1.This Act may be cited as
the Health Care for Hybrids
Act
.
2.Congress makes the following
findings:
(1)The United States
imports over half the oil it consumes.
(2)According to
present trends, the United States reliance on foreign oil will increase to 68
percent of its total consumption by 2025.
(3)With only 3
percent of the world's known oil reserves, the health of the United States
economy is dependent on world oil prices.
(4)World oil prices
are overwhelmingly dictated by countries other than the United States, thus
endangering our economic and national security.
(5)Legacy health
care costs associated with retiree workers are an increasing burden on the
global competitiveness of American industries.
(6)American
automakers have lagged behind their foreign competitors in producing hybrid and
other energy efficient automobiles.
(7)Innovative uses
of new technology in automobiles in the United States will help retain American
jobs, support health care obligations for retiring workers in the automotive
sector, decrease America's dependence on foreign oil, and address pressing
environmental concerns.
<enum>I</enum><header>Program</header>
<section id="id36F1E69EEE714AACB25921D7A05E636F" section-type="subsequent-section"><enum>101.</enum><header>Coordinating task
force</header><text display-inline="no-display-inline">Not later than 6 months
after the date of enactment of this Act, the Secretary of Energy, the Secretary
of Health and Human Services, the Secretary of Transportation, and the
Secretary of the Treasury shall establish, and appoint an equal number of
representatives to, a task force (referred to in this Act as the <quote>task
force</quote>) to administer the program established under this Act.</text>
</section><section id="ID8b5c9629456947599983f2f456fb542c"><enum>102.</enum><header>Establishment
of program</header>
<subsection id="ID117fde2d090b4e7787aa397b8f621db6"><enum>(a)</enum><header>In
General</header><text>Not later than 1 year after the date of enactment of this
Act, the task force established under section 101 shall establish a program to
provide financial assistance to eligible domestic automobile manufacturers for
the costs incurred in providing health benefits to their retired
employees.</text>
</subsection><subsection id="ID4ad685560ee344929d4555c20e96ead3"><enum>(b)</enum><header>Consultation</header><text display-inline="yes-display-inline">In establishing the program under
subsection (a), the task force shall consult with representatives from the
domestic automobile manufacturers, unions representing employees of such
manufacturers, and consumer and environmental groups.</text>
</subsection><subsection id="IDac010230a3914484b60df323d7475f0b"><enum>(c)</enum><header>Eligible
domestic automobile manufacturer</header><text>To be eligible to receive
financial assistance under the program established under subsection (a), a
domestic automobile manufacturer shall—</text>
<paragraph id="ID4a986a56a57a4bdfb07ef5ef886e6ada"><enum>(1)</enum><text>submit an
application to the task force at such time, in such manner, and containing such
information as the task force shall require;</text>
</paragraph><paragraph id="ID2860ca22a1e84ff1ab63f673b8323222"><enum>(2)</enum><text>certify that such
manufacturer is providing full health care coverage to all of its domestic
employees;</text>
</paragraph><paragraph id="ID93a3d2ace249433db9f9e6cd4ee444bb"><enum>(3)</enum><text>provide an
assurance that the manufacturer will invest an amount equal to not less than 50
percent of the amount of health savings derived by the manufacturer as a result
of its retiree health care costs being covered under the program under this
section, in—</text>
<subparagraph id="ID230837c06a3b48f8ae428b2c16068217"><enum>(A)</enum><text>the domestic
manufacture and commercialization of petroleum fuel reduction technologies,
including alternative or flexible fuel vehicles, hybrids, and other
state-of-the-art fuel saving technologies;</text>
</subparagraph><subparagraph id="IDbd47fdccb6234cba90e3215048e2d6ec"><enum>(B)</enum><text>the retraining of
workers and retooling of assembly lines for such domestic manufacture and
commercialization;</text>
</subparagraph><subparagraph id="ID99664cd4e5c54cdca40f0f3f20eb77ea"><enum>(C)</enum><text>research and
development, design, commercialization, and other costs related to the
diversifying of domestic production of automobiles through the offering of high
performance fuel efficient vehicles; and</text>
</subparagraph><subparagraph id="idFC99A46D2E8F4B61B417EFF752744745"><enum>(D)</enum><text>assisting
domestic automobile component suppliers to retool their domestic manufacturing
plants to produce components for petroleum fuel reduction technologies,
including alternative or flexible fuel vehicles, hybrid, advanced diesel, or
other state-of-the-art fuel saving technologies; and</text>
</subparagraph></paragraph><paragraph id="ID0a5a4734663a479fa2e8b7739d33ea40"><enum>(4)</enum><text>provide
additional assurances and information as the task force may require, including
information needed by the task force to audit the manufacturer’s compliance
with the requirements of the program.</text>
</paragraph></subsection><subsection id="IDb4534633d4814313870cac3a482fa846"><enum>(d)</enum><header>Limitation</header><text>The
total amount of financial assistance that may be provided each year under the
program under this section with respect to any single domestic automobile
manufacturer shall not exceed an amount equal to 10 percent of the retiree
health care costs of that manufacturer for that year.</text>
</subsection></section><section id="ID183d6a2fa0e84ee4b873e8f928a156b2"><enum>103.</enum><header>Reporting</header><text display-inline="no-display-inline">Not later than 6 months after the date of
enactment of this Act, and every 6 months thereafter, the task force shall
submit to Congress a report on any financial assistance provided under this
program under this Act and the resulting changes in the manufacture and
commercialization of fuel saving technologies implemented by auto manufacturers
as a result of such financial assistance. Not later than 1 year after the date
of enactment of this Act, the task force shall submit a report to Congress on
the effectiveness of current consumer incentives available for the purchase of
hybrid vehicles in encouraging the purchase of such vehicles and whether these
incentives should be expanded.</text>
</section><section id="IDc534ed881d50430ca0d149b044a97aa8"><enum>104.</enum><header>Authorization
of appropriations</header><text display-inline="no-display-inline">There are
authorized to be appropriated, such sums as may be necessary in each fiscal
year to carry out this Act.</text>
</section><section id="ID3624630498774beea9654aa2bdb5be5c"><enum>105.</enum><header>Limitation on
backsliding</header><text display-inline="no-display-inline">To be eligible to
receive financial assistance under this title, a manufacturer shall provide
assurances to the task force that fuel savings achieved with respect its
average adjusted fuel economy will not result in decreases with respect to fuel
economy elsewhere in the domestic fleet. The task force shall determine
compliance with such assurances using accepted measurements of fuel
savings.</text>
</section><section id="ID4ed4cec7d0e9499596bd3d972fa5769c"><enum>106.</enum><header>Termination of
program</header><text display-inline="no-display-inline">The program
established under this title shall terminate on December 31, 2015.</text>
</section><enum>II</enum><header>Offsets</header>
<section id="IDd068cccec6224e6fbdbe80cd31eb2b29"><enum>201.</enum><header>Clarification
of economic substance doctrine</header>
<subsection id="ID2f990ed00f0e4be1a16696c1fced9dc5"><enum>(a)</enum><header>In
general</header><text>Section 7701 of the Internal Revenue Code of 1986 is
amended by redesignating subsection (o) as subsection (p) and by inserting
after subsection (n) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="idF97234867C444C4EA8A2C1C68D1D0700" style="OLC">
<subsection id="ID3f1543998bb342998a1fd059c4a7e27a"><enum>(o)</enum><header>Clarification
of Economic Substance Doctrine; Etc</header>
<paragraph id="IDa528cff9438749ffaadc2b2f07bfbabc"><enum>(1)</enum><header>General
rules</header>
<subparagraph id="ID57b87fb5bcc042aeaadc7de4e6ed8f80"><enum>(A)</enum><header>In
general</header><text>In any case in which a court determines that the economic
substance doctrine is relevant for purposes of this title to a transaction (or
series of transactions), such transaction (or series of transactions) shall
have economic substance only if the requirements of this paragraph are
met.</text>
</subparagraph><subparagraph id="IDea113c7b02fb44a58fb6b504d6eee5dd"><enum>(B)</enum><header>Definition of
economic substance</header><text>For purposes of subparagraph (A)—</text>
<clause id="IDfd081d92dbeb4ad9928a65dc63349842"><enum>(i)</enum><header>In
general</header><text>A transaction has economic substance only if—</text>
<subclause id="ID5944c09caf244901b2c3465176887c88"><enum>(I)</enum><text>the transaction
changes in a meaningful way (apart from Federal tax effects) the taxpayer's
economic position, and</text>
</subclause><subclause id="ID3468d9351e5f4a8c8b907165857ba175"><enum>(II)</enum><text>the taxpayer has
a substantial nontax purpose for entering into such transaction and the
transaction is a reasonable means of accomplishing such purpose.</text>
</subclause><continuation-text continuation-text-level="clause">In applying
subclause (II), a purpose of achieving a financial accounting benefit shall not
be taken into account in determining whether a transaction has a substantial
nontax purpose if the origin of such financial accounting benefit is a
reduction of income tax</continuation-text></clause><clause id="IDbbe1bd56d79d4c168d1bf361935f4c8b"><enum>(ii)</enum><header>Special rule
where taxpayer relies on profit potential</header><text>A transaction shall not
be treated as having economic substance by reason of having a potential for
profit unless—</text>
<subclause id="ID935604f2011e4397af04c01ebe2b0d3f"><enum>(I)</enum><text>the present value
of the reasonably expected pre-tax profit from the transaction is substantial
in relation to the present value of the expected net tax benefits that would be
allowed if the transaction were respected, and</text>
</subclause><subclause id="ID38f71a6ebba741d8a3177df00eca7d5c"><enum>(II)</enum><text>the reasonably
expected pre-tax profit from the transaction exceeds a risk-free rate of
return.</text>
</subclause></clause></subparagraph><subparagraph id="ID2ca406cb7b0646a099b736dda8e82a0f"><enum>(C)</enum><header>Treatment of
fees and foreign taxes</header><text>Fees and other transaction expenses and
foreign taxes shall be taken into account as expenses in determining pre-tax
profit under subparagraph (B)(ii).</text>
</subparagraph></paragraph><paragraph id="ID352990d58008443da640b420fa0a873a"><enum>(2)</enum><header>Special rules
for transaction with tax-indifferent parties</header>
<subparagraph id="ID7219b224295b48498ed99fc6d7facfa8"><enum>(A)</enum><header>Special rules
for financing transactions</header><text>The form of a transaction which is in
substance the borrowing of money or the acquisition of financial capital
directly or indirectly from a tax-indifferent party shall not be respected if
the present value of the deductions to be claimed with respect to the
transaction is substantially in excess of the present value of the anticipated
economic returns of the person lending the money or providing the financial
capital. A public offering shall be treated as a borrowing, or an acquisition
of financial capital, from a tax-indifferent party if it is reasonably expected
that at least 50 percent of the offering will be placed with tax-indifferent
parties.</text>
</subparagraph><subparagraph id="IDa2ed3de75bef4968804b8de2540b5817"><enum>(B)</enum><header>Artificial
income shifting and basis adjustments</header><text>The form of a transaction
with a tax-indifferent party shall not be respected if—</text>
<clause id="ID5eeba59e43b44e29ba2434fb3369b163"><enum>(i)</enum><text>it results in an
allocation of income or gain to the tax-indifferent party in excess of such
party's economic income or gain, or</text>
</clause><clause id="IDb141a6ea4a25451e98115bc59b4c5a23"><enum>(ii)</enum><text>it results in a
basis adjustment or shifting of basis on account of overstating the income or
gain of the tax-indifferent party.</text>
</clause></subparagraph></paragraph><paragraph id="ID4d793e08da49467ba240287b890084c7"><enum>(3)</enum><header>Definitions and
special rules</header><text>For purposes of this subsection—</text>
<subparagraph id="ID4268801b99944ce7bc265dda235bd2b3"><enum>(A)</enum><header>Economic
substance doctrine</header><text>The term <term>economic substance
doctrine</term> means the common law doctrine under which tax benefits under
subtitle A with respect to a transaction are not allowable if the transaction
does not have economic substance or lacks a business purpose.</text>
</subparagraph><subparagraph id="IDff7eb310395d4c9ca0f02ade7303f2a8"><enum>(B)</enum><header>Tax-indifferent
party</header><text>The term <term>tax-indifferent party</term> means any
person or entity not subject to tax imposed by subtitle A. A person shall be
treated as a tax-indifferent party with respect to a transaction if the items
taken into account with respect to the transaction have no substantial impact
on such person's liability under subtitle A.</text>
</subparagraph><subparagraph id="ID01d9644cb600446a9c774ec825692205"><enum>(C)</enum><header>Exception for
personal transactions of individuals</header><text>In the case of an
individual, this subsection shall apply only to transactions entered into in
connection with a trade or business or an activity engaged in for the
production of income.</text>
</subparagraph><subparagraph id="ID95ba6c7109124193aae2c0e7bb4630a4"><enum>(D)</enum><header>Treatment of
lessors</header><text>In applying paragraph (1)(B)(ii) to the lessor of
tangible property subject to a lease—</text>
<clause id="IDa5e2fd441a3e493e989b50d9dcd61d80"><enum>(i)</enum><text>the expected net
tax benefits with respect to the leased property shall not include the benefits
of—</text>
<subclause id="IDc010bab99d6b40e48a610215af78afef"><enum>(I)</enum><text>depreciation,</text>
</subclause><subclause id="IDa568a17408a24f0c87989767c348a25b"><enum>(II)</enum><text>any tax credit,
or</text>
</subclause><subclause id="ID167e4967acfb47cc8ecbd9b7503fa4a1"><enum>(III)</enum><text>any other
deduction as provided in guidance by the Secretary, and</text>
</subclause></clause><clause id="ID3e41c6c03991469cafacd32df8371322"><enum>(ii)</enum><text>subclause (II)
of paragraph (1)(B)(ii) shall be disregarded in determining whether any of such
benefits are allowable.</text>
</clause></subparagraph></paragraph><paragraph id="ID5e0cf96064ac4d6b9fa62e62f07f6959"><enum>(4)</enum><header>Other common
law doctrines not affected</header><text>Except as specifically provided in
this subsection, the provisions of this subsection shall not be construed as
altering or supplanting any other rule of law, and the requirements of this
subsection shall be construed as being in addition to any such other rule of
law.</text>
</paragraph><paragraph id="IDc21bdf84ccf44585a3ea88fbd2c787a4"><enum>(5)</enum><header>Regulations</header><text>The
Secretary shall prescribe such regulations as may be necessary or appropriate
to carry out the purposes of this subsection. Such regulations may include
exemptions from the application of this
subsection.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID75ac63e0dffb4ff6bf36dd3ce4f47452"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
transactions entered into after the date of the enactment of this Act.</text>
</subsection></section><section id="IDc46864ace05c41ceae06e7f4e162ba74"><enum>202.</enum><header>Penalty for
understatements attributable to transactions lacking economic substance,
etc</header>
<subsection id="IDea1e41f93fc54acf83d18d12c19d8bbb"><enum>(a)</enum><header>In
general</header><text>Subchapter A of chapter 68 of the Internal Revenue Code
of 1986 is amended by inserting after section 6662A the following new
section:</text>
<quoted-block display-inline="no-display-inline" id="idD92A7BFEAA0840B98044679ED33E632A" style="OLC">
<section id="ID49dab1e54920470e861cb2edd57b7243"><enum>6662A.</enum><header>Penalty for
understatements attributable to transactions lacking economic substance,
etc</header>
<subsection id="ID0f57fbf560be4fb3ab1da665e0b9475e"><enum>(a)</enum><header>Imposition of
penalty</header><text>If a taxpayer has an noneconomic substance transaction
understatement for any taxable year, there shall be added to the tax an amount
equal to 40 percent of the amount of such understatement.</text>
</subsection><subsection id="ID49029dd77be1493cbbf8c28fc93e2571"><enum>(b)</enum><header>Reduction of
penalty for disclosed transactions</header><text>Subsection (a) shall be
applied by substituting <quote>20 percent</quote> for <quote>40 percent</quote>
with respect to the portion of any noneconomic substance transaction
understatement with respect to which the relevant facts affecting the tax
treatment of the item are adequately disclosed in the return or a statement
attached to the return.</text>
</subsection><subsection id="IDa67981917abe471c9e6e2dd4288595b4"><enum>(c)</enum><header>Noneconomic
substance transaction understatement</header><text>For purposes of this
section—</text>
<paragraph id="ID5e7b25f07d644f569369eacd9bee83da"><enum>(1)</enum><header>In
general</header><text>The term <term>noneconomic substance transaction
understatement</term> means any amount which would be an understatement under
section 6662A(b)(1) if section 6662A were applied by taking into account items
attributable to noneconomic substance transactions rather than items to which
section 6662A would apply without regard to this paragraph.</text>
</paragraph><paragraph id="ID923b6b91f8ed46eabd9b1208c72c6fc2"><enum>(2)</enum><header>Noneconomic
substance transaction</header><text>The term <term>noneconomic substance
transaction</term> means any transaction if—</text>
<subparagraph id="IDf0f56f0b30344ad8afd804e070f210ed"><enum>(A)</enum><text>there is a lack
of economic substance (within the meaning of section 7701(o)(1)) for the
transaction giving rise to the claimed benefit or the transaction was not
respected under section 7701(o)(2), or</text>
</subparagraph><subparagraph id="IDbc27c8b3498f45dca22aafaf995683b3"><enum>(B)</enum><text>the transaction
fails to meet the requirements of any similar rule of law.</text>
</subparagraph></paragraph></subsection><subsection id="IDe4303b1b97fe43c7b457f0fe112faa53"><enum>(d)</enum><header>Rules
applicable to compromise of penalty</header>
<paragraph id="ID1763b6805ecb4d12ac294a25cb0619c3"><enum>(1)</enum><header>In
general</header><text>If the 1st letter of proposed deficiency which allows the
taxpayer an opportunity for administrative review in the Internal Revenue
Service Office of Appeals has been sent with respect to a penalty to which this
section applies, only the Commissioner of Internal Revenue may compromise all
or any portion of such penalty.</text>
</paragraph><paragraph id="ID9cedf471a51b49e1841298727fff51ad"><enum>(2)</enum><header>Applicable
rules</header><text>The rules of paragraphs (2) and (3) of section 6707A(d)
shall apply for purposes of paragraph (1).</text>
</paragraph></subsection><subsection id="IDebd22712231a4f55989427f3c9eda39f"><enum>(e)</enum><header>Coordination
with other penalties</header><text>Except as otherwise provided in this part,
the penalty imposed by this section shall be in addition to any other penalty
imposed by this title.</text>
</subsection><subsection id="ID415ed82e46664e0cbad43623c06a76af"><enum>(f)</enum><header>Cross
references</header>
<paragraph id="IDd0304e79b2644cf6b25310928a418aaa"><enum>(1)</enum><text>For coordination
of penalty with understatements under section 6662 and other special rules, see
section 6662A(e).</text>
</paragraph><paragraph id="ID05fad5754d694979bc319369f55508a4"><enum>(2)</enum><text>For reporting of
penalty imposed under this section to the Securities and Exchange Commission,
see section
6707A(e).</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID7edb448d08254ea6aa2c97d74ffec1df"><enum>(b)</enum><header>Coordination
with other understatements and penalties</header>
<paragraph id="IDfcbf0a42e8a249948f8a984ad7882605"><enum>(1)</enum><text>The second
sentence of section 6662(d)(2)(A) of the Internal Revenue Code of 1986 is
amended by inserting <quote>and without regard to items with respect to which a
penalty is imposed by section 6662B</quote> before the period at the
end.</text>
</paragraph><paragraph id="ID6bdd0a8f0aa743faa74c70153cf9cffd"><enum>(2)</enum><text>Subsection (e) of
section 6662A of the Internal Revenue Code of 1986 is amended—</text>
<subparagraph id="ID7b5c0986d0b14897ba4e0e140b8975b5"><enum>(A)</enum><text>in paragraph (1),
by inserting <quote>and noneconomic substance transaction
understatements</quote> after <quote>reportable transaction
understatements</quote> both places it appears,</text>
</subparagraph><subparagraph id="ID725b89d64b4b470e8900252a0908665e"><enum>(B)</enum><text>in paragraph
(2)(A), by inserting <quote>and a noneconomic substance transaction
understatement</quote> after <quote>reportable transaction
understatement</quote>,</text>
</subparagraph><subparagraph id="ID8cf57e1d1f1b4333934b68aee2c3e915"><enum>(C)</enum><text>in paragraph
(2)(B), by inserting <quote>6662B or</quote> before <quote>6663</quote>,</text>
</subparagraph><subparagraph id="IDe975b209b46e4f3b8115a4ec67270e0c"><enum>(D)</enum><text>in paragraph
(2)(C)(i), by inserting <quote>or section 6662B</quote> before the period at
the end,</text>
</subparagraph><subparagraph id="ID6c786b9676fe4a89827cd6d86e333aa1"><enum>(E)</enum><text>in paragraph
(2)(C)(ii), by inserting <quote>and section 6662B</quote> after <quote>This
section</quote>,</text>
</subparagraph><subparagraph id="ID940a72c28bea44b9b89887f76776563b"><enum>(F)</enum><text>in paragraph (3),
by inserting <quote>or noneconomic substance transaction understatement</quote>
after <quote>reportable transaction understatement</quote>, and</text>
</subparagraph><subparagraph id="IDeb98d4e48b714a21a512d86113d0c04b"><enum>(G)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id369E694DEAE4407686698624C516A2AF" style="OLC">
<paragraph id="ID53eda1266c4641e9b87d5bb001463f89"><enum>(3)</enum><header>Noneconomic
substance transaction understatement</header><text>For purposes of this
subsection, the term <term>noneconomic substance transaction
understatement</term> has the meaning given such term by section
6662B(c).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="ID2de6bb730b5343918e9db1033474773a"><enum>(3)</enum><text>Subsection (e) of
section 6707A of the Internal Revenue Code of 1986 is amended—</text>
<subparagraph id="IDa4918c02002344d49f8f6a2cd0e2aeaf"><enum>(A)</enum><text>by striking
<quote>or</quote> at the end of subparagraph (B), and</text>
</subparagraph><subparagraph id="ID4b67cf307957410cb9ee467f1dc47743"><enum>(B)</enum><text>by striking
subparagraph (C) and inserting the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="id6EA2D7BCE6E04B96836AF5CD708F3AD1" style="OLC">
<subparagraph id="ID843407162276418baa96ca14fcd72217"><enum>(C)</enum><text>is required to
pay a penalty under section 6662B with respect to any noneconomic substance
transaction, or</text>
</subparagraph><subparagraph id="IDe9d3be95d90f485a9d7292b7e34ca1ef"><enum>(D)</enum><text>is required to
pay a penalty under section 6662(h) with respect to any transaction and would
(but for section 6662A(e)(2)(C)) have been subject to penalty under section
6662A at a rate prescribed under section 6662A(c) or under section
6662B,</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="ID8a2728ef5c1047c8a90a717b23dcc766"><enum>(c)</enum><header>Clerical
amendment</header><text>The table of sections for part II of subchapter A of
chapter 68 of the Internal Revenue Code of 1986 is amended by inserting after
the item relating to section 6662A the following new item:</text>
<quoted-block display-inline="no-display-inline" id="id7785714D72644EF59D8796F327A35E00" style="OLC">
<toc>
<toc-entry bold="off" level="section">Sec. 6662B. Penalty for
understatements attributable to transactions lacking economic substance,
etc.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="IDcfe315fb90014e2fb828b85fa847c481"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
transactions entered into after the date of the enactment of this Act.</text>
</subsection></section><section id="IDdad4963934054f7590928de338b7c10f"><enum>203.</enum><header>Denial of
deduction for interest on underpayments attributable to noneconomic substance
transactions</header>
<subsection id="ID585a1bc94cea43cc9aef26e813dfc63c"><enum>(a)</enum><header>In
general</header><text>Section 163(m) of the Internal Revenue Code of 1986
(relating to interest on unpaid taxes attributable to nondisclosed reportable
transactions) is amended—</text>
<paragraph id="ID1843499ffdea4c8fa906742ceb75144b"><enum>(1)</enum><text>by striking
<quote>attributable</quote> and all that follows and inserting the
following:</text>
<quoted-block display-inline="yes-display-inline" id="id25D27ACA0062423BA26698310FE1943E" style="OLC">
<text>attributable
to—</text><paragraph id="ID1f62738c76754894b878a4f51292e244"><enum>(1)</enum><text>the portion of
any reportable transaction understatement (as defined in section 6662A(b)) with
respect to which the requirement of section 6664(d)(2)(A) is not met, or</text>
</paragraph><paragraph id="ID8b6efe0eafcc48f9a978350b81ec43bb"><enum>(2)</enum><text>any noneconomic
substance transaction understatement (as defined in section
6662B(c)).</text>
</paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID1a43d15631a64db18ead81123479fa7c"><enum>(2)</enum><text>by inserting
<quote>and noneconomic substance transactions</quote> after
<quote>transactions</quote>.</text>
</paragraph></subsection><subsection id="ID6bbe6ae76a304f8987bcee9a4c38bbb4"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
transactions after the date of the enactment of this Act in taxable years
ending after such date.</text>
</subsection></section>