarding clauses (ii) and (iii) of
		subsection (a)(4)(A) thereof,
										(E)by substituting qualified storm
		damage distribution for qualified Katrina distribution
		each place it appears,
										(F)by substituting after the date which
		is 6 months before the applicable disaster date and before the date which is
		the day after the applicable disaster date for after February
		28, 2005, and before August 29, 2005 in subsection
		(b)(2)(B)(ii),
										(G)by substituting the Midwestern
		disaster area, but not so purchased or constructed on account of severe storms,
		tornados, or flooding giving rise to the designation of the area as a disaster
		area for the Hurricane Katrina disaster area, but not so
		purchased or constructed on account of Hurricane Katrina in subsection
		(b)(2)(B)(iii),
										(H)by substituting beginning on the
		applicable disaster date and ending on the date which is 5 months after the
		date of the enactment of the Heartland
		Disaster Tax Relief Act of 2008 for beginning on
		August 25, 2005, and ending on February 28, 2006 in subsection
		(b)(3)(A),
										(I)by substituting qualified storm
		damage individual for qualified Hurricane Katrina
		individual each place it appears,
										(J)by substituting December 31,
		2009 for December 31, 2006 in subsection
		(c)(2)(A),
										(K)by disregarding subparagraphs (C) and (D)
		of subsection (c)(3) thereof,
										(L)by substituting beginning on the
		date of the enactment of the Heartland
		Disaster Tax Relief Act of 2008 and ending on December 31,
		2009 for beginning on September 24, 2005, and ending on December
		31, 2006 in subsection (c)(4)(A)(i),
										(M)by substituting the applicable
		disaster date for August 25, 2005 in subsection
		(c)(4)(A)(ii), and
										(N)by substituting January 1,
		2010 for January 1, 2007 in subsection
		(d)(2)(A)(ii).
										(11)Employee retention credit for employers
		affected by severe storms, tornados, and floodingSection 1400R(a)—
										(A)by substituting the applicable
		disaster date for August 28, 2005 each place it
		appears,
										(B)by substituting January 1,
		2009 for January 1, 2006 both places it appears,
		and
										(C)only with respect to eligible employers who
		employed an average of not more than 200 employees on business days during the
		taxable year before the applicable disaster date.
										(12)Temporary suspension of limitations on
		charitable contributionsSection 1400S(a), by substituting the
		following paragraph for paragraph (4) thereof:

											(4)Qualified contributions
												(A)In generalFor purposes of this subsection, the term
		  qualified contribution means any charitable contribution (as
		  defined in section 170(c)) if—
													(i)such contribution—
														(I)is paid during the period beginning on the
		  earliest applicable disaster date for all States and ending on December 31,
		  2008, in cash to an organization described in section 170(b)(1)(A), and
														(II)is made for relief efforts in 1 or more
		  Midwestern disaster areas,
														(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 1 or more Midwestern disaster areas, 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.
												.
									(13)Suspension of certain limitations on
		personal casualty lossesSection 1400S(b)(1), by substituting
		the applicable disaster date for August 25,
		2005.
									(14)Special rule for determining earned
		incomeSection
		1400S(d)—
										(A)by treating an individual as a qualified
		individual if such individual's principal place of abode on the applicable
		disaster date was located in a Midwestern disaster area,
										(B)by treating the applicable disaster date
		with respect to any such individual as the applicable date for purposes of such
		subsection, and
										(C)by treating an area as described in
		paragraph (2)(B)(ii) thereof if the area is a Midwestern disaster area only by
		reason of subsection (b)(2) of this section (relating to areas eligible only
		for public assistance).
										(15)Adjustments regarding taxpayer and
		dependency statusSection
		1400S(e), by substituting 2008 or 2009 for 2005 or
		2006.
									(e)Modifications to Katrina Emergency Tax
		Relief Act of 2005The
		following provisions of the Katrina Emergency Tax Relief Act of 2005 shall be
		applied with the following modifications:
									(1)Additional exemption for housing displaced
		individualSection
		302—
										(A)by substituting 2008 or 2009
		for 2005 or 2006 in subsection (a) thereof,
										(B)by substituting Midwestern displaced
		individual for Hurricane Katrina displaced individual
		each place it appears, and
										(C)by treating an area as a core disaster area
		for purposes of applying subsection (c) thereof if the area is a Midwestern
		disaster area without regard to subsection (b)(2) of this section (relating to
		areas eligible only for public assistance).
										(2)Increase in standard mileage
		rateSection 303, by
		substituting beginning on the applicable disaster date and ending on
		December 31, 2008 for beginning on August 25, 2005, and ending
		on December 31, 2006.
									(3)Mileage reimbursements for charitable
		volunteersSection
		304—
										(A)by substituting beginning on the
		applicable disaster date and ending on December 31, 2008 for
		beginning on August 25, 2005, and ending on December 31, 2006 in
		subsection (a), and
										(B)by substituting the applicable
		disaster date for August 25, 2005 in subsection
		(a).
										(4)Exclusion of certain cancellation of
		indebtedness incomeSection
		401—
										(A)by treating an individual whose principal
		place of abode on the applicable disaster date was in a Midwestern disaster
		area (determined without regard to subsection (b)(2) of this section) as an
		individual described in subsection (b)(1) thereof, and by treating an
		individual whose principal place of abode on the applicable disaster date was
		in a Midwestern disaster area solely by reason of subsection (b)(2) of this
		section as an individual described in subsection (b)(2) thereof,
										(B)by substituting the applicable
		disaster date for August 28, 2005 both places it
		appears, and
										(C)by substituting January 1,
		2010 for January 1, 2007 in subsection (e).
										(5)Extension of replacement period for
		nonrecognition of gainSection 405, by substituting on or
		after the applicable disaster date for on or after August 25,
		2005.
									703.Reporting requirements relating to disaster
		relief contributions
								(a)In generalSection 6033(b) (relating to returns of
		certain organizations described in section 501(c)(3)) 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 section 1400S(a) applies,
		  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.
								704.Temporary tax-exempt bond financing and
		low-income housing tax relief for areas damaged by Hurricane Ike
								(a)Tax-exempt bond financingSection 1400N(a) of the Internal Revenue
		Code of 1986 shall apply to any Hurricane Ike disaster area in addition to any
		other area referenced in such section, but with the following
		modifications:
									(1)By substituting qualified Hurricane
		Ike disaster area bond for qualified Gulf Opportunity Zone
		Bond each place it appears, except that in determining whether a bond
		is a qualified Hurricane Ike disaster area bond—
										(A)paragraph (2)(A)(i) shall be applied by
		only treating costs as qualified project costs if—
											(i)in the case of a project involving a
		private business use (as defined in section 141(b)(6)), either the person using
		the property suffered a loss in a trade or business attributable to Hurricane
		Ike or is a person designated for purposes of this section by the Governor of
		the State in which the project is located as a person carrying on a trade or
		business replacing a trade or business with respect to which another person
		suffered such a loss, and
											(ii)in the case of a project relating to public
		utility property, the project involves repair or reconstruction of public
		utility property damaged by Hurricane Ike, and
											(B)paragraph (2)(A)(ii) shall be applied by
		treating an issue as a qualified mortgage issue only if 95 percent or more of
		the net proceeds (as defined in section 150(a)(3)) of the issue are to be used
		to provide financing for mortgagors who suffered damages to their principal
		residences attributable to Hurricane Ike.
										(2)By substituting any State in which
		any Hurricane Ike disaster area is located for the State of
		Alabama, Louisiana, or Mississippi in paragraph (2)(B).
									(3)By substituting designated for
		purposes of this section (on the basis of providing assistance to areas in the
		order in which such assistance is most needed) for designated
		for purposes of this section in paragraph (2)(C).
									(4)By substituting January 1,
		2013 for January 1, 2011 in paragraph (2)(D).
									(5)By substituting the following for
		subparagraph (A) of paragraph (3):

											(A)Aggregate
		  amount designatedThe maximum aggregate face amount of bonds
		  which may be designated under this subsection with respect to any State shall
		  not exceed the product of $2,000 multiplied by the portion of the State
		  population which is in—
												(i)in
		  the case of Texas, the counties of Brazoria, Chambers, Galveston, Jefferson,
		  and Orange, and
												(ii)in
		  the case of Louisiana, the parishes of Calcasieu and Cameron,
												(as
		  determined on the basis of the most recent census estimate of resident
		  population released by the Bureau of Census before September 13,
		  2008)..
									(6)By substituting qualified Hurricane
		Ike disaster area repair or construction for qualified GO Zone
		repair or construction each place it appears.
									(7)By substituting after the date of
		the enactment of the Heartland Disaster Tax
		Relief Act of 2008 and before January 1, 2013 for
		after the date of the enactment of this paragraph and before January 1,
		2011 in paragraph (7)(C).
									(8)By disregarding
		paragraph (8) thereof.
									(9)By substituting
		any Hurricane Ike disaster area for the Gulf Opportunity
		Zone each place it appears.
									(b)Low-income housing creditSection 1400N(c) of the Internal Revenue
		Code of 1986 shall apply to any Hurricane Ike disaster area in addition to any
		other area referenced in such section, but with the following
		modifications:
									(1)Only with respect to calendar years 2008,
		2009, and 2010.
									(2)By substituting
		any Hurricane Ike disaster area for the Gulf Opportunity
		Zone each place it appears.
									(3)By substituting Hurricane Ike
		Recovery Assistance housing amount for Gulf Opportunity housing
		amount each place it appears.
									(4)By substituting the following for
		subparagraph (B) of paragraph (1):

											(B)Hurricane Ike
		  housing amountFor purposes of subparagraph (A), the term
		  Hurricane Ike housing amount means, for any calendar year, the
		  amount equal to the product of $16.00 multiplied by the portion of the State
		  population which is in—
												(i)in
		  the case of Texas, the counties of Brazoria, Chambers, Galveston, Jefferson,
		  and Orange, and
												(ii)in
		  the case of Louisiana, the parishes of Calcasieu and Cameron,
												(as
		  determined on the basis of the most recent census estimate of resident
		  population released by the Bureau of Census before September 13,
		  2008)..
									(5)Determined without regard to paragraphs
		(2), (3), (4), (5), and (6) thereof.
									(c)Hurricane Ike disaster areaFor purposes of this section and for
		applying the substitutions described in subsections (a) and (b), the term
		Hurricane Ike disaster area means an area in the State of Texas or
		Louisiana—
									(1)with respect to which a major disaster has
		been declared by the President on September 13, 2008, under section 401 of the
		Robert T. Stafford Disaster Relief and Emergency Assistance Act by reason of
		Hurricane Ike, and
									(2)determined by the President to warrant
		individual or individual and public assistance from the Federal Government
		under such Act with respect to damages attributable to Hurricane Ike.
									BNational disaster
		relief
							706.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 occurring before January 1, 2010, 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), as amended by the Housing
		Assistance Tax Act of 2008, 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, as amended by the Housing
		Assistance Tax Act of 2008, 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 ($100 for taxable
		years beginning after December 31, 2009).
								(d)Effective
		dates
									(1)In
		generalExcept as provided by paragraph (2), the amendments made
		by this section shall apply to disasters declared in 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.
									707.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 occurring before January 1, 2010,
													(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 occurring before such date, or
													(C)for the repair of
		  business-related property damaged as a result of a federally declared disaster
		  occurring before such date, and
													(3)which 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 in connection with disaster declared
		after such date.
								708.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)) occurring
		  before January 1, 2010, 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.
											(4)ExclusionThe term qualified disaster
		  loss shall not include any loss with respect to any property described
		  in section
		  1400N(p)(3).
											.
								(c)Loss deduction
		allowed in computing alternative minimum taxable
		incomeSubsection (d) of section 56 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, in connection with
		disasters declared after such date.
								709.Waiver of
		certain mortgage revenue bond requirements following federally declared
		disasters
								(a)In
		generalSubsection (k) of
		section 143 is amended by adding at the end the following new paragraph:

										(12)Special rules
		  for residences destroyed in federally declared disasters
											(A)Principal
		  residence destroyedAt the election of the taxpayer, if the
		  principal residence (within the meaning of section 121) of such taxpayer
		  is—
												(i)rendered unsafe
		  for use as a residence by reason of a federally declared disaster occurring
		  before January 1, 2010, 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 occurring
		  before such date,
												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)Principal
		  residence damaged
												(i)In
		  generalAt the election of the taxpayer, if the principal
		  residence (within the meaning of section 121) of such taxpayer was damaged as
		  the result of a federally declared disaster occurring before January 1, 2010,
		  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).
											(D)Election;
		  denial of double benefit
												(i)ElectionAn
		  election under this paragraph may not be revoked except with the consent of the
		  Secretary.
												(ii)Denial of
		  double benefitIf a taxpayer elects the application of this
		  paragraph, paragraph (11) shall not apply with respect to the purchase or
		  financing of any residence by such
		  taxpayer.
												.
								(b)Effective
		dateThe amendment made by subsection (a) shall apply to
		disasters occurring after December 31, 2007.
								710.Special depreciation allowance for
		qualified disaster property
								(a)In generalSection 168, as amended by this Act, is
		amended by adding at the end the following new subsection:

										(n)Special allowance for qualified disaster
		  assistance property
											(1)In generalIn the case of any qualified disaster
		  assistance 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 disaster assistance property, and
												(B)the adjusted basis of the qualified
		  disaster assistance 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 disaster assistance
		  propertyFor purposes of this
		  subsection—
												(A)In generalThe term qualified disaster
		  assistance property means any property—
													(i)(I)which is described in
		  subsection (k)(2)(A)(i), or
														(II)which is nonresidential real property or
		  residential rental property,
														(ii)substantially
		  all of the use of which is—
														(I)in
		  a disaster area with respect to a federally declared disaster occurring before
		  January 1, 2010, and
														(II)in the active
		  conduct of a trade or business by the taxpayer in such disaster area,
														(iii)which—
														(I)rehabilitates property damaged, or replaces
		  property destroyed or condemned, as a result of such federally declared
		  disaster, except that, for purposes of this clause, property shall be treated
		  as replacing property destroyed or condemned if, as part of an integrated plan,
		  such property replaces property which is included in a continuous area which
		  includes real property destroyed or condemned, and
														(II)is similar in nature to, and located in the
		  same county as, the property being rehabilitated or replaced,
														(iv)the
		  original use of which in such disaster area commences with an eligible taxpayer
		  on or after the applicable disaster date,
													(v)which
		  is acquired by such eligible taxpayer by purchase (as defined in section
		  179(d)) on or after the applicable disaster date, but only if no written
		  binding contract for the acquisition was in effect before such date, and
													(vi)which is placed
		  in service by such eligible taxpayer on or before the date which is the last
		  day of the third calendar year following the applicable disaster date (the
		  fourth calendar year in the case of nonresidential real property and
		  residential rental property).
													(B)Exceptions
													(i)Other bonus depreciation
		  propertyThe term
		  qualified disaster assistance property shall not include—
														(I)any property to which subsection (k)
		  (determined without regard to paragraph (4)), (l), or (m) applies,
														(II)any property to
		  which section 1400N(d) applies, and
														(III)any property
		  described in section 1400N(p)(3).
														(ii)Alternative depreciation
		  propertyThe term
		  qualified disaster assistance 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)Tax-exempt
		  bond financed propertySuch term shall not include any property
		  any portion of which is financed with the proceeds of any obligation the
		  interest on which is exempt from tax under section 103.
													(iv)Qualified
		  revitalization buildingsSuch term shall not include any
		  qualified revitalization building with respect to which the taxpayer has
		  elected the application of paragraph (1) or (2) of section 1400I(a).
													(v)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
		  rulesFor purposes of this subsection, rules similar to the rules
		  of subparagraph (E) of subsection (k)(2) shall apply, except that such
		  subparagraph shall be applied—
													(i)by
		  substituting the applicable disaster date for December
		  31, 2007 each place it appears therein,
													(ii)without regard
		  to and before January 1, 2009 in clause (i) thereof, and
													(iii)by
		  substituting qualified disaster assistance property for
		  qualified property in clause (iv) thereof.
													(D)Allowance
		  against alternative minimum taxFor purposes of this subsection,
		  rules similar to the rules of subsection (k)(2)(G) shall apply.
												(3)Other definitionsFor purposes of this subsection—
												(A)Applicable disaster dateThe
		  term applicable disaster date means, with respect to any federally
		  declared disaster, the date on which such federally declared disaster
		  occurs.
												(B)Federally
		  declared disasterThe term federally declared
		  disaster has the meaning given such term under section
		  165(h)(3)(C)(i).
												(C)Disaster
		  areaThe term disaster area has the meaning given
		  such term under section 165(h)(3)(C)(ii).
												(D)Eligible
		  taxpayerThe term eligible taxpayer means a taxpayer
		  who has suffered an economic loss attributable to a federally declared
		  disaster.
												(4)RecaptureFor
		  purposes of this subsection, rules similar to the rules under section
		  179(d)(10) shall apply with respect to any qualified disaster assistance
		  property which ceases to be qualified disaster assistance
		  property.
											.
								(b)Effective
		dateThe amendment made by
		this section shall apply to property placed in service after December 31, 2007,
		with respect disasters declared after such date.
								711.Increased
		expensing for qualified disaster assistance property
								(a)In
		generalSection 179 is amended by adding at the end the following
		new subsection:

										(e)Special rules
		  for qualified disaster assistance property
											(1)In
		  generalFor purposes of this section—
												(A)the dollar amount
		  in effect under subsection (b)(1) for the taxable year shall be increased by
		  the lesser of—
													(i)$100,000,
		  or
													(ii)the
		  cost of qualified section 179 disaster assistance property placed in service
		  during the taxable year, and
													(B)the dollar amount
		  in effect under subsection (b)(2) for the taxable year shall be increased by
		  the lesser of—
													(i)$600,000,
		  or
													(ii)the
		  cost of qualified section 179 disaster assistance property placed in service
		  during the taxable year.
													(2)Qualified
		  section 179 disaster assistance propertyFor purposes of this
		  subsection, the term qualified section 179 disaster assistance
		  property means section 179 property (as defined in subsection (d)) which
		  is qualified disaster assistance property (as defined in section
		  168(n)(2)).
											(3)Coordination
		  with empowerment zones and renewal communitiesFor purposes of
		  sections 1397A and 1400J, qualified section 179 disaster assistance property
		  shall not be treated as qualified zone property or qualified renewal property,
		  unless the taxpayer elects not to take such qualified section 179 disaster
		  assistance property into account for purposes of this subsection.
											(4)RecaptureFor
		  purposes of this subsection, rules similar to the rules under subsection
		  (d)(10) shall apply with respect to any qualified section 179 disaster
		  assistance property which ceases to be qualified section 179 disaster
		  assistance
		  property.
											.
								(b)Effective
		dateThe amendment made by this section shall apply to property
		placed in service after December 31, 2007, with respect disasters declared
		after such date.
								712.Coordination
		with Heartland disaster reliefThe amendments made by this subtitle, other
		than the amendments made by sections 706(a)(2), 710, and 711, shall not apply
		to any disaster described in section 702(c)(1)(A), or to any expenditure or
		loss resulting from such disaster.
							VIIISpending
		reductions and appropriate revenue raisers for new tax relief policy
						801.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.
										.
							(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)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.
								(4)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.
								(5)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.

			Secretary