109 HR 6408 IH: Surface Mining Control and

U.S. House of Representatives
2006-12-07
text/xml
EN
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		I
		109th CONGRESS
		2d Session
		H. R. 6408
		IN THE HOUSE OF REPRESENTATIVES

			December 7, 2006
			Mr. Thomas introduced
			 the following bill; which was referred to the
			 Committee on Ways and
			 Means, and in addition to the Committees on
			 Energy and Commerce,
			 Resources,
			 Education and the
			 Workforce, and Government
			 Reform, for a period to be subsequently determined by the
			 Speaker, in each case for consideration of such provisions as fall within the
			 jurisdiction of the committee concerned

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

		1.Short title, etc
			(a)Short
			 titleThis Act may be cited
			 as the Tax Relief and Health Care Act
			 of 2006.
			(b)Table of
			 contentsThe table of contents for this Act is as follows:

					Sec. 1. Short title, etc.
					Division A—Extension and Expansion of Certain Tax Relief
				Provisions, and Other Tax Provisions
					Sec. 100. Reference.
					Title I—Extension and Modification of Certain
				Provisions
					Sec. 101. Deduction for qualified tuition and related
				expenses.
					Sec. 102. Extension and modification of new markets tax
				credit.
					Sec. 103. Election to deduct State and local general sales
				taxes.
					Sec. 104. Extension and modification of research
				credit.
					Sec. 105. Work opportunity tax credit and welfare-to-work
				credit.
					Sec. 106. Election to include combat pay as earned income for
				purposes of earned income credit.
					Sec. 107. Extension and modification of qualified zone academy
				bonds.
					Sec. 108. Above-the-line deduction for certain expenses of
				elementary and secondary school teachers.
					Sec. 109. Extension and expansion of expensing of brownfields
				remediation costs.
					Sec. 110. Tax incentives for investment in the District of
				Columbia.
					Sec. 111. Indian employment tax credit.
					Sec. 112. Accelerated depreciation for business property on
				Indian reservations.
					Sec. 113. Fifteen-year straight-line cost recovery for
				qualified leasehold improvements and qualified restaurant property.
					Sec. 114. Cover over of tax on distilled spirits.
					Sec. 115. Parity in application of certain limits to mental
				health benefits.
					Sec. 116. Corporate donations of scientific property used for
				research and of computer technology and equipment.
					Sec. 117. Availability of medical savings accounts.
					Sec. 118. Taxable income limit on percentage depletion for oil
				and natural gas produced from marginal properties.
					Sec. 119. American Samoa economic development
				credit.
					Sec. 120. Extension of bonus depreciation for certain qualified
				Gulf Opportunity Zone property.
					Sec. 121. Authority for undercover operations.
					Sec. 122. Disclosures of certain tax return
				information.
					Sec. 123. Special rule for elections under expired
				provisions.
					Title II—Energy tax provisions
					Sec. 201. Credit for electricity produced from certain
				renewable resources.
					Sec. 202. Credit to holders of clean renewable energy
				bonds.
					Sec. 203. Performance standards for sulfur dioxide removal in
				advanced coal-based generation technology units designed to use subbituminous
				coal.
					Sec. 204. Deduction for energy efficient commercial
				buildings.
					Sec. 205. Credit for new energy efficient homes.
					Sec. 206. Credit for residential energy efficient
				property.
					Sec. 207. Energy credit.
					Sec. 208. Special rule for qualified methanol or ethanol
				fuel.
					Sec. 209. Special depreciation allowance for cellulosic biomass
				ethanol plant property.
					Sec. 210. Expenditures permitted from the Leaking Underground
				Storage Tank Trust Fund.
					Sec. 211. Treatment of coke and coke gas.
					Title III—Health Savings Accounts
					Sec. 301. Short title.
					Sec. 302. FSA and HRA terminations to fund HSAs.
					Sec. 303. Repeal of annual deductible limitation on HSA
				contributions.
					Sec. 304. Modification of cost-of-living
				adjustment.
					Sec. 305. Contribution limitation not reduced for part-year
				coverage.
					Sec. 306. Exception to requirement for employers to make
				comparable health savings account contributions.
					Sec. 307. One-time distribution from individual retirement
				plans to fund HSAs.
					Title IV—Other Provisions
					Sec. 401. Deduction allowable with respect to income
				attributable to domestic production activities in Puerto Rico.
					Sec. 402. Credit for prior year minimum tax liability made
				refundable after period of years.
					Sec. 403. Returns required in connection with certain
				options.
					Sec. 404. Partial expensing for advanced mine safety
				equipment.
					Sec. 405. Mine rescue team training tax credit.
					Sec. 406. Whistleblower reforms.
					Sec. 407. Frivolous tax submissions.
					Sec. 408. Addition of meningococcal and human papillomavirus
				vaccines to list of taxable vaccines.
					Sec. 409. Clarification of taxation of certain settlement funds
				made permanent.
					Sec. 410. Modification of active business definition under
				section 355 made permanent.
					Sec. 411. Revision of State veterans limit made
				permanent.
					Sec. 412. Capital gains treatment for certain self-created
				musical works made permanent.
					Sec. 413. Reduction in minimum vessel tonnage which qualifies
				for tonnage tax made permanent.
					Sec. 414. Modification of special arbitrage rule for certain
				funds made permanent.
					Sec. 415. Great Lakes domestic shipping to not disqualify
				vessel from tonnage tax.
					Sec. 416. Use of qualified mortgage bonds to finance residences
				for veterans without regard to first-time homebuyer requirement.
					Sec. 417. Exclusion of gain from sale of a principal residence
				by certain employees of the intelligence community.
					Sec. 418. Sale of property by judicial officers.
					Sec. 419. Premiums for mortgage insurance.
					Sec. 420. Modification of refunds for kerosene used in
				aviation.
					Sec. 421. Regional income tax agencies treated as States for
				purposes of confidentiality and disclosure requirements.
					Sec. 422. Designation of wines by semi-generic
				names.
					Sec. 423. Modification of railroad track maintenance
				credit.
					Sec. 424. Modification of excise tax on unrelated business
				taxable income of charitable remainder trusts.
					Sec. 425. Loans to qualified continuing care facilities made
				permanent.
					Sec. 426. Technical corrections.
					Division B—Medicare and Other Health Provisions
					Sec. 1. Short title of division.
					Title I—Medicare Improved Quality and Provider
				Payments
					Sec. 101. Physician payment and quality
				improvement.
					Sec. 102. Extension of floor on Medicare work geographic
				adjustment.
					Sec. 103. Update to the composite rate component of the basic
				case-mix adjusted prospective payment system for dialysis services.
					Sec. 104. Extension of treatment of certain physician pathology
				services under Medicare.
					Sec. 105. Extension of Medicare reasonable costs payments for
				certain clinical diagnostic laboratory tests furnished to hospital patients in
				certain rural areas.
					Sec. 106. Hospital Medicare reports and
				clarifications.
					Sec. 107. Payment for brachytherapy.
					Sec. 108. Payment process under the competitive acquisition
				program (CAP).
					Sec. 109. Quality reporting for hospital outpatient services
				and ambulatory surgical center services.
					Sec. 110. Reporting of anemia quality indicators for Medicare
				part B cancer anti-anemia drugs.
					Sec. 111. Clarification of hospice satellite
				designation.
					Title II—Medicare Beneficiary Protections
					Sec. 201. Extension of exceptions process for Medicare therapy
				caps.
					Sec. 202. Payment for administration of part D
				vaccines.
					Sec. 203. OIG study of never events.
					Sec. 204. Medicare medical home demonstration
				project.
					Sec. 205. Medicare DRA technical corrections.
					Title III—Medicare Program Integrity Efforts
					Sec. 301. Offsetting adjustment in Medicare Advantage
				Stabilization Fund.
					Sec. 302. Extension and expansion of recovery audit contractor
				program under the Medicare Integrity Program.
					Sec. 303. Funding for the Health Care Fraud and Abuse Control
				Account.
					Sec. 304. Implementation funding.
					Title IV—Medicaid and Other Health Provisions
					Sec. 401.  Extension of Transitional Medical Assistance (TMA)
				and abstinence education program.
					Sec. 402. Grants for research on vaccine against Valley
				Fever.
					Sec. 403. Change in threshold for Medicaid indirect hold
				harmless provision of broad-based health care taxes.
					Sec. 404. DSH allotments for fiscal year 2007 for Tennessee and
				Hawaii.
					Sec. 405. Certain Medicaid DRA technical
				corrections.
					Division C—Other Provisions
					Title I—Gulf of Mexico Energy Security
					Sec. 101. Short title.
					Sec. 102. Definitions.
					Sec. 103. Offshore oil and gas leasing in 181 Area and 181
				south Area of Gulf of Mexico.
					Sec. 104. Moratorium on oil and gas leasing in certain areas of
				Gulf of Mexico.
					Sec. 105. Disposition of qualified outer Continental Shelf
				revenues from 181 Area, 181 south Area, and 2002–2007 planning areas of Gulf of
				Mexico.
					Title II—Surface Mining Control and Reclamation Act Amendments of
				2006
					Sec. 200. Short title.
					Subtitle A—Mining control and reclamation
					Sec. 201. Abandoned Mine Reclamation Fund and
				purposes.
					Sec. 202. Reclamation fee.
					Sec. 203. Objectives of Fund.
					Sec. 204. Reclamation of rural land.
					Sec. 205. Liens.
					Sec. 206. Certification.
					Sec. 207. Remining incentives.
					Sec. 208. Extension of limitation on application of prohibition
				on issuance of permit.
					Sec. 209. Tribal regulation of surface coal mining and
				reclamation operations.
					Subtitle B—Coal Industry Retiree Health Benefit Act

					Sec. 211. Certain related persons and successors in interest
				relieved of liability if premiums prepaid.
					Sec. 212. Transfers to funds; premium relief.
					Sec. 213. Other provisions.
					Title III—Other Provisions
					Sec. 301. Tobacco personal use quantity exception to not apply
				to delivery sales.
					Sec. 302. Ethanol Tariff Schedule.
					Sec. 303. Withdrawal of certain Federal land and interests in
				certain Federal land from location, entry, and patent under the mining laws and
				disposition under the mineral and geothermal leasing laws.
					Sec. 304. Continuing eligibility for certain students under
				District of Columbia School Choice Program.
					Sec. 305. Study on Establishing Uniform National Database on
				Elder Abuse.

			AExtension and
			 Expansion of Certain Tax Relief Provisions, and Other Tax Provisions
			100.ReferenceExcept 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.
			IExtension and
			 Modification of Certain Provisions
				101.Deduction for
			 qualified tuition and related expenses
					(a)In
			 generalSection 222(e) is amended by striking
			 2005and inserting 2007.
					(b)Conforming
			 amendmentsSection 222(b)(2)(B) is amended—
						(1)by striking
			 a taxable year beginning in 2004 or 2005 and inserting
			 any taxable year beginning after 2003, and
						(2)by striking
			 2004 and
			 2005 in the heading and inserting
			 After
			 2003.
						(c)Effective
			 dateThe amendments made by this section shall apply to taxable
			 years beginning after December 31, 2005.
					102.Extension and
			 modification of new markets tax credit
					(a)ExtensionSection
			 45D(f)(1)(D) is amended by striking and 2007 and inserting
			 , 2007, and 2008.
					(b)Regulations
			 regarding non-metropolitan countiesSection 45D(i) is amended by
			 striking and at the end of paragraph (4), by striking the period
			 at the end of paragraph (5) and inserting , and, and by adding
			 at the end the following new paragraph:

							(6)which ensure that
				non-metropolitan counties receive a proportional allocation of qualified equity
				investments.
							.
					(c)Effective
			 dateThe amendments made by this section shall take effect on the
			 date of the enactment of this Act.
					103.Election to
			 deduct State and local general sales taxes
					(a)In
			 generalSection 164(b)(5)(I) is amended by striking
			 2006 and inserting 2008.
					(b)Effective
			 dateThe amendments made by this section shall apply to taxable
			 years beginning after December 31, 2005.
					104.Extension and
			 modification of research credit
					(a)Extension
						(1)In
			 generalSection 41(h)(1)(B) is amended by striking
			 2005 and inserting 2007.
						(2)Conforming
			 amendmentSection 45C(b)(1)(D) is amended by striking
			 2005 and inserting 2007.
						(3)Effective
			 dateThe amendments made by this subsection shall apply to
			 amounts paid or incurred after December 31, 2005.
						(b)Increase in
			 rates of alternative incremental credit
						(1)In
			 generalSubparagraph (A) of section 41(c)(4) (relating to
			 election of alternative incremental credit) is amended—
							(A)by striking
			 2.65 percent and inserting 3 percent,
							(B)by striking
			 3.2 percent and inserting 4 percent, and
							(C)by striking
			 3.75 percent and inserting 5 percent.
							(2)Effective
			 dateExcept as provided in paragraph (3), the amendments made by
			 this subsection shall apply to taxable years ending after December 31,
			 2006.
						(3)Transition
			 rule
							(A)In
			 generalIn the case of a specified transitional taxable year for
			 which an election under section 41(c)(4) of the Internal Revenue Code of 1986
			 applies, the credit determined under section 41(a)(1) of such Code shall be
			 equal to the sum of—
								(i)the applicable
			 2006 percentage multiplied by the amount determined under section 41(c)(4)(A)
			 of such Code (as in effect for taxable years ending on December 31, 2006),
			 plus
								(ii)the applicable
			 2007 percentage multiplied by the amount determined under section 41(c)(4)(A)
			 of such Code (as in effect for taxable years ending on January 1, 2007).
								(B)DefinitionsFor
			 purposes of subparagraph (A)—
								(i)Specified
			 transitional taxable yearThe term specified transitional
			 taxable year means any taxable year which ends after December 31, 2006,
			 and which includes such date.
								(ii)Applicable 2006
			 percentageThe term applicable 2006 percentage means
			 the number of days in the specified transitional taxable year before January 1,
			 2007, divided by the number of days in such taxable year.
								(iii)Applicable
			 2007 percentageThe term applicable 2007 percentage
			 means the number of days in the specified transitional taxable year after
			 December 31, 2006, divided by the number of days in such taxable year.
								(c)Alternative
			 simplified credit for qualified research expenses
						(1)In
			 generalSubsection (c) of section 41 (relating to base amount) is
			 amended by redesignating paragraphs (5) and (6) as paragraphs (6) and (7),
			 respectively, and by inserting after paragraph (4) the following new
			 paragraph:

								(5)Election of
				alternative simplified credit
									(A)In
				generalAt the election of the taxpayer, the credit determined
				under subsection (a)(1) shall be equal to 12 percent of so much of the
				qualified research expenses for the taxable year as exceeds 50 percent of the
				average qualified research expenses for the 3 taxable years preceding the
				taxable year for which the credit is being determined.
									(B)Special rule in
				case of no qualified research expenses in any of 3 preceding taxable
				years
										(i)Taxpayers to
				which subparagraph appliesThe credit under this paragraph shall
				be determined under this subparagraph if the taxpayer has no qualified research
				expenses in any one of the 3 taxable years preceding the taxable year for which
				the credit is being determined.
										(ii)Credit
				rateThe credit determined under this subparagraph shall be equal
				to 6 percent of the qualified research expenses for the taxable year.
										(C)ElectionAn
				election under this paragraph shall apply to the taxable year for which made
				and all succeeding taxable years unless revoked with the consent of the
				Secretary. An election under this paragraph may not be made for any taxable
				year to which an election under paragraph (4)
				applies.
									.
						(2)Transition rule
			 for deemed revocation of election of alternative incremental
			 creditIn the case of an election under section 41(c)(4) of the
			 Internal Revenue Code of 1986 which applies to the taxable year which includes
			 January 1, 2007, such election shall be treated as revoked with the consent of
			 the Secretary of the Treasury if the taxpayer makes an election under section
			 41(c)(5) of such Code (as added by this subsection) for such year.
						(3)Effective
			 dateExcept as provided in paragraph (4), the amendments made by
			 this subsection shall apply to taxable years ending after December 31,
			 2006.
						(4)Transition rule
			 for noncalendar taxable years
							(A)In
			 generalIn the case of a specified transitional taxable year for
			 which an election under section 41(c)(5) of the Internal Revenue Code of 1986
			 (as added by this subsection) applies, the credit determined under section
			 41(a)(1) of such Code shall be equal to the sum of—
								(i)the applicable
			 2006 percentage multiplied by the amount determined under section 41(a)(1) of
			 such Code (as in effect for taxable years ending on December 31, 2006),
			 plus
								(ii)the applicable
			 2007 percentage multiplied by the amount determined under section 41(c)(5) of
			 such Code (as in effect for taxable years ending on January 1, 2007).
								(B)Definitions and
			 special rulesFor purposes of subparagraph (A)—
								(i)DefinitionsTerms used in this paragraph which are also
			 used in subsection (b)(3) shall have the respective meanings given such terms
			 in such subsection.
								(ii)Dual elections
			 permittedElections under paragraphs (4) and (5) of section 41(c)
			 of such Code may both apply for the specified transitional taxable year.
								(iii)Deferral of
			 deemed election revocationAny election under section 41(c)(4) of
			 the Internal Revenue Code of 1986 treated as revoked under paragraph (2) shall
			 be treated as revoked for the taxable year after the specified transitional
			 taxable year.
								105.Work
			 opportunity tax credit and welfare-to-work credit
					(a)In
			 generalSections 51(c)(4)(B) and 51A(f) are each amended by
			 striking 2005 and inserting 2007.
					(b)Eligibility of
			 ex-felons determined without regard to family incomeParagraph
			 (4) of section 51(d) is amended by adding and at the end of
			 subparagraph (A), by striking , and at the end of subparagraph
			 (B) and inserting a period, and by striking all that follows subparagraph
			 (B).
					(c)Increase in
			 maximum age for eligibility of food stamp recipientsClause (i)
			 of section 51(d)(8)(A) is amended by striking 25 and inserting
			 40.
					(d)Extension of
			 paperwork filing deadlineSection 51(d)(12)(A)(ii)(II) is amended
			 by striking 21st day and inserting 28th
			 day.
					(e)Consolidation of
			 work opportunity credit with welfare-to-work credit
						(1)In
			 generalParagraph (1) of section 51(d) is amended by striking
			 or at the end of subparagraph (G), by striking the period at the
			 end of subparagraph (H) and inserting , or, and by adding at the
			 end the following new subparagraph:

								(I)a long-term family
				assistance
				recipient.
								.
						(2)Long-term family
			 assistance recipientSubsection (d) of section 51 is amended by
			 redesignating paragraphs (10) through (12) as paragraphs (11) through (13),
			 respectively, and by inserting after paragraph (9) the following new
			 paragraph:

								(10)Long-term
				family assistance recipientThe term long-term family
				assistance recipient means any individual who is certified by the
				designated local agency—
									(A)as being a member
				of a family receiving assistance under a IV–A program (as defined in paragraph
				(2)(B)) for at least the 18-month period ending on the hiring date,
									(B)(i)as being a member of a
				family receiving such assistance for 18 months beginning after August 5, 1997,
				and
										(ii)as having a hiring date which is
				not more than 2 years after the end of the earliest such 18-month period,
				or
										(C)(i)as being a member of a
				family which ceased to be eligible for such assistance by reason of any
				limitation imposed by Federal or State law on the maximum period such
				assistance is payable to a family, and
										(ii)as having a hiring date which is
				not more than 2 years after the date of such
				cessation.
										.
						(3)Increased credit
			 for employment of long-term family assistance recipientsSection
			 51 is amended by inserting after subsection (d) the following new
			 subsection:

								(e)Credit for
				second-year wages for employment of long-term family assistance
				recipients
									(1)In
				generalWith respect to the employment of a long-term family
				assistance recipient—
										(A)the amount of the
				work opportunity credit determined under this section for the taxable year
				shall include 50 percent of the qualified second-year wages for such year,
				and
										(B)in lieu of
				applying subsection (b)(3), the amount of the qualified first-year wages, and
				the amount of qualified second-year wages, which may be taken into account with
				respect to such a recipient shall not exceed $10,000 per year.
										(2)Qualified
				second-year wagesFor purposes of this subsection, the term
				qualified second-year wages means qualified wages—
										(A)which are paid to
				a long-term family assistance recipient, and
										(B)which are
				attributable to service rendered during the 1-year period beginning on the day
				after the last day of the 1-year period with respect to such recipient
				determined under subsection (b)(2).
										(3)Special rules
				for agricultural and railway laborIf such recipient is an
				employee to whom subparagraph (A) or (B) of subsection (h)(1) applies, rules
				similar to the rules of such subparagraphs shall apply except that—
										(A)such subparagraph
				(A) shall be applied by substituting $10,000 for
				$6,000, and
										(B)such subparagraph
				(B) shall be applied by substituting $833.33 for
				$500.
										.
						(4)Repeal of
			 separate welfare-to-work credit
							(A)In
			 generalSection 51A is hereby repealed.
							(B)Clerical
			 amendmentThe table of sections for subpart F of part IV of
			 subchapter A of chapter 1 is amended by striking the item relating to section
			 51A.
							(f)Effective
			 dates
						(1)In
			 generalExcept as provided in paragraph (2), the amendments made
			 by this section shall apply to individuals who begin work for the employer
			 after December 31, 2005.
						(2)ConsolidationThe
			 amendments made by subsections (b), (c), (d), and (e) shall apply to
			 individuals who begin work for the employer after December 31, 2006.
						106.Election to
			 include combat pay as earned income for purposes of earned income
			 credit
					(a)In
			 generalSection 32(c)(2)(B)(vi)(II) is amended by striking
			 2007 and inserting 2008.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to taxable years beginning after December 31,
			 2006.
					107.Extension and
			 modification of qualified zone academy bonds
					(a)In
			 generalParagraph (1) of section 1397E(e) is amended by striking
			 and 2005 and inserting 2005, 2006, and
			 2007.
					(b)Special rules
			 relating to expenditures, arbitrage, and reporting
						(1)In
			 generalSection 1397E is amended—
							(A)in subsection
			 (d)(1), by striking and at the end of subparagraph (C)(iii), by
			 striking the period at the end of subparagraph (D) and inserting ,
			 and, and by adding at the end the following new subparagraph:

									(E)the issue meets
				the requirements of subsections (f), (g), and
				(h).
									,
				and
							(B)by redesignating
			 subsections (f), (g), (h), and (i) as subsection (i), (j), (k), and (l),
			 respectively, and by inserting after subsection (e) the following new
			 subsections:

									(f)Special rules
				relating to expenditures
										(1)In
				generalAn issue shall be treated as meeting the requirements of
				this subsection if, as of the date of issuance, the issuer reasonably
				expects—
											(A)at least 95 percent
				of the proceeds from the sale of the issue are to be spent for 1 or more
				qualified purposes with respect to qualified zone academies within the 5-year
				period beginning on the date of issuance of the qualified zone academy
				bond,
											(B)a binding
				commitment with a third party to spend at least 10 percent of the proceeds from
				the sale of the issue will be incurred within the 6-month period beginning on
				the date of issuance of the qualified zone academy bond, and
											(C)such purposes will
				be completed with due diligence and the proceeds from the sale of the issue
				will be spent with due diligence.
											(2)Extension of
				periodUpon submission of a request prior to the expiration of
				the period described in paragraph (1)(A), the Secretary may extend such period
				if the issuer establishes that the failure to satisfy the 5-year requirement is
				due to reasonable cause and the related purposes will continue to proceed with
				due diligence.
										(3)Failure to spend
				required amount of bond proceeds within 5 yearsTo the extent
				that less than 95 percent of the proceeds of such issue are expended by the
				close of the 5-year period beginning on the date of issuance (or if an
				extension has been obtained under paragraph (2), by the close of the extended
				period), the issuer shall redeem all of the nonqualified bonds within 90 days
				after the end of such period. For purposes of this paragraph, the amount of the
				nonqualified bonds required to be redeemed shall be determined in the same
				manner as under section 142.
										(g)Special rules
				relating to arbitrageAn issue shall be treated as meeting the
				requirements of this subsection if the issuer satisfies the arbitrage
				requirements of section 148 with respect to proceeds of the issue.
									(h)ReportingIssuers
				of qualified academy zone bonds shall submit reports similar to the reports
				required under section
				149(e).
									.
							(2)Conforming
			 amendmentsSections 54(l)(3)(B) and 1400N(l)(7)(B)(ii) are each
			 amended by striking section 1397E(i) and inserting
			 section 1397E(l).
						(c)Effective
			 dates
						(1)ExtensionThe
			 amendment made by subsection (a) shall apply to obligations issued after
			 December 31, 2005.
						(2)Special
			 rulesThe amendments made by subsection (b) shall apply to
			 obligations issued after the date of the enactment of this Act pursuant to
			 allocations of the national zone academy bond limitation for calendar years
			 after 2005.
						108.Above-the-line
			 deduction for certain expenses of elementary and secondary school
			 teachers
					(a)In
			 generalSubparagraph (D) of section 62(a)(2) is amended by
			 striking or 2005 and inserting 2005, 2006, or
			 2007.
					(b)Effective
			 dateThe amendment made by this section shall apply to taxable
			 years beginning after December 31, 2005.
					109.Extension and
			 expansion of expensing of brownfields remediation costs
					(a)ExtensionSubsection
			 (h) of section 198 is amended by striking 2005 and inserting
			 2007.
					(b)ExpansionSection
			 198(d)(1) (defining hazardous substance) is amended by striking
			 and at the end of subparagraph (A), by striking the period at
			 the end of subparagraph (B) and inserting , and, and by adding
			 at the end the following new subparagraph:

							(C)any petroleum
				product (as defined in section
				4612(a)(3)).
							.
					(c)Effective
			 dateThe amendments made by this section shall apply to
			 expenditures paid or incurred after December 31, 2005.
					110.Tax incentives
			 for investment in the District of Columbia
					(a)Designation of
			 zone
						(1)In
			 generalSubsection (f) of section 1400 is amended by striking
			 2005 both places it appears and inserting
			 2007.
						(2)Effective
			 dateThe amendments made by this subsection shall apply to
			 periods beginning after December 31, 2005.
						(b)Tax-exempt
			 economic development bonds
						(1)In
			 generalSubsection (b) of section 1400A is amended by striking
			 2005 and inserting 2007.
						(2)Effective
			 dateThe amendment made by this subsection shall apply to bonds
			 issued after December 31, 2005.
						(c)Zero percent
			 capital gains rate
						(1)In
			 generalSubsection (b) of section 1400B is amended by striking
			 2006 each place it appears and inserting
			 2008.
						(2)Conforming
			 amendments
							(A)Section
			 1400B(e)(2) is amended—
								(i)by
			 striking 2010 and inserting 2012, and
								(ii)by
			 striking 2010 in the heading thereof and inserting
			 2012.
								(B)Section
			 1400B(g)(2) is amended by striking 2010 and inserting
			 2012.
							(C)Section 1400F(d)
			 is amended by striking 2010 and inserting
			 2012.
							(3)Effective
			 dates
							(A)ExtensionThe
			 amendments made by paragraph (1) shall apply to acquisitions after December 31,
			 2005.
							(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
			 2006 and inserting 2008.
						(2)Effective
			 dateThe amendment made by this subsection shall apply to
			 property purchased after December 31, 2005.
						111.Indian
			 employment tax credit
					(a)In
			 generalSection 45A(f) is amended by striking 2005
			 and inserting 2007.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to taxable years beginning after December 31,
			 2005.
					112.Accelerated
			 depreciation for business property on Indian reservations
					(a)In
			 generalSection 168(j)(8) is amended by striking
			 2005 and inserting 2007.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to property placed in service after December 31,
			 2005.
					113.Fifteen-year
			 straight-line cost recovery for qualified leasehold improvements and qualified
			 restaurant property
					(a)In
			 generalClauses (iv) and (v) of section 168(e)(3)(E) are each
			 amended by striking 2006 and inserting
			 2008.
					(b)Effective
			 dateThe amendments made by subsection (a) shall apply to
			 property placed in service after December 31, 2005.
					114.Cover over of tax on
			 distilled spirits
					(a)In
			 generalSection 7652(f)(1) is amended by striking
			 2006 and inserting 2008.
					(b)Effective
			 dateThe amendment made by subsection (a) shall apply to articles
			 brought into the United States after December 31, 2005.
					115.Parity in
			 application of certain limits to mental health benefits
					(a)Amendment to the
			 Internal Revenue Code of 1986Section 9812(f)(3) is amended by striking
			 ‘‘2006’’ and inserting ‘‘2007’’.
					(b)Amendment to the
			 Employee Retirement Income Security Act of 1974Section 712(f) of the Employee Retirement
			 Income Security Act of 1974 (29 U.S.C. 1185a(f)) is amended by striking
			 ‘‘2006’’ and inserting ‘‘2007’’.
					(c)Amendment to the
			 Public Health Service ActSection 2705(f) of the Public Health
			 Service Act (42 U.S.C. 300gg–5(f)) is amended by striking ‘‘2006’’and inserting
			 ‘‘2007’’.
					116.Corporate donations
			 of scientific property used for research and of computer technology and
			 equipment
					(a)Extension of
			 computer technology and equipment donation
						(1)In
			 generalSection 170(e)(6)(G) is amended by striking
			 2005 and inserting 2007.
						(2)Effective
			 dateThe amendment made by paragraph (1) shall apply to
			 contributions made in taxable years beginning after December 31, 2005.
						(b)Expansion of
			 charitable contribution allowed for scientific property used for research and
			 for computer technology and equipment used for educational purposes
						(1)Scientific
			 property used for research
							(A)In
			 generalClause (ii) of section 170(e)(4)(B) (defining qualified
			 research contributions) is amended by inserting or assembled
			 after constructed.
							(B)Conforming
			 amendmentClause (iii) of section 170(e)(4)(B) is amended by
			 inserting or assembly after construction.
							(2)Computer
			 technology and equipment for educational purposes
							(A)In
			 generalClause (ii) of section 170(e)(6)(B) is amended by
			 inserting or assembled after constructed and
			 or assembling after construction.
							(B)Conforming
			 amendmentSubparagraph (D) of section 170(e)(6) is amended by
			 inserting or assembled after constructed and
			 or assembly after construction.
							(3)Effective
			 dateThe amendments made by this subsection shall apply to
			 taxable years beginning after December 31, 2005.
						117.Availability of
			 medical savings accounts
					(a)In
			 generalParagraphs (2) and (3)(B) of section 220(i) are each
			 amended by striking 2005 each place it appears in the text and
			 headings and inserting 2007.
					(b)Conforming
			 amendments
						(1)Paragraph (2) of
			 section 220(j) is amended—
							(A)in the text by
			 striking or 2004 each place it appears and inserting
			 2004, 2005, or 2006, and
							(B)in the heading by
			 striking or
			 2004 and inserting
			 2004,
			 2005, or
			 2006 .
							(2)Subparagraph (A)
			 of section 220(j)(4) is amended by striking and 2004 and
			 inserting 2004, 2005, and 2006.
						(c)Time for filing
			 reports, etc
						(1)The report
			 required by section 220(j)(4) of the Internal Revenue Code of 1986 to be made
			 on August 1, 2005, or August 1, 2006, as the case may be, shall be treated as
			 timely if made before the close of the 90-day period beginning on the date of
			 the enactment of this Act.
						(2)The determination
			 and publication required by section 220(j)(5) of such Code with respect to
			 calendar year 2005 or calendar year 2006, as the case may be, shall be treated
			 as timely if made before the close of the 120-day period beginning on the date
			 of the enactment of this Act. If the determination under the preceding sentence
			 is that 2005 or 2006 is a cut-off year under section 220(i) of such Code, the
			 cut-off date under such section 220(i) shall be the last day of such 120-day
			 period.
						118.Taxable income limit
			 on percentage depletion for oil and natural gas produced from marginal
			 properties
					(a)In
			 generalSection 613A(c)(6)(H) is amended by striking
			 2006 and inserting 2008.
					(b)Effective
			 dateThe amendment made by subsection (a) shall apply to taxable
			 years beginning after December 31, 2005.
					119.American Samoa
			 economic development credit
					(a)In
			 generalFor purposes of section 30A of the Internal Revenue Code
			 of 1986, a domestic corporation shall be treated as a qualified domestic
			 corporation to which such section applies if such corporation—
						(1)is an existing
			 credit claimant with respect to American Samoa, and
						(2)elected the
			 application of section 936 of the Internal Revenue Code of 1986 for its last
			 taxable year beginning before January 1, 2006.
						(b)Special rules
			 for application of sectionThe following rules shall apply in
			 applying section 30A of the Internal Revenue Code of 1986 for purposes of this
			 section:
						(1)Amount of
			 creditNotwithstanding section 30A(a)(1) of such Code, the amount
			 of the credit determined under section 30A(a)(1) of such Code for any taxable
			 year shall be the amount determined under section 30A(d) of such Code, except
			 that section 30A(d) shall be applied without regard to paragraph (3)
			 thereof.
						(2)Separate
			 applicationIn applying section 30A(a)(3) of such Code in the
			 case of a corporation treated as a qualified domestic corporation by reason of
			 this section, section 30A of such Code (and so much of section 936 of such Code
			 as relates to such section 30A) shall be applied separately with respect to
			 American Samoa.
						(3)Foreign tax
			 credit allowedNotwithstanding section 30A(e) of such Code, the
			 provisions of section 936(c) of such Code shall not apply with respect to the
			 credit allowed by reason of this section.
						(c)DefinitionsFor
			 purposes of this section, any term which is used in this section which is also
			 used in section 30A or 936 of such Code shall have the same meaning given such
			 term by such section 30A or 936.
					(d)Application of
			 sectionNotwithstanding section 30A(h) or section 936(j) of such
			 Code, this section (and so much of section 30A and section 936 of such Code as
			 relates to this section) shall apply to the first two taxable years of a
			 corporation to which subsection (a) applies which begin after December 31,
			 2005, and before January 1, 2008.
					120.Extension of bonus
			 depreciation for certain qualified Gulf Opportunity Zone property
					(a)In
			 generalSubsection (d) of section 1400N is amended by adding at
			 the end the following new paragraph:

							(6)Extension for
				certain property
								(A)In
				generalIn the case of any specified Gulf Opportunity Zone
				extension property, paragraph (2)(A) shall be applied without regard to clause
				(v) thereof.
								(B)Specified gulf
				opportunity zone extension propertyFor purposes of this
				paragraph, the term specified Gulf Opportunity Zone extension
				property means property—
									(i)substantially all
				of the use of which is in one or more specified portions of the GO Zone,
				and
									(ii)which is—
										(I)nonresidential
				real property or residential rental property which is placed in service by the
				taxpayer on or before December 31, 2010, or
										(II)in the case of a
				taxpayer who places a building described in subclause (I) in service on or
				before December 31, 2010, property described in section 168(k)(2)(A)(i) if
				substantially all of the use of such property is in such building and such
				property is placed in service by the taxpayer not later than 90 days after such
				building is placed in service.
										(C)Specified
				portions of the GO ZoneFor purposes of this paragraph, the term
				specified portions of the GO Zone means those portions of the GO
				Zone which are in any county or parish which is identified by the Secretary as
				being a county or parish in which hurricanes occurring during 2005 damaged (in
				the aggregate) more than 60 percent of the housing units in such county or
				parish which were occupied (determined according to the 2000 Census).
								(D)Only pre-January
				1, 2010, basis of real property eligible for additional
				allowanceIn the case of property which is qualified Gulf
				Opportunity Zone property solely by reason of subparagraph (B)(ii)(I),
				paragraph (1) shall apply only to the extent of the adjusted basis thereof
				attributable to manufacture, construction, or production before January 1,
				2010.
								.
					(b)Extension not
			 applicable to increased section 179 expensingParagraph (2) of
			 section 1400N(e) is amended by inserting without regard to subsection
			 (d)(6) after subsection (d)(2).
					(c)Effective
			 dateThe amendments made by this section shall take effect as if
			 included in section 101 of the Gulf Opportunity Zone Act of 2005.
					121.Authority for
			 undercover operationsParagraph (6) of section 7608(c) (relating
			 to application of section) is amended by striking 2007 both
			 places it appears and inserting 2008.
				122.Disclosures of
			 certain tax return information
					(a)Disclosures To
			 facilitate combined employment tax reporting
						(1)In
			 generalSubparagraph (B) of section 6103(d)(5) (relating to
			 termination) is amended by striking 2006 and inserting
			 2007.
						(2)Effective
			 dateThe amendment made by paragraph (1) shall apply to
			 disclosures after December 31, 2006.
						(b)Disclosures
			 relating to terrorist activities
						(1)In
			 generalClause (iv) of section 6103(i)(3)(C) and subparagraph (E)
			 of section 6103(i)(7) are each amended by striking 2006 and
			 inserting 2007.
						(2)Effective
			 dateThe amendments made by paragraph (1) shall apply to
			 disclosures after December 31, 2006.
						(c)Disclosures
			 relating to student loans
						(1)In
			 generalSubparagraph (D) of section 6103(l)(13) (relating to
			 termination) is amended by striking 2006 and inserting
			 2007.
						(2)Effective
			 dateThe amendment made by paragraph (1) shall apply to requests
			 made after December 31, 2006.
						123.Special rule
			 for elections under expired provisions
					(a)Research credit
			 electionsIn the case of any taxable year ending after December
			 31, 2005, and before the date of the enactment of this Act, any election under
			 section 41(c)(4) or section 280C(c)(3)(C) of the Internal Revenue Code of 1986
			 shall be treated as having been timely made for such taxable year if such
			 election is made not later than the later of April 15, 2007, or such time as
			 the Secretary of the Treasury, or his designee, may specify. Such election
			 shall be made in the manner prescribed by such Secretary or designee.
					(b)Other
			 electionsExcept as otherwise provided by such Secretary or
			 designee, a rule similar to the rule of subsection (a) shall apply with respect
			 to elections under any other expired provision of the Internal Revenue Code of
			 1986 the applicability of which is extended by reason of the amendments made by
			 this title.
					IIEnergy tax
			 provisions
				201.Credit for
			 electricity produced from certain renewable resourcesSubsection (d) of section 45 is amended by
			 striking January 1, 2008 each place it appears and inserting
			 January 1, 2009.
				202.Credit to
			 holders of clean renewable energy bonds
					(a)In
			 generalSection 54 is
			 amended—
						(1)by
			 striking $800,000,000 in subsection (f)(1) and inserting
			 $1,200,000,000,
						(2)by striking
			 $500,000,000 in subsection (f)(2) and inserting
			 $750,000,000, and
						(3)by striking
			 December 31, 2007 in subsection (m) and inserting
			 December 31, 2008.
						(b)Effective
			 dates
						(1)In
			 generalThe amendments made by paragraphs (1) and (3) of
			 subsection (a) shall apply to bonds issued after December 31, 2006.
						(2)AllocationsThe
			 amendment made by subsection (a)(2) shall apply to allocations or reallocations
			 after December 31, 2006.
						203.Performance
			 standards for sulfur dioxide removal in advanced coal-based generation
			 technology units designed to use subbituminous coal
					(a)In
			 GeneralParagraph (1) of section 48A(f) (relating to advanced
			 coal-based generation technology) is amended by adding at the end the following
			 new flush sentence:

							For
				purposes of the performance requirement specified for the removal of
				SO2 in the table contained in subparagraph (B), the
				SO2 removal design level in the case of a unit designed
				for the use of feedstock substantially all of which is subbituminous coal shall
				be 99 percent SO2 removal or the achievement of an
				emission level of 0.04 pounds or less of SO2 per million
				Btu, determined on a 30-day
				average..
					(b)Effective
			 DateThe amendment made by
			 this section shall take apply with respect to applications for certification
			 under section 48A(d)(2) of the Internal Revenue Code of 1986 submitted after
			 October 2, 2006.
					204.Deduction for
			 energy efficient commercial buildingsSubsection (h) of section 179D is amended by
			 striking December 31, 2007 and inserting December 31,
			 2008.
				205.Credit for new
			 energy efficient homesSubsection (g) of section 45L is amended by
			 striking December 31, 2007 and inserting December 31,
			 2008.
				206.Credit for
			 residential energy efficient property
					(a)ExtensionSubsection (g) of section 25D is amended by
			 striking December 31, 2007 and inserting December 31,
			 2008.
					(b)Clarification of
			 term
						(1)Subsections
			 (a)(1), (b)(1)(A), and (e)(4)(A)(i) of section 25D are each amended by striking
			 qualified photovoltaic property expenditures and inserting
			 qualified solar electric property expenditures.
						(2)Section 25D(d)(2)
			 is amended—
							(A)by striking
			 qualified photovoltaic property expenditure and inserting
			 qualified solar electric property expenditure, and
							(B)in the heading by striking
			 qualified photovoltaic
			 property expenditure and inserting
			 qualified solar electric
			 property expenditure.
							207.Energy
			 creditSection 48 is
			 amended—
					(1)by striking
			 January 1, 2008 both places it appears and inserting
			 January 1, 2009, and
					(2)by striking
			 December 31, 2007 both places it appears and inserting
			 December 31, 2008.
					208.Special rule
			 for qualified methanol or ethanol fuel
					(a)ExtensionSubparagraph (D) of section 4041(b)(2) is
			 amended by striking October 1, 2007 and inserting January
			 1, 2009.
					(b)Applicable
			 blender rateSection 4041(b)(2)(C)(ii) is amended by striking
			 2007 and inserting 2008.
					(c)Clerical
			 amendmentThe heading for section 4041(b)(2)(B) is amended to
			 read as follows: Qualified methanol and ethanol fuel produced from
			 coal.
					209.Special depreciation
			 allowance for cellulosic biomass ethanol plant property
					(a)In
			 generalSection 168 (relating
			 to accelerated cost recovery system) is amended by adding at the end the
			 following:

							(l)Special
				allowance for cellulosic biomass ethanol plant property
								(1)Additional
				allowanceIn the case of any
				qualified cellulosic biomass ethanol plant 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 such property, and
									(B)the adjusted basis
				of such 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
				cellulosic biomass ethanol plant propertyThe term
				qualified cellulosic biomass ethanol plant property means property
				of a character subject to the allowance for depreciation—
									(A)which is used in
				the United States solely to produce cellulosic biomass ethanol,
									(B)the original use
				of which commences with the taxpayer after the date of the enactment of this
				subsection,
									(C)which is acquired by the taxpayer by
				purchase (as defined in section 179(d)) after the date of the enactment of this
				subsection, but only if no written binding contract for the acquisition was in
				effect on or before the date of the enactment of this subsection, and
									(D)which is placed in
				service by the taxpayer before January 1, 2013.
									(3)Cellulosic
				biomass ethanolFor purposes of this subsection, the term
				cellulosic biomass ethanol means ethanol produced by enzymatic
				hydrolysis of any lignocellulosic or hemicellulosic matter that is available on
				a renewable or recurring basis.
								(4)Exceptions
									(A)Alternative
				depreciation propertySuch term shall not include any property
				described in section 168(k)(2)(D)(i).
									(B)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.
									(C)Election
				OutIf a taxpayer makes an election under this subparagraph 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.
									(5)Special
				RulesFor purposes of this subsection, rules similar to the rules
				of subparagraph (E) of section 168(k)(2) shall apply, except that such
				subparagraph shall be applied—
									(A)by substituting
				the date of the enactment of subsection (l) for September
				10, 2001 each place it appears therein,
									(B)by substituting
				January 1, 2013 for January 1, 2005 in clause (i)
				thereof, and
									(C)by substituting qualified cellulosic
				biomass ethanol plant property for qualified property in
				clause (iv) thereof.
									(6)Allowance
				against alternative minimum taxFor purposes of this subsection,
				rules similar to the rules of section 168(k)(2)(G) shall apply.
								(7)RecaptureFor purposes of this subsection, rules
				similar to the rules under section 179(d)(10) shall apply with respect to any
				qualified cellulosic biomass ethanol plant property which ceases to be
				qualified cellulosic biomass ethanol plant property.
								(8)Denial of double
				benefitParagraph (1) shall
				not apply to any qualified cellulosic biomass ethanol plant property with
				respect to which an election has been made under section 179C (relating to
				election to expense certain
				refineries).
								.
					(b)Effective
			 dateThe amendment 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.
					210.Expenditures
			 permitted from the Leaking Underground Storage Tank Trust Fund
					(a)In
			 generalSubsection (c) of
			 section 9508 is amended—
						(1)by striking
			 section 9003(h) and inserting sections 9003(h), 9003(i),
			 9003(j), 9004(f), 9005(c), 9010, 9011, 9012, and 9013, and
						(2)by striking
			 Superfund Amendments and Reauthorization Act of 1986 and
			 inserting Public Law 109–168.
						(b)Conforming
			 amendmentsSection 9014(2) of the Solid Waste Disposal Act is
			 amended by striking Fund, notwithstanding section 9508(c)(1) of the
			 Internal Revenue Code of 1986 and inserting Fund.
					(c)Effective
			 dateThe amendments made by this section shall take effect on the
			 date of the enactment of this Act.
					211.Treatment of coke
			 and coke gas
					(a)Nonapplication
			 of phaseoutSection 45K(g)(2) is amended by adding at the end the
			 following new subparagraph:

							(D)Nonapplication
				of phaseoutSubsection (b)(1) shall not
				apply.
							.
					(b)Clarification of
			 qualifying facilitySection 45K(g)(1) is amended by inserting
			 (other than from petroleum based products) after coke or
			 coke gas.
					(c)Effective
			 dateThe amendments made by this section shall take effect as if
			 included in section 1321 of the Energy Policy Act of 2005.
					IIIHealth Savings
			 Accounts
				301.Short
			 titleThis title may be cited
			 as the Health Opportunity Patient
			 Empowerment Act of 2006.
				302.FSA and HRA
			 terminations to fund HSAs
					(a)In
			 generalSection 106 (relating
			 to contributions by employer to accident and health plans) is amended by adding
			 at the end the following new subsection:

							(e)FSA and HRA
				terminations to fund HSAs
								(1)In
				generalA plan shall not fail
				to be treated as a health flexible spending arrangement or health reimbursement
				arrangement under this section or section 105 merely because such plan provides
				for a qualified HSA distribution.
								(2)Qualified HSA
				distributionThe term
				qualified HSA distribution means a distribution from a health
				flexible spending arrangement or health reimbursement arrangement to the extent
				that such distribution—
									(A)does not exceed the lesser of the balance
				in such arrangement on September 21, 2006, or as of the date of such
				distribution, and
									(B)is contributed by the employer directly to
				the health savings account of the employee before January 1, 2012.
									Such term
				shall not include more than 1 distribution with respect to any
				arrangement.(3)Additional tax
				for failure to maintain high deductible health plan coverage
									(A)In
				generalIf, at any time during the testing period, the employee
				is not an eligible individual, then the amount of the qualified HSA
				distribution—
										(i)shall be includible in the gross income of
				the employee for the taxable year in which occurs the first month in the
				testing period for which such employee is not an eligible individual,
				and
										(ii)the tax imposed
				by this chapter for such taxable year on the employee shall be increased by 10
				percent of the amount which is so includible.
										(B)Exception for
				disability or deathClauses (i) and (ii) of subparagraph (A)
				shall not apply if the employee ceases to be an eligible individual by reason
				of the death of the employee or the employee becoming disabled (within the
				meaning of section 72(m)(7)).
									(4)Definitions and
				special rulesFor purposes of this subsection—
									(A)Testing
				periodThe term testing period means the period
				beginning with the month in which the qualified HSA distribution is contributed
				to the health savings account and ending on the last day of the 12th month
				following such month.
									(B)Eligible
				individualThe term eligible individual has the
				meaning given such term by section 223(c)(1).
									(C)Treatment as
				rollover contributionA qualified HSA distribution shall be
				treated as a rollover contribution described in section 223(f)(5).
									(5)Tax treatment
				relating to distributionsFor purposes of this title—
									(A)In
				generalA qualified HSA distribution shall be treated as a
				payment described in subsection (d).
									(B)Comparability
				excise tax
										(i)In
				generalExcept as provided in clause (ii), section 4980G shall
				not apply to qualified HSA distributions.
										(ii)Failure to
				offer to all employeesIn the case of a qualified HSA
				distribution to any employee, the failure to offer such distribution to any
				eligible individual covered under a high deductible health plan of the employer
				shall (notwithstanding section 4980G(d)) be treated for purposes of section
				4980G as a failure to meet the requirements of section
				4980G(b).
										.
					(b)Certain FSA
			 coverage disregarded coverageSubparagraph (B) of section
			 223(c)(1) (relating to certain coverage disregarded) is amended by striking
			 and at the end of clause (i), by striking the period at the end
			 of clause (ii) and inserting , and, and by inserting after
			 clause (ii) the following new clause:

							(iii)for taxable years beginning after December
				31, 2006, coverage under a health flexible spending arrangement during any
				period immediately following the end of a plan year of such arrangement during
				which unused benefits or contributions remaining at the end of such plan year
				may be paid or reimbursed to plan participants for qualified benefit expenses
				incurred during such period if—
								(I)the balance in
				such arrangement at the end of such plan year is zero, or
								(II)the individual is making a qualified HSA
				distribution (as defined in section 106(e)) in an amount equal to the remaining
				balance in such arrangement as of the end of such plan year, in accordance with
				rules prescribed by the
				Secretary.
								.
					(c)Application of
			 section
						(1)Subsection
			 (a)The amendment made by
			 subsection (a) shall apply to distributions on or after the date of the
			 enactment of this Act.
						(2)Subsection
			 (b)The amendment made by
			 subsection (b) shall take effect on the date of the enactment of this
			 Act.
						303.Repeal of annual
			 deductible limitation on HSA contributions
					(a)In
			 generalParagraph (2) of
			 section 223(b) (relating to monthly limitation) is amended—
						(1)in subparagraph
			 (A) by striking the lesser of— and all that follows and
			 inserting $2,250., and
						(2)in subparagraph (B) by striking the
			 lesser of— and all that follows and inserting
			 $4,500..
						(b)Conforming
			 amendmentSection 223(d)(1)(A)(ii)(I) is amended by striking
			 subsection (b)(2)(B)(ii) and inserting subsection
			 (b)(2)(B).
					(c)Effective
			 dateThe amendments made by
			 this section shall apply to taxable years beginning after December 31,
			 2006.
					304.Modification of
			 cost-of-living adjustmentParagraph (1) of section 223(g) (relating to
			 cost-of-living adjustment) is amended by adding at the end the following new
			 flush sentence:

						In the
				case of adjustments made for any taxable year beginning after 2007, section
				1(f)(4) shall be applied for purposes of this paragraph by substituting
				March 31 for August 31, and the Secretary shall
				publish the adjusted amounts under subsections (b)(2) and (c)(2)(A) for taxable
				years beginning in any calendar year no later than June 1 of the preceding
				calendar
				year..
				305.Contribution
			 limitation not reduced for part-year coverage
					(a)Increase in
			 limit for individuals becoming eligible individuals after beginning of the
			 yearSubsection (b) of section 223 (relating to limitations) is
			 amended by adding at the end the following new paragraph:

							(8)Increase in limit
				for individuals becoming eligible individuals after the beginning of the
				year
								(A)In
				generalFor purposes of computing the limitation under paragraph
				(1) for any taxable year, an individual who is an eligible individual during
				the last month of such taxable year shall be treated—
									(i)as
				having been an eligible individual during each of the months in such taxable
				year, and
									(ii)as having been
				enrolled, during each of the months such individual is treated as an eligible
				individual solely by reason of clause (i), in the same high deductible health
				plan in which the individual was enrolled for the last month of such taxable
				year.
									(B)Failure to
				maintain high deductible health plan coverage
									(i)In
				generalIf, at any time during the testing period, the individual
				is not an eligible individual, then—
										(I)gross income of the individual for the
				taxable year in which occurs the first month in the testing period for which
				such individual is not an eligible individual is increased by the aggregate
				amount of all contributions to the health savings account of the individual
				which could not have been made but for subparagraph (A), and
										(II)the tax imposed
				by this chapter for any taxable year on the individual shall be increased by 10
				percent of the amount of such increase.
										(ii)Exception for
				disability or deathSubclauses (I) and (II) of clause (i) shall
				not apply if the individual ceased to be an eligible individual by reason of
				the death of the individual or the individual becoming disabled (within the
				meaning of section 72(m)(7)).
									(iii)Testing
				periodThe term testing period means the period
				beginning with the last month of the taxable year referred to in subparagraph
				(A) and ending on the last day of the 12th month following such
				month.
									.
					(b)Effective
			 dateThe amendments made by this section shall apply to taxable
			 years beginning after December 31, 2006.
					306.Exception to
			 requirement for employers to make comparable health savings account
			 contributions
					(a)In
			 generalSection 4980G
			 (relating to failure of employer to make comparable health savings account
			 contributions) is amended by adding at the end the following new
			 subsection:

							(d)ExceptionFor
				purposes of applying section 4980E to a contribution to a health savings
				account of an employee who is not a highly compensated employee (as defined in
				section 414(q)), highly compensated employees shall not be treated as
				comparable participating
				employees.
							.
					(b)Effective
			 dateThe amendment made by this section shall apply to taxable
			 years beginning after December 31, 2006.
					307.One-time
			 distribution from individual retirement plans to fund HSAs
					(a)In
			 generalSubsection (d) of section 408 (relating to taxability of
			 beneficiary of employees’ trust) is amended by adding at the end the following
			 new paragraph:

							(9)Distribution for
				health savings account funding
								(A)In
				generalIn the case of an
				individual who is an eligible individual (as defined in section 223(c)) and who
				elects the application of this paragraph for a taxable year, gross income of
				the individual for the taxable year does not include a qualified HSA funding
				distribution to the extent such distribution is otherwise includible in gross
				income.
								(B)Qualified HSA
				funding distributionFor
				purposes of this paragraph, the term qualified HSA funding
				distribution means a distribution from an individual retirement plan
				(other than a plan described in subsection (k) or (p)) of the employee to the
				extent that such distribution is contributed to the health savings account of
				the individual in a direct trustee-to-trustee transfer.
								(C)Limitations
									(i)Maximum dollar
				limitationThe amount
				excluded from gross income by subparagraph (A) shall not exceed the excess
				of—
										(I)the annual
				limitation under section 223(b) computed on the basis of the type of coverage
				under the high deductible health plan covering the individual at the time of
				the qualified HSA funding distribution, over
										(II)in the case of a
				distribution described in clause (ii)(II), the amount of the earlier qualified
				HSA funding distribution.
										(ii)One-time
				transfer
										(I)In
				generalExcept as provided in
				subclause (II), an individual may make an election under subparagraph (A) only
				for one qualified HSA funding distribution during the lifetime of the
				individual. Such an election, once made, shall be irrevocable.
										(II)Conversion from
				self-only to family coverageIf a qualified HSA funding distribution is
				made during a month in a taxable year during which an individual has self-only
				coverage under a high deductible health plan as of the first day of the month,
				the individual may elect to make an additional qualified HSA funding
				distribution during a subsequent month in such taxable year during which the
				individual has family coverage under a high deductible health plan as of the
				first day of the subsequent month.
										(D)Failure to
				maintain high deductible health plan coverage
									(i)In
				generalIf, at any time during the testing period, the individual
				is not an eligible individual, then the aggregate amount of all contributions
				to the health savings account of the individual made under subparagraph
				(A)—
										(I)shall be includible in the gross income of
				the individual for the taxable year in which occurs the first month in the
				testing period for which such individual is not an eligible individual,
				and
										(II)the tax imposed
				by this chapter for any taxable year on the individual shall be increased by 10
				percent of the amount which is so includible.
										(ii)Exception for
				disability or deathSubclauses (I) and (II) of clause (i) shall
				not apply if the individual ceased to be an eligible individual by reason of
				the death of the individual or the individual becoming disabled (within the
				meaning of section 72(m)(7)).
									(iii)Testing
				periodThe term testing
				period means the period beginning with the month in which the qualified
				HSA funding distribution is contributed to a health savings account and ending
				on the last day of the 12th month following such month.
									(E)Application of
				section 72Notwithstanding section 72, in determining the extent
				to which an amount is treated as otherwise includible in gross income for
				purposes of subparagraph (A), the aggregate amount distributed from an
				individual retirement plan shall be treated as includible in gross income to
				the extent that such amount does not exceed the aggregate amount which would
				have been so includible if all amounts from all individual retirement plans
				were distributed. Proper adjustments shall be made in applying section 72 to
				other distributions in such taxable year and subsequent taxable
				years.
								.
					(b)Coordination
			 with limitation on contributions to HSAsSection 223(b)(4)
			 (relating to coordination with other contributions) 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
			 inserting after subparagraph (B) the following new subparagraph:

							(C)the aggregate
				amount contributed to health savings accounts of such individual for such
				taxable year under section 408(d)(9) (and such amount shall not be allowed as a
				deduction under subsection
				(a)).
							.
					(c)Effective
			 dateThe amendments made by this section shall apply to taxable
			 years beginning after December 31, 2006.
					IVOther
			 Provisions
				401.Deduction
			 allowable with respect to income attributable to domestic production activities
			 in Puerto Rico
					(a)In
			 generalSubsection (d) of section 199 (relating to definitions
			 and special rules) is amended by redesignating paragraph (8) as paragraph (9)
			 and by inserting after paragraph (7) the following new paragraph:

							(8)Treatment of
				activities in Puerto Rico
								(A)In
				generalIn the case of any taxpayer with gross receipts for any
				taxable year from sources within the Commonwealth of Puerto Rico, if all of
				such receipts are taxable under section 1 or 11 for such taxable year, then for
				purposes of determining the domestic production gross receipts of such taxpayer
				for such taxable year under subsection (c)(4), the term United
				States shall include the Commonwealth of Puerto Rico.
								(B)Special rule for
				applying wage limitationIn
				the case of any taxpayer described in subparagraph (A), for purposes of
				applying the limitation under subsection (b) for any taxable year, the
				determination of W–2 wages of such taxpayer shall be made without regard to any
				exclusion under section 3401(a)(8) for remuneration paid for services performed
				in Puerto Rico.
								(C)TerminationThis
				paragraph shall apply only with respect to the first 2 taxable years of the
				taxpayer beginning after December 31, 2005, and before January 1,
				2008.
								.
					(b)Effective
			 dateThe amendments made by subsection (a) shall apply to taxable
			 years beginning after December 31, 2005.
					402.Credit for
			 prior year minimum tax liability made refundable after period of years
					(a)In
			 generalSection 53 (relating
			 to credit for prior year minimum tax liability) is amended by adding at the end
			 the following new subsection:

							(e)Special rule for
				individuals with long-term unused credits
								(1)In
				generalIf an individual has a long-term unused minimum tax
				credit for any taxable year beginning before January 1, 2013, the amount
				determined under subsection (c) for such taxable year shall not be less than
				the AMT refundable credit amount for such taxable year.
								(2)Amt refundable
				credit amountFor purposes of paragraph (1)—
									(A)In
				generalThe term AMT refundable credit amount means,
				with respect to any taxable year, the amount equal to the greater of—
										(i)the lesser
				of—
											(I)$5,000, or
											(II)the amount of
				long-term unused minimum tax credit for such taxable year, or
											(ii)20
				percent of the amount of such credit.
										(B)Phaseout of amt
				refundable credit amount
										(i)In
				generalIn the case of an individual whose adjusted gross income
				for any taxable year exceeds the threshold amount (within the meaning of
				section 151(d)(3)(C)), the AMT refundable credit amount determined under
				subparagraph (A) for such taxable year shall be reduced by the applicable
				percentage (within the meaning of section 151(d)(3)(B)).
										(ii)Adjusted gross
				incomeFor purposes of clause (i), adjusted gross income shall be
				determined without regard to sections 911, 931, and 933.
										(3)Long-term unused
				minimum tax credit
									(A)In
				generalFor purposes of this subsection, the term long-term
				unused minimum tax credit means, with respect to any taxable year, the
				portion of the minimum tax credit determined under subsection (b) attributable
				to the adjusted net minimum tax for taxable years before the 3rd taxable year
				immediately preceding such taxable year.
									(B)First-in,
				first-out ordering ruleFor purposes of subparagraph (A), credits
				shall be treated as allowed under subsection (a) on a first-in, first-out
				basis.
									(4)Credit
				refundableFor purposes of this title (other than this section),
				the credit allowed by reason of this subsection shall be treated as if it were
				allowed under subpart
				C.
								.
					(b)Conforming
			 amendments
						(1)Section
			 6211(b)(4)(A) is amended by striking and 34 and inserting
			 34, and 53(e).
						(2)Paragraph (2) of
			 section 1324(b) of title 31, United States Code, is amended by inserting
			 or 53(e) after section 35.
						(c)Effective
			 dateThe amendments made by this section shall apply to taxable
			 years beginning after the date of the enactment of this Act.
					403.Returns
			 required in connection with certain options
					(a)In
			 generalSo much of section 6039(a) as follows paragraph (2) is
			 amended to read as follows:

							shall, for such calendar year, make
				a return at such time and in such manner, and setting forth such information,
				as the Secretary may by regulations
				prescribe..
					(b)Statements to
			 persons with respect to whom information is furnishedSection
			 6039 is amended by redesignating subsections (b) and (c) as subsection (c) and
			 (d), respectively, and by inserting after subsection (a) the following new
			 subsection:

							(b)Statements To be
				furnished to persons with respect to whom information is
				reportedEvery corporation making a return under subsection (a)
				shall furnish to each person whose name is set forth in such return a written
				statement setting forth such information as the Secretary may by regulations
				prescribe. The written statement required under the preceding sentence shall be
				furnished to such person on or before January 31 of the year following the
				calendar year for which the return under subsection (a) was
				made.
							.
					(c)Conforming
			 amendments
						(1)Section
			 6724(d)(1)(B) is amended by striking or at the end of clause
			 (xvii), by striking and at the end of clause (xviii) and
			 inserting or, and by adding at the end the following new
			 clause:

								(xix)section 6039(a)
				(relating to returns required with respect to certain options),
				and
								.
						(2)Section
			 6724(d)(2)(B) is amended by striking section 6039(a) and
			 inserting section 6039(b).
						(3)The heading of
			 section 6039 and the item relating to such section in the table of sections of
			 subpart A of part III of subchapter A of chapter 61 of such Code are each
			 amended by striking Information and inserting
			 Returns.
						(4)The heading of
			 subsection (a) of section 6039 is amended by striking Furnishing of
			 information and inserting Requirement of reporting.
						(d)Effective
			 dateThe amendments made by this section shall apply to calendar
			 years beginning after the date of the enactment of this Act.
					404.Partial expensing
			 for advanced mine safety equipment
					(a)In
			 generalPart VI of subchapter B of chapter 1 is amended by
			 inserting after section 179D the following new section:

							179E.Election to
				expense advanced mine safety equipment
								(a)Treatment as
				expensesA taxpayer may elect to treat 50 percent of the cost of
				any qualified advanced mine safety equipment property as an expense which is
				not chargeable to capital account. Any cost so treated shall be allowed as a
				deduction for the taxable year in which the qualified advanced mine safety
				equipment property is placed in service.
								(b)Election
									(1)In
				GeneralAn election under this section for any taxable year shall
				be made on the taxpayer’s return of the tax imposed by this chapter for the
				taxable year. Such election shall specify the advanced mine safety equipment
				property to which the election applies and shall be made in such manner as the
				Secretary may by regulations prescribe.
									(2)Election
				irrevocableAny election made under this section may not be
				revoked except with the consent of the Secretary.
									(c)Qualified
				advanced mine safety equipment propertyFor purposes of this
				section, the term qualified advanced mine safety equipment
				property means any advanced mine safety equipment property for use in
				any underground mine located in the United States—
									(1)the original use
				of which commences with the taxpayer, and
									(2)which is placed in
				service by the taxpayer after the date of the enactment of this section.
									(d)Advanced mine
				safety equipment propertyFor purposes of this section, the term
				advanced mine safety equipment property means any of the
				following:
									(1)Emergency
				communication technology or device which is used to allow a miner to maintain
				constant communication with an individual who is not in the mine.
									(2)Electronic
				identification and location device which allows an individual who is not in the
				mine to track at all times the movements and location of miners working in or
				at the mine.
									(3)Emergency
				oxygen-generating, self-rescue device which provides oxygen for at least 90
				minutes.
									(4)Pre-positioned
				supplies of oxygen which (in combination with self-rescue devices) can be used
				to provide each miner on a shift, in the event of an accident or other event
				which traps the miner in the mine or otherwise necessitates the use of such a
				self-rescue device, the ability to survive for at least 48 hours.
									(5)Comprehensive
				atmospheric monitoring system which monitors the levels of carbon monoxide,
				methane, and oxygen that are present in all areas of the mine and which can
				detect smoke in the case of a fire in a mine.
									(e)Coordination
				with section 179No expenditures
				shall be taken into account under subsection (a) with respect to the portion of
				the cost of any property specified in an election under section 179.
								(f)ReportingNo
				deduction shall be allowed under subsection (a) to any taxpayer for any taxable
				year unless such taxpayer files with the Secretary a report containing such
				information with respect to the operation of the mines of the taxpayer as the
				Secretary shall require.
								(g)TerminationThis
				section shall not apply to property placed in service after December 31,
				2008.
								.
					(b)Conforming
			 amendments
						(1)Section 263(a)(1)
			 is amended by striking or at the end of subparagraph (J), by
			 striking the period at the end of subparagraph (K) and inserting ,
			 or, and by inserting after subparagraph (K) the following new
			 subparagraph:

								(L)expenditures for
				which a deduction is allowed under section
				179E.
								.
						(2)Section
			 312(k)(3)(B) is amended by striking or 179D each place it
			 appears in the heading and text thereof and inserting 179D, or
			 179E.
						(3)Paragraphs (2)(C)
			 and (3)(C) of section 1245(a) are each amended by inserting
			 179E, after 179D,.
						(4)The table of
			 sections for part VI of subchapter B of chapter 1 is amended by inserting after
			 the item relating to section 179D the following new item:

									Sec. 179E. Election to expense advanced
				mine safety
				equipment.

								.
						(c)Effective
			 dateThe amendments made by this section shall apply to costs
			 paid or incurred after the date of the enactment of this Act.
					405.Mine rescue team
			 training tax credit
					(a)In
			 GeneralSubpart D of part IV of subchapter A of chapter 1
			 (relating to business related credits) is amended by adding at the end the
			 following new section:

							45N.Mine rescue
				team training credit
								(a)Amount of
				creditFor purposes of section 38, the mine rescue team training
				credit determined under this section with respect to each qualified mine rescue
				team employee of an eligible employer for any taxable year is an amount equal
				to the lesser of—
									(1)20 percent of the
				amount paid or incurred by the taxpayer during the taxable year with respect to
				the training program costs of such qualified mine rescue team employee
				(including wages of such employee while attending such program), or
									(2)$10,000.
									(b)Qualified mine
				rescue team employeeFor purposes of this section, the term
				qualified mine rescue team employee means with respect to any
				taxable year any full-time employee of the taxpayer who is—
									(1)a miner eligible
				for more than 6 months of such taxable year to serve as a mine rescue team
				member as a result of completing, at a minimum, an initial 20-hour course of
				instruction as prescribed by the Mine Safety and Health Administration’s Office
				of Educational Policy and Development, or
									(2)a miner eligible
				for more than 6 months of such taxable year to serve as a mine rescue team
				member by virtue of receiving at least 40 hours of refresher training in such
				instruction.
									(c)Eligible
				employerFor purposes of this section, the term eligible
				employer means any taxpayer which employs individuals as miners in
				underground mines in the United States.
								(d)WagesFor
				purposes of this section, the term wages has the meaning given to
				such term by subsection (b) of section 3306 (determined without regard to any
				dollar limitation contained in such section).
								(e)TerminationThis
				section shall not apply to taxable years beginning after December 31,
				2008.
								.
					(b)Credit made part
			 of general business creditSection 38(b) is amended by striking
			 and at the end of paragraph (29), by striking the period at the
			 end of paragraph (30) and inserting , plus, and by adding at the
			 end the following new paragraph:

							(31)the mine rescue
				team training credit determined under section
				45N(a).
							.
					(c)No double
			 benefitSection 280C is amended by adding at the end the
			 following new subsection:

							(e)Mine rescue team
				training creditNo deduction shall be allowed for that portion of
				the expenses otherwise allowable as a deduction for the taxable year which is
				equal to the amount of the credit determined for the taxable year under section
				45N(a).
							.
					(d)Clerical
			 amendmentThe table of sections for subpart D of part IV of
			 subchapter A of chapter 1 is amended by adding at the end the following new
			 item:

								Sec. 45N. Mine rescue team training
				credit.

							.
					(e)Effective
			 dateThe amendments made by this section shall apply to taxable
			 years beginning after December 31, 2005.
					406.Whistleblower
			 reforms
					(a)Awards to
			 whistleblowers
						(1)In
			 generalSection 7623 (relating to expenses of detection of
			 underpayments and fraud, etc.) is amended—
							(A)by striking
			 The Secretary and inserting (a)
			 In general.—The
			 Secretary,
							(B)by striking
			 and at the end of paragraph (1) and inserting
			 or,
							(C)by striking
			 (other than interest), and
							(D)by adding at the
			 end the following new subsection:

									(b)Awards to
				whistleblowers
										(1)In
				generalIf the Secretary proceeds with any administrative or
				judicial action described in subsection (a) based on information brought to the
				Secretary’s attention by an individual, such individual shall, subject to
				paragraph (2), receive as an award at least 15 percent but not more than 30
				percent of the collected proceeds (including penalties, interest, additions to
				tax, and additional amounts) resulting from the action (including any related
				actions) or from any settlement in response to such action. The determination
				of the amount of such award by the Whistleblower Office shall depend upon the
				extent to which the individual substantially contributed to such action.
										(2)Award in case of
				less substantial contribution
											(A)In
				generalIn the event the action described in paragraph (1) is one
				which the Whistleblower Office determines to be based principally on
				disclosures of specific allegations (other than information provided by the
				individual described in paragraph (1)) resulting from a judicial or
				administrative hearing, from a governmental report, hearing, audit, or
				investigation, or from the news media, the Whistleblower Office may award such
				sums as it considers appropriate, but in no case more than 10 percent of the
				collected proceeds (including penalties, interest, additions to tax, and
				additional amounts) resulting from the action (including any related actions)
				or from any settlement in response to such action, taking into account the
				significance of the individual’s information and the role of such individual
				and any legal representative of such individual in contributing to such
				action.
											(B)Nonapplication of
				paragraph where individual is original source of
				informationSubparagraph (A) shall not apply if the information
				resulting in the initiation of the action described in paragraph (1) was
				originally provided by the individual described in paragraph (1).
											(3)Reduction in or
				denial of awardIf the Whistleblower Office determines that the
				claim for an award under paragraph (1) or (2) is brought by an individual who
				planned and initiated the actions that led to the underpayment of tax or
				actions described in subsection (a)(2), then the Whistleblower Office may
				appropriately reduce such award. If such individual is convicted of criminal
				conduct arising from the role described in the preceding sentence, the
				Whistleblower Office shall deny any award.
										(4)Appeal of award
				determinationAny
				determination regarding an award under paragraph (1), (2), or (3) may, within
				30 days of such determination, be appealed to the Tax Court (and the Tax Court
				shall have jurisdiction with respect to such matter).
										(5)Application of
				this subsectionThis subsection shall apply with respect to any
				action—
											(A)against any
				taxpayer, but in the case of any individual, only if such individual’s gross
				income exceeds $200,000 for any taxable year subject to such action, and
											(B)if the tax,
				penalties, interest, additions to tax, and additional amounts in dispute exceed
				$2,000,000.
											(6)Additional
				rules
											(A)No contract
				necessaryNo contract with the Internal Revenue Service is
				necessary for any individual to receive an award under this subsection.
											(B)RepresentationAny
				individual described in paragraph (1) or (2) may be represented by
				counsel.
											(C)Submission of
				informationNo award may be made under this subsection based on
				information submitted to the Secretary unless such information is submitted
				under penalty of
				perjury.
											.
							(2)Assignment to
			 special trial judges
							(A)In
			 generalSection 7443A(b) (relating to proceedings which may be
			 assigned to special trial judges) is amended by striking and at
			 the end of paragraph (5), by redesignating paragraph (6) as paragraph (7), and
			 by inserting after paragraph (5) the following new paragraph:

									(6)any proceeding
				under section 7623(b)(4),
				and
									.
							(B)Conforming
			 amendmentSection 7443A(c) is amended by striking or
			 (5) and inserting (5), or (6).
							(3)Deduction
			 allowed whether or not taxpayer itemizesSubsection (a) of
			 section 62 (relating to general rule defining adjusted gross income) is amended
			 by inserting after paragraph (20) the following new paragraph:

								(21)Attorneys fees
				relating to awards to whistleblowersAny deduction allowable under this chapter
				for attorney fees and court costs paid by, or on behalf of, the taxpayer in
				connection with any award under section 7623(b) (relating to awards to
				whistleblowers). The preceding sentence shall not apply to any deduction in
				excess of the amount includible in the taxpayer’s gross income for the taxable
				year on account of such
				award.
								.
						(b)Whistleblower
			 Office
						(1)In
			 generalNot later than the date which is 12 months after the date
			 of the enactment of this Act, the Secretary of the Treasury shall issue
			 guidance for the operation of a whistleblower program to be administered in the
			 Internal Revenue Service by an office to be known as the Whistleblower
			 Office which—
							(A)shall at all times
			 operate at the direction of the Commissioner of Internal Revenue and coordinate
			 and consult with other divisions in the Internal Revenue Service as directed by
			 the Commissioner of Internal Revenue,
							(B)shall analyze
			 information received from any individual described in section 7623(b) of the
			 Internal Revenue Code of 1986 and either investigate the matter itself or
			 assign it to the appropriate Internal Revenue Service office, and
							(C)in its sole
			 discretion, may ask for additional assistance from such individual or any legal
			 representative of such individual.
							(2)Request for
			 assistanceThe guidance issued under paragraph (1) shall specify
			 that any assistance requested under paragraph (1)(C) shall be under the
			 direction and control of the Whistleblower Office or the office assigned to
			 investigate the matter under paragraph (1)(A). No individual or legal
			 representative whose assistance is so requested may by reason of such request
			 represent himself or herself as an employee of the Federal Government.
						(c)Report by
			 SecretaryThe Secretary of the Treasury shall each year conduct a
			 study and report to Congress on the use of section 7623 of the Internal Revenue
			 Code of 1986, including—
						(1)an analysis of the
			 use of such section during the preceding year and the results of such use,
			 and
						(2)any legislative or
			 administrative recommendations regarding the provisions of such section and its
			 application.
						(d)Effective
			 dateThe amendments made by subsection (a) shall apply to
			 information provided on or after the date of the enactment of this Act.
					407.Frivolous tax
			 submissions
					(a)Civil
			 penaltiesSection 6702 is amended to read as follows:

							6702.Frivolous tax
				submissions
								(a)Civil penalty
				for frivolous tax returnsA person shall pay a penalty of $5,000
				if—
									(1)such person files
				what purports to be a return of a tax imposed by this title but which—
										(A)does not contain
				information on which the substantial correctness of the self-assessment may be
				judged, or
										(B)contains
				information that on its face indicates that the self-assessment is
				substantially incorrect, and
										(2)the conduct
				referred to in paragraph (1)—
										(A)is based on a
				position which the Secretary has identified as frivolous under subsection (c),
				or
										(B)reflects a desire
				to delay or impede the administration of Federal tax laws.
										(b)Civil penalty
				for specified frivolous submissions
									(1)Imposition of
				penaltyExcept as provided in paragraph (3), any person who
				submits a specified frivolous submission shall pay a penalty of $5,000.
									(2)Specified
				frivolous submissionFor purposes of this section—
										(A)Specified
				frivolous submissionThe term specified frivolous
				submission means a specified submission if any portion of such
				submission—
											(i)is
				based on a position which the Secretary has identified as frivolous under
				subsection (c), or
											(ii)reflects a desire
				to delay or impede the administration of Federal tax laws.
											(B)Specified
				submissionThe term specified submission
				means—
											(i)a
				request for a hearing under—
												(I)section 6320
				(relating to notice and opportunity for hearing upon filing of notice of lien),
				or
												(II)section 6330
				(relating to notice and opportunity for hearing before levy), and
												(ii)an application
				under—
												(I)section 6159
				(relating to agreements for payment of tax liability in installments),
												(II)section 7122
				(relating to compromises), or
												(III)section 7811
				(relating to taxpayer assistance orders).
												(3)Opportunity to
				withdraw submissionIf the Secretary provides a person with
				notice that a submission is a specified frivolous submission and such person
				withdraws such submission within 30 days after such notice, the penalty imposed
				under paragraph (1) shall not apply with respect to such submission.
									(c)Listing of
				frivolous positionsThe Secretary shall prescribe (and
				periodically revise) a list of positions which the Secretary has identified as
				being frivolous for purposes of this subsection. The Secretary shall not
				include in such list any position that the Secretary determines meets the
				requirement of section 6662(d)(2)(B)(ii)(II).
								(d)Reduction of
				penaltyThe Secretary may reduce the amount of any penalty
				imposed under this section if the Secretary determines that such reduction
				would promote compliance with and administration of the Federal tax
				laws.
								(e)Penalties in
				addition to other penaltiesThe penalties imposed by this section
				shall be in addition to any other penalty provided by
				law.
								.
					(b)Treatment of
			 frivolous requests for hearings before levy
						(1)Frivolous
			 requests disregardedSection 6330 (relating to notice and
			 opportunity for hearing before levy) is amended by adding at the end the
			 following new subsection:

								(g)Frivolous
				requests for hearing, etcNotwithstanding any other provision of
				this section, if the Secretary determines that any portion of a request for a
				hearing under this section or section 6320 meets the requirement of clause (i)
				or (ii) of section 6702(b)(2)(A), then the Secretary may treat such portion as
				if it were never submitted and such portion shall not be subject to any further
				administrative or judicial
				review.
								.
						(2)Preclusion from
			 raising frivolous issues at hearingSection 6330(c)(4) is
			 amended—
							(A)by striking
			 (A) and inserting (A)(i);
							(B)by striking
			 (B) and inserting (ii);
							(C)by striking the
			 period at the end of the first sentence and inserting ; or;
			 and
							(D)by inserting after
			 subparagraph (A)(ii) (as so redesignated) the following:

									(B)the issue meets
				the requirement of clause (i) or (ii) of section
				6702(b)(2)(A).
									.
							(3)Statement of
			 groundsSection 6330(b)(1) is amended by striking under
			 subsection (a)(3)(B) and inserting in writing under subsection
			 (a)(3)(B) and states the grounds for the requested hearing.
						(c)Treatment of
			 frivolous requests for hearings upon filing of notice of
			 lienSection 6320 is amended—
						(1)in
			 subsection (b)(1), by striking under subsection (a)(3)(B) and
			 inserting in writing under subsection (a)(3)(B) and states the grounds
			 for the requested hearing, and
						(2)in subsection (c),
			 by striking and (e) and inserting (e), and
			 (g).
						(d)Treatment of
			 frivolous applications for offers-in-compromise and installment
			 agreementsSection 7122 is amended by adding at the end the
			 following new subsection:

							(f)Frivolous
				submissions, etcNotwithstanding any other provision of this
				section, if the Secretary determines that any portion of an application for an
				offer-in-compromise or installment agreement submitted under this section or
				section 6159 meets the requirement of clause (i) or (ii) of section
				6702(b)(2)(A), then the Secretary may treat such portion as if it were never
				submitted and such portion shall not be subject to any further administrative
				or judicial
				review.
							.
					(e)Clerical
			 amendmentThe table of sections for part I of subchapter B of
			 chapter 68 is amended by striking the item relating to section 6702 and
			 inserting the following new item:

								Sec. 6702. Frivolous tax
				submissions.

							.
					(f)Effective
			 dateThe amendments made by this section shall apply to
			 submissions made and issues raised after the date on which the Secretary first
			 prescribes a list under section 6702(c) of the Internal Revenue Code of 1986,
			 as amended by subsection (a).
					408.Addition of
			 meningococcal and human papillomavirus vaccines to list of taxable
			 vaccines
					(a)Meningococcal
			 vaccineSection 4132(a)(1) (defining taxable vaccine) is amended
			 by adding at the end the following new subparagraph:

							(O)Any meningococcal
				vaccine.
							.
					(b)Human
			 papillomavirus vaccineSection 4132(a)(1), as amended by
			 subsection (a), is amended by adding at the end the following new
			 subparagraph:

							(P)Any vaccine against the human
				papillomavirus.
							.
					(c)Effective
			 date
						(1)Sales,
			 etcThe amendments made by this section shall apply to sales and
			 uses on or after the first day of the first month which begins more than 4
			 weeks after the date of the enactment of this Act.
						(2)DeliveriesFor
			 purposes of paragraph (1) and section 4131 of the Internal Revenue Code of
			 1986, in the case of sales on or before the effective date described in such
			 paragraph for which delivery is made after such date, the delivery date shall
			 be considered the sale date.
						409.Clarification of
			 taxation of certain settlement funds made permanent
					(a)In
			 generalSubsection (g) of section 468B is amended by striking
			 paragraph (3).
					(b)Effective
			 dateThe amendment made by
			 this section shall take effect as if included in section 201 of the Tax
			 Increase Prevention and Reconciliation Act of 2005.
					410.Modification of
			 active business definition under section 355 made permanent
					(a)In
			 generalSubparagraphs (A) and
			 (D) of section 355(b)(3) are each amended by striking and on or before
			 December 31, 2010.
					(b)Effective
			 dateThe amendments made by
			 this section shall take effect as if included in section 202 of the Tax
			 Increase Prevention and Reconciliation Act of 2005.
					411.Revision of
			 State veterans limit made permanent
					(a)In
			 generalSubparagraph (B) of
			 section 143(l)(3) is amended by striking clause (iv).
					(b)Effective
			 dateThe amendment made by
			 this section shall take effect as if included in section 203 of the Tax
			 Increase Prevention and Reconciliation Act of 2005.
					412.Capital gains
			 treatment for certain self-created musical works made permanent
					(a)In
			 generalParagraph (3) of
			 section 1221(b) is amended by striking before January 1,
			 2011,.
					(b)Effective
			 dateThe amendment made by
			 this section shall take effect as if included in section 204 of the Tax
			 Increase Prevention and Reconciliation Act of 2005.
					413.Reduction in minimum
			 vessel tonnage which qualifies for tonnage tax made permanent
					(a)In
			 generalParagraph (4) of section 1355(a) is amended by striking
			 10,000 (6,000, in the case of taxable years beginning after December 31,
			 2005, and ending before January 1, 2011) and inserting
			 6,000.
					(b)Effective
			 dateThe amendment made by
			 this section shall take effect as if included in section 205 of the Tax
			 Increase Prevention and Reconciliation Act of 2005.
					414.Modification of
			 special arbitrage rule for certain funds made permanent
					(a)In
			 generalSection 206 of the
			 Tax Increase Prevention and Reconciliation Act of 2005 is amended by striking
			 and before August 31, 2009.
					(b)Effective
			 dateThe amendment made by
			 this section shall take effect as if included in section 206 of the Tax
			 Increase Prevention and Reconciliation Act of 2005.
					415.Great Lakes domestic
			 shipping to not disqualify vessel from tonnage tax
					(a)In
			 generalSection 1355
			 (relating to definitions and special rules) is amended by redesignating
			 subsection (g) as subsection (h) and by inserting after subsection (f) the
			 following new subsection:

							(g)Great Lakes
				domestic shipping to not disqualify vessel
								(1)In
				generalIf the electing corporation elects (at such time and in
				such manner as the Secretary may require) to apply this subsection for any
				taxable year to any qualifying vessel which is used in qualified zone domestic
				trade during the taxable year—
									(A)solely for
				purposes of subsection (a)(4), such use shall be treated as use in United
				States foreign trade (and not as use in United States domestic trade),
				and
									(B)subsection (f)
				shall not apply with respect to such vessel for such taxable year.
									(2)Effect of
				temporarily operating vessel in United States domestic tradeIn the case of a qualifying vessel to which
				this subsection applies—
									(A)In
				generalAn electing corporation shall be treated as using such
				vessel in qualified zone domestic trade during any period of temporary use in
				the United States domestic trade (other than qualified zone domestic trade) if
				the electing corporation gives timely notice to the Secretary stating—
										(i)that it
				temporarily operates or has operated in the United States domestic trade (other
				than qualified zone domestic trade) a qualifying vessel which had been used in
				the United States foreign trade or qualified zone domestic trade, and
										(ii)its intention to
				resume operation of the vessel in the United States foreign trade or qualified
				zone domestic trade.
										(B)NoticeNotice shall be deemed timely if given not
				later than the due date (including extensions) for the corporation’s tax return
				for the taxable year in which the temporary cessation begins.
									(C)Period disregard
				in effectThe period of temporary use under subparagraph (A)
				continues until the earlier of the date of which—
										(i)the electing
				corporation abandons its intention to resume operations of the vessel in the
				United States foreign trade or qualified zone domestic trade, or
										(ii)the electing
				corporation resumes operation of the vessel in the United States foreign trade
				or qualified zone domestic trade.
										(D)No disregard if
				domestic trade use exceeds 30 daysSubparagraph (A) shall not
				apply to any qualifying vessel which is operated in the United States domestic
				trade (other than qualified zone domestic trade) for more than 30 days during
				the taxable year.
									(3)Allocation of
				income and deductions to qualifying shipping activitiesIn the
				case of a qualifying vessel to which this subsection applies, the Secretary
				shall prescribe rules for the proper allocation of income, expenses, losses,
				and deductions between the qualified shipping activities and the other
				activities of such vessel.
								(4)Qualified zone
				domestic tradeFor purposes of this subsection—
									(A)In
				generalThe term qualified zone domestic trade means
				the transportation of goods or passengers between places in the qualified zone
				if such transportation is in the United States domestic trade.
									(B)Qualified
				zoneThe term qualified
				zone means the Great Lakes Waterway and the St. Lawrence
				Seaway.
									.
					(b)Effective
			 dateThe amendments made by this section shall apply to taxable
			 years beginning after the date of the enactment of this Act.
					416.Use of qualified
			 mortgage bonds to finance residences for veterans without regard to first-time
			 homebuyer requirement
					(a)In
			 generalSection 143(d)(2)
			 (relating to exceptions to 3-year requirement) is amended by striking
			 and at the end of subparagraph (B), by adding and
			 at the end of subparagraph (C), and by inserting after subparagraph (C) the
			 following new subparagraph:

							(D)in the case of bonds issued after the date
				of the enactment of this subparagraph and before January 1, 2008, financing of
				any residence for a veteran (as defined in section 101 of title 38, United
				States Code), if such veteran has not previously qualified for and received
				such financing by reason of this
				subparagraph,
							.
					(b)Effective
			 dateThe amendments made by this section shall apply to bonds
			 issued after the date of the enactment of this Act.
					417.Exclusion of
			 gain from sale of a principal residence by certain employees of the
			 intelligence community
					(a)In
			 generalSubparagraph (A) of section 121(d)(9) (relating to
			 exclusion of gain from sale of principal residence) is amended by striking
			 “duty” and all that follows and inserting “duty—

							(i)as a member of the
				uniformed services,
							(ii)as a member of the
				Foreign Service of the United States, or
							(iii)as an employee
				of the intelligence
				community.
							.
					(b)Employee of
			 intelligence community definedSubparagraph (C) of section
			 121(d)(9) is amended by redesignating clause (iv) as clause (v) and by
			 inserting after clause (iii) the following new clause:

							(iv)Employee of
				intelligence communityThe term employee of the
				intelligence community means an employee (as defined by section 2105 of
				title 5, United States Code) of—
								(I)the Office of the
				Director of National Intelligence,
								(II)the Central
				Intelligence Agency,
								(III)the National
				Security Agency,
								(IV)the Defense
				Intelligence Agency,
								(V)the National
				Geospatial-Intelligence Agency,
								(VI)the National
				Reconnaissance Office,
								(VII)any other office
				within the Department of Defense for the collection of specialized national
				intelligence through reconnaissance programs,
								(VIII)any of the
				intelligence elements of the Army, the Navy, the Air Force, the Marine Corps,
				the Federal Bureau of Investigation, the Department of Treasury, the Department
				of Energy, and the Coast Guard,
								(IX)the Bureau of
				Intelligence and Research of the Department of State, or
								(X)any of the elements
				of the Department of Homeland Security concerned with the analyses of foreign
				intelligence
				information.
								.
					(c)Special
			 ruleSubparagraph (C) of section 121(d)(9), as amended by
			 subsection (b), is amended by adding at the end the following new
			 clause:

							(vi)Special rule
				relating to intelligence communityAn employee of the
				intelligence community shall not be treated as serving on qualified extended
				duty unless such duty is at a duty station located outside the United
				States.
							.
					(d)Conforming
			 amendmentThe heading for
			 section 121(d)(9) is amended to read as follows: Uniformed services, foreign service, and
			 intelligence community.
					(e)Effective
			 dateThe amendments made by this section shall apply to sales or
			 exchanges after the date of the enactment of this Act and before January 1,
			 2011.
					418.Sale of property by
			 judicial officers
					(a)In
			 generalSection 1043(b)
			 (relating to the sale of property to comply with conflict-of-interest
			 requirements) is amended—
						(1)in paragraph
			 (1)—
							(A)in subparagraph
			 (A), by inserting , or a judicial officer, after an
			 officer or employee of the executive branch; and
							(B)in subparagraph
			 (B), by inserting judicial canon, after any statute,
			 regulation, rule,;
							(2)in paragraph
			 (2)—
							(A)in subparagraph
			 (A), by inserting judicial canon, after any Federal
			 conflict of interest statute, regulation, rule,; and
							(B)in subparagraph
			 (B), by inserting after the Director of the Office of Government
			 Ethics, the following: in the case of executive branch officers
			 or employees, or by the Judicial Conference of the United States (or its
			 designee), in the case of judicial officers,; and
							(3)in paragraph
			 (5)(B), by inserting judicial canon, after any statute,
			 regulation, rule,.
						(b)Judicial officer
			 definedSection 1043(b) is amended by adding at the end the
			 following new paragraph:

							(6)Judicial
				officerThe term
				judicial officer means the Chief Justice of the United States, the
				Associate Justices of the Supreme Court, and the judges of the United States
				courts of appeals, United States district courts, including the district courts
				in Guam, the Northern Mariana Islands, and the Virgin Islands, Court of Appeals
				for the Federal Circuit, Court of International Trade, Tax Court, Court of
				Federal Claims, Court of Appeals for Veterans Claims, United States Court of
				Appeals for the Armed Forces, and any court created by Act of Congress, the
				judges of which are entitled to hold office during good
				behavior.
							.
					(c)Effective
			 dateThe amendments made by this section shall apply to sales
			 after the date of enactment of this Act.
					419.Premiums for
			 mortgage insurance
					(a)In
			 generalSection 163(h)(3) (relating to qualified residence
			 interest) is amended by adding at the end the following new
			 subparagraph:

							(E)Mortgage
				insurance premiums treated as interest
								(i)In
				generalPremiums paid or accrued for qualified mortgage insurance
				by a taxpayer during the taxable year in connection with acquisition
				indebtedness with respect to a qualified residence of the taxpayer shall be
				treated for purposes of this section as interest which is qualified residence
				interest.
								(ii)PhaseoutThe
				amount otherwise treated as interest under clause (i) shall be reduced (but not
				below zero) by 10 percent of such amount for each $1,000 ($500 in the case of a
				married individual filing a separate return) (or fraction thereof) that the
				taxpayer’s adjusted gross income for the taxable year exceeds $100,000 ($50,000
				in the case of a married individual filing a separate return).
								(iii)LimitationClause (i) shall not apply with respect to
				any mortgage insurance contracts issued before January 1, 2007.
								(iv)TerminationClause
				(i) shall not apply to amounts—
									(I)paid or accrued
				after December 31, 2007, or
									(II)properly
				allocable to any period after such
				date.
									.
					(b)Definition and
			 special rulesSection 163(h)(4) (relating to other definitions
			 and special rules) is amended by adding at the end the following new
			 subparagraphs:

							(E)Qualified
				mortgage insuranceThe term qualified mortgage
				insurance means—
								(i)mortgage insurance
				provided by the Veterans Administration, the Federal Housing Administration, or
				the Rural Housing Administration, and
								(ii)private mortgage
				insurance (as defined by section 2 of the Homeowners Protection Act of 1998 (12
				U.S.C. 4901), as in effect on the date of the enactment of this
				subparagraph).
								(F)Special rules for
				prepaid qualified mortgage insuranceAny amount paid by the
				taxpayer for qualified mortgage insurance that is properly allocable to any
				mortgage the payment of which extends to periods that are after the close of
				the taxable year in which such amount is paid shall be chargeable to capital
				account and shall be treated as paid in such periods to which so allocated. No
				deduction shall be allowed for the unamortized balance of such account if such
				mortgage is satisfied before the end of its term. The preceding sentences shall
				not apply to amounts paid for qualified mortgage insurance provided by the
				Veterans Administration or the Rural Housing
				Administration.
							.
					(c)Information
			 returns relating to mortgage insuranceSection 6050H (relating to
			 returns relating to mortgage interest received in trade or business from
			 individuals) is amended by adding at the end the following new
			 subsection:

							(h)Returns relating
				to mortgage insurance premiums
								(1)In
				generalThe Secretary may prescribe, by regulations, that any
				person who, in the course of a trade or business, receives from any individual
				premiums for mortgage insurance aggregating $600 or more for any calendar year,
				shall make a return with respect to each such individual. Such return shall be
				in such form, shall be made at such time, and shall contain such information as
				the Secretary may prescribe.
								(2)Statement to be
				furnished to individuals with respect to whom information is
				requiredEvery person required to make a return under paragraph
				(1) shall furnish to each individual with respect to whom a return is made a
				written statement showing such information as the Secretary may prescribe. Such
				written statement shall be furnished on or before January 31 of the year
				following the calendar year for which the return under paragraph (1) was
				required to be made.
								(3)Special
				rulesFor purposes of this subsection—
									(A)rules similar to
				the rules of subsection (c) shall apply, and
									(B)the term
				mortgage insurance means—
										(i)mortgage insurance
				provided by the Veterans Administration, the Federal Housing Administration, or
				the Rural Housing Administration, and
										(ii)private mortgage
				insurance (as defined by section 2 of the Homeowners Protection Act of 1998 (12
				U.S.C. 4901), as in effect on the date of the enactment of this
				subsection).
										.
					(d)Effective
			 dateThe amendments made by this section shall apply to amounts
			 paid or accrued after December 31, 2006.
					420.Modification of
			 refunds for kerosene used in aviation
					(a)In
			 generalParagraph (4) of section 6427(l) (relating to nontaxable
			 uses of diesel fuel and kerosene) is amended to read as follows:

							(4)Refunds for
				kerosene used in aviation
								(A)Kerosene used in
				commercial aviationIn the case of kerosene used in commercial
				aviation (as defined in section 4083(b)) (other than supplies for vessels or
				aircraft within the meaning of section 4221(d)(3)), paragraph (1) shall not
				apply to so much of the tax imposed by section 4041 or 4081, as the case may
				be, as is attributable to—
									(i)the Leaking
				Underground Storage Tank Trust Fund financing rate imposed by such section,
				and
									(ii)so much of the
				rate of tax specified in section 4041(c) or 4081(a)(2)(A)(iii), as the case may
				be, as does not exceed 4.3 cents per gallon.
									(B)Kerosene used in
				noncommercial aviationIn the case of kerosene used in aviation
				that is not commercial aviation (as so defined) (other than any use which is
				exempt from the tax imposed by section 4041(c) other than by reason of a prior
				imposition of tax), paragraph (1) shall not apply to—
									(i)any tax imposed by
				subsection (c) or (d)(2) of section 4041, and
									(ii)so much of the
				tax imposed by section 4081 as is attributable to—
										(I)the Leaking
				Underground Storage Tank Trust Fund financing rate imposed by such section,
				and
										(II)so much of the
				rate of tax specified in section 4081(a)(2)(A)(iii) as does not exceed the rate
				specified in section 4081(a)(2)(C)(ii).
										(C)Payments to
				ultimate, registered vendor
									(i)In
				generalWith respect to any kerosene used in aviation (other than
				kerosene described in clause (ii) or kerosene to which paragraph (5) applies),
				if the ultimate purchaser of such kerosene waives (at such time and in such
				form and manner as the Secretary shall prescribe) the right to payment under
				paragraph (1) and assigns such right to the ultimate vendor, then the Secretary
				shall pay the amount which would be paid under paragraph (1) to such ultimate
				vendor, but only if such ultimate vendor—
										(I)is registered
				under section 4101, and
										(II)meets the
				requirements of subparagraph (A), (B), or (D) of section 6416(a)(1).
										(ii)Payments for
				kerosene used in noncommercial aviationThe amount which would be
				paid under paragraph (1) with respect to any kerosene to which subparagraph (B)
				applies shall be paid only to the ultimate vendor of such kerosene. A payment
				shall be made to such vendor if such vendor—
										(I)is registered
				under section 4101, and
										(II)meets the
				requirements of subparagraph (A), (B), or (D) of section
				6416(a)(1).
										.
					(b)Conforming
			 amendments
						(1)Section 6427(l) is
			 amended by striking paragraph (5) and by redesignating paragraph (6) as
			 paragraph (5).
						(2)Section
			 4082(d)(2)(B) is amended by striking section 6427(l)(6)(B) and
			 inserting section 6427(l)(5)(B).
						(3)Section
			 6427(i)(4)(A) is amended—
							(A)by striking
			 paragraph (4)(B), (5), or (6) each place it appears and
			 inserting paragraph (4)(C) or (5), and
							(B)by striking
			 (l)(5), and (l)(6) and inserting (l)(4)(C)(ii), and
			 (l)(5).
							(4)Section 6427(l)(1)
			 is amended by striking paragraph (4)(B) and inserting
			 paragraph (4)(C)(i).
						(5)Section 9502(d) is
			 amended—
							(A)in paragraph (2),
			 by striking and (l)(5), and
							(B)in paragraph (3),
			 by striking or (5).
							(6)Section 9503(c)(7)
			 is amended—
							(A)by amending
			 subparagraphs (A) and (B) to read as follows:

									(A)4.3 cents per gallon of kerosene subject to
				section 6427(l)(4)(A) with respect to which a payment has been made by the
				Secretary under section 6427(l), and
									(B)21.8 cents per gallon of kerosene subject
				to section 6427(l)(4)(B) with respect to which a payment has been made by the
				Secretary under section 6427(l).
									,
				and
							(B)in the matter
			 following subparagraph (B), by striking or (5).
							(c)Effective
			 date
						(1)In
			 generalThe amendments made by this section shall apply to
			 kerosene sold after September 30, 2005.
						(2)Special rule for
			 pending claimsIn the case of kerosene sold for use in aviation
			 (other than kerosene to which section 6427(l)(4)(C)(ii) of the Internal Revenue
			 Code of 1986 (as added by subsection (a)) applies or kerosene to which section
			 6427(l)(5) of such Code (as redesignated by subsection (b)) applies) after
			 September 30, 2005, and before the date of the enactment of this Act, the
			 ultimate purchaser shall be treated as having waived the right to payment under
			 section 6427(l)(1) of such Code and as having assigned such right to the
			 ultimate vendor if such ultimate vendor has met the requirements of
			 subparagraph (A), (B), or (D) of section 6416(a)(1) of such Code.
						(d)Special rule for
			 kerosene used in aviation on a farm for farming purposes
						(1)Refunds for
			 purchases after December 31, 2004, and before
			 October 1, 2005The Secretary of
			 the Treasury shall pay to the ultimate purchaser of any kerosene which is used
			 in aviation on a farm for farming purposes and which was purchased after
			 December 31, 2004, and before October 1, 2005, an amount equal to the aggregate
			 amount of tax imposed on such fuel under section 4041 or 4081 of the Internal
			 Revenue Code of 1986, as the case may be, reduced by any payment to the
			 ultimate vendor under section 6427(l)(5)(C) of such Code (as in effect on the
			 day before the date of the enactment of the Safe, Accountable, Flexible,
			 Efficient Transportation Equity Act: a Legacy for Users).
						(2)Use on a farm
			 for farming purposesFor purposes of paragraph (1), kerosene
			 shall be treated as used on a farm for farming purposes if such kerosene is
			 used for farming purposes (within the meaning of section 6420(c)(3) of the
			 Internal Revenue Code of 1986) in carrying on a trade or business on a farm
			 situated in the United States. For purposes of the preceding sentence, rules
			 similar to the rules of section 6420(c)(4) of such Code shall apply.
						(3)Time for filing
			 claimsNo claim shall be allowed under paragraph (1) unless the
			 ultimate purchaser files such claim before the date that is 3 months after the
			 date of the enactment of this Act.
						(4)No double
			 benefitNo amount shall be paid under paragraph (1) or section
			 6427(l) of the Internal Revenue Code of 1986 with respect to any kerosene
			 described in paragraph (1) to the extent that such amount is in excess of the
			 tax imposed on such kerosene under section 4041 or 4081 of such Code, as the
			 case may be.
						(5)Applicable
			 lawsFor purposes of this subsection, rules similar to the rules
			 of section 6427(j) of the Internal Revenue Code of 1986 shall apply.
						421.Regional income tax
			 agencies treated as States for purposes of confidentiality and disclosure
			 requirements
					(a)In
			 generalParagraph (5) of section 6103(b) is amended to read as
			 follows:

							(5)State
								(A)In
				generalThe term
				State means—
									(i)any
				of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico,
				the Virgin Islands, the Canal Zone, Guam, American Samoa, and the Commonwealth
				of the Northern Mariana Islands,
									(ii)for purposes of
				subsections (a)(2), (b)(4), (d)(1), (h)(4), and (p), any municipality—
										(I)with a population
				in excess of 250,000 (as determined under the most recent decennial United
				States census data available),
										(II)which imposes a
				tax on income or wages, and
										(III)with which the
				Secretary (in his sole discretion) has entered into an agreement regarding
				disclosure, and
										(iii)for purposes of
				subsections (a)(2), (b)(4), (d)(1), (h)(4), and (p), any governmental
				entity—
										(I)which is formed
				and operated by a qualified group of municipalities, and
										(II)with which the Secretary (in his sole
				discretion) has entered into an agreement regarding disclosure.
										(B)Regional income
				tax agenciesFor purposes of subparagraph (A)(iii)—
									(i)Qualified group
				of municipalitiesThe term qualified group of
				municipalities means, with respect to any governmental entity, 2 or more
				municipalities—
										(I)each of which imposes a tax on income or
				wages,
										(II)each of which, under the authority of a
				State statute, administers the laws relating to the imposition of such taxes
				through such entity, and
										(III)which
				collectively have a population in excess of 250,000 (as determined under the
				most recent decennial United States census data available).
										(ii)References to
				State law, etcFor purposes of applying subparagraph (A)(iii) to
				the subsections referred to in such subparagraph, any reference in such
				subsections to State law, proceedings, or tax returns shall be treated as
				references to the law, proceedings, or tax returns, as the case may be, of the
				municipalities which form and operate the governmental entity referred to in
				such subparagraph.
									(iii)Disclosure to
				contractors and other agentsNotwithstanding any other provision of this
				section, no return or return information shall be disclosed to any contractor
				or other agent of a governmental entity referred to in subparagraph (A)(iii)
				unless such entity, to the satisfaction of the Secretary—
										(I)has requirements
				in effect which require each such contractor or other agent which would have
				access to returns or return information to provide safeguards (within the
				meaning of subsection (p)(4)) to protect the confidentiality of such returns or
				return information,
										(II)agrees to conduct
				an on-site review every 3 years (or a mid-point review in the case of contracts
				or agreements of less than 3 years in duration) of each contractor or other
				agent to determine compliance with such requirements,
										(III)submits the
				findings of the most recent review conducted under subclause (II) to the
				Secretary as part of the report required by subsection (p)(4)(E), and
										(IV)certifies to the
				Secretary for the most recent annual period that such contractor or other agent
				is in compliance with all such requirements.
										The
				certification required by subclause (IV) shall include the name and address of
				each contractor and other agent, a description of the contract or agreement
				with such contractor or other agent, and the duration of such contract or
				agreement. The requirements of this clause shall not apply to disclosures
				pursuant to subsection (n) for purposes of Federal tax administration and a
				rule similar to the rule of subsection (p)(8)(B) shall apply for purposes of
				this
				clause..
					(b)Special rules
			 for disclosureSubsection (d) of section 6103 is amended by
			 adding at the end the following new paragraph:

							(6)Limitation on
				disclosure regarding regional income tax agencies treated as
				StatesFor purposes of
				paragraph (1), inspection by or disclosure to an entity described in subsection
				(b)(5)(A)(iii) shall be for the purpose of, and only to the extent necessary
				in, the administration of the laws of the member municipalities in such entity
				relating to the imposition of a tax on income or wages. Such entity may not
				redisclose any return or return information received pursuant to paragraph (1)
				to any such member
				municipality.
							.
					(c)Effective
			 dateThe amendments made by this section shall apply to
			 disclosures made after December 31, 2006.
					422.Designation of wines
			 by semi-generic names
					(a)In
			 generalSubsection (c) of
			 section 5388 (relating to use of semi-generic designations) is amended by
			 adding at the end the following new paragraph:

							(3)Special rule for
				use of certain semi-generic designations
								(A)In
				generalIn the case of any
				wine to which this paragraph applies—
									(i)paragraph (1)
				shall not apply,
									(ii)in the case of
				wine of the European Community, designations referred to in subparagraph (C)(i)
				may be used for such wine only if the requirement of subparagraph (B)(ii) is
				met, and
									(iii)in the case any other wine bearing a brand
				name, or brand name and fanciful name, semi-generic designations may be used
				for such wine only if the requirements of clauses (i), (ii), and (iii) of
				subparagraph (B) are met.
									(B)Requirements
									(i)The requirement of this clause is met if
				there appears in direct conjunction with the semi-generic designation an
				appropriate appellation of origin disclosing the origin of the wine.
									(ii)The requirement
				of this clause is met if the wine conforms to the standard of identity, if any,
				for such wine contained in the regulations under this section or, if there is
				no such standard, to the trade understanding of such class or type.
									(iii)The requirement
				of this clause is met if the person, or its successor in interest, using the
				semi-generic designation held a Certificate of Label Approval or Certificate of
				Exemption from Label Approval issued by the Secretary for a wine label bearing
				such brand name, or brand name and fanciful name, before March 10, 2006, on
				which such semi-generic designation appeared.
									(C)Wines to which
				paragraph applies
									(i)In
				generalExcept as provided in clause (ii), this paragraph shall
				apply to any grape wine which is designated as Burgundy, Claret, Chablis,
				Champagne, Chianti, Malaga, Marsala, Madeira, Moselle, Port, Retsina, Rhine
				Wine or Hock, Sauterne, Haut Sauterne, Sherry, or Tokay.
									(ii)ExceptionThis paragraph shall not apply to wine
				which—
										(I)contains less than
				7 percent or more than 24 percent alcohol by volume,
										(II)is intended for
				sale outside the United States, or
										(III)does not bear a
				brand
				name.
										.
					(b)Effective
			 dateThe amendments made by
			 this section shall apply to wine imported or bottled in the United States on or
			 after the date of enactment of this Act.
					423.Modification of
			 railroad track maintenance credit
					(a)In
			 generalSection 45G(d) (defining qualified railroad track
			 maintenance expenditures) is amended—
						(1)by inserting
			 gross after means, and
						(2)by inserting
			 (determined without regard to any consideration for such expenditures
			 given by the Class II or Class III railroad which made the assignment of such
			 track) after Class II or Class III railroad.
						(b)Effective
			 dateThe amendment made by this section shall take effect as if
			 included in the amendment made by section 245(a) of the American Jobs Creation
			 Act of 2004.
					424.Modification of
			 excise tax on unrelated business taxable income of charitable remainder
			 trusts
					(a)In
			 generalSubsection (c) of section 664 (relating to exemption from
			 income taxes) is amended to read as follows:

							(c)Taxation of
				trusts
								(1)Income
				taxA charitable remainder annuity trust and a charitable
				remainder unitrust shall, for any taxable year, not be subject to any tax
				imposed by this subtitle.
								(2)Excise
				tax
									(A)In
				generalIn the case of a charitable remainder annuity trust or a
				charitable remainder unitrust which has unrelated business taxable income
				(within the meaning of section 512, determined as if part III of subchapter F
				applied to such trust) for a taxable year, there is hereby imposed on such
				trust or unitrust an excise tax equal to the amount of such unrelated business
				taxable income.
									(B)Certain rules to
				applyThe tax imposed by subparagraph (A) shall be treated as
				imposed by chapter 42 for purposes of this title other than subchapter E of
				chapter 42.
									(C)Tax court
				proceedingsFor purposes of this paragraph, the references in
				section 6212(c)(1) to section 4940 shall be deemed to include references to
				this
				paragraph.
									.
					(b)Effective
			 dateThe amendment made by this section shall apply to taxable
			 years beginning after December 31, 2006.
					425.Loans to
			 qualified continuing care facilities made permanent
					(a)In
			 generalSubsection (h) of
			 section 7872 (relating to exception for loans to qualified continuing care
			 facilities) is amended by striking paragraph (4).
					(b)Effective
			 dateThe amendment made by
			 this section shall take effect as if included in section 209 of the Tax
			 Increase Prevention and Reconciliation Act of 2005.
					426.Technical
			 corrections
					(a)Technical
			 correction relating to look-through treatment of payments between related
			 controlled foreign corporations under the foreign personal holding company
			 rules
						(1)In
			 general
							(A)The first sentence
			 of section 954(c)(6)(A) is amended by striking which is not subpart F
			 income and inserting which is neither subpart F income nor
			 income treated as effectively connected with the conduct of a trade or business
			 in the United States.
							(B)Section
			 954(c)(6)(A) is amended by striking the last sentence and inserting the
			 following: The Secretary shall prescribe such regulations as may be
			 necessary or appropriate to carry out this paragraph, including such
			 regulations as may be necessary or appropriate to prevent the abuse of the
			 purposes of this paragraph.
							(2)Effective
			 dateThe amendments made by
			 this subsection shall take effect as if included in section 103(b) of the Tax
			 Increase Prevention and Reconciliation Act of 2005.
						(b)Technical
			 correction regarding authority to exercise reasonable cause and good faith
			 exception
						(1)In
			 generalSection 903(d)(2)(B)(iii) of the American Jobs Creation
			 Act of 2004, as amended by section 303(a) of the Gulf Opportunity Zone Act of
			 2005, is amended by inserting or the Secretary’s delegate after
			 the Secretary of the Treasury.
						(2)Effective
			 dateThe amendment made by this subsection shall take effect as
			 if included in the provisions of the American Jobs Creation Act of 2004 to
			 which it relates.
						BMedicare and Other
			 Health Provisions
			1.Short title of
			 divisionThis division may be
			 cited as the Medicare Improvements and Extension Act of
			 2006.
			IMedicare Improved
			 Quality and Provider Payments
				101.Physician
			 payment and quality improvement
					(a)One-year
			 increase in Medicare physician fee schedule conversion factorSection 1848(d) of the Social Security Act
			 (42 U.S.C. 1395w-4(d)) is amended by adding at the end the following new
			 paragraph:

							(7)Conversion
				factor for 2007
								(A)In
				generalThe conversion factor that would otherwise be applicable
				under this subsection for 2007 shall be the amount of such conversion factor
				divided by the product of—
									(i)1
				plus the Secretary’s estimate of the percentage increase in the MEI (as defined
				in section 1842(i)(3)) for 2007 (divided by 100); and
									(ii)1
				plus the Secretary’s estimate of the update adjustment factor under paragraph
				(4)(B) for 2007.
									(B)No effect on
				computation of conversion factor for 2008The conversion factor
				under this subsection shall be computed under paragraph (1)(A) for 2008 as if
				subparagraph (A) had never
				applied.
								.
					(b)Quality
			 reporting systemSection 1848 of the Social Security Act (42
			 U.S.C. 1395w-4) is amended by adding at the end the following new
			 subsection:

							(k)Quality reporting
				system
								(1)In
				generalThe Secretary shall
				implement a system for the reporting by eligible professionals of data on
				quality measures specified under paragraph (2). Such data shall be submitted in
				a form and manner specified by the Secretary (by program instruction or
				otherwise), which may include submission of such data on claims under this
				part.
								(2)Use of
				consensus-based quality measures
									(A)For
				2007
										(i)In
				generalFor purposes of
				applying this subsection for the reporting of data on quality measures for
				covered professional services furnished during the period beginning July 1,
				2007, and ending December 31, 2007, the quality measures specified under this
				paragraph are the measures identified as 2007 physician quality measures under
				the Physician Voluntary Reporting Program as published on the public website of
				the Centers for Medicare & Medicaid Services as of the date of the
				enactment of this subsection, except as may be changed by the Secretary based
				on the results of a consensus-based process in January of 2007, if such change
				is published on such website by not later than April 1, 2007.
										(ii)Subsequent
				refinements in application permittedThe Secretary may, from time to time (but
				not later than July 1, 2007), publish on such website (without notice or
				opportunity for public comment) modifications or refinements (such as code
				additions, corrections, or revisions) for the application of quality measures
				previously published under clause (i), but may not, under this clause, change
				the quality measures under the reporting system.
										(iii)ImplementationNotwithstanding
				any other provision of law, the Secretary may implement by program instruction
				or otherwise this subsection for 2007.
										(B)For
				2008
										(i)In
				generalFor purposes of
				reporting data on quality measures for covered professional services furnished
				during 2008, the quality measures specified under this paragraph for covered
				professional services shall be measures that have been adopted or endorsed by a
				consensus organization (such as the National Quality Forum or AQA), that
				include measures that have been submitted by a physician specialty, and that
				the Secretary identifies as having used a consensus-based process for
				developing such measures. Such measures shall include structural measures, such
				as the use of electronic health records and electronic prescribing
				technology.
										(ii)Proposed set of
				measuresNot later than August 15, 2007, the Secretary shall
				publish in the Federal Register a proposed set of quality measures that the
				Secretary determines are described in clause (i) and would be appropriate for
				eligible professionals to use to submit data to the Secretary in 2008. The
				Secretary shall provide for a period of public comment on such set of
				measures.
										(iii)Final set of
				measuresNot later than
				November 15, 2007, the Secretary shall publish in the Federal Register a final
				set of quality measures that the Secretary determines are described in clause
				(i) and would be appropriate for eligible professionals to use to submit data
				to the Secretary in 2008.
										(3)Covered
				professional services and eligible professionals definedFor
				purposes of this subsection:
									(A)Covered
				professional servicesThe
				term covered professional services means services for which
				payment is made under, or is based on, the fee schedule established under this
				section and which are furnished by an eligible professional.
									(B)Eligible
				professionalThe term eligible professional means
				any of the following:
										(i)A
				physician.
										(ii)A
				practitioner described in section 1842(b)(18)(C).
										(iii)A physical or occupational therapist or a
				qualified speech-language pathologist.
										(4)Use of
				registry-based reportingAs part of the publication of proposed
				and final quality measures for 2008 under clauses (ii) and (iii) of paragraph
				(2)(B), the Secretary shall address a mechanism whereby an eligible
				professional may provide data on quality measures through an appropriate
				medical registry (such as the Society of Thoracic Surgeons National Database),
				as identified by the Secretary.
								(5)Identification
				unitsFor purposes of
				applying this subsection, the Secretary may identify eligible professionals
				through billing units, which may include the use of the Provider Identification
				Number, the unique physician identification number (described in section
				1833(q)(1)), the taxpayer identification number, or the National Provider
				Identifier. For purposes of applying this subsection for 2007, the Secretary
				shall use the taxpayer identification number as the billing unit.
								(6)Education and
				outreachThe Secretary shall provide for education and outreach
				to eligible professionals on the operation of this subsection.
								(7)Limitations on
				reviewThere shall be no administrative or judicial review under
				section 1869, section 1878, or otherwise, of the development and implementation
				of the reporting system under paragraph (1), including identification of
				quality measures under paragraph (2) and the application of paragraphs (4) and
				(5).
								(8)ImplementationThe Secretary shall carry out this
				subsection acting through the Administrator of the Centers for Medicare &
				Medicaid
				Services.
								.
					(c)Transitional
			 bonus incentive payments for quality reporting in 2007
						(1)In
			 generalWith respect to
			 covered professional services furnished during a reporting period (as defined
			 in paragraph (6)(C)) by an eligible professional, if—
							(A)there are any
			 quality measures that have been established under the physician reporting
			 system that are applicable to any such services furnished by such professional
			 for such period, and
							(B)the eligible professional satisfactorily
			 submits (as determined under paragraph (2)) to the Secretary data on such
			 quality measures in accordance with such reporting system for such reporting
			 period,
							in addition
			 to the amount otherwise paid under part B of title XVIII of the Social Security
			 Act, subject to paragraph (3), there also shall be paid to the eligible
			 professional (or to an employer or facility in the cases described in clause
			 (A) of section 1842(b)(6) of the Social Security Act (42 U.S.C. 1395u(b)(6)))
			 from the Federal Supplementary Medical Insurance Trust Fund established under
			 section 1841 of such Act (42 U.S.C. 1395t) an amount equal to 1.5 percent of
			 the Secretary’s estimate (based on claims submitted not later than two months
			 after the end of the reporting period) of the allowed charges under such part
			 for all such covered professional services furnished during the reporting
			 period.(2)Satisfactory
			 reporting describedFor
			 purposes of paragraph (1), an eligible professional shall be treated as
			 satisfactorily submitting data on quality measures for covered professional
			 services for a reporting period if quality measures have been reported as
			 follows:
							(A)Three or fewer
			 quality measures applicableIf there are no more than 3 quality
			 measures that are provided under the physician reporting system and that are
			 applicable to such services of such professional furnished during the period,
			 each such quality measure has been reported under such system in at least 80
			 percent of the cases in which such measure is reportable under the
			 system.
							(B)Four or more
			 quality measures applicableIf there are 4 or more quality measures
			 that are provided under the physician reporting system and that are applicable
			 to such services of such professional furnished during the period, at least 3
			 such quality measures have been reported under such system in at least 80
			 percent of the cases in which the respective measure is reportable under the
			 system.
							(3)Payment
			 limitation
							(A)In
			 generalIn no case shall the
			 total payment made under this subsection to an eligible professional (or to an
			 employer or facility in the cases described in clause (A) of section 1842(b)(6)
			 of the Social Security Act) exceed the product of—
								(i)the
			 total number of quality measures for which data are submitted under the
			 physician reporting system for covered professional services of such
			 professional that are furnished during the reporting period; and
								(ii)300
			 percent of the average per measure payment amount specified in subparagraph
			 (B).
								(B)Average per
			 measure payment amount specifiedThe average per measure payment amount
			 specified in this subparagraph is an amount, estimated by the Secretary (based
			 on claims submitted not later than two months after the end of the reporting
			 period), equal to—
								(i)the total of the amount of allowed charges
			 under part B of title XVIII of the Social Security Act for all covered
			 professional services furnished during the reporting period on claims for which
			 quality measures are reported under the physician reporting system; divided
			 by
								(ii)the total number of quality measures for
			 which data are reported under such system for covered professional services
			 furnished during the reporting period.
								(4)Form of
			 paymentThe payment under this subsection shall be in the form of
			 a single consolidated payment.
						(5)Application
							(A)Physician
			 reporting system rulesParagraphs (5), (6), and (8) of section
			 1848(k) of the Social Security Act, as added by subsection (b), shall apply for
			 purposes of this subsection in the same manner as they apply for purposes of
			 such section.
							(B)Coordination
			 with other bonus paymentsThe provisions of this subsection shall
			 not be taken into account in applying subsections (m) and (u) of section 1833
			 of the Social Security Act (42 U.S.C. 1395l) and any payment under such
			 subsections shall not be taken into account in computing allowable charges
			 under this subsection.
							(C)ImplementationNotwithstanding any other provision of law,
			 the Secretary may implement by program instruction or otherwise this
			 subsection.
							(D)Validation
								(i)In
			 generalSubject to the succeeding provisions of this
			 subparagraph, for purposes of determining whether a measure is applicable to
			 the covered professional services of an eligible professional under paragraph
			 (2), the Secretary shall presume that if an eligible professional submits data
			 for a measure, such measure is applicable to such professional.
								(ii)MethodThe
			 Secretary shall validate (by sampling or other means as the Secretary
			 determines to be appropriate) whether measures applicable to covered
			 professional services of an eligible professional have been reported.
								(iii)Denial of
			 payment authorityIf the Secretary determines that an eligible
			 professional has not reported measures applicable to covered professional
			 services of such professional, the Secretary shall not pay the bonus incentive
			 payment.
								(E)Limitations on
			 review
								(i)In
			 generalThere shall be no
			 administrative or judicial review under section 1869 or 1878 of the Social
			 Security Act or otherwise of—
									(I)the determination
			 of measures applicable to services furnished by eligible professionals under
			 this subsection;
									(II)the determination
			 of satisfactory reporting under paragraph (2);
									(III)the
			 determination of the payment limitation under paragraph (3); and
									(IV)the determination
			 of the bonus incentive payment under this subsection.
									(ii)Treatment of
			 determinationsA
			 determination under this subsection shall not be treated as a determination for
			 purposes of section 1869 of the Social Security Act.
								(6)DefinitionsFor
			 purposes of this subsection:
							(A)Eligible
			 professional; covered professional servicesThe terms
			 eligible professional and covered professional
			 services have the meanings given such terms in section 1848(k)(3) of
			 the Social Security Act, as added by subsection (b).
							(B)Physician
			 reporting systemThe term physician reporting
			 system means the system established under section 1848(k) of the Social
			 Security Act, as added by subsection (b).
							(C)Reporting
			 periodThe term
			 reporting period means the period beginning on July 1, 2007, and
			 ending on December 31, 2007.
							(D)SecretaryThe
			 term Secretary means the Secretary of Health and Human
			 Services.
							(d)Physician
			 assistance and quality initiative fundSection 1848 of the Social
			 Security Act, as amended by subsection (b), is further amended by adding at the
			 end the following new subsection:

							(l)Physician
				assistance and quality initiative fund
								(1)EstablishmentThe Secretary shall establish under this
				subsection a Physician Assistance and Quality Initiative Fund (in this
				subsection referred to as the Fund) which shall be available to
				the Secretary for physician payment and quality improvement initiatives, which
				may include application of an adjustment to the update of the conversion factor
				under subsection (d).
								(2)Funding
									(A)Amount
				availableThere shall be
				available to the Fund for expenditures an amount equal to
				$1,350,000,000.
									(B)Timely
				obligation of all available funds for services furnished during
				2008The Secretary shall provide for expenditures from the Fund
				in a manner designed to provide (to the maximum extent feasible) for the
				obligation of the entire amount specified in subparagraph (A) for payment with
				respect to physicians’ services furnished during 2008.
									(C)Payment from
				trust fundThe amount
				specified in subparagraph (A) shall be available to the Fund, as expenditures
				are made from the Fund, from the Federal Supplementary Medical Insurance Trust
				Fund under section 1841.
									(D)Funding
				limitationAmounts in the Fund shall be available in advance of
				appropriations in accordance with subparagraph (B) but only if the total amount
				obligated from the Fund does not exceed the amount available to the Fund under
				subparagraph (A). The Secretary may obligate funds from the Fund only if the
				Secretary determines (and the Chief Actuary of the Centers for Medicare &
				Medicaid Services and the appropriate budget officer certify) that there are
				available in the Fund sufficient amounts to cover all such obligations incurred
				consistent with the previous sentence.
									(E)ConstructionIn
				the case that expenditures from the Fund are applied to, or otherwise affect, a
				conversion factor under subsection (d) for a year, the conversion factor under
				such subsection shall be computed for a subsequent year as if such application
				or effect had never
				occurred.
									.
					(e)ImplementationFor
			 purposes of implementing the provisions of, and amendments made by, this
			 section, the Secretary of Health and Human Services shall provide for the
			 transfer, from the Federal Supplementary Medical Insurance Trust Fund
			 established under section 1841 of the Social Security Act (42 U.S.C. 1395t), of
			 $60,000,000 to the Centers for Medicare & Medicaid Services Program
			 Management Account for the period of fiscal years 2007, 2008, and 2009.
					102.Extension of
			 floor on Medicare work geographic adjustmentSection 1848(e)(1)(E) of the Social Security
			 Act (42 U.S.C. 1395w–4(e)(1)(E)) is amended by striking before January
			 1, 2007 and inserting before January 1, 2008.
				103.Update to the
			 composite rate component of the basic case-mix adjusted prospective payment
			 system for dialysis services
					(a)In
			 generalSection
			 1881(b)(12)(G) of the Social Security
			 Act (42 U.S.C. 1395rr(b)(12)(G)) is amended to read as
			 follows:

							(G)The Secretary shall increase the
				amount of the composite rate component of the basic case-mix adjusted system
				under subparagraph (B) for dialysis services—
								(i)furnished on or after January 1, 2006,
				and before April 1, 2007, by 1.6 percent above the amount of such composite
				rate component for such services furnished on December 31, 2005; and
								(ii)furnished on or after April 1, 2007,
				by 1.6 percent above the amount of such composite rate component for such
				services furnished on March 31,
				2007.
								.
					(b)GAO report on
			 home dialysis paymentNot
			 later than January 1, 2009, the Comptroller General of the United States shall
			 submit to Congress a report on the costs for home hemodialysis treatment and
			 patient training for both home hemodialysis and peritoneal dialysis. Such
			 report shall also include recommendations for a payment methodology for payment
			 under section 1881 of the Social Security Act (42 U.S.C. 1395rr) that measures,
			 and is based on, the costs of providing such services and takes into account
			 the case mix of patients.
					104.Extension of
			 treatment of certain physician pathology services under MedicareSection 542(c) of the Medicare, Medicaid,
			 and SCHIP Benefits Improvement and Protection Act of 2000 (as enacted into law
			 by section 1(a)(6) of Public Law 106–554), as amended by section 732 of the
			 Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public
			 Law 108–173), is amended by striking and 2006 and inserting
			 , 2006, and 2007.
				105.Extension of
			 Medicare reasonable costs payments for certain clinical diagnostic laboratory
			 tests furnished to hospital patients in certain rural areasEffective as if included in the enactment of
			 section 416 of the Medicare Prescription Drug, Improvement, and Modernization
			 Act of 2003 (42 U.S.C. 1395l–4), subsection (b) of such section is amended by
			 striking 2-year period and inserting 3-year
			 period.
				106.Hospital
			 Medicare reports and clarifications
					(a)Correction of
			 mid-year reclassification expirationNotwithstanding any other provision of law,
			 in the case of a subsection (d) hospital (as defined for purposes of section
			 1886 of the Social Security Act (42 U.S.C. 1395ww)) with respect to which a
			 reclassification of its wage index for purposes of such section would (but for
			 this subsection) expire on March 31, 2007, such reclassification of such
			 hospital shall be extended through September 30, 2007. The previous sentence
			 shall not be effected in a budget-neutral manner.
					(b)Revision of the
			 Medicare wage index classification system
						(1)MedPAC
			 report
							(A)In
			 generalThe Medicare Payment Advisory Commission shall submit to
			 Congress, by not later than June 30, 2007, a report on its study of the wage
			 index classification system applied under Medicare prospective payment systems,
			 including under section 1886(d)(3)(E) of the Social Security Act (42 U.S.C.
			 1395ww(d)(3)(E)). Such report shall include any alternatives the Commission
			 recommends to the method to compute the wage index under such section.
							(B)FundingOut
			 of any funds in the Treasury not otherwise appropriated, there are appropriated
			 to the Medicare Payment Advisory Commission, $2,000,000 for fiscal year 2007 to
			 carry out this paragraph.
							(2)Proposal to
			 revise the hospital wage index classification systemThe Secretary of Health and Human Services,
			 taking into account the recommendations described in the report under paragraph
			 (1), shall include in the proposed rule published under section 1886(e)(5)(A)
			 of the Social Security Act (42 U.S.C. 1395ww(e)(5)(A)) for fiscal year 2009 one
			 or more proposals to revise the wage index adjustment applied under section
			 1886(d)(3)(E) of such Act (42 U.S.C. 1395ww(d)(3)(E)) for purposes of the
			 Medicare prospective payment system for inpatient hospital services. Such
			 proposal (or proposals) shall consider each of the following:
							(A)Problems
			 associated with the definition of labor markets for purposes of such wage index
			 adjustment.
							(B)The modification
			 or elimination of geographic reclassifications and other adjustments.
							(C)The use of Bureau
			 of Labor Statistics data, or other data or methodologies, to calculate relative
			 wages for each geographic area involved.
							(D)Minimizing
			 variations in wage index adjustments between and within Metropolitan
			 Statistical Areas and Statewide rural areas.
							(E)The feasibility of
			 applying all components of the proposal to other settings, including home
			 health agencies and skilled nursing facilities.
							(F)Methods to
			 minimize the volatility of wage index adjustments, while maintaining the
			 principle of budget neutrality in applying such adjustments.
							(G)The effect that
			 the implementation of the proposal would have on health care providers and on
			 each region of the country.
							(H)Methods for
			 implementing the proposal, including methods to phase-in such
			 implementation.
							(I)Issues relating to
			 occupational mix, such as staffing practices and any evidence on the effect on
			 quality of care and patient safety and any recommendations for alternative
			 calculations.
							(c)Elimination of
			 unnecessary reportSection
			 1886 of the Social Security Act (42 U.S.C. 1395ww) is amended—
						(1)in subsection
			 (d)(4)(C), by striking clause (iv); and
						(2)in subsection (e),
			 by striking paragraph (3).
						107.Payment for
			 brachytherapy
					(a)Extension of
			 payment ruleSection
			 1833(t)(16)(C) of the Social Security Act (42 U.S.C. 1395l(t)(16)(C)) is
			 amended by striking January 1, 2007 and inserting January
			 1, 2008.
					(b)Establishment of
			 separate payment groups
						(1)In
			 generalSection 1833(t)(2)(H) of such Act (42 U.S.C.
			 1395l(t)(2)(H)) is amended by inserting and for stranded and
			 non-stranded devices furnished on or after July 1, 2007 before the
			 period at the end.
						(2)ImplementationThe
			 Secretary of Health and Human Services may implement the amendment made by
			 paragraph (1) by program instruction or otherwise.
						108.Payment process
			 under the competitive acquisition program (CAP)
					(a)In
			 generalSection 1847B(a)(3) of the Social Security Act (42 U.S.C.
			 1395w-3b(a)(3)) is amended—
						(1)in subparagraph
			 (A)(iii), by striking and biologicals and all that follows and
			 inserting and biologicals shall be made only to such contractor upon
			 receipt of a claim for a drug or biological supplied by the contractor for
			 administration to a beneficiary.; and
						(2)by adding at the
			 end the following new subparagraph:

								(D)Post-payment
				review processThe Secretary
				shall establish (by program instruction or otherwise) a post-payment review
				process (which may include the use of statistical sampling) to assure that
				payment is made for a drug or biological under this section only if the drug or
				biological has been administered to a beneficiary. The Secretary shall recoup,
				offset, or collect any overpayments determined by the Secretary under such
				process.
								.
						(b)ConstructionNothing
			 in this section shall be construed as—
						(1)requiring the conduct of any additional
			 competition under subsection (b)(1) of section 1847B of the Social Security Act
			 (42 U.S.C. 1395w–3b); or
						(2)requiring any
			 additional process for elections by physicians under subsection (a)(1)(A)(ii)
			 of such section or additional selection by a selecting physician of a
			 contractor under subsection (a)(5) of such section.
						(c)Effective
			 dateThe amendments made by
			 subsection (a) shall apply to payment for drugs and biologicals supplied under
			 section 1847B of the Social Security Act (42 U.S.C. 1395w–3b)—
						(1)on or after April
			 1, 2007; and
						(2)on or after July 1, 2006, and before April
			 1, 2007, for claims that are unpaid as of April 1, 2007.
						109.Quality
			 reporting for hospital outpatient services and ambulatory surgical center
			 services
					(a)Outpatient
			 hospital services
						(1)In
			 generalSection 1833(t) of the Social Security Act (42 U.S.C.
			 1395l(t)) is amended—
							(A)in paragraph
			 (3)(C)(iv), by inserting subject to paragraph (17), after
			 For purposes of this subparagraph, ; and
							(B)by adding at the
			 end the following new paragraph:

									(17)Quality
				reporting
										(A)Reduction in
				update for failure to report
											(i)In
				generalFor purposes of
				paragraph (3)(C)(iv) for 2009 and each subsequent year, in the case of a
				subsection (d) hospital (as defined in section 1886(d)(1)(B)) that does not
				submit, to the Secretary in accordance with this paragraph, data required to be
				submitted on measures selected under this paragraph with respect to such a
				year, the OPD fee schedule increase factor under paragraph (3)(C)(iv) for such
				year shall be reduced by 2.0 percentage points.
											(ii)Non-cumulative
				applicationA reduction under
				this subparagraph shall apply only with respect to the year involved and the
				Secretary shall not take into account such reduction in computing the OPD fee
				schedule increase factor for a subsequent year.
											(B)Form and manner
				of submissionEach subsection (d) hospital shall submit data on
				measures selected under this paragraph to the Secretary in a form and manner,
				and at a time, specified by the Secretary for purposes of this
				paragraph.
										(C)Development of
				outpatient measures
											(i)In
				generalThe Secretary shall develop measures that the Secretary
				determines to be appropriate for the measurement of the quality of care
				(including medication errors) furnished by hospitals in outpatient settings and
				that reflect consensus among affected parties and, to the extent feasible and
				practicable, shall include measures set forth by one or more national consensus
				building entities.
											(ii)ConstructionNothing in this paragraph shall be
				construed as preventing the Secretary from selecting measures that are the same
				as (or a subset of) the measures for which data are required to be submitted
				under section 1886(b)(3)(B)(viii).
											(D)Replacement of
				measuresFor purposes of this paragraph, the Secretary may
				replace any measures or indicators in appropriate cases, such as where all
				hospitals are effectively in compliance or the measures or indicators have been
				subsequently shown not to represent the best clinical practice.
										(E)Availability of
				dataThe Secretary shall establish procedures for making data
				submitted under this paragraph available to the public. Such procedures shall
				ensure that a hospital has the opportunity to review the data that are to be
				made public with respect to the hospital prior to such data being made public.
				The Secretary shall report quality measures of process, structure, outcome,
				patients' perspectives on care, efficiency, and costs of care that relate to
				services furnished in outpatient settings in hospitals on the Internet website
				of the Centers for Medicare & Medicaid
				Services.
										.
							(2)Conforming
			 amendmentSection 1886(b)(3)(B)(viii)(III) of such Act (42 U.S.C.
			 1395ww(b)(3)(B)(viii)(III)) is amended by inserting (including
			 medication errors) after quality of care.
						(b)Application to
			 ambulatory surgical centersSection 1833(i) of such Act (42
			 U.S.C. 1935l(i)) is amended—
						(1)in
			 paragraph (2)(D), by redesignating clause (iv) as clause (v) and by inserting
			 after clause (iii) the following new clause:

								(iv) The Secretary may implement such
				system in a manner so as to provide for a reduction in any annual update for
				failure to report on quality measures in accordance with paragraph
				(7).
								;
				and
						(2)by adding at the
			 end the following new paragraph:

								(7)(A)For purposes of paragraph (2)(D)(iv), the
				Secretary may provide, in the case of an ambulatory surgical center that does
				not submit, to the Secretary in accordance with this paragraph, data required
				to be submitted on measures selected under this paragraph with respect to a
				year, any annual increase provided under the system established under paragraph
				(2)(D) for such year shall be reduced by 2.0 percentage points. A reduction
				under this subparagraph shall apply only with respect to the year involved and
				the Secretary shall not take into account such reduction in computing any
				annual increase factor for a subsequent year.
									(B)Except as the Secretary may otherwise
				provide, the provisions of subparagraphs (B), (C), (D), and (E) of paragraph
				(17) of section 1833(t) shall apply with respect to services of ambulatory
				surgical centers under this paragraph in a similar manner to the manner in
				which they apply under such paragraph and, for purposes of this subparagraph,
				any reference to a hospital, outpatient setting, or outpatient hospital
				services is deemed a reference to an ambulatory surgical center, the setting of
				such a center, or services of such a center,
				respectively.
									.
						(c)Effective
			 dateThe amendments made by this section shall apply to payment
			 for services furnished on or after January 1, 2009.
					110.Reporting of anemia
			 quality indicators for Medicare part B cancer anti-anemia drugs
					(a)In
			 generalSection 1842 of the Social Security Act (42 U.S.C. 1395u)
			 is amended by adding at the end the following new subsection:

							(u)Each request for payment, or bill
				submitted, for a drug furnished to an individual for the treatment of anemia in
				connection with the treatment of cancer shall include (in a form and manner
				specified by the Secretary) information on the hemoglobin or hematocrit levels
				for the
				individual.
							.
					(b)Effective
			 dateThe amendment made by subsection (a) shall apply to drugs
			 furnished on or after January 1, 2008. The Secretary of Health and Human
			 Services shall address the implementation of such amendment in the rulemaking
			 process under section 1848 of the Social Security Act (42 U.S.C. 1395w–4) for
			 payment for physicians’ services for 2008, consistent with the previous
			 sentence.
					111.Clarification of
			 hospice satellite designationNotwithstanding any other provision of law,
			 for purposes of calculating the hospice aggregate payment cap for 2004, 2005,
			 and 2006 for a hospice program under section 1814(i)(2)(A) of the Social
			 Security Act (42 U.S.C. 1395f(i)(2)(A)) for hospice care provided on or after
			 November 1, 2003, and before December 27, 2005, Medicare provider number
			 29–1511 is deemed to be a multiple location of Medicare provider number
			 29–1500.
				IIMedicare
			 Beneficiary Protections
				201.Extension of
			 exceptions process for Medicare therapy capsSection 1833(g)(5) of the Social Security
			 Act (42 U.S.C. 1395l(g)(5)) is amended by striking 2006 and
			 inserting the period beginning on January 1, 2006, and ending on
			 December 31, 2007,.
				202.Payment for
			 administration of part D vaccines
					(a)Transition for
			 2007Notwithstanding any other provision of law, in the case of a
			 vaccine that is a covered part D drug under section 1860D–2(e) of the Social
			 Security Act (42 U.S.C. 1395w–102(e)) and that is administered during 2007, the
			 administration of such vaccine shall be paid under part B of title XVIII of
			 such Act as if it were the administration of a vaccine described in section
			 1861(s)(10)(B) of such Act (42 U.S.C. 1395w(s)(10)(B)).
					(b)Administration
			 included in coverage of covered part D drugs beginning in
			 2008Section 1860D–2(e)(1) of the Social Security Act (42 U.S.C.
			 1395w–102(e)(1)) is amended, in the matter following subparagraph (B), by
			 inserting (and, for vaccines administered on or after January 1, 2008,
			 its administration) after Public Health Service
			 Act.
					203.OIG study of never
			 events
					(a)Study
						(1)In
			 generalThe Inspector General in the Department of Health and
			 Human Services shall conduct a study on—
							(A)incidences of
			 never events for Medicare beneficiaries, including types of such events and
			 payments by any party for such events;
							(B)the extent to
			 which the Medicare program paid, denied payment, or recouped payment for
			 services furnished in connection with such events and the extent to which
			 beneficiaries paid for such services; and
							(C)the administrative
			 processes of the Centers for Medicare & Medicaid Services to detect such
			 events and to deny or recoup payments for services furnished in connection with
			 such an event.
							(2)Conduct of
			 studyIn conducting the study under paragraph (1), the Inspector
			 General—
							(A)shall audit a representative sample of
			 claims and medical records of Medicare beneficiaries to identify never events
			 and any payment (or recoupment) for services furnished in connection with such
			 events;
							(B)may request access
			 to such claims and records from any Medicare contractor; and
							(C)shall not release
			 individually identifiable information or facility-specific information.
							(b)ReportNot later than 2 years after the date of
			 the enactment of this Act, the Inspector General shall submit a report to
			 Congress on the study conducted under this section. Such report shall include
			 recommendations for such legislation and administrative action, such as a
			 noncoverage policy or denial of payments, as the Inspector General determines
			 appropriate, including—
						(1)recommendations on
			 processes to identify never events and to deny or recoup payments for services
			 furnished in connection with such events; and
						(2)a
			 recommendation on a potential process (or processes) for public disclosure of
			 never events which—
							(A)will ensure
			 protection of patient privacy; and
							(B)will permit the
			 use of the disclosed information for a root cause analysis to inform the public
			 and the medical community about safety issues involved.
							(c)FundingOut of any funds in the Treasury not
			 otherwise appropriated, there are appropriated to the Inspector General of the
			 Department of Health and Human Services $3,000,000 to carry out this section,
			 to be available until January 1, 2010.
					(d)Never events
			 definedFor purposes of this section, the term never
			 event means an event that is listed and endorsed as a serious
			 reportable event by the National Quality Forum as of November 16, 2006.
					204.Medicare
			 medical home demonstration project
					(a)In
			 generalThe Secretary of Health and Human Services (in this
			 section referred to as the Secretary) shall establish under
			 title XVIII of the Social Security Act a medical home demonstration project (in
			 this section referred to as the project) to redesign the health
			 care delivery system to provide targeted, accessible, continuous and
			 coordinated, family-centered care to high-need populations and under
			 which—
						(1)care management
			 fees are paid to persons performing services as personal physicians; and
						(2)incentive payments
			 are paid to physicians participating in practices that provide services as a
			 medical home under subsection (d).
						For
			 purposes of this subsection, the term high-need population means
			 individuals with multiple chronic illnesses that require regular medical
			 monitoring, advising, or treatment.(b)Details
						(1)Duration;
			 scopeThe project shall operate during a period of three years
			 and shall include urban, rural, and underserved areas in a total of no more
			 than 8 States.
						(2)Encouraging
			 participation of small physician practicesThe project shall be
			 designed to include the participation of physicians in practices with fewer
			 than three full-time equivalent physicians, as well as physicians in larger
			 practices particularly in rural and underserved areas.
						(c)Personal
			 physician defined
						(1)In
			 generalFor purposes of this section, the term personal
			 physician means a physician (as defined in section 1861(r)(1) of the
			 Social Security Act (42 U.S.C. 1395x(r)(1)) who—
							(A)meets the
			 requirements described in paragraph (2); and
							(B)performs the
			 services described in paragraph (3).
							Nothing in
			 this paragraph shall be construed as preventing such a physician from being a
			 specialist or subspecialist for an individual requiring ongoing care for a
			 specific chronic condition or multiple chronic conditions (such as severe
			 asthma, complex diabetes, cardiovascular disease, rheumatologic disorder) or
			 for an individual with a prolonged illness.(2)RequirementsThe
			 requirements described in this paragraph for a personal physician are as
			 follows:
							(A)The physician is a
			 board certified physician who provides first contact and continuous care for
			 individuals under the physician’s care.
							(B)The physician has
			 the staff and resources to manage the comprehensive and coordinated health care
			 of each such individual.
							(3)Services
			 performedA personal physician shall perform or provide for the
			 performance of at least the following services:
							(A)Advocates for and
			 provides ongoing support, oversight, and guidance to implement a plan of care
			 that provides an integrated, coherent, cross-discipline plan for ongoing
			 medical care developed in partnership with patients and including all other
			 physicians furnishing care to the patient involved and other appropriate
			 medical personnel or agencies (such as home health agencies).
							(B)Uses
			 evidence-based medicine and clinical decision support tools to guide
			 decision-making at the point-of-care based on patient-specific factors.
							(C)Uses health information technology, that
			 may include remote monitoring and patient registries, to monitor and track the
			 health status of patients and to provide patients with enhanced and convenient
			 access to health care services.
							(D)Encourages patients to engage in the
			 management of their own health through education and support systems.
							(d)Medical home
			 definedFor purposes of this section, the term medical
			 home means a physician practice that—
						(1)is
			 in charge of targeting beneficiaries for participation in the project;
			 and
						(2)is responsible for—
							(A)providing safe and
			 secure technology to promote patient access to personal health
			 information;
							(B)developing a
			 health assessment tool for the individuals targeted; and
							(C)providing training
			 programs for personnel involved in the coordination of care.
							(e)Payment
			 mechanisms
						(1)Personal
			 physician care management feeUnder the project, the Secretary shall
			 provide for payment under section 1848 of the Social Security Act (42 U.S.C.
			 1395w–4) of a care management fee to personal physicians providing care
			 management under the project. Under such section and using the relative value
			 scale update committee (RUC) process under such section, the Secretary shall
			 develop a care management fee code for such payments and a value for such
			 code.
						(2)Medical home
			 sharing in savingsThe
			 Secretary shall provide for payment under the project of a medical home based
			 on the payment methodology applied to physician group practices under section
			 1866A of the Social Security Act (42 U.S.C. 1395cc–1). Under such methodology,
			 80 percent of the reductions in expenditures under title XVIII of the Social
			 Security Act resulting from participation of individuals that are attributable
			 to the medical home (as reduced by the total care managements fees paid to the
			 medical home under the project) shall be paid to the medical home. The amount
			 of such reductions in expenditures shall be determined by using assumptions
			 with respect to reductions in the occurrence of health complications,
			 hospitalization rates, medical errors, and adverse drug reactions.
						(3)SourcePayments
			 paid under the project shall be made from the Federal Supplementary Medical
			 Insurance Trust Fund under section 1841 of the Social Security Act (42 U.S.C.
			 1395t).
						(f)Evaluations and
			 reports
						(1)Annual interim
			 evaluations and reportsFor each year of the project, the
			 Secretary shall provide for an evaluation of the project and shall submit to
			 Congress, by a date specified by the Secretary, a report on the project and on
			 the evaluation of the project for each such year.
						(2)Final evaluation
			 and reportThe Secretary shall provide for an evaluation of the
			 project and shall submit to Congress, not later than one year after completion
			 of the project, a report on the project and on the evaluation of the
			 project.
						205.Medicare DRA
			 technical corrections
					(a)PACE
			 clarificationParagraph (7) of section 5302(c) of the Deficit
			 Reduction Act of 2005 (42 U.S.C. 1395eee note) is amended to read as
			 follows:

							(7)Appropriation
								(A)In
				generalOut of funds in the Treasury not otherwise appropriated,
				there are appropriated to the Secretary $10,000,000 to carry out this
				subsection for the period of fiscal years 2006 through 2010.
								(B)AvailabilityFunds
				appropriated under subparagraph (A) shall remain available for obligation
				through fiscal year
				2010.
								.
					(b)Miscellaneous
			 technical corrections
						(1)Correction of
			 margin (Section 5001)Section 1886(b)(3)(B) of the
			 Social Security Act (42 U.S.C.
			 1395ww(b)(3)(B)), as amended by section 5001(a) of the Deficit Reduction Act of
			 2005 (Public Law 109–171), is amended by moving clause (viii) (including
			 subclauses (I) through (VII) of such clause) 6 ems to the left.
						(2)Reference
			 correction (Section 5114)Section 5114(a)(2) of the Deficit
			 Reduction Act of 2005 (Public Law 109–171), in the matter preceding
			 subparagraph (A), is amended by striking 1842(b)(6)(F) of such Act (42
			 U.S.C. 1395u(b)(6)(F)) and inserting 1842(b)(6) of such Act (42
			 U.S.C. 1395u(b)(6)).
						(c)Effective
			 DateThe amendments made by this section shall take effect as if
			 included in the enactment of the Deficit Reduction Act of 2005 (Public Law
			 109–171).
					IIIMedicare Program
			 Integrity Efforts
				301.Offsetting
			 adjustment in Medicare Advantage Stabilization FundSection 1858(e)(2)(A)(i) of the Social
			 Security Act (42 U.S.C. 1395w-27a(e)(2)(A)(i)) is amended by striking
			 2007, and $10,000,000,000 and inserting
			 2012, and $3,500,000,000, respectively.
				302.Extension and
			 expansion of recovery audit contractor program under the Medicare Integrity
			 Program
					(a)In
			 generalSection 1893 of the Social Security Act (42 U.S.C.
			 1395ddd) is amended by adding at the end the following new subsection:

							(h)Use of recovery
				audit contractors
								(1)In
				generalUnder the Program,
				the Secretary shall enter into contracts with recovery audit contractors in
				accordance with this subsection for the purpose of identifying underpayments
				and overpayments and recouping overpayments under this title with respect to
				all services for which payment is made under part A or B. Under the
				contracts—
									(A)payment shall be made to such a contractor
				only from amounts recovered;
									(B)from such amounts
				recovered, payment—
										(i)shall be made on a
				contingent basis for collecting overpayments; and
										(ii)may be made in
				such amounts as the Secretary may specify for identifying underpayments;
				and
										(C)the Secretary shall retain a portion of the
				amounts recovered which shall be available to the program management account of
				the Centers for Medicare & Medicaid Services for purposes of activities
				conducted under the recovery audit program under this subsection.
									(2)Disposition of
				remaining recoveriesThe
				amounts recovered under such contracts that are not paid to the contractor
				under paragraph (1) or retained by the Secretary under paragraph (1)(C) shall
				be applied to reduce expenditures under parts A and B.
								(3)Nationwide
				coverageThe Secretary shall
				enter into contracts under paragraph (1) in a manner so as to provide for
				activities in all States under such a contract by not later than January 1,
				2010.
								(4)Audit and
				recovery periodsEach such
				contract shall provide that audit and recovery activities may be conducted
				during a fiscal year with respect to payments made under part A or B—
									(A)during such fiscal
				year; and
									(B)retrospectively
				(for a period of not more than 4 fiscal years prior to such fiscal
				year).
									(5)WaiverThe Secretary shall waive such provisions
				of this title as may be necessary to provide for payment of recovery audit
				contractors under this subsection in accordance with paragraph (1).
								(6)Qualifications of
				contractors
									(A)In
				generalThe Secretary may not
				enter into a contract under paragraph (1) with a recovery audit contractor
				unless the contractor has staff that has the appropriate clinical knowledge of,
				and experience with, the payment rules and regulations under this title or the
				contractor has, or will contract with, another entity that has such
				knowledgeable and experienced staff.
									(B)Ineligibility of
				certain contractorsThe
				Secretary may not enter into a contract under paragraph (1) with a recovery
				audit contractor to the extent the contractor is a fiscal intermediary under
				section 1816, a carrier under section 1842, or a medicare administrative
				contractor under section 1874A.
									(C)Preference for
				entities with demonstrated proficiencyIn awarding contracts to
				recovery audit contractors under paragraph (1), the Secretary shall give
				preference to those risk entities that the Secretary determines have
				demonstrated more than 3 years direct management experience and a proficiency
				for cost control or recovery audits with private insurers, health care
				providers, health plans, under the Medicaid program under title XIX, or under
				this title.
									(7)Construction
				relating to conduct of investigation of fraudA recovery of an
				overpayment to a individual or entity by a recovery audit contractor under this
				subsection shall not be construed to prohibit the Secretary or the Attorney
				General from investigating and prosecuting, if appropriate, allegations of
				fraud or abuse arising from such overpayment.
								(8)Annual
				reportThe Secretary shall
				annually submit to Congress a report on the use of recovery audit contractors
				under this subsection. Each such report shall include information on the
				performance of such contractors in identifying underpayments and overpayments
				and recouping overpayments, including an evaluation of the comparative
				performance of such contractors and savings to the program under this
				title.
								.
					(b)Access to
			 coordination of benefits contractor databaseThe Secretary of
			 Health and Human Services shall provide for access by recovery audit
			 contractors conducting audit and recovery activities under section 1893(h) of
			 the Social Security Act, as added by subsection (a), to the database of the
			 Coordination of Benefits Contractor of the Centers for Medicare & Medicaid
			 Services with respect to the audit and recovery periods described in paragraph
			 (4) of such section 1893(h).
					(c)Conforming
			 amendments to current demonstration projectSection 306 of the
			 Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public
			 Law 108–173; 117 Stat. 2256) is amended—
						(1)in subsection
			 (b)(2), by striking last for not longer than 3 years and
			 inserting continue until contracts are entered into under section
			 1893(h) of the Social Security Act; and
						(2)by striking
			 subsection (f).
						303.Funding for the
			 Health Care Fraud and Abuse Control Account
					(a)Departments of
			 Health and Human Services and Justice
						(1)In
			 generalSection 1817(k)(3)(A)(i) of the Social Security Act (42
			 U.S.C. 1395i(k)(3)(A)(i)) is amended—
							(A)in the matter
			 preceding subclause (I), by inserting until expended after
			 without further appropriation;
							(B)in subclause (II),
			 by striking and at the end;
							(C)in subclause
			 (III)—
								(i)by striking
			 for each fiscal year after fiscal year 2003 and inserting
			 for each of fiscal years 2004, 2005, and 2006; and
								(ii)by striking the
			 period at the end and inserting a semicolon; and
								(D)by adding at the
			 end the following new subclauses:

									(IV)for each of
				fiscal years 2007, 2008, 2009, and 2010, the limit under this clause for the
				preceding fiscal year, increased by the percentage increase in the consumer
				price index for all urban consumers (all items; United States city average)
				over the previous year; and
									(V)for each fiscal
				year after fiscal year 2010, the limit under this clause for fiscal year
				2010.
									.
							(2)Office of the
			 Inspector General of the Department of Health and Human
			 ServicesSection 1817(k)(3)(A)(ii) of such Act (42 U.S.C.
			 1395i(k)(3)(A)(ii)) is amended—
							(A)in subclause (VI),
			 by striking and at the end;
							(B)in subclause
			 (VII)—
								(i)by striking
			 for each fiscal year after fiscal year 2002 and inserting
			 for each of fiscal years 2003, 2004, 2005, and 2006; and
								(ii)by striking the
			 period at the end and inserting a semicolon; and
								(C)by adding at the
			 end the following new subclauses:

									(VIII)for fiscal year
				2007, not less than $160,000,000, increased by the percentage increase in the
				consumer price index for all urban consumers (all items; United States city
				average) over the previous year;
									(IX)for each of fiscal
				years 2008, 2009, and 2010, not less than the amount required under this clause
				for the preceding fiscal year, increased by the percentage increase in the
				consumer price index for all urban consumers (all items; United States city
				average) over the previous year; and
									(X)for each fiscal
				year after fiscal year 2010, not less than the amount required under this
				clause for fiscal year
				2010.
									.
							(b)Federal Bureau
			 of InvestigationSection 1817(k)(3)(B) of the Social Security Act
			 (42 U.S.C. 1395i(k)(3)(B)) is amended—
						(1)in the matter
			 preceding clause (i), by inserting until expended after
			 without further appropriation;
						(2)in clause (vi), by
			 striking and at the end;
						(3)in clause
			 (vii)—
							(A)by striking
			 for each fiscal year after fiscal year 2002 and inserting
			 for each of fiscal years 2003, 2004, 2005, and 2006; and
							(B)by striking the
			 period at the end and inserting a semicolon; and
							(4)by adding at the
			 end the following new clauses:

								(viii)for each of
				fiscal years 2007, 2008, 2009, and 2010, the amount to be appropriated under
				this subparagraph for the preceding fiscal year, increased by the percentage
				increase in the consumer price index for all urban consumers (all items; United
				States city average) over the previous year; and
								(ix)for each fiscal
				year after fiscal year 2010, the amount to be appropriated under this
				subparagraph for fiscal year
				2010.
								.
						304.Implementation
			 fundingFor purposes of
			 implementing the provisions of, and amendments made by, this title and titles I
			 and II of this division, other than section 203, the Secretary of Health and
			 Human Services shall provide for the transfer, in appropriate part from the
			 Federal Hospital Insurance Trust Fund established under section 1817 of the
			 Social Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical
			 Insurance Trust Fund established under section 1841 of such Act (42 U.S.C.
			 1395t), of $45,000,000 to the Centers for Medicare & Medicaid Services
			 Program Management Account for the period of fiscal years 2007 and 2008.
				IVMedicaid and Other
			 Health Provisions
				401.
			 Extension of Transitional Medical Assistance (TMA) and
			 abstinence education programActivities authorized by sections 510 and
			 1925 of the Social Security Act shall continue through June 30, 2007, in the
			 manner authorized for fiscal year 2006, notwithstanding section 1902(e)(1)(A)
			 of such Act, and out of any money in the Treasury of the United States not
			 otherwise appropriated, there are hereby appropriated such sums as may be
			 necessary for such purpose. Grants and payments may be made pursuant to this
			 authority through the third quarter of fiscal year 2007 at the level provided
			 for such activities through the third quarter of fiscal year 2006.
				402.Grants for
			 research on vaccine against Valley Fever
					(a)In
			 generalIn supporting
			 research on the development of vaccines against human diseases, the Secretary
			 of Health and Human Services shall make grants for the purpose of conducting
			 research toward the development of a vaccine against coccidioidomycosis
			 (commonly known as Valley Fever).
					(b)SunsetNo
			 grant may be made under subsection (a) on or after October 1, 2012. The
			 preceding sentence does not have any legal effect on payments under grants for
			 which amounts appropriated under subsection (c) were obligated prior to such
			 date.
					(c)Authorization of
			 appropriationsFor the purpose of making grants under subsection
			 (a), there are authorized to be appropriated $40,000,000 for the period of
			 fiscal years 2007 through 2012.
					403.Change in
			 threshold for Medicaid indirect hold harmless provision of broad-based health
			 care taxesSection
			 1903(w)(4)(C) of the Social Security
			 Act (42 U.S.C. 1396b(w)(4)(C)) is amended—
					(1)by inserting
			 (i) after (C); and
					(2)by adding at the
			 end the following:

							(ii)For purposes of clause (i), a
				determination of the existence of an indirect guarantee shall be made under
				paragraph (3)(i) of section 433.68(f) of title 42, Code of Federal Regulations,
				as in effect on November 1, 2006, except that for portions of fiscal years
				beginning on or after January 1, 2008, and before October 1, 2011, 5.5
				percent shall be substituted for 6 percent each place it
				appears.
							.
					404.DSH allotments
			 for fiscal year 2007 for Tennessee and HawaiiSection 1923(f)(6) of the
			 Social Security Act (42 U.S.C.
			 1396r–4(f)(6)) is amended to read as follows:

						(6)Allotment
				adjustments for fiscal year 2007
							(A)Tennessee
								(i)In
				generalOnly with respect to fiscal year 2007, the DSH allotment
				for Tennessee for such fiscal year, notwithstanding the table set forth in
				paragraph (2) or the terms of the TennCare Demonstration Project in effect for
				the State, shall be the greater of—
									(I)the amount that
				the Secretary determines is equal to the Federal medical assistance percentage
				component attributable to disproportionate share hospital payment adjustments
				for the demonstration year ending in 2006 that is reflected in the budget
				neutrality provision of the TennCare Demonstration Project; and
									(II)$280,000,000.
									(ii)Limitation on
				amount of payment adjustments eligible for federal financial
				participationPayment under section 1903(a) shall not be made to
				Tennessee with respect to the aggregate amount of any payment adjustments made
				under this section for hospitals in the State for fiscal year 2007 that is in
				excess of 30 percent of the DSH allotment for the State for such fiscal year
				determined pursuant to clause (i).
								(iii)State plan
				amendmentThe Secretary shall permit Tennessee to submit an
				amendment to its State plan under this title that describes the methodology to
				be used by the State to identify and make payments to disproportionate share
				hospitals, including children’s hospitals and institutions for mental diseases
				or other mental health facilities. The Secretary may not approve such plan
				amendment unless the methodology described in the amendment is consistent with
				the requirements under this section for making payment adjustments to
				disproportionate share hospitals. For purposes of demonstrating budget
				neutrality under the TennCare Demonstration Project, payment adjustments made
				pursuant to a State plan amendment approved in accordance with this
				subparagraph shall be considered expenditures under such project.
								(iv)Offset of
				federal share of payment adjustments for fiscal year 2007 against Essential
				Access Hospital supplemental pool payments under the TennCare Demonstration
				Project
									(I)
				The total amount of Essential Access Hospital supplemental pool
				payments that may be made under the TennCare Demonstration Project for fiscal
				year 2007 shall be reduced on a dollar for dollar basis by the amount of any
				payments made under section 1903(a) to Tennessee with respect to payment
				adjustments made under this section for hospitals in the State for such fiscal
				year.
									(II)The sum of the
				total amount of payments made under section 1903(a) to Tennessee with respect
				to payment adjustments made under this section for hospitals in the State for
				fiscal year 2007 and the total amount of Essential Access Hospital supplemental
				pool payments made under the TennCare Demonstration Project for such fiscal
				year shall not exceed the State's DSH allotment for such fiscal year
				established under clause (i).
									(B)Hawaii
								(i)In
				generalOnly with respect to fiscal year 2007, the DSH allotment
				for Hawaii for such fiscal year, notwithstanding the table set forth in
				paragraph (2), shall be $10,000,000.
								(ii)State plan
				amendmentThe Secretary shall permit Hawaii to submit an
				amendment to its State plan under this title that describes the methodology to
				be used by the State to identify and make payments to disproportionate share
				hospitals, including children’s hospitals and institutions for mental diseases
				or other mental health facilities. The Secretary may not approve such plan
				amendment unless the methodology described in the amendment is consistent with
				the requirements under this section for making payment adjustments to
				disproportionate share
				hospitals.
								.
				405.Certain Medicaid DRA
			 technical corrections
					(a)Technical
			 Corrections Relating to State Option for Alternative Premiums and Cost Sharing
			 (Sections 6041 Through 6043)
						(1)Clarification of
			 continued application of regular cost sharing rules for individuals with family
			 income not exceeding 100 percent of the poverty lineSection
			 1916A of the Social Security Act, as
			 inserted by section 6041(a) of the Deficit Reduction Act of 2005 and amended by
			 sections 6042 and 6043 of such Act, is amended—
							(A)in subsection
			 (a)(1)—
								(i)by
			 inserting but subject to paragraph (2), after
			 1902(a)(10)(B),; and
								(ii)by
			 inserting and non-emergency services furnished in a hospital emergency
			 department for which cost sharing may be imposed under subsection (e)
			 after (c);
								(B)by redesignating
			 paragraph (2) of subsection (a) as paragraph (3);
							(C)in subsection (a),
			 by inserting after paragraph (1) the following:

									(2)Exemption for
				individuals with family income not exceeding 100 percent of the poverty
				line
										(A)In
				generalParagraph (1) and subsection (d) shall not apply, and
				sections 1916 and 1902(a)(10)(B) shall continue to apply, in the case of an
				individual whose family income does not exceed 100 percent of the poverty line
				applicable to a family of the size involved.
										(B)Limit on
				aggregate cost sharingTo the extent cost sharing under
				subsection (c) and (e) or under section 1916 is imposed against individuals
				described in subparagraph (A), the limitation under subsection (b)(1)(B)(ii) on
				the total aggregate amount of cost sharing shall apply to such cost sharing for
				all individuals in a family described in subparagraph (A) in the same manner as
				such limitations apply to cost sharing and families described in subsection
				(b)(1)(B)(ii).
										;
							(D)in subsections
			 (c)(2)(C) and (e)(2)(C), by inserting under subsection (a)(2)(B)
			 or after cap on cost sharing applied; and
							(E)in subsection
			 (e)(2)(A), by inserting who is not described in subparagraph (B)
			 after subsection (b)(1).
							(2)Clarification of
			 treatment of non-preferred drug and non-emergency
			 cost-sharingSuch section is further amended—
							(A)in subsections
			 (b)(1) and (b)(2), by striking , subject to subsections (c)(2) and
			 (e)(2)(A);
							(B)in subsection
			 (c)(1), in the matter preceding subparagraph (A), by striking least (or
			 less) costly effective and inserting most (or more) cost
			 effective;
							(C)in subsection
			 (c)(1)(B), by striking otherwise be imposed under and inserting
			 be imposed under subsection (a) due to the application
			 of;
							(D)in subsection
			 (c)(2)(B), by striking otherwise not subject to cost sharing due to the
			 application of subsection (b)(3)(B) and inserting not subject to
			 cost sharing under subsection (a) due to the application of paragraph
			 (1)(B);
							(E)in subsection
			 (e)(2)(A)—
								(i)by
			 amending the heading to read as follows: Individuals with family income between 100 and
			 150 percent of the poverty line.—; and
								(ii)by
			 striking under subsection (b)(1) and inserting under
			 subsection (b)(1)(B)(ii);
								(F)in subsection
			 (e)(2)(B), by striking who is otherwise not subject to cost sharing
			 under subsection (b)(3) and inserting described in subsection
			 (a)(2)(A) or who is not subject to cost sharing under subsection (b)(3)(B) with
			 respect to non-emergency services described in paragraph (1) and
							(G)in subsection
			 (e)(2)(C), by inserting or section 1916 after subsection
			 (a).
							(3)Clarification of
			 cost sharing rules applicable to disabled children provided medical assistance
			 under the eligibility category added by the family opportunity
			 actSuch section is further amended—
							(A)in subsection
			 (a)(1), in the second sentence, by striking section 1916(g) and
			 inserting subsection (g) or (i) of section 1916; and
							(B)in subsection
			 (b)(3)—
								(i)in
			 subparagraph (A), by adding at the end the following:

										(vi)Disabled children
				who are receiving medical assistance by virtue of the application of sections
				1902(a)(10)(A)(ii)(XIX) and 1902(cc).
										;
				and
								(ii)in
			 subparagraph (B), by adding at the end the following:

										(ix)Services
				furnished to disabled children who are receiving medical assistance by virtue
				of the application of sections 1902(a)(10)(A)(ii)(XIX) and
				1902(cc).
										.
								(4)Correction of
			 iv–b referencesSuch section is further amended in subsection
			 (b)(3)—
							(A)in subparagraph
			 (A)(i), by striking aid or assistance is made available under part B of
			 title IV to children in foster care and inserting child welfare
			 services are made available under part B of title IV on the basis of being a
			 child in foster care; and
							(B)in subparagraph
			 (B)(i), by striking aid or assistance is made available under part B of
			 title IV to children in foster care and inserting child welfare
			 services are made available under part B of title IV on the basis of being a
			 child in foster care or.
							(5)Non-emergency
			 servicesSection 1916A(e)(4)(A) of the
			 Social Security Act, as added by
			 section 6043(a) of the Deficit Reduction Act of 2005, is amended by striking
			 the physician determines.
						(6)Effective
			 dateThe amendments made by this subsection shall take effect as
			 if included in the amendments made by sections 6041(a) of the Deficit Reduction
			 Act of 2005, except that insofar as such amendments are to, or relate to,
			 subsection (c) or (e) of section 1916A of the Social Security Act, such amendments shall take
			 effect as if included in the amendments made by section 6042 or 6043,
			 respectively, of the Deficit Reduction Act of 2005.
						(b)Clarifying
			 Treatment of Certain Annuities (Section
			 6012)
						(1)In
			 GeneralSection 1917(c)(1)(F)(i) of the
			 Social Security Act (42 U.S.C.
			 1396p(c)(1)(F)(i)), as added by section 6012(b) of the Deficit Reduction Act of
			 2005, is amended by striking annuitant and inserting
			 institutionalized individual.
						(2)Effective
			 dateThe amendment made by paragraph (1) shall be effective as if
			 included in the enactment of section 6012 of the Deficit Reduction Act of
			 2005.
						(c)Additional
			 Miscellaneous Technical Corrections
						(1)Documentation
			 (section 6036)
							(A)In
			 generalEffective as if included in the amendment made by section
			 6036(a)(2) of the Deficit Reduction Act of 2005, section 1903(x) of the
			 Social Security Act (42 U.S.C.
			 1396b(x)), as inserted by such section 6036(a)(2), is amended—
								(i)in
			 paragraph (1), by striking (i)(23) and inserting
			 (i)(22);
								(ii)in
			 paragraph (2)—
									(I)in
			 the matter preceding subparagraph (A), by striking alien and
			 inserting individual declaring to be a citizen or national of the United
			 States;
									(II)by striking
			 subparagraph (B) and inserting the following:

											(B)and is
				receiving—
												(i)disability
				insurance benefits under section 223 or monthly insurance benefits under
				section 202 based on such individual's disability (as defined in section
				223(d)); or
												(ii)supplemental
				security income benefits under title
				XVI;
												;
									(III)in subparagraph
			 (C)—
										(aa)by
			 striking other; and
										(bb)by
			 striking had and inserting has;
										(IV)by redesignating
			 subparagraph (C) as subparagraph (D); and
									(V)by
			 inserting after subparagraph (B) the following new subparagraph:

											(C)and with respect
				to whom—
												(i)child welfare
				services are made available under part B of title IV on the basis of being a
				child in foster care; or
												(ii)adoption or
				foster care assistance is made available under part E of title IV;
				or
												; and
									(iii)in
			 paragraph (3)(C)(iii), by striking I–97 and inserting
			 I–197.
								(B)Assurance of
			 State foster care agency verification of citizenship or legal status
								(i)State plan
			 amendmentSection 471(a) of the Social Security Act (42 U.S.C.
			 671(a)) is amended—
									(I)in paragraph (25),
			 by striking and at the end;
									(II)in paragraph
			 (26)(C), by striking the period at the end and inserting ; and;
			 and
									(III)by adding at the
			 end the following:

											(27)provides that,
				with respect to any child in foster care under the responsibility of the State
				under this part or part B and without regard to whether foster care maintenance
				payments are made under section 472 on behalf of the child, the State has in
				effect procedures for verifying the citizenship or immigration status of the
				child.
											.
									(ii)Inclusion in
			 reviews of child and family services programsSection 1123A(b)(2)
			 of the Social Security Act (42 U.S.C. 1320a–2a(b)(2)) is amended by inserting
			 (which shall include determining whether the State program is in
			 conformity with the requirement of section 471(a)(27)) after
			 review.
								(iii)Effective
			 dateThe amendments made by this subparagraph shall take effect
			 on the date that is 6 months after the date of the enactment of this
			 Act.
								(2)Miscellaneous
			 technical corrections
							(A)Effective as if
			 included in the enactment of the Deficit Reduction Act of 2005 (Public Law
			 109–171), the following sections of such Act are amended as follows:
								(i)Section 5114(a)(2)
			 is amended by striking section 1842(b)(6)(F) of such Act (42 U.S.C.
			 1395u(b)(6)(F)) and inserting section 1842(b)(6) of such Act (42
			 U.S.C. 1395u(b)(6)).
								(ii)Section
			 6003(b)(2) is amended, by striking subsection (k) and inserting
			 subsection (k)(1).
								(iii)Sections
			 6031(b), 6032(b), and 6035(c) are each amended by striking section
			 6035(e) and inserting section 6034(e).
								(iv)Section 6034(b)
			 is amended by striking section 6033(a) and inserting
			 section 6032(a).
								(v)Section 6036 is
			 amended—
									(I)in subsection (b),
			 by striking section 1903(z) and inserting section
			 1903(x); and
									(II)in subsection
			 (c), by striking (i)(23) and inserting
			 (i)(22).
									(B)Effective as if
			 included in the amendment made by section 6015(a)(1) of the Deficit Reduction
			 Act of 2005, section 1919(c)(5)(A)(i)(II) of the Social Security Act (42 U.S.C.
			 1396r(c)(5)(A)(i)(II)) is amended by striking clause (v) and
			 inserting subparagraph (B)(v).
							COther
			 Provisions
			IGulf
			 of Mexico Energy Security
				101.Short
			 titleThis title may be cited
			 as the Gulf of Mexico Energy Security Act of 2006.
				102.DefinitionsIn this title:
					(1)181
			 areaThe term 181 Area means the area identified in
			 map 15, page 58, of the Proposed Final Outer Continental Shelf Oil and Gas
			 Leasing Program for 1997–2002, dated August 1996, of the Minerals Management
			 Service, available in the Office of the Director of the Minerals Management
			 Service, excluding the area offered in OCS Lease Sale 181, held on December 5,
			 2001.
					(2)181 south
			 areaThe term 181 South Area means any area—
						(A)located—
							(i)south of the 181
			 Area;
							(ii)west of the
			 Military Mission Line; and
							(iii)in
			 the Central Planning Area;
							(B)excluded from the
			 Proposed Final Outer Continental Shelf Oil and Gas Leasing Program for
			 1997–2002, dated August 1996, of the Minerals Management Service; and
						(C)included in the
			 areas considered for oil and gas leasing, as identified in map 8, page 37 of
			 the document entitled Draft Proposed Program Outer Continental Shelf Oil
			 and Gas Leasing Program 2007–2012, dated February 2006.
						(3)Bonus or royalty
			 creditThe term bonus or royalty credit means a
			 legal instrument or other written documentation, or an entry in an account
			 managed by the Secretary, that may be used in lieu of any other monetary
			 payment for—
						(A)a bonus bid for a
			 lease on the outer Continental Shelf; or
						(B)a royalty due on
			 oil or gas production from any lease located on the outer Continental
			 Shelf.
						(4)Central planning
			 areaThe term Central Planning Area means the
			 Central Gulf of Mexico Planning Area of the outer Continental Shelf, as
			 designated in the document entitled Draft Proposed Program Outer
			 Continental Shelf Oil and Gas Leasing Program 2007–2012, dated February
			 2006.
					(5)Eastern planning
			 areaThe term Eastern Planning Area means the
			 Eastern Gulf of Mexico Planning Area of the outer Continental Shelf, as
			 designated in the document entitled Draft Proposed Program Outer
			 Continental Shelf Oil and Gas Leasing Program 2007–2012, dated February
			 2006.
					(6)2002–2007
			 planning areaThe term 2002–2007 planning area means
			 any area—
						(A)located in—
							(i)the
			 Eastern Planning Area, as designated in the Proposed Final Outer Continental
			 Shelf Oil and Gas Leasing Program 2002–2007, dated April 2002, of the Minerals
			 Management Service;
							(ii)the
			 Central Planning Area, as designated in the Proposed Final Outer Continental
			 Shelf Oil and Gas Leasing Program 2002–2007, dated April 2002, of the Minerals
			 Management Service; or
							(iii)the Western
			 Planning Area, as designated in the Proposed Final Outer Continental Shelf Oil
			 and Gas Leasing Program 2002–2007, dated April 2002, of the Minerals Management
			 Service; and
							(B)not located
			 in—
							(i)an
			 area in which no funds may be expended to conduct offshore preleasing, leasing,
			 and related activities under sections 104 through 106 of the Department of the
			 Interior, Environment, and Related Agencies Appropriations Act, 2006 (Public
			 Law 109–54; 119 Stat. 521) (as in effect on August 2, 2005);
							(ii)an
			 area withdrawn from leasing under the Memorandum on Withdrawal of
			 Certain Areas of the United States Outer Continental Shelf from Leasing
			 Disposition, from 34 Weekly Comp. Pres. Doc. 1111, dated June 12, 1998;
			 or
							(iii)the 181 Area or
			 181 South Area.
							(7)Gulf producing
			 stateThe term Gulf producing State means each of
			 the States of Alabama, Louisiana, Mississippi, and Texas.
					(8)Military mission
			 lineThe term Military Mission Line means the
			 north-south line at 86°41′ W. longitude.
					(9)Qualified outer
			 continental shelf revenues
						(A)In
			 generalThe term qualified outer Continental Shelf
			 revenues means—
							(i)in
			 the case of each of fiscal years 2007 through 2016, all rentals, royalties,
			 bonus bids, and other sums due and payable to the United States from leases
			 entered into on or after the date of enactment of this Act for—
								(I)areas in the 181
			 Area located in the Eastern Planning Area; and
								(II)the 181 South
			 Area; and
								(ii)in
			 the case of fiscal year 2017 and each fiscal year thereafter, all rentals,
			 royalties, bonus bids, and other sums due and payable to the United States
			 received on or after October 1, 2016, from leases entered into on or after the
			 date of enactment of this Act for—
								(I)the 181
			 Area;
								(II)the 181 South
			 Area; and
								(III)the 2002–2007
			 planning area.
								(B)ExclusionsThe
			 term qualified outer Continental Shelf revenues does not
			 include—
							(i)revenues from the
			 forfeiture of a bond or other surety securing obligations other than royalties,
			 civil penalties, or royalties taken by the Secretary in-kind and not sold;
			 or
							(ii)revenues
			 generated from leases subject to section 8(g) of the Outer Continental Shelf
			 Lands Act (43 U.S.C. 1337(g)).
							(10)Coastal
			 political subdivisionThe term coastal political
			 subdivision means a political subdivision of a Gulf producing State any
			 part of which political subdivision is—
						(A)within the coastal
			 zone (as defined in section 304 of the Coastal
			 Zone Management Act of 1972 (16 U.S.C. 1453)) of the Gulf producing
			 State as of the date of enactment of this Act; and
						(B)not more than 200
			 nautical miles from the geographic center of any leased tract.
						(11)SecretaryThe
			 term Secretary means the Secretary of the Interior.
					103.Offshore oil
			 and gas leasing in 181 Area and 181 south Area of Gulf of Mexico
					(a)181 Area Lease
			 SaleExcept as provided in section 104, the Secretary shall offer
			 the 181 Area for oil and gas leasing pursuant to the Outer Continental Shelf
			 Lands Act (43 U.S.C. 1331 et seq.) as soon as practicable, but not later than 1
			 year, after the date of enactment of this Act.
					(b)181 South Area
			 Lease SaleThe Secretary shall offer the 181 South Area for oil
			 and gas leasing pursuant to the Outer Continental Shelf Lands Act (43 U.S.C.
			 1331 et seq.) as soon as practicable after the date of enactment of this
			 Act.
					(c)Leasing
			 ProgramThe 181 Area and 181 South Area shall be offered for
			 lease under this section notwithstanding the omission of the 181 Area or the
			 181 South Area from any outer Continental Shelf leasing program under section
			 18 of the Outer Continental Shelf Lands Act (43 U.S.C. 1344).
					(d)Conforming
			 AmendmentSection 105 of the Department of the Interior,
			 Environment, and Related Agencies Appropriations Act, 2006 (Public Law 109–54;
			 119 Stat. 522) is amended by inserting (other than the 181 South Area
			 (as defined in section 102 of the Gulf of Mexico Energy Security Act of
			 2006)) after lands located outside Sale 181.
					104.Moratorium on
			 oil and gas leasing in certain areas of Gulf of Mexico
					(a)In
			 GeneralEffective during the period beginning on the date of
			 enactment of this Act and ending on June 30, 2022, the Secretary shall not
			 offer for leasing, preleasing, or any related activity—
						(1)any area east of
			 the Military Mission Line in the Gulf of Mexico;
						(2)any area in the
			 Eastern Planning Area that is within 125 miles of the coastline of the State of
			 Florida; or
						(3)any area in the
			 Central Planning Area that is—
							(A)within—
								(i)the
			 181 Area; and
								(ii)100
			 miles of the coastline of the State of Florida; or
								(B)(i)outside the 181
			 Area;
								(ii)east of the western edge of the
			 Pensacola Official Protraction Diagram (UTM X coordinate 1,393,920 (NAD 27
			 feet)); and
								(iii)within 100 miles of the coastline
			 of the State of Florida.
								(b)Military Mission
			 LineNotwithstanding subsection (a), the United States reserves
			 the right to designate by and through the Secretary of Defense, with the
			 approval of the President, national defense areas on the outer Continental
			 Shelf pursuant to section 12(d) of the Outer Continental Shelf Lands Act (43
			 U.S.C. 1341(d)).
					(c)Exchange of
			 Certain Leases
						(1)In
			 generalThe Secretary shall permit any person that, as of the
			 date of enactment of this Act, has entered into an oil or gas lease with the
			 Secretary in any area described in paragraph (2) or (3) of subsection (a) to
			 exchange the lease for a bonus or royalty credit that may only be used in the
			 Gulf of Mexico.
						(2)Valuation of
			 existing leaseThe amount of the bonus or royalty credit for a
			 lease to be exchanged shall be equal to—
							(A)the amount of the
			 bonus bid; and
							(B)any rental paid
			 for the lease as of the date the lessee notifies the Secretary of the decision
			 to exchange the lease.
							(3)Revenue
			 distributionNo bonus or royalty credit may be used under this
			 subsection in lieu of any payment due under, or to acquire any interest in, a
			 lease subject to the revenue distribution provisions of section 8(g) of the
			 Outer Continental Shelf Lands Act (43 U.S.C. 1337(g)).
						(4)RegulationsNot
			 later than 1 year after the date of enactment of this Act, the Secretary shall
			 promulgate regulations that shall provide a process for—
							(A)notification to
			 the Secretary of a decision to exchange an eligible lease;
							(B)issuance of bonus
			 or royalty credits in exchange for relinquishment of the existing lease;
							(C)transfer of the
			 bonus or royalty credit to any other person; and
							(D)determining the
			 proper allocation of bonus or royalty credits to each lease interest
			 owner.
							105.Disposition of
			 qualified outer Continental Shelf revenues from 181 Area, 181 south Area, and
			 2002–2007 planning areas of Gulf of Mexico
					(a)In
			 GeneralNotwithstanding section 9 of the Outer Continental Shelf
			 Lands Act (43 U.S.C. 1338) and subject to the other provisions of this section,
			 for each applicable fiscal year, the Secretary of the Treasury shall
			 deposit—
						(1)50 percent of
			 qualified outer Continental Shelf revenues in the general fund of the Treasury;
			 and
						(2)50 percent of
			 qualified outer Continental Shelf revenues in a special account in the Treasury
			 from which the Secretary shall disburse—
							(A)75 percent to Gulf
			 producing States in accordance with subsection (b); and
							(B)25 percent to
			 provide financial assistance to States in accordance with section 6 of the
			 Land and Water Conservation Fund Act of
			 1965 (16 U.S.C. 460l–8), which shall be considered income to the
			 Land and Water Conservation Fund for purposes of section 2 of that Act (16
			 U.S.C. 460l–5).
							(b)Allocation Among
			 Gulf Producing States and Coastal Political Subdivisions
						(1)Allocation among
			 gulf producing states for fiscal years 2007 through 2016
							(A)In
			 generalSubject to subparagraph (B), effective for each of fiscal
			 years 2007 through 2016, the amount made available under subsection (a)(2)(A)
			 shall be allocated to each Gulf producing State in amounts (based on a formula
			 established by the Secretary by regulation) that are inversely proportional to
			 the respective distances between the point on the coastline of each Gulf
			 producing State that is closest to the geographic center of the applicable
			 leased tract and the geographic center of the leased tract.
							(B)Minimum
			 allocationThe amount allocated to a Gulf producing State each
			 fiscal year under subparagraph (A) shall be at least 10 percent of the amounts
			 available under subsection (a)(2)(A).
							(2)Allocation among
			 gulf producing states for fiscal year 2017 and thereafter
							(A)In
			 generalSubject to subparagraphs (B) and (C), effective for
			 fiscal year 2017 and each fiscal year thereafter—
								(i)the
			 amount made available under subsection (a)(2)(A) from any lease entered into
			 within the 181 Area or the 181 South Area shall be allocated to each Gulf
			 producing State in amounts (based on a formula established by the Secretary by
			 regulation) that are inversely proportional to the respective distances between
			 the point on the coastline of each Gulf producing State that is closest to the
			 geographic center of the applicable leased tract and the geographic center of
			 the leased tract; and
								(ii)the
			 amount made available under subsection (a)(2)(A) from any lease entered into
			 within the 2002–2007 planning area shall be allocated to each Gulf producing
			 State in amounts that are inversely proportional to the respective distances
			 between the point on the coastline of each Gulf producing State that is closest
			 to the geographic center of each historical lease site and the geographic
			 center of the historical lease site, as determined by the Secretary.
								(B)Minimum
			 allocationThe amount allocated to a Gulf producing State each
			 fiscal year under subparagraph (A) shall be at least 10 percent of the amounts
			 available under subsection (a)(2)(A).
							(C)Historical lease
			 sites
								(i)In
			 generalSubject to clause (ii), for purposes of subparagraph
			 (A)(ii), the historical lease sites in the 2002–2007 planning area shall
			 include all leases entered into by the Secretary for an area in the Gulf of
			 Mexico during the period beginning on October 1, 1982 (or an earlier date if
			 practicable, as determined by the Secretary), and ending on December 31,
			 2015.
								(ii)AdjustmentEffective
			 January 1, 2022, and every 5 years thereafter, the ending date described in
			 clause (i) shall be extended for an additional 5 calendar years.
								(3)Payments to
			 coastal political subdivisions
							(A)In
			 generalThe Secretary shall pay 20 percent of the allocable share
			 of each Gulf producing State, as determined under paragraphs (1) and (2), to
			 the coastal political subdivisions of the Gulf producing State.
							(B)AllocationThe
			 amount paid by the Secretary to coastal political subdivisions shall be
			 allocated to each coastal political subdivision in accordance with
			 subparagraphs (B), (C), and (E) of section 31(b)(4) of the Outer Continental
			 Shelf Lands Act (43 U.S.C. 1356a(b)(4)).
							(c)TimingThe
			 amounts required to be deposited under paragraph (2) of subsection (a) for the
			 applicable fiscal year shall be made available in accordance with that
			 paragraph during the fiscal year immediately following the applicable fiscal
			 year.
					(d)Authorized
			 Uses
						(1)In
			 generalSubject to paragraph (2), each Gulf producing State and
			 coastal political subdivision shall use all amounts received under subsection
			 (b) in accordance with all applicable Federal and State laws, only for 1 or
			 more of the following purposes:
							(A)Projects and
			 activities for the purposes of coastal protection, including conservation,
			 coastal restoration, hurricane protection, and infrastructure directly affected
			 by coastal wetland losses.
							(B)Mitigation of
			 damage to fish, wildlife, or natural resources.
							(C)Implementation of
			 a federally-approved marine, coastal, or comprehensive conservation management
			 plan.
							(D)Mitigation of the
			 impact of outer Continental Shelf activities through the funding of onshore
			 infrastructure projects.
							(E)Planning
			 assistance and the administrative costs of complying with this section.
							(2)LimitationNot
			 more than 3 percent of amounts received by a Gulf producing State or coastal
			 political subdivision under subsection (b) may be used for the purposes
			 described in paragraph (1)(E).
						(e)AdministrationAmounts
			 made available under subsection (a)(2) shall—
						(1)be made available,
			 without further appropriation, in accordance with this section;
						(2)remain available
			 until expended; and
						(3)be in addition to
			 any amounts appropriated under—
							(A)the Outer
			 Continental Shelf Lands Act (43 U.S.C. 1331 et seq.);
							(B)the
			 Land and Water Conservation Fund Act of
			 1965 (16 U.S.C. 460l–4 et seq.); or
							(C)any other
			 provision of law.
							(f)Limitations on
			 Amount of Distributed Qualified Outer Continental Shelf Revenues
						(1)In
			 generalSubject to paragraph (2), the total amount of qualified
			 outer Continental Shelf revenues made available under subsection (a)(2) shall
			 not exceed $500,000,000 for each of fiscal years 2016 through 2055.
						(2)ExpendituresFor
			 the purpose of paragraph (1), for each of fiscal years 2016 through 2055,
			 expenditures under subsection (a)(2) shall be net of receipts from that fiscal
			 year from any area in the 181 Area in the Eastern Planning Area and the 181
			 South Area.
						(3)Pro rata
			 reductionsIf paragraph (1) limits the amount of qualified outer
			 Continental Shelf revenue that would be paid under subparagraphs (A) and (B) of
			 subsection (a)(2)—
							(A)the Secretary
			 shall reduce the amount of qualified outer Continental Shelf revenue provided
			 to each recipient on a pro rata basis; and
							(B)any remainder of
			 the qualified outer Continental Shelf revenues shall revert to the general fund
			 of the Treasury.
							IISurface Mining
			 Control and Reclamation Act Amendments of 2006
				200.Short
			 titleThis title may be cited
			 as the Surface Mining Control and
			 Reclamation Act Amendments of 2006.
				AMining control and
			 reclamation
					201.Abandoned Mine
			 Reclamation Fund and purposes
						(a)In
			 generalSection 401 of the
			 Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1231) is
			 amended—
							(1)in
			 subsection (c)—
								(A)by striking
			 paragraphs (2) and (6); and
								(B)by redesignating
			 paragraphs (3), (4), and (5) and paragraphs (7) through (13) as paragraphs (2)
			 through (11), respectively;
								(2)by
			 striking subsection (d) and inserting the following:

									(d)Availability of
				moneys; no fiscal year limitation
										(1)In
				generalMoneys from the fund for expenditures under subparagraphs
				(A) through (D) of section 402(g)(3) shall be available only when appropriated
				for those subparagraphs.
										(2)No fiscal year
				limitationAppropriations described in paragraph (1) shall be
				made without fiscal year limitation.
										(3)Other
				purposesMoneys from the fund shall be available for all other
				purposes of this title without prior appropriation as provided in subsection
				(f).
										;
							(3)in subsection
			 (e)—
								(A)in the second
			 sentence, by striking the needs of such fund and inserting
			 achieving the purposes of the transfers under section 402(h);
			 and
								(B)in the third
			 sentence, by inserting before the period the following: for the purpose
			 of the transfers under section 402(h); and
								(4)by adding at the
			 end the following:

									(f)General
				Limitation on Obligation Authority
										(1)In
				generalFrom amounts deposited into the fund under subsection
				(b), the Secretary shall distribute during each fiscal year beginning after
				September 30, 2007, an amount determined under paragraph (2).
										(2)Amounts
											(A)For fiscal years
				2008 through 2022For each of fiscal years 2008 through 2022, the
				amount distributed by the Secretary under this subsection shall be equal
				to—
												(i)the amounts
				deposited into the fund under paragraphs (1), (2), and (4) of subsection (b)
				for the preceding fiscal year that were allocated under paragraphs (1) and (5)
				of section 402(g); plus
												(ii)the amount needed
				for the adjustment under section 402(g)(8) for the current fiscal year.
												(B)Fiscal years
				2023 and thereafterFor fiscal year 2023 and each fiscal year
				thereafter, to the extent that funds are available, the Secretary shall
				distribute an amount equal to the amount distributed under subparagraph (A)
				during fiscal year 2022.
											(3)Distribution
											(A)In
				generalExcept as provided in subparagraph (B), for each fiscal
				year, of the amount to be distributed to States and Indian tribes pursuant to
				paragraph (2), the Secretary shall distribute—
												(i)the amounts
				allocated under paragraph (1) of section 402(g), the amounts allocated under
				paragraph (5) of section 402(g), and any amount reallocated under section
				411(h)(3) in accordance with section 411(h)(2), for grants to States and Indian
				tribes under section 402(g)(5); and
												(ii)the amounts
				allocated under section 402(g)(8).
												(B)ExclusionBeginning
				on October 1, 2007, certified States shall be ineligible to receive amounts
				under section 402(g)(1).
											(4)AvailabilityAmounts
				in the fund available to the Secretary for obligation under this subsection
				shall be available until expended.
										(5)Addition
											(A)In
				generalSubject to subparagraph (B), the amount distributed under
				this subsection for each fiscal year shall be in addition to the amount
				appropriated from the fund during the fiscal year.
											(B)ExceptionsNotwithstanding
				paragraph (3), the amount distributed under this subsection for the first 4
				fiscal years beginning on and after October 1, 2007, shall be equal to the
				following percentage of the amount otherwise required to be distributed:
												(i)50 percent in
				fiscal year 2008.
												(ii)50 percent in
				fiscal year 2009.
												(iii)75 percent in
				fiscal year 2010.
												(iv)75 percent in
				fiscal year
				2011.
												.
							(b)Conforming
			 amendmentSection 712(b) of the Surface Mining Control and
			 Reclamation Act of 1977 (30 U.S.C. 1302(b)) is amended by striking
			 section 401(c)(11) and inserting section
			 401(c)(9).
						202.Reclamation
			 fee
						(a)Amounts
							(1)Fiscal years
			 2008–2012Effective October
			 1, 2007, section 402(a) of the Surface Mining Control and Reclamation Act of
			 1977 (30 U.S.C. 1232(a)) is amended—
								(A)by striking
			 35 and inserting 31.5;
								(B)by striking
			 15 and inserting 13.5; and
								(C)by striking
			 10 cents and inserting 9 cents.
								(2)Fiscal years
			 2013–2021Effective October 1, 2012, section 402(a) of the
			 Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1232(a)) (as
			 amended by paragraph (1)) is amended—
								(A)by striking
			 31.5 and inserting 28;
								(B)by striking
			 13.5 and inserting 12; and
								(C)by striking
			 9 cents and inserting 8 cents.
								(b)DurationEffective
			 September 30, 2007, section 402(b) of the Surface Mining Control and
			 Reclamation Act of 1977 (30 U.S.C. 1232(b)) (as amended by section 7007 of the
			 Emergency Supplemental Appropriations Act for Defense, the Global War on
			 Terror, and Hurricane Recovery, 2006 (Public Law 109–234; 120 Stat. 484)) is
			 amended by striking September 30, 2007 and all that follows
			 through the end of the sentence and inserting September 30,
			 2021..
						(c)Allocation of
			 fundsSection 402(g) of the Surface Mining Control and
			 Reclamation Act of 1977 (30 U.S.C. 1232(g)) is amended—
							(1)in
			 paragraph (1)(D)—
								(A)by inserting
			 (except for grants awarded during fiscal years 2008, 2009, and 2010 to
			 the extent not expended within 5 years) after this
			 paragraph; and
								(B)by striking
			 in any area under paragraph (2), (3), (4), or (5) and inserting
			 under paragraph (5);
								(2)by striking
			 paragraph (2) and inserting:

									(2)In making the grants referred to in
				paragraph (1)(C) and the grants referred to in paragraph (5), the Secretary
				shall ensure strict compliance by the States and Indian tribes with the
				priorities described in section 403(a) until a certification is made under
				section
				411(a).
									;
							(3)in paragraph
			 (3)—
								(A)in the matter
			 preceding subparagraph (A), by striking paragraphs (2) and and
			 inserting paragraph;
								(B)in subparagraph
			 (A), by striking 401(c)(11) and inserting
			 401(c)(9); and
								(C)by adding at the
			 end the following:

										(E)For the purpose of paragraph
				(8).
										;
								(4)in paragraph
			 (5)—
								(A)by inserting
			 (A) after (5);
								(B)in the first
			 sentence, by striking 40 and inserting 60;
								(C)in the last
			 sentence, by striking Funds allocated or expended by the Secretary under
			 paragraphs (2), (3), or (4) and inserting Funds made available
			 under paragraph (3) or (4); and
								(D)by adding at the
			 end the following:

										(B)Any amount that is reallocated and
				available under section 411(h)(3) shall be in addition to amounts that are
				allocated under subparagraph (A).
										;
				and
								(5)by striking
			 paragraphs (6) through (8) and inserting the following:

									(6)(A)Any State with an
				approved abandoned mine reclamation program pursuant to section 405 may receive
				and retain, without regard to the 3-year limitation referred to in paragraph
				(1)(D), up to 30 percent of the total of the grants made annually to the State
				under paragraphs (1) and (5) if those amounts are deposited into an acid mine
				drainage abatement and treatment fund established under State law, from which
				amounts (together with all interest earned on the amounts) are expended by the
				State for the abatement of the causes and the treatment of the effects of acid
				mine drainage in a comprehensive manner within qualified hydrologic units
				affected by coal mining practices.
										(B)In this paragraph, the term
				qualified hydrologic unit means a hydrologic unit—
											(i)in which the water quality has been
				significantly affected by acid mine drainage from coal mining practices in a
				manner that adversely impacts biological resources; and
											(ii)that contains land and water that
				are—
												(I)eligible pursuant to section 404
				and include any of the priorities described in section 403(a); and
												(II)the subject of expenditures by the
				State from the forfeiture of bonds required under section 509 or from other
				States sources to abate and treat acid mine drainage.
												(7)In complying with the priorities
				described in section 403(a), any State or Indian tribe may use amounts
				available in grants made annually to the State or tribe under paragraphs (1)
				and (5) for the reclamation of eligible land and water described in section
				403(a)(3) before the completion of reclamation projects under paragraphs (1)
				and (2) of section 403(a) only if the expenditure of funds for the reclamation
				is done in conjunction with the expenditure before, on, or after the date of
				enactment of the Surface Mining Control and
				Reclamation Act Amendments of 2006 of funds for reclamation
				projects under paragraphs (1) and (2) of section 403(a).
									(8)(A)In making funds
				available under this title, the Secretary shall ensure that the grant awards
				total not less than $3,000,000 annually to each State and each Indian tribe
				having an approved abandoned mine reclamation program pursuant to section 405
				and eligible land and water pursuant to section 404, so long as an allocation
				of funds to the State or tribe is necessary to achieve the priorities stated in
				paragraphs (1) and (2) of section 403(a).
										(B)Notwithstanding any other provision
				of law, this paragraph applies to the States of Tennessee and
				Missouri.
										.
							(d)Transfers of
			 interest earned by abandoned mine reclamation fundSection
			 402 of the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1232)
			 is amended by striking subsection (h) and inserting the following:

								(h)Transfers of
				interest earned by fund
									(1)In
				general
										(A)Transfers to
				combined benefit fundAs soon
				as practicable after the beginning of fiscal year 2007 and each fiscal year
				thereafter, and before making any allocation with respect to the fiscal year
				under subsection (g), the Secretary shall use an amount not to exceed the
				amount of interest that the Secretary estimates will be earned and paid to the
				fund during the fiscal year to transfer to the Combined Benefit Fund such
				amounts as are estimated by the trustees of such fund to offset the amount of
				any deficit in net assets in the Combined Benefit Fund as of October 1, 2006,
				and to make the transfer described in paragraph (2)(A).
										(B)Transfers to
				1992 and 1993 plansAs soon as practicable after the beginning of
				fiscal year 2008 and each fiscal year thereafter, and before making any
				allocation with respect to the fiscal year under subsection (g), the Secretary
				shall use an amount not to exceed the amount of interest that the Secretary
				estimates will be earned and paid to the fund during the fiscal year (reduced
				by the amount used under subparagraph (A)) to make the transfers described in
				paragraphs (2)(B) and (2)(C).
										(2)Transfers
				describedThe transfers referred to in paragraph (1) are the
				following:
										(A)United mine
				workers of america combined benefit fundA transfer to the United
				Mine Workers of America Combined Benefit Fund equal to the amount that the
				trustees of the Combined Benefit Fund estimate will be expended from the fund
				for the fiscal year in which the transfer is made, reduced by—
											(i)the amount the
				trustees of the Combined Benefit Fund estimate the Combined Benefit Fund will
				receive during the fiscal year in—
												(I)required premiums;
				and
												(II)payments paid by
				Federal agencies in connection with benefits provided by the Combined Benefit
				Fund; and
												(ii)the amount the
				trustees of the Combined Benefit Fund estimate will be expended during the
				fiscal year to provide health benefits to beneficiaries who are unassigned
				beneficiaries solely as a result of the application of section 9706(h)(1) of
				the Internal Revenue Code of 1986, but only to the extent that such amount does
				not exceed the amounts described in subsection (i)(1)(A) that the Secretary
				estimates will be available to pay such estimated expenditures.
											(B)United mine
				workers of America 1992 benefit planA transfer to the United
				Mine Workers of America 1992 Benefit Plan, in an amount equal to the difference
				between—
											(i)the amount that
				the trustees of the 1992 UMWA Benefit Plan estimate will be expended from the
				1992 UMWA Benefit Plan during the next calendar year to provide the benefits
				required by the 1992 UMWA Benefit Plan on the date of enactment of this
				subparagraph; minus
											(ii)the amount that
				the trustees of the 1992 UMWA Benefit Plan estimate the 1992 UMWA Benefit Plan
				will receive during the next calendar year in—
												(I)required monthly
				per beneficiary premiums, including the amount of any security provided to the
				1992 UMWA Benefit Plan that is available for use in the provision of benefits;
				and
												(II)payments paid by
				Federal agencies in connection with benefits provided by the 1992 UMWA benefit
				plan.
												(C)Multiemployer
				health benefit planA transfer to the Multiemployer Health
				Benefit Plan established after July 20, 1992, by the parties that are the
				settlors of the 1992 UMWA Benefit Plan referred to in subparagraph (B)
				(referred to in this subparagraph and subparagraph (D) as the
				Plan), in an amount equal to the excess (if any) of—
											(i)the amount that
				the trustees of the Plan estimate will be expended from the Plan during the
				next calendar year, to provide benefits no greater than those provided by the
				Plan as of December 31, 2006; over
											(ii)the amount that
				the trustees estimated the Plan will receive during the next calendar year in
				payments paid by Federal agencies in connection with benefits provided by the
				Plan.
											Such
				excess shall be calculated by taking into account only those beneficiaries
				actually enrolled in the Plan as of December 31, 2006, who are eligible to
				receive benefits under the Plan on the first day of the calendar year for which
				the transfer is made.(D)Individuals
				considered enrolledFor purposes of subparagraph (C), any
				individual who was eligible to receive benefits from the Plan as of the date of
				enactment of this subsection, even though benefits were being provided to the
				individual pursuant to a settlement agreement approved by order of a bankruptcy
				court entered on or before September 30, 2004, will be considered to be
				actually enrolled in the Plan and shall receive benefits from the Plan
				beginning on December 31, 2006.
										(3)AdjustmentIf,
				for any fiscal year, the amount of a transfer under subparagraph (A), (B), or
				(C) of paragraph (2) is more or less than the amount required to be transferred
				under that subparagraph, the Secretary shall appropriately adjust the amount
				transferred under that subparagraph for the next fiscal year.
									(4)Additional
				amounts
										(A)Previously
				credited interestNotwithstanding any other provision of law, any
				interest credited to the fund that has not previously been transferred to the
				Combined Benefit Fund referred to in paragraph (2)(A) under this
				section—
											(i)shall be held in
				reserve by the Secretary until such time as necessary to make the payments
				under subparagraphs (A) and (B) of subsection (i)(1), as described in clause
				(ii); and
											(ii)in the event that
				the amounts described in subsection (i)(1) are insufficient to make the maximum
				payments described in subparagraphs (A) and (B) of subsection (i)(1), shall be
				used by the Secretary to supplement the payments so that the maximum amount
				permitted under those paragraphs is paid.
											(B)Previously
				allocated amountsAll amounts allocated under subsection (g)(2)
				before the date of enactment of this subparagraph for the program described in
				section 406, but not appropriated before that date, shall be available to the
				Secretary to make the transfers described in paragraph (2).
										(C)Adequacy of
				previously credited interestThe Secretary shall—
											(i)consult with the
				trustees of the plans described in paragraph (2) at reasonable intervals;
				and
											(ii)notify Congress
				if a determination is made that the amounts held in reserve under subparagraph
				(A) are insufficient to meet future requirements under subparagraph
				(A)(ii).
											(D)Additional
				reserve amountsIn addition to amounts held in reserve under
				subparagraph (A), there is authorized to be appropriated such sums as may be
				necessary for transfer to the fund to carry out the purposes of subparagraph
				(A)(ii).
										(E)Inapplicability
				of capThe limitation described in subsection (i)(3)(A) shall not
				apply to payments made from the reserve fund under this paragraph.
										(5)Limitations
										(A)Availability of
				funds for next fiscal yearThe Secretary may make transfers under
				subparagraphs (B) and (C) of paragraph (2) for a calendar year only if the
				Secretary determines, using actuarial projections provided by the trustees of
				the Combined Benefit Fund referred to in paragraph (2)(A), that amounts will be
				available under paragraph (1), after the transfer, for the next fiscal year for
				making the transfer under paragraph (2)(A).
										(B)Rate of
				contributions of obligors
											(i)In
				general
												(I)RateA transfer under paragraph (2)(C) shall not
				be made for a calendar year unless the persons that are obligated to contribute
				to the plan referred to in paragraph (2)(C) on the date of the transfer are
				obligated to make the contributions at rates that are no less than those in
				effect on the date which is 30 days before the date of enactment of this
				subsection.
												(II)ApplicationThe contributions described in subclause
				(I) shall be applied first to the provision of benefits to those plan
				beneficiaries who are not described in paragraph (2)(C)(ii).
												(ii)Initial
				contributions
												(I)In
				generalFrom the date of
				enactment of the Surface Mining Control and Reclamation Act Amendments of 2006
				through December 31, 2010, the persons that, on the date of enactment of that
				Act, are obligated to contribute to the plan referred to in paragraph (2)(C)
				shall be obligated, collectively, to make contributions equal to the amount
				described in paragraph (2)(C), less the amount actually transferred due to the
				operation of subparagraph (C).
												(II)First calendar
				yearCalendar year 2006 is the first calendar year for which
				contributions are required under this clause.
												(III)Amount of
				contribution for 2006Except as provided in subclause (IV), the
				amount described in paragraph (2)(C) for calendar year 2006 shall be calculated
				as if paragraph (2)(C) had been in effect during 2005.
												(IV)LimitationThe
				contributions required under this clause for calendar year 2006 shall not
				exceed the amount necessary for solvency of the plan described in paragraph
				(2)(C), measured as of December 31, 2006 and taking into account all assets
				held by the plan as of that date.
												(iii)DivisionThe
				collective annual contribution obligation required under clause (ii) shall be
				divided among the persons subject to the obligation, and applied uniformly,
				based on the hours worked for which contributions referred to in clause (i)
				would be owed.
											(C)Phase-in of
				transfersFor each of calendar years 2008 through 2010, the
				transfers required under subparagraphs (B) and (C) of paragraph (2) shall equal
				the following amounts:
											(i)For
				calendar year 2008, the Secretary shall make transfers equal to 25 percent of
				the amounts that would otherwise be required under subparagraphs (B) and (C) of
				paragraph (2).
											(ii)For calendar year
				2009, the Secretary shall make transfers equal to 50 percent of the amounts
				that would otherwise be required under subparagraphs (B) and (C) of paragraph
				(2).
											(iii)For calendar
				year 2010, the Secretary shall make transfers equal to 75 percent of the
				amounts that would otherwise be required under subparagraphs (B) and (C) of
				paragraph (2).
											(i)Funding
									(1)In
				generalSubject to paragraph (3), out of any funds in the
				Treasury not otherwise appropriated, the Secretary of the Treasury shall
				transfer to the plans described in subsection (h)(2) such sums as are necessary
				to pay the following amounts:
										(A)To the Combined Fund (as defined in section
				9701(a)(5) of the Internal Revenue Code of 1986 and referred to in this
				paragraph as the Combined Fund), the amount that the trustees of
				the Combined Fund estimate will be expended from premium accounts maintained by
				the Combined Fund for the fiscal year to provide benefits for beneficiaries who
				are unassigned beneficiaries solely as a result of the application of section
				9706(h)(1) of the Internal Revenue Code of 1986, subject to the following
				limitations:
											(i)For fiscal year 2008, the amount paid under
				this subparagraph shall equal—
												(I)the amount
				described in subparagraph (A); minus
												(II)the amounts
				required under section 9706(h)(3)(A) of the Internal Revenue Code of
				1986.
												(ii)For fiscal year
				2009, the amount paid under this subparagraph shall equal—
												(I)the amount
				described in subparagraph (A); minus
												(II)the amounts
				required under section 9706(h)(3)(B) of the Internal Revenue Code of
				1986.
												(iii)For fiscal year
				2010, the amount paid under this subparagraph shall equal—
												(I)the amount
				described in subparagraph (A); minus
												(II)the amounts
				required under section 9706(h)(3)(C) of the Internal Revenue Code of
				1986.
												(B)On certification by
				the trustees of any plan described in subsection (h)(2) that the amount
				available for transfer by the Secretary pursuant to this section (determined
				after application of any limitation under subsection (h)(5)) is less than the
				amount required to be transferred, to the plan the amount necessary to meet the
				requirement of subsection (h)(2).
										(C)To the Combined Fund, $9,000,000 on October
				1, 2007, $9,000,000 on October 1, 2008, and $9,000,000 on October 1, 2009
				(which amounts shall not be exceeded) to provide a refund of any premium (as
				described in section 9704(a) of the Internal Revenue Code of 1986) paid on or
				before September 7, 2000, to the Combined Fund, plus interest on the premium
				calculated at the rate of 7.5 percent per year, on a proportional basis and to
				be paid not later than 60 days after the date on which each payment is received
				by the Combined Fund, to those signatory operators (to the extent that the
				Combined Fund has not previously returned the premium amounts to the
				operators), or any related persons to the operators (as defined in section
				9701(c) of the Internal Revenue Code of 1986), or their heirs, successors, or
				assigns who have been denied the refunds as the result of final judgments or
				settlements if—
											(i)prior to the date of enactment of this
				paragraph, the signatory operator (or any related person to the
				operator)—
												(I)had all of its beneficiary assignments made
				under section 9706 of the Internal Revenue Code of 1986 voided by the
				Commissioner of the Social Security Administration; and
												(II)was subject to a
				final judgment or final settlement of litigation adverse to a claim by the
				operator that the assignment of beneficiaries under section 9706 of the
				Internal Revenue Code of 1986 was unconstitutional as applied to the operator;
				and
												(ii)on or before
				September 7, 2000, the signatory operator (or any related person to the
				operator) had paid to the Combined Fund any premium amount that had not been
				refunded.
											(2)Payments to
				States and Indian tribesSubject to paragraph (3), out of any
				funds in the Treasury not otherwise appropriated, the Secretary of the Treasury
				shall transfer to the Secretary of the Interior for distribution to States and
				Indian tribes such sums as are necessary to pay amounts described in paragraphs
				(1)(A) and (2)(A) of section 411(h).
									(3)Limitations
										(A)CapThe
				total amount transferred under this subsection for any fiscal year shall not
				exceed $490,000,000.
										(B)Insufficient
				amountsIn a case in which the amount required to be transferred
				without regard to this paragraph exceeds the maximum annual limitation in
				subparagraph (A), the Secretary shall adjust the transfers of funds so
				that—
											(i)each transfer for
				the fiscal year is a percentage of the amount described;
											(ii)the amount is
				determined without regard to subsection (h)(5)(A); and
											(iii)the percentage
				transferred is the same for all transfers made under this subsection for the
				fiscal year.
											(4)Availability of
				fundsFunds shall be transferred under paragraph (1) and (2)
				beginning in fiscal year 2008 and each fiscal year thereafter, and shall remain
				available until
				expended.
									.
						203.Objectives of
			 FundSection 403 of the
			 Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1233) is
			 amended—
						(1)in subsection
			 (a)—
							(A)in paragraph
			 (1)—
								(i)by
			 striking (1) the protection and inserting the following:

										(1)(A)the
				protection;
											;
								(ii)in
			 subparagraph (A) (as designated by clause (i)), by striking general
			 welfare,; and
								(iii)by
			 adding at the end the following:

										(B)the restoration of land and water
				resources and the environment that—
											(i)have been degraded by the adverse
				effects of coal mining practices; and
											(ii)are adjacent to a site that has
				been or will be remediated under subparagraph
				(A);
											;
								(B)in paragraph
			 (2)—
								(i)by
			 striking (2) the protection and inserting the following:

										(2)(A)the
				protection
											;
								(ii)in
			 subparagraph (A) (as designated by clause (i), by striking health,
			 safety, and general welfare and inserting health and
			 safety; and
								(iii)by
			 adding at the end the following:

										(B)the restoration of land and water
				resources and the environment that—
											(i)have been degraded by the adverse
				effects of coal mining practices; and
											(ii)are adjacent to a site that has
				been or will be remediated under subparagraph (A);
				and
											;
								(C)in paragraph (3),
			 by striking the semicolon at the end and inserting a period; and
							(D)by striking
			 paragraphs (4) and (5);
							(2)in subsection
			 (b)—
							(A)by striking the
			 subsection heading and inserting Water supply restoration.—; and
							(B)in paragraph (1),
			 by striking up to 30 percent of the; and
							(3)in the second
			 sentence of subsection (c), by inserting , subject to the approval of
			 the Secretary, after amendments.
						204.Reclamation of
			 rural land
						(a)AdministrationSection 406(h) of the Surface Mining
			 Control and Reclamation Act of 1977 (30 U.S.C. 1236(h)) is amended by striking
			 Soil Conservation Service and inserting Natural Resources
			 Conservation Service.
						(b)Authorization of
			 appropriations for carrying out rural land reclamationSection
			 406 of the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1236)
			 is amended by adding at the end the following:

								(i)There are
				authorized to be appropriated to the Secretary of Agriculture, from amounts in
				the Treasury other than amounts in the fund, such sums as may be necessary to
				carry out this
				section.
								.
						205.LiensSection 408(a) of the Surface Mining Control
			 and Reclamation Act of 1977 (30 U.S.C. 1238) is amended in the last sentence by
			 striking who owned the surface prior to May 2, 1977, and.
					206.CertificationSection 411 of the Surface Mining Control
			 and Reclamation Act of 1977 (30 U.S.C. 1240a) is amended—
						(1)in subsection
			 (a)—
							(A)by inserting
			 (1) before the first sentence; and
							(B)by adding at the
			 end the following:

									(2)(A)The Secretary may, on
				the initiative of the Secretary, make the certification referred to in
				paragraph (1) on behalf of any State or Indian tribe referred to in paragraph
				(1) if on the basis of the inventory referred to in section 403(c) all
				reclamation projects relating to the priorities described in section 403(a) for
				eligible land and water pursuant to section 404 in the State or tribe have been
				completed.
										(B)The Secretary shall only make the
				certification after notice in the Federal Register and opportunity for public
				comment.
										;
				and
							(2)by
			 adding at the end the following:

								(h)Payments to
				States and Indian tribes
									(1)In
				general
										(A)Payments
											(i)In
				generalNotwithstanding section 401(f)(3)(B), from funds referred
				to in section 402(i)(2), the Secretary shall make payments to States or Indian
				tribes for the amount due for the aggregate unappropriated amount allocated to
				the State or Indian tribe under subparagraph (A) or (B) of section
				402(g)(1).
											(ii)Conversion as
				equivalent paymentsAmounts allocated under subparagraphs (A) or
				(B) of section 402(g)(1) shall be reallocated to the allocation established in
				section 402(g)(5) in amounts equivalent to payments made to States or Indian
				tribes under this paragraph.
											(B)Amount
				dueIn this paragraph, the term amount due means the
				unappropriated amount allocated to a State or Indian tribe before October 1,
				2007, under subparagraph (A) or (B) of section 402(g)(1).
										(C)SchedulePayments
				under subparagraph (A) shall be made in 7 equal annual installments, beginning
				with fiscal year 2008.
										(D)Use of
				funds
											(i)Certified states
				and indian tribesA State or Indian tribe that makes a
				certification under subsection (a) in which the Secretary concurs shall use any
				amounts provided under this paragraph for the purposes established by the State
				legislature or tribal council of the Indian tribe, with priority given for
				addressing the impacts of mineral development.
											(ii)Uncertified
				States and Indian tribesA State or Indian tribe that has not
				made a certification under subsection (a) in which the Secretary has concurred
				shall use any amounts provided under this paragraph for the purposes described
				in section 403.
											(2)Subsequent State
				and Indian tribe share for certified States and Indian tribes
										(A)In
				generalNotwithstanding section 401(f)(3)(B), from funds referred
				to in section 402(i)(2), the Secretary shall pay to each certified State or
				Indian tribe an amount equal to the sum of the aggregate unappropriated amount
				allocated on or after October 1, 2007, to the certified State or Indian tribe
				under subparagraph (A) or (B) of section 402(g)(1).
										(B)Certified State
				or Indian tribe definedIn this paragraph the term
				certified State or Indian tribe means a State or Indian tribe for
				which a certification is made under subsection (a) in which the Secretary
				concurs.
										(3)Manner of
				payment
										(A)In
				generalSubject to
				subparagraph (B), payments to States or Indian tribes under this subsection
				shall be made without regard to any limitation in section 401(d) and
				concurrently with payments to States under that section.
										(B)Initial
				paymentsThe first 3 payments made to any State or Indian tribe
				shall be reduced to 25 percent, 50 percent, and 75 percent, respectively, of
				the amounts otherwise required under paragraph (2)(A).
										(C)InstallmentsAmounts
				withheld from the first 3 annual installments as provided under subparagraph
				(B) shall be paid in 2 equal annual installments beginning with fiscal year
				2018.
										(4)Reallocation
										(A)In
				generalThe amount allocated to any State or Indian tribe under
				subparagraph (A) or (B) of section 402(g)(1) that is paid to the State or
				Indian tribe as a result of a payment under paragraph (1) or (2) shall be
				reallocated and available for grants under section 402(g)(5).
										(B)AllocationThe
				grants shall be allocated based on the amount of coal historically produced
				before August 3, 1977, in the same manner as under section
				402(g)(5).
										.
						207.Remining
			 incentivesTitle IV of the
			 Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1231 et seq.) is
			 amended by adding at the following:

							415.Remining
				incentives
								(a)In
				generalNotwithstanding any
				other provision of this Act, the Secretary may, after opportunity for public
				comment, promulgate regulations that describe conditions under which amounts in
				the fund may be used to provide incentives to promote remining of eligible land
				under section 404 in a manner that leverages the use of amounts from the fund
				to achieve more reclamation with respect to the eligible land than would be
				achieved without the incentives.
								(b)RequirementsAny
				regulations promulgated under subsection (a) shall specify that the incentives
				shall apply only if the Secretary determines, with the concurrence of the State
				regulatory authority referred to in title V, that, without the incentives, the
				eligible land would not be likely to be remined and reclaimed.
								(c)Incentives
									(1)In
				generalIncentives that may be considered for inclusion in the
				regulations promulgated under subsection (a) include, but are not limited
				to—
										(A)a rebate or waiver
				of the reclamation fees required under section 402(a); and
										(B)the use of amounts
				in the fund to provide financial assurance for remining operations in lieu of
				all or a portion of the performance bonds required under section 509.
										(2)Limitations
										(A)UseA
				rebate or waiver under paragraph (1)(A) shall be used only for operations
				that—
											(i)remove or
				reprocess abandoned coal mine waste; or
											(ii)conduct remining
				activities that meet the priorities specified in paragraph (1) or (2) of
				section 403(a).
											(B)AmountThe
				amount of a rebate or waiver provided as an incentive under paragraph (1)(A) to
				remine or reclaim eligible land shall not exceed the estimated cost of
				reclaiming the eligible land under this
				section.
										.
					208.Extension of
			 limitation on application of prohibition on issuance of permitSection 510(e) of the Surface Mining Control
			 and Reclamation Act of 1977 (30 U.S.C. 1260(e)) is amended by striking the last
			 sentence.
					209.Tribal
			 regulation of surface coal mining and reclamation operations
						(a)In
			 generalSection 710 of the Surface Mining Control and Reclamation
			 Act of 1977 (30 U.S.C. 1300) is amended by adding at the end the
			 following:

								(j)Tribal
				regulatory authority
									(1)Tribal
				regulatory programs
										(A)In
				generalNotwithstanding any other provision of law, an Indian
				tribe may apply for, and obtain the approval of, a tribal program under section
				503 regulating in whole or in part surface coal mining and reclamation
				operations on reservation land under the jurisdiction of the Indian tribe using
				the procedures of section 504(e).
										(B)References to
				StateFor purposes of this subsection and the implementation and
				administration of a tribal program under title V, any reference to a
				State in this Act shall be considered to be a reference to a
				tribe.
										(2)Conflicts of
				interest
										(A)In
				generalThe fact that an individual is a member of an Indian
				tribe does not in itself constitute a violation of section 201(f).
										(B)Employees of
				tribal regulatory authorityAny employee of a tribal regulatory
				authority shall not be eligible for a per capita distribution of any proceeds
				from coal mining operations conducted on Indian reservation lands under this
				Act.
										(3)Sovereign
				immunityTo receive primary regulatory authority under section
				504(e), an Indian tribe shall waive sovereign immunity for purposes of section
				520 and paragraph (4).
									(4)Judicial
				review
										(A)Civil
				actions
											(i)In
				generalAfter exhausting all tribal remedies with respect to a
				civil action arising under a tribal program approved under section 504(e), an
				interested party may file a petition for judicial review of the civil action in
				the United States circuit court for the circuit in which the surface coal
				mining operation named in the petition is located.
											(ii)Scope of
				review
												(I)Questions of
				lawThe United States circuit court shall review de novo any
				questions of law under clause (i).
												(II)Findings of
				factThe United States circuit court shall review findings of
				fact under clause (i) using a clearly erroneous standard.
												(B)Criminal
				actionsAny criminal action brought under section 518 with
				respect to surface coal mining or reclamation operations on Indian reservation
				lands shall be brought in—
											(i)the United States
				District Court for the District of Columbia; or
											(ii)the United States
				district court in which the criminal activity is alleged to have
				occurred.
											(5)Grants
										(A)In
				generalExcept as provided in subparagraph (B), grants for
				developing, administering, and enforcing tribal programs approved in accordance
				with section 504(e) shall be provided to an Indian tribe in accordance with
				section 705.
										(B)ExceptionNotwithstanding
				subparagraph (A), the Federal share of the costs of developing, administering,
				and enforcing an approved tribal program shall be 100 percent.
										(6)ReportNot
				later than 18 months after the date on which a tribal program is approved under
				subsection (e) of section 504, the Secretary shall submit to the appropriate
				committees of Congress a report, developed in cooperation with the applicable
				Indian tribe, on the tribal program that includes a recommendation of the
				Secretary on whether primary regulatory authority under that subsection should
				be expanded to include additional Indian
				lands.
									.
						(b)Conforming
			 amendmentSection 710(i) of the Surface Mining Control and
			 Reclamation Act of 1977 (30 U.S.C. 1300(i)) is amended in the first sentence by
			 striking , except and all that follows through section
			 503.
						BCoal Industry
			 Retiree Health Benefit Act
					211.Certain related
			 persons and successors in interest relieved of liability if premiums
			 prepaid
						(a)Combined Benefit
			 FundSection 9704 of the Internal Revenue Code of 1986 (relating
			 to liability of assigned operators) is amended by adding at the end the
			 following new subsection:

								(j)Prepayment of
				premium liability
									(1)In
				generalIf—
										(A)a payment meeting
				the requirements of paragraph (3) is made to the Combined Fund by or on behalf
				of—
											(i)any
				assigned operator to which this subsection applies, or
											(ii)any related
				person to any assigned operator described in clause (i), and
											(B)the common parent
				of the controlled group of corporations described in paragraph (2)(B) is
				jointly and severally liable for any premium under this section which (but for
				this subsection) would be required to be paid by the assigned operator or
				related person,
										then such
				common parent (and no other person) shall be liable for such premium.(2)Assigned
				operators to which subsection applies
										(A)In
				generalThis subsection shall apply to any assigned operator
				if—
											(i)the
				assigned operator (or a related person to the assigned operator)—
												(I)made contributions
				to the 1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan for employment
				during the period covered by the 1988 agreement; and
												(II)is not a 1988
				agreement operator,
												(ii)the assigned
				operator (and all related persons to the assigned operator) are not actively
				engaged in the production of coal as of July 1, 2005, and
											(iii)the assigned
				operator was, as of July 20, 1992, a member of a controlled group of
				corporations described in subparagraph (B).
											(B)Controlled group
				of corporationsA controlled group of corporations is described
				in this subparagraph if the common parent of such group is a corporation the
				shares of which are publicly traded on a United States exchange.
										(C)Coordination
				with repeal of assignmentsA person shall not fail to be treated
				as an assigned operator to which this subsection applies solely because the
				person ceases to be an assigned operator by reason of section 9706(h)(1) if the
				person otherwise meets the requirements of this subsection and is liable for
				the payment of premiums under section 9706(h)(3).
										(D)Controlled
				groupFor purposes of this subsection, the term controlled
				group of corporations has the meaning given such term by section
				52(a).
										(3)RequirementsA
				payment meets the requirements of this paragraph if—
										(A)the amount of the
				payment is not less than the present value of the total premium liability under
				this chapter with respect to the Combined Fund of the assigned operators or
				related persons described in paragraph (1) or their assignees, as determined by
				the operator's or related person's enrolled actuary (as defined in section
				7701(a)(35)) using actuarial methods and assumptions each of which is
				reasonable and which are reasonable in the aggregate, as determined by such
				enrolled actuary;
										(B)such enrolled
				actuary files with the Secretary of Labor a signed actuarial report
				containing—
											(i)the date of the
				actuarial valuation applicable to the report; and
											(ii)a
				statement by the enrolled actuary signing the report that, to the best of the
				actuary's knowledge, the report is complete and accurate and that in the
				actuary’s opinion the actuarial assumptions used are in the aggregate
				reasonably related to the experience of the operator and to reasonable
				expectations; and
											(C)90 calendar days
				have elapsed after the report required by subparagraph (B) is filed with the
				Secretary of Labor, and the Secretary of Labor has not notified the assigned
				operator in writing that the requirements of this paragraph have not been
				satisfied.
										(4)Use of
				prepaymentThe Combined Fund shall—
										(A)establish and
				maintain an account for each assigned operator or related person by, or on
				whose behalf, a payment described in paragraph (3) was made,
										(B)credit such
				account with such payment (and any earnings thereon), and
										(C)use all amounts in
				such account exclusively to pay premiums that would (but for this subsection)
				be required to be paid by the assigned operator.
										Upon
				termination of the obligations for the premium liability of any assigned
				operator or related person for which such account is maintained, all funds
				remaining in such account (and earnings thereon) shall be refunded to such
				person as may be designated by the common parent described in paragraph
				(1)(B)..
						(b)Individual
			 employer plansSection 9711(c) of the Internal Revenue Code of
			 1986 (relating to joint and several liability) is amended to read as
			 follows:

								(c)Joint and several
				liability of related persons
									(1)In
				generalExcept as provided in paragraph (2), each related person
				of a last signatory operator to which subsection (a) or (b) applies shall be
				jointly and severally liable with the last signatory operator for the provision
				of health care coverage described in subsection (a) or (b).
									(2)Liability
				limited if security providedIf—
										(A)security meeting
				the requirements of paragraph (3) is provided by or on behalf of—
											(i)any last signatory
				operator which is an assigned operator described in section 9704(j)(2),
				or
											(ii)any related
				person to any last signatory operator described in clause (i), and
											(B)the common parent
				of the controlled group of corporations described in section 9704(j)(2)(B) is
				jointly and severally liable for the provision of health care under this
				section which, but for this paragraph, would be required to be provided by the
				last signatory operator or related person,
										then, as
				of the date the security is provided, such common parent (and no other person)
				shall be liable for the provision of health care under this section which the
				last signatory operator or related person would otherwise be required to
				provide. Security may be provided under this paragraph without regard to
				whether a payment was made under section 9704(j).(3)SecuritySecurity
				meets the requirements of this paragraph if—
										(A)the
				security—
											(i)is
				in the form of a bond, letter of credit, or cash escrow,
											(ii)is
				provided to the trustees of the 1992 UMWA Benefit Plan solely for the purpose
				of paying premiums for beneficiaries who would be described in section
				9712(b)(2)(B) if the requirements of this section were not met by the last
				signatory operator, and
											(iii)is in an amount
				equal to 1 year of liability of the last signatory operator under this section,
				determined by using the average cost of such operator's liability during the
				prior 3 calendar years;
											(B)the security is in
				addition to any other security required under any other provision of this
				title; and
										(C)the security
				remains in place for 5 years.
										(4)Refunds of
				securityThe remaining amount of any security provided under this
				subsection (and earnings thereon) shall be refunded to the last signatory
				operator as of the earlier of—
										(A)the termination of
				the obligations of the last signatory operator under this section, or
										(B)the end of the
				5-year period described in paragraph
				(4)(C).
										.
						(c)1992 UMWA
			 Benefit PlanSection 9712(d)(4) of the Internal Revenue Code of
			 1986 (relating to joint and several liability) is amended by adding at the end
			 the following new sentence: The provisions of section 9711(c)(2) shall
			 apply to any last signatory operator described in such section (without regard
			 to whether security is provided under such section, a payment is made under
			 section 9704(j), or both) and if security meeting the requirements of section
			 9711(c)(3) is provided, the common parent described in section 9711(c)(2)(B)
			 shall be exclusively responsible for any liability for premiums under this
			 section which, but for this sentence, would be required to be paid by the last
			 signatory operator or any related person..
						(d)Successor in
			 interestSection 9701(c) of the Internal Revenue Code of 1986
			 (relating to terms relating to operators) is amended by adding at the end the
			 following new paragraph:

								(8)Successor in
				interest
									(A)Safe
				harborThe term successor in interest shall not
				include any person who—
										(i)is
				an unrelated person to an eligible seller described in subparagraph (C);
				and
										(ii)purchases for
				fair market value assets, or all of the stock, of a related person to such
				seller, in a bona fide, arm's-length sale.
										(B)Unrelated
				personThe term unrelated person means a purchaser
				who does not bear a relationship to the eligible seller described in section
				267(b).
									(C)Eligible
				sellerFor purposes of this paragraph, the term eligible
				seller means an assigned operator described in section 9704(j)(2) or a
				related person to such assigned
				operator.
									.
						(e)Effective
			 dateThe amendments made by this section shall take effect on the
			 date of the enactment of this Act, except that the amendment made by subsection
			 (d) shall apply to transactions after the date of the enactment of this
			 Act.
						212.Transfers to
			 funds; premium relief
						(a)Combined
			 Fund
							(1)Federal
			 transfersSection 9705(b) of the Internal Revenue Code of 1986
			 (relating to transfers from Abandoned Mine Reclamation Fund) is amended—
								(A)in paragraph (1),
			 by striking section 402(h) and inserting subsections (h)
			 and (i) of section 402;
								(B)by striking
			 paragraph (2) and inserting the following new paragraph:

										(2)Use of
				fundsAny amount transferred under paragraph (1) for any fiscal
				year shall be used to pay benefits and administrative costs of beneficiaries of
				the Combined Fund or for such other purposes as are specifically provided in
				the Acts described in paragraph (1).
										;
				and
								(C)by striking
			 From Abandoned Mine
			 Reclamation Fund in the heading thereof.
								(2)Modifications of
			 premiums to reflect Federal transfers
								(A)Elimination of
			 unassigned beneficiaries premiumSection 9704(d) of such Code
			 (establishing unassigned beneficiaries premium) is amended to read as
			 follows:

										(d)Unassigned
				beneficiaries premium
											(1)Plan years
				ending on or before September 30, 2006For plan years ending on
				or before September 30, 2006, the unassigned beneficiaries premium for any
				assigned operator shall be equal to the applicable percentage of the product of
				the per beneficiary premium for the plan year multiplied by the number of
				eligible beneficiaries who are not assigned under section 9706 to any person
				for such plan year.
											(2)Plan years
				beginning on or after October 1, 2006
												(A)In
				generalFor plan years beginning on or after October 1, 2006,
				subject to subparagraph (B), there shall be no unassigned beneficiaries
				premium, and benefit costs with respect to eligible beneficiaries who are not
				assigned under section 9706 to any person for any such plan year shall be paid
				from amounts transferred under section 9705(b).
												(B)Inadequate
				transfersIf, for any plan year beginning on or after October 1,
				2006, the amounts transferred under section 9705(b) are less than the amounts
				required to be transferred to the Combined Fund under subsection (h)(2)(A) or
				(i) of section 402 of the Surface Mining Control and Reclamation Act of 1977
				(30 U.S.C. 1232)), then the unassigned beneficiaries premium for any assigned
				operator shall be equal to the operator's applicable percentage of the amount
				required to be so transferred which was not so
				transferred.
												.
								(B)Premium
			 accounts
									(i)Crediting of
			 accountsSection 9704(e)(1) of such Code (relating to premium
			 accounts; adjustments) is amended by inserting and amounts transferred
			 under section 9705(b) after premiums received.
									(ii)Surpluses
			 attributable to public fundingSection 9704(e)(3)(A) of such Code
			 is amended by adding at the end the following new sentence: Amounts
			 credited to an account from amounts transferred under section 9705(b) shall not
			 be taken into account in determining whether there is a surplus in the account
			 for purposes of this paragraph.
									(C)Applicable
			 percentageSection 9704(f)(2) of such Code (relating to annual
			 adjustments) is amended by adding at the end the following new
			 subparagraph:

										(C)In the case of
				plan years beginning on or after October 1, 2007, the total number of assigned
				eligible beneficiaries shall be reduced by the eligible beneficiaries whose
				assignments have been revoked under section
				9706(h).
										.
								(3)Assignments and
			 reassignmentSection 9706 of the Internal Revenue Code of 1986
			 (relating to assignment of eligible beneficiaries) is amended by adding at the
			 end the following:

									(h)Assignments as of
				October 1, 2007
										(1)In
				generalSubject to the premium obligation set forth in paragraph
				(3), the Commissioner of Social Security shall—
											(A)revoke all
				assignments to persons other than 1988 agreement operators for purposes of
				assessing premiums for plan years beginning on and after October 1, 2007;
				and
											(B)make no further
				assignments to persons other than 1988 agreement operators, except that no
				individual who becomes an unassigned beneficiary by reason of subparagraph (A)
				may be assigned to a 1988 agreement operator.
											(2)Reassignment upon
				purchaseThis subsection shall not be construed to prohibit the
				reassignment under subsection (b)(2) of an eligible beneficiary.
										(3)Liability of
				persons during three fiscal years beginning on and after October 1,
				2007In the case of each of the fiscal years beginning on October
				1, 2007, 2008, and 2009, each person other than a 1988 agreement operator shall
				pay to the Combined Fund the following percentage of the amount of annual
				premiums that such person would otherwise be required to pay under section
				9704(a), determined on the basis of assignments in effect without regard to the
				revocation of assignments under paragraph (1)(A):
											(A)For the fiscal
				year beginning on October 1, 2007, 55 percent.
											(B)For the fiscal
				year beginning on October 1, 2008, 40 percent.
											(C)For the fiscal
				year beginning on October 1, 2009, 15
				percent.
											.
							(4)Effective
			 dateThe amendments made by this subsection shall apply to plan
			 years of the Combined Fund beginning after September 30, 2006.
							(b)1992 UMWA
			 Benefit and other plans
							(1)Transfers to
			 plansSection 9712(a) of the Internal Revenue Code of 1986
			 (relating to the establishment and coverage of the 1992 UMWA Benefit Plan) is
			 amended by adding at the end the following:

									(3)Transfers under
				other Federal statutes
										(A)In
				generalThe 1992 UMWA Benefit Plan shall include any amount
				transferred to the plan under subsections (h) and (i) of section 402 of the
				Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1232).
										(B)Use of
				fundsAny amount transferred under subparagraph (A) for any
				fiscal year shall be used to provide the health benefits described in
				subsection (c) with respect to any beneficiary for whom no monthly per
				beneficiary premium is paid pursuant to paragraph (1)(A) or (3) of subsection
				(d).
										(4)Special rule for
				1993 plan
										(A)In
				generalThe plan described in section 402(h)(2)(C) of the Surface
				Mining Control and Reclamation Act of 1977 (30 U.S.C. 1232(h)(2)(C)) shall
				include any amount transferred to the plan under subsections (h) and (i) of the
				Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1232).
										(B)Use of
				fundsAny amount transferred under subparagraph (A) for any
				fiscal year shall be used to provide the health benefits described in section
				402(h)(2)(C)(i) of the Surface Mining Control and Reclamation Act of 1977 (30
				U.S.C. 1232(h)(2)(C)(i)) to individuals described in section 402(h)(2)(C) of
				such Act (30 U.S.C.
				1232(h)(2)(C)).
										.
							(2)Premium
			 adjustments
								(A)In
			 generalSection 9712(d)(1) of such Code (relating to guarantee of
			 benefits) is amended to read as follows:

										(1)In
				generalAll 1988 last signatory operators shall be responsible
				for financing the benefits described in subsection (c) by meeting the following
				requirements in accordance with the contribution requirements established in
				the 1992 UMWA Benefit Plan:
											(A)The payment of a
				monthly per beneficiary premium by each 1988 last signatory operator for each
				eligible beneficiary of such operator who is described in subsection (b)(2) and
				who is receiving benefits under the 1992 UMWA benefit plan.
											(B)The provision of a
				security (in the form of a bond, letter of credit, or cash escrow) in an amount
				equal to a portion of the projected future cost to the 1992 UMWA Benefit Plan
				of providing health benefits for eligible and potentially eligible
				beneficiaries attributable to the 1988 last signatory operator.
											(C)If the amounts
				transferred under subsection (a)(3) are less than the amounts required to be
				transferred to the 1992 UMWA Benefit Plan under subsections (h) and (i) of
				section 402 of the Surface Mining Control and Reclamation Act of 1977 (30
				U.S.C. 1232), the payment of an additional backstop premium by each 1988 last
				signatory operator which is equal to such operator's share of the amounts
				required to be so transferred but which were not so transferred, determined on
				the basis of the number of eligible and potentially eligible beneficiaries
				attributable to the
				operator.
											.
								(B)Conforming
			 amendmentsSection 9712(d) of such Code is amended—
									(i)in
			 paragraph (2)(B), by striking prefunding and inserting
			 backstop, and
									(ii)in
			 paragraph (3), by striking paragraph (1)(B) and inserting
			 paragraph (1) (A).
									(C)Effective
			 dateThe amendments made by this paragraph shall apply to fiscal
			 years beginning on or after October 1, 2010.
								213.Other
			 provisions
						(a)Board of
			 trusteesSection 9702(b) of the Internal Revenue Code of 1986
			 (relating to board of trustees of the Combined Fund) is amended to read as
			 follows:

								(b)Board of
				trustees
									(1)In
				generalFor purposes of subsection (a), the board of trustees for
				the Combined Fund shall be appointed as follows:
										(A)2 individuals who
				represent employers in the coal mining industry shall be designated by the
				BCOA;
										(B)2 individuals
				designated by the United Mine Workers of America; and
										(C)3 individuals
				selected by the individuals appointed under subparagraphs (A) and (B).
										(2)Successor
				trusteesAny successor trustee shall be appointed in the same
				manner as the trustee being succeeded. The plan establishing the Combined Fund
				shall provide for the removal of trustees.
									(3)Special
				ruleIf the BCOA ceases to exist, any trustee or successor under
				paragraph (1)(A) shall be designated by the 3 employers who were members of the
				BCOA on the enactment date and who have been assigned the greatest number of
				eligible beneficiaries under section
				9706.
									.
						(b)Enforcement of
			 obligations
							(1)Failure to pay
			 premiumsSection 9707(a) of the Internal Revenue Code of 1986 is
			 amended to read as follows:

									(a)Failures to
				pay
										(1)Premiums for
				eligible beneficiariesThere is hereby imposed a penalty on the
				failure of any assigned operator to pay any premium required to be paid under
				section 9704 with respect to any eligible beneficiary.
										(2)Contributions
				required under the mining lawsThere is hereby imposed a penalty
				on the failure of any person to make a contribution required under section
				402(h)(5)(B)(ii) of the Surface Mining Control and Reclamation Act of 1977 to a
				plan referred to in section 402(h)(2)(C) of such Act. For purposes of applying
				this section, each such required monthly contribution for the hours worked of
				any individual shall be treated as if it were a premium required to be paid
				under section 9704 with respect to an eligible
				beneficiary.
										.
							(2)Civil
			 enforcementSection 9721 of such Code is amended to read as
			 follows:

									9721.Civil
				enforcementThe provisions of
				section 4301 of the Employee Retirement Income Security Act of 1974 shall
				apply, in the same manner as any claim arising out of an obligation to pay
				withdrawal liability under subtitle E of title IV of such Act, to any
				claim—
										(1)arising out of an
				obligation to pay any amount required to be paid by this chapter; or
										(2)arising out of an
				obligation to pay any amount required by section 402(h)(5)(B)(ii) of the
				Surface Mining Control and Reclamation Act of 1977 (30 U.S.C.
				1232(h)(5)(B)(ii)).
										.
							IIIOther
			 Provisions
				301.Tobacco personal use
			 quantity exception to not apply to delivery sales
					(a)DefinitionsSection
			 801 of the Tariff Act of 1930 (19 U.S.C. 1681) is amended by adding at the end
			 the following:

							(3)Delivery
				saleThe term delivery sale means any sale of
				cigarettes or a smokeless tobacco product to a consumer if—
								(A)the consumer
				submits the order for such sale by means of a telephone or other method of
				voice transmission, the mail, or the Internet or other online service, or the
				seller is otherwise not in the physical presence of the buyer when the request
				for purchase or order is made; or
								(B)the cigarettes or
				smokeless tobacco product is delivered by use of a common carrier, private
				delivery service, or the mail, or the seller is not in the physical presence of
				the buyer when the buyer obtains personal possession of the delivered
				cigarettes or smokeless tobacco
				product.
								.
					(b)Inapplicability
			 of exemptions from requirements for entry of certain cigarettes and smokeless
			 tobacco productsSection 802(b)(1) of the Tariff Act of 1930 (19
			 U.S.C. 1681a(b)(1)) is amended by adding at the end the following new sentence:
			 The preceding sentence shall not apply to any cigarettes or smokeless
			 tobacco products sold in connection with a delivery sale..
					(c)State access to
			 customs certificationsSection 802 of the Tariff Act of 1930 (19
			 U.S.C. 1681a) is amended by adding at the end the following new
			 subsection:

							(d)State access to
				customs certificationsA State, through its Attorney General,
				shall be entitled to obtain copies of any certification required under
				subsection (c) directly—
								(1)upon request to the
				agency of the United States responsible for collecting such certification;
				or
								(2)upon request to
				the importer, manufacturer, or authorized official of such importer or
				manufacturer.
								.
					(d)Enforcement
			 provisionsSection 803(b) of the Tariff Act of 1930 (19 U.S.C.
			 1681b(b)) is amended—
						(1)in the first
			 sentence, by inserting before the period at the end the following: , or
			 to any State in which such tobacco product, cigarette papers, or tube is
			 found; and
						(2)in the second
			 sentence, by inserting , or to any State, after the
			 United States.
						(e)Inclusion of
			 smokeless tobacco
						(1)Sections 802 and
			 803(a) of the Tariff Act of 1930 (19 U.S.C. 1681a and 1681b(a)) (other than the
			 last sentence of section 802(b)(1), as added by subsection (b) of this section)
			 are further amended by inserting or smokeless tobacco products
			 after cigarettes each place it appears.
						(2)Section 802 of
			 such Act is further amended—
							(A)in subsection
			 (a)—
								(i)in
			 paragraph (1), by inserting or section 4 of the Comprehensive Smokeless
			 Tobacco Health Education Act of 1986 (15 U.S.C. 4403), as the case may
			 be after section 7 of the Federal Cigarette Labeling and
			 Advertising Act (15 U.S.C. 1335a);
								(ii)in
			 paragraph (2), by inserting or section 3 of the Comprehensive Smokeless
			 Tobacco Health Education Act of 1986 (15 U.S.C. 4402), as the case may
			 be, after section 4 of the Federal Cigarette Labeling and
			 Advertising Act (15 U.S.C. 1333); and
								(iii)in
			 paragraph (3), by inserting or section 3(d) of the Comprehensive
			 Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402(d)), as the case
			 may be after section 4(c) of the Federal Cigarette Labeling and
			 Advertising Act (15 U.S.C. 1333(c));
								(B)in subsection
			 (b)—
								(i)in
			 the heading of paragraph (1), by inserting or smokeless tobacco
			 products after cigarettes; and
								(ii)in the heading of paragraphs (2) and (3),
			 by inserting or smokeless
			 tobacco products after cigarettes; and
								(C)in subsection
			 (c)—
								(i)in the heading, by inserting
			 or smokeless tobacco
			 product after cigarette;
								(ii)in
			 paragraph (1), by inserting or section 4 of the Comprehensive Smokeless
			 Tobacco Health Education Act of 1986 (15 U.S.C. 4403), as the case may
			 be after section 7 of the Federal Cigarette Labeling and
			 Advertising Act (15 U.S.C. 1335a);
								(iii)in
			 paragraph (2)(A), by inserting or section 3 of the Comprehensive
			 Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402), as the case
			 may be, after section 4 of the Federal Cigarette Labeling and
			 Advertising Act (15 U.S.C. 1333); and
								(iv)in
			 paragraph (2)(B), by inserting or section 3(d) of the Comprehensive
			 Smokeless Tobacco Health Education Act of 1986 (15 U.S.C. 4402(d)), as the case
			 may be after section 4(c) of the Federal Cigarette Labeling and
			 Advertising Act (15 U.S.C. 1333(c)).
								(3)Section 803(b) of
			 such Act, as amended by subsection (d)(1) of this section, is further amended
			 by inserting , or any smokeless tobacco product, after or
			 tube the first place it appears.
						(4)(A)The heading of title
			 VIII of such Act is amended by inserting and smokeless tobacco products after
			 cigarettes.
							(B)The heading of section 802 of such Act
			 is amended by inserting and
			 smokeless tobacco products after
			 cigarettes.
							(f)Application of
			 civil penalties to relandings of tobacco products sold in a delivery
			 sale
						(1)In
			 generalSection 5761 of the Internal Revenue Code of 1986
			 (relating to civil penalties) is amended by redesignating subsections (d) and
			 (e) as subsections (e) and (f), respectively, and inserting after subsection
			 (c) the following new subsection:

								(d)Personal use
				quantities
									(1)In
				generalNo quantity of tobacco products other than the quantity
				referred to in paragraph (2) may be relanded or received as a personal use
				quantity.
									(2)Exception for
				personal use quantitySubsection (c) and section 5754 shall not
				apply to any person who relands or receives tobacco products in the quantity
				allowed entry free of tax and duty under chapter 98 of the Harmonized Tariff
				Schedule of the United States, and such person may voluntarily relinquish to
				the Secretary at the time of entry any excess of such quantity without
				incurring the penalty under subsection (c).
									(3)Special rule for
				delivery sales
										(A)In
				generalParagraph (2) shall not apply to any tobacco product sold
				in connection with a delivery sale.
										(B)Delivery
				saleFor purposes of subparagraph (A), the term delivery
				sale means any sale of a tobacco product to a consumer if—
											(i)the
				consumer submits the order for such sale by means of a telephone or other
				method of voice transmission, the mail, or the Internet or other online
				service, or the seller is otherwise not in the physical presence of the buyer
				when the request for purchase or order is made, or
											(ii)the tobacco
				product is delivered by use of a common carrier, private delivery service, or
				the mail, or the seller is not in the physical presence of the buyer when the
				buyer obtains personal possession of the tobacco
				product.
											.
						(2)Conforming
			 amendments
							(A)Subsection (c) of
			 section 5761 of such Code is amended by striking the last two sentences.
							(B)Paragraph (1) of
			 section 5754(c) of such Code is amended by striking section
			 5761(c) and inserting section 5761(d).
							(g)Effective
			 dateThe amendments made by
			 this section shall apply with respect to goods entered, or withdrawn from
			 warehouse for consumption, on or after the 15th day after the date of the
			 enactment of this Act.
					302.Ethanol Tariff
			 ScheduleHeadings 9901.00.50
			 and 9901.00.52 of the Harmonized Tariff Schedule of the United States are each
			 amended in the effective period column by striking 10/1/2007
			 each place it appears and inserting 1/1/2009.
				303.Withdrawal of
			 certain Federal land and interests in certain Federal land from location,
			 entry, and patent under the mining laws and disposition under the mineral and
			 geothermal leasing laws
					(a)DefinitionsIn this section:
						(1)Bureau of Land
			 Management landThe term Bureau of Land Management
			 land means the Bureau of Land Management land and any federally-owned
			 minerals located south of the Blackfeet Indian Reservation and east of the
			 Lewis and Clark National Forest to the eastern edge of R. 8 W., beginning in T.
			 29 N. down to and including T. 19 N. and all of T. 18 N., R. 7 W.
						(2)Eligible Federal
			 landThe term eligible Federal land means the Bureau
			 of Land Management land and the Forest Service land, as generally depicted on
			 the map.
						(3)Forest Service
			 landThe term Forest Service land means—
							(A)the Forest Service
			 land and any federally-owned minerals located in the Rocky Mountain Division of
			 the Lewis and Clark National Forest, including the approximately 356,111 acres
			 of land made unavailable for leasing by the August 28, 1997, Record of Decision
			 for the Lewis and Clark National Forest Oil and Gas Leasing Environmental
			 Impact Statement and that is located from T. 31 N. to T. 16 N. and R. 13 W. to
			 R. 7 W.; and
							(B)the Forest Service
			 land and any federally-owned minerals located within the Badger Two Medicine
			 area of the Flathead National Forest, including—
								(i)the
			 land located in T. 29 N. from the western edge of R. 16 W. to the eastern edge
			 of R. 13 W.; and
								(ii)the
			 land located in T. 28 N., Rs. 13 and 14 W.
								(4)MapThe
			 term map means the map entitled Rocky Mountain Front
			 Mineral Withdrawal Area and dated December 31, 2006.
						(b)Withdrawal
						(1)In
			 generalSubject to valid existing rights, the eligible Federal
			 land (including any interest in the eligible Federal land) is withdrawn
			 from—
							(A)all forms of
			 location, entry, and patent under the mining laws; and
							(B)disposition under
			 all laws relating to mineral and geothermal leasing.
							(2)Availability of
			 mapThe map shall be on file and available for inspection in the
			 Office of the Chief of the Forest Service.
						(c)Tax incentive
			 for sale of existing mineral and geothermal rights to tax-exempt
			 entities
						(1)ExclusionFor
			 purposes of the Internal Revenue Code of 1986, gross income shall not include
			 25 percent of the qualifying gain from a conservation sale of a qualifying
			 mineral or geothermal interest.
						(2)Qualifying
			 gainFor purposes of this subsection, the term qualifying
			 gain means any gain which would be recognized as long-term capital gain
			 under such Code.
						(3)Conservation
			 saleFor purposes of this subsection, the term conservation
			 sale means a sale which meets the following requirements:
							(A)Transferee is an
			 eligible entityThe transferee of the qualifying mineral or
			 geothermal interest is an eligible entity.
							(B)Qualifying
			 letter of intent requiredAt the time of the sale, such
			 transferee provides the taxpayer with a qualifying letter of intent.
							(C)Nonapplication
			 to certain salesThe sale is not made pursuant to an order of
			 condemnation or eminent domain.
							(4)Qualifying
			 mineral or geothermal interestFor purposes of this
			 subsection—
							(A)In
			 generalThe term qualifying mineral or geothermal
			 interest means an interest in any mineral or geothermal deposit located
			 on eligible Federal land which constitutes a taxpayer’s entire interest in such
			 deposit.
							(B)Entire
			 interestFor purposes of subparagraph (A)—
								(i)an
			 interest in any mineral or geothermal deposit is not a taxpayer’s entire
			 interest if such interest in such mineral or geothermal deposit was divided in
			 order to avoid the requirements of such subparagraph or section 170(f)(3)(A) of
			 such Code, and
								(ii)a
			 taxpayer’s entire interest in such deposit does not fail to satisfy such
			 subparagraph solely because the taxpayer has retained an interest in other
			 deposits, even if the other deposits are contiguous with such certain deposit
			 and were acquired by the taxpayer along with such certain deposit in a single
			 conveyance.
								(5)Other
			 definitionsFor purposes of this subsection—
							(A)Eligible
			 entityThe term eligible entity means—
								(i)a
			 governmental unit referred to in section 170(c)(1) of such Code, or an agency
			 or department thereof operated primarily for 1 or more of the conservation
			 purposes specified in clause (i), (ii), or (iii) of section 170(h)(4)(A) of
			 such Code, or
								(ii)an
			 entity which is—
									(I)described in
			 section 170(b)(1)(A)(vi) or section 170(h)(3)(B) of such Code, and
									(II)organized and at
			 all times operated primarily for 1 or more of the conservation purposes
			 specified in clause (i), (ii), or (iii) of section 170(h)(4)(A) of such
			 Code.
									(B)Qualifying
			 letter of intentThe term qualifying letter of
			 intent means a written letter of intent which includes the following
			 statement: The transferee’s intent is that this acquisition will serve 1
			 or more of the conservation purposes specified in clause (i), (ii), or (iii) of
			 section 170(h)(4)(A) of the Internal Revenue Code of 1986, that the
			 transferee’s use of the deposits so acquired will be consistent with section
			 170(h)(5) of such Code, and that the use of the deposits will continue to be
			 consistent with such section, even if ownership or possession of such deposits
			 is subsequently transferred to another person..
							(6)Tax on
			 subsequent transfers
							(A)In
			 generalA tax is hereby imposed on any subsequent transfer by an
			 eligible entity of ownership or possession, whether by sale, exchange, or
			 lease, of an interest acquired directly or indirectly in—
								(i)a
			 conservation sale described in paragraph (1), or
								(ii)a
			 transfer described in clause (i), (ii), or (iii) of subparagraph (D).
								(B)Amount of
			 taxThe amount of tax imposed by subparagraph (A) on any transfer
			 shall be equal to the sum of—
								(i)20
			 percent of the fair market value (determined at the time of the transfer) of
			 the interest the ownership or possession of which is transferred, plus
								(ii)the
			 product of—
									(I)the highest rate of
			 tax specified in section 11 of such Code, times
									(II)any gain or
			 income realized by the transferor as a result of the transfer.
									(C)LiabilityThe
			 tax imposed by subparagraph (A) shall be paid by the transferor.
							(D)Relief from
			 liabilityThe person (otherwise liable for any tax imposed by
			 subparagraph (A)) shall be relieved of liability for the tax imposed by
			 subparagraph (A) with respect to any transfer if—
								(i)the
			 transferee is an eligible entity which provides such person, at the time of
			 transfer, a qualifying letter of intent,
								(ii)in
			 any case where the transferee is not an eligible entity, it is established to
			 the satisfaction of the Secretary of the Treasury, that the transfer of
			 ownership or possession, as the case may be, will be consistent with section
			 170(h)(5) of such Code, and the transferee provides such person, at the time of
			 transfer, a qualifying letter of intent, or
								(iii)tax has
			 previously been paid under this paragraph as a result of a prior transfer of
			 ownership or possession of the same interest.
								(E)Administrative
			 provisionsFor purposes of subtitle F of such Code, the taxes
			 imposed by this paragraph shall be treated as excise taxes with respect to
			 which the deficiency procedures of such subtitle apply.
							(7)ReportingThe
			 Secretary of the Treasury may require such reporting as may be necessary or
			 appropriate to further the purpose under this subsection that any conservation
			 use be in perpetuity.
						(d)Effective
			 dates
						(1)MoratoriumSubsection
			 (b) shall take effect on the date of the enactment of this Act.
						(2)Tax
			 incentiveSubsection (c) shall apply to sales occurring on or
			 after the date of the enactment of this Act.
						304.Continuing
			 eligibility for certain students under District of Columbia School Choice
			 Program
					(a)In
			 generalSection 307(a)(4) of the DC School Choice Incentive Act
			 of 2003 (sec. 38—1851.06(a)(4), D.C. Official Code) is amended by striking
			 200 percent and inserting the following: 200 percent (or,
			 in the case of an eligible student whose first year of participation in the
			 program is an academic year ending in June 2005 or June 2006 and whose second
			 or succeeding year is an academic year ending on or before June 2009, 300
			 percent).
					(b)Effective
			 dateThe amendment made by subsection (a) shall take effect as if
			 included in the enactment of the DC School Choice Incentive Act of 2003.
					305.Study on
			 Establishing Uniform National Database on Elder Abuse
					(a)Study
						(1)In
			 generalThe Secretary of Health and Human Services, in
			 consultation with the Attorney General, shall conduct a study on establishing a
			 uniform national database on elder abuse.
						(2)Issues
			 studiedThe study conducted under paragraph (1) may consider the
			 following:
							(A)Current
			 methodologies used for collecting data on elder abuse, including a
			 determination of the shortcomings, strengths, and commonalities of existing
			 data collection efforts and reporting forms, and how a uniform national
			 database would capitalize on such efforts.
							(B)The process by
			 which uniform national standards for reporting on elder abuse could be
			 implemented, including the identification and involvement of necessary
			 stakeholders, financial resources needed, timelines, and the treatment of
			 existing standards with respect to elder abuse.
							(C)Potential
			 conflicts in Federal, State, and local laws, and enforcement and jurisdictional
			 issues that could occur as a result of the creation of a uniform national
			 database on elder abuse.
							(D)The scope,
			 purpose, and variability of existing definitions used by Federal, State, and
			 local agencies with respect to elder abuse.
							(3)DurationThe
			 study conducted under paragraph (1) shall be conducted for a period not to
			 exceed 2 years.
						(b)ReportNot
			 later than 180 days after the completion of the study conducted under
			 subsection (a)(1), the Secretary of Health and Human Services shall submit a
			 report to the Committee on Finance of the Senate and the Committee on Ways and
			 Means of the House of Representatives containing the findings of the study,
			 together with recommendations on how to implement a uniform national database
			 on elder abuse.
					(c)AuthorizationThere
			 are authorized to be appropriated to carry out this section, $500,000 for each
			 of fiscal years 2007 and 2008.