[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7202 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 7202

 To amend the Internal Revenue Code of 1986 to extend certain expiring 
  provisions, to provide individual income tax relief, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 28, 2008

  Mr. Rangel introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committees on 
Agriculture, Natural Resources, Energy and Commerce, and Education and 
 Labor, 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 certain expiring 
  provisions, to provide individual income tax relief, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Temporary Tax 
Relief Act of 2008''.
    (b) Reference.--Except as otherwise expressly provided, whenever in 
this Act an amendment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the Internal 
Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title, etc.
               TITLE I--EXTENSION OF TEMPORARY PROVISIONS

         Subtitle A--Extensions Primarily Affecting Individuals

Sec. 101. Deduction for State and local sales taxes.
Sec. 102. Deduction of qualified tuition and related expenses.
Sec. 103. Treatment of certain dividends of regulated investment 
                            companies.
Sec. 104. Tax-free distributions from individual retirement plans for 
                            charitable purposes.
Sec. 105. Deduction for certain expenses of elementary and secondary 
                            school teachers.
Sec. 106. Stock in RIC for purposes of determining estates of 
                            nonresidents not citizens.
Sec. 107. Qualified investment entities.
Sec. 108. Real property tax standard deduction.
         Subtitle B--Extensions Primarily Affecting Businesses

Sec. 121. Research credit.
Sec. 122. Indian employment credit.
Sec. 123. New markets tax credit.
Sec. 124. Railroad track maintenance.
Sec. 125. Fifteen-year straight-line cost recovery for qualified 
                            leasehold improvements and qualified 
                            restaurant property.
Sec. 126. Seven-year cost recovery period for motorsports racing track 
                            facility.
Sec. 127. Accelerated depreciation for business property on Indian 
                            reservation.
Sec. 128. Expensing of environmental remediation costs.
Sec. 129. Deduction allowable with respect to income attributable to 
                            domestic production activities in Puerto 
                            Rico.
Sec. 130. Modification of tax treatment of certain payments to 
                            controlling exempt organizations.
Sec. 131. Qualified zone academy bonds.
Sec. 132. Tax incentives for investment in the District of Columbia.
Sec. 133. Economic development credit for American Samoa.
Sec. 134. Enhanced charitable deduction for contributions of food 
                            inventory.
Sec. 135. Enhanced charitable deduction for contributions of book 
                            inventory to public schools.
Sec. 136. Enhanced deduction for qualified computer contributions.
Sec. 137. Basis adjustment to stock of S corporations making charitable 
                            contributions of property.
Sec. 138. Work opportunity tax credit for Hurricane Katrina employees.
Sec. 139. Subpart F exception for active financing income.
Sec. 140. Look-thru rule for related controlled foreign corporations.
Sec. 141. Expensing for certain qualified film and television 
                            productions.
                      Subtitle C--Other Extensions

Sec. 151. Authority to disclose information related to terrorist 
                            activities made permanent.
Sec. 152. Authority for undercover operations made permanent.
Sec. 153. Increase in limit on cover over of rum excise tax to Puerto 
                            Rico and the Virgin Islands.
          TITLE II--ADDITIONAL TAX RELIEF AND OTHER PROVISIONS

Sec. 201. Refundable child credit.
Sec. 202. Provisions related to film and television productions.
Sec. 203. Exemption from excise tax for certain arrows designed for use 
                            by children.
Sec. 204. Modification of penalty on understatement of taxpayer's 
                            liability by tax return preparer.
                    TITLE III--SECURE RURAL SCHOOLS

Sec. 301. Secure rural schools and community self-determination 
                            program.
  TITLE IV--PAUL WELLSTONE AND PETE DOMENICI MENTAL HEALTH PARITY AND 
                      ADDICTION EQUITY ACT OF 2008

Sec. 401. Short title.
Sec. 402. Mental health parity.
                      TITLE V--REVENUE PROVISIONS

Sec. 501. 0.2 percent FUTA surtax.
Sec. 502. Nonqualified deferred compensation from certain tax 
                            indifferent parties.
Sec. 503. Increase and extension of Oil Spill Liability Trust Fund tax.
Sec. 504. Delay in application of worldwide allocation of interest.
Sec. 505. Time for payment of corporate estimated taxes.

               TITLE I--EXTENSION OF TEMPORARY PROVISIONS

         Subtitle A--Extensions Primarily Affecting Individuals

SEC. 101. DEDUCTION FOR STATE AND LOCAL SALES TAXES.

    (a) In General.--Subparagraph (I) of section 164(b)(5) is amended 
by striking ``January 1, 2008'' and inserting ``January 1, 2010''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2007.

SEC. 102. DEDUCTION OF QUALIFIED TUITION AND RELATED EXPENSES.

    (a) In General.--Subsection (e) of section 222 is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2007.
    (c) Temporary Coordination With Hope and Lifetime Learning 
Credit.--In the case of any taxpayer for any taxable year beginning in 
2008 or 2009, no deduction shall be allowed under section 222 of the 
Internal Revenue Code of 1986 if--
            (1) the taxpayer's net Federal income tax reduction which 
        would be attributable to such deduction for such taxable year, 
        is less than
            (2) the credit which would be allowed to the taxpayer for 
        such taxable year under section 25A of such Code (determined 
        without regard to sections 25A(e) and 26 of such Code).

SEC. 103. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED INVESTMENT 
              COMPANIES.

    (a) Interest-Related Dividends.--Subparagraph (C) of section 
871(k)(1) (defining interest-related dividend) is amended by striking 
``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Short-Term Capital Gain Dividends.--Subparagraph (C) of section 
871(k)(2) (defining short-term capital gain dividend) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (c) Effective Date.--The amendments made by this section shall 
apply to dividends with respect to taxable years of regulated 
investment companies beginning after December 31, 2007.

SEC. 104. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS FOR 
              CHARITABLE PURPOSES.

    (a) In General.--Subparagraph (F) of section 408(d)(8) is amended 
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions made in taxable years beginning after December 31, 
2007.

SEC. 105. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND SECONDARY 
              SCHOOL TEACHERS.

    (a) In General.--Subparagraph (D) of section 62(a)(2) is amended by 
striking ``or 2007'' and inserting ``2007, 2008, or 2009''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2007.

SEC. 106. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF 
              NONRESIDENTS NOT CITIZENS.

    (a) In General.--Paragraph (3) of section 2105(d) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to decedents dying after December 31, 2007.

SEC. 107. QUALIFIED INVESTMENT ENTITIES.

    (a) In General.--Clause (ii) of section 897(h)(4)(A) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 2008, except that such amendment shall not 
apply to the application of withholding requirements with respect to 
any payment made on or before the date of the enactment of this Act.

SEC. 108. REAL PROPERTY TAX STANDARD DEDUCTION.

    (a) In General.--Subparagraph (C) of section 63(c)(1) is amended by 
inserting ``or 2009'' after ``2008''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2008.

         Subtitle B--Extensions Primarily Affecting Businesses

SEC. 121. RESEARCH CREDIT.

    (a) In General.--Subparagraph (B) of section 41(h)(1) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Computation of Credit for Taxable Year in Which Credit 
Terminates.--Paragraph (2) of section 41(h) is amended to read as 
follows:
            ``(2) Computation of credit for taxable year in which 
        credit terminates.--
                    ``(A) In general.--In the case of any taxable year 
                with respect to which this section applies to a number 
                of days which is less than the total number of days in 
                such taxable year, the applicable base amount with 
                respect to such taxable year shall be the amount which 
                bears the same ratio to such applicable amount 
                (determined without regard to this paragraph) as the 
                number of days in such taxable year to which this 
                section applies bears to the total number of days in 
                such taxable year.
                    ``(B) Applicable base amount.--For purposes of 
                subparagraph (A), the term `applicable base amount' 
                means, with respect to any taxable year--
                            ``(i) except as otherwise provided in this 
                        subparagraph, the base amount for the taxable 
                        year,
                            ``(ii) in the case of a taxable year with 
                        respect to which an election under subsection 
                        (c)(4) (relating to election of alternative 
                        incremental credit) is in effect, the average 
                        described in subsection (c)(1)(B) for the 
                        taxable year, and
                            ``(iii) in the case of a taxable year with 
                        respect to which an election under subsection 
                        (c)(5) (relating to election of alternative 
                        simplified credit) is in effect, the average 
                        qualified research expenses for the 3 taxable 
                        years preceding the taxable year.''.
    (c) Conforming Amendment.--Subparagraph (D) of section 45C(b)(1) is 
amended by striking ``December 31, 2007'' and inserting ``December 31, 
2009''.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to amounts paid or 
        incurred after December 31, 2007.
            (2) Computation of credit for taxable year in which credit 
        begins.--The amendment made by subsection (b) shall apply to 
        taxable years beginning after December 31, 2007.

SEC. 122. INDIAN EMPLOYMENT CREDIT.

    (a) In General.--Subsection (f) of section 45A is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2007.

SEC. 123. NEW MARKETS TAX CREDIT.

    Subparagraph (D) of section 45D(f)(1) is amended by striking ``and 
2008'' and inserting ``2008, and 2009''.

SEC. 124. RAILROAD TRACK MAINTENANCE.

    (a) In General.--Subsection (f) of section 45G is amended by 
striking ``January 1, 2008'' and inserting ``January 1, 2010''.
    (b) Effective Date.--The amendment made by this section shall apply 
to expenditures paid or incurred during taxable years beginning after 
December 31, 2007.

SEC. 125. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED 
              LEASEHOLD IMPROVEMENTS AND QUALIFIED RESTAURANT PROPERTY.

    (a) In General.--Clauses (iv) and (v) of section 168(e)(3)(E) are 
each amended by striking ``January 1, 2008'' and inserting ``January 1, 
2010''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2007.

SEC. 126. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS RACING TRACK 
              FACILITY.

    (a) In General.--Subparagraph (D) of section 168(i)(15) is amended 
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2007.

SEC. 127. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON INDIAN 
              RESERVATION.

    (a) In General.--Paragraph (8) of section 168(j) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2007.

SEC. 128. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

    (a) In General.--Subsection (h) of section 198 is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to expenditures paid or incurred after December 31, 2007.

SEC. 129. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME ATTRIBUTABLE TO 
              DOMESTIC PRODUCTION ACTIVITIES IN PUERTO RICO.

    (a) In General.--Subparagraph (C) of section 199(d)(8) is amended--
            (1) by striking ``first 2 taxable years'' and inserting 
        ``first 4 taxable years'', and
            (2) by striking ``January 1, 2008'' and inserting ``January 
        1, 2010''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

SEC. 130. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS TO 
              CONTROLLING EXEMPT ORGANIZATIONS.

    (a) In General.--Clause (iv) of section 512(b)(13)(E) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to payments received or accrued after December 31, 2007.

SEC. 131. QUALIFIED ZONE ACADEMY BONDS.

    (a) In General.--Subpart I of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new section:

``SEC. 54C. QUALIFIED ZONE ACADEMY BONDS.

    ``(a) Qualified Zone Academy Bonds.--For purposes of this 
subchapter, the term `qualified zone academy bond' means any bond 
issued as part of an issue if--
            ``(1) 100 percent of the available project proceeds of such 
        issue are to be used for a qualified purpose with respect to a 
        qualified zone academy established by an eligible local 
        education agency,
            ``(2) the bond is issued by a State or local government 
        within the jurisdiction of which such academy is located, and
            ``(3) the issuer--
                    ``(A) designates such bond for purposes of this 
                section,
                    ``(B) certifies that it has written assurances that 
                the private business contribution requirement of 
                subsection (b) will be met with respect to such 
                academy, and
                    ``(C) certifies that it has the written approval of 
                the eligible local education agency for such bond 
                issuance.
    ``(b)  Private Business Contribution Requirement.--For purposes of 
subsection (a), the private business contribution requirement of this 
subsection is met with respect to any issue if the eligible local 
education agency that established the qualified zone academy has 
written commitments from private entities to make qualified 
contributions having a present value (as of the date of issuance of the 
issue) of not less than 10 percent of the proceeds of the issue.
    ``(c) Limitation on Amount of Bonds Designated.--
            ``(1) National limitation.--There is a national zone 
        academy bond limitation for each calendar year. Such limitation 
        is $400,000,000 for 2008 and 2009, and, except as provided in 
        paragraph (4), zero thereafter.
            ``(2) Allocation of limitation.--The national zone academy 
        bond limitation for a calendar year shall be allocated by the 
        Secretary among the States on the basis of their respective 
        populations of individuals below the poverty line (as defined 
        by the Office of Management and Budget). The limitation amount 
        allocated to a State under the preceding sentence shall be 
        allocated by the State education agency to qualified zone 
        academies within such State.
            ``(3) Designation subject to limitation amount.--The 
        maximum aggregate face amount of bonds issued during any 
        calendar year which may be designated under subsection (a) with 
        respect to any qualified zone academy shall not exceed the 
        limitation amount allocated to such academy under paragraph (2) 
        for such calendar year.
            ``(4) Carryover of unused limitation.--
                    ``(A) In general.--If for any calendar year--
                            ``(i) the limitation amount for any State, 
                        exceeds
                            ``(ii) the amount of bonds issued during 
                        such year which are designated under subsection 
                        (a) with respect to qualified zone academies 
                        within such State,
                the limitation amount for such State for the following 
                calendar year shall be increased by the amount of such 
                excess.
                    ``(B) Limitation on carryover.--Any carryforward of 
                a limitation amount may be carried only to the first 2 
                years following the unused limitation year. For 
                purposes of the preceding sentence, a limitation amount 
                shall be treated as used on a first-in first-out basis.
                    ``(C) Coordination with section 1397e.--Any 
                carryover determined under section 1397E(e)(4) 
                (relating to carryover of unused limitation) with 
                respect to any State to calendar year 2008 shall be 
                treated for purposes of this section as a carryover 
                with respect to such State for such calendar year under 
                subparagraph (A), and the limitation of subparagraph 
                (B) shall apply to such carryover taking into account 
                the calendar years to which such carryover relates.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Qualified zone academy.--The term `qualified zone 
        academy' means any public school (or academic program within a 
        public school) which is established by and operated under the 
        supervision of an eligible local education agency to provide 
        education or training below the postsecondary level if--
                    ``(A) such public school or program (as the case 
                may be) is designed in cooperation with business to 
                enhance the academic curriculum, increase graduation 
                and employment rates, and better prepare students for 
                the rigors of college and the increasingly complex 
                workforce,
                    ``(B) students in such public school or program (as 
                the case may be) will be subject to the same academic 
                standards and assessments as other students educated by 
                the eligible local education agency,
                    ``(C) the comprehensive education plan of such 
                public school or program is approved by the eligible 
                local education agency, and
                    ``(D)(i) such public school is located in an 
                empowerment zone or enterprise community (including any 
                such zone or community designated after the date of the 
                enactment of this section), or
                    ``(ii) there is a reasonable expectation (as of the 
                date of issuance of the bonds) that at least 35 percent 
                of the students attending such school or participating 
                in such program (as the case may be) will be eligible 
                for free or reduced-cost lunches under the school lunch 
                program established under the National School Lunch 
                Act.
            ``(2) Eligible local education agency.--For purposes of 
        this section, the term `eligible local education agency' means 
        any local educational agency as defined in section 9101 of the 
        Elementary and Secondary Education Act of 1965.
            ``(3) Qualified purpose.--The term `qualified purpose' 
        means, with respect to any qualified zone academy--
                    ``(A) rehabilitating or repairing the public school 
                facility in which the academy is established,
                    ``(B) providing equipment for use at such academy,
                    ``(C) developing course materials for education to 
                be provided at such academy, and
                    ``(D) training teachers and other school personnel 
                in such academy.
            ``(4) Qualified contributions.--The term `qualified 
        contribution' means any contribution (of a type and quality 
        acceptable to the eligible local education agency) of--
                    ``(A) equipment for use in the qualified zone 
                academy (including state-of-the-art technology and 
                vocational equipment),
                    ``(B) technical assistance in developing curriculum 
                or in training teachers in order to promote appropriate 
                market driven technology in the classroom,
                    ``(C) services of employees as volunteer mentors,
                    ``(D) internships, field trips, or other 
                educational opportunities outside the academy for 
                students, or
                    ``(E) any other property or service specified by 
                the eligible local education agency.''.
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 54A(d) is amended to read as 
        follows:
            ``(1) Qualified tax credit bond.--The term `qualified tax 
        credit bond' means--
                    ``(A) a qualified forestry conservation bond, or
                    ``(B) a qualified zone academy bond,
        which is part of an issue that meets the requirements of 
        paragraphs (2), (3), (4), (5), and (6).''.
            (2) Subparagraph (C) of section 54A(d)(2) is amended to 
        read as follows:
                    ``(C) Qualified purpose.--For purposes of this 
                paragraph, the term `qualified purpose' means--
                            ``(i) in the case of a qualified forestry 
                        conservation bond, a purpose specified in 
                        section 54B(e), and
                            ``(ii) in the case of a qualified zone 
                        academy bond, a purpose specified in section 
                        54C(a)(1).''.
            (3) Section 1397E is amended by adding at the end the 
        following new subsection:
    ``(m) Termination.--This section shall not apply to any obligation 
issued after the date of the enactment of this subsection.''.
            (4) The table of sections for subpart I of part IV of 
        subchapter A of chapter 1 is amended by adding at the end the 
        following new item:

``Sec. 54C. Qualified zone academy bonds.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 132. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF COLUMBIA.

    (a) Designation of Zone.--
            (1) In general.--Subsection (f) of section 1400 is amended 
        by striking ``2007'' both places it appears and inserting 
        ``2009''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to periods beginning after December 31, 2007.
    (b) Tax-Exempt Economic Development Bonds.--
            (1) In general.--Subsection (b) of section 1400A is amended 
        by striking ``2007'' and inserting ``2009''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to bonds issued after December 31, 2007.
    (c) Zero Percent Capital Gains Rate.--
            (1) In general.--Subsection (b) of section 1400B is amended 
        by striking ``2008'' each place it appears and inserting 
        ``2010''.
            (2) Conforming amendments.--
                    (A) Section 1400B(e)(2) is amended--
                            (i) by striking ``2012'' and inserting 
                        ``2014'', and
                            (ii) by striking ``2012'' in the heading 
                        thereof and inserting ``2014''.
                    (B) Section 1400B(g)(2) is amended by striking 
                ``2012'' and inserting ``2014''.
                    (C) Section 1400F(d) is amended by striking 
                ``2012'' and inserting ``2014''.
            (3) Effective dates.--
                    (A) Extension.--The amendments made by paragraph 
                (1) shall apply to acquisitions after December 31, 
                2007.
                    (B) Conforming amendments.--The amendments made by 
                paragraph (2) shall take effect on the date of the 
                enactment of this Act.
    (d) First-Time Homebuyer Credit.--
            (1) In general.--Subsection (i) of section 1400C is amended 
        by striking ``2008'' and inserting ``2010''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to property purchased after December 31, 2007.

SEC. 133. ECONOMIC DEVELOPMENT CREDIT FOR AMERICAN SAMOA.

    (a) In General.--Subsection (d) of section 119 of division A of the 
Tax Relief and Health Care Act of 2006 is amended--
            (1) by striking ``first two taxable years'' and inserting 
        ``first 4 taxable years'', and
            (2) by striking ``January 1, 2008'' and inserting ``January 
        1, 2010''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2007.

SEC. 134. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD 
              INVENTORY.

    (a) In General.--Clause (iv) of section 170(e)(3)(C) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made after December 31, 2007.

SEC. 135. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF BOOK 
              INVENTORY TO PUBLIC SCHOOLS.

    (a) In General.--Clause (iv) of section 170(e)(3)(D) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made after December 31, 2007.

SEC. 136. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER CONTRIBUTIONS.

    (a) In General.--Subparagraph (G) of section 170(e)(6) is amended 
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made during taxable years beginning after December 31, 
2007.

SEC. 137. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING CHARITABLE 
              CONTRIBUTIONS OF PROPERTY.

    (a) In General.--The last sentence of section 1367(a)(2) is amended 
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made in taxable years beginning after December 31, 
2007.

SEC. 138. WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA EMPLOYEES.

    (a) In General.--Paragraph (1) of section 201(b) of the Katrina 
Emergency Tax Relief Act of 2005 is amended by striking ``2-year'' and 
inserting ``4-year''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to individuals hired after August 27, 2007.

SEC. 139. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.

    (a) Exempt Insurance Income.--Paragraph (10) of section 953(e) 
(relating to application) is amended--
            (1) by striking ``January 1, 2009'' and inserting ``January 
        1, 2010'', and
            (2) by striking ``December 31, 2008'' and inserting 
        ``December 31, 2009''.
    (b) Exception to Treatment as Foreign Personal Holding Company 
Income.--Paragraph (9) of section 954(h) (relating to application) is 
amended by striking ``January 1, 2009'' and inserting ``January 1, 
2010''.

SEC. 140. LOOK-THRU RULE FOR RELATED CONTROLLED FOREIGN CORPORATIONS.

    (a) In General.--Subparagraph (C) of section 954(c)(6) (relating to 
application) is amended by striking ``January 1, 2009'' and inserting 
``January 1, 2010''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years of foreign corporations beginning after December 31, 
2008, and to taxable years of United States shareholders with or within 
which such taxable years of foreign corporations end.

SEC. 141. EXPENSING FOR CERTAIN QUALIFIED FILM AND TELEVISION 
              PRODUCTIONS.

    (a) In General.--Subsection (f) of section 181 is amended by 
striking ``December 31, 2008'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to productions commencing after December 31, 2008.

                      Subtitle C--Other Extensions

SEC. 151. AUTHORITY TO DISCLOSE INFORMATION RELATED TO TERRORIST 
              ACTIVITIES MADE PERMANENT.

    (a) In General.--Subparagraph (C) of section 6103(i)(3) is amended 
by striking clause (iv).
    (b) Disclosure on Request.--Paragraph (7) of section 6103(i) is 
amended by striking subparagraph (E).
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures after the date of the enactment of this Act.

SEC. 152. AUTHORITY FOR UNDERCOVER OPERATIONS MADE PERMANENT.

    (a) In General.--Subsection (c) of section 7608 is amended by 
striking paragraph (6).
    (b) Effective Date.--The amendment made by this section shall take 
effect on January 1, 2008.

SEC. 153. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX TO PUERTO 
              RICO AND THE VIRGIN ISLANDS.

    (a) In General.--Paragraph (1) of section 7652(f) is amended by 
striking ``January 1, 2008'' and inserting ``January 1, 2010''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distilled spirits brought into the United States after December 31, 
2007.

          TITLE II--ADDITIONAL TAX RELIEF AND OTHER PROVISIONS

SEC. 201. REFUNDABLE CHILD CREDIT.

    (a) Modification of Threshold Amount.--Clause (i) of section 
24(d)(1)(B) is amended by inserting ``($8,500 in the case of taxable 
years beginning in 2009)'' after ``$10,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2008.

SEC. 202. PROVISIONS RELATED TO FILM AND TELEVISION PRODUCTIONS.

    (a) Modification of Limitation on Expensing.--Subparagraph (A) of 
section 181(a)(2) is amended to read as follows:
                    ``(A) In general.--Paragraph (1) shall not apply to 
                so much of the aggregate cost of any qualified film or 
                television production as exceeds $15,000,000.''.
    (b) Modifications to Deduction for Domestic Activities.--
            (1) Determination of w-2 wages.--Paragraph (2) of section 
        199(b) is amended by adding at the end the following new 
        subparagraph:
                    ``(D) Special rule for qualified film.--In the case 
                of a qualified film, such term shall include 
                compensation for services performed in the United 
                States by actors, production personnel, directors, and 
                producers.''.
            (2) Definition of qualified film.--Paragraph (6) of section 
        199(c) is amended by adding at the end the following: ``A 
        qualified film shall include any copyrights, trademarks, or 
        other intangibles with respect to such film. The methods and 
        means of distributing a qualified film shall not affect the 
        availability of the deduction under this section.''.
            (3) Partnerships.--Subparagraph (A) of section 199(d)(1) is 
        amended by striking ``and'' at the end of clause (ii), by 
        striking the period at the end of clause (iii) and inserting 
        ``, and'', and by adding at the end the following new clause:
                            ``(iv) in the case of each partner of a 
                        partnership, or shareholder of an S 
                        corporation, who owns (directly or indirectly) 
                        at least 20 percent of the capital interests in 
                        such partnership or of the stock of such S 
                        corporation--
                                    ``(I) such partner or shareholder 
                                shall be treated as having engaged 
                                directly in any film produced by such 
                                partnership or S corporation, and
                                    ``(II) such partnership or S 
                                corporation shall be treated as having 
                                engaged directly in any film produced 
                                by such partner or shareholder.''.
    (c) Conforming Amendment.--Section 181(d)(3)(A) is amended by 
striking ``actors'' and all that follows and inserting ``actors, 
production personnel, directors, and producers.''.
    (d) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        taxable years beginning after December 31, 2007.
            (2) Expensing.--The amendments made by subsection (a) shall 
        apply to qualified film and television productions commencing 
        after December 31, 2007.

SEC. 203. EXEMPTION FROM EXCISE TAX FOR CERTAIN ARROWS DESIGNED FOR USE 
              BY CHILDREN.

    (a) In General.--Paragraph (2) of section 4161(b) (relating to 
arrows) is amended by redesignating subparagraph (B) as subparagraph 
(C) and by inserting after subparagraph (A) the following new 
subparagraph:
                    ``(B) Exemption for certain arrow shafts.--
                Subparagraph (A) shall not apply to any shaft measuring 
                \5/16\ of an inch or less in diameter and consisting of 
                either--
                            ``(i) all fiberglass and hollow, or
                            ``(ii) all natural wood,
                with no laminations or artificial means of enhancing 
                the spine of such shaft (whether sold separately or 
                incorporated as part of a finished or unfinished 
                product) of a type used in the manufacture of any arrow 
                which after its assembly is not suitable for use with a 
                bow described in paragraph (1)(A).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to shafts first sold after the date of enactment of this Act.

SEC. 204. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF TAXPAYER'S 
              LIABILITY BY TAX RETURN PREPARER.

    (a) In General.--Subsection (a) of section 6694 (relating to 
understatement due to unreasonable positions) is amended to read as 
follows:
    ``(a) Understatement Due to Unreasonable Positions.--
            ``(1) In general.--If a tax return preparer--
                    ``(A) prepares any return or claim of refund with 
                respect to which any part of an understatement of 
                liability is due to a position described in paragraph 
                (2), and
                    ``(B) knew (or reasonably should have known) of the 
                position,
        such tax return preparer shall pay a penalty with respect to 
        each such return or claim in an amount equal to the greater of 
        $1,000 or 50 percent of the income derived (or to be derived) 
        by the tax return preparer with respect to the return or claim.
            ``(2) Unreasonable position.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, a position is described in this 
                paragraph unless there is or was substantial authority 
                for the position.
                    ``(B) Disclosed positions.--If the position was 
                disclosed as provided in section 6662(d)(2)(B)(ii)(I) 
                and is not a position to which subparagraph (C) 
                applies, the position is described in this paragraph 
                unless there is a reasonable basis for the position.
                    ``(C) Reportable transactions.--If the position is 
                with respect to a reportable transaction to which 
                section 6662A applies, the position is described in 
                this paragraph unless it is reasonable to believe that 
                the position would more likely than not be sustained on 
                its merits.
            ``(3) Reasonable cause exception.--No penalty shall be 
        imposed under this subsection if it is shown that there is 
        reasonable cause for the understatement and the tax return 
        preparer acted in good faith.''.
    (b) Effective Date.--The amendment made by this section shall 
apply--
            (1) in the case of a position other than a position 
        described in subparagraph (C) of section 6694(a)(2) of the 
        Internal Revenue Code of 1986 (as amended by this section), to 
        returns prepared after May 25, 2007, and
            (2) in the case of a position described in such 
        subparagraph (C), to returns prepared for taxable years 
        beginning after the date of the enactment of this Act.

                    TITLE III--SECURE RURAL SCHOOLS

SEC. 301. SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION 
              PROGRAM.

    (a) Reauthorization of the Secure Rural Schools and Community Self-
Determination Act of 2000.--The Secure Rural Schools and Community 
Self-Determination Act of 2000 (16 U.S.C. 500 note; Public Law 106-393) 
is amended by striking sections 1 through 403 and inserting the 
following:

``SECTION 1. SHORT TITLE.

    ``This Act may be cited as the `Secure Rural Schools and Community 
Self-Determination Act of 2000'.

``SEC. 2. PURPOSES.

    ``The purposes of this Act are--
            ``(1) to stabilize and transition payments to counties to 
        provide funding for schools and roads that supplements other 
        available funds;
            ``(2) to make additional investments in, and create 
        additional employment opportunities through, projects that--
                    ``(A)(i) improve the maintenance of existing 
                infrastructure;
                    ``(ii) implement stewardship objectives that 
                enhance forest ecosystems; and
                    ``(iii) restore and improve land health and water 
                quality;
                    ``(B) enjoy broad-based support; and
                    ``(C) have objectives that may include--
                            ``(i) road, trail, and infrastructure 
                        maintenance or obliteration;
                            ``(ii) soil productivity improvement;
                            ``(iii) improvements in forest ecosystem 
                        health;
                            ``(iv) watershed restoration and 
                        maintenance;
                            ``(v) the restoration, maintenance, and 
                        improvement of wildlife and fish habitat;
                            ``(vi) the control of noxious and exotic 
                        weeds; and
                            ``(vii) the reestablishment of native 
                        species; and
            ``(3) to improve cooperative relationships among--
                    ``(A) the people that use and care for Federal 
                land; and
                    ``(B) the agencies that manage the Federal land.

``SEC. 3. DEFINITIONS.

    ``In this Act:
            ``(1) Adjusted share.--The term `adjusted share' means the 
        number equal to the quotient obtained by dividing--
                    ``(A) the number equal to the quotient obtained by 
                dividing--
                            ``(i) the base share for the eligible 
                        county; by
                            ``(ii) the income adjustment for the 
                        eligible county; by
                    ``(B) the number equal to the sum of the quotients 
                obtained under subparagraph (A) and paragraph (8)(A) 
                for all eligible counties.
            ``(2) Base share.--The term `base share' means the number 
        equal to the average of--
                    ``(A) the quotient obtained by dividing--
                            ``(i) the number of acres of Federal land 
                        described in paragraph (7)(A) in each eligible 
                        county; by
                            ``(ii) the total number acres of Federal 
                        land in all eligible counties in all eligible 
                        States; and
                    ``(B) the quotient obtained by dividing--
                            ``(i) the amount equal to the average of 
                        the 3 highest 25-percent payments and safety 
                        net payments made to each eligible State for 
                        each eligible county during the eligibility 
                        period; by
                            ``(ii) the amount equal to the sum of the 
                        amounts calculated under clause (i) and 
                        paragraph (9)(B)(i) for all eligible counties 
                        in all eligible States during the eligibility 
                        period.
            ``(3) County payment.--The term `county payment' means the 
        payment for an eligible county calculated under section 101(b).
            ``(4) Eligible county.--The term `eligible county' means 
        any county that--
                    ``(A) contains Federal land (as defined in 
                paragraph (7)); and
                    ``(B) elects to receive a share of the State 
                payment or the county payment under section 102(b).
            ``(5) Eligibility period.--The term `eligibility period' 
        means fiscal year 1986 through fiscal year 1999.
            ``(6) Eligible state.--The term `eligible State' means a 
        State or territory of the United States that received a 25-
        percent payment for 1 or more fiscal years of the eligibility 
        period.
            ``(7) Federal land.--The term `Federal land' means--
                    ``(A) land within the National Forest System, as 
                defined in section 11(a) of the Forest and Rangeland 
                Renewable Resources Planning Act of 1974 (16 U.S.C. 
                1609(a)) exclusive of the National Grasslands and land 
                utilization projects designated as National Grasslands 
                administered pursuant to the Act of July 22, 1937 (7 
                U.S.C. 1010-1012); and
                    ``(B) such portions of the revested Oregon and 
                California Railroad and reconveyed Coos Bay Wagon Road 
                grant land as are or may hereafter come under the 
                jurisdiction of the Department of the Interior, which 
                have heretofore or may hereafter be classified as 
                timberlands, and power-site land valuable for timber, 
                that shall be managed, except as provided in the former 
                section 3 of the Act of August 28, 1937 (50 Stat. 875; 
                43 U.S.C. 1181c), for permanent forest production.
            ``(8) 50-percent adjusted share.--The term `50-percent 
        adjusted share' means the number equal to the quotient obtained 
        by dividing--
                    ``(A) the number equal to the quotient obtained by 
                dividing--
                            ``(i) the 50-percent base share for the 
                        eligible county; by
                            ``(ii) the income adjustment for the 
                        eligible county; by
                    ``(B) the number equal to the sum of the quotients 
                obtained under subparagraph (A) and paragraph (1)(A) 
                for all eligible counties.
            ``(9) 50-percent base share.--The term `50-percent base 
        share' means the number equal to the average of--
                    ``(A) the quotient obtained by dividing--
                            ``(i) the number of acres of Federal land 
                        described in paragraph (7)(B) in each eligible 
                        county; by
                            ``(ii) the total number acres of Federal 
                        land in all eligible counties in all eligible 
                        States; and
                    ``(B) the quotient obtained by dividing--
                            ``(i) the amount equal to the average of 
                        the 3 highest 50-percent payments made to each 
                        eligible county during the eligibility period; 
                        by
                            ``(ii) the amount equal to the sum of the 
                        amounts calculated under clause (i) and 
                        paragraph (2)(B)(i) for all eligible counties 
                        in all eligible States during the eligibility 
                        period.
            ``(10) 50-percent payment.--The term `50-percent payment' 
        means the payment that is the sum of the 50-percent share 
        otherwise paid to a county pursuant to title II of the Act of 
        August 28, 1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 1181f), 
        and the payment made to a county pursuant to the Act of May 24, 
        1939 (chapter 144; 53 Stat. 753; 43 U.S.C. 1181f-1 et seq.).
            ``(11) Full funding amount.--The term `full funding amount' 
        means $500,000,000 for fiscal year 2008.
            ``(12) Income adjustment.--The term `income adjustment' 
        means the square of the quotient obtained by dividing--
                    ``(A) the per capita personal income for each 
                eligible county; by
                    ``(B) the median per capita personal income of all 
                eligible counties.
            ``(13) Per capita personal income.--The term `per capita 
        personal income' means the most recent per capita personal 
        income data, as determined by the Bureau of Economic Analysis.
            ``(14) Safety net payments.--The term `safety net payments' 
        means the special payment amounts paid to States and counties 
        required by section 13982 or 13983 of the Omnibus Budget 
        Reconciliation Act of 1993 (Public Law 103-66; 16 U.S.C. 500 
        note; 43 U.S.C. 1181f note).
            ``(15) Secretary concerned.--The term `Secretary concerned' 
        means--
                    ``(A) the Secretary of Agriculture or the designee 
                of the Secretary of Agriculture with respect to the 
                Federal land described in paragraph (7)(A); and
                    ``(B) the Secretary of the Interior or the designee 
                of the Secretary of the Interior with respect to the 
                Federal land described in paragraph (7)(B).
            ``(16) State payment.--The term `State payment' means the 
        payment for an eligible State calculated under section 101(a).
            ``(17) 25-percent payment.--The term `25-percent payment' 
        means the payment to States required by the sixth paragraph 
        under the heading of `FOREST SERVICE' in the Act of May 23, 
        1908 (35 Stat. 260; 16 U.S.C. 500), and section 13 of the Act 
        of March 1, 1911 (36 Stat. 963; 16 U.S.C. 500).

 ``TITLE I--SECURE PAYMENTS FOR STATES AND COUNTIES CONTAINING FEDERAL 
                                  LAND

``SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING FEDERAL LAND.

    ``(a) State Payment.--For fiscal year 2008, the Secretary of 
Agriculture shall calculate for each eligible State an amount equal to 
the sum of the products obtained by multiplying--
            ``(1) the adjusted share for each eligible county within 
        the eligible State; by
            ``(2) the full funding amount for the fiscal year.
    ``(b) County Payment.--For fiscal year 2008, the Secretary of the 
Interior shall calculate for each eligible county that received a 50-
percent payment during the eligibility period an amount equal to the 
product obtained by multiplying--
            ``(1) the 50-percent adjusted share for the eligible 
        county; by
            ``(2) the full funding amount for the fiscal year.

``SEC. 102. PAYMENTS TO STATES AND COUNTIES.

    ``(a) Payment Amounts.--Except as provided in section 103, the 
Secretary of the Treasury shall pay to--
            ``(1) a State or territory of the United States an amount 
        equal to the sum of the amounts elected under subsection (b) by 
        each county within the State or territory for--
                    ``(A) if the county is eligible for the 25-percent 
                payment, the share of the 25-percent payment; or
                    ``(B) the share of the State payment of the 
                eligible county; and
            ``(2) a county an amount equal to the amount elected under 
        subsection (b) by each county for--
                    ``(A) if the county is eligible for the 50-percent 
                payment, the 50-percent payment; or
                    ``(B) the county payment for the eligible county.
    ``(b) Election To Receive Payment Amount.--
            ``(1) Election; submission of results.--
                    ``(A) In general.--The election to receive a share 
                of the State payment, the county payment, a share of 
                the State payment and the county payment, a share of 
                the 25-percent payment, the 50-percent payment, or a 
                share of the 25-percent payment and the 50-percent 
                payment, as applicable, shall be made at the discretion 
                of each affected county by August 1, 2008 (or as soon 
                thereafter as the Secretary concerned determines is 
                practicable) and transmitted to the Secretary concerned 
                by the Governor of each eligible State.
                    ``(B) Failure to transmit.--If an election for an 
                affected county is not transmitted to the Secretary 
                concerned by the date specified under subparagraph (A), 
                the affected county shall be considered to have elected 
                to receive a share of the State payment, the county 
                payment, or a share of the State payment and the county 
                payment, as applicable.
            ``(2) Source of payment amounts.--The payment to an 
        eligible State or eligible county under this section for a 
        fiscal year shall be derived from--
                    ``(A) any amounts that are appropriated to carry 
                out this Act;
                    ``(B) any revenues, fees, penalties, or 
                miscellaneous receipts, exclusive of deposits to any 
                relevant trust fund, special account, or permanent 
                operating funds, received by the Federal Government 
                from activities by the Bureau of Land Management or the 
                Forest Service on the applicable Federal land; and
                    ``(C) to the extent of any shortfall, out of any 
                amounts in the Treasury of the United States not 
                otherwise appropriated.
    ``(c) Distribution and Expenditure of Payments.--
            ``(1) Distribution method.--A State that receives a payment 
        under subsection (a) for Federal land described in section 
        3(7)(A) shall distribute the appropriate payment amount among 
        the appropriate counties in the State in accordance with--
                    ``(A) the Act of May 23, 1908 (16 U.S.C. 500); and
                    ``(B) section 13 of the Act of March 1, 1911 (36 
                Stat. 963; 16 U.S.C. 500).
            ``(2) Expenditure purposes.--Subject to subsection (d), 
        payments received by a State under subsection (a) and 
        distributed to counties in accordance with paragraph (1) shall 
        be expended as required by the laws referred to in paragraph 
        (1).
    ``(d) Expenditure Rules for Eligible Counties.--
            ``(1) Allocations.--
                    ``(A) Use of portion in same manner as 25-percent 
                payment or 50-percent payment, as applicable.--Except 
                as provided in paragraph (3)(B), if an eligible county 
                elects to receive its share of the State payment or the 
                county payment, not less than 80 percent, but not more 
                than 85 percent, of the funds shall be expended in the 
                same manner in which the 25-percent payments or 50-
                percent payment, as applicable, are required to be 
                expended.
                    ``(B) Election as to use of balance.--Except as 
                provided in subparagraph (C), an eligible county shall 
                elect to do 1 or more of the following with the balance 
                of any funds not expended pursuant to subparagraph (A):
                            ``(i) Reserve any portion of the balance 
                        for projects in accordance with title II.
                            ``(ii) Reserve not more than 7 percent of 
                        the total share for the eligible county of the 
                        State payment or the county payment for 
                        projects in accordance with title III.
                            ``(iii) Return the portion of the balance 
                        not reserved under clauses (i) and (ii) to the 
                        Treasury of the United States.
                    ``(C) Counties with modest distributions.--In the 
                case of each eligible county to which more than 
                $100,000, but less than $350,000, is distributed for 
                any fiscal year pursuant to either or both of 
                paragraphs (1)(B) and (2)(B) of subsection (a), the 
                eligible county, with respect to the balance of any 
                funds not expended pursuant to subparagraph (A) for 
                that fiscal year, shall--
                            ``(i) reserve any portion of the balance 
                        for--
                                    ``(I) carrying out projects under 
                                title II;
                                    ``(II) carrying out projects under 
                                title III; or
                                    ``(III) a combination of the 
                                purposes described in subclauses (I) 
                                and (II); or
                            ``(ii) return the portion of the balance 
                        not reserved under clause (i) to the Treasury 
                        of the United States.
            ``(2) Distribution of funds.--
                    ``(A) In general.--Funds reserved by an eligible 
                county under subparagraph (B)(i) or (C)(i) of paragraph 
                (1) for carrying out projects under title II shall be 
                deposited in a special account in the Treasury of the 
                United States.
                    ``(B) Availability.--Amounts deposited under 
                subparagraph (A) shall--
                            ``(i) be available for expenditure by the 
                        Secretary concerned, without further 
                        appropriation; and
                            ``(ii) remain available until expended in 
                        accordance with title II.
            ``(3) Election.--
                    ``(A) Notification.--
                            ``(i) In general.--An eligible county shall 
                        notify the Secretary concerned of an election 
                        by the eligible county under this subsection 
                        not later than September 30, 2008 (or as soon 
                        thereafter as the Secretary concerned 
                        determines is practicable).
                            ``(ii) Failure to elect.--Except as 
                        provided in subparagraph (B), if the eligible 
                        county fails to make an election by the date 
                        specified in clause (i), the eligible county 
                        shall--
                                    ``(I) be considered to have elected 
                                to expend 85 percent of the funds in 
                                accordance with paragraph (1)(A); and
                                    ``(II) return the balance to the 
                                Treasury of the United States.
                    ``(B) Counties with minor distributions.--In the 
                case of each eligible county to which less than 
                $100,000 is distributed for any fiscal year pursuant to 
                either or both of paragraphs (1)(B) and (2)(B) of 
                subsection (a), the eligible county may elect to expend 
                all the funds in the same manner in which the 25-
                percent payments or 50-percent payments, as applicable, 
                are required to be expended.
    ``(e) Time for Payment.--The payments required under this section 
for a fiscal year shall be made as soon as practicable after the end of 
that fiscal year.

``SEC. 103. TRANSITION PAYMENTS TO STATES.

    ``(a) Definitions.--In this section:
            ``(1) Adjusted amount.--The term `adjusted amount' means, 
        with respect to a covered State for fiscal year 2008, 90 
        percent of--
                    ``(A) the sum of the amounts paid for fiscal year 
                2006 under section 102(a)(2) (as in effect on September 
                29, 2006) for the eligible counties in the covered 
                State that have elected under section 102(b) to receive 
                a share of the State payment for fiscal year 2008; and
                    ``(B) the sum of the amounts paid for fiscal year 
                2006 under section 103(a)(2) (as in effect on September 
                29, 2006) for the eligible counties in the State of 
                Oregon that have elected under section 102(b) to 
                receive the county payment for fiscal year 2008.
            ``(2) Covered state.--The term `covered State' means each 
        of the States of California, Louisiana, Oregon, Pennsylvania, 
        South Carolina, South Dakota, Texas, and Washington.
    ``(b) Transition Payments.--For fiscal year 2008, in lieu of the 
payment amounts that otherwise would have been made under paragraphs 
(1)(B) and (2)(B) of section 102(a), the Secretary of the Treasury 
shall pay the adjusted amount to each covered State and the eligible 
counties within the covered State, as applicable.
    ``(c) Distribution of Adjusted Amount.--Except as provided in 
subsection (d), it is the intent of Congress that the method of 
distributing the payments under subsection (b) among the counties in 
the covered States for fiscal year 2008 be in the same proportion that 
the payments were distributed to the eligible counties in fiscal year 
2006.
    ``(d) Distribution of Payments in California.--The following 
payments shall be distributed among the eligible counties in the State 
of California in the same proportion that payments under section 
102(a)(2) (as in effect on September 29, 2006) were distributed to the 
eligible counties for fiscal year 2006:
            ``(1) Payments to the State of California under subsection 
        (b).
            ``(2) The shares of the eligible counties of the State 
        payment for California under section 102 for fiscal year 2011.
    ``(e) Treatment of Payments.--For purposes of this Act, any payment 
made under subsection (b) shall be considered to be a payment made 
under section 102(a).

              ``TITLE II--SPECIAL PROJECTS ON FEDERAL LAND

``SEC. 201. DEFINITIONS.

    ``In this title:
            ``(1) Participating county.--The term `participating 
        county' means an eligible county that elects under section 
        102(d) to expend a portion of the Federal funds received under 
        section 102 in accordance with this title.
            ``(2) Project funds.--The term `project funds' means all 
        funds an eligible county elects under section 102(d) to reserve 
        for expenditure in accordance with this title.
            ``(3) Resource advisory committee.--The term `resource 
        advisory committee' means--
                    ``(A) an advisory committee established by the 
                Secretary concerned under section 205; or
                    ``(B) an advisory committee determined by the 
                Secretary concerned to meet the requirements of section 
                205.
            ``(4) Resource management plan.--The term `resource 
        management plan' means--
                    ``(A) a land use plan prepared by the Bureau of 
                Land Management for units of the Federal land described 
                in section 3(7)(B) pursuant to section 202 of the 
                Federal Land Policy and Management Act of 1976 (43 
                U.S.C. 1712); or
                    ``(B) a land and resource management plan prepared 
                by the Forest Service for units of the National Forest 
                System pursuant to section 6 of the Forest and 
                Rangeland Renewable Resources Planning Act of 1974 (16 
                U.S.C. 1604).

``SEC. 202. GENERAL LIMITATION ON USE OF PROJECT FUNDS.

    ``(a) Limitation.--Project funds shall be expended solely on 
projects that meet the requirements of this title.
    ``(b) Authorized Uses.--Project funds may be used by the Secretary 
concerned for the purpose of entering into and implementing cooperative 
agreements with willing Federal agencies, State and local governments, 
private and nonprofit entities, and landowners for protection, 
restoration, and enhancement of fish and wildlife habitat, and other 
resource objectives consistent with the purposes of this Act on Federal 
land and on non-Federal land where projects would benefit the resources 
on Federal land.

``SEC. 203. SUBMISSION OF PROJECT PROPOSALS.

    ``(a) Submission of Project Proposals to Secretary Concerned.--
            ``(1) Projects funded using project funds.--Not later than 
        September 30 for fiscal year 2008 (or as soon thereafter as the 
        Secretary concerned determines is practicable) each resource 
        advisory committee shall submit to the Secretary concerned a 
        description of any projects that the resource advisory 
        committee proposes the Secretary undertake using any project 
        funds reserved by eligible counties in the area in which the 
        resource advisory committee has geographic jurisdiction.
            ``(2) Projects funded using other funds.--A resource 
        advisory committee may submit to the Secretary concerned a 
        description of any projects that the committee proposes the 
        Secretary undertake using funds from State or local 
        governments, or from the private sector, other than project 
        funds and funds appropriated and otherwise available to do 
        similar work.
            ``(3) Joint projects.--Participating counties or other 
        persons may propose to pool project funds or other funds, 
        described in paragraph (2), and jointly propose a project or 
        group of projects to a resource advisory committee established 
        under section 205.
    ``(b) Required Description of Projects.--In submitting proposed 
projects to the Secretary concerned under subsection (a), a resource 
advisory committee shall include in the description of each proposed 
project the following information:
            ``(1) The purpose of the project and a description of how 
        the project will meet the purposes of this title.
            ``(2) The anticipated duration of the project.
            ``(3) The anticipated cost of the project.
            ``(4) The proposed source of funding for the project, 
        whether project funds or other funds.
            ``(5)(A) Expected outcomes, including how the project will 
        meet or exceed desired ecological conditions, maintenance 
        objectives, or stewardship objectives.
            ``(B) An estimate of the amount of any timber, forage, and 
        other commodities and other economic activity, including jobs 
        generated, if any, anticipated as part of the project.
            ``(6) A detailed monitoring plan, including funding needs 
        and sources, that--
                    ``(A) tracks and identifies the positive or 
                negative impacts of the project, implementation, and 
                provides for validation monitoring; and
                    ``(B) includes an assessment of the following:
                            ``(i) Whether or not the project met or 
                        exceeded desired ecological conditions; created 
                        local employment or training opportunities, 
                        including summer youth jobs programs such as 
                        the Youth Conservation Corps where appropriate.
                            ``(ii) Whether the project improved the use 
                        of, or added value to, any products removed 
                        from land consistent with the purposes of this 
                        title.
            ``(7) An assessment that the project is to be in the public 
        interest.
    ``(c) Authorized Projects.--Projects proposed under subsection (a) 
shall be consistent with section 2.

``SEC. 204. EVALUATION AND APPROVAL OF PROJECTS BY SECRETARY CONCERNED.

    ``(a) Conditions for Approval of Proposed Project.--The Secretary 
concerned may make a decision to approve a project submitted by a 
resource advisory committee under section 203 only if the proposed 
project satisfies each of the following conditions:
            ``(1) The project complies with all applicable Federal laws 
        (including regulations).
            ``(2) The project is consistent with the applicable 
        resource management plan and with any watershed or subsequent 
        plan developed pursuant to the resource management plan and 
        approved by the Secretary concerned.
            ``(3) The project has been approved by the resource 
        advisory committee in accordance with section 205, including 
        the procedures issued under subsection (e) of that section.
            ``(4) A project description has been submitted by the 
        resource advisory committee to the Secretary concerned in 
        accordance with section 203.
            ``(5) The project will improve the maintenance of existing 
        infrastructure, implement stewardship objectives that enhance 
        forest ecosystems, and restore and improve land health and 
        water quality.
    ``(b) Environmental Reviews.--
            ``(1) Request for payment by county.--The Secretary 
        concerned may request the resource advisory committee 
        submitting a proposed project to agree to the use of project 
        funds to pay for any environmental review, consultation, or 
        compliance with applicable environmental laws required in 
        connection with the project.
            ``(2) Conduct of environmental review.--If a payment is 
        requested under paragraph (1) and the resource advisory 
        committee agrees to the expenditure of funds for this purpose, 
        the Secretary concerned shall conduct environmental review, 
        consultation, or other compliance responsibilities in 
        accordance with Federal laws (including regulations).
            ``(3) Effect of refusal to pay.--
                    ``(A) In general.--If a resource advisory committee 
                does not agree to the expenditure of funds under 
                paragraph (1), the project shall be deemed withdrawn 
                from further consideration by the Secretary concerned 
                pursuant to this title.
                    ``(B) Effect of withdrawal.--A withdrawal under 
                subparagraph (A) shall be deemed to be a rejection of 
                the project for purposes of section 207(c).
    ``(c) Decisions of Secretary Concerned.--
            ``(1) Rejection of projects.--
                    ``(A) In general.--A decision by the Secretary 
                concerned to reject a proposed project shall be at the 
                sole discretion of the Secretary concerned.
                    ``(B) No administrative appeal or judicial 
                review.--Notwithstanding any other provision of law, a 
                decision by the Secretary concerned to reject a 
                proposed project shall not be subject to administrative 
                appeal or judicial review.
                    ``(C) Notice of rejection.--Not later than 30 days 
                after the date on which the Secretary concerned makes 
                the rejection decision, the Secretary concerned shall 
                notify in writing the resource advisory committee that 
                submitted the proposed project of the rejection and the 
                reasons for rejection.
            ``(2) Notice of project approval.--The Secretary concerned 
        shall publish in the Federal Register notice of each project 
        approved under subsection (a) if the notice would be required 
        had the project originated with the Secretary.
    ``(d) Source and Conduct of Project.--Once the Secretary concerned 
accepts a project for review under section 203, the acceptance shall be 
deemed a Federal action for all purposes.
    ``(e) Implementation of Approved Projects.--
            ``(1) Cooperation.--Notwithstanding chapter 63 of title 31, 
        United States Code, using project funds the Secretary concerned 
        may enter into contracts, grants, and cooperative agreements 
        with States and local governments, private and nonprofit 
        entities, and landowners and other persons to assist the 
        Secretary in carrying out an approved project.
            ``(2) Best value contracting.--
                    ``(A) In general.--For any project involving a 
                contract authorized by paragraph (1) the Secretary 
                concerned may elect a source for performance of the 
                contract on a best value basis.
                    ``(B) Factors.--The Secretary concerned shall 
                determine best value based on such factors as--
                            ``(i) the technical demands and complexity 
                        of the work to be done;
                            ``(ii)(I) the ecological objectives of the 
                        project; and
                            ``(II) the sensitivity of the resources 
                        being treated;
                            ``(iii) the past experience by the 
                        contractor with the type of work being done, 
                        using the type of equipment proposed for the 
                        project, and meeting or exceeding desired 
                        ecological conditions; and
                            ``(iv) the commitment of the contractor to 
                        hiring highly qualified workers and local 
                        residents.
            ``(3) Merchantable timber contracting pilot program.--
                    ``(A) Establishment.--The Secretary concerned shall 
                establish a pilot program to implement a certain 
                percentage of approved projects involving the sale of 
                merchantable timber using separate contracts for--
                            ``(i) the harvesting or collection of 
                        merchantable timber; and
                            ``(ii) the sale of the timber.
                    ``(B) Annual percentages.--Under the pilot program, 
                the Secretary concerned shall ensure that, on a 
                nationwide basis, not less than 35 percent of all 
                approved projects involving the sale of merchantable 
                timber are implemented using separate contracts.
                    ``(C) Inclusion in pilot program.--The decision 
                whether to use separate contracts to implement a 
                project involving the sale of merchantable timber shall 
                be made by the Secretary concerned after the approval 
                of the project under this title.
                    ``(D) Assistance.--
                            ``(i) In general.--The Secretary concerned 
                        may use funds from any appropriated account 
                        available to the Secretary for the Federal land 
                        to assist in the administration of projects 
                        conducted under the pilot program.
                            ``(ii) Maximum amount of assistance.--The 
                        total amount obligated under this subparagraph 
                        may not exceed $1,000,000 for any fiscal year 
                        during which the pilot program is in effect.
                    ``(E) Review and report.--
                            ``(i) Initial report.--Not later than 
                        September 30, 2010, the Comptroller General 
                        shall submit to the Committees on Agriculture, 
                        Nutrition, and Forestry and Energy and Natural 
                        Resources of the Senate and the Committees on 
                        Agriculture and Natural Resources of the House 
                        of Representatives a report assessing the pilot 
                        program.
                            ``(ii) Annual report.--The Secretary 
                        concerned shall submit to the Committees on 
                        Agriculture, Nutrition, and Forestry and Energy 
                        and Natural Resources of the Senate and the 
                        Committees on Agriculture and Natural Resources 
                        of the House of Representatives an annual 
                        report describing the results of the pilot 
                        program.
    ``(f) Requirements for Project Funds.--The Secretary shall ensure 
that at least 50 percent of all project funds be used for projects that 
are primarily dedicated--
            ``(1) to road maintenance, decommissioning, or 
        obliteration; or
            ``(2) to restoration of streams and watersheds.

``SEC. 205. RESOURCE ADVISORY COMMITTEES.

    ``(a) Establishment and Purpose of Resource Advisory Committees.--
            ``(1) Establishment.--The Secretary concerned shall 
        establish and maintain resource advisory committees to perform 
        the duties in subsection (b), except as provided in paragraph 
        (4).
            ``(2) Purpose.--The purpose of a resource advisory 
        committee shall be--
                    ``(A) to improve collaborative relationships; and
                    ``(B) to provide advice and recommendations to the 
                land management agencies consistent with the purposes 
                of this title.
            ``(3) Access to resource advisory committees.--To ensure 
        that each unit of Federal land has access to a resource 
        advisory committee, and that there is sufficient interest in 
        participation on a committee to ensure that membership can be 
        balanced in terms of the points of view represented and the 
        functions to be performed, the Secretary concerned may, 
        establish resource advisory committees for part of, or 1 or 
        more, units of Federal land.
            ``(4) Existing advisory committees.--
                    ``(A) In general.--An advisory committee that meets 
                the requirements of this section, a resource advisory 
                committee established before September 29, 2006, or an 
                advisory committee determined by the Secretary 
                concerned before September 29, 2006, to meet the 
                requirements of this section may be deemed by the 
                Secretary concerned to be a resource advisory committee 
                for the purposes of this title.
                    ``(B) Charter.--A charter for a committee described 
                in subparagraph (A) that was filed on or before 
                September 29, 2006, shall be considered to be filed for 
                purposes of this Act.
                    ``(C) Bureau of land management advisory 
                committees.--The Secretary of the Interior may deem a 
                resource advisory committee meeting the requirements of 
                subpart 1784 of part 1780 of title 43, Code of Federal 
                Regulations, as a resource advisory committee for the 
                purposes of this title.
    ``(b) Duties.--A resource advisory committee shall--
            ``(1) review projects proposed under this title by 
        participating counties and other persons;
            ``(2) propose projects and funding to the Secretary 
        concerned under section 203;
            ``(3) provide early and continuous coordination with 
        appropriate land management agency officials in recommending 
        projects consistent with purposes of this Act under this title;
            ``(4) provide frequent opportunities for citizens, 
        organizations, tribes, land management agencies, and other 
        interested parties to participate openly and meaningfully, 
        beginning at the early stages of the project development 
        process under this title;
            ``(5)(A) monitor projects that have been approved under 
        section 204; and
            ``(B) advise the designated Federal official on the 
        progress of the monitoring efforts under subparagraph (A); and
            ``(6) make recommendations to the Secretary concerned for 
        any appropriate changes or adjustments to the projects being 
        monitored by the resource advisory committee.
    ``(c) Appointment by the Secretary.--
            ``(1) Appointment and term.--
                    ``(A) In general.--The Secretary concerned, shall 
                appoint the members of resource advisory committees for 
                a term of 4 years beginning on the date of appointment.
                    ``(B) Reappointment.--The Secretary concerned may 
                reappoint members to subsequent 4-year terms.
            ``(2) Basic requirements.--The Secretary concerned shall 
        ensure that each resource advisory committee established meets 
        the requirements of subsection (d).
            ``(3) Initial appointment.--Not later than 180 days after 
        the date of the enactment of this Act, the Secretary concerned 
        shall make initial appointments to the resource advisory 
        committees.
            ``(4) Vacancies.--The Secretary concerned shall make 
        appointments to fill vacancies on any resource advisory 
        committee as soon as practicable after the vacancy has 
        occurred.
            ``(5) Compensation.--Members of the resource advisory 
        committees shall not receive any compensation.
    ``(d) Composition of Advisory Committee.--
            ``(1) Number.--Each resource advisory committee shall be 
        comprised of 15 members.
            ``(2) Community interests represented.--Committee members 
        shall be representative of the interests of the following 3 
        categories:
                    ``(A) 5 persons that--
                            ``(i) represent organized labor or non-
                        timber forest product harvester groups;
                            ``(ii) represent developed outdoor 
                        recreation, off highway vehicle users, or 
                        commercial recreation activities;
                            ``(iii) represent--
                                    ``(I) energy and mineral 
                                development interests; or
                                    ``(II) commercial or recreational 
                                fishing interests;
                            ``(iv) represent the commercial timber 
                        industry; or
                            ``(v) hold Federal grazing or other land 
                        use permits, or represent nonindustrial private 
                        forest land owners, within the area for which 
                        the committee is organized.
                    ``(B) 5 persons that represent--
                            ``(i) nationally recognized environmental 
                        organizations;
                            ``(ii) regionally or locally recognized 
                        environmental organizations;
                            ``(iii) dispersed recreational activities;
                            ``(iv) archaeological and historical 
                        interests; or
                            ``(v) nationally or regionally recognized 
                        wild horse and burro interest groups, wildlife 
                        or hunting organizations, or watershed 
                        associations.
                    ``(C) 5 persons that--
                            ``(i) hold State elected office (or a 
                        designee);
                            ``(ii) hold county or local elected office;
                            ``(iii) represent American Indian tribes 
                        within or adjacent to the area for which the 
                        committee is organized;
                            ``(iv) are school officials or teachers; or
                            ``(v) represent the affected public at 
                        large.
            ``(3) Balanced representation.--In appointing committee 
        members from the 3 categories in paragraph (2), the Secretary 
        concerned shall provide for balanced and broad representation 
        from within each category.
            ``(4) Geographic distribution.--The members of a resource 
        advisory committee shall reside within the State in which the 
        committee has jurisdiction and, to extent practicable, the 
        Secretary concerned shall ensure local representation in each 
        category in paragraph (2).
            ``(5) Chairperson.--A majority on each resource advisory 
        committee shall select the chairperson of the committee.
    ``(e) Approval Procedures.--
            ``(1) In general.--Subject to paragraph (3), each resource 
        advisory committee shall establish procedures for proposing 
        projects to the Secretary concerned under this title.
            ``(2) Quorum.--A quorum must be present to constitute an 
        official meeting of the committee.
            ``(3) Approval by majority of members.--A project may be 
        proposed by a resource advisory committee to the Secretary 
        concerned under section 203(a), if the project has been 
        approved by a majority of members of the committee from each of 
        the 3 categories in subsection (d)(2).
    ``(f) Other Committee Authorities and Requirements.--
            ``(1) Staff assistance.--A resource advisory committee may 
        submit to the Secretary concerned a request for periodic staff 
        assistance from Federal employees under the jurisdiction of the 
        Secretary.
            ``(2) Meetings.--All meetings of a resource advisory 
        committee shall be announced at least 1 week in advance in a 
        local newspaper of record and shall be open to the public.
            ``(3) Records.--A resource advisory committee shall 
        maintain records of the meetings of the committee and make the 
        records available for public inspection.

``SEC. 206. USE OF PROJECT FUNDS.

    ``(a) Agreement Regarding Schedule and Cost of Project.--
            ``(1) Agreement between parties.--The Secretary concerned 
        may carry out a project submitted by a resource advisory 
        committee under section 203(a) using project funds or other 
        funds described in section 203(a)(2), if, as soon as 
        practicable after the issuance of a decision document for the 
        project and the exhaustion of all administrative appeals and 
        judicial review of the project decision, the Secretary 
        concerned and the resource advisory committee enter into an 
        agreement addressing, at a minimum, the following:
                    ``(A) The schedule for completing the project.
                    ``(B) The total cost of the project, including the 
                level of agency overhead to be assessed against the 
                project.
                    ``(C) For a multiyear project, the estimated cost 
                of the project for each of the fiscal years in which it 
                will be carried out.
                    ``(D) The remedies for failure of the Secretary 
                concerned to comply with the terms of the agreement 
                consistent with current Federal law.
            ``(2) Limited use of federal funds.--The Secretary 
        concerned may decide, at the sole discretion of the Secretary 
        concerned, to cover the costs of a portion of an approved 
        project using Federal funds appropriated or otherwise available 
        to the Secretary for the same purposes as the project.
    ``(b) Transfer of Project Funds.--
            ``(1) Initial transfer required.--As soon as practicable 
        after the agreement is reached under subsection (a) with regard 
        to a project to be funded in whole or in part using project 
        funds, or other funds described in section 203(a)(2), the 
        Secretary concerned shall transfer to the applicable unit of 
        National Forest System land or Bureau of Land Management 
        District an amount of project funds equal to--
                    ``(A) in the case of a project to be completed in a 
                single fiscal year, the total amount specified in the 
                agreement to be paid using project funds, or other 
                funds described in section 203(a)(2); or
                    ``(B) in the case of a multiyear project, the 
                amount specified in the agreement to be paid using 
                project funds, or other funds described in section 
                203(a)(2) for the first fiscal year.
            ``(2) Condition on project commencement.--The unit of 
        National Forest System land or Bureau of Land Management 
        District concerned, shall not commence a project until the 
        project funds, or other funds described in section 203(a)(2) 
        required to be transferred under paragraph (1) for the project, 
        have been made available by the Secretary concerned.
            ``(3) Subsequent transfers for multiyear projects.--
                    ``(A) In general.--For the second and subsequent 
                fiscal years of a multiyear project to be funded in 
                whole or in part using project funds, the unit of 
                National Forest System land or Bureau of Land 
                Management District concerned shall use the amount of 
                project funds required to continue the project in that 
                fiscal year according to the agreement entered into 
                under subsection (a).
                    ``(B) Suspension of work.--The Secretary concerned 
                shall suspend work on the project if the project funds 
                required by the agreement in the second and subsequent 
                fiscal years are not available.

``SEC. 207. AVAILABILITY OF PROJECT FUNDS.

    ``(a) Submission of Proposed Projects To Obligate Funds.--By 
September 30, 2008 (or as soon thereafter as the Secretary concerned 
determines is practicable) a resource advisory committee shall submit 
to the Secretary concerned pursuant to section 203(a)(1) a sufficient 
number of project proposals that, if approved, would result in the 
obligation of at least the full amount of the project funds reserved by 
the participating county in the preceding fiscal year.
    ``(b) Use or Transfer of Unobligated Funds.--Subject to section 
208, if a resource advisory committee fails to comply with subsection 
(a) for a fiscal year, any project funds reserved by the participating 
county in the preceding fiscal year and remaining unobligated shall be 
available for use as part of the project submissions in the next fiscal 
year.
    ``(c) Effect of Rejection of Projects.--Subject to section 208, any 
project funds reserved by a participating county in the preceding 
fiscal year that are unobligated at the end of a fiscal year because 
the Secretary concerned has rejected one or more proposed projects 
shall be available for use as part of the project submissions in the 
next fiscal year.
    ``(d) Effect of Court Orders.--
            ``(1) In general.--If an approved project under this Act is 
        enjoined or prohibited by a Federal court, the Secretary 
        concerned shall return the unobligated project funds related to 
        the project to the participating county or counties that 
        reserved the funds.
            ``(2) Expenditure of funds.--The returned funds shall be 
        available for the county to expend in the same manner as the 
        funds reserved by the county under subparagraph (B) or (C)(i) 
        of section 102(d)(1).

``SEC. 208. TERMINATION OF AUTHORITY.

    ``(a) In General.--The authority to initiate projects under this 
title shall terminate on September 30, 2011.
    ``(b) Deposits in Treasury.--Any project funds not obligated by 
September 30, 2012, shall be deposited in the Treasury of the United 
States.

                       ``TITLE III--COUNTY FUNDS

``SEC. 301. DEFINITIONS.

    ``In this title:
            ``(1) County funds.--The term `county funds' means all 
        funds an eligible county elects under section 102(d) to reserve 
        for expenditure in accordance with this title.
            ``(2) Participating county.--The term `participating 
        county' means an eligible county that elects under section 
        102(d) to expend a portion of the Federal funds received under 
        section 102 in accordance with this title.

``SEC. 302. USE.

    ``(a) Authorized Uses.--A participating county, including any 
applicable agencies of the participating county, shall use county 
funds, in accordance with this title, only--
            ``(1) to carry out activities under the Firewise 
        Communities program to provide to homeowners in fire-sensitive 
        ecosystems education on, and assistance with implementing, 
        techniques in home siting, home construction, and home 
        landscaping that can increase the protection of people and 
        property from wildfires;
            ``(2) to reimburse the participating county for search and 
        rescue and other emergency services, including firefighting, 
        that are--
                    ``(A) performed on Federal land after the date on 
                which the use was approved under subsection (b);
                    ``(B) paid for by the participating county; and
            ``(3) to develop community wildfire protection plans in 
        coordination with the appropriate Secretary concerned.
    ``(b) Proposals.--A participating county shall use county funds for 
a use described in subsection (a) only after a 45-day public comment 
period, at the beginning of which the participating county shall--
            ``(1) publish in any publications of local record a 
        proposal that describes the proposed use of the county funds; 
        and
            ``(2) submit the proposal to any resource advisory 
        committee established under section 205 for the participating 
        county.

``SEC. 303. CERTIFICATION.

    ``(a) In General.--Not later than February 1 of the year after the 
year in which any county funds were expended by a participating county, 
the appropriate official of the participating county shall submit to 
the Secretary concerned a certification that the county funds expended 
in the applicable year have been used for the uses authorized under 
section 302(a), including a description of the amounts expended and the 
uses for which the amounts were expended.
    ``(b) Review.--The Secretary concerned shall review the 
certifications submitted under subsection (a) as the Secretary 
concerned determines to be appropriate.

``SEC. 304. TERMINATION OF AUTHORITY.

    ``(a) In General.--The authority to initiate projects under this 
title terminates on September 30, 2011.
    ``(b) Availability.--Any county funds not obligated by September 
30, 2012, shall be returned to the Treasury of the United States.

                  ``TITLE IV--MISCELLANEOUS PROVISIONS

``SEC. 401. REGULATIONS.

    ``The Secretary of Agriculture and the Secretary of the Interior 
shall issue regulations to carry out the purposes of this Act.

``SEC. 402. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated such sums as are 
necessary to carry out this Act for each of fiscal years 2008 and 2009.

``SEC. 403. TREATMENT OF FUNDS AND REVENUES.

    ``(a) Relation to Other Appropriations.--Funds made available under 
section 402 and funds made available to a Secretary concerned under 
section 206 shall be in addition to any other annual appropriations for 
the Forest Service and the Bureau of Land Management.
    ``(b) Deposit of Revenues and Other Funds.--All revenues generated 
from projects pursuant to title II, including any interest accrued from 
the revenues, shall be deposited in the Treasury of the United 
States.''.
    (b) Forest Receipt Payments to Eligible States and Counties.--
            (1) Act of may 23, 1908.--The sixth paragraph under the 
        heading ``FOREST SERVICE'' in the Act of May 23, 1908 (16 
        U.S.C. 500) is amended in the first sentence by striking 
        ``twenty-five percentum'' and all that follows through ``shall 
        be paid'' and inserting the following: ``an amount equal to the 
        annual average of 25 percent of all amounts received for the 
        applicable fiscal year and each of the preceding 6 fiscal years 
        from each national forest shall be paid''.
            (2) Weeks law.--Section 13 of the Act of March 1, 1911 
        (commonly known as the ``Weeks Law'') (16 U.S.C. 500) is 
        amended in the first sentence by striking ``twenty-five 
        percentum'' and all that follows through ``shall be paid'' and 
        inserting the following: ``an amount equal to the annual 
        average of 25 percent of all amounts received for the 
        applicable fiscal year and each of the preceding 6 fiscal years 
        from each national forest shall be paid''.
    (c) Payments in Lieu of Taxes.--
            (1) In general.--Section 6906 of title 31, United States 
        Code, is amended to read as follows:
``Sec. 6906. Funding
    ``For each of fiscal years 2008 and 2009--
            ``(1) each county or other eligible unit of local 
        government shall be entitled to payment under this chapter; and
            ``(2) sums shall be made available to the Secretary of the 
        Interior for obligation or expenditure in accordance with this 
        chapter.''.
            (2) Conforming amendment.--The table of sections for 
        chapter 69 of title 31, United States Code, is amended by 
        striking the item relating to section 6906 and inserting the 
        following:

``6906. Funding.''.

  TITLE IV--PAUL WELLSTONE AND PETE DOMENICI MENTAL HEALTH PARITY AND 
                      ADDICTION EQUITY ACT OF 2008

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Paul Wellstone and Pete Domenici 
Mental Health Parity and Addiction Equity Act of 2008''.

SEC. 402. MENTAL HEALTH PARITY.

    (a) Amendments to ERISA.--Section 712 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1185a) is amended--
            (1) in subsection (a), by adding at the end the following:
            ``(3) Financial requirements and treatment limitations.--
                    ``(A) In general.--In the case of a group health 
                plan (or health insurance coverage offered in 
                connection with such a plan) that provides both medical 
                and surgical benefits and mental health or substance 
                use disorder benefits, such plan or coverage shall 
                ensure that--
                            ``(i) the financial requirements applicable 
                        to such mental health or substance use disorder 
                        benefits are no more restrictive than the 
                        predominant financial requirements applied to 
                        substantially all medical and surgical benefits 
                        covered by the plan (or coverage), and there 
                        are no separate cost sharing requirements that 
                        are applicable only with respect to mental 
                        health or substance use disorder benefits; and
                            ``(ii) the treatment limitations applicable 
                        to such mental health or substance use disorder 
                        benefits are no more restrictive than the 
                        predominant treatment limitations applied to 
                        substantially all medical and surgical benefits 
                        covered by the plan (or coverage) and there are 
                        no separate treatment limitations that are 
                        applicable only with respect to mental health 
                        or substance use disorder benefits.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Financial requirement.--The term 
                        `financial requirement' includes deductibles, 
                        copayments, coinsurance, and out-of-pocket 
                        expenses, but excludes an aggregate lifetime 
                        limit and an annual limit subject to paragraphs 
                        (1) and (2).
                            ``(ii) Predominant.--A financial 
                        requirement or treatment limit is considered to 
                        be predominant if it is the most common or 
                        frequent of such type of limit or requirement.
                            ``(iii) Treatment limitation.--The term 
                        `treatment limitation' includes limits on the 
                        frequency of treatment, number of visits, days 
                        of coverage, or other similar limits on the 
                        scope or duration of treatment.
            ``(4) Availability of plan information.--The criteria for 
        medical necessity determinations made under the plan with 
        respect to mental health or substance use disorder benefits (or 
        the health insurance coverage offered in connection with the 
        plan with respect to such benefits) shall be made available by 
        the plan administrator (or the health insurance issuer offering 
        such coverage) in accordance with regulations to any current or 
        potential participant, beneficiary, or contracting provider 
        upon request. The reason for any denial under the plan (or 
        coverage) of reimbursement or payment for services with respect 
        to mental health or substance use disorder benefits in the case 
        of any participant or beneficiary shall, on request or as 
        otherwise required, be made available by the plan administrator 
        (or the health insurance issuer offering such coverage) to the 
        participant or beneficiary in accordance with regulations.
            ``(5) Out-of-network providers.--In the case of a plan or 
        coverage that provides both medical and surgical benefits and 
        mental health or substance use disorder benefits, if the plan 
        or coverage provides coverage for medical or surgical benefits 
        provided by out-of-network providers, the plan or coverage 
        shall provide coverage for mental health or substance use 
        disorder benefits provided by out-of-network providers in a 
        manner that is consistent with the requirements of this 
        section.'';
            (2) in subsection (b), by amending paragraph (2) to read as 
        follows:
            ``(2) in the case of a group health plan (or health 
        insurance coverage offered in connection with such a plan) that 
        provides mental health or substance use disorder benefits, as 
        affecting the terms and conditions of the plan or coverage 
        relating to such benefits under the plan or coverage, except as 
        provided in subsection (a).'';
            (3) in subsection (c)--
                    (A) in paragraph (1)(B)--
                            (i) by inserting ``(or 1 in the case of an 
                        employer residing in a State that permits small 
                        groups to include a single individual)'' after 
                        ``at least 2'' the first place that such 
                        appears; and
                            (ii) by striking ``and who employs at least 
                        2 employees on the first day of the plan 
                        year''; and
                    (B) by striking paragraph (2) and inserting the 
                following:
            ``(2) Cost exemption.--
                    ``(A) In general.--With respect to a group health 
                plan (or health insurance coverage offered in 
                connection with such a plan), if the application of 
                this section to such plan (or coverage) results in an 
                increase for the plan year involved of the actual total 
                costs of coverage with respect to medical and surgical 
                benefits and mental health and substance use disorder 
                benefits under the plan (as determined and certified 
                under subparagraph (C)) by an amount that exceeds the 
                applicable percentage described in subparagraph (B) of 
                the actual total plan costs, the provisions of this 
                section shall not apply to such plan (or coverage) 
                during the following plan year, and such exemption 
                shall apply to the plan (or coverage) for 1 plan year. 
                An employer may elect to continue to apply mental 
                health and substance use disorder parity pursuant to 
                this section with respect to the group health plan (or 
                coverage) involved regardless of any increase in total 
                costs.
                    ``(B) Applicable percentage.--With respect to a 
                plan (or coverage), the applicable percentage described 
                in this subparagraph shall be--
                            ``(i) 2 percent in the case of the first 
                        plan year in which this section is applied; and
                            ``(ii) 1 percent in the case of each 
                        subsequent plan year.
                    ``(C) Determinations by actuaries.--Determinations 
                as to increases in actual costs under a plan (or 
                coverage) for purposes of this section shall be made 
                and certified by a qualified and licensed actuary who 
                is a member in good standing of the American Academy of 
                Actuaries. All such determinations shall be in a 
                written report prepared by the actuary. The report, and 
                all underlying documentation relied upon by the 
                actuary, shall be maintained by the group health plan 
                or health insurance issuer for a period of 6 years 
                following the notification made under subparagraph (E).
                    ``(D) 6-month determinations.--If a group health 
                plan (or a health insurance issuer offering coverage in 
                connection with a group health plan) seeks an exemption 
                under this paragraph, determinations under subparagraph 
                (A) shall be made after such plan (or coverage) has 
                complied with this section for the first 6 months of 
                the plan year involved.
                    ``(E) Notification.--
                            ``(i) In general.--A group health plan (or 
                        a health insurance issuer offering coverage in 
                        connection with a group health plan) that, 
                        based upon a certification described under 
                        subparagraph (C), qualifies for an exemption 
                        under this paragraph, and elects to implement 
                        the exemption, shall promptly notify the 
                        Secretary, the appropriate State agencies, and 
                        participants and beneficiaries in the plan of 
                        such election.
                            ``(ii) Requirement.--A notification to the 
                        Secretary under clause (i) shall include--
                                    ``(I) a description of the number 
                                of covered lives under the plan (or 
                                coverage) involved at the time of the 
                                notification, and as applicable, at the 
                                time of any prior election of the cost-
                                exemption under this paragraph by such 
                                plan (or coverage);
                                    ``(II) for both the plan year upon 
                                which a cost exemption is sought and 
                                the year prior, a description of the 
                                actual total costs of coverage with 
                                respect to medical and surgical 
                                benefits and mental health and 
                                substance use disorder benefits under 
                                the plan; and
                                    ``(III) for both the plan year upon 
                                which a cost exemption is sought and 
                                the year prior, the actual total costs 
                                of coverage with respect to mental 
                                health and substance use disorder 
                                benefits under the plan.
                            ``(iii) Confidentiality.--A notification to 
                        the Secretary under clause (i) shall be 
                        confidential. The Secretary shall make 
                        available, upon request and on not more than an 
                        annual basis, an anonymous itemization of such 
                        notifications, that includes--
                                    ``(I) a breakdown of States by the 
                                size and type of employers submitting 
                                such notification; and
                                    ``(II) a summary of the data 
                                received under clause (ii).
                    ``(F) Audits by appropriate agencies.--To determine 
                compliance with this paragraph, the Secretary may audit 
                the books and records of a group health plan or health 
                insurance issuer relating to an exemption, including 
                any actuarial reports prepared pursuant to subparagraph 
                (C), during the 6-year period following the 
                notification of such exemption under subparagraph (E). 
                A State agency receiving a notification under 
                subparagraph (E) may also conduct such an audit with 
                respect to an exemption covered by such 
                notification.'';
            (4) in subsection (e), by striking paragraph (4) and 
        inserting the following:
            ``(4) Mental health benefits.--The term `mental health 
        benefits' means benefits with respect to services for mental 
        health conditions, as defined under the terms of the plan and 
        in accordance with applicable Federal and State law.
            ``(5) Substance use disorder benefits.--The term `substance 
        use disorder benefits' means benefits with respect to services 
        for substance use disorders, as defined under the terms of the 
        plan and in accordance with applicable Federal and State 
        law.'';
            (5) by striking subsection (f);
            (6) by inserting after subsection (e) the following:
    ``(f) Secretary Report.--The Secretary shall, by January 1, 2012, 
and every two years thereafter, submit to the appropriate committees of 
Congress a report on compliance of group health plans (and health 
insurance coverage offered in connection with such plans) with the 
requirements of this section. Such report shall include the results of 
any surveys or audits on compliance of group health plans (and health 
insurance coverage offered in connection with such plans) with such 
requirements and an analysis of the reasons for any failures to comply.
    ``(g) Notice and Assistance.--The Secretary, in cooperation with 
the Secretaries of Health and Human Services and Treasury, as 
appropriate, shall publish and widely disseminate guidance and 
information for group health plans, participants and beneficiaries, 
applicable State and local regulatory bodies, and the National 
Association of Insurance Commissioners concerning the requirements of 
this section and shall provide assistance concerning such requirements 
and the continued operation of applicable State law. Such guidance and 
information shall inform participants and beneficiaries of how they may 
obtain assistance under this section, including, where appropriate, 
assistance from State consumer and insurance agencies.'';
            (7) by striking ``mental health benefits'' and inserting 
        ``mental health and substance use disorder benefits'' each 
        place it appears in subsections (a)(1)(B)(i), (a)(1)(C), 
        (a)(2)(B)(i), and (a)(2)(C); and
            (8) by striking ``mental health benefits'' and inserting 
        ``mental health or substance use disorder benefits'' each place 
        it appears (other than in any provision amended by the previous 
        paragraph).
    (b) Amendments to Public Health Service Act.--Section 2705 of the 
Public Health Service Act (42 U.S.C. 300gg-5) is amended--
            (1) in subsection (a), by adding at the end the following:
            ``(3) Financial requirements and treatment limitations.--
                    ``(A) In general.--In the case of a group health 
                plan (or health insurance coverage offered in 
                connection with such a plan) that provides both medical 
                and surgical benefits and mental health or substance 
                use disorder benefits, such plan or coverage shall 
                ensure that--
                            ``(i) the financial requirements applicable 
                        to such mental health or substance use disorder 
                        benefits are no more restrictive than the 
                        predominant financial requirements applied to 
                        substantially all medical and surgical benefits 
                        covered by the plan (or coverage), and there 
                        are no separate cost sharing requirements that 
                        are applicable only with respect to mental 
                        health or substance use disorder benefits; and
                            ``(ii) the treatment limitations applicable 
                        to such mental health or substance use disorder 
                        benefits are no more restrictive than the 
                        predominant treatment limitations applied to 
                        substantially all medical and surgical benefits 
                        covered by the plan (or coverage) and there are 
                        no separate treatment limitations that are 
                        applicable only with respect to mental health 
                        or substance use disorder benefits.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Financial requirement.--The term 
                        `financial requirement' includes deductibles, 
                        copayments, coinsurance, and out-of-pocket 
                        expenses, but excludes an aggregate lifetime 
                        limit and an annual limit subject to paragraphs 
                        (1) and (2),
                            ``(ii) Predominant.--A financial 
                        requirement or treatment limit is considered to 
                        be predominant if it is the most common or 
                        frequent of such type of limit or requirement.
                            ``(iii) Treatment limitation.--The term 
                        `treatment limitation' includes limits on the 
                        frequency of treatment, number of visits, days 
                        of coverage, or other similar limits on the 
                        scope or duration of treatment.
            ``(4) Availability of plan information.--The criteria for 
        medical necessity determinations made under the plan with 
        respect to mental health or substance use disorder benefits (or 
        the health insurance coverage offered in connection with the 
        plan with respect to such benefits) shall be made available by 
        the plan administrator (or the health insurance issuer offering 
        such coverage) in accordance with regulations to any current or 
        potential participant, beneficiary, or contracting provider 
        upon request. The reason for any denial under the plan (or 
        coverage) of reimbursement or payment for services with respect 
        to mental health or substance use disorder benefits in the case 
        of any participant or beneficiary shall, on request or as 
        otherwise required, be made available by the plan administrator 
        (or the health insurance issuer offering such coverage) to the 
        participant or beneficiary in accordance with regulations.
            ``(5) Out-of-network providers.--In the case of a plan or 
        coverage that provides both medical and surgical benefits and 
        mental health or substance use disorder benefits, if the plan 
        or coverage provides coverage for medical or surgical benefits 
        provided by out-of-network providers, the plan or coverage 
        shall provide coverage for mental health or substance use 
        disorder benefits provided by out-of-network providers in a 
        manner that is consistent with the requirements of this 
        section.'';
            (2) in subsection (b), by amending paragraph (2) to read as 
        follows:
            ``(2) in the case of a group health plan (or health 
        insurance coverage offered in connection with such a plan) that 
        provides mental health or substance use disorder benefits, as 
        affecting the terms and conditions of the plan or coverage 
        relating to such benefits under the plan or coverage, except as 
        provided in subsection (a).'';
            (3) in subsection (c)--
                    (A) in paragraph (1), by inserting before the 
                period the following: ``(as defined in section 
                2791(e)(4), except that for purposes of this paragraph 
                such term shall include employers with 1 employee in 
                the case of an employer residing in a State that 
                permits small groups to include a single individual)''; 
                and
                    (B) by striking paragraph (2) and inserting the 
                following:
            ``(2) Cost exemption.--
                    ``(A) In general.--With respect to a group health 
                plan (or health insurance coverage offered in 
                connection with such a plan), if the application of 
                this section to such plan (or coverage) results in an 
                increase for the plan year involved of the actual total 
                costs of coverage with respect to medical and surgical 
                benefits and mental health and substance use disorder 
                benefits under the plan (as determined and certified 
                under subparagraph (C)) by an amount that exceeds the 
                applicable percentage described in subparagraph (B) of 
                the actual total plan costs, the provisions of this 
                section shall not apply to such plan (or coverage) 
                during the following plan year, and such exemption 
                shall apply to the plan (or coverage) for 1 plan year. 
                An employer may elect to continue to apply mental 
                health and substance use disorder parity pursuant to 
                this section with respect to the group health plan (or 
                coverage) involved regardless of any increase in total 
                costs.
                    ``(B) Applicable percentage.--With respect to a 
                plan (or coverage), the applicable percentage described 
                in this subparagraph shall be--
                            ``(i) 2 percent in the case of the first 
                        plan year in which this section is applied; and
                            ``(ii) 1 percent in the case of each 
                        subsequent plan year.
                    ``(C) Determinations by actuaries.--Determinations 
                as to increases in actual costs under a plan (or 
                coverage) for purposes of this section shall be made 
                and certified by a qualified and licensed actuary who 
                is a member in good standing of the American Academy of 
                Actuaries. All such determinations shall be in a 
                written report prepared by the actuary. The report, and 
                all underlying documentation relied upon by the 
                actuary, shall be maintained by the group health plan 
                or health insurance issuer for a period of 6 years 
                following the notification made under subparagraph (E).
                    ``(D) 6-month determinations.--If a group health 
                plan (or a health insurance issuer offering coverage in 
                connection with a group health plan) seeks an exemption 
                under this paragraph, determinations under subparagraph 
                (A) shall be made after such plan (or coverage) has 
                complied with this section for the first 6 months of 
                the plan year involved.
                    ``(E) Notification.--
                            ``(i) In general.--A group health plan (or 
                        a health insurance issuer offering coverage in 
                        connection with a group health plan) that, 
                        based upon a certification described under 
                        subparagraph (C), qualifies for an exemption 
                        under this paragraph, and elects to implement 
                        the exemption, shall promptly notify the 
                        Secretary, the appropriate State agencies, and 
                        participants and beneficiaries in the plan of 
                        such election.
                            ``(ii) Requirement.--A notification to the 
                        Secretary under clause (i) shall include--
                                    ``(I) a description of the number 
                                of covered lives under the plan (or 
                                coverage) involved at the time of the 
                                notification, and as applicable, at the 
                                time of any prior election of the cost-
                                exemption under this paragraph by such 
                                plan (or coverage);
                                    ``(II) for both the plan year upon 
                                which a cost exemption is sought and 
                                the year prior, a description of the 
                                actual total costs of coverage with 
                                respect to medical and surgical 
                                benefits and mental health and 
                                substance use disorder benefits under 
                                the plan; and
                                    ``(III) for both the plan year upon 
                                which a cost exemption is sought and 
                                the year prior, the actual total costs 
                                of coverage with respect to mental 
                                health and substance use disorder 
                                benefits under the plan.
                            ``(iii) Confidentiality.--A notification to 
                        the Secretary under clause (i) shall be 
                        confidential. The Secretary shall make 
                        available, upon request and on not more than an 
                        annual basis, an anonymous itemization of such 
                        notifications, that includes--
                                    ``(I) a breakdown of States by the 
                                size and type of employers submitting 
                                such notification; and
                                    ``(II) a summary of the data 
                                received under clause (ii).
                    ``(F) Audits by appropriate agencies.--To determine 
                compliance with this paragraph, the Secretary may audit 
                the books and records of a group health plan or health 
                insurance issuer relating to an exemption, including 
                any actuarial reports prepared pursuant to subparagraph 
                (C), during the 6-year period following the 
                notification of such exemption under subparagraph (E). 
                A State agency receiving a notification under 
                subparagraph (E) may also conduct such an audit with 
                respect to an exemption covered by such 
                notification.'';
            (4) in subsection (e), by striking paragraph (4) and 
        inserting the following:
            ``(4) Mental health benefits.--The term `mental health 
        benefits' means benefits with respect to services for mental 
        health conditions, as defined under the terms of the plan and 
        in accordance with applicable Federal and State law.
            ``(5) Substance use disorder benefits.--The term `substance 
        use disorder benefits' means benefits with respect to services 
        for substance use disorders, as defined under the terms of the 
        plan and in accordance with applicable Federal and State 
        law.'';
            (5) by striking subsection (f);
            (6) by striking ``mental health benefits'' and inserting 
        ``mental health and substance use disorder benefits'' each 
        place it appears in subsections (a)(1)(B)(i), (a)(1)(C), 
        (a)(2)(B)(i), and (a)(2)(C); and
            (7) by striking ``mental health benefits'' and inserting 
        ``mental health or substance use disorder benefits'' each place 
        it appears (other than in any provision amended by the previous 
        paragraph).
    (c) Amendments to Internal Revenue Code.--Section 9812 of the 
Internal Revenue Code of 1986 is amended--
            (1) in subsection (a), by adding at the end the following:
            ``(3) Financial requirements and treatment limitations.--
                    ``(A) In general.--In the case of a group health 
                plan that provides both medical and surgical benefits 
                and mental health or substance use disorder benefits, 
                such plan shall ensure that--
                            ``(i) the financial requirements applicable 
                        to such mental health or substance use disorder 
                        benefits are no more restrictive than the 
                        predominant financial requirements applied to 
                        substantially all medical and surgical benefits 
                        covered by the plan, and there are no separate 
                        cost sharing requirements that are applicable 
                        only with respect to mental health or substance 
                        use disorder benefits; and
                            ``(ii) the treatment limitations applicable 
                        to such mental health or substance use disorder 
                        benefits are no more restrictive than the 
                        predominant treatment limitations applied to 
                        substantially all medical and surgical benefits 
                        covered by the plan and there are no separate 
                        treatment limitations that are applicable only 
                        with respect to mental health or substance use 
                        disorder benefits.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Financial requirement.--The term 
                        `financial requirement' includes deductibles, 
                        copayments, coinsurance, and out-of-pocket 
                        expenses, but excludes an aggregate lifetime 
                        limit and an annual limit subject to paragraphs 
                        (1) and (2),
                            ``(ii) Predominant.--A financial 
                        requirement or treatment limit is considered to 
                        be predominant if it is the most common or 
                        frequent of such type of limit or requirement.
                            ``(iii) Treatment limitation.--The term 
                        `treatment limitation' includes limits on the 
                        frequency of treatment, number of visits, days 
                        of coverage, or other similar limits on the 
                        scope or duration of treatment.
            ``(4) Availability of plan information.--The criteria for 
        medical necessity determinations made under the plan with 
        respect to mental health or substance use disorder benefits 
        shall be made available by the plan administrator in accordance 
        with regulations to any current or potential participant, 
        beneficiary, or contracting provider upon request. The reason 
        for any denial under the plan of reimbursement or payment for 
        services with respect to mental health or substance use 
        disorder benefits in the case of any participant or beneficiary 
        shall, on request or as otherwise required, be made available 
        by the plan administrator to the participant or beneficiary in 
        accordance with regulations.
            ``(5) Out-of-network providers.--In the case of a plan that 
        provides both medical and surgical benefits and mental health 
        or substance use disorder benefits, if the plan provides 
        coverage for medical or surgical benefits provided by out-of-
        network providers, the plan shall provide coverage for mental 
        health or substance use disorder benefits provided by out-of-
        network providers in a manner that is consistent with the 
        requirements of this section.'';
            (2) in subsection (b), by amending paragraph (2) to read as 
        follows:
            ``(2) in the case of a group health plan that provides 
        mental health or substance use disorder benefits, as affecting 
        the terms and conditions of the plan relating to such benefits 
        under the plan, except as provided in subsection (a).'';
            (3) in subsection (c)--
                    (A) by amending paragraph (1) to read as follows:
            ``(1) Small employer exemption.--
                    ``(A) In general.--This section shall not apply to 
                any group health plan for any plan year of a small 
                employer.
                    ``(B) Small employer.--For purposes of subparagraph 
                (A), the term `small employer' means, with respect to a 
                calendar year and a plan year, an employer who employed 
                an average of at least 2 (or 1 in the case of an 
                employer residing in a State that permits small groups 
                to include a single individual) but not more than 50 
                employees on business days during the preceding 
                calendar year. For purposes of the preceding sentence, 
                all persons treated as a single employer under 
                subsection (b), (c), (m), or (o) of section 414 shall 
                be treated as 1 employer and rules similar to rules of 
                subparagraphs (B) and (C) of section 4980D(d)(2) shall 
                apply.''; and
                    (B) by striking paragraph (2) and inserting the 
                following:
            ``(2) Cost exemption.--
                    ``(A) In general.--With respect to a group health 
                plan, if the application of this section to such plan 
                results in an increase for the plan year involved of 
                the actual total costs of coverage with respect to 
                medical and surgical benefits and mental health and 
                substance use disorder benefits under the plan (as 
                determined and certified under subparagraph (C)) by an 
                amount that exceeds the applicable percentage described 
                in subparagraph (B) of the actual total plan costs, the 
                provisions of this section shall not apply to such plan 
                during the following plan year, and such exemption 
                shall apply to the plan for 1 plan year. An employer 
                may elect to continue to apply mental health and 
                substance use disorder parity pursuant to this section 
                with respect to the group health plan involved 
                regardless of any increase in total costs.
                    ``(B) Applicable percentage.--With respect to a 
                plan, the applicable percentage described in this 
                subparagraph shall be--
                            ``(i) 2 percent in the case of the first 
                        plan year in which this section is applied; and
                            ``(ii) 1 percent in the case of each 
                        subsequent plan year.
                    ``(C) Determinations by actuaries.--Determinations 
                as to increases in actual costs under a plan for 
                purposes of this section shall be made and certified by 
                a qualified and licensed actuary who is a member in 
                good standing of the American Academy of Actuaries. All 
                such determinations shall be in a written report 
                prepared by the actuary. The report, and all underlying 
                documentation relied upon by the actuary, shall be 
                maintained by the group health plan for a period of 6 
                years following the notification made under 
                subparagraph (E).
                    ``(D) 6-month determinations.--If a group health 
                plan seeks an exemption under this paragraph, 
                determinations under subparagraph (A) shall be made 
                after such plan has complied with this section for the 
                first 6 months of the plan year involved.
                    ``(E) Notification.--
                            ``(i) In general.--A group health plan 
                        that, based upon a certification described 
                        under subparagraph (C), qualifies for an 
                        exemption under this paragraph, and elects to 
                        implement the exemption, shall promptly notify 
                        the Secretary, the appropriate State agencies, 
                        and participants and beneficiaries in the plan 
                        of such election.
                            ``(ii) Requirement.--A notification to the 
                        Secretary under clause (i) shall include--
                                    ``(I) a description of the number 
                                of covered lives under the plan 
                                involved at the time of the 
                                notification, and as applicable, at the 
                                time of any prior election of the cost-
                                exemption under this paragraph by such 
                                plan;
                                    ``(II) for both the plan year upon 
                                which a cost exemption is sought and 
                                the year prior, a description of the 
                                actual total costs of coverage with 
                                respect to medical and surgical 
                                benefits and mental health and 
                                substance use disorder benefits under 
                                the plan; and
                                    ``(III) for both the plan year upon 
                                which a cost exemption is sought and 
                                the year prior, the actual total costs 
                                of coverage with respect to mental 
                                health and substance use disorder 
                                benefits under the plan.
                            ``(iii) Confidentiality.--A notification to 
                        the Secretary under clause (i) shall be 
                        confidential. The Secretary shall make 
                        available, upon request and on not more than an 
                        annual basis, an anonymous itemization of such 
                        notifications, that includes--
                                    ``(I) a breakdown of States by the 
                                size and type of employers submitting 
                                such notification; and
                                    ``(II) a summary of the data 
                                received under clause (ii).
                    ``(F) Audits by appropriate agencies.--To determine 
                compliance with this paragraph, the Secretary may audit 
                the books and records of a group health plan relating 
                to an exemption, including any actuarial reports 
                prepared pursuant to subparagraph (C), during the 6-
                year period following the notification of such 
                exemption under subparagraph (E). A State agency 
                receiving a notification under subparagraph (E) may 
                also conduct such an audit with respect to an exemption 
                covered by such notification.'';
            (4) in subsection (e), by striking paragraph (4) and 
        inserting the following:
            ``(4) Mental health benefits.--The term `mental health 
        benefits' means benefits with respect to services for mental 
        health conditions, as defined under the terms of the plan and 
        in accordance with applicable Federal and State law.
            ``(5) Substance use disorder benefits.--The term `substance 
        use disorder benefits' means benefits with respect to services 
        for substance use disorders, as defined under the terms of the 
        plan and in accordance with applicable Federal and State 
        law.'';
            (5) by striking subsection (f);
            (6) by striking ``mental health benefits'' and inserting 
        ``mental health and substance use disorder benefits'' each 
        place it appears in subsections (a)(1)(B)(i), (a)(1)(C), 
        (a)(2)(B)(i), and (a)(2)(C); and
            (7) by striking ``mental health benefits'' and inserting 
        ``mental health or substance use disorder benefits'' each place 
        it appears (other than in any provision amended by the previous 
        paragraph).
    (d) Regulations.--Not later than 1 year after the date of enactment 
of this Act, the Secretaries of Labor, Health and Human Services, and 
the Treasury shall issue regulations to carry out the amendments made 
by subsections (a), (b), and (c), respectively.
    (e) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply with respect to group health plans for plan years 
        beginning after the date that is 1 year after the date of 
        enactment of this Act, regardless of whether regulations have 
        been issued to carry out such amendments by such effective 
        date, except that the amendments made by subsections (a)(5), 
        (b)(5), and (c)(5), relating to striking of certain sunset 
        provisions, shall take effect on January 1, 2009.
            (2) Special rule for collective bargaining agreements.--In 
        the case of a group health plan maintained pursuant to one or 
        more collective bargaining agreements between employee 
        representatives and one or more employers ratified before the 
        date of the enactment of this Act, the amendments made by this 
        section shall not apply to plan years beginning before the 
        later of--
                    (A) the date on which the last of the collective 
                bargaining agreements relating to the plan terminates 
                (determined without regard to any extension thereof 
                agreed to after the date of the enactment of this Act), 
                or
                    (B) January 1, 2009.
        For purposes of subparagraph (A), any plan amendment made 
        pursuant to a collective bargaining agreement relating to the 
        plan which amends the plan solely to conform to any requirement 
        added by this section shall not be treated as a termination of 
        such collective bargaining agreement.
    (f) Assuring Coordination.--The Secretary of Health and Human 
Services, the Secretary of Labor, and the Secretary of the Treasury may 
ensure, through the execution or revision of an interagency memorandum 
of understanding among such Secretaries, that--
            (1) regulations, rulings, and interpretations issued by 
        such Secretaries relating to the same matter over which two or 
        more such Secretaries have responsibility under this section 
        (and the amendments made by this section) are administered so 
        as to have the same effect at all times; and
            (2) coordination of policies relating to enforcing the same 
        requirements through such Secretaries in order to have a 
        coordinated enforcement strategy that avoids duplication of 
        enforcement efforts and assigns priorities in enforcement.
    (g) Conforming Clerical Amendments.--
            (1) ERISA heading.--
                    (A) In general.--The heading of section 712 of the 
                Employee Retirement Income Security Act of 1974 is 
                amended to read as follows:

``SEC. 712. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER 
              BENEFITS.''.

                    (B) Clerical amendment.--The table of contents in 
                section 1 of such Act is amended by striking the item 
                relating to section 712 and inserting the following new 
                item:

``Sec. 712. Parity in mental health and substance use disorder 
                            benefits.''.
            (2) PHSA heading.--The heading of section 2705 of the 
        Public Health Service Act is amended to read as follows:

``SEC. 2705. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER 
              BENEFITS.''.

            (3) IRC heading.--
                    (A) In general.--The heading of section 9812 of the 
                Internal Revenue Code of 1986 is amended to read as 
                follows:

``SEC. 9812. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER 
              BENEFITS.''.

                    (B) Clerical amendment.--The table of sections for 
                subchapter B of chapter 100 of such Code is amended by 
                striking the item relating to section 9812 and 
                inserting the following new item:

``Sec. 9812. Parity in mental health and substance use disorder 
                            benefits.''.
    (h) GAO Study on Coverage and Exclusion of Mental Health and 
Substance Use Disorder Diagnoses.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study that analyzes the specific rates, 
        patterns, and trends in coverage and exclusion of specific 
        mental health and substance use disorder diagnoses by health 
        plans and health insurance. The study shall include an analysis 
        of--
                    (A) specific coverage rates for all mental health 
                conditions and substance use disorders;
                    (B) which diagnoses are most commonly covered or 
                excluded;
                    (C) whether implementation of this Act has affected 
                trends in coverage or exclusion of such diagnoses; and
                    (D) the impact of covering or excluding specific 
                diagnoses on participants' and enrollees' health, their 
                health care coverage, and the costs of delivering 
                health care.
            (2) Reports.--Not later than 3 years after the date of the 
        enactment of this Act, and 2 years after the date of submission 
        the first report under this paragraph, the Comptroller General 
        shall submit to Congress a report on the results of the study 
        conducted under paragraph (1).

                      TITLE V--REVENUE PROVISIONS

SEC. 501. 0.2 PERCENT FUTA SURTAX.

    (a) In General.--Section 3301 (relating to rate of tax) is 
amended--
            (1) by striking ``through 2008'' in paragraph (1) and 
        inserting ``through 2009'', and
            (2) by striking ``calendar year 2009'' in paragraph (2) and 
        inserting ``calendar year 2010''.
    (b) Effective Date.--The amendments made by this section shall 
apply to wages paid after December 31, 2008.

SEC. 502. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX 
              INDIFFERENT PARTIES.

    (a) In General.--Subpart B of part II of subchapter E of chapter 1 
is amended by inserting after section 457 the following new section:

``SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX 
              INDIFFERENT PARTIES.

    ``(a) In General.--Any compensation of a service provider which is 
deferred under a nonqualified deferred compensation plan of a 
nonqualified entity shall be includible in gross income when there is 
no substantial risk of forfeiture of the rights to such compensation.
    ``(b) Nonqualified Entity.--For purposes of this section, the term 
`nonqualified entity' means--
            ``(1) any foreign corporation unless substantially all of 
        its income is--
                    ``(A) effectively connected with the conduct of a 
                trade or business in the United States, or
                    ``(B) subject to a comprehensive foreign income 
                tax, and
            ``(2) any partnership unless substantially all of its 
        income is, directly or indirectly, allocated to--
                    ``(A) United States persons (other than persons 
                exempt from tax under this title),
                    ``(B) foreign persons with respect to whom such 
                income is subject to a comprehensive foreign income 
                tax,
                    ``(C) foreign persons with respect to whom--
                            ``(i) such income is effectively connected 
                        with the conduct of a trade or business within 
                        the United States, and
                            ``(ii) a withholding tax is paid under 
                        section 1446 with respect to such income, or
                    ``(D) organizations which are exempt from tax under 
                this title if such income is unrelated business taxable 
                income (as defined in section 512) with respect to such 
                organization.
    ``(c) Determinability of Amounts of Compensation.--
            ``(1) In general.--If the amount of any compensation is not 
        determinable at the time that such compensation is otherwise 
        includible in gross income under subsection (a)--
                    ``(A) such amount shall be so includible in gross 
                income when determinable, and
                    ``(B) the tax imposed under this chapter for the 
                taxable year in which such compensation is includible 
                in gross income shall be increased by the sum of--
                            ``(i) the amount of interest determined 
                        under paragraph (2), and
                            ``(ii) an amount equal to 20 percent of the 
                        amount of such compensation.
            ``(2) Interest.--For purposes of paragraph (1)(B)(i), the 
        interest determined under this paragraph for any taxable year 
        is the amount of interest at the underpayment rate under 
        section 6621 plus 1 percentage point on the underpayments that 
        would have occurred had the deferred compensation been 
        includible in gross income for the taxable year in which first 
        deferred or, if later, the first taxable year in which such 
        deferred compensation is not subject to a substantial risk of 
        forfeiture.
    ``(d) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Substantial risk of forfeiture.--
                    ``(A) In general.--The rights of a person to 
                compensation shall be treated as subject to a 
                substantial risk of forfeiture only if such person's 
                rights to such compensation are conditioned upon the 
                future performance of substantial services by any 
                individual.
                    ``(B) Exception for compensation based on gain 
                recognized on an investment asset.--
                            ``(i) In general.--To the extent provided 
                        in regulations prescribed by the Secretary, if 
                        compensation of a service provider is 
                        determined solely by reference to the amount of 
                        gain recognized on the disposition of an 
                        investment asset, such compensation shall be 
                        treated as subject to a substantial risk of 
                        forfeiture until the date of such disposition.
                            ``(ii) Investment asset.--For purposes of 
                        clause (i), the term `investment asset' means 
                        any single asset (other than an investment fund 
                        or similar entity)--
                                    ``(I) acquired directly by an 
                                investment fund or similar entity,
                                    ``(II) with respect to which such 
                                entity does not (nor does any person 
                                related to such entity) participate in 
                                the active management of such asset (or 
                                if such asset is an interest in an 
                                entity, in the active management of the 
                                activities of such entity), and
                                    ``(III) substantially all of any 
                                gain on the disposition of which (other 
                                than such deferred compensation) is 
                                allocated to investors in such entity.
                            ``(iii) Coordination with special rule.--
                        Paragraph (3)(B) shall not apply to any 
                        compensation to which clause (i) applies.
            ``(2) Comprehensive foreign income tax.--The term 
        `comprehensive foreign income tax' means, with respect to any 
        foreign person, the income tax of a foreign country if--
                    ``(A) such person is eligible for the benefits of a 
                comprehensive income tax treaty between such foreign 
                country and the United States, or
                    ``(B) such person demonstrates to the satisfaction 
                of the Secretary that such foreign country has a 
                comprehensive income tax.
            ``(3) Nonqualified deferred compensation plan.--
                    ``(A) In general.--The term `nonqualified deferred 
                compensation plan' has the meaning given such term 
                under section 409A(d), except that such term shall 
                include any plan that provides a right to compensation 
                based on the appreciation in value of a specified 
                number of equity units of the service recipient.
                    ``(B) Exception.--Compensation shall not be treated 
                as deferred for purposes of this section if the service 
                provider receives payment of such compensation not 
                later than 12 months after the end of the taxable year 
                of the service recipient during which the right to the 
                payment of such compensation is no longer subject to a 
                substantial risk of forfeiture.
            ``(4) Service provider.--The term `service provider' has 
        the meaning given such term in the regulations under section 
        409A, determined without regard to method of accounting.
            ``(5) Exception for certain compensation with respect to 
        effectively connected income.--In the case of a foreign 
        corporation with income which is taxable under section 882, 
        this section shall not apply to compensation payable by such 
        foreign corporation which, had such compensation been paid in 
        cash on the date that such compensation ceased to be subject to 
        a substantial risk of forfeiture, would have been deductible by 
        such foreign corporation against such income.
            ``(6) Exception with respect to employees of certain 
        subsidiaries.--This section shall not apply to compensation 
        deferred under a nonqualified deferred compensation plan of a 
        nonqualified entity if--
                    ``(A) such compensation is payable to an employee 
                of a domestic subsidiary of such entity, and
                    ``(B) such compensation is reasonably expected to 
                be deductible by such subsidiary under section 
                404(a)(5) when such compensation is includible in 
                income by such employee.
            ``(7) Application of rules.--Rules similar to the rules of 
        paragraphs (5) and (6) of section 409A(d) shall apply.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
section, including regulations--
            ``(1) disregarding a substantial risk of forfeiture in 
        cases where necessary to carry out the purposes of this 
        section, and
            ``(2) providing appropriate treatment where an individual 
        who was employed by an employer which is not a nonqualified 
        entity is temporarily employed by a nonqualified entity which 
        is related to such employer.''.
    (b) Conforming Amendment.--Section 26(b)(2) is amended by striking 
``and'' at the end of subparagraph (V), by striking the period at the 
end of subparagraph (W) and inserting ``, and'', and by adding at the 
end the following new subparagraph:
                    ``(X) section 457A(c)(1)(B) (relating to 
                determinability of amounts of compensation).''.
    (c) Clerical Amendment.--The table of sections of subpart B of part 
II of subchapter E of chapter 1 is amended by inserting after the item 
relating to section 457 the following new item:

``Sec. 457A. Nonqualified deferred compensation from certain tax 
                            indifferent parties.''.
    (d) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        amounts deferred which are attributable to services performed 
        after December 31, 2008.
            (2) Application to existing deferrals.--In the case of any 
        amount deferred to which the amendments made by this section do 
        not apply solely by reason of the fact that the amount is 
        attributable to services performed before January 1, 2009, to 
        the extent such amount is not includible in gross income in a 
        taxable year beginning before 2018, such amounts shall be 
        includible in gross income in the later of--
                    (A) the last taxable year beginning before 2018, or
                    (B) the taxable year in which there is no 
                substantial risk of forfeiture of the rights to such 
                compensation (determined in the same manner as 
                determined for purposes of section 457A of the Internal 
                Revenue Code of 1986, as added by this section).
            (3) Accelerated payments.--No later than 120 days after the 
        date of the enactment of this Act, the Secretary shall issue 
        guidance providing a limited period of time during which a 
        nonqualified deferred compensation arrangement attributable to 
        services performed on or before December 31, 2008, may, without 
        violating the requirements of section 409A(a) of the Internal 
        Revenue Code of 1986, be amended to conform the date of 
        distribution to the date the amounts are required to be 
        included in income.
            (4) Certain back-to-back arrangements.--If the taxpayer is 
        also a service recipient and maintains one or more nonqualified 
        deferred compensation arrangements for its service providers 
        under which any amount is attributable to services performed on 
        or before December 31, 2008, the guidance issued under 
        paragraph (4) shall permit such arrangements to be amended to 
        conform the dates of distribution under such arrangement to the 
        date amounts are required to be included in the income of such 
        taxpayer under this subsection.
            (5) Accelerated payment not treated as material 
        modification.--Any amendment to a nonqualified deferred 
        compensation arrangement made pursuant to paragraph (4) or (5) 
        shall not be treated as a material modification of the 
        arrangement for purposes of section 409A of the Internal 
        Revenue Code of 1986.
            (6) Certain preexisting arrangements.--If, pursuant to a 
        written binding contract entered into on or before December 31, 
        2007, any portion of compensation payable under such contract 
        for a period is determined as a portion of the amount of gain 
        recognized on the disposition during such period of a specified 
        asset, the amendments made by this section shall not apply to 
        the portion of compensation attributable to such disposition 
        notwithstanding the fact that such portion of compensation may 
        be reduced by realized losses or depreciation in the value of 
        other assets during such period or a prior period or be 
        attributable in part to services performed after December 31, 
        2008, but only if--
                    (A) payment of such portion of compensation is 
                received by the service provider and included in its 
                gross income no later than the earlier of--
                            (i) 12 months after the end of the taxable 
                        year of the service recipient during which the 
                        disposition of the specified asset occurs, or
                            (ii) the last taxable year of the service 
                        provider beginning before January 1, 2018; and
                    (B) the specified asset is held by the service 
                recipient on the date of the enactment of this section.

SEC. 503. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST FUND TAX.

    (a) Increase in Rate.--
            (1) Increase in rate.--Section 4611(c) is amended by adding 
        at the end the following new paragraph:
            ``(3) Increase in oil spill liability trust fund financing 
        rate.--For purposes of this subsection, the Oil Spill Liability 
        Trust Fund financing rate is increased (in addition to any 
        other increase under this subsection) by--
                    ``(A) in the case of crude oil received or 
                petroleum products entered before October 1, 2014, 4 
                cents a barrel, and
                    ``(B) in the case of crude oil received or 
                petroleum products entered after September 30, 2014, 5 
                cents a barrel.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply on and after the first day of the first calendar 
        quarter beginning more than 60 days after the date of the 
        enactment of this Act.
    (b) Extension.--
            (1) In general.--Section 4611(f) (relating to application 
        of Oil Spill Liability Trust Fund financing rate) is amended by 
        striking paragraphs (2) and (3) and inserting the following new 
        paragraph:
            ``(2) Termination.--The Oil Spill Liability Trust Fund 
        financing rate shall not apply after December 31, 2017.''.
            (2) Conforming amendment.--Section 4611(f)(1) is amended by 
        striking ``paragraphs (2) and (3)'' and inserting ``paragraph 
        (2)''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on the date of the enactment of this Act.

SEC. 504. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.

    (a) In General.--Paragraphs (5)(D) and (6) of section 864(f) are 
each amended by striking ``December 31, 2010'' and inserting ``December 
31, 2018''.
    (b) Transition.--Subsection (f) of section 864 is amended by 
striking paragraph (7).

SEC. 505. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

    The percentage under subparagraph (C) of section 401(1) of the Tax 
Increase Prevention and Reconciliation Act of 2005 in effect on the 
date of the enactment of this Act is increased by 49 percentage points.
                                 <all>